An operating agreement is used by limited liability companies (LLC) to establish the operations of the business. An operating agreement for an LLC is very similar to by-laws that are used by legal corporations. Within the operating agreement is typically the terms agreed to by members of the LLC, including both day-to-day operating procedures as well as special circumstances. 

If you’re ready to complete and file your LLC paperwork then you should also make sure you’re drafting an operating agreement to outline the rules for members of the LLC. This can protect your liability and make sure all members are on the same page with operating procedures and bound to them legally. My Company Works offers same-day LLC filing and we’ll provide you with an operating agreement for your state as a one-stop-shop. 

What is an Operating Agreement Used For? 

An operating agreement is a legally binding document used by members of an LLC to outline contingencies with their legal relationship within the business. Without an operating agreement then the owners of an LLC would be leaving to chance how a court wants to handle any potential future dispute amongst themselves. 

If you have an LLC then it’s important to draft an operating agreement at the time of business formation. It’s not a legal requirement, in most states, for an LLC to have an operating agreement but it is recommended by many legal experts so that your business operations are protected for your needs. 

Every operating agreement is typically different because each business has different owners with unique circumstances and relationships. It’s important for some to have procedures in place for taking on money in the future while it’s important for others to establish what happens if one of the members of the LLC gets a divorce. 

How to Prepare an Operating Agreement

An operating agreement is a business contract so it’s drafted similarly to any other one. While your articles of incorporation are required to be filed with your state, an operating agreement is not. The operating agreement is optional in many states and rules for these agreements could vary based on the state you incorporate in. You’ll want to partner with a company that is experienced in drafting these within your state, or a local attorney, to make sure you’re creating an operating agreement that benefits your needs. 

The operating agreement should contain information about your company and its members. The agreement should include all the information that you find needs to be spelled out in how the various LLC members and manager(s) work and interact together. There might also be some specific laws in your state that you’d like to moderate for your business by including different rules in your operating agreement. Some of the most common terms included in operating agreements are discussed below. 

Terms to Include in Your Operating Agreement

Your operating agreement, and the terms it contains, should be unique to you and your business. You should also include terms that will allow your business to operate differently than any state rules that don’t work for your business. For example, some states require all profits to be distributed equally, unless otherwise stated in your operating agreement. 

With those considerations, here’s a list of some of the most common terms you’ll want to think about including inside your LLC’s operating agreement: 

• Equity Structure & Membership Interest: Who owns the business and, typically, what percentage of the business does each LLC member own? The membership interest can be broken up into two different components: the economic interest and management interest. Technically someone who owns more management interest in the business could have full control of decision-making even if someone else owns more of an equity interest, though this typically isn’t the case.
  
• Rules for Allocation of Profits: There are basic rules for the allocation of profits, which is typically the rule that all profits are distributed evenly based on the percentage of ownership. However, you could alter this rule by coming up with your own within the operating agreement.
  
• Management Structure: With an LLC you can set it up where it’s managed by members of the LLC (owners) or by a manager. If you’re setting it up to be run by a manager then you would need to define how that relationship will work within this section of the operating agreement so that everyone is on the same page.
  
• Transferability: This section of the operating agreement will define the rights and restrictions of LLC members to transfer their rights and ownership. You may enact veto rights by the other members in case a single member is trying to sell a large interest to an outside party that the rest of the members don’t want to operate with. You could also enact a right of first refusal in the event of a potential sale to allow the other members to potentially purchase the ownership interest instead of a sale to a third party.
  
• Buyout: This clause in the agreement would outline the rules behind certain buyout situations. For example, if a member of the LLC dies, divorces, or files for bankruptcy. The rules could stipulate that the company buys back the membership interest in any of those circumstances so that the other members don’t have to deal with an unexpected party.
  
• Dissolution: This stipulates the circumstances of how the LLC can be dissolved, typically by unanimous or a majority vote of the members.
  
• Records: This provision will dictate how and what records should be kept for the company, and often how long the records should be held. The most important part is to specifically point out the most important records that must be up to date at any given time.
  
• Forbidden Acts: This is an interesting provision that can actually restrict the members or managers of an LLC from specific acts, such as ones that would prevent the business from operating. Generally the punishment for these acts will also be spelled out, such as an involuntary withdrawal from being a member of the LLC. 

These rules are not a catch-all for what is included in all operating agreements but it should give you a good idea of what needs to go in yours. If you’re still not sure then you should contact legal counsel or an experienced company that helps business register LLCs. 

When is an Operating Agreement Required? 

The requirements for operating agreements vary greatly by state. Many states don’t require you to create an operating agreement when you register your LLC, but some do. For example, Alabama, California, and Ohio all require you to have an operating agreement if your LLC has more than a single member. This is contrary to other states like Colorado and Connecticut that require an operating agreement for single-member LLCs. If you’re not sure which state to incorporate in, these are the types of things you should be thinking about. Consider our guide on where to form an LLC. 

The best action for any LLC is typically to have an operating agreement in effect. If you choose not to draft and execute an operating agreement then your business will be at the mercy of the state operating laws. This isn’t an ideal situation because you won’t be able to clearly define the operating procedures that are important to you and your business. 

You may even want to have an operating agreement if you’re the only member of your LLC. Establishing an LLC and including an operating agreement with specific business operating procedures should fully establish your business from being a sole proprietorship and help you further separate your personal and business legal liability. 

Register Your LLC & Get an Operating Agreement

Even if your state doesn’t require you to have an operating agreement, it’s a best practice to create one when you register your LLC. This is to make it clear how the operating procedures work within your business, even if you’re just a single-member LLC for now. Operating agreements can help protect your business from unfavorable laws or yourself by providing a shield of liability that the courts recognize. When you register your LLC at MyCompanyWorks, you’ll get an operating agreement for your state! 

A lot of small business owners are vaguely aware of the Federal government passing various laws related to the Covid-19 virus, but it’s not 100% clear on exactly what is in them (some bills are over 1000 pages!) or how we can utilize the benefits.

This guide aims to make it clear in plain English what’s available and how to get it. Note that there are some qualifications and addendums that this may not be 100% accurate to your specific small business, but should apply to 99% of small businesses out there. 

Summary:

• You can apply online and get $10,000 in 3 business days for free if you don’t qualify for a regular SBA loan. UPDATE: There are delays on this – see below.
• You can get 2.5 times your monthly payroll in a loan that has 6 months without payments, 1% interest and can largely be forgiven if you use it to cover payroll. 
• You can apply for both programs above. 
• You can get tax credits for paying required sick time under new rules. 

Who Is This Guide For? 

Since 99% of employers have 50 employees or less, this guide is only for private businesses (including sole proprietors) with less than 50 employees (not owned by other businesses). If you have more than 50 then we recommend our Small Business Action Plan article which lists the various laws and benefits that apply to those with 500 to 51 employees. 

What’s Available?

First, let’s get clear on the help that’s available. I won’t confuse you with the various legislation “Act” names and other things that just tend to make things hard to understand. Here is the help that’s available. 

Resource #1: $10,000 Grant and up to $2 million Economic Injury Disaster Loan (EIDL)

Pay attention, because this is somewhat confusing if you’re not familiar with how SBA loans work. Typically, the Small Business Administration (SBA) will help businesses get loans that suffer from a disaster and this is called an Economic Injury Disaster Loan (EIDL). Private banks actually give the loans but they are guaranteed by the SBA. 

You can get approved for up to $2 million depending on your credit, etc. Importantly, they’ve waived a “personal guarantee” of loans under $200,000 – that’s huge. 

This new resource is different – it’s a grant that you can get right away (within 3 business days) and you don’t have to pay back if you don’t qualify for the EIDL loan! This is basically free money to any small business who can claim they are being affected by Covid-19 and don’t qualify for other SBA loans.

How to Apply

Visit https://covid19relief.sba.gov and simply complete the application online. The information is fairly simple and you should have the required information on hand or at least be able to estimate most required information (annual revenue, cost of goods sold, etc.). So, you will be applying for an EIDL but you will automatically be given the $10,000 grant to cover payroll and other qualified business expenses within 3 business days. 

NOTE: Make sure to check this box at the end of the application to apply for the $10,000 Grant portion of the EIDL. 

How Long Will It Take?

As mentioned, you can get the Grant in 3 business days. EIDL loans will take longer but the government is trying to expedite. I’ll update this page when I know more. 

UPDATE 4/4/2020: We’re hearing reports that it is taking much longer than 3 days as of April 10, 2020 but we’re hearing that the funds are coming and apparently you can register and track your loan online with the SBA.

UPDATE 4/14/2020: We’re now hearing reports that the Grant is only being given at a rate of $1,000.00 per employee up to 10 employees. Either the initial information they provided was a lie or they changed the rules after seeing demand. Not sure which is worse but disgraceful behavior from the SBA.

Update 4/30/2020: These are being funded and it appears to be roughly 3 weeks after applying but varies from business to business.

More Information

Visit the SBA website. You can also contact the SBA directly by calling 1-800-659-2955 or via email at [email protected] 

Resource #2: Paycheck Protection Program (PPP) Loan up to $10 Million

NOTE: This program is starting April 3rd for businesses and April 10 for independent contractors but we believe that some banks are accepting applications now. Best to get in line first. Note that you can apply to this one as well as the EIDL above but this loan seems to have better interest rates and forgiveness. 

As long as you have fewer than 500 employees and were in business on or before February 15, 2020 (and can certify that Covid-19 has negatively impacted your business), you can get a loan for 2.5 times your average monthly payroll (for previous 12 months) up to $10 million. 

So, for example, if your payroll is $40,000/month then you could get $40,000 X 2.5 = $100,000. There are no payments for 6 months, no collateral or personal guarantees and the interest rate is 1%. The term is for 2 years.

NOTE: What you pay 1099 contractors are NOT included in this amount since they can apply for the PPP on their own starting April 10.

Even better, here’s more details from the SBA:

 “The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.”

Apparently, whatever is used within the first 8 weeks will be forgiven on the loan. This is another fantastic opportunity for small businesses. If your business has been affected by Covid-19 then I’m not seeing much harm in applying for this loan. There are no prepayment penalties, the interest rate is low and a good portion of the loan can be forgiven. 

How to Apply

You have to apply directly with an existing SBA-approved bank. Here’s a list of their top 100 lenders and a listing by zip code but I would recommend you contact your existing bank and see if they are an SBA-approved lender and if not, whom they recommend.  Here’s the sample application form from the Treasury Department – download that and then get your information and documentation ready to go because it may take some time to get approved. The better your information the faster you get approved! 

UPDATE: Quickbooks has been approved as an SBA Lender so if you’re a customer I would recommend them if your bank is not being responsive.

How Long Will It Take?

The government says they are encouraging bankers to expedite these loans, some in days so ask your banker and make sure you get your documents ready to go. I’ll update this page when I know more. 

UPDATE: As of April 10, banks are taking much longer than expected but funds are still being distributed. We still recommend going to your current bank first.

UPDATE: As of April 30, there is a new round of funding for the PPP program from the government, however the larger banks like Chase, Bank of America and Wells Fargo have been limited to only a certain percentage of the money. Currently, we’re recommending you contact a local bank, PayPal (you don’t have to have a PayPal account) or Womply (who seem to be funding faster than the big banks).

UPDATE: Read this article on PPP Loan Forgiveness to make sure you meet the qualifications to have your loan forgiven.

Resource #3: Tax Credits for Employees Dealing with Covid-19

The Families First Coronavirus Response Act (FFCRA or Act) requires certain employers to provide their employees with paid sick leave and expanded family and medical leave for specified reasons related to COVID-19. These provisions will apply from April 1, 2020 through December 31, 2020.

Here are the qualifying reasons: 

1. is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
2. has been advised by a health care provider to self-quarantine related to COVID-19;
3. is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
4. is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
5. is caring for his or her child whose school or place of care is closed (or child care provider is unavailable) due to COVID-19 related reasons; or [SEE BELOW FOR IMPORTANT EXCLUSIONS FOR SMALL BUSINESS]
6. is experiencing any other substantially-similar condition specified by the U.S. Department of Health and Human Services.

However, the Department of Labor is exempting certain businesses with fewer than 50 employees. From the Department of Labor: 

“The FFCRA covers private employers with fewer than 500 employees and certain public employers. Small employers with fewer than 50 employees may qualify for an exemption from the requirement to provide paid leave due to school, place of care, or child care provider closings or unavailability, if the leave payments would jeopardize the viability of their business as a going concern.” 

Specifically:

“Small businesses with fewer than 50 employees, including religious and nonprofit organizations, are exempt from two aspects of the FFCRA’s provisions — (1) paid sick leave due to school closure, place of care closure or child care provider unavailability for COVID-19 related reasons; and (2) emergency paid leave under the Family and Medical Leave Act (FMLA) — when doing so would jeopardize the viability of the business, DOL said. An “authorized officer” of the business must determine whether it meets this criteria, according to the guidance.” 

So if you have 50 or less employees and you are an “authorized officer” and can clearly document that complying with the act would jeopardize the viability of the business then you are exempt from point #5 above specifically and perhaps the others. I will update this section when I have more guidance. 

What You Have to Provide to Employees

Send your employees (full and part time) the Official Notice and follow the instructions for posting it correctly (email will work if you send it to all employees). 

You will pay the required sick time (which is in addition to any current sick time or PTO offered). However, you will get a tax credit for the sick time. For example, if you owe $8000 in taxes to the IRS for payroll but you paid out $5000 in sick time, you only have to deposit $3000. Many payroll providers have already added the category of “emergency” pay to their systems to properly track this and make sure you get proper refunds. Make sure you track this as well. 

More Information

1. IRS Summary of the Bill
2. Employer obligations in the new bill
3. What employers need to know
4. What it means for small business

Summary

Update: Here’s a nice summary of the various other benefits of the CARES Act.

I’ve spent much of the last week or two reviewing articles, PDFs, webinars and emails and none of them really made it clear how easy it was to apply for some quick cash and what a good deal the loans are, especially the PPP. I recommend every small business owner to consider taking advantage of these benefits if your business is even remotely affected by Covid-19. 

Have any other advice or tactics that can help? I will continue to update this page with everything I can. Leave a comment below or email me matt – at – mycompanyworks.com.

Please stay positive, healthy and safe!

Matt Knee
Founder/President
MyCompanyWorks, Inc.

To all small business owners:

I’m not going to sugarcoat it, these next few months could get pretty bad for small business, so I’m putting together an Action Plan to help us survive and thrive. The government is stepping in but let’s get clear on exactly what our next steps should be.

Always remember that great businesses have survived and even been created during recessions or disasters so stay healthy, keep your mindset positive and let’s get to work.

I believe we should all focus on these main things at the moment:

Step 1: Do a Quick Break Even Analysis

You need to know how much money you need to keep operating on a monthly or even weekly basis. So fire up a spreadsheet (this doesn’t have to be perfect, just get some numbers down) – I’ve made one for you here – and open your accounting software or books and calculate the expenses which are “fixed” and you cannot quickly change (realistically). This would include things like salaries, rent, utilities, software, insurance, etc.

Then add your income from all sources. Just go through your monthly profit and loss statement and add any of these items to your spreadsheet. I would do a “recent” month to see what’s normal and then a “worst case” to calculate the total to see what we’re dealing with.

If it’s negative (and it likely will be), then we now know roughly how much we may need to cut (or lower prices, etc. to boost sales).

NOTE: If you want to dive into the numbers further, you can calculate your variable and per-unit costs as well. This is a good article to follow for that.

Step 2: Reassure Customers and Pivot If Necessary

If your business has not been closed down then make sure to reassure your customers you are open either via email, signage or even call them and then let them know your action plan. See our action plan here for some ideas; here’s a template you can use as well. Mostly, you want to assure your customers that you are open and are taking precautions for your employees and customers safety.

For example, if you run a restaurant, you’ll want to mention how you’re using gloves, masks, increased sanitizing schedules, etc. to make people confident they can order from you. Basically, if you handle any physical items that a customer will receive you need to reassure them you’re taking precautions.

Some businesses may consider a quick “Pivot” in their business model to deal with the virus. For example, if you’re a restaurant, consider adding delivery or take out. If you sell physical items retail, it’s time to consider shipping to customers if you don’t currently (setup a website as well if you don’t have one). If you typically cater to large events, consider smaller venues or pivot towards smaller events or individuals.

NOTE: There are many quick ways to get an online website and ordering system setup that require “no code” – try Makerpad for example who is offering this for free right now. Yorcue is doing this as well and has an app that can schedule pick up and delivery for your business.

For example, most of the Las Vegas Strip has been shut down but the meat and restaurant food providers are making menus and posting them on Facebook to sell that food to individuals. If you run a landscaping company, you could add on services like delivery or trash disposal for customers. Get creative and see what you can pivot towards for the down turn.

Look how fast this company pivoted:

Other quick business ideas:

• Cleaning and sanitizing services
• Sanitizer and mask manufacturing
• Task services: delivery of anything by trained and sanitized staff
• Remote office consulting and setup
• Twitter thread: What new or existing companies will thrive during coronavirus?
• 10 Industries that will be winners in the stay-home economy
• 100+ Ways to Make Money on the Internet
• Some companies are offering their paid training and other software or resources for free.

Step 3: Cut Expenses

We’ve had several years of a really good economy and I think a lot of us have allowed various things to crawl onto our credit card statements and into our payables inbox, and we just sort of dismissed them. Now’s the time to go through those and cancel, reduce or renegotiate those services.

So go through each item on your spreadsheet and see what you can do to reduce these. The spreadsheet I provided has a column for that. Think outside the box here: call your landlord (or any vendor) and ask for a discount, delay of 30-90 days or similar.

People are going to be understanding now while the panic is starting, but not necessarily in 2 months so start now. Your pitch to vendors like landlords: “I can pay you partially/in 30/60/90 days or I can go out of business and not pay anything – what would you prefer?”.

Unless your business is very dependent on something that is essentially shutdown (travel, sports, events, etc.) then be cautious about dialing back advertising or marketing at this point. You may want to closely review your accounts and trim the fat but don’t fail to get the word out at all. Remember that many businesses thrived in recessions or depressions.

Next, be very, very cautious about cutting salaries, reducing hours or benefits until you have all the information about what the Small Business Administration or Federal Government may provide you (see below).

Cutting people, salary, hours or benefits will likely have a demoralizing effect and you don’t want to do it more than once if absolutely required. At the least keep communication very clear with your staff – some may actually volunteer for reduced hours or even a 30 or 60 day furlough to spend more time at home.

Personally, I would try to cut other expenses, boost sales and/or pivot (see steps below) first before cutting staff.

Recommended Articles: How to Cut Expenses and The Virus Survival Strategy for Startups

Step 4: Boost Sales and Cash Flow if Possible

Now would be the time to run any promotions, sales or specials. Cutting prices may be unavoidable to just get cash flow going. So consider having a sale and make sure to promote it after reassuring your customers.

Local businesses, if you have gift certificates then now is the time to promote them. A lot of people want to support small business now and that’s by far the easiest way to get cash in your pocket now. Some places are offering the equivalent of a bond: pay $75 now to get $100 in the future, etc.

If you have outstanding receivables you may want to follow up with those, especially from customers who can easily weather the storm. Also, be careful of taking on new customers that may not pay so be very careful about extending credit without proven payments or deposits.

Recommended Article: Marketing Your Way Through a Recession

Step 5: Understand the Families First Coronavirus Response Act (FFCRA), CARES Act (H.R. 6201) and Federal Grants and Loans

The bill was just signed into law and provides mandatory paid sick time and other long term leave for those diagnosed or helping others with Covid-19. It applies to businesses with fewer than 500 employees (but those with 50 or fewer may be exempt). Here’s a few summaries:

FFCRA:

1. IRS Summary of the Bill
2. Employer obligations in the new bill
3. What employers need to know
4. What does it mean for working Americans
5. What it means for small business

CARES Act:

1. Summary of the CARES Act
2. Another summary from Reddit
3. Emergency Loans summary from US Chamber of Commerce

We will update this post with a checklist of items for small business employers as we learn more, but for now, those articles above seem to be the most comprehensive. Please leave a comment if you have a better link or more accurate information.

There are really good sources of funds available right now. So much so that we’ve written a separate post on How to Get Covid-19 Funds For Your Small Business.

Other Sources of Loans:

• Kabbage – Loans & MCA
• BlueVine –  Loans 
• Clearbanc – Loans 
• PNC – Line of Credit
• Forward Financing – MCA
• Total Merchant Resources – Loans & MCA

Fundraisers and More:

Some small businesses have started raffling off prizes and starting a “GoFundMe” page to get community donations and support. Quickbooks is sponsoring GoFundMe’s as well.

Here’s a list of Small Business Relief programs by state.

Anything Else?

Have any other advice or tactics that can help? I will continue to update this page with everything I can. Leave a comment below or email me matt – at – mycompanyworks.com.

Please stay positive, healthy and safe!

Matt Knee
Founder/President
MyCompanyWorks, Inc.

If you’re reading this then you’re either interested in starting your business, or you’ve started one already but found that you built yourself a job, not a business.

You might have read books and articles about genius entrepreneurs building multi-billion dollar businesses, going public with an IPO, and escaping off into the sunset. 

But that’s not you. 

Instead, you want to build a business so your wife can stop working.

Maybe you want a business that gives you time to spend with your kids.

Maybe you’re just tired of your day job and want to build something on the side that gives you more fulfillment.

You’re in luck. 

The books in this article will teach you to think like an MBA, even if you’ve never taken a business class in your life. You’ll learn how to start, market, and scale a business, even if you’re still working a day job. And most importantly, you’ll learn about different kinds of business that others have already built so you have a roadmap for your own journey.

Let’s get into it.

The Foundation of a Successful Small Business

1. The Four Steps to the Epiphany by Steve Blank

This is the best step-by-step startup book you can read. The book organizes the beginning stages of building a business. It talks about knowing your values, being market-driven, focusing on customer development versus product development, and how to go mainstream by making products for early adopters first.

2. Great by Choice by Jim Collins

This book tackles the question of, “Are successful companies just lucky or are there replicable patterns they follow?” 

Centered around the tenets of discipline, calibrated creativity, and a healthy sense of paranoia, the book teaches you how to create a foundation for your business that will let it thrive amidst uncertain environments.

3. Good to Great by Jim Collins

If you’ve ever wondered what separates good companies from the ones that are truly great, then this book holds the answers. Concepts in the book, like the Hedgehog Concept and the Flywheel, show you the qualities and mindsets you need to cultivate in yourself and in your employees to build a company that lasts.

4. Purple Cow by Seth Godin

This book is about how you and your business can stand out… And how to handle the risk that comes with being different. You’ll learn about creating remarkable products and services, and identifying the first few customer-slash-evangelists who will excitedly tell the world about your business

How to Start a Successful Small Business

5. The Personal MBA by Josh Kaufman

You should read this book if you think you need an MBA to build a successful business (spoiler alert: you don’t). You’ll learn to ask the hard questions that will help you make the right decisions so your business succeeds. You’ll build a framework for business decisions like getting outside funding, vision, marketing, negotiation, and collaboration.

6. The E-Myth Revisited by Michael Gerber

Coupled with The Personal MBA, this book is for anyone who is great at what they do and now wants to build a business around that expertise. You’ll learn about the nitty-gritty operations side of the business: how to plan for growth from day one, what to put in place so that you’re building a business and not a job for yourself, and how to (eventually) find and train people to run your business for you.

7. The 4-Hour Workweek by Tim Ferriss

If you want to build a business and not another job for yourself, then you need to be intentional about this from the beginning. This book will teach you how to redefine why and how you work, help you eliminate as much busy-work from your plate as possible, and prepare yourself for entrepreneurship — even if you’re still at your day job.

8. The Lean Startup by Eric Ries

Building a successful business is simple but difficult. It’s not about how fast you grow. It’s not even just about how much revenue you make. Instead, it’s about finding a profitable business model that can stand the test of time. 

In this book, you’ll learn the right and wrong reasons to start a business. You’ll learn how to test to make sure your business idea is profitable before you release your product. And you’ll also learn how to bake marketing into your product so that it sells itself. 

9. Zero to One by Peter Thiel

The most difficult stage of building a business is taking it from 0 sales and customers to the first ones. That’s much harder than going from 1 to 2. In this book, you’ll learn why successful founders tend to be weird oddballs, the sequence you need to follow if you want mass-market success, and the 7 crucial questions you need to ask yourself before you start your business.

How to Find Your First Customers for Your Small Business

10. This Is Marketing by Seth Godin

This is the best high-level marketing book you can read. Good marketing is about painting a story about how your business can help your customer improve their life. And This is Marketing gives you a framework for the marketing strategies and tactics that you’ll learn in other books.

11. Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne

Stop trying to be better. Just try to be different.  This is the main premise of this book — and it’s the most important positioning concept you need to learn in a world of commodities and choice. The book teaches you to be different, to carve out category or niche (blue ocean) and to stop seeking out crowded markets (red oceans).

12. Tribes by Seth Godin

The health of your business is dependent on the audience or tribe you built around the change you’re trying to make. Tribes is a short book that goes into detail on how communities start and thrive, and how you can start, nurture, and build a tribe around your work.

13. Show Your Work! by Austin Kleon

If you subscribe to the “build it and they will come” model of marketing, then you’re in for a rude awakening. These days, your marketing needs to start as soon as (or even before) you build your product. This book shows you how you can start documenting the process of building your business… So that when you finally launch, you won’t launch to crickets; you’ll have people who are eager to buy.

14. Traction by Gabriel Weinberg and Justin Mares

If you want a systematic way to grow customer demand as early as possible, then you need to read this book. It runs you through the 20 possible channels you can take to find customers, and with ‘The Bullseye Method’, teaches you how to systematically test each one until you find the ones that give you the most bang for your buck.

How to Grow and Scale Your Small Business

15. Company of One by Paul Jarvis

This book is about perspective and priorities — how “successful” doesn’t have to mean big, and how ‘“staying small” might actually be a better definition of success for your business. You’ll learn to focus on the people who are working in the business (for a small business, that’s probably just you) and the two things you should emphasize to build a successful small business.

16. Small Giants by Bo Burlingham

This book is for business owners who want to keep control of their company. You’ll learn why staying private might be a good idea in this time of high growth, IPOs, and unicorns. You’ll also learn what it means to be community-focused as a company, both internally and externally, so that you grow without outside funding.

17. Work the System by Sam Carpenter

If you’re reading this, then it’s likely you struggle with perfectionism and control — two common traits that entrepreneurs share. More than just learning to build systems, this book will teach you how to let go of perfection and focus on controlling the parts of your business that you can change.

If you want to learn how to scale a business without making a job for yourself, then this book is for you. 

18. The Effective Executive by Peter Drucker

As a business owner, you have to wear a lot of hats and that can get overwhelming. In this book, one of the history’s foremost thinkers on business and management helps you take your effectiveness and efficiency to the next level by asking, “Is this decision even worth making?” 

You’ll learn why and how to delegate based on strengths and not weaknesses, how to make decisions when you have to, and why holding longer decision-making meetings might actually save you more time down the road.

19. The 80/20 Principle by Richard Koch

Whether it’s dealing with toxic customers, having too many business ideas, or just having too much on your plate, entrepreneurs are constantly stretched thin. The main premise of this book — that the largest share of your results is produced by just a small fraction of the work — helps you simplify your professional (and personal) life.

By focusing only on the 20% of products and customers that actually drive your business, you’ll spend more time on the most important tasks, instead of managing your time.

20. Startups Made Simple by Matt Knee

Drawing from his experience running an INC5000 company, Matt helps entrepreneurs start and run their businesses. In this book, he distills lessons from the best business thinkers and books (including ones from this list) and organizes it into a step-by-step system you can follow to start and grow your own business.

Next Steps

Did we miss one? Let us know in the comments!

Below is an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here.  

Very closely related to Clear Vision is how you will reverse engineer your Vision into Clear Goals, concrete action steps that need to be taken to turn that Vision into reality. This is where most visionaries drop the ball and remain in the thinking part, not the doing part.

In a well-run company, not only is there usually one big, obvious goal (called a “Big Hairy Audacious Goal” or BHAG®️ made famous in the book Good to Great by Jim Collins), but you should have realistic (but aggressive) yearly and quarterly goals that you’re looking to accomplish that moves your company forward to that big goal. Each employee should have an individual goal and that’s usually (but not always) tied to the company goal. 

For example, let’s say my Vision was to build the next “LinkedIn for Businesses” platform and my BHAG was to have 1 million businesses on my platform by 2029. Here’s how I might quickly brainstorm and reverse engineer the steps to make that goal. Note that these are just wild guesses and things will change each year or even quarter.

1. Write specifications for beta version of website 
2. Design mockup and logo for website
3. Get a marketing list of 1,000 random small businesses of all types for testing
4. Build and test website 
5. Invite marketing list for free beta signup and to provide feedback 
6. Interview 10 users a week and build around their biggest feature requests 
7. Launch “Invite my Address Book” functionality 
8. Reach 10,000 signups 
9. Launch targeted ads and newsletter functionality 
10. Reach $10,000 in monthly revenue 
11. Launch “Message my Business” functionality 
12. Launch mobile app
13. Launch national digital advertising campaign 
14. Reach 100,000 signups 
15. Launch “Recommended Vendor” functionality 
16. Reach $100,000 in monthly revenue 
17. Reach 250,000 signups 
18. Launch premium membership option
19. Launch national radio advertising campaign 
20. Reach 500,000 signups 
21. Launch national TV advertising campaign 
22. Reach 1 million signups 

Based on that very rough list of possible goals to get to our BHAG, you can close in on the likely goals you’ll need for the next year or so and then further break down those goals by quarter. So you’ve taken a long term vision and now have a solid sense of what needs to get done in the next year. Now break down what needs to happen this year by quarters, make them measurable and assign them to a responsible person (likely yourself at first). 

The important thing is to have the vision and general roadmap to getting there and adjust along the way. With this example, I know I need to get working on the specs and design for my website right away. Finally, assigning deadlines (even if those are guesses) to your goals is a very effective way to encourage their completion and add a sense of urgency to getting them done. 

A frequent question I get is, “When am I supposed to find the time to work on goals while I’m busy working in my business?” The obvious answer is that building your business should already be based on clear goals, but if not, then you should make a roadmap like I’ve listed above. As I discuss in the section on the superpower of Productivity, there is Real Work and there is Process Work. Process Work is the stuff you do daily to provide your product or service. Real Work is working on Goals and things that move the company forward.

If your vision and BHAG are big, then realize you’ll never get there doing the Process Work all day. I recommend you brainstorm goals yearly and assign goals each quarter to individuals and make sure they are measurable. We’ll go into more specifics about creating a plan for your company in later chapters, especially Step 5. 

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.