Conventional wisdom says that those who forget the past are doomed to repeat it. I say when you study other people’s past, you can avoid their mistakes and find a clear path to success. Here are five things I've learned over my career that may help you:
1) The most important lesson any entrepreneur can learn is to spend their time more carefully than they spend their money. New sales can be found, investors can add cash, people can miss payroll, but you can never recapture an hour incorrectly used. Start every day with a list and be RUTHLESS about saying no. Time is your most important asset.
People going on diets are urged to keep track of everything they eat. People starting a company should carefully track how they spend every quarter of an hour. This meticulous attention to time will teach you a lot about how to work efficiently.
2) Keep the overhead down. No matter how good things look, less overhead means more flexibility. Pay small salaries and give big bonuses. Crowd a few more desks into a space. Use Skype instead of traveling.
3) Revenue is consistently the hardest part of running a business. Focus on it, and structure your company to succeed with fewer sales, not more. You keep the overhead down to reduce the pressure on getting more revenue. Sales and marketing (and yes, they are two very different things) drive all businesses. Some products don’t need much marketing and sales, while others need a good deal, but you always have to generate revenue.
4) Avoid the trap of growing revenue by selling something for significantly less than it costs to make. The revenue looks great, but it doesn’t help build your business. This means keeping careful track of costs and revenues to make sure you end the day/week/month with money left over. You can’t pay yourself $20 an hour to do a job that only generates $10 an hour.
5) Finally, don’t neglect your support group…spouse, friends, and parents. You can work 20 hours a day and still keep in touch with the people who mean the most to you. There will be occasions in the future when you’ll really need them, so make sure you haven’t left them behind!