16 Dec Building The Right Team and Letting Them Do Their Job
When deciding whether to invest in a company or not, the venture capitalist will invest eighty percent in the entrepreneur and management team while only about twenty percent is invested in the product. The reason I am telling you this is to show you how important it is to build the right team that can really take the company forward. This is where it might have actually been better to get a bachelor of art in business administration rather than a bachelor of science, because it really is an art. And once you have the right team in place you can rest assured that if the product or service you are selling can move forward, then it will move forward.
Letting the sales team do the selling
One of the common mistakes that an entrepreneur makes is thinking that he has to do everything because no one else can do it right. While this is completely blunders it also limits the amount of work that can be done. I once went to a venture capital conference in Utah where various investors had the chance to meet with business owners and listen to their pitch or presentation and decide if they wanted to invest. One of the presenters who presented, he was the CEO, talked about how great the product is and how great of a sales team he had and how everything else involved with his company was so great; but he was not very good at selling the business himself. My colleagues and I wondered why he was the one presenting and not this amazing sales team. Sometimes being the best business manager means stepping out of the way and letting those who are the best at something do the thing they are best at.
Getting Some Skin In The Game
Many business owners want to keep everything to themselves without giving any portion of the business to the management team. Venture Capitalist and Private Equity groups see things a little differently, they usually give some sort of equity or structure in some sort of compensation package that will provide additional motivation to the management team to get things moving forward. Whenever you can get the team to invest or take on some sort of risk themselves then you can view it as a good sign that you are starting to get the right people on board.
Once you have established the capable team you need to ensure that a form of accountability is in play that will let the team do their job and make sure that they don’t fall behind. Once you have these structures in play then you have established a system that will be particularly eye-catching to investors or others looking to acquire a business. Setting us a system and getting the right people on board is one of the hardest aspects of starting a business. In fact it is probably one of the biggest reasons businesses fail in the first place, regardless of finances and demand.