The goal of any new business is just to survive long enough to see if the business is viable.

Viability means: can a new business survive on its own? It means you have enough cash to continue the business operations to pay it’s expenses.

When you’re working with limited capital, a gross margin of 10% won’t get the job done. A gross margin of 40% is obviously much better. For every dollar of expenses, you only need $2.50 of sales. Time is survival, you’re buying yourself time.

Gross profit is better than gross sales. Look for ways to increase profits not lower them.

The two most important rules for any new business:

1. Protect your capital
2. Do not go after any low margin sales.

Spend time with your high margin customers, which usually means low volume customers. Then let the low margin customers come to you.

Commissioned salespeople only worry about hitting their gross sales, not their gross margin. That tactic could really jeopardize the business. Because you’re taking essentially money out of your own personal expenses to continue to fund the business. That comes directly out of Gross Profits.

The stage when businesses reach critical mass means it has enough sales and cash flow to where it can operate on its own expenses. That’s when you go from being a start-up into a viable business.

Always protect the pot.

An entrepreneur needs discipline and focus above all else. You should be firmly disciplined on focusing on this one business opportunity for a very long time and nothing else.

There are millions of business opportunities and it’s easy to find the next business opportunities. It’s much harder to stay on track. You have to be most focused and flexible on your specific business.

Possibly the most important trait of entrepreneurs is grit – stick-to-it-ive-ness, never quit attitude resilience, and perseverance.

The author says it’s important to find a business concept that has been around for 100 years. Why? Because it is incredibly expensive to educate the customer.

Find a business that is antiquated, not old-fashioned, but where the clients are out of touch with the business and vice versa. Something that is right in the middle.

Find your niche. If there are thousands of companies like yours in an antiquated market, find a new thing where you can succeed.

If you are going to seek out investments to grow your business, make sure you understand their investment threshold.

Build a relationship with your bank. It’s best not to have to fund or obtain a loan for a business using a bank, but the day will come up where you will need financing.

Asset-based lenders are less favorable over commercial based lenders.

Track your numbers by hand. Find out your key numbers to determine if your company is growing. Gross sales also equal lower cash flow. Understand the EBITDA to determine how much your business is actually worth.

In any negotiation listen and dig to find out what’s just below the surface. Assume the other party is smarter than you. In adversarial negotiations, the best deal is one that leaves both parties a little unhappy.

Lose your fear of asking. You don’t ask you don’t get.

Never badmouth A competitor. Don’t be a sore loser. Always be accommodating.

Your public perception is huge, and whether you realize it or not your competitors shape a role in that.

Small customers with high gross margins built-in are the backbone of any successful service-based business.

If you have one client that does over 30% of your sales that’s not good for business. Make sure your biggest customer actually does only 10% of your overall sales.

The winner often builds a relationship. That’s how sales are done. Customer retention is the key to growth. I retain customers by maintaining a relationship. Build Customer FaceTime into your schedule.

The company should raise prices on a regular basis. You’re reducing your profit margins each year by probably 9%, you should raise prices.

The life plan has to come before the business plan. For example, if you want to scale your company, you have to ask yourself why. And then ask yourself how it impacts your family and your life.

Growing a business is a matter of choice. Be sure you know why you’re doing it.

No matter how you view your business, you and your employees should always treat your relationship as a business relationship. Nothing more.

The way to eliminate employee theft is to improve your systems, not to stop trusting people.

Your most powerful recruitment tool is your company culture.

Company culture is made up of three things: Mutual trust, appreciation for your employees’ efforts, and letting employees know that they are valuable members of a community.

You as the CEO are the only person who can enforce the company culture. It’s the one thing that you cannot delegate.

Expenses have a natural tendency to creep up over time. If you want to lower them, get everyone involved.

To build an effective sale, you need a good sales team. It’s a team effort.

Higher salespeople, not entrepreneurs. Avoid hiring salespeople from within your industry and hotshot sales people. Also, commissions create division amongst your employees so pay them a salary and make them part of the team.

Lawyers are not business people. Take their advice on legal matters and liabilities, but not on how to make business decisions.

Same with accountants, they are historians. They report the past, not the future.

There are plenty of retired or networking business people that you’d hire. All they need is a steady income where they can operate of their own base and bring value to you.