Book Summary: EntreLeadership – 20 Years of Practical Business Wisdom – Written by Dave Ramsey
Dave is a bestselling author and financial consultant. His ideas are simple in thought and tough in reality but that is why they are so good. Some examples are pay down debt, if you don’t have the cash don’t buy it and the most famous “the borrower is slave to the Lender”. EntreLeadership is a combination of Entrepreneurial and Leadership in action.
Why is this important to me?
I always want to ask this question as if I am sitting in your shoes. Will this summary benefit you if you review it? I am a big fan of mash ups which means combining concepts to make a “bigger/better” outcome. Successful mash ups include: Ray Charles – combination of Gospel and R&B, Kid Rock – combination of Rock & Roll, Country and Rap. Mash ups are very successful and that is why millions of people carry a combination phone, computer, camera in a device called the iPhone.
Entrepreneur is a term applied to a person who is willing to help launch a new venture or enterprise and accept full responsibility for the outcome.
Leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task”
EntreLeadership is packed with great information about building a business. This is Dave’s scrapbook of experiences and lessons. We can learn a lot from this book. Remember, it is more important to leverage associations and learn from others to speed up success. I will profile four concepts and put a spin on it as it has helped in my business.
1. Passionate Action – Passion by far is the most important energy force in any business. Without passion, then the business will die. The easiest way to put this in perspective is marriage. If there is no passion in the marriage or relationship then over time, it will die. Action is required to get things done. Action and execution is what separates winners from losers. George S. Patton said – “A good plan violently executed now is better than a perfect plan next week.”
2. Decisions – Decision making is a skill that has to be mastered. Any decision is better than no decision. Many people become paralyzed when an important decision needs to be made. There are several skills in decision making but here are a couple of things that will help:
1. Weigh the worst case scenario – If you can handle the worst case and the benefit outweighs the cost then do it.
2. Trust your gut – The red flags are there for a reason. I can tell you from personal experience that I did not follow my gut when I purchased a particular business. I knew the previous owner was a nightmare and I did the deal anyway. It was a big mistake. My gut told me no and my head got caught up in the perceived numbers. Not following your “informed gut” equates to bad decisions.
3. Decision Tree – People tend to think that decisions exist in a vacuum. This is not the case because a decision will just lead to the next decision. When you frame it this way then it becomes more manageable.
4. Outs – If you play poker then you understand the power of leaving yourself outs. Having outs (or options) after the decision makes things much easier. In poker if you decide to go all in and need one card to win then that is a bad decision but if you have 12 card options to win then that is a good decision. That is the essence of having “outs”.
3. Selling – Generating profitable revenue is the most important task of any business. Thus when you make the decision to start your business then you need to do it part time without quitting your job. The fastest way to build up the business is to make sure a market exists and you can generate revenue. I have seen countless failures because people focus on setting up the business, the office and the equipment to get started but they forgot the customer part. This leads to bankruptcy. You can scale infrastructure after you start generating profitable revenue. Until then you need to sell and market to prove that the business is viable. One quick note, you can do market testing with Google without spending any money on product. This is a great way to prove that people will buy your stuff and you don’t have to fork over thousands of dollars on prototypes and production to do it. Do the market research first and then ramp up.
4. Money – “Borrow is slave to the lender” according to Dave and he is absolutely right. When the tides come, you know exactly who is naked because too much debt and expenses kill businesses. In 2008, Lehman Brothers went out of business, Merrill Lynch was sold in a weekend and Bear Stearns got a bail out. All of this happened because the management was incompetent and had no idea how to manage debt. Money hides mistakes. It should be a goal that each week you walk out of your business not owing any money. For the small business owner this gives you “outs” and flexibility to ride the market waves.
EntreLeadership is a good book that provides a functional road map for the small business owner. A portion of the book talks about adding people. This can be the scariest thing a business owner can do. Remember that if you hire people better qualified than yourself then your business can go to heights beyond what you thought. Good quality people with the right direction and leadership make for great businesses.
I hope you have found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days. One thing you can take away from this book is ACTION. If you have an idea and need extra money then put the hours in and start a home based business. Small business accounts for 3 million new jobs a year. Start now but don’t give up your day job until your business can sustain your life style.