By Ed McLaughlin
and Wyn Lydecker and Paul McLaughlin
THE PURPOSE IS PROFITOur Book
Every entrepreneur faces the moment of truth. When is the right time for you to start up? What kind of business are you going to start? And what are you going to do about it?
If you have the dream to become an entrepreneur and start your own business, this book was written for you. The Purpose Is Profit gives you the inside story from the entrepreneur’s perspective. It covers the full arc – from the struggle to conceive the right idea, to funding the startup, to scaling the business, to executing the strategy behind the exit. Finally, the book discusses life after the sale to a Fortune 100 company – the good, the bad, and the ugly.
The Purpose Is Profit delivers direct insight about the startup process and how business really works. Each chapter tells a part of the story woven with the tools you need to build your own business. As a special feature, the Appendix includes two essential manuals: The Startup Roadmap and The Startup Funding Guide.
It’s your time. Take charge. Start up now.
As my late friend and mentor, John Stanger, entrepreneur and past head of General Electric Credit, said, “Do it! Do it! Do it!” I followed John’s advice, and I think you should too.
The Purpose Is Profit will:
The Purpose is Profit is designed to:
The Purpose Is Profit because:
People told me I was crazy. “You are going to fail!”
I can’t blame my colleagues for saying that. I was setting out to start not one, but two, real-estate-related businesses in the midst of the major 1991 commercial real estate slump, which had been brought on by the sweeping failures of savings and loans across the country. But I just had to do it. My heart told me that it was a bigger risk to my well-being to stay shackled to a corporation than it was to head out on my own. As it turned out, one of the businesses did fail. But the other one took off, generating a profit in its fourth month. We never looked back.
Section One: PRE-LAUNCH
Chapter 1: The Pull and the Push
The pull is the overwhelming desire to realize your own business vision, to be in charge of your own destiny. Whereas, the push is the crystallizing moment when your need to start your business becomes greater than the fear of venturing out on your own.
Chapter 2: Distinctive Competence
You will substantially increase your probability of startup success if you build a business in which you have distinctive competence. What special knowledge, exceptional talent, or unique skill can you bring to your business?
Chapter 3: Dynamic Planning
When starting a business you need to organize your thoughts, goals, strategies, and plans so that you can realize your business vision – all while dealing with the non-stop challenges of preparing to launch. I call this active process dynamic planning.
Section Two: LAUNCH AND EARLY STAGE
Chapter 4: Entrepreneurial Branding
The difference between traditional corporate branding and entrepreneurial branding is two-fold: first, the brand is a highly personal reflection of you and your vision, and second, you must take full responsibility for all facets of the branding process.
Chapter 5: Capital, Cost, and Control
Every business needs capital to start, operate, and grow. You need to determine how much money you need and where you are going to get it. Is it better to use other people’s money or your own money? After exploring and considering the cost and control issues, I came to the conclusion that bootstrapping was best.
Chapter 6: Do It! Do It! Do It!
Put your plans into action. “Do It! Do It! Do It! You can build more wealth and have more fun than a lifetime spent in the corporate world.” It’s time to turn your preorders into contracts, hire superior talent, and invest in growth catalysts.
Chapter 7: A Hard Lesson
Blinded by passion and without a shred of proven competence, I launched a national magazine within 12 months of my first startup. The publication bled red ink for more than three years before we shut it down. This venture demonstrates that passion is not enough; you really need distinctive competence to create a successful business.
Section Three: GROWTH STAGE
Chapter 8: Sales Is a Contact Sport
Like high-performance athletes, we developed a mindset that we deserved to win every contest. We described our competitive drive by coining the phrase: Sales is a Contact Sport. You can start a business, produce a great product, and offer a superior value proposition, but you need to invest in a professional sales force to ensure your success.
Chapter 9: The Ten Commandments of Startup Profit
From the beginning, we were organized around 10 core profit principles. We factored profit into every business decision that we made. These 10 profit principles get at the nub of how my company, USI, made consistent profits and how they can help you produce sustainable profits as well.
Section Four: EXIT
Chapter 10: Realizing Value
With competitive pressure looming on the horizon, we decided it was time to sell the company. As we reviewed the proposals, I began to realize that my small startup had grown into a very valuable business. We could monetize our equity at peak value, and the entire firm could be vaulted into a new, more powerful position. You can take a seat at the negotiating table with a Fortune 100 company and gain the insider’s perspective on how we maximized our valuation.
Chapter 11: Preserving the Secret Sauce
Even though the company that bought us wanted to preserve the secret sauce, I soon realized it was on their terms and under their direction. Selling your business can create a substantial windfall, but it will come at the price of control. You need to think beyond the obvious strategic benefits and visualize the operating realities of your life after the sale.
Epilogue: To Thine Own Self Be True
As I approached the end of my stay-back period, I realized that my first love was entrepreneurship. I just had to step away from the big corporate life and return to my entrepreneurial roots. So I started a new business and continue to use the profit principles in this book as an entrepreneur and angel investor today.
The Startup Roadmap is a step-by-step guide designed to help you understand the mechanics of starting and running a profitable business. The steps fall into three categories: Proof, Profit, and Potential. First, you need to develop and prove your idea. Second, you have to figure out if you can make a profit. Third, you need to estimate the business’s ultimate potential for success. This manual walks you through the entrepreneurial thought process – the same process I used for starting USI. Following the steps in The Startup Roadmap will improve your probability of success.
Every entrepreneur wrestles with the need for startup funding. How do you determine how much capital you really need? What are the essentials of financial modeling and forecasting? What are the costs of capital – both equity and debt? How does valuation influence cost and control? What are the sources of startup funding? Increase your bargaining power by taking the mystery out of the startup funding process.
THE PURPOSE IS PROFITReviews
Jeff Fortin, CEO, Founder-Entrepreneur
“Thank you for sharing with me your excerpts from your upcoming book; it is right on and appealing. I would be interested in learning about its full release in the future, please keep me in the loop. I see you formatted it with larger text and easy reading verbiage.
“As a business leader, every bit of material for starting, emerging, and growing a business is good food. I like simple, focus on Who we are, What we do, and Why we do it, fits most formats, Keep up the great work.”
Robbie Kunkel, Entrepreneurship Consultant, Renaissance Entrepreneurship Center
“You write with an engaging style that is quite appealing. The real strength of your text, however, is in the story of your journey toward entrepreneurship and the various push/pulls that occurred along the way. The photo of your personal contract is a compelling way to demonstrate the personal power invoked by such an agreement. I will suggest your book to my entrepreneurship students.”
Lanny White, Business Mentor at UM I-Corps “The Pull to Becoming an Entrepreneur!”
“Having reread this section for the 3rd time, I think the piece explained the early, discovery stage very well. Your story helped me imagine the journey to the next chapter which I presume will describe your transformation into independent entrepreneurship.”
Fred Schmidt, President and COO at Coldwell Banker Commercial
“I had the opportunity to work on Ed’s team, and his advice is based on hard won experience. He built a powerhouse business in the very competitive commercial real estate services market. This is real world experience that is being conveyed, not theory that you hear from so many others. Well done ED.”
Brian Froelich, President BPF Consulting
“No one can guarantee your success. But Ed Mclaughin’s book will maximize your chance of success. Experience is the best teacher and Ed’s book can give you that hard won and very practical experience in advance- if you are willing to listen and open to learning!”
Harry Thomas, Diplomat in Residence/Adjunct Professor at Arizona State University
“Skip McLaughlin’s “The Purpose is Profit” is essential to budding entrepreneurs in need of a blue print to start and successfully manage a business. The book skillfully maneuvers readers through the startup maze and offers alternative plans that will help establish a new business and offer success to those willing to try his methods.”
Alicia Chasse, Controller at Innovative Design Engineering Assoc. (IDEA)
“Profit Principle#4 the taking charge of the money and controlling it…key to any successful business, my experience has been of late that many business owners fail to recognize that portion of their business. They are consumed by the focus of their core competencies and overlook the point that the money can disappear just as quickly as it arrives, and reinvestment into the business is an essential element of success.”
Prajakt Raut, Co-founder at Applyifi and founder The Hub for Startups, New Delhi Area, India, Venture Capital & Private Equity
“Read the chapter. (“The Ten Commandments of Startup Profit!”) Very neat. Crisp and incisive. All the best with the book. It will certainly help first-time entrepreneurs think through various aspects of their business.”
Shane Guan MCR, Customer Business Director, APJ at Johnson Controls
“First, I have to say I fell into your story immediately as it reminded me about my dream of owning and running my own business. The chapter is not only motivating, but also full of important factors that could lead to a successful new business start-up, for example, clear life goals, wise business mentorship, partnership & team, invaluable learning and experience gained from leading companies, plus right market and its opportunities….”
Dennis Fogarty, Business Consultant and Retirement Specialist at Omni Resource Group, www.orgconsultants.com
“The Purpose is Profit” is appropriately titled for an entrepreneur or a small business looking to grow. When I consult, I grab a handy item like a coffee cup and tell my client that this represents his business. It’s a simple machine whose sole reason for being is to generate net cash flow. What you put into the cup determines the amount of net cash flow (profit) that will come out of the cup. Skip McLaughlin’s book “The Purpose is Profit” is a simple and powerful primer for the entrepreneur on how to make his cup spit out profit and how to make the cup grow to generate increasing profit.”
Dan Tefft, Sustainable Business Developer & Capital Coach, Greater New York City Area, Capital Markets
“Ed McLaughlin’s book ‘The Purpose Is Profit’ is an excellent guide for entrepreneurs at any stage of the game. I’ll be encouraging my clients to read this book.” @TreeBanker
Josh Crandal, Owner, Closet Renovations
“I read your chapter, and I want to tell all entrepreneurs that this is a must read. In this individual chapter you have clarified many aspects of the business that I did not understand. I look forward to the full book as this one chapter was a wealth of knowledge…I must say, Ed, I was very driven after reading that chapter and I thank you for the opportunity to attain that knowledge and look forward to more when the book comes out.”
Jacque Freeman, Sales Manager at CBS Radio, Charlotte, North Carolina, Broadcast Media
“Thank you for the valuable information. A person in the decision phase of starting his or her own business would be inspired by every written word. Great job, Sir!!”
Paula M. Parker, Business Alchemist, Greater Boston Area, Management Consulting
“Excellent. It is a solid nuts and bolts book that inspires the ‘dream’ while providing sound business methodology. You write what you know, from quantifiable experience, and you’ve been stunningly successful.”
Chris Hollis, Marketing Consultant and Teacher, SendOutCards.com – “Changing Lives…One Card at a Time”
“Many entrepreneurs need guidelines such as you have written about in the early start-up of their business. I don’t know of any one who couldn’t use some common sense advice when starting any business, not just in the entrepreneurial world.
Keep up the good work, Ed!”
Steve Sanchez, Global Logistics/Transportation Executive Mechanicsburg, Pennsylvania, Transportation/Trucking/Railroad
“The 10 Commandments are simple, yet actionable with huge value/risk if followed, or not.”
Hon. Count David J Gagnon, MP, Ph.D., D.D., HKTS, FWCI, Minister of Foreign Affairs and Finance, Member of Parliament, Instruction Judge
“Ed “Skip” has written a great book which I would highly recommend to anyone thinking about opening a business. It’s called “The Purpose is Profit!” which is an eye-opener. He so graciously allowed me to preview one of the chapters called, “The Ten Commandments of Startup Profit!” and I must admit this should be a mandatory study for anyone taking a business course. I highly recommend this book as an educational insight into the real life business.”
James Peter Krasnow, Investor Relations at US Funding, Inc., Miami/Fort Lauderdale Area, Financial Services
“‘The Purpose is Profit’ book will become one of the required “bibles” for every start-up company… actually it already is, it’s just that people haven’t heard about this insightful, well written book yet. THEY WILL, if they are well informed.”
Roseann Fitzgerald Senior Research for Strategic Initiatives, College of the Holy Cross
“I enjoyed reading the preview of “The Ten Commandments of Startup Profit”. Even though I work for a not-for profit, profit principles are just as important for achieving success in any programmatic enterprise. The concepts of building a ‘war chest’ for future investments is so key for the growth of any business and I particularly liked the profit principle of ‘behaving ethically, and profits will follow.'”
Peter Dean, Partner and Web Design Consultant at Debayne Web Design – Connections – Networking – Public Speaking
“I must admit when Skip asked me to review ‘The Purpose is Profit’ I was a bit dubious. In the course of my career I have read a great many books that are proclaimed by others, to be ‘the definitive guide’ only to see the same old ideas recycled in a new format. First let me say that I can admit that I was wrong in this case, and I will tell you why. This is the book that you should be reading before you make that leap into the unknown, before you take one step, read this book especially the chapter on the Ten Commandments Of Startup Profit. It is like a tick list to guaranteed success!
“What I found in these pages is a blueprint that will suit EVERY startup business and if I am brutally honest, I wish that I had written it or at least read it before we learned some of the lessons contained here the hard way. Whether you are selling houses or decorated cakes, insurance or cookies – the principles laid out here will help you to build a strong business from day one, sidestepping all of the land-mines that will see so many startups fail inside 12 months.
Don’t worry, I get it. You want to start a small business; you know your market and where you want to be – that is not even half of the picture. This book is a manual to success, I would recommend it to anyone even thinking of starting their own business, read this first!”
Justin Grayman, IT Management Mastermind
“I think the thing that made this preview chapter a really good read was the story framework, because a lot of people can relate to what’s written in this book and it allows textbook insights to resonate with the reader.”
Steve Sanchez, Senior Director Operations – Process Engineering, DHL
“The 10 Commandments are simple, yet actionable with huge value/risk if followed, or not.”
Manidhar Devineni CEO – Broadcast Media – India
“I read ( in fact twice) “The Ten Commandments of Startup Profit!”
They are the steps to success. The way they were articulated is excellent. Particularly, Recognizing and Hiring the ” Lightning in a Bottle” and the last point of doing things Ethically are worth a mention.
It was pleasure reading the article. I have experienced them and they are the perfect steps to long term success.”
Love Gregorie Perez, Senior Executive in Social Entrepreneurship and Development
“Based on the book excerpt, I believe that your book will be able to help entrepreneurs achieve the discipline and systems needed to grow and scale, and balance this with the other personal, ethical, social aspects of themselves that entrepreneurship also answers.”
Larry Reilly, Retired from Automotive Business – Consultant
Well written Ed. This needs to be a part off every training session for franchisees or business start-ups. It is a road map to the correct process and procedures that needs to be take at the start of every new business venture. I have trained my franchises by asking one basic question. ” Can anyone in the class eat and elephant in one bite” . They all grin and agreed it wasn’t possible . Well it’s the same with business you need to approach it one step at a time. The CEO of Meineke Car Care Ken Walker always started the first day of training with a tool box on the table. He would go to each new dealer and ask, DO YOU KNOW WHATS IN THE BOX.. The answer were tools. Ken would say your only half right. They are tools to make you a success in your business if you choose to use them. He went on to explain that Meineke will give you the tools but to be a success you need to uses them.
Ken was one of the smartest CEO I ever had the chance to work with.
WELL DONE Ed……
Jeevan Maringanti, Sales Operations, Hyderabad Area, India
1) Really liked the concept of 3 categories Profit,Proof & Potential and 21 steps distributed over these 3 categories
2)I was awed by the Simple “back of the envelope” calculations 🙂 especially in Steps17,18 3)
3.) (Regarding) ‘AN ENTREPRENEUR’S MOTIVATION’ given at the end of PDF … I find your story very inspiring!!
Andrew Markwell, IHZ Consulting Pty Ltd, Australia
Helena Brusic, Managing Director at The Imagination Agency Pty Ltd, Australia
“I recently connected with Ed “Skip” McLaughlin, an author, who is currently offering free downloads for a limited time for his ebook, “The Startup Roadmap” https://lnkd.in/bVWBEaQ The ebook is relatively short, however it is jam-packed with really pertinent information. This is no flowery generic “you should think about..’ ebook, but truly a concisely written roadmap, and as such, even if you have been in business for a while, you can still learn from it. I was more than pleasantly surprised! Well done Ed! And yes, you sold me, I AM buying the book, The Purpose Is Profit.”
Guy Cleveland, Senior Director at SageGroup Strategies
“If you are starting to think about becoming a brave new entrepreneur, this is the guide to use. In fact, I promise you will learn more than one new thing from this book even if you think you have ‘done it before!’”
Great read Ed and thanks again for the preview —
Brendan Rafalski, Asst. Portfolio Manager at Barrow Street
“I thought that the new addition of the “Startup Road Map” was particularity very helpful and something I have not seen elsewhere. I recently read a few other books that focus on startups, Peter Thiel’s Zero to One and Ben Horowitz’s The Hard Thing About Hard Things, and while both were great reads, they mainly focus on anecdotal experiences and are more geared towards tech startups. Peter Thiel’s book offered “7 Questions” the entrepreneur should be able to answer before launching a business, but it was nothing like the detailed road map you have laid out.”
Robert Geller, Owner at Instan Tek
Thank you for sending me an e-copy of your book. I’ve already read part of it in paper form and have enjoyed it. I particularly like reading your story and how you started your business. It takes so much courage to make the leap as we both know.
Albert Eins, Principal at 5 Faces Media
Your eBook is one of great advice for people who want to be entrepreneurs in this world. Great questions!
Nana Sono-Koree, PhD, Biotechnology Professional
I have read the PreRelease Snapshot of your upcoming book “The Purpose Is Profit: The Truth about Starting and Building Your Own Business.”and I must say it is practical and something most aspiring entrepreneurs can relate to. I love it and look forward to its launch this fall.
Mike Harris, President – Technology at Lindsay Corporation
“I read the (“PreRelease Snapshot”) preview of your book…Very well done. I’m looking forward to buying the book once it’s out. You have a lot of good advice to offer on the topic.”
Justin Christopher, MBA Candidate at Harvard Business School
“I enjoyed this sample chapter–I found it clear and concise, and the step-by-step guidance you provide to the potential entrepreneur is well illustrated with examples from your experience with USI.
Best of luck with the release.”
A. Scher, Broadcast Media Professional, Producer, Writer, Director, Editor, Post Supervisor
“I find the way you break down the information and your writing style make all the information in it extremely accessible…I am definitely interested in reading more.”
THE PURPOSE IS PROFITSpecial Offer
The Ten Commandments of Startup Profit
From the beginning, my company, USI, was organized around 10 core profit principles. I call these profit principles The Ten Commandments of Startup Profit. We factored profit into every business decision that we made. The 10 profit principles listed below get at the nub of how USI made consistent profits and how they can help you build an enduring business that produces sustainable profits as well.
The Ten Commandments of Startup Profit
Understanding these profit principles and applying them to your business can increase the probability of your long-term success and improve your returns along the way.
The Purpose Is Profit will be released August 2, 2016.
THE PURPOSE IS PROFITEvents
Professor Dan Cohen will host Ed to address two sections of his class:
“Managing the Entrepreneurial Venture: Startups to Early Growth”
Ed will address the value of launching a solid business idea that is combined with a working business model and effective implementation
Q&A Exchange to Follow
Two Sessions: 8:30 am and 12:30 pm
Innovation, Creativity and Entrepreneurship
Ed will address the Wake Forest community on the topic, “Becoming an Entrepreneur”
Location: Z. Smith Reynolds Library Auditorium, Room 404
Time: 5:30 – 6:30 pm
Ed will be a member of the Pitch Feedback Panel hosted by Bruce Crawford. More details to come.
Ed will be the Panel Director for Corporate and Private Venture Capital at 3:55 pm
Location: The New York Academy of Sciences, 7 World Trade Center,
250 Greenwich St., New York, NY
40th Floor, Main Conference Room 1
Presented by: Invest in Bavaria
Ed will present to Sloan Entrepreneurship and Innovation Club:
The Unicorn Bubble – Growth vs Profit
Launching Your Business – Timing and Funding
Ed will present to the Babson Entrepreneurship Club:
The Unicorn Bubble – Growth vs Profit
Launching Your Business – Timing and Funding
Location: Microsoft, 11 Times Square (8th Avenue), NY, NY
Ed will speak on “The Ten Commandments of Startup Profit,” followed by a panel discussion with these distinguished panelists:
Amit Shah, founder of AIT International Corp., Rohan Marley, founder of Marley Coffee, and Bruce Bachenheimer, Clinical Professor of Management and the Executive Director of the Entrepreneurship Lab at Pace University.
The host will be David Carlos, and the moderator will be Kevin Pianko.
Sign up to attend: http://www.meetup.com/Disruptive-Technologists-in-NYC/events/222991644/
$15.00 to attend. UC Berkeley Alumni Association of NY & all PAC-12 Alumni free to attend.
Location: 26 West 61 Street, New York, NY 10023
Contact Number: 212-300-4084
Ed will conduct a Professional Enrichment Seminar for the NYIT School of Management.
Event will be live-streamed to two additional campus locations:
Upper West Side NYIT campus and Westbury, Long Island NYIT campus.
Event is Free. Non-students can register to attend: http://www.meetup.com/Disruptive-Technologists-in-NYC/events/224101822/
Learn more and register to attend at Funding Post.
Ed is one of the panelists for this event.
Event Topic: “Early-Stage Venture Investing: How to meet investors, pitch them, and what it really takes to get them to write you a check!”
Optional pitching workshop and lunch from 11:00 am to 1:00 pm
Location: Workbench, 110 Fifth Avenue, 5th Floor, NY, NY. Time: 6pm
Hosted by Mark Birch
Event Topic: Building the Sales Organization
Ed will be presenting on the topic: “Scaling Your Sales Force.”
Location: At Edison Community, 89 Fifth Avenue, NY, NY
Ed and Wyn will be judges at the New York Startupalooza.
Before the pitching at 6:00 pm, there will be a Capital Raising Workshop at 3:30 pm.
Registration: webinar registration will be available soon at this link.
Ed will be presenting a webinar on starting your business.
This webinar is being hosted by Progress Playbook in conjunction with NYC Business Solutions.
Ed and Wyn will be attending BEA in New York City, the #1 Book and Author Expo. http://www.bookexpoamerica.com/
First aired on May 5, 2015
Host – Jim Beach, interviewed Ed McLaughlin on “Bootstrapping for Success!” on the award-winning “School for Startups Radio.”
Location: Rutgers University Business School, New Brunswick, NJ
Ed will be the featured speaker for the MBA students during their noontime lunch program.
Sign up to attend: Disruptive Technologists in NYC Meetup \
Location: Microsoft, 11 Times Square (8th Avenue).
Topic: Panel discussion on “Balancing a Cool Idea with Profitability.”
Wyn will be judging the semi-finalists in the Princeton Social Imp act Competition(PSICOMP15)
This event is sponsored by the Princeton Social Innovation Club.
On February 20, 2015, Adèle McLay, interviewed Ed for her Successful Entrepreneurs series.
Read Adèle’s introduction here: http://www.adelemclay.com/successful-entrepreneurs-stories-meet-ed-mclaughlin/
THE PURPOSE IS PROFITServices
The Purpose Is Profit Services
Every entrepreneur could use a GPS to identify the best routes in the pursuit of profit. Our Consulting Team is available to assist burgeoning entrepreneurs, small business owners, and large business executives on building a Roadmap to Profit, tailored to your specific needs. Once we scope and quantify the project, we will create a mutually agreeable contract for our engagement for a fixed fee, or on an hourly or per-project basis.
The Authors of The Purpose is Profit are available for speaking engagements for a fee to Entrepreneurial Programs, Business Schools, Corporate Events, and Industry Conferences. Topics will be determined based on the goals and objectives of the host organization with an emphasis on the content discussed in the book. An example topic includes:
Organize Around Profit: The Road to Profit begins with your decision to start your own business. You have identified a product and/or service that offer customers a superior value proposition. You are confident that your value proposition is bankable. You have determined that your value proposition can generate sustainable profits.
As a result, you have decided to put your reputation on the line by risking capital, time and effort (collectively, productive output). You are bargaining your productive output on your value proposition in exchange for profit. Profit is the fuel that enables your business to grow and prosper. Profit is the single most important measure of commercial success.
Copyright ©2016 by Ed McLaughlin. All rights reserved.