This is the first draft of the content from the core conversation panel I did at SxSW earlier this year. When it’s done it will go up as a PDF and a blog post. I’m posting here so that I can start getting feedback if possible; and have kept things numbered for easier reference – feel free to comment to this post… ;-)
Once it’s final I’ll format it better too…
Dustin took some great photos on the day, so you might want to check them out on Flickr.
A short disclaimer:
These are obviously all my own opinions and as such I cannot take responsibility for anything that happens once you’ve read this document. Whilst I would think that the following are things that I have learnt over the last few years, I don’t profess to be anything more than someone who is trying to learn and apply these learnings â€“ I’m certainly not going to say I’m on top of all of them!
Some questions to ask yourself before starting:
Are you a business owner?
Do you want to be a business owner?
What’s your age?
Do you mind hard work?
Do you have savings in the bank?
Are you a coder, a business person, an ideas person, or a generalist?
If you have a business, do you have a business partner?
If you have a business, is it a product or service business?
If you have a business, are you cashflow positive?
If you have a business, are you profitable or in debt?
I’ve tried to keep the content as short and easily digestible as possible, erring on the side of using point form. I’ve also tried to group things so that chunks digest together. If you’d like some elaboration then please feel free to ask.
Without further ado, here’s the content:
1.Ask yourself what kind of business you’ll love. Then start.
(a)Set SMART goals to make sure you know if you’re reaching them. Use the internet to learn more about SMART goals.
2.Your life won’t be normal, accept it.
(a)Dont use your â€œnormalâ€ friends as your benchmark, they’re generally not working under the same conditions you’ll be.
3.Embrace your fears, they are only fears.
(a)It’s the only way to start and make progress. There’s never a â€œrightâ€ time to get started, so just do it and work things out as you go.
4.Roll the snowball uphill, this is not an avalanche.
(a)I’ve seen very few people succeed without consistent effort. In the long run, persistence and continued effort pays off more.
5.Business is won in inches, just like in sports.
(a)Things seldom take as long as you hope they will, often twice as long.
(b)Doing small things first wins trust, and leads to bigger things when trust is earned.
(c)A sales cycle will typically take anything from 1 to 6 months to bear fruit, probably with a 10 to 20% success rate. Prioritise the small things that will help you to close a deal.
6.Build processes wherever you can to give yourself more time to do the things you’re good at.
(a)Processes you can generally optimise on or find services for are around invoicing, banking, timesheets, sales cycle documentation, proposals, quotes and your daily routine!
7.Abstract and automate wherever you can, you’re not an ISP.
(a)Use 3rd party service providers to make your life and administration easy.
(b)Don’t ever re-invent the wheel unless it makes sense to. Evaluate cost and cost of time against periodic or once off service costs.
(c)Examples are email, calendar (Google Hosted apps), customer support (eSupport), Project management (Basecamp), invoicing (Freshbooks)
8.Cashflow is King, always, without question.
(a)You should always always always have an eye on your cashflow, which literally means how much cash you have in the bank. When you lose sight of this, you will come unstuck and have to go to emergency measures. Knowing what cash you have frees you up to focus on bringing it in and to set your goals.
(b)Know what your cashflow needs are at the beginning of the month; then re-assess at around the 10 or 12 of that month. Start collecting or making arrangements for what you need from then.
9.Learn to leverage debt. Don’t let debt ruin your business.
(a)I categorically don’t recommend you get into debt if you can avoid it, as it’s a big risk. However, if you can bear the risk, and can manage it well, it can serve you without you having to find other less economical sources.
(b)I prefer credit cards as they don’t lock you into overly long payment terms, and you can squash the debt when you’re able to.
(c)Make sure you make your interest payments every month so you don’t affect your credit rating; know where you are within your limit at all time; revolve credit from one provider to another to get better interest rate deals.
10.Learn to network. Become good at it.
(a)I can’t stress enough how important this is. Learning to do this well is a lifelong skill that will always benefit you in business.
(b)Always be genuine, start relationships you aim to maintain, never abuse peoples trust, and always remember that you have two ears and one mouth which should be telling you to use them in equal proportion!
11.Define what success looks like for you, don’t fumble around and be wishy washy.
(a)Everyone has their own ideas and parameters for what success is, so you need to know what yours are before you find your success.
(b)Some good places to start are:
i.What kind of cashflow will you be happy with?
ii.What kind of people do you want to work with?
iii.Are you looking for industry or regional kudos that will indicate some level of personal and professional achievement?
12.Good people are your most important asset, absolutely. They’re generally the largest business cost, but more important than pretty much everything else.
(a)Will you invite them to lunch with your team?
(b)Would you introduce them to your Mom and Dad?
(c)Would you go into battle with them?
13.Learn the difference between â€œbread and butterâ€ and â€œicing on the cakeâ€ work.
(a)There will always be work that is less exciting, more repetitive and which generates a lower profit. It’s called bread and butter ‘cos it’s likely that although it’s not great or ideal work, it puts bread and butter on the table and keeps the wolf from the kitchen door. More specifically, it’s likely to keep your business running, but not generate great returns or much profit. Generally it’s 60 to 90% of your workload.
(b)Conversely, if you can find it there will also be more ideal work, or â€œicing on the cakeâ€ which makes you happier, presents more of a challenge, is more rewarding both professionally and will probably generate more profit.
(c)You should aim to reduce the bread and butter and increase the ideal work.
14.Strive to find a work/life balance. Everyone will find the balance in different ways.
(a)Clearly define what your balance is; check-in weekly or monthly (or what makes sense for you) to make sure you’re getting there.
(b)Often your most important or rewarding work comes when you’re subconsciously working on it in your â€œoffâ€ time. A good example is the coder that finds the solution to his problem while in the shower (buy Crayola shower pens!).
15.Learn to push; learn to relax.
(a)Despite thinking that a work/life balance is necessary, I also believe that there are times when it’s just not going to happen for you for whatever reason. Learn to recognise these times and make sure you come out of them.
(b)Similarly, when you’re not in â€œpushâ€ mode, make sure you wind down and re-charge so that you don’t run your internal personal battery down.
16.Know what your role in the business is. Recruit around that. Play to your strengths.
(a)This seems obvious but many people end up doing stuff they didn’t intend to from the start. It’s natural to try to retain control by doing everything, but you’ll soon reach a point where you just can’t do it all. The best thing you can do is to find people that compliment you in other areas.
17.Read, apply and continually practise the following principles in your life:
(a)The 80/20 (or Pareto) Principle
(c)Getting Things Done (GTD)
(d)The 7 Habits of Highly effective people
(e)… and, don’t forget to eat your own dogfood.
18.Become a Jedi Master at getting things done. Start now.
(a)Most successful people I know have some sort of system they use to keep the stuff in their head from exploding. I’ve found that GTD with a few mods is a good system for keeping me sane and on top of things.
19.Know your limits
(a)Know how much sleep you need to function effectively.
(b)Know your skills around dealing with people so you can get help when you need it.
(c)Know how good you are at negotiating so you can improve or hire someone better than you at it.
(d)Know what you’re good at so you can keep doing it. Don’t assume you’re best at everything.
20.Save for a rainy day & for Vat or Tax (whichever your country uses)
(a)Having a few months cash under the mattress is a good way to get around your fears and to help you to focus.
(b)Saving cash to pay your government is a sure way to prevent you from having to dip into profit/loans/credit/salaries/growth funds when you need to pay up.
(c)I’ve found creating two separate bank accounts for each and putting money in them every month is a great way of consciously simplifying and managing.
21.Focus on your important relationships, don’t worry about the rest for now.
(a)Make sure you keep in touch with your family, good friends, accountant, bank manager, and partners.
22.There are only 3 ways to make more money. Do something in your business to optimise for each way.
(a)To make more money you can:
i.gain new customers
ii.get more money from existing customers
iii.raise your prices
iv.Start with one that works for you, and move onto the next as soon as you can.
23.Spread your bets, scale up if your bets pay off.
(a)Make sure you don’t put all your eggs in one basket, to mitigate your risks.
(b)If a bet does pay off, then scale it up quickly to get as much out of it as possible.
24.Charge more than you think you should. Go on, try it.
(a)It’s easier to earn more from less projects, then earn more from more projects. The inference is that you charge more, have less things to manage, but still earn more.
(b)You’re more than likely charging less then you should. Decide whether you think you’re worth more. If so, start charging more until people stop asking you to do work for them.
25.Get a good accountant. Then educate them about your business and market so they can give better advice.
(a)I can’t overstate the importance of a good, proactive, helpful, accountant, who knows that helping to make you successful will also make them more successful.
(b)Don’t be afraid to interview your prospective accountant – I would advise it’s always a 2 way relationship.
26.If you can at all, implement systems before you start. It WILL save you time and money.
(a)A system can be:
i.as simple as a checklist of things to do for a specific outcome, like SEO items or setting up a new client on your server;
ii.more detailed like creating document templates which will support your business processes (RFP, costing, quotes, spec docs, resourcing, timesheets, invoices, manuals etc etc);
iii.or more involved like setting up Salesforce.com specifically to suit your business, to setting up an accounting or banking package that gives you the reports you need to assess financial situation
(b)Of course, in the heat of a start-up you might never get to it in advance, so this may be called wishful thinking. But the week or so doing this will pay off in the long run â€“ you’ll sleep more, get more real work done, and you’ll feel like you’re keeping the ship in the right course.
(c)Always err on the side of simplicity; abstract the system so it can be used in as many scenarios as possible; use spreadsheets before buying expensive packages; and do backups!!!
27.Do one thing well at a time. It will revolutionise your productivity.
(a)Learn to tell the difference between distractions, actions, projects and priority. Learn to focus on one thing at a time and to do it well. Learn to say no.
28.Understand why you’re good at what you do. Then learn to communicate it to your parents, then your grandparents.
(a)If you don’t understand what you’re good at, and why, then how are you going to get someone to see it for themselves? Buyers buy for themselves, mitigating against their fears â€“ they don’t buy for a skillset or go for acronyms.
(b)If you can explain this to someone so it’s easily digestible and easy to remember, then you’re onto something.
A.â€œI specialise in building CMS solutions that are well structured, portable on most any server, properly documented, easily maintainable and futureproofâ€; is better than â€œI’m a php coder that does CMS solutionsâ€.
B.â€œI’ve worked on large scale LAMP community sites, building out code and infrastructure to manage Alexa 5000 ranking trafficâ€, is better than â€œI’ve worked on some cool stuff for community sitesâ€.
29.Find, create, develop an outstanding elevator pitch. Then practice it until it’s second nature.
(a)You should be able to explain to someone what you do in about 20 seconds, and it should be interesting and unique enough for them to remember you and it. If it doesn’t do that, go back to the drawing board. Practise on people who do not work in tech.
30.Keep learning. Keep moving.
(a)I’ve always believed that individual stagnation is the killer of personal progress. Continually learning is one way not to stagnate, and IMO no one has nothing to learn. Similarly, staying in one place too long breeds comfort zones and complacency.
(b)If you’re in a comfort zone, ask yourself how long you’ve been there for, and why? If you’re complacent, then you need to ask yourself where that will get you?
31.Shave more. Invest in good shirts and shoes. Wear shirts to meetings. It works.
(a)I’m the last one to do the above willingly. I’m far happier barefoot and in the bush, wearing shorts and a t-shirt. Problem is I’m now in London.
(b)In my experience, people give you more credibility if you look the part relative to them, so learning how to clean up and present yourself is a lifelong skill that will help you more than you estimate.
32.You’ll need to work insane hours sometimes. Get regular sleep when you don’t.
(a)I’ve not yet met a business owner who did not work until the wee hours either regularly or often enough for it to show physically.
(b)So, like the soldier, practice and be strict about getting regular sleep when you can because at some stage you’re going to need to dip into your â€œsleep bank accountâ€ and use it to help you get through stressful and sleepless nights.
33.Tequila isn’t good for Mondays; but it is good on Fridays.
(a)This is really just a nice way of saying that you need to be able to let your hair down and have fun from time to time; but that shouldn’t come at the expense of your ability to perform the next week.
(b)So hit the tequila on a Friday, rest up on the weekend, then hit the ground running on Monday.
34.Exercise. You’ll handle stress much better.
(a)What is important is that you exercise regularly. What’s not important is what you do. Just make sure you sweat and do it often enough to make you sleep well at night.
(b)You can also use exercise to break up work periods, so you come back fresh.
(c)Aim for 3 x weekly, build up to 5 x weekly.
35.Get your bank manager to send you wine once a year.
(a)My father once said that you should know two people really well in your life; your wife, and your bank manager…
(b)My experience of this is that if you have a good relationship with your bank manager you’re more likely to be able to get out of cashflow scrapes if you need to, as well as get access to other banking facilities that you wouldn’t if your bank manager wasn’t your fan.
(c)Make sure it’s good wine, not cheap rubbish!!
36.Understand P/L statements & Balance sheets. If you do, you’ll make less mistakes.
(a)Accountants, bankers and financial people generally think in terms of Profit and Loss (P/L) and Balance sheets. At a high level, they’re health indicators for your business, and summaries of the way things are going.
(b)If you can understand them, your ability to communicate with financial people will be better, the benefits of which are pretty obvious.
37.Model your time, productivity and billing. You’ll be more productive and you’ll end up making more money.
(a)Your job as a business owner is to reduce inefficiency and optimise efficiency. If you’re able to model accurately what your time is worth with respect to your business and cashflow, then model that against productivity and your billing, you’ll be able to spot and rationalise weak spots much faster than if you let them hit you in the face. Promise.
(b)The simplest thing you can do is ask yourself the following questions, then answer them as honestly as possible:
i.How much time do I spend working on average per day?
ii.How much of that time do I spend doing something that will benefit my business?
iii.How much of that time can I directly attribute to revenue? [ service business ]
iv.How much of that time is making an effect on my product? [ product business ]
(c)Use spreadsheets to model resources against billing as far in advance as possible, so that you can predict cashflow and resource fluctuations in advance, and plan to mitigate them.
38.Get a life and / or business coach. Get advisors. Find a mentor who you respect.
(a)The best thing you can do for yourself is to acknowledge that you’re not perfect. Everyone can improve in some way.
(b)With that comes the realisation that other people who are perhaps older and more experienced than you, might also be willing to share their knowledge with you.
(c)Having trusted people on the outside of your situation might also help you to see things clearer.
(d)Most local successful businessmen will happily give up a lunch every month to 6 weeks or so, to help someone who is proactive and willing to learn. Find those people!
39.Reward yourself. You deserve it.
(a)One of my deepest regrets is that I haven’t given myself permission to reward myself for all the work I’ve put in. I’ve lived for a long time in a state of delayed gratification â€œI’ll go on that holiday to Greece when X happensâ€; â€œI’ll buy that camera I’ve had my eye on for two years when I have no debtâ€; â€œI’ll buy myself that TV for Christmas next yearâ€ – sound familiar?
(b)So, my recent learning is to let go and reward myself sometimes. I’m happier and more content, even though I may have spent more money this month that I wanted to. In the short term, being happier and content affects your life in so many other ways it’s worth it.