Book Report “Profits Aren’t Everything, They’re the Only Thing” I chose the book “Profits Aren’t Everything, They’re The Only Thing.” A basic understanding of the book relates to the authors strict authority towards business operations, and how implementing an attitude of “survival of the fittest” enables the survival of small-medium size businesses. The author provides multiple examples of how he and his company solved each problems relating to businesses that is on the brink of failure. By implementing his ideal, the author believes your company will survive, along with great rewards in the future. The book starts off in chapter 1 by introducing himself and his company, American Management Services, they have been working for decades to help save Main Street Businesses. The truth at the beginning of the chapter is YOU’RE the fault for your business failures, do not blame recession for your failure, you are the ultimate factor in determining your businesses survival. You must challenge yourself constantly in order to set the tone of the top. This means coming in on Saturdays, or Sundays to work instead of fishing or golfing. No one should know about your financials better than yourself. Keep on task with every details relating to payrolls, expenditures over certain amounts, approve checks going out, etc. These things must be constantly imbedded in order to have a successful business. The chapter also pinpoints another important factor, “Profits Aren’t Everything, They’re the only thing.” You need to do everything you can to let Profits be positive even if that means firing your family members, or incompetent employees. To ensure survival you must be what the author likes to call “ruthless.” Setting the tone of tough, but fair leader will better you in the long wrong. Another ideal the author has embedded in his book is cash is everything, a small business must have constant cash flow, and the author provides guidance and ways to help ensure that in later chapters. The specific right now is cash equals profit, and positive profit is the main goal of your company. In Chapter two, the author provides you with red flags that you must catch. You must end the denial that your business will be ok, its only hitting a rough patch now, it will improve later. This is a devastating ideal to implement if you’re the small business that is going under, its one of the first red flag you must catch. If your business has been facing tough means to achieve positive cash flow, quite denying the fact it doesn’t needs to be restructure or change its way of operation because that’s how its been done for the last 20 years. If its not working now, there must be a reason, so look for it and correct it. In chapter three, the first reminder the author provide is, if you’re not able to pay yourself a sufficient salary, your company is in trouble, that’s a red flag. By reducing you salary so you can pay a outstanding loan, or make ends meet will not do you anything good, because eventually you will lose everything by mortgaging your house, selling your assets, and etc. Your not in the business to help others, its your business and its your risk, take care of yourself first. Chapter four and five relapse the idea that you must love your business more than your family. Your business is not a part time job; you have to put in the hours to retain its survival. If that means you have to miss your daughter’s recital, staying longer hours, work weekends then so be it. If you don’t put in your effort, you might as well kiss your business goodbye. Also if you feel like your son, daughter, nephew, wife, etc are not capable of their job, don’t be soft, fire them and replace them with someone better. If your worried about how they will survive without the job, parole them for a bit, and gave them time to find another job, but that should be it. In addition, the author also specifies that you shouldn’t work from home because there are too many distractions. Chapter 6 taught the audience that you shouldn’t delegate your responsibilities or important tasks to others. This is just another way of saying I’m shrinking my responsibilities. If your wondering why your business is not thriving or why thing’s aren’t getting done, its because your not the control, authoritative role model that every leader needs to be. Be that guy that leads others, set your standards, implement your plan of action, and do it. You must micromanage, meaning you should be able to know everything that is happening within your company, even if your far away at a conference or vacation. You have to be all over the important tasks, your company should be at your fingertips, and you should be able to manage it through it. Delegate your responsibilities but verify, have your employees report to you every detailed sales, payrolls, tasks of the week, monthly sales, customers, etc. Chapter 7 and 8 wants you to live and die by your plan and how you can motivate your employees. Examine your profits for the year, and manage your expenses from it. If you set your profit at 1.5 million, while you estimate sales to be at 7 million, that means your business must strive to live by an expense of 5.5 million. Profit is always first, and that ideal must be imbedded. Let your employees know what your plans are, and hold them accountable in achieving it. Provide them with incentives to help raise performances, also provide a performance-based salary, that way employees won’t take advantage of you. This is just an entitlement, slap them on the head, and correct them if they are making a mistake, these performance based salary should be considered as an reward. Chapter 9 is about attitude, which is the structure of this book. You must be a tyrant, don’t aim at being liked, “let your employees fear and respect you first.” The rest of the chapters are guidelines and techniques you should implement that will help your company strive. One of them is the ideal that if your company’s asset is less than your liabilities, and you don’t see anyway for it to turn around, files for chapter 11 bankruptcy then. By filing for bankruptcy you stop debt collectors, and reduce your payments to them by about 90 percent. However, you must file early, other wise it is hard to turn around your business. Another tip for your business survival is that you shouldn’t pay your vendors on time. By stalling payments, you could use the money not spent on things you are behind. This is probably one of your biggest weapons, when you’re fighting for survival. Don’t rush to pay your rent, sit with him and explain your situation that you need longer times. It is more expensive for landlords to evict you then extent their collection time. So usually they will work with you, if you have justifiable means. The author also specifies that golfing is probably one of biggest waste of time, and waste of money a leader can do. A lot of the time, they think being part of the country club is more important for their business because of networking. However, the hard truth is that its just an excuse to not work, you waste valuable time when you could be in the office familiarizing with your company, and it is expensive. So the author hates golfing, and suggests no one takes it up. Finally, the author does not believe in teamwork. Teamwork to him is what cause the downfall of small to mid size businesses. His theory, “a team is only as strong as its weakest link, there is no money in team just mediocrity and excuses.” The author believes that in order to survive you employees should follow your rules, and you must present with leadership and structure. Encourage diverse opinions is not encouraged because this is a business not a “democracy.” So basically this is the summary of the book and the authors idea in running a successful business. My opinion of this book is that I think the author takes too much pride in himself. He has a couple pointers that I believe are essentials. However, a lot of his tips provide negative effects. For example, I believe a strong leader is build through trust, leadership, example, and support. The author’s way is not through trust, support, or teamwork but simply through competent individuals and examples. His ideal is out of proportion in my opinion. You can’t convince anyone that certain individual is capable of his leadership role, unless you build a trustful, and teamwork based environment. Eventually it will come and bite you in the back, and you will wonder why it’s not long lasting. Thus far, the author said his business is still thriving after years of implement this strategy, But how would the reader know for sure his way is the right way, if we never seen his business or understand who he is. Another thing that gets me is the whole family comes last. I firmly believe family is what guides your through your tough times, if someone was the sabotage that relation, I don’t any amount of help will reverse your business. Of course, his suggestion of firing incompetent family member is right, and that I firmly believes. However, I also believe in second chances, if that family members or other close friends fails again, then I will not hesitate in firing them. The negatives are a handful, but positive suggestions are also around. His guidelines in pinpointing red flags, micromanaging techniques, when to file for bankruptcy, and stalling payments are some positives I think are beneficial. However, overall this book in my opinion was not my type. I don’t believe in individual work like I said previously, a successful leader is some one who is trust worthy, team player, and loved by his families. The dictatorship that I get our of reading this book just didn’t suite my taste. But like I said before, its not all negatives, there are some positives.