Best book for running a small business

January 27, 2011 1:15 PM

Please recommend a “how to run a small business” book, but how to think about it (not the technical aspects).

I’m a freelance writer, and over the last few years what I really struggled with was how to think (psychological?) about aspects of a business. For example, the idea that if I wanted to be paid X, turn it away unless they agreed to X (or that it was not out of the question to ask for a certain price per hour). Or if a client was happy with my work, it was okay to then check in with them every few months. I know these concepts sound basic but they really did not occur to me at all, and I’ve only arrived at these conclusions from friends letting me know different ways that I can think about the problems in front of me (over and over and over again before I implement the ideas), which I never would have confronted as an employee. I’m looking for more books because I’ve reached close to the limits of how much friends who work in cubes can really help in terms of thinking about running a business.

Occasionally a book is able to present new ways to think about running a business. The E-myth came pretty close, but I’d like more suggestions. Most of the “how to run a small business” books (IMO) have been vehicles for the author to peddle him or herself on a platform rather than present ways to think about it.

IF perspective as to where I am right now helps. I’m doing well. Too well. I’m working round the clock and onwards into the evening and on weekends and needed to turn away work a few times. To be honest, at minimum I need to hire someone, but I am afraid of things like cost, what if they don’t perform work to the same level, blah blah blah. Maybe a “how to expand your business,” but I’m open to suggestions. Please let me know in a few sentences why you are recommending a particular book if possible.

Or if you have other ways as to how to think about the next stage of a business, too, that would also help. Other than books, though, I don’t know where else to look

posted by Wolfster to work & money (8 answers total)

This might be a good time to network and get a mentor. Someone you can talk to whose business you admire, someone who's on the other side of the gap you want to cross.

Books are great, but wisdom from experience is better, IMO.
posted by cross_impact at 1:25 PM on January 27, 2011

Congrats on doing well, it's not easy in this economy. The term you're looking for is "professional services firm", as in:

- "Professional services marketing" (M. Schultz, J. Doerr)
- "Managing the professional services firm" (D. Maister)

As to the financial burden of hiring. Maister explains very well how to budget for your firm - which turns out to be not too hard: if they work 1500 (billable) hours per year at 70 $ per hour, they will bring in 105 000 $. Add your own 1500 billable hours @70, brings your gross revenue to 210 000. Factor in expenses at 70k (a bit on the high side, maybe), wages of your colleague at 45000 and yours at (say) 60 000. This leaves a handsome profit of 35k per year. (For tax reasons, it might be interesting to set your own wage very low and to cash out the higher profit as a dividend - by all means, find a decent accountant).

Beware: adding a 'junior' to your firm will change a whole lot of dynamics between you and your clients. You will need to step up marketing efforts, because a lot of your existing clients will simply not accept that your junior delivers the same quality as you. They will reject, out of hand, any text that is mailed from the junior's account, even if it's impeccable. Hence the need to market your firm brand instead of your name, etcetera.

But books are a great way to start thinking about marketing, sales, business. I can highly recommend 'Guerilla Marketing' by Jay Conrad Levinson. The title makes it sound like a stupid book, but it's full of very practical and excellent advice.

I love discussing this sort of thing on MeMail, so feel free to mail.
posted by NekulturnY at 1:54 PM on January 27, 2011 [1 favorite]

I haven't read it yet, but have often heard recommended, "Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm" by Verne Harnish.
posted by bumpcat at 2:16 PM on January 27, 2011

If you're a solo freelance writer, I'm not sure books aimed at people starting or running small businesses will really be a great fit for you. Though there will definitely be useful ideas you can translate into your own circumstances.

The Personal MBA looks like it might be the kind of thing you're after.

I've not read it myself, but saw it via the author posting it on Mefi Projects. He also has a website where he recommends a bunch of good business books, many of which I have read.

As I say, I haven't actually read the book itself, but I am an MBA, and from what I saw when I checked out the website, it looks good, and the tips are indeed similar to what you'd learn in business school.
posted by philipy at 5:26 PM on January 27, 2011

I'm a consultant (and sometimes a freelancer) and I run a popular blog on consulting. Really, it sounds like you're at the point where you need to create a little distance between yourself and your business. Figuring out how to contract out some parts of your work might help. I started with the Emyth, but then turned to local resources, such as the BC Women's Enterprise Centre, the Forum for Women Entrepreneurs, a women's entrepreneur group and a mentor or two. Why all the women's resources? Well, much of what I read suggested that women tend to keep things close to them, take fewer risks with giving work to others and are less likely to delegate. I don't know if that's actually true, but it was true for me and the other women I knew running businesses. So I really got out there and started looking at ways to grow a business. And I really explored my fears.

You see, for me, I was worried about the risk of having someone else do work. What if they screwed it up? What if they didn't deliver? What if clients felt it was a bait and switch? Well, I had to change my sales and marketing process, my contracts, my relationship building and so on. The Emyth was good for getting me to think about what things I really did not need to be doing.

And a funny thing? It started with hiring a house cleaner. I realized that hiring a house cleaner allowed me to learn to let go. It had nothing to do with my business and yet everything to do with my business. And then I changed the name of my company - it used to be under my own name. I then stopped saying "I". I repositioned. And then i started handing out little tiny projects to people.

So that's what I would start with. Get out there and read about growing a business. Identify your fears about growth. Come up with a plan. Take some baby steps. And then evaluate where you are.
posted by acoutu at 10:35 PM on January 27, 2011

I came in here to recommend The E-Myth and then saw you already read it.

So, another recommendation: The Four-Hour Workweek is a little over-the-top and not entirely practical for most people, but will certainly give you new perspectives on how to approach running a business. Tim Ferriss is very creative when it comes to eliminating work!

More generally on effective time management, The 80/20 Principle.
posted by Jacqueline at 12:06 AM on January 28, 2011

Instead of actually hiring someone, you might want to start contracting out to a couple of people you think might work well with you. I am a proof-reader / copy-writer and I work with a couple of web designers and secretarial services who use me to do the work, pay me my usual rate and bill the customer (presumably a bit more). Maybe if you tried this out, rather than hiring people full-time, you can grow the business a bit more, see if the work is out there and what profit you can make using an extra person, then slide over to employing someone when you feel ready.

Just an idea, not trying to suggest you contract out to me, btw, just wanted to demonstrate I'm in a similar line of work.

Oh, and the best business books I've read are autobiographies of business people, which allow me to feed off their energy and creative thinking, rather than how-to stuff. For that, I follow a couple of business forums.

Good luck!
posted by LyzzyBee at 5:22 AM on January 28, 2011 [1 favorite]

I want to thank everyone for their replies; even if I didn’t mark it as favorite or reply to you individually here, I will check out all the books recommended and think more about your suggestions.

CI – I had the same thought but I wasn’t sure where/how to find a mentor

Neukturn –thank you for the new terms (that is exactly what I needed); I will definitely check those out when time to breathe again.

Acoutu – now I have read your replies to these type of questions before, but wow …y ou may be onto something (I’ve always rolled my eyes when pple have suggested to find organizations that support women business owners, but what you said rings very true for me). I also hired a friend (just for a few hours) to do some of my work for me (outsourcing), and it was hard to let go. Very hard.

Jacqueline – I have read The 4 Hr Workweek – although I initially liked the idea, I don’t know if I can get rid of the “work” part (who would hire me for projects?)

LyzzyBee – good idea both in terms of surviving, and I may market myself in a similar way, too, but make it specific to what I do.

Thanks again everyone.
posted by Wolfster at 2:13 PM on February 1, 2011