A recent article in Forbes resonated with me as I feel no matter how large or small our companies are, we need to strongly consider the 10 Rules for a Successful Business as practiced by Seth Goldman and Barry Nalebuff.
For those of you who are not familiar with Seth Goldman and Barry Nalebuff, they built Honest Tea from scratch into a $100 million enterprise.
As you look over what you have done during this past year, think about where you want to go, revisit your strategic action plan to ensure goals for the future are met and think about how you can follow and build on these 10 rules for success.
Although many of us may not build our companies into a $100 million enterprise we can be successful with what we can do by following and building on their rules for success.
1. “Build something you believe in – because that’s the first step to building a great brand.”
When starting my business most everyone thought we were only working with financial institutions. That made sense because that was what I was known for. I knew I needed to let the community know – let my prospects know – that I work within most all industries. Why? Because I know our principles apply to all businesses and I believe passionately in what our company offers our clients. I knew what I had to do to start our branding – Do you?
2. “Don’t aim for 10% improvement. Make it radically better and different.”
Competition – yes there is competition – so learn from them. Don’t just offer what someone else is offering – do what you love doing and make it special – something better – something you are proud of regardless of whether you are selling a “widget” or providing a service. Just as many singers say, “I sing popular songs but I make it my own.” Find and do something “better and different.”
3. “Prepare to be copied. Don’t start unless you’ll survive imitation.”
With the Internet, YouTube, and other means of communication, in addition to all of the startups, don’t plan to be the sole provider of your services. Don’t be concerned either – one company cannot supply all the needs within your industry. You just need to be a believer in what you do and deliver your services in a special way. This breeds success. As learned in the Forbes article, Honest Tea owners made friends with one of the gorillas and let them buy them out (Coca-Cola Company acquired Honest Tea in 2011). Not a bad idea if this is your exit strategy – or an offer too good to pass up.
4. “Build up reserves of money and energy for bad luck and mistakes.”
There will be mistakes along the way, and a little bad luck now and then, but if you can’t weather the storm you will be out of business. Remember, keep expenses down, run your business lean and ask yourself if you really need to spend money on things that come up. Yes, you need to spend money to get money but spend it wisely. If you have capital you will have the energy to grow the company.
5. “Never, ever give up control – until you sell.”
Raising venture capital doesn’t mean you need to give up control of your company. When you lose control, you lose the vision and strategic initiatives you have and want to put in place. Also learned in the Forbes article, “even though Honest Tea raised investment capital from the beginning, the co-founders always remained in the driver’s seat. (And yes – Goldman can still drive his vision as CEO of Honest Tea, but his boss at Coca-Cola can say ‘no’ at anytime. Thus, true control is forever gone.)”
6. “Don’t compromise on the big things – compromise on everything else.”
When establishing a company, Vision Statements, Mission Statements and Core Values are absolutely critical. This is the future – the direction – the soul of your company and don’t stray from them. Don’t get distracted from who you are and what your company stands for. Where the compromise and flexibility needs to be is in your product or services. Know where the market is and how your product and services fit in that market – don’t hang on to something that doesn’t meet the customer’s needs – remember listen to the “market” and what is happening. You don’t need to change constantly (not a good practice – sure way to fail) – but you do need to be “current.”
7. “Figure out how to achieve your goals on a tiny budget – then cut that number in half.”
Too many times we think we need all the bells and whistles, the big office to show we’re successful, entertain without being strategic about it and lots of collateral material. I say, run your company lean and know where the dollars are going – do you really need to spend the dollars being spent. Not keeping on a “realistic” budget is a sure sign of disaster.
8. “It’s a marathon, not a sprint.”
I think this is one of the most difficult things for many new entrepreneurs to understand and to accept. They have an idea, know the world needs their “widget” and services and expect to be millionaires overnight. It takes time, time to build the business, time for the “world” to learn about the company and time to be a good leader. Existing companies also need to understand that it takes capital to sprint – do you have the capital to do what you think you can do? Do you have the leadership and experience to meet your vision as you travel the journey? You may want to consider a coach.
9. “Take care of your family, personal and spiritual health – if you aren’t laughing or smiling on a regular basis, recalibrate.”
I learned a great lesson from what I understand Goldman’s practice has been throughout his career. He told an author that there are two reasons he made it through the rough years: First – he believed in his purpose, second – his drive for personal balance. I admire him for this because too many times we are so involved in making our company successful we forget what our purpose is and the need for personal balance. I didn’t always stand true to this but wish I had – don’t make the same mistake.
10. “Build the enterprise and the brand as if you’ll own them forever.”
So many times companies are started for a quick sell and rarely do they succeed. I am aware of a few banks that opened their doors with the understanding to their investors they would sell within 5 years thereby realizing a huge return on investment, but due to change in the market, they were not able to sell. This is not just in the banking industry, it is in all industries. Remember, following these rules will permit you to sell your company if and when you feel it is the “right” time – in the meantime – build, build, build the enterprise.
Remember – work hard, play hard and enjoy what you are doing and make sure your family is enjoying the ride along with you.