7 Tips Learned On The Street About Running A Business

Being “street smart,” or able to anticipate and deal with daily business problems and surprises, is generally recognized as a critical skill to have for business owners and entrepreneurs. Most investors say they can recognize this capability when they see it, but it’s hard to define if you haven’t been there. They say you can’t have street smarts if you have never lived in the streets.

Some people argue that you can only be born with street smarts, but I see these as more of a function of experience. In many cases, they come from lessons learned from prior failures (and successes), but I believe the most productive street smarts are the result of personal disciplines, which can be learned and practiced by any business person. These include the following:

1. Keep the emphasis on working smart, rather than working hard. This means using every resource to get smart on relevant issues before you start a business. Find out everything you can about the domain you are targeting, preferably by taking a job there to lean the unwritten rules before you try to compete with your own business. For example, we probably all know people who have started restaurants because they like to cook, but with absolutely no experience in the restaurant business. No matter how hard they work, most of these fail, not because of their food, but for a lack of marketing, or service, or lack of cash flow management.
2. Every conversation is a business communication or negotiation. Don’t fool yourself into thinking that everyone has to be your friend, or wants to be. You can work hard on friendly chatter, but results come from sending and receiving real information from the right people at the right time. Use preparation, practice, delivery, and ask for the order.
3. Surround yourself with people who can help, not just be helpers. We all have strengths and weaknesses, and the best business people understand their own. You must find partners and build a team of people smarter than you are in key areas, to complement your strengths. Look for a match in values, work ethic, and chemistry.It takes discipline to recognize your needs ahead of time, carve out the time to do the recruiting job right, and resist the temptation to hire inexpensive interns, or unqualified family members. Assuming or hoping that new team members can “learn on the job” and will free up your valuable time, without making mistakes, is not being street smart.
4. Spend time working on the business as well as in the business. It takes discipline to focus on constantly improving processes and looking ahead for new customers, as well as looking behind for competitors sneaking up on you. As Andy Grove of Intel once said, “Only the paranoid survive.” If your business isn’t evolving and growing, you are failing.
5. Manage your work, health, and work-life balance. It’s hard for a business to be healthy if the leader isn’t healthy. Street smart business leaders recognize that they need down time and non-work activities to stay balanced. They learn and practice time management disciplines. Banish procrastination. Be decisive. Have some fun.
6. Manage your business cash flow personally every day.  The most street smart business people manage cash flow relentlessly and never delegate decisions about spending money. A big influx of orders may feel like success, but can kill your business if you don’t have the cash at the right time to produce, deliver and wait for payment.
7. Be the visible role model for urgency vs emergency. Street smart business leaders are not easily distracted by putting out fires in the business while they are working on the business. The best display a calm but visible urgency for scaling the business, and designing the next product generation. They know their team culture mirrors the leader.Overall, street smarts requires that you put all these things together for problem solving, and dodge and weave effectively through the risky business streets. It means balancing your idealistic vision of how things could be, against the realities of the business world. The alternative is a long and painful learning curve, which neither you nor your investors can afford.

Overall, street smarts requires that you put all these things together for problem solving, and dodge and weave effectively through the risky business streets. It means balancing your idealistic vision of how things could be, against the realities of the business world. The alternative is a long and painful learning curve, which neither you nor your investors can afford.

Reprinted by permission.