There is an ancient farming philosophy which states you do not harvest your field to the very edge but leave the edges for the poor and needy so they may be fed. Farmers would instruct their staff to harvest only the main sections of the fields and leave the edges alone. The harvest of the farmer would be enough to meet their needs, provide revenue from what was sold, and provide additional seed to sow for the next season. After the land owner would finish harvesting, the poor would come along and harvest the edges of the field to feed their households and provide for their needs.
In my opinion, I believe this could be a secret for having great success in the midst of troubles and prospering when everyone else is struggling especially for business owners. Yes, a business strategy that could actually move you from being in the red to being in the black.
Think about this. How are most of us trained to run our businesses today? How have we seen most corporations manage their cash flow, today? Now, what has been the end result?
Today more organizations run their businesses with a ‘me mentality’. Most believe, “I take care of me and the rest of the population can just try to make it the best way they can.” We can see from our current worldwide situation that this methodology does not work.
On the contrary, we are not supposed to set up systems in which people can sit around and just be taken care of as others produce. This system has also proven it does not work by the example of Africa. Over the years, billions of charity dollars have been poured into this nation yet it still remains one of the poorest nations in the world.
Operation of the Strategy
To implement this strategy you have to think different then you have in the past about what it means to help another. Helping others does not mean I do everything for them and thus rob them of the incentive to work. Nothing destroys a man and a culture faster then the loss of the incentive to create and produce.
To institute this strategy in a business you must first outline it in your business plan and see it as a policy for the entire organization. Set up budget line items specifically focused on developing the widows, poor, and orphans. What service or skill set can this group bring to your organization that will take care of small task (which represent the edges of the field) and how much money can be allocated to pay for these services?
Note, in the example of the farmer he has already harvested the main harvest for his livelihood and operational budget. The edges of the field have not been factored into the equation for regular operational needs. Consequently, the overall organization will not suffer if the task is not completed. In our example, if the harvest is not picked by the widows, poor, or orphans then it will simply dry up and return to the ground to nourish the soil.
A few things to notice in the illustration of the farmer: First, he has proper financial projections to know how much grain is needed for the current season (how much for personal needs, how much to sell, how much to reinvest for a future harvest). Secondly, the vision is properly planned and communicated to their entire staff for proper execution. Thirdly, he understands that as he prospers he has an obligation to take care of those who are less fortunate and give them opportunities. Fourth, he has control over where his wealth is allocated and he can define how others can be helped without putting a strain on his companies operations.
Perhaps you may feel as a business owner trying to survive that you can’t afford to give much less add one more line item into your budget to care for others. Honestly, you can’t afford not to give and take care of others who are less fortunate. Let me put it this way! You may not pay at the moment and you may not pay directly but at some point in time you are going to have to pay and it will cost you much more. Additionally, someone else will be making the decision on how you will give and how much. It’s your choice. You can control the bottom line of your company today or you can hand it over to someone else for them to control it tomorrow. Be mindful that hand may be the government.
For more information on this strategy or help implementing it into your organization please contact EDALS Consulting.
Friday, August 21, 2009
Monday, August 3, 2009
All Eggs in One Basket – Are You Kidding Me!!!
A recent article on banking was released regarding a strategy Commercial banks may adopt to determine who will make a good credit card customer. No longer will your credit score determine who gets the prize credit card but now let’s see how much money you have in our wonderful bank vaults.
Are you kidding ME!!! Let me see if I can grasp this thought process through my non bank owner mind. You want me to take all my hard earned money, place it into your bank thus giving you access to do more of your wise and profitable projects like sub-prime lending. In return you are going to give me a credit card with outrageous interest fees in exchange for the use. Consequently, continue a lifestyle of living on credit and beyond my means. WOW!
Now I will admit I am not a rocket scientist nor am I banker but does this sound like wise money management to anyone except the guy in the big office making all the money. I must admit when I shift and jump over to the other side of the desk it sounds like a sound idea. But then again I am not at all concerned about the customer, their lifestyle, their future, nor their assets being safe. I am merely focused on my bottom line and how I can generate income for my bank and shareholders. No, I don’t want to give people who don’t make payments on time more credit. Nor do I want to give little Sally who has very little cash savings any credit. I certainly don’t care about Mr. Small Business Owner who used the credit card to keep the company flowing between invoice payments. Who cares that Mr. Small Business could not possible keep a large balance in his account because he uses the cash to actually run the business – what a concept!
We are entering into a new era and how we function, do business, and run our financial affairs is going to have to change. Each family and business owner is going to have to look at their individual situations and make tailored plans that will meet the needs of short and long term goals.
Does it make sense to put all your eggs in one basket or better yet all your resources into one bank. In my opinion diversification has always been the best strategy for hedging against bad times and the poor business decisions of others. Today people are going to have to search for ways to get outside the box and develop strategies to meet their needs and objectives. If this makes you nervous or overwhelmed then stop trying to do it yourself. Look to find people who can help solve your problem. In other words, look to build a team with people who are strong in areas where you are weak. If you build houses and you are the best builder in the world then focus on building. But you had better pray and find someone who is as good at business strategy as you are at building houses or your future at building could be shorter then you plan.
Yes, the news may make you sick to your stomach or even temp you to yell at the announcer. In the end big bank presidents and big corporate owners can make decisions that could have a negative affect on your business and lifestyle. However, there is always a way of escape which means you can always find a way legally to get the job done. It will probably take some uneasy adjustments, perhaps a budget, and good partnerships. But you can do it!
This is not the first shift the American economy has gone through since the first day the boat landed. The World just keeps making the necessary adjustments and the people who move make the money the people who wait serve those who moved.
Are you kidding ME!!! Let me see if I can grasp this thought process through my non bank owner mind. You want me to take all my hard earned money, place it into your bank thus giving you access to do more of your wise and profitable projects like sub-prime lending. In return you are going to give me a credit card with outrageous interest fees in exchange for the use. Consequently, continue a lifestyle of living on credit and beyond my means. WOW!
Now I will admit I am not a rocket scientist nor am I banker but does this sound like wise money management to anyone except the guy in the big office making all the money. I must admit when I shift and jump over to the other side of the desk it sounds like a sound idea. But then again I am not at all concerned about the customer, their lifestyle, their future, nor their assets being safe. I am merely focused on my bottom line and how I can generate income for my bank and shareholders. No, I don’t want to give people who don’t make payments on time more credit. Nor do I want to give little Sally who has very little cash savings any credit. I certainly don’t care about Mr. Small Business Owner who used the credit card to keep the company flowing between invoice payments. Who cares that Mr. Small Business could not possible keep a large balance in his account because he uses the cash to actually run the business – what a concept!
We are entering into a new era and how we function, do business, and run our financial affairs is going to have to change. Each family and business owner is going to have to look at their individual situations and make tailored plans that will meet the needs of short and long term goals.
Does it make sense to put all your eggs in one basket or better yet all your resources into one bank. In my opinion diversification has always been the best strategy for hedging against bad times and the poor business decisions of others. Today people are going to have to search for ways to get outside the box and develop strategies to meet their needs and objectives. If this makes you nervous or overwhelmed then stop trying to do it yourself. Look to find people who can help solve your problem. In other words, look to build a team with people who are strong in areas where you are weak. If you build houses and you are the best builder in the world then focus on building. But you had better pray and find someone who is as good at business strategy as you are at building houses or your future at building could be shorter then you plan.
Yes, the news may make you sick to your stomach or even temp you to yell at the announcer. In the end big bank presidents and big corporate owners can make decisions that could have a negative affect on your business and lifestyle. However, there is always a way of escape which means you can always find a way legally to get the job done. It will probably take some uneasy adjustments, perhaps a budget, and good partnerships. But you can do it!
This is not the first shift the American economy has gone through since the first day the boat landed. The World just keeps making the necessary adjustments and the people who move make the money the people who wait serve those who moved.
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