5 Business Rules Worth Breaking — and 1 You Absolutely Must Follow : Under30CEO 5 Business Rules Worth Breaking — and 1 You Absolutely Must Follow : Under30CEO
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5 Business Rules Worth Breaking — and 1 You Absolutely Must Follow

| August 14, 2013 | 21 Comments

Break the rules.

You can’t get through a semester of business school or a meeting with a loan counselor without learning the so-called unbreakable rules of business.  And, yet, some of the world’s most successful entrepreneurs ignored accepted business conventions.

Bill Gates, for example, attributes some of his success to reading, thinking, researching and being quick to call a dumb idea dumb.  But he’s never written a playbook for business success.  And Donald Trump, a perennial member of Forbes’ list of billionaires, suggests that rules don’t matter when he says “Everything in life is luck.”

Can only the lucky few get away with breaking the rules?  Or can anyone?  Can you?

Here are five business rules that successful CEOs have ignored:

1.  Never start a business with friends or family.

Taki Skouras, Jaime Brown and Joseph Brown wanted to work together after they graduated from college.

They opened a weight loss kiosk, and it failed miserably.

But their friendship and desire to work together remained intact.  They opened a second kiosk business, one that offered cell phone accessories.

Although they struggled initially, living together in a single room and taking home about $100 a week, they kept their faith in their friendship and the business.

Today, 10 years later, Cellairis has grown into a $350 million success, according to company spokesperson Andrew Park.

2.  Never start a business unless you have a product or service to sell.

When Ronny C Jetmore was 25, he started his own insurance company despite the fact that he had no products of his own or contracts with outside insurers.  He also had no money and limited knowledge of insurance — he had worked for one year at State Farm.

“This was 12 years ago.  I was too young to be crippled by other people’s message of doom and gloom and had no bridges to burn, so why not do it?  The worst that would happen was that I would fail and then simply get a job, so I did it.”

Jetmore never had to find a job.  He continues to run Jetmore Insurance Group, Inc.  in Lusby, MD as a successful small business.

“My wife stays home to raise the kids, and we are growing, almost every year.  We have a house, cars, some money put away and we take a vacation once in a while.  We don’t drive Ferraris, but we don’t drive jalopies either.”

3.  Don’t start a business unless you have a solid business plan.

Audry Darrow had no business plan, no business experience and no product to sell when she launched Earth Science Organics.

She was a 50-year-old, stay-at-home mom and breast cancer survivor who changed her eating habits as part of her healing process.  Her passion to help others motivated her to open a food manufacturing facility.

“Currently we are number one in our niche around the country selling to over 1,300 stores,” Darrow says.  Sales this year are projected to reach $1.5 million.

4. Keep cash on hand to protect your business from slow-paying customers.

When Julia Cole launched Perfect Rubber Mulch six years ago, she didn’t have any spare cash lying around.

She solved the problem by refusing to allow credit terms to anyone who wanted to buy rubber mulch for use in playgrounds, sports fields or landscapes.

This was an unusual stance to take in a business-to-business environment in which 30 to 60-day billing cycles are the norm and not infrequently stretch to 90 and 120 days.

Cole said she lost a few customers because of her no-credit policy, but the company has grown to $1 million in sales and she never had to spend money on bill collection.

5. Stick to something you know.

The worlds of late-night infomercials and brick-and-mortar businesses collided when A.J. Khubani decided to take a product called Amber Vision glasses mainstream.  He convinced a sporting goods store in New Jersey to carry them.  The bold move made him a millionaire by age 26.

That was 30 years ago. Khubani’s “as seen on TV” products and the now ubiquitous red logo he created for them are carried in chain stores such as Target, Walmart, CVS and Bed, Bath and Beyond.

He recently expanded into book publishing. “Who Knew: 10,001 Easy Solutions to Everyday Problems” sold more than 600,000 copies between December 2012 and June 2013, according to Andrea Pass, a company spokesperson.

The One Unbreakable Rule

Gates and Trump both speak openly and often about one constant in their careers:  hard work.  The entrepreneurs interviewed for this article also spoke about the principle of hard work.  They didn’t clock out at 5 p.m., shift unreasonable burdens on to their staff or substitute a can-do attitude for actually doing the labor necessary to achieve and maintain monetary rewards.

You can’t phone-in success.  But, if you work hard at something you’re passion about, success will call you.

KOTAW Content Marketing believes that educational marketing is key to closing the gap between businesses and consumers. For more information visit their blog. Also follow Katherine on Twitter.

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Category: Entrepreneurship, Startup Advice

  • https://www.facebook.com/michaelamushe Michael Amushelelo

    Surely a great article, so i will be breaking rules now and then. :-)

  • Michael Luchies

    Fun article. This is really interesting because for everyone of the entrepreneurs listed above who broke those ‘rules’, there are probably 10 who tried to go that route and failed.

  • Tyson Hartnett

    Nice article. However, I think some of these are the exception, not the norm. Like, if you getting into business without a product might be difficult. And family a lot of times aren’t the best fit for a business partner.

  • Katherine Kotaw

    Certainly difficult to go into a business without a product and family members can make lousy business partners. But sometimes passion and persistence overcome common obstacles, and it’s worth celebrating the exceptions. Thank you for your thoughts, Tyson. They are much appreciated.

  • Katherine Kotaw

    Thanks for commenting, The odds are definitely stacked against those who break business rules, but the odds are stacked against anyone who starts a new business. There’s a fine, undetermined line between playing it too safe and taking too many risks.

  • Katherine Kotaw

    Thank you for writing, Michael. I think the “now and then” idea is sound.

  • Tyson Hartnett

    No problem katherine. The hard work rule is obviously essential, but I like what Trump said about luck. I think luck is definitely a factor, something that is out of our hands most of the time.
    Like, for instance, an interview with a great company. Any number of things can influence whether you get hired or not. The hiring manager might not like your name, or how you handled yourself, or their brother might be competing for the same spot. Lots of little things go into creating a big thing, and if the little things don’t go your way, it could ruin the whole thing.

  • Katherine Kotaw

    Luck always helps, Tyson. It never hurts to have the stars align in your favor. And, when luck doesn’t go your way at a particular time, say the job interview you mentioned, sometimes that’s a good thing, too. Occasionally I’ve missed out on projects only to learn that the person who “lucked out” had a miserable experience.

  • http://www.callboxinc.co.uk/ Oliver Scott

    They say you always have to do things the unorthodox way, but I guess it’s a matter of how you play such a wild card in terms of business. Just remember rules are broken because of the given conditions: timing, opportunity and the aforementioned luck. That said, we should never forget to be practical in what we do.

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  • Katherine Kotaw

    Thanks for commenting, Oliver. I think you need to be innovative, not necessarily unorthodox. And understand the rules you’re breaking — and why.

  • Tyson Hartnett

    yea that’s a good point. It plays a role, but sometimes we can use it as an excuse for things that we really do have control over.

  • Charlotte Taylor

    I think some of the people commenting are missing the point of this article. Ms. Katherine Kotaw is certainly not coming up with her own set of “rules to break” in order to succeed in business or saying that because one set of friends made millions in business together and managed to stay friends, you should do this too! She is saying that “rules” are only as important as you make them to be. Of course these people and business are the exceptions to the rules, but they MADE themselves the exceptions! That comes from taking risks, thinking creatively, working hard and being willing to fail in order to succeed. Inspirational article!

  • Katherine Kotaw

    How true! Sometimes “bad luck” is really a bad choice.

  • Katherine Kotaw

    Thank you, Charlotte! Yes, breaking the rules means a willingness to take risks. Successfully breaking the rules means all of those other things — thinking creatively, working hard…

    The same is true of luck. Donald Trump attributes luck to his success and, certainly, he’s had lucky opportunities. But he’s also made some of his own luck and, more important, he put in the dedication and expertise to take advantage of those lucky moments.

  • Rochelle Watt

    Ahh but therein lies the rub – it seems to me that some of the previous commenters want to be considered as entrepreneurs but to truly be a successful entrepreneur, you need to be able to calculate risks and know that some risks although not pre-quantitative are definately worth taking and you just know that it will be successful – you have the drive, determination and belief – I think this is where lady luck decides to pay a visit – and lend a helping hand – but if you don’t believe down to your soul – you will never take that risk and lady luck will not lend that hand if you don’t use yours first. Seems to me some of the would be entrepreneurs need a blue print. But there are still a lot of individuals that still can visualize, even with a blueprint. Entrepreneurs are those that have vision for the future. This is exemplified most recently by Jeff Bezos purchase of the Washington Post and Arianna Huffington’s article today. (http://www.linkedin.com/today/post/article/20130814183645-143695135-bezos-heraclitus-and-the-hybrid-future-of-journalism)

  • Katherine Kotaw

    You’re right, Rochelle. Lady Luck doesn’t often visit dreamers — casino owners bank on this. But she rewards those with vision and the passion to follow through. Certainly, Jeff Bezos has a vision for the Washington Post.

    The purchase of the newspaper was by no means a safe bet. But just as he foresaw greatness in an online bookstore, he surely sees something in a newspaper struggling to succeed in a changing world of publishing. Just as Arianna Huffington saw opportunity in something as mundane as a blog.

    I expect luck hangs out with people like Bezos and Huffington because they are worth befriending.

    Thank you for your insights and for joining a lively discussion. You sound like the type of person Ms. Luck will count among her friends.

  • Sharon Watson

    I think there’s a common thread among the rule-breakers: passion. All of the people quoted were so CERTAIN they would exceed that they didn’t let a few rules get in the way. They also worked really hard to prove that their passions were more than dreams. I found the stories inspiring.

  • Katherine Kotaw

    Thanks for writing, Sharon. Passion definitely inspires greatness. Determination — the hard work you mentioned — keeps the passion alive and helps people achieve greatness.

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