1.5.6 Moving from Entrepreneur to Leader Flashcards
business issues- matching production to demand
more demand must be stimulated in order by targeting new markets or launch new variants of products to suit different tastes
-forecasting sales is important to do in less familiar markets
-overestimating forecasts results in too much cash tied up in stock
-whereas underestimating demand can cause business failure if customers are disappointed with no stock left
business issues- financing growth
as the business grows, it will acquire higher costs for things like wages, more materials, space, equipment etc
-more finance will need to be raised, however ensure not too much of the business is sold away or high interest costs
e.g. selling shares to raise finance can cause a loss of control over the business.
business issues- overtrading
overtrading can result in a short term boom in sales, therefore more capacity is invested into, leading to high outflows of cash resulting in a cash flow crisis.
-control over the business is important and growth needs to be appropriately financed
business issues- change in structure
as an entrepreneur’s role changes towards a leader, they may face personal issues
-more layers may be needed to facilitate and control more staff
-to avoid the span of control becoming too wide, managers or supervisors may now be needed/ added, changing the business dynamic
why may entrepreneurs face personal issues?
as the business grows, the entrepreneur will need to understand how to delegate responsibility and sub-manage the business
personal issues- delegating
letting go of authority can be difficult for a successful entrepreneur
-the subordinate must feel trusted to make decisions without any boss interference
personal issues- maintaining effective communication
the boss needs to understand customer’s opinions (bottom-up)
-supervisors may feel hesitant to tell them about problems
the boss needs to keep control and exert a strong influence over the business (top-down)
-in larger organisations, orders and instructions can get distorted as several layers are passed
personal issues- keeping an eye on big issues
a leader needs to understand exactly where the business should be heading and inspire others with a vision
-a growing business will experience small changes in direction
-a new leader needs to also ensure the management of resources is not neglected and remains efficient
how to make the transition between an entrepreneur to a leader?
-learning to delegate
-trusting others
-listening to others
-having an open mind
-be less reactive (setting trends and seeing a gap in the market)|
-develop emotional intelligence
developing emotional intelligence important for this transition…
self-awareness is your ability to accurately perceive your emotions and stay aware of them as they happen
self-management is your ability to use awareness of your emotions to stay flexible and positively direct your behaviour
social awareness- picking up on emotions in others and understand them
relationship management- manage interactions successfully
entrepreneur
a person who has an idea for a business, develops the idea and organises the necessary resources to see the idea through
-they create and build business enterprises
leader
a person that motivates, influences and inspires others to high job performance and personal fulfilment
