Lawrence Fine

When looking at investments, it’s important to know what your goals are for the investment.

For most people, when they invest in something (whether it’s stock, a company, real estate etc) they either are looking for cash flow or increased equity. As an example, if they are looking to purchase stock, if they are interested in cash flow, their big emphasis will be on the dividends being paid out (this is assuming it’s not a quick buy/sell). If they are looking for increased equity they are not as interested in the dividends as they are in the value of the stock increasing over the long run.

In buying a business, if cash flow is the emphasis, they will be interested in taking the profits out of the business while if increased equity is the emphasis, they will more likely reinvest the profits back into the business to increase the value long term.

If buying real estate as an investment, if they are interested in cash flow, the primary interest will be that the incoming rent is greater than the outgoing expenses (mortgage, taxes, insurance, management fees). If increased equity is the greater concern, the intention/hope is that the house will appreciate over time and the incoming payments will simply cover costs in the short term.

There isn’t a “right” or “wrong” as far as cash flow vs increased equity but if you don’t go into an investment knowing what your plans are, that is where the real problems come into play.

Even if you do know your plans, it’s important to make sure they are realistic and instead of looking at the hoped for numbers, take a look at the worst case scenario numbers.

If looking to purchase real estate and you figure the incoming rent will cover the costs while the equity increases, are you also planning for the times when you have vacancies? Are you in a position to cover the costs without the rents coming in? How will you get affected by a real estate bust (as we have been experiencing)?

Too often we look at the “pie in the sky” numbers in investments and not the realistic numbers or the worse case scenario numbers. The result…..look at the economy today!

A smart investor will have some investments emphasizing cash flow (to keep things going) with others for equity (looking more long term). A dumb investor….doesn’t give either a thought!

Have a great day!

Lawrence
PS See what others are saying about the book “11+10=1” such as Thomas Crone “Sometimes, a book comes along at “just that right time”… To read more please go to http://lawrencefine.com/sales.php

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Many industries have changed in recent years. As an example, years ago, if you wanted to take a trip, you might go to a travel agent, have them find the best airfares, hotels and tourist destinations and book everything through them. Now, you can simply go online to a site such as expedia.com, priceline.com, hotwire.com (my favorite) and book everything yourself.

If you wanted to buy a book, you had to take a trip to the local book store, search for the book in the stacks and make the purchase in person. Now, you can go online to a site such as amazon.com and order online (and even with shipping, it’s frequently cheaper).

When it was time to do your taxes, you met with your accountant or, you went to a tax preparer. Now, you can use any number of software programs to do it yourself.

Does this mean that travel agents, book stores and accountants are going out of business? Not at all, those that are smart are adapting with their industry and modifying their businesses to adjust to the changes.

The two problems organizations have is when they don’t recognize that their industry has changed and even when they do recognize the change, when they don’t adapt accordingly.

Has your industry changed? (if your answer is “no” most likely you are WRONG). Have you changed accordingly? (if the answer is “no” there is a good chance you will be looking for a new industry shortly).

Have a great day!

Lawrence

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So many of us have huge demands coming from many different directions. Everything from friends and family obligations to work requirements to charitable requests. The more we say yes to things, the worse it gets.

The problem is, we are afraid to say no because we think we might be letting someone down or hurting someones feelings.

The reality is, the more over committed we are, the more we are letting people down. Many of us have so many obligations and commitments that we end up doing a poor job with them all.

There comes a point where we just need to say “NO”

No we can’t be a member of that committee.

No we can’t donate to yet another charity.

No we can’t attend yet another work related dinner.

No we can’t take on yet another project.

While you might think saying no is a sign of weakness, you will actually find that it takes a great deal of strength to say no to something.

Sometimes the options are being on 5 committees and not doing a good job on any of them because of a lack of time, or being on 1 committee and doing a great job because you have the time and focus for that one issue.

Rather than get to the point of not being able to do anything well, just say NO!

Have a great day!

Lawrence

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People spend a great deal of time organizing. Whether it’s organizing your closets, organizing your schedule or organizing your business, organizing is an important part of most peoples lives/

It’s important to keep in mind that before you organize something, you should first declutter it.

If your desk is filled with old and unnecessary paperwork, what good does it do to organize this paperwork when the reality is, your should purge (or digitize) most of it instead?

If your closet has a lot of old clothing which you never wear, what good does it do to rearrange these clothes when the proper thing to do would be to donate them to someone who will use it?

If your business has employees who don’t do a good job, what good does it do to restructure the organizational chart when you first should get rid of the people you don’t need?

We spend a lot of time organizing but most of us don’t spend nearly enough time decluttering first.

Get rid of what you don’t need, organize what you do need so they are utilized more efficiently and good things will happen

Have a great day!

Lawrence

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Many of us suffer from occasional bouts with anxiety or depression or other temporary periods that result in emotional discomfort. As an example, when I have to do any form of public speaking, I get extremely nervous. For years, I simply avoided all forms of public speaking however in the past few years, not only did I stop avoiding those types of situation, I went out of my way to create some. I stil get nervous (which might be the understatement of the year) but through the use of visualization, I can quickly calm down to the point where I’m considered to be quite good in these situations these days.

Before I explain how I use visualization to quickly change my emotional state, please understand, the most important thing to do is be prepared (or in my case, I prefer to over prepare so I can be prepared for any situation that might arise. Even if you go into a situation relaxed, you will get stressed out (for good reason) as soon as you realize you are unprepared, so step one is to prepare for almost any situation that might arise.

Once you are prepared and are starting to suffer from these anxious moments, close your eyes and picture yourself in a situation you find relaxing. If you find the beach relaxing, picture yourself walking along the beach enjoying the experience. When you can picture yourself in that environment, you will quickly relax as if you are actually at the beach, If you find it relaxing hiking in the mountains, picture yourself doing that and you will get the same result.

The great thing about this technique is it literally only takes a few seconds and works every time.

Not only can this be done to relax but you can also use this for other purposes as well. If you are experiencing a lack of confidence before a sales pitch, close your eyes and picture yourself doing something that reminds you of a successful experience.

The key to visualization is it requires you to not just picture the situation but to be able to picture yourself in that situation. So it’s not good enough to just visualize the beach, you must visualize yourself at the beach. Put yourself in the picture and it truly works.

It’s difficult to make others to practice visualization because if they don’t believe, it doesn’t work. However, for those who believes, it can help you do tremendous things!

Have a great day!

Lawrence

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I was walking past a store the other day (it’s been open for over a month) and they have a temporary banner up instead of a real sign and the shelving in the store was very makeshift.

I went into the store and looked around (the presentation inside the store didn’t provide a warm feeling at all) and the owner struck up a conversation with me. I asked if they were still waiting on their signs and her response was “no, we are waiting to see if the store becomes popular before spending money on signage and decor”.

In other words, she is waiting for customers to make a commitment to her store before she is willing to make a commitment to the store. As a potential customer, I had no confidence at all that this store was going to survive. The temporary approach she was taking will most likely prevent any possibility of permanent success.

If you want others to take you seriously, you must first take yourself seriously.

Look temporary and be temporary. Look permanent and you will increase your chances of being permanent.

By the way, I didn’t buy anything from that store I walked into….I figure I might buy from the next store that is in it’s place.

Have a great day!

Lawrence

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When competing (and let’s be honest, we all compete at something whether it’s in sport, in business or in life), there are three reasons we might not win.

The smallest percentage of losses is the result of it just not working out. As an example, two even competitors are competing and one of them has to lose. You didn’t do anything wrong in this case, sometimes, it just happens.

The Bigger percentage is because the opponent is simply better than you. It might be the case of them being bigger, stronger, faster or smarter but most of the time you compete against these people, you will lose. There is nothing to be ashamed of when when losing in this type of competition because we almost all have someone we simply don’t match up well against.

Sadly, the BIGGEST percentage of losses is our own fault. Everything from lack of preparation to poor mental attitude. The reason this is so sad is the BIGGEST percentage of our losses is in the one category we can control.

The good news is…..the biggest percentage of our failures are within our control! Short term, it’s difficult to get much bigger stronger or faster but we can control our preparation, we can control out attitude, we can control our discipline.

The even better news is when we start taking responsibility for our own actions, not only will this BIGGEST category get much smaller but the small category (which some would call unlucky) will also get smaller. This is tied into the golfer who, after making a great chip shot and someone tells him it was a lucky shot responds, “it’s amazing but the more I practice, the luckier I seem to get!”

No matter how much you prepare and how much your attitude improves, with very few exceptions, we all will have some encounters with opponents we don’t match well against (the Bigger group). However, we can significantly lower the size of the BIGGEST and the small groups and this will result in much greater success, whether on a field, court or in boardroom. So much will simply depend on whether you really want to win or whether you simply say you want to win (there is a BIG difference).

Have a great day!

Lawrence

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You have a great deal of potential! How do I know this? Because almost everyone has a great deal of potential at something.

You can accomplish great things!

You can be almost anything you want to be!

You can make a big difference in this world!

You can help many people!

You can help others while also helping yourself!

Creating a win/win scenario where everyone benefits is not only possible, it’s easier than you think!

So the one question is…what is holding you back?

No one can prevent you from achieving your potential (except you)

No one can stop you from doing something great (except you).

Stop making excuses, go do something special…achieve your potential!

Have a great day!

Lawrence

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In order to do big things, it requires a big belief in order to overcome the naysayers. While others are afraid of failure, the truly talented are willing to take chances others are not, in order to do something truly remarkable.

While these people who are willing and able to do the remarkable are invaluable to an organization, the truth is they do come with baggage. As great a player as Michael Jordon was for the Chicago Bulls, while he was responsible for many wins and many championships, dealing with someone of that level brings problems as well. In order to be that successful on the court required a large ego and while some might not feel it’s worth it, others understand that the rewards (in this case the championships) were worth the risks.

Are you willing to have people in your organization who have big talent but also big egos OR are you more concerned about maintaining a harmonious environment at the risk of losing the big talents?

If you haven’t done so yet, please take a moment to check out my new book at http://lawrencefine.com/sales.php

Have a great day!

Lawrence

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At first, it might seem impossible to sell something for less than you bought it for and still make a profit but if you really understand pricing and expenses, it most certainly is possible.

An example would be a book I purchased recently through Amazon.com. I found the listing for the book and then looked at the options for buying a used copy of the book. There was a copy listed for $0.01 and when I looked at the reviews of the seller (used books frequently are sold on Amazon.com through independent book stores) they were almost all positive. I went ahead with the purchase and paid the $3.99 for standard shipping for a total of $4.00 This shipping price is standard for sellers on Amazon.com so it’s not a case of them charging an exorbitant fee for shipping. I received the book five days after ordering (including the weekend) and the book was in excellent shape. When I went to the sellers web site, I found that they would buy this same book, in the same condition for $0.25 and pay for shipping to them.

The key is to look at all costs to see how they are able to do this. When they purchase books, it’s an automated system where you go to their web site, enter the ISBN number and it lets you know how much they are willing to pay for that book and also how many copies they will buy. There is a minimum of $10 they will pay so in most cases, you would be sending them multiple books. All the seller has to do is put the books in a box and print out the shipping slip and drop the box off at the post office. The shipping slip takes care of the postage and once the books arrive the company evaluates the books to make sure they are in acceptable condition and then sends payment.

When they make a sale (mainly through amazon.com), they ship the book via USPS media mail which costs them $2.74 plus the cost of the shipping material which is around $0.07 based on the quantities they are most likely buying. Including the cost of the label and ink, total shipping cost is around $2.85. They buy the book for $0.25 for a total cost of around $3.20 and make a sale for $4.

You might wonder if it’s really worth doing this for a profit of around $0.80 but then I looked and found that in the past year, they have received over 18000 reviews on amazon.com so they made at least that number of sales (and most are for more then $0.01) and I’m sure it’s many more than that because that is just the people who bought from them and then did a review and I’m sure there are many more who didn’t bother with the review.

While there are other fixed costs in this (the cost of the warehouse, the cost of the web site etc) most of these costs aren’t affected by one more book or one more sale. The key to this type of a business is for them to truly understand all costs involved in transactions in both directions and to automate as much as possible. It wouldn’t work if they had to look up the price manually and give a quote over the phone because the cost in terms of time would be too high. If the shipping labels had to be hand done, it would cost too much so the more they can automate, the less they can charge (assuming they have enough business to cover the costs of the automation in the long run)

Other examples of selling for selling an item for less than it costs would be razors. The actual razor frequently costs more to manufacture than they sell it for. However, the profit comes from selling the razor blades so they can afford to sell for less than cost knowing that future purchases will make up for the it. Another example is video games. The video game systems frequently cost more to manufacture than they are sold for but the profit comes from the software (the games) that are sold as a follow up.

The question for you is whether you truly understand the costs in your business? Can you break things down to the point where you know where your profit truly is coming from as well as where your losses are coming from?

Too many people ignore the numbers because it’s not the “glamorous” part of the business but while not glamorous, it’s vital to the success of your business

Have a great day!

Lawrence

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