Joe: You described a variety of disciplines, characteristics that you must have. If you had to single one of them out, is there one that’s more important or are all of them equally important?
Related Podcast and Transcription: Are You a Qualified Entrepreneur?
Randy Nelson: I’ll say financial, and I’ll say it for a couple of reasons. A lot of entrepreneurs love to say “Not my area. I outsource that. I give that to somebody else.” But, it’s one of the main reasons why companies fail and I’ll give you one example. Cash, we all know we need cash, but sixty percent of businesses up to ninety percent of businesses fail because they don’t have cash. And, it’s not because we’re unsuccessful. A lot of businesses just grow themselves out of business. So, what I ask on the Qual Card as an example is “I don’t want you just to know whether you have the cash today. I want you to know whether you have cash six months from now and I want you to understand the trend of cash because if you’re making growth decisions inside your business you should understand whether six months from today those growth decisions are going to keep you in business or put you out.
Joe: I think that’s a good suggestion. You’ll see an entrepreneurs start out, they have a great idea, they’ll get some VC funding maybe or some backers or something but they really don’t ever find a way to generate cash with their idea.
Randy: Yeah. I’ll give you a specific example. January 1, 2004, my business heads had $500,000 in the bank. We were growing. We looked good as a company. My six-month forecast had us at -650,000. Now, we had a line of 700,000 but the problem was we were; I could pretty well forecast we’re done. And, not only that but the covenants that the bank had put on me, those I recommend being forecasted because these are, again, I’m not trying to instill, I’m not trying to make anybody a military discipline type of entrepreneur . What I’m trying to do is I’m trying to get them to stay in business and to maximize their potential.
Randy Nelson, author of The Second Decision, is a speaker, a coach, a Qualified Entrepreneur, and a former nuclear submarine officer in the U.S. Navy. Randy now runs Gold Dolphins LLC, a coaching and mentoring firm to help entrepreneurial leaders and CEOs become Qualified Entrepreneurs and achieve their maximum potential.
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