Lessons from my father: 25 Rules of Bootstrapping a Business

Sitting here on Father's day I was thinking about everything my father has taught me about business. Growing up in an entrepreneur's house is always interesting, and with my father it meant that my whole childhood was an education on business. Every Saturday we checked the mail, went to the office, swept the floors and checked on the shop. When I was 12 he gave me a loan to buy my first lawn mower and made me pay him back after every lawn until I was paid up - it was my first lesson on getting out of debt and bootstrapping a company. He taught me how to save up with each lawn cutting and buy more equipment so I could charge more for each lawn cutting by offering more services. Then when I was 16 and started a consulting business he taught me how to sell and market, and finally when we started JBKnowledge in 2001 we went into business together and he gave me an MBA in the Jim Benham School of Business. Texas A&M taught me a lot in my undergrad and masters from the Mays School of Business but my Dad brought it home in a way that has been incredibly useful for the last 18 years of building a business that has sold to businesses all over the world and has built teams on 3 different continents. I've tried to boil his advice down into 25 straight forward rules, so here goes:

1. The number one rule of business is Survive! Stay in business long enough for good things to happen. 
2. Only the paranoid survive. Be productively paranoid. 
3. Cash is king. If your outgo exceeds your income your upkeep is your downfall. 
4. Use debt as little as possible and pay it off as fast as possible. Debt will sink businesses faster than almost anything.
5. Everything is a trade off. Make your choices wisely and make your mistakes small. Small mistakes are recoverable, big ones might not be. 
6. Always have more office space than you need and you’ll work hard to fill it up with profitable activity.
7. What looks like opportunities can be snakes or rabbits, snakes will kill you and rabbits will lead you on a crazy trail. 
8. There’s no substitute for hard work. Most of the time you will simply outwork your competition. 
9. Don’t forget to always ASK for the sale explicitly. Most people are afraid to actually ask for the sale.
10. Always ask every prospect 3 questions : Can I work for you? Do you know anyone I can work for? Should I be a part of any trade associations that you belong to?
11. When budgeting, take your expected revenue and cut it in half, take your expected expenses and double them, and you might be close on projections. 
12. When all else fails, go to a directory of companies and start calling companies. Then get on the road and go see them.  In my dad's day it was the yellow pages.
13. Running a business is like surfing on a wave - it’s really hard to get on the wave, but if you stay balanced you can ride with much less effort than getting on.
14. A business is a tiger - once you get on its back you hold on hard or the tiger eats you. Remain vigilant all the time and don't ease up.
15. Trust but verify, and don’t be afraid to check in regularly to make sure the job gets done. Reference rule #2.
16. Always pay your vendors and employees on time and they’ll go to the mats for you. 
17. Bootstrap, keep your equity and always maintain control of the business - Don’t sell control of your vision for early, easy money. 
18. Don't nickel and dime your clients : if you take care of them they will appreciate it forever.
19. As the owner, you always get paid last. Get used to it. 
20. As the owner, your compensation should always be insignificant to the financials of the business. Keep it that way and you’ll stay in line. 
21. The Chief Executive is the Chief Spokesperson - get out and sell and don’t be afraid to travel. 
22. Have simple metrics that tell you how your business is doing. My dad’s was the UPS shipping bill. 
23. Don’t be a lazy farmer. Get up early, work hard, and go to bed tired. 
24. Bring your kids to work, show them what you do and they’ll appreciate it, and you, much more. 
25. Short term sacrifice for long term gain : be willing to reinvest everything you make in the first several years back into the business to grow it quickly.

I hope you get as much out of these as I have. Business is hard, and bootstrapping a business in harder. Survival is key and success is never guaranteed, but it's a heck of a ride. As we say at JBKnowledge, Enjoy the Ride and Geek Out!