The Art of Winning. The Startup Guide

I have travelled a bunch and studied a lot, visiting various business-schools. One training program in Switzerland was based on a very useful slogan: “Pry!”

Pry and learn: the path that others have already walked is something to be studied as quickly as possible. It is very important to get to know the process better: to try and come to grips with everything that is connected with the supplies, to find out how dealers and distributors work in the field that you are interested in, what are the legal norms, the taxes and the limitations, what licenses are required and how your products or services should be licensed.

– Business case —

…A buddy of mine, having already become a successful entrepreneur in the field of wholesale and retail food trade, made the decision to start a second business. In no time at all he bought equipment for the production of toothpicks and opened a small workshop. He had learned the technological process somewhere and counted that having over fifty shops (and the experience of selling large batches in other friendly retail networks) he would not need much time to make his toothpick business a profitable one. Unfortunately, neither his business experience, nor the perfectly copied technological process helped him, because, as it turned out, he did not have the entire “score” for the process of producing toothpicks. It was very important to determine certain things. How much was the cost of a cubic meter of timber? What quality timber should be used? Was there a possibility for regular cooperation with a serious supplier and how should one deal with the packaging?

He opened that production line, because he owned a small forestry which could provide him with cheap timber of any size and quality. But, as it turned out, timber logging, production of toothpicks, packing and selling them are separate businesses that vary in profits, volumes and complexity. When the entrepreneur combined them, the result he got was a failing toothpick business which he subsequently had to sell along with the logging business. As for food retail, he is still very successful in this field.

…Once I decided to help someone build a business from scratch. I was sure that in order to do that it was enough to use certain knowledge that I had, chose the right product and a place to sell it, and everything would work. We chose the German leather brand “Picard”, bought a sufficient amount of a wide range of products directly from the plant and with the highest possible discounts, brought them to Russia, went through customs, and opened two sales points. Successful sales continued for only ten months, while the owner of the business was in charge of it herself. However, it so happened that she had to delegate management to a trusted top manager. After a while the business stopped bringing profits and was finally shut down.

However “correctly” a business is organized, it should be managed by its owner. No consultant will ever arrange a business so that it keeps bringing profits incessantly without any participation on the side of the entrepreneur, because as the “play” of the business is being written (a business process is never embalmed), only an “entrepreneur-composer” can make changes and be incessantly successful. But the business process itself will never be.

Are you an entrepreneur or a manager?

Business is a process that requires constant management and there is no better manager for your company than yourself. And yet, after a while the entrepreneur should better let go of the steering wheel and delegate the actual business administration to someone else. Negotiation trips, endless lines for various permissions in the offices of state officials, exhibitions, conferences, purchases – thousands and thousands of things to do. Naturally, a lot depends on the business format, but as your company is growing, you slowly realize that you have to hire a top manager, who will take on the responsibility for making quick decisions and for the result.

I hired my first manager when my staff consisted of only fourteen employees and my business was less than three years old. After that I have never been a senior manager in the business that I owned, even while being the CEO of my enterprise I always hired a COO. As far as I am concerned, nothing is more effective than a well-arranged work process, where the owner is working on the business strategy without shifting his or her attention to everyday problems, and an experienced top manager is successfully running the company.