Rules of “The Knack”

"I’ve been an entrepreneur for almost 30 years now–29 years and two months, to be exact, but who’s counting?–and one thing I’ve learned is that there is no formula for success in business…what we have in common is a certain mentality, a way of thinking that allows us [company builders] to overcome many obstacles and take advantage of many opportunities as they arise.  I call it the knack."

That’s an excerpt from Norm Brodsky’s Street Smarts column in the print edition of the October 2008 issue of Inc.  He and his co-author, Bo Burlingham, have written The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up

In Inc., Brodsky writes, "Rather than repeat what’s there, I thought I would give you what I believe are the 10 most important lessons I have learned over the past 29-plus years, the rules I still rely on today."

Handshake 2.0 found Brodsky’s business advice of inestimable value.  Although the article is not yet available online (one assumes it will soon be on Street Smarts) and the text explaining the rules is stellar, we offer this excerpt as Brodsky’s Rules of The Knack:

  1. Numbers run a business.  If you don’t know how to read them, you’re flying blind.
  2. A sale isn’t a sale until you collect.
  3. When your short-term liabilities exceed your short-term assets, you are bankrupt.
  4. Forget about shortcuts.  Run a business as if it’s forever.
  5. Cash is hard to get and easy to spend.  Make it before you spend it.
  6. You have no friends in business, only associates.
  7. Don’t focus on the top line.  Gross margin is the most important number on the income statement.
  8. Identify your true competitors, and treat them with respect.
  9. Culture drives a company.  In the long run, the boss’s most important job is to define and enforce it.
  10. The life plan has to come before the business plan.
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