Multiply Your Profit Working 2 Hrs A Day

(Reprinted from my blog https://saintwords.com/blog/f/multiply-your-profit-working-2-hrs-a-day)

How many of you SME promoters think that the sentence in the subject is nothing more than a marketing gimmick? I see most of you raising hands. How many of you think that you really need to work very hard to grow your business? You are raising hands again.

The greatest fallacy in the entrepreneurs' world today is the belief that the entrepreneur needs to work hard to grow big. A typical businessman works for around 11 hours a day when he earns Rs 12 lakhs a year and he continues working 11 hours a day even if he starts earning Rs 12 crore a year. Logically this can't happen. This is the first evidence of the fallacy. The growth from Rs 12 lakh to Rs 12 crore a year doesn't come from his hard work but something else. 

The All In One

A typical SME promoter keeps his businesses dependent on himself to the maximum extent possible. As a result throughout the day he remains extremely busy with mundane operational work and stressed. Thus there is a huge gap between what he needs to do as the promoter and what he actually does all the day. And at the end of the hectic day the promoter has the feeling that nothing has been done.

The Illusion

The promoter delegates only out of extreme compulsion. Thus his delegation is extremely slow and so is his growth. Still he remains under the illusion that the little growth - whatsoever - is due to his hard work only.

The reality is, growth happens because of proper delegation, not because of hard work of the promoter. The hard work of the promoter in fact is the main hindrance of growth.

The Head of Sales

As the business grows, after compulsive delegations, the promoter keeps sales and / or production department under himself. Thus the promoter acts as a head of sales or head of production. Apart from that position he also works in all the positions that are lying vacant across the organization. Thus, actually, no body is working as CEO or MD in his business. And without a CEO a business cannot grow at proper pace.

 No CEO

A head of sales or head of production position has a limit to its capability. If the head of the organization is head of sales the business grows only up to that limit. To make the business grow beyond that limit the business needs a CEO or MD in true sense, who does CEO/MD's job day in and day out.

The CEO's Job

A CEO's job is what he needs to do to achieve his vision. His job is to ascertain that the business creates value. Enterprise value is a function of profit and growth. If the promoter doesn't know what is his last month profit then he is not yet the CEO. He also doesn't have any record of monthly operating cashflow - which he suffers from regularly. His accountant, if any, is busy tax saving then providing regular operational information.

The Smartest Leader

The SME promoter is the smartest guy in the team. So his limitation becomes the limitation of his business. His organizational goal is limited by the limit of his own capability. He cannot dare to dream big. On the other hand in a growth oriented business team members are much more intelligent than the promoter. The organisational goal is dependent on the capability of the team and not the leader. And the capability of the team can be enhanced without limit and so is the organisational goal.

(Please read our previous article titled, "The Ultimate Secret of Dhirubhai." Link: https://saintwords.com/blog/f/the-ultimate-secret-of-dhirubhai )

- Utpal Choudhury

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