How Are Businesses Valued?

Business valuation can be a difficult figure to obtain because there are so many variables. Business valuation models (methods) have been developed to make the process easier and more accurate. Some of the methods include :

• Return on Investment (ROI) method
• Market value
• Asset value going concern
• Asset value liquidation
• Net present value

The most appropriate method of valuing the majority of small businesses (up to $1 Million) is through the ROI method. The technique measures the return (i.e. profit before owner’s salary) received from an investment (i.e. purchase price) and is calculated by the following formula:

Price = net annual profit x ROI % (for that industry)

For example: if a business is making $50,000 profit and the accepted ROI for that industry is 30% then the price equals $166,667.

Here are example ROI’s for different industries (information provided by GMO Business Brokers – September 2009):

• Book Stores 20% to 25%
• Boutiques 75% to 80%
• Florists 70% to 100%
• Liquor Stores 22% to 28%
• Lotto Kiosks 22% to 28%
• Newsagencies 25% to 30%
• Restaurants (Fine Dining) 70% to 80%
• Lunch Bars 50% to 75%
• Manufacturing 25% to 38%
• Wholesale 27% to 35%

27 Questions You Should Ask Before Buying A Business

I met the husband and wife owners of a small retail shop recently. The business was running at a $65,000 (approx) annual loss.They had purchased the business over 12 months ago and had been steadily losing money. I looked briefly at their books and realised they had paid too much for the business. On top of that, both of them had no retail business experience and they had decided to cut out all of the advertising that the previous business owner had been running – due to cost reasons only.

I asked them how much research and due diligence had they conducted before buying the business. I was shocked by their response…

“We asked the solicitor who was performing the business settlement service if the business was a good buy.”

Talk about flushing $$$ down the toilet. Needless to say, they no longer have any available capital to invest in marketing or anything else. The outcome will be to close up shop and accept the loss, and the lesson.

So how do you actually avoid this type of business disaster?

Ask yourself these questions…

1. Why am I going into this business?

• For lifestyle (to work fewer than 40 hours per week, with the freedom to go on holidays whenever you choose)
• To make a profit by building the business up (increasing sales)
• To generate more cash-flow than than a 9-to-5 job.

If your reasons are not listed above – don’t buy the business. If you want to be involved in what the business does (manufacturing, retail, services, etc) out of personal interest, it’s much less stress and safer to be an employee.

2. What do I want from being in business?

3. What will be my exit strategy to get out of the business?

• Sell the business for a profit
• Sell the business to a major shareholder(s) and become a silent partner
• Pass the business down to a family member
• Franchise

4. What skills do I have that will make me successful in this business?

Please don’t think that all that is required to ‘improve’ the business is cosmetic – by changing some of the products, re-designing the store interior, etc. These ‘improvements’ won’t double sales.

Only very good marketing, a good sales team and good systems will increase sales significantly. Think MARKETING, SALES, DELIVERY of the product or service (using systems).

5. What skills will I have to “hire in”?

6. What cash flow do I need?

7. How much working capital do I have access to?

8. Will this business suit me i.e. hours, type of operation?

To ask the vendor who is selling the business…

9. How long has the business been operating?

10. How long has the current owner had the business?

11. Why is the current owner selling?

• Worn out from working long hours for little money?
• Couldn’t make the business work (perhaps in it’s current location)?
• Actual legitimate reasons such as retiring, moving to another state or country, or looking for another challenge in another business?

12. What is the Cash flow and Profit (Gross and Net) for the business?

13. What is the business owner paying him/herself?

14. What do the last 3 years of financial accounts show?

15. How has the business been valued?

16. Who are the key customers, suppliers, staff?

17. What are the terms and length of any leases?

18. Will the current owner stay on and assist for a period of time?

Ask them to put this period in WRITING!

19. What areas of the business are systemised?

20. Is there a business plan?

21. How many hours a week does the current owner work in the business?

22. When was the last time the current owner took a holiday?

23. What is the marketing systems like? Do they make money for the business?

Review all advertising material, the customer database, the POS systems (if applicable), any loyalty programs, special promotional material, etc.

24. What facts support the "story" of the business?

25. How secure is future income i.e. contracts with customers and suppliers?

26. How dependent is the business on the current owner?

27. What will it take to grow the business so I can sell it for a profit?

Before you make an offer

1. Get your accountant to check the financial accounts

Obtain actual lodged tax returns with the government, not the business owner’s printout or handwritten bookkeeping summary.

Your accountant will ensure that the business has cashflow and is not over-capalised.

2. Hire a solicitor who is experienced in buying businesses like the one you are looking at.

Your solicitor will ensure that the contracts with suppliers, the landlord, etc don’t have any surprises.

3. If you are spending over $250,000 on the business, or even if you want to be extra careful, pay for a business valuation.

Pay a licenced valuer to come in and audit the business. Even if you have to spend $7,000 for the valuation, it’s still much better than paying $50,000, $100,000 or more than you should have to buy the business.

You may even be able to ‘use’ the valuation to negotiate a better price.

The lesson

Homework always pays off in business. Taking shortcuts and buying a business on emotion often lead to regrets. Don’t let this happen to you.

The Business Story Behind Monopoly

The Monopoly Book by Maxine Brady

The Setting

The stock market crash of 1929 caused mass unemployment for millions of Americans. For Charles Darrow, the financial problems grew increasingly difficult. Once a salesman of heating and engineering equipment, he spent the early 1930s looking for a job. He’d been feeding himself, his wife, and their son by taking any odd job he could find. He repaired electric irons, did occasional fix-it jobs, even walked dogs – when he could find someone to pay him for his labors.

It wasn’t enough, though. Now his wife was expecting their second child. He had to find a way to make more money.

To fill his idle hours, and help him forget his worries temporarily, Darrow invented things. Some of them were fun; others were probably devised in hopes that they would become profitable. He made jigsaw puzzles; he created a combination bat-and-ball, which was supposed to be used as a beach toy; he designed an improved pad for recording and scoring bridge games. They were interesting diversions, but nobody was willing to pay for them.

Darrow’s problem, of course, was not unique. Many of his friends and family were out of jobs, and were having trouble affording even such necessities as food and shelter. For them, as for most people, the movies, the theater, and any form of entertainment which cost any money at all was too expensive.

So they got together in the evenings and on weekends, when the offices of the Federal Emergency Relief Administration were closed, and they talked. And after the gloomy recital of that day’s particular troubles, the conversation would usually become nostalgic: remember the good old days?

Darrow did. For him and his wife, thinking back to the more prosperous life they had led only a few years before, some of the pleasant memories were of the vacations they had spent at one of their favorite holiday places, a seaside resort in New Jersey called Atlantic City.

The Game

One evening in 1930, Darrow sat down at his kitchen table in Germantown, Pennsylvania, and sketched out some of the street names of Atlantic City on the round piece of oilcloth that covered the table. The streets he chose were all from the same side of the city: between the Inlet and Park Place, along the Boardwalk. When he finished, Darrow was short one name, so he choose Marven Gardens, a section from nearby Margate. Probably unintentionally, he altered the spelling, and it was penciled onto his board as Marvin Gardens.

He included the three railroads that carried the wealthy vacationers to the resort, and the utility companies that serviced them, as well as the parcels of real estate of varying prices. He wanted a fourth railroad to make his board symmetrical, so he added the Short Line: actually it was a freight-carrying bus company that had a depot in Atlantic City. A local paint store gave him free samples of several colors, and he used them to color his game board. A new game began to take form in his mind.

Darrow cut houses and hotels for his little city, using scraps of wooden molding that a lumber yard had discarded. He rounded up stray pieces of cardboard, and typed out title cards for the different properties. The rest of the equipment was fairly easy to acquire: colored buttons for the tokens, a pair of dice, and a lot of play money.

From then on, in the evenings, the Darrows would sit around the kitchen table buying, renting, developing, and selling real estate. They had little enough real cash on hand, yet The Game, as they all referred to it, permitted them to manipulate large sums of money as they engaged in complex negotiations to acquire valuable blocks of property. The simple, almost crude set exerted a continuing fascination and challenge. As friends dropped in to visit, they were invited to join the game. Soon the “Monopoly evenings” became a standard feature at the Darrow home.

Then the friends wanted to take the game home with them. Each night’s winner, a bit heady with his success in the nether reaches of high finance, asked for a set of his own, so that he could show off his financial wizardry. The runner-up, convinced that he could win the next time if he could only hone his skill with a little practice, generally wanted a set too. Darrow had an overabundance of free time, so he began making copies of his board, property cards, and buildings. His delighted friends supplied their own dice and tokens, and often their own package of play money.

But the demand increased, and Darrow increased his output to two handmade sets a day. Selling them for $4 apiece, each set brought him new customers. People kept talking about the new game and playing it with their friends. Through word-of-mouth advertising alone, Darrow sold about one hundred sets, and had orders for many more. But his one-at-a-time production technique simply couldn’t keep up with the demand.

Encouraged by his friends, Darrow decided to test the game outside his personal sphere of acquaintances and friends of friends. He made up a few sets and offered them to department stores in Philadelphia, the nearest city. They sold.

With the knowledge that his game was marketable, he attempted to increase his rate of production. A friend helped out by printing the Monopoly boards and the title cards. Darrow continued to paint in the colors and assemble the sets by hand. This partial automation enabled him to produce six games a day. It wasn’t enough.

Parker Brothers

By 1934, now fully aware that his interesting diversion had turned into a potentially profitable business, Darrow arranged to have the same friend print and package the complete sets. It looked like they had the problem solved, for a little while. Production was finally keeping pace with sales. But they hadn’t reckoned with the Philadelphia sales. Soon, a department store began ordering sets wholesale, in quantities far greater than anything they could accommodate. It became obvious to Darrow that he had only two choices. He could borrow money and plunge wholeheartedly into the game business, or he could sell Monopoly to an established game company. Darrow wrote to Parker Brothers, then as now one of the world’s major game manufacturers and distributors, to see if the company would be interested in producing and marketing the game on a national basis.

Parker brothers had by then been in business for half a century, and had become accustomed to enthusiastic inventors sending in new game creations. Some of the ideas had even proven marketable, but, by and large, the company’s managers tended to trust the creativity of their own staff far more than they did an unproven novice.

Although Parker Brothers thought the basic framework of the game seemed possibly interesting, they handled the game routinely. Various members of the company sat down at their offices in Salem, Massachusetts, to try it out, as they do all prospective games. They played it several times and found that they all enjoyed it. But the company had evolved a set of inviolable ground rules for “family games,” which they held to be mandatory for any game that could be successfully marketed. According to the Parker precept, a family game should last approximately forty-five minutes. Monopoly could go on for hours. Parker also felt that a game should have a specific end, a goal to be achieved. (In their other board games, the players’ tokens progressed around a track until they reached the end – which might be symbolized by a pot of gold, a home port, a jackpot, or even Heaven – and the first player to reach this goal was the winner.) In Monopoly, the players just kept going round and round the board. The only goal was to bankrupt the other players and emerge still solvent yourself. Furthermore, Monopoly’s rules seemed far too complex to the Parker staff; they thought the general game-playing public would be hopelessly confused trying to learn how to handle mortgages, rents, and interest.

After testing the game for several weeks, Parker Brothers made the unanimous decision to reject it. The company wrote and informed Darrow of this decision, explaining that his game contained “fifty-two fundamental errors.” It would never be accepted by the public.

Darrow, of course, was considerably annoyed. He knew very well how people responded to his game. Despite Parker Brothers’ analysis, Monopoly was decidedly marketable. Unfortunately, however, it was far more marketable than Darrow himself; he was still unemployed. Monopoly, it seemed, was virtually his only asset.

Therefore, he went back to his printer friend, ordered the production of five thousand sets, and continued to sell the game locally. But locally included Philadelphia, and the department stores there were soon aware that Darrow was increasing his output. They began placing massive orders for the Christmas season. Darrow now found himself working fourteen hours a day just trying to keep up with the shipping.

With the game now being ordered in wholesale lots, Parker’s sales representatives soon became acutely aware that the Philadelphia stores were expecting huge sales of Monopoly the following Christmas, the traditional game-buying season. Word was quickly passed back to corporate headquarters in Salem, where the issue was deemed worthy of reconsideration. Then, to top things off, a major New York toy and game store, the prestigious F. A. O. Schwarz, bought two hundred sets out of the original five thousand printing.

Shortly afterwards, a friend telephoned Saly Barton (daughter of Parker Brothers’ founder, George Parker) to rave about a wonderful new game she had purchased at F. A. O. Schwarz. It was called Monopoly, and it was hard to come by and in short supply. The friend suggested that Mrs. Barton tell Parker Brothers about it. Sally did. She told her husband, Robert B. M. Barton, who happened to be the president of the company. Curious about a competitor’s product, he purchased a copy of the game at F. A. O. Schwarz, took it home and wound up playing it until 1 A.M. The next day, Barton wrote to Darrow, and three days later they met at Parker Brothers’ New York sales office in the Flatiron Building.

Parker Brothers offered to buy the game outright and give Darrow royalties on all sets sold. The company insisted, though, on making some revisions which would refine the game and clarify the rules. Some of the staff were still concerned about the indefinite playing time, so they agreed to market the original version as long as Darrow permitted them to develop a variation of the game which could be played in less time. This shorter version was to be printed along with the general rules, to give the public an option.

Darrow agreed and the contract was signed. Later, in explaining why he had decided to sell his brainchild, Darrow related his decision to the monetary commitment he would have otherwise had to make in order to keep producing the game himself. “Taking the precepts of Monopoly to heart,” he said, “I did not care to speculate.” Years afterward, commenting on the final offer from Parker Brothers, he wrote: “I gladly accepted and have never regretted that decision.”

The royalties from sales of Monopoly soon made Darrow a millionaire. He retired at the age of forty-six, to become a gentleman farmer in Bucks County, Pennsylvania, a world traveler with a particular interest in ancient cities, a motion picture photographer, and a collector of exotic orchid species. In 1970, a few years after Darrow’s death, Atlantic City erected a commemorative plaque in his honor. It stands on the Boardwalk, near the juncture of Park Place.

Who’s On Your Team?

Every successful business has a good team.

Notice how before the wealthy people make any decisions, they consult their team of professionals. No one person can be up-to-date with the latest knowledge in all fields. Some team members will be only required for a certain project, others will be needed on a regular basis. This is a way of leveraging your time which is one of our wealth principles.

How do you start?

You build a team slowly, by finding and hiring them as you need them. You might find them by going through the telephone directory, or discovering their advertisement, or by recommendations from an associate. This might take trial and error, as you may find that the professional does not have the knowledge that you require and you will need to find someone else.

You may, in the initial stages of your road to wealth, not be able to afford the services of all the team members. You might have to fill several ‘positions’ on your team. You could take a short course in bookkeeping, computerised design, or in the field of your future employees. This would only be for the short-term until your business is able to provide surplus income. If course, one skill I don’t recommend you short-cut is legal, use a good solicitor before you purchase a business, sign a lease or any other contract of significant value.

Your team members can include :

• Finance
  • Bankers
  • Investors
  • Partners (active / non-active)
  • Shareholders
• Tax
  • Accountants
  • Bookkeepers
  • Computer accounting specialists
• Legal
  • Solicitors
• Settlement (business and real-estate)
  • Conveyancers / settlement agents
• Mentors
  • Coaches
  • Mentors
  • Business specialists
• Workers
  • Employees
  • Skilled specialists
  • Builders
  • Trades people

25 Things You Absolutely Must Do To go From Nothing To Self-Made Millionaire Within The Next 7 Years …

I came across this interesting article by Bob Bly. I have added my comments in italics.

THE 25 PRINCIPLES OF BUSINESS SUCCESS BY BOB BLY:

1. Have a definition of success.
2. Live below your means – with occasional exceptions.

A good book to read about this is the Richest Man In Babylon

3. Learn a money-making skill that will pay you at least twice the national average income.

My suggestions would be : Sales, marketing, designing, copywriting, computer programming, speaking, writing

4. Improve your level of skill or the demand for your skill until you are paid twice as much — $200,000 a year.
5. Set a financial goal of a liquid net worth of $2 million excluding primary residence by age 50.
6. If you are going to have children, have them young.

Not so sure about this one – I’m 39 and I enjoy spending time with my young son very much.

7. Assign a dollar value to your time and outsource everything you can, except what you are great at, to people who charge less than your hourly rate.
8. Learn how to negotiate win win deals.
9. Be a specialist, not a generalist; focus on core skills, markets, areas – three maximum, no more than that.
10. Micro niche
11. Become an information junkie and be sure to read in “adjacent areas”
12. Modelling

Don’t re-invent the wheel. Another word for modelling is mentor. In almost every business situation – someone has been there, done that – find out who they are and learn from them.

13. The Real McCoy Strategy
14. Don’t lower price; add value
15. Do things that are important but not urgent
16. Little details count
17. Achieve balance between 4 success factors
18. Attitude of gratitude
19. Understand the best and worst investments you can make
20. Do something you love
21. Stop trading hours for dollars
22. Stop making excuses
23. Understand Robert Gibert’s success formula : SWL + SWL = SW
24. Put it in writing
25. ACTION

Lots of great ideas here – how many of them can you work towards this year?

The Real Reasons Why Small Businesses Fail

Do you know a small business that has failed?

According to a Commonwealth Bank Of Australia survey 80% of new small businesses fail in the first five years. Why is this so?

In his book, Small Business Management, Michael Ames gives the top reasons small businesses fail (in no particular order) :

• Lack of business management experience
• Insufficient capital (money)
• Too much debt in relation to cash-flow
• Poor sales
• Poor location
• Poor inventory management
• Over-investment in fixed assets
• Poor credit arrangements
• Personal use of business funds
• Unexpected growth (sounds like a good problem to have, but too much growth can lead to lower quality product or service, more returns, mistakes, hiring of unsuitable staff, overspending on stock, cash-flow problems, etc)

My thoughts on this that out of the list above ‘Poor Sales’ should be the the top of the list, though I have personally seen business fail for the other reasons too. I would re-arrange and group these reasons for business failure as such :

1) Poor sales. Including poor location.

2) Lack of management experience. Including insufficient capital, too much debt, poor inventory management, over investing in fixed assets, poor credit arrangements, personal use of business funds, unexpected growth.

Both of these two main areas of business failure can be addressed by hiring experts and for the business owner to invest in their own continual business and management training.

Time Management Secrets Of Successful Business People

Once of the most common responses I get from business owners is about time – “How do I get time to work on my marketing?”, “How do I find time to systemise my business?”, “I just don’t have time to think about my strategic plans”

Hundreds of books have been written on the subject of time management and most have good suggestions, tips and ideas. But the simplest way to find out how successful people manage their time is to ‘model’ what they do. I have copied (modelled) my work habits around successful businesses people in my industry and these are ones that I have found to be the most successful :

1) Creating a daily to-do list with 3 top things to be done. Doing your best to complete those 3 tasks – usually by ‘blocking’ out time without interruptions (from staff, no phone calls, reading emails, etc). You are essentually making an appointment with yourself (or have your PA do this for you). Any uncompleted tasks are rolled over to the next day.

2) Creating a 30-day to-do list. These are tasks to be completed this month – you pull your daily top 3 from here.

3) Focusing on high leverage tasks, rather than on medium and low leverage tasks.

4) Delegating, training, systemising and giving staff the authority to make decisions on their own – so your business can run without you!

Here is a list of high leverage business tasks (this is where you should be spending most of your time)

• Strategic planning and vision for the business
• Marketing planning
• Utilising media (press releases, advertising, direct mail, etc)
• Developing business systems (admin, legal, IT, staff, service delivery, supply, marketing, sales, etc)
• Developing information material or products (every business whether wholesale, retail, service or professional services needs these)
• Working on business uniqueness
• Reviewing financials and ensuring a good return on investment
• Creating Joint Ventures and Strategic Alliances
• Promoting the business – developing presentations and speaking at seminars, trade shows or networking
• Reviewing staff performance, feedback and suggestions and developing staff systems for your General Manager
• Organising customer research or reviewing customer feedback
• Meetings with your ‘Mastermind Group’ – peers in business
• Meeting with your ‘top’ staff – financial controller, marketing, sales and general managers (these many be shared roles in a small business)
• Delegation : Staff and outsourcing

Here is a list of medium leverage business tasks

• Sales (of products and/or services)
• Providing the service that the business sells (auto servicing, computer servicing, chiropractic care, financial planning, etc)
• Supplying products that the business sells (wholesale, retail)

Here is a list of low leverage business tasks

• Bookkeeping and Accounting
  • Paying bills
  • Payroll
  • Invoicing
  • Following up outstanding payments (account receivables)
  • Tax preparation
• Inventory
  • Ordering stock
  • Receiving and inventory of stock
• Administration
  • Staff admin
  • Opening the mail
  • Filing
  • Basic computer stuff
• Supervising and training staff (you should be working on staff systems instead)
• Answering the telephone
• Deliveries
• And so on … you get the idea…

The four time management procedures (daily list, 30 day list, high leverage, delgating/systemising) are simple to understand and easy to follow. All it takes is a bit of self discipline initially and then it will become routine. If you have staff there may be some resistance to change as they may be used to ‘bugging you’ everytime they have a problem – but, don’t ignore them – document their frequent questions and the answers – that way they can consult training or company procedures instead. Soon you will quickly notice how much progress you have made ‘working on your business’ and not ‘in it’.

Creating Wealth by Adding Value!

Make me rich!

Everyone wants to be rich (or at least have a good disposable income). It’s human nature. Often this desire comes out of the ‘frustration’ of the daily grind (the rat race). Getting rich quickly is even more desirable, hence the search for the ‘holy grail’ of being able to create wealth the easy way, but in reality it involves some exchange of ‘value’ for money. This got me thinking – so I grabbed a few books from my personal ’success’ library.

Here is how wealth is able to be created (in broad terms) by an individual or by a company :

• Creating / Inventing something (e.g. Apple iPod)
• Producing / Manufacturing something (e.g. Apple iPod)
• Improving something (e.g. Newer models)
• Providing a service (e.g. Settlement agent, Financial Planner, etc)
• Repairing / servicing something (e.g. Auto vehicle servicing)
• Selling (e.g. selling own manufactured product)
• Trading (buying and selling)
• Holding something (it becomes more valuable the longer you hold on to it).

Even ‘holding’ onto real estate is adding something .. time (which equates to more demand as the human population increases).

When we provide our knowledge and skills to something we are paid. For example, accounting, bookkeeping, hairdressing, auto servicing to name a few. We are paid in direct relationship too how many people can provide the same thing, the skill and expense required to attain those skills (e.g. medical degrees, etc), and the demand for those skills. How can you do ’something’ that few other people can do (which is in demand)?

For example, someone that can touch their nose with their tongue might be neat, but how is that going to make them money? (Apart from appearing on television as a novelty).

The big money question is ‘How can I add more value, quicker and easier, and to more people?’

This is one strategy…

Use leverage

The definition of business and financial leverage is using less of your resources (time and money) to create a bigger end result (Return on Investment). Here are some of the ways you can use leverage to obtain a bigger result.

• Your Skills
• Your Knowledge
• Your Money
• Your Time

Some examples may include :

Your Skills

• Employing staff, delegating or outsourcing.
• Applying your skills to bigger projects for a bigger reward
• Creating information products (books, audio and video recordings)
• Creating business systems

Your Knowledge

• Creating information products (books, audio and video recordings)
• Creating business systems

Your Money

• Purchasing income-producing assets
• Utilising media to communicate your marketing message (e.g. advertising, direct mail, email, etc).
• Re-investing in the business (e.g. marketing systems, technology)

Your Time

• LABOUR : Employing staff, delegating or outsourcing.
• TRAINING : Training staff so they can perform their functions well.
• SYSTEMS : Introducing systems to ensure the job is done right the first time and consistently.
• TECHNOLOGY : Using technology (e.g. using video conferencing instead of travelling to a meeting).
• MARKETING : Developing lead generation systems to reduce time spent acquiring leads one-by-one.
• GROUP SELLING :Speaking and selling at seminars rather than speaking to prospects one-on-one.

Hopefully the strategies mentioned above have given you some ideas. You can also have a close look at your chosen business niche or investment area (residential real-estate, commercial real-estate, stocks, etc) and see how other successful business owners or investors have added ‘value’ or used leverage to create wealth. It’s not worth re-inventing the wheel. Find a way to copy what works and improve on it!

Attitudes (Mindset) of Successful People

Most people have a desire to be rich or be successful, yet so few attain prosperity and great wealth. This is something that I have pondered for over twenty years. So, I had a close look at my mentors and other role models like Steve Jobs, Bill Gates, Donald Trump, Warren Buffett, Richard Branson, Anthony (Tony) Robbins and many others. I observed personal success usually occurs from a number of behavioural patterns and certain ‘attitude’ traits. Here are some of the reasons why many individuals are successful in their field of endeavours.

1] They have a life purpose or vision of what their company or life will be like in the future.

All great accomplishments begin with an idea and a vision. It’s purpose and vision that drives and motivates them.

To help you define your life purpose, click here.

To help you create a vision for your business, click here.

2] They have written down goals.

If you don’t know where you’re going, how do you know when you’re going to get there? I know many people in my own life (including family members) that just ‘float’ along in life without direction.

Studies have shown that written down goals have a higher probability of being achieved.

Try our goal setting forms, click here.

3] A burning desire to succeed.

Think about how competitive it is to be good in a chosen field these days. You WILL encounter set backs and challenges. I like to look at these challenges as a test to see if I’m serious about achieving my goals or not.

This is where written goals help. They will highlight what you have achieved so far and will give you the extra boost to keep going.

Having a good ‘friend’ to talk to when you feel a bit ‘blue’, helps too. Ask them to be your ‘Success Buddy’.

Read about other successful people and what challenges they overcame.

4] The acquisition of specialised knowledge to achieve your goals.

I enjoyed reading about the life story of Henry Ford. He continually learnt more about building motor vehicles, hiring talented people and investing in research.

To achieve your goals you will need to master certain specialized fields or skills, such as book writing, public speaking, writing and publishing press releases, becoming an expert in engine repair, etc.

If you can afford it, hire the best skilled people you can find.

Want a shortcut? Find people that have achieved your goals and just ‘copy’ them. It might cost you a few thousand dollars, but you will reach your goals quicker with lower chance of failure.

Read, watch videos, go to seminars, conduct tests and experiments, observe all you can about your specialisation.

5] Being decisive in nature.

Successful people know how to take advantage of opportunities that come up and they make a decision very quickly. Sometimes the decision will be the wrong one, but not making a decision is really a ‘no’ decision anyway.

Rich people surround themselves with experts who assist in making informed decisions. What ‘experts’ do you have around you?

6] Utilising mentors or being a part of a mastermind group.

As already mentioned in point four and five, surround yourself with experts and also have another group of people who share similar goals as yourself.

I currently meet with my ‘mastermind’ group every week for two hours. We’ve been doing that for over one year now and the benefits are enormous.

The outcome?

There are no guarantees in life (unfortunately), BUT, I have seen (personally) many of my wealthy mentors ‘live’ the attitudes mentioned above and I strongly believe these are some of the main reasons they are so successful. Now, how can you apply them to your journey?

Creating the Vision, Mission and Culture for Your Business

Step 1) Define the Vision

• What do I see as the key to the future for our organisation?
• What unique contribution should we be making in the future?
• What would make me excited about being a part of this organisation in the future?

A vision statement is a company’s inspiration. A vision asks, “Toward what reality do you want to lead this organisation?”

Step 2) Create the Mission Statement

How will the vision be achieved?

a) Who are you ? Define the characteristics of the people in your organisation. What are their qualities, attributes, etc ?

b) What business are you in?
e.g. the transport business

c) Who are your customers?
e.g. demographics, age, etc

d) What makes you different?

e.g. Starbucks
“Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.”

e.g. Target
“At the heart of our strategy is our commitment to delight our guest by consistently delivering the right combination of innovation, design and value in our merchandising, in our marketing, and in our stores. This is the essence of our “Expect More. Pay Less.” brand promise.”

e.g. Nike
“To bring inspiration and innovation to every athlete* in the world.”

Step 3) Culture statement

Ownership, integrity, teamwork, communication, etc

This is an example of a culture statement :

Ecolab USSpirit Ecolab associates are the company’s heart and soul. Hungry to succeed and passionate to achieve, we embrace the unknown, fearlessly taking risks, confident in our ability to deliver results. We are eager and ambitious. We tenaciously persevere, surmounting obstacles with grit and determination. Above all, we find joy in our work, and in serving the company and our customers. Pride Exceptional service, exceptional products…We delight in presenting premium quality in all we offer. No matter how big the project, or how small the request, we strive for excellence in our response, for we relish perfection. We cherish our company, and represent it with honour. Determination Ambitious and aggressive, driven and determined, enthusiastic and energetic, we cultivate the opportunity to compete. We thrive on challenges, viewing them as an invitation to success. A true team, we work together to routinely please our customers, surpass our record achievements, and drive our organization to greater success. Commitment Like a family, we are united by an unspoken pledge, bound by our convictions. We prize dedication, and are moved to help each other and our customers. We accept nothing less than loyalty in our ranks. We are true to each other and to our cause. Passion We wholeheartedly believe in our company; its goals and objectives are our mission, and we enthusiastically embrace them and relentlessly pursue them. More importantly, we truly believe in each other, care, protect and support each other. Integrity Professional. Reliable. Trustworthy. Honest. Our corporate integrity is a critical asset and we are committed to upholding it worldwide. We set high standards, and we abide by them as we practice business fairly and behave ethically. We share our expectations with each other and strive to maintain a workplace built on mutual values, trust and goodwill.

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