Are you an entrepreneur, or do you want to invest in one? Better check their entrepreneurial IQ first. Have them take the EIQ test. There is no such thing yet, but there should be. But, what types of questions would you ask an entrepreneur to see if they have what it takes? Most entrepreneurs are failures and will never amount to anything. What separates the winners from the rest of the pack?
Note: If an entrepreneur is poor at even one of the skillsets below, they are likely to fail in business and you will lose your investment money.
1. Problem solving skills
Perhaps the same types of questions you see in math class as a kid that you do for extra credit. Or your dad might buy you a book of these from a bookstore to keep your mind active. This is exactly the type of thinking you need as an entrepreneur because entrepreneurs face endless problems of varying complexity.
2. Prioritizing skills
It is easy to work everyday, and not that hard to be good at something. However, learning how to prioritize your skills and be good at that is not so easy. How do you measure the value of each skill, and when the optimal time to do it is? A good entrepreneur should know what to focus on, otherwise their time will not be used profitably and neither will their resources! Additionally, you will need to put your work ahead of friends, family and girlfriends or boyfriends. If you are too socially comfortable, you won’t make a good entrepreneur. You’ll be too busy socializing to make business a priority. It helps when you start off by being socially ostracized. That way you don’t have to choose. Being in business becomes more of a way to fill the void at that point which is one of the tickets to success.
3. Time Management
None of us are good at time management. I read a Harvard Business Review article about time management. It said to avoid visiting your email. I did exactly this and saved tons of time. Two weeks later my email was filled with irate customers asking me why I didn’t answer their email. There is a time and place for everything. Emails perhaps should be the first thing you do every day, but perhaps only once per day so you can focus on projects! But, the point here (and yes I have a point) is that entrepreneurs who are poor at time management will fail for sure.
4. Honesty & Integrity
An entrepreneur who cheats, or is not loyal in relationships is a disaster. Unfortunately, these days 99% of people I meet lack integrity. It is always refreshing to see someone who has been in the same job for 15 years. That shows a type of integrity called commitment. You need that in a marriage and an investment in an entrepreneur is similar to a marriage (but, hopefully without the sex.)
5. Work Ethic
It is hard to test work ethic in an IQ test, but you need to test it. A good entrepreneur will work until 3am if they need to get something done. If you want to leave work at 5pm and play with your kids or take your girlfriend out, you will be popular with them, but not your investor which in most cases — is yourself!
6. Hiring & Firing
Do you have the right stuff to hire the right people and fire them at the right time? The problem is that the right people seem not to exist which is why I do most of my work myself. Being good at spotting someone who will do good work, be nice, and not quit is essential. I’m not sure how you could incorporate this into a multiple choice test, but if there is a will, there is a way. In real hiring, there could be three hundred applicants and you have to choose the best one, plus a few backups. If are Warren Buffet, you might go through ten thousand. After all, you want someone who will be with you for twenty years, so why would you make a twenty year decision in twenty minutes? Good decisions take time!
7. Technical Skills
Obviously, you need to be good at your core competency whatever that is. Since I don’t know what you specialize in, I can’t comment.
8. Innovation
This is similar to problem solving, except that innovation deals with finding radically new and usually technologically advanced ways of solving problems. Regular problem solving deals with what to do when your customer received bad service and needs help. Innovation deals with finding and building a computer system that can help your customer in ways you never dreamt possible.
9. Financial Planning
As an entrepreneur, you not only have to be able to budget your time and hire the right people, you need to be good at allocating your limited cash which normally starts on a bootstrapped shoestring (or boot string as the case may be.) If you invest too much money in things that are not absolutely essential, or invest money in inefficient ways to solve problems, you will go broke and fail. This is why garage entrepreneurship makes so much sense. Your garage is already paid for. You are finding new ways to use resources you already have — that is called efficiency. Which brings me to my next point.
10. Efficiency Competency
Do you know how to use resources efficiently? Do you have your callers spend too much time on each client? Do you spend not enough time on the important clients? Do you call people when you should email them? Do you spend $20 on lunch when you could get a better lunch for $11 down the street which would save you driving time? (which is worth more than money) Seeing how you handle issues that relate to efficiency is very important otherwise you will waste resources which spells bankruptcy and failure. If you are successful you can spend more on food and luxuries, but not while you are on your way up.
The joke about efficiency is that a space data company decided to have its office in space to save money on rent. After all, space is free in space. They changed the tune they were whistling when they got their oxygen bill. $700 for oxygen? I’m changing providers. So, they called the 800 number and were put on hold. John wondered out loud, “I wonder how long I’ll be on hold with this oxygen company.” His coworker replied, “Don’t hold your breath!”
11. Vision
According to spiritual principles, if you can see it, you can’t build it. You have to envision growth otherwise it won’t happen. If you lack a good imagination and a practical imagination, you can’t do well as an entrepreneur. “Think it and they will come” should be your motto.
12. Ambition
A good work ethic without ambition or vision leaves you being just another top notch grunt worker. You’ll be in the same lousy company in the same lousy position for the rest of your life. Or perhaps you’ll be promoted to management. However, those are the types of people you want to hire. Hire people who work hard but who don’t want to be the owner themselves otherwise they will quit and leave you high and dry only to find out they are your competitor. You can’t be successful unless you can envision success, be ambitious enough to make it happen, have the work ethic to back up your ambition, and have good smarts and problem solving skills of many types. Once again, if you are weak in any of the magical twelve skills to be an entrepreneur, you will fail for sure!
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Think it and they will come
Space data company puts their office in space but owner flips lid when he sees their oxygen bill.