Dave Ramsey’s EntreLeadership Reviewed

“Wear the old coat and buy the new book.” – Austin Phelps

If you have ever listened to Dave Ramsey on the radio or read any of his books, you will understand that the quote above fits nicely with his way of thinking.  For example, in his book EntreLeadership one of the points he makes is that a business does not necessarily need to by new equipment (call equipment the old coat), yet he also emphasizes investing in the education and training of employees (the new book).

In early 2011 I read his book, Financial Peace Revisited. It was insightful and in general I would have to say there was very little with which I was not 100% in agreement. He strengthened and expanded my thoughts on personal finance. Since I agreed with his thoughts there and because I advise small businesses as a Part-time CFO or Controller, EntreLeadership seemed like a logical selection to read.

What I Had Expected

Based on Ramsey’s conservative (and highly sensible) views on managing personal finances, I fully expected the same tone in a book by him on business management, particularly in the parts relating to finances. There was certainly no disappointment there. He bases his thoughts on sound Biblical Principles, such as the golden rule (See Matthew 7:12), improving the probability of success by seeking counsel (Proverbs 15:22), carefully considering the cost (Luke 14:28-30), and being true to your words (let your yes be your yes and your no be your no. See Matthew 5:37).

Over the years I have had a number of occasions to observe the negative consequences of businesses that did not follow these principles; consequences such as high employee turnover, bad or broken relationships with vendors and customers, overextending by inadequate planning, and cash shortages. Keep teaching this sound advise, Dave Ramsey.

What I Had Not Expected

Actually, based on what I already knew of Dave Ramsey and his philosophy, I really should not have been surprised, but yet I was. In an earlier posting, The Big 4 Capital Users, and its follow up posts, 3 Low Cost Sources of Cash – Part 1, 3 Low Cost Sources of Cash – Part 2, 3 Low Cost Sources of Cash – Part 3, and Small Inventory – Big Benefits, I used an acronym for four areas where I have found that businesses (particularly small businesses) get into financial trouble. The acronym was CRIP, and it stands for Capital Equipment, Receivables, Inventory, and People. I concluded over a number of years that these areas were the most common for poor financial management. I couldn’t help but smile when I read EntreLeadership and found the same general theme in much of his book. For example, in chapter 9 (Financial Peace for Business) of EntreLeadership, Ramsey specifically addresses Capital Equipment and Inventory. In chapter 8 (Death of a Salesman) he addresses the things that lead to problems with Receivables. He also discussed the importance of doing the accounting, and I have to agree that this is another area where businesses are often negligent until it is too late. As to People, he covers this in multiple areas of the book, particularly in chapter 11 (People Matter Most) (see my blog A Leader’s Choice for some thoughts on how you treat people).

In general, I could not help but be amazed at how often Dave Ramsey identified the same issues I discussed in my earlier blog posts. Ramsey, of course, went much deeper, and quit frankly helped me see additional opportunities to help a business.

In conclusion, I highly recommend this book to all business owners and managers, particularly those with small companies. Feel free to contact me for help in getting these areas and more under control.

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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