9 Things Every Business Owner Should Know
Always Remember. Cash is king :
Cash crunches happen from time to time, but if they are chronic at your company, then you may have to re-think the way you do business. Though cash-flow squeezes often seem satisfying, there are only a few explanations. Your gross margins may be too low, caused by discounted prices or out-of-control direct costs. Your overhead, including rent and payroll, may be too high. Your payment terms may be too liberal or your billing procedures too slack. You may be tying too much money up in accounts receivable or you have too much debt from nonpaying customers. Finally, it is also possible that you are holding too much inventory. If you feel tight on cash, investigate on each of these possibilities and figure out which one is causing the biggest drain on your bank account.
Cash may be king, but its not everything:
A business and the person who owns it, can have a material impact on the world well beyond the dollars attached to it. So, money aside, it is important to have a mission, and stick to it.
Systems can be humane:
Nick Sarillo of Nick’s Pizza & Pub in suburban Chicago has built his company’s cutlure by using a form of management that we dubbed “trust and track.” The system defines the basic tasks of the business down to the letter, then trusts workers to consult lists of directions in order to complete these tasks. Sequences are mapped out, but particular duties are not assigned. Workers are expected to take initiative. “Managers trained in command and control think it’s their responsibility to tell people what to do,” Sarillo says. “They like having that power. It gives them their sense of self-worth. But when you manage that way , people see it, and they start waiting for you to tell them what to do. You wind up with too much on your plate, and things fall through the cracks. It is not efficient or effective.
Character is key when hiring new employees:
In many companies, the person who talks the best usually gets the job. But CEO of Whole Foods John Mackey views the skills to look for in a job candidate, especially for a leadership position, has evolved over the years as he has seen confident, fluent employees over the years as he has seen confident, fluent employees fall short on the merits of their work. Now, he looks for character over communication skills, and tries to promote from within as much as possible.
Culture Matters:
Zappos CEO Tony Hsieh build his company into an exemplar of great service by first figuring out what he needed to do to treat his employees well. The answer is quite simple: Plenty of individuality and autonomy, a pride in human weirdness, cheers and off-hours fraternizing and figuring out how to weed out half-hearted employees before they bring everybody else down.
Working with partners is easier said than done:
A strategic or joint-venture partner can help your company enter new lines of business, and expand at a more rapid clip than you could otherwise. But partnerships are tricky to manage. Make sure you research the reputations of potential partners with care, establish both the big-picture objective of a deal as well as the nitty-gritty who knows what, identify your champion within the other organization, and put in writing a mechanism for ending the partnership amicably.
The best salespeople thrive on rejection:
G.Clotaire Rapaille, a psychoanalyst and ethnographer who lives in Florida, has studied salespeople and finds that the best are those who are somewhat thrilled by rejection. He calls them: happy losers. What makes a good salesperson is that these rejections didn’t make them want to give up. It made them want to find another way. Among the other virtues of happy losers: They try more techniques, they improvise, they take “chances” and they don’t believe a sale closes with a yes.
Knowing how to control clients is an art:
One of the greatest gifts for entrepreneurs to have is having the ability to say the word no. Learning the word no and then really have the energy and the experience and the knowledge to sit your client down and tell them not to do something is difficult. You have to be like a good trekker going through Nepal.
You need to leave yourself time to dream:
An entrepreneur is, by definition, a creative person. But as your company grows, you are likely to get dragged away from the most innovative, idea-driven parts of your business. Don’t let that happen, at least not without a fight. Build time into each day to think about your company’s vision, to brainstorm new products, to read for pleasure, or simply to muse about things that might not matter much. Staying creative is among the healthiest things a CEO can do personally and for the company.
***ARTICLE BASED ON Inc. Staff’s ARTICLE: 15 Things Every Business Owner Should Know, FROM Inc.om***
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