The next skill I want to talk about is human resources.
As an entrepreneur, you are a human resource manager.
There is a lot to do in human resources, and it's actually probably one of
the last things that you will hire for your company.
Is someone to be a HR manager, or to handle human resources.
You will be handling human resources after you've got a marketing manager,
after you've got a CFO, after you've got an accountant.
You'll still be doing human resource management.
You need to stay on top of this.
There's a lot of leadership in here.
But there's a lot of management.
The things that we as entrepreneurs really wanna concern
ourselves with in human resources is developing the proper kind of team or
teams we need to run our business or its departments.
We need to constantly concern ourselves with motivation.
Not just in the terms of leadership motivation, having people follow.
But how am I creating a company structure, that motivates my employees?
Company culture.
Something that we're teaching and researching, and
learning about, more than ever now.
What kind of culture am I creating at my company?
We used to say, take care of the customers.
Take care of the customers.
Be a customer centric company; focus on the customers.
We're actually changing that funny enough.
We're now saying take care of the employee, and
the employee will take care of the customers.
This is interesting, but it actually works better because
as much as we try to make our customer, our employees take care of customers.
If they're not happy they don't do a very good job of it.
Whereas, if we take care of the employee,
the employee is naturally gonna want to take care of the customer.
So now we're starting to change.
Focus on the employee, and let the employee take care of the customer.
You're gonna have to deal with diversity.
In business we want diversity, we don't want everybody thinking alike.
If I hire two people I want two different minds.
I don't want the same mind twice.
But diversity causes conflict by nature,
and what we want in business is interdependence.
So a key skill of the entrepreneur, a key HR skill is managing diversity and
interdependence, two conflicting ideals at the same time.
You're going to have to do evaluation, right?
You're going to have to evaluate your employees.
You're going to have to be able to evaluate
your employees in a fair and a consistent manner.
You're gonna need to reward them for good evaluations.
You're gonna have to use negative evaluations
to show them how they can improve.
You're gonna have to have training and
support backing up your evaluations.
You're going to need to work on retention.
How do you keep your employees?
Cuz it costs a lot to hire someone and
train them and you don't want them just turning over all the time.
And in the middle of trying to retain your employees you're going to have to fire.
And this is never nice, even when it's someone you want to fire, it's not nice.
Okay. You can tell I'm somebody who's
fired people.
It's not nice.
But the biggest insult you can give your employees, is keeping a bad one.
The biggest insult you can give your employees, is keeping a bad one.
Don't let bad employees hang around.
Get rid of them, you have to get rid of them.
Otherwise it will affect your company culture,
it's going to affect the motivation, it's going to affect the teams.
Retention and firing, and then of course there is compliance.
I'm talking to you from the state of California,
one of the most litigious states in the United States of America.
And clearly the most regulated in terms of HR laws, and procedures, and compliance.
You, wherever you are, whether it's Alaska, or whether it's Zanzibar.
You need to know what you need to comply with in your particular area, region,
and you've got to make sure that you're complying, your employees are complying.
Otherwise you can end up with some serious fines and
even simply being put out of business.
Human resources is another extremely important skill of the entrepreneur.
It's something that, whether it comes naturally to you or not,
you're gonna have to learn.
You're gonna have to develop.
And you're probably gonna have to get help, with at least some aspects.
Because as I've gone through these areas of HR, these are completely different
areas and requiring completely different skills from the entrepreneur.
The next skill is another very neglected one, especially formally.
Operations and Processes.
As we put together our business and we start conducting business,
a lot of times we simply do what's required of us, as it's required of us.
And that might work for the first week or two.
But very quickly, you're gonna get to a level of business, which is not huge.
In which you require actual formalized operations and processes.
Not having these can be the kiss of death to an entrepreneur,
especially if they're struck with a family emergency or an illness, and
because they have no formal operations and processes written and
recorded, nobody else can go in and do what needs to be done.
Sometimes as bad as nobody can even go in and
open up the business and having it running for business because they don't know
the little things that the entrepreneur does every morning when they come in.
So having operations and processes.
Understanding what do you want to automate and what do you want to keep manual.
What you want to spend money on and what is not worth your money at this time.
What is worth investing a little bit more time into, and
what is worth again automating and getting it done very, very quickly.
What we call Process Mapping, and you can Google Process Mapping and
get a couple examples of different process maps.
But at least take the time and process map your company,
the different things that happen.
What is the process?
And in doing so, you can identify weaknesses and
bottlenecks, or potential weaknesses and bottlenecks.
So, don't neglect your operations and processes.
Don't neglect to formalize as much as you can, have things written,
have things mapped, and understand how your company operates and
be able to give it to an employee or a manager, or even a potential investor
to show, this is how we run, this is how we conduct our business.
Now I want to talk a little bit about metrics.
These are skills but this is also a tool.
And it's probably more of a tool than a skill because
there's lots of metrics out there that you can just steal.
You can google metrics,
company metrics, financial metrics, and you can get all sorts of things.
There's a saying, you can't manage what you don't measure.
Understand this.
You can't manage what you don't measure.
If you are not measuring something by definition, you're not managing it.
So measure.
Okay.
It's an evolutionary process.
I always say that I measure everything in my business.
Of course it's not true.
I don't measure everything, but I measure a lot.
I've got my Excel sheet that I open up every day.
And I put in the days information, and
as I go through the course of my business, I add new metrics.
I start measuring something that maybe I wasn't measuring before.
And a lot of times I'll even measure data, cuz it's easy to measure,
that I don't even know right now what I'm gonna use that for.
But in the future I might want it.
Okay?
Get the numbers, track the numbers.
If you are not measuring something, you are not managing it.
If you're not measuring your daily sales, you're not managing it.
If you're not measuring the return on advertising,
the return on marketing, You're not managing.
There's an old saying in marketing.
They say 50% of all marketing money is wasted, we just don't know what 50%.
This isn't actually true anymore.
In today's world of digital marketing, right?
Mobile marketing and the tools,
the digital tools we have to measure even a traditional market.
No. You can measure.
Right, you can measure and you don't have to be wasting that other 50%.
It's not necessarily true today.
So measure it.
There's another expression.
Torture the numbers long enough and they're bound to confess.
So collect the data, put it all on a single spreadsheet somewhere and
have several tabs, that's okay.
But collect the data.
And use that data to measure the things that you wanna manage better.
What is not going well with your business?
What is hindering you from getting to the next level?
Well if you have the numbers, you can measure that.
And if you can measure it, you can manage it.
So make sure that you are measuring what you need to in your business.
That you are measuring the important things, the relevant things and
the things that you're most interested in.
So this brings us to the final tool that I wanna talk about today, and
it's basically the Entrepreneur's Dashboard.
What's a dashboard?
Well, anybody whose ever flown a plane, or
more likely driven a car, you know what a dashboard is.
You're driving along, and up in front of you,
you've got the speed that you're going.
You've got how the engine's doing.
You probably have a clock telling you the time of day, right?
You have all sorts of different things on that dashboard, and
what you really have there, is you have what the automobile company that made your
car has decided is the important stuff that you need to know.
Okay? That's your dashboard.
And actually, it extends beyond your dashboard.
Right, there's also the pane of glass that lets you see outside.
There's the visor to keep the sun outta your eyes.
And inside that visor, more and more often these days, there's that little mirror so
you can look at yourself and see what you look like,
see how you're doing before you get out of the car.
And this is the way an Entrepreneur's Dashboard should be.
You should have a dashboard somewhere, and
my dashboard is not a formal dashboard purchased from a dashboard company, and
yes there are dashboard companies out there.
Mine is on my Excel sheet.
It's the first tab of my Excel sheet where it feeds me through what
I consider the most relevant information that I need to look at every day.
Right? You look at
your dashboard every time you drive your car, not once a month, right?
So you look at that dashboard everyday and
what we often teach people in putting together that dashboard is you want that
dashboard to show you various aspects of your business and your life.
There's things that are important to me.
What important to me as an entrepreneur?
My business, clearly, and
I want some primary business metrics on that dashboard.
My sales, my profitability, how I'm doing versus last last year.
How much I'm up or down versus last year.
Right? This is almost like my speedometer and
my engine check and things like that.
I wanna know how the business is doing right now.
Okay? So that if something starts to happen
that's contrary to what I want, I don't find out next week or next month.
I start to see that right now.
The other thing that I wanna see on my dashboard is
I wanna see things in the environment that might very well affect my business.
That's almost like the windshield and the mirrors that we have in the car, right?
The windshield tells me what's out in front of me.
What's coming in my not too distant future?
My mirrors, they show me what's around me.
What are the other cars, maybe the competition, what are they doing?
Okay, what are they up to?
Am I the only one on the road?
Is it packed?
This is showing me things about the environment.
And you wanna know what environmental factors are important to your business.
I'm in retail in Laguna Beach, California.
That means that, important to my business, is the local weather.
If Laguna is rainy, nobody's gonna come out and shop.
Right?
Another thing that's important to my business is national weather.
When it gets cold, in America, they all go down to winter in Laguna.
They all come down to have some sun,
and they stay in Laguna Beach, California, and my sales go up.
Right? So local weather, local bad weather will
drive my sales down, but national bad weather will drive my sales up.
So different things in the environment that we want to look at,
especially in my business.
What are the environmental factors that are going to affect your business?
The third area of that dashboard, and
this is something that many entrepreneurs really neglect to take care of is you.
How are you doing?
You're the entrepreneur.
You're the leader.
You're the head of the ship.
Hopefully you've hired and trained a good crew behind you.
But whether you have or whether that's still in your future, if you go down,
there's gonna be some consequences.
How are you doing with your health?
How are you doing with daily exercise?
How are you doing with two words that entrepreneurs rarely hear, time off.
Another word most entrepreneurs don't hear very often, vacation.
How are you doing with that?
How are you doing with some personal goals in your lives?
You need to set some personal goals, not for your business, for you.
Take a week vacation this year.
Take one day off in every ten.
Right? And if you're still working at a normal
company, you're thinking, whoa, that's nothing.
One week off in a year.
One day off in ten.
That is huge for an entrepreneur.
Most entrepreneurs don't see a day off in their first five years of business.
They don't see a week off for their first decade, if ever, okay?
So.
What do you wanna do?
And that way, if you know what you wanna do and it's there on your dashboard,
I promised myself I would take a week off this year.
I promised myself I would take off one day in ten.
Then you manage towards that as you approach it, and
you plan for it, and you make it happen.
So your dashboard, make sure of course you know how your business is doing.
Make sure you know how the environment is doing in relation to your business and
how that's gonna affect your business.
And make sure you know how you're doing.
As a person.
Not just a business person but as a person.
Are you taking time to enjoy life?
Are you taking time to get the exercise you need,
the rest you need, the intellectual stimulation you need?
Anything that it is you need in your life.
Skills and tools of entrepreneurs.
I hope this helps you as you formulate your own path and your own company.
And really start to prepare the launch of your own business.