October 26th, 2011 David Finkel (Taxloopholes.com Advisor)
Top 3 Business Lessons:
Lesson One: The fundamental model and map that 95+% of business owners follow to build their business is simply flawed.
Time and time again I’ve seen thousands of business owners who have invested so much of their time, energy, passion, and money to build a business, but their model for how to build that business was simply wrong.
They used a model that both limited the business, and left it vulnerable to “SBD” – Sudden Business Death (a term I created to describe the numerous businesses that seem stable, but after one of the key team members leaves the business dies in less than 90 days.)
That’s why here at the Maui company we work so hard to define, map, and clarify the Level Three Road Map™ so that clients get a concrete road map through the entire lifecycle of their business, from launch to exit. This way you know the specific focus, key milestones, core systems, critical controls, and necessary team at every step and stage along this powerful map.
This way you start off with the proven road map to go straight to the end state of a Level Three business.
Lesson Two: Don’t build your business in isolation.
Very few business owners can successfully scale their company without having a core community of other business owners with whom they can associate, share ideas, get candid feedback, and soak up new ideas.
Your employees can’t fill this role – it just creates problems of its own.
Often your significant other can’t fill (or fully fill) this role, or the business becomes too consuming in your life.
You need an upgraded peer group of other DOERS.
Lesson Three: You cannot build your business based solely on the backs of a strong team.
If you haven’t yet learned this, you will–people’s lives are complicated. They will come and go in your business. The one thing you can count on is that given enough time, you will have turnover of key team members.
If you build y our business so that all the key “know how” and design of the business is based on great people just knowing what to do your business is incredibly vulnerable.
Instead you’ve got to build your business on the strong foundation of three cornerstones: solid business systems, intelligent business controls, and a talented team.
Yes your team matters and is an essential ingredient. It’s just that they are one of three critical elements.
Lesson Four: Investing from a place of ignorance may work when you are in a bubble market, but it is the kiss of death when that bubble bursts!
In fact, it is the false confidence that so many of us (yes I include myself in this category… I have learned my lesson!) generated from years of succeeding with our investing due to the rapidly appreciating bubble market that caused us to under invest (or reinvest) in our Advantages (of skill, expertise, knowledge, experience, contacts, etc.)
This lead me directly to the next lesson.
Lesson Five: The major risk you take is NOT a factor of your choice of investment niche or specific investment itself, but rather it is a result of YOU!
Hard as this is to accept, you are the greatest risk variable in your investment portfolio.
Learning to manage YOU… continually reinvesting in YOU… is the very best way to manage risk.
Lesson Six: You must have a sound, clear, financial plan that you build based on your future, not on your past.
I share from personal example. From 2002 through 2006 I had massive growth in most of my investments and my main businesses. When I sold off my two main companies I had a big cash position.
I spent 2006 deciding how best to invest this liquid cash and I made the MAJOR mistake of not re-evaluating my investment plan from scratch. My needs had changed (I now had the net worth I need to retire if I chose), my risk profile had changed, my strategy SHOULD have changed… but I didn’t. I invested based on my past successes and as a result my total portfolio was totally out of whack. And when the market melt-down happened I had the joy of learning this lesson up close and personal. Granted we still had a large net worth relative to the average person, but we lost close to 60% of our investable assets. While I can’t change that fact, I sure did learn something of enduring value from it, and I want you to learn it to:
Your wealth plan has to reflect your current starting point and build FORWARD, not be based on how and who you were in the past.
Whole Life Wealth
Lesson 7: Focus more of you on what matters most.
For me that meant simplifying my life. Heather and the boys and I moved out full time to Jackson Hole Wyoming and to a smaller community.
I cut back on many of the commitments I had so that I could spend more time with my family, and doing things with a smaller group of friends and family.
Lesson 8: Life is sweet, life is good, and life is FLEET.
It all seems to happen faster and faster every year you get older. The kids grow up… you get older… and before you know it you’re at one of those “zero” birthdays looking back and saying to yourself, “It all seems to have gone by so fast.”
Savor it now… enjoy it now… share it now.
Lesson 9: To be happy we’ve got to get over ourselves and focus on what we can give and do to make the world better.
I know these last few lessons are a bit corny, but they are so significant in my book.
Have a great day.