From putting profits first to building a business to sell – my top 5 books for business owners

Most successful business owners I know didn’t go to business school and don’t have MBAs.

Most of them jumped (or were dropped!) in at the deep end or built their businesses from scratch. As such, they have had to learn how to run businesses as they have gone along through trial and error.

To be honest, I don’t think that learning how to run a business makes you qualified to do so. Mike Tyson once said that everyone has a strategy until they get punched in the face and its similar with business where you need to deal with (sometimes difficult) staff, challenging customers, changing markets, bad payers, faulty products etc and need to learn to roll with the punches. You will find that more often than not, the best people to learn from are other business owners who have been there and done it, got knocked down and got back up again.

Some of the most successful business owners have gone onto write books so that others can learn from them, and this article is a summary of the five books that I would recommend any business owner to read:

Profit First – Mike Michalowicz

This book provided a bit of an epiphany moment for me as it changed the way that I looked at businesses in that it made it clear that the purpose of the business is to generate cash for the shareholders.

The book takes you through several principles to follow to turn your business from a ‘cash eating monster to a money-making machine.’

I admit that I haven’t implemented the full methodology that is described in the book, but I now run my businesses with a focussed mindset – ie - putting profit at the forefront and not chasing growth or taking on unnecessary expenses!

Blue Ocean Strategy – W. Chan Kim & Renee Mauborgne

I’ve now read this three times and the two follow-up books which are worth a read but didn’t have the same fundamental impact on the way that I think about business as the original did.

The book describes the challenge that most businesses face in that they are competing in what they call ‘red oceans’ where businesses compete in the same market spaces, adding features or cutting costs and it becomes a bit of a bloodbath, or like sharks fighting in the sea. The authors then teach you how to move out of the red ocean to create uncontested market space or ‘Blue Oceans’.

This book will make the reader think hard about their business and the market that that they operate in and hopefully, allow them to identify the strategic moves to render competitors as obsolete and create new demand.

The E-myth – Michael Gerber

This is one of the most powerful business books ever written. It starts with the fact that 80% of small businesses fail within the first five years of their existence, and of those who do survive, 80% of these will fail in the next five years. The book takes the reader through the reasons why this is and how systemising all of the business’ activities (applying the lessons of franchising) not only creates profitable businesses but frees the business owner from the day-to-day grind.

Built to sell – John Warrillow

I really enjoyed this book not only for the quality of the content but the way that the author uses a fictional struggling business owner whose story takes the reader on a journey from stress and struggle to a successful exit. The challenges that the character Alex faces along the way will resonate with most business owners and this book will provide clarity of though and inspiration when thinking ahead to an exit one day.

Turnover is vanity, profit is sanity – 9 ½ steps to improving your profits and cashflow - Dan Bradbury

If you had to read just one of the books that I recommend in this article, this would be the one. The author has built, bought and sold many companies himself and runs a successful mastermind programme and has condensed much of his experience, the experiences of his clients and the teachings from other business authors and gurus to provide a 9 ½ point checklist for small business owners.

It is a relatively light read but provides a heap of easy-to-follow advice. Following the checklist is a path to growing company profits and cashflow predictably, sustainably, and efficiently.

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