Book Title - How to Read a Financial Report: Wringing Vital Signs Out of the Numbers
Author: John A. Tracy
Date of Publication : 2004 (6th Edition)
I believe if you are serious about growing your stock portfolio & at the same time wish to protect it, you should certainly read as much trading books as possible related to stock trading so as to fully understand how the stock market actually works. This is especially true if your stock portfolio is part of your financial planning or retirement funds.

Accounting frauds like the Enron, WorldCom cases have certainly been a rude awakening to many people who lost a lot of money investing in companies where share prices have plunged because of questionable accounting practices.

Since I have money invested in the stock market, I’ve reminded myself not to be complacent and decided to make an effort to understand what a company’s financial statement really is and how I should dissect the financial statement to understand the financial health of a company.

As I do not have prior accounting knowledge, it’s an uphill task for me to understand the figures presented in the financial statements. Fortunately, a good friend of mine recommended that I pick up the book “How to Read a Financial Report” written by Mr John A. Tracy to help me understand what a financial statement is in a simpler way.

Basically, the financial statement comprises the Balance Sheet, Income Statement & the Cash Flow Statement.

Mr John A. Tracy has organized the chapters beautifully so that readers first learn how the Balance Sheet items like cash holdings, inventory, accounts receivables, fixed assets, accounts payable, debts reflect the financial condition of the company

This is followed by explanation of items in a company’s Income Statement like revenue, costs of goods sold, various expenses like sales & admin expenses, tax, interest payable to derive the profit performance of the company.

Mr John A. Tracy then explained how certain items in the Balance Sheet & the Income Statement relate to one another so that readers could further understand of how the company balances the profit performance with control of expenses and the control of assets & liabilities.

I also appreciate Mr John A. Tracy’s discussion of some of the management ratio in these chapters like the accounts receivable turnover ratio & inventory turnover ratio.

Mr John A. Tracy then moved on to describe the other important component of a financial statement - the Cash Flow Statement and explained clearly how the items reported in the Cash Flow Statement relate back to the relevant items reported in the Balance Sheet and the Income Statement for readers to get a even more comprehensive picture of the financial health of the company.

Mr John A. Tracy has included examples of Balance Sheet, Income Statement & Cash Flow Statement throughout the books to aid his presentation. Arrows to indicate relationship of items reported were also clearly labelled. The author is also generous to offer softcopy version of these templates to readers who request for them.

Other chapters that I like the include the importance of reading footnotes in the annual reports to dig out important messages which would usually not be reflected in the grossy, colour sections. Chapters on accounting frauds and audits are also educational.

This article concludes our three-part review of Malcolm Gladwell’s The Tipping Point. As mentioned before, Gladwell is a journalist, not an employee of an ad agency or member of a large corporate marketing department. But, the ideas presented in The Tipping Point are extremely relevant to the small business owner looking for an edge over her competition.

Gladwell’s third factor influencing a tipping point is The Power of Context. The idea that the environment surrounding us heavily influences emotions and individual behavior is at the heart of this section of the book. A key theme for small business owners then is the importance of the details in their business.

Of all the different premises put forth in this book, this one is perhaps the most disturbing to our traditional ideas of what makes humans behave as they do. Gladwell demonstrates that in many instances the environment is a much more important element in influencing immediate behavior than we typically like to think it is. He describes people as being “…more than just sensitive to changes in context. We are exquisitely sensitive to them.” (p. 140)

The lesson for the small business owner is simple and yet far from easy: surround your customers with an environment that is most conducive to their buying from you. Easier said than done, of course; but if Gladwell is remotely correct, then we have a chance to influence our customer’s behavior by altering small things in the environment.

The balance of The Tipping Point is filled with case studies that support Gladwell’s theory that much of human social behavior mirrors the way epidemics move through a population. For those of you who run a small business that is growing, he also offers some insight into the size limits of an effective working group. Once the number of people in a group exceeds 150 group communication becomes less efficient and tends to break down. This isn’t so much a function of the marketing side, but it is interesting from the operations side of business.

The Tipping Point is one of those “deep-well” books you can turn back to again and again and still draw fresh ideas from. Gladwell’s style is true to his journalism background. He doesn’t supply a clear-cut roadmap or a “how to” for small business owners. Rather, his method supplies that gentle finger pointing toward further action on our part. This is a book that can–and should–sit on your reference shelf for years, helping you guide your small business as it grows and changes. We recommend you buy it yet this year.

Remember: Brand (who you are) + Package (your Face to the Customer) + People (customers and employees) = Marketing Success.

Small business owners beware the competitor that has read–and practiced–what Dale Carnegie preached seventy years ago in his innovative work, How to Win Friends and Influence People.

What’s this book doing here? Aren’t we talking about marketing?
Absolutely. And since marketing deals with people, what better book to examine than one that helps a Chief Marketer excel in her people skills.

This is a great time to re-evaluate your personal skills as a business professional. Being a powerful Chief Marketer is so much more than creating that penetrating insight into the market. Usually, it involves listening to and working with people all year long.

Dale Carnegie’s book is often overlooked. It is rarely offered as a core coursework in any college or university, but its lessons are infinitely important to a person in business. This is a book that can easily be read in a couple of weeks. It is best read with a highlighter and a pen to scratch out margin-notes as you go along. We found many little ‘aha’ moments over ten years ago when we first read this work.

Returning to its pages we find that it is still quite resonant, even a decade after first reading. And maybe that is why it is still relevant, some seventy plus years after it was first published. Human nature, after all, hasn’t changed a bit.

Of course the technology changes, and so we ofttimes tend to get bogged down in the latest tactical tech advantages that are now at our fingertips. Tech changes are constant–just look at how the internet is still allowing us to find new ways to contact our clients. The holiday season is the season of new tech-toys coming to market, each promising an improvement over last year’s model. But tech changes are sometimes dangerous. We can fall under the spell that the latest tech tool will finally be a marketing cure-all. The beauty of anchoring oneself with a solid grounding in the basics of human communication is that we can better understand how to best use the new technology to better meet our customer’s needs.

And Carnegie was a master at passing on to us how to communicate effectively with other people. Instead of teaching us to become a better speaker, which one might think would be the best thing for a salesperson or marketer to do, Carnegie stressed the importance of being a better listener. You will notice that successful companies, at their core, are very good at listening to what their customers are telling them.

2005 marked the 50th anniversary of the passing of Dale Carnegie. That his landmark book is still being produced is a testament to his vision as a person who had vast insight into human nature. It is as relevant as ever for any of us who want to learn how to successfully communicate with our fellows.

Sorry, small business owners, but it’s time to think about Brand, again.

Thinking about Brand is really thinking about yourself–which is what most of us spend an awful lot of time doing, anyway, right? Your small business brand is the “who” of your company. The more intimately you can understand this ‘who-ness’, the better your chance of success in small business.

Don’t let the title fool you into thinking The 22 Immutable Laws of Branding by Al and Laura Ries is this is some marketing theory book you’ll never read. This is a quick read stuffed full of ideas you can implement to help your business better package its brand. In an earlier article we reviewed Positioning by Al Ries and Jack Trout. You’ll see the Positioning philosophy threaded through this newer book, but there is enough fresh, practical material here that is worth a Chief Marketer or small business owner to look at.

There are very practical, graphic arts tips in the book, dealing with items such as how to lay out a logo and what color scheme to use (Laws 16 & 17). These are helpful, but even more valuable to a company’s long-term strategy is Law 12 that deals with verbal communication and naming your products or services.

Page 99 on the importance of verbal communication in a brand is particularly helpful. Many of these are ideas began in Positioning but expanded on here–very valuable for your business as you create or market new products as your company grows.

Also, on a related theme, their advice that you make sure you hilite your brand name over your company name is very important (Law 13).

On page 109 is a very simple question regarding what to name your brand. This one question is worth the price of the book. $12.89 is pretty cheap insurance to make sure your brand is properly named.

Then, make sure you spend time to understand page 155 and the Law of Consistency (Law 19). Ries and Ries state a great truth here, not one that is meant to discourage, but rather just a statement of fact: “Brand building is boring work. What works best is absolute consistency over an extended period of time.” This is one place where again, as a small business marketer, you can leverage an advantage over BigCorp. Throughout the organization you and your employees can reinforce and understand the brand. Plus, you can practice this kind of brand vigilance for years–even decades.

Many marketing books are heavy on theory yet light on tactics; or they emphasize a hundred different tactical uses of marketing but are quite thin on the rationale behind the application of the methods. Laurence Vincent provides a small business marketer with a handy blend of both.

Legendary Brands: Unleashing the Power of Storytelling to Create a Winning Marketing Strategy is not written with the small business marketer in mind. Vincent’s target audience seems to be advertising agencies and corporate in-house marketers. Nevertheless, the small business marketer can learn a great deal about story and then apply this knowledge within the means of their small business budget.

“The inspiration to pen this book began with a very simple premise–that the truly great consumer brands tell a story.” Vincent’s quote from p. 15 outlines the book’s premise. Vincent constructs his story in three parts. Part I deals with what constitutes a legendary brand, Part II describes how to use story to create the legendary brand, and Part III outlines various marketing methods a marketer can use to promote its message.

Please note an important idea: Vincent doesn’t advocate that every brand try and become legendary. Indeed, (p. 17) he states: “Your brand can be very successful and even gain great consumer loyalty without becoming a Legendary Brand.” Small business marketers take note: there are other marketing tactics beyond successful use of story that you can use to win out over your competition. But, you need to be at least familiar with how story may be used, to evaluate for yourself if it’s a good fit for your company. And Legendary Brands is a great way to learn about the power of story for the marketer.

Part I is largely an introduction to the theory behind legendary brands. Part I introduces us to the importance of stories in our life, and how stories and various types of stories play into our daily lives. Vincent outlines the difference between Story, Legend, Narrative and Myth, and shows how each of these has been historically important to different cultures through the years. Vincent draws from a far-reaching variety of sources as he writes the book; you won’t find many marketing books that draw upon Carl Jung and Joseph Campbell to validate their views.

And yet it is just this refreshing journey that Vincent takes us on in Part I of the book that sets us up for Parts II and III, which are the more practical, “how to apply the theory” sections of the book.

Especially important is his idea of Brand Narrative and how it interacts with what Vincent calls the customer’s “personal narrative”. The brand has its story, and “It is how you activate the personal narrative that determines your ultimate connection to the customer.” (p. 96)

Perhaps the most powerful series of ads that Vincent references are the “Kodak Moment” ads from a dozen years ago. These didn’t talk features and benefits of Kodak film, at all. Rather they continued a story that the customer was already playing out. Many of you remember those ads, and the phrase “Kodak Moment” became quite popular in the US vocabulary at the time.

Another component to be aware of in Part I is his emphasis on “brand agents” and how they work to promote the brand. Brand agents can be a company spokesperson, or they can be the product itself. Especially for the small business marketer that relies on word of mouth for much of its advertising, the brand agent is likely to be the other customers and the employees of the company.

If you decide to read this book, it’s important to jot down notes and try to understand the overall theme of what Vincent is saying at the outset. It will make the practical application of the information much easier when you understand his philosophy.

As is the case with another author we recently review, Arthur Hughes and his book Strategic Database Marketing, not every small business will be able to use story as a key element in their marketing strategy. But, for those that can, Vincent provides a fantastic blueprint throughout Legendary Brands.

This is Part II of our review of Vincent’s work, Legendary Brands: Unleashing the Power of Storytelling to Create a Winning Marketing Strategy. Remember, the main thrust of this book is how a brand can interact with a customer’s own story. It’s worth repeating this important quote: “It is how you activate the personal narrative that determines your ultimate connection to the customer.” (p. 96)

The second part is essentially the “how to” portion of the book. Chapter Five, “Investigating Brand Narrative”, offers guidelines on what to do as you go about uncovering the ways in which your customer’s story can interact with your company story. Revisiting again the “Kodak Moment” ad campaign–Kodak didn’t try and tell its customers “You’ll take award winning photos with our film”—that wasn’t what was important to most of their customers. Rather, preserving the great memories of the good times they had experienced with their families was far more important to a greater number of consumers. Pages 109 and 110 are especially useful for the Chief Marketer.

Chapter Six is “Crafting Brand Narrative”, and it is here that you are going to determine what story you are going to tell. We found great tips in pages 144-150, and more practical guidelines for the small business owner.

Another of Vincent’s useful insights is his idea of creating a “brand bible”. This is a physical guideline to use to help you double-check that your marketing and promotion efforts stay true to the brand. We discussed the value of archiving past promotions in an earlier article when we outlined the merit of a promotions vault. The value of tangible guides to help us in our marketing can’t be overstated. Smart marketers often come up with great ideas, but then at times our own inspiration can be a bit off or possibly overzealous and we can stray from our mission. Vincent’s idea of a brand bible to help you stay on track with your brand is a great idea for anybody involved in small business marketing.

Another very important topic Vincent covers is the idea of “brand stewardship”. For many successful brands, the company doesn’t completely own the brand, it actually guides it. So the role of the marketer becomes that of steward or guardian but also shepherd of the brand. Yes of course, the company may own the logos and sayings and trademarks of a brand, but the way in which the brand interacts with a customer’s life can’t really be owned.

This is a key concept for small business marketing, as well. You simply can’t control what the customers say about you. At best, you can influence what they mention about your company.

Vincent has some valuable insights for the brand steward. One important note is that you need to listen to the people who are most fanatical about your brand when they give you feedback (p.206). He examines the phenomenon of the launch of New Coke and the instant negative reaction some of the Coke faithful had to the new product. This type of brand fanatic brings to mind the mavens Malcolm Gladwell mentions in The Tipping Point. Small business owners need to pay attention to these people because they are often devoted to the company’s product at an extreme level. If possible, seek them out for some feedback on your next marketing campaign before you launch.

Lastly, we know that many of you work with a very established brand in your small business. Your small business may have been around for decades; it may be on its second or third or fourth generation owner from the same family. Legendary Brands delivers an informative case study in Chapter 12, Rescuing the Troubled Brand. Although this chapter deals with the West Coast fast food chain Jack in the Box and how it was able to recover from a crisis, the chapter includes some interesting ideas for a small business which has possibly strayed from being true to its former brand roots.

I never thought a business book would make my summer reading list until I skimmed through “Grey Matters: The Workplace Survival Guide” in the local bookstore. At first glance, the book appears to be a parody of the working life, because it is funny and entertaining. Yet, it is heavy on practical advice for anyone who has, at one time or another, felt he was hanging from the end of his rope inside the maze of company politics.

The illustrated format suggesting comic strips is an excellent survival guide in any chaotic work environment. What keeps the reader reading is the narrative that teaches and offers solutions to workplace problems through the main character Gray Blanderson’s adventures while he stumbles and then glides over working life’s imperfections and product marketing challenges.
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This article is based on the following book:

The Brand Called You:

“The Ultimate Brand-Building and Business Development Handbook to Transform Anyone Into an Indispensable Personal Brand”

By Peter Montoya

Published by Personal Branding Press 2003

ISBN 0967450659

278 pages

What does it mean to consider yourself a brand? When Ralph Lifshitz wanted to become a famous fashion designer, he didn’t start by working 24 hours a day designing clothes. The first thing he did was to change his name to Ralph Lauren. Branding seeks to create a better perception. Not a better product. So your role is to make the changes necessary to create a better perception. The principles for creating a “Personal Brand” are spelled out in great detail in “The Brand Called You.” In this book, you will understand, too, that it’s not enough “to understand the principles.” What you will need further is the flexibility of mind to actually adopt and use these principles.

This book is about more than helping you survive your first year of business. It’s also about getting out of your “survival mode” and turning your business into a consistent profit-making venture. It’s about reaching the potential you know your business has. Most of all, it’s about your branding being as strong as your skills, and making more money than you ever thought possible.

Small business marketers have counted on word-of-mouth advertising since long before the internet and the advent of popular phrases like “viral marketing”. But, as Chief Marketer you know you always need to be on the lookout for new ways to boost this important customer-centered marketing technique.

Emanuel Rosen has penned a great book on the subject: The Anatomy of Buzz: How to Create Word-of-Mouth Advertising.

Rosen breaks his book into three parts:

How Buzz Spreads
Success in the Networks
Stimulating Buzz

In this first of our two review articles on this work we focus on the first two sections. In these two parts Rosen sketches his philosophy of how word of mouth works, and tells us, as marketers, the two critical components for succeeding in buzz.

Let’s start with Rosen’s definition of buzz. “Buzz is all the word of mouth about a brand. It’s the aggregate of all person-to-person communication about a particular product, service or company at any point in time.” (p.7) This is a useful way to define buzz, and Rosen stays true to this designation throughout his book.

Next, Rosen introduces us to the concept of the “invisible network” (pp. 8 &9). He urges us to imagine all the people on the planet, connected to each other within a variety of different networks. Contained inside these networks are people who Rosen describes as “hubs” or “people who are especially well positioned to transmit information.”

As a small business marketer you, of course, need to reach these critical hubs so they, in turn, can pass on the buzz about your company. Chapter Four, Network Hubs, probes these people in depth. In The Tipping Point Malcolm Gladwell speaks in terms of Mavens and Connectors. Rosen speaks of Expert Hubs (similar to Gladwell’s “Mavens”); and Social Hubs (similar to Gladwell’s “Connectors”). There is actually an example of one individual common to both books. As a small business marketer, it isn’t so important to try and determine which of these authors’ nomenclature is more correct as simply to notice the similarities and differences between the two categories of “hub” and then adjust our marketing toward both types.

If you look at the last paragraph on p. 53, Rosen clearly tells us that we need to talk to both types. This is why it is so important for small business marketers to listen to the types of questions customers are asking–then make sure the company marketing material addresses these questions. For a quick review of helping customers spot the mavens, see our earlier article on the subject.

Next, it’s important to mention Rosen’s overview of The Diffusion of Innovation. This model is often mentioned only in passing by marketers. If you’ve read Harry Beckwith’s The Invisible Touch, you may recall he gives us some insight into the bell- shaped curve in relation to buyers of services as opposed to products .

Rosen supplies us brief glimpses into the history of the development and evolution of the diffusion of innovation theory in marketing over the past five decades (pp. 23, 56, 81, 94-96). By doing so, he enables us to grasp a more complete picture of word-of-mouth and general advertising, and how the concept of word-of-mouth has matured during this time.

Rosen helps us to learn which among the five groups on that bell-shaped curve to target to effectively promote buzz. Rosen supplies a key insight on p. 23: “…even though a person adopts “early” in terms of the overall market, he or she may be late in his or her own network.” (Italics mine.) Here, again, the smart marketer realizes the importance of reaching multiple networks. Indeed, this is a key sub-them of Rosen’s.

Rosen’s chapter on Network Hubs helps us to analyze who to look for and, importantly, where they may be. These certainly aren’t always obvious.

Those of you who are active in marketing your own company through keyword or affiliate programs can definitely benefit from Rosen. In the five years since his book was written, the entire Internet Advertising industry has evolved tremendously. All of the theory and tactics Rosen espouses are very viable today as a marketing primer. Remember, most of us in small business marketing have to survive by our wits more than our coffers, and so it is vital that we leverage everything we have, whenever possible.

In part two, Rosen identifies two keys for “Success in the Networks”. Essentially, you need a good product, one that is “contagious” and then you need to do whatever you can to actively accelerate “natural contagion”. Much earlier, on p. 25, Rosen charts the kinds of products that people will talk about. Rosen lists a stellar example of a product that, try as a marketer might, simply won’t generate buzz: Paper Clips. This is a product that is simply too utilitarian and commonplace. His listing of criteria that make a product interesting to talk about is also most useful. Plus it reinforces the fact that services, being invisible, are much harder to get people to talk about. (Again, this echoes Beckwith.)

We now complete our two-part review of one of the more overlooked marketing books of the past five years: Emanuel Rosen’s The Anatomy of Buzz: How to Create Word-of-Mouth Advertising.

“Stimulating Buzz” is the third of Rosen’s three themes, and takes up the second half of the book. Many of Rosen’s subjects in this half of the book touch on marketing topics we’ve visited in previous articles.

Chapter Nine, Working with Network Hubs, is devoted to this vital subject. Many of the themes Rosen covers are topics which our articles have visited during the past several months, including: “Letting Network Hubs Identify Themselves” (p. 136). See our earlier article for our comments on spotting the “Mavens” among your customers.
In “Keeping Track” (p. 143) Rosen points out the importance of capturing contact information on the Network Hubs. See our earlier article on database marketing for more insights into this vital marketing component.

“The Elements of a Good Story” is the title of Chapter 11. Rosen devotes an entire chapter to this critical topic. We of course feel it is crucial, as we have devoted several articles to the importance of story. But Rosen has a good twist on story, since each of the elements he describes specifically targets how to entice people to talk about your company. Here, Rosen’s work is a nice complement to Laurence Vincent’s Legendary Brands.

Another great insight that Rosen provides for small business marketers is the idea that one must “actively seed” the “dead networks” (p. 165). This is an important concept for small businesses, which usually have only time to listen to the customers that are doing the talking. In other words-there are potential customers out there yet to be discovered, but you probably will have to scout them out in some other places you aren’t searching now.

Finally, you’ll find two more excellent resources at the end of this work. Rosen provides us with a glossary of buzz marketing words, as well as an exhaustive listing of the sources he utilized, in the Notes and the References section of the work.

Today, six years after The Anatomy of Buzz was published, concepts like viral and buzz marketing may seem common. But, most small businesses are only now beginning to learn how to use them. The Anatomy of Buzz is a great fit for small businesses that rely on word of mouth as their number one advertising tool.