The easiest example to use would be the home builder. Potentially, they can make more money building houses for themselves and then selling the house to the highest bidder. Many builders would like to do this as their primary business but the problem is they are completely dependent upon the market to hope they can sell the house and get a good price. Until the house is sold, the builder is responsible for 100% of the costs. Thus the builder potentially could make a lot of money but they are also taking the risk of hoping to sell the house.

The contrast is for the builder to sign a contract to build a home (or do a renovation) for a client. They would agree to a price ahead of time. This might be based on the size of the project, the number of hours or the total costs. The profit potential is more limited but the risk is also quite limited.

Many computer programmers go through this same type of decision as well. Should we develop programs we believe there is a need for and we think might be sell able or should we do contract work for others which have guaranteed.

It’s really not a case of having to choose one or the other. If possible, use the contract work to help offset the costs of the spec work until the spec work can fully pay for itself (or at the very least help offset the costs).

Frequently the spec work is the fun, challenging work and the contract work is how to pay the bills short term. Realize if you can combine the two you might have the best of both worlds.

Have a great day!

Lawrence

Enthusiasm is wonderful

We like to be surrounded by excited, energetic, enthusiastic people. It’s contagious,

One thing to keep in mind is to make sure there is some substance behind the enthusiasm.

Enthusiasm plus substance can produce great things.

Enthusiasm, with nothing to back it up just creates empty promises.

Just something to think about.

Have a great day!

Lawrence

The alternative is to use the cash flow method. Rather than saying “I need to make an X% markup” you make the determination based on cash flow. This technique involves looking at how much money you need for the given time period (to make payroll, pay expenses, etc) and price your products or services in a way to make sure you, at the very least, have enough cash to pay your bills. While this method wont work long term (since it might require you to price things below cost occasionally) it will help you survive short term.

Keeping margins up is a great thing but sometimes maintaining margins wont allow you to survive the short term. Be willing to go with the cash flow method when necessary. It might be the difference between survival or failure

Just something to think about.

Have a great day!

Lawrence

Many people will buy the less expensive option because it’s easier to afford and will work just the same. Others realize that while they might have to make some sacrifices in order to buy the better one, in the long run it will be much cheaper from not having to buy replacements every few years.

A week ago I had dinner with friends and they mentioned the dining room table we were sitting at was their very first purchase as a married couple 34 years ago. Back then they didn’t have much money so they had to work hard and save in order to buy this table but 34 years later it’s still in great shape. It would have been easier (and cheaper) to buy a lesser table but how many tables do you think they would have bought since that one?

It’s not about buying the most expensive or buying the big name brand. It’s about buying the best quality you can afford (and if you can’t afford it, hold off till you can save enough to buy it). It will pay off in the long run

Have a great day!

Lawrence

You can teach technique

You can teach math

You can teach physics

You can teach languages

You can teach many things but one thing it’s very difficult to do is teach someone who is stupid. You can help make someone better at things but it’s extremely difficult to take someone who is stupid and make them smart.

Trying to take a mentally slow person and teach them do things that require a great deal of intelligence is difficult if not impossible. The question is, why do we try to do this so often?

How often have we tried putting a person in a position that is over their head with the idea of “they will figure it out” or “I can teach them”? If they have the ability that is one thing but to put someone in a position that is beyond them mentally is to put them in a position to fail. It’s done all the time and simply doesn’t make sense.

Remember, you can’t teach stupid so instead put people in a position for them to succeed, given their capabilities and things will work out much better

Just something to think about.

Have a great day!

Lawrence

There are positives all around us, we just have to be willing to see them.

If you are determined to find the negatives…you will.

If you are determined to find the positives…you will.

Which do you choose to find?

Have a great day!

Lawrence

Are you part of the “in crowd”?

Is your boss regularly pleased with your performance?

Do your peers see you as “one of them”?

If so, are you doing anything that makes you special?

If you fit in then you must not be outstanding.

If your boss is regularly pleased it most likely means you aren’t trying to raise the bar (and as a result occasionally stepping outside the lines).

Be willing to take chances. Be willing to stand out. Be willing to not fit in. You might surprise yourself and others and actually do something special.

Have a great day!

Lawrence

The other night I checked into a hotel in Richmond VA. I booked the room online and the pictures of the hotel looked wonderful. They took some old row houses and turned them into one hotel.

When I arrived it was too early to check in so I waited in the lounge area. This area was furnished with items from the 1950′s and it looked like nothing had been reupholstered since being bought new.

When it was time to check in they informed me the elevator was broken so I would have to take the stairs to the 4th floor. I was fine with this but was a bit surprised when they handed me a key to my room (I can’t remember the last time I stayed somewhere which still used keys instead of a card).

I went to my room and the first thing I noticed is the TV was 15 inches and the reception was somewhat fuzzy.

Throughout this process I was thinking “should I check out and go somewhere nicer?”

I have to admit I was exhausted when I checked into the hotel so I took a short nap before dinner and after asking the person at the front desk for a recommendation I went to dinner and upon returning I started looking around a bit further.

On each floor there were numerous sitting areas (indoors as well as outdoors). Many of these included comfortable rocking chairs and small tables.

The room I was in was absolutely huge. It was one of the largest non suite rooms I have ever stayed in. The beds were extremely comfortable. The towels were large and lush.

There was an outdoor courtyard which, in nicer weather, would have been wonderful to sit in and relax.

The people at the front desk were always smiling and friendly (and they had offered to have someone take everyones luggage to their rooms for them and to bring it down for checkout).

They offered a complimentary pass to the local YMCA for anyone who wanted to work out and had a complimentary shuttle to get around the area if a place was too far to walk.

Basically, once I truly opened my eyes and stopped looking at the negatives I noticed all of the positives and my perception changed to closer match the reality

Initially I considered checking out and finding a better place to stay. Eventually, I realized if I come back to this area I would definitely want to stay there again

Be willing to change your perception based on the reality

Have a great day!

Lawrence

Do you look to these people for recommendations and suggestions?

If so, you are like many people. These people you look to are “influencers”.

If you look to influencers for recommendations don’t you think others do the same?

When marketing your product or service, if you can get to these influencers you can get through to many others as well. Ignore these influencers and it’s hard to be successful

Have a great day!

Lawrence

The other day I was down in South Carolina visiting with friends and they were hosting a meet and greet for one of the presidential candidates. The advance team for the candidate was insisting on a certain size room for the event based on the areas demographics, the number of registered voters etc. They were looking for a room that would hold 75-100. The local hosts tried explaining that they were expecting much more than that based on their previous events in the area etc. The national people insisted they knew more so it was put in a room that seats 100. This was a bit of a problem when over 750 people showed up. The problem was the national people were basing things on their experience and not based on the experience for that locale

In the same way, assuming that what works locally will also work nationally can cause the same type of situation

Realize that what works locally doesn’t always work nationally and what works nationally doesn’t always work locally

Have a great day

Lawrence