After years of running various small businesses I have finally come to conclude that people are bad for your profits! What made me arrive at this conclusion? Well obviously it’s a very broad statement & people are not always bad for profits. Of course they are not, as many businesses make all their money by selling to the end consumer. But I believe there are better ways for people looking to set up a small profitable business than dealing direct with customers to make their money.

When considering about 50% of small businesses fail within the first year you need to make your business as smooth & efficient as possible. Especially if there are only a few employees or you are the only employee.

This is where people are bad for your profits. Dealing directly with the customer in order to close a sale & then thereafter support the customer if/when any future issues arise will be a major drain on your very limited resources. How much time can you really afford to spend on each customer to make X amount of profit? Do you really have the resource to be able to provide the after sales service as well, which will enhance your reputation in the community & hopefully earn you more sales? If you don’t provide a good after sales service you will soon get a bad reputation & your business will fail before it has even begun! I believe this is the mistake many people make when setting up their small business, the reality of the time required to deal with customers directly and still make a profit.

People are all different as are their requirements. This is the variable that makes it hard to automate any business where you have to deal directly with the customer. I believe that letting the companies already geared up with all the logistics of dealing direct with customers is the key in setting up a profitable new business with minimum overheads.

The key to making money in business is how can you serve more people & in turn generate more money? But after what I have just talked about we want to serve more people without draining company resources. Well if you are looking to set up a new business I would look at setting up an online business & sell other people’s products or services through your website. This means you can concentrate on generating your online sales & let the company who you are representing deal with the customer. This way if you generate 10 sales a day or 1000 sales a day it makes no difference to the load on resources within your small business, let the company you are representing deal with the extra costs and you concentrate on making the sales & more importantly money!

If you are successful in this and start making good profits with low overheads then maybe you can look at expanding your business in to different areas but at least this way you are giving yourself a chance to beat the statistics.

Until you have established a cash generative & profitable business people ARE bad for your profits!

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A RECENT survey of how eyes read a web page shows that most users read in an F shaped pattern.

The test, which has been carried out by boffins working for the Nielsen Norman Group, monitored what the eye balls of 232 users were doing when they looked at web pages.

Much to their surprise they found that users first read in a horizontal movement, usually across the upper part of the content area.

Next, they move down the page a bit and then read across in a second horizontal movement that typically covers a shorter area than the previous movement.

Lastly they scan the content’s left side in a vertical movement. The group has published pictures of a typical reading here here, but if the report is correct then it could have a few implications for web designers and news sites.

Firstly no one is going to read text word-by-word and most are only going to read the first two paragraphs.

In other words, you are all tabloid readers and if you have got this far in a story you are in an incredible minority. So really I write what I like about your mother down here and you will never know. [You're fired Nick. Ed.] µ

http://www.theinquirer.net/?article=31057

http://www.useit.com/alertbox/reading_pattern.html

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Rupert Steiner in his book ‘My First Break’ attempted to define the secret of becoming an entrepreneur and following interviews with over one hundred entrepreneurs, Steiner concluded that there was not one defined path. He has, however, drawn out observations of an entrepreneur’s personality traits. They have a tendency to be rebels, outsiders, original thinkers, risk takers and break new ground. Entrepreneurs are always on the lookout for new business opportunities and have the guts it needs to start up a business. They have total commitment to what they are doing, which verges on obsession behaviour.

Although some of the traits that they exhibit are similar to those of ‘ordinary’ businessmen, entrepreneurs have a tendency to come up with good ideas, which they execute better than anyone else. The have the flair to identify niche opportunities and are able to secure finances and to build an infrastructure and to keep the organisation afloat until it starts to make a profit.

Sue Birley, Imperial College Management School Professor of Entrepreneurship has tried to identify when the spark of an entrepreneur comes from. She concluded that to get a business established you need someone with persuasion, persistence with no inhibitions about identifying resources to transform the vision into reality.

People do not typically switch on being an entrepreneur. Some comes from nature, some from nurture. It is hard for people to be taught to be entrepreneurial: they either have it in their genes or in their upbringing or not at all. People cannot be taught to relish risk taking. Imagination is not taught in the classroom.

However, academics believe that education can help to provide those with a spark with at least some of the skills they will need to turn that spark into something more substantive. Michael Hay, Director for the Foundation for Entrepreneurial Management at the London Business School says it is possible to give aspiring entrepreneurs some insight and help to build their confidence. He says that you cannot teach people to have a good idea but you can develop inter-personal skills, sales and marketing and general management skills. You can make them better prepared and increase the odds for success. He says that it is crude to say that people are born entrepreneurs but thinks they are shaped by early experiences and role models.

Other theories regarding the psychological traits of an entrepreneur suggest that they are driven by specific psychological traits or even flaws. Some have a passion to be able to prove to themselves and to others that they can achieve although deep down they are suffering from low self-esteem. It has been found that some entrepreneurs are profoundly insecure and they strive to prove to themselves that they are better than they perceive themselves to be. However, they do tend to have an insight into other people’s strengths and weaknesses and have a great ability to lead and motivate their staff. They generally have a gut feel for what customers want.

Extensive research has been carried out on the psychology of entrepreneurs by Cary Cooper who is Bupa Professor of Organisational Psychology at Manchester University’s Institute of Science and Technology and he states that many entrepreneurs are ‘bounce-back’ people with a powerful desire to achieve. He says that ‘….they do not get distracted by either success or failure; they just plough on, never satisfied and constantly in fear of ‘being found out’. Often after one success they think ‘I fooled them’ and need to do it again to prove it was not just a freak event.’

Cooper also says that entrepreneurs see failure as confirming their inner fears but following failure they do not give up; they just get started again to try and prove that they can get it right a second time. Cooper also observes that being an entrepreneur has negative aspects to it. They tend to be unable to have and miss out on close relationships and the family life that others have. Their focus is only on the business to an obsessional degree, which can be likened to a drug. Only a few entrepreneurs actually set out to build big businesses and to attain wealth and, interestingly, money I is not a prime motivator.

Cooper has classified entrepreneurs into two categories; those who are functional and those who are real. He suggests that functional types are not genuine entrepreneurs. They tend to have one success and subsequently live off that success and need to show to people that they have been successful. They like to be seen with their money as they have little drive to establish another success. This varies significantly from the real entrepreneur. They keep coming up with new ideas to prove to themselves and to their peers that they are capable to doing so. Their main driver is a fear of failure and not for tangible wealth benefits. A real entrepreneur never stops.

It has been demonstrated that many entrepreneurs grow tired of their business after a while and sell them or recruit fresh managers to free them up from day to day involvement. Once the buzz has gone from the original risk, many are on the look for their next entrepreneurial ‘fix’.

By definition they are risk takers, modern merchant adventurers avoiding the stifling bureaucracy and politics of big companies.

Cooper notes that many entrepreneurs are actually incapable of running a business. They do not like the tedium of building a company. They employ a strong team of managers to do this

Cooper says entrepreneurs are driven by a need to control the world in a way that they were unable to control in their childhood’s. In a survey he discovered many were inspired by a caring parent or a mentor. More than 70% of entrepreneurs could identify some significant shaping event in their childhood. A factor common too many entrepreneurs Cooper has researched are the number who suffered bereavement at an early age.

Richard Branson of the Virgin Group says that he would not have been able to start Virgin if he had not done so whilst he was a teenager, with no mortgage, dependants or ties. He states that half of his success is getting the right people around him and encouraging them to be committed to what he is doing. He states the importance of having a passion for what you are doing.

Krueger and Thueson using the Myers-Briggs Type Personality Indicator would describe an entrepreneur as having an ENTP type of personality – extrovert, intuitive, thinker, and perceiver. An ENTP looks for one exciting challenge after another. They are highly inventive types whose enthusiasm leads to a variety of activities. Their inventiveness is attributable to their rich intuition which gives them a world of endless possibilities, which, when combined with their objective decision making facility and directed outwardly converts everything to ideas and schemes.

During an interview with a Consultant Clinical Psychologist, he described entrepreneurs as extroverts. Serebriakoff describes entrepreneurs as an outward looking, socially friendly and uninhibited type of person. Enjoys company, feels at ease in a large circle and tends to form a large number of relatively shallow relationships. They are confident, assertive and friendly, we can represent this extreme type as a boisterous, talkative and friendly commercial traveler who is very much at home in a bar or at the club.

The constant variable in being an entrepreneur is getting a break.

Any country that ignores its entrepreneurs quickly runs into trouble!

Aurel Voiculescu MBA http://www.aurelvoiculescu.com Corporate strategy research – Media Industry – The honey pot for entrepreneurs. http://www.aurelvoiculescu.com/mba/strategy.htm For a full list of references follow the links in the resource box.

Article Source: http://EzineArticles.com/?expert=Aurel_Voiculescu

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