Book Review: The Engine of America, The Secrets to Small Business Success from Entrepreneurs Who Have Made It!, By Hector V. Barreto, John Wiley & Sons, Inc.; 223 pp.; $24.95

Reviewed by Joseph Patrick Bulko, STAFF WRITER



In The Engine of America, former U.S. Small Business Administration Administrator Hector V. Barreto spends considerable time hyping the SBA and his accomplishments during his five-year tenure beginning in 2001. Barreto's exuberance and concern for the budding entrepreneur are genuine, though, as he reminds the reader of his successful efforts to expand the SBA loan program and help small businesses find the resources they need.

In this book he uses an anecdotal approach, often teaching by example through the words and observations of various successful entrepreneurs who dispense excellent advice on establishing and building successful business ventures. The book purports to separate the entrepreneurial wheat from the chaff, the pretenders from the players - to help individuals determine if they are the sort who should be starting businesses and working for themselves.

Barreto has not written a "how-to," instead choosing to alert the reader to the many issues arising throughout the entrepreneurial process without providing the details or nuts-and-bolts of executing them. His target audience includes beginning small business owners, established entrepreneurs seeking critical advice to reach the next level and people not yet in business but who are considering starting one.

The book's ongoing value is a comprehensive Appendix containing lots of links to useful business-related web sites: SCORE, SBA, GSA, Dun & Bradstreet, U.S. Chamber of Commerce and many more. Perhaps Barreto's greatest advice to the budding entrepreneur is to seek outside help - from SCORE, in particular. He raves about the invaluable and free assistance from SCORE, known as the "Counselors to America's Small Business," and the SBA, an agency that can be helpful finding banks to make small business loans.

The Engine of America provides a valuable service by discussing in some detail the availability of government and corporate procurement opportunities. The federal government has a procurement goal of providing up to 23% of its contracts to small businesses. There are various set-asides for minorities, women and veterans. Small businesses are advised to seek these contracts. The private sector provides opportunities for small businesses, too, as many big corporations look to small firms to supply their many and varied needs. Business matchmaking services help to connect the small business owner with corporate representatives.

The reader discovers that while nearly two-thirds of new businesses survive two years, barely 50% survive past five years. Barreto notes that some of these "failures" are planned "business closures" of successful ventures. He says that the 25 million small businesses in the United States produce 52% of the country's gross domestic product (GDP), represent more than 50% of employee payrolls in the U.S. and create 60-70% of new jobs each year.

Failed businesses derive from a lack of preparation, a lack of capital (or not knowing how long it will take to reach breakeven or to generate positive cash flow) or a lack of customers. Early planning is the absolute main key to success.

Common features of a successful small business owner include values, character, perseverance and goodwill to others (employees, customers, community and families). Running a small business is challenging but fulfilling, and the owners work longer hours than employed people, often putting in 60- to 80-hour weeks. Starting a business is a question of faith, of confidence, of will and of being relentless.

Barreto explains that the business plan is "the road map to success." It provides a detailed overview of all aspects of the business. The business blueprint, as distinct from the business plan, identifies all the major functions and tasks required to run the business. The rationale for the business plan (aside from trying to attract investors) is that it helps the budding entrepreneur achieve a new level of understanding of the requirements of launching the new business, or helps determine if the venture is even viable.

Throughout the book, Barreto emphasizes the importance for the entrepreneur of knowing what he or she doesn't know. The entrepreneur must understand all facets of the business, even those that might not be readily apparent to the novice business owner. Education and training are the best investments that the entrepreneur can make. New business owners must be willing to ask for help (and know that they need to ask for help). Also, success in one business does not guarantee success in a different business.

Barreto advises against starting a business that's simply a carbon copy of what is already out there. To be successful, the entrepreneur should find a need and then fill it. He or she should find voids in the marketplace that are not being served, and generally be unique, different and better.