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Title: Entrepreneurship 101: How to Turn Your Idea into a Money Machine
Author: Michael E. Gordon
Publisher: Wiley
ISBN: 0470047127

Refreshing basics is a good idea–in any domain. However experienced you are. I found “Entrepreneurship 101: How to Turn Your Idea into a Money Machine” states the basics of entrepreneurship very clearly; covers almost all points.

It starts with the spirit of entrepreneurship. It strongly states the fact several entrepreneurs learned with their lives:

“You can’t do it alone. Building a world-class team is the only way to big success”.

It tries to define an entrepreneur in a very interesting and convincing way. I liked that section very much; I’m sure it’s gonna be a whack on the head for many.

Gordon explains the difference between an idea and an opportunity. Many think they are same. He explains the differences and provides means to find out whether an idea is an opportunity or not.

Gordon’s list of “Essential Entrepreneurial Power Skills” is a great one. I liked a practical tip called “Power of Zero” on how to step up your inflow in a phased manner. He defines phases of business which many entrepreneurs forget to track in their day-to-day rush.

Then he talks about how ideas can make or break you. The need of selecting and examining ideas which best suit you and your skills; very important I should say. An idea which is good by itself may not be good for you. He emphasis the need of finding the fit between you and your idea.

Business design is something all entrepreneurs take for granted. They go with “as soon as it makes money, it’s fine” approach. Gorden goes a level deeper and talks about designing your money machine very objectively. I liked that. It’s more scientific and rational. Again nothing new in this but a good refresher.

Once you have identified your idea the next thing you need to define is your competition. “Good” and “bad” industries are identified with this. Consider all aspects while doing this: competing products and substitutes, bargaining power of suppliers, bargaining power of customers, etc., etc.. He says “it’s a jungle”.

There is a chapter on “Raising Money” which will be a handy one for all new entrepreneurs. Gordon explains what are the options available to raise money with pros and cons of each equipping you to take a decision of your own.

I’m not from a business family. But I wanted to do business ever since I started thinking about my career and life. But I was often worried about the fact that mine is not a “business blood”. But later on I started realising that an inherent desire is enough to become an entrepreneur. This book underlines that. Gordon clearly states that entrepreneurship can be learned just like any other skill. That’s true. The question is whether you want to be entrepreneur.

The author talks about the importance of finding the lacking skills in you as an entrepreneur. This is a much-ignored element especially with self-funded entrepreneurs (who usually manages everything by themselves and “be his own boss” in literal sense) and can severely affect the growth of business.

This book referres many excellent entrepreneurial and business books. Most of them are must-reads. Read them too if you haven’t already. Entrepreneurship 101 is very informative and inspirational (an unusual combination) and includes a pep talk section at the end of each chapter.

What this book doesn’t cover are day-today running and operational matters of your business. That subject is in a domain of its own. So I would recommend reading Execution: The Discipline of Getting Things Done along with this book, if you want to have more comprehensive coverage on entrepreneurship. Another element missing in this book is the human resource part.

What the author talks about web sites and other IT related subjects lacks up-to-date knowledge. For example, he talks about the importance of meta tags in web pages to get it listed in search engines. The days of meta tags with respect to search engines are gone. Now you need to look at SEO techniques.

Conclusion

If you are a wannabe-entrepreneur this book is a must-read for you. If you already wet your feet, read this book twice over (you might need to unlearn something).

I would rate this book 4/5.

If there is an MBA on collecting money, I would like to hire one with that qualification. Acquiring a client and then making a sales with them is just one side of the story; getting their money in your bank account is the other.

It doesn’t make any difference whether you are a giant MNC or a garage start-up and it doesn’t make any difference either even if your client is overwhelmed with your service/product. They will have an accounts department which functions in isolation and its sole duty seems to deliver enough verbiage and delay your payment.

Ever since I started doing business I have been seeing this pattern. I had discussed this with other business people and accountant/finance people whom I met on non-business occasions. They all secretly agree that delaying payment is considered to be “a revenue” and is a standard practice. So better be prepared for that.

It doesn’t matter where in the value chain your position is. Or whether you are in B2B or in B2C business (I know one private utility company with INR 3cr. (30 million) outstanding to be collected from its end-customers). Outstanding debt in B2C business is a global story though.

Further to my research I found out that everyone in the business chain is practicing it! So that means none is benefited out of it, isn’t so? I think so. So why can’t we decide to be principled to release the money we owe to other businesses and clean up the entire chain?

A Few Notes for Start-Ups

You gotta learn to live with this unfair practice or you die. See the following notes; they will save your business.

Take control of your cash flow: That is the life blood of your business however big or small your business is. Having everything right, the only thing which can upset your cash flow is the unexpected delay in collecting your money from your clients. So leave room for that. Check out with your peers in the business about the payment norms in your sector (it is there in very sector; only difference is “how long”). Make sure that you do not expect an inflow too ahead of it actually reaches you.

Plan only after money reaches your account: This is an extreme defense you can adopt. Do not spend before you get the money in hand. But this can slow down things a little bit. So practice a safe balance.

Plan as if delayed payment is the norm: For all your long term plans which are based on your business inflow, plan as if delayed payment is the industry norm. I have seen a business with a healthy turnover of INR 2cr (20 million) and with a strength as low as 10 crumbles just because of delayed payments.

Do not spoil relationships: Collecting money is a tough thing. They will make you feel like you are in their house to ask a favor! Be prepared as they will have stories to counter your arguments. Such situations are emotionally demanding. You whim and yell and shout; but make sure that it won’t cost your relationship. The world is so small; a spoiled relationship can cost your business–not just with them but in the entire sector depending on the influence of the people you are dealing with.

You made a sale? Do not relax. The real job starts after you deliver. Do not forget this.