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How to effectively manage scarce resources (Scarcity could be a great teacher to entrepreneurs)

By News Express on 18/04/2016

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People think that being an entrepreneur is kind of glamorous, and maybe for the top 1% it is, but for most of us, the reverse is the case. Bootstrapping a startup can make you scrappy and creative.

When a certain startup left screenwriting to start Catch My Party (an online business) in 2009, she used her own money to fund the online site that provides inspiration for party themes and encourages others to share their celebration experiences and tips.

Bootstrapping her startup taught her to be scrappy and creative, while forcing her to develop a strategy to make the best use of limited resources.

The biggest challenge is always allocating resources because they are never enough. There’s never enough money, time, or people.

This scarcity demands that an entrepreneur continually assesses where his or her company is heading. With each step comes a re-evaluation of resource allocation.

Entrepreneurs are recommended to capitalise on the specific areas where their company has an abundance of resources (where your business has comparative advantage). For the Catch My Party startup, it’s the interactive community of users who post party photographs, recipes, and tips on the site. “We might not have money, but we’ve got awesome evangelists who will support our company and promote it,” said the promoter.

Evaluating your success is impossible unless you have a way of measuring it, and the data is useless unless it tells you what you need to know. This startup chooses specific markers to measure success, including company growth, earnings, and the growth and engagement of those who use their products.

You can do the same; then, after the numbers come in, the key is to hold yourself accountable to these measuring sticks and to make adjustments as needed in reaction to them.

Be Nimble: Identifying when the company is heading down the wrong path is difficult.

You have to be willing to recognise when something isn’t working and just pull it up and start over. You have to rely on both gut instincts and “these little things called analytics.”

However, beware of letting your gut feelings override the objective data. You have to recognise when it’s wrong and move on. Several startups often don’t a couple of times, because they’re like, ‘this just should make sense’. – You have to be willing to recognise when something isn’t working and just pull it up and start over.

Appear Bigger Than You Are: Scarcity is a great teacher that has forced several startups to be scrappy and creative. You figure out that you need less than you think you do, that means testing to see if something is resonating with the customers, and then moving on if it is not. And it means getting by on few resources while giving an outward appearance of abundance. Try not to look like you’re scrappy; always come up with the image of abundance. Try to look like you’re bigger than you exactly are; it helps to keep a positive and amiable corporate image.

Don’t Ignore You: Having some sleepless nights and upsetting days comes with the territory of being an entrepreneur, but prepare to flame out if you don’t find a way to manage the ups and downs of starting a business.

That means learning to handle the bumps along the way without going up and down with them. By reducing the highs and the lows, it is easier to have the stamina for the long haul.

After a while, you learn that something that looks “awful” today won’t look so bad in the morning. You also learn that things which look really awesome today probably won’t be as awesome tomorrow.

What’s the Next Big Thing?

Being an effective entrepreneur automatically enrols you into the busy schedule world and so, I would say that the next big thing for any entrepreneur that would make it big, would be anything that saves time: thereby allowing you ample time and opportunity to satisfy your demanding itinerary – because you need all the time you can get to handle your tight and busy schedule.

We will even have a more exciting discussion next week, remain blessed.

•Lawrence Nwaodu is a small business expert and enterprise consultant, trained in the United Kingdom and the Netherlands, with an MBA in Entrepreneurship from The Management School, University of Liverpool, United Kingdom, and MSc in Finance and Financial Management Services from Rotterdam School of Management, Erasmus University Netherlands. Mr. Nwaodu is the Lead Consultant at IDEAS Exchange Consulting, Lagos. He can be reached via nwaodu.lawrence@hotmail.co.uk (07066375847).

Source News Express

Posted 18/04/2016 10:12:42 AM

 

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