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The Knack, by Norm Brodsky and Bo Burlingham (both columnists for Inc Magazine) is a gift to any entrepreneur. The books is filled with pearls of wisdom about “real companies facing real challenges”. The basic premise of the book is that there is no magic formula or step by step process for running your own business rather, “there’s a mentality that helps street-smart entrepreneurs solve problems and pursue opportunities as they arise. Brodsky calls this mentality “the knack“.

From the books website…

Among the morsels of business wisdom you will find here:

Numbers run a business. - If you don’t know how to read them, you’re flying blind.—Start tracking them by hand as soon as you launch your business.

A sale isn’t a sale until you collect. - A receivable is like a loan. Make sure your customers are credit-worthy.

When your short-term liabilities exceed your short-term assets, you’re bankrupt. - Keep track of how much you’re going to collect and spend in the next twelve months.

Forget about shortcuts. Run a business as if it’s forever. - In the long run, your shortcuts will prove to be detours on the road to achieving your goals.

Cash is hard to get and easy to spend. - Make it before you spend it.

You have no friends in business, only associates. - You can laugh and cry with your employees, but neither you nor they should forget that it’s a business relationship.

Gross margin is the most important number on the income statement. - Don’t make the mistake of focusing on the top line.

Identify your true competitors, and treat them with respect. - Their opinion of you will play a critical role in determining your reputation.

Culture drives a company. - The boss’s most important job is to define and enforce it.

The life plan has to come before the business plan. - You need to figure out where you want to go before deciding how to get there.

The book is well worth the time spent reading it. Go pick up a copy of: The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up