Make Sure Your Assumptions Are Right!

My academic work was and is in economics – “The Dismal Science” as per Adam Smith’s contemporaries.

My best classes were money and banking. In 4th year undergrad honors classes I loaded up on all the classes I could on that topic. I even went for dinner with a great professor from the Chicago “school” of monetary policy. Look it up. It’s a thing.

I loved it!

And still do.

The “fiat” money system. Money created out of thin air by debit and credit entries at the bank. Money created through debt – your debt! The subtle mechanism of monetary policy used by policy makers to expand and contract the economy. So amazing!

Last week at our rapid round (“Ask me any question on any topic) two business owners asked me what I thought would happen to their real estate. One was a real estate investor with rental houses. The other was a tourism operator with an amazing B&B.

Each was concerned...

The background:

We had participant, Kylie, in our Rapid Round this Tuesday. She is looking to start a not-for-profit day care.

The paperwork is in progress. They have a vacant building that is a former day care. It all seems great!

The problem:

1. They don't have finances to rent the building.

2. They can't get clients without a building.

3. The landlord won't rent to them without proof of revenue (clients).

It's the classic chicken or egg problem. No building if you don't have revenue. No revenue if you don't have a building in which to do business.

The solution:

• Compress the timeline. You need to get the chicken and the egg simultaneously. It's only possible in a compressed timeline.
• Create a calendar with time blocks with every task you need to get this done.
• Calculate the number of clients you need to pay all bills. Make that your target.
• Find clients by telling them you are opening on a certain date, say August 15, shortly before school...

If you have a service business, you’ve taken a big hit during the past two years.

Many of you are out of business. Some are still alive – but suffering. Very few are as prosperous as they used to be.

And I am so sorry for your experience! So. Very. Sorry.

It really is unfair.

I love the entrepreneurial spirit of the small business owner.

The big corporates made it through. Public sector employees all kept their jobs, working from home, every dollar intact. 

But what happened to the small shop owner?

Did they get to stay home? Well, yah! But not in the way you think. They had to pretty well shut down and many really did lose their business. They didn’t get paid.

I know quite a few people who really are second-class citizens in their own right. They found a place to lease. They put some (or all) of their retirement savings into renovations, hired staff, bought some advertising, and toiled away day after day to eke out more or less what they would make at a...

Your Inflation Rate

Last week, two of my clients were about to make important decisions.

One is about to buy a commercial property with offices and shop space to house his growing staff. Another is planning to invest in an accelerator and initiate the first tranche of a capital pool.

Each told me that they had confidence in their own business. But both expressed fears about the world economy.

Should they take the risk?

And most importantly – How do they get the information to even make a good decision?

It prompted me to review all the sources of information I get on a regular basis – economic reports, wealth management advisor updates, big-five consulting reports, think tank opinions, etc.

Tons of paper. Little consensus. Zero action plans for the ordinary business or family.

Do I have a definitive opinion for you? Yes.

I’m planning to do a webinar in May that will review my opinion on economic indicators that I think will influence our lives in the...

For 12 years at the angel investor group I saw 250 to 300 deals a year. Now that I run a family investment fund and an informal angel network, I see about 100 a year.

It’s a great vantage point to see how leadership works.

This question of when you change leaders always comes up -- mainly when it’s too late.

Aside from the emergency reasons to change a leader (death, sudden retirement, firing, scandal, incapacitation, political correctness blunders – just kidding about this last one, or maybe I shouldn’t kid about it), there are only two times when you should change business leaders.

SITUATION #1: When the leader outgrows the business.

• You can be a leader with a specialty. Let’s say you’re finishing a merger or have negotiated the sale. Consider a graceful retirement after the harsh cost cutting and tough negotiations and let a healer move in.
• Or let’s say you’re a consolidator or deal maker. Now that you’ve...

Just last week, one of my coaching clients showed up frustrated:

“I can’t get going. I think I have a great idea and then I think of all the things that can go wrong. And I freeze.”, he said.

“I can’t quit my job yet. But I know that I can’t stay there forever."

“What do I do?” Then he fell silent.

Privately I thought: “Here we go again!"

I’ve heard it a hundred times. 

If I had a pipe I suppose I would now pack in some “Yellow Sail” like my grandfather used to do. Light it using a couple of those nifty wooden matches. Take a few puffs.

Maybe blow a ring like Gandalf. And then utter some great wise saying to convince him that he can do it!

Instead I remind him: “You know I’ve told you a million times, there is a way to solve this procrastination!"

His response: “I know. I know. I know! I believe you. But tell me again!”

So I tell him and I hope you can believe this...

Should you rehire somebody who left?

No you should not.

Why not?

1. A returnee can have a sense of entitlement that is not helpful. Even if that person tries to suppress this, human nature will creep in.
2. “Unfinished business” will rear its head – whether that individual left on good terms or otherwise.
3. A returnee can disrupt the natural harmony of the workplace that grew after he or she departed.
4. A returnee’s authority will inevitably be compromised.

How do I know this? Seen it. Lived through it. Regretted it. Saw the damage. Saw numerous clients experience the same thing. Will never bring someone back who left.

Our great team assists clients daily with this and other hiring challenges. We help principled leaders excel!

Overthinking comes from a common habit in which we roll the issue around and around in our head, moving from decision to doubt to another decision, more doubt, and then yet another decision in a seemingly endless loop. We can’t be against prudential judgement or sober second thought. But even those virtuous practices have a natural limit. As has been often said: “Virtue is in the mean.”

How to solve this: Set up a decision tree of successive decisions that begin to steer us in the right direction (no unnecessary backward loops) – “wide” decisions at first, moving successively to “narrower and narrower” decisions, finally resting in the “micro decision-making level”.

Example: “I will start a business part-time and not full-time”. [You don’t choose between making fine furniture OR creating a delicious new barbecue sauce at this point. Just keep it wide – in the example the first decision is...

How do you actually make a decision on what to do next?

Last week a client revealed the constant struggle with how to make a decision on what business to start. He got into an endless repeating loop – sort of like that great Star Trek episode where the crew keeps reliving the same few moments in an endless loop.

I offered the idea of making a short list of 3 to 5 criteria that would reflect a “good” decision. The client would run various options through this funnel. The criteria could change from time to time – and this would actually strengthen the eventual outcome. The client would run this process several times over.

This method works when you have to make a decision quickly OR slowly. Why?

Because this simple (but not simplistic) process is deliberate, disciplined, and objective.

Our great team assists clients daily with this and other procrastination challenges. We help principled leaders excel!

Is it a product or a business?

As an investor in start-ups I’ve noticed a trend where people believe that developing a product is the same as developing a business. Not true. A product is sold TO a business and the only exit is to sell your product to another business. A business is sold AS a business to another business.

Yes, it is understood that in order to make a single product you need to build it, have staff, figure out financing, protect your IP, sell to a limited number of retailers and wholesalers, etc., but, still, it’s not the same thing as building a business with a suite of products and multiple customers.

Seasoned investors know the difference between a product and a business, especially when they hear a pitch. This small point makes a big difference in strategy. It would be good to contemplate this.

Our great team assists clients daily with capital challenges. We help principled leaders excel!