5 Truths Serial Entrepreneurs Wish They Had Known Earlier

Get your business into shape

Early in a business, every business owner or manager must make one of two hard choices:

To prioritize the human resources and internal culture of their company OR

To prioritize the metrics- revenue, sales, net profit, and quarterly earnings above the people and the products.

The latter is far more common. After all, entrepreneurs are in the business of making money.

Besides, it’s a more reliable way of gauging progress and growth. However, this approach is counterproductive.

Here is why.

Managers who focus on the profits and revenues sometimes do so at the expense of their employees, whose relentless passion and hard work brought about the profit in the first place.

Most managers perceive investment in human resources, employees’ harmony, and the firm’s internal culture as a less worthwhile adventure due to its long-term nature.

In a way, this is true.

Again, most entrepreneurs do not have much free time, which is quite understandable given the overwhelming pressure from shareholders.

However, according to time-tested principles, companies that put their people and products first stand out in their respective niches.

Quite unbelieving, right? But that’s the truth, fam.

Young entrepreneurs find it challenging to believe profit-making companies are more than just profit-driven.

Besides the value those firms offer, they treat their employees right.

Those firms focus mainly on what we often refer to as trivial. Trivial attributes such as employees’ relationships, the company’s internal culture, the commitment and morale of the workers, and the leadership’s personality.

But because of the overwhelming pressure, many business owners are not always patient enough to wait. And hence, they succumb to prioritizing the short-term gains.

Here are a variety of reasons you must not give in to the urge to prioritize short-term gain:

1. They Cannot Sustain The Business In The Long Run

Go check companies who have stood the test of time. Many had a unique attribute that surpassed their urge to make a profit.

For example, In the early years of Amazon, Jeff Bezos aimed to offer the best commodity at the most affordable price. And he somehow compelled his employees and co-workers to key into that vision. In order to accomplish this, Bezos proposed they use a cost-effective makeshift table, an idea they gladly accepted. Had it been he never won his employees over and developed a good relationship with them. Maybe Amazon wouldn’t be where it is today.

Business owners and managers must understand that the early years of a start-up or SME is a time for sowing. And just like all sowing seasons, it’s all hard work with little or no result. However, you can count on the fact that you will reap your rewards in great tons during the peak of the season.

Management is no different.

Early in a company’s life, it would be best to plant the seeds of long-term and significant results rather than squeeze the last drop of juice from your unripe company at the expense of your employees’ satisfaction.

As always, focus on the revenues, sales and profits metrics forces you to crave for the harvest too early enough.

2. They Emphasize The Product, Not The Producers

In his classic book, 7 Habits of Highly Effective People, Stephen Harvey beautifully illustrates the significance of paying attention to the means of production rather than the products.

An excerpt from The 7 Habits of Highly Effective People points out, “An effective company cannot only care about customers but ignore employees.”

Let's imagine a scenario for a second.

Let's assume a car to be a producer. In this case, the product we stand to gain is transportation from one point to another.

If the car owner's aim is to get transported at the expense of the producer — the car, chances are the car will break down in no time.

The same can be said of management.

If you focus on getting the profits at your workers' expense, such profit will not extend or continue far into the future.

3. They Shift Focus From The Consumers

Though indirectly, prioritizing the employees focuses on the customer. In contrast, prioritizing the short-term income focuses on pleasing the investors. Perhaps you are wondering how this is possible.

Let us dissect the logic.

There is no doubt that a firm is responsible for its customers first. Agreed?

That's common knowledge if you ask me.

Focus on the employees brings the best out of them. The employees, therefore, feel valued and appreciated, motivating them to satisfy the customers.

This employee-centric approach turns out to be of long-term significance to the customers.

For example, companies prioritizing the employees and customers spend most of their resources on Customer Service and Experience, which might make no sense to a metrics manager, as there is not much to gain in the short term.

4. They Suppress Innovation And Creativity

Innovation and creativity are at the core of entrepreneurship. Innovation and creativity are the drivers of future change. From time to time, New companies spring up and change the status quo in an industry. Firms like this are said to be innovative.

Companies that choose not to adjust as time unfolds risk dying out. Unfortunately, companies like this are mostly short-minded firms unwilling to take a dent in their today's earnings so they can win big in the future.

Given that human needs change from time to time, companies are expected to innovate to satisfy their customers' wants better.

The story of Nokia beautifully surmises this point. They were once a global leader in the mobile phone industry. But their utmost focus on the short-term and unwillingness to change led to their downfall.

5. They Crush The Firm's Relevance

In the end, investment in people is a seed of greatness, yielding many benefits in the future. Of course, you may not reap the benefits in the early days of your business. However, it will eventually pay off.

Conclusion

In the end, investment in your workers might not give you what you so much cherish in the short term. But be rest assured it will serve as a springboard for future success.

Dear Business Owners, play the long-term game. Invest in your staff. Appreciate them. Pay listening ears to their complaints. Befriend them. In the long run, this might end up being one of the best investments you ever made.