BIZTIPS© Choosing The Right Resources

Consider the employed civil servant leaving her job to start a small business in the Accounting field. She immediately sets up an office and hires a Secretary. After a year, she will hire another Accounting clerk and this increase in staff will continue.

by: Dykon Developments
Dec 01, 2008

At each stage of the business, not only at start up, the entrepreneur is faced with the dilemma of choosing the right resources. What are the ingredients to the business construct that will make it taste feel, look and be ideal for the business culture that the business is meant to represent?

Two colleagues went into business recently and opened a bar and restaurant in the immediate suburb of the capital city of a small island. One of the partners is still employed as the sales manager whilst the other left the hardware business she was in to deal with this new venture. They immediately employed security personnel, Manager, and sufficient staff. The physical space is very small and an average of thirty to forty patrons are present on the one night they are most busy. Certainly all of the ingredients for this business venture may be deemed necessary, but easily the fixed costs suggest that break even was a long way off.

Consider the employed civil servant leaving her job to start a small business in the Accounting field. She immediately sets up an office and hires a Secretary. After a year, she will hire another Accounting clerk and this increase in staff will continue. Consider whether the prioritization of resource retention was correct in this case. The amount of administrative work will increase based on churning out services, it would serve the entrepreneur in better stead if she hired the additional Accounting resource and have him do some of the administrative work.

These two examples are real ones, and there is no right or wrong in either case. The match between the return versus the cost of each resource has to be carefully determined. The entrepreneur has to factor in the opportunity cost of each decision he makes when determining the resource to be employed. Additionally the entrepreneur must make the distinction between productive assets and non-productive assets.
 
We should start by looking at the underlying reason for entering into business, which is to make a profit. Everything else happens as a consequence or is necessary for that ultimate goal to be achieved.

Each business fingerprint is different; the methodology is similar and sometimes can be scientific, but just like cooking a meal, or your fingerprint, the outcome may be different.

Choosing the right resources at the right time demonstrates the unique capability of the entrepreneur. This includes the ability to balance scientific management principles with the personal characteristic of the individual entrepreneur. There are thin lines amongst what you have to do, what you want to do and what you should do.  Choose wisely.