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The Bookworm – Part IX by Ben J. Pritchett
In the past eight issues, I’ve recommended thirty or so books … How’s your reading going? Have you added to your library?
Here’s a very sad, sad truth:
A lot of people don’t read anymore, entrepreneurs or otherwise. Brian Tracy once said that the majority of people don’t read another book cover-to-cover after they finish college. Wow. Imagine the knowledge and ideas these people are missing.
Here’s the great thing though
You read the books, you get the knowledge, and you sell it to them for a Hell of a lot more than the books cost you!
In this issue, I’m going to revisit some of the past topics along with some slightly different twists on the previous recommendations. I’m stepping back into business structures and systems, business values, and being able to exit your business. More specifically, in this case, helping your clients to do these things.
Over 25 years ago, I was the youngest this and the youngest that, I was nominated for a young entrepreneur award … today I realize that I’ll probably only be the youngest if I’m at a senior’s home or a bingo hall.
All humor aside, I’m still under 50, but I’m well into my career, as are the majority of entrepreneurs.
There’s an awful lot of grey hair (or no hair) in every association, every chamber of commerce and every industry. At some point, these folks have got to sell their business, or pass it along to another generation. Most of them have not prepared to do it and have no idea how to do it.
That’s where a good coach or consultant can make all the difference
The Automatic Customer: Creating a Subscription Business in Any Industry by John Warrillow
Most entrepreneurs start a business with the goal of building it
They want to create a job for themselves or others. Possibly even to create wealth. What very few think about is the end game when they’re no longer in the business.
In a similar style to The E-Myth, this book is written as a story, not a dry, stuffy, traditional business book. It’s a quick, easy read that will give you a different take on how a business might be structured to run without the owner around, and ultimately to be sold so the entrepreneur can leave the business behind.
I’ve touched on the fact that a well-systematized business can be worth more (I even wrote a book about it myself). In Warrillow’s other book, he discusses putting a subscription model into almost any business – this is a skill and concept you should master. Why? Most traditional businesses sell for around 3x their income, a business with a subscription model (also known as continuity) can sell for 6x or even 7x their income.
What could teaching your clients these things be worth to you?
What would they pay you to help them implement? Imagine having a participation clause in a business that doubles in value thanks to your efforts!
by Gino Wickman
Recommending this book is a bit of a no-brainer when it has the endorsement of Dan Sullivan (founder of Strategic Coach) right on the cover.
While every business owner probably thinks they are unique in their quest for profits, their painful employee experiences, their woeful lack of growth and a myriad of other complaints, they are not in the least. Most entrepreneurial ventures will face the same problems at some point or another.
Wickman has come up with what he calls the Entrepreneurial Operating System. He gives entrepreneurs tools and ideas for improving their businesses and making them run like a well-oiled machine.
He gets into employee buy-in (What The Heck Is EOS? is aimed at employees) – DO NOT DISCOUNT THIS POINT. Have you ever coached a client and found them to be totally gung-ho to implement your ideas, only to come back to them and find their attitude completely changed? I’m willing to bet that an employee or a family member kyboshed your ideas and sabotaged your progress.
Nearly every entrepreneur you’ll come across wants leads
That’s why so many business coaches teach marketing skills. But, what if your potential client isn’t profitable, and they don’t know it? What if their pricing model sucks and they’re losing a little money on every sale?
Getting more leads and sales for somebody who is selling a widget that costs them $5 for $4 is going to bury them faster than ever before. Sure, they’ll be thrilled by increased sales for a few minutes until they discover there’s nothing left over to pay themselves, or you.
This book takes an unconventional approach to understanding the financials and making small businesses profitable. Many of your clients may not even know they need to know more about this topic. That’s what their accountant is for, right? Wrong.
I’m reminded of two quick stories
one was from Dan Kennedy who knew a guy who would always say something to the effect of “If there’s enough top line, there has to be a bottom line.” Nope, not true.
The other was for an early dot-com – I believe it was the first incarnation of price.com – the business model was that they were going to sell popular items at a small loss every day (no, I’m not joking). Their concept was to do so much volume that they’d sell enough advertising on the site to cover the losses. Guess what happened? After losing one BILLION dollars, the venture capitalists pulled the plug and shut it down.
What’s my point? Use this book and whatever others you can find to understand small business finance and find ways to teach your clients how to become profitable in spite of themselves. They may want leads, but they need profits.
Until next time, happy reading, and keep your clients growing!
About Ben Pritchett
Ben Pritchett started his first business at the age of 15, and began his own consulting practice in 1991. For over 25 years he has worked with clients in many industries including restaurants, direct sales, software development, tourism, dimension stone (granite quarrying and manufacturing), aviation, and optometry, just to name a few. Companies coached by Ben have nearly doubled and tripled their revenues in a single year.
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