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ELECTION 2022

Business rules you can break with a big smile

THE STANDARD INSIDER
By Pauline Muindi | Sep 23rd 2020 | 5 min read

In business, like in any other aspect of life, there are general rules of thumb. In most cases, these rules are a guide to achieving business success faster and more easily. However, some rules are not cast in stone. A smart entrepreneur knows when to colour outside the lines for the benefit of their business. The decisions you make for your business should be guided by the uniqueness of the situation. Remember, entrepreneurship and risk-taking are inherently connected. Breaking the rules when the situation calls for it can lead to growth and increased net profit.

Before breaking a rule, weigh the pros and cons of your decision. Ideally, the rewards associated with the decision should outweigh the potential setbacks. Make sure that your business is able to sustain itself, even if the risk doesn’t pan out the way you’d hoped.

With that in mind, here are some business rules you should break:

Work in silence

You have probably gotten this advice from different quarters: always work in silence. For the most part, this is great advice. As a common quote attributed to Frank Ocean says “work in silence, let success be your noise.” But for the astute entrepreneur, part of the decision-making process is sharing your ideas with relevant people. By sharing an idea, you reduce your biases and blind spots. But what if you share your idea only to have it stolen? Bear in mind that there are very few truly unique ideas.

Coming up with an idea is the easy part of the business. Creating a sustainable business out of it takes time, effort and resources. Most of the people you share ideas with will be too busy with other endeavours, too afraid of the risks, or just not interested in “stealing your idea.” Even if someone steals your idea, they can never execute it quite like you would. Two people may have the same general idea, but it is very unlikely that they’ll have the same strategies and outcomes. It is still advisable to exercise caution regarding who you share your business ideas with. You don’t want your ideas leaking to the competition. But do talk your ideas out with mentors, key partners and employees. You have more to gain than lose by sharing your business ideas with others.

The customer is always right

Coined in 1909 by Harry Gordon Selfridge, this saying emphasizes on prioritising customer satisfaction. It makes sense - after all, no business can make it without giving customers what they need. The money customers give you in exchange for your goods or services is a business’ sole lifeblood. But while the ethos is definitely sound, sometimes customers are simply wrong. The customers might be misinformed, resistant to necessary change, rude to employees, or dishonest. Always differing to customer experience or expertise is a sure way to kill your business. In some industries, in particular, you should do what you know to be right, not what your customer wants. This is especially true in healthcare. A patient might Google their symptoms and feel that their self-diagnosis is right. Always bending to the customer leads to higher health costs and might even cost them their lives.

As a famous quote attributed to Henry Ford says, “If I had asked people what they wanted, they would have said faster horses.” This means customers might not have a clear grasp of the solution that they need. It’s up to you as an entrepreneur to have a clear vision of what you want to achieve and go for it. For example, customers at high-end resorts might claim they want state-of-the-art TV screens in their rooms. As an entrepreneur, you might decide to remove TV screens from the rooms to allow guests to relax, interact with each other, and enjoy outdoor activities. Although a few guests might complain, many might realise that the changes are exactly what they needed.

In the case where a customer complains about an employee, listen to both sides. If the employee isn’t at fault, don’t feel like you have to side with the customer. “When we run into customers that we can’t reel back in, our loyalty is with our employees,” says Gordon Bethune in his book From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback. Always siding with the customer can decrease employee morale, which leads to less productivity and commitment. A high employee-turnover has a negative effect on your business reputation and your ROI.

Diversify your client base

You have a thriving business but there’s one problem: you only have a few clients. Many small businesses thrive on building strong relationships with a few clients. The common wisdom is for businesses to diversify their client base as much as possible. The reasoning is that relying too much on one or two customers can expose your business to a cash crunch if they stop their orders for any reason. But according to Rene Shimada Siegel, the founder of High Tech Connect, this is a business rule you can break. “Really, we’ve tried for years. But when an industry giant is your largest client and managers tell colleagues in other departments about you, who’s to complain?” she says of her business. “Word-of-mouth marketing is always a gift. Sure, we’ve worked with many other large clients, and plenty of small clients too, but our largest client is the one that keeps us in business. We work hard to earn their business again every day.”

Never work for free

Every business has one goal: to make money. Therefore, the idea of giving services or products for free seems counterproductive. As common wisdom dictates “nobody will buy the cow if milk is free.” However, a smart entrepreneur knows this rule isn’t written in stone. There are instances where giving something for free is a clever business strategy to increase future returns. Giving out services for free can help you build experience and expertise. For example, offering free services to a blue-chip company will legitimise your business. This strategy is especially effective when you’re starting out. However, make sure it only accounts for a small portion of your time and sales. When you give potential customers free samples of your product, it provides a perfect opportunity to educate them on the product and get their feedback. In today’s world, many eCommerce businesses have a free version or period designed to get customers hooked. The customers are enticed to purchase the premium product once they’ve tried the free version or when the trial period is up.

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