YOUR FIRST LOSS IS YOUR BEST LOSS

          The most difficult discipline in business to execute as an entrepreneur:  your first loss is your best loss.  An entrepreneur is determined and perseveres.  An entrepreneur encourages others to work their strengths within the vision and direction of the entrepreneur – the entrepreneur is a cheerleader of the business.

          A start up business, or a real estate opportunity an entrepreneur purchases, takes a lot of hard work.  An entrepreneur has lots of time into the project.  An entrepreneur begins looking at the project as his “baby”.

          A key to getting better at this discipline, when beginning a new venture, is to set out specific exit strategies.  The phrase “exit strategy” is not a bad word.  An entrepreneur simply preplans to try different courses of action.  However each exit strategy must have a detailed method of measuring so the entrepreneur knows one strategy has not worked thus he has to act towards the next strategy then do it.  Of course deadlines for each exit strategy is equally important to measurement.

Finally the last exit strategy is to shut the project down.  This is executing taking your first loss as your best loss.  Most likely the entrepreneur would have defined or measured the “first loss” in terms of money expended or lost.  There is always another opportunity in the future if the entrepreneur has not exhausted himself of all potential resources and emotionally zapped himself beyond recovery.

By the way, the second most difficult discipline in business is saying no.  If an entrepreneur learns to master this second discipline, the entrepreneur decreases the chance of having to complete the first most difficult discipline!

PRECIOUS METALS AND INSURANCE

When Helping with Estate Planning, I am Asked About Precious Metals and Insurance

Investments are assets.  Precious metals are also assets but not investments.  Precious metals do not produce income, investments do.  Investments add to the income section of a profit and loss statement.

Precious metals are in an asset sector called the speculation sector.  When speculators use money to purchase precious metals they are speculating that in the future others will spend more United States currency compared to today when buying, for instance, an ounce of gold.  Speculators guess precious metals will appreciate.  They additionally “bet” if United States currency falls out of favor, future purchasers of the speculator’s precious metals will exchange with the speculators what the speculators need (food, clothing, etc.) in exchange for the precious metals the speculators possess.

Speculating is not a bad word especially when the speculator has self-imposed rules.  Common every day speculators, compared to Wall Street speculators, do not speculate with more than between five or ten percent of their net worth.  Regarding speculation, however, at least precious metals will not turn into a liability.  Comparatively if a speculator speculates with real estate (not for rents, but for appreciation) the real estate is a liability right away because have to pay expenses of taxes, insurance, and maintenance.  A liability adds to the expense section of a profit and loss statement.

  Most life insurance is a liability because there is the expense of a reoccurring premium.  The single type of life insurance investors buy is term insurance, which is much less expensive compared to other life insurance like whole life, universal, etc...  Life insurance is for asset protection or income producing protection.  A provider to a family is an asset to their family because he produces income.  If the provider dies, he wants his family to have a million dollar term life insurance death benefit to invest then live off of the income the million dollars produce since his family will no longer have the income the provider generated while he was alive.

TRIM THE HEARTH AND SET THE TABLE

“Make your house fair as ye are able, trim the hearth and set the table.”
– Christmas song

December is a great time of year to make sure your house is in order, as fair as ye are able. I’m not just talking about putting up decorations made of pine boughs and hiring a carpet cleaning guy to get the place ready for a big party. Trim the hearth also means watching your financial affairs carefully and planning for a brighter future. If, like most Americans, you have noticed your bills keep going up but your income does not, there is another way to come out with more “net positive.”

You can find tons of money in next year’s budget even if you do not get a raise in January. How?

Here is a great tip: Check your credit card statements carefully. Is BGM still billing you for their Cassette Tape of the Month Club? What other services you aren’t using or products you do not need from companies keep dinging your card on a monthly basis? A few phone calls could save you hundreds per month.

It’s a great time to make sure your interests are protected and that the government is not taking more of your money than you need to pay!

There are also a couple of things we can do to help here at Metz Legal Services, PC. First of all, if you’re managing properties, make sure you’re appealing your property taxes every time. It is not too late, to appeal your 2010, payable 2011 taxes. But time is running out. There is no reason to give Uncle Indy extra chunks of cash. This is something we do at three different times during the year and we get a kick out of helping you keep your hard-earned pennies.

This is also a great time to make sure the family is protected by reviewing your will. A great referral for us is that person in your family who does not have a will at all! Roughly 4 out of 5 people that you know do not have one at all. They may think, wrongly, that “grandma will get the kids if I die.” Unfortunately, without a will, that is a decision the state will make. Don’t let your loved ones leave it in Uncle Indy’s hands! If you overhear someone during this holiday season commenting that they do not have a will, tell them to give us a call. Instead of making it a New Year’s Resolution next month and then forgetting about it, we invite you to call our office today to set an appointment.

Thanks for letting us help you set the table for many generations to come!

UP FRONT BAIL OUTS

The authority for a city in Indiana to act as a governmental entity comes from the Indiana Code which the Indiana Legislature passed into law. One group of elected decision makers working for the city and for voting taxpayers is council members. Council members each individually make decisions like every other human being using their own preferences. Two examples are: i) council members who appropriate a half million dollars for the city to purchase buildings prefer to spend taxpayers’ money and lose tax revenue from private ownership of the real estate; and ii) council members who vote to loan taxpayers’ money as wholly forgivable prefer to forego the city making a profit (interest). Is the thinking behind these two preferences productive for the taxpayers?

Private decision makers who prefer making profit must think critically before venturing into a new, productive opportunity. Private decision makers (private venturers) are motivated to do so, compared to politicians, because private decision makers have their own “skin in the game.” Private decision makers must think through income and expenses. If income is not greater than expenses, private decision makers would not move forward with the possible new venture because there is too much risk.

Politicians who prefer to influence private venturers’ profit decisions with selling buildings under cost, providing money with forgivable loans, and incurring construction costs for private venturers’ developments while spending taxpayers’ money, directly cause private venturers to lose clarity. Private venturers allow the expenses they do not have to pay for because the city is paying with taxpayers’ money, to trump the risk and reward analysis. Such private venturers do not figure out how to manage the real risk in order to move forward since they are getting “bailed out” up front. Up front bail outs lead to hurt feelings, sour relationships, poor decisions, and lost jobs.

IDENTIFYING DECISION MAKERS

The authority decision makers hold is great and affects many people. Decision makers make judgment calls that once are made, carries with such judgment calls long term effects whether good or bad. Decision makers’ thinking leading up to the judgment calls is important to understand. Decision makers who are elected officials, for instance, make judgment calls once they get elected which most of the voters do not even know about. Elected decision makers commonly are not held accountable about their thinking.

One reason elected decision makers are not held accountable is because voters do not identify who exactly is making the judgment calls. If decision makers are not identified, then voters cannot explore the thinking of the decision makers separately since voters do not know whose thinking to explore. Decision makers are difficult for voters to identify because when judgment calls are made, terms like Congress, the Indiana Legislature, the City Council, or the City are used.

The City of Elkhart, for example, is not a decision maker. The term City refers to many different groups of people like the City Council, departments, the Mayor’s staff, and citizens themselves. The term City is a collection of many different people some of whom are decision makers. The City being made of the collective individuals cannot make judgment calls. The City is incapable of being held accountable for its thinking because the City does not think. The City’s representative legislative group, namely the City Council, is also incapable of being held accountable for its thinking because the City Council does not think, the elected members of the City Council think.

In order for voters to make those with judgment call authority accountable, voters must understand who is making the decisions and supposedly thinking. Voters cannot get confused with collective terms like City and City Council but must identify who is the elected official who is supposed to think before making a decision. Once voters begin keeping tabs on an elected official about such elected official’s habits of thinking, voters will understand the attitude of the elected official and better understand whether the elected official is a servant leader.

DO NOT GET CAUGHT UP IN SEMANTICS - JUST DO IT

When the velocity of cash flow is like a gluttonous bubble, the phrase “market share” is overused without understanding. During recessions the phrase is not used as much. Regardless of good economic times, or bad, the phrase has less relevance to a solid enterprise than sales people think.

A well thought out enterprise defines market by initially answering the question, “Who are the buyers?” The most faithful buyers are buyers who recognize they cannot do without and want what the enterprise is selling. The buyers’ perceived value of what the enterprise sells is greater than the price so the buyers buy.

There is something to sell today, but most importantly tomorrow and days, weeks, months, years, or decades after tomorrow, on which buyers will spend more compared to their spending in the past. A solid enterprise, after identifying buyers, answers “What do the buyers want to buy?”

After the enterprise identifies buyers and identifies what the buyers want to buy then, and only then, should the enterprise figure out how to supply the buyers with what they want. The enterprise must communicate to the buyers that the enterprise has what the buyers want. The bottom line is the enterprise must figure out who to sell to, what to sell, and how to sell it – and in this order.

MOTIVATION

How concerned is our society about motive? How often do we hear in police shows about a criminal's motive?

We are motivated to do something either because of need or due to passion. Do we first learn motivation by need rather than passion?

Those of us who are parents could do everything for our children even after they become adults. We could consume ourselves to meet their every need until the day we die. How then would our adult children ever become motivated to do something for themselves? Every person must face their own needs to become motivated to help themselves.

We learn motivation from our own need unless stopped from doing so by parents or government. Once we embrace our very own motive to do something, we can begin a search for our passion. On this journey we can eliminate the things we are not passionate about. When we focus on our passion, we become motivated not due to need but because of the strong emotion attached to our passion. A person motivated to do something out of passion cannot be stopped and is contagious.

"I can do everything through [Jesus] who gives me strength." Philippians 4:13

You Are Worth Every Last Penny You Are Paid

A friend once told me not to underestimate the value of what I do to serve others professionally. Do I believe the value added to a client or a client's business is me? Do the client and employees of the client believe my standing alongside them adds value?

The people served will not believe you add value unless you believe it yourself first. When giving away something free, whether your time, a writing like a blog, or your dedication to serve, you are communicating you have have no value. Naturally the people who receive your free offering do not perceive a value either. You certainly do not communicate your worth by giving away yourself for free so how are they going to know unless you charge for your time, expertise, and wisdom.

The people you serve will not understand your value added until they have "skin in the game." Your responsibility is to discover what you give away then charge for all current free offerings. Only then will others embrace the value you add to them and their enterprise. Only then will transformation of their enterprise be substainable.

What your customers want is sustained change for the bottom line of their business. As a leader your responsibility is to communicate clearly your customer must pay for you to effectuate change that is lasting.

To discover the change your customer needs the most, you must begin with the customer paying you to listen and ask good questions. What is the customer's outcome? What are the implications for the customer when the customer reaches the outcome? What does the client see as the value added when the outcome is achieved?

How is the customer going to get there? Who is going to help the customer get there? The best form of selling is allowing the customer to reach the conclusion themselves that you are the solution. When the customer pays you (preferably up front), the customer immediately adds value because the customer effectuated change: the customer gave you money from his business to have you on his team.

BUSYNESS AND DORMANCY

Infinite possibilities exist between two extremes. For a business owner to balance the enterprise’s time of abundance with periodically removing himself from the busyness is essential.

The business owner must prepare for all possibilities between the extremes. The business owner must ready himself and plan for extremes of busyness comparatively to needed dormancy. Neither planned busyness nor planned dormancy is less important than the other.

The business owner must make sure the enterprise’s systems for handling abundant times are in writing. These times are best described as busyness when the business owner does not know how everything is going to get done within the current systems in place.

The business owner not working in the administration of the enterprise is necessary for the business owner to customize constantly the systems. The more the systems administrate without the business owner’s involvement the better the business owner can work on the enterprise and manage human resources.

The manager must know the strengths of all employees so every employee is fit into the systems best suited for them. During more dormant times compared to extreme busyness the business owner, as the manager, has time to evaluate employees’ strengths and to come up with new methods of measuring the employees’ progress through the next busy time.

The business owner as the leader must communicate clearly how the enterprise competes against itself to make better systems while employees are challenged to change for their own betterment within the systems the employees work. Employees must know how the enterprise measures them through the constant refining of the systems.

ADVISOR

Integrity in customer relations is about clearly communicating what the business owner knows as fact distinguished from theory. This is true whether selling a product or system, providing services, and it is particularly true when issuing advice.

An advisor who himself has done what he advises is better equipped to separate fact from theory. When focusing on facts, the advisor more likely can guide toward desired results because the advisor can rely on his experience to assert the likelihood of an outcome.

A thoroughly honest advisor who comes up with a theory admits his theory is a metaphor. His theory has only a likeness to reality. An advisor with integrity knows the term theory means conjecture.

If a business owner wants to become an expert in his field, he must verify facts. Experts live in the reality of facts, not conjecture. Make sure the advisor you are relying upon to provide you expert advice has done the more difficult work of searching out facts.

FISHING

I enjoy fishing. This past Saturday I caught a walleye at Sylvan Lake near Rome City, Indiana. Any year when I catch a walleye this early in the year is a great fishing year.

The confidence of a fisherman is very significant. If a fisherman is confident he will stay alert. While alert the fisherman will set the hook upon the fish striking the bait. A good fisherman knows to set the hook firmly.

This time of year the water is chilly. Minnows are the best bait. The bigger the minnow the bigger the fish caught. The bigger the fish caught the longer the fisherman has to wait to catch the big fish.

After the walleye I caught a crappie using a minnow. The day before I caught a trout using a minnow. Two days before I caught a bass using a minnow.

Three days in a row the weather was warm. The wind was slight. I got sunburned while wearing shorts and a tee shirt.

I cannot beat warm weather, fishing, and catching. This year is a great fishing year.

TRUTH

At college I took a class entitled Modern Literature. The theme of the class was “Fiction mirrors reality.”

When practicing law, I hear many true stories. I use the phrase “Who needs fiction when you have reality.”

Recently I heard a quote from Mark Twain. He said, “Fiction is obliged to stick to possibilities. Truth isn’t.”

Last Sunday the speaker encouraged his listeners to dig for the truth. He explained resources of news are not enough to know the whole story.

Learning how to learn is so important. The skills I have developed for learning how to learn have proven invaluable.

Such skills strengthened me to read the One Year Bible many times. I was able to study God’s Word and learn His truth.

Such skills make me look into the background of all resources I use. I investigate the behavior and witness of resources’ authors.

I encourage others to choose carefully what they decide to put into their heads. You are what you think.

GENUINE CHARACTER

I hold in high personal regard people who are authentic. Authentic people are sincere, communicate directly, and are honest. Authentic people have genuine character.

The history for the term authentic also carries with it “one who does things himself.” Another word is self-sufficient: having the necessary resources to get along without help.

The more and more an entrepreneur maintains a consistent genuine character, the more likely the entrepreneur’s enterprise will have necessary resources. The necessary resources resulting from a genuine character are customers with whom the entrepreneur wants to work, an outstanding reputation, and trustworthy referral sources.

An entrepreneur with genuine character may boldly embrace sales. For an entrepreneur with genuine character sales is not a gimmick, puffing, or a canned presentation. Sales for an entrepreneur with genuine character can be performed with a conversation about what the entrepreneur is passionate about.

Before conducting sales an authentic entrepreneur already figured out what others need and how to best serve. With sincere and direct conversation about the enterprise’s purpose, the entrepreneur grows relationships then nourishes the relationships with timely follow through and by keeping his promises.

An entrepreneur striving for consistent genuine character makes an honest effort to understand fully his strengths and the opportunities of the enterprise. The entrepreneur can then confidently use his sales strengths and grab the opportunities available.

COACHING

A coach serves as a leader. A leader must communicate clearly. A coach must establish a code of honor all teammates abide by. I use the 345 Reward System.

The 3 in 345 is three rules. Each team member holds their tongue (is quiet) when a coach is talking. Each team member always hustles. Each team member is never negative. These three rules work great during practice. The team members know the authority outlined practice for continuous hustle and the team members should not complain.

The 4 in 345 is four requirements. Team members communicate to one another. Each team member is to concentrate constantly. Team members work hard. All team members compete. These four rules work great during time outs. When the game is going well, the team quickly reaffirms the team’s good play by committing to remain steady at the requirement the team is performing best. When the game is not going so well, the team can point to one requirement the team is doing worst at then commit they will immediately get better at the unsatisfactory requirement.

The 5 in 345 is five character building statements. The first is “Not Today” meaning there is no acceptable level of failure. The statement is a call to perform with excellence, not simply to make a mediocre effort.

The second is “It Doesn’t Matter.” No matter what the challenge there is no place for self pity. Team members do not use excuses or blame others.

The third is “Finish It.” Most sporting activities have half times. There is no success at half time. Whether referencing a set play or a shot for a goal, each team member must finish strong.

The fourth is “There is No Growth Without Failure.” No one grows through constant success. Team members cannot give up no matter how bad the circumstances.

The fifth is “There is no Strength Without Pain.” Most everyone has heard the phrase no pain, no gain. The bottom line: if you want to perform, you must work hard.

With these character statements coaches and teammates encourage each other. The greatest reward is when each team member fulfills his role and the team performs successfully. A coach should reward team members verbally with encouragement every opportunity the coach has.

TEAMS

For teams to work the members of the team must each agree to follow a code of honor. The leader must clearly communicate the code of honor in writing. The code of honor sets forth expectations for each and every combination of relationship between team members. Each team member agreeing to the expectations better prevents the relationships from failing.

Teams come in all shapes and sizes. A team I recently wrote a code of honor for was my wife, me, and my daughter who started college. We agreed to a code of honor for a point of reference or guideline for my daughter’s four years at college.

When a student decides to attend college the future is uncertain. For instance, the student and the parents are concerned how the student will fit in. As part of the leader communicating clearly, less is more.

The code of honor includes my daughter must stay busy. The busier a student is the more efficient the student remains. The student decreases mind clutter because the student does not have time to second guess. The student has less room to make errors with extra time if the student is busy enough the student by force learns how to use time wisely.

The code of honor requires a commitment to personal development. The most significant habit of personal development is eradicating offers or events for which the student does not have a passion. Part of the college experience is gathering experiences and exploring a variety of disciplines then discovering what the student does not like. The commitment will define the student’s vision and provide focused direction as the college years go on. The personal development of the student includes equipping the student with skills matching the student’s talents.

The student within the code of honor must contribute financially. No one has a sufficient stake in a commitment without some skin in the game. Education should address the two resources over which each student serves as a steward: time and money. When the student contributes financially, the student learns the relationship between time and money.

The student must ask for help. Asking for help is a strength, not a weakness. The student healthily seeks independence but should know she is supported. As a good steward, the student will understand the benefit of asking for help before the resource of time, for example, is expended and there is no hope for recovery.

The student timely shares grades and report cards. Codes of honor essentially have methods to measure progress. Report cards with grades reflect whether the student is meeting the expectations of the professor who is the authority providing the measure.

I will write about another code of honor example tomorrow. Tomorrow’s entry will address coaching.

ENTREPRENEUR

An entrepreneur grabs an opportunity without having control over all of the resources. An entrepreneur first has to recognize an opportunity. An entrepreneur develops his ability to recognize an opportunity when accelerating failure.

An entrepreneur does not view the reality that challenges are in store as a problem. An entrepreneur knows problems will come up but is confident solving problems when the challenge arises. The entrepreneur constantly learns how to learn and a challenge positively accelerates learning how to learn.

Learning how to learn increases emotional intelligence and has little to do with a measured intelligence quotient. Failing at a high velocity most quickly nourishes emotional intelligence. Upon failing an entrepreneur naturally learns how to learn and will most efficiently and effectively meet the challenge.

Learning how to learn while meeting challenges sharpens an entrepreneur’s ability to make correct snap decisions. The higher the emotional intelligence the higher the confidence and the less second guessing occurs. The absence of second guessing eliminates analysis paralysis.

When analysis paralysis is absent the entrepreneur recognizes opportunities more rapidly. The entrepreneur makes snap decisions about lucrative opportunities and eradicates less valuable opportunities. Even if the entrepreneur incorrectly chooses one opportunity over another the entrepreneur is grateful for the opportunity to sort through opportunities because the sorting process causes the entrepreneur to learn how to learn better.

This process best defines the term opportunist. A faithful entrepreneur who is a humble opportunist knows to serve or to meet a need. When an entrepreneur serves others’ best interests or meets the need of others, the resource of money will follow collaterally.

THREE STRUCTURES

Three structures in which servant leaders may work are government, organizations like churches, and business. I chose business. None are wrong or right. I was called to business. My strengths and talents best match with serving as an entrepreneur.

The wisdom of leadership is providing clarity. Humans who are followers of leaders have common fears. A significant fear is fear of the future. Fearing the future causes uncertainty. When a leader is clear the leader is communicating certainty for the best interests of the followers.

A leader must first strive for clarity in his own life. A leader must embrace a purpose to focus on the direction for his life. A leader must struggle and persevere to strengthen his character and to have hope about following a plan to meet his purpose. The clarity about his purpose dispels fear and allows confidence in his direction, plan, and steps within his course of action.

A leader must get help. A leader must have mentors. A leader must surround himself with other servant leaders who are smart about what the maturing leader needs them to be smart about. With others surrounding the leader, the leader best eradicates distractions to more rapidly gain on his personal development. Anyone who makes the leader accountable helps the leader stayed focused.

LEGACY

American citizens over the age of eighty were asked, “What would you have focused more on in your life if you had to do it all over again.” Most respondents stated they would have worked more diligently on their legacy. My legacy is to continue developing an enterprise that contributes more and more to organizations effectively pointing singly to Jesus.

Over 20 years ago I read a book about a man from Ohio named Stanley Tam. When Mr. Tam started his business, he provided ten percent of the gross proceeds from his business to organizations effectively pointing singly to Jesus. During the decades Mr. Tam grew his business he incrementally provided larger percentages. His business grew to provide ninety percent of gross proceeds to organizations effectively pointing singly to Jesus.

An enterprise like Mr. Tam’s business is much bigger and greater than the founder. My vision is to continue developing an enterprise that allows all involved to maximize their strengths within their clear roles so the enterprise efficiently operates with an increasing profit margin.

The enterprise in which I devote one hundred percent of my effort and expertise is my law firm. Metz Legal Services maintains long-term relationships with people who own businesses and customizes its expert and practical legal consulting services to meet client needs in growth, compliance, and wealth planning. My purpose is to learn how to learn better, to communicate clearly, and to encourage others.

I am committed to communicate clearly on my blog. I hope something on my blog encourages somebody. I trust I will continue to learn more and more about clearly communicating and encouraging others as I add to my blog.