Time and Money Management: Speed Matters to Both!
When overseeing the processes that lead to a successful startup, there are two items that will play the most pivotal role and will have the greatest impact on your results. Those key elements are your effective use of time and money.
Speak with any experienced entrepreneur and they will tell you the two commodities they are most in need of, and the two that they invariably have the least of are time and money. When dealing with the time element, it is crucial that we realize that speed matters. Getting things done now, as quickly and as efficiently as possible, must always be one of our guiding principles.
When dealing with finances, cash flow is king. Managing the processes to ensure that our runway of capital is sufficient to reach the next tranche and/or milestones is critical. Failure here will ultimately lead to either the death of the company, or its’ loss to vulture capitalists.
Yes, I meant to say vulture and not venture. When you miss milestones and run out of cash before the next tranche is due, venture capitalists often quickly turn into vulture capitalists. Like vultures circling a prey gasping for its last few breaths, they tend to swoop in and offer terms that you have no alternative but to accept.
When this happens, ownership of your dream and your company are often lost to the people with the capital. A poignant point to remember is the golden rule here is that he who has the gold makes the rules.
The good news is that there are a few common mistakes that early or first-time entrepreneurs tend make in these two areas, which can be corrected or avoided altogether with a little foresight and planning. Let’s take a closer look at some of them.
Time. One of the most common and most serious impediments to the effective use of time is indecision. In an attempt to get things perfect, many entrepreneurs delay taking action because they want to wait until they have everything just right. They often convince themselves that just one more change or alteration is needed and then they’ll be ready. Often, even without realizing it, this is simply a stalling tactic because of their uneasiness about moving forward.
One simple adage provides us with a basic tenet that we can use to avoid this pitfall.
“Leaders don’t always make the right decision, but they always decide.”
As a general rule your guiding principle must always be to assess the situation, review the facts, make a decision NOW and act. Experience teaches us that acting now, sooner rather than later, will drive the best results and offer us the greatest likelihood of success.
Yes, there will be times when we make the wrong decision, and when that happens and we realize this to be the case, simply redirect, correct the mistake and move on. Over time, your organization will fare much better by acting quickly and with conviction than it will by over analyzing and delay. Another adage that applies here is “He who hesitates is lost.” Believe it.
Capital represents the other facet of our lifeline that will make or break us. Use it wisely, ensure your runway to the next tranche is reasonable, achievable AND that there is some room to account for missteps. Things tend to take longer and cost more than initially expected. This is especially true in the logistics nightmare created by the COVID-19 pandemic. Be sure that you have accounted for some level of the unknown as best you can.
What many people don’t realize is these two facets, effective and timely decision making, and the efficient use of capital, often support each other. Many entrepreneurs tend not make decisions because they are worried about cash flow. While we must always have our pulse on this issue, making the right decision at the right time and following through to implement the decision, will often have a positive impact on cash flow. We must remember that we are burning cash every day, and time is money. The longer it takes to make and implement a decision, the greater the drain on our resources.
Acting now with conviction, confidence and clarity will win the day.
Here at Lead Read Today, we endeavor to take an objective (rational, scientific) approach to analyzing leaders and leadership. All opinion pieces will be reviewed for appropriateness, and the opinions shared are solely of the author and not representative of The Ohio State University or any of its affiliates.