5 Must-Read Money Books for Entrepreneurs
Hundreds of books (maybe more!) come out each year on the topics of business and money. Books provide us, as business owners, an opportunity to learn from the triumphs and challenges of others who are journeying through entrepreneurial life. They provide insight that can otherwise only be learned through trial and error ourselves. Summer is just around the corner, and if you’re like us, it’s the season that affords us the time to catch up on our reading. We thought we’d share our must-read money books with you. Some of these books are on the tactical side and some give you that inspirational boost that we all need as business owners from time to time. We curated this list to hit all the spots. We hope it inspires you to pick up some new literature and some new ideas too. Happy reading.
1. Profit First by Mike Michalowicz
A new approach to making your business profitable from day one
Are you a service-based entrepreneur? If the topic of business models and profitability gets you excited, then this book is for you! The author flips the traditional profitability model on its head and offers a new way to think about how you make money. Traditionally, profit is defined as the money left over after you subtract your expenses from your revenue (as we explained in more detail in our recent blog post). The profit is what’s left after you have paid all your bills. Makes sense right? That's certainly how we've been taught to frame our business. However, Michalowicz has a different opinion.
In his approach, he challenges us to first identify the amount of profit we need (or want) to generate in our business. This is the amount of money above what’s required to cover anticipated expenses, and an income for ourselves. The profit that’s leftover might be considered by some to be “extra” money (or retained earnings we like to say in fancy accounting language). In simple terms, he says to project your annual sales, then determine the percentage of those sales that you’d ideally like to keep as profit (otherwise known as profit margin). Sounds fairly standard, right?
The next step is what’s different. Michalowicz suggests the next step is to actually set aside that money you’ve identified as the “extra” first. So with each sale, if you’ve determined that your goal is to have a 10% profit margin, then the first thing you do is set aside 10% of the revenue from the sale into a separate account. Then with the funds that are left over, you can pay your expenses.
This is often the opposite of the steps you, and most other entrepreneurs take, as the focus is usually on paying expenses first, and hoping for money to be left over for other projects, savings, etc. at the end of the year. But Michalowicz believes that when you prioritize paying yourself first, then profitability will naturally follow. If you are not making enough to pay yourself (even a little) then that tells you something about your business. It's a red flag.
So much food for thought in this one and it might just change the way you think about your business.
2. Balance by Andrew Hallam
How To Invest and Spend for Happiness, Health, and Wealth
Balance - a word that is well-used in our culture to describe the seemingly endless pursuit of achieving the right mix of work, play, rest, and money (among other things) in our lives. If you are like most entrepreneurs we know, a large part of the motivation behind launching a business of your own was because you were hoping to find a better sense of “balance” in your own life, while achieving success.
The terms “balance” and “success” can certainly mean different things to different people. Hallam takes us on a journey in this worthy read, where he explores the definition of both, and shares valuable insight on ways to increase life satisfaction while striving to achieve both these things, and more. He extensively explores the complicated relationship between money and happiness, sharing from his own life experiences, and science-backed research to provide us with meaningful ways to increase happiness through effective money management strategies, prioritizing enriching experiences, pursuing purposeful activities and maintaining healthy relationships.
Described by Daniel H. Pink - #1 New York Times bestselling author, as being “one of the best personal finance books you’ll ever read - because it’s so much more than that”, this is a book that is sure to change the way you think about and handle your money moving forward.
3. The Psychology of Money - by Morgan Housel
Timeless lessons on wealthy, greed, and happiness
Have you ever found yourself in a situation where you bought something, perhaps on impulse, only to regret your purchase as soon as you got home? We've all been there. It's one of those situations where you found your actions, or behaviour, did not at all match the logical side of your brain that was trying to tell you that purchase was a bad idea. A perfect example of self sabotage.
So why does this happen? It has a lot to do with our surroundings and experiences. Housel explores the many influences that shape the way we feel towards, and manage our money. Everything from our egos, to our past experiences, the influences of friends and family, and more, play a big part in our spending and saving habits.
Housel shares 19 compelling short stories showing the, at times, strange ways we spend our money and offers helpful ways to better understand what's behind our decisions about our money.
4. We Should All Be Millionaires by Rachel Rodgers
For the woman who holds limiting beliefs around money
Do you hold self-limiting beliefs around money? A lot of people (women especially) limit themselves financially without even realizing it. We may think we don't deserve more wealth, or are not capable of creating it for ourselves. So we stay small. By holding onto crippling money narratives, we unconsciously cap our earning potential. In this book, the author presents a key mindset shift, which she argues can unlock your badass, money-making self.
Rodgers will teach you how to, stop making "broke-ass decisions", and instead start making more "million dollar decisions". If you're like us, it will form part of the dialogue on the regular in your business and you'll find yourself focusing more time on those "million dollar decisions" from here on out.
This book is written specifically for women. No matter where you're at on your money journey, or what your current level of income is, this is the read for you that will show you how you can start earning more now and gain power over your financial future.
5. The Soul of Money by Lynne Twist
A guide to reclaiming your inner wealth
What? Money has a soul? We thought it was cold and hard and uninterested in feelings. This author argues that money is like a current, that it has an energy that we activate with our intentions. If you are not motivated by ‘just making lots of money’, and are seeking a deeper connection to money, this is your read. The author focuses on aligning your beliefs around money to purpose, social good and your own values and beliefs. It may sound a bit woo-woo, but it's a very compelling perspective on how energetic money can be. It also talks about the author’s personal journey in transforming her own money story.
The Bottom Line
Reading is not just a great way to absorb information and knowledge, it’s also a way to feed your mind and boost your motivation as a business owner. Try starting a book club with your business pals and see where those conversations take you. It was difficult to put this list together since we have read so many great business/money books over the years. We think that the five books above have something for everyone. Different books will resonate with you at different times. So whether you are taking this book to the beach, the campsite, or the airport this summer, we hope you get inspired!
Interested in learning more from us? Follow along with us through our social media accounts (find us on Instagram @growcpa) and sign up for our newsletter for more educational and fun financial content.
Wishing you success in your business,
- Martina + Ashli
Date published: July 1, 2022
Disclaimer - The information provided in this blog is general in nature and solely for educational purposes. Readers use and implementation of the information comes at their own risk and is their own responsibility.
