Advice I Gave to a Young Entrepreneur

outer space galaxies stars nubulae
No do-overs in this universe.
We don't get do-overs in this universe. What's done cannot be redone. Your successes and not-quite-successes stay on your private resume throughout your whole life. A young friend of my three sons, whom I refer to as my fourth son, is an engineer and approached me about getting some advice and guidance on starting his own business providing engineering and construction services. He knew I had some experience starting, operating, growing, and selling a business in a similar industry. We agreed to meet in a few days, and the prospect of discussing business formation and growth prompted me to consider what I had really learned from my (gulp!) many years of experience in the trenches.

I started musing about what I know now that could have been very helpful to me if I had known it when I was a cub business owner. I share my thoughts below in no particular order. Some might have some redundancy, but I decided to present it pretty much the way it spilled out with a minimum of editing. Perhaps you have some you might add.
  1. Every outcome has a probability. In any situation there are countless possible outcomes. Each has a probability. For the decision maker, it is important to avoid the false euphoria of being sure of an outcome. Other outcomes are possible, even though the likelihood of their occurrence may be very small. Recognize the range of outcomes that have reasonable probability and have a plan for their occurrence.
  2. Have a plan for succession or dissolution. When a business is started, the principals are often excited and full of hope. Nothing wrong with that, but a written agreement should be made that delineates the terms the govern if one of the principals decides to leave the venture. While the discussion is akin to a couple hammering out the terms of their divorce while attending their engagement party, having this agreement in place at the outset can avoid conflict at a later date.
  3. Avoid letting your hair catch fire. This is an expression, probably outdated, that refers to an overreaction to a newly presented problem. Problems are seldom solved by histrionics. Calm, systematic, and rational approaches will work best at overcoming challenges.
  4. Everything is fine – until it is not. Especially in contracts with customers, employees, and partners, outlining what terms and procedures shall govern when things do not go as anticipated can avoid wasted time, conflict, damages, and other occurrences which will negatively impact the business. This is especially applicable to informal verbal agreements or understandings. If the issue has a reasonable probability of occurring, better to solidify an understanding among all involved parties at the outset, before their view is impacted by actual occurrence of unforeseen events.
  5. Agree on things before they become things. The best time to reach agreement on anything is before anything happens. This is especially true when money is involved. People think and act more rationally when the object of the agreement does not yet exist.
  6. Do not underestimate the power of greed. Study and understand greed and how it can affect the behavior of your partners, employees, customers, and suppliers. Also examine how greed can impact your own behavior. People you know and love may do some pretty harsh and unexpected things when in its grip.
  7. Or fear. Everyone has fear of something. At a primitive level, it is what helps us survive. In a business environment, identifying your own fears, as well as the fears of those you work with, can be valuable in decision making and planning.
  8. If you want someone to do something, make them believe it is their idea. Don’t worry about not getting credit for the good idea. Your goal is to make money. If sharing or relinquishing ego boosting credit for success or an idea motivates an employee or partner to higher levels of performance, let it happen. Better yet, make it happen.
  9. Never discount the potential impact of luck. Luck, good and bad, is the occurrence of those events that, in your estimation, had very low probability. Luck can also be the occurrence of an outcome about which you were not even aware. There is a substantial amount of chaos in the world. Be aware of chaos, and as prepared as you feel is prudent. Oh, almost forgot, do not take professional credit for lucky positive events. Show some integrity and call them what they are.
  10. Recognize the most basic purpose of your business. It is to collect checks, revenue, money. The manner in which you go about collecting checks reflects your dedication, professionalism, and ethics.
  11. Marketing makes you money – create solid presence and discoverability. This has always been true, but the manner is which you go about it has dramatically changed. Presence and discoverability are essential for growth in the modern business environment. They lead to opportunities for contact and revenue.
  12. Revenue generation is paramount. For small businesses, I mean genuine small businesses with owner/operators that know the first names of everyone working at the company, keeping money coming in is the number one priority. Be sure not to forget that for even one day.
  13. Pay employees first, then taxes, then suppliers, finally yourself. Your business plan should have allowances for paying everyone, especially yourself. As owner, you are last in line to get paid. Your employees and suppliers put their trust in your integrity and ability to make everything work and generate the revenue needed to pay them for their contribution to your business.
  14. Revenue generating activities take precedence over everything else. There is never a shortage of things that need doing in a small business. Prioritizing and delegating tasks in a manner that balances all the needs of the business is your responsibility, Boss.
  15. Suppliers can be your greatest source of short term financing. Materials and subcontracted work can be a substantial component of the deliverables of certain businesses. Even terms of net 30 days gives you a month to complete work and get paid. Do not underestimate this value. Good financial relations with a partner supplier can pay off when you need a small extension for a big project.
  16. Take liberal advantage of opportunities to outsource. Your human resources have some level of specialized knowledge or skill that directly relates to your company's revenue generation. That is what their pay is based upon. Avoid applying specialized resources to tasks outside of their specialization. Their pay is based upon their value as a skilled operator. Make sure you leverage that cost and skill to its maximum level. Outsourcing frees up the time of the specialists to do the important work.
  17. Avoid growth into areas subject to automation and AI takeover….unless you are the one taking over.  In this case, I took a liberty and applied my past experience to the current times. A more generalized appropriate maxim might be "Don't forget to keep a keen eye on the future of your industry". Many areas of work are being changed forever by automation and AI. Learn to recognize tasks or projects your company performs mostly with human resources that might be targets for automation and AI invasion. You should either innovate into automation and AI, or avoid those market segments as potential areas of growth.
  18. Establish and describe the value each person brings to the business. This includes all principals, current employees and new hires. The description of that value is the baseline that can be used to assess whether their value has increased, or even if it is being maintained. It’s important not to keep paying people more money for doing the same thing. Pay should be commensurate with value.
  19. Examine and understand your risk tolerance profile. Your appetite for risk, or your aversion to it, will impact your decisions in ways you need to understand. Excessive tolerance or aversion can result in a failure to capitalize on growth opportunities, or getting involved in projects with elevated probability of a negative outcome. Knowing your risk profile will help you to temper your enthusiasm or reservations to make prudent decisions. 
  20. Put systems in place that can easily scale up 20x. When you start your business, everything is small except your expectations. Putting business systems in place that can remain in place and easily scale up as your business grows will save substantial amounts of money and help you avoid the disruption that comes from changing from one system to another.
  21. Be prepared for big opportunities. They usually come without warning.
  22. You will likely overvalue your business. If you ever reach a point where the sale of the business is in play, recognize that your own valuation probably includes some very subjective elements related to your personal experience. Don’t be offended by a potential buyer’s failure to share your enthusiasm. Be prepared to show tangible evidence that supports your valuation.
  23. Plans for growth and success should be based upon the use of human resources with average levels of performance. You are not going to hire a staff of super-humans. Companies with tons of cash will hire all the super-humans. Don’t worry, with the right plan, you won’t need them.
  24. Nobody will do it as fast, or as well, as you. Accept that and plan accordingly.
  25. Downtime away from work is where inspiration is found. Find or make time to let your mind freewheel. When your mind is not occupied by the daily grind, room for free thought is plentiful.
  26. There will always be more customers. You don’t need to work with the bad ones. Avoiding an overly risky project, or a customer that demands too much of your time, can be a positive move for your growth.
  27. Suppliers may be your most important business relationship. A customer is unlikely to have the power to put you out of business. A supplier might, though. You do not want suppliers talking badly about your company’s demeanor (through interactions with your employees) or its payment record.
  28. Resources are limited. If you give something, be sure to get a return. This applies to everything. The return need not be monetary. It might be information you can use to build your business. Have a simple plan for every contact that outlines a simple goal you wish to achieve that will constitute your return on the time or money invested in the encounter. 
Now my young friend is prepared for success!

Follow, comment, contact me with your questions. I can be contacted directly at CMS4i by putting @TomO in the message section. At CMS4i, we help small companies build their brand and web presence, so contact us anytime.

While You Are In Pursuit of Success...

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This image is actually related to the article.
Often enough, I catch myself pounding away at my business pursuits with that "I've got to get this done" attitude. For many of us, business takes up a big part of the day. In my work, I frequently rummage through articles and other content generated by others. This is mostly a quest to build and maintain my level of familiarity with the industries and companies that we serve here at CMS4i, but once in a while I come across a piece that stops me dead in my tracks and hits my reset button. This happened recently when I opened up the January newsletter from SVF Flow Controls. The company president, Wayne Ulanski, with whom I am not acquainted, penned up a list that he called "Little Rules of Life". I wanted to share the list with you, and give all the credit to Mr. Ulanski for a thoughtful and interesting list of things for us all to ponder. Sometimes it helps to step away, far away, from the daily mind grind and think a little about what we can do to make ourselves, and those we contact, a little happier.

Here is the list, and it's a little long but worth reading. There is something in it for everyone. You can also see the entire newsletter, or see what SVF Flow Controls is all about. My favorite, probably my credo, is number five.

  1. Sing in the shower.
  2. Treat everyone you meet like you want to be treated.
  3. Watch a sunrise at least once a year.
  4. Leave the toilet seat in the down position.
  5. Never refuse homemade brownies.
  6. Strive for excellence, not perfection.
  7. Plant a tree on your birthday.
  8. Learn 3 clean jokes.
  9. Return borrowed vehicles with the gas tank full.
  10. Compliment 3 people every day.
  11. Never waste an opportunity to tell someone you love them.
  12. Leave everything a little better than you found it.
  13. Keep it simple.
  14. Think big thoughts but relish small pleasures.
  15. Become the most positive and enthusiastic person you know.
  16. Floss your teeth.
  17. Overtip breakfast waitresses.
  18. Be forgiving of yourself and others.
  19. Say, “Thank you” a lot.
  20. Say, “Please” a lot.
  21. Avoid negative people.
  22. Buy whatever kids are selling on card tables in their front yards.
  23. Wear polished shoes.
  24. Remember other people’s birthdays.
  25. Commit yourself to constant improvement.
  26. Carry jumper cables in your trunk.
  27. Have a firm handshake.
  28. Send lots of Valentine cards.
  29. Sign them, “Someone who thinks you’re terrific.”
  30. Look people in the eye.
  31. Be the first to say hello.
  32. Use the good silver.
  33. Return all things you borrow.
  34. Make new friends, but cherish the old ones.
  35. Keep a few secrets.
  36. Feed a stranger’s expired parking meter.
  37. Plant flowers every spring.
  38. Always accept an outstretched hand.
  39. Stop blaming others.
  40. Take responsibility for every area of your life.
  41. Wave at kids on school buses.
  42. Be there when people need you.
  43. Sing in a choir.
  44. Don’t expect life to be fair.
  45. Never underestimate the power of love. 
  46. Drink champagne for no reason at all.
  47. Live your life as an exclamation, not an explanation.
  48. Don’t be afraid to say, “I made a mistake.”
  49. Don’t be afraid to say, “I don’t know.”
  50. Compliment even small improvements.
  51. Keep your promises no matter what.
  52. Marry for love.
  53. Rekindle old friendships.
  54. Count your blessings.
  55. Register as an Organ Donor.
  56. Losing yourself in new surroundings is the best way to find yourself.
  57. Call your mother.