The Ten Rules of Entrepreneurship

The rules for success as an entrepreneur

Here is what I have learned over 40 years:

  1. Business ideas are often shiny objects — they can divert your attention, have little to offer and aren’t real. Practical business concepts are often pretty dull, but they always focus on meeting a need, fulfilling a customer need. Realistic business concepts provide something that customers will pay for, either for convenience, need, or desire.
  2. Nothing happens until something is sold. Sales and marketing are crucial to success. You must identify and know your target market. You should know more about them than they do. You must constantly research, evaluate and investigate. You must constantly look for new markets, ways to refresh old markets and you must perfect the art of the recurring sale. A one time sale is a loser. You must have repeat business to survive.
  3. Cash flow, cash flow, and cash flow. You can’t survive without it, but it must come from profitable operations. Cash flow which comes from increased leverage, or volume which comes from selling below cost is like cancer: it will eat you out from within until your business collapses.
  4. Your “solution” had better be relevant, time-effective and cost effective. It will stay that way only until your competition bests you. What do you do then? You better have a really good plan and be ready. You’ll go through this loop many times, so be prepared. The first plan is never the last plan. You better have plan B and C ready to go.
  5. A business must be scaleable. If the business is largely centered around your skills, your personality, your talents, and those can’t be multiplied, duplicated or cloned effectively, then you just created your own box, and you are now a slave to the business.
  6. A business must have systems, protocols and documented methods. If you are constantly reinventing the wheel, doing things one way one day and another way tomorrow, you have a never ending series of near calamities and mishaps which will eventually crash and burn.
  7. A business must have a good information system. You must know what your costs are, what your revenues are, what your margins are. You must have an idea of your break-even point, your marginal cost of operations, your cost per hour and cost per square foot of operations. These things constantly change, and you better have a great accounting system to track and analyze this stuff. Otherwise, you are a blind man driving a truck on a mountain road.
  8. A business must have a soul. You must stand for something besides just your product or service. How does that product or service contribute to society? Are you helping people? Are you a problem solver or a problem creator? If your business has no valuable societal purpose, there’s no good reason for it to exist.
  9. A business must understand what its assets are, and preserve, protect and grow those assets. For most businesses, that means the people that make up the business ( number 1), the intellectual properties that make the business unique ( goodwill, reputation, patents, copyrights etc), the physical assets ( buildings, equipment, etc) and the financial assets ( cash, investments, etc).
  10. Play nice, do good, help people. Follow the law, both in letter and intent. Don’t try to take unfair advantage of people or other businesses. Just because you “can” doesn’t mean you “should.” Be a force for good in the world. Demonstrate integrity in all you do. Play fair. Good Karma will follow, as it is a fundamental law of the universe.

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