Searching for a holiday gift for the entrepreneur in your family?
Look no further than your local bookstore for a new title that is a must read for every small business owner — from the newbie to the seasoned veteran.
The book, “The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up” by Norm Brodsky and Bo Burlingham, will soon be a classic because of the practical and insightful advice the authors provide on how to successfully run an entrepreneurial venture.
Brodsky and Burlingham are columnists for Inc. magazine. Brodsky is also the founder of CitiStorage and seven previous start-up companies, one of which went into bankruptcy. He has more than 30 years of entrepreneurial experience. Burlingham is also editor at large for Inc. magazine and an author of several other outstanding books on entrepreneurship.
The authors communicate their street-smart advice through the use of numerous examples from Brodsky’s long and storied small business career, and from the letters of advice he has written to hundreds of entrepreneurs over the years. Brodsky clearly knows what works and what doesn’t work and communicates his thoughts with his co-author in a very engaging style, giving the reader a gold mine of new ideas to try out on their own small business.
All the words of wisdom from “The Knack” are too numerous to discuss in a single column. However, we want to share with you some of our favorite ideas from the book: why many start-ups don’t survive, negotiations, knowing the numbers of your business and the importance of creating a company culture.
New company survival
The authors go against the conventional wisdom when it comes to defining what it takes for a new company to survive. They point out that many small business experts often stress you must create a business around a unique product or service or enter a market with little competition.
Instead, Brodsky and Burlingham recommend that you find “an established concept, one that everybody understands because there is nothing more expensive than educating a market.”
They also suggest that you look for a market where many of the industry players are out of touch with the changing needs of their customers and then create a niche within that market.
The art of negotiation
The tips you’ll find in their discussion of improving your negotiation skills is really what makes this book a must-read. Their advice focuses on being flexible, making sure you listen to the other party, and that it’s all right if a deal results in both parties being a little unhappy with the results.
We especially enjoyed the story where Brodsky confronts a very difficult negotiation for warehouse space for his CitiStorage company and succeeds by following all his rules for negotiating, including resolving less important issues first with the other party before focusing in on what is most important to you.
Numbers of a business
Brodsky is definitely old school when it comes to analyzing the numbers of the business.
At the beginning of any business, he recommends the new business owner should “keep track of their monthly sales and gross margins by hand until you have a good feel for them.” He hits that point home with the story of a cosmetics accessories business he was assisting. The company had grown from nothing to $1.5 million in sales, but was always short on cash. Not until the owner took Brodsky’s advice to track the numbers by hand, did she fully realize that the cause of her problem was selling too many low-margin products.
Brodsky also emphasizes the need to have a “key number” that lets you know how your business is performing before the monthly financial reports are generated. He shares the insight of a restaurant owner whose key number is the wait time for customers at 8:30 p.m. each night and the gear-making company owner that knows how his firm is doing by the total weight of the gears being shipped.
Company culture
Brodsky and Burlingham spend a chapter on creating a positive company culture. They are correct to conclude that hiring the right person does involve a certain amount of luck. As we all know, the individual who interviews the best and has the most experience doesn’t always work out. Therefore, the entrepreneur must intentional create a company culture that attracts and retains high-quality employees.
For the authors, this means developing a single culture and not allowing competing department cultures to exist. Multiple cultures invite politics and disharmony among the staff.
We also found their suggestions for creating a culture that values cost savings especially timely, given today’s struggling economy.
Pat Sisneros is the Associate Vice President of Administrative Services at Everett Community College. Lynne Munoz is Director for the School of Business Design. Please send your comments to entrepreneurship@everettcc.edu.
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