Learn to negotiate - and learn to negotiate win/win simply means that both you and your negotiating partner get out of the agreement well. The mistakes in our own history make us open to new ideas, open to unusual ways of doing things...and yet...at the same time stubborn and unyielding on the issues that really, really matter.
Know your weaknesses
If you recognize that recruiting such leadership is not a skill you possess or perhaps want to learn (because none of us are born with it), then your solution is to sell your ideas early – once you've proven it basic concept. Now you may be tempted to sell a new business – until I tell you that you will be selling it for thousands of pounds instead of millions.
Know your personal management potential
The implementation of good leadership is about the people you put together, and don't forget how you put them together. That way, if you realize you've made a mistake, it won't cost you a fortune to change.
Know your strengths
If you don't know the answer to this – or you're not sure – then the best thing to do is to focus on what you love most and find a hard way to make it a business (Other rules in this book will of course, help you there). You may change your mind about what your true strengths are along the way, but at least you'll like it, and there's a reasonable chance that what you like best will also be what you'll be most good at. the good ones.
An alternative approach
You, the entrepreneur, started the business in your head long before anyone was hired. That is, even if you didn't put a ton of money into the business, you made a brave decision and risked your time, energy, and reputation to keep the business going.
Do not keep normal office hours
As the business grew, I felt like I needed to be in the office to make sure everyone was working as well. It would have been better to reduce the business costs to the point where it was always profitable by the end of the third week in each month.
Go on holiday – and judge your business on your return
If you set a goal of making a profit by the end of the third week, you only need to show up at the office at the end of week two and week three. You can let go of the need to know if your staff are at their desks at nine in the morning or working after 5pm.
Be passionate – even though others don’t like it
I'm passionate about publishing and media - that's why I write books, blogs and develop digital media companies. You can only put up with 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.
The money has to be secondary
If they ever leave the fight when they are of working age, it won't be long before they return. So the reason that young entrepreneurs set this goal has to do with the fact that they don't enjoy what they do.
Risk rises at the prospect
If you just focus on surviving and organize your business accordingly, chances are that sooner or later – as with all goals, especially in recessions – you will fall just short of your goal. When you focus on avoiding the negative outcome (surviving the recession), you forget to focus on what's important and that is growing your business.
Avoid the ‘market has disappeared’ fallacy
Your business is still growing in terms of its value even if the revenue is decreasing significantly. 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
If your revenue depends on a cyclical business cycle (for example, real estate or recruiting), then your business will go up and down with the cycle. If your best employees keep leaving (top salespeople, for example) and you can't replace them, your company starts losing money.
What is sustainable?
The point here is not the absolute figure, but whether the revenue per employee is growing. If the revenue per employee increases, you build power into your business (getting closer to a Google).
Avoid the ‘sell for £x’ shareholder goal
This shareholder frustration is likely to lead to some risky behavior, such as replacing founders, breaking the rule of profit margin and increasing revenue, or looking to sell at the top of the market (highly risky) in bank place for a healthy profit. early.
Set an expiry date for business or shareholder goals
Of course, if you have no other shareholders, then you don't need to manage at this level of detail. Therefore, even if this business remains entirely in your control, you must establish and communicate this goal - and that it has an expiration date.
Sell your business when you are winning awards
It is easy to forget at this stage that you have two roles – managing the business and maximizing shareholder returns (or shareholder profits). There is only one real measure of shareholder return, and that is how much money the company will pay out in dividends and for how long.
Keep salary and dividend conversations apart
Remember, dividends are paid out of a business's profits – where some of the profits are retained to be reinvested in the business (more on that later). We know that everything in business ultimately depends on profit (or, as we saw earlier, profit margin).
Reject all long-term agreements that aren’t win/win
Young entrepreneurs sometimes interpret advice to beg, borrow or barter as a recommendation to try to get everything for free and offer nothing in return. And it should be applied not only in the begging-borrowing-bartering stage of the beginning, but always - in relations with your staff, discussions with your suppliers, and so on (all of them, in short).
The walk-away negotiation rule
Don’t knock down the price
So if you're quoted $500 for a project, see if you can add any other valuable services to the total quote. And you know what, even if you don't deliver everything you wanted to deliver right away, you've at least shown that you're willing to work hard and keep going until.
Parkinson’s Law
At the time of the highest stress in my first business, the freelancers and contractors were acting mature and mature, with a shared desire to do whatever it took to make the business work. The effect, however, was to make the business untenable for everyone: the contractors, the employees who were willing to be flexible, as well as those who were not, and also the freelancers.
Freelancers working in your office
Therefore, if you're managing a team of full-time employees, you may need to spend more of your time questioning whether you've hired the right people than you would with your freelance staff. The world of employing skills and talent in your business has really changed and it is essential that you take advantage of these changes if you want to succeed.
Expect excellence every day
It's not because sales and revenue aren't important - they are - it's just that you can't expect to grow revenue unless you're willing to instill excellence in what you and your team do. Sometimes, you'll need to take a modest step back before you can move forward again.
Don’t tolerate bad (or average) performance
If you don't want the best to leave in bitterness, then you can't afford to tolerate poor or average performance. Hard, I know, but if you can do that and build this principle into the heart of your business, you will ultimately build a very strong business.
Recruit before growth
If you find that you lack the appropriate skill level (and you want excellence, right?), then you need to reduce your business commitments. Yes, this seems counter-intuitive, and it is – but gathering a team of experts around you, even if you don't have an immediate role for them, is by far the most sustainable choice.
The problem of panicking managers
I've found that this is often the best way to find out if the panic is resolvable or not. I need more staff or resources,” the answer might be, “Yes, and I need a new manager.”
Why young businesses struggle to recruit from within – and how to solve it
If a role is established as a value-creating (ie profitable) role, it can become permanent. Do not assume that the person who posted the application is the right person to fill the existing position because the application is profitable and valid; often they are not.
Use senior interim managers in entrepreneurial businesses
So you can ask yourself separately who is the right person for this role now that it has become permanent. If you have a star who can set up new roles, it's better to move that person to a new role, maybe start a new department.
Acting-up roles and splitting roles
Too many employees at small companies are over-promoted because of the difficulty of hiring career managers in a growing company. I've already pointed out the difficulty of recruitment in the previous lines, but the solution, however tempting, is not to over-promote your existing team.
Take responsibility before it’s too late
Use a career-tracking recruitment agency for senior staff
Of course, all team members want big job titles because it makes them feel good, but be careful – once given, it's very hard to take one away. If you have a director of a £50,000 turnover business, you will have to fight to appoint a senior manager (another director) above him or her when your business is a £5m turnover business.
Only legally registered directors get the director job title
A successful recruit for an agency is one who manages to get through the first three months without being fired (as this is normally the limit of the recruitment agency's refund policy). This is a common arrangement and can be placed through third party umbrella companies (see Rule 27).
Be very, very, very careful with recruitment decisions
And finally, if it doesn't work, if your stress levels are too high, downsize the company and fire those managers who aren't delivering steady growth without your intervention. When someone decides to leave, it is a free opportunity to organize the business differently.
Never offer to raise the salary to keep staff
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
A key problem with promotion from within is that employment rights accrued over, say, five years on a starting salary of £20,000 become huge if that person then progresses to £50,000 - redundancy rights relate to their last salary, although that amount they didn't earn for five years. How will you know if your manager is good or not when your business grows and most of the senior staff report to your managers.
What is an appraisal and a KPI?
Now you know what to do when it comes to hiring and firing. Appraisal is simply a formal way of evaluating whether or not your team member is delivering on agreed upon KPIs.
Never skip staff or team appraisals
Remember that your assessment is based on three key measurable factors – this is not a long list of things you need to do. Keeping your managers' evaluations simple will mean your teams have the most freedom.
A perfectly good member of the team can become a poor performer for no other reason than they just don't want to do the job anymore. Just prepare yourself by understanding that this can always happen and that in a young cash business you have no place for people who no longer have the fire or excitement.
Managers should spot roles that don’t exist anymore
Managers manage team performance – not HR
Managers cannot shift business objectives due to trading conditions
But just make sure it's a proposal coming from team members (see Rule 41) or else you could be sending the ducks to the school of eagles. Make sure you choose the right three KPIs to focus on for any given role; your business depends on it.
Make the KPI objectives measurable
This is very important if you intend to hold your managers accountable through their ability to manage performance. If you cannot agree on objectives, then see the previous section in Rule 44 entitled "Managers must identify roles that no longer exist".
Take responsibility away from staff if performance is not right
Then be prepared to measure the success of the objectives; and second, be prepared to take action if objectives are not met. For senior managers with profit and loss responsibility, you would expect to replace the 'revenue' target with the 'profit' or 'profit margin' target.
Only external factors count as excuses
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.
All sales staff excuses are equal
If you reach the end of the month and the gap has not yet been closed, you need to take stronger action. However, if, like me, you don't have a sales background, you'll have to overcome this classic mistake quite quickly if you want to succeed in an entrepreneurial business.
Strike one, strike two, strike three and out
Instead, start using mid-month sales figures as your best forecast for month-end sales. If someone on your team is good enough, you'll turn them into a hero because you're so glad they're on board and you can finally hand over some of the responsibility.
Let the team choose individual awards
Looking for single heroes devalues teamwork and the team ethic and is likely to annoy more people than it encourages. A bonus item must match the KPIs you specify in your team member's performance or appraisal review and be tied to long-term value creation in your business.
Don’t have long-term contractual bonus commitments
Finding a business-value basis for the bonus
Even more troubling, an employee may rush through work to finish a project early and earn their bonus for less-than-perfect work. Another example would be to reward an employee who gets repeat business instead of just single instances of business.
Unlimited bonus structures only for pure sales businesses
So the salesperson's focus shifts to acquiring repeat customers – and then to retaining those repeat customers. This is the advantage of an unlimited bonus structure: it allows a few individuals to make a lot of money and this will provide an incentive for other staff who also want to make more money.
When to use profit, when revenue for bonuses
Only salespeople get individual revenue bonuses
Non-sales people must have team bonuses
Instead, your bonus should reflect the success of the team, as this will encourage collaborative work. You will also find that the bonus may only make up a smaller part of the overall package.
Bonus can be team of teams
The great thing about profit sharing schemes is that they help build the sale value of the business (as the value of the business is a measure of its current and future profitability) while costing nothing up front. Shareholders will agree if the bonus promotes the company's profit generation, which in turn naturally increases the value of the company.
Bonus on increase-in-dividend payout
So, to make it work in the 'here and now' of modern business life, the company must make a commitment to pay out a minimum proportion of its profits as dividends - perhaps 25% or 35%. This method also negates the need to give senior managers shares or stock options, as these are closely linked to the true performance of the business - the rates of return (or dividends) to shareholders.
New diversified businesses go into new legal entity
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.
Understand the difference between a business vision and mission statement
It's also easy to forget the impact your brand has on suppliers - but don't. So treat branding investment as an investment in the long-term profitability of your business.
Small-scale infringements
You must protect your intellectual property by registering patents and trademarks and by devising a strategy to combat infringement.
Large-scale infringements
Clearly, customers who value your team members are in some ways a good problem to have – it should mean that your staff are performing at their best. So it's likely that many more than four customers have problems with you by now - it's just that they're so disillusioned that they can't be bothered to get in touch.
Don’t worry about theft of ideas too early
In short, these are ideas that can be implemented or that customers can be persuaded to buy. Yes, if you managed a three-year research project and came up with a unique formula or process, you should patent it.
Share formulae – under a lawyer’s guidance
The ideas about how to market the product or process, while new, clearly do not deserve to be tied up in the dreaded NDA (non-disclosure agreement).
Legalities of protecting ideas
For most businesses, the key is to get a .com domain name quickly for their brand. So the simple fact of owning a .com domain name for your brand and using that website will establish a right that will be registered in due course.
The “Would you sue?” test
The essence of a successful commercial lawsuit is that you must be able to prove a financial loss. This means that you must live close to your business – close enough to not be bothered by spending time in the office, shop, factory or whatever space your business occupies.
Spot the rot and stop bad practice
When things are going well, you don't need to be in the office all the time - but when problems arise, you need to be able to look people in the eye and decide who's telling the truth and who's not. they are telling the truth and who is deceiving themselves and you. Conference calls are great and can bring quick resolution to many issues – especially if you have a lot of staff out of the office – but you need to make really important decisions.
Know how much it will cost if it goes wrong
For example, if a supplier fails you and you have to pass on the disappointment to customers, then being able to tell your customers that you have a proper written agreement will reassure them that you are a serious business and worth to trust. If you don't believe me, try telling your customers you don't mind written agreements.
Don’t worry about the fine legal print
Put the contract in the bottom draw – it won’t deliver
Never delegate the contract signing
Never delegate the cheque signing
Never give personal guarantees
And if you don't like the size of this number, take steps to reduce it. If you let taxes be your reason and driving, you are letting the tail wag the dog.
Once decided – don’t forget to optimise your tax
If your current group of employees or advisors understood your problem, then it wouldn't be a problem, right. That doesn't mean no one understands your business problem—just that none of your current advisors do.
Innovation or advice
So logically, the problems you have will almost always be problems that your current group of people (including you) can't solve or don't know how to solve. This way of looking at the business problem will then lead you to a people search, to find the person who can solve your problem quickly and easily because he or she has already solved that problem somewhere else.
Build your professional network
Therefore, if your current pool of contacts does not give you the connection to solve your business problem, start looking for new pools. If you have a technical team, you will be tempted to find projects to keep them busy.
Avoid big bang technology developments
Release all technical developments on Monday at 9 am
Good credit control is necessary, but even better is setting up a payment plan that requires prepayment. Too many entrepreneurs make the mistake of not getting their contracts in order before it's too late.
Control unlimited liabilities
However, if you are a CEO/entrepreneur, then the buyer will want to connect you. Here's another approach: Build and sell your first business for whatever you can, on the basis that you're not involved in the business after the sale.
Don’t get tied in when the business is sold
The insolvency exit
Exit according to the business cycle
Consider all offers
It's like the old saying 'a bird in the hand is worth two in the bush' - cash in the hand is worth twice what anyone else would have paid for it. And remember: your entrepreneurial career doesn't stop here; you just choose a new and more exciting path.
Some birds migrate
However, until shareholders have someone else to hold accountable (ie the entrepreneur has sold a large portion of his or their shares), then board meetings are useless and should be avoided, with the exception of allowing an entrepreneur to not - involve executive directors in his or her board meeting. If you have an accountant, your accountant must provide you with the data and key business measures discussed in these Rules.
Non-exec rule for allowing board meetings
The non-executive directors will always have the interests of the shareholders in mind and may come into conflict with the CEO and executives over issues such as capital investments, dividends and executive compensation. This extra scrutiny and control by non-executive bodies is one of the hidden costs of raising funds.
Ensure spreadsheets are circulated prior to important meetings
They will help ensure appropriate checks and balances are placed on the paid CEO and their team. Of course, if you are looking to raise a large amount of cash, potential investors will want to see a strong non-management team, as this will reassure them that their money is safe.
Managers must be prepared
Spreadsheets reveal assumptions – so discuss the assumptions
So address assumptions early to avoid the classic mistake of surprise. Once your spreadsheets are in on time, the next step is to make sure the meeting focuses on the assumptions behind the spreadsheet, and not the spreadsheets themselves.
Avoid the ‘sudden increase in profit in year three (or five)’ business forecast error
No questions? Don’t come!
Avoid the “sudden increase in profits in year three (or five)” business forecasting mistakes. behind company performance does not need to attend future management meetings. You can always invite people to attend the meeting as guests, but you should only allow those people who are willing and able to dive into the depth of the business plan to join the meeting.
Discussing potential ideas
Business plans should be the kind of thing that everyone in your business, at every level, every day in their corner of the business can understand and work out. Too often, the design of the marketing package, and the most important part of marketing, is over-fixed.
Don’t forget design
What really counts is the list of customers (potential or actual) to whom you send the marketing package. You don't measure design by whether you think it's nice or pretty, but by whether or not it sharpens your message and differentiates you from the competition.
Avoid the ‘got money – so let’s spend’ mistake
Therefore, the absence of design will just make your brand and offer look relatively careless and shabby when placed next to the competitors. Instead, look at the accuracy and clarity with which the design conveys your brand and offering.
Measure, measure, measure
If you only spend 10% of your budget on finding out what works and what doesn't, then you have 90% left to focus on the most effective marketing method or methods. They then want someone else to meet their remaining marketing goals based on the 10% of the budget that is left.
Avoid falling for the next big marketing thing
We launched (and thus tested) a new page for this issue - Jobs - and found that it became the most popular page on our site almost immediately. When you realize what his real concerns are, you stop him briefly and say, "Let's bring Jack into this conversation."
