But first, a sneak peak at the new upcoming E29 product:

Now then, I’m going to be started a new weekly tradition here, the Friday Five. Not original, I know, but basically every Friday I’m going to pick a topic and try to give five points of wisdom.

This week the topic is business: The top five things every business owner, or aspiring business owner needs to know and tackle.

1. Don’t try to save the world
2. Design first, document last
3. Know thy competitors
4. Keep trade secrets a secret
5. Don’t mix family and funding

1. Don’t try to save the world

As a business owner and a software developer, I sometimes try to overthink, and overreach. It’s a flaw that most of us have, and when profit margins and deadlines are thrown into the mix, it can be a costly habit. Having a grand idea is, well, grand, but the idea itself isn’t what is important. It’s the process leading up to the execution of the idea. If you try to write your own CMS/Blog/Gallery/Forum/Social Networking/File Storage/Video rating/Web 2.0 website, you’ll be in development until the funds run out, which usually hits about month eight. Plan out your attack, pick the most market friendly piece of the idea and start some buzz. Launch with a CMS, that has illusions of being a blog platform. Progress from there and add on blog functions.

This way, you’ve generated some buzz, got people talking, and have a solid base to work from. Oh, and don’t fall prey to the “total rewrite” after two versions. If you keep rewriting your backend/frontend, you’ll stay in development until the web has progressed beyond your idea.

2. Design first, document last.

When I was in high school, our computer science teacher Mr Romine made us write out programs by hand, and then a week later input them into the computer. Annoying? Yes, but it drove home a very important point. Design your application, your business, your budget, even your dinner FIRST. Instead of wasting months ( or in the case of dinner, ruining the mash potatoes ) on implementing a scatter-brained feature list, design out your idea first, and then start into the implentation.

And, of course, document last. No one likes to change screenshots and text every time the developer changes a feature.

3. Know thy competitors

Once upon a time Fiction Corp dreamed of being purchased by a larger company. They worked and slaved for years, always asking themselves “Why haven’t we been acquired yet?”. When asked what their primary competition was, and what their strong points were, they would reply “Pfft, we don’t pay them any mind, we work faster than they do, and have better ideas. Their customers are ALWAYS complaining about how they don’t have this feature or that killer app.” A couple years later, that competitor is acquired in a multi-million dollar deal, and Fiction Corp is still blindly trying to carve their niche.

Competitors define the market. If you’re not first to market, then you’re simply a cog in that industry’s wheel. Other cogs are bigger, stronger, and can be learned from. Blindly disregarding your competition because you feel that you’re in a better position only leads to the above mentioned story.

In a perfect scenario, I would recommend keeping tabs on your competitors, including any information you can glean from their press releases relating to employee size, revenues, etc.  By opening a file on them, you can track performance metrics related to the company’s health.  Are they growing quickly, or slowing down?  Are their employee numbers fluctuating wildly, which is a sure sign of high turnover? Using this information, you can attempt to lure away some of their best and brightest.

4. Keep trade secrets a secret.

This point is pretty much self explanatory, however overlooked.  What lengths are you using to protect your business secrets, software, or IP rights?  Having a lawyer and a boilerplate employment agreement are one thing, but actually taking interest in securing your secrets is another.  It only takes one social engineer to leak out your best kept features and ideas to the market.  Do you answer phone calls from “press” that seem overly interested in your next product?  Employees should know and understand that all press contacts need to funnel through one central position, preferably a marketing or sales executive.  In some cases an employee may leak information without realizing it, setting the company back or even costing it some of that hard earned profit.

It may have taken one hundred people to build your company, but it can only take one to torch it.

5. Don’t mix family and funding

Actually this point can go both ways, and even I’m on the fence with this one.  Nearly all of the business help guides or books that you see in Barnes & Noble, Borders and others recommend going to family first with your business idea.   While I don’t outright disagree with that position, if you do decide to tap your family for business finances, they need to understand that it is strictly as a business partner/investor.  Write up an agreement, sell them stock, give them equity, whatever you need to do to raise the money, but don’t accept $10,000 from Uncle Joey on the verbal agreement that you’re a good kid and he thinks you’ll make a million bucks in a year and remember him.  When a year rolls by and you’re still operating at a loss, Uncle Joey is going to get pissed and cause some family tension.

Instead, work out that Uncle Joey is now an investor in ABC Corp, with 10% equity.  Explain to him that you’re planning on operating at a loss for the first two years, and on the third, you’ll possibly pay out a dividend equal to his stock value.  As long as your family understands the finer points of business, they shouldn’t have any problem with investing in your idea for the long run.

That’s all my wisdom for this Friday.. well now Saturday.  Hopefully someone will find these posts useful, especially if they are thinking about starting a business.  It’s a fun ride if you do it right, but it’s definitely not for everyone.