Entrepreneurs need to make decisions, create strategies, plan projects and constantly face risks in order to manage day-to-day business challenges. In a global business environment, alertness and the right pace is the key to success. Critical thinking is the most important skill needed by entrepreneurs that can help them move ahead consistently and diligently.
The fundamental aspect of critical thinking is a clear and rational thinking process involving critique. The National Council for Excellence in Critical Thinking defines critical thinking as the “intellectually disciplined process of actively and skillfully conceptualizing, applying, analyzing, synthesizing, and/or evaluating information gathered from, or generated by, observation, experience, reflection, reasoning, or communication, as a guide to belief and action.”
When you think through a business problem, your thought process is naturally motivated by biases, such as your point of view and your assumptions about the situation. Such ideas and biases affect your reasoning. If you let your biases drive your thought process and overlook blind spots in your logical thinking, you’ll unintentionally make decisions filled with flaws.
So what is the right method?
Here is a step-by-step process that can help you get better in critical thinking:
1. Knowledge or insight: The first step is to ask the right questions that can help deep understanding about the problem. The questions in this stage should be open-ended to allow the chance to discuss and explore main reasons. At this stage, two main questions need to be addressed: What is the problem? And why do we need to solve it?
2. Understanding: At this step you understand the material read, heard or seen. In understanding, you make the new knowledge that you have acquired your own by relating it to what you already know. The better you are involved with the information, the better you will understand it. The best way to know if you have understood and comprehended something is by defining what you have read or heard into your own words.
3. Application: This is the step where you build a linkage between the information, your understanding and resources available. An example would be to use Mind maps to analyze the situation, build a relation between it and the core problem, and determine the best way to move forward and take action.
4. Analysis: This is the stage when you deep dive into the problem and divide it into smaller sections or workable actions, so that you have a clear understanding of how ideas are ordered, related, or connected to other ideas and steps.
5. Synthesis: At this stage you put it all together. A decision should be formed about how to solve the problem and the initial routes to follow to take this decision into action. Synthesis involves the ability to put together the parts you analyzed with other information to create a solution.
6. Get going and take action: The result of critical thinking should be transferred into clearly defined actionable steps. If the decision involves a specific project or team, a plan of action could be implemented to ensure that the solution is adopted and executed as planned.
Last but not the least; it is highly recommended that you consider implications of your options and decisions. Every choice and action has consequences, and you can improve your decision-making by anticipating what those might be. In order to do that, try to look at the problem from all different viewpoints and angles and repeat the above steps if needed.
Picture this: An 18 year old boy busy working on a Mac machine in his bedroom in the London district of Wimbledon. All he does is write computer code and read on topics related to natural language processing. Soon this boy is seen selling apps to Yahoo Inc.
This is not a clip from a teen movie but a realty! Meet the 18-year-old WSJ. Magazine Technology Innovator of 2013 who became an overnight millionaire by inventing an app that may revolutionize how we read “on the go”
Nick D’Aloisio has changed the Way We Read: Earlier this year, this 18-year-old London schoolboy had sold a piece of software to Yahoo! for $30 million. The app called Summly, compresses long pieces of text into a few representative sentences. In a world where people generally read when on the go, this kind of an app, that delivers brief, accurate summaries, has practically changed the way we read.
The history of Summly can be traced back to 2011, when at the age 15; D’Aloisio managed to close a seed round of funding from Li Ka-shing, the wealthiest man in Asia. An early version of Summly, called Trimit, was featured in Apple’s app store in July 2011 on a list of new and noteworthy offerings. This is where it got noticed by the influential Silicon Valley blog TechCrunch and quickly came to the attention of an investment group led by Li Ka-shing. A year later, Summly was launched, and within a month it had attracted 500,000 users and became the number-one news app in 28 countries.
D’Aloisio says: “I thought I was going to sell the app in the Apple store for a pound or two each, and then I’d use the money to buy a new computer. I’d never had any contact from an investor before. And now here’s an email supposedly from a Hong Kong billionaire. It sounded dodgy. I didn’t respond the first time. They had to email me again.”
Later that year D’Aloisio was accompanied by his mother and father as he took a meeting with Horizons Ventures’s representatives in London. The meeting ended with D’Aloisio receiving a seed investment of $300,000.
Currently D’Aloisio is enjoying the new found success and spends most of his time managing his app and thinking of new ways to include improved features. He’s also contemplating whether to enroll in university in England or maybe the U.S. to be closer to Silicon Valley. Or maybe he’ll just skip college entirely and just focus on his work.
D’Aloisio says: “Serial entrepreneurs get addicted to creation. I want to be passionate. I feel really bad when I’m not doing something new.”
Accounting and budgeting are the most essential parts of any small businesses setup. Business owners and entrepreneurs are always looking for easy-to-use tools that helps them manage their day-to-day accounting, financing, invoicing and budgeting tasks. With emerging new technologies and the introduction of cloud based computing, it is important to choose a robust tool that helps you with basic tasks and gives you that extra value and ease.
There are a growing number of online services dedicated to helping users manage their finances. Here is a list of the top five most popular and user friendly accounting and financing tools:
QuickBooks: One of the most popular accounting and financing tools available in the market, QuickBooks has been developed by Intuit. After its initial release, the software became instantly popular among small business owners who had no formal accounting training. The software is currently offered through a hard drive version and also online. The software provides a comprehensive menu of functions, including a ledger, accounts and payable, payroll and inventory.
Freshbooks – It is a complete cloud based accounting tool designed for small business owners. Founded in Canada by Mike McDerment and Joe Sawada in 2003, FreshBooks is a complete solution that can be used online. This program allows you to upload documents for members to use and send invoices via mail or e-mail. You can track the status of your invoices, as well as all of your expense and income reports.
Sage 50 or Peachtree Accounting: A business management cum accounting software, this product was published by the Sage Group and is sold primarily in the USA and Canada. Popularly known as Peachtree, however as of the 2013 edition, the software is now called Sage 50. In addition to the standard accounting functions of inventory tracking, reports and analysis, this tool also provides customer contact records and transaction histories. This software also makes it easy for you to manage cash flow, customer payments, track inventory and plan purchases. This tool is apt for any medium sized business.
Xero: This online software gives you the option to manage your business and your personal financing. The solution is sold by a monthly subscription and the charge is proportionate to the number (and type) of company entities managed by the subscriber. The key features of Xero include automatic bank account feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, and standard business and management reporting. Xero is an online cloud based tool, so you can also partner Xero with numerous add-ons, including programs for performance reports and online signatures.
Outright: Primarily a US based solution, Outright is an accounting and bookkeeping application that assists small businesses and sole proprietors with managing their business income and expenses. This online software covers the basic functions of income, expense and tax reports. The Outright website is focused on “a single word – simplicity.”