Which type of Constitution will suit your Business?

1. Let me start by asking you 3 basic questions: a. As an entrepreneur do you really control your business? Or does the business control you, your work timings, your vacation plans, your commitments, etc.? b. Do your employees work for you? Or do you work so that you could pay your employees on time? c. An entrepreneur invests a lot of his time, money & energies into setting up a profitable business. After several years of rigorous hard work, when he is 55-60 years old – he wishes to sell off his business for good amount of money, and spend his retirement years comfortably; however he finds that there are no takers to that business. 2. I am sure – Most of the entrepreneurs would be able to relate to these questions. 3. Let us now understand the Number 1 reason behind this – so that you (as an entrepreneur) build your business in the right way. Reason behind the problem: 1. Most of the businesses are promoter-driven; all major decisions are taken by the Promoter; all big business dealings are undertaken by the Promoter himself. 2. Such businesses do not have their own identity – no value of their own. 3. Such organisations will never grow / prosper without the promoter; the moment such businesses are taken over by someone else, their operations face multiple challenges. Hence nobody is interested in buying such businesses. Real Problem: 1. What good is your business in which you invested the best years of your youth working hard and taking several risks – when you are not able to generate money out of it? Solution: 1. Solution to this problem is simple: Transform your business from People-dependent to System-dependent. 2. One of the ways to do that is to create an Organised Business Structure, such as a Private Limited Company (with feeder firms supplying goods / service to the company). 3. In a proprietorship / partnership firm, owners are the same as managers. However, in case of a company – Ownership is separated from Management. Hence companies survive years after the promoter is dead; they have their own identity. 4. Once you have created a Private Limited Company, then implement a Promoter-CEO model, where Promoter does only the Strategy planning & ideation of how the business should grow. Execution of these goals should be delegated to a competent Managing Director & CEO. 5. This CEO then hires his own team of functional directors to handle different functions in business such as – Production, Sales, HR, Finance, Operations, etc. 6. Thereafter, create exhaustive & detailed SOP’s – to ensure all processes are standardised. 7. Hire people on the basis of their CHARACTER & VALUES; and train them later on the skill sets required to do the tasks. 8. After creating such an organised structure along with well-defined systems and processes, slowly & gradually the company starts functioning on its own without depending too much on a single person. Thank you so much for your time; and I sincerely hope this article would be useful to you. Please share it with other entrepreneurs and wanna-be entrepreneurs. Thanks again. Take care.