College programs give you an MBA in
two years or less, but from observed experience it takes five years to earn an
MBA in Enterprise. Only two out of every 10 enterprises survive their first
year. Of those that survive their first year only 20% live to see their third
year. In other words, less than 2% of enterprises started every year get to see
their third year of existence. We are not even talking about whether they will
be successful or not.
In the first year of business you
have no idea of what you are going. You do things because you have been told
they work. When they do work you are surprised and when they do not work you
have no clue of what to do about why they are not working. Your first year is
really a day to day hope against hope.
In the second year you are busy
avoiding all the mistakes you made in the first year. You are so busy trying to
stay afloat that where you are going does not matter as much as the fact that
you are not sinking. Everyone is congratulating you for still being around, but
deep down you have no idea how long you will survive because you have lost
everything possible including your friends and possibly self respect. You will
not have hit the bottom of the J curve yet, that is supposed to come in the
third year but you are rapidly approaching your loan limits and your start up capital
was exhausted long ago.
In the third year, you now know
what you should be doing and begin to focus on it. All the excitement of
startup is gone and you know that survival is a ruthless battle. At this point
it is also clear to you that you can’t go back and you can’t get out and look
for a job because nobody will hire you (they will want to know what you have
been doing for the past three years). The truth is you have been doing a lot of
things, but have nothing to show for it. You have burned your ships at sea and
have lost everything that got you to where you are. If your business gets to
year three you have no choice but to press on. Pressing on is the easier
option. Congratulations you have hit the bottom of the J-curve But you do get
some comfort from the new comers and greenhorns who believe you are an old
hand.
Only in your fourth year of
business do you have enough data for decision making. Only then can you sit
down analyze the business cycles you have been through over the last three
years. You can evaluate your performance, produce and process to draw up a
plan, execute a budget and look forwards to a modest profit. At this point in
your business, if you have maintained the discipline of not eating your working
capital, you understand what it means to break even. Breaking even is getting
to the point where you understand what you are doing and can begin to replicate
your performance. Many enterprises never break even until their 5th
or 6th year.
In the fifth year you have enough experience to have mastered
the enterprise process in your chosen area and can now embark on developing
mission statements, developing products and strategic plans. In your fifth year
you will have developed a loyal customer base, learned a great deal about yourself
and cultivated a niche market that regularly consumes your products. If you get
there; you will have earned your MBA.
NGCL Team
