Norm is pretty sharp guy, no questions. His dad taught him the first lessons of business and despite the fact, that he went to college and came out as a lawyer, he built some great and big businesses.
In first chapter he mentions right away that his business failed by a bad decision – acquiring a business that wasn’t healthy.
From the first chapter we follow an example of a business started by his friends in technology. Salesperson that got fired and wanted to join his wife and her friend that were working together but barely surviving. Norm helped them to get the business off the ground and in almost every chapter showed an example what questions they asked and how he helped them through it.
Firstly they asked him whether the business would work – Norm crunched the numbers and found out that no way for 3 people. Wife’s friend would have to be let go and even then they’d barely survive.
In subsequent chapters they ask him how to grow the business, what to do when they are losing customers and so on.
What I remember very clearly was when he mentioned what customers does he prefers – he definitely said the small ones and that the big ones should never make more than 20% of the business because when you lose them, your business can be in jeopardy.
Norm also talks about a business plan which I really like:
The first business plan needs to answer 4 basic questions:
- 1. What is the concept
- 2. How are you going to market it
- 3. How much do you think it will cost to produce and deliver what you selling
- 4. What do you think will actually happen when you go out and start making sales?
Don’t worry if you get it wrong. Everyone does. You should also write it for yourself and not for your investors.
In another chapter he mentions that he doesn’t understand why people are trying to go into a very niche businesses or find something unique – there are no customers for it and you’d have to create them from scratch hence Norm actually suggests to go where there’s competition because there’s a market. Educating the market can be also very expensive. Very different perspective and one that I quite like.
Norm mentions that you shouldn’t take business advice from two people, lawyers and accountants. Why? Because they aren’t business people!
– Those who persevere, win
– Welcome failure
– Don’t make excuses
– The solution are seldom right in front of you
– It’s better to start a business than to buy one (for first time entrepreneurs)
– Your time is more valuable than money and you should be careful not to waste it
– When you start a business, keep track of your money by hands until you get a good feel
– Find a key numbers by which you know how your business is doing in real time
– More sales usually mean more casflows
– Understand EBITDA
– Do not cut prices because of unused capacity (it might cost you more and you alienate your paying customers)
– Work out your margin and do not go below it
– You lose money on small customers that don’t pay on time as you need to borrow the money they didn’t pay you on time
If you’re starting business or even are already in one, read the book. I’m sure you’ll find it valuable.