10 Business Axioms – Required Reading
one) Tell me and I’ll forget it
show me and maybe I’ll remember,
involve me and I will understand.
Chinese proverb.
Why is this important?
It’s important because Web2.0 has redefined sales for many companies. Selling really is a people business – you need to connect with people on a much deeper level to sell very successfully. People need to understand why your product is right for them so they can trade their hard-earned money for your product or service. The problem is that money is scarce and a finite thing for most people. People can spend all their money on a huge list of needs and wants; in fact, evidence from our current economy shows that people are willing to spend more than they have on the things they want. Other than that, as a seller, you need to engage people in your product or service before they trade the money so they UNDERSTAND what it will do for them. Them grasp. Them make the decision. All you have done is offer them a way to experience it. Only then will you be promoted to their A-List for priority purchases.
2) Surround yourself with skeptics, not true believers who will tell you what you want to hear. Demand that your guardians also tell the truth and that they back down whenever they see a mistake in judgment on your part.
David F. D’Alessandro.
Why is this important?
It is vital to the success of your business. Hearing what you want to hear takes you only one way. It leads to the fall of empires and is, at least in part, responsible for the vast removal of capital from our most recent economy. People only wanted to hear about the good stuff, even when the risks may have been conspicuously absent. Skeptics question everything. They force you to have the answers to difficult questions and never allow you to ignore the things that are best left silent. Through this open approach comes greater integrity. All of this presupposes your willingness to listen to it as well. You want to avoid being endorsed or creating a hostile environment for questions by being receptive, honest, and fair. These attributes will bring success.
3) It’s not what you pay a man but what he costs you that counts.
Will Rogers.
Why is this important?
I found this particularly interesting because there are so many employees who don’t recognize that they work where they do by choice, trade their time for money, and are working to create value in some way. If they do not understand these principles, then as a business owner you have failed as an employer. While employees sit on the cost side of the ledger, they really are an investment meant to earn a return on investment. You need to sit down with your employees and together define how they will give you a return on investment above your cost, hopefully by 2X, 5X or even 10X their salary.
4) No person can be a great leader unless they genuinely enjoy the successes of those under them.
Anonymous.
Why is this important?
If you’re too busy deciding who gets credit for something and who’s going to fall for something, you’re not even a good leader: you’re acting like a 4-year-old. There is ample evidence in the world that more is achieved by a team working together than by the sum of all individuals working separately. A great leader surrounds himself with the best people available, gives them authority, autonomy, and allows the best to rise to the top on their own merits. As a business owner, if he can hire people he honestly believes he could work for one day, let it happen! Thus the tide rises to all ships.
5) I praise loudly and blame quietly.
Catherine the great
Why is this important?
People know when they screw up, and self-reprimand is usually more than enough. Besides, guilt doesn’t change what happened. Praise goes so far: it goes beyond money, beyond limits, and beyond the fence. I have seen very high earners leave their jobs because why? They didn’t even get a ‘thank you’. Money doesn’t matter as much as praise. As a business owner, don’t use this as an excuse to underpay people because you have to treat people fairly… but praise will keep great people working for you longer than you think.
6) Work expands to fill the time available for its completion.
C. Northcote Parkinson.
Why is this important?
The importance can be seen by looking along the lines of ‘if you want something done, give it to a busy person’. Work is really a four letter word, isn’t it? You can waste a lot of time trying to get something absolutely perfect. George Patton said something to the effect of ‘it’s a much better plan if executed violently today than if done perfectly tomorrow, tomorrow never comes’. The Pareto Principle also comes to mind in the sense that 80% of the work occurs in the final 20% of perfection. Now, before you blast this as sloppy workmanship and low quality standards, look at the general principles and do what Nike does very well: just do it. Then move on. It’s about results versus activity.
7) Twenty percent of your products will generate eighty percent of your revenue.
Twenty percent of your income will require eighty percent of your resources.
Wilfredo Pareto.
Why is this important?
The Pareto Principle is so important that I can’t believe people haven’t heard of it. It translates to all aspects of your business. 20% of your customers will generate 80% of your profits. Don’t mix benefits with income. The other 20% of your customers will cost you 80% of your time. Time is finite and your greatest asset. DO NOT WASTE YOUR TIME. Keep your time like it’s all you have. Spend your time working with the 20% of the people who generate 80% of your profits, this will allow you to stay in business.
8) Cut your losses and let your profits run.
Anonymous.
Why is this important?
This is another blockbuster in my books. In your business, you need to be testing ideas all the time. Thomas Edison is supposed to have ‘invented 998 ways NOT to make a light bulb’. I am a firm believer in the idea that the only shame in falling is never getting up again. Try new ideas. Work on your strengths, hire for your weaknesses, and do what you do best. Then test and compare. Whatever idea produces the best result, go ahead. Then try again. Whatever idea produces the best result, go ahead. This will create an evolution in your business that will find trends without you having to see them.
9) If you can run a business well
you can handle any business well.
Ricardo Branson.
Why is this important?
For a couple of reasons: Richard Branson has built empires and branched out into all kinds of paths, so he’s living proof. He also tells me that there are overriding principles of success that transcend the details of a discipline or education. People can be educated on yin-yang, but I’ve met a few MBAs who can’t do much of what I can without one. As a business person, when it comes time to hire someone, keep this in mind; You will be able to discover what one person has achieved and know that you will be able to do it again with your company.
10) It’s not how much you earn that counts,
but how much money do you keep?
Roberto Kiyosaki
Why is this important?
It is the difference between revenue (how much you earn) and margin (what you keep). It applies to every business and every person I can think of. You can earn $1,000,000.00 annually, but if you spend $1,100,000.00 to make your million, then your million is not worth much or sustainable. What counts is how much to keep. As a business owner, you need to manage your costs, understand your metrics, and try to keep as much as you can. Things like average transaction size, purchase frequency, your customer lifetime, first purchase revenue, lifetime customer profit, and customer acquisition costs are critical to understanding your business. That’s why I’m concentrating on this for the first segment of my consulting practice.
I’m also a big fan of under-promising and over-producing, so here’s my free bonus.:
eleven) Never confuse activity with achievement.
wooden john
Why is this important?
This is especially important when you have employees in your own building. People are busy coming and going, back and forth, going to meetings, folders under their arms. Don’t confuse this with getting results. Part of the beauty of having offsite contract workers is that all you see is their accomplishment – delivered according to contract. However, with employees who are in your office space, it’s important to make sure you’re evaluating their accomplishments and results in addition to how busy they appear to be.
