Rules of business
By andy on Wednesday, January 4, 2006 - 4:14 pm
Interesting note for those of you who want to start you own business. Many people often rush into starting their own business without a plan in mind. If you have those types of dreams, here’s a good rule of thumb…
Rent should take up no more than 25 percent of your revenue, another 25 percent should go toward payroll, and 35 percent should go toward the product. The remaining 15 percent is what you take home. Thereâ€™s an even more elegant version of that rule: Make your rent in four days to be profitable, a week to break even. If you havenâ€™t hit the latter mark in a month, close.
And for those of you who think you have the next big idea, and have dreams of getting venture capital – here is some of the best detailed advice I’ve read lately. It comes from none other than the eloquent Guy Kawasaki. (Thanks Guy for continuing to put your vision and standards out there in the open. The world needs more people like yourself.)
- Deep. A great product is deep. It doesnâ€™t run out of features and functionality after a few weeks of use. Its creators have anticipated what youâ€™ll need once you come up to speed. As your demands get more sophisticated, you discover that you donâ€™t need a different product.
- Indulgent. A great product is a luxury. It makes you feel special when you buy it. Itâ€™s not the least common denominator, cheapest solution in sight. Itâ€™s not necessarily flashy in a Ferrari kind of way, but deep down inside you know youâ€™ve rewarded yourself when you buy a great product.
- Complete. A great product is more than a physical thing. Documentation counts. Customer service counts. Tech support counts. Consultants, OEMS, third-party developers, and VARS count. Blogs about it counts. A great product has a great total user experienceâ€”sometimes despite the company that produces it.
- Elegant. A great product has an elegant user interface. Things work the way youâ€™d think they would. A great product doesnâ€™t fight youâ€”it enhances you. (For all of Microsoftâ€™s great success this is why itâ€™s hard to name a Microsoft product that youâ€™d call â€œgreat.â€) I could make the point that if you want to see if a companyâ€™s products are elegant, you need only look at its chairmanâ€™s presentations.
- Emotive. A great product incites you to action. It is so deep, indulgent, complete, and elegant that it compels you to tell other people about it. Youâ€™re not necessarily an employee or shareholder of the company that produces it. Youâ€™re bringing the good news to help others, not yourself.
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