The Small Business Owner’s 10 Commandments

Over the years, I have delved into numerous books on small business success, accumulating a wealth of knowledge on various aspects of the entrepreneurial journey. While I could compile an extensive list of relevant topics, I appreciate the need for brevity and prioritization. In light of this, I have distilled my insights into what I believe are the top 10 commandments for small business owners, along with an optional #11. Although these principles may not be divinely inspired, they encapsulate fundamental business practices that are essential for success.

1. Thou shalt not operate without a clear strategy and business plan: Every business requires a well-defined direction and a plan to achieve its goals. Making decisions impulsively or engaging in business planning sporadically can result in aimless wandering. Remember, if you don’t know where you’re going, any road will get you there.
2. Thou shalt ensure all key employees understand and can measure success: Communication and clarity play vital roles in employee engagement. When interviewing employees, the lack of understanding of the organization’s vision and their place in it often arises as a primary concern. To achieve consistent results, ensure that your employees understand their responsibilities and how their contributions support the broader organizational objectives.
3. Thou shalt not make emotional decisions or ignore business logic: Passion drives many business leaders, but emotions alone should not dictate decision-making. Every business operates within a competitive marketplace, and every action has consequences. Therefore, carefully consider the financial, marketing, and operational repercussions before testing decisions and actions in the real world.
4. Thou shalt not price products/services without understanding related costs: Understanding your business’s financial dynamics is crucial. Surprisingly, many entrepreneurs lack financial comprehension when making economic model decisions. To set appropriate prices and ensure profitability, you must grasp your actual costs. It really is that simple.
5. Thou shalt not withdraw more from the business than it can afford: A colleague of mine aptly states that some business owners “pimp” their businesses by extracting more money than the enterprise can generate organically. If you create cash flow problems to sustain your lifestyle, your business model is not sustainable in the long run.
6. Thou shalt not accumulate excessive debt: Debt can be a helpful tool when managed effectively. However, taking on too much debt, especially for low-margin businesses, can lead to challenges with compounding interest and financial strain. Exercise prudence and ensure that your business can repay any debts within a reasonable timeframe.
7. Thou shalt hire people who align with the organizational culture: Cultural fit is paramount when building a cohesive team. It is easier to train individuals in job-specific skills than to change their values and beliefs. A poor cultural fit can lead to significant workplace issues, making it essential to prioritize shared values and behavioral alignment during the hiring process.
8. Thou shalt create a safe and fair working environment for employees. This is a self-explanatory commandment, as providing a safe and equitable workplace is crucial for fostering high performance and employee retention. Your employees need to feel valued and secure to deliver their best work consistently.
9. Thou shalt not take customers for granted: Customers are the lifeblood of any business, as revenue stems from their patronage. Acquiring new customers is often more expensive than retaining and servicing existing ones. Satisfied customers are likely to make repeat purchases and refer others to your company. Never underestimate the value of a loyal customer base.
10. Thou shalt conduct business ethically and with integrity: Above all, a business leader’s integrity is their most precious asset. Approaching business with the right motives and maintaining ethical practices will ultimately reflect positively on you and your enterprise. Unethical behavior and deceitful practices tend to catch up with those who engage in them.

Optional #11: Thou shalt stress the business from the outside in, not the inside out: Revenue problems are rarely solved by expense-focused solutions. Instead, focus on generating revenue by selling as much of your product or service as possible. By stretching your capacity and building sales before expanding your internal engine, you can avoid a constant struggle for sales merely to sustain the business.

Years of experience and observation in my coaching and consulting practice have shaped these commandments. By adhering to these principles, small business owners can establish a solid foundation for success and effectively navigate the challenges that arise. Remember, these commandments may not be divinely inspired, but they embody time-tested business practices that can guide you toward leadership fulfillment, prosperity, and long-term success.