Book review: Good Business Bad Business by Roger Green

Good Business Bad Business (The rules of small business and how to break them) – Roger Green

Synopsis:
This book takes a wide view at starting and running a small business. The author splits the book into two viewpoints: ‘good business’ and ‘bad business’. The ‘good business’ character resembles a formally educated businessperson while the ‘bad business’ character can be thought of as a college dropout opening a trendy coffee shop. The book covers topics expected such as planning, recruitment, managing, bookkeeping and others.

What I gained from reading this book:
When I picked this book up I was quite optimistic that it would compare practices that did and didn’t work (what I assumed ‘good business bad business’ meant). I was sadly mistaken. After reading the high quality small business book ‘The E-Myth Revisited’, my expectations for this book was way too high and I was left frustrated after the first few chapters. I struggled to finish the book and the only reason I did finish it was so I could write this review.

My first frustration was with the title. Good Business Bad Business suggests (at least to me) that there is a good way of running a business and a bad way of running it. I couldn’t have been more wrong with my assumption. A more accurate title would be ‘Formal business and Informal business thoughts and practices’, but even that would be misleading. It’s hard to explain the actual difference between the characters.

My second frustration was the actual content of the book. The blurb reads, “[The book] takes the form of an argument, with two characters... ..They yell, abuse, insult and caricature each other as they disagree on all the issues facing small businesses”. That pretty much sums up the quality of the work. Any book starting with a concept like that is doomed to begin with. Instead of being informative for readers, you are given a jumbled conversation with no conclusions. Which do you think you would learn more from, hearing two people argue pointlessly or attending a seminar on sound business practices? It really is pointless rambling. Take this line from the ‘good business’ character: “In Australia there are also business angels, rich people who are looking for an easy investment where some idiot does all the work. They often provide a bit of advice with their capital. They drive old Mercs. It’s a good racket.” Thanks, I learned nothing from that. How are you supposed to learn anything when both of the characters ‘disagree on all the issues’?

My next frustration was the quality of the advice given. Take for example what the ‘good business’ character has to say about the use of debt to fund your business: “Debt is good... Look at that guy driving a Ferrari; he’s borrowed millions... Most of the corporate giants have used other people’s money to buy businesses. You can too. It’s magic.” So this is the quality of the advice the author comes up with? Debt is magic? Most corporations have used it so you can too? I’m sorry but this is just not good enough. It really isn’t. It worries me that some 18 year old straight out of school will read this and think that it’s okay to load up on debt and run a business, buy a Ferrari and everything will be okay. After that little trip on how magical debt is, I expected some warnings on how debt can be bad and how it can ruin people’s lives. Nope. I had to wait until the ‘Bad Business’ character started his rambles on debt to hear any negative on debt. But that still didn’t have any warnings.
Another example of dangerous advice this author gives is when the ‘Good business’ character explains the benefits of using a company structure. He says “If you have run up a few too many debts, just pull the pin and toss the company in the direction of the creditors. It disappears in a cloud of smoke, leaving the shareholder and director intact”. I wish I was back studying company law at university when I read this to show it to my lecturer for a laugh. All corporation law students know it’s possible for a court to ‘lift the corporate veil’ and hold the owners liable. This is just bad information. I could continue to point out all the problems and bad advice this book gives but I think you get the point.

I have many more frustrations but I’ll finish with one more. The use of ‘characters’ to explain the two viewpoints creates a problem. So many times the pages are filled with junk the author has put in so you can get a feel for the characters’ thoughts. The ‘bad business’ character really does sound like a hippie activist with lines like “It’s like jumping into a wild river you’ve never travelled before. Forget the destination. Perhaps one of those waterfalls in the froth of chaos will take you to a beautiful place. Stay calm. Go with the flow.” I’m sorry but how is that remotely helpful in running a business? Rather than the author focus on giving readers valuable information and relevant advice, he is distracted by trying to give the characters a voice.

So in conclusion, what I learned from this book was that if you start with a bad concept (ie: centring your book on two characters rambling and arguing) you will end up with bad results. I’m sure the author feels the book was a success but for me it was just pointless.

Positives:
Despite my frustrations towards this book there are positives. Normally I try to stay objective in this section and leave my personal opinions in the ‘What I gained’ section. But in this case I’m so frustrated I chose not to list the positives.

Negatives:
Refer to ‘What I gained’ above.

Recommended for: Not recommended
This is the first book I have reviewed that I do not recommend. Normally when I read a book I don’t recommend I don’t write a review for it. But in this case I needed to point out that some business books aren’t worth your time.

Genre: Small Business

Overall rating: 2 out of 10 stars

Where to from here:
Read The E-Myth Revisited if you are considering starting your own business. It blows this book out of the water.

If you have read this book, feel free to give it your own rating by posting a comment below. I was very harsh and negative on this book so if you have read it and thought it was good, feel free to let me know in the comments below.

Book review: Good to Great by Jim Collins

Good to Great: Why some companies make the jump… and others don’t – Jim Collins

Synopsis:
Jim Collins and his research team set out to answer the questions, “can a good company become a great company?” and “if they can, how?”. By studying countless articles, interview transcripts and data, the research team came up with a definition of a ‘great’ company. The team would study two companies that started off in similar situations with similar future prospects but in one point in time (what they call the transition point) one company skyrocketed while the other withered. The great company (the one that skyrocketed) is compared to the comparison company (the one that underperformed). The results are the basis of this book. The chapters explain concepts and principles that were consistent among all the great companies but lacking in the comparison companies.
Companies such as Wells Fargo, Gillette and Circuit City (among many others) are analysed throughout the chapters. The book concludes with a very insightful FAQ section and wealth of information in the appendices.

What I gained from reading this book:
I read this book expecting it to be very similar to The E-Myth. It turned out to be very different. I am still undecided if I like this book or not. While I could clearly see that much effort has gone into the research, I’m not too convinced on the value of the results. Some concepts seemed so obvious that it seemed a waste of time to read about them.
The main problem I had with this book is the way the concepts were explained. Phrases such as ‘Getting the right people on the bus’, ‘the hedgehog concept’, ‘the three circles’, ‘grasp the flywheel, not the doom loop’, ‘level 5 managers’ pretty much sum up the type of lingo used throughout the entire book. I was expecting straight forward explanations and was disappointed to find that most explanations followed the lines of ‘make sure you get the right people on the bus in the right seats and the wrong people off the bus’. While using metaphors continuously may work for some people, it sure didn’t work for me.
Most people could probably guess the principles and values the great companies have before even picking up the book. So I was not impressed when I came across the part where the author explains why the company that gave the executives lavish perks in expensive buildings underperformed the disciplined company that cut executive’s pay 75% when times became tough and ran the business in a dental sized suite.
Although I do feel that most of the findings could have been explained better on a single A4 sheet of paper, I did enjoy reading this book (only some parts). For example: hearing about Walgreens and how they crammed so many stores in a small area and why was very interesting.

Positives:
Provides insight into many great companies and their culture. Very thorough explanations on the principles and concepts. Plenty of information in the appendices.

Negatives:
Most concepts and principles are obvious before even reading the book. A lot of buzz words and metaphors are used that may distract rather than assist. The viability of the study and the results is questionable.

Recommended for: Small business owners
I recommend this book for small business owners to get a better understanding of the types of principles and values they should apply to their business. Although many of the principles are obvious and common sense, it always helps to read up about them to help you apply them.

Genre: Business

Overall rating: 6 out of 10 stars

Australians can buy the book by clicking the picture below:

Where to from here:
I recommend reading The E-Myth: Revisited instead of this book. Read my review to understand why.

If you have read this book, feel free to give it your own rating by posting a comment below.

Book review: The E-Myth Revisited by Michael Gerber

The E-Myth Revisited (Why most small businesses don’t work and what to do about it) – Michael Gerber

Synopsis:
This book looks at why 80 percent of small businesses fail within five years of starting. The mindset of the business owner is looked at and analysed to determine why the business fails. The mindset of the business owner and how they think of their business is a significant factor in the success of the business.

The author introduces Sarah, a small business owner struggling to keep the business running. The author walks through a conversation with Sarah explaining the reasons why her business isn’t working and what she needs to think about for it to work. The author uses storytelling and examples to give the reader a clear picture of a certain situation or problem. The steps in the ‘life’ of the business are considered in detail to give the reader an idea of stages a business must pass through to become successful. Lessons in franchising are considered and the way of thinking Ray Kroc (from McDonalds) used to build his massive empire.

What I gained from reading this book:
This book makes it very clear why many people fail at running their own business. The concept that people should work ‘on’ their business and not ‘in’ it is so important in my eyes now after his explanations. As the author states, this book is not a ‘how-to’, instead it is a ‘what to do and why it needs to be done’. The author strongly believes that ‘how-to’ books don’t work if you don’t know ‘what to do and why’ first.

This book has really got me thinking about issues I had never considered before. I want to one day open up a small business and this book was just what I needed. Through my university studies I have already studied plenty of ‘how-to’ but those studies never considered the ‘what to do’ and ‘why’. Now that I know what I need to do and why it needs to be done I can look again at the how-to books to properly prepare myself.

Although I haven’t started my business yet (it could be years from now), I now feel much more confident in building a successful business because I understand why many people fail and why. This is the number one gain I received from this book, the understanding that three years of business study never even considered. I wish I read this book three years ago.

Positives:
Extremely insightful to the realities of small businesses and their owners. Identifies the reasons why many businesses fail and what to do to avoid being one of them. The use of storytelling and examples are very good at painting a detailed picture of the concepts to learn.

Negatives:
This book is not a ‘how-to’ so people expecting this may be disappointed. While some people may like the storytelling the author uses, other people may find it distracting. Apart from that the book was very well done.

Recommended for: Anybody interested in small businesses.
I recommend this book for anybody wanting to start a small business of their own and those who have already started one. If you haven’t started yet, this book will give you a great starting point to understand what you need to learn and why you need to learn it. For those who have already started a business, this book will get you to look at the business in a new way that will no doubt improve your chances of success.

Genre: Small business

Overall rating: 9 out of 10 stars



Australians can buy the book by clicking the picture below:

Where to from here:
After reading this book I would read one of the ‘how-to’ books on specific topics the author mentions. I would recommend reading MBA in a day by Steven Stralser to get an overview of business skills. From there you can go into more detail on each topic.

Gaining an advantage in a recession

THE CURRENT SITUATION
The current (2009) global economic position isn't too flash. With many countries in or nearing recession, companies are more likely to downsize and people are more likely to lose their job. Increasing your skill base not only improves your chances of keeping your current job, but it also improves your competitiveness if you look for another job. Recruiters are known to be pickier in times of recession and maximising your skills and knowledge can help you stand out of the crowd.
If you currently have a job you like you should be happy because many people wish they could say the same thing. If you are concerned about the real possibility of losing that job, reading up on the following topics will put you in a better position to hold onto your job.
On the other hand, if you are unfortunate enough to have lost a job already, don't let it get you down. Read up on these topics to help you stand out of the crowd when looking for a new job.

WHAT TO LEARN
For those who are looking at improving their skills and knowledge to gain an edge in the business world, I recommend learning the following topics.

1. Negotiation
It doesn't matter what type of job you have or want, you will need to know how to negotiate. People have a common misconception about negotiating, thinking it is only for union leaders or board room meetings. In fact, it is an everyday skill that everybody uses without even realising it. By reading up on this skill, you will not only have more control of your current situation, but you will have more control over your future situation. This is number one on the list because of the positive impact it can have on your career. It’s not just used to ask for a raise, it can be used to get more favourable hours, flexibility, increase possibility for promotion, etc.

2. Communication
Look at almost any job advertisement and under the list of skills required will almost definitely be 'good communication skills'. It is so important and yet, many people don't even bother to learn about it. Even reading one book on the subject puts you above the majority. So find a book on the topic and read about it. Then go out there and apply the information you have read. Recruiters put a very high emphasis on communication skills.

3. Body language
Most people either don't have a clue what body language is or they have an extremely limited understanding of it. This is why it is so important to learn. If you learn about body language, you will have a clear advantage over most people. Body language is the non-verbal language everybody uses without realising it. You can accurately read other people's signals and gestures to determine their thoughts and feelings. This is great for most jobs when you work with other people. Reading other people's body language can help you a great deal.

4. Business basics such as accounting, economics, management, marketing
Even having a basic understanding of these areas can put you at an advantage. Most people are happy with their limited understanding and don't care about learning other areas. Those who learn even the basics of other business areas have an advantage. If you have ever heard somebody use jargon and you were left scratching your head over it, you should learn more about the area. Not only will it make your life easier by understanding more, but other people will recognise and value your wide understanding.

5. Personal finance
This topic is more for your own personal needs rather than career need. Having a better understanding of personal finance can help you improve your situation so a recession won't have as much of an impact on you. Unfortunately for many, the recession has already hit hard. In either case by learning more on personal finance you are improving your future prospects. If you know the basics you should continue your learning by reading up on more advanced areas. Doesn't matter what your current situation is, you can improve your situation through learning. Even if you have a financial planner you go to, you should still read up on it. You may even find out that the principles are so basic you can do it yourself without any help from a financial planner.

THE FUTURE SITUATION
By reading up on these topics you put yourself in a better position for the future. If you read up on the basics of economics, you will find out that recessions (like the current one) will end. When the recession ends you will be better prepared for the next expansion (opposite of recession) and be at an advantage when looking to improve your career. While I can't guarantee that learning about these topics will be enough to get you a new job or keep your existing one, I am sure that it will help you to do so. Just remember, the more you learn the luckier you get.

Have a look at List of Book Reviews to find books I have reviewed on the topics above. If you can think of any other topics that are useful to gaining an advantage in a recession and could be added to this list, feel free to let me know by leaving a comment.