Several months ago, I wandered upon Pamela Slim’s excellent blog, Escape from Cubicle Nation. In a nutshell, the blog covers the transition from working in a cubicle (i.e., a traditional job) to self-employment – and all of the issues in between.

Slim packaged up many of the best ideas into a guide to this transition, also titled Escape from Cubicle Nation. And, since I enjoyed the blog so much, I picked up the book, looking forward to reading what Slim had to say, especially since this is a journey I’ve gone through over the last couple of years.

Here’s the entire thing in a nutshell: if you’re thinking of quitting your office job and doing something on your own, this is your handbook. It’s thorough, detailed, and heavy on the applicable ideas. Let’s dig in.

I Have a Fancy Title, Steady Paycheck, and Good Benefits. Why Am I So Miserable?
Many jobs involve sacrificing one’s core values – you might not necessarily be doing work that you dislike or object to, but the work isn’t in line with what you want out of life. Many jobs are also filled with trifling details that are simply not fulfilling. Work also often involves jumping through hoops for a boss – a process that isn’t clear on how it helps you (or helps anyone). Adding these factors together, it’s not entirely surprising that people are unhappy with their work, even if it’s a “good” job.

If It Is So Bad, Then Why Am I Afraid to Leave?
Slim points toward status, routine, and recognition as big factors, but I think an even bigger factor is a fear of the financial unknown. Many, many people are out there living paycheck to paycheck, deeply fearing the idea that the job might go away. I know that this was my biggest roadblock against taking the leap into being a self-employed writer – I was afraid that the steady money would go away. Security was my biggest fear and it held me in place for a long time.

Detox from Corporate Life
Slim offers six steps that can help a person “detox” from corporate life – in other words, the steps a person should take to reduce and eliminate some of the mental holds that their job puts on their mind. Clear your plate of as many tasks as you can (leaving you some breathing space in your day). Start writing down and tracking your ideas. Get creative and expose yourself to new ideas.

What’s Really Involved in Moving from Employee to Entrepreneur?
This chapter outlines a step-by-step process for making that leap. It’s not a be-all end-all guide, but instead it just outlines a framework that the rest of the book fills in in detail. I think her framework might be too specific – what I’ve found is that often people try out lots of different things, something takes off, and they hop onto the rocket ship. Thus, it’s often useful to look at some of the prep as generally useful – like getting your finances in order – but some of the others are a bit more specific than might be necessary. Instead, just try to seek out your own rocket ship – and the way to do that is to follow your passions.

What Are All the Ways to Be Self-Employed?
It’s really impossible to make such a list, so what Slim does instead is to break it down into a big handful of different factors worth considering. What will you do? Why will you do it? Who will consume it? How will they pay? Who will you do it with? Those factors are very different in different self-employment and entrepreneurship positions.

How Do I Choose a Good Business Idea?
After that chapter, a person’s mind might be loaded down with ideas. How do you choose the right one? Slim argues that a person benefits from figuring out their sweet spot – the point where your talents (what you’re genetically encoded to do), your passions (what you love to do), and what’s marketable (what people will pay you to do) intersect. You can even do it by making a list for each of these three categories and figure out where they overlap. Once you start getting a vague sense of where you’re going, start doing research. What’s possible in that area?

Recruit Your Tribe
The next step to success is to surround yourself with the right people – peers who are doing similar things and mentors who have already found success. Slim addresses how to do this in detail, encouraging you largely to just go where the conversation is, join in, and listen. People are already out there talking about your area and it’s worth your while to start participating, building relationships, and growing.

Rethink Your Life: Options for Scaling Back, Downsizing, and Relocating
What? Frugality? Minimizing your stuff? That’s for losers, right? Actually, frugality is for winners. It’s much, much easier to take a challenging leap if you’ve got a healthy bank account and don’t have a pile of bills coming in every week. If you want to give self-employment a try, minimize. Save some money. Get rid of as many bills as you can. Learn how to live a little leaner. It’s really a choice: do what makes you happy all the time or have stuff that makes you happy during the hours you’re not working.

Do I Really Have to Do a Business Plan?
Many people look at a business plan as some sort of dry, formal step – a pointless document that doesn’t really help anyone and is best avoided. In truth, a business plan’s purpose is simply to guide you through the thought process of making sure all of your bases are covered. Have you thought about your customers? Have you thought about likely what-ifs? A business plan is just a way to push you to think about these vital questions. So, don’t worry about the formality of your document at the end – but think a lot about the questions involved.

Define the Spirit of Your Brand
What are you going to do to stand out from the pack? What’s different about your business, particularly in a field full of competitors? That’s a difficult question for a lot of people. You cannot find success by just copying something that’s already successful. At most, you’ll be mediocre. What did I do different to build The Simple Dollar? I decided not to be snarky or wholly fact-based, but instead to be earnest, something that wasn’t really done in a blog form too much at that point.

Test Often and Fail Fast: The Art of Prototypes and Samples
Once you have your idea in place, try it. Don’t spend lots of time making it perfect before trying it. Instead, throw it out there, share it, get some feedback, and use it to improve. That’s what I’m doing with my podcast. The first few episodes weren’t all that good, but if I hadn’t shared them anyway, the later episodes wouldn’t have improved at all. I wouldn’t have had a good idea of what was wrong.

Look Your Finances in the Eye
What about the money? It’s all about the money, in the end. You need to get a real grip on your financial state – and that means real numbers. Know what you owe. Know what your bills are. Know what you bring in now. Then plan ahead – get rid of those debts as soon as you can, minimize your bills, improve your credit rating, and build a big fat emergency fund. This is all personal finance 101, but it’s worthwhile stuff.

How to Shop for Benefits
The biggest fear when it comes to self-employment for many folks is health insurance. What will I do without employer health insurance? Slim covers options for people in the United States here, but in the end, this area changes so much that you should do your own research. I think the real solution over the long run will probably be a national health care plan – if this is easily accessible and actually decent, people will sign up in droves and take the leap, I think.

Dealing with Your Friends and Family
Many people find a lot of resistance in their lives if they suggest making a major change in their career. Why? In the end, most people resist change in their lives, and your major career change is often a change in the lives of people around you – a change they’ll resist. I was lucky when I made my change that I had a lot of supportive people around me who knew I’d dreamed of spending more time with my kids and writing for a living for a long time, but this isn’t always true of everyone. What can you do? Listen to their concerns, but realize that many of the doubts expressed are actually their own doubts, not yours. Accompany those doubts with a well-thought-out business plan that analyzes those doubts and ensures that you’ll survive them.

Line Your Ducks in a Row
For Slim, this means getting appropriate support around you. A lawyer you trust. An accountant. Possibly a virtual assistant to help with the flood of emails and contacts you’ll get. You’ll face a lot of problems, and having support around you for the less important things lets you focus on the most important things – like how to overcome the problems that are set out in front of you.

When Is It Time to Leave?
Escape from Cubicle Nation winds down by asking the big question: when is it time to make the leap? Sure, there are logistical issues – do you have the money? Do you have the connections in place? Is the business plan ready to go? Have you already started (and is it successful)? But a big part of it comes from inside as well. It’s a major leap – are you mentally ready for it?

Is Escape from Cubicle Nation Worth Reading?
If you’re working in a typical job (employed by someone else) and have ever thought of going it alone or starting a small business, Escape from Cubicle Nation is an essential read. Slim goes through the factors worth considering in great detail, outlining the things that need to be considered and the things that need to be put in place.

My only complaint – and this is a minor one – is that the topics felt a little bit out of order. This is something I’ve been struggling with while writing my own book lately – are the topics really in the best order? I even sat down and tried to figure out how I would change it, but without blowing most of the chapters to bits and reconstructing them out of pieces, I don’t know what I would change. I think the problem is that Slim tackles so many ideas in the book – but is that really a problem?

Look at your own life. If this book matches the journey you’re on, it’s a must read.

It’s official: I’m ready to get out of here. I’m tired of working here and I have a lot of people lined up to hire me for home catering and cooking. I’m sure you did a bunch of planning before you made the leap. What exactly did you plan?

I know at least one other former coworker who is contemplating a similar move into a freelancing gig, though his plans are decidedly less clear at this point.

So what exactly did I do during that transition period? I started making a list of the things I did – then, soon, I realized that there were several things I wish I had done. Before I knew it, the email had ballooned into a guide that I thought might be useful to quite a few people.

Here are fifteen things I did (or wish I had done) during the months leading up to my transition to working for myself.

1. Learn to live on less.
One of the biggest challenges of freelancing/self-employment is the uneven pay. Gone are the steady paychecks of a typical job. Gone is the idea that you’ll make roughly the same amount next month as you will this month. During 2009, I have had months that earned only 25% as much as other months – and I anticipate a single month later in the year when several projects come to fruition in which I have by far the best month of the year.

If you allow your spending to match your income, you’re not going to be able to survive during the lean months. Instead, you need to adapt yourself to a consistent lower level of spending. Start looking now for fat to trim from your life. Every expenditure you have that’s not necessary for your basic living standards should come under very careful scrutiny.

Many people balk at this, but the truth is this: your first several months as an independent worker are going to be a real shock in a lot of ways. The last thing you need making this transition more difficult is a bunch of unnecessary expenditures. If things go well, you can always add some expenses back into your life – but you may find, surprisingly, that you’re quite happy without most of them.

2. Create a budget, both personal and business.
As I’ve written before, I’m not a believer in the “one-budget-fits-all” approach. Trying to make your budget or spending match an example provided by someone else is doomed for failure because that example doesn’t match your life.

I argue that the real value provided by a budget is that it reveals, loud and clear, how you actually spend your money and it can provide some clear pointers to where you need to make changes. Prepare a budget by just keeping careful track of what you spend for a month – make a giant list of every dime you spend, then organize all of that spending into categories that make sense to you. When you have that in place, look not only at the total amount you spend (you’re going to need an income level that on average exceeds that by at least a little), but also at the various categories – are there areas that you can cut?

A similar exercise for one’s business expenses is also useful, though it can be more difficult. Seek advice on the expenses that people typically have freelancing in your area of interest and use that for a basis.

3. Build up a big emergency fund.
If you’ve followed steps one and two and made serious cuts in your spending, you’ve now got a nice surplus of money coming in each month. Don’t be tempted to spend it. Instead, sock it all away into a savings account. In fact, do it automatically – instruct your bank to automatically transfer a healthy amount each week into a savings account on your behalf.

If you’ve done your budget, you have a good idea of what your monthly expenses actually are. I recommend having at least six months worth of living expenses in your emergency fund before making the leap. This will help you survive the lean months, particularly those early on in your freelancing experience.

4. Now make it bigger.
Quite often, people go light on the emergency fund before they make the leap. They have a bit of cash saved up, but they’ve convinced themselves that they’re ready – they have plenty of clients and opportunities lined up.

Don’t make that mistake.

The big problem is that freelancers and self-employed folks – especially early on – can have a tendency to count their chickens before they hatch. No deal, no matter how good it is, is a sure thing until contracts are signed and products are delivered. You might have ten potential clients that talk big about what they want to do, but when push comes to shove, all of them could vanish – and many of them will.

Be prepared for that. Don’t leave yourself in a desperate situation if a conversation doesn’t pan out. Cover your bases – and the best way to do that is with a healthy emergency fund. Build it now, build it later, keep it nice and fat.

5. Start reaching out to your audience and client base now.
There is no better time than right now to start digging for opportunities, even if your leap is far into the future. Get out there and start seeking out the people you want to know – and the people you want to sell to.

In a nutshell, this is market research – you need to find out if there are people that will buy what you do and figure out how to connect with them. Obviously, the internet and social media (like Twitter and Facebook) are good places to start, but they’re just a start. You should also go directly to where people who might be potential clients – or potential competition – congregate.

Start finding the people now. Join messageboards. Start Twittering. Start a blog. Pound the pavement in your local community. Dig through freelancing boards and other job boards. If you’re passionate about the field you’re leaping into – and you must be if you want freelancing to work – you have plenty already to talk about. Let the passion flow.

6. Eliminate as many regular bills as you can.
Back on the money side of the coin, start whacking your regular bills, particularly any related to entertainment. Ditch Netflix – if you want to watch a movie, use Redbox or a similar service. Ditch your cable bill entirely – use a digital converter box and Hulu to get your television fix. Sell your car – if you can use public transportation or ride a bike to work, do you really need one?

For the ones you can’t eliminate, trim. Make your living quarters as energy efficient as you can, with programmable thermostats and the like. Cut your cellular plan – do you really need that much data, those minutes, or that many text messages? If you decided to keep cable or satellite, whack some premium channels you don’t watch.

The more monthly bills you can eliminate or reduce, the more room you have to breathe when you make the transition.

7. Write a business plan.
Don’t worry about being too formal when you do this. The purpose of a business plan is to make you think about all of the details of what you’re about to leap into. Have you really thought things through?

Areas to include: market analysis (is there actually a need or a market for what you’re doing), product or service development (what kind of service or product will you actually offer), marketing (how will you draw attention to what you’re doing), financial organization (the money), and risk factors (what problems might crop up and how you might handle them).

Spend some time on this. Include everything that comes to mind, and flesh out details on every point. Don’t sweat the formality – just focus on ideas. The more effort you put in here, the easier it will be to make this all work when things get rolling.

8. Now rewrite that business plan.
Quite often, most freelancers make only a minimal effort at a business plan, if they bother at all. Big mistake.

I suggest using a self-imposed deadline of sorts. Arrange to show your business plan to someone you trust on a certain date for their input. Putting that deadline in place will keep you focused on the project, as you’ll want to present something reasonable.

Then, when you deliver it, ask for feedback of all kinds – everything they can think of that might improve the plan. What you’re really asking for is advice on the work you intend to do. This is a double check to make sure you’ve thought everything through.

When you get the suggestions, use them to rewrite your plan. Then repeat, perhaps with another person who might read it and offer suggestions. A few such repetitions will go a long way towards creating a real plan that works – and making sure you’ve really thought this through.

A good business plan isn’t a boring thing to “waste” your time on. It’s a great way to make sure all of your bases are covered, and often the revision process is the most powerful part.

9. Find a mentor.
So who can you take that business plan to? A mentor, that’s who.

Seek out someone that knows what they’re talking about that isn’t a potential competitor of yours. Look for someone experienced at freelancing in a tangential field – not a direct competitor – and ask them for advice and help. Be specific in your questions and don’t take criticism personally – it’s offered with the goal of making you better, not cutting you down.

Recognize that the person is probably busy and contribute some value to the relationship yourself, by promoting their work or offering them something of value, too. For example, if you’re a nascent blogger and would like to attract a professional blogger as a mentor, spend some time simply promoting their best stuff. Write about it on your own blog and talk about their stuff on Twitter. Buy their book and write a review of it (if they have a book out there). Participate in their comments and in their other conversations online.

Actions like these are ways that you can make a mentoring relationship into a fair value exchange instead of just a “gimme gimme gimme” relationship.

I wrote a detailed guide on finding a mentor in the past that can be very useful reading.

10. Make it easy for people to see the good stuff you can do.
Create an online presence for yourself that makes it very easy for people to find your best work. Regardless of whether you’re doing online work or not, have a website with an easy-to-remember URL that contains links to examples of the best stuff you’ve created. Join social networking services (Facebook and LinkedIn) and make professional pages about yourself that clearly show off your best side.

If people hear about you, they’re going to Google you. You want to make it so that the first things they find are good, positive, impressive things – the types of things that will draw them in, not push them away. Never take the attitude that you can appear antisocial and that if they don’t like it, they can walk – that attitude will push many of your potential clients away because you’ll seem unreliable from the get-go. There is never a downside to appearing friendly and accessible.

11. Communicate, communicate, communicate.
The more you talk, the more likely people are to discover you. Share your thoughts and ideas and comments as much as you can, as widely as you can.

Start a blog. Join social media sites (Twitter and Facebook, for starters). But, most important, join in on conversations. Link to interesting people and ideas on your blog and offer your take. Follow interesting people on Twitter and respond to the things they say. Comment on interesting blogs (with a link back to your own of course) and make worthwhile comments.

Most important, stick generally in your area of expertise, but don’t be afraid to jump into topics that are at best tangentially related. The goal is to make people interested in what you’re doing, and the best way to do that is to always speak from your heart and from your mind. Be positive, put your voice out there, and good things will happen.

12. Build connections with local small business/entrepreneurship groups.
Even if your work is outside of your local community (online work, for example, or freelancing work for remote enterprises), it’s worthwhile to engage with local small businesses and entrepreneurs – after all, that’s exactly what you are. Such groups are almost always sources of good ideas and leads for areas where you might improve, and they’re also places where you can float new ideas and gauge them. Even better, leadership in such groups provides countless ways to reach out and connect to others in countless ways – conferences, meetings, and so forth.

Get involved in peer groups, both in your own physical community and in your professional community – and don’t be afraid to dive right in and participate, even before you’ve made the leap. The number of valuable connections you’ll make there will pay off time and time again.

13. Have a place where you can focus on work – and only work.
Many freelancers start off working at the desk in the corner of the living room – the same one that houses lots of personal material as well. What often happens, though, is that the personal material begins to interfere with the professional work and the lines begin to blur. You find yourself working when you should be engaged in personal activity, and doing personal things when you need to be working.

Find a location somewhere that you can devote solely to your work – no personal stuff. Ideally, it’s a place that you can isolate yourself from the things around you. For example, I have a room in our home that serves as an office. When I need to work, I go in there and close the door and I’m in “work” mode. When I leave that room, I’m no longer in “work” mode (unless I’m headed out to do some research).

Without that barrier, it would be incredibly easy for me to constantly take my eye off the ball – and if I did that, I would constantly find myself falling behind on my work.

14. Build your current bridges as strong as you can – and don’t burn them when you leave.
Many people, as they begin to transition mentally into freelancing, let their current work relationships slide, deciding that they don’t matter. Actually, quite the opposite is true – they matter more now than they did before.

Here’s why. The strong connections you have in your previous line of work will continue to serve you well after your transition. The connections may provide you with new clients and interesting angles to pursue. Plus, if freelancing doesn’t work out, you often have a strong foot in the door for returning to a position in your previous career path.

On the other hand, if you let those relationships burn out, you miss out on these opportunities – and that big safety net.

Spend your final months tying up loose ends, but make sure that the relationships you’ve built don’t fray, either.

15. Practice, practice, practice.
This is perhaps the most useful lesson of all. If you want to be a real standout in your area of expertise, keep practicing at it. Study it. Try new things, and work to get better at the things you already do. In short, practice every single day.

If you’re a writer, write (and share them, via a blog). If you’re a graphic designer, make designs and share them (via Flickr or other avenues). If you’re a musician, practice daily and share demos with the world. Doing this not only makes you better, but it shows that you’re a hard worker and helps you get a better grasp on what people like and what they don’t like.

As time goes on, you’ll get better and better at what you do – and you’ll have a long track record that shows how diligent you are at your work.

A Final Tip: Dig Into Freelancing/Self-Employment Resources and Communities
Here are five websites I visit all the time for advice and thoughts on being self-employed and accepting freelance work.

FreelanceSwitch
http://www.freelanceswitch.com/
FreelanceSwitch is my website of choice for thoughtful and insightful conversation on freelancing and self-employment issues. It’s a daily read for me.

Elance
http://www.elance.com/
Elance is a clearinghouse of freelancing opportunities of all stripes. I like to keep an eye on freelancing opportunities in several areas.

Guru.com
http://www.guru.com/
Guru is a similar clearinghouse for freelancing opportunities.

Web Worker Daily
http://webworkerdaily.com/
If you do computer-based freelancing, this site is a must-read. Again, I read this one almost daily.

Freelance Folder
http://freelancefolder.com/
Freelance Folder offers a ton of widely varied and interesting advice on freelancing topics.

Good luck!

It’s no secret to long-time readers of The Simple Dollar that I loved Keith Ferrazzi’s first book Never Eat Alone. I thought it was a brilliant discussion of how to network ethically in the modern world by building real, valuable relationships with people centered on giving of yourself to others. Even though I’m an introvert, I’ve taken many of the principles in Never Eat Alone to heart in my own real-world experiences – and online as well.

While Never Eat Alone does a great job of outlining how to build relationships with a large group of people, it’s fairly self-evident that there’s a lot of value in building particularly strong relationships with a small group of people. These are people you trust and who trust you, wise and insightful and willing to spend significant time with you because you make each other better. Mentors, advisors, friends – all of those titles apply. Most people are lucky if they find a handful of such people in their lives.

Finding and cultivating this inner circle is what Who’s Got Your Back focuses on. How do you find these core people? What traits do you have that will click well with others, and how do you find the traits that will click well with you? How do you maintain relationships with them over the very long haul?

I’m a huge believer in the power of mentors, and I’ve discussed techniques for finding a good mentor in the past. Let’s dig in and see what Ferrazzi has to say on the subject.

One: Who’s Got Your Back
Ferrazzi argues that the need for an inner circle of mentors, advisors, and friends that you trust and respect is something that almost everyone in the modern world strives for – if that wasn’t true, why would things like “life coaching” be such a huge multi-billion dollar industry? Even more disturbing, according to a 2006 study in American Sociological Review, the average person has only two confidants, and 25% of people have none at all. In a ever more complex world, confidants and advisors are more important than ever before – yet people have fewer of them.

Ferrazzi then makes the case for how valuable “lifeline” relationships are, focusing on four ways that such relationships are critical:

1. To help us identify what success truly means for us, including our long-term career plans.
2. To help us figure out the most robust plan possible to get there, through short-term goals and strategies that would tie us in knots if we tried to go it alone.
3. To help us identify what we need to stop doing to move forward in our lives. I’m referring to the things we all do that hold us back from achieving the success we deserve.
4. To have people around us committed to ensuring that we sustain change so that we can transform our lives from good to great.

I know that in my own life, my chief “lifeline” relationship is with my wife, and I constantly talk to her about the things above. It helps more than you can ever know and often guides me towards difficult decisions that I might “chicken out” on if I did them alone.

Two: The Four Mind-Sets
Ferrazzi identifies four “mindsets” – more like traits, actually – that, when cultivated, provide the foundation for building such lasting “lifeline” relationships.

Generosity You have to be willing to give sincerely of yourself without expecting a thing in return. Generosity is the foundation of trust, and trust is what makes such relationships work.

Vulnerability You have to be willing to be vulnerable. Can you move outside your safety zone? Can you accept criticism from others?

Candor You have to be willing to be totally honest with others. If something’s on your mind, you shouldn’t hold it back. It might be valuable.

Accountability You have to be willing to follow through on the promises you make to others.

These four traits are vital for building lifeline relationships – ones where you can bounce ideas freely, receive criticism, and truly grow as a person as well as in your ideas and goals. Others that you build such relationships with must have such traits as well – without them, the relationship is not going to succeed over the long haul.

Three: Building Your Dream Team
So how exactly do you build this team? Ferrazzi identifies a nine step plan for finding these people, cultivating the relationships, and maximizing their value in your life.

Step One: Articulate Your Vision This means soul searching. What do you really want in life? What are your big goals and dreams? What are your interests and passions? What do you really value? For me, my values center around my family and my writing, so if I were looking for people for my own inner circle, I’d want someone that valued family and had some insight into creative careers.

Step Two: Find Your Lifeline Relationships Look throughout your life – your work, your extracurricular activities, your personal life – and identify people who match up at least somewhat with what you want in life. Get to know that person a little and find out if they actually exhibit those valuable traits. Are they committed? Do they have some know-how – knowledge of what they’re talking about? Do you get along well with them? Are they curious by nature? If you see a lot of these factors, you’ve got someone very promising.

Step Three: Practice the Art of the Long Slow Dinner Gradually get to know a potential lifeline quite well. Have a lot of meetings with them – lunches, dinners, coffee. Talk about anything and everything. Feel them out. If it’s right, you’ll know it – if it’s not, don’t be afraid to move on and try again.

Step Four: Broaden Your Goal-Setting Strategy The first real way to get your lifeline friends involved is to talk about the goals you have – and the goals they have. Offer candid input on their goals, and invite (and accept) their candid comments on your own goals. Develop new goals together – and talk about how you can get there.

Step Five: Create Your Personal Success Wheel The “personal success wheel” is a wordy way of describing the key areas in your life that you want to succeed in. Financial success, spirituality, giving back, physical wellness, intellectual stimulation, deep relationships, and professional growth are areas that Ferrazzi mentions that are common to most people. Ask yourself what you’re doing in each of those areas – and bounce your thoughts off of those people in your lifeline. Similarly, encourage them to do the same – think of their core areas, ask themselves what they’re doing in each, and bounce their thoughts off of you.

Step Six: Learn to Fight! In other words, you have to be able to (and be willing to) diasgree with people in your inner circle. More importantly, you have to be able to debate ideas without making it personal – Ferrazzi calls this “sparring.” The key is realizing right off the bat that you’re just comparing and analyzing ideas, not attacking each other, and you can both grow from this process.

Step Seven: Diagnose your Weaknesses Introspection is a key part of all of this. You have to be able to not only figure out your weaknesses (and Ferrazzi gives a lot of tips for this), but be able to reveal and discuss those weaknesses with others, along with strategies for overcoming that weakness (or turning that weakness into a strength).

Step Eight: Commit to Improvement Steps four through seven are going to give you constant ideas on how to improve your life (and, along the way, give the others in those relationships with you tons of ideas as well). In order to actually get something out of it, though, you have to be willing to commit to improving yourself. You need to take at least some of those ideas and actually implement them, making yourself better, or else you come off as very insincere. Doing is much more valuable than talking.

Step Nine: Fake It Till You Make It – Then Make It Stick Ferrazzi’s big point here is that practice and repetition are vital. All of the steps above are ones that you should be constantly repeating. All of the ideas generated should constantly be worked on. They should just become a part of your life – and they easily can. Why? Because those “lifeline” friends will eventually become your closest friends – the foundation of your life.

Four: Make It Your Life
The final portion of Who’s Got Your Back picks up where the final point leaves off. The ideas in the book aren’t just a one time process, but elements of a successful life. Ferrazzi offers several worthwhile points to cap off those ideas – here are three.

A group of like-minded people is a great place to start. If you don’t know where to start, look for an already-existing group of like-minded people that share your interests. If you’re an entrepreneur, check out local small business associations. If you’re a parent, look for PTA meetings. Find people that share your passions and you’ll have a great group to start with.

Forming an actual group can be quite scary. Ferrazzi suggests several approaches, but the real foundation is the people. Your best bet to make a group work is to try to cultivate the relationships between people you have lifeline relationships with. If you can get, say, four people where every person has a one-on-one relationship of this kind, that group will be invaluable to all of you.

Suggestions are invaluable. If you have an out-of-the-blue idea that really fits a person you have a lifeline relationship with, write it down and treat it with the weight you would treat a great idea for yourself. If you’re doing this for each other, it’s like having two or three or four minds out there trying to come up with great ideas to push you farther.

Is Who’s Got Your Back Worth Reading?
To put it simply, I loved this book, too. The material in here applies well to virtually everyone, particularly people who are somewhat introverted who may need that extra push to build strong life relationships (I’d put myself in that group). What appeals to me, as with Never Eat Alone, is that everything is underlined with giving of yourself. Paying it forward is a strategy that has never, ever failed me in life.

This one is already on my re-read pile. I plan to let the contents of it sink in for a while, then give it another read-through in a few months.

My only criticism is similar to the criticism I had with Never Eat Alone, but it’s one that I understand. Ferrazzi has a tendency to name-drop in places. My interpretation of it is that Ferrazzi is actually much like myself – he’s an introvert who has to work on being an extrovert, and being able to drop those names makes it easier. I do a similar thing, to be quite honest – I tend to talk in big bursts when I don’t know someone well. I’ll be quiet for half an hour, then drop a two minute wall of words. It’s something that comes up as a result of my natural introversion – and it’s something I’m aware of and try to work on.

Put this on your Amazon wish list or your library list. This one’s really good.

Discover your passions and make a living from it.

It’s an idea I talk about quite often on The Simple Dollar – and it often gets pooh-poohed by people who believe strongly in work-life separation, that you should do a job that maximizes your income for your effort. My belief is that you can reach that same point and enjoy yourself along the way by following your passions.

Others argue that their passion isn’t possibly something they could earn an income from. For those, there’s Craft Inc. by Meg Mateo Ilasco.

The idea behind Craft Inc. is simple: you like making something, but you have very little understanding of how you can translate it into a business. Although the book focuses specifically on crafts (with a layout that reinforces that idea), it’s actually a great side business starter book no matter what you want to sell.

So what’s inside the covers? Let’s dig in and discover something interesting.

1 – Your Creative Mind
Many people have the spark of a great creative idea within them, but they bury it behind myths that aren’t really true. “I’m too old” is a myth. “I’m not an ‘arty’ type” is a myth. “I’m waiting for the right time” is a myth. “I need to do this full time before I start” is a myth. Don’t let myths hold you back.

The best way to get started is to simply do it. Spend some time every day practicing your craft. Keep track of interesting ideas. Find a place to work that makes you feel creative and energetic. Most of all, share your dreams with others – tell them what your wildest dreams are related to your craft.

2 – Your Business Mind
The first step in translating the craft you enjoy into a business that can make money is developing a business plan. Craft Inc. offers a great framework for doing this, identifying all of the key elements you need and discussing some in detail. More importantly, it outlines why you need to do this – more than anything, it’s a powerful way to get all of your ideas in order and make sure all of your bases are covered.

Do you need to file for trademarks? Maybe, depending on what you’re doing – and the book provides a brief guide. Do you need to file paperwork to start a company? If it’s just you and just a side business, probably not – a sole proprietorship will work at first. Where should the seed money come from? Your best bet is likely living frugal and saving up that initial investment yourself.

3 – Your Personal Style and Your Products
A boring product doesn’t sell. How can you be sure that whatever you’re making will leave a lasting and positive impression?

First, don’t try to please anyone – instead, focus on pleasing yourself. Create things that you like. Package them in a way that you like. If it’s not appealing to you, don’t do it – look for a different approach.

Attend trade shows and craft shows for ideas. That doesn’t mean you should copy the ideas you find, but having lots of input will help you figure out elements that work for you – and elements you should leave behind.

Keep a notepad with you at all times to jot down ideas and things that you observe that you like. Record those ideas as soon as they come to mind so you don’t have the chance to forget them.

Set clear goals. Figure out what exactly you’re working towards and what your next step is, then focus in on that next step. Don’t sweat the mountain before you – focus on getting the next step right.

If you need help with specific elements, ask for it. Ask people who are already doing these things (or similar things) how they handle that area. Don’t be afraid of the fact that you can’t do everything yourself.

4 – Production and Pricing Plans
Scaling up a hobby that you enjoy is tricky. Initially, you’ll try to price an item based on the work put in and raw materials invested in a single item, but often that price is too high to sell. So you have to lower it. Plus, you’ll start seeking supplies in bulk (reducing your cost per item) and rethinking everything about what you do.

The biggest step for most nascent businesses is to rethink the production of the items. You might have a great procedure down for making one quilt, for example, but there might be a much better strategy if you’re attempting to make twenty quilts.

In my own experience with The Simple Dollar and my other writing endeavors, I had to make the same transformation. It wasn’t simply enough to just write when I felt like it or to write one piece at a time. I had to organize ideas, schedule my writing, and plan ahead instead of just doing things as they came along. That change made my writing vastly more productive.

5 – Marketing and Publicity Strategies
Once you’ve got the manufacturing part in line, you have to start finding customers (and hopefully lots of them). Craft Inc. advises you to be your own publicist, especially at first. Start a website for your business (and spring for a good design and your own domain name). Start a blog and update it regularly, just writing off the cuff stuff – don’t worry about hard-selling the product.

One big key: take good photographs of your products. Try lots of things and take plenty of shots until you find ones that really make the product sparkle. The photograph of the product is often the first impression that people get – and a good first impression can often clinch the sale.

6 – Making Sales and Order Fulfillment
So, how do you actually make the sale? Craft Inc. makes the sensible recommendation that you should start in situations where others handle at least some of the mechanisms of salesmanship for you.

First, sell online. Sites like etsy are great places to start if you’re making handmade items. Another strong tactic is to try consignment – putting your items in a shop, but you retain ownership while the actual shop either gets a flat fee or a cut of each sale. The best way to get started on that is to simply start talking with appropriate shops.

The next step usually revolves around craft fairs, which is a great platform once your business is taking off. Craft fairs help you make connections with shop owners, directly sell to customers, and network with others doing similar things.

7 – Ups, Downs, and Next Steps
Craft Inc. closes with an “odds and ends” chapter, covering several topics in brief. How does one deal with knockoffs? How does one deal with burnout? When is it time to quit? How should you be reviewing your business? When is it time to expand, particularly when you need to outgrow the spare space in your home?

I was particularly intrigued by the discussion on burnout. The big key for avoiding burnout is to focus on the areas that made the hobby interesting in the first place. That may mean delegating some of the activities – quite often, burnout is a sign that you either need an employee to handle the drudgery or you need to rethink the whole business plan (change prices, find new suppliers, etc.).

Is Craft Inc. Worth Reading?
If you’ve ever had a hobby and thought about whether or not you could turn it into a business, Craft Inc. is a wonderful handbook to help you get started on that path. It offers a ton of great advice on transitioning something that’s just a hobby you’re passionate about into a side business – or even more. I’m a big believer in following this path, guiding your passions into a channel through which you can earn a living.

Having said that, I think you need to bring some significant passion in the door to make the ideas in this book work. If you don’t have a hobby you’re passionate about, Craft Inc. won’t help you get there – instead, it helps you translate a passion into a side business.

Craft Inc. is a very worthwhile read if you’re interested in following that path, even if your passion isn’t directly related to crafting. Most of the advice in this book applies well to any passion that you might want to translate into a business.

Transferrable skills are often left by the wayside in competitive college majors. In order for a computer science major to get a leg up in the post-graduation workplace, for example, it’s often preferable to jam in another programming or algorithms class than it is to insert another public speaking class. Even if the program does require classes on transferrable skills, those classes are often looked down upon as “blow off” classes – ones that have to be finished in order to get down to the real classes within the major.

I believe this is a mistake. As change in this world accelerates, people are spending less and less of their life strapped to one particular career. They have the freedom to choose other avenues – starting a new career, starting their own businesses, and so on. In that environment, transferrable skills become more and more valuable. In fact, a well-polished transferrable skill makes for brilliant resume fodder no matter what your job – communication skills and leadership experience are a plus for almost any post-college job you might apply for.

Obviously, course loads often aren’t very flexible in a college environment, so my recommendation would be for college students to seek out other sources for picking up and mastering transferrable skills – extracurricular activities, internships, and other sources. Beyond college, transferrable skills are useful for everyone to work on at any stage in one’s career

Here are six significant areas of transferrable skill well worth working on, both to improve yourself and to prepare for your future.

Leadership Can you actually lead a team? Can you herd a group of people towards a greater purpose? Are you self-motivated enough to do this? Can you set goals and actually achieve them? Can you plan large projects and push them forward?

How can I get it? Join a community or student organization and take charge of a large project. Later, run for a leadership position within that group. The best way to learn leadership skills is to learn them in the laboratory of life, and organizations provide the perfect opportunity.

Administrative skills Are you able to prioritize the tasks in front of you? Can you analyze information and then describe it in layman’s terms for others to understand? Can you interpret rules and use them effectively?

How can I get it? Get involved in the planning of as many large projects as you can. Project planning teaches you many of the administrative skills you’ll need in life. If there is a large project, volunteer to help with the planning – if there’s already a planner in place, learn everything you can from that planner.

Information management Can you actually research a topic? Can you take a pile of research and use it to answer worthwhile questions? Can you communicate those facts to others? Can you manage a budget and handle financial records? Can you use a wide variety of computer programs?

How can I get it? If there are opportunities to present anywhere around you, take them, even if you aren’t familiar with the topic. Of particular use are topic areas where you’ll have to do some research in order to get the presentation right. Another great avenue is to volunteer to be the secretary or (particularly) the treasurer for a group. Such activities will require you to carefully manage a large amount of information on behalf of a large group.

Creativity Can you come up with interesting ideas of all kinds? Are you good at coming up with marketing ideas? Are you good at formulating the next step in a process? Are you good at creating visually appealing layouts?

How can I get it? Create some websites for groups – and learn how to do it along the way. Whenever there’s an opportunity for brainstorming, get involved and throw out ideas. Creativity is something that is best learned by practice – so practice it.

Interpersonal communications Are you willing to speak in public? Can you communicate your ideas well in writing? Can you lead a conversation? When you communicate with others, do they understand your ideas?

How can I get it? Participate in conversations and meetings instead of just sitting there. Volunteer for any and all public speaking opportunities that come your way. Volunteer for difficult and arduous tasks of documentation – that’s the best way possible to practice writing to communicate information.

Personal development Can you use the experiences in your life as a source for growth and personal change? Do you have a personal moral code that you actually follow? Can you effectively and honestly evaluate the strengths and weaknesses of others (both people and things)? Can you deal with stress?

How can I get it? Don’t shy away from challenges – step up to big projects. Keep a journal and use it to explore what you really think about things, particularly the people around you.

Every moment you spend learning the above skills is a valuable moment. You’ll find yourself returning to these skills time and time again throughout your life – and they’ll provide a surprisingly strong backbone for your career and personal success.

Rich Like Them by Ryan D’Agostino follows in the tradition of The Millionaire Next Door and The Difference: it interviews a large group of millionaires in order to figure out what traits they have in common.

Rich Like Them takes this tactic and runs in a slightly different direction with it. The author, Ryan D’Agostino, identified the fifty richest zip codes in the United States and went to forty nine of them. He quite literally went door to door, knocking on the doors of people in these communities, and asking them if they’d be willing to discuss how they “made it.” Surprisingly, he got a roughly 10% success rate, even including the droves of people that weren’t home or avoided the interview.

The result of these interviews is Rich Like Them – a collection of the advice that D’Agostino collected on this journey. In fact, he codifies all of this advice into five general areas.

One: Open Your Eyes
We’re all almost drowning in opportunities. The problem is that many of us simply don’t see them. We’re either too focused on the specific little thing at hand or simply aren’t keeping our mind open when we’re “off the clock.” Every person you meet and every situation you’re in is an opportunity not only to improve yourself, but to connect to others and open the door to money-making possibilities.

What steps can you take? Build relationships with people – and, even better, try to connect those relationships to each other, because bringing people together in a useful way is one of the best things you can do. Listen to what people are actually saying and doing – and try as hard as you can to keep your own conclusions out of the mix.

Two: Luck Doesn’t Exist
Luck is mostly about preparation. If you have the ability to record great ideas and to take immediate advantage of opportunities that come your way, you’ll seem much more lucky than the guy who never writes anything down and doesn’t have a hefty savings account.

What steps can you take? Write down ideas as soon as they come to you. Have an “opportunity fund” in the bank in cash form that you can use when something great comes along. Surround yourself with people who are doing useful and interesting things.

Three: The Economics of Obsession
Find something you’re passionate about and throw yourself in head first. Become obsessed with what you’re doing. Read everything you can get your hands on. Meet everyone even remotely related to your passion. Try it all. Practice, practice, practice.

What steps can you take? Figure out what you’re truly passionate about, then when you find it, make it central to your life. Surround yourself with people and activities that reinforce that passion. Become so obsessed, in fact, that others sometimes find it almost scary.

Four: The Myth of Risk
Risk is real, but most people use risk as an excuse not to try things. Instead, you should build a safety net for yourself and take that leap sometimes. A risk that others aren’t willing to take is often the source of an incredible opportunity for someone who is passionate and is prepared.

What steps can you take? Make your own life as financially secure as you can. Dig into opportunities and figure out their real risks. Realize that if something is truly in your wheelhouse, you’re likely to face less risk than someone less impassioned.

Five: Humility
Above all, no matter what happens, be humble. Humility takes you far in life – you can mess up and you will. The way you treat others often winds up matching the way they treat you, especially at that key moment when you really need their help.

What steps can you take? Treat everyone well. Don’t complain about the behavior of others – instead, set your own example. Be humble about your accomplishments instead of bragging about them.

The Best Part: Little Points of Wisdom
The part of this book that really stuck with me was the short principles and quotes inserted throughout the book every few pages. I collected these pieces together, simply because I thought they were so incredibly worthwhile:

Don’t forget your goal – even when you’re on vacation
Where others see death, imagine life
When you hear someone say “If only I could…,” you’re hearing an opportunity
Connect the people you meet
Even when you find the sure thing, save some money for a rainy day
Once you connect the dots, follow through
Choose your purpose, and don’t let anyone tell you you’re wrong
Remember: with time comes free money
Watch your pennies, no matter how many you have
Keep your cool – it’s a big part of persevering
Don’t deviate from your planned path to get a quick gain
Perseverance doesn’t take forever
Once you find your calling, persevering is easy
Remember that you can’t do a business transaction with yourself
Prepare to get lucky
Find a driver other than money – it’s usually more lucrative than money alone
Do one thing and do it well
Obsess over whatever job you have
Take your mind off the money – you’ll earn more
Don’t plan a career – plan a life
Obsession makes you work harder
If you look forward to going to work, that’s a good sign
Discover love through immersion
Turn fear into passion
Never stop being a student
Calculate every risk – even the one you live in
Look for your window to go solo
You want autonomy? Let it motivate you
Be cocky when it counts
Don’t worry about what other people think
Reduce risk by believing in yourself
When you fail miserably, rejoice
If you hate your career, um, change it
Sometimes the biggest risk is doing nothing
Never let pride get in the way of profit
Be humble even if you’re as rich as Brooke Astor
Understand your limitations
Don’t be a slave to Plan A – it’ll prevent you from seeing plan B
Don’t be afraid to make less than your spouse
Never feel as if you’re too successful to sweat
Remember that you are not, nor will you ever be, a god or goddess

Good stuff, all around. Somewhere in there is a piece of advice that is probably a life changer for you.

Is Rich Like Them Worth Reading?
Rich Like Them is a spectacular handbook for someone who is a self-starter with an entrepreneurial bent. If you’ve got a strong desire to build your own success, the advice in this book can provide a great foundation.

If that doesn’t sound like you, Rich Like Them doesn’t have as much to offer. Unlike The Millionaire Next Door and The Difference, the focus here is strongly on entrepreneurial behaviors – taking advantage of the opportunities around you.

So, here’s the deal: if you have an entrepreneurial nature, Rich Like Them is an excellent read; if not, I highly recommend giving The Millionaire Next Door and The Difference a read.

Since then, lots of readers have written to me, asking for ideas on how to start a simple side business. What follows is a list of 50 of those ideas that I’ve collected over the last year or so. Each of these ideas is very simple to start, and most can be done as a sole proprietorship at first (meaning you don’t have to file any legal documents to get started, though you will want to do that if it starts to take off). Most of these can be done at home in your spare time in your spare space, too.

Ready? See if there are any ideas below that fit you well. If you find an idea, seek out a guide on how to get started in that area.

Antique refurbishment This is a perfect side business for people who love antiquing. Take worn-out antiques home with you, invest the time and care needed to transform those old items into something amazing, then resell them at a profit.

Auto detailing Have a meticulous eye for detail and love to get things gleaming clean? Auto detailing is probably a perfect side business for you. In essence, your job is to make cars sparkle inside and out – and many people are quite happy to pay well for this service.

Babysitting Got lots of evenings free? Like kids? Babysitting may be a great side business for you. Keep an eye on multiple children on Friday and Saturday nights and you can earn some solid income.

Bed and breakfast Have some extra space in your home? Turn that extra bedroom into a “bed and breakfast” room. This works particularly well if you have a somewhat older home or live near an area that attracts regular travelers and tourists.

Blogging If you enjoy writing, find a topic you’re passionate about and start a blog on the topic. All you need is a computer, some time, and some energy to consistently write.

Cake decorating Enjoy baking and have a bit of an artistic touch? Learn how to decorate cakes and make them for special events. One of my mother’s old friends does this and makes quite a bit of money on the side.

Candle making Candle making is a great little craft to learn. You can often easily sell the candles at local shops and also through websites like Etsy.com.

Candy making Homemade candies are easier to make than you think and quite popular. Package them in nice little boxes and sell them through a local gift shop.

Card making This is another artistic “crafty” angle you can follow. Make greeting/birthday cards from scratch using your own photographs, some blank cards, and a healthy dose of artistic flair. Again, you san sell items like these through a local gift shop or at sites like etsy.com.

Catering If you love to cook, take the “Blondie” route and start a home catering business. Catering is a business that’s perfectly designed to reward those who plan well and can often fit perfectly into weekends, lining up wonderfully opposite a normal workweek.

Childcare service Many states allow people to start up in-home daycares with minimal licensing and paperwork. If you love children and have plenty of time and space at home, this is a perfect business to get into.

Cleaning services for businesses Many businesses and civic institutions have a need for individuals who will provide cleaning services at a low cost outside of business hours. This is a great side business for those who can put in a few hours late at night or on weekends.

Collectible trading If there’s a particular type of collectible that you know a great deal about, you can often make good money as a collectible trader, utilizing tools like eBay and opportunities to find those collectibles in the community. I had some success with this myself with both trading cards and video games in the past.

Computer troubleshooting I had some success with this in the past, though I’ve largely moved away from it now. If you have a knack for fixing computers, this is a good place to start.

Consignment buyer Consignment shops and consignment auctions are often loaded with good deals if you know how to identify them – quite often, you can turn these good deals around and make a nice profit elsewhere. Get started by visiting some consignment shops and critically evaluating the prices on the items there.

Cookie making Much like candy making, homemade cookies can be a great seller. Bake the cookies, package them well, and resell them through a local gift shop. Often, you can find people in your social network who will buy batches from you for special occasions.

Dinner preparer I recently met a woman who earned quite a bit of money as a very part-time chef. Once a week, she would go to someone’s house and prepare a homemade meal for their family, then do all the dishes and cleanup work. This gives the family plenty of together time, while earning the lady some cash in the pocket. If you love to cook, this can be a great opportunity, but you may have to put a lot of work into searching for clients.

Event coordinator Events like family reunions and large parties are often full of busywork that many people simply don’t want to tackle. That can be the perfect place for you to step in and take charge of the planning and coordination.

Event DJing Are you an audiophile? If you have a great sound system and a large selection of music, you’ve already got what you need to hire yourself out as a DJ for various events and receptions. This is a great way to fill an afternoon and evening while also earning some cash in the process.

Exercise teacher Many gymnasiums will trade membership and often a bit more for a person willing and able to teach an exercise class. If you’re in good shape, this is a great opportunity to earn some extra money, plus it can often lead to additional income with one-on-one teaching opportunities.

Furniture making If you’re adept at woodworking and have just a bit of basic equipment, it’s easy to get into business making deck furniture. It only requires a few items – a saw, a drill, a sander – and some creativity and passion for working with wood.

Garage sale management One person I know holds a garage sale at their house almost every weekend during the summer. As a result, that person has a lot of regular customers who stop by almost every weekend to see what’s on sale. That person then goes to neighbors and friends and offers to sell their stuff at that yard sale for them, splitting the proceeds. People are usually happy to do this, since they don’t have to go to all of the work of running a yard sale, but still get rid of unwanted items and earn a bit of money, too.

Gardening services I’ve actually had requests from others for people willing to do this, so the demand is out there. To put it simply, some people are willing to pay others to get a vegetable or flower garden started for them in their yard so they can have access to ultra-fresh produce without all the legwork.

Handy man services Skilled at basic home repair? Let people know that they can call you for little repair jobs, like basic plumbing and other things. You’d be amazed at the simple things people are willing to pay others to help them with.

Housecleaning Many people simply don’t enjoy cleaning their homes and are willing to pay a reasonable price to have someone do the work for them. This is a great way to earn extra money in a flexible way, particularly if you have time off during the workweek.

Interior decorating Fascinated by interior design? Have a huge collection of interior design materials around? Many people are quite happy to hire individuals to help them decorate their home – I know, for one, that I have no eye for this type of thing.

Jewelry making If you have a good eye for detail work and a lot of patience, homemade jewelry can be quite profitable. As with other items on this list, there are many opportunities to sell such items through local gift shops or at sites like etsy.

Knitting / crocheting / quilting Skilled at creating blankets and sweaters? There’s a huge market for these types of items – even better, you can usually make them in your spare time whenever you have it. As always, local shops and places like etsy are great places to go to sell such items.

Landscaping services Willing to mow lawns and trim bushes and trees? Many people are quite happy to pay for such services. Not only is this a great side business for a fit adult, it’s also a great way for a teenager to get a small business started.

Meal-to-go preparations Remember my earlier post about breakfast burritos? Making meals in advance is a great way to save money for yourself – but you can often prepare these for others as well and sell them for a markup. Prepare eight casseroles, for example, then sell six of them to cover your costs, and you’ve got two free dinners for your family (and maybe a bit more). You can grow this by taking orders from others and finding out what they like.

Online media consultant Like participating on messageboards, Facebook, Twitter, and so on? Become an online media consultant and help people promote things. Start small – help local businesses get a presence on Facebook and set them up with Twitter. From there, you can grow to whatever works for you.

Personal shopping Many very busy people and elderly people are willing to pay a fee for people to do their shopping for them. Simply retrieve a shopping list from them, return with the receipt, and accept payment for the purchased items (plus a little fee). You can often do this in conjunction with your own shopping trip if you’re well-organized (take two carts!).

Pet grooming Many people loathe bathing their pets and trimming their hair – I know I do. Pet groomers perform these tasks for a small fee – a perfect job for a person who loves dogs and cats.

Pet sitting When people go on trips, they’re often concerned as to what will happen with their pets. That’s where you step in – offer yourself as a safe place to leave their pets, or be willing to go to their home to take care of their pets.

Pet walking Many busy people leave their pets home all day, but realize that those pets really could use a vigorous walk (and an opportunity to relieve themselves) during the day. Pet walking is a great opportunity for exercise, fresh air, and some pocket money if you have free time during each day.

Pet yard waste cleanup For many people in suburban areas, cleaning up pet yard waste is a real hassle – it’s disgusting, for one. Instead of cleaning it up themselves, they might hire someone to do it regularly, two to three times a week. There are several such services in our area, actually.

Produce selling Like to grow vegetables? Focus in on one vegetable and sell the excess to grocery stores and at farmers’ markets. My father does this with tomatoes and earns some solid extra money during the summer months. You can do really well, though, if you can grow things inside during the winter – February fresh tomatoes can sell quite well.

Proofreading Have strong English skills and exceptional grammar? You may have opportunities to work as a proofreader from home. Advertising for this can be difficult – seek out those who might actually be able to use your services and advertise directly to them.

Public speaking If you’re the type of person who can get the attention of a room easily, public speaking might be for you. Take advantage of every public speaking opportunity you can and you’ll be surprised at the opportunities that make themselves available for you.

Scrapbook making Many people dream of having beautiful scrapbooks. They collect all the materials they want in the scrapbooks but never follow through on the actual creation. You can step in here – take their ideas and materials and assemble a scrapbook for them.

Senior citizen assistance Many elderly people need assistance with a wide variety of simple household tasks – cleaning, laundry, and so forth. Many children of elderly people are quite willing to hire someone to help out their parents.

Sewing and alterations My wife is quite handy with a sewing machine and often hems and modifies our children’s clothes. She could easily take this a step further and offer her services to others, doing basic garment repair and modification for a small price on lazy evenings.

Soap making Making amazing homemade soaps isn’t as hard as you might think – it just takes time and patience. Again, items like these can easily be sold via local gift shops and through websites like etsy.

Teaching music If you know how to play an instrument (particularly the piano or the guitar) and have patience, you’ve got what you need to teach others how to play. Offer lessons in that instrument to others – this can also be an excellent thing to barter with, too.

Toy making From simple things like sock monkeys to more elaborate things like handcrafted chess sets, many people are willing to pay good money for handcrafted toys that you can easily make at home in your spare time. Again, gift shops are the place to go with items like these.

Tutoring Did you major in a particular topic in college? Do you have patience with children? You likely have what you need to tutor kids in particular subjects. Seek out parents and let them know that you tutor in a particular subject and provide materials for them to share and phone calls will often trickle in.

Video preparation services Many people like to have videos made for special events, such as weddings, or for gifts. This may mean actually taking the video yourself at a special event, or it may mean simply assembling materials and creating a video from those items. Either way, with a well-equipped PC, some taste, and some patience, you can make quite sophisticated video productions at home.

Virtual assistant Many ultra-busy professionals appreciate having someone who can check and answer their email, organize task lists for them, update their calendars, and so on, with minimal interaction. The best part is that you can provide this service from home with a good internet connection.

Web site design Many small businesses in your community could use a very basic web presence to tell others about their business. Quite often, these businesses don’t have a large budget for such things. That’s where you come in – get a bunch of clients from the local community by beating the pavement, create sites for them, and maintain them for a small fee. Get enough businesses and you have a nice side business of your own that doesn’t require a ton of maintenance time.

Wedding planner If you’re one of those people who can’t help but flip through bridal magazines and think about various wedding arrangements in your daydreams, wedding planning might be the perfect thing for you. A great way to get started is to develop a website on the topic, get to know people online, and offer your services throughout the community.

I’m betting the readers have many, many more ideas along these same lines.

Prior to making that leap, I worked full time in a research lab with a small, rather tight-knit group of people and I spent my spare time (when I could find it) working on The Simple Dollar. After a year and a half of essentially managing two careers, I began to realize that it was creating a great deal of wear and tear on my family and on my relationships, so I made a difficult choice – and took a leap of faith on the writing.

I did a status report at the four month mark regarding how the transition was going. Among the highlights:

The huge amount of time that I didn’t have before has opened the door to countless projects
I feel genuinely fulfilled by my work
I miss my old job – at least the socialization aspects of it
I get stir crazy and often have to leave to go do something
Time management is a completely different challenge than before
My biggest frustration is the interruptions
The new money management stresses me out sometimes

That’s actually a great description of the situation as I saw it four months after changing my career. At this point, though, different things have moved to the forefront and other things have moved to the back burner. Here are the big things I’ve noticed after a full year of working from home.

My biggest challenge is often loneliness
This might seem like a strange complaint, but it’s true: the biggest frustration I regularly face is simple loneliness. I miss the ability to simply stroll across the hall and talk to people throughout the day. I miss social interaction, in short. This was made somewhat worse by a very rough Iowa winter, coupled by the fact that I live in a rather rural area, meaning there isn’t a local place I can visit for that interaction.

What’s the solution? One of the best tactics I’ve found is actually just calling people regularly. I call my parents quite often during the afternoon, mostly to hear what they’re up to and recharge my social batteries. Not only do such calls help keep the social circle going, it enables me to get past any loneliness I may be feeling, gives me a sounding board for ideas, and also helps me keep in touch with the concerns of others.

My biggest benefit is time flexibility
The single biggest benefit of working from home is the time flexibility. I can easily address any task that I need to focus on, whether it’s personal or work-related, as it comes up, provided I’ve built up enough of a “buffer” with my work tasks. Aside from a solid three hour block of time each day that I devote to my family (5 PM to 8 PM, roughly), my weekdays are basically filled with whatever task (in any aspect of my life) seems most urgent at the moment.

There are some big caveats here, though. First, I have to maintain a work buffer – that means I usually have quite a few articles already completed and ready to go before you read them. Second, I have to have a good sense of what’s a priority and what isn’t. Both of these attributes take a great deal of time to develop and maintain in order to gain flexibility. Things don’t become flexible just because you’re self-employed – you have to be able to make the situation flexible.

Meditation and prayer have grown in importance for me
When I was at my previous job, I rarely felt like I had time for things like meditation or prayer. They seemed like good ideas, but there was always something else to do. When I switched careers, I made it a goal to get more in touch with my spiritual side – and it’s the best thing I’ve done in terms of my personal growth.

Each day, I spend a bit of time in what I would describe as a mix of meditation and prayer. Most days, I do it twice – once early in the day and once in the late afternoon. These sessions are simple – I usually just attempt to relax myself, empty my mind of cluttered thoughts (I actually jot down everything I think I’ll need to deal with later), then sit still for a long while, clearing my mind of everything. Whatever comes, comes. Doing this twice a day has done wonders in terms of my clarity of thinking in all aspects of my life.

If I ever return to a “nine to five” career, I will take this aspect of my experience with me.

It’s easy to get overly introspective
It is very easy for me to start chasing windmills. I’ll get obsessed with some little detail of some project I’m working on or on some strange idea in my head or some little aspect of my health, and it will draw all of my focus if I’m not careful.

For me, good task management helps. I’ve become devoted to the use of task management tools to keep me going with my work. Whenever I finish a task, I try to move quickly to a new one. If I find a task is becoming overwhelmingly detailed, I stop, make an effort to break it down into smaller pieces, then work on those pieces. I also make an effort to eliminate distractions, and I’ve come to pride myself on days where I stick to my “to-do” list and accomplish as many items as I can on it. Without that kind of guidance, I’d get obsessed with all kinds of wasteful things.

Finding the right balance of not taking on too much is still a challenge
Sometimes, I feel like I can accomplish far more than I’m doing. Other days, I’m hit with a gigantic case of writer’s block and I can’t seem to accomplish anything. Given that I choose what I work on and what to commit to, I can put myself in great danger if I commit to too many things – but I’m also driven enough to want to commit to plenty of projects. There’s a balance there – and it’s still a tricky one.

My solution revolves around doing as much work up front as I can. If I’m going to start a series on The Simple Dollar, I usually have the whole series framed and quite a few of the articles already written. If I’m shopping a freelance article, that article is either done or close to it. My second book is already extensively outlined and half-written, but I still haven’t signed a contract for it.

Doing things this way gives me the maximum amount of freedom to work with my own personal ebb and flow. I can work hard when things are flowing well and not be panicked if I get a big dose of writer’s block.

Careful bookkeeping is essential
When you work for an employer, keeping track of taxes and other expenses is done for you – you just collect your paycheck and do your taxes at the end of the year. Once you’re working for yourself, you have to keep careful track not only of any income, but also of any spending that you do during the year that’s related to your work.

Take the time to develop a filing system that you understand. Mine tends towards the simple – I mostly just focus on making sure I have every receipt and invoice in a constant place. I also maintain a careful calendar of all financial due dates – quarterly tax dates, for example. Without it, things would get problematic very quickly.

When the economy is good, there are a lot of ways to increase your income: hunting for a new job, asking for a raise, switching careers, starting a side business, and so on. Unfortunately, when the economy is down, many of those options are much more dangerous than before – people are afraid to rock the boat at work because of fears of layoffs and the job market is pretty tight as well.

In a down economy, I believe the best way to set yourself up for more income over the long haul is to start a strong side business. A side business started today will be ready to really thrive as the economy begins to rebound and people begin to spend their money more freely. Better yet, many good side businesses don’t have a tremendous amount of startup cost, so you don’t have to put yourself at personal finance risk right now.

You can do this. Many, many people believe that they don’t have what it takes to make such a thing succeed, especially now in terrible economic times. That’s simply not true. There are many, many ways to make extra money no matter what your skills are.

First off, at first, it’s useful to think of a side business as a hobby with benefits. Don’t worry too much about choosing the activity that will earn you a lot of money.

Instead, start off by thinking about the things you enjoy doing. For example, my mother truly loves young children – babies and toddlers. Few things make her happier than rocking an infant to sleep. Thus, for a while, she’s considered opening up a very small in-home daycare, simply because she personally enjoys the experience so much.

The Simple Dollar started off as a side business in a sense. I never anticipated it would earn very much money, but I knew that I enjoyed writing and felt I was at least moderately skilled at it. It was a great way to funnel my energies into something that could help others and might potentially earn a few dollars.

What do you truly enjoy doing? Don’t answer this immediately – it’s much more effective to start a list and keep it over a period of time. Write your ideas down now, then leave the list out somewhere where you’ll routinely bump into it.

Also, it doesn’t have to be something that others consider fun. It’s about what you enjoy doing. What things do you do that leave you feeling good after you do them?

After a week or so, take a look at all of the things you’ve written down. Somewhere on that list is the perfect side business for you. The trick is finding it.

Try brainstorming a few different ways to earn money for each of the items on the list. Let’s say, for example, that you wrote down “prep sports” as an interest. Perhaps you could become a referee. Perhaps you could start a blog discussing prep sports in your state. Make a list of all of these ideas – two or three or four for each thing you enjoy.

What you’ll find is that some of the ideas sound unappealing and others sound merely okay. What you’re looking for, though, is the one or two items on the list that fill you with excitement. You’re getting close.

If you have a small handful of ideas, whittle them down by eliminating ones that would require a large initial investment and also eliminate the ones that seem like they might wear on you with a large investment of your time and energy.

What you’re left with is something with potential. It’s something that can fill your spare time with something you enjoy. It’s something that can earn you some extra money on a regular basis.

So now what? You have your idea. Now get started. Let the idea fill up your spare time – devote at least an hour or two to it each evening. Don’t necessarily seek income right off the bat – instead, figure out what you’re actually doing by learning from others who are doing similar things (the internet is a fantastic resource for this).

More importantly, try, try, and try again. Don’t just sit there attempting to formulate the perfect idea. Instead, give your pretty good idea a shot. If you fail, great – learn from it and try again. Try as often as you can.

I’m reminded of a great story I read a while back, originally told by Alison Woods:

The ceramics teacher announced on opening day that he was dividing the class into two groups. All those on the left side of the studio, he said, would be graded solely on the quantity of work they produced, all those on the right solely on its quality.

His procedure was simple: on the final day of class he would bring in his bathroom scales and weigh the work of the “quantity” group: fifty pound of pots rated an “A”, forty pounds a “B”, and so on. Those being graded on “quality”, however, needed to produce only one pot – albeit a perfect one – to get an “A”.

Well, came grading time and a curious fact emerged: the works of highest quality were all produced by the group being graded for quantity. It seems that while the “quantity” group was busily churning out piles of work – and learning from their mistakes – the “quality” group had sat theorizing about perfection, and in the end had little more to show for their efforts than grandiose theories and a pile of dead clay.

Go out there and try something. You’ll probably fail, but learn something from it. Get back up and try again.

Don’t spend hours and hours sweating over making a blog post perfect. Write something, edit it a bit so that the big ideas are clear, then share it.

Don’t worry about being the perfect referee. Learn the rules and procedures of the game, then go out there and try it.

Don’t worry about knowing how to handle every computer repair task. Master the basics and be able to back it up with good documentation, then get started.

Most important, don’t worry about maximizing your profit. Instead, focus on enjoying what you’re doing and building a positive reputation as you learn and improve. Eventually, you’ll reach a point where you’re in demand because you’re both skilled and you have a positive reputation – and then you’ll be able to earn quite a lot.

Good luck.

1. Numbers run a business. If you don’t know how to read them, you are flying blind.
2. A sale isn’t a sale until you collect.
3. When your short-term liabilities exceed your short-term assets, you are bankrupt.
4. Forget about shortcuts. Run a business as if it’s forever.
5. Cash is hard to get and easy to spend. Make it before you spend it.
6. You have no friends in business, only associates.
7. Don’t focus on the top line. Gross margin is the most important number on the income statement.
8. Identify your true competitors, and treat them with respect.
9. Culture drives a company. In the long run, the boss’s most important job is to define and enforce it.
10. The life plan has to come before the business plan.

Excellent advice for entrepreneurs, all around, but what really stood out for me from these ten points is how most of these tactics really help out in our day to day lives, too. Let’s look at several of them.

If you don’t know how to read numbers, you’re flying blind.
In order to succeed with personal finance, one needs to have at least a minimal ability to work with numbers – to add and subtract in a logical fashion and a basic understanding of how interest rates work. Without that, you truly are flying blind – it’s impossible to know whether or not you can really afford purchases or not. If you’re trying to get your financial life turned around but you’re quite afraid of numbers, ask for help – one should never be ashamed of asking for assistance when trying to improve oneself.

Money isn’t money until you have it.
This is a solid, simple rule to live by – don’t spend money you don’t have yet. The easiest way to do this is to simply avoid credit cards, or to only use them if you have enough cash in your checking account to immediately pay off the full balance. Doing this ensures that you’ll not run up a big debt tab that will be difficult to pay off.

Don’t focus on the top line. Gross margin is the most important number on the income statement.
What’s “gross margin”? It simply means spend less than you earn – it’s the difference between how much you bring in and how much you spend. The bigger the difference between what you spend and what you earn, the better shape you’ll be in over the long term. That means it pays to both be frugal and push yourself to earn more – one or the other alone isn’t enough to achieve strong, lasting financial success and security.

Culture drives a company.
What does this mean for you? Surround yourself with friends and people who all practice a healthy financial lifestyle. Friends who socialize by shopping don’t help. Friends who constantly try to one-up each other with the biggest, best, and latest gadgets don’t help. Friends who encourage each other to improve and do better? They help. Friends who constantly help each other out with tasks? They help.

Forget about shortcuts.
Putting yourself in a healthy long-term solution for financial success is never easy. It’s going to take work and diligence. One month of scrimping isn’t going to make all the debt go away. Instead, you need a long-term plan for turning things around. Take things one step at a time, retain the tactics that work, and ditch the ones that don’t. Be persistent, and don’t give into frivolous temptations.

The tactics for success in business, in the end, aren’t that different than the tactics for success in everyday life. Spend less than you earn, do it consistently, and surround yourself with support for that lifestyle, and you’ll do well.

I’m a high school senior. Over the last two years, I’ve built a very successful lawn care business in my neighborhood that filled up my entire summer this year. I will make about $35K this year and I can make a lot more once I graduate. My grades are good and I got good scores on the ACT and SAT. I applied to a few colleges and got accepted to all of them, but I only applied because my mom pushed me. What I really want to do is build my lawn care business after I graduate. My dad sort of agrees with me but my mom demands that I go to college. What do you think I should do?

This is one of those situations where you’re going to have loud, strong proponents on both sides of the decision. Some people believe ardently in the value of a college education – others see the value in a strong entrepreneurial opportunity.

Let’s look at each case.

Build That Business!
Successful businesses require a mix of drive, talent, and luck. Andy already has all three.

Drive Andy wanted to build his own business and had the drive and desire to actually get up off the couch and do it. While his friends were busy with their X-Box 360s, Andy was building a $35K business – that takes initiative.

Luck In order to make $35K from a part time lawn care business, Andy must have stumbled upon a niche and filled it well. That’s a business opportunity that doesn’t come along all that often.

Talent Every day, as a small business owner, you’re called upon to make difficult choices. It takes raw talent to consistently make the right ones and build business. Andy’s obviously got that talent.

Andy has the natural drive to start his own business, the luck to stumble upon a niche that needed filling, and the talent to grow that business into something impressive. That’s a combination of factors that doesn’t come along that often, and Andy needs to take advantage of the situation.

Go To School!
I speak from experience here: college is a life-transforming experience. It is truly an opportunity for you to figure out your beliefs, learn new things, have countless compelling experiences that are almost impossible to replicate outside of college, and get an education in an area you’re compassionate about. Not only that, it comes at a point where your mind is most open to such diverse experiences – early adulthood.

Andy shouldn’t let that opportunity pass him by. He can always return and get an education later on, but the full growing experience won’t be as open to him.

He has the seed of a small business in place, sure, but he can keep that business going during the summer while attending school, plus he can use the business income to pay for his degree.

Plus, if Andy chooses to major in business, he might find yourself walking out of school with a brilliant plan for transforming your the mowing business into something truly amazing. College doesn’t have to mean giving up that dream.

My Thoughts
I think the real answer resides within Andy himself. Andy, are you truly happy mowing cemetery lawns, fixing lawnmowers, handling invoices, and so on? Do you have a desire to keep pushing the pedal to the floor, growing the business, eventually hiring employees and advertising to build a bigger and bigger client list?

Either these thoughts will excite you or they will fill you with unease. Be truly honest with yourself. This is one of the biggest professional choices you’ll probably ever make.

If you can’t imagine anything better than building this business you’ve started, then go for it. Throw all your gusto into that business and make it grow. Along the way, save most of what you earn – put it away so you can walk away from the business at a fairly young age. If you’ve built the business into something large and successful and sell the whole thing at age thirty, you can go to college then if you want to.

On the other hand, if growing the business doesn’t excite you and you just want to mow lawns, go to school. You can still spend your summers (and lazy weekends in the spring and fall) mowing lawns and maintaining your business as it is. You can use that income to pay for your education and when you graduate, you’ll still have your small side business to do with what you wish, plus a paid-for college degree.

You already know the answer, Andy. It’s inside of you. Ask yourself that honest question: is building this business the thing you really dream about? Let your answer guide you.

One final point of advice: if you do decide to go with the business, save your money. Spend as little as possible and sock the rest in the bank for later. If you decide in two years that you want to go to college instead, it’ll be quite easy if you’ve been banking your cash.

I think those comments are true – for them. At the same time, I don’t think it’s true for all people – or even for most people.

We’ve all heard the talk about how 75% of small businesses fail without ever turning a profit. What sets aside the other 25%? I argue that the big difference is the drive to succeed as an individual.

In order to stand out from the crowd and be individually successful at any endeavor, you have to stand out. When you’re an entrepreneur, that means you’ve invested a ton of your own energy in creating a product and promoting it to the point where you can sustain yourself (and hopefully others) with the profit from that effort while at the same time competing with large, efficient enterprises likely doing a similar thing.

No matter what else you bring to the table, success in that arena takes a certain kind of drive. You have to be passionate about creating your product and you have to be passionate about promoting it, too. Or, you have to be deeply passionate about one side of the coin and have a partner that feels similarly passionate about the other side. You have to be driven to make it work, devoting much of your life to transforming an idea into success.

To put it simply, some people don’t have that same drive. That’s not to say they’re somehow inferior – it just simply means that they are passionate and driven by different things. Perhaps their passion is their family, and work is just something they do to support that passion. Their passion might be social work and they’re driven towards helping others.

The entrepreneurial drive is a wonderful personal asset to have and I encourage everyone to see if they have it within themselves. Applied correctly, it can be the source of incredible financial and personal security.

But not everyone has that drive. Some like to believe that they have it – and those are among the 75% that fail.

Do you have a strong desire to run your own business? For some people, the question is such an automatic “yes” that they can scarcely believe that anyone would say anything else. But it’s not an automatic answer for most of us, and many people know that the answer for themselves is “no.”

People who answer “no” to that question find success in different contexts. Perhaps their skills are best met in a technical field. Or, perhaps they’re better suited for a socially oriented career. It’s far more important to know what you’re passionate about and what your skills are than to try to chase something you know you don’t truly want.

There’s another part of that pro-entrepreneur argument that’s off base: the idea that the only way you can really get ahead is through entrepreneurship, not working as an employee. That’s simply false.

It doesn’t matter whether you work for yourself or work for an employer, you can always get ahead by spending less than you earn. Save that difference and, when you begin to build up a fair amount, start investing it. That money will provide security through all the bumps in your life. Even better, if you do it strongly enough, you’ll eventually be free of the day-to-day demands of your job or your business – you’ll be independent and able to do whatever you want.

Entrepreneurship works for some people, and it teaches so many valuable lessons that everyone should consider whether they have the entrepreneurial drive. However, if you find your passion and drive leads you in another direction, you have a huge opportunity for success in that direction on your own terms. Use your own definition of success – raising great kids, helping a lot of people, building a following for your blog – and don’t let others define them for you, no matter what you do.

Writing about kids and money is a fairly sticky topic. I’ve read several books on the topic and only bothered to review a few on here. The best one I had read so far, David Owen’s First National Bank of Dad, was really entertaining and offered some thought-provoking material, but in David’s own anecdotes, he didn’t practice what he preached, leaving me wondering what the point was.

For the most part, those books quibbled over issues like whether or not to give your child an allowance, how to convince your child to save, and how to introduce various money topics, such as credit cards. Troy Dunn, the author of Young Bucks, takes a different tactic. His focus is entrepreneurship for kids – how can you show your kids how to work for their own money in a fairly safe environment and also see the clear rewards of their effort?

Dunn is a self-made millionaire and the father of seven children, so he has extensive experience in both the entrepreneurship and parenting arenas. Do these combine to make a thought-provoking book of parenting advice about personal finance, or does it fall flat like many others?

One – Millionaire Mentality
Dunn argues right off the bat that there are three harmful myths that parents tend to share with their children that subtly guide them away from entrepreneurship and successful money management. First, a college education is the key to business success, which is something I’ve become less and less convinced of myself as of late. Second, a job with a good corporation will secure your child’s financial future. I don’t agree with that one, either – all it takes is a memory of Enron to show how fleeting even the biggest corporations can be. Third, children shouldn’t have to worry about money when they’re young, as there’s plenty of time to focus on finances when they’re adults. I think there’s a general sense that this third one is a myth, at least among people who think about their finances carefully. So many of us who are in debt trouble today came into that situation because of a lack of experience with money in our childhood.

Two – Mentor Magic
Dunn argues that you should be a business mentor to your children, encouraging them to think creatively about the things that they can accomplish with their time, their work effort, and their ingenuity. Have you ever told your kids to enjoy their childhood because when they grow up, they’ll have to work? That paints an extremely negative view of work, one that’s going to rub off on your kids. Instead of thinking of it as a fun challenge that they throw their passion into, they instead dread it. Change that by encouraging their creativity, offering only suggestions to channel it a bit, not stifle it. Even more importantly, Dunn encourages no allowances at all and no splurging, either. While that seems really harsh to some, his point is that an allowance encourages your children not to work and plan for what they want. Instead, you should encourage them to be little entrepreneurs, earning that money.

Three – The Millionaire March
What are your child’s natural talents and traits? What adjectives do you use when you think about your kid? Almost all of those, from stubborn to outgoing, are elements that point a child towards something productive they could be doing with their time. Dunn suggests simply taking those traits and coming up with an idea for a small business that the child could run. What fits their natural tendencies? The key, though, isn’t to push your great idea for them on them, but hold onto it and slowly push them towards developing it themselves.

Four – Business Building Blocks
So you have this great idea for how your kids could make money for themselves, but have you thought through it clearly? Dunn spends this chapter outlining some of the key things you should be thinking about well in advance of your kids so you’re prepared for it, from safety and seed money to legal requirements and logistics. Dunn also suggests starting as young as possible, assigning your youngest children (five and under) simple tasks and paying them immediately for them. We’ve already started doing this a bit with our two year old, believe it or not – he earned fifty cents for picking green beans the other day (seriously, yes, a two year old picked enough green beans for a family supper and earned fifty cents for his work). When they’re between the ages of six and ten, you should start them on very simple businesses – like, for example, collecting aluminum cans in the neighborhood. He suggests trying things at this age because they’re still happy for attention and deeply enjoy spending time with you. After that, it gets trickier – you’ll have to convince pre-teens that things are possible.

Five – The First Meeting
So, how do you get started? Dunn suggests waiting until there’s something that they want that they can’t afford, giving them incentive. Then, suggest the idea of starting their own little business with questions, not by offering commands that seem like more work. “Why don’t you try earning the money?” Allow them to be creative, then just guide that creativity with some more questions, and eventually transition that into coming up with a business plan with them. Just let them lead – ask questions that makes them think about all of the things you’ve already considered. That way, when the idea comes to fruition, they’ll feel as though they built it.

Six – Business Begins
Once the ball is rolling, you’ll have to guide your child through many of the logical steps of a basic business. What exactly are you going to provide? What is a sensible price? How will you market it? What are the startup costs, and how will those be handled and repaid? As a parent, you should consider these things and offer your child good suggestions that will help them out. Show them the prices of comparable items. Show them how other businesses advertise – what makes an effective poster? Let them decide, but be there to help them along and help them avoid any obvious pitfalls.

Seven, Eight, and Nine – Big-Buck Businesses
Here, three chapters are devoted to ideas for microbusinesses for your children to take up. In all, twenty eight businesses are suggested over the three chapters, with a detailed description, the startup costs, needed materials, potential income, and suggested marketing strategy for each one. While reading these, many others came to mind – this is really just a starting point to get your (and your child’s) creative juices going.

Ten – Business Pitfalls
Obviously, such a business is not going to be all roses and cherries. One big problem that children face at the lemonade stand is people who play hardball – they “power negotiate” or they simply don’t pay up for the service provided by the child. Don’t let your child get disillusioned – talk to them about it seriously. Help them to develop a healthy sense of skepticism (but not paranoia or mistrust). Eventually, they’ll be able to apply that skepticism successfully in other aspects of life.

Eleven – Sweet Returns on Passive Revenue
Your child is earning money and building up a nice little amount. What should they do with it? At first, obviously, they’ll probably purchase the item they’ve been talking about, but after that, it’s a good idea to encourage them to do something wise with it. Perhaps they can hire an assistant, paying that assistant some portion of the proceeds to help with the business. They might also want to reinvest it, buying a better lawn mower or more supplies. They may also want to invest it in something more than just a savings account. Again, talk with your child about these decisions and make sure they choose one that makes sense.

Some Thoughts on Young Bucks
I think you have to be entrepreneurially minded to encourage your kids to be entrepreneurially minded. Most of this advice works best if you’re an entrepreneur (or at least self-employed) with kids, because most of the thought process here will already be natural to you.

The “no allowance” thing is interesting. I think the idea is strong, though, as long as the child has the opportunity to earn direct rewards for extra work. Dunn points towards this with young children in the fourth chapter.

I think this is much more like the direction that I’d like to encourage my children to go than some other books I’ve read. I’d like my children to see the basics of personal finance management as young as possible, see the connection between work and money, and see the value of saving and budgeting as early as they can and repeat it for as long as possible.

Is Young Bucks Worth Reading?
If you have kids, I think Young Bucks is well worth reading. The idea of encouraging your children to follow an entrepreneurial path is worth serious consideration. I know in my family it’s one that we’re pondering over as we watch our young ones slowly progress from being babies to being toddlers, then on to being young children. How will we teach them how to spend and use money wisely?

Given that, I don’t think Dunn’s overarching ideas about child entrepreneurship are necessarily something every parent will agree with. Young Bucks is, in some ways, a perspective book – it’s a how-to for encouraging your child to be an entrepreneur. But do you want your child to be an entrepreneur? That’s a question you really have to answer for yourself, and this book just provides one side to that argument.

From my perspective, though, Young Bucks was a very enjoyable and thought provoking book to read. It goes up right next to First National Bank of Dad as the best reading I’ve come across for thoughts and interesting reading on how to financially educate your children, and it tackles the topic in a much different fashion. Well worth reading if you’re a parent of young children.

When I look at my life, it becomes quite clear to me that if I ever wanted to start a small business (and, no, I don’t quite consider my solo writing gig to be a small business, although big swaths of this book do apply to my wife and I), I would need the blessing of and a lot of support from my wife. She really is the cornerstone of so much of my life – without her working hand in hand with me, I would never be able to get any significant project off the ground.

Honey, I Want to Start My Own Business has the same perspective: a successful small business owner that’s married already has a business partner. Only by working in concert with your spouse can you really hope to achieve great success in business, whether it’s through direct support (i.e., your spouse is helping you with the business) or indirect support (your spouse is understanding of the challenges and helps you find the space you need to get things done).

Let’s see what insights Azriela Jaffe has to offer us in this book.

1. Exploring Self-Employment Alternatives: Considering Family Issues
Two big things stood out at me in this first chapter.

First, in a completely unusual move for a book on this topic, there were three pages of additional suggested resources on the topic of exploring your self-employment options. This book didn’t profess to have the answers on finding the right small business for you – it sticks right with the target area, which is how that small business will relate to your relationship with your partner.

The bigger one, though, was a list of fifty questions to consider if you’re looking into self employment. Before I quit my desk job and started The Simple Dollar, I really believed I had considered every angle of the decision, but this list of fifty questions spurred dozens of discussions with my wife. A sampling:

38. How does this business option mesh with your partner’s work and livelihood? Is it synergistic, harmonious, and complementary? How will it conflict?
42. How will this business option improve, solidify, or sustain your relationship?
43. How could this business option jeopardize or deteriorate your relationship?
48. Do you hope to pass the business along to your children?

These (and many others) were all issues I hadn’t really considered before, and they were well worth considering.

2. Combining Marriage and Entrepreneurship: Three Models of Joining Together on the Entrepreneurial Journey
This chapter discusses three potential different models for a entrepreneurial household: full partnership (where both partners are involved in the business), dual entrepreneurship (where both partners are involved in separate businesses), and a supportive spouse (where only one partner is involved in the business). Each type is given about fifteen pages of coverage, outlining the specific considerations for that type of relationship.

Obviously, the third one (a supportive spouse) applies best to my situation, and most of the description there is pretty apt. My wife and I find a lot of creative ways to be flexible around each other’s needs, and that’s really the key to being a supportive spouse.

3. Financial and Family Planning: Planning Ahead to Avoid Disaster
Here, Jaffe offers ten guidelines for financial and family planning:

1. Acknowledge the existence of risk.
2. Identify your risk personality and that of your partner’s.
3. Clarify how much you and your spouse are willing to risk materially to be self-employed.
4. Form mutual agreement about material risk.
5. Hope for the best, but plan for the worst-case scenario.
6. Establish guidelines for money management and decision making.
7. Allow the differences between how you and your partner handle money to work to your advantage.
8. Discuss money issues at a time and place that will be productive.
9. Define your boundaries for personal sacrifice.
10. Plan for the details of entrepreneurial family life.

These ten guidelines make a great deal of sense and deserve some careful attention during the early stages of any self-employment or entrepreneurial initiative. Each one is given a few pages’ worth of individual attention in the chapter.

4. The Joys and Challenges of Working at Home: How Working at Home Can Work – and When It Can’t
This portion of the book felt the most familiar to me in my current situation. It was a real and honest assessment of the good elements and the bad elements of working from home, not just a whitewashed projection of how things should be or ought to be.

For example, in my own situation, the flexibility that working at home has given to me has been tremendously enjoyable, but that flexibility has a powerful flip side – it also means that interruptions become much easier. This chapter actually projects such a phenomenon, as well as the interesting challenges of working at home with little kids who don’t understand (and shouldn’t be expected to understand) the need for “work time” and for “play time.”

5. Communication Skills: Understanding Your Partner and Getting Your Point Across
At this point, the book somewhat switches gears and begins to focus on basic relationship issues. Why? Jaffe makes the case that entrepreneurship works best in the context of a strong relationship and that having the tools to make your relationship successful will make it much easier for you to make your entrepreneurship successful.

Jaffe starts off with the idea that communication is fundamental, something I strongly agree with in any relationship. My favorite insight? “Imagine that your partner is an animal from another kingdom. He or she may be nurtured, sustained, and excited by very different experiences than you are.” For example, after some significant time learning and observing, I discovered my wife truly loves very gentle back rubs over the full length of her back – they can actually put her to sleep. So about once or twice a week, she falls asleep to this. It’s a simple thing that takes very little effort from me, but it makes a world’s worth of difference to her. If you can find some things you can do like this for your partner, it’ll make a huge difference in your relationship.

6. Win/Win Conflict Resolution: Resolving Conflict at Work and at Home
What about the inevitable conflicts? Jaffe again offers some strong advice, starting with the suggestion that you figure out how to resolve the conflict within yourself before addressing your partner with it. If you can figure out a healthy solution on your own, you eliminate the need for direct conflict.

If you do feel the need for conflict, figure out what you actually want to communicate and what you hope to get out of the conflict before you go in, and make both of those very clear right off the bat. Be realistic in both, however; your partner has needs and wants, too. The less clear you are about your reasons for being upset and your desired solutions, the less likely it is that you’ll get the resolution that you want.

7. Keeping the Romance Alive: Creative Ways to Protect and Nurture the Intimacy of Your Relationship
Set aside time. That’s the real key. When both members of a relationship have very full lives, it’s often hard to find time to focus on your relationship.

For my wife and I, the way we’ve found to make it work is to simply spend an hour or two together before bed, just talking about things, doing simple household chores, or reading right next to each other. For example, this evening we’re going to spend the hour or two before bed preparing appetizers for a party this weekend, talking and just enjoying each other before we go to sleep.

8. This Isn’t What I Bargained For: Coping with Hard Times and Coming Out Stronger
The book closes with a brief look at crises and some suggestions for fixing them. My suggestions largely match up with hers, but really boil down to having two things at all times, no matter what you’re doing. You should have an emergency fund with several months’ worth of living expenses, and you should have a backup plan for what to do if your current endeavor completely falls apart. I’m very thankful that we have both.

Some Thoughts on Honey, I Want to Start My Own Business
This was a very thought-provoking book for us. Here are a few of them.

After reading this, I don’t feel like I adequately thought through all of the ramifications of my career shift. There were so many aspects of the choice to become self-employed that I didn’t really give enough thought to, and that made me feel both a bit guilty and quite energized to talk through the decision again with my wife. I feel like it really was the right decision in the end, though.

My wife really makes this site possible, in so many ways. It’s easy to forget how much she supports my day-to-day life when I’m writing and working feverishly in the office with the door closed by myself. When I open the door, she’s there, though – her smiling face, creativity, and wonderful deeds make this all work.

I wonder how many couples don’t think about these things at all when making a major leap. I thought we had handled it in great depth, but there were many areas we didn’t even really talk about at all. In a less communicative couple, I can see one person just making the leap largely without the spouse on board, and that just seems like a recipe for disaster.

Is Honey, I Want to Start My Own Business Worth Reading?
If you’re in a long term committed relationship and you’re either considering self-employment or a small business or are already involved in such a situation, read this book with your partner and, more importantly, talk about it with your partner.

Honey, I Want to Start My Own Business has started more conversations with my wife than any other personal finance or business book I’ve ever read (except for possibly the venerable Your Money or Your Life). On almost every page, there was something that came up that I jotted down to discuss with my wife later, and we spent several hours in the car recently mostly talking about how my writing endeavors intersect with our home life, almost entirely fueled by concepts from this book.

This one is a hidden gem. It’s not one that’s on every bookstore’s shelf, but if you can get a copy of it and you’re in that audience, it’s a very rewarding read.

I like Michael Masterson’s books. In the past, I’ve given high marks to three of his works: Automatic Wealth, Automatic Wealth for Grads, and Ready, Fire, Aim.

Because of my enjoyment of his other books, I decided to look past the wariness I felt about the title of this, Seven Years to Seven Figures. The title gives me a big “get rich quick” vibe, and that’s a type of book that I actively choose to stay away from. I decided to give this one a shot, solely because of my faith in the author.

Is this just a boring, generic, bogus “get rich quick” book? Or does Masterson actually offer some compelling advice in this area? Let’s dig in and find out!

A Look at Seven Years to Seven Figures

The meat of this book (the middle eight chapters) focus on a series of specific cases where individuals managed to build seven figure wealth in seven years or less. In other words, this is a “teach by example” book. Some people thrive on these, others don’t.

Another thing to note is that most of these stories revolve around entrepreneurship, often entrepreneurship that is seeded at their current job. For most people who have the drive to do something big but don’t know where to start, this type of story is perfect.

One: What the Heck Do I Know?
Masterson opens the book with his own story, relating how he started at an editorial position in a newsletter-writing business and leveraged his work into a bigger salary and eventually a stake in the business itself. In other words, he knows what he’s talking about. The portion I found most impressive, however, is that he recognizes that nothing would have happened had he not made a deep and serious commitment to making it work. He was basically a person with too many dreams – he wanted to write, he wanted to explore, and he wanted to do many, many other interesting things. The problem was that he didn’t have the freedom to follow those dreams, so he committed to doing what he needed to do to make them come true – and that was to build enough savings in the bank that he could make choices about his life without regards to the income consequences.

Two: Are You Ready for Wealth?
Masterson is blunt here: if you want to actually do this, the only way to do it is by making an absolute commitment to making it happen, then diving into entrepreneurial activities and saving it. That means spending less than you earn in both senses of the word – work hard to earn more, but don’t spend to match it. Instead, invest that difference. Masterson says go hardcore – if you really want to make this work, you need to not only be busting your butt to maximize your income, but you need to be saving 50% of what you make.

I like this attitude. If you want your dreams to happen, you have to work for them. Period. Sitting around dreaming about being rich isn’t going to cut the mustard.

Three: Audrey Maxwell
Audrey started out as a copywriter who spent money as fast as she made it, even leading to a negative net worth at one point. She turned this around by doing three things: she turned her reputation as a quality hard working copywriter into the foundation of a business, figured out the sweet spot of pricing that business, and started saving that money to build personal equity (starting by buying a house in a good neighborhood). The real lesson learned? If you know you don’t have the skills to make your own business work, know what skills you do have and find people that can complement that in a business.

Four: Alan Silver
Alan’s story is really all about “chicken entrepreneurship” – in other words, he kept his day job while making something else work. This is more or less what I did with my writing – I wrote in the evenings and the early mornings while still maintaining my day job. While this does provide financial security while making entrepreneurship work, it’s hard – very hard, especially if you have a family. Masterson encourages people who try this to seek help – find a mentor who can provide advice and guide you.

Five: Bruce Buffer
Yes, the brother of boxing announcer Michael Buffer. Basically, Bruce figured out how to really effectively market his brother and got on board with the business end of Michael’s career. What’s the lesson here? Pay attention to what’s going on around you and look for opportunities that are just waiting to happen. Basically, Michael was very good at being a ring announcer and fairly good at promoting himself, but didn’t have the foresight into building it into something bigger and sustainable. That’s where Bruce stepped in, building his brother’s announcing talent into a larger business (and dabbling in ring announcing himself with UFC).

Six: Justin Ford
Justin was basically very confident of his skills as a copywriter, but he had no money – he had recently declared bankruptcy. So, while maintaining his day-to-day copywriting job, he also took on some copywriting opportunities where he didn’t get paid. Instead, he would just receive some percentage of the income that the company earned from the ad. Since this was essentially free advertising, several large organizations agreed, and Justin put his skills to work on some very successful direct marketing campaigns, earning a percentage of the income from those campaigns. He took that extra money and, instead of spending it, invested it in real estate, buying land wherever he could find a bargain deal.

Seven: Ken Morris
Ken liked antiques and building furniture. He made the observation that there was a lot of cheap, old wood to be had in his area, so he took to building “imitation” antiques from this old wood, giving newly-built furniture an antique look. He sold these items at far below the price of equivalent antiques to people who were interested in having the antique look, but weren’t worried about the authenticity and didn’t want to pay the price. As his business took off, he eventually moved into making the furniture for others to sell, and then moved on to training others to do it. Once that happened, he had a significant amount of cash in the bank and was able to move on to new endeavors – such as becoming a homebuilder. What’s the story here? Ken did what he was passionate about – building antique-looking furniture – and he found the right market to sell such items (the southern Atlantic coast). In other words, he knew what he was passionate about, so he invested the time and effort to find when and where that passion would sell.

Eight: Monica Day
Monica desperately wanted to become a copywriter, so in between jobs, she basically decided to spend six months making it happen or failing. Instead of using that period of downtime between jobs to hunt for a new one, she threw herself into correspondence courses on copywriting and taking on as many spec jobs as she could in her spare time. Once she began to get some nibbles, she hunted for mentors and basically by sheer force of will pulled herself towards success. The valuable lesson here is to just go for it. Don’t wait around for the “perfect” opportunity because it won’t come. Instead, put forth your own consistent and honest effort and see where it will lead you. Effort and passion make all the difference in the world.

Nine: David Keller
David was a doctor who believed that alternative medicine was a valuable route for many people to look at for their personal health. So, he basically leveraged his positive reputation as a medical doctor (and the connections he had) to start an alternative medicine consultation business. In other words, he took his pre-existing reputation and his own beliefs and theories and passion and packaged it all together. He started a newsletter to share his views and began consulting with companies he believed in in the natural health business, writing articles and other materials for them in order to help promote their products. Eventually, this new direction earned him substantially more money than his old medical practice. What’s the lesson to be learned? It’s good to be an expert in a field, much better than being just another person in a much larger field. Keller rode his passion and general medicine expertise into being a leader in the alternative medicine niche – and did very financially well for himself in the process.

Ten: Brad Solomon
Brad was an accountant with a knack for communicating ideas with people, and he was bored in his accounting job. Eventually, he built a friendship with another fellow who was involved in a customer relations business, and he had taken on more jobs than he cold chew. Brad thought it interesting, and decided to give it a shot, as this successful person agreed to mentor him and Brad was ready to try a new challenge. This mentor recognized Brad’s skill set and built a bond with him, eventually teaching Brad how to build his own strong public relations business. The lesson here? Don’t let a great mentor slip by. If someone’s interested in you, is very successful themselves, and is willing to be a mentor for you, that’s an incredible opportunity.

Eleven: The Baby Boomer Challenge
The book begins to wind down here with a very simple argument that baby boomers – and thus anyone under that age – should focus seriously on building their own wealth following the advice on this book, because the social structures available for retirement aren’t reliable. Don’t count on Social Security, Medicare, or pensions to save you – do it yourself or it might not happen at all.

Twelve: Lessons from Life: What I’ve Learned about Building Wealth Quickly
You really only need three things to make this all work: a plan of action, the time to make that plan work, and the willpower needed to actually do the work. Many people have one or two of these things – you have to put forth a lot to be able to do all three. I agree with this conclusion – it’s basically the thread that ties all of these stories together.

A Few Thoughts on Seven Years to Seven Figures

“Chicken entrepreneurship” is a slick idea that everyone should try. A side business, particularly one without a significant additional investment from you, is one of the best things you can do with your time. You can build new skills, new relationships, and earn more money, plus it’s a brilliant way to use your spare time.

Masterson tends to focus on the areas that he knows. In some ways, that’s good – he’s obviously in the know about the areas he focuses on. In other ways, it makes for a book with hints of repetitiveness. For example, Masterson made his first chunk of change in copywriting, so unsurprisingly he focuses on several people that also used copyrighting to leverage themselves well.

This isn’t really a “get rich quick” kind of book. It’s about people starting legitimate businesses that took off and sharing what they know. There is no “plan” here that will put cash immediately in your pocket. I was quite worried about a “get rich quick” scheme when I started, but there is no get rich quick scheme – it’s really about hard work and finding mentors.

Entrepreneurship doesn’t work if you’re not frugal. If you’re just blowing everything you earn, it doesn’t matter how good of an entrepreneur you are, eventually everything will collapse. Masterson definitely understands this and preaches it throughout – when you’re making good money, you should be investing a lot of that money.

Is Seven Years to Seven Figures Worth Reading?

If the idea of “chicken entrepreneurship” appeals to you at all, Seven Years to Seven Figures is a worthwhile read. I felt a lot of kinship with a few of these people, particularly Alan Silver, who took a dream of writing, dabbled in it on the side, and eventually built it into something that was sustainable.

Masterson doesn’t sell entrepreneurship as some sort of easy route, though – it requires a lot of work and isn’t a path to yachts and Cristal. If you’re looking for a book to paint you a happy picture of entrepreneurship, this probably isn’t it. Instead, it’s realistic – if you put in your heart and soul, Masterson has a lot of good pointers that can make the difference between utter failure and some degree of success.

In the end, though, Seven Years to Seven Figures and books like it come down to you. You have to be willing to suck it up and make a significant commitment yourself or else they’re simply not worth reading. It’s a potentially lucrative (and liberating) path, but it’s only that way if you’re willing to commit.

One topic that doesn’t get nearly enough coverage on The Simple Dollar (or on other blogs as well) is entrepreneurship – the transformation of an idea and a passion into a full-fledged business. It can be a splendid way to make money, either as an individual or as a larger enterprise, but it comes with a lot of risk.

Because I’m now effectively self-employed, I’m becoming more interested in entrepreneurship as a topic, and so I’ve decided to start absorbing some books on the topic. I decided to start with this one, Ready, Fire, Aim, because I’ve read two other books (Automatic Wealth and Automatic Wealth for Grads) by Michael Masterson and found them both to be compelling reads.

This book is a relatively large volume, weighing in at just under 400 pages, and it covers each stage of the development of a business from an individual idea or passion into a large organization. Quite honestly, my interest is centered around the early stages – the place where people try to make side businesses work and eventually build that into self-employment or a very small business with just an employee or two. While the resulting path is worth looking at, my primary interest – both personally and as a personal finance blogger – is in those nascent steps.

Does this book have enough compelling meat on the bone to make it a worthwhile read? Or is it just overblown common sense fluff? Let’s take a look.

Digging Into Ready, Fire, Aim

As I mentioned above, the book is broken down into pieces that describe the growth of an idea into a side business, then into a small business, then into a large one. Masterson handles this progression chronologically, starting with the idea.

Part One – Being All That You Can Be

Introduction – The Very Best Job in the World
Masterson defines the best job in the world in very clear terms on page six: “I work when I want, where I want, and with whom I want, doing only what I want to do.” That’s why entrepreneurship is such a strong carrot to so many people – it really is a great job … if you can get there. That’s a mighty big if, however, and it’s a climb that many people fail to accomplish because they don’t put all of the pieces together. The purpose of Masterson’s book is to lay out most of the potential traps people fall into along the way and provide some advice on how to chart a path around them.

Ch. 1 – Getting to the Next Level
Masterson’s main idea for the book is that there are four levels in building a business. For me, the first level is the most fascinating – he calls it infancy, and it mostly revolves around making the first cost-effective sale, and the big challenge is that you really have no idea what you’re doing. I strongly identify with that feeling – I’ve felt that way about most of the endeavors I’ve been involved with. The other stages are business growth stages: childhood (developing more products quickly and becoming profitable – in other words, replicating the success that pushed you out of the first stage), adolescence (turning the chaotic growth into an orderly system – in other words, taking that replication process and making it orderly and refined so that it’s easier to do), and adulthood (continuing the growth and encouraging the business to run itself).

Ch. 2 – Why Employee Size Matters: A Different Way of Measuring the Four Stages
Another way to look at the growth of your business is in terms of the employee count, though this one has much blurrier lines. He uses the idea that you can only effectively delegate to and communicate with seven people at once, so he identifies the first stage as being you and up to seven employees, the second stage as being eight to forty nine employees (in other words, a maximum of two layers of delegation between you and any employee), the third stage as being between fifty and three hundred forty three employees (in other words, a maximum of three layers of delegation between you and any employee), and the fourth stage being anything larger than that. This also makes quite a bit of sense, in a sad way, because the more layers there are, the bigger your organization is, but the less control you have over it – it begins to run itself.

Ch. 3 – Becoming a Five-Star Business Genius
Masterson argues that to start a business and keep it going, a person must have five key skills: the ability to come up with new ideas, the ability to sell products, the ability to manage systems, the ability to develop superstar employees, and the ability to take action. Different skills matter at different levels of growth – early on, for example, the idea and the salesmanship are the central skills, while later on the ability to manage systems and develop quality employees is the difference maker.

Part Two – Stage One: Infancy

This is the area where most of my interest is, as I’m self-employed – effectively, a business with one employee.

Ch. 4 – The Supremacy of Selling
Without sales, it is very hard to sustain an ongoing business. This is the principal concept behind this chapter, and he’s right – if you can’t sell anything, you’re not going to make it. It’s true for any method a person might try to use to earn money. Take writing, for example. If I’m not able to sell pieces of writing to publications, I don’t earn anything. If I can’t “sell” what I’m writing for The Simple Dollar, readers will go away (in other words, if I start writing garbage, you’ll stop reading). It’s true for almost every business I can conceive of, from running a restaurant to repairing computers – if you can’t sell it, then it probably won’t function as a business.

Ch. 5 – Your Optimum Selling Strategy and the Four Fundamental Secrets of Selling Your First Product
Masterson argues here that there are four big questions you need to ask yourself to determine the optimum selling strategy for your business:

1. Where are you going to find your customers?
2. What product will you sell them first?
3. How much will you charge for it?
4. How will you convince them to buy it?

Obviously, different businesses have different strategies for answering these questions. For writers (like me), the goal really is to find an audience that’s willing to read what you write – the infamous “1,000 true fans” concept. In other words, the success of creative types is often entirely based on their audience. I truly have you guys to thank for making The Simple Dollar possible – thank you, truly, from the bottom of my heart. (Along the same lines, I’m genuinely not impressed by artists and entertainers and educators who take their fan base for granted or actively work to alienate them.) The chapter goes on from there to discuss pricing strategies and other basics of how to make the sale of a product work – solid information for the beginning entrepreneur, all around.

Ch. 6 – Mastering the Copy Side of Selling
In order to sell something, you have to be able to describe it and pitch it in such a way that others will be intrigued enough to spend their money on the product. Masterson offers some solid advice here (focus on benefits instead of features, make the product seem like it fills a need and not a want, and make it better than – or at least seem better than the competition), but I found this chapter to be a mere faint echo of the truly excellent Ogilvy on Advertising, which I glowingly reviewed a while back. If you’re trying to sell something (which basically means if you’re trying to start a small business), read the Ogilvy book.

Ch. 7 – Secondary – Yet Important – Priorities for Stage One Businesses
There are really three tips in this chapter, all of which are useful in areas of life outside of a business. The first, have a mentor, means to find someone experienced in your area of interest and ask them routinely for advice and suggestions, so that you can learn from their world lessons. The second, be a mentor, means to pass on what you’ve learned to others who might follow in your footsteps. The last, set clearly defined goals, merely gives you a goal to reach for as you yearn to grow what you have.

Ch. 8 – The Problems, Challenges, and Opportunities Faced by the Stage One Entrepreneurship
This chapter largely reiterates the key points of the previous chapters in the section: go cheap on everything but directly selling the product, get a mentor or two and learn from them, and don’t overprice your product right off the bat (because right now you need sales and loyal customers). Solid material, but just several pages of reiterated filler.

Part Three – Stage Two: Childhood

There may perhaps be a point in the future where I’m able to develop a business that grows to this point, but as of yet, I’m not there. Still, it’s interesting to know what lies ahead.

Ch. 9 – From $1 Million to $10 Million and Beyond
The second stage occurs when you’ve figured out how to successfully sell one product. Now that you’ve achieved that one successful product, the time has come to start brainstorming and either add more products to the mix or significantly improve (and thus diversify) the existing product. Not only that, the strategy you came up with to sell the original product will eventually stop working, so you need to be ready to tweak your selling strategy and perhaps even devise a new one. That’s a lot of effort – why do it? With a stage one business, you’ll probably make enough money each year to match a good salaried position, but your business likely doesn’t have much equity in it yet – not much value for the long haul. Stage two is about building that equity value that will add up over the long haul – making your business actually worth something significant to others.

Ch. 10 – Innovation – the Key to Second Stage Growth
The key to stage two growth is innovation, period. You need ideas to develop new products and update old ones. What can you do that’s interesting, useful, and sellable? Stage two growth is all about the creativity, and that means you’ll likely benefit from getting some highly creative types involved with your business at this point. In fact, I actually know one business that has an individual whose chief job is to just come up with potential ideas and do the first level of massaging them. He basically pitches a new idea every week – most of them are failures, but a few are being grown into products as I type this.

Ch. 11 – Speed: Putting Ready, Fire, Aim into Your Business
The growth of your business in this stage is directly related to the speed of your ideas. The quicker you can come up with good ideas that can be developed into products you can sell, the faster your business will grow. Masterson’s big suggesting is testing the product – if it seems like a solid idea, make a simple version of it (or a small number of complete versions) and let your trusted customers test it and tell you what’s wrong. They’re loyal and will give you good feedback, which will allow you to fix any problems and improve the product for final release. So, let’s say you’re a writer of a personal finance blog, and you’re thinking of writing on a different topic (say, cooking). The best way to launch that cooking blog would be to mention it to the readers of your already-existing personal finance blog and let them help you hone the exact direction it should go in, making it much higher in quality.

Ch. 12 – Getting Ready
This is the ready portion of the title of the book, and it basically entails just getting a product up and ready to be launched as quickly as possible. Don’t worry about finding potential customers or anything like that, just get a new quality product ready to go and get it out there. Your initial sales of the product will come from your existing customers anyway, who don’t need a strong marketing push in order to be interested. The key isn’t developing some great marketing plan at this stage – the key is getting the product done and ready to go.

Ch. 13 – What Are You Waiting For? Start Firing Already!
Again, if you haven’t gotten the memo yet, get it done and get it out there. Don’t worry about developing the marketing initially. The key is speed – don’t worry about perfection and don’t let the little tasks bog you down. The absolute focus is getting the product itself ready to go and out the door, not with periphery issues.

Ch. 14 – Aiming the Product
Once the product is out the door, however, then you can worry about sharpening the product. Pay careful attention as to who likes the new product and see if you can identify any patterns in that. See if you can eliminate specific aspects of a product – like ingredients in a food product – to reduce cost without reducing quality. For example, one of my closest friends claims that his “secret barbecue” sauce went down from having originally eleven ingredients to currently having four (and I don’t know what they are). See if you can improve the little details, too – sharpen the packaging and the presentation.

Ch. 15 – Aiming the Marketing, Part 1: A Quick Crash Course
My favorite quote from the entire book comes from this section:

Despite your success at creating a million dollars’ worth of revenues so far, you may be harboring bad feelings about the selling process. You may still harbor negative ideas about the ethical validity of business. You may also be afraid of selling.

Don’t worry. These are the thoughts and feelings that anyone who has been educated in the United States is likely to have. Having them simply means you’re smart and sensitive.

Most of this chapter is devoted to the idea of whether or not marketing is needed at all, and if it is, what parts are ethical and which ones aren’t. For the most part, Masterson seems to encourage people to make up their own minds about things and not cross any personal ethical boundaries, almost implying that companies that do cross boundaries that you’re uncomfortable with might be companies you don’t want to buy products from. His advice: treat the customers the way you would like to be treated. That’s an ethical standard I wish all companies lived by.

Ch. 16 – Aiming the Marketing, Part 2: Understanding the Buying Frenzy
If you read nothing else in this book, read this chapter. If you’re at the library and browsing for books, grab Ready, Fire, Aim and just flip to this chapter, no matter whether you’re interested in being an entrepreneur or not. Over about thirty pages, Masterson provides the best description of consumerism and the ethics of the seller that I’ve ever read. Is it ethical for a person to sell a luxury item, and if it is, what’s an ethical way to market that item? Masterson’s argument is basically that a seller has only responsibility to the product. In other words, a seller should only be concerned about selling a quality product that does exactly what is promised, not in the financial situation of the customer. The customer should have the wisdom to decide whether they actually can reasonably afford the item. I agree with this perspective in a bubble, but I start to have a harder time with it when advertising and marketing intentionally manipulate people’s self-image and feelings, causing them to associate positive feelings with a product that aren’t based in reality. That makes me uncomfortable, and as a consumer and a writer about consumer issues, it’s something I write about a lot and try to combat effectively. Does that make the seller unethical? I generally don’t think the salespeople on the floor (unless they’re using cheesy high-pressure tactics – and those are doomed to failure over the long haul) are unethical – I usually blame the large-scale marketers who carefully plot how ads can tweak people’s emotions. Whew! Good stuff here.

Ch. 17 – Ready, Fire, Aim in Action
Here, Masterson just gives some specific examples of the whole “ready, fire, aim” idea in action, showing how businesses execute the entire plan from having one successful product to having another one. Masterson picks some compelling success stories that really show how this can work in vastly different genres (side businesses that grow up, producing an album, and making a movie, for starters), but it’s missing what I always like to see from examples – how people work through problems in the process.

Ch. 18 – The Problems, Challenges, and Opportunities Faced by the Stage Two Entrepreneur
As with the previous section, this is just a summary of the key points from the second stage of business growth. The key point here really is that ideas are paramount and ethics are starting to become important, too. In effect, this is a Cliff’s Notes for the whole section, so if you just want to grab this at the library and get the high points, go to these chapters.

Part Four – Stage Three: Adolescence

Similar to the previous section, this is a “look ahead” at some of the things to think about when it comes to the long term.

Ch. 19 – Making the Stage Three Transformation
The third stage is really all about structure. The second stage was about rapidly developing products and getting them out the door, but if multiple products become successful, then you have a major enterprise on your hands without a whole lot of structure around it. Your focus as an entrepreneur when your business begins to have multiple layers of leadership and more going on than you can keep track of is to build a reasonable structure to contain all of this growth. In effect, you have a locomotive flying down the tracks and not enough rails to run on – you need to get those rails laid, pronto.

Ch. 20 – Changing into a Corporate Leader
The surest sign that you’ve reached the adolescent stage of growth is that there’s simply too much information being thrown around for you to keep track of it all. You either can’t get the access to all of the data you want (meaning the data tubes are clogged) or the sheer volume of data is overflowing everything. At this point, you can no longer have your hands on every tiny decision at the company and that means it’s time to transition from being an entrepreneur to being a corporate leader. It’s your job not to make every quibbling decision, but to make sure that decisions can be appropriately made by the appropriate people. There are countless business books on how to do this, advocating all sorts of things – the key is to take the time and implement things that work for you. Another key is to remember that marketing is still your main job, but now you’re marketing to different people – potential great employees, investors, and often broad swaths of consumers at once.

Ch. 21 – Filling Your Stage Three Business with Stars and Superstars
Of course, doing that means hiring quality people that you trust – many business books refer to these people as “stars” and “superstars.” How do you get these people into your organization? Give them almost infinite upside – the better they do, the better off they are, almost without limit. Barriers and job descriptions aren’t important with people of this caliber – you just need to point them in a general direction and let them loose to show what they can do, and you can usually quickly tell if they’re up to it or not (if they’re constantly foundering, they might not be what you need). When you find these people, mentor them and cultivate them. Talk to the top people in your organization all the time, share your ideas, and listen to what they have to say and where they think you should go.

Ch. 22 – Bottlenecks, Bureaucracy, and Politics
Every organization begins to deal with these issues eventually, and Masterson offers one central cure. Make your company’s central mantra about the customers, period. Nothing else matters but the customers. If a situation arises that’s slowing things down or creating a distraction, ask everyone involved how this helps the customer. Have people prioritize their work based around that principle. Usually, that means letting other people do their thing – if someone sends out a memo specifying the exact formatting of a company memo, this should be shot down immediately. How does it help the customer? It doesn’t. When someone plays political gamesmanship to get ahead, ask the people involved directly how they’re helping the customer. They’re not. Cut through the nonsense by focusing on what really matters: the people you’re serving.

Ch. 23 – The Problems, Challenges, and Opportunities Faced by the Stage Three Entrepreneur
Again, this chapter provides a concise summary of the materials that came before: let go, build the necessary structures, hire good people that you can trust and let them do their thing, and focus entirely on making customers happy. Everything else just follows from those tactics.

Part Five – Stage Four: Adulthood

The closing section seems tacked on a bit, as it addresses huge businesses that are likely addressed much better by books for large businesses, like Built to Last.

Ch. 24 – The Last Big Change
If you’ve managed to get a lot of good people on board, developed some sensible flows of information, and the company’s products are still growing and you’re still adding new people, you have a real winner on your hands. Unfortunately, it also means that you’ll have to step back even further – the company is now out of your hands and effectively running itself. The best you can do now is guide it – find strong, ethical leaders that can keep pushing things forward and keep asking the right questions. It’s also the point where you’ve got a huge asset that you’ve built up – your business is worth a ton. What do you do with it? Take it public? Sell the company? Keep running things and eventually pass the business off to your handpicked successors? I know what I’d do.

Ch. 25 – Acting as Your Company’s Main Investor
In essence, your role now is that of an investor in the company. You’re likely the largest shareholder in the company – and perhaps the only shareholder. Your focus should be on building long term value for that share. Make choices that keep the business growing, but keep it ethical and healthy so that it will stay vibrant for a long time. In some ways, it’s still about the same things it was when you started: a reflection of what you consider ethical and right, and built on the backbone of your ideas. Keep that in mind – and make sure the people who will run your company in the future believe in the same things. That way, your investment will continue to pay dividends for a very long time – in both the literal and figurative sense.

Some Thoughts on Ready, Fire, Aim

I was left with several thoughts while reading Ready, Fire, Aim. Here are a few of the more interesting ones.

Ideas are simply the key to everything. If you are creative and can consistently generate workable ideas, you’ll always find success at something in life. This book basically boils down businesses to a series of creative endeavors, particularly in the early stages – how do I create one product, how do I sell that product, how do I create more products, how do I sell those products. I’d go so far as to say that creativity is the most powerful skill a person can have in the modern era.

I understand now why some people actively choose to “keep it small.” Many of the problems faced by businesses as they grow are ones that don’t interest me very much. Developing a corporate culture? Yawn. Developing procedures for others to follow? I’d rather not. I think if I ever grew something to that size, I’d sell it and go do something else with my life (likely volunteer work, because at that point I wouldn’t need to earn any income).

The key to making the stuff in this book work is drive. If all of this seems exciting to you and you can’t wait to try out some of these things, then you’re probably ready to be an entrepreneur. But that’s not everybody – if this stuff sounded as boring as can be, you’re probably cut out for a different path in life. You’ve got to have the drive to make all this stuff work – without it, things will fail.

Is Ready, Fire, Aim Worth Reading?

This is a solid introduction to the things a person needs to think about while growing a business. It made me think carefully about many of the choices I’m making as a self-employed writer and consider the choices I may be making in the future if I choose to develop some of the other possibilities I have floating on the back burner.

My biggest complaint about the book is that it almost feels like too much was jammed into this one book. Because of that, the portion I was most interested in – the infant stage – felt really compressed, even in a large book like this one. For me (and for many readers), a book focused in on the specific growth stage that we’re involved with as entrepreneurs would be quite insightful and useful – I’d happily read Masterson’s book on the infant stages of a business.

On the other hand, seeing the concepts that a large business has to deal with versus the concerns of a small business was insightful. There are a lot of things you can focus on when you’re making a nascent business work, but if you follow the “generic business book” advice, you’ll quite likely follow the wrong ones for what a small business needs.

Masterson makes that distinction quite well, and because of that, this book is a very solid read for anyone interested in entrepreneurship, from baby steps to building something big.

In reality, this is actually a move towards being an entrepreneur, and I wasn’t surprised at all to find out that the biggest entrepreneurial inspiration in my life was one of the people most in favor of the move once I laid out all of my plans.

A sidebar: Is being a writer being an entrepreneur? Definitely. The modern era, especially with the advent of the internet, is changing the role of writer quite a bit. The internet gives writers a platform upon which to sink or swim themselves, based on their own merits. When I publish on The Simple Dollar, I’m using a platform I built myself, not just submitting a written piece to a publisher somewhere. This platform required me to have a lot of skills: technical skills, marketing skills, and so on.

Those skills, combined with a lot of passion and a lot of readers who support what I’m doing (and without that support, this wouldn’t work), have made it possible for me to swim, and also made it possible for me to open all sorts of interesting doors: writing a book, for starters, and several other very interesting things that hopefully will be coming down the pike soon. Even writing a book alone is much like any other form of entrepreneurship: I create a proposal, shop it around to publishing houses, and try to fish out a book deal.

So who is this entrepreneurial inspiration who gave me the thumbs-up to make the leap and actually gave me the inspiration to even think about it as a possibility?

I call him Dad.

My father was a born entrepreneur. He worked at a (somewhat) steady job for thirty five years, but that was just his regular income. He devoted much of his free time to other pursuits that earned money: small-scale commercial fishing, small-scale commercial gardening (growing what we needed, plus quite a bit more), welding, and other tasks that earned him a fairly steady side income through thick and thin.

When I was young, he was often laid off from his job – the company he worked for had serious economic problems in the 1980s and would often temporarily lay off large chunks of their work force. We persevered, mostly thanks to my father’s entrepreneurial bent. As soon as he was laid off, he’d throw himself heavily into the fishing and the gardening, employing me and my brothers as helpers in the activities. Thanks to my father, I know how to grow a garden, I can run a trot line, and I know how to hunt for deer and trap wild game.

These were activities that were self-directed, that led to us having the things we needed to survive as a family. But it went beyond that, too.

If a friend needed a helping hand or some food on their table, my father would make sure they had it. He’d stop in, see them, and leave behind what they needed. We never talked about it, but I saw him do it many, many times, and it left a lasting impression on me.

He would also take the time to befriend everyone he met, from the president of the local bank to the ragged jobless guy living in a shack down by the river. He knew them both by name and treated them both as friends. When the time came and he needed help, the guy at the bank would lend him money, no questions asked, and the guy down by the river would help him run trot lines, no questions asked. He spent his entire life building friendships and equity in other people, and that has paid off many times over.

In short, all of the elements I needed to know to be an entrepreneur, I learned from him. Do it yourself, because no one will do it for you. Follow something you’re passionate about, because that will make the work into play. Invest love and care into the people around you, because that care will pay dividends for the rest of your life. The more income streams you have available to you, the more likely you are to easily weather any storm.

I didn’t have all the things I wanted growing up, but I had most of the things that mattered: a loving home and a set of parents who genuinely cared for me and wanted me to succeed in life. When I look back on my childhood now, I realize that most of the tools I needed in life came from there.

Entrepreneurship isn’t about starting and building a giant corporation. It’s about the freedom to choose what you want to do – and when you’ve found it, chasing it yourself and building it into whatever you want it to be. My dream is the freedom to write whatever I want and earn enough from that endeavor to give my children a wonderful childhood and to grow old gracefully with my wonderful wife. Entrepreneurship means I’ll figure out the plans to make that happen, and my own father is my inspiration for doing just that.

About a year ago, I began to really look at The Simple Dollar as the beginnings of a small business – likely one that would only ever have one employee (me), but a business nonetheless. I proceeded to dive into a big handful of recommended business books, but most of them made no impact at all on me – they either didn’t apply to me or were filled with platitudes so generic that they didn’t matter.

Then a reader of The Simple Dollar sent me his copy of Built to Last with a little inscription inside: “This book will change the way you think about The Simple Dollar and any goals you have with it. Good luck.”

I was really intrigued by this, and even more intrigued when I opened the book to the introduction and read the following:

We’ve come to understand since publication that, ultimately, this is not a business book, but a book about building enduring, great human institutions of any type. People in a wide range of noncorporate situations report that they’ve found the concepts valuable – from for-cause organizations like the American Cancer Society to school districts, colleges, universities, churches, teams, governments, and even families and individuals.

What’s so compelling here? Built to Last, in a nutshell, tries to extract the reason for success behind some of the greatest corporate success stories in American history. What do companies like 3M, Boeing, Sony, and Hewlett-Packard have in common, and what made them rise above the pack and keep enduring?

The idea that this subject could extract principles that apply to any organization, from Exxon-Mobil down to an individual person running a small, self-employed business, and that this book is so highly respected in the business community says that there might be something compelling for all of us between the covers. For instance, I read it for ideas on how to make The Simple Dollar a long-term thing. Let’s dig in together and see what there is to learn.

A Deeper Look At Built to Last

The Best of the Best
The book opens by seeking to identify visionary companies – best of breed companies within their respective areas that have endured over time. Some companies peak and then fall off (like, uh, Enron) and others stay around for a long time but never stay on top of any area (like Colgate, for instance). The book winds up identifying a list of eighteen companies – Citicorp, Procter and Gamble, Philip Morris, American Express, Johnson and Johnson, Merck, General Electric, Nordstrom, 3M Ford, IBM, Boeing, Walt Disney, Marriott, Motorola, Hewlett-Packard, Sony, and Wal-Mart – that have persisted at or near the top of their respective areas for a long time, surviving leadership changes and drastic changes in the marketplace. While I can think of a few companies that could be added to this list (Microsoft immediately comes to mind), I do have to say that all of the companies here did reinvent themselves and manage to stay relevant for a very long time (even if a few are having troubles right at the moment).

Clock Building, Not Time Telling
When you look at that list of companies, what do they make? You’ll probably come up with a long list of answers, but they all made one thing in common: an organization that could survive any personnel change, product change, or market change. Great ideas and great leaders might have helped in some cases, but neither one of those is absolutely necessary. What mattered was defining a process that worked regardless of the product, the idea, or the personnel.

Let’s translate this to blogging, something I’m interested in. You could compare The Simple Dollar to a completely different blog – say, amalah (an excellent parenting blog). We write about completely different topics and have almost no audience overlap, yet we’ve both found success in our respective areas – personal finance blogs and parenting blogs. What do we have in common that has value? We both write in a conversational tone. We both write very regularly, so that our readers can expect posts on a consistent basis. We both write on material that matters to our audience – we don’t write sidebar posts about our cat getting sick that are completely disconnected from the topic at hand. We’re both working on ways to make our message more permanent, through downloadables and book deals. It’s reasonable to think that these are elements of success that build a continually successful blog – and I’d bet that a lot of people would agree with that.

More Than Profits
Another interesting piece of the pie is that these companies all have goals in mind that don’t mention profits. Their mission doesn’t directly involve making money – money just comes in as a result of successfully completing the mission. They use a compelling example with Merck, who gave away millions of doses of Mectizan in the third world, a drug that cures “river blindness.” It brought them no profits at all – in fact, it was by itself a giant net loss. They did the same exact thing in Japan after World War II – they sold streptomycin there at cost because the Japanese couldn’t afford expensive medicine. What happened after that in Japan? Merck became the dominant American pharmaceutical company there because they didn’t just talk the talk about healing the world, they walked it, too.

I’ve taken this lesson to heart recently. What is the mission of The Simple Dollar? It’s to talk frankly about financial issues and help people to get back on track financially, regardless of where they came from. If I make money in the process of doing that, that’s great – it’s wonderful to receive some compensation for my time. But the mission of the site is to help people financially. That’s why I made some difficult choices recently, particularly in getting rid of most of the ads. I am violating my own mission by having payday loan ads or other ads that encourage poor financial decision making on the site, and while I’ve come to the viewpoint that such a stand is a bit extreme, it’s where my heart lies. In the long run, I firmly believe that following my mission above all else will pay off – I’ll reach more people than ever before. And that, my friends, is how I define success.

Preserve the Core/Stimulate Progress
A successful company usually has three or four core principles – outside of those principles, the company should be willing to change anything. Companies get into trouble when they start holding onto ideas and “rules” that are less important and refusing to change when the market changes. Built to Last uses IBM as an example here, showing their three core principles (give full consideration to the individual employee, spend a lot of time making customers happy, and go the last mile to do things right), the success IBM had when they followed them (up until the mid-1980s or so), and the failures after they started adhering to secondary principles, like corporate culture and such.

What are The Simple Dollar’s core principles? I sat down and thought about this for a while, and I came up with three. Simplify and humanize personal finance and growth is pretty much the core principle of the site, and these relate to my other two principles: never recommend a principle that I wouldn’t follow myself and be open and honest, even in failure. Everything I write or do related to The Simple Dollar comes from these three principles.

Big Hairy Audacious Goals
Here, Built to Last uses Boeing as the primary example, talking about how time and time again the company bet its entire future on what they saw as the next evolutionary step in the airplane. The challenge, though, is to make sure that these big goals are in line with your core principles – it wouldn’t make sense, for example, for Ford in 1909 to revolutionize the railroad industry.

What’s a big goal for The Simple Dollar? A book deal? 100,000 subscribers? My biggest goal, actually, would be to be able to have enough passive income to focus on spreading this message full time – the other items are just pieces of the puzzle to get there.

Cult-Like Cultures
Another element of long-term success is that people in the organization believe in the principles in the organization. This is how often companies with great success bring in new management that doesn’t believe in the company’s principles – and then proceed to derail everything. Think of Bob Nardelli at Home Depot, for example – he came into a company with some core principles, basically chucked them out the door, and installed a version of what worked at GE. A lot of the Home Depot folks didn’t like that much at all, and it created a long period of internal strife there.

In other words, everybody involved needs to believe in the same principles. When that fails to happen, then the organization begins to waste a lot of effort working against itself instead of working towards those goals. From my perspective, this is even greater encouragement to throw out the things that don’t work.

Try a Lot of Stuff and Keep What Works
Continuing this same thread, Built to Last also encourages trying a lot of different things, seeing which ones work, and sticking with the ones that do work. Thus, most successful organizations (like 3M) encourage people to spend a percentage of their time simply trying out new things instead of doing the same old same old. A lot of innovative companies do the same – Google comes immediately to mind.

I do the same thing with The Simple Dollar. I constantly try out new topic areas to see how they fit, try new writing styles, and take contrarian views. Some of these things work – some of them don’t. But each time, I learn something new about myself and about people reading this site, and that makes the site better and more useful for everyone.

Home-Grown Management
The book also encourages companies to look for management from within, something I strongly agree with. Almost every large company that brings in a new management team from the outside – particularly from another industry – winds up with some significant problems. For example, Jack Welch came from within GE and Lee Iacocca (at Chrysler) came from Ford and both saw great success, but Bob Nardelli came from GE to Home Depot and it was a big mistake.

I truly hope to find a mentor for The Simple Dollar someday. I would like to transition the entire site to the right person when the time comes (though that’s a long way off). But, if I don’t find the right person, I’ll just stop the whole thing – I want someone who is intimately involved with the site to take it over and I want that person to believe in the same things.

Good Enough Never Is
Built to Last believes the biggest enemy of all is complacency. Complacency is the point where you let competitors overtake you because you believe you’ve earned your spot. That never happens – someone’s always waiting to take your place in a competitive market.

How do I keep trying to work harder? I read the negative comments and rarely look at the positive ones. This even includes the ones that are obviously people trying to grind an axe that is unrelated to me. The negative comments usually point me to where I need to improve – the positive ones, while reaffirming, usually carry the message that I don’t need to improve. And that’s dangerous.

The End of the Beginning
The last principle is that success isn’t the end of the road. It’s merely the start of it, because now you have to live up to that success. Where can you go from here? It’s an eternal question that some companies can answer and some cannot. If you have all of the tools in place, you can usually find the answer to that question. It’s a powerful question to always think about, even if you believe that you really are the best – how can you get better?

Building a Vision
This chapter largely concludes the book by stating that all of these pieces do in fact intersect and come together, showing you a true vision for your organization. This isn’t buzzwords or “mission statements,” but the actual realization of the path you have left to travel and the tools you have to get there.

Buy or Don’t Buy?

Every person who does any sort of side business or is involved in running anything should read this book. It made me think about The Simple Dollar and my other side businesses in a very deep and careful way and it made me realize that the core values I’ve adopted really are the most important thing of all.

I really just scratched the surface of this book in this writeup, trying to point out a few of the principles that relate to what I do. This book is far deeper than that and not only relates to things done within an organization, but with how you choose to live your life as well. It brought me to some serious realizations about my principles and what I’m doing – you’ve already seen some of this in the last few months, and I think you’ll start to see more of them.

Read this book – it’s really worth it. It’s a bit of an older book, so you should be able to get it from your library or from PaperBackSwap quite easily.

Unfortunately, several events killed my entrepreneurial spirit – chief among them, a painful experience where my collected aluminum for most of a summer was stolen by someone I trusted. The wind left my entrepreneurial sails – and it didn’t really come back until the last few years.

That’s a true shame, in my opinion, because I missed out on the best years to be an entrepreneur – late childhood until you settle down with a family. You have the time and the freedom to really let your sails unfurl and let that entrepreneurial wind push you towards your dreams.

Now that I’m a father, I’m looking at my children starting to grow up and I realize that it won’t be long before they reach the age where they will want to earn their own money. Here are seven techniques, learned from observing the parents and mentors of young entrepreneurs, that I intend to use to encourage my own children to make their own success. These techniques will work for anyone you might want to mentor, from

Let them see the possibilities from a very young age. Even now, I’m pointing out to my two year old son that people work to earn money. “Dad and Mom go to work every day so they can make money. We use that money to buy food, to buy our house, and our clothes. Usually, the harder and smarter we work, the more money we make for our time.” I try to constantly show him better ways of doing stuff – like it’s easier to stack the plates when taking them out of the dishwasher then putting the stack away than to put the plates away one at a time. That’s more efficient, and that’s the key to success.

Let their options for earning money be a choice with differing levels of success. I’ve fostered that a bit by having him help with household cleanup – he has some required things to do, like cleaning up his Legos, but he can sometimes earn a quarter by unloading the plates and saucers in the dishwasher, for example. He’s learning that he has an entrepreneurial choice – he can either go play and not stack the plates, or he can stack them and earn a quarter. Most of the time, he wants the quarter – he’s learned that quarters can be taken to the store to buy a new car. Tying the two pieces together, he’s learned that stacking the plates first gets the job done faster (while still doing it just as well as before).

Always provide positive encouragement. The worst thing you can tell someone is that they can’t do it. Instead, point out that they can do it, but before they get there, they’re going to need to add some skills. This is something that my parents and mentors both did quite well – my parents were always adamant that I could live my dreams once I got an education, and lately my mentors have shown me that effort and diligence can carry you quite far. I know that I can’t follow every dream, but I know that with the right tools, I can follow most of them – and it’s because of encouragement that I believe it.

Help them brainstorm. Entrepreneurship feeds on ideas, usually starting with a core idea that gets developed into a profitable enterprise. This requires creativity and critical thinking, and most of the time, both processes can be helped along with a guiding hand. Listen to their ideas and offer your own. Be willing to be a sounding board for what they’re thinking, and offer positive suggestions. For example, let’s say your nephew wants to start a lawn care business. He needs to think about equipment, about marketing, about policies and prices, and about time to execute these things. Suggest these, watch the wheels turn, and offer some help when it’s needed.

Strongly encourage them to plan ahead. The more planning one does in terms of the future, the more likely long term success will occur. Encourage them to write an actual business plan, and be willing to be an editor of that plan. Encourage thought about where this might potentially go, and whether or not it makes sense to make different basic choices to get there. Should you buy a sturdier lawnmower now, or get a cheap one to get started and upgrade later?

Invest in their work. Many beginning entrepreneurs are stymied by a lack of capital. They can’t afford equipment, business cards, or needed services. Offer to be an “angel investor” for their small enterprise, giving them an interest-free loan to get started. That way, you’re letting them get started while the fire is still burning hot and not putting them in a financial trap, either. I’ve invested in the budding entrepreneurship of multiple people in the last few years, including a person who’s starting a beverage company.

Let them fail, but help them get back up. Failure is going to happen. Vital equipment will fail, a key customer will quit, or all of your work product will get stolen – I’ve seen all of these happen. Let the person feel failure for a bit, but then help them get back up off the ground. This is something that I wish had happened to me when I was younger – I was reeling from the punch, but no one encouraged me to get back out there and keep fighting. Instead, I began to believe that entrepreneurship wasn’t for me – the biggest mistake of all.

The most important thing? Don’t be afraid to be a mentor. If you know someone who’s starting a business, offer to help them in some way, even just in the form of someone to bounce ideas off of. You’ll get nothing but benefit from this in the long run, in the form of a local businessperson who values you and a stronger sense of community and of your own sense of entrepreneurship.

1. Clarify what you plan to do.
It’s easy to dream about something you want to do. One of my readers is dreaming of opening a coffee shop in his neighborhood. Another reader really wants to start a blog on video gaming for busy thirtysomethings. A third reader is trying to develop a seminar series. All of these are potentially great ideas, but they all need some more thought. Here are some specific points that you should try to answer before anything else.

What sets your idea apart from what’s already out there? With The Simple Dollar, I was aware that there were personal finance blogs out there. I sought to set myself apart by writing quality content with my own real voice and update it on a very consistent schedule, something that I didn’t see in the personal finance blogosphere at the time.

Who are your customers, do they actually exist, and how will they find you? You don’t have to research this (that will come later), but you should at least be able to define who these customers are and have some idea how they will find you. You should also honestly ask yourself whether there are enough of these customers to sustain what you want to do.

How will you actually make money at this? With some businesses, it’s obvious: you’re going to sell a product. With other great ideas, it’s not so clear. Where will the money actually come from? What will the costs be (roughly)?

2. Find a mentor.
The process of mulling over those questions will likely cause you to second-guess the purity of your plan and also make you wonder how you really can make this work. That’s the perfect time to find someone who can be a mentor for you.

A mentor is basically a person who has seen success in an area somehow related to the area you’re seeking success in. For you, a potential small businessperson, that means a person who has started some sort of enterprise successfully on their own, whether it’s a large business or just a sole proprietorship. Some mentors will be engaging and easy to talk to, others may be more challenging, but the two things you really need from any mentor are candor (a willingness to talk seriously and honestly about things) and support (are they actively helping you towards a positive outcome). Without those, no mentor is useful.

Don’t know where to start? Here’s where you can find a mentor (or three)…

Locate and identify businesses in your niche that are outside of your area. For example, if you’re going to open a coffee shop, try to find a coffee shop owner far enough away from your target area that you won’t be in competition with each other. If you’re looking at blogging, look for an expert blogger that’s working in a niche that you won’t be working in.

Locate and identify businesses in your area that are outside of your niche. With the coffee shop, try to find a small business owner in the area that you’re going to target. With the blogging, look for someone who is knowledgeable about the topic you’re going to write about, but doesn’t blog about it.

Locate anyone you trust that has successfully started a business. This person will be a great one because you can feel much safer bouncing your fears.

… and some key things to do and ask your mentor.

Do something generous to get their attention. Most people who are successes have a pile of things that need their attention. You’re hoping for some free advice and counseling from them. You might get it for free if you’re lucky, but it’s usually easier to do something kind to get their attention. For example, I’m much more likely to communicate with and mentor people who comment frequently and participate on or donate to The Simple Dollar than people who just write to me out of the blue. Similarly, I had another person have me “repair” their PC by the hour – and it was mostly running a spybot removal program while they asked me a lot of questions.

Schedule a meeting. If it’s a local businessperson, take them out to lunch. If it’s an online person, ask them if they have time to talk at length on IM (better) or by email (if this is the only option). Be persistent, but not annoying – if they say no, ask if you can try to schedule again in the future. If you still get a firm no, send a gracious response and let it drop – don’t make a nuisance of yourself and respect that other people are very busy.

Ask every question you can, but don’t forget the most important one! You’re going to have a lot of things to talk about, but there’s one thing you should never forget to ask. What would you do differently if you started all over again? This is key, as it goes right to the core of challenging parts of the business model. I’ll even give you a tip with The Simple Dollar: if I could start all over again with it, I would have had a slower writing schedule right at the start so I could focus on more individual quality posts.

3. Do some honest soul-searching about passion.
You’re now equipped with the basic information that you need to know about your business, and you know the pain and sacrifice that it involves (the mentor will clue you in here if they’re worth their salt). Now comes the real question: do you have the passion necessary to carry this through?

This is not an easy question to answer – if the answer is an immediate yes, you haven’t given the question the weight it deserves. A successful business requires a lot from you, even if it is something that you believe you’ll enjoy from top to bottom. You now have an idea of what it will really take to make it go – do you honestly have that drive within you to make it work? Do you have the commitment to collect the resources to get started? Do you have the fire to take those resources and build it into something that the people will want?

It may sound like I’m trying to talk you out of starting, but without the fire to strongly and unequivocally answer “yes” to those questions, your business has a very, very strong chance of failing. Don’t even start if you’re not fully committed to success.

4. Do some market research.
You know what you want to do. You know the commitment required, and you’re willing to step up to the plate with it. Now, you need to know whether anyone’s going to buy what you are selling. This is called market research, and it’s a vital step to take before you make the leap into a business.

The first step is to clearly define your market. Who exactly are the people that will partake in what you’re offering? Define them as clearly as you can. How old are they? What are their other interests? What places are they visiting right now? What are their core values that you can appeal to?

Once you’ve identified that market, try to identify people who are in that market. Look for some specific people who would potentially partake in your business. Look for places where they would congregate. These people will be the ones that will give you the real skinny on whether your business will work or not.

Now, mine these people for information. There are a lot of ways to do this. One good way is to offer them a freebie in exchange for answering a few questions in a survey format. I actually did this myself when trying to figure out a computer consulting business. One good method I’ve found is to buy a bunch of quality chocolates, get permission from the business to conduct a short survey outside of their shop (many will say okay if you aren’t trying to start a business in direct competition), and then ask customers if they’d answer a few questions in exchange for a piece of chocolate.

If this doesn’t seem like a good opportunity, tap your social network to find potential customers. Float the idea to your contacts that you’re thinking of starting a new business and you’d like some input from potential customers, and describe who you’re looking for. If you don’t have a social network within the area where you’re going to try to build a business, get started building one now. I really recommend the book Never Eat Alone if you have a lot of difficulty doing things like this.

What do you ask these customers? Keep the number of questions low. Ask them whether they would be willing to visit such a place, should it open up. Ask them what they would like to see in such a shop, in terms of items for sale, services, content, etc. Also, ask them what their favorite similar places are and why. Many people won’t give you useful answers – but note as much as you can because no matter what it will come in handy.

5. Write a detailed business plan.
Most of the first four tips revolve around gathering the information you need to really understand the situation. You should have developed a very clear idea of how your business will earn money and most of the major challenges along that path, along with ideas on how you’ll get around those challenges. That material needs to be codified and written down in an organized manner, preferably in a single document. That document is your business plan.

Many people starting side businesses and sole proprietorships skip this step because at first glance it seems like a big waste of time. You have your ideas already worked out in your head and you know what you’re going to do, so why bother writing out this big document? There are two giant reasons for doing this.

First, it makes you move carefully through your entire game plan to make sure you haven’t missed anything. By laying down every idea, thinking carefully about it, detailing it, and connecting it to the next step, you’re taking the time to ensure that you haven’t missed anything important along the way.

Second, it provides you with a document to provide to others for input. When you have your entire plan together, it’s easy to take it and show it to others, showing them your ideas and plans in one collected place.

What about formality? It doesn’t have to be highly formalized unless you’re seeking outside investors. The thing you most need to worry about is that it’s thorough and that it’s readable above all else. Don’t worry about formality unless you’re going to attempt to borrow your capital or get investors to get involved.

6. Talk to your “inner circle” and make sure they support you.
When your business plan is complete, you would be doing yourself an injustice if you didn’t circulate that plan around your inner circle. Talk to the people who matter the most to you, show them your plan, and ask for feedback.

Who’s the inner circle? I would include the people whose opinions you trust the most, including at least one cynic, as well as your mentor. If you have established good relationships with people in the local community, talk it over with some of them. Don’t include people who are just going to bobble their head “yes.” These people are great for our egos, but not very helpful with making us successful.

What sort of feedback should I seek? Positive feedback is nice. Criticism, though, is what you really want. Have them try to find holes in what you’ve written. Have them look at every angle.

Most importantly, don’t argue with their criticism. You can ask questions to clarify what they’re saying, but don’t argue with them. They’re usually giving you criticism for a reason, even if it’s not readily apparent to you. For example, if you do have an answer for a particular criticism, add it to the business plan. If you think it’s completely off the wall, still jot it down and do a bit of investigation into it. Don’t toss it aside just because it doesn’t match your world view.

With regards to your family, make sure that they’re willing to support you in this endeavor. Without the support of the people whose lives you interconnect with every day, a successful business won’t happen, period.

7. Revise your detailed business plan.
After you collect all of this feedback, use it to revise your business plan. Go back and rewrite parts of it. Add other parts. Maybe even delete a piece or two. Move things around. Clarify some pieces. Use all of that feedback to make your plan better.

In fact, if you have willing people, use them as a feedback cycle. Make all of the changes you can think of from the first go-round, then ask for opinions. You might even want to do this in “levels,” meaning you give the first version to some people, have them suggest changes, then give the second version to another group, and so on. This will hone the document into a finely-tuned instrument, one that explains exactly what you’re going to do to make this a success.

When do I know that it’s done? In one way, it’s never truly done. When things get rolling, you’ll find that some parts of the plan were wrong and other parts were missing – that’s unavoidable.

The moment when it’s time to move on, though, comes when you read through your final revision of the plan and feel it deep inside. A business plan that’s ready to go is one that inspires you every time you think about it. It feels complete to you, and the people you’ve shown it to are positive about it as well. You’ll know in your gut when it’s done.

8. Learn how to live frugally.
The last three points can be done at the same time as the first seven because they provide the support you’ll need to execute the game plan.

First of all, it’s essential to learn how to live frugally. You need to learn how to run your life like you run a business, and you don’t run a business by throwing cash to the wind. Start cutting your spending on all fronts, but particularly on the nonessentials. Eliminate all of your credit card debt and put away money each month.

The best first step I’ve found for trimming the fat from your spending is to trim the fat from your monthly bills. There are many ways to do this: be more energy efficient, don’t use optional services, trim the “extras” that you don’t need on your plans, practice maintenance of the stuff you have, and so on.

Also, a major stumbling block for most people is a sense that they need to have the newest, latest, and greatest of everything. I know many people who “lease jump,” meaning they lease a car for two years, then move to a brand new one to lease – over and over again. That’s a gigantic waste of money, money that could be used to build your business into something amazing or construct a strong personal safety net.

When your business is a success, you may have the income needed to enjoy such things, but for now you don’t have room for it. Learn about frugality and practice it until it becomes second nature. Leave that credit card in your pocket.

9. Build up the capital you need.
For some people, their small business won’t require much investment at all to start with, just time. For others, the seed money may come from a relative or a friend or an investor. But for many people starting their own small business, the money will come from their own pocket, and that means it’s time to start saving now.

Set up an automatic savings plan today, putting away as much as you reasonably can on a weekly or monthly basis. Put that cash straight into a high-yield savings account, then just leave it alone. Wait until you’re ready to make your move, then tap it.

Although it should be part of your business plan, you should know your startup costs in great detail. This should be your goal for saving, and the absolute best time to get started is right now, even if you haven’t sat down and tabulated your total startup cost yet – or even have any idea what that will be.

10. Make sure you have a safety net.
Many small businesspeople I know get so excited about their plans that they take the leap without really thinking about a plan for failure. It’s a fact of life that many small businesses fail for various reasons, even ones that are well thought out and well executed, so it pays to think about that “what if” before you even start.

Make sure you have at least a few months’ worth of living expenses in the bank at all times. Never, ever go without an emergency fund, especially in the early days.

Also, don’t get the finances of the business mixed up in your own personal finances. Make the line very clear. Keep them in separate accounts, and pay yourself from the business account when appropriate. What I tend to do is pay myself effectively as a contractor to my various businesses – I provide things for the business in exchange for pay. Make this the standard even before you start.

Ready… Set… Go!
If you’ve done all these things, you’re well ahead of the game. The final step is to wait until the time is right and pull the trigger.

Good luck.