Even though the nature of business growth is incredibly dynamic, the challenge is that we operate in an ecosystem that rewards the status quo.
Banks, business development partners and talent all see a business for what it is today, rather that for what it could be. Are you an SME, MME or perhaps you’ve already made it? It is uncanny how external observers assert their superiority by hurriedly labelling you or your business and recognising your limitations before they have taken the time to understand your potential.
How does a business break out of the mould of the status quo?
The first step is to make the entrepreneurial journey less solitary. Find a knowledgeable friend, coach or mentor who you respect to motivate you and keep you on track. You will not always like what you hear but you will certainly doubt your judgment less as time goes on and the trust builds. This is a challenging step for many entrepreneurs as they don’t always like the mirror that a mentor holds upto them; however, those that welcome constructive criticism will last the distance.
Then ask yourself the obvious questions – we routinely fail to address the simplest tasks ahead of us as we often fear the outcome. Take the time away from your daily
fire-fighting to define the path that you want to take and how you will tread. Clarify your mission, vision and values. This will help keep you on track and guide those on the journey alongside you. Is your big audacious visionary goal to change the world? Put it out there; acknowledge it – you are leading the charge after all. Clarify your mission with your top team – it’s always good to remind everyone why your business exists.
Next, look around you – how entrenched are you in the status quo? Does your network and ecosystem take you where you want to go? Most entrepreneurs graduate from a discipline (engineering, commerce, etc) with a skill and network that they share with their peers. Break out of the mould and realise that there are networks outside of your sphere which find you relevant and interesting. Your novelty outside of your comfort zone will work in your favour and will help you to grow. For most entrepreneurs the lonely journey thus far and the paucity of time for friends and family often makes this effort seem like an indulgence. However, if you put in the energy and start enjoying the exercise, then your business boundaries will erode.
I have seen many instances of missing jigsaw pieces – gifted tech entrepreneurs lacking content, creative geniuses missing commercial acumen and product experts not understanding how to connect with their consumers. Start scouting for the talented people who can help you to navigate challenges that you have not seen before. As the organisation grows, the importance of value-based hiring cannot be overstated – it may sound like a gimmick but it is very effective in unearthing the motivations and priorities of potential team members. A recent client had a string of dismissals and departures which then reduced once they started screening candidates rather than just hiring opportunistically.
Be credible and professional in communicating your message – tell your story simply and effectively and ensure you are meeting the right person even if it takes a little longer. You are the decision maker in your organisation and you should meet someone who has a similar status in order to get new business moving. If you try but you are not getting there, then take help from your mentor and network. You have limited resources; so make every attempt at business development really count.
By now it should be clear that money isn’t the solution to all your troubles, but it certainly helps. In order to attract it and deploy effectively you need to get smart. You are an SME and will stay one unless you start taking deliberate steps to land yourself an aligned investor. Think like they think. Remove the risk obstacles.
If your business plan involves doing something that you’ve never done before, then pull up your bootstraps one more time and pilot it (or elements of it) on a small scale. This will reassure investors who may have previously doubted your strategy, unproven business or revenue model and the ability of your team to execute. For example, if you have never sold into organised retail or validated your pricing with an institutional customer then show yourself that it can be done. Intelligent case studies can silence many investor concerns.
If you have made it to this point and you find yourself across the table from an investor who is still trying to impose his view of the world on you, then have the confidence to cut your losses and politely move on to the next discussion. If you have a great business and have communicated your proposition well, then you should have the confidence to protect your business – and that will only happen with an investor who respects what you have created and what you can build together.
(The author is founder of Mentor Growth Capital, a Mumbai-based firm working actively with emerging consumer businesses.)
To become a guest contributor with VCCircle, write to email@example.com.