Trade Non-Secrets

It has been said that all trades (and most professions) have their own little secrets, known only to the practitioners. This may in fact be true, but in my experience, these gems of wisdom are not going to be of much help to the layman. I'm never going to need to know the secrets of filling a dental cavity, pressure-testing the hull of a submarine, or filing a legal brief, just to take three obvious examples. Telling me these things would be interesting, but not very helpful. What are frequently more useful are the things that EVERYONE in a given profession knows (and takes for granted), but the layperson does not. Certainly, this is the case in Business...

For example, most trained businesspeople know that in certain types of business (notably retail stores, restaurants, and other businesses that serve the public directly) there are three critical factors to success: location, location, and especially location! If the store isn't easy to find, if it isn't easy to get to, if the signage is poor (or non-existent), if there's nowhere to park, if the neighborhood is so bad that no one wants to go there, or so boring that no one would go there for any other reason, then it doesn't matter how good our merchandise is, how great our decor is, or how wonderful our employees are; no one is going to shop there. And if there is no one in the area who wants to purchase what we sell, we're already in trouble...

Then there's the fact that we all need a plan. In this case, the profession in question is Strategists; many people in business (even some trained as Managers) do not understand the need to plan out your enterprise well in advance. But no one trained in strategy would even consider running a complex enterprise without a detailed plan, and most people with any training in business would realize that asking a banker or venture capitalist for the money to start or expand a business without first providing a detailed business plan is absurd. Yet several bankers of my acquaintance (and just about every venture capitalist I've ever met) have stories to tell about people coming to see them, describing a brilliant concept for a new business, and then pulling up short when asked for a written business plan...

To someone with business training, the idea that someone would just hand you large sums of money because you have a good idea and articulate it well seems, well, preposterous; yet hundreds of people, many of them extremely knowledgeable in other fields, make this assumption every day. Equally silly is the idea that bankers (and venture capitalists) don't want to make loans, and will invent reasons for not doing so. Bankers, in particular, get a good laugh out of this (very popular) view their industry. Banks make all of their money on interest; if they're not making loans, they're not making money. But by the same token, no one wants to just give money away to someone who is going to lose it, squander it, declare bankruptcy, or never pay any of it back. The fact is your banker wants to loan you money, and he or she wants you to be wildly successful in your new enterprise, so that you can pay back your loan (along with gobs of interest) and then, someday soon, take out an even bigger loan (paying even more interest!) when you expand into a larger operation...

Then there are industry-specific truisms, like the fact that most restaurants need to make the rent in the first four days of each month to turn a profit (and within a week to break even), the fact that real estate goes through boom and bust phases in a predictable cycle (about 7 years in Southern California, for example), or the fact that certain brands of cheap tinned corned beef will implode if you stack the cans more than 4 high on a shelf without external support...

I could go on, I suppose, but you get the point. In most cases, it’s not the intricacies of a new business that will defeat the unwary; it’s the everyday rules that you don’t know about that will do you in. And for that, it’s not the industry secrets you need to discover, assuming your industry has any secrets in the first place. It’s the things that everyone in the business already knows – and which you’d better find out right away…