Low Risk, High Reward: Starting and Growing a Business with Minimal Risk

I am getting ready to launch a new product and this book gave me some great insight on how to research and launch products. Very good material not available anywhere else.

"Low Risk, High Reward" is an outstanding introduction to starting a small business. The book starts out with a well-thought-out list of ten personal attributes an entrepreneur should have. Reiss explains why each personal attribute contributes toward likely success. Reiss puts passion for the endeavor at the top of the list, explaining that not only does it sustain you during bad times, but that it is also the "ultimate" sales tool. Reiss goes on to discuss skills entrepreneurs need, including salesmanship and communication ability. He includes decision-making as a key skill, pointing out that entrepreneurs who act quickly have the edge. He favors making business decisions intuitively, providing you have experience and knowledge which gives you valid intuition. He points out that risks aren't the same for everybody and uses the example of a gymnast on a balance beam. He writes, "I'd sure rather see a young Olympic gymnast on a balance beam than me. The difference, of course, is preparation and ability. Risk is variable, depending on who's taking it." The lesson is that experience and personal contacts lessen risk.One of my favorite chapters is "Numeracy" which briefly discusses "thinking in numbers." Reiss briefly mentions product cost analysis, break-even analysis, and cash-flow analysis. He does an especially thorough job discussing cash flow, which includes a nice cash-flow example in an appendix. Reading this is well worth any new entrepreneur's time. Yet, many new business people won't read it until after they have some bill due, and find out, despite doing well, they don't have the cash to pay the bill! Then, cash flow will become important to them. So, put a bookmark in that appendix, and remember it's there!"Low Risk, High Reward" includes an appendix giving very complete details of one of Reiss's company's experiences with TV Guide Trivia Game, which is used as a case study at many business schools. It's well worth reading. But I'm not a big fan of case studies, which suffer from at least two serious problems. First, the selection problem. Want to find business cases where acting fast and capturing market share, despite losing money, works? No problem! We can find cases to support our theory. Want to show that acting fast and capturing market share while losing money leads to failure? Again, no problem! No matter what the business philosophy, we can find supporting cases. Second, is the attribution problem. What we attribute success or failure to may not, in fact, be correct at all.I think Reiss's TV Guide Trivia Game is a good example of a low financial risk endeavor, but also an endeavor with a high likelihood of failure. And, I wouldn't call it high reward. Maybe, moderate reward is more accurate. Reiss seems to have what might be called the "mail order" mentality (I don't mean this as derogatory in any way. In fact, from what I've read, Reiss sounds like a man of very high integrity and honor) . By this, I mean the philosophy of tos

In the second chapter of his book, Reiss writes about the key numbers that all CEOs running companies should know. He refers to this stuff as 'numeracy,' and he writes clearly on how you need to understand these numbers to get a clear sense of your company's health. He also advocates that CEOs take regularly scheduled snapshots of these companies by updating cash-flow statements, performing cost analysis on products, and doing break-even analyses for the company and all products. A firm understanding of these numbers limits the number of surprises that can wreak havoc on the company. "Tinkering at the margins is what most businesses are really about," Reiss writes. It's not a matter of coming up with anything remarkably new, but borrowing other's time-tested ideas, improving on them a bit and then executing. Clear stuff from someone with experience.

In today's world with women fleeing corporations to start their own businesses coupled with mature executives forced out of corporations due to mergers or downsizing, Bob Reiss' book is a life raft. Frankly, I think risk management is the least important lesson Reiss offers. His real gifts are how to get started, how to build the company, and how to create, build, and sell products not only to the buyer but to the consumer. For those with a great idea who may be financially challenged, he also offers info on how to create a cash flow, a product cost analysis, a break-even analysis, and a business plan that will help get money. If ever a book were written for the fledgling entrepreneur or entrepreneur wanna-be, this is it.

Reiss' book gives ideas you can use obviously gleaned from his personal experiences "where the rubber meets the road."My sons are buying my business and I've given them the book as assigned reading; particularly the chapter"Numeracy".I personally used his ideas from the chapter "Building the Company" about how to get free publicity instead of paying for advertising. I'm building a condo project and received 8 newspaper articles, with photos- some front page- in three different newspapers! The articles generated 16 inquiries and 1 sale so far.Bob's 16 common attributes of entrepreneurs in Chapter 1 are fascinating. I teach literacy to a foreigner who is keenly interested in business and I used this chapter with him.If you own a business, want to or deal with entrepreneurs, get this book and study it!