I would suggest that even if you capture someone with an MBA, you must still know your own business. Even an MBA on staff doesn’t allow you to recite facts at a moment’s notice, leaving you unable to respond to (for example) an investor you’ve just met.

This is serious stuff! Lenders like to see that both the owner and management team represent a reasonable investment risk. Far too many businesses rely completely on accountants, failing to maintain a working knowledge of daily, weekly and monthly financials"with respect to the three most mismanaged aspects of business: money, people and product. You must know your own business.

The MBA, when viewed as a business framework such as I’ve described, ensures that you do know your business: weaknesses, strengths, operational systems and the numbers that go with them. I can help you achieve the same thing by reducing the MBA to a series of practical tools with which to build a business that can sustain long-term profitability.

EXCERPT

Chapter 2

The Bare Knuckle Approach

Objectives: What to do if you don’t have an MBA. Introduce the concept of “synergy,” and identify the lack of it as a major problem facing small businesses. Also, as many owners and managers fail to view their business as a money making machine, I’ll begin to develop this extremely important metaphor.

Reality check... The only way I (and most small business owners) can afford to hire someone with an MBA is on a commission basis. What do think of our chances of success? Another route is to find someone who’s come by the required knowledge experientially. And guess what? Most of us are working for ourselves. Bare Knuckle MBA offers a viable alternative.

The primary focus of this work, as a whole, will be to walk you through a (simplified) MBA-based business start-up, highlighting the methods you can use to get the most from each part or system in said business (viewed as a money-making machine). The examples used represent real statistics and numbers taken from company documents as well as from statistical tables. I don’t expect you to do anything that hasn’t already been applied successfully in business.

As you and I visit each important aspect of business, great care will be taken to stress steps you can take to create synergy (the interaction or cooperation of all your business systems to produce a combined effect greater than the sum of their separate effects). The reality being that the greatest inefficiencies in business occur because of friction between the parts of the money-making machine. Particular emphasis will be placed on the management of money, people and product.

In addition, you’ll be provided with at least one immediately applicable business tool for each system discussed, any of which can provide a good return on your investment. Filled with over 20 years of both hands-on and researched business knowledge, Bare Knuckle MBA contains what you really need to know to run and sustain a profitable business. These are tools your company can use internally to create a machine capable of leading the pack.

Bare Knuckle MBA is a low cost program that business owners can implement after one day of training. It’s practical and invaluable.

But beware: potential doesn’t always equate to actual success.

For example... I pay you one dollar. Can you tell me where each penny of that revenue will go (within your business)? Can you do it on the spur of the moment? What are your working ratios for the major systems that comprise your operation? Can’t answer? YOU MUST KNOW YOUR BUSINESS! I’ll help you to gather and learn those numbers.


Chapter 3

The Start-up

Objectives: discuss and debunk the myth of business failures; that financial success doesn’t equate to business survival. We’ll also demonstrate why the owner and management team must know the business on every level: management, people and product.

The majority of small businesses fail; 80 to 90% is what you'll often hear. These figures are repeated as if they're fact. But my own research suggests that the following figures are probably more accurate, that while 50-60% of employing firms will close over a five to ten year period, the percentage of those closures due to financial failure is only 16-20%. The other 34-40% of so-called failures are due to things like going into business for the wrong reasons, becoming overwhelmed by the workload and misunderstanding money, people or operations"all of which lead to stress, lack of enjoyment, disillusionment and eventual termination of ownership.
Understood in this way, the given numbers aren’t scary enough to warrant the kind of fear most people have when it comes to starting a business! Why? The above list of problems can be easily dealt with. So what's going on? What created the enduring myth of high rates of start-up failure? The answer would seem to be the inclusion of financially successful businesses in generally quoted closure statistics.
The implication of the above revelation is simple to understand yet surprising: Financial success does not equate to business survival.
It’s simple to understand when you recall that we've all met owners who find the reality of running a business far less enjoyable than they’d anticipated. The end result of this unfortunate reality? They can't keep going. They lose interest. Burn out. Others do nothing more (at least on the surface of things) than buy themselves a job, most often failing to treat their business as an investment, a long-term solution to the lifestyle they’d hoped for. Once again, disillusionment sets in, turning them toward more enjoyable pursuits. And I shudder at the thought of the myriad of small business owners who could have made it"if they’d just understood that their most valuable asset was people.
The implication is also surprising because there are easily attainable numbers that prove few businesses close due to financial failure. Available figures vary, but annual business bankruptcy rates tend to fall into the 1-8% range, and I've found ten year figures to support an average bankruptcy rate of 5%. If start-up companies were doing solid research, they’d already know what I’m about to say: ignorance and incompetence play a bigger role in business failures than do money problems.
This is amazing information! It also supports a belief I've held for many years. Industry is simple: create that which someone else can’t or won’t create, then make it easy for people to buy from you. On the other hand, there’s no doubt that industry is difficult. It entails the proper management of financial resources, human resources and operations. In simpler terms: a businessperson must quickly learn to be an effective manager of money, people and product; operating systems and the people and the money they use must come together in such a way as to mimic the seamless meshing of the gears of a machine. Let’s walk you through the entire process...

But First:

Did you know that the average/rough percentages of expenditures for the business management business sector are as follows?

Overhead, 20%
Delivery, 20%
Sales/marketing, 40%
Profit, 20%.
As a business owner I’ve also tabled such numbers in terms of money, people and product for my industry and my business. If you haven’t done the same, how can you know whether or not you’re on track today?