Yaneek Page The best unconventional advice for entrepreneurs
Last week, as I navigated the congested airport on one of the busiest travel days, a passing stranger posed a thoughtful question that momentarily whisked me away from the urgency of my journey. With genuine curiosity, they inquired: “What is one piece of unconventional or unpopular entrepreneurial advice you wish everyone knew?”
As my mind sifted through a multitude of gems, I shared the one with the most shining potential for transformation: Entrepreneurs need to treat themselves like astute investors in their own business rather than tireless workhorses owned by and forever bound to their companies, which are lacking in innovation and growth.
In May, the Inter-American Development Bank, IDB, issued a news release titled ‘IDB Report Finds Caribbean Businesses Need More Innovation and Productivity’. The report referenced data collected from nearly 2,000 firms across 13 Caribbean countries with the objective of providing an informed assessment of innovation and productivity in the Caribbean since the global pandemic. It highlighted poor performance and anaemic growth as urgent challenges to be overcome if the region is to enjoy prosperity in the post-pandemic era.
The findings are strikingly consistent with a publication from the World Bank Latin American and Caribbean Studies, which, in 2014, asserted that the entrepreneurial landscape in the region is characterised by “many firms but little innovation or high growth, transformational entrepreneurship”.
Within this context it would be reckless for an entrepreneur to invest everything in their business with no clear investment objectives, boundaries, or prudent risk- management strategies governing that investment.
Investing with purpose
Whether they are the CEO of a growing empire, self-employed professionals or tradesmen, veteran sole proprietors, or budding entrepreneurs, too many folks operating businesses in Jamaica today have invested all they have in their business without setting a single goal as an investor in that enterprise.
In my years of experience as a trainer and coach, when I would ask entrepreneurs if they had investors, they almost always said no. I would then ask: “So what are you? Haven’t you invested money, a great amount of time and effort in your business? Aren’t you the largest and most faithful investor?” That’s when it connected for them. I could almost see the light bulbs going off in their minds as they experienced that critical eureka moment. I hope for my readers it will be the same.
Many business owners work extended hours with little rest or break every month and still go years without collecting a steady pay cheque. They live mainly off meagre cash flows and sometimes lean in on inconsistent profit ebbs and flows. Some are dangerously overleveraged in poor-performing or underperforming ventures, which are robbing them of their potential for wealth creation as the years go by.
An important context for us is that culturally, we are often individualistic and keep our business close to our chest. Several studies have shown that we struggle with mobilising social capital. Domiciled in a palpably low-trust environment, we fear “bad mind” worse than failure, so we trod alone and, unfortunately, suffer in silence. For this same reason, it is also not common to seek out mentors, financial advisers, or coaches for guidance or support.
One simple step to solving these dilemmas may be for entrepreneurs to become disciplined and astute investors.
Astute investors
An “astute investor” is a person, institution, or group that invests their time, money, and or other resources for a specific purpose while possessing the acumen to make shrewd financial decisions when allocating those resources. Astute investors always have a plan that includes diversification, diligent risk management, objectivity or emotional control, and an exit strategy. They know and enforce their rights as investors.
Interestingly, several studies have shown that companies that robustly safeguard investor rights enjoy better operating performance and consistently increase value to those investors while companies that do not prioritise their investors tend to experience less growth, less profit, and minimal increase in value. Some of the reasons for these disparities are accountability, urgency, transparency, and the strategic management required to balance investor rights and confidence with business leadership responsibilities.
Leaders who are held accountable for the performance of their organisations, and who are forced to expose their financial and operational results to scrutiny, appear motivated to achieve more.
One of the ways an entrepreneur can safeguard their own investments in their business, and prevent complacency, is to assimilate the rigours of astute investment principles. This involves setting hard targets for profit, which is separate from their earned salaries, which should, at the very least, be paid consistently.
This shift alone will necessitate fundamental changes to business as usual and spur action to achieve greater innovation and transformational enterprise. Or at the very least, they may be forced to comply with the basic tenets of good investing, which is to have an exit strategy to stem losses and remaining laser focused on the wealth creation as one of the primary personal objectives.
One love!
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Yaneek Page is the programme lead for Market Entry USA, and a certified trainer in entrepreneurship.
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