5 Business Rules

Welcome back! After a hiatus of several months while we re-tuned both our website and our electronic newsletters, we are back. Hopefully, you will find these newsletter articles noteworthy, informative and helpful.  

Most of us, over the course of our business careers, have either come across fundamental rules of business that prove both true and helpful. In the wake of the recent corporate tribulations that have made so much news, I came across five rules that are worth presenting here. You may find them helpful, which is one of our newsletter objectives.

The first rule is – “Stick to your knitting.”  Do what you know; avoid what you don’t know; stay within your core competencies and focus on the business you understand. At one time I asked a corporate treasurer if he ever invested his firm’s money in derivatives. He responded that he wasn’t that smart, that he didn’t understand derivatives, and because he didn’t understand them, then he wouldn’t invest in them. Well, to me that executive was plenty smart! He knew what he knew, and more importantly, he knew what he didn’t know. He stuck to his knitting. The same applies to business. Stay focused on what you know and do well.   

Second rule – Too-fast growth can be risky. What goes up always comes down. Unfortunately, what goes up too fast often comes down even faster.  A steady sustained growth over the long run will easily trump any “jack rabbit” start.  

Third – An internet strategy, by itself, is no guarantee of success. While it is necessary, if not mandatory, to have a website in this day and age, that website must be supported by internal procedures that efficiently and quickly respond to customer inquiries. Don’t let your internet leads slip away from you, or cool off.

Fourth rule – Executives should not do business with their own firms, except as employees. This includes taking out loans from their own businesses, or selling to their own businesses through another business entity. More careers and businesses than I can count have been ruined by violating this rule.

Fifth – Integrity and reputation do matter. People simply prefer to do business with those they trust, with people who demonstrate over time that they are trustworthy. If everything else fails, at the end of the day, the people and businesses that maintain their integrity and nurture their fine reputations will survive and thrive.

Are those rules helpful? Let me know.