by Norm Brodsky and Bo Burlingham
I, Michael Parker, own this book and took these notes to further my own learning. If you enjoy these notes, please purchase the book!
- pg 6: The initial goal of every business is to survive long enough to see if it's viable, or can pay its own bills.
- pg 9: Cost of sales subtracted from sales is your gross profit; as a percentage of sales, it's your gross profit margin.
- pg 10: The higher your gross margin, the fewer sales needed to cover expenses, and the longer your capital will last.
- pg 11: Reserve additional capital at the start; putting up additional capital after you think you've made the maximum investment required is hard.
- pg 13: Sales do not equal cash; your gross profit must cover your expenses, so maintain the highest margin you're capable of achieving.
- pg 20: When you reach critical mass, don't be carefree; stay on top of the numbers and let them balance your emotions.
- pg 27: Once you have an ongoing, viable business, you must put its welfare first and never do anything to put it in jeopardy.
- pg 29: The only opportunity a start-up should think about is building a customer base that will make the business viable.
- pg 42: Revolutionary concepts are risky; there is nothing more expensive than educating a market.
- pg 44: Having a niche for a startup is important because you can't compete with established players on price, but need high gross margins.
- pg 50: Write your first business plan for nobody but yourself; you need to test assumptions before you go out and raise money.
- pg 58: The more debt you use to finance a startup, the greater the potential increase in its equity value.
- pg 60: Approach long-shot investors first; you'll likely be turned down, but at least you'll learn something from the rejection.
- pg 62: Asset-based lenders take control of your receivables; it has no incentive to help you, as it only depends on your customers.
- pg 66: Don't ignore your banker when you don't need anything; meet regularly with them to build good relationship.
- pg 71: When you need cash right away, asking from your best accounts will alienate them; and use personal relationships to collect.
- pg 76: Low-margin sales can help build relationships, but must be dealt with when the focus turns to increasing profitability.
- pg 77: Tracking numbers by hand gives you a better feel for them; when a computer does the work, the numbers are made abstract.
- pg 79: Finding key numbers that you can track daily or weekly and measure the health of your business can help avoid downturns.
- pg 83: A new customer will cost you, up front, for the daily cost of goods sold and any related overhead until you first collect.
- pg 89: Acquirers buy the potential to make money in the future; they'll pay less if the risk of losing your cash flow is greater.
- pg 92: Negotiate first about a secondary matter; a concession there will give you bargaining power on your number one issue.
- pg 96: It's always best to keep the other side guessing.
- pg 102: It's okay to walk away from a dispute a little unhappy; don't let emotions dictate your business decisions.
- pg 107: Once you know your niche, you can use that knowledge to build a solid customer base even in a competitive market.
- pg 113: Remain flexible after you start your company; no niche lasts forever, as other companies will copy what you do.
- pg 115: If your competitors respect you, it's probably deserved; if they think you're a lowlife, you're probably in trouble.
- pg 120: Focus on small customers first; they yield high gross margins, and if you lose one it won't spell the end of your business.
- pg 124: Giving away your ideas and expertise builds trust; you demonstrate your commitment to the customer's best interests.
- pg 127: Don't sell the best things important to you; listen to a customer, and sell them on your solutions to what they find important.
- pg 131: Never sell unused capacity at a discount; full-time customers won't tolerate paying more for the same service, and will leave.
- pg 133: You can discount for volume, special terms, or maintain price while adding value; just don't discount excess capacity.
- pg 139: Nurture a customer relationship by teaching them your business; help them be smart buyers and smart consumers.
- pg 142: Simply talking to customers lets you know their needs, but also shapes the company culture.
- pg 148: Raise prices gradually to cover creeping expenses and maintain strong profit margins; a business with weak margins won't sell.
- pg 152: Rules takes away your employees' ability to use common sense in responding to reasonable customer requests.
- pg 155: Let your personal goals, such as where you want to be in five years and what you'll earn, help decide your business growth rate.
- pg 156: Look for new services to offer current customers, as the easiest customer to get is the one you already have.
- pg 158: If you don't have a firm grasp on what's driving the success of your business, growing it could devalue it.
- pg 167: Befriending your employees can lead to promoting incompetent ones, or not letting them go soon enough.
- pg 168: You're the boss, but don't need to become the manager; delegate the responsibility and do what you do best.
- pg 172: Have procedures in place to make theft difficult and catch it without your supervision, but check up from time to time.
- pg 178: Transitioning to shared leadership creates structure which employees want, where the rules are known and applied evenly.
- pg 182: A strong company culture binds your employees to the business; others will notice, and the quality of job applicants will rise.
- pg 187: Only allow one corporate culture in the company; if managers create subcultures, chaos and corporate politics arise.
- pg 190: Attacking creeping expenses requires everybody's help, which doesn't happen unless employees care about the company.
- pg 196: Salespeople who stick around and perform consistently are invaluable, so screen out those dreaming of their own business.
- pg 198: Avoid hotshot salespeople who focus only on sales and beat systems; they can sully relationships with your customers.
- pg 201: Putting salespeople on salary encourages them to work together as a team, where each can bring their strengths to a deal.
- pg 202: Commissioned salespeople make sure a customer belongs to them, not the company; that connection is their livelihood.
- pg 203: You can't hire new salespeople on salary alone; instead, start them with commission, and then buy it out later.
- pg 211: Outside perspectives are important because we look for the type of solution that we are most comfortable with.
- pg 218: Don't look to accountants for business advice; they deal with historical data, and so will never question your assumptions.
- pg 221: Lawyers should only provide legal advice; their duty to protect clients from liabilities and risk aversion makes for bad business.
- pg 236: Don't let everyday business demands stop you from addressing the cause of a problem, not just its symptoms.
- pg 239: Learning all you can about a customer, its representatives, and every surrounding aspect is a competitive advantage.
- pg 244: There are more opportunities than you can take advantage of, and real ones don't disappear; so take time to think things over.
- pg 246: Bringing on another full-time salesperson is a decision to grow; do it carefully, or it can have long-term repercussions.
- pg 253: A web site allows finding one-time buyers very cheaply, whom you don't have to offer discounts given to regular customers.
- pg 254: Once viable, you can accept some high-volume, low-margin sales so long as not getting paid doesn't jeopardize your business.
- pg 260: You need to love your business, or else you'll have a hard time convincing anyone else to make commitments to you.