What Advice Do You Have About Running A Business?

Last week, I received the above question from an MBA candidate who will be graduating in May. He was looking to start or buy a business in the near future and was wisely contacting as many alumni as possible for advice, and simply to network. Like many business owners, I really enjoy getting these calls and I am always happy to share my experiences. In fact, for 10 years or so, I was a guest speaker for an MBA professor teaching a class on entrepreneurship. I never pretend to have all the answers, but I do think that these lectures and conversations leave the budding entrepreneurs with a few nuggets of wisdom hard earned over years of arduous trial and frustrating error.

Since all businesses are different, I do think it is important to know a bit about the business I run so you can put my thoughts in perspective. K2Awards.com, founded in 2002, is an online retailer, and light assembler, of trophies and awards. We have about 50 employees who work out of our 50,000 square foot facility in Richmond, VA.

So here as my stab at answering the question in the headline, based on my experiences. I cannot emphasize enough, that what has worked for our business, may not be appropriate for yours. But I do hope that a few items provide you with points to ponder.

1. Learn on someone else’s dime. While there are famous entrepreneurs that started their thriving businesses in their teens (e.g. Bill Gates, Michael Dell, Mark Zuckerberg), these individuals are brilliant and their businesses absurdly transformational. Most of us are not as smart, nor are our business ideas as unique. We benefit from making mistakes and learning business concepts while working for someone else. In my case, I worked for a small outdoor rec company, an advertising agency, a national retail chain and a credit card company. I had some successes but plenty of failures. Along the way, I picked up ideas and processes I have incorporated into our business.
2. You can’t start a business while working for another company. I speak to many, many individuals who want to start a business on the side. In theory that could work, but in practice, starting a business is more than a full time job and requires your to focus all your energy and resources into making the business viable.
3. Make sure you have several hypotheses of how you can grow the business. You may think you have the best idea in the world, only to discover it isn’t. Make sure you have several different plans for each of the main drivers of your business. In our case, I had several different sales hypotheses and what I thought was the fifth most likely idea was the only one that initially was successful.
4. When opportunity knocks, open the door. I am a firm believer that really big opportunities present themselves only a handful of times throughout your career, and, unfortunately, most people find reasons not to pursue the opportunities. There are always excuses as to why you cannot pursue the opportunity: the timing is not right, you don’t have enough money, etc. But the reality is that if the opportunity is large enough, all those excuses go away.
5. Surround yourself with other entrepreneurs. The early days of a business can be isolating. All ideas have to come from you. Join networking groups to share business challenges and to feed off each others’ ideas.
6. Follow the money. Too many small businesses fail because there are not tight enough controls on the finances or the owner relies on mediocre, or in some cases corrupt, bookkeepers. Check balances daily. Keep on handle on expenses and the profitability of sales channels. You cannot outsource fiscal responsibility.
7. Don’t be afraid to charge for your product and/or service. The temptation is to get sales by lowering the price. Focus instead on adding value and the price you charge will be more attractive to you and your customer.
8. Don’t dwell on your mistakes. If you are pushing hard enough, you are going to make a ton of errors and will disappoint customers and employees. Acknowledge and try to resolve these mistakes and move on. Negative vibes are toxic.
9. As soon as possible, take a vacation. Starting a business is hard work and you will feel that you are the only one who can manage the business. Not only is this wrong, it is detrimental to the development of your team. When you take a vacation, you show confidence in your managers and they will rise to the occasion.

Starting a business is not easy and not for everyone. But if it is your calling, there is no other way to make a living.