The Art of Winning. The Startup Guide. Yury Yavorsky
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acts as a musician in the orchestra of his own creation. To avoid wasting energy that can be channeled into creativity, the “entrepreneur-composer” must only “compose” the business, and the management itself can be delegated into the hands of a hired manager.
Success in the competitive struggle is a result of constant growth, as well as an ability to suggest new interesting methods of promoting your products and services and constant renewal. If at the same time the entrepreneur remains a “composer”, they will always be one step ahead of their opponents.
However, there is a limit to any development, so we are inevitably facing the following question: how can you determine your maximum? Should you be satisfied with owing a cigarette stall, a hairdresser’s or a small bakery? Is there a possibility to run a small-sized business your whole life limiting your expenses at the very beginning? Originally no one thinks about how high they will rise, but even those who sell homespun stockings or stamp metal want their products and their mastery to be recognized by the maximum number of people.
Recognition is measured in demand. “I want to produce something worth a dollar, but I want every person on the planet to buy it” – this is the kind of thinking appropriate for a burgeoning entrepreneur.
– Business case —
…I have witnessed a number of my friends open their businesses and then, all of a sudden, change the direction of their ambitions making up new ways of development. One of such companies is now working with tent materials and it has become one of the strongest and most famous in its segment. When they started, the owners of this business (a married couple) were selling shoes: bought them wholesale and sold them by retail, accumulating experience, competence and the original capital. They visited Italian plants, increased the number of sales points, but at a certain moment they suddenly decided to sow tents for motor trucks.
Why would they shift into a totally different field? The answer is simple: they were unable to resist the growing competition within the shoe business. And their “composing” talent told them to change the market, channel their efforts into a field where the competition was not so harsh.
At the moment the tents sowing market was empty and growing. At first they decided to collaborate with “Kamtent”, a company from Tatarstan, but pretty soon an independent company “Nizhtent” was born. In the course of the first decade “Nizhtent” not only became a dominating company in its region, but also started developing in other corners of Russia. The equipment they bought and the arrangement of production sites with dozens of well-trained employees allowed them to make a step towards making pavilions from tent and other special materials, and later rent them out. All that was possible because they chose to leave the “narrowing” show market and move to another one which guaranteed stable growth of their business.
…I started by selling spare parts, but one day walking along the market, I noticed that the components for the dashboard (there were over a hundred of them) were sold separately and all the parts, including the tiniest ones, were in stock. Adding up their prices, I realized: on the same market a full dashboard was two or three times more expensive. I bought all the components, assembled a dashboard and sold it at the nearest consignment shop, thus doubling the capital that I had invested into the components.
In a few months several dashboard assemblers were working in my shops, and in the following years my baby business was already producing thousands of dashboards for the growing automobile market.
Just as one cannot write a score without notes, or become a composer without an ear for music, an entrepreneur can never develop and expand their business without education and discretion.
I have travelled a bunch and studied a lot, visiting various business-schools. One training program in Switzerland was based on a very useful slogan: “Pry!”
Pry and learn: the path that others have already walked is something to be studied as quickly as possible. It is very important to get to know the process better: to try and come to grips with everything that is connected with the supplies, to find out how dealers and distributors work in the field that you are interested in, what are the legal norms, the taxes and the limitations, what licenses are required and how your products or services should be licensed.
– Business case —
…A buddy of mine, having already become a successful entrepreneur in the field of wholesale and retail food trade, made the decision to start a second business. In no time at all he bought equipment for the production of toothpicks and opened a small workshop. He had learned the technological process somewhere and counted that having over fifty shops (and the experience of selling large batches in other friendly retail networks) he would not need much time to make his toothpick business a profitable one. Unfortunately, neither his business experience, nor the perfectly copied technological process helped him, because, as it turned out, he did not have the entire “score” for the process of producing toothpicks. It was very important to determine certain things. How much was the cost of a cubic meter of timber? What quality timber should be used? Was there a possibility for regular cooperation with a serious supplier and how should one deal with the packaging?
He opened that production line, because he owned a small forestry which could provide him with cheap timber of any size and quality. But, as it turned out, timber logging, production of toothpicks, packing and selling them are separate businesses that vary in profits, volumes and complexity. When the entrepreneur combined them, the result he got was a failing toothpick business which he subsequently had to sell along with the logging business. As for food retail, he is still very successful in this field.
…Once I decided to help someone build a business from scratch. I was sure that in order to do that it was enough to use certain knowledge that I had, chose the right product and a place to sell it, and everything would work. We chose the German leather brand “Picard”, bought a sufficient amount of a wide range of products directly from the plant and with the highest possible discounts, brought them to Russia, went through customs, and opened two sales points. Successful sales continued for only ten months, while the owner of the business was in charge of it herself. However, it so happened that she had to delegate management to a trusted top manager. After a while the business stopped bringing profits and was finally shut down.
However “correctly” a business is organized, it should be managed by its owner. No consultant will ever arrange a business so that it keeps bringing profits incessantly without any participation on the side of the entrepreneur, because as the “play” of the business is being written (a business process is never embalmed), only an “entrepreneur-composer” can make changes and be incessantly successful. But the business process itself will never be.
Are you an entrepreneur or a manager?
Business is a process that requires constant management and there is no better manager for your company than yourself. And yet, after a while the entrepreneur should better let go of the steering wheel and delegate the actual business administration to someone else. Negotiation trips, endless lines for various permissions in the offices of state officials, exhibitions, conferences, purchases – thousands and thousands of things to do. Naturally, a lot depends on the business format, but as your company is growing, you slowly realize that you have to hire a top manager, who will take on the responsibility for making quick decisions and for the result.
I hired my first manager when my staff consisted of only fourteen employees and my business was less than three years old. After that I have never been a senior manager in the business that I owned, even while being the CEO of my enterprise I always hired a COO. As far as I am concerned, nothing is more effective than a well-arranged work process,