Since May 1, we’ve been asking Slate readers to help us create the ultimate small-business cheat sheet—the 10 best pieces of advice for aspiring entrepreneurs. (Read the introduction here.) Halfway through the monthlong project, you’ve come through with dozens of proposals, from the hopeful and idealistic (“passion is the key”) to the gleefully cynical (“steal”). We thought it would be a good time to underline some of the best tips we’ve seen so far—and reiterate the call for more.
Some of the rules proposed thus far are eminently sensible: Research your market. Hire good people. Keep overhead low. Others are helpfully specific and practical: Don’t learn Quickbooks. Don’t incorporate. Treat your vendors well.
But our favorites are the ones that might not seem as obvious to a first-time entrepreneur. Think the key to a successful startup is hitting on an original idea? Not according to our readers. “If you have a business idea that ‘no one else is doing,’ there’s probably a good reason,” chides one who’s seen too many Steve Jobs wannabes go bust. “Learn from your competitors,” counsels another—“they aren’t stupid.” Want to skip the trouble of coming up with your own business model altogether? You could always start a franchise. (As Slate’s Katy Waldman pointed out, signing a franchise license doesn’t have to mean relinquishing your creative license.)
Think it’s important to beat your competition on price? Not always. Underpricing your product can be “a fatal flaw.” Instead, you should take into account upcoming overhead costs at the outset and price for the future. (As Slate’s Jeremy Stahl explained, that’s a piece of wisdom that Kozmo.com would have done well to heed 15 years ago.)
A word of caution to those who think starting a business means financial freedom and setting your own hours: More likely it means pouring in your own money and being your own slave labor, at least for the first several years. (Or enlisting your kids as labor to teach them the value of hard work, as Slate’s Rachael Larimore recalls her parents doing when they owned a mom-and-pop grocery in small-town Ohio.)
Most of all, several readers argue, it means paying hawklike attention to your cash flow. The balance sheet has been a common topic (“play with your money,” “cash is more important than your mother”), but the most popular rule so far is the one that offers the most specific recommendation. “Know your ‘nut,’ ” it advises. What’s a nut? It’s all your expenses for the year, divided by the number of days you’re going to be open for business. That’s how much you have to bring in on an average day to keep your enterprise afloat. “Keep track of it on a daily basis,” the post recommends. “If you have a lot of days where you don’t make your ‘nut,’ you need to rethink things.”
Still, not all of the rules are quite so sobering. The Center for Public Policy Innovation points out the benefits of cost-saving online tools. New technologies have pros and cons, of course. For instance, your customers’ ability to share their experience on social-media outlets like Twitter and Yelp means you’d do well to keep your promises. And as technology reconfigures the competitive landscape, it’s best to choose an industry that’s on the right side of that creative destruction. (Slate’s Farhad Manjoo suggests looking for things the Internet does poorly.)
Think any of the advice here is off-base? Explain why by commenting on the rule in question, or propose a rule of your own. And please do browse through the ones that have already been submitted and vote for those you find most useful. Your feedback will help us narrow the list down to the top 10, which we’ll publish after the voting ends on May 26.