Do’s and Don’ts of Mastering a Small Business

I’ve read quite a lot of small and home business books, but one book that stands out from the rest is Ken Boyar’s The Practical Dreamer: Do’s and Don’ts of Mastering a Small Business.

“The Practical Dreamer: Do’s and Don’ts of Mastering a Small Business” will not teach you the permits and licenses you need to get, or the step by step process you need to do to launch your business on the ground. It is not a checklist for starting a small business. Instead, Boyar’s book will help you understand how proper financial planning can spell the success of your business.

While the book deals with financial management, the book will not help you create a financial statement, or help you understand what each financial ratio means. Rather, it will teach you how to understand the financial side of your business, and make you look deep at how you intend to make money from the business.

Boyar is a business consultant and a certified accountant, and the book delves deeply into his experience in the field and working with various business owners. His goal in this book is to help you to run a financially successful business.

He starts by stressing the importance of a written business plan, and the questions that having a solid plan will be able to address, such as:

• Will I need more or less money to start the company than initially planned?
• If I am going to run out of money, in what month can I expect that to happen?
• If I need to secure a loan, in what month should I apply for that loan in order to have the cash when I need it?
• What amount of income or sales do I need to generate every month in order to cover my basic expenses?

He also stresses the importance of having day-one money, or being well capitalized. It is very advantageous to have more than enough money to start the business. If you don’t, then you need to rework your plan for your business and make it more practical and achievable.

Boyar also advises to spend your money wisely – from day one. Spending wisely means thinking of your business as an investment, and every decision making needs to support your goal of seeing that investment grow.

There are ways to invest and ways to spend. Hiring the right staff, seeking advice from outsiders (even if you have to pay them), engaging a professional to assist in writing your business plan, working with a coach when things don’t seem to be going your way. These are investments that will pay off.

And of course, being a CPA, he devotes a chapter of his book on the importance of hiring an accountant. One advice he gives is to find an experienced bookkeeper, which will not only do the data entry of your financials, but able to give meaningful suggestions and comments based on the financial data. Your accountant should be able to help you make smart business decisions.

Each chapter in the book contains case studies of his workings with his clients. This approach allows you to have concrete and practical examples to help you better understand the concepts in the book.

The book is an easy and short read (in fact, it is puny compared to other books on small businesses with only 127 pages). If you have limited extra time, spend it reading this book and it can help you a lot in the way you think about the financial side of your business.