3 Things You Should Know About Small Business: May 9

NEW YORK (MainStreet) -- What's happening in small business today?

1. Wilbur Ross takes a turn as a management guru. Prominent distressed investor Wilbur Ross offered two tips to new managers at a lunch hosted by Bloomberg Markets on Tuesday: give up sleeping and don't be reactive, according to Business Insider.

"As you probably know, he made his billions making distressed companies work again. That means going into a new business, figuring out its problems, and many times overhauling its management from the ground up," BI says.

Ross's best advice -- besides never sleeping again -- was to make sure you do your research well in advance to find the next opportunity. Ross also likes to have "lots of eyes and ears on something," BI says.

2. Get these things right when starting a company. Harvard Business Review points out that while new businesses are bound to make mistakes, there are four decisions made early on that a young company must get right: the founding team; core values; company location; and terms of the initial investors.

"Only a strong co-founder has both the perspective and authority to challenge another co-founder's ideas," the authors write. "Moving forward without a co-founder is risky and moving on with a bad co-founder almost unimaginably costly."

Culture is also important. "Although 'culture' gets dismissed because of what large PR departments do with the term, corporate culture (or values, or philosophy - the label is irrelevant) really does matter," the article says. "Start-ups get complex quickly and having a coherent philosophy reduces cognitive load and improves results."

A good location makes funding easier and as a business makes more hires, the entrenchment in a community becomes more permanent, the article says.

Finally don't let the terms of your initial investors be too stringent or allow for investors who are not aligned with the company's philosophy.