I was talking to the lawyer the other day. A contract on a property purchase I am negotiating has a few nasty special clauses. The contract called for a directors personal guarantee (to complete) should a corporate purchaser fail to complete. These clauses were once rare, but you can’t keep secrets in contracts, so they are more common.
Now in this case I am the director of a trustee company, for a unit trust I have no benefit in. This is strictly a fee for service gig, so I am effectively an employee. Why would I provide such a guarantee to a vendor for my employer? How much would I want to guarantee specific performance? Give me a moment to do the math…
Yup, as I thought. They don’t pay me enough.
I won’t even ponder the value of a guarantee from me. I don’t own anything. The smarter Marx (Groucho not Karl) said
I would never belong to a club that would have me as a member
. Should I do business with someone that would have me as a client? 😉 Lets leave that thought for another day.
OK so the lawyer explains that it is perfectly normal to expect specific performance and director liability. She tells me that I’d want the same certainty if the roles were reversed.
And that dear readers is my typically long-winded point. Always do deals in your own interest. I don’t give personal guarantees for entities I do not control. I expect personal guarantees from parties purchasing my assets. Yes it’s a double standard. “I don’t want to seem like a bad guy” is not a reason for a business decision.
Next article is on Win-Win versus Win-Lose strategies.
It’ll never work. Not now. Not here. And definitely not for you. It works “over there” but that’s different.
If you haven’t been spun a variation on this theme, click comment now and tell me your secret.
Even with the most supportive family, friends and collegues the world is full of people who tell you it can’t be done, and why. If they didn’t believe it they’d have to do something about their current situation wouldn’t they?
There is one exception to this, when I’m getting told that by someone who already did it. They may have a different perspective. But generally those guys will tell you why it made sense to them back then and how it’s changed. Rarely will they tell you that you can’t do it too.
This reminds me of the eighties slogan:
It’s hard to fly like an eagle when you’re surrounded by turkeys. 😉
Don’t get arrogant about it. It’s easy to interpret the lesson as advice to look down upon people with different beliefs or values.
Extraordinary returns cannot consistently be made by a pack (at least in my belief structure). I stack the odds in my favour by associating with other like-minded people. That association stimulates and motivates me to keep at it. I even learn something when I shut up long enough to listen to another.
Find a group of supportive people, meet regularly and listen to them.
I received the following email:
Quick Question:: you had mentioned in one place, you build business.
What have you built? and how hard was it?
I am thinking of buying and building a business but a bit scared
(butterflies in the stomach and all that crap)..
Thriving business is the most fulfilling thing I have ever done. When things go wrong it is agonising.
I’ve run businesses in the fields of: book publishing; newsletters and subscriptions; half-way house management; IT and management consultancy; direct sales teams; marriage counselling and alternative dispute resolution services; coffee shop; dating agency and even network marketing.
Some were successful, some weren’t. Some were full-time, others were something on the side. All could have done better with a bit more time to mature or capital.
What you need to succeed – off the top of my head:
1) Guts – feel the fear and do it anyway.
2) Passion – love it or you can’t all that needs to be done.
3) Margins – it will cost you more, and you will sell less than you hope. Make sure your product/service has adequate margins.
4) Story – have a good angle or hook, otherwise you will be tempted to compete on price and that my friend is the toughest business.
Is that enough of a start? I’ll continue in the days to come and Thursday I’ll update the 3 small units story — it’s settlement day.
The finance on the three small units is almost in place. What a cocktail it is! But it is not the size of the units that is the problem.
Normally I keep myself “ready to borrow”. Tax returns up-to-date, company trading accounts ready and stuff like that. Because I took Bookaburra over in July, none of that is ready. It was deliberately kept “open” to facilitate the asset purchase.
Then I found a deal too good to pass up. I wasn’t ready to finance. Hence all the hoops I had to jump through. I expect the finance to be unconditionally approved in three steps by Tuesday.
I’ll let you know the details once it’s in place.
I tithe. That means 10% of my income and capital gains is given away. That either occurs quarterly on trading income or on settlement for capital gains. I give sacrificially, if I don’t miss it I’m not giving enough.
Why? Because I think my gifts make the world a better place. I also believe that it is the obligation of the fortunate to contribute to society’s less fortunate. I also get better results when I’m tithing to when I’m not. The evidence for that is anecdotal and without scientific verification. 😉
The main reason I tithe right now is to answer the following question. When is the best time to start giving your wealth away? If I can’t give sacrificially today while I’m building the wealth how will I give once I’ve made it? And how will I know when I’ve made it sufficiently to start giving?
There is never a good time to start giving. Start anyway the discipline is worth it.