Entrepreneurial Habits

Every people will face some challenges, but what sets entrepreneurs apart from non-entrepreneurs is their mental habits.
Listed below are the habits of entrepreneurs:
Curious being
Boredom is the killer of effectiveness, which is why the most successful entrepreneurs are never bored. They happily
spend endless hours working and doing what they love to do. They make it a habit to be open and curious about
everything.
Turn obstacles into assets
The best entrepreneurs believe and act as if everything is a gift. First, you were going to find out eventually what
people did and did not like about your idea. Better to learn it as soon as possible, before you sink more resources into
the concept. Second, the feedback could take you in another direction, or serve as a barrier to your competitors.
Third, you got evidence. You know something they don't, and that is an asset. You are ahead of the game.

Having high tolerance of ambiguity

Ambiguity can be really uncomfortable to many people. They need a clear set of rules and expectations about how
things should be. They are more willing to accept murky conditions—situations where the likelihood of winning or
losing is unknown. Having a high tolerance for ambiguity makes you less likely to get anxious. You can think quickly
on your feet and see things from different angles.

Using fears and anxieties as fuel

When we’re feeling anxious, many of us try to calm ourselves down. Instead, reframing your anxiety as excitement
can dramatically improve your performance. That’s one reason why professional athletes and successful
entrepreneurs frame their anxieties as feeling “pumped up,”
Focus on the causes, not effects, of confidence and success

Many people don’t handle either failure or success very well. When things are not going well, they are overwhelmed
or depressed. When things are going well, they are overconfident and lazy. In fact, success might represent an even
greater adversity than failure. As soon as we succeed, we tend to focus on the causes of our success, believing we
were right all along to feel confident in ourselves. Our focus shifts toward the effects of our success.

Be proactive
Proactivity means more than merely taking initiative. We have the initiative and the responsibility to make things
happen. “No one can make you feel inferior without your consent.” – Eleanor Roosevelt.
Begin with the end in mind

This principle states that all things are created twice, but not all first creations are by conscious design. In this case,
leadership is the first creation, and management is the second creation (Covey, 1989). Management is doing things
right; leadership is doing the right things.
Put first things first

There are two (2) factors that define an activity: urgent and important. Urgent means it requires immediate attention. For
example, a ringing phone is urgent; most people can’t stand the thought of just allowing the phone to ring. Urgent
matters are usually visible; they insist action. Importance, on the other hand, has to do with results. If something is
important, it contributes to an entrepreneur’s mission, values, and high priority goals.
Think win-win
Win-win is a frame of mind and heart that constantly seeks mutual benefit in all human interactions. Win-win means
that agreements or solutions are mutually beneficial and satisfying. With a win-win solution, all parties feel good about
the decision and feel committed to the action plan. Win-win sees life as a cooperative, not a competitive arena.
Steps: put yourself in the other person’s shoes, identify the key issues and concerns, identify the outcomes
that would fully beneficial, and lastly, think new options and possibilities to make these happen.
 Seek first to understand, then to be understood

"Seek first to understand" involves a very deep shift in paradigm. People typically seek first to be understood. Most
people do not listen with the intent to understand. Emphatic listening is getting inside another person’s frame of
reference. You look through it, you see the world the way they see the world, you understand their paradigm, and
you understand how they feel.
Synergize

Synergy means that the relationship which the parts have with each other is a part in and of itself. It is not only a
part, but the most catalytic, the most empowering, the most unifying, and the most exciting part.
Sharpen the saw

This means expressing all four (4) (perspective, autonomy, connectedness, and tone) motivations. It is the exercising
of the four (4) dimensions of our nature, regularly and consistently, in wise and balanced ways (Covey, 1989).
DEVELOPING BUSINESS ACUMEN
The Purpose of Business

Naert’s Model

Naert, dean of the Antwerp Management School in Belgium, believes that value creation is the purpose of business.
Not only this approach lead to an under emphasis on other stakeholders within the organization, but that it
frequently does not even maximize return to the shareholder. While economic value and societal value historically
have been viewed in opposition to one another as part of a zero-sum game, Naert argues that both can be pursued at
the same time (Erisman & Gautschi, 2015).

Van Duzer’s Model

Jeff Van Duzer, dean of the School of Business and Economics at Seattle Pacific University, shares some commonalities
with Naert in his criticism of the shareholder model.
Van Duzer proposes that the purpose of business is twofold:
 To serve customers through providing goods and services that promote human flourishing
This tends to focus on employees and vendors. Subsumed within this purpose statement is the notion that
businesses create work that allows people through their labor to sustain their lives. But it is intentionally more
than this. The work is to be meaningful and creative in ways that allow for the development of human potential
and extend far beyond mere material sustenance.
 To serve employees by providing opportunities for meaningful and creative work
The focus is primarily on customers and the broader community. It highlights the role that business plays in
bringing products to markets.
“The purpose of a business, in other words, is not to make a profit, full stop. It is to make a profit so that the business
can do something more or better.” – Jeff Van Duzer

Parikh’s Model
Indira Parikh, president of the Foundation for Liberal and Management Education (FLAME), argues that the ancient
wisdom of many Hindu scriptures can and should be appropriated to business practice in India.
 Bhagavad Gita
It asserts that people should focus on their thoughts and actions rather than the outcomes of those actions.
  Greed is bad. You should never engage in action only for the desire of rewards.
 Be fair. Enlightened leaders are compassionate and selfless. “They treat everyone as equals.” Followers will
rally around them and follow their example.
 Act rather than react. A leader’s actions today can become the “karma” that influences his/her status
tomorrow.
 Seek higher consciousness. Leaders should view problems within their larger contexts. Show sensitivity to
multiple stakeholders including shareholders, employees, partners, and neighbors

 Dharma
Generally speaking, Dharma can be understood as righteous duty, or the right path that will uphold the family and the
organizational and social fabric.
 Loka Sangraha (Public Good) – the practice of seeking one’s own gains and also catering to the welfare
of others. This largely reflects all the stakeholders.
 Kausalam (Efficacy) – judicious use of resources and preserving resources for future generations. This
reflects concern for ecology as well as for stakeholders.
 Vividhta (Innovation) – beyond survival, business has to be the engine of innovation constantly seeking
more effective solutions to meet their economic and social expectations.
 Jigyasa (Learning) – change and continuity coexist.

Business Models
In essence, a business model embodies nothing less than the organizational and financial ‘architecture’ of a business. .
Basically, a business model is a system whose various features interact, often in complex ways, to determine the
company’s success.
The Six (6) Keys to Success
1. A more personalized product or service
Many new models offer products or services that are better tailored than the dominant models to
customers’ individual and immediate needs.
2. A closed-loop process
Many models replace a linear consumption process (in which products are made, used, and then disposed of) with
a closed loop, in which used products are recycled. This shift reduces overall resource costs.
3. Asset sharing
Some innovations succeed because they enable the sharing of costly assets. The sharing typically happens by
means of two-sided online marketplaces that unlock value for both sides. Sharing also reduces entry barriers to
many industries because an entrant need not own the assets in question; it can merely act as an intermediary.
4. Usage-based pricing
Some models charge customers when they use the product or service, rather than requiring them to buy something
outright.
5. A more collaborative ecosystem
Some innovations are successful because a new technology improves collaboration with supply chain partners and
helps allocate business risks more appropriately, making cost reductions possible.
6. An agile and adaptive organization
Innovators sometimes use technology to move away from traditional hierarchical models of decision- making in
order to make decisions that better reflect market needs and allow real-time adaptation to change in those needs.
The result is often greater value for the customer at less cost to the company.
THE LANGUAGE OF BUSINESS
Understanding Financial Statements Balance
Sheet/Statement of Financial Position

The purpose of a balance sheet is to show the financial position of a business on a certain date, usually the end of the
 month or year. For this reason, it is often called the statement of financial position. It is important to note that the date
on the balance sheet is a single date, whereas the dates on the other three
(3) statements cover a period of time, such as a month, quarter, or year. The balance sheet presents a view of the
business as the holder of resources, or assets, that are equal to the claims against those assets (Needles, Powers, &
Crosson, 2014).
It provides insights about how the business is financed and how its funds are deployed.
It can provide a basis for assessing the value of the business.
Relationships between assets and claims can be assessed.
Performance can be assessed.

Income Statement
The income statement summarizes the revenues earned and expenses incurred by a business over an accounting
period.
Cash Flow Statement
The statement of cash flow focuses on liquidity, that is, balancing the inflows and outflows of cash to enable it to
operate and pay its bills when they are due. Cash flows are the inflows and outflows of cash into and out of a business.
Net cash flows are the difference between the inflows and outflows.
Financial Ratios

Return on Investments

ROI generally means return on owner’s equity; hence it is sometimes referred to as ROE. This is to avoid confusion
because the word investment may connote investment or funding by both stockholders and creditors.
Profit Margin/Return on Sales (ROS)
The profit margin, also known as return on sales, is the ratio of income to net sales.
Return on Assets (ROA)
As such, ROA is equal to operating income divided by average total assets. Again, the average is used for a better
gauge.
Current Ratio
The current ratio relates current assets to current liabilities and shows the immediate solvency and liquidity of a firm.
Quick Ratio (Acid-Test Ratio)
The quick ratio is an indicator of a company’s short-term liquidity, and measures a company’s ability to meet its short-
term obligations with its most liquid assets.
Debt Ratio
The debt ratio compares a company’s total debt to its total assets. This provides creditors and investors with a general
idea.
Stockholder’s Ratio
As such, the total stockholder’s equity to total assets ratio is often computed. Instead of using the formula dividing total
stockholder’s equity by total assets, it can be simply:
Debt-Equity Ratio
The debt-equity ratio is a measurement of the percentage of the company’s balance sheet that is financed by suppliers,
lenders, creditors, and obligors versus what the shareholders have committed. It provides another vantage point on a
company’s leverage position.
Interest Coverage Ratio
Interest coverage ratio is the indicator of a company’s ability to meet its interest payment obligations. It is computed by
dividing the operating income by the interest expense. It shows how many times the company earns its annual interest
expense.