Sun Tzu was a Chinese General who wrote the first treatise on warfare and how to win battles. Funny enough the Art of War is easily adaptable to business and is taught as such in some of the world’s leading business schools.

When you read the following tactics imagine that Chinese General and how doing business, especially in a bad economy is like going to do battle for life or death.

1. The entrepreneur’s five most desired traits.
Wisdom is the quality of being able to make sound, logical decisions. It doesn’t come easy and can only be perfected through years of study and experience. Credibility is being able to gain the trust of others through dependable and consistent demeanour. As such, little effort is needed to ‘rally the troops’. Benevolence means the intentions of the businessman are always focused on being concerned for his employees well-being. The entrepreneur’s Courage is one of his most valuable traits, without which he cannot effectively lead. He is self confident in knowing that as he leads others will follow. Doubt Kills the Warrior! Discipline prevents him from growing soft. I keep a notepad next to my bed at night in case I awake with some transitory thought about my business that I need to write down. An entrepreneur must be alert to opportunity and be ready for it. His standards are high and kept high.

2. Sun Tzu urges the entrepreneur to examine the situation, and most particular, the advantages.
Leverage those advantages to the fullest.

The entrepreneur has to get his ducks in a row, so to speak, prior to starting his business or initiating a new strategy in an existing business. This means taking steps in advance to give you the best chance possible of achieving success.

Looking at this from a business perspective, if you are going to run a company, there are both initial start up costs and ongoing expenses which must be accounted for.

The Dot-com crash was a pretty good example of what can happen when people forget this.

3. “Therefore those skilled warfare move the enemy, and are not moved by the enemy.”-Sun-tzu.
This is a very important quote. Basically what this means is that the entrepreneur’s competition must play by your game, not you by his game.

This is simply saying that the first to market has the advantage and that the competition wanting to follow is at a big disadvantage.

4. Doing the right things at the right times
An entrepreneur should surround himself with skilled managers and trained employees. A small company should be careful when coming up against a giant competitor. Invincibility results from.
doing the right things at the right times.

During the 1970s, Digital Equipment Co. (DEC) in Massachusetts ceded the mainframe computer business to IBM and focused on developing and marketing their line of mini-computers. DEC exploited IBM’s absence from the marketplace and from 1972-1985 they had phenomenal success.

Watch out for Walmart. They are exploiting their core competencies in technology and inventory management and transferring those skill sets by building bigger stores that offers far more goods than the classical Walmart store from 10-15 years ago. At the same time, Walmart has excelled in exploiting their economies of scale and is the major reason why stores like K-Mart have very little time left before they go belly-up.

6 Weakness and Strength
In business, perceiving one’s environment, maintaining flexibility and adaptability are keys to success. You must know your strengths and weaknesses and perform a SWOT analysis as part of your Business Plan (SWOT is Strengths, Weaknesses, Opportunities and Threats). One must always be prepared to seize the initiative when an opportunity presents itself. Carpe Diem!

7. Armed Struggle
“One who does not know the mountains and forests, gorges and defiles, swamps and wetlands cannot advance the army. One who does not use local guides cannot take advantage of the ground.”-Sun-tzu.

You as a business person must know ‘the lay of the land’  when going out for business. This mitigates the disadvantages of facing the competition.

8. Principles of warfare
Do not depend on the enemy (competitor) not coming, but depend on your readiness against him. Do not depend on the competition to keep a distance but depend on your business being prepared when they do come.

Do not attempt the insane – like setting up a coffee shop next to Starbucks. Join forces with like-minded businesses or setup strategic alliances. Do not leave yourself open to attacks from your competition. Be prepared. If you are going to go after your competitors go there to beat them – take no prisoners.

9. Strategic Planning
An entrepreneur who lacks strategic planning and doesn’t work with a Business Plan will fail.

If the entrepreneur gives out rewards frequently, he is running out of resources.

10. The Battle Field
It’s not a question of winning the battle, it’s a question of how you win. Because how you win proves that you are either a great strategist or a bad one. If everything is in your favour and you fail it’s your skill as an entrepreneur that caused the failure

11. Unpredictabilty

Be unpredictable. With good strategies and intelligence (the military kind) you can pick the time to go after your competition and hit them with surprise

12. Using Spies
Gathering data is one step. Interpreting it is another. I get my clients to call or visit the competition and see how they do business, what they charge for products or services and generally find weaknesses and strengths in order to run their busienss better and to better compete. You can get friends to help you if you feel being a ‘spy’ is not for you.

I find that if you call a competitor in a different market that takes them out of the competitor role and ask them pointed questions about their operation a lot of people will give you good advice.

I helped a client setup a video store (before the corner stores disappeared to Blockbuster) in Vancouver some years ago. We contacted a video store in Kelowna (350 miles away) and talked to a wonderful man who not only gave us all we needed but offered to come to our location for a few days to help if we paid for his expenses – of course!

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