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If you ask me, entrepreneurship is one of the most difficult roles you possibly can ever take on. The stress and burden of starting and building a successful business – not to mention the pressure of keeping people in gainful employment – falls squarely on your shoulders.
It might be all too easy to get distracted by increasing revenues and sales to reassure investors who forget about the health of their company. The greater your company gets, the heavier the load becomes. But for those that have the fortitude to take it on, it is an exciting and rewarding experience, full of on a regular basis joys and challenges.
Regardless of the type of business they run, every entrepreneur needs to step away from their day-to-day work and assess where their business is and whether it is healthy. As an entrepreneur and enterprise capitalist, I at all times try to assess the overall health of a startup and focus on these five areas to make it a healthier company.
1. How are my employees doing and how can I improve their well-being?
No healthy startup will stay that way if the individuals who power it are not healthy. If the pandemic has shown us anything, it’s that providing support and resources for health and well-being can positively impact worker morale.
A startup’s commitment to creating a supportive and healthy work environment might help reduce stress and improve worker motivation, increasing engagement and productivity. I’m not talking about a general, one-size-fits-all approach that can simply be seen as a half-measure. Each person on your team is different and each person’s well-being needs are different.
(*5*) worker well-being
If your startup is still small, do not be afraid to talk directly to your employees to ask them how they’re doing and understand their wellness routines. These conversations will aid you develop an informed strategy for your business to higher support its needs.
For larger firms, contact an worker wellbeing consultancy. Ask them to collect worker feedback, discover what your competition is doing, and use that data to create a tailored plan for your employees. Don’t exclude your own health in this regard either. As a leader, you have to be at the top of your game, setting an example for others to do the same.
2. How do we deal with failure?
Depending on your personality type, the risk of failure might be the best or worst part of your startup life.
Most entrepreneurs realize that failure might be a good thing, but only if it is handled properly. While this may occasionally be difficult to measure, here are some questions to help get a clearer picture:
- Do I or my team dwell on failures longer than we should always?
- Do we keep repeating the same mistakes?
- Does fear of failure affect our motivation and creativity?
Strong leadership is crucial
Ultimately, it is the leadership team’s job to encourage a culture of learning from mistakes and put structures in place to leverage those learnings while stopping them from happening again.
It is essential to encourage leaders and employees to think critically and assess where things have gone improper. Meet with your teams and discuss the following questions:
- What was inside their control and what was beyond their control?
- Looking back, were there any early signs that now seem obvious that it was going to be a failure?
- What can we alter in our process to higher detect problems earlier?
3. Are we attracting the right type of people?
Generally speaking, there are two types of employees: those that work for a greater paycheck and those that work because they consider in the direction and culture. Is your company built for one type and not the other?
It’s essential to focus on building a company that individuals will want to work for, not those that will work there just because they earn above market rates. For younger employees, compensation is essential, but the role and fit with the company are equally, if no more, essential. This is one other difficult area to check your status, but a good sign is that you simply’re repeatedly receiving messages coming in on LinkedIn and directly from job seekers.
Hiring the best candidates for your startup
So where to find the right candidates?
Your employees are your biggest supporters, and while you would like to watch out, you’ll often find quality candidates in their networks. Encourage your employees to take some responsibility and allow them to be more involved in the recruitment process, especially if your team is smaller.
4. How well do you know what you spend your money on?
You’d be shocked how often firms don’t know how much money they spend each month, quarter or 12 months. If you fall into this category – and you do not have to admit it – or want to higher understand your financial situation, here are some questions you possibly can ask yourself and your team:
- Do you have a budget and is it realistic? Have other people in the organization checked this for common sense?
- How are you currently tracking your activities compared to your budget?
- How well is spending aligned with your core strategy versus recent opportunities or potential distractions?
These are easy questions, but they’ll aid you uncover significant errors in your financial process.
Early focus on funds
Building a solid finance function early in a company’s lifecycle may cost more up front. Still, it saves you and your startup headaches and costs in the future, especially when you begin contacting investors and auditors.
If your company is more mature and making significant financial progress, it might be time to invest in a strong CFO if you have not already. You’ll want to hire someone who can tie the company’s strategy to your budget and expenses and support the finance team.
5. Do your employees show initiative?
Earlier, I discussed how essential it is to hire the right people for your organization. This aspect shall be reinforced when you check how often employees are promoted and take on responsibility – and whether you, as a leader, encourage this. Because they experience the ins and outs of company life every day, your employees likely know the inner workings of your company higher than you do. This is something good. This means they are deeply committed and invested.
However, it is essential to recognize whether your employees are presenting recent ideas to you of their very own volition or are simply following orders. Do they express their thoughts and opinions in meetings, or do they sit quietly and just listen?
Promoting a culture of initiative
One of the best things you possibly can do as a leader is to take the initiative yourself and talk to your employees, encouraging them to think critically about operations and providing them with a protected environment in which they’ll do so. In some cases, it is higher to do this through a third-party company or anonymously. As an investor, I’ve had more success talking directly to employees and providing feedback to management.
A healthy perspective
Assessing the overall health of a startup means being attentive to details beyond financial metrics. An entrepreneur must consistently assess the company’s health and correct it as crucial to ensure long-term success. These five questions are not exhaustive, but they are essential to building a healthy and sustainable business.
All of this requires a deep sense of self-awareness on the part of the leader. Leaders often operate in isolation, with their eyes closed, pursuing their goals or revenue goals, sacrificing the broader fundamentals of the business and its impact on future scalability. As a long-term investor, I strongly consider in building solid foundations, even if it means taking things a little slower.