Investments - Questions to Ask - 3 Dimensions

Know yourself:
 {Have stamina? Whine if lose $50? Financial Health State, Objective – buy house etc, Commitments, Risk Appetite vs. Can actually take }  What are my financial needs ? => Financial Need Analysis – 6 mths review
•    How much should i save?
•    How much risk can i take / should i?
•    How long should i stay invested?

Know the Products:
{Missed Opportunities}
[Risk Level – Volatility, Liquidity, Counter party]
[Investment Horizon or Tenor] -> 3-5 years
[Complexity]
•    What investments are available?
•    How safe are these investments?
•    Will i be able to get cash back when i need it?
•    How long does it take for the investment to return me the cash?

Know the Strategies:
{Lower return if don’t know}
•    How much do i invest in each type of investments?
•    How can i protect my investment?
•    Do i invest long-term or adjust consistently in the short-term?
•    How often should i review my investment?
•    When should i take profit and cut my losses?
•    How do i take advantage of economic growth of other countries?
•    Should i invest in the local markets only or global markets?

In General:
Don’t suffer as a result of investment!
The stock market is there to fool you overcome with knowledge
Don’t be greedy and be taken by promoters
Don’t rush!

Business common sense ...

Common Sense Rules- What you really need to know about business
By Deborah Meaden, 2009, Published by Random House Business Books
http://www.deborahmeaden.com/

1.    What makes an entrepreneur?
The aspiring entrepreneur
–    seek out opportunity and seize it, spent time wisely (just get on the task vs. compare), nothing is impossible, enjoy yourself
–    similar mindset => ask questions, anticipate challenge, deal with inevitable setbacks & disappointment, never stop learning from own success and failures
–    It’s not where you come from, it’s where you are heading?
–    Passion, focus an insatiable desire to succeed
–    Quick minded and bright – think on your feet & work under pressure – crisis, business leader can’t say ‘I need to retire to the corner for 1-2 hrs’, got to kicked into action immediately – ‘what to do’, ‘how do I fix this?’
–    Confidence attracts – can be sense and Self-belief
–    Commitment = takes lots of time and energy { family, close friends} , also dun give 110% cannot sustain, go 80% and 20% keep for crisis
–    Loss Averse – hating to lose
–    take calculated risk (during cool-head moments) – do not gamble, ‘You will be able to follow your dream, just not today’
–    Be realistic
–    When one door close the other opens

2.     What makes a great idea?
Turning great ideas into great business

–    Brilliant ideas are good, but brilliant business propositions are what count
–    Give your product an edge and then tell everyone about it
–    Don’t get hung up on confidentiality and patents
–    Where there’s a plan there’s a way – have enough info, the right info
–    Business founder who do not pay themselves will waste precious energy getting agitated over how they are going to look after their family and pay bills.
–    Business plan an indicator how business is doing and heading – action points – monthly report
3.    What makes people invest?
Tracking down the investment you need
–    Consider the business reason for going in with friends and family
–    Only purse an investment that is right for you
–    Pitches don’t need to be perfect, just credible
–    Never say ‘ I am the idea person, not a number person’, it’s just not enough to be asking for someone else’s money while you are making such claims
–    Entrepreneur only really have to remember a few figures – turnover, profit& cash flow
–    Difficult to value business – formula too simplistic, look for market evidence
–    Every day is a new challenge

4.    How do you turn your great idea into a great business?
The all-important start-up phase
–    Business valuation should be realistic
–    Accept responsibility
o    Start-up phase of business venture is rather like having a baby – dependent
o    Founder need to stay ahead else it suffer
o    How will the business stand on its own feet? Besides getting started – they think short-term and about what happen in 5 years and not the journey in between
o    Upon Securing an investment - don’t relax completely – success is not assured and achieved by careful application. Hard work does not stop upon securing funds and certainly not once first product has been built.
–    The devil is in the details – somebody has to worry about the little things to stop them turning into big things
o    System & process --- till delivery
o    Soft launch vs Big Bang – bad publicity
–    Get the business covered
–    Don’t get hung up on name or status
–    Always be honest with an investor
o    If something not right, pick up the phone, set out what is wrong and let’s find a way to fix it. Don’t just fire off a series of email and delay for a few hours
o    Communicate rather than correspond
o    Protect the business by communicating effectively from the start

5.    What about buying a business or running a franchise?
Alternative ways to start your own business – or turn someone else’s around
–    Get the facts fast and keep the pace up – time does kill deals => make your mind and execute
o    Start-up fail undercapitalize – misjudge how much $ they actually need or unable to raise adequate $
–    What’s in for you ? Don’t go into business for the wrong reasons. Passion for cooking is not good enough to be a restaurant owner – its complicated involve dealing with peple, supplier, negotiation and more
–    When you buy other business you need to know
o     where you can make the change
o    How long will it take and how much to see profits
–    Identify the strengths – and build on them
o    Be willing to hear from your stuff- ideas, especially new owners – six months to prove themselves
–    Give the key people a reason to stay
–    If it ain’t broke, don’t fix it (passive). A new business should constantly look to move things forward and check out things around the corner. Surely the appropriate strategy is to keep ahead of events. A company cannot simply wait for things to happen to the business and react when it is very often too late to do anything about it

6.    Running the show
Leading the way
–    Know when to spend time on and when to spend it
o    Every business have key indicators = dashboard
o    80% of the time drive the indicators, the rest day-to-day running of the business
o    Discuss the same point endlessly and going around circles can cost a business $
o    “Unforgiveable” to waste half an hour of everyone’s time to bring that person up to date – not prepared, ask them to leave, there was little point in them being there after all
o    Meeting should be discipline – why are you there ? timing
–    Cash will not just flow – it needs to be managed
o    Have an idea if you are trading profitably – info to tweak margins, wage & pricing
–    Set realistic goals, expect the unexpected, disaster planning &  recovery plan
–    don’t be over optimistic
–    Never forget your goals -  why you go into business the first place.
–    Resist greenwashing – Go green and with quality solution and service
–    Being ethical is not an indulgence
–    Be proactive not Reactive. Company should be ahead of the game by judging the market and forecasting what will be important to its customers in future, and it should also take the temperature of what is making them tick right now. Consumer will always surprise – business got to responds quickly and effectively not standing still and ignoring the zeitgeist that is the real crime in business

7.    Building your team
Managing a talented team
–    Nobody works best alone
–    Remember to listen – e.g. employee’s idea
o    Staff think underpaid – taken advantage
o    Staff think overpaid – worry will be found out and eliminated
o    Targets based on performance – future of the business
–    Adopt a zero tolerance approach to bullying – create a happy working environment – make staff feel special at same ensure customer not neglected
–    Give space for people to make mistake. As long you win more you are on the right track
–    When tough time comes you must meet them head-on
–    Tackle employment changes fast
–    Surround yourself with people smarted than you. Company leaders are not looking for a bunch of really clever people who can outwit them at every turn. They are looking for people who have particular strengths in a specific area. By all means, find people with talent who are smarter than you in their particular areas, but stay one step ahead by being smarter overall

8.    Building your brand
Focusing on your brand
–    Marketing on its own means nothing – without the product its nothing – main target market
–    Build an effective online presence – buy the product, founder’ history customer don’t really bother
–    Put yourself there
–    All publicity is not good publicity
o    That what customer what’s to know about the product not how product was in invented
o    Timing is critical, ad for low-income families late in the month no use.
–    Lunch is for wimps – putting people around a dinner table will always produce interesting results – used to social settings – common ground among diners. On contrary put them in a meeting room and that you are going to discuss next year budget – guard will be up, they will be watching what they

9.    Building your sales
Maximizing sales
–    Good salesman must understand consumer needs not themselves – sell fish
–    Nothing sell itself – consumers must believe in the product
–    Working hard all day is not enough to make a *successful* business. Doing everything themselves, from the bookkeeping to designing their own websites, does not mean everything is going to work out fine. It won’t. You have to be intelligent about the things you put effort into and sales should be one of the top priorities
–    Value is the main consideration in pricing
?    Business has more customers than it can handle physically – under pricing => unable to adequately serve all its customers
?    Establish quickly what the market will take
?    Should listen and adjust to the market
?    Offer both low-cost and premium version of the product
?    Establish brand then sub brands
–    Get out there and Sell
–    Sell them something they want and they will come back more
–    Customer complaints are an opportunity, don’t let complaint escalate, proper logging
–    Keep existing customers happy – a bird in the hand, well-worth to spend money on keeping hard-earned customers happy
–    Make sure your website delivers – beware of copycats
–    You can’t turn around a tanker with a speedboat charge => communicate to the organization quickly and get an instant reaction -> extra factor, should structure the communication lines to able to reach to all

10.    What if I fail?
When times are tough
–    Take the initiatives
o    Wake up to the fact
o    Having to do the unpleasant – reduce spending
–    Communicate with your bank before trouble begins
–    Get advise fast – not end up find a shoulder to cry on for comfort
–    Know when to quit
o    Spot the signs – smoke detector goes do something fast
o    If it’s a good business and it has failed to introduce enough though there is a market for the product, or they have not changed or seen a change in the market, or they have failed to introduced enough products. There is no point struggling on believing that something from outside will ‘rescue’ the venture
–    Take full responsibility and then move on
–    Any can go wrong will go wrong
–    Learn from your mistakes

11.    When is it time to sell up?
Selling up and moving on
–    Plan for the future
–    Watch the market
–    Always keep your price in mind
–    Work out your cut-off point and stick it
–    Finally move on
–    Don’t lose sight of why you started the business – and why you are selling it
–    Look after number one is selfish and short-sighted. A company founder should look after everyone who is involved in their business and on the outside. Then the business will look after them. Put your interest early ahead of business and its requirements particularly early days business can fail. It’s a symbiotic relationship. A person who makes sure that a business gets what it need will more than likely end up getting what they need out of it

12.    Fundamental Questions to ask before you jump on board ....

1.    Do I have the right personality?
2.     Will I be able to deal with knock-backs?
3.    Can I be honest all the time ?
4.    Am I prepared to take risk ?
5.    Is my vision string enough that I will be able to see it through even when the going get toughs?
6.    Have I done enough research and do I know my market?
7.    Am I prepared to plan carefully?
8.    Can I adapt to changing circumstances?
9.    Am I self-reliant ?
10.    Do I know when to delegate ?
11.    Am I able to communicate my ideas and message?
12.    Am I prepared to sell, sell, sell?
13.    Am I focusing on the right things?
14.    Do I know where I am going?

The Knack

The following are bottom lines from ‘The Knack’ as seen above. I recommend this book to you. (Published 2008)


Notes Compiled Raj 2 July 2009, for personnel reference =)

How to succeed in Business (Chapter 1)
1. Don’t let emotions lead you into hasty decisions that will make it more difficult for you to achieve your real goals.
2. Make sure you understand what cash flow is and figure in advance where it’s going to come from.
3. Control the sales mentality and balance it with a business mentality and before it’s too late.
4. Learn to anticipate and recognize the changes in your business by developing a good feel for the numbers.

The Right Stuff (Chapter 2)
1. Those who perseveres win. Be resilient and welcome failure. That’s how you become a better businessperson.
2. You learn by refusing to make excuses and looking deep inside yourself for the reasons things have gone wrong.
3. Focus (what kind of customer & focus on building the base) and discipline are more important than identifying opportunities, but they have to be balanced with flexibility
4. The solutions are seldom right in front of you. You need to learn how to spot them out of the corner of your eye.

Why Start-up Fail (Chapter 3)
1. It’s good to have a lot of competitors because education a market is a very expensive proposition.
– agree, with my team mate started a mobile location based services start-up, take a while for people to comprehend what we are doing, no standards to follow and so forth
2. If you are a first time entrepreneur, It’s generally better to start a business than to buy one
3. The first business plan should be simple and you should write it for yourself, not for potential investors.
4. Your time is more valuable than money and you should be careful not waste it.
- I fully agree with this point, money can always be earn, time nope, don’t want to waste my youth

Where the Money Is (Chapter 4)
1. Before you ask people for money, make sure you know how much they like to invest and what they are looking for.
2. Start early to build a relationship with a commercial banker and use an asset-based lender only If you can’t get the money you need from a commercial bank
3. Bankers are businesspeople too. Treat them the way you would like your customers to treat you.
4. Your receivables are loans to your customers. Make sure your portfolio is in good shape.

Magic Numbers (Chapter 5)
1. Whenever you launch a new business, keep track of your monthly sales and gross margin by hand until you have a good feel for them. --- will require discipline
2. Find the key numbers that tells you how your business is doing real time, before you get the sales report.
3. More sales usually mean less cash flow. Figure out your future cash needs while you still have time to address them.
4. Understand your earnings before interest, taxes, depreciation and amortization, and use a multiple of that not sales as the measure of your business’s value.

The Art of the Deal (Chapter6)
1. Listening is the most important part of any negotiation. Make sure your hear what is really being said.
2. Go in with no preconceptions, and always assume that the other side is smarter than you. -Agree
3. Develop the habit of questioning what you see on the surface and dig to find out what ‘really going on. - Agree
4. In an adversarial negotiation, the best deal is one that leaves both sides a little unhappy.

It Begin with a Sale (Chapter7)
1. The secret of successful selling lies in losing your fear of asking. You don’t ask, you don’t get
2. You probably won’t discover your company’s niche until after you have launched the business.
3. No niche lasts forever. You may have to discover new ones as you go along
4. Your reputation is your most valuable business asset, and your competitors play a critical role in shaping it.
5. What business are you really in ?

Good Sales, Bad Sales and the Ones That Get Away (Chapter8)
1. You are better off with a base of many small customers than with few large ones
2. Showing is more effective than telling when it comes to signing up new customers. Let them experience what you have to offer
3. Listening is a lost art. You can gain a competition advantage just by listening carefully to what your prospects and customers are saying.
4. It is almost always a bad idea to reduce your prices just to fill unused capacity. You will just undermine the more profitable part of your business. (Watch out for hidden expenses)

Customer for Keeps (Chapter 9)
1. Customer retention is the key to growth, and you retain customers by building strong relationship with them.
2. One way to build strong relationship with customers is to help them become smarter buyers by teaching them your business.
3. Make a point of treating old customers like new prospects. Otherwise, it’s easy to start taking them for granted.
4. You will lose contract with your customers as your company grows unless you build customer face-time into your schedule.

How to Lose Customers (Chapter 10)
1. Customers don’t like feeling that they are supporting your lavish lifestyle. Don’ give them reason reasons to think they are
2. Make a habit of a having a small piece increases on a regular basis so that you aren’t forced to have a big increase later on. This reminds me of the regular price hike in transport fee in the lion city.
3. Your company is probably your most valuable personal assert. Don’t undermine its value by letting your margin erode
4. Beware of the rules you make. They may inadvertently force your employees to provide poor service to customers.

The Decision to Grow (Chapter 11)
1. Business is a mean to an end. Does a life plan before you make your business plan. --- This is an eye opener to me!
2. When trying to move to the next level sales, don’t assume you know all the factors that led to your initial success.
3. Growing a business is a matter of choice. Before deciding to grow, make sure you know why you are doing it
4. Biggest is not always better. Small companies have some advantage that large companies can’t match

Becoming the Boss (Chapter 12)
1. As close as you may be to your employees, neither you nor they should forget that it’s a business relationship and needs to be treated as such
2. If you, like most entrepreneurs, prefer selling to managing, remember that you can hire other people to do management. You don’t have to do it yourself.
3. The way to deal with employee theft is to improve your system, not stop trusting people.
4. When the time comes for you to step aside and turn day-to-day operations over to your managers, get someone you trust to help you with the transition, and find other ways that you can contribute to the business.

Becoming the Boss (Chapter 13)
1. Your company’s culture can be your most powerful tool for finding and keeping great employees. Don’t miss the opportunities to shape it that arise every day.
2. The one thing you can’t delegate is the responsibility for making sure the company has a single culture, not several competing ones
3. Expenses have a natural tendency to creep up over time. If you want to control them, you need to get everyone involved in the effort.
4. Look for opportunities to send the message to employees that you really care about them, and that you want to them to care about keeping costs done (the pen)

Selling is a Team Sport (Chapter 14)
1. Salespeople are your representatives in the marketplace. Make sure you choose salespeople who will represent you well.
2. Beware of hotspots and would be entrepreneurs and don’t hire salespeople from within your industry.
3. Sales commission cause divisions in a company and get in the way of building a team. Don’t pay on commission unless you have to, and switch to salary plus bonus as soon as you can.
4. All your employees have an impact on sales, at least indirectly. With the right training, you can teach them how to have a direct impact.

Help! I Need Somebody (Chapter 15)
1. Sometimes you get so close to the problem that you lose other perspective.
2. You usually need help from someone who is not emotionally involved and who knows the right question to ask.
3. When you are struggling with a problem, get an outside perspective to make sure you are identified the real one and come up with a solution that’s going to address it.
4. Accountants are good for explaining what has happened in the past, but don’t go to them for business advice. Talk to an experience business owner instead.
5. Your Lawyer’s job is to tell you the potential legal consequences of a decision or a course of action – not to give you business advice.
6. Yes, your small companies can afford to hire world-class executives as long as you are willing to create a situation in which they can make money and have fun.

When the Student Is Ready, the Teacher Appears (Chapter 16)
1. There are great business lessons to be learned wherever you go, but you have to remember to look for them.
2. Solving a problem is a two-step process. First you should stop the bleeding, and then you need to address the underlying cause.
3. Preparation is a crucial competitive edge. Don’t assume you know what’s in a contract – even an old contract – unless you have gone back and reread it.
4. The harder someone pushes you to make a quick decision, the more insistent you should be about taking your time.

Keeping Up with Stones (Chapter 17)
1. Be prepared to carry new salespeople for up to a year before getting the kind of production that will justify what it cost to hire them
2. If you want salespeople to make good sales, teach them how your business makes money
3. Watch your numbers carefully and when they change – find out why. There’s always a reason
4. Enthusiasm is lifeblood of a business. Be generous with it.