50 Pieces Of Business Advice From Successful Entrepreneurs

50 Pieces Of Business Advice From Successful Entrepreneurs

Get ready for the challenges you face, by reading the best business advice and tips from experts and experienced entrepreneurs or starting and growing a small business

Starting a business whilst developing yourself as a leader and an entrepreneur can be a daunting prospect and one of the biggest challenges you can face. Still many entrepreneurs fail to ask for business advice from experienced entrepreneurs or experts. Although this strategy is brave, its ultimately fool hardy as although many things you have to experience to learn there are many more things you can learn by listening to the those who’ve been there before, saving yourself a lot of time, headaches and money in the process.

So why not put yourself ahead of the rest and find take a look at the 52 most important pieces of business advice you’ll ever get, covering starting a business, growing a business and developing yourself as a leader and an entrepreneur.

1. Build On The Functionality Of Your Ideas

Primarily, to start a business, you need to have a unique and functional idea or concept for the product or service that you plan to offer. Observe your environment and assess in what sectors you may be of help to bridge the gap and fulfil consumer requirements. Identify the consumer needs and inspire yourself to devise and offer viable solutions.

Put yourself in the shoes of the consumer and list down all the consumer needs and requirements. It is probable that you might be able to identify a section of the market which remained unexplored and you might bank on the opportunity to fill the gap.

2. Try Your Business First

Before you start your own business, look for a way of getting some hands-on experience. This may be easier in some professions than it is in others, and there may be a different approach needed for some of them.

For example, if you are passionate about good food, it can be quite easy to get a job as an assistant cook, but if you want to set up your own recording company, things start to get a little complicated. If you are going to get involved in a business which has a slightly complicated entry process, then the way to go is to offer your services for free. Small and medium-sized enterprises often use interns and volunteers to help them cut costs, so it is worth researching them and getting in touch with a manager or the person responsible for hiring staff.

3. Ask For Feedback From Friends And Family
Tell people close to you about your business idea and ambitions and ask them for feedback. Choose carefully whom you approach though, the people who are supportive of your personal life will be more willing to listen and give you a realistic opinion. A proper technique is to prepare a short informal presentation for your friends where you will ask them to try out your product or service. If you want an unbiased opinion, try approaching individuals or small organisations in your local community and offering them a free trial.

4. Be Mentally Prepared To Start A Business
Now assess your ability and willingness to deal with all individual aspects of the business. Some of the tasks will be more challenging than others, and not everything will work out well the first time.

If you want to start a business, it is essential to be mentally prepared for the highs and lows that may come. If someone only focuses on the easy and enjoyable aspects of the business, he or she will usually underestimate the situation and encounter many more difficulties on his or her journey. You are much more likely to achieve success if you have a realistic idea and treat the easy and challenging tasks with equal enthusiasm and effort.

5. Test Your Business Idea
It happens to everyone. You are walking down a proverbial street and see someone struggling with a mundane everyday task. Channelling your inner telemarketer, you think to yourself: ‘there must be an easier way to do that.’

A few hours later, an obligatory ‘Aha!’ moment ensues. You think you found the perfect solution, come up with the perfect idea, but being the serious entrepreneur that you are (go you), you are not yet sure if the market will agree. So now there you are, facing a business dilemma of your own. You may be onto something, but don’t feel like wasting a year’s worth of salary to develop a product and thoroughly test demand fully. Once again, there is, in fact, an easier way. Do it.

6. Carry Out Market Research
If you have ever seen an episode of Shark Tank or Dragon’s Den, you already know why you should always test your business idea first. Too many budding entrepreneurs spend a small fortune building a product nobody wants to use. You might think selfie sticks for dogs are the next Uber. However, until you get market confirmation, you are just a guy saying ‘selfie sticks for dogs are the next Uber’.

Of course, there’s the good, the bad and the ugly of doing market research. Having your family and friends entirely on board with your idea is far from a reliable proof of concept. Most people think correctly validating your concept takes too much time, effort and resources before getting relevant insights. Most successful founders disagree. Let’s assume you have already covered the basics. You have identified your target audience. You have analysed their pain points and come up with a unique value proposition. It is then time to get some much-needed feedback.

7. Pitch Your Idea To Professionals
Once you have a concept that is well-thought out, the ultimate test of its worth is trying and selling it to someone. Creating a successful pitch requires effective brainstorming and strategy, so ensure you take all the necessary steps to do so. A pitch can have various forms; you can write a donor letter, do a presentation or fill in an application for a business grant.

8. Find Out Opinions On Similar Products
Online discussions and user forums can give you a good insight into what consumers honestly think about a product or service, to identify their needs and expectations, and find out what upsets them. For example, large online retailers such as Amazon or eBay use a 1-5 star grading system which enables you to learn the average feeling about a product including views from all sides of the customer base: satisfied, neutral and dissatisfied customers.

9. Organise A Focus Group
The idea of a focus group is to assemble a small group of people and ask them about their opinions, perceptions, or beliefs about your concept. It is a good way of gaining some insight on what people think of your product, service, concept, advertisement, idea or packaging. Some useful tips on how to run a focus group are offered here.

10. Know Your Market
Once you have an idea about what you want to do, explore what’s going on in the particular industry you are interested in. Read news related to your chosen area and look for information about which products are currently popular, what the latest innovative ideas are, development in other areas that influence the industry. The information on market trends can be accessed most easily in the specialized sections of publications such as ‘business’, ‘tech’, ‘lifestyle’, ‘environment’, ‘travel’ etc.. However, you can get more specific and valuable information if you invest in an industry journal, website or newsletter from a professional body.

11. Understand Your Industry
Learn the ins and outs of your chosen sector and focus primarily on the things you find most difficult. Sometimes the perceptions of how a professional life in the industry looks entirely different than it is. Every road to success has its challenges, and as you learn more about your industry, it will be easier to envision what kind of issues you may come across and what it might take to overcome them.

12. Have A Good Idea Of What Needs To Be Done
Write down a list of the main tasks you will need to handle when operating your own business. The basic list could include activities such as: attracting clients, managing customers’ inquiries and complaints, writing proposals to potential sponsors, researching suitable premises, looking for reliable suppliers, paying business taxes, complying with legal requirements in your chosen business sectors, educating yourself about the industry, obtaining necessary certifications and more.

13. You Do Not Need To Be A First Mover
It has been well established that first-mover advantage is highly overrated, and history is littered with successful second or later movers. Google was not the first search engine, and Microsoft was not the first GUI/Windows-based software. See this article on Last-Mover Advantage for more detail.

So if it is not your idea, then your execution is going to be the critical factor in whether you become the number one or an also-ran. So what do we mean by ‘good execution’?

14. Jump In And Get Started
It seems like most aspiring entrepreneurs delay acting on an idea until all of the stars aligned. I am no astronomy major, but it seems like that rarely, if ever, actually ends up happening. Moreover, even when it does, feeling the initial market pulse should not require expending massive resources and creating a comprehensive overview of the playing field. Think big. Start small.

15. Execute Correctly
Looking at the execution hurdle, whether you will ever achieve a product-market fit and if your market is big enough are calls you have to make, but many good ideas languish through poor execution. First mover advantage is highly overrated. Take Facebook as an example; it was not the first social network, but often success is about being a few percents better across hundreds of activities rather than the big idea.

If you want your startup to succeed, a good product and ambition are not always enough. Crisp execution, rather than a bright idea, is vital to the success of a startup. Starting a successful business is never easy, but with the right attitude and the right approach then it is entirely possible. When you do make mistakes- learn from them. They are nothing wrong with experiencing failure so long as you learn from it.

16. Consider Working From Home
This may significantly reduce your capital requirements. A significant portion of your capital, when starting a business, is allotted to the rent or purchase of office space. Hence, working from home, you may be better able to meet your financial requirements when laying down the foundation for a start-up. You may transform one of your spare rooms into your workspace or use a secluded space in your home as your office.

Adorn the space with rented or purchased office furniture- whatever fits your bill- to fulfil the requirements of your workspace.

17. Make Sure To Create A Website
Starting a business in the present age without launching a website can be suicidal for your business. Online presence plays a significant role in the success and survival of a start-up business and to increase the chances of your success, you may pay sufficient attention towards making your website appear professional and appealing to your consumers.

A website launch is not as costly, and it offers broader reach to the target consumers. Also, you may make your website SEO friendly and choose a suitable URL to increase its functionality.

18. Create A Brand
Once you have got a product, you want people to be able to remember it and speak about it as early as possible that why you need to create a brand: find a name and hire a designer to create a brand identity. Communicate about the product and the mission on relevant websites, so you develop awareness and get feedback. Provide all the information they need to your first visitors; they are your future advocates.

19. Register With The HMRC
Make sure that you register with HMRC, as soon as you establish your business, to avoid any possibilities of getting penalised. Its an easy thing to postpone and forget about but this can cost you dearly later on, so make sure to get your financial ducks in a row from the beginning!

20. Bootstrap
Bootstrap, find a friend/parent/family/partner to provide some capital. Failing this, look for advances from distributors, vendors or even government grants. You do not always need £50k in the bank to start a business. ‘Go in’ with a web developer or offer a key supplier an equity share in return for 60 days credit. Some of the most impressive pitches I have seen are people that say “this is what I have done with £500, so imagine what I could do with some serious investment!”

21. Engage With Your Community
Entrepreneurs do this ALL the time. With about a £50 investment, anyone can run an initial market test and get immediate feedback. Playing with paid advertising might seem daunting, but Google and Facebook have gone to great lengths to keep it simple. Especially if you are only using two or three of its most fundamental features.

If you already know where your target audience gathers, feel free to go even leaner. Engaging directly with a community is a powerful way of collecting quality insight, when and if you can get away with it. Sometimes, all you need to do to is ask. A fellow Redditor recently created a website that complements Twitch, a massively popular video-game streaming service, and asked a relevant subreddit for feedback. Most of the 200 comments came within the first 48 hours of him starting a thread.

People shared their thoughts, proposed tweaks and even offered small strategic partnerships. Obviously, this should not be the be-all and end-all of his market analysis, but it sure looks like a good start. The cost? Virtually nothing.

22. Delay Charging A Price Or Give A Free Trial
All those years of training in business have taught you that profit maximisation is the crucial goal of a business. Hearing us say that you should not charge for your services may sound stupid, but it worked for Craig Newmark. The creator of Craigslist designed a free website, and despite its roaring success, the site continues to be free except for specific ad categories. The company now has a net worth of $400 million. That is your proof that this peculiar strategy works. It gives the owner time to build an audience for the business and engage customers.

You can also explore giving a free trial; people are always looking for freebies, so offering your products or services free of charge will provide you with an excellent opportunity to gain some honest opinions. If you want to sell food, you can contact organisers of various community events in a local community centre and offer them free catering. If you are going to open a consulting business, post a classified ad providing your services for free to a specified number of people on a first come first serve basis. The options are endless; however, you need to ensure that the freebies on offer have active promotion via traditional advertising or social media channels.

23. Keep Your Costs Low
You may also consider the employment of various strategies to reduce your costs and capital requirements. For instance, you may think to work from home to save the cost of renting or purchasing an office space. You may convert a spare room into your workspace, adorning it with suitable furniture or you may find a secluded space in your home to work without any distraction.

Another way to reduce costs is to hireable candidates who may agree to work on a salary that you may find affordable. Also, consider hiring part-timers, and by saving costs, you may be able to meet your other financial requirements.

24. Put Systems And Procedures In Place
HMRC requires that all businesses keep clear and logical financial records, so put technology to good use and simplify all systems and processes.

While on the subject of technology, you might want to consider whether business needs are being met by your current software. If not, have a look at industry-specific management information packages. They will support business growth by providing real-time data that offers agility should your market change.

25. Hire The Right People
Ideas themselves are not worth much- it is the people behind them that matter most. So if you have got people onboard who do not share the same vision- change them. You need to hire an ‘A-grade’ team, you need to surround yourself with ‘A-grade’ players.

26. Sell Your Product In An Unfinished State
Believe it or not, there are customers out there who are willing to pay for an unfinished product or service so that they get to use it earlier than others. Online businesses which create software can benefit the most from this strategy. They can release their unfinished software to zealous customers and can get valuable feedback from them. This feedback can help them tweak the final product before the release date arrives.

27. Adapt & Reiterate
Build, test, iterate, reiterate, pivot. You know the rest. Frequently the first product that a startup brings to market will not meet market needs. Every startup ever created has changed direction at some point- it is impossible to predict every single step that needs to be taken accurately.

28. Have A Long-Term Focus
Performance metrics should always extend beyond short-term revenue. Too frequently do startup entrepreneurs focus upon instant short-term results rather than building a business. Focus on making a sustainable business model, not a ‘get-rich-quick’ scheme.

29. Generate Revenue
No. Then don’t quit until you are. Yes: great – generate more, a lot more! No idea how? Time to get a clue or get off the field. Not counting social enterprises, a business which isn’t generating revenue is not a business; it is an expensive hobby. Revenue, customers or a clear go-to-market strategy are already more important benchmarks of success in Europe for VC’s. In a more difficult environment, they will become the minimum needed to secure a meeting with a VC.

30. Raise Investment While You Can (If You Need To)
While startups are still sexy and viable (to investors and the general public: crowdfunding) get as much cash in the bank at the most favourable valuation you can get. The money will only get more expensive later on. Make sure as little of it as possible is debt funding. Loan notes which can be converted will be when upstream funding starts to dry out for VC firms.

31. Go Into Stealth Mode (For High-Tech)
A stealth startup is defined as a company that avoids public attention, with the intention of hiding from competitors, to conceal information or as part of mysterious marketing strategy. A startup could also be stealth to quietly test and improve its product or service pre a mass launch and for a million other reasons. If you have developed a new technology or innovation that’s going to disrupt a market and could be easily replicated by competition or near enough, stealth should be considered an option. A good situations and reasons below for when you should consider secrecy as an option for your startup:

Because odds are there are better funded, better known and more developed direct/indirect competitors out there who could merely copy your technology, change it slightly and legally wholly dominate the market you are in before you have the chance to start selling.
In the worst case scenario, your technology could just be stolen by a foreign or domestic competitor. It is not only significant American giants like Lockheed Martin who are at risk of IP theft, but there are also many businesses now battling Chinese rivals who are alleged to have stolen technology and IP.
A competitor may have developed or be developing a similar technology/ innovation, and if they go to press, you can guarantee they are going to steal your thunder, potential investors and clients. First to market has a lot going for it.
You may also be hastily acquired before you hit the market. This is not common, but it does happen, you can get bought out at a fraction of your potential value. It may seem right in the short term, but in the long run, this acquirer may shut down the project and keep it quiet or integrate into their service. There are plenty examples of early acquisitions that made founders rich but incredibly unhappy.
Overall there is no hard and fast on whether you should be stealth but new game-changing technology/IP is an excellent reason to do so. One thing we will say having worked with 1000’s of startups is to consider if what you have developed is that innovative. Many founders get sucked into their hype, and it is something to be avoided because as we will explain in the next section, the benefits of stealth are destroyed by the lost traction from not being loud if it is not right for you.

32. Go Easy On The Marketing
It is tempting to run paid marketing campaigns. However, it is also pretty expensive, and unless you can implement defined marketing goals that are measurable, then it can become a drain on your capital. You need to define the marketing funnel and determine the relationship between your conversion rate and your customer acquisition cost. Moreover, then monitor it all very carefully.

33. Focus On The Product
Spend a lot on your product. Build, test, iterate, reiterate, pivot and get to MVP and beyond. You know the rest. This is where most of your capital should be deployed. Both on product cost and salary costs- good developers do not come cheap (for an institutionally-backed startup you should be looking at spending £40k+/year for decent product talent).

34. Outsource The Tasks You Can
An excellent way to retrench expenses and boost profits is to outsource a major portion of your business. This can diminish the need to hire people on full-time and save time and money spent on recruitment. Outsourcing tasks to international companies with cheap labour can greatly trim down costs.

35. Be Aware Of The Worst-Case Scenarios
Imagine the worst-case scenarios that could happen in your business and plan accordingly. If you need funding, give yourself six months to find it. Schedule on your calendar the day when fund seeking needs to begin, put in enough time for a meeting and sufficient time to make a plan. Then let it go and relax. By giving yourself sufficient lead-time and scheduling the necessary amount of time in, you can take that fear off of your mind for the time being.

36. Find A Way Or Make One
I take this very literally. I even have a tattoo on my thigh that says ‘Find a way or make one’ in Latin. Nothing is impossible. You will never succeed in business if you do not feel compelled to work hard for your achievements. Doing anything by half measures will only get you halfway to success.

37. Don’t Give Up
No one likes seeing a startup fail. So why do most startups fail? Contrary to popular belief, most startups do not fail because they run out of money. Yes, cash flow is often the reason that the business ultimately closes, but the number 1 reason that most startups fail is that the founder quits. Be it a loss of faith, loss of interest, loss of innovation, however you see it; it is the founder’s mentality that almost always fails the startup.

38. Don’t Lose Interest In The Product
Maybe you have seen a better product, or (more likely) because the revenue model is taking longer than you initially predicted. Either way, this is NOT a good sign. A sense of resilience is one of the critical aspects of success. A pivot is needed drastically to turn the idea into something you want. Rarely (if ever) do financial forecasts for startups work; pushing through the negativity can make the difference between success and failure. Stick with it!

This suggests you have lost your passion for the current business model. Maybe it is because you have seen a better product, or (more likely) because the revenue model is taking longer than you initially predicted. Either way, this is NOT a good sign. A sense of resilience is one of the critical aspects of success. A pivot is needed drastically to turn the idea into something you want. Rarely (if ever) do financial forecasts for startups work; pushing through the negativity can make the difference between success and failure. Stick with it!

39. Build A Team
This is the biggest lever you can operate in your business so you should be putting your weight behind it. It is exceptionally easy to lose focus the faster you are growing. You have a million and one other things to distract you, your recruitment volumes are increasing, and you have more pressure to ‘fill seats’, not having enough people looks like one of the leading barriers to growth.

Hire for drive and motivations, not just experience. Some people are driven by the need to succeed; these are the people you want. Make sure their motives are in line with yours.
Be involved and keep your standards high. Aaron Levie says he likes to imagine if he would employ each person if they were going to be one of the first ten hires.
Always remember it is a two-way process. The best people will be being wooed by other companies. Still make sure you sell the benefits of working with you and move fast to secure the best people.
Don’t interview. Use motivational tests and practical exercises as much as possible. Interviews and experience have been shown time and time again to be the worst indicator of future success. Go further than checking a CV.
Hire people that are taking a step up in their career to join you. Question the motives of people making a sideways move – do they have the drive, and will they be challenged sufficiently to be engaged?
40. Foster Good Relationships
As Theodore Roosevelt once said, “The most important single ingredient in the formula of success is knowing how to get along with people.”

From customers to suppliers, financial advisers to employees, you can develop a competitive advantage by merely fostering good business relationships. Social media allows us to keep in touch with each other 24/7, and it takes no time at all to send an email or Tweet to a business contact or potential lead.

These three strategic questions will help you to focus and start getting your business in shape in 2017:

What stage are you at now?
Where do you want to be this time next year?
How are you going to get there?
Once everything has been analysed and evaluated, it is time to update that business plan and use it as a roadmap for the New Year.

41. Evaluate Your Marketing
Do you see results? Are you doing any marketing? It is essential to identify which marketing channels work best for your business – maybe that is social media, local advertising, or direct mail – and then focus on the ones that bring results.

Tracking those results is crucial to understanding your target market’s response to various channels, and thanks to the availability of online data, never have it been easier to see where your efforts should be concentrated.

If Pareto’s principle is anything to go by, 80% of sales will have emanated from 20% of your customers. Use this to your advantage by focusing marketing efforts on this lucrative section of the customer base.

42. Retain Your Talent And Team
Most people start with incentives and stock options, which are essential, but not sufficient. The first thing to get right is the three Rs, responsibility, respect, and recognition. People thrive when they set clear (SMART) objectives, trusted to get on with it and recognised (publically and privately) when they do a good job.

Keep people challenged, but not so challenged they fall apart through stress. A good rule of thumb is that 25% of their job can be a tedious admin, 50% they should be able to do standing on their head, and 25% should stretch them.
Make sure the workplace is supportive (see culture and communication below.)
Be accepting of mistakes, but not sloppiness. Good mistakes happen when people push themselves beyond their comfort zone, and you do not develop without making some. Bad mistakes are the small things (not checking their work properly for example.)
Manage people on outcomes, not processes. Who cares how hard people are working if they do not get results? Process focus stifles innovation and takes responsibility away from people. A pet peeve of mine is worrying about how much time people spend on social media. If they can do the job, why care how much time they spend on Facebook.
Keeping the top performers and removing underperformers is critical. People in the same team know who is doing a good job and who is not. Keeping people that are underperforming reflects poorly on you and is harmful to the people that are working better and harder for the same money.

A good test of how highly you value someone is to imagine how you would feel if they resigned. If it would not bother you, why are you employing them?

43. Hire Knowledgeable And Experienced Individuals
Hiring informed and experienced individuals might be of your particular advantage if you lack sufficient experience and exposure in the industry. It might be of help to hire people who share a similar background, but hiring individuals who are more informed and experienced can be of utmost advantage to ensure that your business flourishes and progress. They have the core competencies that may be required to ensure the success of your business.

Also, take into consideration your skills and shortcomings while hiring your team. If you are familiar with all the technological details but lack in departments like marketing and sales, you may hire individuals who may offer expertise to compensate these shortcomings.

44. Regularly Check And Manage Your Businesses Finances
Your business plan may be neglected and gathering dust, but by updating it with current and projected figures for 2017, it will help to focus the mind and provides a specific target to aim for. Analyse cash flow and profitability for the year using budgeted and actual figures, as variances can reveal potential problems that may have gone unnoticed in the hectic day-to-day reality of business life.

Being in control of your spending is key to your financial success, revenue too but the cost is as important, you can be making all the money in the world and spending more. Make sure, whether you like it or not, to know where you are at financially, where your going and have it tracked closely by yourself, even if you have a CFO. This is the real crux of most startups burning capital too quickly, often the finance is not carefully managed, the investment seems like a bottomless pit, and within six months you hit the edge of that pit.

Problems such as poor credit control, a creeping inability to pay suppliers on time, or an out-of-date pricing structure, will all reveal themselves if you look closely enough.

45. Prefer Hiring Individuals You Know
Though, it is in no way recommended that you hire relatives and acquaintances who lack the necessary skills to work at your company, but hiring people from a similar background can always be of your advantage. If you are aware of their abilities and capabilities, you will find it easier to show confidence in their competencies, and resultantly, they might prove to be more productive for your business. Also, they might be better able to contribute towards your success, and if they are familiar with the rest of your team, you may expect better cooperation and teamwork.

46. Target The Right Audience
Plenty of small businesses do not run sufficiently targeted campaigns, though many people know that targeting is one of the primary advantages of online advertising if done well. It is critical to building up a profile of your demographic and potential and past customers, the better your information, the more targeted your campaign will be, and the best results you will achieve. Your messaging also needs to be aimed at specific demos and groups to maximise interest and conversion rate.

47. Communicate With Your Team
I do not think it is possible to over communicate, however, communication needs to flow in both directions. You need to make sure everyone knows the direction you are headed and has a chance to input (positively and negatively) into achieving it.

If you dismiss someone’s feedback or suggestion, it is highly unlikely they will make another. You do not have to agree with everything, but you have to listen carefully and explain your decision to them appropriately.

48. Build A Great Company Culture
In an interview with this author, David Cohen, founder of TechStars said “team” is the top three of six criteria they use when judging candidates for their accelerator programs. Ben Horowitz talks about the importance of creating a strong culture in his book, The Hard Thing About Hard Things, which he firmly believes is essential when building a successful business.

These aspects of leadership will make all the difference when things get harder. A strong team of A-players will work to keep a business going, especially if they are invested in the company and want it to succeed.
Founders need to create the best environment for their teams, which once profits are being generated will make the external funding situation mostly irrelevant. So when we all start feeling the cold wind those who saw the signs would be safe and warm inside walls, they built themselves, brick by brick, rather than with the borrowed largesse of investor capital.

49. Remain Agile And Innovative
If you have hired the right people with clear objectives, proper responsibilities and flexible process, you have created the platform for innovation. However, again, this is something you have to work at. You need to tell people that you value innovative solutions, and you should ask people what are they trying that is new. Let them know that there will be some failures along the way; it is your role to encourage the right mistakes. If you never fall over it will take you a long time to learn to ski. For example, you could have a monthly review of new initiatives and treat failures as valuable lessons learned.

Essential reading on this is Mindset by Carol Dweck. She identifies a growth mindset which means that you understand that personal growth comes not from innate talent but hard work and practice and that purposeful practice where you push yourself outside your comfort zone and start making mistakes are how you learn the fastest (provided you learn from the errors). This book is a must for anyone hiring and managing people or bringing up children.

50. Get In Place Processes And Data
Proper processes are ones that codify lessons learned and best-practice, bad processes are ones that assume people have no initiative and need to be spoon-fed. The line between them is fragile. Proper processes are more like guidelines with clear explanations of why things are done that way. Bad processes are rigid and exist because things have always been done that way.

As you grow, jobs that were once done by one person will then be done by many, and as workflow spreads over several people, make sure the processes work to keep everyone informed. Try not to replicate effort several times and don’t create bottlenecks where one person holds up the workflow from several people. This is why having an operations director is almost always a good idea when you start snowballing. This is a critical but administrative job that the founder should not have on their plate.

As the company grows, it becomes more complicated. In a smaller company where you are heavily involved in all departments, you can have a good instinctive feel for what is working and what isn’t. You also may not have sufficient data to draw sound conclusions. Entrepreneurs thrive in this gut-feeling environment. In the large company, you need data. This is not just about the KPIs that you use to evaluate company success. This is about properly attributing costs and risks to projects to work out profitability. It is very easy to think you are doing well because you are winning loads of clients, revenues are shooting up, and you are hiring lots of people. You are also at a stage where you are not expected to make a profit – but you are supposed to be building a company that will become profitable.