Build Your Business using Guiding Principles – Part 1

Our grandparents called it “The Golden Rule.” Our parents told us to “Put yourself in the other guy’s shoes.” We call it “How would you like it?” But it’s all the same concept of fair play. Unfortunately, in our fast-paced, highly competitive business environment, this basic idea can get lost.

Starting a business feels overwhelming. It seems like there’s never enough money, time, or resources to gain traction in the marketplace. We may apply industry standards in our own business, and not even question them. Then we add our own personal standards that we inadvertently bring to our new business. Some may be counterproductive to our very success. Business consists of one decision after another, back to back, sometimes in rapid succession, and often under pressure. Is there a set of guiding principles we can weigh those decisions up against to help us make the choices that will sustain and grow our business?

While building the Barefoot Wine brand, we learned, sometimes the hard way, what those guiding principles looked like. We call them collectively, The Barefoot Spirit . They enabled us to get the advice we needed, and keep the best people. They reduced our need for capital, and increased our credit and terms. By relying on our guiding principles to make decisions, we increased sales, reduced our overhead, gained new loyal customers, and grew our brand. Since then we have found that these same principles apply to most businesses.

Over the next few posts we will examine these guiding principles and how they may benefit you. We will ask questions in four categories to uncover a series of critical decisions that can make a big difference in your success. They may seem simple at first, but as you get into them and their implications, you will realize they are anything but simple.

The questions are: How would you like it if you 1) worked for yourself, 2) extended credit to yourself,   3) sold to yourself, or 4) bought from yourself?

1. Would you work for yourself? Would you want to work for an employer who treated your labor as a commodity, trying to see how little you would work for? Would that save the company money, or lose money due to turnover and lost relationships? Or would you prefer an employer who sees people as an asset, rewarding them for performance and acknowledging their achievements? Would this increase innovation and long-term relationships? We found that people work primarily for income, recognition, personal time, and security. When we began paying for performance rather that attendance, we found our best people didn’t leave because they benefited financially from their own production. Those who were less productive were paid less and could not afford to stay. As an employer, do you acknowledge producers publically, or are you afraid they will ask for a raise? By giving time off, do you think you are losing production, or that you are increasing production with recharged and loyal people? Do you see medical and retirement benefits as a cost, or as an investment in long-term stability?

Your attitude and philosophy toward these critical aspects of business will shape the decisions you make. Next time we will examine the other questions that reveal your basic business philosophy. In the long run, if you would be happy doing business with yourself on all of these levels, you will have a big head start on the ultimate success of your company.