To succeed in business today, you need to be flexible and have good planning and organizational skills. The biggest problem founders and small business owners have is that they’re experts in their field and novices in what it really takes to effectively run a business. Sooner or later, that’s what usually trips them off. Business is much more difficult than we thought, but you can avoid this in your business ventures by taking your time and planning out all the necessary steps you need to reach to achieve success.
Here are 15 important tips before you launch your first venture.
1. Enough Cash.
The most common business-failure mode, hands down, is running out of cash. Always make sure there is enough cash in your bank. If you know you’ve got a cash flow or liquidity problem coming up, fix it now.
2. Be sure when to fire employees.
Just make sure you know they’re the problem, not you.
3. Take care of your star employees.
The cost of losing a star employee is enormous, yet business leaders rarely take the time to ensure their top performers are properly compensated, motivated and challenged.
4. The problem is probably you.
When things aren’t going well, the first place to look for answers is in the mirror.
5. Your people are not your slave.
If you use and abuse them that way, you will come to regret it.
6. Learn to say “yes” and “no” a lot.
Learn to say “yes” and “no” a lot. And that means being firm. The most important reason to focus – to be clear on what your company does – is to be clear on all the things it doesn’t do.
7. Learn two words: meritocracy and nepotism.
The first is how you run an organization – by recognizing, rewarding, and compensating based solely on ability and achievement. The second is how you don’t run an organization – by playing favorites and being biased.
8. Listen to your customers.
It boggles my mind how little most entrepreneurs value their customers when, not only are their feedback and input among the most critical information they will ever learn, but their repeat business is the easiest business to get.
9. Know when and when not to be transparent.
Transparency is as detrimental at some times as it is beneficial at others. There are times to share openly and times to zip it. You need to know when and with whom to do one versus the other. It comes with experience.
10. Trust your gut.
Trust your own instinct because this is the most valuable tool in making decisions. Just be quiet, sit and listen to yourself.
11. Protect and defend your intellectual property.
Most of you don’t know the difference between a copyright, trademark, trade secret, and patent. That’s not acceptable. If you don’t protect and defend your IP, you will lose your only competitive advantage.
12. Learn to read and write effective agreements.
You know the expression “good fences make good neighbors?” It’s the same in business. The more effective your agreements are, the better your business relationships will be.
13. Run your business like a business.
Far too many entrepreneurs run their business like an extension of their personal finances. Bad idea. Very bad idea. Construct the right business entity and keep it separate from your personal life.
14. Know your finances inside and out.
If you don’t know your revenues, expenses, capital requirements, profits (gross and net), debt, cash flow, and effective tax rate – among other things – you’re asking for trouble. Big trouble.
15. You don’t know what you don’t know.
Humility is a powerful trait for leaders, and that goes for new business owners, veteran CEOs of Fortune 500 companies, and everyone in between. More times than not, you will come to regret thinking you knew all the answers.
Behind every failed company are dysfunctional, delusional, or incompetent business leaders. The irony is, none of them had the slightest idea that was true at the time. Even sadder, most of them still don’t. Don’t end up like one of them.