6.12.2014

16 New Rules of Business

Lauren-drell-headshot-newEntrepreneurs are nothing if not a trailblazing bunch, and they know firsthand that many rules were made to be broken. From hiring to time management, email etiquette to funding, today's business owners are tossing the guidebooks. More and more businesses these days are even breaking the (former) cardinal rule of business — don't start a venture with friends — and seeing success.
We spoke with a handful of entrepreneurs about their approach to business — and the rules they broke along the way.

1. Hire outside the box
"I have learned over the past eight years that it is better not to hire someone with 'industry experience,' particularly when your product and business model is a disruptor. People with industry experience have been trained to approach growing a brand, going to market, and selling in the same way that all big incumbents have. When you are a disruptor, you purposefully need to think and act differently — to see the opportunity where others haven't looked. It is true in how you talk with your consumer, how you make your product and how you go to market. I have found that people from the industry have a very difficult time thinking another way." — Kara Goldin, founder and CEO, Hint

2. Timeshift your team
"Of a Kind HQ doesn't officially open for business until 10:30 a.m., and we made the decision to have a late start-time in order to protect our mornings. We realized quickly when launching the company that our nights were almost always packed with commitments (drinks meetings! events! dinners!), and that if we didn't do things like exercise and drop-off dry-cleaning in the morning, we would never have that personal time. This way you can come into the office feeling like you've got your sh*t together, which sets the tone for the day ahead." — Erica Cerulo, cofounder, Of a Kind

3. Do a little bit of everything — even the dirty jobs
"In the very early days we did everything ourselves to save cash (cleaning toilets is not below us!). But this was really instrumental in helping us understand how to operate the most efficiently, and it has generated enormous respect from our employees. When they see us doing everything and working our butts off, it helps motivate them to do the same." — Chelsea Kocis, cofounder and COO, Swerve Fitness

4. Tune out
"Disconnect and take time away from your 'baby.' When first starting a business, you most likely play the role of the CEO, COO, CFO, CMO and Director of HR. This leads to long hours and very little separation between work and home. Set aside time to shut off your phone and take time to disconnect. You will be a better entrepreneur and a better human being by doing so." — Tracey Noonan, owner, Wicked Good Cupcakes

5. Be transparent — even in HR
"Every new employee joins us on a 45-day trial. At the end of that trial, the entire company gets to have input on whether that person should join the team — kind of like Survivor, where the person can be voted off if there isn't a fit. Cultural fit is so key to an early-stage company that spending this extra time in hiring is key — about 60% of candidates successfully make it through the trial. We also don't have many of the traditional recruiting levers at our disposal. With all salaries banded and transparent to the rest of the organization, it isn't possible just to get a potential employee to sign up by slipping a few extra thousand dollars. Negotiation really doesn't exist in the salary component, which changes a lot from the normal process.” — Dane Atkinson, CEO, SumAll

6. Enforce a hard stop
"My company is distributed, with most of us working from home most of the time in different time zones. Our rule: No email on weekends or after 7 p.m. in whatever time zone you're in. You can work any hours you want, but you have to use Boomerang for overnight email. (We make exemptions for urgent business and in the time before a big event.) It helps everyone stay conscious about working too long and ensures that we have meaningful breaks from each other. Plus general sanity." — Sarah Milstein, CEO and cofounder, Lean Startup Productions

7. Don't think in annual terms
"It took the experience of running five companies before I was able to slap some sense into myself and convince myself I could bootstrap it out of cash flow and sales. Many times it's not until you begin to lose money in business that you cut back on marketing and customer service, which is a vicious cycle. It's foolish to cut costs in the business to the detriment of the delivery of your product or service. Simply getting rid of staff or resources that adversely affect great customer service or quality of your product will only serve to end up costing you more in the long run. [In the beginning, you should] seek better supply chain deals to reduce cost of goods and bonus staff on performance so your salary and wage costs reflect a sales result or improvement of revenue in the business. [Also], monitor your P&L monthly, not annually — a business is typically going broke 12 months before it does, so an annual review is too little too late. Spend time managing the money you've made, not just on making more money. — Troy Hazard, former global president of the Entrepreneurs' Organization, founder and owner of 11 businesses and author of Future-Proofing Your Business
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