If you’re just starting out on the path to small business ownership, here are a few key books designed to help you build your strategy and develop sustainable, long-lasting profit.
1. The E-Myth Revisited by Michael E. Gerber
An oldie but a goodie, The E-Myth Revisited was first published in 1995. There have been several editions since then, yet some small business owners may believe a book this old can’t possibly be relevant in the digital age and sadly overlook this classic. But it’s an essential piece of any entrepreneur’s toolkit because it teaches would-be entrepreneurs how to work on their business, not just in it.
The author believes people who are exceptionally good in business aren’t so because of what they know but because of their insatiable need to know more. Many small businesses fail because their owners encounter a fundamental imbalance: they excel at the technical side of their offering but have no skills in managing a business.
Example: a hairdresser who is wonderful at colouring hair opens a salon. They don’t promote it (because they don’t know anything about marketing), and they don’t balance their books (because they don’t know anything about accounting). Within six months, the salon closes its doors. Unfortunately, the hairdresser was unable to balance mastering their craft with learning how to run a business.
The E-Myth Revisited is a great read for anyone in the early stages of building a small business. Plenty of food for thought!
2. Profit First by Mike Michalowicz
A newer addition to the small business book canon, Profit First was published in 2014. This book offers a counterintuitive approach to managing small business finances. Instead of the usual formula (Sales – Expenses = Profit), Mike Michalowicz flips it to (Sales – Profit = Expenses)—a similar concept to the ‘pay yourself first’ axiom popularized by Robert Kiyosaki of Rich Dad, Poor Dad fame. This small shift in thinking helps entrepreneurs prioritize profitability at the outset.
Many small business owners—particularly those who may be entering entrepreneurship for the first time after years of working for someone else—may benefit from this book for several key reasons:
- Staying focused on profit over growing sales can help prevent new business owners from draining cash reserves too early in the process
- It teaches new entrepreneurs to be mindful of spending
- Putting profit first can help small business owners manage their work-life balance more effectively
- Long-term growth becomes more likely once sustainable profitability is realized (especially if it happens early on)
Definitely worth a read for small business owners looking to free up cash as well as free time!
Built to Sell by John Warrillow
Even if you never plan to sell your business, this book teaches small business owners a wealth of actionable tips designed to create a more valuable, efficient, and scalable company. Many small businesses can’t function without their owner’s personal involvement, making it near impossible for owners to attract investment—let alone ever take a day off! Built to Sell shows owners how to develop good processes and build their enterprise sustainably.
Some key insights include:
- Avoid relying too heavily on any one client. No one customer should ever make up more than 15% of your total revenue.
- Specialize, and say no to projects that are outside your scope
- Don’t carry too many opportunities in the pipeline. Take the time to focus on the ones that will most likely lead to close
- Hire more than one sales rep. This tactic allows to you benefit from the natural competition that tends to arise between sales folks.
A great read for any entrepreneur looking to step up their game.
All of these books provide useful insights for both fledgling and established small business owners. We’ll be adding to this list regularly, so stay tuned and follow us here.