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Reader Responses

Pamela M. from says:

As a mentee of Norm’s, I can personally attest to how valuable his advice is– congrats on the book!

David from says:

Is all cash created equal?
I know you advise owners to watch cash flow and the current ratio (curr assets/curr liabilities). What advice do you have regarding lines of credit in managing the cash number? If we tap our line of credit, we can add $20k of cash to the bank account… at a price, of course. How should we include lines of credit in our cash management process?

Chris from says:

I have recently come up with an idea in the health care field that adds safety and convience for my patients. However I am not sure how or where to start to get my idea out there. Very little money to work with. I have pitched my ideas to some of my patients and they all say that it’s a great idea. This may not be an area you deal with, but it never hurts to ask. Thanks.

John from says:

Norm—love the book, and I am recommending it to everyone. On page 76, you provide Anisa Telwar your form for tracking numbers. Any chance that you can provide this form, and any others, on your site for loyal readers and aspiring entrepreneurs? Thanks!

Stephen H Malley from says:

Hello Norm
Will you be signing your book in Austin, Tx? Thanks for all the help thru the years, your column is the first to be read when my INC. arrives.
Steve

William from says:

Hey Norm, I was at the Street Smart Event at Columbia University a couple days ago. I’m 30 years old, been an artist my whole life prior. Now I’m coming to terms. I really get that I’m an entrepreneur. I’m learning from my mentor in the business and always looking forward to good information. You break it down old school and I love that because these days all you here about is design this design that. Being an artist I can appreciate that but it’s not what puts the money in the bank. Thanks again.

Andrew Witherbee from says:

Hi Norm,
First, great book! How can small to midsized companies integrate ‘sustainability’ into thier operations? And isn’t “socially and environmentally sustainable” just a long-winded way of saying “good business?”

Jerry from says:

Hello Norm,
It was a pleasure listening to your informative Street Smart session last week at UCLA. You mentioned that there are a lot of opportunities during this bad economy and recession. I am a 57 yr old laid off executive who has been trying to start my own business for a long time, but unsuccessful. How would I identify the “opportunities” you mentioned with a niche and be able to survive and make the company grow during these horrible economic times? I hear there is a good possibility of U.S. going into a “depression or 100 yr bear market” soon. I would really appreciate your feedback and advise.
Regards,
Jerry

Kevin Cunningham from says:

Norm,
I started my business about 7 years ago (2 years part time & 5 years full time). Today through a google search my web site is rated #1 from all the hits I receive. My strong areas are field applications and sales. My weak area is the office end. I’ve also started manufacturing a product that I invented and have a couple more in mind. Question is, I don’t have the capital or know how to get to the next level. So my thoughts were to try and sell the business and stay on with the new owner and grow my dream with his capital or bring on a money partner. What are your thoughts?
Stressed Out
P.S. I’m only getting 4 out of 10 questions right on your survey… that might not be a good sign.

Jude from says:

Dear Norm,
I just ‘finished’ reading The Knack and wanted to say thank you. Thank you for sharing your insights, your impressions and your counsel. I’m in my 13th year of business, with business doing very well, but I have been searching for some of the insights you outlined in order to help me grow and develop not only the business, but myself as a leader. Thank you. I’m now going to go back through and start making some changes that jumped out at me, specifically about culture, watching our margins and recognizing what my new position means as the CEO and not just the manager. Thank you. The Knack is one of the best books I have picked up in years—I’m sure I will be referring to it often. I especially loved the part about mapping out your numbers by hand. My bookkeeper always teases me, but I tell her its how I feel what’s happening. Thanks for the vindication!
Thank you again,
Jude Smiley

Gabriel Hernandez from says:

Hi Norm,
I once read something you wrote that said pick a field that has competition; that it is easier to sell people on why they should choose you and not what exactly do you do. Boy, were you correct on that one. I have a company that basically performs everything estimating for construction companies. For example, a General Contractor employs an estimator to determine the price from a set of plans, and usually versus other General Contractors doing the same. Well, I was an estimator working for one of those contractors for a number of years, so I know how the process works, and I found that I can replicate the same job as an outsource option. At first, I thought it really caught on. I sent quite a few emails from I trade directory and found that maybe there really is a need out there for sub-contractors, general contractors and even owners looking to lower their overhead by outsourcing. The problem is that most of the time people don’t know how to use my service because it is so different from the norm. I find myself constantly selling not only myself, but the whole concept that I am trying to get accomplished. Half the time, I cant even get in the door because of it. And to top it off, I don’t have the funds to spoonfeed a great number of people as to what I do. What am I doing wrong? And what can I do to get my company heard?

Betty Hardin from says:

What are the implications of changing from cash basis to accrual accounting?

Aaron Michael from says:

Dear Norm,

I would like to begin by thanking you for your informative column—truly eye-opening.

As a cofounder of Inspri I have taken it upon myself to “get the word out there” regarding our web based business. Our patented product addresses those with coccyx and sciatic nerve pain and we wish to target that particular demographic. I have created a video, established a presence on some social networks, and may create a blog (though I am not the blogging type). We are also working with some local chiropractors to reach those who may not have ready access to the internet. Do you have any suggestions aside from our current campaign?

Kind regards,
Aaron Michael
http://www.insprico.com

John M. from says:

Dear Norm:

I think this email is more asking for advice than a specific question.

As I am sitting in a Starbucks waiting for a job interview, I feel that my life has gone backwards more than forward. I own a business called Bicom (www.bicomsite.com), we provide lead generation and appointment setting for a number of marketing organizations and advertising companies (yellow pages, direc tmail, etc). I started 4 years ago and my business did well the first 2 years. The key of my success was the way that I’d structured my business and the excellent price that I offer, I created a program similar to PPC called pay per appointment, I charge 35 dollars per appointment to( most) part of my clients. As the economy has gotten from bad to worse the same system that made me attractive (and still is attractive) has become less and less profitable, to a point that I am making little bit of money and now I have to look for a job. Along the way I made tons of mistakes, unfortunately for me I never have a mentor, I just worked in one company that taught me very little (or nothing). I don’t want to forget, the call center I have is located in south america with 15 blinigual reps, so my cost is not so expensive as if I would have it here in the Us. I came up with a solution that will change the structure of my company (if u want log in in bicomsite use demo as username and demo as password). My solution is a product similar to salesgenie but I called it “personal sales assistant”. The problem is that we are so tied with money that I cannot wait 4 months until the program has been completely sold. The possibilities are great but I lack capital (and advice) and I can show the projections if you’d like. I hope that you read this email and share your thoughts with me. I have also a second phase to the expansion utilizing Spanish-speaking agents to cater to the Hispanic community in the U.S.

Thank you,
John M.
2404607859

Sean Berg from says:

I have a six year old company that makes fleece socks for flip-flops. We are experiencing steady growth but I really want to hit a homerun! I am thinking about using the local university’s entrepreneur program as a way to get ideas to market and expand. Do you think it is a good idea?

john edwards from says:

Norm-

I am planning on starting a company, but I have a few problems. I currently work for a company that I have a non-compete agreement with but that doesn’t really bother me because I want to start the company in Denver, Colorado. I am currently in St. Louis. The problem is my wife is in nursing school until july so I can’t really afford to start the business until she gets out. We went to Colorado two weeks ago to see if I could talk to some vendors but some of the vendors ended up being future clients that need work now. So the problem is can I start the company in st. louis w/ a non-compete if my clients are out of state and second can I form the company in st. louis as an LLC and move it to Denver after my wife gets out of school? Any help would be gladly appreciated. Thank you

John

Bryan Miller from says:

Norm,
Love the book, I’m reading it again from cover to cover. I have an old stack of Inc. and I’m going back to read every one of your articles. One question, how do I compute the COGS for a single-person consultancy? I work out of my kitchen so I have no office, just a laptop, some software and my only deliverable comes out of my head.

Brent White from says:

I’ve invented a game which I believe can be marketed a number of ways other than just your standard board game being sold thru retail outlets. My question to you is how do I protect myself from having it knocked off as soon as I put it out into the marketplace? I’ve been in contact with a Patent attorney and he told me that the design of a game is not patentable and then simply sent me a standard outline of what patents and trademarks are. So how do all these games on the market protect themselves then from someone simply going to China and importing a knockoff version?

Greg Johnson from says:

Hi Norm, I am contenplating relocating (headquarters) my business from Phoenix to Dallas. My team and I have planned for this financially but there is a part of me wondering if perhaps it might be smarter to wait until the economy ticks back up. The other part of me says everything is on sale and other similar businesses are all retracting so now might be the ideal time to push forward. As I move forward what are top three things I should be looking at?

carol snipes from says:

have written a children’s book that includes a cd, alphabet cards, and a poster. The cd plays as the book is read to the child. the set is interactive, as well as phonetically based. I am interested in finding a book(such as yours?) to help me with details involved in running a small business. I have a name for the business and it is registered. I have sold many copies of my book, and people seem to like it. The book encourages parents to engage their children in a fun activity that will teach. I would be happy to send you a copy of the book, cd, cards,and poster to look over. I would appreciate any advice on what steps I need to take in order to get my book to more children.

marilyn kellepourey from says:

Dear Norm,

Can you pretty please provide the answers to your recent quiz. Despite a valiant effort I was unable to correctly answer all ten questions and it really bothers me.
Sincerely,
Marilyn

Ross Croley from says:

Norm,
I own a web site development firm with offices in Knoxville, Nashville, and Atlanta. I am 30 years old and started when i was 19. We currently have 20 employees. In our industry this is a pretty good size organization. Most of our competition is made up of 3-7 person web design shops with $500-$600K in annual sales. We have $1.5 million in sales. I would like to grow our company in the next few years to $5-$10 million. We work in the Southeast now, but have a strong sales presentation and a great client list with many National and Global brands. I don’t have capital to buy competitors, but i think there has to be a way to acquire them so that i can implement our strategy in their regions. They all lack a sales and lead generation model that we have. Also, they lack the software platform that we have. Our sales engine and our software make us more competitive than the other firms in our industry. What takes them 2-3 months of development time, we have streamlined into a 1 week development timeline. Do you have any idea for me on how to grow to the next level. Again, my business experience is starting this company at 19 and growing it over the last 12 years. We have accounts such as Macy’s, Shell Oil, and Volvo. I think we have something great going, but i don’t want to settle for a $1.5 million per year company. We target companies in the 10 million – $1 billion range although we have clients who are bigger. There really is not one dominant company that we compete with. Every city has about 20 compeitors who are smaller and cannot offer the service or the product. We just need to tell the story to more people in more places. Please help.

Ross

Peter Alberti from says:

Hi Norm,

One popular response to the current economic conditions is a consistent cry of “It’s a great time to start a business!” I think this is often a reactive defense for those looking for an outlet to quell their fears and frustrations.

While I happen to agree that it IS a great time to start a business (we just did), I think it’s prudent for business advisors to help these budding entrepreneurs confront the brutal facts that the down economy is a major factor and potential obstacle.

Can you shed some fundamental guidance on the “Let’s go into business” outbreak?

Ross Liew from says:

Hi Norm,
I just bought your book and am halfway reading through it. It has been educational and not least inspirational! I didn;t know numbers could be such an exciting topic.

I’m presently working as a banker handling corporate loans. On the side, i’m deciding whether to pursue a passion of mine i.e. start an indie record label for metal music. I need your advice as to whether it will be a sustainable venture.

I know times are bad now and music is facing free downloads so CD sales are dropping. However, i’m looking at a niche i.e. underground metal music which has its own set of followers. I understood what you meant by having strong gross profits to cover expenses and subsequently boost the bottomline. I’m also planning on boosting sales (which is contrary to what you taught in your book) via lowered pricing. Basically, i’m banking on the favourable USD/MYR exhange rate of USD1=MYR3.5. With our lower cost of production, i should be able to gain a hefty gross margin of more than 100% even while pricing each CD at USD5 a piece.

Am i on the right track? I would appreciate any feedback you may give me before i start.

Many thanks and hope to hear from you again.

Cheers,
Ross
Malaysia

Jennifer from says:

Norm, we’re a small company in business since 1991. Since this time, our product offerings and success has deviated somewhat from what our company name would suggest – Filing Solutions. We are considering a name change, but have heard horror stories and we’re not quite sure how to proceed (or not). We’ve hired professionals for their advice, spent hours debating back and forth, and still have not come to a concrete conclusion. Can you offer any advice to us?

Thank you.

Heidi Dedeaux from says:

Norm, I am finally “getting” it! As an entrepreneur with no background in accounting at all (all self taught by the seat of my pants) the numbers have always stumped me or at least were my weakest link. You make it so clear, simple, direct. Awesome! I love it! I feel so empowered now when I pull out my pencil and paper. Now I can see where we were, how we got there and how we are going to get where we want to be. Thanks Norm. Your book is special, and not just for the numbers. Really sound, smart, REAL advice. Your enthusiasm and love for people and business always comes through. I have always enjoyed your column and I’ll pass those old INC mags on to others but I am keeping this book. Looking forward to meeting you!
Heidi

Lori Palmer from says:

Norman,
Do you feel we have a chance of getting a client back that we had a disagreement with about 10 years ago? They are a growing company and I feel we have grown and become better since the incident. How do you think we should go about getting the business back and maintaining it?
Thank you,

fieneReerce from says:

Hi guys, I’m new to this website, I just wanted to say hi & good luck with your site!

I hope i get a chance to say some more clever stuff :)

Val Andersen from says:

Hi Norm,
I had the opportunity to meet you in Austin, TX several months ago when you and Bo spoke at the Exec Center at U of Texas. I was so motivated and inspired by your interview, and really appreciated the opportunity to partake in the event.

I grew up in an entrepreneurial family, with my father running a pizzeria my grandmother started in the 1960′s after she was widowed, poor, and left with 7 children to care for. This one, humble restaurant has turned into 3 successful family owned pizzerias in the midwest. I always wanted to be in the family business, but had been a good student. My fatherwent into the family business and never had the opportunity to go to college, and encouraged me to get my degree first. I was good at math, and got a degree in chemical engineering. 10 years, 2 kids, and an MBA later, I am a single mom working in corporate banking earning good money but I wake up every day wanting to pursue myentrepreneurial interests.

I graduated from the University of Texas with my MBA last fall. I spent 2 years in the MBA program following my entrepreneurial passion, working on the tutoring company I had started in my undergraduate days (I put myself through my undergrad 100% with this business). At the end of the program, I was almost out of savings, and have 2 wonderful kids to support. I had an incredible offer from a Bank and really needed the money, so I took it. I feel that I have sold myself out, and have no time to work on my business. It is hard to get up and go to work every day knowing my heart isn’t in this. I’m writing to ask for a bit of guidance here. My tutoring company really has the potential to take off, but I don’t have the time with my kids and day job to put into it. I’m not sure what my specific question is to you here, I guess I am just reaching out for some advice. Or if there is someone in the local Austin area you know I could connect with that would be willing to serve as an entrepreneurial mentor and help get me back on track.

Thanks for the time to read this Norm, I hear you saying “There’s a million dollars under your shoe…” to myself almost every day.
- Val Andersen
vkandersen33@hotmail.com
480-275-1612

Stephen Joseph from says:

Salutations Norm,

I am just starting my company, Thermal Eye Inspection, and I am in the Green Industry. My question is how does one pay one self and what are the mechanics behind it?

Thank you,

Stephen Joseph

sandra campeau from says:

Norm,

I’ve been reading your book “The Knack” and have a question about the first chapter regarding sales and gross margin. Your examples are related to a business with receivables. I have a cash, service business (hair salon). I’m thinking once I cover my fixed costs, my variable costs are a much smaller percentage. Wouldn’t it make sense to offer a discount to drive sales as long as I’ve covered my fixed costs?

Sincerely,

Sandra Campeau

Dredceadiaper from says:

Good Morning,

I am sure by now you have heard the buzz around the LMT Forex Formula by Dean Saunders. What do you all think of it?

Do you think it’s worth investing in ?

I am getting into forex and it seems to be a good investment…let me know..

Here are some sites I found that may help…

http://digg.com/business_finance/LMT_Forex_Formula_SCAM_Exposed

http://www.slideshare.net/mariawilson/forexppt1

http://www.slideshare.net/mariawilson/lmtppt2

Regards
Bob Patterson

Jeff Linville from says:

I serve as the President for a freight management company I founded with partners in 1999. The economy has presented some real challenges in maintaining sales as of late. My questions is do I entrench the business and wait for the tide to turn? Last year we sold $23 million in services and if we have a repeat in 2009 I will have considred that a quiet victory. Our customers are the US government, manufacturers, distirbutors, and third party sales organizations

Larry from says:

Dear Norm,
I am investigating launching a property management business. My current challenge is (1) achieving good margins while (2) remaining price-competitive in the market and (3) attracting quality long-term employees. In my mind, this is a trust business, where my employees will have access to the homes of our clients and be the face of my company to the world. Further, on a personal level I feel obligated to provide employees with a decent salary and the benefits any adult would need to provide for their family, including paid vacation and holidays and sick days, medical/dental/vision and 401(k), and possibly education reimbursement or other perks as well. The problem is I cannot seem to balance my three priorities and create a viable business. Any suggestions on how to tackle this?
Larry

Edmund Kamugisha from says:

Norm and Bo;
i found your book at my local tiny bookstore and the title “theknack” got me pondering..
i got it 3 weeks ago, and in between family, work and private time, i must admit that it is still making me pnder on and on and on…
It is an amazing set of experiences that i am constantly being humbled by!
i am very thankful i spent that money that day, and i am using so many of the lessons slowly and very surely

mike from says:

Hi Gentelmen,

I’m a long time fan of your columns! I’m looking for advice about obtaining financing and consulting. I’m a minority partner in a golf recreation facility where I have been the operating partner for 8+ years and my partners are interested in selling (at their price) and I’m interested in buying. The catch is that they want a bidding war and have assembled a book and distributed it to potential buyers who are very interested in the business but the land lease is too short for most interested parties. I need help negotiating the price and getting the financing together. My partners (all CPA’s) are good business men and tough negotiators, negotiating is my weakness. They are only in interested in selling at their price and will not take any paper in the deal. The business has great cash flow and they will sell it at about seven times earnings (based on their valuation) or about 70% higher than my first offer (which was about 30-40% lower than the valuation I used). There are many more interesting details to this deal but I can not divulge all of it here. If you should print this question, please do not include the location. Also, if you could recommend a good acquisition consultant it would be greatly appreciated!

Thanks,

Mike

Sidharth from says:

How do you handle an employee who has just joined our organisation from competition?.I am responsible to manage him and am happy that he is joining. However this being the first time We wanted to know if we need to take any special care or pay attention to certain issues in his case. Your valuable inputs will be highly appreciated. Thanks

brian southwell from says:

How much capital does it require to set up a small venture capital firm and what return should I expect in the first 3 years

derek from says:

Book doesnt do anything but reaffirm what we already know

Nothing that is written that is new will help entrepreneurs.

You have to look back farther and get back to basics of culture, ethics and morality to define your business role.

Sam Thevanayagam from says:

It was nice meeting you at the Clinton Foundation & Inc event in Philly last week. I look forward to reading your book over Christmas break and getting my knack sharpened for the New Year.
Will be in touch. All the best to you & your family this Holiday Season.

Locksley Waites from says:

Hello, I’m a young (23), aspiring Jamaican entrepreneur. I’ve read a lot of business books, but finally I’ve found one thats actually practical. Thank you and keep up the good work.

Your’s Sincerely,

Locksley

Kim Coleman from says:

Norm,
I attended the Innovative Career Consulting innaugural breakfast this morning with you as the guest speaker. I just wanted to say “Thank You” for your presentation. Your information touched me on both a personal and professional level and is so applicable to life!! I am a Human Resources professional and have always been the keeper of the culture. I am challenged by your words today to push my performance to the next level! Thank you!! I also wanted to say that I appreciated your advice to apply something we liked/learned today within 48 hours. I’m working on that too! My husband and I have been talking about our need to “plan better” and little does he know we are going to start working on our life plan this weekend based on your reminders today.

I look forward to reading The Knack and thank you for providing it to us today.

Thanks again for a great presentation!!

Kind regards,
Kim Coleman

Robin Allen from says:

Dear Norm,

I am a senior in college who has recently decided to pursue a career in entrepreneurship (which is my major). I have a copy of your book and am wondering if you can recommend any other books that provide the same level of expertise on the discipline of entrepreneurship with the same quality of presentation.

Regards,
Robin

Harinda Danangalage from says:

I believe this is the best I have ever read on entrepreneurship and I wish I have had read this book at least two years ago. After reading this book only I understood what are the causes for my failures , what are the causes for my successes.

Thanks Norm for this great book , this will be my business bible for rest of my life.

Shivkumar Chandrashekar from says:

Dear Mr. Brodsky,
I happened to read your brilliantly written book. Having red it from cover to cover, need some suggestions. I am a financial journalist based in India and quit my last job and now in the process of starting a small business, a new web site, with a payment gateway and with aspire to scale up the venture to a full fledged news agency. We (there are three others involved in the project, all seasoned professionals) have funded the seed capital entirely from our savings. Yes, we are aware that capital would be required.
However, our intentions are to initially pursue an earning driven growth model. We are wary of external capital, since the colour of external resources is of vital importance to us. We are keen that any external investments would have to be collaborative, technical with risk sharing. At the same time we are eager to leap frog into the news agency status fast. Obliged, if you could suggest some ideas.
Thank You,
Warm Regards.
C Shivkumar

Rony from says:

Dear Norm,
I am an entrepreneur myself, since I was a kid I wanted to do my own business, tried few business but it did not work with me. I believe the reasons are, because I start all my businesses without a capital, and clients are not taking me seriously as I am still 21. I don’t want to ask my dad for a capital, because I know it won’t pressure me as much as I put it from my own money. I just graduated, and going in another business again without a capital, I want this to work, I want clients to take me seriously, what should I do?

Alison Blume from says:

Would love to get your review of Alina Wheeler’s new book Brand Atlas.
Would love to send you a copy if interested.

John S Wolter from says:

I’m learning to Knack every idea that pops into my head. It helps identify the good ones. Knack, Knack, what’s there?

Dima Kazantsev from says:

Norm, I really enjoy reading your Q/A in the INC magazine. I always cherish the time when I talk to great people as you are! My name is Dima and I came from Russia in 1995. Ever since then I studied at home and worked hard. I am an eager learner and in 2002 I started working for Mathis Electronics. We assemble circuit boards and since then I worked up from assembler to Vice President of the company. Now I am two months in this position and found a costumer that will sky rocket our business. We do roughtly $1.2 million a year in sales. With this customer its going to double maybe even triple our gross sales. I understand that NET is more important then gross income and I am trying to make sure NET is not in negatives. My question is what do I need to watch out for when company is going to sky rocket within a year? We are looking into getting new equipment and people, but not making a move until we need to. I want to be prepared at least somewhat for this adventure. We are in prototyping stage right now, but I am trusting we will get the order. I thank you very much in advance for answering my question. 828-274-5925