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Economics usually scares people.  It sounds like a subject only understandable to those in the world of colleges and universities.  That’s because the Ph.D.s of the world like to keep it that way.

 I am here to tell you that nothing could be farther from the truth.  That is if you leave out the numbers.  You can understand a lot of principles without ever having an understanding of math.  I have no math skills and passed five upper level classes while obtaining my journalism degree.

 This is important for the simple reason that economics effects business just as sure as gravity effects what happens to us during our time on earth.  If you make an error in pricing your products, that fact will come crashing down on you.  If you try to enter a market with a luxury good during a recession, your failure will be painful.  If you enter a market that is already overcrowded, the result will not be pleasant.

 The beginning of all of this is the study of scarcity.  Scarcity is the painful fact that there isn’t enough of any given product to go around to anyone who might want it. When someone buys a portion of any given product, it simply means that someone else is going to go without.  How all of this happens is explained in understanding the laws of economics.

 The best reading on the subject still is “Economics in Plain English,” by Leonard Silk.  It was written in the late 70s and still relevant.  There are a couple a dozen used copies available on Amazon. 

 Pick out the portions of newspapers and magazines that deal with the issues that are a part of the everyday life of entrepreneurs.  This includes “Business Week,” the “Wall Street Journal,” and your local daily paper.

 Running a small business with no understanding of economics is akin to training a test pilot without him having knowledge of aeronautics.

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