Business Rules of Thumb Wiki
Welcome to the Business Rules of Thumb wiki. This public wiki is designed to track useful rules of thumb in business. Please do not delete any rules; just add! They don't have to be yours, but do include the author.
The password for this wiki is: thumb
If this list becomes comprehensive enough, I may publish it in book form. Some of this content is used with permission from the 1987 book Business Rules of Thumb by Seth Godin and Chip Conley. Thanks! - Ben Casnocha (ben (at) casnocha (dot) com)
What is a thumb? A short (less than paragraph) instruction for dealing with a set of circumstances. A rule of thumb can be used when there's less time and less information than the user may desire.
Topics (jump to section on this page):
NEGOTIATION
In a negotiation, he who cares less, wins. - Anonymous
Don't go into a negotiation without listing every issue beforehand. Establish an aspiration level, a minimum, and an initial asking price for each issue. - Charles Karrass
If you're planning on doing business with someone again, don't be too tough in the negotiations. If you're going to skin a cat, don't keep it as a housecat. - Marvin Levin
If you don't like what you're hearing, respond with a question, even if it's no more than "Why are you saying that?" - Mark McCormack
Talk about price last. People have tremendous anxieties about hearing the price, so use preliminary negotiations to get all the auxiliary issues resolved first. Say "If the price is OK, would you be willing to..." - Jay Kaplan
Round numbers beg to be negotiated, usually by counteroffer round numbers. Odd numbers sound harder, firmer, less negotiable. - Mark McCormack
As a buyer approaching a negotiating meeting, be sure to trumpet any bad economic news headlines as much as possible. - Chip Conley
Throw a temper tantrum within the first ten minutes of the negotiating -- nine out of ten times it will effectively intimidate your opponent. - Mark Randall
Successful negotiations are 70% preparation, 20% implementation, and 10% acting. - Robert Olson
Never negotiate on a full stomach. - Victor Antonetti
ENTREPRENEURSHIP
The less time and money it takes to start and manage a company, the more likely it is to succeed. First-time entrepreneurs are better off pursuing ideas they can implement handily. - Robert Kessler
Don't use your personal name as part of the business name of a new company, as this protects you in case the company fails and protects you against disagreeable business practices of a future purchaster. - Chase Revel
Before going into a partnership with someone, spend time with them in three different kinds of situations: a relaxing one, a competitive one, and an intellectually stimulating one. - Joan Kelly
Choose carefully your first people in starting a business. Make sure they have quality as humans, that they are more qualified than yourself, and that at least one has already been successful. - James Treybig
The idea for a new venture is likely to be strategically unsound if it can't be put into one coherent sentence. - Kenichi Ohmae
The chances of success of a new company are generally greater with two full-time partners rather than a solo entrepreneur. - Professor Arnold Coooper
An entrepreneur is somebody who steals office supplies from home and brings them into work. - Auren Hoffman
PRODUCT DEVELOPMENT
The two worst things to say to a creative person: 1. That's been done before. 2. That's never been done before. - Seth Godin
People don't steal ideas. Ideas are cheap. Implementation makes the difference. - Seth Godin
A new product should have at least three different substanial advantages over its competitors in order to justify support. - Karl Vesper
Don't start raving about a new idea to everyone in the corporation. Instead, enlist the support of those who like the idea, think it through, then propose it. - Robert Townsend
In choosing the name of a new product or service, there are only two guidelines that must be met (all other guidelines are superfluous): a) Flexibility: Does the name transcend price categorization? Is it sufficiently broad enough to allow changes in the product/service? b) Pleasant-sounding: Is the name easy to say and hear? Does the sound of the name get the point across? - Seth Godin
Thirty percent of new product failures had a concept that met no clear need. - Thomas Poole
The level of detail in a Product Requirements Document is directly proportional to the amount of offshore outsourcing used to fulfill it. - Ben Casnocha
MARKETING
The most important qualities in a marketing executivec are: patience, imagination, ego-strength, and aggressiveness. - Jay Conrad Levinson
Offer customers a guarantee on an aspect of the business that is routinely performed. - Customer Service in Action
Real stamps instead of metered inkblots raise the response rate of mailing to consumers at home. - Shell Alpert
SALES
When fielding questions from a customer, paraphrase his objections, avoid showing resisteance, and question him tactfully on those parts of his arguments that seem to be weak. - Amacom, "The Skills of Selling"
If you're only there to sell one thing, make a suggestion or assumption and let them tell you you're wrong. People have a need to feel smarter than you are. - Mark McCormack
Sprinkle your sales letters or presentations with references tso your subject's first name. - Mell Holloway
Offer your customer a choice between two alternatives; don't force the customer into a "yes/no" decision on one alternative. - Mirek Springer
Summer sales calls should be scheduled in the middle of the week to avoid prospects who are taking long weekends. - Salesmakers Syndicated Services
Sales reps spend 32% of their time on waiting and travel, 24% on administration and meetings, 5% on service calls, and only 39% of their time selling. - McGraw-Hill Research
Make sales presentations one-to-one to the key decision maker. Try to restrict it to one person because this does not allow the dynamics of the interrelationships of the individuals to affect the presentation. - Mark McCormack
Always have the chief decision maker to invite his/her secretary to the sales pitch. This makes follow-up meetings and phone calls easier to schedule. - Ben Casnocha
Once you get the point in a sales pitch where you have asked for a commitment, don't speak again until the other person has replied in some fashion. - Mark McCormack
Smile. - Dale Carneige
ADVERTISING
Ads with people in them score higher. - Starch Research
When writing an ad, use sentences of no more than twelve words. - David Ogilvy
It takes the average consumer nine exposures to an ad before the ad is readily remembered. - Jay Conrad Levinson
Black text on a white background is better read than white type reversed on a black background. - David Ogilvy
PR
Do anything but the normal office routine -- nap, jog, get a facial massage -- on the day of a TV interview. - Business Week
A corporation should not present favorable news items on late Friday afternoons or early Saturday. - Ana and John Kadon
Every top executive should serve a stint in Washington, D.C. - A.W. Clausen
Answer the question you want to answer. - Regis McKenna
PRESENTATIONS
In public speaking, start by telling them what you're going to tell them. Then tell them. Finally, tell them what you've already told them. - Lee Iacocca
The 10/20/30 Rule of PowerPoint: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points. - Guy Kawasaki
CUSTOMER SERVICE
Customers feel better when their complaints are handled by someone who appears to have a high standing in the organization. - Robert Townsend
In dealing with community groups, you must allow the groups to have a pound of flesh in the first meeting (let them shit all over you). Once they have voiced their anger they'll be more trusting. - Kirk Hanson
Perception is all there is. If the customer think he's right, he's right. - Tom Peters
HUMAN RESOURCES
Get away from job descriptions for employees and instead define the desired end result. Job descriptions should concern output rather than activities. If you cannot describe tangible output, the job should not exist. - James Giardina
Give everyone a title. Nothing pleases mankind as much and costs as little. Give everyone their own coffee cup. - Jerry Favretto
Assign people expected to produce creative work to easygoing supervisors. - International Management
First-rate men hire first-rate men...second-rate men hire third-rate men...these third-rate men will then employ the bulk of your company's employees and they tend to select fourth-rate people. - Richard M. White
Reinforcement ought to be specific, incorporating as much information content as possible. Reinforcement should have immediacy. Reinforcement should be unpredictable and intermittent. - B.F. Skinner
Paying average performers the same as high performers is the most effective demotivator of high performers. - Robert Hencault
Roughly 70% of all chronic absence is alcohol or drug related. - Dr. Daniel Lancer
The best person you interview isn't necessarily the best person for the job. - Robert Half
Never hire a salesman you'd want your daughter to marry. - Eugene Webb
Don't accept a job offer without sleeping on it. - Paul Hellman
A bad reference is as hard to find as a good employee. - Robert Half
INTERPERSONAL RELATIONS
Rather than telling an associate, "You look good in that suit," tell the person, "That suit looks good on you." - Dale Carneigie
You should be suspicious of someone who nods and speaks in the affirmative, but has their arms crossed. - Dale Carnegie
Sandwich every bit of criticism between two heavy layers of praise. - Mary Kay Ash
If you're interested in obtaining something from someone else, always preface your request with "I have a favor to ask you" as people hate turning down favors. - N. Bruce Ashwill
Don't cut off the early chatter and small talk of a new group -- the tendency of people to tell stories that seem irrelevant is part of the process of group integration. Don't interrupt them as irrelevancies which must be suppressed. - Harold Leavitt
MISCELLANEOUS
Exercising during the lunch hour makes your afternoon twice as productive. - Grant McLaren
At a business meal, do not turn to business until the meal has been ordered and the menus taken away. - Mark McCormack
BUILDING CHARACTER
Never sleep with someone who reports to you. - Robert Tillman
Make your important phone calls early in the morning. - Execu-Time
Keep a little book that lists each person and each conversation you have with them on a daily basis. - Jervis Webb
Read and listen for what is missing. Many advisers - in and out of government -- are quite capable of telling the President how to improve what has been proposed, or what's gone wrong. Few seem capable of sensing what isn't there. - Donald Rumsfeld
There are basically two kinds of meetings: meetings for approval and meetings for idea generation. Be careful not to combine them. - Seth Godin
Always start a meeting with one member of the group telling his or her most embarassing personal experience relating to the subject matter. This tends to lighten up the group and provide for a free flow of information. - Kurt Wilson
INVESTING
Make stock purchases near the close of trading on Mondays and stock sales near the close of trading on Fridays. Studies have shown that stock prices typically drop on Mondays and then progressively rise during the week. - Edward Dyl and Stanley Martin
Don't move a substantial portion of your wealth into or out of the market at one time. Ease in, ease out. - American Assoc of Individual Investors
BUSINESS STRATEGY
Objectives should be activities, not abstract financials. - Tom Peters
Fast-growing companies generally run into trouble at about $10 million in sales (when manageemtn's needs outstrip the founder's capacity). They run into trouble again at about $40 million in sales, when professional management techniques usually need to be installed. - Boardroom Reports
Don't worry about trends. The best successes often lie in redefining dormant businesses. - Tom Peters
FINANCE
Stratify suppliers into those that: a) must be paid currently, b) accept late payment occassionally, c) take late payment as a matter of informal policy. - James Wicker
SUCCESS
The success of a chief executive officer is directly proportional to the length of time he has worked with his executive secretary. - Chip Conley
80% of success is showing up. - Woody Allen
CREATIVITY
The best way to find good ideas is to let people tell you what the good ideas are. - Niel Robertson
After a new idea is presented in a group, the first comment should be praise. - Ben Casnocha
TECHNOLOGY
Without an English-speaking supervisor on the ground, offshore outsourcing for software development is a cheap way to fail. - Ben Casnocha
RAISING MONEY
When a VC says "Maybe," s/he means "No". - Ben Casnocha
NETWORKING
Everybody is interesting for at least 20 minutes. - Auren Hoffman
"Career Networking" events are filled with people you don't want in your network. - Ben Casnocha
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