LOW RISK, HIGH REWARD Starting and Growing Your Business With Minimal Risk by Bob Reiss with Jeffrey Cruikshank - Practical Lessons from the Front Lines of Entrepreneurship.

EVER THE ENTREPRENEUR from

From the

The Right Way to Grow Your Business from

From the Business Advisor-Wells Fargo

Getting the first order is good, and filling those orders is good. But getting the reorder--that's the real beginning of your business.

Success Times 14

One successful business of your own does not make you an entrepreneurial genius, says Bob Reiss. The Boca Raton, Fla.-based entrepreneur has been involved in 14 start-ups in his 40-year career, including a pencil company, a national sales rep company, three game companies (remember "The TV Guide Trivia Game?"), a consulting company, a personalization company and a watch company.

Reiss's book, Low Risk, High Reward: Starting and Growing Your Business with Minimal Risk, addresses methods for identifying, managing and reducing risks in virtually every facet of business and outlines the attributes, or personal qualities, he feels most successful entrepreneurs possess. The number one attribute is passion for their work. "Every other attribute is learnable," Reiss says, "passion is innate."

Seize the Opportunity

Reiss is the perfect example of a serial entrepreneur identifying opportunity and jumping into action. When the famed Rubik's Cube was taking America by storm, Reiss noticed that manuals on how to solve the puzzle were not available in stores that sold the product. Ever the opportunist, he contacted the publisher of the manual, asked to purchase them on a guaranteed sales basis in bulk quantity, and then distributed them to retailers across the country. Reiss sold more manuals than expected, and everyone enjoyed a healthy profit.

Do Your Homework

However, Reiss knows the difference between a genuine opportunity and wishful thinking. Falling in love with your idea--or product--can blind you to the reality of the marketplace, according to Reiss. Even though entrepreneurs and small business owners may not have the means to do market research, "you have to study your market--you just have to," he says. "Is there even a market? Many people I ask don't know the answer to that question, and that's why they fail."

Reiss currently spends time traveling and speaking to enterprising and energetic young entrepreneurs at various colleges and universities around the country. One lesson he always mentions apllies to reliable market knowledge. "I always tell them that getting the first order is good, and filling out those orders is good," he says. "But getting the reorder--that's the real beginning of your business."

EVER THE ENTREPRENEUR

EVER THE ENTREPRENEUR, one author helps market his own book.

Robert S. Reiss, 69 years old, of Boca Raton, Fla., has founded 14 small companies in his career -- mostly to sell novelty products. By becoming expert at risk reduction -- which is often counterintuitive to entrepreneurs -- he has also become a regular guest speaker at the Harvard and Columbia business schools. Now he has authored "Low Risk, High Reward," a guide to starting and expanding small businesses "with minimal risk."

Though published last month under the well-known Free Press imprint of Viacom Inc.'s Simon & Schuster unit, the book runs the obvious risk of being just one more title in an all-too-crowded market. But Mr. Reiss -- unlike most authors -- aims to increase the odds of success by assuming a big role himself in marketing the book.

Indeed, he says he bought 2,000 copies himself (of about 14,000 printed) -- more than were ordered by any single retail chain or distributor. Now he is trying to resell the copies in channels outside the book trade, such as banks, insurance companies and mail-order catalogs for general merchandise.

To get a price break from the publisher, Mr. Reiss assumed more risk than stores and distributors do: He gave up the right to return copies. (He says the potential reward is worth the risk.)

The author says he told his publisher: "You have to learn new forms of distribution. I'll be the guinea pig. You'll learn from me."

It's A Hit!

Low Risk, High Reward. . .

is going into the second printing.
is being translated into Chinese by a Bejing publisher.
is being translated into Spanish by a publisher in Spain.
recently had its first distribution in the UK.

The Right Way to Grow Your Business

Most businesses make a simple mistake in the growth phase: they expand before establishing profitability.

"They spend their money on fancy new showrooms, or cars or more employees," says Bob Reiss, the author of the new book, Low Risk, High Reward: Starting and Growing a Business with Minimal Risk (The Free Press) with Jeffrey L. Cruikshank. "People tend to lose sight of the object of being in business, which is to make a profit." Reiss believes businesses are too often evaluated on sales figures alone. But if they're not profitable, they will eventually run out of cash and "that's what causes most business failures," he says.

An entrepreneur himself, Reiss has been involved in 14 start-ups including R&R Inc., which was named to Inc. magazine's list of America's 500 fastest-growing companies in 1992, 1993 and 1994. Reiss holds an MBA from Harvard and lectures frequently on entrepreneurship.

Once you've determined if your company is profitable, Reiss suggests asking these important questions before growing your business.

Q: "How will you, as the business owner, fit in?"
As the size of the company changes, your role will change. You'll probably spend less time with customers and more time dealing with investors. You will have more meetings to attend and less time for close personal relationships with employees.

"Some companies never make it to the next level because their founders can't let go. They have to do everything themselves," says Reiss. He has observed that many companies, after going public, eventually fire the founder because he or she is unable to make the transition.

Q: "Where will the staff come from?"
More employees will be needed, and finding good people with new skills is not always an entrepreneur's forte. Retaining old employees may also be difficult. While it sets a good example to have senior people around with a link to the company's past, some may not have the skills to keep up with changes. Inevitably, you will have to re-examine everyone's contribution to the firm, and may have to let some of the original staffers go "which can be an agonizing process," he says.

"Without exception, all of the people I've talked to who have shepherded their companies from small to large say they waited too long to make key personnel changes, and wound up regretting it."

Q: "What new systems and procedures will be needed?"
Department heads will need to be hired and monitored, and policies formalized. "The wrong moves by a department head can be devastating," Reiss says.

Q: "How can the company stay flexible and opportunistic?"
Perhaps this is the greatest challenge of all. Big companies tend to act like big companies, says Reiss. "All too often, they promote and reward people who don't make mistakes. But very often the people who don't make mistakes are also the people who don't try new things. A lot of companies get bigger and lose sight of what made them special in the first place."