I want to thank the publishing team at Harriman House who stood their ground and forced this book to be better than I could ever have made it. In this book I describe what have become for me the 100 most important rules for entrepreneurs.
Talent is defined as anyone who can take your idea and make it better than you can. If you find you are giving a job or delegating the work to
Yes, they can work from home or in their own agency, but they must be near home or in their agency, but they must be nearby.
Never hire new staff to meet growth – instead you should have your team prepared and ready for action before you take on the additional business
Business is not about jobs or ‘saving jobs’ – it’s about profit and then the talent you can engage with that profit
If you don't love your business, move on - if you've built a successful business but don't enjoy it anymore, move on, sell up, get out. Make your business smart – set a target for annual revenue per employee or effective employee (ordinary freelancers count against.
Grow your business smart – set a target of the annual revenue per employee or effective employee (regular freelancers count in proportion to
Learn to negotiate - and learn to negotiate win/win meaning, simply that both you and your negotiating partner get out of the agreement well. In this way, both you and your negotiating partner get a good result from the agreement.
Manage your managers. You need a mechanism to decide whether your managers are performing – which you will need once your business grows
As a demotivated manager, your business isn't going to last anyway, so sell it quickly and find something new to do. Avoid dangerous targets - don't set a rigid target of selling your business for millions of pounds or dollars within three years - that will only lead you to.
Avoid dangerous goals – don’t set a rigid target to sell your business for x million pounds or dollars within three years – it will only lead you to
You must build a strong brand – all your ability to maintain price
Just do it…
However, despite the excitement and massive learning curve we all enjoyed in the first eight years of growth, it was in the last two years of decline and subsequent closure that I really learned my entrepreneurial lessons. And so our first rule begins with Just Do It - because there is no substitute for putting down the business plan and just getting started...and no better way of learning.
Learn from your mistakes
And one in which you can cement your humility and willingness to listen to others, but at the same time maintain a steely determination to see it through, no matter what. The mistakes in our history make us open to new ideas, open to unusual ways of doing things…and yet…at the same time, stubborn and steadfast on the issues that really matter.
Never blame the market
Never blaming the market goes hand in hand with the essence of entrepreneurship: pave your own path, drive your own success, build your own great business.
Take care of yourself
Know yourself
Know your weaknesses
Even if you continue, don't forget that the time to get out is when you are no longer playing to your strengths. So, the timing of your exit is always about when you reach the limit of your strengths and not about a fixed goal or whether the market offers you maximum value.
Know your personal management potential
Know your strengths
Measure success properly
If Mr. Trump's point of view was one you agreed with, then yes, you would rate your trip by the amount of money you managed to raise. Equally, if you agree that you should 'do it for fun - money is secondary' then you would probably choose 'fun' as the measure.
An alternative approach
Sharpen the saw
You, the entrepreneur, started the business in your head long before anyone was hired. That is, even if you didn't put an awful lot of money into the business, you made a brave decision and risked your time, energy and reputation to get the business off the ground.
Do not keep normal office hours
It's a great way to keep everyone on their toes - no one knows when you'll be in the office. So get your business to perform according to the right measures and then you can stop worrying about clocking in and out.
Go on holiday – and judge your business on your return
Make your passion your business
I'm passionate about publishing and media – so I write books, blog and develop digital media businesses. You can only handle a business you're not passionate about for a very short time, especially if you're a natural entrepreneur who always wants to move on to the next new project.
Be passionate – even though others don’t like it
The money has to be secondary
Nothing but the truth – and quick
The sooner you tell them this, the easier it will be for them to achieve and fulfill their goals or overcome a problem. If you have managers or team members who struggle with this idea or can't articulate quickly and clearly, let them; they are not right for your business.
Don’t pin your hopes on a premature retirement
Risk rises at the prospect
Never work to ‘save jobs’
It sounds so good and healthy to say that you are working to save jobs in your company, but it is the death knell for a company. It is the absence of profit that forces job cuts: therefore the emphasis should be on profit and not on 'saving jobs'.
Avoid the ‘we’ve just got to survive the recession’
Avoid the ‘market has disappeared’ fallacy
Proper profit is profit margin
200,000 and he or she can do so by selling four times as much product at half the profit margin. In particular, the thinner margin will make your business much more vulnerable to small changes in the cost of raw materials (or, say, an increase in government employment taxes).
Avoid short-term profitability if at the expense of profit margin
The second goal of business is sustainability
If your business is based on one or two customers, you are at risk if a single customer changes their mind. If your best people keep leaving (like your best salespeople) and you can't replace them, your business will start losing money.
What is sustainable?
How to set a business-sale goal
Avoid the ‘sell for £x’ shareholder goal
Set an expiry date for business or shareholder goals
Sell your business when you are winning awards
Run the business for dividends (shareholder profit)
It's easy at this point to forget that you have two roles – running the business and maximizing shareholder returns (or shareholder profits). The shareholders may decide not to take any of the profits right now (which would come in the form of dividends) and instead reinvest everything in the hope of selling the company for big money later.
Keep salary and dividend conversations apart
- Use the dividend cash flow to value your business
- Focus on cash-flow forecasts
- Check your bank balance daily
- Don’t do guilt
- Beg, borrow and barter
- Use win/win negotiation
Using industry standard profit margins as your base, you can begin to forecast cash flow. With knowledge of sales volume and profit margin, you can now calculate your dividend, and from this your business value (see rule 17).
Reject all long-term agreements that aren’t win/win
The walk-away negotiation rule
Don’t knock down the price
Deliver your promises up-front
Instead, as previously stated, aim to deliver one new client immediately and then promise to bring in three more if you reach a deal. This approach will show that you are not only a skilled negotiator, but also likely to be a very valuable client and source of business in the future.
Keep collaborating
Run a ‘to-stop’ list
In addition, the email systems and shared drives were backed up every night – so we effectively had five copies of every customer email.
Parkinson’s Law
Freelance is best
However, the effect was to make business unsustainable for everyone – contractors, employees who were willing to be flexible as well as those who weren't, and freelancers as well. Therefore, we must deal with the mistakes that are made in relation to the traditional.
Hire freelancers correctly
Freelancers working in your office
Constantly question whether you have the right people in the right roles
The key factor in all successful approaches, however, is that the entrepreneur will constantly focus and constantly question whether they have the right people on board and in the right roles. Therefore, if you're managing a team of full-time employees, you may need to spend a lot more of your time questioning whether you've hired the right people than you would with your freelance staff.
Hire better than you need
And if you could only get one day a month from a senior non-exec director to guide your business, you'd really be turning him or her away. Thinking that you can't hire high quality people in one day a week is simply an example of small thinking.
Expect excellence every day
If they've lost their appetite or appetite, you can even invite them to take three or six months off, and yes, that may mean turning down new contracts due to lack of staff. Sometimes you have to take a modest step back before you can move forward again.
Don’t tolerate bad (or average) performance
Grow only as fast as your resources allow
If you find that you lack the right level of skills (and you want . . . excellence, don't you?), then you should cut back on your business commitments. Hard, I know, but if you can do it and build this principle into the heart of your business, then in the end you will build a very strong enterprise.
Recruit before growth
The problem of panicking managers
Hire hunger (humble and hardworking), not the best (proud and expensive)
The best staff or contractors are often those people who are hungry to progress, so they may start with lower salaries because their lack of experience or qualifications doesn't allow them to get paid the big bucks. Some highly paid employees with a good track record may be burned out or no longer hungry.
Pay the right price for the person
Why young businesses struggle to recruit from within – and how to solve it
Use senior interim managers in entrepreneurial businesses
Never over-promote
Too many employees at small companies are over-promoted because of the difficulty of hiring career managers in a growing company. In the previous lines I highlighted the difficulty of recruiting, but the solution, however tempting, is not to over-promote your existing team.
Acting-up roles and splitting roles
Take responsibility before it’s too late
Use a career-tracking recruitment agency for senior staff
Meet the spouse for senior roles
All three factors will put significant pressure on their partner and family, so the family must support the new role, and so you must meet the family before you hire.
Use references early in recruitment
If they are moving jobs due to relocation, then they will not expect a pay rise and may be willing to take a pay cut, but you would want to make sure that the previous employer would be willing to employ them. again. Now, there may be a good reason for this - but you want to know that, and you also want to know what the previous employer or client thought.
Avoid job titles
The times of job titles come from traditional hierarchical business that operated in fixed structures. That's not how business is done today; today it has to be very flexible and we all have to be ready to switch roles, innovate on the fly, and responsibilities have to be flexible – especially if you're building a business that expects massive growth.
Only legally registered directors get the director job title
Pay recruitment fees on ‘success’
A successful recruit for an employment agency is someone who manages to get through the first three months without being fired (as this is usually the limit of the recruitment agency's refund policy). This is a common arrangement and can be set up through third party umbrella companies (see Rule 27).
Keep new roles temporary
Be very, very, very careful with recruitment decisions
Quality team equals low stress levels
Firstly, a very high level of stress for the entrepreneur, who will have to patch up and make up for the resulting shortcomings or oversights in his team. So take a good look at your stress levels and then your team and start looking for the right kind of talent that will allow you to thrive with much lower stress levels.
When staff leave, let them go without a fight
In the meantime, it's often unwise to immediately hire their replacement, but spend a few weeks watching how the company runs without them and look for other skills you can bring to the company if necessary.
Never offer to raise the salary to keep staff
Commit to excellence – fire the ‘good’
If you recruited them on a contract or freelance basis, this will be easy to implement. Therefore, think long and hard about whether you are truly committed to excellence and if you are willing to act.
Don’t send ducks to eagle school
Don’t fall for the ‘teach a man to fish’ fallacy
The Peter Principle
Measure team performance
Behind every great company is a great team, and that team is shaped and developed by constant attention. The answer is that how your manager delivers the KPIs for his or her team and manages his or her team assessments will be your best indicator of managerial excellence or weakness.
What is an appraisal and a KPI?
Never skip staff or team appraisals
If your manager gives weak (or missed) evaluations that do not address key issues, it may be a good idea to personally participate in the next round of evaluations. You will quickly find out if your manager is able to identify, highlight and address key issues.
Three months never says it all
A perfect member of the team can turn into a poor performer for no other reason than they just don't want to do the job anymore. Just prepare by understanding that this can always happen, and that in a young, cash-rich company, you don't have room for people who don't have the fire or enthusiasm anymore.
Managers and recruitment
Managers should spot roles that don’t exist anymore
Managers manage team performance – not HR
Managers cannot shift business objectives due to trading conditions
Making the KPIs solid
Make sure you choose the right three KPIs to focus on for a given role; your business depends on it. Remember, three KPIs means your rating system remains simple and easy to measure and implement.
Make the KPI objectives measurable
For senior managers with profit and loss responsibility, you would expect to replace the 'revenue' measure with the 'profit' or 'profit margin' measure.
Take responsibility away from staff if performance is not right
Only external factors count as excuses
Poor performers get fired – not made redundant
Okay, it's faster to get rid of a non-performing staff member using redundancy than to fix their performance issues. It is far better to work through the poor performance process and end up firing that staff member.
Deal with personnel problems immediately
All sales staff excuses are equal
Strike one, strike two, strike three and out
- Use great questions to tease out performance
- Promote anyone who makes their job redundant
- Know employees by their fruits
- Do away with formal meetings
- The team is the hero
The easiest way to promote this practice is to close half the meeting rooms or not have them at all. If someone on your team is pretty good, you make them a hero because you're so happy that they're joining in and you can finally pass on some of the responsibility.
Let the team choose individual awards
Have a wise head on hand
A worse mistake is to grant equity or stock options to anyone and everyone just because you're there. One solution to this indiscretion is to have an older, wiser head on hand—a presiding officer—who can say "no" to some things you might find hard to say no to.
Reward long-term value creation
Don’t have long-term contractual bonus commitments
Finding a business-value basis for the bonus
Unlimited bonus structures only for pure sales businesses
This is the advantage of a bonus structure that is unlimited – it allows a few individuals to earn a lot of money and it will be an incentive for other staff to also want to earn more money. However, such bonus structures typically require quick payment of the bonus – as it makes your whole team believe they have an equal chance of succeeding – and therefore runs the risk of your bonus being based on a simple.
When to use profit, when revenue for bonuses
So if the seller requests a discount of more than 10%, it can be accepted provided it does not count towards the seller's goal. You can also have a ceiling on the expenses for traveling salespeople - after which any excess amount is deducted from the bonus.
Only salespeople get individual revenue bonuses
Non-sales people must have team bonuses
Bonus can be team of teams
The John Lewis example of company-wide bonuses
Be wary of bonuses?
In the ideal world this is the perfect solution, but to be effective you need to have the facility to let your staff go quickly and easily. My view is that this simple no-bonus approach is best in the early stages of a business.
Use profit-share bonuses
Remembering that shareholders are actually interested in the profit margin, if you can link the bonus to the profit margin, then you align the interests of shareholders, staff and the company much more. Finally, it would be easier to convince shareholders to share profits if they were based on increasing profits (or profit margins).
Pay out some profits as dividends for directors
Bonus on increase-in-dividend payout
Keep two accounts
Any manager who wants to bid for an investment can do so on the basis that only what is available in the investment account can be spent, and that his or her idea must compete with any other idea to take that money. The Board of Directors of course reserves the right to change the allocation when the business is under great pressure, but any change should be to a.
Pride goes before a fall
Don’t diversify to escape trouble
Therefore, if your diversification efforts are expected to reduce your profit margin - even temporarily - they are probably a very bad idea. This is why a mature company is better off accepting a shrinking or no-growth market, and focusing on the profit margin.
New diversified businesses go into new legal entity
Let go – faster
If you are a true entrepreneur, then you will be good at an extremely wide range of different things. You'll be good at all of these - but you'll probably be good at none.
Letting others have a go will help them develop greatness
Eliminate puff
Understand the difference between a business vision and mission statement
Build your brand
It's also easy to forget the impact your brand has on suppliers - but don't. So treat brand investment as an investment in the long-term profitability of your business.
Protect your brand and IP
Small-scale infringements
Large-scale infringements
67.Product = brand = product = brand
- Establish clear ownership of code, content and process
- Own your clients
- Refocus your brand – regularly
- Measure resolutions as well as complaints
- Rattle the cage to maintain excellence
Of course, in some respects, customers judging your team members is a good problem to have – it should mean your staff are performing out of their league. So it's likely that by now, far more than four customers have problems with you - they're just so disappointed they can't be bothered to get in touch.
