Lawrence Fine

We made a profit of 200 (doesn’t matter if it’s $200, $200,000 or $200,000,000). Rather than declaring this as a good achievement (or a bad achievement), it’s important to know the trends.

If the 200 is greater than previous accomplishments, you are trending up. If the 200 is less than previous accomplishments, you are trending down.

One of the mistakes large organizations make is to look at the final numbers and ignore the trends. They see a profit and ignore the trends and before they know it, it’s too late to correct.

Watch the trends, figure out what is causing them and react accordingly

Have a great day!

Lawrence

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People LOVE meetings. Let’s meet to discuss. Let’s meet to review. Let’s meet to …meet.

The question is, are people taking into consideration the cost of these meetings? Occasionally, the meeting room costs money. Frequently, it doesn’t. Even if the room doesn’t cost money, could that room be used for something else that generates money (opportunity cost)?

It costs money to get to meetings. Gas, airfare, etc.

The major cost, and the cost most frequently ignored cost is the cost of peoples time. A one hour meeting with six people is taking six hours (not counting time to get to and from the meeting).

If the people attending the meeting have no value to their time, why have the meeting in the first place? If they do have a value to their time, you have to make sure what is accomplished in the meeting is worth more than the costs of the meeting (including time) and more than the opportunity costs. If you can’t get more out of the meeting than the costs associated with it, reconsider the meeting.

By the way, the same applies to conference calls.

Have a great day!

Lawrence

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1 is greater than 0. It’s such a simple business concept but so easy to forget.

If you are selling a good or service where there is plenty of supply, if you make a sale for greater than it costs, you are making a profit. It’s great to make a large profit but a small profit (1) is greater than no profit (0).

Hotels understand this concept which is why if you need a hotel room at the last minute, you can go to sites such as hotwire.com and get an incredible price at a four star hotel. While the hotel might want $225 per night for the room, it’s better for them to get $79 for that room rather than have it sit empty and make $0

A number of years ago, I was selling soccer equipment online. I was able to buy for the same price as any other dealer but was willing to sell for a lower price because I understood the simple concept that 1 was greater than 0. I wasn’t allowed to advertise how low I was selling for because the manufacturer felt that would devalue their product but the reality is they didn’t care how low I sold it for because they made their profit from selling to me at the wholesale cost. Other dealers didn’t like it because they wanted to maintain a certain profit margin but I was more interested in making a profit than a profit margin.

There are exceptions to this rule. A hotel room night works because if it’s not used, it’s lost forever. Food works because if it’s not used, it goes bad. On the other hand, a fine piece of Art can only be sold once so if you sell for a small profit, you lose the opportunity to sell for more later on. Same thing with real estate and time that is in demand.

Basically, this rule applies for items with high supply or those which expire.

Some people will never apply this rule because selling for a small profit will damage their ego however, it worked quite well for Sam Walton!

Have a great day!

Lawrence

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Inevitably, we all will deal with a customer or client who is a complete pain in the neck. They want to negotiate every term, nit pick every item and seem to want way more than we want to provide.

The tendency when dealing with this type of a person is to go the extra mile, try to make them happy, have the frustration build up inside of us and then we get to the point of not wanting to deal with them so we “fire” the client and everyone loses.

An alternative to firing a client is to make them an offer YOU can not turn down.

The way way to do this is to figure out what they want and then offer it to them with terms that, while possibly unreasonable, will make it worth your while.

As an example, if you are negotiating with a potential client to design and program their web site and the normal fee is $2500.00 but they keep making requests that make this unreasonable, offer them EXACTLY what they want but the price might now be $10,000.00. This puts the decision in their hands. They can walk away (which is what you were wanting anyway) or they might surprise you and agree to the $10,000.00 at which point, it might be worth it to you to not turn down.

When using this technique, make sure the offer is really worth your time and effort and if it’s not, UP THE OFFER.

Make them an offer YOU can not turn down and you might be surprised by what it does to your bottom line (and your psychological well being)

Have a great day!

Lawrence

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There are things we can control and other things we can’t. Once you are in a certain environment, it’s difficult, if not impossible, to change the environment. However, in most cases, you have much more control over the selection of the environment.

As an example, last night I went to dinner at a restaurant that every Thursday evening has live music in the lounge area. The music is very appropriate for this particular restaurant, not too loud or too soft. One of the patrons, who asked for a specific table in the dining area requested that the server speak to all of the people in the lounge area, and the musician, to make less noise. This patron does not have the ability to control the noise in the lounge area but did have the ability to request a table further from the lounge or to go to a different establishment. Rather than trying to change the environment, this patron should have chosen a different environment.

In a business meeting, if you are hoping to have two groups come to an agreement that will benefit both sides, don’t sit at a conference table with one group on one side of the table and the other group on the other side. Having the table in between the two sides establishes a divide that makes it more difficult to come to an agreement. Either, choose a room without this type of conference table or make sure the groups are mixed so some are sitting next to each other as opposed to opposite each other.

If you are looking to have a quick meeting, choosing a room with refreshments and ultra comfortable chairs is not a good decision.

If you want to have a discussion amongst equals, having one person sitting at a higher level is not a good decision.

Too often, we spend too much time planning what we want to be accomplished with an opportunity and not enough time selecting the optimal environment to get this accomplished.

Have a great day!

Lawrence

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A truly successful negotiation will result in a win/win situation. Both sides will benefit from the negotiation and no one will be the loser. Unfortunately, in life, there are situations where people lose and our choice is to lament over the situation, ignore the situation or to make sure you are the person who wins from the situation.

Using real estate as an example, there are millions of homes either that have been foreclosed upon or which are going to be foreclosed upon in the near future. Many people out there are pissed. They are saying things like “the banks are screwing us over”, “the damn government is messing up everything” and “it’s the economies fault”. Other people are just ignoring the situation because “it hasn’t happened to me”

The people who want to win from the situation are the ones who realize for every home foreclosed upon by the bank (or other lending institution) while one person is losing their house, it’s an opportunity to purchase the house at a reduced price. This isn’t a matter of taking advantage of a person who is down as whether you are the one buying the foreclosure or someone else is, the previous owner isn’t affected at all.

Companies are downsizing and laying off marketing staff and bookkeeping so while it’s unfortunate for them, it’s an opportunity for the person who can offer to outsource small business marketing and bookkeeping.

Colleges are struggling with finding students who can get financing for their schools so the organization who can provide an alternative in distance learning will prosper.

It’s a shame some people have to lose but realize for every loss, there is an opportunity for you to win!

Have a great day!

Lawrence

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There is a belief that one of the main things people need to do is to TAKE ACTION. People use terms such as “analysis paralysis” to demonstrate the need to take action however, they don’t take into consideration the ramifications of their actions.

There are a number of college coaches who read these posts and they know just how big and just how ridiculous the NCAA rulebook is that they must abide by. The NCAA (along with many other organizations) take action based on isolated situations and don’t always take into consideration all of the issues these actions might cause. As an example, at one point, high school students could call college coaches collect in one division but they could not call using a schools toll free number. In another division, high school students could call using a schools toll free number but could not call collect. Why would they have such different (and ridiculous) rules? I’m assuming in each case, they were reacting to a specific issue and didn’t look at the big picture.

In your organization, are you establishing rules and policies after looking at the big picture ramifications or are you taking action quickly and then having to react later to the things you didn’t take into consideration when you rushed into action?

Taking action is important. Planning ahead of time and then taking action is worth the extra time because while it takes more time short term, it potentially avoids a LOT of problems long term.

Have a great day!

Lawrence
PS Someone asked me yesterday which of the books I have written is my favorite book. Without a doubt it’s “11 + 10 = 1: How the Addition of 10 Principles in Life Turned 11 Players Into 1 Team” If you haven’t done so, please check it out at http://www.amazon.com/11-10-Addition-Principles-Players/dp/1442185155/

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You are a college coach and you believe it would be wonderful if there was one camp where most of the top athletes would all attend and coaches could use this one camp for evaluating and recruiting purposes….if it doesn’t exist, CREATE IT.

You are a Realtor and feel if only your clients were better educated when it comes to buying and selling real estate it would make it better for all concerned….if no one is providing this educational opportunity, CREATE IT.

You run a convention center and notice a slow down in conventions and meetings due to the economy, rather than waiting for the economy to change (it will change but no one knows in what direction), CREATE YOUR OWN EVENTS.

It’s easy to wait for someone else to create an opportunity for you. However, by waiting, it means you are hoping someone else does something and hoping they are doing it the way you want it done. Rather then sitting back and hoping, step up and create it yourself

Have a great day!

Lawrence

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There is no Blueprint for Success

There are thousands of books available on how to be successful.

There are thousands of websites and blogs online that will “teach” you how to make money.

There are courses available to “show you the way to success”.

There are “mentors” out there who will take you step by step to success.

The thing to remember is as long as you keep looking for the blueprint for success, you will continue to struggle.

The thing that works for one person will not necessarily work for someone else. The thing that worked last year will not necessarily work this year. The situation in Arkansas is quite different than the situation in Alaska.

Rather than looking for the blueprint for success, you should approach your business like a true business. Do a SWOT Analysis of your business, do a SWOT Analysis of your competition (if you aren’t sure how to do a SWOT Analysis check out http://www.amazon.com/SWOT-Analysis-Strength-Weaknesses-Opportunities/dp/1449546757/), be passionate about your product or service, pick a path to pursue based on your research for this particular business and give it your all.

Too often, we want to be given the “secret” which will speed up our path to success. The secret is to stop looking for the blueprint from others and develop a customized blue print for YOUR SUCCESS.

Reading or hearing what others have done to be successful can be helpful but if you follow their path you will most likely fail as there are always different variables in each situation. Create your own path, you will find it works quite well

Have a great day!

Lawrence

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When you start a new job, or you start a new project or get a new client, do you do your very best work at the start and then get complacent or does your work continue to improve?

You would think most peoples work would continue to improve but if you really observe what people do, I think you will find the opposite is true.

People tend to give their best at the beginning (trying to earn trust) and once that trust is earned, they become complacent and do average work. These people take advantage of the fact most people don’t like change so once a person is established in a position, unless things go really bad, the status quo will be maintained.

The person who truly wants to be invaluable will start a project or job strong and then based on their new experiences will continue to improve each day. They will keep building and getting better and in time, truly make a difference.

Does your work get better or worse over time?

Have a great day!

Lawrence

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