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100 Rules For Entrepreneurs

Book Description

COMPREHENSIVE, HARD-WON, NO-NONSENSE ADVICE 100 Rules for Entrepreneurs covers every aspect of business from the entrepreneur's point of view. Unlike other guides it avoids mere theorising. Instead, everything is tackled in light of the realities of business in the 21st century, and through the lens of serious entrepreneurial experience. The rise of regulations, the impact of competition and the growth of globalisation means that start-ups have to be more flexible and robust than ever before in order to prevail. Mindful of this, Neil Lewis provides practical and original advice on: - how to properly measure profit - and what a really sustainable business looks like (and how it can be grown) - how to handle recruitment - and not only why freelance is the future, but how best to take advantage of it - how to manage your management team, set effective goals for your business and prevent the rot from setting in - the best time to sell your business (and how best to do it). He also brings to bear his experiences on dealing with dividends, shareholders and other advanced aspects of running a start-up. GRITTY WISDOM Accessible and memorable - counterintuitive at times, at times reassuringly simple; refreshingly realistic throughout - 100 Rules is the ultimate companion for today's entrepreneur. It is the direct and hard-earned wisdom of an entrepreneur who has seen it all: the giddying heights of reaching a £12m valuation in eight years from a simple start in a back bedroom with a computer and £2,000; the dizzying descent of losing it all in two, and the work required to pick up and start, successfully, again.

Table of Contents

  1. Cover
  2. Publishing details
  3. About the Author
  4. Acknowledgements
  5. Introduction: 15 Principles of Successful Entrepreneurs
  6. 1. Just do it…
  7. 2. Learn from your mistakes
  8. 3. Never blame the market
  9. 4. Take care of yourself
  10. 5. Know yourself
    1. Know your weaknesses
    2. Know your personal management potential
    3. Know your strengths
  11. 6. Measure success properly
    1. An alternative approach
  12. 7. Sharpen the saw
    1. Do not keep normal office hours
    2. Go on holiday – and judge your business on your return
  13. 8. Make your passion your business
    1. Be passionate – even though others don’t like it
    2. The money has to be secondary
  14. 9. Nothing but the truth – and quick
  15. 10. Don’t pin your hopes on a premature retirement
    1. Risk rises at the prospect
  16. 11. Never work to ‘save jobs’
  17. 12. Avoid the ‘we’ve just got to survive the recession’ fallacy
    1. Avoid the ‘market has disappeared’ fallacy
  18. 13. Proper profit is profit margin
    1. Avoid short-term profitability if at the expense of profit margin
  19. 14. The second goal of business is sustainability
    1. What is sustainable?
  20. 15. How to set a business-sale goal
    1. Avoid the ‘sell for £x’ shareholder goal
    2. Set an expiry date for business or shareholder goals
    3. Sell your business when you are winning awards
  21. 16. Run the business for dividends (shareholder profit)
    1. Keep salary and dividend conversations apart
  22. 17. Use the dividend cash flow to value your business
  23. 18. Focus on cash-flow forecasts
  24. 19. Check your bank balance daily
  25. 20. Don’t do guilt
  26. 21. Beg, borrow and barter
  27. 22. Use win/win negotiation
    1. Reject all long-term agreements that aren’t win/win
    2. The walk-away negotiation rule
    3. Don’t knock down the price
  28. 23. Deliver your promises up-front
  29. 24. Keep collaborating
  30. 25. Run a ‘to-stop’ list
    1. Parkinson’s Law
  31. 26. Freelance is best
  32. 27. Hire freelancers correctly
    1. Freelancers working in your office
  33. 28. Constantly question whether you have the right people in the right roles
  34. 29. Hire better than you need
    1. Expect excellence every day
    2. Don’t tolerate bad (or average) performance
  35. 30. Grow only as fast as your resources allow
    1. Recruit before growth
    2. The problem of panicking managers
  36. 31. Hire hunger (humble and hardworking), not the best (proud and expensive)
  37. 32. Pay the right price for the person
    1. Why young businesses struggle to recruit from within – and how to solve it
    2. Use senior interim managers in entrepreneurial businesses
  38. 33. Never over-promote
    1. Acting-up roles and splitting roles
    2. Take responsibility before it’s too late
    3. Use a career-tracking recruitment agency for senior staff
  39. 34. Meet the spouse for senior roles
  40. 35. Use references early in recruitment
  41. 36. Avoid job titles
    1. Only legally registered directors get the director job title
  42. 37. Pay recruitment fees on ‘success’
  43. 38. Keep new roles temporary
    1. Be very, very, very careful with recruitment decisions
  44. 39. Quality team equals low stress levels
  45. 40. When staff leave, let them go without a fight
    1. Never offer to raise the salary to keep staff
  46. 41. Commit to excellence – fire the ‘good’
    1. Don’t send ducks to eagle school
    2. Don’t fall for the ‘teach a man to fish’ fallacy
    3. The Peter Principle
  47. 42. Measure team performance
    1. What is an appraisal and a KPI?
    2. Never skip staff or team appraisals
    3. ...unless you cancel all appraisals and replace with a simple measure
  48. 43. Three months never says it all
  49. 44. Managers and recruitment
    1. Managers should spot roles that don’t exist anymore
    2. Managers manage team performance – not HR
    3. Managers cannot shift business objectives due to trading conditions
  50. 45. Making the KPIs solid
    1. Make the KPI objectives measurable
    2. Take responsibility away from staff if performance is not right
    3. Only external factors count as excuses
  51. 46. Poor performers get fired – not made redundant
  52. 47. Deal with personnel problems immediately
    1. All sales staff excuses are equal
    2. Strike one, strike two, strike three and out
  53. 48. Use great questions to tease out performance
  54. 49. Promote anyone who makes their job redundant
  55. 50. 100% management support – all the time
  56. 51. Know employees by their fruits
  57. 52. Do away with formal meetings
  58. 53. The team is the hero
    1. Let the team choose individual awards
  59. 54. Have a wise head on hand
  60. 55. Reward long-term value creation
    1. Don’t have long-term contractual bonus commitments
    2. Finding a business-value basis for the bonus
    3. Unlimited bonus structures only for pure sales businesses
    4. When to use profit, when revenue for bonuses
    5. Only salespeople get individual revenue bonuses
    6. Non-sales people must have team bonuses
    7. Bonus can be team of teams
  61. 56. Be wary of bonuses?
  62. 57. Use profit-share bonuses
  63. 58. Pay out some profits as dividends for directors
    1. Bonus on increase-in-dividend payout
  64. 59. Keep two accounts
  65. 60. Pride goes before a fall
  66. 61. Don’t diversify to escape trouble
    1. New diversified businesses go into new legal entity
  67. 62. Let go – faster
  68. 63. Letting others have a go will help them develop greatness
  69. 64. Eliminate puff
    1. Understand the difference between a business vision and mission statement
  70. 65. Build your brand
  71. 66. Protect your brand and IP
    1. Small-scale infringements
    2. Large-scale infringements
  72. 67.Product = brand = product = brand
  73. 68. Establish clear ownership of code, content and process
  74. 69. Own your clients
  75. 70. Refocus your brand – regularly
  76. 71. Measure resolutions as well as complaints
  77. 72. Rattle the cage to maintain excellence
  78. 73. Know your source of world-class business excellence
  79. 74. Know your business’s economic engine
  80. 75. Ideas are cheap – unless they are patentable
    1. Don’t worry about theft of ideas too early
    2. Share formulae – under a lawyer’s guidance
    3. Legalities of protecting ideas
    4. The “Would you sue?” test
  81. 76. Live above the shop
    1. Spot the rot and stop bad practice
  82. 77. Remember the risk to your reputation
    1. Know how much it will cost if it goes wrong
  83. 78. Put it in writing – and make sure you sign it
    1. Don’t worry about the fine legal print
    2. Put the contract in the bottom draw – it won’t deliver
    3. Never delegate the contract signing
    4. Never delegate the cheque signing
    5. Never give personal guarantees
  84. 79. Understand fixed costs
  85. 80. Never let tax drive your decision making
    1. Once decided – don’t forget to optimise your tax
  86. 81. Someone has already solved your problem
    1. Innovation or advice
    2. Build your professional network
  87. 82. Put business before technology
    1. Avoid big bang technology developments
    2. Release all technical developments on Monday at 9 am
  88. 83. Control credit
    1. Control unlimited liabilities
  89. 84. Tough decisions are the right ones
  90. 85. Plan your exit from your business
    1. Don’t get tied in when the business is sold
    2. The insolvency exit
    3. Exit according to the business cycle
    4. Consider all offers
    5. Some birds migrate
  91. 86. Avoid management and board meetings
    1. Non-exec rule for allowing board meetings
    2. Ensure spreadsheets are circulated prior to important meetings
    3. Managers must be prepared
    4. Spreadsheets reveal assumptions – so discuss the assumptions
    5. Avoid the ‘sudden increase in profit in year three (or five)’ business forecast error
    6. No questions? Don’t come!
    7. Discussing potential ideas
  92. 87. Use the envelope test
  93. 88. Marketing comes first, design second
    1. Don’t forget design
    2. Avoid the ‘got money – so let’s spend’ mistake
    3. Measure, measure, measure
    4. Avoid falling for the next big marketing thing
  94. 89. Set in place a feedback loop
  95. 90. Solve problems with three-way conversations
  96. 91. Avoid shareholders
    1. Or make sure you get tag-along rights
  97. 92. Never let family be shareholders
    1. Get professional shareholders
    2. Avoid quick buck shareholders
    3. Avoid the horror of the shareholder collective
  98. 93. Debt is like a disease
    1. The ‘debt focuses the mind’ fallacy
    2. When you must take debt – take lots
  99. 94. Build a strong non-exec team – prudently
  100. 95. Understand the three stages of a business
    1. Avoid speculating business angels
  101. 96. No share options
    1. Use employee shares if you have a share market
  102. 97. Let yourself be ousted – at the right price
    1. Use two valuations to protect your share value
  103. 98. Cease trading before it is too late
    1. Create a freelance skeleton staff before the business goes wrong
    2. Close down subsidiary businesses first (especially foreign ones)
    3. Understanding the types of liquidation
    4. A director who is a shareholder is most vulnerable
    5. Don’t forget the things a director needs to do
    6. The 12-month rule of protection
    7. From hero to villain
    8. Dead period between ceasing to trade and creditors’ meeting
    9. What can go wrong at the creditors’ meeting
    10. Don’t pay one creditor and not another
    11. Doctors with a good bedside manner don’t get sued
  104. 99. Choose the right opportunity
    1. Begin
    2. Be willing to fail
    3. Follow your passion
    4. Keep going
  105. 100. Business comes, business goes – you’ll always be an entrepreneur
  106. Postscript
  107. Other Business eBooks From Harriman House
  108. Other eBooks From Harriman House