How would you know whether this person is suitable to run business?
When a person decided to run a business, is there a way to check whether he is fit to run business?
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Jan 7, 2014
I would assess what is needed in this particular business and with these data assess the person using the CVI, an assessment that bypasses personality and behavior revealing ones unchanging motivational drivers and sense for how one is wired to contribute to the world around him.
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Jan 5, 2014
Check out his references and do a background check. It's not everything but it should be a good start.
Jan 3, 2014
There are certain characteristics of people that can be assessed to determine their suitability. In summary, they should be decisive, be driven by certain values that are suitable to the type of business and should base their decision-making on practical thinking. These characteristics can be determined by the use of a profile assessment that can be taken on line.
Jan 3, 2014
Jan 3, 2014
Sorry, I am confused by your question. If you are asking my role in asking this question - it is the intention to have "suitability" open to discussion so that we can gain more through this process.
Jan 8, 2014
I apologize for the confusion (and for my delay in responding). Your question then is to help another decide if they are suitable to run a business. Is this correct? It seems you are mentoring/coaching/advising someone else (that is where my question was going). In that case my first question of "the client" would be what is your purpose in starting this business? There is no short answer to the question, as it is a process as the many respondents have pointed out.
Jan 8, 2014
I am a management consultant. As mentioned earlier - this question is meant for people to discuss so that we all can gain at the same time. I would expect the answer apply to everyone - not just "the client", simply because we need an approach to apply to everyone not just "the client". BTW, I have clients who also management consultants too.
Jan 2, 2014
Passion for the Business. Persistence.
These are not reducible to paper or gleaned from qualifications but most often found in one's experiences. You can develop a hiring matrix but developing an instinct for people will net a far higher success rate.
Jan 2, 2014
Depending upon the business, hopefully it's something they have experience or knowledge in and are very passionate about it. There are personality and disc tests that can help find out too. Besides having knowledge or expertise in an area, a person needs an entrepreneurial spirit, willingness to go it alone, work long hours when needed, be the boss and make decisions, have good leadership and management skills. The disk tests really help and some of them can even help fit someone in the right business or business area.
Jan 2, 2014
Good question JC. Most all of these questions answer this question in one way or another. I'll take a little different tact here and make it simple. Does the person WANT to run a business or just do the kind of work (service/product) that the business plans to provide?!
Here is the point of the question. Many people start a business because they love to do the work, but they hate learning about business. Same business owners like this tend to create a job for themselves instead of creating a self-sustaining asset. As a result they find themselves miserable after the honeymoon is over.
If the person is serious about learning what is necessary in order to make the business successful then I say YES the person can learn what is necessary to be successful. They just must realize that it will require a change in themselves in order to finally achieve success.
I hope this helps, - Dino
Jan 2, 2014
Totally agree with you Dino. 6 years back I partner with another 2 friends to incorporation a company. These two friends held very high positions in a MNC and had some power to influence the market we are in. A wonderful match where they responsible to marketing, sales, and technical respectively and I responsible for general management and operation.
However, when the business didn't turned out to expected, one of the partner "suddenly" feel that he was not suitable to do business and left the company with full consent and support from us. Eventually, the business fail and we are split, however the other partner and myself still running our own business and 3 of us have regular meeting to do catch up since then.
I would like to put your point as psychological conditioning which probably links to the personality of an individual.
Jan 5, 2014
Great point JC and thanks for sharing. I would say that your awareness of the situation and this psychological conditioning gives you a far greater chance to find a success outcome. Good luck and let me know if I can be of any assistance as you progress. - Dino
Jan 2, 2014
The primary way of finding out if someone is suitable to run a business is based on three things:
(1) Previous experience.
(2) Their understanding of true leadership and entrepreneurship and, through questionning, ascertaining what creative energies they may have that will not only mean they will be able to run the business, but also to develop it.
(3) Define an opportunity to work with them on a small project, especially if it was in order to ultimately appoint them to the role to run a business on your behalf.
Jan 2, 2014
Thanks for your input, Trevor. I would like to reduce the unceesary variables to make the testing more objective and general. The intention is not ambitious but essential as once we establish the basic, additional variables for different scenarios can insert as adjusters. Thus I would take in your point 1 & 2 and to forgo point 3 reason being that we try to avoid subjective conclusion.... Just some of my thoughts.
Jan 1, 2014
When I am writing a custom business plan for a start-up, buyout or expansion and my client says, I don't know too many times I start to wonder about their success. Don't get me wrong. There are many acceptable "I don't knows" for a start-up. These are followed by, "I will find outs". And when I need to chase after them and ask the same question 7 times, I get a sense of not qualified.
Jan 1, 2014
I'll try to answer with very simple words )
First of all, just check his/her personnel/professional background...(portfolio, experience, trusted person or not etc.)
Second, Analyze his/her business plan/offer/proposal (business type/model, his/her risks, your risks, costs, estimated revenue, rev.share percentage etc.)
Then you will get some results and will know what is your next step. Good luck )
Dec 31, 2013
This is a very good question. I would pose my answer in terms of if I were looking to join a start-up and I'll try to just talk in general terms. It is important that this individual in my opinion has sound business sense, whether through a combination of education and relevant experience. Getting to know this person through meetings would be beneficial to understand if their words and thoughts and vision of a business are in synergy with their experience. The next thing I would look for in this case is trust. This is where one has to listen to his/her intuition. I have learned through my experiences that if there is no trust, it can be very difficult to believe in the relationship that could be formed to help this individual run their company. You can also talk to others that you trust that know this individual (mutual colleagues/partners) and gain their opinion as well. At the same time, I would do research on how well this person has positioned their company to gain market share and how well they understand their customer need and what their value proposition is before potentially working with this individual.
Jan 2, 2014
Indeed true, there are a series of tests at different point of time. We can't just conduct some tests at the begin to determine whether his person would be the ideal candidate. In another words, several tests at different point of time and each pass would consider obtain certain assurance but not complete confirmation.
Dec 30, 2013
HI JC - thanks for the interesting topic.
In my business coaching work, I face a lot of individuals who are keen to start up a business because they feel that they have great experience in their line of work. However, one needs to go deeper and find out their understanding of running a business which in most cases, it is the reason for failure.
Most start-ups fail within the first few months and most of the time it boils down to lack of understanding, knowledge and experience in running a profitable business. Questions to ask are the type of business they are interested in, understanding of their competition, Leadership skills (they might be good in their job but lousy leaders), understanding of the core business activities, management skills etc.
Obviously, it depends on what type of business they are after and what their future aspirations are. Surviving the first 12 months is key in running a new business and all these factors needs to be considered before taking the next step. Sometimes all you need is someone to take your hand and assist you to get the 'basic' business infrastructure in place.... Normally 'determination' is not the issue but the business knowhow is...
I coach and give business consultancy services a lot of companies who want to move from the Western World to the Middle East, India and Asia and even though they might be successfull in their home country, they fail overseas because they do not understand the basic requirements to expand Internationally. For example one of the key factors of success here is understanding the culture - most companies come up with the idea that if it works in the US or in Europe, it should work in Vietnam or China.
In short, the cocktail for success is based on a lot of factors rather than just understanding your product/services etc.
Dec 31, 2013
Agree to you Paul that the success ingredient consists of many factors. One thing I like to stress is that a person may fit to run business, but his business may still fails. The intention of getting a fitter person to run business is to increase chance of success.
I am working mainly in Asia, being native here and being assigned for regional and global management appointments. Basically, my clients are Asian. I do have companies from US and UK expand into Asia and (assume market is viable) most of the time I only set one objective for them - "Localise".
BTW if you need help in China, Vietnam and Singapore, I have offices there, maybe can help :).
Dec 30, 2013
Check out the following in a) his track record and b) what type of business he has in mind.
a) What type of employment record does he/she have . Larger corp with lots of resources or small company where you wear a lot of hats. This should illustrate this person's adaptability.
b) What type of business? Who would the potential competitors be? Where would be the source of venture capital for this person's start-up?
Dec 30, 2013
Hi JC ~
What I haven't seen addressed yet is people who are solo practitioners (e.g., chiropractors, acupuncturists, hair stylists, coaches, etc.) who are, by definition, "running their own business." If the person does not have a business background, they would either need to get some training or hire a manager with business savvy to run the enterprise while they see clients. Many sole proprietors in public-facing businesses do this as a matter of necessity: it is difficult for a solo health care practitioner to both see patients and manage the waiting room/payment desk simultaneously. However, a "front desk" person may not have the business skills to keep the business well managed and flourishing, so a business consultant or marketing/PR support might fill this need.
Dec 31, 2013
Amara, you are right. Basically, these practitioners may lack business management skills. If they are not capable to run a business, a good business coach will be useful. Therefore the fitting test helps to assess the extend of training required.
Well this is not a stagnant world, self development and improvement need to be on going.
Dec 30, 2013
You actually pose a very deep question here. On one hand, this guy, lets call him Joe for now. He majored in Business at NYU, then went on to get a MBA from Harvard. He is very well educated. Is he fit to run a business on paper? Yes.
On the other hand, lets take Sue. Sue just immigrated to the US from China. She has no higher education, yet was a clerk in her family's store in Beijing before coming here and opening up her own business.
I posed two scenarios here. Now lets dive deeper. Joe opens up a Start Up based out of Boston. He hires 5 employees that he literally treats like dirt. He doesn't pay well for making his employees work long hours, with poor conditions. His business folds after year.
Sue on the other hand, gets married and she and her husband share the duties in the store which is becoming very prosperous in a San Francisco suburb. She is able to hire three employees to which she pays three dollars above minimum wage, and gives them time and a half for working over their hours. She gives them lunch breaks, and gives them perks as employees such as free drinks. Business booms for her and she is soon able to open a second store on the other side of town.
Looking at the two scenarios who is better fit to run the business? The Harvard MBA whose business folded within a year, or the hardworking immigrant?
Dec 30, 2013
There are a number of ways to check.
1. Combination of experience and education
2. Cross discipline experience in sales, marketing, finance and operations
3. Past success in similar ventures.
If a person is deciding to run their own business, it's important to have enough assets. All the skill in the world won't overcome lack of cash.
Dec 30, 2013
Is a person suitable to run a business seems to be a questions from your answer to your comment. It depends on who he is surrounded by. You will rarely find a person than can fit all the entrepreneur skills. However if they are surrounded by the people who have the missing skills your start up will be part of you 30% success... the most important if you bring someone from the outside is whether it will not just bring the necessary skills but will it fit with the business culture and values...and no test can answer this...
Dec 30, 2013
Jeanne, actually I really want to test whether the person is fit to the business culture and values or not. When selecting a candidate for CEO position, apart from checking he has the relevant skills set and industrial influences, his values and culture have to be in line with the existing one. An alignment test need to conduct to see whether he fit in or not.
However if we feel that the only way to save the company is to change its values and culture, than we should look for desirable candidate who possess certain culture and values we wish to have.
Dec 30, 2013
JC, I have recruited people who needed to fit the firm culture and values as it is my WoW. the only way is to talk and interview the guys around it. you can not do test on it as this is purely a behavior....but they do exist! there is a fit of every culture and values...most of the time it is more the issue that the companies have customer orientated values and culture and forgot what is means for their employees...
Dec 30, 2013
Jeanne, thanks for advice. I am seeking a way to include the testing of culture and values. The process of interview those guys so as to draw conclusion whether they are fit to the organization's values and culture - this shows that a way of testing do exist, I will work on this direction.
I believe when we look for whether the person can run a business, he is the leader and he set the organization's values and culture, which is different from an employee's perspective who need to fit so that can follow the leader well. Please advice whether my thinking is correct.
Dec 30, 2013
Remember that the leader are the role model for the employee..as such if they do not behave to the culture and values of the firm they will not be followed...as of test, if questions and answers is a test, yes you need to ensure you ask the proper question related to your values and culture while believing in the mission and vision...so many question are easy to ask to get all this.
concerning your view on the person who run the business set the organisation value and culture...I do not agree as a brand and business should not compulsory change depending on the CEO's changes it will twick but should not change with the CEO it should change when the vision change and decided that the organisation values needs to evolve that can happen while you still have the same CEO....
What do you think?
Dec 30, 2013
I like the discussion, we are exploring deeper and knocking the fundamentals. I agreed your point, we can't let new CEO free will to change corporate culture and values, especially if the change alter the original purpose of the business's mission. That's why I believe the new CEO has to his values to the company, if the differences too wide, it is questionable to accept the CEO.
But I reserve my view when situations changes - EG, a) it is a startup; b) it is a desperate company seeking a knight to rescue. Than this CEO not only need to be strong but also visionary.
Just wonder can psychologist do something here?
Dec 29, 2013
Is this something you love and enjoying doing? If yest, proceed to the next step.
Dec 30, 2013
IF person is making more use of his brain then his heart can run good business.Key success of any business is the the decision making ability of a person.If a person is taking his decision by heart he is not a good business man.There is no place for emotional person in a business world.Business happens only by Brain :)
Dec 31, 2013
Sheetal, the highest IQ person may not able to run good business, which I cannot agree on the brain factor. Decision making is very critical for any business as highlighted to you, which I totally agree with you, but intelligent person may not make good decision though.
What TD is saying, if I am not wrong, it is about passion. Passion is like fuel to provide you energy for your long business journey, without positive passion perseverance can't last.
Jan 2, 2014
HI JC,
Brain factor is not just limited to the IQ of a person. Brain performs variety of functions like reasoning, planning, problem solving,recognization , risk assestment and many more.Passion is also a kind of feeling developed from Brain.When i say making use of brain it take cares of all the important parameters which are require to run a good business.When a person is making use of his brain he will always be proactive and person who is making use of his heart which means who is very emotional ,impractical will always be reactive.Proactiveness is must for good businessmen.
Dec 29, 2013
I've found that having a business is like having a baby and it doesn't matter if the parents are "fit" or not because "the baby is coming and or already here." With that said, one quick sure fire way to see where they are is to ascertain whether or not the person knows the difference between a Deliverable and an Action Item. Not saying the person is not "fit" to run a business if they don't know, but there are some steps that need to be taken to get them more "fit" before they begin or dig themselves deeper. Much like learning how to change a diaper, the sooner you learn, the sooner you avoid a big mess. JustMy3Cents
Jan 2, 2014
I would determine the fitness in two aspects from your above 3cents - "fit" to run from a general view point before running a business still required (which is different from your view where I don't' think it is appropriate let a parent to take care of a baby if he doesn't ready to be a parent - grandparent will come to help. Likewise, pass a business to someone who is not "fit" will mean putting the business at stake - if it is a Startup business, the impact may be ok as it is small; but if it is a middle or large company, the are many parties will be affected)
2nd aspect - I would adopt the idea of "Plan as you do" - through doing and experiencing, the person gain knowledge and skills to run the business better.
Jan 20, 2014
A baby or a business is already here or in progress once we as consultants are hired on usually - so that's where I was coming from. Unlike many times (I was raised by my Grandparents who were/are saints) Grandparents & family are not in a position to step in full time, therefore a child raises a child just like a business sometimes ends up "raising" an entrepreneur who has to "Plan as they do" as you stated. Hopefully, someone is able to step in, family member or a consultant in our case and provide guidance, help, etc. Whether a company numbers 1 or 1,000 or 30,000, incompetence is costly to the bottom line and sometimes dangerous (see any business scandal or closing), but can be overcome with mentors, education, communication, a strong people philosophy & strategic guidance - what a good consultant is ultimately made of and any start up should strive to obtain in leadership, whether they have it from Day 1 or Day 21. (Now you have my 5 cents :-)
Thanks, this looks great!