20% Down + 80% for 10 years @ fair interest rate= deal

Listen

Life Cycle – Product & Business

Three Scenarios

• Bad - Expected (OK) - Good

Four Financial Statements

• Bank for credit - Government Taxes, Operation, Build Wealth(Long Term)

• Example of building long term wealth – buy RE, depreciate building and expect appreciation on land.

Five Steps

• Business & Not for Profit Organizations – Risk & Reward• Surround yourself with people of impeccable character• Have a positive cash flow• Satisfy customer’s & Members “perceived value”• Minimize your risk & Maximize your rewards (play the

game)

Six ways to keep the organization healthy. Ask the following:

• What can the organization do without & when?

• What overall or category price increases can be made & when?

• Repeat question one now that the distance to the improvement goals are apparent.

• What individual product &/or service price increases are possible, over & above those in question?

• What can be done differently? Begin with the identification of product &/or services that are not contributing sufficiently to overhead & profit.

• Implement all these answers & changes as soon as possible & continue repeating the process by starting at (a.).

Seven steps to do it:

• Plan• Set Tasks• Delegate• Control & Monitor• Listen & Learn• Reward• Repeat all the above – an on going process.

Eight Disciplines to continue to learn about:

– General Management– Human Aspects of Business and Organization– Management Control– Financial Management– Marketing Strategy– Decision Analysis– Business, Government & the Global Economy &

Society– Creating & Managing Global Business &

Organizational Relationships

Nine Uncontrollable Environmental Forces to be aware of:

• Changes in Macroeconomics,• Microeconomics,• Technology, • Governmental rules & regulations, • Physical environment, • Social forces,• Life styles,• Your mental ability & well-being, • Your physical and personal health.

Ten Steps to take entrepreneurial action

1. Listen & Learn 2. Focus 3. Plan-write it down (Business and personal life Plan) 4. Delegate 5. Control & Monitor (Systems & Processes) 6. Teach & Train 7. Learn & Listen 8. Reward 9. Improve (change & adjust) 10. Repeat all above steps.

• Before starting your dream business from scratch consider buying a business and tweaking it in order to have exactly what you want.

• What did I do wrong? I started from scratch instead of buying: Ian Sharlit• 5-8% of businesses succeed from starting from scratch• 80-90% of purchased businesses succeed• Do the math• Do your “Due diligence” • Treat people fairly. Do not attempt to get everything in a negotiation, find out

what they want and attempt to give it to them while you get what you want.• 20% down and 80% pay out over 10 years (Interest rate negotiable – fair)

• Make sure you can pay the 20% back to yourself within weeks by lowering inventory, selling off assets that are not needed, collecting receivables faster, cutting expenses like bottled water, etc.

• My key was having a clause that if I missed two payments, even if they were the last two payments, the sellers would get everything back. The word got out and they lined up.

• Buy a business and then “tweak it” like you would want it.• Also, you can buy businesses in not popular industries (for example petroleum &

diesel rail road train engine overhauling)

• Two stories which convinced me:• A corrugated box company in San Gabriel Valley. He had seven

competitors and the third one he asked to buy out said yes, for $1M. Gave him $200k down, and the other $800k over ten years. Within three months he moved the operation to his plant and operated 24 hours per day, sold off equipment for $150k cash, sold the building and real estate land for $200k, put $150k cash into his pocket and made approximately $1M per year from then on.

• A newspaper in the Bay Area was loosing over $1M per year and BofA was calling their $2M loan. Ian told the editor that he must cut 5 of his 10 reporters. The editor said he was unable to do that. Ian then said, OK, then cut 8 and run the reporting with 2 reporters. The editor said that would be impossible, how would they have any news. The suggestion was to have the two reporters watch CNN the night before and report from that new source. Five reporters were temporarily laid off and the cash loss went to zero per month within two weeks. Ian then visited the warehouse where there was 32 days of paper in large rolls inventoried. He said to not buy anymore paper until there was only 3 days supply. The warehouseman said what would happen if they had a strike and were not able to get paper? Ian’s answer was that they would probably be out of business before that ever happened. In not buying paper for 30 days they were able to cumulate $2M in cash and pay the bank off completely. After cutting other expenses they were able to hire the reporters back within a few months and have been profitable ever since.