Rules for a successful business

**aneil4lom** · January 27th, 2012, 06:56 PM

So many people I know suffer from not following rule number 2. Worse yet, when you show them certain possibilities where a venture might not work; they get insulted.

**Clinton** · January 31st, 2012, 10:15 AM

Ken, sometimes the best advice is easily missed because it's so obvious.

**Slowdive** · January 31st, 2012, 04:32 PM

Ultimately these rules seemed to be typed out of a bcom text book, which of course coming from me is not unlike saying the bible seems to have been taken from a kids show. I appreciate I am not necessarily in the same league as the intended audience.

Lets just take point 1....Reduce Risk.
Myself I do not want to buy what is, in my understanding a bankrupt business I am not sure what the legal implications of receivership implies in the U.K but for me it means bad credit, bad PR and a brand I have to revive.
If I bought a bum business it would only be too float it so I can sell myself as competition.
So we are talking at different ends, rescue a multi thousand company and revive it? Well no, I am not multi anything so I make what I have work for me.
So my take on reducing risk is thus, how much can I do? After testing how much does it earn? When I compare my time spent with my earnings I find a figure I can afford to expend on a brand, business or idea. If I am spending and still making a fiver I have reduced risk.

As Ken said earlier I do not want to pick apart all ten rules and really I do not feel qualified to do so. However they seem very sound in theory, Just like a lot of money making blogs they just do not share much.

**KenW3** · January 31st, 2012, 05:04 PM

Originally Posted by Clinton

Ken, sometimes the best advice is easily missed because it's so obvious.

...and that was my complaint with the information. To whom would this be obvious? If one can perceive value within the advice, is it only from a perspective of prior personal experience?

Originally Posted by Slowdive

they seem very sound in theory, Just like a lot of money making blogs they just do not share much.

Agreed. Lack of specifics is my primary complaint with the points provided. Does this not appear as demonstrating a lack of respect for business-people's abilities? Does his activity on Dragons' Den distort or bias perception of small businesses?

Originally Posted by TheoPaphitis.com

Rule 4: Know that cash is king.

Cash flow is king. Profit is sanity. Turnover is vanity.

A lack of profit is like a cancer. If it carries on for a long time, it will eventually kill you.

Water is wet. The sky is blue. Air is highly valued for its ability to sustain life.

Never be without water. Lack of water is a problem. If it carries on for a long enough time, it will eventually kill you.

How basic is too basic? When does advice become useless?

**Kay** · January 31st, 2012, 05:09 PM

Myself I do not want to buy what is, in my understanding a bankrupt business I am not sure what the legal implications of receivership implies in the U.K but for me it means bad credit, bad PR and a brand I have to revive.

But Theo's point is that by buying bankrupt businesses you can take the good parts and leave the liabilities behind. And with a reputation like his and the backing of his fortune there's no question of any bad credit stigma.

Of course, if Theo Paphitis takes over a business it's a lot different to any ordinary mortal taking it over. Maybe it's partly a question of rep - and he has it.

**Clinton** · February 1st, 2012, 02:39 AM

Originally Posted by KenW3

Agreed. Lack of specifics is my primary complaint with the points provided. Does this not appear as demonstrating a lack of respect for business-people's abilities?

Lack of specifics is something newbies see on this forum regularly. Our stand is that they need to read between the lines and nobody is going to spoonfeed them.

The cashflow advice is spot on. He should find one or two more ways to say it because some experienced business managers still don't get that it's about profit, not turnover!

**Kay** · February 1st, 2012, 03:02 AM

In the words of another Dragon, Duncan Bannatyne, "Turnover is vanity. Profit is sanity".

I feel so strongly about the cash flow issue I'll do a blog posting about it if I can ever find the time or unless someone else beats me to it.

**mark2000** · February 1st, 2012, 07:51 PM

Great list, but than I almost always find these kind of lists from $100 million plus entrepreneurs interesting! Every bit of advice I've heard before (except the receivership bit) but as some said already, it never hurts to hear it again. For me, it's interesting BECAUSE it's what a very successful entrepreneur has used as his guide.