Introduction

The advice industry is full of theories, concepts, and systems designed to improve business results. Most of them make it all far more complicated than it has to be—certainly, far more complicated than it ought to be. Most business owners need to stop casting about for the latest solution and focus solely on the only true metric of business success: profits. Far too many business leaders are focused on sales, but increased sales do not always mean increased profits. Increased profits mean increased profits. Most company CEOs rise through the ranks as salespeople, so that’s how they’re conditioned to respond to every business challenge—more sales. Instead, it’s a focus on profits that produces results. The road to profits is not one paved with complicated systems or concepts. It’s simple. I’ve done it, and so can you.

My knowledge doesn’t come from theory; it comes from experience. I’ve been a CFO, I’m a CPA, I’ve handled turnarounds for troubled companies around the world, and I’m a business owner myself. I know what needs to be done to make a business run, and it’s not as complicated as the advice industry makes it seem. In fact, the root of success is a series of simple business concepts—concepts everyone can understand.

To build a profitable business, the key is to make smart decisions at the start to set yourself up for success. Most businesses, at some point in their trajectory, hit rough spots. It can’t all be smooth sailing. The question then becomes how do you as a business owner handle that challenge? Far too many business owners dig themselves deeper by either ignoring the problems or running after trendy solutions to solve the problems. Both of those options are expensive and often futile. Success is a series of simple concepts: set the building blocks in place, create a model based on the mathematics of profit, and keep your focus.

Now that you have picked up this book, you are halfway to the finish line. The title is a critical setup. If you already know somehow, somewhere that you need to change how you run your business, that’s a good sign. You are in the right frame of mind to hear what I discuss in these pages. This is a book about tactics. It’s a book about steps to take, partnerships to pursue, and plans to make. It’s as concrete as I can make it. Approach your business with a focus on profits and a devotion to the simple, and success will follow. I know. I’ve done it.

The book is divided into two sections. The first half is what I call the fundamentals. These are the foundation upon which you will build the rest of the business. I’ll look at business models, org charts, budgets, partnerships, and employee-management techniques. Any missing or broken elements will keep your business from succeeding.

In the second half, I’ll move on to more strategic concepts. These elements assume you’ve got all the key building blocks in place. These are the strategic elements that can now lead to growth: marketing, retail and other distribution concepts, taxes, compensation issues, and exit strategies.

 

Frequently Asked Questions

You probably have lots of questions. I’m used to that. Here are a few of the ones I get most often.

Will your ideas work for any industry?

Yes. The processes I lay out are core building blocks of business success for any kind of business. It doesn’t matter whether you design software or make auto parts or paint houses. Businesses need a critical set of processes to succeed, and when you find a struggling business, often the reason is buried in these fundamentals. When I go into a company, I don’t look at the nature of the industry or the quirks of that particular marketplace. I’m digging into the foundational elements of the business. More often than not, the problem is in there. That’s why it doesn’t matter what industry you’re in. All successful businesses need to start with successful fundamentals.

 

Will the mechanic’s solution work even in a bad economy?

Especially in a bad economy. It’s amazing how many lousy businesses can look successful when the economy is booming. In good times, there is enough money sloshing around to make even a poorly conceived business look okay. New money covers up poor fundamentals. In a bad economy, that veneer falls away. In a bad economy, businesses fall back on their core processes, and if the core processes are broken, the business will falter. Simplicity is especially critical in a bad economy. That’s when there’s no other way to be successful.

 

If your approach is so simple, why doesn’t everybody do it?

That’s a good question. Frankly, I don’t know. But that shouldn’t stop you from doing it yourself. I have often wondered why business owners fail to take the obvious steps toward sound profitability. I don’t know why they keep the negative employees. I don’t know why they retain the unwieldy organizational structure. I don’t know why they fail to create a business model with a profit goal. I once went into a company to execute a turnaround, and I asked my partner that very question: why are they paying us to come in and do this when it’s really such fundamental work? He said, “I don’t know, but that’s our job.”

 

If you’re ready to stop overthinking and start taking the necessary steps, you’re ready for this book. You’re ready to be a mechanic. Read on.