Running my own business has been and continues to be the greatest challenge of my professional life. It’s not easy. As the CEO of your own enterprise, you have to manage all aspects of your business and do them all well. You will make mistakes along the way, but the key is to learn from them and grow.
I have made my share of mistakes.
Now imagine if I could access Mr. Peabody’s Way Back Machine and travel back in time to give my former self some words of wisdom. What would I say? Well, besides investing in Tesla and Bitcoin, here are 7 lessons that I teach my former self. These important lessons would have helped me avoid problems and capitalized to a greater degree on opportunity.
#1: You have to focus on yourself first.
You come first. Some people really struggle with this idea because they don’t want to be categorized as selfish. But this is a very fundamental concept that entrepreneurs must embrace. After all, why are you in business if not to pursue your own goals and live your own values?
Of course, you can’t fulfill your own needs without first serving the needs of your customers. It can be easy to lose sight of what is in your business’ best interest if you do not have a disciplined mindset. You have to be selective in the types of customers you bring on. The work you perform must be consistent with your personal and business goals. Don’t get guilted into taking on charity-case customers, or customers that demand you offer services inconsistent with your vision.
It is important to embrace the power of the word “no”, so you can eventually say “yes” to the business opportunities that satisfy your own needs. Pursue Win-Win relationships with your customers.
#2: Continuously Innovate.
As a small business it can be easy to fall into the trap of a comfort zone performing the same basic services or producing the same basic products for customers. If you don’t have an innovation mindset, you can soon find yourself behind your competitors or even obsolete.
Even if you are a one-person business, it is important to embrace the idea of a “laboratory” where you spend time learning, experimenting, and trying new ideas. It is important to get away from your day-to-day work IN your business. When you are in your laboratory, this is where you get to work ON your business.
With the constant revolution of new technology, there are many ways you can come up with new products, new services, new business processes, and new automated systems that are still consistent with your company’s overall mission.
One of the new ideas I have embraced to keep me focused on an innovation mindset is the Battle Board popularized by Brendon Burchard. The Battle Board is a large flip chart paper or even a huge room wide butcher board paper that charts out all of your innovation goals and ideas. When done properly you can break down larger innovation projects into individualized tasks and then time slot them by month. Then this Battle Board is something you and your team see every day to keep you focused and on track.
Resisting innovation can happen quickly. Comfort zones can trap you into just focusing on your day-to-day management of your business. Before you know it, your business gets stale, and your competitors pass you by.
#3: Invest in areas of your business that give you a strategic and differentiating advantage.
Investing in your business can happen in any number of ways. You might be acquiring new technology, hiring new people, or expanding into more commercial real estate space. When you decide to make those strategic investments with the limited resources that you have, it is critical that they be forward thinking investments that help differentiate you from your competitors.
Product development is an excellent category for investment. Doing so requires market analysis, R&D, trials in your laboratory, multiple failures and eventually a successful new product that you can bring to market. This an example of playing offense.
On the other hand, there are investments that exist that help you play defense. These investments may help you save money by insourcing services. Be careful here. These investments often require long term commitments for technology, office space and people. They greatly reduce your flexibility. Plus, they offer no significant differentiating benefit to customers.
The lesson I learned was to embrace outsourcing, particularly for commodity services. Keep your staff lean and focused on playing offense. There are always third-party contractors and service providers that help you play defense.
#4: You have permission to change direction, if necessary.
Starting your own business can be an overwhelmingly emotional exercise. You may have a big idea to start your business, but when you begin to pursue that idea, you may discover that the market doesn’t embrace what you are offering. Or you may learn that the business process required to product products or deliver services is much more difficult than your original estimate.
It can be easy to dig your heels and stick with your original idea. You may have your identity wrapped up in that original idea. It can be difficult to realize that it simply is not working.
Keep in mind that one of the reasons you went into business was to give yourself greater control over your situation. You have the power to change direction. In fact, your nimbleness as a new business is an advantage in that you can pivot quickly if necessary.
I am not suggesting giving up too quickly on your vision. I am just saying don’t be so married to your idea that you are unwilling to step back, reassess, and then make a course correction.
Self-awareness is key. Remember, you are in charge of you. You have the freedom to change your mind. You have the intelligence to learn from your mistakes and make the necessary adjustments.
#5: Less is More.
Life is complicated. Business is complicated. That is why it is so important to strive for simplicity wherever possible.
I tend to overcomplicate things and that can lead to paralysis. That can make projects more difficult, time consuming and ultimately frustrating.
You don’t need to release a new product or service that has every feature in your original brainstorming session. Instead, streamline the idea and come out with a simplified version of that product so you can quickly go to market and get traction. You can add those additional features in future releases.
On another level, it is important to understand people are often your biggest expense. Less is more applies to human resources as well. Before considering hiring that new employee, ask yourself if this is a task that you can instead outsource to a third-party or hire as a contractor. This will give you the flexibility to better manage your business while keeping your staff lean and focused.
Here’s another lesson in human resources: Hire slow, and fire fast. If you have an employee that is not working out, use your instincts to know if it is easier to cut bait then to try to train and bring that employee along. Often addition by subtraction is amazingly effective.
#6: Build systems that are repeatable.
In Jim Collins book “From Good to Great” he talks about The Flywheel Concept which is the additive effect of many small initiatives; they act on each other like compound interest.
The idea of building systems that are repeatable is another way to create a Flywheel Concept.
The key point here is to avoid a business model with so much customization from client to client. Doing so makes your business too complex, too volatile and makes it more challenging to get traction. Your ability to scale becomes seriously diminished.
Instead, create defined processes for specific tasks that are disciplined and consistent. Doing makes it easier to train employees and ensure a high-quality result every time.
One business that I have always admired is In-N-Out Burger. The way they run their business is remarkable. First of all, they have a simple menu that never changes. Compare that to other fast-food franchises where their menu is always releasing new products and seasonal offerings, all requiring different processes with different rhythms.
In-N-Out Burger has built internal processes that optimize the production of their burgers and French Fries. They have built a smooth-running machine. It doesn’t matter which location you visit; they quality of their food is always excellent.
In-N-Out Burger also has a constant flux of new employees cycling in and out. How do I know? Because we can see inside their kitchen as we go through the drive thru. In-N-Out embraced transparency before transparency was cool. When I look inside, I see different employees each time, but always performing the same process and always delivering the same quality. Their repeatable processes make it easier to train new employees to deliver the same high-quality, consistent result.
In-N-Out has built a repeatable process and they clone it at every one of their locations.
Another huge benefit to a repeatable process is that it makes your business easier to sell. New buyers want to hire a General Manger to run the operation according to your bullet proof processes, so they can then pursue their next investment opportunity.
Side note on In-N-Out Burger: I said they have the same menu, and it never changes. Well, that is not exactly true. If you are a fan of In-N-Out Burger you may know they have their special Secret Menu that is not widely publicized. This is one of the greatest marketing tactics in the fast-food industry. Their secret menu helps drive word-of-mouth advertising and creates a cult-like following of their brand.
What can you do? I like the idea of “productizing” your service offerings. Create a process that is consistent and repeatable, so the delivery of that service provides the same quality result. This transforms services into a product. In-N-Out is not a custom chef. They produce cheeseburger products.
Avoid being a custom shop.
#7: Trust your gut.
When you are running your own business, you have your finger in every aspect of your company. You are simultaneously managing financials, employees, suppliers, salespeople, and operations. While you think you know everything, you likely do not. Your rational mind has only been able to process a limited amount of information.
It is important to trust your gut. Often you will be in a difficult situation requiring an important decision. You may not have all of the facts. But your subconscious mind often knows more than you realize. It is important to have this self-awareness. It is important to listen to your body when you are encountering these difficult decisions.
I have been in some situations where my gut was telling me one thing, but my conscience mind would talk me out of it. I would either be unaware of my gut, or I would have an internal debate with myself to justify why my gut was wrong.
Trust your gut. But you have to have that self-awareness in the first place, so you are listening.
As an entrepreneur and self-employed for over 17 years, I have learned a ton along the way. I graduated from the School of Hard Knocks. I hope these 7 lessons I learned as an entrepreneur can be helpful as you start and build your business.
There’s tremendous opportunity out there. Good Selling!