Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

5 Steps to Navigate through Difficult Times

There is little difference in people, but that little difference makes a big difference. The little difference is attitude. The big difference is whether it is positive or negative. W. Clement Stone

The global economy these days is not in the best of shapes. There are endless stories circulating about how the world as we know it is about to come to an end. I was at a workshop last week and someone was talking about the alarming rate at which Chinese factories were closing down. An older gentlemen who had recently set up his first business turned to me and said “Doesn’t all of this affect you as an entrepreneur?”. I explained to him how the businesses I was involved would not be directly affected and in the end it was up to me to allow such news to affect me or not. Later on I decided to write a series about the question to articulate my thoughts on the matter. Listed below are five steps that every business owner should take to re-evaluate their business during these difficult times.

1. Reality Check: A reality check comprises of taking into account the performance of each one of your businesses major components. These include, sales & marketing, operations, human resources and finances. Each division needs be re-evaluated and adjustments need to be made to cater for the changed external environment. Adjustments can include adjusting your pricing models, laying off staff who are not performing, cutting back on unnecessary perks for executives etc. The primary objective of this exercise is to break each division down and build it back up to cater to the changes. To read the adjustments that need to be made to each division in detail please click here.

2. Communication Channels: Without clear channels of communication a business is in a constant state of flux. During turbulent times communication between management, employees and investors needs to be done at regular intervals. This is vital to diffuse the anxiety, frustration and stress that everyone may be feeling due to the current state of affairs. Mechanisms need to be developed to allow management to talk regularly to their star performers, group sessions need to carried out to get everyone on the same page and most importantly, senior management needs to continuously update the team. To learn more on improving your communication channels please click here.

3. Getting an Outsider’s Perspective: When things are difficult and we are busy putting off all the small fires in the business we tend to forget the bigger picture. An outsider in the form of a mentor or a business coach can assist in making sense of things when everything is in a mess. By leveraging on their experience and rolodex, a business has the capability to dodge pitfalls and possibly make some large sales. Also, having someone from the outside affirm the direction that has been selected and the tactics  being used can greatly enhance the confidence level of a team. To learn more about the benefits of an outsider’s opinion please click here.

4. Focus: As a small business we have to realize from the very beginning that we cannot provide every service under the sun. We need to find a niche where we can develop a competitive advantage that will differentiate us from the rest. During difficult times it is paramount that we focus our resources on our core product/services to achieve optimal results. During these times we cannot afford to experiment and lose sight of our regular clients. All efforts need to be geared to ensure that we provide as much value as possible to our existing clientele. To read more about the importance of focus please click here.

5. Positive Outlook: Our attitude towards the changes taking place externally or internally will decide how we navigate our way through these difficult times. We have a choice of either allowing the negativity to get to us and plague the workplace, or to put a positive spin on things. It is critical that the leader’s attitude be one of positivity and optimism. His/Her attitude is very important to the business as a whole and is used as a gauge by everyone else. To read more about the importance of having a positive outlook please click here.

The primary objective of the steps outlined above is to get everyone to think about their business and how the changes in the external or internal environment are going to affect them. I have relied heavily on these steps to help me navigate through difficult times. On the surface they appear to be relatively straightforward, however, I find that when we are down, our thought processes do not function optimally. Negativity seems to penetrate our thoughts and obvious answers elude us. I hope these steps will help you get started on your journey through the tough times ahead. I look forward to your comments and feedback.

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Communicating Effectively

“The difference between a smart man and a wise man is that a smart man knows what to say, a wise man knows whether or not to say it.” Frank M. Garafola

Will the business survive this downturn? Will I be able to hang on to my job?  Common questions on the mind of all business owners and employees alike in these difficult times. It is only natural to have an heightened level of anxiety during stressful periods. However, if we were to hold all of that stress within ourselves and not have an outlet to release it, things could become ugly very fast. People begin to talk, rumors about layoffs begin to circulate, productivity levels fall, anxiety increases and just about any call from senior management begins to imply that you are about to be fired. All of this can be dealt with reasonably through effective communication. Senior management needs to provide all stakeholders with a clear and candid message about the health of the business and where it is headed. If a culture of candor has not been created in the organization this can lead to uncomfortable and awkward situations. Such an environment needs to be created.

Listed below are some ways to communicate effectively during such periods:

1. One on one sessions: Ensure that you have individual sessions with key players on the team, assess their current needs and answer any concerns they may have. I have found this to be a most effective strategy as it gives the person concerned a platform and ability to speak his mind, at the same time enjoy privacy about his concerns.

2. Group information sessions: Individuals who are responsible for broader functions like operations, marketing, finance and human resources should give talks on how the current situation is likely to impact the business and strategies that can be used to get through this period. Once again this provides the ability for individuals to get an idea of the company from different angles and provides valuable feedback.

3. Layoffs: Firing people is never easy and is something I really do not like doing at all (I don’t think anyone really enjoys it). However, when it needs to be done it should be done swiftly and as soon as possible. Delaying the inevitable is not a smart strategy and only compounds the problem.

4. Updates from senior management: I usually send companies I am involved with updates after every quarter. When times get tough I increase the updates to a monthly or even bi-weekly schedule depending on the situation. This keeps everyone focused on what is important and on the same page.

Depending on the structure of your business I recommend doing whatever is necessary to ensure that everyone is able to bring their concerns forward. Whether it is through group meetings, online forums or one on one sessions. Mechanisms need to be in place so that communication is made feasible as easily as possible. Failure to do so will further deteriorate the business and one could end up losing a lot of key players.

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Focus

One reason so few of us achieve what we truly want is that we never direct our focus; we never concentrate our power. Most people dabble their way through life, never deciding to master anything in particular. Anthony Robbins

During boom periods we tend to spread ourselves thinly over too many projects. This places a great strain on the business and dilutes the focus away from core business units. When times get tough I like to sit down with the team and map out priorities. What has been working? What has not been working? What do we want to achieve? When do we want to achieve it by? and, How will we achieve it? These are some questions I use to start up discussions and get everyone involved in the future direction of the business. As a small business we have to realize from the very get go that we cannot be everything to everyone. We have to pick our spots wisely and make sure we can cater to that one segment really well.

In the past I have made the mistake of drifting away from core business units one to many a time. It may be due to the fact that settling into a routine is something I do not like particularly. I need something different or exciting to be happening. Well after a couple of years as an entrepreneur I can attest to the fact if you keep changing the color of your business whenever you get ‘bored’ very little progress is going to be made. When you look at small businesses which succeed there is always a laser like focus on doing something much better than anyone else doing it. Also there is constant improvement on the product/service. One service which comes to mind is 37signals. They have a bunch of productivity apps which I highly recommend such as Highrise and Basecamp. 37signals has developed for itself a highly profitable niche. It keeps its products as simple as possible and has managed to amass a legion of fans.

Whether a business is experiencing a huge upturn or is stuck in a downward spiral, it is essential they maintain focus on what they set out to do. Select your niche carefully, build a product or deliver a service that brings value to your customers and do not lose sight of your end goals. The future of your business could depend on it.

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5 Reasons why Teams Fail

“You will find men who want to be carried on the shoulders of others, who think that the world owes them a living. They don’t seem to see that we must all lift together and pull together.” Henry Ford

I started this series with a question posed by a reader  asking  why some teams succeed and others don’t. When I began structuring my thoughts and getting advice from more experienced entrepreneurs, the same issues kept coming up in one form or other. The core message behind all of them was the same, to get the team to work right, certain factors need to be in place along with hardwork and persistence. We have all been in teams where team cohesion is problematic, it is always an extremely frustrating experience. Hence first off, selection of team members/partners is an extremely important aspect, one that needs to be given a great deal of attention. Call it co-incidence, my post on 8 characteristics of an ideal business partner is the most visited post on this blog. However, even after you have reviewed your prospect partners using the 8 step process, there is still a likelihood of things not working out. Listed below are 5 things to look out for to measure the health of your team:

1. Mismanagement of Competing Interests: When a team comprises of many ‘star’ performers they are bound to have multiple offers on the table. When these offers begin to interfere with their performance and their  commitment to the project at hand, problems begin to arise. If these are left unmanaged they will slowly set seeds of mistrust and suspicion in other team members, this has a destabilizing impact on the entire team. It is important that these competing interests are brought to the table and are not used to leverage a team member’s position or interfere with their commitment. To read more about managing competing interests please click here.

2. Lack of Candor: The ability to communicate effectively is one of the core reasons why some teams succeed and others do not. When a team is unable to communicate their thoughts, suggestions or feedback openly, tensions arise. Being candid is every team members responsibility to themselves and to the rest of the team. This is not always the easiest path to take and many a time one will need to step out of their comfort zone to say it as it is. However when all is said and done, it is the things which are left unsaid that destroy a team from within. Set up systems where everyone is given the opportunity to speak freely and easily. To learn more about the importance of candor please click here.

3. Lack of Trust: In any relationship trust is a must, without it there is no team. In my opinion there are degrees of trust which need to be developed within a team. Expecting your team members to have 100% trust in you and your abilities from the get go is wishful thinking. Trust needs to be earned. The ability to trust someone depends on their shared core values, self confidence and risk tolerance. Mismatches in these components will result in a slow build up of trust. Low trust teams are very fragile and the slightest of hiccups can have severe ramifications. To learn more on how to build trust please click here.

4. Lack of Accountability: When team members talk more than they actually do, problems are bound to arise. Without clear objectives on what each team member is responsible for a culture for execution cannot be formed. Without such a culture certain team members may ride on the coat tails of others just to get by. Every team member must be held accountable for what he/she has been given responsibility. Inability to meet commitments, needs to be reviewed and appropriate action taken. To learn more on the importance of accountability and how to create it please click here.

5. Consistent Poor Results: If a team is consistently unable to reach targets and goals, the team and entire business model needs to be looked into. Many teams linger on even when results are clearly not being produced. This puts an enormous strain on the team and eventually leads to unpleasant defections and confrontations. This issue must be dealt with as soon as possible and strategies and tactics revised. If the team is unable to produce the results it needs, it is best to figure out how and where the team should  go from there. To learn more about how to deal with consistent poor results please click here.

The points listed above are I believe leading factors why some teams fail. One of the factors that I have not included in this series is a lack of good leadership. This is an issue that I think needs to be tackled in a separate series. Also, unlike the problems listed above this issue does not have any easy answer which says follow steps 1, 2 and 3 to help overcome the issue. Good leadership is a rare commodity. It all goes back to team selection and who is chosen to be the leader. If there is a problem at the initial selection stage then the team has a lot more to be worried about. The issues highlighted in this post are in the context where even though the team and team leader were correctly selected, the team still fails. I hope to get your comments and feedback on this series.

Related Posts:

8 Characteristics of Ideal Business Partners

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Consistent Poor Results

“Waiting is a trap. There will always be reasons to wait. The truth is, there are only two things in life, reasons and results, and reasons simply don’t count.” Dr. Robert Anthony

During the course of the week I have spoken about some key factors which lead to high performance teams failing. As a culmination of all the factors mentioned in my prior posts, the inability to reach targeted bottom line results, is a leading cause why such teams fail. I was advising a young startup team a few years ago, it was full of stars. They had a fantastic business plan and worked really well together. However the business was not gaining the traction they had projected. This was causing much tension within the team. This is a time when internal conflicts begin to surface. Initially no one really talked about it, rather they hoped that things would change. Unfortunately the market they were targeting was not ready for the product they had and soon the defections started to take place. This is a story one has seen many a time in small startups, as well as large companies.

It is only natural that when things are not going well that team members begin to explore other alternatives open to them. They are justifiably looking out for themselves and being realistic about the situation. However, if the business had created a culture of accountability and candor, I believe things may have gone very differently. Firstly, when things were obviously not working, how to tweak the business model would have been brought up and discussed candidly. Secondly, with greater transparency in the team, those individuals who were not contributing or whose skills were not required, could have started exploring other opportunities without suddenly leaving the team. Lastly, if the team did work well together there could have been other opportunities which they could have pursued.

Consistent poor results are definitely a major reason why teams and businesses fail. The key word is ‘consistent’. Losses are bound to occur at some point or other in a business. However, it is when they continue to appear without any direct action being taken, that it gets serious. As a team leader one needs to continuously keep a keen eye on key metrics and regularly update members about results and problems being faced. Transparency helps leave doors open for candid discussions and gives  team members the opportunity to make graceful exits. Warren Buffet has some wise words on this matter “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

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5 Key Non-Financial Metrics

“Companies that establish clear lines of sight to the metrics that matter and then make sure that employee behavior is aligned with those metrics can create enormous value growth.” Tony Siesfeld and John-Paul Pape

Over the past two weeks I have been discussing both financial and non financial metrics. They both have their place in helping manage businesses better. I find non-financial metrics fascinating and am inclined to look at them for guidance in comparison to financial metrics. Unlike financial metrics which are purely numbers performing in different segments, non-financial metrics provide much deeper insights into the inner workings of the business. They help understand why certain financial metrics turn out the way they are and what changes can be brought about to improve them. Some however find safety in numbers and are less inclined to rely on these relatively intangible measures. As entrepreneurs we have to look after the business on multiple fronts. We must have the ability to quickly assess several key components on a regular basis. Outlined below are five relatively generic key non-financial metrics. They can be applied to all sorts of business models to help you gauge the level of progress being made from a dashboard view.

1. Customer Satisfaction: Acquiring a customer is only the first step, providing value and satisfying the customer is where the actual work begins. It is a well known fact that acquiring a new customer is between 5-10 times more expensive than retaining your current customer base. To measure customer satisfaction comprehensively we need to take into account all major touch points where the customer will be interacting with our business. Subsequently we will need to choose several sub metrics such as perceived quality & value, trust and loyalty to accurately gauge their satisfaction levels. These can be measured through a variety of tools such as surveys, focus groups and observations. To learn more please click here.

2. Employee Loyalty: Employee loyalty has been directly linked to the customer’s loyalty and corporate profitability. Whether you are a new start up or an established one, this measure needs to be continuously monitored. From the very beginning employees must be told what to expect when they join the firm. They need to be made part of the inner circle to avoid alienating them. Growth and development opportunities must be presented to keep their motivation levels high and lastly they need to be compensated fairly for the work they are doing. Each one of these sub measures needs to be monitored along with several other key indicators such as burnout thresholds. To learn more please click here.

3. Innovative Index: Innovation is measured very differently in various organizations. I believe innovation relates to the ability of an organization to continuously improve on its existing product/service ranges as well as to develop complementary assets around them which will enhance their core products. This will help create multiple lines of business and will keep the business afloat when a core product faces strong competition or a recessionary pressures. To learn more about this metric please click here.

4. Market Share: There is substantial evidence which states that market share is directly related to ROI. With an increase in market share a business can expect to benefit from economies of scale that ultimately lead to better operating margins. A business therefore becomes stronger by gaining market influencing powers and equipping itself with quality management teams. To measure a business’ market, one needs to first understand the industry, competitors, customers and other market factors which have a direct impact on it. Through the understanding of these measures we can calculate how much the total market is worth and then determine our share. Accordingly we can then measure how we grow market share over a period of time. To learn more about this metric please click here.

5. Execution of Corporate Strategy: Business all comes down to execution. Without this critical component we can make all the plans we want and prepare for every possible scenario and achieve very little. As business owners we set ourselves targets and construct strategies to reach them. The next step requires one to implement strategies through a set of tactics. This is the step that separates the talkers from the doers. Don’t get me wrong, careful planning, thoughtful preparation and taking calculated risks is very important. However it should not restrict someone from taking action. To learn more about this metric please click here.

Listed above are a set of non-financial metrics which I believe can be applied to most business models. Apart from these metrics, a business needs to be careful of other measures which are critical to their particular business model. In the end these metrics should not be the end all and be all of the organization. Their purpose is to primarily provide management with the ability to look at several key segments of the business and get an idea about their performance. I believe the correct use of these metrics helps us not only to become better leaders but also impacts positively and dramatically on the business. I would really like to know what non-financial metrics you are using and which industry you are in. Feedback and comments on the metrics provided above will be greatly appreciated.

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Non-Financial Metric #5: Execution of Corporate Strategy

“There is value in careful planning and thoughtful preparation. However, until there is execution, no plan is flawed; no preparation inadequate. Execution spotlights all.” Chip R. Bell

Business all comes down to execution. Without this critical component we could make all the plans we want and prepare for every possible scenario, but achieve very little. As business owners we set ourselves targets and construct strategies to reach them. The next step requires one to implement these strategies through a set of tactics. This is the step that separates the talkers from the doers. Don’t get me wrong, careful planning, thoughtful preparation and taking calculated risks is very important. However it should not restrict someone from taking action. When it comes to measuring how effective an ability to execute has been, we have to look closely at the following:

1. Goals: As mentioned many times on this blog, to be able to reach our goals they need to be specific, measurable, attainable, realistic and time specific (SMART). Many times when I have been unable to reach my target goals it has been due to the fact that I left one of these important components out. When this happens there is a complete break down in the execution process as the strategies we select will be flawed and thus will result in the use of inappropriate tactics. Therefore be very clear with the goals and targets which one creates.

2. Strategies: Good strategies comprise of objectives, scope and competitive advantages. Through goals we can establish what the business wants to achieve. For example say, our business wants to increase traffic on our website by 10% over the next quarter. The strategy for such an objective could be something like “increase traffic on our website by 10% over the next quarter by tapping into the the 18-25 demographic in Europe through leveraged relationships with our European affiliates.” If we were to leave the statement at tapping into Europe we would still be missing the “how?”.

3. Tactics: In the last statement we mentioned we would leverage our relationships with our European affiliates. Tactics need to translate this into reality by chalking out ways on how this can be achieved. For example, we could participate in some seminars next quarter in Europe, we could equip our affiliates with additional marketing material or we could even provide greater financial incentive to reach targets. What is important is that our tactics are aligned with our strategies which are aligned with our goals.

At the end if we were not able to reach goals then we need to go back and re-evaluate where we went wrong. This review process needs to take place on a weekly, monthly, quarterly and yearly basis. As a startup it is imperative that we continually evaluate how effectively we are executing and where we are facing the biggest impediments. When such a culture of accountability and execution is developed it turns into a huge competitive advantage.

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Non-Financial Metric #4: Market Share

“Failure to gain market share even with superior costs is failure to compete. This failure is also a failure to achieve even lower costs.” Bruce D. Henderson

There is substantial evidence which states that market share is directly related to ROI. With an increase in market share, a business can expect to benefit from economies of scale that ultimately lead to better operating margins. Therefore a business becomes stronger by gaining market influencing powers and equipping itself with quality management teams. Keeping track of market share is an important indicator in evaluating how business stacks up against the competition and how it progresses over time. In the early stages of starting out, a venture market research is a critical component of developing a business plan. This is usually a challenging exercise, because information regarding industries and markets is often not readily available. Listed below are some steps I use to evaluate the market and set market share targets accordingly:

1. The Industry: One needs complete information regarding growth rates of a particular industry. What are it’s historic trends? What were the revenue figures for the segment? Have any major technological innovations taken place in it recently? Is the industry very segmented? These are some preliminary questions of interest and importance when looking at an opportunity in a particular industry.

2. Competitors: This is an important segment, one in which you need to document as many direct and indirect competitors in the market place as possible. Look at their teams, products/services, pricing and any other marketing collateral which you can find. Remain constantly vigilant about your competitors, this is a must for any company regardless of size. Create document files which can be referenced easily, this will come in handy during later sections, when you are positioning and promoting your product as well.

3. Customers: Evaluate the target demographic that is going to be targeted. Is the segment growing? What are the current options that they are using in place of the product/service you will provide? How are they currently purchasing the product/service?

4. Market Factors: Are there any external factors which have a deep impact on your target market? These can be government policies, market consolidation and volatile raw material costs. The presence of these factors can have a substantial impact on your target market and must be taken into account.

Ultimately approximate size of market will be gauged. The most common metrics used for broad approximations are, sales by revenue & sales by volumes. Once we know an approximate size of the market we can set targets for ourselves. This metric can then be tracked periodically to ensure that we stay on course and alert to any fundamental market changes.

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Non-Financial Metric #3: Innovativeness Index

“Innovation is ultimately not an act of intellect but of will.” Joseph Schumpeter

How do we measure innovation? Unfortunately there is no one framework which is used universally to measure innovation. Innovation according to Wikipedia means “a new way of doing something. It may refer to incremental, radical, and revolutionary changes in thinking, products, processes, or organizations. A distinction is typically made between Invention, an idea made manifest, and innovation, ideas applied successfully.” The stress is on the actual application of the idea. Without taking action we could talk about theoretical models and concept all we want, but without tangible output, innovation does not take place.

I believe Google is an innovative enterprise. Successful products such as gmail, chrome and orkut were all created in the 15% innovation time that all employees are given. They are all motivated to put their ideas into action, and then see the response it receives. Much of the time these initial attempts will be inferior to products which may be in the market. In this case Hotmail, FireFox and Friendster were all established players in the industries they were targeting. Nonetheless, they put their products out there and continued to improve on them. There were several products which did not achieve any critical mass and they were discontinued. The important thing is that a shot was taken. As an entrepreneur we have to take calculated risks and continue pushing our products/services out of their comfort zone.

Some useful sub metrics I use to measure an organization’s innovative index are:

1. Incremental Changes: How a business continues to improve its product/service is an important component of innovation. Once again, if you take Gmail for example, they continue to add new features which may have been requested by users or deemed necessary to enhance the user experience. Recently they integrated the ability to use video within the service, canned messages to enable faster replies and new themes to make the interface look unique. Set benchmarks for your products/services and then track what those changes do in terms of traffic, sales and profitability.

2. New Products/Services: I am a big fan of creating complementary assets around core business units which are performing well. Not only does this provide further advantages to continue using the core product but it opens up the ability to leverage on the successful product/service to launch others. Also one can measure how many new products/enhancements are in the pipeline and when they are expected to be released.

Depending on the type of organization that you are part of, one will need to come up with relevant sub metrics to calculate the innovative index. While I was searching for models I came across a great article written by the author of Freakonomics Stephen J Dubner called “How can we measure innovation?“. The article includes answers from many well known authors and industry leaders. I strongly recommend reading the entire article. It provides a point of view from individuals with very different backgrounds and can help you find the right metrics for your business model.

Related Posts:

Assessing innovation metrics: McKinsey Global Survey Results

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Non-Financial Metric #2: Employee Loyalty

“I believe the real difference between success and failure in a corporation is how well the organization brings out the great energies and talents of its people.” Thomas Watson Jr.

Volumes of books and years of study materials have been developed to enable managers to attract better talent and retain them. From an entrepreneur’s point of view there are several structural differences compared to those faced in larger organizations. First off, much of the time a new start up will have an untested product/service with a small team which may or may not have the relevant experience needed. What they do have is an intense passion for what they want to do, that is probably the only way they can attract quality talent. Even though they are convinced and on board, things do not become easier. Salaries are usually minimal, stress levels are very high and burnout thresholds are reached much earlier. Losing a critical member of a team for a start up can signal the end of the road. Therefore this metric has to be given due importance to ensure that goals are met. Listed below are a couple of steps that have helped me keep the employee loyalty index high at businesses I have been part of :

1. Full Disclosure of Position: When recruiting someone for your start up team, one needs to ensure that you communicate clearly what role they will have to play. We all know that at smaller start ups many different hats need to be worn during the course of the day. The individual needs to be comfortable with this and willing to put in the long hours which will be required. Salaries, equity stakes, confidentiality agreements and all other formalities should be openly discussed and negotiated before hand. If these factors are left to be discussed at a later date, there is bound to be trouble and the situation becomes sticky.

2. Open Communication & Fairness: Take for example,  two founders who want to add a new marketing individual to the team. Whether this individual comes in with a substantial equity stake or on a salary it is important for the founding team to keep communication channels as open as possible. I have noticed that when groups are formed or information withheld, it leads to a drastic decrease in loyalty as the feeling of being ‘part of the team’ is not there. Have regular feedback sessions to understand the sentiments of the team. Trust has got to be earned and the only way this can get done is by communicating and getting to know the individual better.

3. Development Opportunities: Do your best to give everyone the opportunity to showcase their skill sets as well as learn new ones. I have been pleasantly surprised many a time when I found that a technical team member had some pretty extraordinary presenting skills or marketing insights. At a start up there needs to be strong focus on getting your team members to open up and move out of their comfort zones. If they don’t feel like they are growing and getting experience, which they would not have received in large organizations, chances of them defecting increase dramatically.

4. Fair Compensation & Reward: As hard as we attempt to get people to work for as little as possible in lieu of a big pay day, down the line, chances are they are going to react at some point in time. First off, compensation and rewards need to be discussed before adding the individual to the team. They should have a good idea what to expect to make, as well as how they will be compensated with non cash benefits. There will be times when cash flows are thin and payroll expenses may not be met. This is a time for open communication and ways of compensating them differently, greater equity or the ability to work part time needs to be offered.

Employee loyalty is directly linked to customer loyalty and corporate profitability. Whether you are a new start up or an established one, this measure needs to be continuously monitored. Sub indicators such as burnout thresholds are critical to ensure that you know when to apply the brakes. It is undoubtedly a challenging juggling act and becomes harder as the team begins to expand. By monitoring this metric from the beginning a start up has a substantial advantage and can use it to develop a sustainable competitive advantage.

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