Friday, June 20, 2008

SMEs - is this entrepreneurial behaviour

Assume you are chatting to someone. They are fired up about their business and have great plans for growth. The plans are coming together well from a marketing point of view! Sales are starting to grow. But they steadfastly continue to fly by the seat of their pants, rather than by running the numbers and understanding what their cash flow requirements are going to be in order to sustain the "planned" growth.

Is this person an entrepreneur? I would tend to say no. Although they are entrepreneurial in many other ways, I believe that to knowingly ignore the figures is like attempting economic suicide. It is merely a question of whether or not the cut will go deep enough to kill the business.

While all entrepreneurs will have an ability to often work on gut feel, as this is merely a decision based upon internalised knowledge, I believe that once the "gut" tells you the plan is good, it needs to be verified and understood.

So please all you entrepreneurs out there, verify your gut feel, and run the numbers to be sure you are correct, and also to understand the real impact on your business. Your business may just depend upon it.

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