One Million in the Bank

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Re: One Million in the Bank

Post by jennypenny » Sat Mar 18, 2017 1:17 pm

I want to +1 the recommendation to read everything you can, and point out that it's especially important in combination with networking. You might get lucky enough to talk to the right person, but if you haven't done your homework you won't get as much out of the experience. When I was learning about trading and investing, I read as much as possible about the different strategies. I didn't like most of the canned systems but being knowledgeable about them helped me understand what traders were talking about when I interacted with them. People are also more willing to give you their time if they think you've put in your time as well.

On this forum, I find it a little frustrating when jacob takes the time to answer a newbie's questions only to find out that the person hasn't even read ERE yet. Think of how much more information they would have gotten out of jacob if they'd read it beforehand and didn't waste time asking him questions he'd already answered in the book.

I've never regretted buying a book. Even if you don't like it, it's a cheap mistake.

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Re: One Million in the Bank

Post by Fish » Wed Mar 22, 2017 7:16 am

Read Gerber's E-Myth Revisited. Great book, 5/5. Worth at least 2-5 years of experience. :D

I was kind of disappointed with One Million. Would rate 3/5 and equal to 30 days in the lab, which still means it was a fair deal for the price, but I'm used to reading only classics. E-Myth is a tough act to follow.

Answering my own questions:

1) Jacob summarized the content of his chapter quite well. For me it was one of the most pleasant parts of reading One Million but Jacob's best writing by far is in the ERE book/blog/forum. I could be a lot more critical but I'll stop here because I don't really like it when I'm in range and other people are talking about me, but not at me.

2) Looking past the plain writing style, the bright light bulbs are mostly in Chapter 1. I had high expectations but the rest of the book was full of generalities and short on specifics. It really felt as if he had made an outline of business-related topics and then filled it out using personal experience, interviews, and Google search. There didn't seem to be much strategy to the book's organization. The $1 million gimmick tied the book together. :(

The book offered breadth while I was expecting depth. There's a lot of "I never tried X but here's an overview of how it works so it's in your toolbox." Since I was starting from zero, I actually benefited from it. But Google would get you just as far if you knew what keywords to search. There's very little secret sauce. Instead I would have preferred a detailed step by step model or example of how to build a tried-and-tested business from scratch. I understand such a plan is fragile but why must it always be general principles and the rest left as an "exercise for the reader?" :evil:

E-Myth killed my business dreams in the front matter even before I got to Chapter 1. However, One Million had a few words of encouragement toward the end that re-opened my mind to the possibility of starting a business. That has to be worth something.

Overall recommendation: I wouldn't consider it a classic or essential reading. If you have little business knowledge and you're looking for white hat information on getting started, it makes a nice overview. It won't lead you down the wrong road or into dark backalleys where you'll get ambushed by the sharks of the business world. However, you will certainly need other how-to books to continue. It's a summary, not a walkthrough.

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Re: One Million in the Bank

Post by BRUTE » Wed Mar 22, 2017 1:34 pm


that story about the baker is brutal :D

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Re: One Million in the Bank

Post by Fish » Fri Mar 24, 2017 12:57 am

I'm wondering if I was unnecessarily harsh on One Million simply due to having read it in the same night as E-Myth. The euphoria of receiving a grand vision from a great teacher followed by a plain and honest description of reality from an instructor who is merely good. Would like to compare notes with others who have read the book. I still can't get over that underwhelmed feeling though.

@brute I got weeded out even earlier than that. There was a line in the introduction of E-Myth stating that the (most) successful people in business are those who have an insatiable thirst for learning. One Million includes a similar statement. I'm not that kind of person (yet?). I need to change my habits.

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Re: One Million in the Bank

Post by simplex » Mon Mar 27, 2017 3:24 am

One Million is more of a general introduction than a specific business practice book.
The thing is: Most business advice is wrong (because it applies to a different business than yours). For example, some books advise on hiring early on. Others advise going alone. Which one is right? That depends on your goals and situation.
So, after some general orientation, you should focus on a specific business model and customer group, which both fit your personality. Be prepared to test if your plan is ok for you. Visit businesses which have similar clients. Do you like this? If not, it's hard to become successful.

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Re: One Million in the Bank

Post by distracted_at_work » Sat Apr 08, 2017 7:11 pm

I've finished One Million and overall enjoyed it.

I was a good contrast against the vision oriented E-Myth that I found in the library :) . I appreciated the idea of making money in a simple business. I thought his big point was that do you not need to re-invent the wheel. I also appreciated Slavin's thoughts/examples on financing the business as that would be my main challenge.

My main criticism was how often and heavily he referenced SBDC & SCORE. As a non-American it really fell on deaf ears. I've been doing my own research on Canadian business development organizations but still. I would have preferred it been written without the national slant. I also would have liked to hear how he made money in oil exploration, that's not exactly a simple business as he preaches about doing the rest of the book. You depend so heavily on having good geologists, completion engineers, production engineers. I've seen, and worked for, exploration companies that fail because they drill a few bad wells in a row or have a dud acquisition. It's not simple work.

@Jacob Your chapter left me wondering if you recommend living an ERE lifestyle while I start a business or to complete ERE via the hamster wheel before I start a business. Specific example, presume I have $100K and need $500K in capital to start my business. If I wait, I can maintain 100% equity in the venture. Of course, saving up $500K also provides me with an early retirement that would be risked by staring a business.

I know too many personal variables for a hard answer but that's the question I'm left with.

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Re: One Million in the Bank

Post by jacob » Sun Apr 09, 2017 9:34 am

@daw - If we rephrase your $500k as a student loan, what would your answer be in terms of having 100% equity in your education vs having borrowed it? I wouldn't be looking at equity for this decision. I would be looking at whether current liabilities are covered. This is what sinks businesses in the early stages---running out of money to pay its founders a living wage. If you're FI, your living is covered forever. If you're not, you now have a deadline before failing to get the business airborne sends you back into a "real job".

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Re: One Million in the Bank

Post by BlueNote » Sun Apr 09, 2017 7:06 pm

When I was in University and college I wanted to start my own businesses. I took small business courses, read a ton of books and interviewed a ton of people (for school and privately) on the topic. I started three different businesses, which I eventually stopped (one failed suddenly). I boot strapped all of my business (no loans and almost no equity)so there were no financial blowups of the type described in ch1 of million in the bank. I worked part time at a normal job too. They were a lot of work and I don't miss some parts of it, like collecting or dealing with totally irrational and/or scammy customers. A lot of people on these boards are trying to get away from the things being an entrepreneur entails, the BS only gets worse in some cases so beware. I read a lot of books in this genre including E-Myth and associated Gerber books/brochures. I haven't read 1 million in the bank (read the first chapter and it's similar to other material I have read) but let me share the main points of what I learned:

1. Marketing/Sales: Sales and marketing is very , very important especially in the beginning. You need a product/service (supply) and you need marketing/sales (demand) in order to earn revenues and even hope to make profits. Some businesses require a direct sales approach, other businesses don't. If you're not able to be a good sales person then you'll need to either find a business that doesn't require sales ability or you'll need to get the sales skill through others (employees, partners, consignment etc.). For example if you buy a McDonalds franchise you don't need sales skills, the franchisor will take care of that for you through mass advertising. On the other hand if you buy/start a car dealership you'll be a one legged man in an ass kicking contest if you can't sell or get some people to sell for you. Marketing is really important, so if I were to give small business another go I'd spend about half to 2/3 of my time on marketing/sales at the beginning unless I had a franchise where that was taken care of. I met a lot of people who had a product that they just couldn't sell to save their lives, they were usually terrible at marketing too. Their businesses almost always failed and they moved on to employment work. These people should have considered franchises IMHO.

2. Cash Flow: As Jacob mentioned liquidity (cash flow) is one of the more useful financial metrics for small businesses. I interviewed quite a few small businesses and in their initial excitement many ran into some early liquidity trouble. You can easily ruin a profitable business when your customers don't pay you for 90-120 days but you're costs ( labour, materials and overhead) are paid on delivery. There are ways to get out of this problem but they're usually somewhat expensive and painful. As a general rule learn basic accounting and bookkeeping or at least have a competent financial person review your plans and financials. Make sure that you are matching your asset due dates ( when the non-cash asset converts to cash) to your liability dues dates and you generally won't have this problem. For example if your suppliers require cash payment then pass this along to your customers by requiring cash payments from them too, otherwise you'll end up having to finance a liquidity issue through a loan, retained earnings and/or equity investment. On the other hand if you can get suppliers to accept payment in 90 days then you can consider extending credit to your customers, if it makes you more profit, but be careful because you have to factor in bad debts, late payers etc. With ERE you can probably afford to avoid these problems because you're personal cash burn is super slow but you need to be able to recognize financial problems in advance in order to avoid them , hence my call for a basic understanding of accounting and bookeeping..

3. Learn: Read a lot of books on starting and running a small business so you can avoid some of the big mistakes that others often make. These books will usually recommend and advise on things like a business plan, finding financing, and coming up with operational manuals which is usually a good idea. However as you gain experience points you'll see new opportunities that weren't part of the original plan so the plan is often most useful as a tool to think about things in a structured way but shouldn't be a straight jacket, you should be evolving the plan all the time. Also interview and talk to people in the community, on the Internet , at conventions etc. I saw a lot of people putting in way more work then they needed to because they didn't have a good grip on strategy, marketing, operations and other areas of importance. They just left money on the table because they cut themselves off from freely available knowledge.

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Re: One Million in the Bank

Post by distracted_at_work » Sun Apr 16, 2017 3:28 pm


Excellent point. Thanks for the insight and apologies for the slow reply, I'm currently traveling in internet-scarce parts of Nicaragua.

Based on your comments my plan of action should be to work towards FI while ironing out details on the business or while starting a less expensive small-scale proof-of-concept operation in the meantime. As Slavin pointed out, it may be easier than I thought to finance. I've pitched my idea to family members and friends and have already had a VP of a major Canadian bank come back to me via word of mouth and ask for a business plan :shock:

If I financed through debt, my research indicates I could give a decent rate of return (~14%+) if I didn't pay myself. I'd need to negotiate a 6-mo grace period in order to start cash-flowing I think. This would be my ideal scenario.


Thanks for the detailed post and again apologies for the slow reply.

Marketing/sales is my weakest point, at least on paper, currently. If I brought on a partner/employee, I would want them to be the expert in this.

Cash is king seems to be the small business mantra, at least from everyone I've talked to. I'd have to do my best to negotiate net-90 on my payments until I can start cash flowing. Would you consider getting an extra % of costs in financing to cover cash flow in the first year? That seems to be the danger zone for failure.

Learning is what I'm here for! I've been doing nothing but talking to local owners and reading every book I can get my hands on. I'm amazed at how open potential competitors are with sharing information.

I know I'm being a tease but I will make a big post explaining my idea and asking for specific feedback. Probably not until I'm back in Canada and have secured a place to live, however.

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