As one of the core skills for entrepreneurs, mobilizing resources is a required curriculum when studying entrepreneurship. I already outlined the types of resources and some basic information in the blog “The Basic Skills for Entrepreneurs“.
Today, we will look into the core strategies when mobilizing resources:
- Getting and managing the material, non-material and digital resources needed to turn ideas into action
- Making the most of limited resources
- Getting and managing the competencies needed at any stage, including technical, legal, tax and digital competencies
What Resources do you need?
The kind of resources you will need depend very much on the type of business you’re in and the intended goal. In short, what do you need the resources for?
In its essence, the resources you’ll need are whatever is required to make your business a success. These are not just external items, like money, clients, business partners or an office, but also knowledge and expertise. Even you, as the entrepreneur running the business, are a resource.
The best way to find out what you really need for your business is by separating resources in 3 core categories:
- Material resources
- Non-material resources
- Digital resources
Let me give you an example:
If you’re a hairdresser and you’re planning to start your own hairdressing salon, one of the resources you will need is a place of work, a salon.
That was easy. But this comes with signing a rental contract or buying a property. Besides money, you will need some non-material resources, like the knowledge about rental contracts, how to finance the property, etc. You will need equipment, furniture, a computer and possibly personnel. Someone needs to be in the salon during the actual working hours. In the beginning, this will probably be yourself. You are a resource as well and you will need to manage your time in the shop.
As you can see, resource types are almost always linked to each other. For that reason, you’ll need to be very clear of the impact each resource you require will have on other resources. I always create a spreadsheet, listing all the resources that come to mind in the left column, and add anything related or needed to make this resource useful to the right in the same row.
|Core Resource||Additional Resources|
|Business setup||Legal advice, accounting, banking|
|Shop||Knowledge of rental laws, transport to shop, alarm system, insurance, …|
|Furniture and equipment||Insurance, knowledge about equipment, …|
|Computer||IT knowledge of system and programs, backup internet, network, …|
Just add everything that comes to mind in the left column and add anything you will need to make the resource useful and functional to the right column.
This shows you very quickly the impact on the overall resources you will need and how they interact.
To decide on the resources for your business, you will need to look at the intended outcome. Practically, you start from the outside in.
The size of your hairdresser salon will be very much based on how big you want your business to be. A big salon is not just a big resource to manage, but also requires big resources to be of use. It depends on your overall business plan.
Fill in that table as much as you can and add or remove resources, as you learn more.
TIP: Have a look at the Business Model Canvas. It is a great tool that puts the resources you need into perspective to the rest of your business.
Where to get the Resources from?
If you have done the spreadsheet, as mentioned above, you should have a good idea about the resources you need. But now, let’s talk about where you can get the resources from.
The first step must be to estimate the costs for each resource. Keeping in mind that money is a resource as well. That means, if you need to borrow money for your business, interest rates, guarantees, etc. are also resources you’ll need.
The next step is to identify the resources you already have. For example, if you have experience in IT and you feel comfortable to manage your computer hardware and software, you don’t need to buy that knowledge.
Mark it on your list as available (not needed). Underline the resources you already have with a green marker and the ones you need with a red marker. The ones you are not sure about, mark in yellow.
You now have a list of all the resources you need to find. But before you run out talking to suppliers, have another look at your budget and the estimates you’ve listed. The first resource you will need is the money to buy everything else on your list. This includes your own wages and possible staff.
Is the number you see realistic?
If you’re not sure about your estimates, go and find out. Speak to suppliers and explain your business idea. You might be surprised at what cheaper alternatives you can find this way.
The next step is to go into the market and get some offers from suppliers for your identified resources. Make sure you stick with what is on your list, that is what you need. If a supplier points out a few more resources you should think about, add them to your list and research if you really need them. Mark them yellow for now until you are sure.
Why you might want to outsource Resources
Another option is outsourcing some of the required resources. The most common outsourced resource is often accounting. Most businesses opt for an accountant instead of doing their own accounting.
IT and transport are other good examples. Usually, those resources come as a package, cover many of the resources you’ve listed in the right column. A car leasing comes commonly with insurance and service included. It often even covers a replacement if that is important to you.
Take each of your listed resources and see what the market offers and if it covers all the sub-resources you identified. Update your list accordingly and be very analytical about each resource. Always ask yourself: Can I do it without this resource?
What do you do if you have limited resources?
When we talk about limited resources, we often talk about money or connections. Mainly non-material resources.
Dealing with limited resources is really about cutting down on the non-essential things you need. It sounds obvious, and it is.
But sometimes having another look at your business model, might just do the trick. To come back to the previous example of a hairdresser salon, maybe instead of offering everything a hairdresser salon could offer, you start with a small subset and figure out a niche that would work in your area.
Very likely, you won’t need all the stock, money and other resources, but you can start your business and over time, as you grow, build it out to the intended size and market.
I always play this game with all my clients: Take the table with all the resources you managed to list and take one of the main resources (left column) out. Now see what you can do with whatever is leftover. You might be surprised what you will come up with to make it work.
Limited resources are very rarely a good reason not to start a business. You just have to change your point of view and look at it from different angles.
Learning the skills you need at every stage
When starting a new business, there are lots of things you don’t know yet. As we said before, some you could source out. And you might do that, but you should definitely know how it works before you outsource it.
This is your business and your responsibility. If things go wrong you can’t just turn around, blame someone else and continue. It’s all on you.
You should take some resources, like time and money, to learn as much as you can about the things you outsource. You might decide to get an accountant, but you need to understand how taxes work. You need to be able to assess what it takes to do this right. Even if it is just to see if your accountant charges you too much.
It doesn’t mean you have to train as an accountant to do so, but you need to know the basics, at least. I always advise my clients to do most of the work themselves at the beginning. To get a better understanding of what’s involved and what the real value or cost of the resource is.
You can’t do all of it yourself, but you can learn about it. If you look for insurances for your business, having an understanding of how insurances work, reading up on experiences of other people and business owners and getting some advice from neutral sources, will certainly help you to find the best possible deal for your business.
Doing this on every stage of your business keeps you in touch with all aspects and resources involved. Now you can take a proper decision when and how you manage your resources.
What to look out for
Before you start, let me make a few points I believe are important for you to consider:
Use resources responsibly!
This means, don’t buy a car if public transport will do. There is a fine line between the things you want and the things you need. We tend to lean towards the things we want and easily find reasons why we would need them.
Imagine you would advise someone else in this matter. Would you still go for the car?
Make the most of your time!
It will take you a while to get all the information you need together. Concentrate on the most important resources first. You will find that many things you thought are important to have, you might not need and the other way around.
Speaking to start-ups, this seems to be more often than not “money”. Depending on your business, this might be true, but often money isn’t the most important part. Yes, you need it, but you will need a lot of things. Is money the core of your business?
Don’t waste time on the least important resources. Ask yourself which resource the business could not work without.
If this is your first business or even your 10th business, surround yourself with people that can help you make the right decisions. This really goes with the previous point. You can’t afford to waste too much time learning everything you need to know. And even if you know, you won’t have the experience to apply that knowledge.
This might be someone you know, a friend, a co-worker or family. You could even join your local Business Association and find support there.
To sum it all up
Managing resources is not as difficult as you might think. Create that table we spoke about and add everything that comes to mind. Give yourself some time to come up with a complete list. Speak to other experienced entrepreneurs and get their advice.
Now link all the resources together. Find out if some resources depend on another. Some might need money, while others need time or knowledge and expertise.
Mark the resources you have green, the ones you don’t have but need red and the rest yellow. Have another look at the yellow and red ones and ask the question: “Do I really need this?”
If you find a resource you need, but don’t have, take another look at your business plan (use the Business Model Canvas). Can you make adjustments so it will work without the missing resource?
Would it make sense to niche-down and start smaller until you can afford the missing resources and then start building it up?
- Use resources responsibly
- Make the most of your time
- Get support
And most of all, enjoy your business.