Ten Commandments for Building a Growing Company
1. Thou Shalt Have a Pre-Incorporation Agreement
Limit the primary participants to people who can consciously agree upon and contribute directly to that which the enterprise is to accomplish, for whom, and by when. Only consider investors that bring more than money to the table: e.g. connections, marketing skills, technical expertise, etc.
2. Thou Shalt Acknowledge That the Customer is King
Define the business of the enterprise in terms of what is to be bought, precisely by whom, and why. Avoid disaster by testing the market prior to development of a product.
3. Though Shalt Use a Rifle Not a Shotgun
Concentrate all available resources on accomplishing two or three specific, operational objectives within a given time period.
4. Thou Shalt Not Fail to Plan Because Failing to Plan is Planning to Fail
Prepare and work from a written plan that delineates who in the total organization is to do what, by when. Use your business plan as a budget. If you cannot stick to that budget, your business plan is too ambitious.
5. Thou Shalt Pick the Key Employees and Pay a Premium
Employ key people with proven records of success at doing what needs to be done, in a manner consistent with the value system of the enterprise. When in doubt, hire your biggest or best competitor’s key people. Free agency works in business too.
6. Thou Shalt Reward the Superstars
Reward individual performance that exceeds agreed upon standards. Move the non-producers into administrative positions, or replace them.
7. Thou Shalt Expand Methodically
Expand methodically from a profitable base toward a balanced business. A smaller, more focused business can sometimes be far more profitable and stable than a large and fractured one.
8. Thou Shalt Acknowledge That Cash Flow is King!
Project, monitor, and conserve cash, and protect credit capability. Over-expansion, failure to see coming trends or competition, and poor credit policies are your biggest enemies.
9. Thou Shalt Hire and Fire Properly
Maintain a detached point of view. Never hire family or friends, unless you are also willing to fire them. Be decisive and do what is best for the business. This could included firing yourself and hiring a more qualified manager!
10. Thou Shalt Acknowledge Change
Anticipate constant change by periodically testing adopted business plans for their consistency with the realities of the world marketplace. Read Kenichi Ohmae’s books, “The End of the Nation State”, “The Borderless World”, and “the Mind of the Strategist”.