0/ If you’re an SMB operator and want to increase the value of your business, focus on 2 things above all else.

1. EBITDA: how much $ do you make
2. Risk: how reliable is the $ you make

Enough has been written about #1. Here are 5 things you can do to tackle #2:

[THREAD]

1/ All 5 of these tactics are a function of the same guiding principle:

Spend more time working ON the business, not IN the business.

Your job as CEO is to consistently:

- Identify opportunity
- Execute once
- Set process
- Delegate
- Fire yourself

With that said…
2/ Establish your focus

Most SMBs survive in the early days through 1-2 key customers.

If you do a good job, they'll give you more business.

That's the trap.

If it's not in your core focus, resist the urge.

If you don't you'll become a consulting firm for 1 customer.
3/ Eliminate Key Man Risk

SMBs are overly reliant on a small handful of individuals to run the operation.

Implication: Most knowledge about the business sits in the heads of a few people.

Take the time to develop strong Tier 2 management - this creates redundancy in the org
4/ Institute Operating Process

Strong Tier 2 management isn't good enough. You need knowledge to live in docs and systems, not just in brains.

Every dept should have a stand alone playbook.

An easy test: "how quickly can somebody that knows nothing about the dept. plug in?"
5/ Double Down on Corporate Controls

Accounting is the lifeblood of your business.

A lot of SMBs run their financials off of Excel and don't understand their cash flow.

This will literally break your business - I've seen it so many times.

Set up proper systems on Day 1.
6/ Develop a killer brand

SMBs are (on average) SO bad at marketing. The fallacy is most think it takes a lot of resources.

It really doesn’t!

- Invest in a good looking site
- Take professional headshots
- Create high fidelity content

The ROI of professional optics is 🔥
7/ The cool part about hitting on all of these is they will tie right back to overall company growth.

Over the last 2 years, we’ve instilled all 5 of these into our company’s fabric. It’s led to:

- 7 figure EBITDA growth
- Materially less risk in the operation
8/ So remember - keep it simple.

If you’re running an SMB, do everything you can to:

1. Establish your core focus
2. Eliminate any key man risk
3. Institute operating process
4. Double down on corporate controls
5. Develop a killer brand

More from Romeen Sheth

The cold hard truth:

Why do companies like Quibi raise billions, while companies like Peloton get nothing?

Because fundraising is a GAME

And the insiders keep the rules to themselves.

Here are 100 tips the insiders don’t want you to see but will help you win the game:

1. You can’t play the game without nailing the basics.

There are 5 core ingredients to a startup pitch.

Most have 2.
Good ones have 4.
The best have all 5.


2. Now that you have a grasp of the basics, it’s time to level up.

Good news - most founders make the same mistakes as each other.

Bad news - these mistakes are really easy to make.

Here's what not to do:


3. Ok so you told me what not to do.

So what should I do?

Read below.


4. We’re in a really unique fundraising environment right now.

It’s important to contextualize all these tips in the “here and now” of what’s going on in the landscape.
I love Twitter.

It’s truly the Town Square of the Internet.

But finding the diamond in the rough voices can be tough.

Here are 20 of my favorite people to follow:

1. Alex Lieberman - @businessbarista

Alex writes extensively about the Founder journey.

The cool part is he’s lived everything he talks about - starting from $0 and selling for $75M with hardly any outside capital raised.

My favorite piece:


2. Ryan Breslow - @ryantakesoff

Ryan is a Top 1% founder.

This guy is a machine - he’s built 2 unicorns before the age of 27.

Ryan spells out lessons on fundraising, operating and scaling.

My favorite piece:


3. Jesse Pujji - @jspujji

Jesse is who I think of when I think “bootstrapping.”

He bootstrapped his company to an 8-figure exit and now shares stories about other awesome bootstrappers.

He’s also got great insight into all things growth marketing:


4. Post Market - @Post_Market

Post puts out some of the most thoughtful investment insights on this platform.

It’s refreshing because Post cuts through the hype and goes deep into the business model.

Idk who he/she/it is, but the insights are 💣.

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We know that elite institutions like the one Flier was in (partial) charge of rely on irrelevant status markers like private school education, whiteness, legacy, and ability to charm an old white guy at an interview.

Harvard's discriminatory policies are becoming increasingly well known, across the political spectrum (see, e.g., the recent lawsuit on discrimination against East Asian applications.)

It's refreshing to hear a senior administrator admits to personally opposing policies that attempt to remedy these basic flaws. These are flaws that harm his institution's ability to do cutting-edge research and to serve the public.

Harvard is being eclipsed by institutions that have different ideas about how to run a 21st Century institution. Stanford, for one; the UC system; the "public Ivys".