Nine Years of Failure?

I have a friend who's basically a genius -- and a very successful man, in my books. Yet he's too hard on himself. This gentleman doesn't give himself enough credit for what he's done right. He's been a entrepreneur now for most of his adult life, but claims that for the first nine years he was an entrepreneur, he was a failure -- because he tried so many things and they didn't make any money. It was one failed attempt after another.Let's get real here. That isn't failure. All you have to do is implement a small mind shift to realize that his "failures" were stepping stones on the way to success. As long as you learn something, no failure is a true failure. You only fail when you decide to give up.To truly succeed, we have to be kind to ourselves. In fact, we have to be proud of ourselves -- and that includes all the times when things don't work out right. You've got to keep that little spark alive inside of you. Be willing to do whatever it takes to succeed, even as others sneer at you for being obsessed, or think you're crazy for thinking someone like you can become a millionaire. They'll be the first ones to tell you you're "just lucky" when you crack the millionaire code -- or to come to you with their hands out.You see, it all starts with a dream. Those of us who've already made it have tried and failed at a lot of things, because that's how it works. We've learned, for example, that most multilevel marketing programs are scams -- but we've also learned which ones aren't, and how to tell the difference. The people involved with MLM are great. They're earnest and optimistic, kindred spirits in the battle for self determination. Some of them do succeed in MLM, but the great majority do not. Still, most of the entrepreneurs I know got their start in MLM. It was a boost up for them, like it was for me.Most MLM doesn't work because most participants can't and won't sell. They hate selling. But if you're going to be successful at MLM, or at any business at all, you've got to start with a sincere, firm desire to sell. It's all about selling; never let anyone tell you otherwise.Remember: the only true failure occurs when you just give up. And I run into those people all the time. They tell me, "Oh, I had a business once. But I had to close it." I've spoken to hundreds of people over the years who have said that. They admire those of us who've been self-employed for years, and they tried it, but it didn't work for them right away -- so they gave up. They went back to working for other people. Those people can say they're failures, because they gave up.Maybe it just wasn't for them. They may not be failures in all aspects of their lives; in fact, they may be very successful otherwise. But they're not businesspeople. That's not intended as a judgment call or slur, just an observation. Some people are born employees, and there's nothing wrong with that. How could we entrepreneurs build our businesses without them?Ben Franklin once pointed out, "Those things that hurt, instruct." We tend to learn our lessons the hard way. But it's still not failure until you quit for good. Just understand that, and if you haven't quit, feel good about yourself. You've got to. This idea that you'll perform at a higher level if you beat yourself up is ludicrous; it's not a good long-term strategy. The right way to excel is to stay focused on your goals, stay very excited about what you're trying to do, and be determined to make it -- to find a way, no matter what. Try a lot of different ideas. Pace yourself, but push yourself. Don't burn out. Like the Journey song says, be good to yourself. In the end, you're all you've got. Even when you're surrounded by all kinds of good people, in the end it's the relationship with yourself that matters.Marketing guru Dan Kennedy once had a client in Phoenix, Arizona. The first time he walked into this client's office, he saw a bulletin board covered with business cards. Dan said, "Oh, I see you collect business cards, too," and the guy replied, "Nope, those are all my own cards from businesses I've had in the past." This guy had been involved in lots of different businesses. Some made a little money; some didn't. But he never quit, even when a business didn't work out. He found something else to get excited about, and eventually went on to make millions -- and then he retired.Here's the thing: the average entrepreneur will try at least four or five different things before succeeding -- unless they give up. Sadly, you're never going to hear that statistic from the government. They only give you part of the story, telling you that 95% of new businesses fail within five years. Hearing that, why would anybody go into business for themselves? That statistic scares people to death, so they quit before they even begin. Why try if you're facing such miserable odds? They'd rather stay with the soul-killing little jobs they hate so much, where they feel like they're in prison every day, just marking time until they're finally released.


But that 95% failure rate may as well be a lie, because it hides the fact that most entrepreneurs have to try many different things before they finally find their one wild success story. And many of those businesses that no longer exist after five years? It's because they were profitably sold to someone else, folded into a larger enterprise, or deliberately closed so the owner could take part in a different opportunity. The statistics don't take any of that into account.Ordinary people get rich every day. A great book came out in the 1990's called The Millionaire Next Door. Two college professors wanted to do a study of people who had a net worth of over a million dollars; they were going to find these people, interview them, get some of their greatest tips, tricks, and strategies, and reveal them. And frankly, it's easy to find people who have a net worth of over a million; it's public domain information. So they went to a city, set up in a nice hotel suite with caviar and champagne, and invited the local millionaires to visit.It turned out the people who showed up weren't caviar and champagne people. They were beer and pretzels kind of people -- mostly just average small business owners. And I'm not talking high-tech businesses, either, but the Mom and Pop type (the Internet was barely off the ground at that time). They didn't live in fancy neighborhoods or drive new cars, for the most part. Read The Millionaire Next Door. It's instructive and funny. It turns out that most millionaires live in older neighborhoods, in houses they've paid off. They aren't flashy people. In fact, the professors found that the people that lived in flashy neighborhoods were mostly about six months away from being homeless. They were living beyond their means, so if they lost their jobs or something happened to them, they were in trouble.Failure isn't failure until you give up. My friend who said that he'd failed for nine years -- no, he didn't fail. He tried a lot of things during those nine years. He learned all of the things that didn't work, and he was learning other things as he went along, too. Thomas Edison and his team supposedly tried over 1,000 different experiments before he perfected the light bulb. When asked, he said he didn't fail; he just found 1,000 ways that didn't work.In his most famous speech, Winston Churchill got up in front of these kids at a college graduating class and basically said, "Never, never, never, ever give up." And then he sat back down. No one was expecting that, but it was utterly brilliant.I subscribe to Forbes Magazine, and they have some great articles about people who are raking in the money. I once read about an entrepreneur who was 52 years old when he started to make his billions about ten years before. There was one sentence in that article that jumped out and hit me like a sledgehammer: "Push it until it breaks, fix it, then push it until it breaks again." That's a hell of a philosophy, especially coming from a billionaire. It resonates because of that, whereas it might not if spoken by someone less successful.Success leaves clues. You've got to try a lot of different things. Look at Thomas Edison and the light bulb. Look at the story about Dan Kennedy's client with all the business cards. And remember my friend, the one who thought he had failed for nine years straight. Most of those people were surrounded by others who told them they didn't know what they were doing, that were wasting their time, that they were never going to make it big.You're never going to please your naysayers, no matter what you do. They'll always be critical -- and that's fine. But they've never built a statue of a critic, have they? The heroes in this world aren't just sitting around criticizing other people. They're out there making it happen. They're out there doing it, every day. That's what you've got to do, too.Learn from the things you try. Even mistakes aren't just mistakes -- they're ways you've discovered that don't work. You should always look for a better, faster, easier, simpler, more effective, more profitable way of doing things. By the time you find it, you'll have had a lot of experience, because you'll have tried a lot of different things, and that will be your secret for making all the money that you want and need.All that money is out there, waiting for you. Be good to yourself. Just because you've tried things in the past and failed, that doesn't make you a failure; it makes you a typical entrepreneur. Keep trying. Keep failing. Eventually, you're going to hit it big.

Your Profits Are Not A Joke

Yes, having a sound business plan, being aware of the competition, meeting the needs of your customers, and executing a solid marketing strategy can make your business successful sooner rather than later.However, it takes time to build a reputation and gain repeat customers.During that time, don't treat your business and your profits like an April's Fool Joke, because you will exhaust a great deal of your funding.Remember: Don't ignore the numbers! They speak a very particular language. The language of a Profitable Business.If they tell you that it should take three years to show a profit, then don't start spending your profits in the first six months before you have any.Too many businesses (particularly home based businesses and online businesses ) have made the mistake of spending paper profits.Remember that banks and venture capitalists look at financial statements, and eye balls don't pay the bills... real money does!When should you start looking at your profits?The sooner the better. You should plan for your profits before you start your business, and you do that in your Business Plan.OK, I know you didn't do it before you started your business, but now is better than never! Trust me when I tell you that it's costing you money not to have a Business Plan, and I don't mean hundreds of dollars.. I'm talking 30 to 50 percent of your profits can be saying bye bye to you right now, without you even knowing it.Let me give you a clear picture... Have you ever seen a house that was remodeled and rooms were added to it randomly? What if on the other hand you see a house and you can't believe it was remodeled and rooms where added, because they were planned from the beginning? Do you get the picture?


Structure your business as if you are going to make $1 Million Dollars, and celebrate when that day comes (it might be closer than you think). The alternative is having to lose a lot of money, when you get there, because you didn't plan accordingly... I think I like the first idea better.I know Business Plans can be intimidating, and if you don't know how to use them, they may seem like a good dust collecting object, but the truth is that a Strategically Built Business Plan, and tailored Financial Statements are managerial tools that can easily double your profits almost instantly.I know it's all confusing and fuzzy. It's like speaking another language, and fortunately for you I'm fluent on those languages and I'm more than happy to show you:a) either the basic words you want to know in every language ( you know beer, bathroom, thank you )b) the whole enchilada, so you can be proficient and independent, making financial decisions that put money in your pocket day after dayc) and of course, anything in between...Normally, unless I'm running a promotion I don't offer my private sessions, because my calendar is full, but because I love my readers and I want to offer something super special that I've never done before.

Why Are Our Corporate Projects Failing? The Importance of Requirements

In my first article, I described the importance of having a systems engineering (SE) process to manage and direct the technical aspects of a project. I provided a very brief overview of what SE addresses, what the costs are of having (and not having) an effective SE program in place.In this article, I will discuss one of the most important aspects of the SE process: requirements definition. This is arguably the critical piece of the SE process that can make or break a project. It defines what is going to be built, manages expectations of the end users and stakeholders, and places a boundary around the effort. It also provides an objective set of criteria to evaluate whether or not the delivered system or systems meet everybody's expectations.Please be aware, this article is not a comprehensive discussion of the requirements process. Rather, it's designed to provide a limited discussion of the process, how requirements should be categorized and structured, and why this basic understanding is so important in defining a project. There are many books, Internet resources, and the International Council on Systems Engineering INCOSE website that can provide the details for the requirements definition process.What are Requirements?Wikipedia has a very good definition of a requirement: it is a statement that identifies a necessary attribute, capability, characteristic, or quality of a system for it to have value and utility to a customer, organization, internal user, or other stakeholder. A specification is a specific set of requirements that are satisfied by a material, design, product, or service.Requirements are typically organized in a way that address very high level needs to very specific needs. Requirements can also specify the processes needed for realization of the deliverable. This set of requirements defines what is being built and how it fits into the overall enterprise. For example, at the highest level, requirements can define mission, operational objectives, and management. As the specificity increases, requirements can be categorized by operational scenarios, use cases, and behaviors. Finally, at the highest level of specificity, we can include Performance, the "ilities" (i.e., Reliability, Availability, Maintainability), Security, and Safety.We can also have orthogonal requirements that focus the "how:" how are we going to implement the requirements. These focus on management of the effort and will be discussed in the next section.Taxonomies of RequirementsRequirements are organized by taxonomy. At the highest level, there are functional requirements, which defines what the systems does and how it does it, and non-functional requirements, which covers everything else, which are generally the management aspects of how the system will be designed, built, tested, and delivered. These can also include management constraints, regulatory requirements, and technical standards, and quality of service requirements.How the requirement taxonomy is constructed should be based upon some known standards, such as those from INCOSE, IEEE, and the International Institute of Business Analysts, which I offer below:
Business requirements: High-level statements of the goals, objectives, or needs of an organization. They usually describe opportunities that an organization wants to be realized or problems that they want to be solved. Often stated in a business case.
User (stakeholder) requirements: Mid-level statements of the needs of a particular stakeholder or group of stakeholders. They usually describe how someone wants to interact with the intended solution. Often acting as a mid-point between the high-level business requirements and more detailed solution requirements.
Functional (solution) requirements: Usually detailed statements of the behavior and information that the solution will need. Examples include formatting text, calculating a number, modulating a signal. They are also known as capabilities.
Quality-of-service (non-functional) requirements: Detailed statements of the conditions under which the solution must remain effective, qualities that the solution must have, or constraints within which it must operate. The "ilities" are examples of QoS requirements: Reliability, Testability, Maintainability, and Availability.
Management (non-functional) requirements: These requirements include project methodology (e.g., Scrum, Waterfall, Spiral, etc.), support deliverables such as project management plan, systems engineering plan, test plans, monthly progress reports, etc.
Implementation (transition) requirements: Usually detailed statements of capabilities or behavior required only to enable transition from the "as is" state of the enterprise to the "to be" enterprise. Examples include: staffing, training, change management, and data migration.



Characteristics of RequirementsIn order for requirements to be effective, they need to have certain characteristics. In this section, I offer some key characteristics that are important to evaluate requirements against:
Unitary: The requirement addresses only one thing.
Complete: The requirement is fully stated with no missing information
Consistent: The requirement is consistent with the other requirements, does not contradict other requirements technical standards, and design documentation.
Realistic: The requirement must be feasible with the available technology, cost, and schedule constraints, and acceptable risk.
Traceable: The requirement must be traceable back to the business and/or mission needs.
Measurable and verifiable: The requirement must be stated unambiguously; with measureable criteria for insuring the deliverable can be tested against the requirement. This is especially important when dealing with quality of service requirements. In the case of more qualitative requirements such as user experience (UX and human factors, it is important to consider metrics of human performance against the interface such as time to react, maximum error rates, etc.
Importance/prioritization: Requirements need to be ranked from critical to non-critical or "nice-to-have." This provides needed information to the project manager and the development team on the implantation sequencing in the project plan. Another aspect is risk/reward: It is often useful to implement low-risk high reward requirements early on, especially when using Agile or Spiral development approaches.
Documenting RequirementsThere are numerous software tools available for requirements management, from IBM/DOORS at the high end to simple Excel spreadsheets. Whatever method is used, it is necessary to employ a requirements engineer who is familiar with requirements documentation, systems, and methods. One method I have successfully employed is a requirements wiki. The wiki provides an attributable tool for requirements management, including progress reporting, changes, issues, and recommendations for improvement.Requirement PitfallsThe biggest issue with requirements management is scope creep: this is the tendency to add new requirements during development. In extreme cases, new requirements are added faster then they can be realized, which means the project starts to move backwards. Besides the fact the project is at risk of never being completed, adding new requirements adds to costs, creates frustration with the development staff, and complicates implementation. For example, if new requirements are added after a significant amount of development is completed, it often means throwing out work that has been delivered and starting anew. It also dramatically increases the risks of interface problems and unanticipated consequences.The requirements process can also create pitfalls. The process for collecting, evaluating, vetting, and managing requirements can be influenced by outsiders with agendas who may want to influence, or worse yet, sabotage the project. A good example of this was the F-16 program, which was perceived as a threat to the F-15 program, with the latter surreptitiously injecting new requirements into the former, to overburden the project with complexity, weight, and capabilities. As a result, it is extremely important the requirements process be rigorous, independent, and managed buy a strong leader who can say "NO!" when these pitfalls occur.ConclusionsThe requirements process and the proper definition of requirements for a system are critical for increasing the odds of a project's success. The growing number of failed projects can be directed attributed, in whole or in part, to an ineffective requirements processes, which resulted in poorly defined requirements, scope creep, or political gamesmanship in the definition and prioritization of the requirements. As a result, getting an expert systems engineer who is well versed in the requirements definition process is absolutely necessary to mitigate the risk of project failure.

Do You Have a Plan?

It's hard to believe that we are already half way through April and well into the 1st quarter. Did you reach your goals for the first quarter? Are you on track for the 2nd quarter and for reaching your goals for 2014?A lot of times we start off the year with a big bang and lots of great intentions yet if we don't have a plan we often end up not reaching out goals, our sails get deflated and we end up not achieving what we want. Nothing breaks my heart more than to see others not achieve their goals due to simply forgetting to take this essential step.Whether you are just starting a business or you have been in business for years, one of the greatest keys to success is having a plan. Seriously, having a successful and profitable business isn't rocket science but it does require a plan. The simple truth is its nearly impossible to reach your goals; whatever they are (you want to make $1000/month or $100,000/month) it all starts with a plan. I'm sure you have heard the cliché, those who fail to plan, plan to fail. The reason I ask though is that I talk to folks all the time that don't have a sound plan in place to reach their business and life goals.Therefore, I wanted to give you the quick and dirty of putting together a plan so that you can reach your goals fast, with a simple plan.Step 1 - You need to know where you are going. I like to break things down into easy to follow steps and look at plans with a 90 day/30 day /weekly and daily focus. This really helps you to put your plan into action, which is step 3. Look at what you want to achieve in this time frame, do you want to launch a new program? Bring in a certain amount of additional revenue? Do a certain number of speaking gigs? What do you want to accomplish?


Step 2 - What do you need to be/do or have to complete the plan. Do you need to delegate to a team member? Outsource to an expert? What can you do? For instance, if you decide in the next 90 days you want to create a new online program, ask yourself, what do I need to have in place in order to achieve this goal? Who do I need to have on my team or engage to achieve this goal? What software or systems do I need to have in place in order to achieve this goal?Step 3 - Take action - Delegate whatever needs to be delegated and then calendar your plan for the next 90 days, all the way down to the daily level, this will ensure that you know what you are doing each day in order to reach your goals. Lets look at our example again of launching a new online program. You will want to create a list of everything you need to do, everything your team members need to do, what software you need, etc. then you need to attach time frames to these tasks. Once you have a clear plan map it out on your calendar so that you know what action step you need to take each day.

A Million Dollar Content Syndication Strategy

As a start-up business owner, I didn't have much of an advertising budget to promote my business - actually I really didn't have any budget whatsoever.So, I got my hands on any free information that was available on the topic. (There are a bunch of great free resources available through your local library or by simply doing a Google Search for the information you want to learn)And as much as I could, I found people within my local community or my current network that were a bit further down the path than I was and sought them out for guidance.Fast forward to today, after much trial and error and statistical analysis, I came up with the strategy that I'm about to share with you.Important Note: This strategy works very well with any piece of original content that you have. If you can, crank out as much ORIGINAL content as you can and run it through this system. The results that you can get with 200 original articles are MUCH MORE than what you can get with 20 articles. So crank out content.Okay, let's get straight to it.
Post Article on External Directory - This is the absolute 1st time that your content will be seen by the public. Your article should be posted to a public directory like EzineArticles.com where you can create your own author profile and get access to a large audience.



Publish YouTube Version - You can do this simply by recording yourself reading the article, then creating a slide show with PowerPoint where each slide is one paragraph of the article, recording a screen capture of the slide show with a software like Camtasia, matching up the audio to the slide show, and exporting to YouTube. (This can also be done through other video hosting or audio hosting sites)



Announce the Publishing to the Press - Through free services like PRLog.com, you can publish press releases covering any news that you want. And the release of new content counts as news. So your first announcement is that in a few days you're about to publish a post on your blog "including detailed video" covering _______ topic.



Publish Article & YouTube Video on Blog - This is simply embedding your YouTube video at the top of the post, and pasting the article right below it. You should make a few tweaks here and there to make it more geared towards a blog post but that's pretty much it.



Announce "Being Live" to the Press - This step is simply publishing another press release saying that the content you were talking about a few days ago has officially launched and gone live on the business owner's site.


That is at least 5 different times that the public heard about your content. And if you did a good enough job of optimizing the content so that it's "SEO friendly", then you'll get the passive and residual traffic that will come from this content.Not to mention, if you've done a good job of plugging a sales process into your blog, then the traffic that your external sources are going to generate will likely monetize into leads and sales.

Three Killer Questions That Can Earn You Millions

In this article, I'll introduce three killer questions that you should ask yourself repeatedly if you want to explode your profits and fill your bank account with cash. Ignore these questions at your own risk.I love questions like these, because if you constantly ask yourself such questions over time, you'll be able to generate some incredible answers. But you have to ask yourself the right questions. You should ask yourself these three over and over again.Here's the first question: Are you focused on the few things that will bring your company the most sales and profits? The reason why this is such an important question is that in most cases, business owners are focused on the minutia of their businesses: planning, preparation, inventory, and all the little things that keep the business going, instead of the few big things make the most money. In most cases, that's the marketing-actually getting out there and selling, whether it's through magazine ads or online sales letters. You may have heard the 80-20 rule, the one that states that 80% of your profits come through 20% of your actions. It's absolutely true. So ask yourself this question every single day, day after day, and if you can, delegate the small tasks to other people.The second question just drives that first question home: Are you sure? Are you sure you're focused on the few things that will bring your company the most sales and profits? The first question is so crucial that even after you ask yourself that question, you need to come back and revisit it. If your actions aren't giving you the biggest bang for your buck, then you need to re-tool what you're doing -- and have to push yourself back to where the most money is made.Well-known marketer Ron LeGrand likes to say, "The less I do, the more I make." Now, he's not saying he's lazy. What he means is that he's pulled out of everything he used to do that wasted time, and he's now focused on the few things that make him the most money. He only does those things, like marketing, that reward him with the biggest bang for his buck. He outsources everything else. Maybe he's down to just five moneymaking activities-but because they produce so much profit, he increases the amount of money he makes. So ask yourself, "Okay, is what I'm doing really giving me the biggest bang for my buck? Is it really bringing my company the largest amount of sales and profits?" Then double-check that by saying the next question: "Are you sure?"The third question is: What did I do today to achieve this goal? This is a checkup. You can ask yourself the first two questions at the beginning of the day, and then at the end of the day you need to say, "Okay, what did I do today to achieve this goal? What actions did I take?" That way you can review and say, "I did these three things. But I really should have done these other things, too. What can I do tomorrow to make sure this happens?" This keeps you on track. If you can stay focused, you're going to achieve success -- whatever that means to you -- a lot faster.


In most cases, people live their lives just reacting to things. They wander from here and there, their lives on autopilot. If you'll focus your attention on your goals, on achieving the success that you want, and do that every single day, you'll get there a lot faster than someone who's wandering without any direction.The ability to focus is supremely important. You'll find plenty of time management books out there, some of them offering elaborate marketing and management systems, but all you really need is something simple. Here's what I suggest: write down the six most important things you have to accomplish every day, and then start with the one that's the most important or the most difficult, and get it done. Then go on to the other five. Try it; break some of your big tasks down into smaller tasks. Just make sure you devote a significant amount of time to the most important things.It's all about focus, and it's all about intention, and it's all about sales and profits. The money that you want to make is out there -- I don't care whether it's a million dollars a year or a million dollars a month. It's in the marketplace right now, and what you have to do is not only develop the right products and services to reach your target marketplace, but also develop a specific strategy to get there. Then you have to break that strategy down into smaller steps. When you get down to it, it's a game you're playing, and in every game you use strategy -- a series of methods and activities that you can perform to achieve your goal.Other people are doing this. You can do it too. All those entrepreneurs who are making millions of dollars are fundamentally no different from you are. It's your belief that they are that creates most of the barriers in your business. But the truth is, they're just people like you. They're doing some of these things I'm talking about here. They let other people do what other people do best while they do what they do best, and they stay focused on the sales and the profits. They're constantly asking themselves better questions, which lead to better answers.Focus on the things that bring in the most money, and let other people do all the other things. Don't get caught up trying to do everything, because that's shortsighted. You may think you can't afford to hire other people to help you do the little things, but you really can't afford not to. When you're getting started, outsource anything other people can do that you don't need to have control over.Don't worry about the details that don't really matter. Spend as much of your time as possible thinking about who your customers are and what you're going to sell them.

Lessons From the Beginning of America's Economic Independence

Twenty years after America's political independence from England, its transportation network connecting the country's towns and cities remained inadequate for the needs of its own commerce. At the turn of the 18th century, information traveled at the same speed as people whether by messenger, the mail, or the newspaper. The news that George Washington died on December 14, 1799 took seven days to travel the 240 miles from northern Virginia to New York. Under these conditions, few institutions operated across long distances, even as Americans began to move west over the Appalachian mountains by the thousands.At that time, New York's aristocrats were classic landed gentry, owners of vast manorial estates along the Hudson River. They felt that people of their class were the rightful owners of business monopolies, and unsurprisingly, this attitude gave the ruling class a windfall of profits which they used to maintain their social control. Cornelius Vanderbilt became very wealthy by breaking the transportation monopoly and he did it by challenging the laws in court and he competed for customers by offering more consistent and faster service at lower prices.Vanderbilt grew up on Staten Island, off the coast of New York when New York City was smaller and less important than Philadelphia. He got into the family business young, ferrying people to and from the island. One of his first insights was to run his ferries according to a set schedule instead of the common practice of holding the boats at the pier for a threshold of passengers before setting sail. Vanderbilt gave the customer more control of their time, and he became known for regular, consistent service.


He took an active interest in the technical design of his boats to gain tactical advantages. For instance, because of a particular shallow channel at Raritan, all ferries needed to shuttle passengers by scow to the New Brunswick pier. The ferries ran aground if they tried to dock. To solve this key problem, Vanderbilt lengthened his boat to reduce its draft, enabling it to dock at the pier regardless of the tide's height. His competitors followed, as he knew they would, but a pattern of-leadership began and Vanderbilt became known as being one step ahead of the rest.Vanderbilt grew his business by investing in partners who had access to technology that he did not. He bought shares of other boats and managed his partners' boats when it was beneficial to him. For instance, he learned the intricacies of steam by running Thomas Gibbons' boat, the first steamboat in America. As he kept his sailing boats operating, he expanded into steam building his technical knowledge as he went along. In addition, his partnership with Gibbons, who was a very good attorney, gave Vanderbilt the winning legal strategy in Washington to break the monopoly.

The One Thing Successful Businesses Do To Guarantee Success?

The long way around... please be patient...When I first thought of writing a book... any book... the first thing I thought of was creating a goldmine. You know the one... best selling author, on the talk-show circuit, speaking engagements, movie deal... nice thoughts... LOL!When I started writing, all I thought of was finding a way of creating a real goldmine, one that everyone could easily and effortlessly create, but like most people in business, we are so busy that it took me a long time to understand what this 'goldmine' actually was... it was like chasing the 'Holy Grail'!During my research...Well... that's another story, now back to this one...Years ago, I had read Russell Conwells, "Acres of Diamonds", and even though I thought I understood the principles and the context... I didn't. As it turns out, so many other business people also didn't get it!So let's begin the journey.Years ago I heard this tale about the founding of IBM.Thomas J. Watson Snr., and his associates got together and brain-stormed the development of IBM. The goal was to determine what this company IBM would look like in 25 years. Once they achieved this, they started IBM with the attitude that they were already this 25-year-old enterprise, and acted as if the future was NOW.What a concept!Interestingly, this isn't how IBM started. It evolved from another company called the 'Computing Tabulated Recording Corporation' which Watson joined as an employee and eventually became its President. This company was later renamed IBM in the 1920's.But reality or myth, the real message is very clear for all businesses... "Always start with the end in mind!" - Stephen Covey.To that end let's get started in helping you find "Your Hidden Goldmine", so that you can prosper and enjoy the fruits of your labours, now and for a long time to come.


By the way, I need to ask you this question (one of the few that will be asked throughout the book), "Why are you in business?" Or perhaps a better question is "What is the purpose of your business?"Not surprisingly, when I was asked this question a number of years ago by my good friend and mentor Iain (pronounced 'Iron') MacKenzie, I got it very wrong... and I'm a business consultant.I say not surprisingly (although it surprised me at the time), because I have asked this question to clients, workshop participants and audiences over the years, and very, very few have actually got right.Despite the answers we all give, ie. freedom, flexibility, making money, being able to steer one's own course and certainly being able to have control of our lives etc... we all pretty much miss the mark.The answer is...... to develop 'sustained or sustainable profitability'.Because without sustainable profitability, we could be making lots of money in our businesses and still be going broke, just like many of the largest corporations around the world have found out in recent years.Without sustainable profitability we very easily become slaves to our businesses, working 16 to 18 hour days, seven days a week. Eventually the idea of being a wage slave where we have our nights and our weekends free to do other things, starts to look good.The reason I asked this question, is that by knowing the real answer we can now start to build a better business...... by always starting, building and growing with the 'end in mind'.So... spend some time on your business and work out what your business is about and where it is going, and keep in mind that the end, isn't and never was the end... it was always the beginning.Remember... business is simple, NOT easy...

What Is Your Company Really Worth?

There are several paths a business owner can take when it comes to transitioning ownership. For example, an owner may sell to a strategic buyer (competitor), to a financial buyer (private equity firm or employee stock ownership plan) or to the company's management team (management buyout). The owner may also decide that a full or partial sale is several years in the future, but is interested in exploring gift and estate tax planning strategies or buying out another owner.Whether a business owner is selling all or a portion of the company or engaging in a transaction that requires a valuation, knowing what the company is worth is critical. Obtaining a business valuation, or appraisal of the company's worth, will give the owner a competitive edge. This is because valuation is the heart of business transactions and corporate decisions. By going through the valuation process, an owner will come to understand the drivers that positively and negatively impact value. Armed with a valuation, an owner can make intelligent business decisions.Key Value DriversBusiness owners should know the value of their business and what factors drive value. Most business owners understand that private businesses are typically priced as a multiple of earnings before interest, taxes, depreciation and amortization ("EBITDA"). EBITDA serves as a proxy for cash flow, the lifeblood of any business. Companies with higher growth potential and greater free cash flow (discretionary cash flow available to owners) typically command higher multiples of EBITDA.Generally, multiples increase as the company's size increases. In other words, a company with $20 million in revenue and $2 million in EBITDA will likely be valued at a greater multiple than a company with $10 million in revenue and $1 million in EBITDA.In addition to a company's size, there are internal and external factors that affect value. External drivers include market conditions such as the range of multiples that publicly-traded companies in the same or similar line of business command. Lending conditions, industry specific factors and government regulation are also examples of external market conditions that may positively or negatively impact value. A business owner typically has little to no control over the market conditions that affect value, but does have control over the internal value drivers.Internal value drivers include the company's margins, management team depth and experience, customer concentration, business plans and growth strategies. Generally,companies with experienced and deep management teams and solid growth command higher valuations.The aforementioned key value drivers are a few of the factors that impact valuations. It has often been said that valuation is an art and a science, and business owners should, at the very least, have a basic understanding of the theory and application of business valuation.The Valuation ProcessThe first step in the valuation process is scoping the engagement. This critical first step outlines various administrative issues such as identifying the goals and objectives of the business owner, the valuation process and the standard of value to be employed in the valuation. Business owners should recognize that like beauty, value is in the eye of the beholder. That is, the same business interest may have a materially different value depending on the standard of value assumed in the valuation. Just a few of the various standards of value are listed below:

Fair Market Value

Fair Value

Investment Value

Use Value

Book Value



The most common standards of value are fair market, fair value and investment value. The standard of value applied in the valuation is specific to the goals and objectives of the business owner and should be discussed at the outset of the engagement process, prior to conducting any valuation analysis. In certain circumstances such as selling to an ESOP or for gift and estate tax reporting, the standard of value is mandated by law. In those instances, if the business owner desires to sell shares to the ESOP or gift shares to family members, trusts or to charity, the appropriate standard of value is fair market value, which is the price between a willing buyer and seller, with each having reasonable knowledge of all relevant facts and neither under compulsion to buy or sell.Once the valuation assignment is scoped out, the valuator will begin the second step which is the collection of data. During this phase, the valuator will conduct initial due diligence which includes, among other things, the collection of financial data, background and history of the enterprise, budgets, customer lists, business plans, and other important documents.Step three is a continuation of the second step, with the difference being that step three is far more detailed as the valuator actively engages in detailed discussions with the business owner and dives deep into the inner workings of the business. This step usually includes an on-site due diligence meeting with the business owner and/or key members of the management team.After the valuation analyst conducts in-depth due diligence, he or she begins step four, building the valuation models. In conducting the valuation portion of the analysis and developing the concluded work product, the valuation analyst typically considers various valuation approaches deemed to be appropriate in estimating the value of the company. The generally accepted approaches and methods may include:Income Approach - Discounted Cash Flow Method - Analyzes the company's forecasted cash flow stream, estimates its future economic returns and "converts" those returns into a value estimate.Market Approach - Guideline Publicly Traded Company Method - The guideline publicly traded company method looks to the market pricing multiples of comparable companies in the industry that are adjusted against the earnings of the subject company.Step five in the valuation process entails reviewing preliminary schedules with the business owner. Depending on the valuation assignment and the terms and conditions outlined in the engagement letter, the preliminary schedules may or may not communicate all of the assumptions and value conclusions. This may be to protect independence, but in all cases this serves as a quality-control measure.Step six is when the valuation analyst formally prepares the report and ultimate deliverables to the client. Step seven is the formal presentation to the client, which typically includes an oral presentation of the report and detailed explanation of the conclusions reached.Parting ThoughtsIt is never too early to start planning the transition of a business. Ideally, business owners should discuss their goals and options with their financial advisors years before any ownership transition transaction. There are usually complex issues to address, such as tax implications, management succession and owner's legacy. Business owners should understand the key value drivers and engage in active discussions with their financial advisors to implement a strategy to meet their goals.