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. That’s what usually trips them up, sooner or
later.
Don’t let that happen to you. Admit that you don’t
know what you don’t know about business, starting with these 15 tips
guaranteed to help keep you and your company out of hot water. Some are
straightforward, others are counter-intuitive, but they’re all true. And
some day they’ll save your butt.
Always make sure there is and will be enough cash in the bank.
Period.
The most common business-failure mode, hands down, is running out of
cash. If you know you’ve got a cash flow or liquidity problem coming up,
fix it now.
Take care of your stars.
This goes for every
company, big and small. The cost of losing a star employee is enormous,
yet business leaders rarely take the time to ensure their top
performers are properly motivated, challenged, and compensated.
Learn to say "yes" and "no" a lot.
The two
most important words business owners and founders have at their disposal
are “yes” and “no.” Learn to say them a lot. And that means being
decisive. 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.
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.
Trust your gut.
This phrase is often
repeated but rarely understood. It means that your own instincts are an
extremely valuable decision-making tool. Too often we end up saying in
retrospect and with regret, “Damn, I knew that was a bad idea.” But the
key is to know how to access your instincts. Just sit, be quiet, and
listen to yourself.
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.
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.
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.
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.
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.
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