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Five More Rules Of Business That Stand The Test Of Time

In my previous piece, I shared five business rules that I learned from my father. I believe these rules are hugely important for business owners and leaders.

Those who want to have a positive impact on their team and company can't always rely on their gut feelings. Contrary to what many believe, your gut feelings can sometimes be wrong, and it can sink your organization.

I believe that leading a business should be intentional, and rules like my father's can serve as a guiding light. Here are the next five business rules my father taught me.

1. Be a good listener.

My father had this uncanny sixth sense that allowed him to detect, by listening, how authentic and real the other person was. He didn't appreciate phonies or pompous peacocks, and he used listening to detect that. I believe that every leader has to have the ability to home in on what people are really saying.

How can this work in the day to day life of a leader?

There are many different types of listening. One is active listening. This involves repeating what you heard the other person say back to them. Some call it empathic listening, meaning that you reflect back the emotions you heard. This shows that you listened and, more importantly, that you understood the other person.

For example, an employee might complain about something, and you could say, "You sound frustrated or overwhelmed," rather than chastising them for complaining.

2. Focus on profits, not sales.

You can sell a lot without making a profit. If you have salespeople, you likely know exactly what I mean. Many business owners don't properly evaluate how much money they’re making, and their profit is either nonexistent or not enough to cover expenses. They’re focused on sales rather than profits.

But as someone once said, business without profit is like eating soup with a fork — you make a lot of motions, but nothing gets to your mouth. Know your numbers, and make sure you’re making a decent return on your investments. I recommend that my clients aim to make at least a 10% net profit after all expenses and salaries.

Oftentimes, business owners and leaders don't feel empowered to turn down unprofitable clients.

My father used to say, "Only take the profitable business, and send the unprofitable ones to your competition."