I grew up in an area that was not very nice. It was not a slum, but it had some competing teenage gangs and thugs who did everything for a dime. It was often a tough environment that taught me how to respect myself and how to deal with tricky situations. Today, 15-20 years later I am staring to notice that most rules in business are remarkably similar to street rules.
1. If you don’t know who is getting ripped off then it’s probably you
In the streets it goes like this: You meet some new people and they invite you to take part in a deal: “Let’s do this together, we gonna throw in $500 each.” Then they disappear, you never see your money back because they have already shared it.
In business, people will try to get you into all sort of opportunities that require you to invest work, time, and money without guaranteed return. This is normal. But when the business plan is too good to be true or you don’t see any realistic ways how this will make money for you, then probably you will be used or ripped off.
So be aware of this and before you get into situations where the source of revenue or distribution of profits (or your payout) is not clear then I suggest think twice and stay clear.
2. Be alert when you feel big
There is a Hungarian rap song with a memorable line translated something like this:
When you start to feel big, someone will pick you. He is bigger than you, knows your business better, won’t care about petty cash, first he will throw some coins on you then eat you.
So you just leveled up? Congratulations. Be careful because your progress is not only interesting to your friends, but also to those players who are bigger and stronger and won’t hesitate to drive you out of business if you interfere with their circles.
When your outgrow your competitors then you enter a new territory where you won’t be welcome. So keep watching your back besides celebrating. Some of the big guys might approach you with a friendly deal and rip you off. Or just simply take your clients with a better offer as he can afford to undercut your prices or offer more.
3. Keep your friends close but your enemies closer
This might be a cliche but very important. In business, friends are those who you make money with, enemies are the ones who you take money away from. Good business relations can turn around quickly.
So why would you want to keep your enemies close? For two reasons. First of all to avoid any sudden moves they could otherwise do against you. Secondly, to observe and understand what they are doing.
In case they can help each other out, competitors can form powerful partnerships and decide to share profits they take from the same market together. Maintaining partnerships take less resources compared to staying in fierce competition. Furthermore two strong players joining together can drive other competitors out of business more easily, then share the market.
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