What is Your Entrepreneurial Ability?

Entrepreneurship is a mindset, not a title!

Entrepreneurship is a mindset, not a title. If you're considering risks of doing business, figuring out optimal combination of resources, keeping a constant eye on the returns on investments, and making decisions to extract the highest level of profits, you have an entrepreneurial ability that you can leverage well.

With the Fed keeping interest rate steady for the time being, the time is ripe to consider AI, tech, or digital transformation. The ROI for each cost needs to be calculated with care, because productivity can change exponentially.

While most accounting departments and owners have a software or spreadsheet with running totals of amounts spent on business aspects and incoming revenues, economic costs often get obscured under the dollar amounts.

4 Types of Economic Costs of Production

1. Rent

   1. paid to "Land" resources

   2. Raw materials, software subscriptions, buildings, cloud storage, etc.

2. Wages

   1. paid to "Labor" resources

   2. Employees who work in your business.

3. Interest

   1. paid to "Capital" resources

   2. Borrowed money for construction, digital transformation, etc.

4. Entrepreneurial Profit

   1. paid to "Entrepreneur" resources

   2. Owner, CXOs, decision-makers in company

   3. NOT the same thing as "BUSINESS PROFIT"

Actionable Insights for Entrepreneurs

1. Know which costs are non-negotiable.

2. Calculate returns on each cost frequently.

3. Involve others when making AI/Tech decisions.

4. Ensure that the data and dashboards are accurate.

5. Seek expert help to optimize your costs and revenues.

P.S.: Would you like me to show examples of ROI of each type of cost in the coming week?

Want to increase your SMB’s profits by 10-20%? My Data-Audit & Action Plan does that for you!

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