Principle #1: Take fewer risks as you get older
When you are young, you should be doubling down because you don’t have much to lose. If you are in your early 20s or 30s, you probably don’t have as many commitments compared to people in their 40s or 50s.
If you are in your late teens or early 20s, you can probably live with your parents, avoid bills and focus on going to school/building a business. During this period in your life you should be placing as many bets as possible and doubling down when you see fit.
And when you get older, you have more financial responsibilities, such as a family to support and a mortgage payment. So, you shouldn’t make as many risky bets because if things go south, it will affect more than just your life.
Principle #2: Never lose your investors money
Have you ever heard of Warren Buffett’s two main rules? Well if you haven’t, here they are:
- Never lose money
- Never forget rule one
I can’t say that I have followed Warren’s rules to the tee because I have lost money and the chances you will too. So I modified his rule because I am a big believer in never losing other people’s money.
Whether it is your family’s money, or investors, you just don’t want to lose other people’s money. And if you do, figure out a way to repay them because if you take care of your investors they will always take care of you.
Principle #3: Spend 10% of your day thinking about new ways to make money
You don’t have to do this during working hours, but you should focus a portion of your day thinking about ways to make more money. Doing this everyday will help you come up with creative money generating ideas.
Now, this doesn’t mean that you should look to start a new business, but instead look for new ways to grow your company’s revenue. Think outside the box, look for new marketing trends or waves you can ride.
And once you find these waves to ride, be the first to leverage them. Once a channel gets saturated, it becomes very difficult to leverage.
Principle #4: Over communicate
The one thing that I love doing is over communicating. Whether it is with investors, customers, co-workers, or business partners, you have to over communicate.
I have co-founded a handful of companies and every time my revenues decline it’s usually because of communication issues. You can avoid this mistake if you:
- Listen carefully – before you communicate you need to understand what the other party is asking for.
- Communicate regularly – come up with a regular schedule that way people know you care about them.
- Be clear and concise – what makes sense to you may not make sense to others. Make sure you are descriptive.
- Stop whining – use facts when communicating. Complaining or putting blame on other parties never helps.
It will take a while for you to sharpen up your communication skills, so if you are interested in speeding up the process you may want to read some of these articles.
Principle #5: Never burn bridges
It’s just a matter of time before someone screws you over. It happens to all of us and the shitty thing about it is that the other party usually doesn’t think that they are screwing you over.
But instead of getting upset, talking trash, and burning your relationship, you should just let things go. You never know when that person can come in handy and who knows they may realize what they did is wrong.
I’ve been burned a ton of times and once it even cost me a million dollars. But there were other times in which the people who burned me apologized, and made me a decent amount of money later on in life.
Principle #6: Spend 10% of your day networking
I’m a big believer that you don’t have to be great at what you do to make money. You just have to be well connected. Going to local networking events, blogging, and even participating on social web are good ways to network.
Heck, if you really want to network go get an MBA from Harvard or Stanford.
If you don’t think networking is important, just look iCrossing. iCrossing is a marketing agency that sucks at marketing, so much that they don’t have the best reputation in the Internet marketing world. But the people within the firm are so well networked that they were able to bring in millions of dollars in revenue and ended up selling the company to Hearst for $325 million.
Principle #7: Never bail on business partners or investors
For some reason it is considered “ok” to leave a company you founded. And to make it worse, many of these entrepreneurs who are leaving took on millions of dollars of investment from venture capitalists.
I don’t give a shit if you hate what you are doing, but you never leave a team member or investor stranded. If your company is making millions of dollars in profit and your co-founder/investors feel that you are not needed to keep on growing the business, then that’s fine, you can leave.
But if that’s not the case, you better stick it out with your investors and co-founders.
Closing thoughts
There are a lot of different business philosophies that you can follow, the 7 above just happen to be ones I live by. Follow what works for you and most importantly, do what’s ethical.
Do you know of any other business philosophies that we should all be following?
Look over my shoulder while I share: 
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I like that never leave a team member or investor stranded.
You brings some great point.
I agree with this one. I’ve been left stranded myself and there is nothing worse.
Yeah, it’s a shame when people something like that. Karma takes it’s toll.
Yeah, it’s only the proper way to do business.
What goes around comes around. I’ve been left behind too but my principles won’t change. You can’t make business this way.
It is just a fact of life that everybody is going to get shafted every once in awhile. Just don’t be the one doing the shafting. Karma, you can’t run from it.
lol exactly… never lower your standards.
Exactly… I can’t count how many times i’ve been a b*tch of karma. Well, out of chaos comes order. Most of the times
haha, karma always has a way of working …usually against you.
I agree, so you always need to be careful to never burn bridges.
your right about that. You never know who may work with or need around in the future.
yep… burn that thought into your head
I agree with these pricinples but the one about burning bridges is kind of hard to accept.
If someone screwed you over wouldn’t you want to disassociate yourself from them?
I understand if a partner makes an honest mistake.
I agree with this until one point. But what if the business hasn’t any chance to recover and you stay until you loose everything? I think that sometimes you have to be smarter and take the safest route.
No risk no reward. Small risk, small reward. It comes down to what you want.
Be focused on what you want to create: if it’s not this way, it might be another (even better) way to get there. Don’t get stuck in something that’s not working.
That’s true don’t waste time in what there is no out come but sometimes those things brings you out of tight situation.
Yes, but also don’t just keep moving one after the other.
That’s true Neil, Because if you just kep moving from one another, you can never stay on one for enough time to make a solid profit
I agree with that… that’s why it’s important to keep your focus…no matter what.
Somethings may seem to not work at the beginning but after a while everything will flow. Patience is also required in this situation.
Yes, most things don’t happen instantly, but rather randomly after much persistence.
Listening to the other party is very important. If you do that well you’ll get many good connections. It’s a pitty that it is so difficult.
Great points!
Thomas Breeuwsma
Listening is a powerful skill and trait that every entrepreneur should have.
This is a fabulous list that has many worthwhile suggestions. It is great to hear from an entreprenuer who has succeeded talk about what may have led to that success. Thank you for taking the time to create this informative post.
If I had to add one it would be this.
Principle #8: Do what you love
It is undoubtedly easier for entrepreneurs or business people to stay motivated and work harder when they actually care about the work they are doing! If you have a choice, try to do something that gets you fired up, that you love doing. It will stop seeming like work, and start feeling like you are living life to your highest potential.
Doing what you love can be a bit complicated… in the sense that if you do what you love, you may not make the money you want and be able to experience what you love.
Very true, but if you aren’t passionate about your craft, success will be harder to come by.
Very true… do what you love.
I agree with you Neil, We need first to do what we love and then love what we did.
I like this quote a lot!
Nice tips. I have worked in a few companies where these tips should have been posted on the wall.
lol… that’s interesting. Which companies?
My current one for instance. I was involved with the production of a film a few years ago where one of the founding members just bailed on us with half the footage we needed. Heck, even when I was working at retail jobs like Sears and CompUSA some of these mantras would have applied.
Wow, that’s interesting. You must of had great experiences.
Wow man, getting bailed especially on a film production… That must’ve hit you guys hard Alex :S
Although i have to say that i really wonder what kind of experiences you had on there
I’ve got to say i kind of disgree with the ‘taking less risks when you are older’ point. I can understand the point of view, but i think that without risk taking you will never get ahead. Risk taking is extremely important – even to those with more responsibilites than others.
You have to take a risk but must be more careful with your risk as you get older…obviously since more people are affected.
If you want to achieve whatever you had a goal you can come what may. But always try to make money by taking risk as risk and entrepreneurs both goes hand in hand.
As usual, thoughtful post. However, I agree with “Plumber” on #1: I left my 30s a while ago, but I think the problem people of all ages tend to have is not taking enough risks. This seems to be a growing problem in the U.S., I feel…
I’ve just read a book about persuasion and communication, and #4 pretty much sums up that whole book. It works very well.
Taking risks when you’re younger is a good idea, but when you lose it all (even when you’re young) it hurts and makes the 2nd time scarier than the first. But the 3rd time, I think that’s when you should have figured out how to take huge risks that are more calculated, and even though risky you’ll probably have quite a few back up plans and exit strategies in place.
It is scary for sure, but the fact is you much more time to bounce back then if you’re older with a family.
Really great advice and suggestion, I would suggest finding a mentor. I agree keep your commitments at minimal. I have heard and read this advice in many places. Most notable example, Napoleon Hill’s “Think and Grow Rich.”
That’s a fantastic book!
Hi,
I have two things to say after reading this article,
1)The article reached my mail box 2 days late.
2)I don’t really thing we should go by ethical means, I think any way which is not harming you or your users should be adopted because the word ethical is very subjective.
I hope you will agree
regards,
mayank sharma
Not sure why it came late, maybe just a glitch. I think ethical has a pretty universal definition.
I would like to modify Principle #3 to spending 10% of you day thinking how you can add value to other people to make money out of it.
Thanks for the 7 principle, but I think I have one more…. Principle # 8: Spend sometime with your love ones….
Very good one to add
Listen to those who know more than you and take their advice. Don’t do business with Family or Friends. You were given ONE Mouth and TWO ears so you can listen twice as much as you talk.
lol, I definitely agree with you on that one.
I like how you boil it down so clearly, simply and clean.
I would like to suggest, “Follow through”…Do what you say and say what you do…always, even when it hurts. Losing time hurts and time is money. In sales one key factor in building trust with a customer is follow though, even the little things matter, like sharing a blog you were talking about with a customer on a unrelated topic. Yet the quickest way a company can lose trust is not following through, like marketing saying one thing and shipping doing another.
Most people forget the follow through for some reason. The same applies in many sports
Some very good, precise points. I especially like the “spend 10% of your day networking and 10% think of new ways to make money”
Very well done sir.
That’s really needed. May be more than 10% sometimes for networking. By networking you can get good results in business.
You can go far with the connections you create from networking.
Yes that’s why m giving much important to networking and connections, it will be helpful in future business.
Networking allows you to be connected with people and places you weren’t able to get in with before.
Glad you found it useful. Let me know how you apply it.
I agree with Jonny. My challenge is keeping focused on the task at hand while spending 10% of my time being creative and thinking of new ideas. Sometimes new creations can get exciting and lead you somewhere else, for better or worse. Networking is something I need to spend time doing a lot more.
Definitely… networking will open up several doors for you.
I agree 100% with the rules here. To me they are more “natural” rules to business. You can really say: be smart, be respectful, be forgiving (most of the time), be creative and be social. These alone can take you an enormous distance in business and in your personal life. Great post!
Even if you were able to master one of those you’d go far.
You make a great point. If you have passion for what you do and follow the basic rules you will go far. I find a lot of people have lost the most basic forms of respect.
If you enjoy what you do, you’re more apt to do a great job.
Never lie to your team mates. Honestly, when I was working at PWC, having staff members tell me what I want to hear b/c they don’t want to get in trouble creates an enviroment where I could not trust them.
Tell me about it. Dishonesty can be the cornerstone for many business failures. Telling people what you think they want to hear is just a recipe for disaster.
It’s just a temporary thing for people that are like that. Overall it’s definitely the demise of a good relationship.
Yes that’s something you definitely don’t want to do.
The rule of thinking about business 10% of the day seems the best to me. Why? Because when you get older you forget to use your brain and your business can suffer.
lol… that maybe true
Some great thoughts here..
Diversifying income streams and searching for new ideas and paths is important…Also building relationships has a big factor on success
Building relationships is definitely key to growing.
Fewer risks as you get older, 10% of your day networking and 10% of your day thinking of ways to make money.
These are the three I find most important. The brainstorming about ideas and networking kind of go hand and hand.
We spend a lot of time wanting to do something great and little time “doing” it.
Good choice on your top 3. Let me know how you apply it in your business.
Nice points Neil, especially those about taking time out of your day to think ahead. We all get bogged down sometimes and it’s good to get your head above the trees and see where you are going for a while.
I’d recommend doing this first thing in the morning. After reading Paul Graham’s post on focusing in on your one key idea in the shower every morning, I think it’s good to follow up on that idea as quickly as possible. So I get it out of the way early, then i can move on to the rest of my day.
Paul’s post is here, for those who are interested:
http://www.paulgraham.com/top.html
I agree, if you don’t follow up on your ideas or what you’re supposed to take action on, you’ll never get it done.
Never burning bridges is very important. You never know who may work with in the future.
Exactly… you never know when you’ll have to cross that path again.
That’s true. I mean regular networking helps in building good business networks and also helps in generating business.
If you’re consistently networking, you’ll definitely grow your business.
Major businesses are such that they get other business opportunities through networking only.
I agree… that’s why it’s so important to get yourself out there.
the number of times i read your post.. i feel like i need to bookmark every post… 10%networking..10%thinking abt new ways of making money…. what abt rest 80%
The rest is taking action
Lately I think 30% of my day involves thinking of new business ideas.
Nice… how much of your day are you doing money generating activities?
I like them all. Actually by investing time in networking, you can also simultaneously find new ways to make money, just by learning from people around your network.
It’s funny how all you gotta do is just open your eyes
Hello Neil, Great article as usual.
But ask me my #1 business principle and the answer will be “Constantly work upon creating great products” and #2 will be “Constantly keep improving those products”. and well, #3 “Copy other products but end up creating some better than them”
Over these years, what I’ve learned about business failures is that they’re out of ideas on creating good products. A good product (or idea) is the key to turning the wheels of your business.
Of course, we’ve these other principles, but that’s after you’re head deep into your business. My first business was about ‘selling hand made greeting cards’ in my hostel where no student was allowed to go out of the campus. Teachers birthdays were celebrated just with claps. I started making cards and sold them for a tiny price.
Though I was a bootstrapper back then, and now that I own a pretty big business, my number #1 business principle always remains about ‘finding the deficiency and creating something reliable that fill it’
It’s all that experience that adds up that collectively gives you the knowledge you need to take you where you want to go.
Focus on Customers and Never Forget that Your Business is Simply a Collection of Customers. No Customers, No Business!
I have found that in discussions amongst entrepreneurs there is very little discussion about getting and keeping customers. Our Businesses live and die by customers.
Really enjoyed reading your entire blog! Refreshing.
People often forget something as simple as that.
I am 24 lets say I am going to be taking a the biggest risk so far with my company. It is emotional man!
Really, no kidding… but how exciting for you!
I see so many unethical business people these days failing principle #7! We need more accountable people in business. LOL Some still act like they are in high school.
I agree… I think once you’re “on your own…” that’s the most important factor.
I love principle No. 3
The problem is that I actually spend about 20% of my time thinking about how to make more money in my distribution business. What I really want to do now is to spend more time having some fun and building more Web applications.
-S
Exactly. For most entrepreneurs, thinking about expanding takes much more time than it’s supposed to
But if you’re thinking properly, chances are that you will be successful!
You just need to remember to keep pushing because if you stop, you’ll fall behind.
Then what better way to do it then to just TAKE ACTION
nr. 5 is probably the most important of them all. The thing is though; it is SO difficult to “just let it go” if someone you might have trusted, screws you over big time. I takes a lot of practice to turn the other cheek, but it in the long run, it’s worth it
Your reputation will follow you everywhere, so guard it well!
Great words someone told me once.. GOI – get over it
I think risk is the basic thing a entrepreneur has to take for starting the business. Without risk business cannot start and run.
Appreciated. Might be there are possibilities where there is a chance to start without risk but to grow you have to take risk.
It’s the old risk versus reward scenario. Without the risk there is no reward. The bigger the risk, the bigger the potential rewards.
“We always differentiate between a plan and an aspiration.
There is always a short term plan, but there are always long term aspirations.”
It’s definitely a combination of both, but it’s the small picture stuff that gives you the daily motivation to push forward.
Ideally… that’s what everyone hopes for.
Never can you get into a business and be successful without some sort of risk.
No risk… no reward.
“stop whining”, honestly, having been in positions managing others this really hit home, it has also gone the other way as well, with people in power failing and their excuse is “I dident know, I’m only in charge”. Re-reading what I wrote, just reminded me to stop whining in the comments lol. Anyway, everything is on point with this one.
Lol, it’s funny when you look back at yourself after becoming more consciously aware.
I like to think that I spend 10% of my day thinking of new ways to make money, so that’s one tick on the above list at least. I definitely need to start doing more networking! One of my main downfalls!!
Connect with more successful people and you’ll naturally be involved with more successful ideas, concepts, and adventures.
Nice points Neil. But the fact is that, when you are not very successful, you get to think of other ways of making money for %50 of the day
lol, whatever it takes!
Wouldnt that still be considered a risk? Any sort of venture would have some sort of risk whether or not you have others you rely on or not.
what do you mean by that?
Can you please explain what you were trying to say? I am curious what did you meant when you said about the risk. What risk?
The older you get the less time you will have to make money. So if you are really young, try riskier business ventures as the rewards could be huge if you succeed. As you get older, you don’t want to try to create a business like Facebook as less than 1 in a million of those hit. You may want to consider trying a different type of business in which you will have better odds.
I perfectly understand you Neil. When you are young and you have no obligations sky is the limit, but as you get older things are starting to change.
#7 says very true thing on not letting trust down of business partner or of any team member who has been working with you for a long time. it is must to run any successful business as it will allow both the ones to grow business along with themselves.
Yeah, having a partner is what will help you get the proper vision and the best of both worlds.
In a business a partner is like your other half. You can’t go on without each other and you are doing well only if you remain united. This is the reason why the business partner has to be hand picked
Oh yea… handpicked, scrapped, scrubbed, and whatever reason you can find for it to not work. If they pass, then move forward.
Hi Neil,
Great Post. I need your advice boss.
I am almost 40. I have tried a lot of businesses but with moderate or no success at best. What is the way I should take at this point of my life. Financially I am so so. Do you think it is possible to click this late ?
It’s possible. It’s totally up to you, if you are willing to risk things then keep on trying. If not, then look for a more steady gig.
What you said was very true indeed, especially about protecting the investor’s money.
Thanks for the post, loved it.
Can i ask for a link exchange with my blog – Tons Of Resources
?
If you’re one of the top commentors, you’ll get a link on the sidebar above
I think I’d put ‘listening’ at the top of the pile. I know its part of communication, but communicating has two parts and most people focus on the ‘getting themselves understood’ part, rather than the listening part.
Listening is one of the most powerful skills you can learn. When you listen, you’ll be able to befriend almost anyone you want.
Awesome I would say that these are just not the business principles, most of the points are valid for being successful in the corporate world. I would say communicating is real important. It is the showcase of your personality and business.
Communication is what the most successful people have in common so I would undoubtedly believe it to be one of the most important.
These should be regarded as keys to success and not only principles. In order to have a prosper business you need to be organized, to have a right conduit and to be able adapt quickly.
There are several keys to success, not just one.
I wish I would have started my own business in my teens. This kind of puts things in perspective. Thanks,
Joe
Well, it’s better late than never!!
In the purchase of raw materials in the auction house be sure to keep an eye on the bargains. Usually, the battery cells are cheaper than those sold separately.
It’s funny how that works in some cases but it’s true.
It’s truly amazing how well the phone smile works. Love how you mix online and offline marketing. Thanks,
Joe
Thanks Joe, happy to hear that it helps you. Let me know if there’s any other advice you’re looking for.
These are all good. I know there are few more we could add. I would like to call out one #8 as “Know exactly who you are serving” – Rafterman and Marlee Green above mentioned trusting and focusing on customer. They are right – I just think “who” and “serving” are the keywords here. Most business, consciously or not, are serving the investors or “owner”. Very few truly serve the end customer. IMHO, if we get that right, we can be successful in anything – business or otherwise.
Love reading your blog.
Thanks for sharing that
I look forward to more of your feedback.
Yes, if we get that right, there can be some very exponential improvements…
i think for a successful business never lose trust of your investors and customers, because every business need a strong foundation…
jacob
That’s really true jacob. And this strong foundation leads you to successful businessman ahead.
Most people often forget that.
Yes they do and that’s what people unfortunately forget.
I really like #5 – not burning your bridges. Unfortunately I’ve been on both sides of the table on this one
Being burned and then being asked for a favor – naturally I said NO. Not a fun place to be by any means… On the other side of things, having gotten into arguments with business people and regretting that I did.
It’s a really interesting feeling isn’t it.?
One other principle: Put extreme attention and research into a potential business partner before giving part of your company up
Since it’s a marriage, it’s a very good idea to do so.
You never know what’s behind the ‘mask’, so generally you should follow your instinct and double-check it with some research.
Hi Neil, I like your principle#3. Sometimes I spend 50% of my day just to think some idea on how to earn money.
Neil, I like the 7 points you already have here, but would like to add one of my own. That is, have some understanding of accounting issues and how they work. If you don’t you are very likely to get screwed – sometimes not intentionally but everyone out there has a “legal” way of trying to get money out of you.
I agree, that’s a very good principle to know… too many people are taken advantage of.
Another principle could be… Take your time to trust the people around you, but once you do … delegate work effectively
Right, delegating is really an art that you need to learn.
The converse of principle #1 is also true: you can take more risks when you are younger. When you are older, it’s time to settle in and play it safe. You can’t lose the house that your family lives in. But when you’re younger, you don’t have a family living in the house, so you might as well take some risks. The higher the risk, the higher the potential reward…as long as you aren’t doing anything illegal. That’s too risky at any age…
Yes, when you’re young, you should be taking some bigger than normal financial risks. When you get older, the risks dwindle.
Thanks for listing 7 basic principles that we have to follow to run a good business. I am bad in two areas. I don’t overcommunicate with my customers and don’t spend 10% of my work in thinking about new ways to make money. Let me correct myself.
Perfect! Remember, after you do it, share with us your results.
Great post, Neil ( I know you are busy but you should really post more often!). I’m only 27 but I’ve never been a real risk-taker, business-wise. I guess Its because Im a mother so I keep things really practical, lol. Number 3 I find myself doing probably more than 10% of my day, problem with that is I got “Oh…that’s a great idea” Then I start to implement it in someway to prevent procrastination which means I spread myself too thin, sigh. I’m working on it!
Well it’s actually a problem that’s common for most people. It’s easy to get lost in an idea then get lost again with another one. Learn to create focus and stick with it.
This blog is more about neo-business. These are some radical business princilpes we “have” to follow. But the best part about these tips is that they are practical.
Awesome post, truly enjoyed.
That’s what I’m trying to go for, practical advice to help you make money… not get rich quick.
This blog is more about neo-business. These are some radical business principles we “have” to follow. But the best part about these tips is that they are practical.
Awesome post, truly enjoyed.
I think never burning bridged is key. You never know who you may need or want to work with later. And sometimes you have to work in collaboration and that can get messy if you are on bad terms.
I agree… don’t ever burn bridges, you never know when you’ll run into that person again.
I have always come across these situations, when your business partners find other potentail businesses to grow their portfolio , they fail to mention it you about it, but when it is the other way around , they actually get offended and hold a grudge against you. How do you actually deal with double standards like this?
Sometimes business partners work well for some businesses and not for others. It just varies.
I like that never leave a team member or investor stranded.
Yeah, communication and business etiquette are very important.
Every point is quite importance for successful business but i think networking is most important for every business.
Definitely, networking is essential to growing your business.
Principle #2 struck a chord for me. My husband and I went into business with another couple and after it crashed and burned, we found out they fought us on everything because the wife didn’t want to be in the business. Her husband basically forced her. Needless to say, money was lost and we felt guilty to try to get them their money back. Only she refuses to take anything from us. Guilty conscious about sabotaging us from the start maybe? But I no longer feel guilty about it. We risked much more than they did.
How about it should be simply, “Don’t Lose Money”…whether its yours or theirs.
I like that motto and I definitely live by it. Always be mindful of money.
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Great Blog. I didn’t know about Warren Buffet’s 2 rules until now, but they sure make sense. Also dedicating 10% of the day to thinking about new ways to make money will help ensure yourself you should be ok financially, or at least a step ahead of everyone else.
Thanks again.
Great principles you adopted, Neil. I’d like to add a few things that come to my mind: never hide something from a business partner; having a partner implies both sides are equal or at least have equal rights. Also, never lie or cheat your partner – cause it is like one’s cheating themselves.
Definitely, always being honest and honorable will take you far . If you lie and cheat it will just hurt you and your business in the long run. Nice points, thanks for the addition.
One key principle would be to make sure you focus your time on those activities that make the biggest difference. So, don’t sweat the small stuff. I think many people spend 80% of their time on things that probably won’t make that much of a difference.
I agree. Thanks for you additional input, you made some good points.
Your blog is very informative on the subject that interests me.