Saturday, May 21, 2011

Reasonable Expectation of Growth

Unless you buy your business at a ridiculously low price, which is usually only evident in retrospect, growth is where the money is made. Let's say you buy a business for one million dollars, borrowing 800 thou with 200 thou down. Suppose it is doing 1 million in sales for simplicity, and making 200 thou a year cash flow for simplicity. After you pay the principle and interest, you will have a livable salary, and after 10 years of payments, you will own a million dollar business assuming it isn't worn out by then, either in terms of physical capital or buzz or whatever. Nothing wrong with a million, but most people who work at a decent place for 30 years build up that with decent returns in their 401K, notwithstanding the recent losses of about a year ago. If you stay the same, that and your social security will get you by til you croak. However, if you double the size of the company, and double the profits, now you have an extra million in equity, and a pretty good salary. If you save that and invest it also, you could be in pretty good shape. So make sure there is room to grow!

Monday, May 16, 2011

Head of the IMF

Is it just me, or does any one else wonder how the head of the International Monetary Fund Dominique Strauss-Kahn can afford to fly first class, and stay in 3000 dollar a night suites that he uses to be "the great seducer" as they call him, in spite of the fact he is also married? Why again does the United States send money to the IMF?

New Pool Construction- How to Prepare for Having a Pool Put In

If you are having a pool put in, chances are you are very excited about the upcoming new pool construction. Well, maybe not so much the construction as the results. Dreams of lazy days by the pool without ever leaving your home are sure to be dancing around the heads of the whole family. You do have to get past the construction phase first, however, and that can be less than fun. Those dreams are what will get you through days of a messy back yard full of equipment and workers. While it should not take too long if the weather cooperates, there are some tips that can make the whole process easier on even the youngest of family members.
Young children that are used to running free around the back yard or wherever the new pool construction is taking place will likely have the hardest time, as they may not be able to make the connection that the current chaos will lead to future fun in the sun. Try to prepare them by explaining before everyone shows up and when they start arriving that they will not be able to play in the area where construction is taking place. Be sure to plan some outside time elsewhere during construction so young ones do not get to frustrated being cooped up. Allowing them to watch through windows or at a safe distance can be helpful and very entertaining as well.
Speaking of widows, try to pick up some simple drinks to make available to those working on your new pool construction. Though it may not be necessary, it will go a long way toward inspiring them to work as quickly and efficiently as possible, and reduce the number of trips they take to get drinks elsewhere. It will also teach your kids how to they should treat others, and it will make you feel good.
It may also help to have a plan for which restroom you want workers to use, and make arrangements for when they need to come into your home. Having a rug readily available for them to wipe muddy feet on will save your carpet. Prepare the new pool construction area as well buy putting away any outside toys and furniture for the duration of the construction. This will keep your property safe and save the construction workers the time of doing it themselves, meaning they get started on your pool faster.

Friday, March 4, 2011

Successful Track Record of Owning a Business

The title speaks for itself, but its importance is often overlooked. Many people will think you are crazy for going out on your own, they will tell you you can't do it. Maybe they are right. Have you successfully run a business before? It is not so easy when you are the one responsible for everything. Whatever goes wrong - it is going to be up to you to take care of it - often at a loss. It can be very unpleasant. So, if you haven't met any of the other criteria, please be advised to think very strongly about keeping your day job!

Monday, January 24, 2011

New site Quotes by John Wooden

The new site Quotes by John Wooden has the coach's quotes plus discussion. John Wooden was the winningest championship coach in the NCAA, but he was also teaching people about life. Read his famous quotes on this site.

Sunday, January 23, 2011

My All Time Favorite Real Estate Get Rich Seminar Guy!

Tommy Vu is no longer in business or giving seminars, as far as I know. I do not endorse his seminars (even though they are somehow free) but I have always loved his ads - please enjoy my favorite all time infomercial guy from the 1980's in this youtube compilation. My favorite part is at about 2:40.

Wednesday, January 19, 2011

Combination of talents and experience to give you a Sustainable Competitive Advantage

This phrase is not new to me. But it perfectly describes the requirements for a long term successful company. Something has to be going on at the company to keep people coming back for its product or service. At Apple, its the highly innovative and functional products which have created a cult following. At the local bakery, it is the genius in the kitchen who creates delicious treats worth spending money on, and making you drool about the taste. At Starbucks, it is.....I'm not sure. But it must be something because it makes the company unique. People want to go there (OK, the employees have that Southwest Airlines type spirit!)Somehow Southwest Airlines has stayed unique and fun all these years, and now they have over 30,000 employees. Can they keep it up? Can you define why you like them? If you've ever flown on Northwest Airlines, contrast the experience and maybe it will be clearer to you.

Wednesday, January 12, 2011

The Donald May Run for President

As per today's radio broadcast on The Sean Hannity Show, apparently Donald Trump may run for President! He has some great ideas - such as making Iraq pay us back the 1.5 trillion Dollar cost of the war - plus paying every injured soldier a million dollars, and a million dollars to the families of the soldiers killed in the war.

Expert Skills Which Will Keep You Ahead of the Competition

If you like what you are doing, this will come naturally. This is what everyone thinks you are doing by running the business. This is why they come to you. You are an expert in your field. You will have to let people know, and give speeches, hold workshops, teach a class, etc. The by now famous E-Myth refers to the fact that everyone sees the small business owner in a sea of bliss doing what he loves. You will need to have this skill, if not immediately, then develop it along the way. Don't buy the business in the first place on this alone, however, unless there are people out there besides your mother who agree you are an expert.
If being an expert in your field is your only business qualification, if you don't meet the other criteria - you could be in for trouble.

Saturday, January 1, 2011

Take over (purchase with borrowed money)

One of the best situations to purchase a business occurs when you have been running the business you wish to buy. You have earned a position of trust, you have taken the reigns, you've been the responsible party. In this situation no one is going to just give you the business, but if you have run it for 3 years and increased the profits, they will often give you a good deal on financing. Expect to pay the normal price, but you should know best what has been taken out of it, and you will get your own chance to improve it. You should expect to take a pay cut of a sort to build up equity.
Here is an example. Say you are running a small restaurant without property, but a reasonable rent that will stay close to the same. Let us say it does about 600,000/year in sales, with about 90,000/year going to the owner while you really do the work, and get about 60,000/year. It might sell for around 450,000 on the high side, depending on numerous factors, such as equipment quality and age, last update of the interior, etc. (consult a business broker for more exact figures of actual sales) At 5% interest on a 5 year note, your payment would be 8500 per month, or 102000 per year. Cut your own pay by 12000 per year, and after 5 hard years you will have paid off your loan, and built up equity. Then, you could hire an assistant and still make up for the loss of pay. Further, you now own it!