Tag Archives: Starting a business

What are Best Practices?

My business book describes many “Best Practices.” A Best Practice is an ideal procedure for your business. It might be a certain hiring strategy, a certain production plan, or a certain marketing technique. You must employ a Best Practice in each of these areas to be successful. Get the right people on your team, find the most efficient way to produce your goods or services, and get your target audience to buy what you sell. Together, multiple Best Practices make up a business strategy that puts you ahead of your competition.

How to Identify Best Practices

To identify your Best Practices, test everything you do in your business. Document every procedure in your company and check it for efficiency. Make certain everything your business does is effective. To identify the Best Practices of other companies, study them and figure out what makes them successful. When you find their strength, you should figure out a way to imitate that strength or to capitalize on your existing strengths to surpass theirs.

The business book MakeMillions.Com highlights several excellent Best Practices for you to start with. Some of them are:

  • Pay attention to details, especially when communicating!
  • Be polite and patient with customers and clients
  • Work quickly and constantly strive to improve your practices
  • Spend 85% of your time on profitable activities and the remaining 15% on improvement
  • Make sure you and your team are constantly reading to stay up on new practices

The Origin of Best Practices: Kaizen

The concept of Best Practices actually comes from the Japanese term “kaizen,” meaning good and continuous improvement. Kaizen includes five principles: tidy, orderly, clean, standardized, and sustained.  An attractive and organized workplace that is free of clutter is key to maintaining productivity. Employees in such an environment will naturally be more efficient and effective. Then you can work to find what is most efficient and effective and make that your standard operating procedure. Once that standard is in place, you must work hard to sustain your success.

Best Practices depend greatly on context and will change as your industry changes. To sustain your success, you must review and revise your Best Practices often to make sure they are still best for your circumstances. To stay ahead of your competition, you will probably need to make changes in your products and services, your marketing, your business plan, or all of the above. Each time you make a change, your business will be stronger for it. You will be able to leverage your business to meet your goals.

Leverage your Best Practices for Success

Once you have identified the Best Practices for your business, you must use them to leverage your success. To implement a Best Practice, document it by describing the practice and offering a brief explanation of why it is best. You will remember the Best Practice better, and your team will be able to adopt it more easily. Once you and your team have adopted good procedures, you can focus on growth.

Your business strategy must constantly evolve as the market changes. Your target audience may grow, shrink, alter their preferences, or change in other ways. You must adapt with them in order to keep your edge in the market.

Everything you do in your business must be bankable. While there are some necessary activities that do not make money, the vast majority of what you do should generate strong profits. When you get to this level of operation, you will never need to worry about breaking even. Instead, you will be able to focus on staying ahead of your competition and keeping the market share you need to succeed.

Take Nothing for Granted: Choose a Good Name!

To set your business up for success, you must choose a good business name. The wrong name can set you up for failure regardless of what you do, while the right name can give you a huge starting boost. Your name needs to be easily found online, and it needs to describe what you do. It must also be catchy. Your name must survive for years while your company gets established and builds a reputation.

Choose a Business Name and Logo Your Customers Like

You need to reach out to your target audience and find out what name will draw them in. Use MTurk.com to find out what name consumers may like. For $50, you can get hundreds of votes on a business name that will bring customers in. However, do not assume just because you’ve never heard of the name before that no one is using it. Even if you can trademark the name with the US Patent and Trademark Office, you should make certain that no one in another country is using the name.

Choosing a memorable logo is just as important as selecting a good name. Use MTurk.com to find out what logo is most appealing to your customers. You must also scour the market to make certain your logo is not too much like any other company’s logo. It is not wise to deliberately choose a logo like your competitor’s in the hope of stealing customers, as that will probably land you in court.

Leave Yourself Room To Grow

When you file for incorporation, the form asks you to describe what your business will do. Leave yourself room to grow by listing “to engage in all lawful activity” as the purpose of you business. If you limit yourself to “selling widgets,” it will be illegal for you to expand your business beyond selling those widgets. You may find years down the road that you need to change industries to keep your business alive. For example, IBM is now primarily a consulting company. DuPont began as a gunpowder company but now makes all sorts of synthetic chemicals. Like them, your business may have to change drastically as the market changes.

Keep Improving and Take Nothing for Granted

Upon opening for business, you must constantly recheck everything you are doing. Keep a close eye on the market. It will change daily, as will the preferences of your customers. What sells products today may not sell them tomorrow, so don’t take even your most successful marketing campaigns for granted. Try new sales strategies regularly and measure the results.

Don’t assume that the way you began operating is the best simply because you are meeting your costs. New and better ways of manufacturing products and providing services are constantly being invented, and those who adopt them gain a strategic advantage. You must constantly watch your industry—and even other industries—for any new trends and respond accordingly.

In order for your business to succeed, you must choose a good business name, write a flexible plan, and assemble a great team who know how to constantly improve their work. Your success will come as you follow Best Practices and constantly watch the industry and your target audience to keep up with changes that will come.

Why I gave away my company to charity, by Derek Sivers

Recently I ran across a blog that exemplifies the spirit of social entrepreneurship. Derek Sivers is the founder of CD Baby, Host Baby, Much Work and NowNowNow. For all intents and purposes he gave away CD Baby and HostBaby. Below is a repost from his blog that explains his thinking behind the transaction.

Why I gave away my company to charity

Two friends were at a party held at the mansion of a billionaire. One said, “Wow! Look at this place! This guy has everything!” The other said, “Yes, but I have something he’ll never have: enough.

When I decided to sell my company in 2008, I already had enough.

I live simply. I hate waste and excess. I have a good apartment, a good laptop, and a few other basics. But the less I own, the happier I am. The lack of possessions gives me the priceless freedom to live anywhere anytime.

Having too much money can be harmful. It throws off perspective. It makes people do stupid things like buy “extra” cars or houses they don’t use – or upgrade to first class for “only” $10,000 so they can be a little more comfortable for a few hours.

So I didn’t need or even want the money from the sale of the company. I just wanted to make sure I had enough for a simple comfortable life. The rest should go to music education, since that’s what made such a difference in my life.

So I found a great way to do this. I created a charitable trust called the “Independent Musicians Charitable Remainder Unitrust.” When I die, all of its assets will go to music education. But while I’m alive, it pays out 5% of its value per year to me.

(Note: 5% is the minimum allowed by law. It’s still too much. I would have preferred 1%, but oh well. I’m free to use it to start new businesses to help people, or whatever.)

A few months before the sale, I transferred the ownership of CD Baby and HostBaby, all the intellectual property like trademarks and software, into the trust.

It was irreversibly and irrevokably gone. It was no longer mine. It all belonged to the charitable trust.

Then, when Disc Makers bought it, they bought it not from me but from the trust, turning it into $22 million cash to benefit music education.

So instead of me selling the company – (getting taxed on the income, and giving what’s left to charity) – that move of giving away the company to charity then having the charity sell it saved about $5 million in taxes. (That means $5 million more going to music education.)

Also, the move of giving it away into a trust now – instead of holding on to it until I die – means its investments get to grow and compound tax-free for life, which again means more goes to musicians in the end.

I’m only writing this article because many people have asked why I gave it away, so I thought I’d write my long explanation once and for all.

It’s not that I’m altruistic. I’m sacrificing nothing. I’ve just learned what makes me happy. And doing it this way made me the happiest.

I get the deeper happiness of knowing the lucky streak I’ve had in my life will benefit tons of people – not just me.

I get the pride of knowing I did something irreversibly smart before I could change my mind.

I get the safety of knowing I won’t be the target of a frivolous lawsuit, since I have very little net worth.

I get the unburdened freedom of having it out of my hands so I can’t do something stupid.

But most of all, I get the constant priceless reminder that I have enough.

best things in life aren't things

Originally posted Dec. 4, 2009 by Derek Sivers at http://sivers.org/trust.