Rules of business (1)

This article is for Passionate Revolutionaries focused on leading and inspiring others to create innovative products, services, and business models that add meaning and purpose to people’s everyday lives.

If you are not a business owner or executive, please read this with an open mind and ask yourself, “How can I apply that?”

12 Primary Rules are some of the most important, immutable Rules of Business:


It may sound strange, but if you want a quantum leap in your results — the first place to begin is to take a good look in the mirror. This article focuses on YOU and your relationship to your business.

Many people start a business to make money, and others want to make a contribution or to express themselves. Whatever your reason is, you will find that business’s basic, fundamental rules have not changed for thousands of years.

The pace of change has increased; new technologies have changed how we do business and have increased our potential markets and our competitors.

How Fast You Learn is Now a Competitive Advantage.


Your thoughts, attitudes, beliefs, values, goals, strengths, weaknesses, management style, and philosophy all show up in your business. If you believe you have to work 16-hour days to succeed, you will end up working 16-hour days. And you may or may not be successful.

If your leadership style disrespects team members and customers, the business’s energy will reflect this. Only second-rate team members will be attracted as you will only attract people who are OK being disrespected and not appreciated. Your company will only achieve a fraction of what is possible. The leader’s style will set the tone for the entire organization through the multiplier effect. Everything is reflected back to you multiplied, exaggerated, and often dramatized.


This is one of the most difficult concepts for most people to accept. When our results aren’t what we want or expect, we first look for who is to blame – then demand that they change. Husbands expect their wives to change and wives their husbands. For a business leader, we expect the team to change, and the team wishes their boss would change.

Have you ever tried to change someone else? How did it go? I bet they resisted and refused to change unless you applied a lot of pressure. Even if, under pressure, they changed, it ended up being temporary and not lasting!

The one person you can change is yourself. An amazing, incredible, almost magical thing happens when you change. Everyone around you responds differently and mysteriously changes too.

The company’s leadership is the key person whose vision is the vital element, the Lifeforce or driving force behind the company and everything it does.


The vision sets the tone and the agenda. The vision provides the team with a focus, a purpose, and a guiding star to follow.

The number one function of the leader is to catalyze a clear and shared vision for the company and to secure the team’s commitment to the vigorous pursuit of the vision. A clear sense of purpose comes directly from a clear vision of what it is supposed to look like in the end.

When a leader is not clear on the vision, and this vision isn’t communicated to the team members, associates, suppliers, and customers, then the company languishes and is mediocre. The company struggles, and the team work harder and harder.


If you are like most people, you grew up with the “work hard” ethic. From the time we were young children, we were told by people that we loved, trusted, and respected, “If you want to get ahead in life, you have got to work hard,” or “If you want to make lots of money, you have got to work hard.” And this is simply not true.

The gardener works harder than the company executive; he toils all day in the hot sun, and he gets his hands dirty… However, the executive works no more hours but makes many times more than the gardener.

According to the Jan/Feb 2009 issue of Inc. Magazine, Markus Frind, the founder of the website Plenty of Fish, based in Vancouver, Canada, works one hour a day and pays himself an annual income of $5 million. He is not working hard! I ask myself is; “If he is working 1 hour a day and making $5 million, how much could he make working 8 hours a day?”

I am sure you will agree that hard work alone will not solve anything (although it is a start). The key is to undo the training, programming, and conditioning that tells us to work hard; and replace it with a different philosophy of life and work that takes into account what you work hard at doing.


This means that we are responsible for our results. No one else is. If the economy is bad and your customers aren’t spending as much as they used to, you have to do something different. Simply blaming your lower results on the economy won’t do anything other than keep you stuck. Forget excuses, justifications, or blaming anyone else.

Your results tell you how you are doing.

The key is to get more done in less time. To be ever more efficient and effective. To produce a better quality product for less cost to you, which you then pass on to your customers. Many companies lower their cost and, instead of passing these savings onto their customers, keep them for themselves. This may work in the short term; however, it increases the risk of your competition gaining an edge on you.


Because its purpose is to acquire and satisfy customers, your business has one and only one function: to add value through innovative products and services. If your product and service are the same as your competitors, how are you going to add value in a way that your customers will continue to buy from you?

To innovate means to make changes and bring new methods, ideas, and ways of doing things that benefit your customer — saving them time or money. This requires leadership and the constant pursuit of creative and imaginative solutions to new and old problems.


Marketing is about attracting people to buy your product or service, getting them to come back again and again, and getting them to purchase more when they do come back.

It includes sales, advertising, product design, public relations, and other less obvious ingredients. Without marketing, you lose customers. Marketing can make the difference between the life and death of your business, yet it is one of the business’s least understood and most under-utilized facets.

Most businesses have been reduced to a commodity. No one can buy their materials for that much less than anyone else. Advertising costs about the same. Even a second or third shift doesn’t give your business that much advantage.

However, if you make your salespeople out-produce your competition’s salespeople by two or three times; if you can make every advertisement you run produce ten times more than your competitors do; if you can get a customer to buy 50% to 200% more “on average” from you than they do from your competitors…

Plus, if you can successfully figure out how to resell each customer numerous “additional” times a year and sell them multiple products or services with higher profit margins each time — your business will grow exponentially — even in a down economy.


A corporation is a legal entity incorporated to fulfill a specific purpose. As a legal entity, a corporation has the same rights as any other citizen of the country within which it is incorporated. A corporation can own property, buy and sell, manufacture products, and bring lawsuits as if its members were one person.

Ownership in the corporation is divided into a certain number of shares, and the corporation issues stockholders one or more stock certificates to show how many shares they hold. The stockholders own the company and elect a board of directors to manage it.

The board of directors determines basic company policies and appoints executive officers. These officers include a chairman of the board, a chief executive officer, a president, and some vice presidents. They are responsible for carrying out the decisions of the board of directors and the stockholders. The executive officers also select the managers of the various departments of the corporation.

Stockholders may sell their stock whenever they want to unless the corporation has some special rule to prevent it. The price of the company’s stock changes according to general business conditions and the earnings and future prospects of the company. If the business is doing well, stockholders may be able to sell their stock for a profit. They may have to take a loss to exit if it is not.

When the corporation has made a profit, the directors may divide the profit among the stockholders as dividends, or they may decide to use it to expand the business. Dividends may be paid only out of the corporation’s profits. When profits are used to expand the business, the directors and stockholders may decide to issue more stock to show that there is more money invested in the business. This new stock will be divided among the stockholders as a stock dividend.

Stockholders in a corporation have limited liability. If the corporation fails, it can lose no more than its investment because the corporation’s debts are not its debts.

The founder of a corporation may be a stockholder and a director — but this is not necessary. Any corporation may raise funds to establish the company or to increase the available capital for investment, growth, or ongoing operations.

Funds may be raised by selling stock (these investors become stockholders), acquiring debt, or through revenue participation.

The challenge for most founders who are also stockholders and directors is that they can “over-identify” with the corporation. They end up living vicariously through the success and failure of the corporation. In many cases, the founder does not pay themselves a salary during the startup phase because they are the owner and are building an asset. This mistake undervalues the founder’s contribution and makes it more difficult to replace the founder by hiring an employee.

The key here is to understand that you are not the business, and if you have an employee role within the corporation, you pay yourself a fair market salary. To do this requires that you have enough capital to operate the business and cover all the expenses with some excess for unforeseeable circumstances — especially during start-up or high-growth phases.

Nothing is more difficult than growing a company on a limited capital base — using cash flow as a source of funds. And then, if your personal success or failure is connected to how the company performs, you may be seduced into making personal guarantees or investing more of your personal money that you would like to keep the company going.

While this may sound admirable, it is a recipe for a downward spiral, a reduction in your personal wealth, and an emotional roller coaster. You are not the business, so keep your personal finances separate from the business and respect it as an investment that MUST pay for itself.


This is a very controversial topic. Most founders operate from the opposite — pay yourself last. And this is exactly what happens; once all the expenses are covered, there often isn’t anything left over. So you end up working for free and justifying it by saying you are building a business.

“Pay yourself first” means to include yourself along with all the other salaries and to follow the advice of the “Richest Man in Babylon”:  a part of all I earn is mine to keep. No matter how much money you are making, it is important to maintain regular investing habits. The amount isn’t important, but the habit is.

And when you make yourself important and commit to paying yourself no matter what, a mysterious thing happens — you create enough cash flow to pay yourself.

If you are willing to work for free, you will work for free.


The difference between the leader who struggles all the time, has no free time, is surrounded by drama solving crisis after crisis and the leader who appears to have lots of free time, makes more money each year, and seems to have the golden touch… is the team that they are a part of.

You are only as good as your team!

And your team isn’t limited to your employees. Who is on your board of directors? Do you have a formal board of advisors? Do you have a personal mentor or coach? These people will tell you what you need to hear versus what you want to hear.

Unless you are willing to be surrounded by people who expect more of you than you do, you will have people telling you what you want to hear and confirming that you are right — when you may be wrong.

Your team can even include your suppliers and customers.

If you aren’t part of a winning team, you are working too hard.


Investing in your team’s ongoing development and training is one of the best investments you can make. If someone makes $50,000 a year and can generate $500,000 in value for you, why not take this person and increase their skill, ability, talent, attitude, and education, so that they can add a million dollars in value?

A $50,000 investment that brings a $1 million return is a very, very valuable asset.

There is no better investment that companies can make than in the education and development of their own people.

If you are looking for help along the way, are committed to change, and are ready for the most fun you can have as an adult in a crafted learning environment… check out the 3-Day GOLDZONE Experience. It will change your mind about learning, engage all your senses and make you a better, more flowing, and lucky leader!

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