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Entreprenurial management. How small business owners effectively manage and micro manage.

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Business Education

It won't come from college

Your bachelors degree in business, in thirty minutes or less.

I suppose that fifty years ago you could get a fairly solid business education by going to college, but today, and I'm speaking anecotally perhaps, it's probably the worst path you could take.

Why don't colleges offer a real business education?
I would imagine that just about every four year college in the country offers a degree in business. But what are they teaching?.

You get your business education at a real business.
If you were to go to a colleges website and look for the curriculum for a business degree what you would find is that they teach you accounting, law, communication, economics, entrepreneurship, International business, investment, information technology, management and marketing. Sounds good so far doesn't it? The problem is in what they teach, and the difference between the college curriculum, and the real world.

What they teach you, and what you really need to know.

Management

They teach you this:
Your management education will focus on things like social responsibility, business ethics in management, motivating employees, and other worthless bits of information.

You need to know this:
As a business owner or manager, you are paying someone to do a job, that is all the motivation they need. If that isn't enough, you've hired the wrong person, and you should help them out in their career by terminating their employment with you. You settle disputes between employees by siding with the person who is more productive, or for the person who is in the right morally and ethically. If you give someone a job, because they need it, but they are not qualified, you are stealing from those who need a job and have earned it, and you are stealing from the investors in your business.

Investment:

They teach you this:
Stock holders and investors have a responsibility to the community at large. Your decisions should be made not on the bottom line of profits, but on the bottom line of the good of society.

You need to know this:
The stock holders and investors have lent you their money. They didn't put it in a mattress, or invest in some other business, they invested in you. They did this because they felt that you would help them get more money. The benefit to society is that your company makes a product or service that increases the efficiency of the world, thereby adding to the people who have jobs and can take care of themselves and feed and educate their families.

Accounting:

They teach you this:
The process of accounting, balance sheets financial statements, taxes and comliance and other high level principles of accounting are taught. This isn't bad, and it does give you a solid foundation. The problem lies in what they don't teach you.

You need to know this:
At a small or mid-sized company, it's all about cash flow. You'll need to develop a simple spreadsheet that shows how much money you have going out every month, what your current accounts recievables are, and what the pay history is. As the months and years pass and you get to understand these numbers intimately, you'll have attained a perfect education in accounting. You are looking for benchmarks. If outgoing cash exceeds incoming, you'll need to make tough decisions. In a small business, this means you're going to have to fire people. Your small business is probably not a union shop. You should fire the people who are the least productive. Your accountant handles your taxes, and you need to find a good one.

Law:

They teach you this:
The law is difficult and complex, you are taught a basic level of corporate law, with a focus on social responsibility, and The Americans with Disabilities act will be discussed until you become nauseous.

You need to know this:
The laws change constantly. At some point, an unscrupulous attorney is going to file suit against you. You should never compromise and pay a negotiated settlement if you are in the right. If you are accused of doing something you didn't do, you counter suit, for defamation of character. You file extension after extension, and you do what it takes, within the bounds of the law that the lawyers have created, and within the bounds of your budget. Sometimes you will be shaken down for money in a court of law, that you don't rightfully owe, and the money will be taken from you. You just keep fighting. If you are in business there are thousands of laws against you, and about ten in your favor. Hire a good lawyer, and pay him well. If you are in the wrong, you won't last in business anyway. If you are a crook, you'll get just what you deserve.

Marketing;

They teach you this:
Branding and brand identity are the most important. You should package your product or service to appeal to the masses, and not offend any possible market segment because you will lose business. You'lll learn probably a little about graphics, color theory, and presentation, all of which you will forget.

You need to know this:
Branding for a small business is a rough way to go, and very expensive. While it is desirable, it is not always practical. You should appeal to the widest possibe audience, for your products, and your marketing should never offend a potential customer. You should also know that y our marketing effort should complement your sales effort, never the other way around. You should also know that when business is slow, you need to increase your marketing budget, and your sales budget. Business education is about growing a business, branding is about maintaining a business.

Sales:

They teach you this:
Usually nothing at all. If so, they'll teach you that sales people are evil.

You need to know this:
If you are the greatest in the world at what you do, and you can't sell, you will not eat. (OK, but you'll buy your food with food stamps). Sales is the life blood of every business. Even if you don't have sales people, someone must be selling for you to get business. There is nothing wrong with selling high expectations, just make sure they are met. Selling is a numbers game. The more people you connect with, the better your chances of closing the sale. Sales staff should be well compensated, and always recieve a commission. Your best sales people should be treated with the same respect as the owner. The worst sales people should be fired, where hopefully they will find gainful employment with your competitor. All new sales people should hit the ground running. Your sales people need to be trained on two things, the product or service they are selling, and exactly what the benefit is to the customer.

Operations:

They teach you this:
Operations are tied in with just about every class you'll take, which makes it very difficult.

You need to know this:
There are two components to small business operations. Most succesful small business owners do one or the other very well. The ones who do both very well, become big businesses. The two components are day to day operations, and the operational duties you need to monitor on a monthly, quarterly and yearly basis. Your education on the day to day operations is easy. You know what needs to be done, make sure it gets done. When it doesn't re-prioritize an do it tomorrow. If it isn't getting done, find out why, and fix the problem. The infrequent operations are the bane of most small businessman. You need to check your costs, but not once a week. You need to audit your books, quickly, but an audit nonetheless, at least once a month. You need to develop a process by which none of the longer term operations duties is ever missed. This can be as simple as single sheet of paper, taped on the wall right in front of your computer, or on your refrigerator at home. But you need to develop this habit. Once every month you should evaluate the operations of your sales staff. Once every quarter you should take some time to evaluate your marketing efforts. Once every quarter you should check in on major projects, and make it a point to touch base with a few of your top customers. Once every year you should look at your business from an outsiders persepective. You should see what your competitors are doing, and if they are growing why? The list of infrequent operations will change depending on the business you are in. The process for staying on top of things is the important part.

The most important thing you should learn is this:

At least once every month, for at least a couple of hours, you should sit and focus all of your mental energy on the business. What can you do better? What new markets should you enter. And some days just sit and ponder the status of your business. Have a notebook with you and take copious notes on the thoughts that arise. If something jumps out at you, pursuit it. You will literally be amazed at the business education you can generate inside your own mind. The more experience you have, the more profitable this exercise will become. Eventually you will complete lose your fear of trying new things. But the new things you pursuit, you will pursuit with a measured, disciplined and logical approach. Your education in effective operations never ends, and it is tied to cost control.

Congratulations, you have just completed your business education.

The summary:
If you work hard, pay attention to the important details, and don't sweat the unimportant details. you will be successful..

The John Galt approach to business.

Managing difficult People

How to become a CEO

National Business Education Association