The Eight Books to Read Before You Start Your Business

Of course, you've heard all those admonitions before, but Davis creates standards against which would-be business builders ought to measure their own thinking about how their companies are going to work. To some readers, some of Davis's chapters--those on "any-place" and "no-matter" in particular--may sound old hat, but I'd be careful about skipping over them. One has only to be a customer in America today to know how far short most companies still fall of future perfect.

4
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It
By Michael E. Gerber

The problem with most failing businesses I've encountered is not that their owners don't know enough about finance, marketing, management, and operations--they don't, but those things are easy enough to learn--but that they spend their time and energy defending what they think they know.
--Michael E. Gerber,
The E-Myth Revisited

We begin our discussion of Gerber's book with a quote about owners of failing businesses because that's what most founders quickly become. But starting a company isn't like shooting craps, in which winning is all in the luck of the throw. More companies would succeed, says Gerber, but for the E-Myth, "a romantic belief that small businesses are started by entrepreneurs, when, in fact, most are not." Most businesses, Gerber says, are started by technicians--people who know how to do something. The barber starts a barbershop and the cook, a restaurant--on the fatally erroneous assumption that to understand the technical work is to understand the business that does it.

So technicians should not start businesses? No, that's not Gerber's message. "Everybody who goes into business," he claims, "is actually three-people-in-one: the Entrepreneur, the Manager, and the Technician." The technician in you can do the work, but it can't run the business, and it certainly can't grow it. Those are the jobs of the manager and the entrepreneur. Owners need to get their roles straight--their job is to work on the business, not in it.

One reason this book is fourth on the reading list is that it wrings a methodology out of the metaphysical. You've been speculating about your place in God's universe and in man's, indulging in the daydream of yourself as the successful entrepreneur, and along comes the unromantic Gerber, who says, OK, it's time to make some choices. What are your aims in life? How much money do you need? And so on, from big choices to small ones--from your organizational strategy (you've thought about that, haven't you?) to how you'll decide what color to paint your product or logo.

There are no answers in Gerber's book; it's a framework that guides you along a logical path of inquiry.

One piece of advice that Gerber keeps coming up with: "Your business is not your life." Shades of Wheelis.

5
The Practice of Management
By Peter F. Drucker

You are about to become the manager of the business you will soon create. But what does it mean to manage? Better to ask now than to wait until the task is upon you.

There's a hint at what's involved in The E-Myth Revisited, but you'll sense when you're reading it that Gerber's language is too spare, clipped, epigrammatic--just short of glib--to be authoritative. The value he adds is the business-development framework. For substance and depth on management there's only one writer to read: Peter Drucker. But which Drucker book? He's written a couple dozen.

Not a few people promoted Innovation and Entrepreneurship, published in 1985, for inclusion here on the grounds that this is, after all, a reading list for entrepreneurs. But I'm suggesting instead The Practice of Management, published in 1954, which is the more inclusive work. (It got its own fair number of recommendations.) No other book that I'm aware of captures so thoroughly and yet so succinctly the principles of business management. Reading Drucker won't make anyone a manager--he's more scholar than trainer--but without having read and absorbed the wisdom of Drucker, it would be substantially more difficult for entrepreneurs to understand the roles and duties of managers and to evaluate the worth of the countless management techniques that they'll hear touted.

What, for instance, have Theory Z, MBWA, Anita Roddick, or reengineering changed about the truth of this short excerpt from Drucker's introductory chapter?

The final function of management is to manage workers and work....This implies organization of the work so as to make it most suitable for human beings, and organization of people so as to make them work most productively and effectively. It implies consideration of the human being as a resource--that is, as something having peculiar physiological properties, abilities, and limitations that require the same amount of engineering attention as the properties of any other resource, e.g., copper. It implies also consideration of the human resource as human beings having, unlike any other resource, personality, citizenship, control over whether they work, how much and how well, and thus requiring motivation, participation, satisfactions, incentives and rewards, leadership, status and function. And it is management, and management alone, that can satisfy these requirements.

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