Streetwise Advice: 5 Rules of Thumb for Small Businesses

Worship Your Customers, but Don’t Give Away the Store

It is important to create good products and run an efficient business, but you also need to be responsive to the needs of customers—even when doing so may sometimes require changing the way you are currently doing business. Listen to your customers’ comments, and do what you can to give them what they want. But don’t give away the store! Make sure that at least over a period of time, you are realizing a good profit with every customer, no matter how much they spend.

Guard Your Cash like King Midas

As a small business owner, you are going to be fighting a constant battle to hold on to your cash. Overruns in startup costs, lower-than-anticipated profit margins, and sales that grow slower than expected are among the most common cash drains on new businesses. Even established, highly profitable, fast-growing businesses often run out of cash because of the need to finance growing inventories and customer receivables.

You may also find that well-meaning employees are constantly suggesting new ways to spend or invest your precious cash. You are going to have to pull in the reins and say “NO, NO, NO” to the many different demands on your money. You will need to learn to project cash flow with a fair degree of accuracy. If you don’t become disciplined in controlling your cash, you can get into trouble very quickly.

Treat Your People Right

Virtually all employees want to work hard to help your business succeed. Treat them right, show interest in them, and compliment their every success. You’ll be much more likely not only to retain them but to keep them motivated, too. Otherwise, a lot of money and time can be wasted hiring and training new hires. On top of that, you’ll go home each day feeling a little better about yourself.

Beware the Friendly Salesperson

Once you open your small business, you are instantly going to be a prime target for every salesperson within calling range. New business owners often have a hard time saying “No,” until they get burned buying something they don’t need. Salespeople are not here to help you! They are there to separate you from your cash! Chances are, when you are starting or running a small business, you will need your cash a lot more than you will need what they are selling.

Have Fun

Just because many other businesses are boring, stale, routine places to work doesn’t mean that your business has to be, too. Make work fun, exciting, and challenging for your employees, and you’ll find that in addition to happier people you’ll have less turnover and higher productivity. Besides, you just might have a little more fun, too!

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.