Management often more critical than finance

Editor’s note: Michelle Stockman works with Little Rock-based Arkansas Capital Corp. to promote entrepreneurship development around the state. Stockman earned a bachelor’s degree from Loyola University-Chicago in communications and fine arts, and earned a master’s in entrepreneurship from Western Carolina University. Her thoughts on business success appear each week on The City Wire.

“Management, not finance, is the greatest threat to small businesses.”

Ernesto Sirolli, who recently spoke in Oklahoma City, addressed a room of entrepreneurs on the successful management of a small enterprise. Sirolli, author of the “Ripples from the Zambezi,” found that entrepreneurs are their own largest hurdle in working toward success in their businesses.

It is difficult to get entrepreneurs to loosen their control of the business to take an honest look at their own skills being given to the company. In looking back at the greatest businesses to rise within our country, GE, Wal-Mart, Amazon, Microsoft, Mars, etc., it doesn’t take long to see that no one business was built by one single business person. Sirolli said all these businesses had more than one person behind the scenes.

While Fortune Magazine may spotlight one “great mind” behind the company, further investigation points out that the person in the spotlight had at least one additional person by their side working through the challenges of a new start-up. If no one company was started alone, how does a business start when the entrepreneur feels he either is or needs to be alone?

Through his experiences, Sirolli pointed out three facets of business the entrepreneur needs to oversee in one form or another. First, someone in the business needs to be the expert in the product. Either in inventing or selling, the product person must know all the ins and outs of what is being sold. Secondly, someone needs to be the expert at marketing. From understanding the market place to getting the product sold, marketing entails a broad set of skills. Lastly, the business needs a financial manager who fully understands the cost of business as well as the reward of ROI.

While some entrepreneurs may be able to do well in more than one of those categories, no one is an expert in all three. The goal for entrepreneurs is to find out which area they are weak, be able to admit it and seek the resources that will fill the area of weakness.

Whether it is finding a book keeper to fill the financial manager role to hiring a marketing associate, the sooner the entrepreneur can fill these business rolls the better.

Sirolli notes that the key for entrepreneurs is to do what you love.

“The product, marketing and financial management have to be in the hands of the people who love it.”

If you find an area in your business that you do not love, it is time to find a way to fill that role elsewhere. On the flip side, many entrepreneurs have trust problems with allowing others in to help with the business. While an entrepreneur should learn to trust in others with their business, entrepreneurs should also oversee the work being done.

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Stockman can be reached at [email protected]