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Thinking Like an Entrepreneur
Book Reviews
"I have not read a better book for entrepreneurs."
Paul Tulenko, syndicated small business columnist
IdeaCafe reviews Thinking Like An Entrepreneur
and says, "With its diverse topics and solid information, you'll get a
well-balanced meal on making healthy business decisions as an entrepreneur."
The Midwest Book Review says "Peter Hupalo's Thinking
Like An Entrepreneur is a superb guide to making intelligent business
decisions. Comprehensive, easy-to-read, even inspirational..." Midwest Book
Review
Ed Martin says, "I found Thinking Like an Entrepreneur
to be a great read. Even if you are not interested in starting a business, the
information contained in the book is highly informative and entertaining. If you
work in business or want to understand the process of starting a business, I
heartily recommend Thinking Like an Entrepreneur.
Besides, any business book that quotes Yul Brenner, and does it well, gets my
recommendation." Ed Martin, About.com Guide to Small Business Information.
Starting A Small Business?
"Peter Hupalo's
Thinking Like An Entrepreneur is a superb guide to making intelligent
business decisions. Comprehensive, easy-to-read, even inspirational..." Midwest
Book Review
Thinking Like An Entrepreneur
Table of Contents
Chapter 1. Don’t Get Bernoullied
Daniel Bernoulli was the first mathematician to show how people make investment
decisions, not just from a mathematical risk and reward standpoint, but from an
emotional standpoint. How they emotionally value the investment. People are risk
adverse and often will stay at a job they are not passionate about for fear of
losing what they already have. To start a company you must become de-Bernoullied.
Chapter 1 explains how to become de-Bernoullied and learn to think more like an
entrepreneur.
Chapter 2. You’re Not That Far Behind Michael Dell
Beyond a certain point, does it really matter how much money you have? Is there
anything that you could buy for $100 million that you couldn’t buy for $10
million that would contribute meaningfully to your life? Probably not. In fact,
a few million and financial security is more than enough for most people. You
can build that much wealth by building and growing your own company. But to
succeed you will need to learn financial decision-making and how to choose a
business that puts the chances of financial success more in your favor. The rest
of Thinking Like An Entrepreneur will take you far in that direction.
Chapter 3. Men Are Cheaper Than Guns
Yul Brynner, from the movie The Magnificent Seven, meets up with these
representatives from a small town that is being pestered by bandits. The
representatives are seeking to buy guns so that they can defend themselves from
the bandits. Yul looks like a man they can trust. They ask him, "Will you help
us buy guns?" and Yul responds, "Why buy guns? Why not buy men? Men are cheaper
than guns." Henry, the struggling consultant, has an epiphany of understanding
about how you grow a company. You don’t need to know it all. You can hire
others.
Chapter 4. Intellectual Capital and Bootstrapping
Lifer Game Company has great demand for its "Lifers." They are able to bootstrap
themselves to success because they control a proprietary product. We see just
how quickly, in theory, a company can compound wealth and what real life factors
can prevent such growth.
Chapter 5. The Importance of Margins
High-profit margins are crucial to a company’s success. Struggling with a
low-margin business is like standing on a precarious ledge by a huge raging
torrent of water at Niagara Falls trying to get a cup full of water. Learn how
to predict likely profit margins for your company.
Chapter 6. The Need To Generate Good Revenue Per Sale
Often the thing overlooked by people who dream of direct mail (or today,
Internet) riches. Profit margins are nice, but it’s difficult to be successful
selling a $1 product. This chapter examines overhead and period costs.
Chapter 7. The Internet and Commerce
Will the combination of JAVA and Linux do in Microsoft? Will programming jobs
flowing out of the U.S. create a Ross-Perot like sucking sound? How will the
Internet revolutionize commerce? Everyone will have his or her own small online
business someday. Needless to say, most will never succeed. What does the
Internet mean for you?
Chapter 8. Expectation Values and Decision Making
The concept is simple. What do you expect to happen? You figure this by
multiplying the probability of occurrence of the event by the value of the event
that will occur if this probability were to materialize. By summing over all
likely and important business cases, you get a measure of the most likely
overall result. I discuss how to use this method to evaluate business decisions
from a rational framework.
Chapter 9. Personality and Business Choice
There are companies for bold people, and there are companies for shy people.
Choose a business suited to who you are as a person. Don’t fail because you
choose to start a business not suited to your personality. It is important that
you have fun building your business.
Chapter 10. Risk Shifting and Pursuing Larger
Opportunities
This chapter is about shifting the risk of your venture by seeking equity
capital. How to make your company interesting to venture capitalists.
Chapter 11. Long Shots and Diversification
How not to diversify your business, but why you might want to. Active
entrepreneurship is compared to passive investment.
Chapter 12. Cash Flow Versus Earnings and Working Capital
This chapter teaches the reader how to make cash flow predictions and prevent
having bills to pay and no money to pay them. Not predicting or understanding
cash flow is one of the most common and deadly mistakes new entrepreneurs make.
Really following the advice in this chapter will enhance your chances of
company success tremendously. You will learn to think about cash flow issues
before you begin your company.
Chapter 13. Knowing Where The Value is Created. A
Comparison of Computer Programming to CBT.
Learn how finding the address on an envelope can save a billion dollars.
Computer Based Training is a rapidly growing area. You do not need great
programming skills, but an understanding of instructional design is important.
Know where your company creates value. Even if your business is totally
unrelated to computer programming or multimedia development, this chapter shows
you how to view things from your potential customer's standpoint.
Chapter 14. You Know Enough, But Keep Learning Anyway
Is it who you know or what you know that is important?
Chapter 15. The Role of Luck In Business. The Importance
of Getting Started Now
Is business like chess, a coin toss, or backgammon? Why is Bill Gates the
richest man alive today?
Chapter 16. An Introduction To the Nature Of Compounding
and the Time Value of Money
Extremely important topics for a new entrepreneur to understand. How does
your company grow its profits? You will learn to analyze this. Learn what
affects your company’s compounding cycle and your company's rate of return in
the cycle.
Chapter 17. To Incorporate Or Not To Incorporate? That is
the Question
This chapter discusses the benefits of incorporation, S-Corp versus C-Corp
decisions and how to minimize your overall tax rate. Taxes due on S-Corp phantom
income is discussed as are issues of liability and how you can inadvertently
destroy the protection that incorporation was meant to offer you.
Chapter 18. The Definition of Entrepreneur: Bringing
Together the Resources
When resources come together, things can happen. What is the job of a movie
producer? This chapter points out the simple fact that entrepreneurs are the
ones who make things happen by simply taking action and doing it. Yet, why don't
most people ever learn to take action and just do it?
Chapter 19. A Lesson From Direct Mail: Test First
An introduction to targeted marketing to a niche. But more than that. A
philosophy for seeking to learn whether or not what you are trying to do will
work, cutting your losses if it won’t, and running with the idea to success if
the idea will work.
Chapter 20. Selling Benefits, Savings, "An Image"
An introduction to sales. Why people really buy consumer products and how to
reach what is important to them. You sell products that make the person feel
more like himself or herself, that reinforce self-perception.
Chapter 21. Relationship Marketing: The Cost of Losing
Clients
Finding new customers is not as easy as selling to previous customers. Bill
Gates has turned you into an annuity!
Chapter 22. Supplier Financing, Customer Financing
Learn great alternatives to borrowing money from a bank or seeking venture
capital. As sales grow, cash flow can be a big problem to the entrepreneur.
Supplier and customer financing are ways to combat this problem. Learn how to
get the deal you want.
Chapter 23. Going It Alone, Consulting
Are you cut out to be a consultant? What issues are important to a new
consultant? How much money do consultants really make? You will learn what you
need to get started consulting if you decide to go it alone.
Chapter 24. Virtual Organization, Outsourcing
An alternative to hiring employees is presented, and the opportunities for
becoming a person or a company outsourced to are considered.
Chapter 25. The Value of Time
How much is your time really worth? A meeting with the grim reaper shows the
danger of calculating the value of your time by your wages alone. Learn how to
evaluate if time is being squandered within your organization.
Chapter 26. Buying a Business
A detailed chapter that discusses price-to-sales ratios, valuation issues,
accounting differences, the valuation of intellectual capital, and other issues
to consider when buying a business. Buying into an existing business is a good
entry strategy for many new entrepreneurs, but don't get taken on valuation.
This chapter is also excellent reading for angel investors who wish to invest in
smaller companies and are looking for objective methods of small company
valuation.
Chapter 27. Writing a Business Plan
Having a business plan helps you focus upon the issues important to your
business. It also helps you evaluate your entrepreneurial thinking. Failure to
properly plan your business is one of the key factors The Small Business
Administration lists as leading to company failure. Two types of plans are
considered. One, a plan of business to help you understand what you need to do
to succeed. And, two, a business plan targeted to raising capital.
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