Archive for April, 2011
What Would Warren Buffet Do?
I don’t know about you but when I am evaluating a business I want to make sure that I can turn it into a cash cow. How do I do this? Well, a business must have a number of key traits to make it “interesting” – to me anyway. And – guess what – being in on the ground floor is not one of them.
What I like to follow is Warren Buffett’s model.
There are four questions that Buffett considers when he is evaluating a business. If the answers are acceptable to him, he will invest. If not, he will pass. Might I suggest that you do no less of an analysis in evaluating a business you are considering.
1. Do you understand the business?
- Do you understand how money is made?
- Do you like the business?
- Can you reasonably predict future earnings?
- Does the business have excellent business economics and pay plan [cash cow candidate]?
- Does the company have a franchise/consumer monopoly [good] or is it a commodity business [bad]?
- Does the business have favorable long-term prospects?
2. Does the business have a durable competitive advantage? [economic moat] What is it?
- Product leadership
- Brand name
- Superior product
- Intellectual property
- High switching costs
- Economies of scale
- Human capital
- High fixed costs
3. Is the management up to the task?
- Are they hard working?
- Are they intelligent?
- Are they honest?
- Do they do ordinary things exceptionally well?
- Do they profitably deploy earnings?
Honesty is critical – if they are dishonest yet hard working and intelligent they will rob you blind.
4. Is the price of building the business in line with the initial cost and the desired return?
- Are the returns sufficiently high?
- Can you leverage it?
It’s far better to get into a wonderful company at a fair price than a fair company at a wonderful price.
I was reading an interesting blog post the other day. It gives some useful metrics on why people in the US leave brands they were following on Facebook, Twitter, and email. We can all learn something from these statistics – even those of us in network marketing. So, pay attention and avoid the pitfalls.
Over 80% of consumers say they have “broken up” with at least one brand on Facebook, Twitter, or email. The main reasons are that they find the messages that they are getting are irrelevant, boring, or there are too many of them.
As far as Facebook goes, 63% of fans there have “unliked” a company because of too many posts while 38% of have “unliked” a brand because posts were boring or repetitive.
On Twitter, 41% of users say they’ve stopped following a brand. Boring content is the main culprit (52%). Frequency is less of a concern (39%) for these users but clutter is more of a concern (41%).
Over 90% of email users say they have unsubscribed to a brand’s list. The main reasons are too many emails (54%), repetitive or boring content (49%), and cutting back on email subscriptions (47%) in general. In addition, 17% delete these emails as soon as they arrive, and 8% hit the spam button.
What can we conclude from this? Well, my conclusion is that people do pay attention to what you send out. So, respect your followers. Keep your content quality high and your message frequency reasonable. Only speak when you have something useful to say. Otherwise, you will become one of these statistics!
Here is the link to the full article.
Note: The study was conducted by ExactTarget and CoTweet. The findings are based on a survey, conducted from Dec. 2010 to Jan. 2011, of 1,506 online adults in the US.
Always recruit up. Why?
Well, first of all, because your income is the average of the incomes of the ten people with whom you most closely associate. [This is known as a hint! 
]
Then, the people you hang around with will influence your results in life [good, bad, or indifferent].
Know that you have a choice. You can choose to let only the positive influences in or you can open yourself up to all kinds of externally inflicted negativity. Which will it be?
Let’s take a closer look. Have you ever noticed that:
- Positive people can help move you forward in the direction of your goals. The rapid growth that can be created in your organization through the synergy of a powerful alliance of success oriented team members can mean the difference between no growth and massive growth.
- Apathetic people can help keep you stuck where you are. If you hang around with people who have no vision or goals, you will begin to lose yours.
- Negative people WILL move you backwards into self-doubt and failure. People with a bad attitude are a cancer in your life. They are not happy unless they’re miserable and they are happier when you are miserable with them – and they will make sure that you are.
So, what does all this have to do with “recruiting up”?
Very simply, success breeds success. Success is planned. It’s never an accident. To “recruit up” means to bring people into your business who have already experienced success in business or other fields. These people already have a winner’s mentality. If you recruit people who are “better at the game” than you are, not only will your organization grow, but you will grow in the process.
Read the bios of all the blue diamonds, black diamonds, intergalactic presidential star fleet admiral commanders in the industry and you’ll see that a large percentage were highly successful in business, real estate, and other areas before getting into network marketing.
And, even though they were usually overcommitted and overworked, many dropped everything and plunged ahead with radical zeal when they saw the opportunity for residual income in network marketing. And, they brought other high achievers with them because they knew that powerful alliances with other winners create massive income streams due to momentum and turnkey duplication and healthy competition encourages each player to stretch beyond self-imposed limitations.
So, Don’t make the mistake many networkers make and go after somebody who needs a job or needs the money. That is not “recruiting up”.
This is not a business of “saving people” [usually from themselves!] Remember, that people in this category usually “need a job” for a reason . . . and that reason is not conducive to their building a large successful networking business all of a sudden. In all likelihood, at best they will impede your progress. Remember what I said earlier about your income?
You are probably working with a very credible company with a solid business opportunity. Yet, while the company provides a great opportunity, your success will depend on what you do and who you pick for your team.
Choose your inner circle wisely and with proper systems in place you will be well on your way.
Live long and prosper!
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