Business schools will teach you theory and practice, but insight into the real business world comes from experience. Most students agree that business school taught them little about the process of establishing a new business, finding sources of capital, recruiting and hiring employees, and how to beat larger competitors. Here's a handful of business truths that you didn't learn in business school.
Luck is real; the best take advantage of it. You may or may not believe in luck, but chance is real. You might just be in the right place at the right time when an opportunity comes your way. That opportunity might make you radically successful. Lucky people are those that are aware of chance happenings and are prepared to take advantage of them. You do this by preparing your mind to be open to things that are different than your preconceived notions. In other words: be open-minded.
You may need a “get out of jail free” card. During the course of your career, you may connect with or partner with people that make poor decisions. Those poor decisions might lead to big problems that you had nothing to do with. However, as an equity participant you could be equally at risk. You might need to be proactive if problems arise and trade information for a get out of jail free card. I have one from 2001 and it is very valuable to me.
Relationships are your best and most valuable asset. Industries, business, and times change. You may have a thriving business today that is worthless in five years. The one thing you can always leverage for new business in the future is your positive relationships. Therefore, protect your relationships like they are gold...because they are.
You should be able to get a million-dollar loan in 5 minutes. Great business people have banking relationships in which you build trust over time. You should get to the point where your bank trusts your integrity so that you could borrow any amount of money on your reputation and your current cash flow alone. Banks bank people, not companies.
Calculating the cost of capital is not as important as calculating the cost of “no capital.” There are a lot of things you do in b-school to pass a test that you won't need in real life. Calculating the cost of capital is somewhat valuable, but understanding the weakness of having no capital is critical. You must constantly be looking for sources of capital to keep your business growing. You should have several options should a need for capital arise. If you have no capital when you need it; it is completely your fault.
Every payroll dollar must have a measurable outcome. When you hire an employee, or offer someone a job, you should trade that wage for measurable results. This is not always easy. Consider all the ways the employee makes an impact in the organization. Connect actions to results you can track and report. Remember; what you measure you will get.
Leaders are people surrounded by others but feeling all alone. You have heard it said, it is lonely at the top. That statement is accurate. As you truly lead, you hold people accountable and therefore people will distance themselves from you. The people with the most to hide will distance themselves the furthest from you. Be observant.
Bad sales people rely on using computers and long presentations. A well-trained salesperson uses their ears to listen and understand. A poor salesperson sells with their mouth. Teach your team to listen and win business on only one item; trust.
Contracts are all one-sided; which side are you on? Contracts are used to protect. Whoever writes the agreement or contract is protecting themselves first. You must be aware that contracts only become unbiased when you balance the scales to make a win-win agreement. Spend time reading and you will get really good at it.
You can only beat competitors if you are better than them. You don't have to beat your competition in every aspect of the business, but you must be better at them in something. Do not go to the market until you truly believe that you are the best at something that is important to the client.
Meetings without clear goals are an indication of incompetence. Every meeting must have goals to achieve. Good business people have goals to achieve before they start the meeting and can clearly articulate them. The common misconception is that getting to know each other is a good meeting strategy. It is not. Be specific about meeting takeaways and you will succeed.
Firing employees is not personal. There is a difference between the person and the work they do. If you have to fire an employee it is because the employee made choices that caused their termination. The decision to terminate is not fun but it is not personal. Keep the role and the person in their proper context.
Glass conference tables intimidate opponents. If you want to have the upper hand in every meeting, consider a glass table in which your opponent at a tough meeting is at a disadvantage. The inability to hide nervous habits allow you to observe and to benefit. Use every asset you have to win the day.