What is the most important thing in business – self-realization or getting profit? Perhaps, when chasing profit something really important slips away, something that business has no future without… How to define that and make business more efficient for investors, for the head, and for each employee of a company? And finally, what is the most “right” way to develop your business?
For many years doctor of political sciences, the Academician of IIA, Certified Management Consultant in Accordance with the Amsterdam Standard ICMCI Konstantin Smolentsev has been trying to help answer these questions. He became a “Guest of “Vsluh.ru” and a hero of national interview.
- Konstantin Yurievich, surprisingly there are a lot of questions on how to start activity of an entrepreneur. Perhaps, many want that type of life, yet have many doubts. For example, Alexandra from Ishim is asking: “What do I have to do to build successful business? What knowledge can help on a development stage?”
-To successfully start your own business, it is necessary to have an idea and again, idea! And hope that you will do “it”. That is the most important thing. Along will help basic entrepreneur knowledge: general theory of management, strategic management, marketing, basics of economics and management of personnel, understanding legal and accounting-tax aspects of business management. Knowing a foreign language would be a great addition.
- Speaking of having an idea, there’s a question: “Good day! Mr.Smolentsev, how do you think, is it possible to get support from the government for a businessman-beginner, if he doesn’t have money, but has an idea and a huge desire to make it true? If yes, then what is the volume of that aid and what are the ways to get it? Thank you. Artemiy Ivanchenko, Tyumen.”
— Good day, Mr.Ivanchenko. For the government, I think, your idea has to be important for the society. That’s first of all. Then – it is necessary to work through the idea carefully, develop a real business plan. On that stage it is necessary to consider all existing market limitations, “inner” and “external” parameters. How is your “product” going to differ from existing ones, why is it unique, who are your competitors, who are your clients? Predicted efficiency? Those questions are first of all more important for you – they will show realizability of the idea. And only then, when calculations are ready, you can contact authorities. From their side there are various means of support, it all depends on sphere of your business. Browse carefully through government websites, you’ll find answers to majority of your questions, and after – contact branch department, which supervises sphere of your business, they have to consult you.
-But it seems like consultation is not enough, a more efficient support is needed. For instance, Lena from Tyumen writes: “I would like to start my own business, open a store, for example, but to be completely honest, I fear the perspective of figuring out taxes-accounting departments. How do I focus on the “battle”? Can a business consultant or a law firm solve those problems for me? And one more thing – is there some resource that would tell you step by step how to start your own business?”
— You are right, there’s no need to take on responsibilities when you know you’re not competent enough. Every person should do what he can. And do it on a professional level. You can contact a consulting-audit company. They will take over questions that you have problems with. In the contract you can and you should state that they take up responsibility for correctness of conducting accounting and tax account and other questions. Thus in case of occurred disputes or conflicts with supervising bodies or employees, protection of your interests will be conducted by an audit company, as well as to bear liability in case of loss. And the prices for these services, as far as I know, are pretty reasonable in Tyumen.
Last question is more “painful”. You are not the first one who asked me that question. Unfortunately, there’s a “black hole”. My plan is to create such resource.
-Can any person open his own business? What psychological qualities, character is necessary for a businessman first of all? – Tatyana is asking, Tyumen.
— Not every person has the qualities to run enterprise activity. From psychological qualities, from my point of view, a businessman needs first of all: psychological stability, susceptibility to the environment, analyticity, hardness (but not closed mind!), flexibility (but not softness!), ability to think beyond standards, communicability, ability to bring innovations, stubborn desire to “concur new heights”. And if you have charisma – that is very good.
- What book would you recommend to read for a beginner entrepreneur? Valeriy, graduate 2008.
— I remember, that on the changing point of epochs, when entrepreneurship was born in Russia, one of the first books about business and destiny of a businessman came out was “Career of Manager” Lee Iacocca. It made an enormous impression on our businessmen. Today, there’s a lot of literature, Russian and translated. I suggest reading regularly. And the good ideas you find in books, immediately try to realize in real life.
- And now questions from another sphere. “Good day. What do You think, will there be a law on audit? And one more question, what type of payment to auditors is most comprehensible? Olga, Tyumen”.
— Hello, Olga. I, unfortunately, can’t make prognosis activity of our legislators. As for type of payment to auditors, comprehensible is the one which allows to combine personal interests of an auditor and interests of an audit company. Today, in my opinion, in majority of audit companies this question is solved in an overly easy manner. Therefore often quality of audit is not the best and level of personnel “fluidity” is too high. I have my own vision on development of system for personnel motivation, precisely “intellectual” business. It’s not an easy task. Read my article “Managing Business: Motivation-development approach”.
- Question about your work biography. “Good day. Wasn’t lazy to type in your name in Yandex search system. One of the links showed – Strategic Development Director of consulting group “Leks”. Means that you’re from Tyumen? Where else did you work in our city and how did you manage to start working on an international arena? Evgeny Vladimirovich, Tyumen”.
— Hello, Evgeny Vladimirovich. International field “we, Konstantin Yurievich”, entered in early 90s and are not planning to leave (smiles). With “Leks”, yes, I have cooperated for approximately one year when the company was entering world market.
- What other Tyumen companies did you cooperate with? And do you currently cooperate with any?
— I was almost always an owner of my own business. My view on cooperation – partnership with clearly defined goals, limits and responsibility. There may be many forms. Is strategic partnership, specifically with Tyumen businessmen possible? Why not? I’m always open for that. Today there are several business directions on the territory of the region which I’ll gladly invest in. Key role plays personality of the partner when I make a decision about partnership. It is more than half of success of any project. To lose with a smart and intellectual person – is a coincidence, to earn with an unintelligent and dim-witted – is impossible. This is my strong opinion. So if there are offers, I will look at them.
- What do you think, is it possible to start small business while having a main job? Can business be some sort of a hobby that with bring if not big but some profit? And one more question. What can you say about business development in Russia, connected with Internet: what branches are developing in a more dynamic way?
— Very interesting and genuine question, thank you. I have discussed an analogical theme recently with a woman-executive of one of the companies. You can and sometimes you even need that! And often it is not about the money, but about self-realization, “escape” from main work. And hobby here is ideal!
Now about internet-business. It is dynamically developing, including even in Russia. Thought doesn’t have limits. It is already a subculture of humanity. Internet-business sometimes develops in a very unexpected manner. It is an intellectual sphere of human activity, hence, priorities change very fast. Even in “World Wide Web”, there are a lot of opinions and prognosis on that topic. I can say one thing, importance of an IDEA in internet-business can often become more significant due to its simple and fast realization.
- So, in your opinion, is there a right way to answer: what is the main thing in business? Its efficiency is defined by its profit, that is my strong opinion. Otherwise, what else is it needed for?
Alexander P., Tobolsk
— If it’s your strong opinion, then why dispute? I don’t want to discuss the difference of income and profit right now. Income may be less then expenses. Profit, from my point of view, – is a necessary condition for business survival. That’s it. Here our positions are similar. Business efficiency is a more complex definition, which expresses possibilities of business to not only stay alive, but to also actively develop, satisfying requirements of the society, owners and labor workers. What is business for? First of all, to satisfy primary needs of survival: food, housing, transportation means, supporting family. After, when some amount of capital is saved, – it’s already from a sphere of self “ego”, realization of your dream, ambitions… Another thing (which is arch-important!) is that when starting business, you have to think of its evolution and mutual influence on the owner, and build according to that your actions on business development and self destiny, but you can also not know that and not think about it, and then with time a lot of unexpected things will occur, which are not easy to deal with…
- Maybe this can be the right answer: “Business is creating resources for self-realization in it and other branches”? How to start business, I think about it a lot, but am moving pretty slow. I decided to start with a team – it is hard, for now a picture of attractive future hasn’t formed not for me, neither for those who I call to be with. How did you start?
— Your questions consist of almost ready answers. I absolutely agree with the first expression: “Business is creating resources for self-realization in it and other branches”. Further – initiator has to form a clear appealing “image”. Those are also your words. Concreteness attracts people. Thirdly: business requires a leader. Someone has to take a role of a first one, “general”. When there’s a leader, often a clear image isn’t needed. It is enough to look around at executives of businesses and governments. My way… I always generated ideas and never was afraid to take a role of a leader. At some point (period of cooperative movement) I tried to implement full “business-democracy”. Business started to slow down in its progress. And for majority role of a co-participant wasn’t close. Hence: “image” – “leadership” – “effective business” – “self-realization”. Good luck, Lyudmila!
-Greetings! Can you please remind how you started your career … And why is your Ph.D. on a political topic, not economic? And what is the volume of that political side in LARGE (on a Tyumen scale) businesses? Irina Vetrova, Tyumen
— Greetings, Irina! Remind? Did I ever tell about my career way? (Smiles). Everything started banally. At some point qualified specialists weren’t needed anymore in Russia, and people needed to survive. An idea arose. After — versatile business, then — financial, consulting. On a certain stage, when everything was fine, it “has clicked”, is it possible to do the same thing differently, more professionally? A necessity arose to stop for a while, look back, rethink a lot of things. Candidate and doctors thesis on a merging point of politics and economics, non-economical aspects of attraction and regulation of investment flows.
Life has proved correctness of my conclusions in dissertations. Today investment appeal of regions and business — question, equally political-economical. And to form investment appeal it is necessary to consider existing realities. It is also the answer to your last question. The political component of any large and even average Russian business is rather significant. I speak about it not abstractly, "from rumors". In consulting projects which we conduct, this aspect has a serious role.
- Konstantin Yurievich, you haven’t talked about your “pre-career” way. Can you slightly open the “veil”?
— Well, you know how to persuade! I will open to you first. I moved to Tyumen when I was 1 year old. Kinder gardens, schools, music school (grandfather gave me a violin), backyard football and hockey with stealing boards from constructions to build a court, favorite dog… Tyumen State University (hydrogeology, engineering geology, field practice from Caucasus up to Kamchatka, a rock group, a victory over the first regional competition of discos). Very interesting time! When I was a student interest towards philosophy to me was “imparted” by Fedor Andreevich Selivanov, with warmth I remember our conversations. That was the moment when I realized that there are so many interesting things, undiscovered, opportunities on a merging point. Merge of sciences, fields of activity, interests.
This vital conclusion, by the way, has found subsequently expression in my practical activities, and in scientific researches. At mature age – MBA program in the Academy of National Economy under the Government of the Russian Federation. Same place – specialization in management consulting. Thesis – in Academy of Public Service under the rule of President of the Russian Federation. For the past 10 years I haven’t been living in Tyumen, but life keeps on returning me there…
- Good day. Looking at your website, your last projects are in agrarian sphere. Why do you pay so much attention to that? We’re used to thinking that agriculture is a black hole, where you only invest and never get enough. And really, you truly believe in success? Bonded loan, some “Balanced Scorecard” – do you really think our farmers understand that? I don’t want to upset anyone, but I think it’s a little bit too hard for them.
— The day is truly good! Perhaps, your opinion is based on something. And, unfortunately, is it widely spread. It’s not a minus to you, it is reality. You are right, before we didn’t pay much attention to projects in agro sector of economy. Although I wouldn’t compare agriculture with other branches, and every branch has its own specification. Everything depends on people who work there. That is my deep belief. And in agribusiness you can meet a lot of interesting, ambitious and highly qualified people. This was a conceptual moment. About the question of realization. Today there aren’t many enterprises in Russia (any branch), which would realize modern management techniques in the same volume as our clients in agrarian sphere.
Actually, I don’t like the word “clients”. It incorrectly reflects an essence of our relationship. Partners! When carrying out seminars and offer listeners new business-terms, every time I doubt if they accustom, will they be in demand? And then I come back for another internal consulting session to the agro holding and hear terms in dialogues among regular experts: feedback on investments, project management, KPI, Balanced Score Card, strategic card, balanced development,… and you understand that your work has paid off, it is in demand, it brings real help. And result can be easily counted and estimated. I don’t want to advertise myself and my partners, but banal comparison of numbers can talk for itself. About belief in success… You shouldn’t start any business if you don’t believe in its success.
- One more question in continuation of agrarian theme: “Is it possible for a physical person to participate in bill loans of “AgroIntel”? Curious investor”.
— Dear curious investor! As much as I know, certain conditions, offered today by the bill program of “AgroIntel”, are intended especially for investors-physical persons.
- Literally a few days ago you have announced that together with group of companies “AgroIntel” you are intending on carrying out International Agrarian Forum “Innovations in agribusiness” in Tyumen and Zavodoukovsk (!). Moreover, you are counting that it will become one of the most elite forums in this sphere. What makes you so confident?
— Our confidence is based on the fact that today there is an objective need to exchange innovative experience in agriculture (we’re talking about plant growing), both in selection and cultivation of agricultural crops, as well as in organizational construction of agribusiness (specifically as modern business!). And there is no other platform of such format but our forum. We are the first ones. It is our idea, our know-how. World is cardinally changing. Social importance of food stuffs is rapidly increasing. That is understood by average people, when they enter grocery shops. That is understood by government rulers. That is also understood by agribusiness representatives.
Without innovations, without exchanging ideas (again – ideas!), without change of attitude of social institutes towards that question, active development of competitive agriculture is impossible. There are no forums for such direction, but there is demand. We have just announced about carrying out the forum, but already started getting many applications for participation from different countries. Both from agro-industrial producers, and representatives of authorities; agrarian professional associations; analytics; selectors; representatives of consulting, financial, investment and insurance companies; representatives of producers of agricultural machinery, fertilizers and means of protection. This means that we have caught existing need. I am sure, that forum will be a successful event.
- You, as far as I know, have been dealing with the problem “a woman in business”. Here’s a question about it: “Hello, Mr. Smolentsev. Several years ago I was reading your thoughts about a business-lady. Thank you for your serious attitude towards women, not like most men – looking down on us. I hope since then your attitude hasn’t changed? Do you carry out any researches concerning career of a woman? If yes, what do they show? Anna, Yekaterinburg”.
— Hello, Anna. I assure you, my quivering attitude towards women has not changed. I don’t carry out any special researches concerning women’s careers. It is very interesting, but I’m more of a business-expert. But it is necessary to help. After my article “Woman + business = Business-Lady?” throughout these years more than 500 women have asked for my opinion from Russia, USA, Canada, France, Estonia, Latvia, Great Britain, Kazakhstan, Kirgizstan, Germany, Lithuania, Israel, Finland, Belarus, Ukraine, Uzbekistan, South Korea, Cyprus, and other countries of Europe and Asia. Approximately to a half of that number I have helped with advices consultations. And statistics, obviously, have built up. And certain conclusions arise. Certainly – massive amount of information is priceless. I have an idea to group all this experience in a book, but there is catastrophically no time…
- What about other books? Have you published something?
— There are several books I have published. Although they are addressed more to specialists in spheres of investment and political relations. And recently society has been asking for literature for a more wider auditorium.
- In the news I have heard that deputies are going to create a law about struggle with raiders – is this problem truly “hot”? Are you aware of any raider cases which happened in Tyumen region?
— Of course it is “hot”. It is sad that the government paid attention to this problem only now. Maybe, the “critical mass” has accumulated. We know several raider captures in Tyumen region. Most of them were actively talked about in mass media. Unfortunately, all of them resulted with success from raider’s side. It means that majority of heads underestimate the situation with raiders. When working with enterprises, we’re always trying to convince heads to preventively integrate in their businesses anti-raider systems of protection. And we can practically estimate efficiency of such approach.
- How do you think, does the attacking side win because one of the main tools are authorities?
— You said that.
- Well, alright. Can you name the most simple “preventative measures”, available for any entrepreneur, even the “smallest” one, to protect business from raiders?
— Banal standard rules: statement of effective controllability in a company, choosing “right” partners, constant monitoring and structuring shareholders capital, formation of rallied command, competent management of creditor debts, reasonable publicity, forecasting actions of competitors, presence of worked out scenario variants of business development with security resources… Generally speaking, “if you want peace – prepare for war”.
- Let’s move on to “macro-analysis”. Nina is interested: “What are your political convictions? How do you estimate conditions for business development, which are in Russia?”
— Î-î-î! I’m a realist. I think that at the developed world price conjuncture and our resources in Russia it was possible and necessary to change a lot of things and make them much better. Although, in “football and politics everyone is an expert” (smiles). Nevertheless in majority of parameters we’re losing to not only India, China, Brazil, but to also some of our soviet republics. And that is also a consequence of existing conditions for business development.
- What would you change?
— I would pay key attention to development of rising generation – it is the future of our country, basis of our competitiveness. I would provide worthy life for pensioners – they deserve it without any debates. And I would give an opportunity for those who are able to work to independently build their lives with minimum government participation in it. Role of the government means certain “game rules”, strategic management, control and protection. I would equalize responsibility of officials in relation to citizens and business in same degree citizens and businesses to government, it should be a mutually responsible relationship. Concrete person today – that is the focus of all worries of a government. And the government has to carry all responsibility for its functions and actions. But we still cant get rid of that amorphous bright future ahead of all plans and actions, a lot of declarations and little realization…
By the way, those are not thoughts “sitting in the kitchen”. My offers on realization of national project “Education” and increasing social security I have transferred a year and a half ago to the head of President Administration of the Russian Federation Mr.Sobyanin to present it to President at that moment Vladimir Putin. Several offers on decreasing social intensity and increasing social security of Canada’s population I have made for the Prime Minister of Canada Mr. Stephen Harper. We have a lot in common with Canada. Model of Canada’s development in many aspects is rather indicative for Russia and can be used in practice. But we also have identical problems.
- And last question: “And after all, without what business has no future? Vladimir K., entrepreneur-beginner”.
— Without personality, Vladimir. Definitely!
Author: Prepared by Irina Abbasova
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