Learn The 3 Things Every Business Owner Must Know: Fill & Download for Free

1. Don't hire family or friends.
Friendships should end and business should begin at work. I have done 4 startups and lost as many close friends due to miscommunication on some level. No one really likes it when their boss comes down on them and friends take it the worst. It also causes another issue when the other employees feel that your friend/ family member is getting different treatment or more opportunities that they are. The only way I recommend that you hire family/friends at a startup is if both of you sign a “State of Grace” agreement to address what happens when things go bad.2. You are not the smartest person in the room.Repeat after me, you are not the smartest person in the room. You and I both know that there is a distinct possibility that you are, in fact, the smartest person in the room. However, spending your time proving it causes more issues than it solves. Your goal should be to make everyone else in the room feel smarter. If you are pitching, slow down and make sure people get it. If they don’t, change the pitch. Investors want to know that you know what you are talking about, but they also want to see your ability to sell your ideas to others. 
3. The internet hates you.The internet is going to hate you at some point. It will not be the whole internet and it could only be that one guy you pissed off by not buying from, selling to, or by having a better idea than him. In the book “Brand Against the Machine”, they point out something that is incredibly important. You need to focus on the needs of the customers that support you and pretty much ignore the people who hate you. That is not to say don’t try to understand why they hate you, but do not respond to hate. If they bring up a valid point, address it to everyone and not the person who hated on you. I learned this the VERY VERY hard way.4. Know where your money is going and where it went.One of the most important things to do in a startup is to have a plan. Before you code, make, or paint anything you need to come up with a plan. Part of that plan should be what are you going to spend money on and when. Too many times in the past, I let money management fall into the “we will ask for more if we need it “ camp. Plan from the outset for the day you will have almost no money (90 days of runway) and absolutely no money (30 days of runway). At only 30 days left, you should be telling your employees where the company is and give them the opportunity to seek other employment if things crash. Hopefully, you will never have to deal with this because you have created and operated against a plan.5. Have a plan and ONLY work towards that plan.A business is just an idea if there is no plan. If you want to make your idea into a business, you will need to create as detailed a plan as you can imagine and then have people punch holes in it. This is really really hard for idea people to do because we do not like to spend a lot of time on any one thing. This is the one thing that you MUST spend time on. Your plan gives your company direction and FOCUS, which are two things investors and customers need to be able to spend money with you. Your plan shows investors where you are headed and allows you to take into account issues that may creep up in an organized fashion. Customers see your plan as your brand. They will believe in a product or service that was created with a purpose and supported as best as possible.6. Make time for things other than work.Like everything else I put in this post, I learned this the hard way. During my years in startups, I have gotten divorced, lost a child, and nearly killed myself. TAKE THE TIME TO LIVE YOUR LIFE. Your startup is not your only reason for living and I argue that it is not even a top priority for your happiness. Pick a time to end your day and end it. No emails. No phone calls. No exceptions. Spend time with your family and friends. Make sure you stay in touch with what drives you to succeed. Constantly learn something new. Meet new people. Each day when you go back to work, you will feel refreshed and excited to start the day. Take breaks and enjoy a vacation every now and then. Finish a big product push, give your team some time off. Also, make sure that you or someone in your organization is policing this policy for everyone. Some people will stress out over every little thing at work. Putting in a policy of dedicated family/personal time will allow your employees to relax and destress. That will allow the to be better employees today and in the future.

Not knowing what you don't know, and overcoming fear of the unknownPhoto: Alice Popkorn, unknown landSmall businesses are started by people with a wide variety of backgrounds, but it's rare to find a first-time business owner who knew exactly what they were getting into. When I started my first business at 19 (design), I thought I understood the basics, based on having worked for small businesses and having sold stuff on eBay for years. I made a basic business plan. I registered my business name. I applied for the appropriate licensing. I had a plan for getting customers. I knew how to position myself and my services.Over the next year I figured out that I'd understood only a narrow sliver of the basics. I didn't understand invoicing and payment terms. I didn't understand project management. I didn't know I had to pay several different taxes as a business, on top of paying additional taxes on my personal income. I didn't think about residual income or repeat business, I thought of each project as a one-off and was totally unprepared to service customer accounts. I didn't think about customer service & support. I didn't think about limiting the services I offered. I knew nothing about contract negotiation. I knew nothing about...I could fill a book with what I didn't know. Once I realized I'd forgotten something, I did my best to catch my business up, but I could only correct my error when I knew I made one. I didn't know what I didn't know, and when you are starting a business, that can be terrifying. For example, I didn't realize that, based on my business type and location, I was supposed to make quarterly tax payments. I'd missed three by the time I realized my error, and even though I talked with an accountant and got things sorted out, I spent the next year afraid the government would knock on my door one day with a claim on my firstborn.That fear carried through other areas of my business. What was I missing? What am I not thinking about today that will cause me legal headaches in a year? Am I missing opportunities to grow my business way faster? Am I giving money away somehow? Am I being taken advantage of? Is there some fundamental something-or-other that will make or break my business forever?Of course, there are plenty of resources to learn about these things—but the amount of information, sources, and variability can be overwhelming and difficult to trust. Every small business owner must make difficult decisions about how to spend their time, so each thing I chose to learn about felt like a commitment that needed to have good ROI.Learning dozens of new skills at oncePhoto: Bev Sykes, Where to beginA small business owner is a jack of all trades, but many people don't understand the degree and breadth of responsibility before starting a business. Say, for example, my friend makes jewelry on Etsy as a hobby and wants to turn that into a business. She's good at making jewelry and her products are trendy, so she thinks she'll do OK on her own. But she doesn't have direct experience with...Customer relationship management: providing service, creating guidelines, building relationshipsSales & negotiation: identifying new customers, trying new techniques, scaling customer acquisition, understanding and improving contract termsFacilities: securing places for a storefront, manufacturing, storage, etc. and all that entailsBookkeeping: all the accounting minutia of tracking sales, cost of goods sold, taxes, etc. and how they are different from personal equivalentsFinancial analysis: understanding profitability, forecasting revenue & profit, computing growth, etc.Sourcing: lowering costs and managing raw materials by looking at different materials & suppliersMarketing: customer segmentation, lifetime value, cost of acquisitionStrategy: how to deal with competition, how to grow the company...and much moreMy friend doesn't have to learn all of this at once: some she might know from previous jobs, some can be learned later, some can be handled with software or other products, some can be outsourced to professional services, some can be delegated by hiring employees. But regardless of the solution, my friend will still need to learn a bare minimum of all of this if she wants to be an informed manager/owner. This can be especially difficult in an established business, because another major challenge is:Making time for the long-termWhether or not you own a business, you've probably got a to-do list of stuff you need to manage in your life. Many productivity theories categorize these lists on two dimensions: how valuable an activity is, and how much effort it requires. Categorizing activities this way is supposed to help you prioritize your to-do list, and results in a matrix you've probably seen before:"Low-hanging fruit" describes activities that are high in value and easy to accomplish; it makes sense to pursue these things first, since it's easier to accomplish, gives you an immediate reward, and these activities keep you afloat. After tackling the low-hanging fruit, you should focus on the high-value, high-effort work that leads to growth and improvement. You can then fill the gaps with "tweaks"—work that is low-value but easy to do.In theory, your work cycle should look like this:However, the wide range of stuff that small business owners must think about means two things:You always have 10x more stuff to do than hours in the day, and that stuff is spread across dozens of functional areas, so there's a lot of low-hanging fruit.You can do a lot of it yourself, whether you should or not. That makes it tempting to spend your free time doing low-effort, quick work that gives you a sense of accomplishment, at the expense of long-term planning.Thus, many small business owners find themselves in cycles that look more like this:This is extremely dangerous for small business owners because it looks like you're accomplishing a lot when all you're really doing is keeping the lights on. You spend all your time on tasks, sometimes 80-100 hours per week or more, then wonder why your business hasn't progressed despite how hard you've been working.

Firstly understand that nobody in this world is born with business experience.The great business leaders you see and read about in the Forbes magazine were almost like you and I at a certain point of time.Sure, starting a business with no experience is hard and daunting. However, that is exactly why you need to start a business, or how else are you going to get that business experience?However, there are certain things which beginners could do to make the journey of starting a business much easier, here are some suggestions from my side:Start a simple business: As a beginner one should aim to focus on as simple business as possible, for example if you are a web designer, you can simply register on a freelancing site. This makes your business less complex as you need to focus on only two aspects of business i.e making sites and searching for clients.Start a business which needs no or low capital: When you are starting out, you are more prone to making mistakes and if you invest a lot of money at an early stage, chances are that you might loose it, which can be extremely discouraging for new founders. Hence always start a business where the capital requirements are low.Do it for the experience, not for the money: First few years of your business should be focused on learning about the business and should not be as much about making money. By learning I don’t mean to say reading books on business but actually doing it.Find a partner who can compliment your skills: Are you a good developer but suck at writing client proposals? Do you know a friend who can write really well? You can partner up with him and compliment each other skills to make the most out of your individual talents.Great businessmen keep learning: Most good businesspeople out there assume themselves to be a noob learner, they don’t consider themselves as genius or experts because they know that there is lot more to be discovered.Keep trying: Yes 90% of the businesses fail, means that if you start a business, you have a 10% chance of succeeding which seems quite low. But if you fail and start again, you have more chances of winning the next time. Like with tossing a coin in the air which has a 90% probability of getting tails, if you toss it enough number of times eventually it will turn out to be head. Hence keep trying till you succeed.Have fun: Running a business can be successful and challenging, however if you accept challenges with a positive attitude, you will actually enjoy running and operating a business.Learn sales: Sales is a lifeblood of every organisation, there exists no business which does not sell. If you wish to be a successful business owner, you must know how to sell. Even if you wont be the salesman at your company, you still need to know how sales work for your products and services.