Beauty is in the eye of the…PRICE…wait!..what!?

Beauty is in the eye of the…PRICE…wait!..what!?

I believe I was around 9 years old when I first heard “beauty is in the eye of the beholder,” and even though my teacher was trying to make the point that even though I didn’t like my art project, she and others found it to be very good.  I still don’t believe she really thought it was that great, but what else would a teacher do other than employ whatever means possible to bolster the confidence of one of her students.

I must admit, I didn’t really grasp what it meant at that time – I never heard the phrase uttered again until high school while looking at a painting during a museum field trip where the guide uttered the phrase, and even then, its deeper meanings and application to many areas outside of the field of art escaped me.

It wasn’t until much later when I was doing some deep, postgraduate research into the Eastern and Western philosophies, that I finally understood that my reality, the way that I evaluated whether something was good, bad, great or terrible was entirely dependent on how I thought about it.  It had nothing really to do with the object, individual or circumstances themselves but rather it was that I imbued my attitude about them into them.  

My thoughts shaped my perspective and experience, or put another way, beauty is in the eye of the beholder.

Following this line of discussion, I believe that money and its cohort, price, could be guided  down a similar path of reasoning. 

From one perspective, price could easily be viewed as a grouping of numbers, dollar signs, commas and periods – numbers arranged in an order that lets someone know the amount they need to hand over in order to obtain some product and/or service.

$99.99, $1,101.01 and $129,000.32 are nothing more than numbers arranged in a particular order, but they certainly become muddied once you start to pile on one’s considerations, attitudes and thoughts concerning their particular arrangement or grouping.

For example, do you think one’s attitude would change if their bank account suddenly had ten times the amount today than it did yesterday?  How about a hundred times the amount today than yesterday, or a thousand times?  

When you look at the bank balance from the perspective of it simply being numbers arranged in a certain order separated by commas and periods, it’s not as if anything has necessarily changed other than the arrangement of the numbers is different than before.  Yet if one suddenly had 10 times the amount of money than they had the day before, they’re attitude would certainly lift without a doubt.

But why?

I think that when you take a number and add a dollar sign to it, logic has a tendency to hop in the back seat, and then all sorts of considerations begin to climb in for the ride. And it’s not as if everyone holds the same attitude; there’s not a universal, agreed-upon-by-everyone sort of an attitude – it’s actually quite unique to each person.

What’s even more interesting, is that it is a 100% learned attitude.  No one was born with it; it’s not in our DNA.    

Now I’m not here to go into the many ways one shapes these attitudes, as this is not the purpose of this article.  I’m trying to lay the groundwork that everyone has a unique, personal perspective on money, which will inevitably translate into a unique set of attitudes regarding price.

There is not some universal pricing manual that tells you what to charge for your products and/or services.  For sure there is guidance that you can get from your industry, competitors, consultants, cost analysis, etc.  But in the end, where did any of these get their pricing guidance from? 

At some point, it was simply created, made up!  I’m sure it has some basis, but I’m certain the Oracle of Pricing was not consulted.

Above all, you have to have a firm belief in what you are charging for your product or service, because your pricing is going to go up against what others believe it is worth.  This is where the rubber meets the road in how you respond when someone says “that is too expensive” or “what can you do for me on price,” because it will determine whether or not you get the market to pay you for what you feel your product or service deserves, or you give in and reduce your price.

Since the price is made up, all you have to do is firmly believe that your product or service warrants its asking price, and then you simply need to build more value in the customers mind so that they too can see that your price makes sense – once they place more value on your product than they do their money, they will happily exchange it for your product or service.

Price is not something that someone can purchase.  It is not a physical object, rather it is more of an idea than anything else.  You could even go so far as to say price is a myth.  It is so easy to get wrapped up in all the significance of it, so you must remember it is simply numbers arranged among commas, periods and a dollar sign.  From its simple arrangement, all sorts of considerations form in one’s mind – “it’s too expensive”, “that price is too high” “I can’t afford that”, “I never pay retail prices” and so on.  It’s not that these ideas are not important, they absolutely are to that person, but you don’t have to hold these same beliefs or buy into them.  These ideas are theirs, not yours.  Know that your product is a tremendous value, and then go about showing the customer that value, and all of their considerations will fold in the face of your conviction.

Entrepreneurship in this economy.

Entrepreneurship in this economy.

Layoffs in the news; we’re in a recession or one is coming; rising interest rates; housing bubble; inflation – these headlines are never ending.

Whether or not any of these hold merit is up for debate, but one thing is for sure, these topics and their endless discussion have a definite effect on one’s confidence, one’s outlook, one’s peace of mind, which in the end does the greatest damage to the entrepreneur.

An entrepreneur is a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk.

Risk is defined as the potential for loss or the exposure to chance of injury or loss.

Initiative is defined as the ability to assess and initiate things independently.

Entrepreneurs and small business owners are always looking into the future, assessing and monitoring risks to their business and devising strategies to overcome them.  To concern oneself with such is beyond challenging, and frankly, the incorrect estimation of what it will take to overcome these is the reason that businesses fail.

Add to this challenge, mainstream and social media’s unrelenting messaging of how bad everything is and you greatly intensify the entrepreneur’s level of stress and uncertainty.

When confronted with situations like this, I believe it is best to identify what it is that you can control.  Clearly, monetary policy, housing prices, inflation and recessions are out of my control, but I can control my actions, mindset, skills and attitude.

When looking to address any issue in business, I believe that the underlying principles need to be understood prior to the application of the methods designed to remedy the situation.

Principles over methods – principles are the fundamental rules or foundations concerning a topic. The principles explain what you should be doing or what should be done about it. Methods, on the other hand, are merely the actions taken to apply those principles in a particular circumstance.

These are the core principles for starting, growing and expanding a business regardless of all the noise that is going on in the media and coming from the people in your environment:

  • Go out into the marketplace
  • Make and build relationships
  • Increase visibility in the marketplace
  • Get people to know me
  • Get people to talk about me
  • Get people to do business with me
  • Get people to call me
  • Get people to send me business

With these principles understood, any method that we put into place simply needs to embrace and forward these principles.  If it doesn’t, then it needs to be set aside.  If it does and works, then it needs to be strengthened and done over and over until the results are no longer there.

Looking over the above principles, I would say that the 1st one, “Go out into the marketplace”, if followed consistently over a long period of time, would eventually encompass all those that follow.  

Going out into the marketplace can be as simple as going to an industry conference, setting up a booth to promote your products or services.  It could be calling on the local businesses in your area or reaching them broadly by placing cold calls to introduce your company or leveraging business relationships to get an introduction to the stakeholders in a particular company.  It could also be as simple as showing up at a networking meeting, introducing yourself and your company.  Lastly, you could post to social media such as Instagram, Facebook or LinkedIn.

These actions, done consistently, over an extended period of time, will begin to bring you and your company out of obscurity and others will begin to do business with you, refer you business, call you and will even talk about you in the marketplace.

Under these circumstances, your brand is building and gaining traction, there is a new level of activity in the office, you and your employees are gaining confidence, revenues are growing, excitement about you and your company is growing and most, most, most importantly, your certainty about the future has grown stronger than the uncertainty that all the messaging channels around you are pushing.

Pick the things that you can control, control them, continue to control them and no bad news or economic conditions can bring you down.

You are an unstoppable force, go out in the marketplace and get what is yours!

Newton’s law and success.

Newton’s law and success.

Newton’s First Law of motion states that an object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.

We easily observe this phenomenon of motion, rest and force in the physical world all the time: kicking a ball, jumping on a trampoline, riding a bike or seeing an apple falling from a tree. 

But what if we applied it to success.  More specifically, what if we looked at these factors of the First Law from the viewpoint of success creation.

First off, we could liken the motion in Newton Laws to the many motions in business: picking up the phone to contact a new client, executing a contract, manufacturing a product, ordering materials, collecting a receivable, paying bills, advertising, executing a marketing campaign, sending out promotional materials, presenting your company at a business conference, posting to social media. 

So let’s say that the above actions are occurring with a degree of frequency or at a rate of speed:  making so many calls to contact new clients each day, signing a certain number of contracts per month, manufacturing x number of products per day, ordering so many units of raw materials per week and so on.  

The above actions then culminate into meaningful measurements or metrics that pretty much all businesses monitor – sales, expenses, cash flow, net income, assets, liabilities, etc.  Basic income statement, balance sheet and cash flow statement data.

At an agreed upon time frame, management will typically review the numbers, the metrics, the financial statements to get a picture of how the business is doing.  Typically, there is some level of performance that they are expecting and if those are met, you keep moving forward, but if the performance is not where it needs to be then plans are usually devised to change the scene.

Back to the First Law.  What is an “unbalanced force”?

Unbalanced forces are the things that make an object deviate from their current state of motion. 

Here’s a simple example: Imagine a book lying at rest on top of a table. With this scenario, the force of gravity is pushing down on the book while at the same time, the table is exerting an upward force on the book of equal magnitude and opposite direction as gravity (this could be called the normal force). Because these forces are exactly equal and in opposite directions, they  cancel each other out and the book does not change its state of motion. Hence, the book is at equilibrium and the two equal and opposite forces are called balanced.

Now, imagine what happens if we suddenly remove the table. Once we remove the table, there is no longer any upward force acting on the book. So, the force of gravity takes over and causes the book to accelerate towards the ground. In this situation, the forces are considered unbalanced.

Using this example, let’s say the book is the business itself and the table is the plans, strategies, quotas, budgets – essentially the table is what the stakeholders are trying to create with the business in terms of the level of production, success or income that they want to bring about.  In other words, they each have an idea of what is the acceptable level of performance for their business for them to deem that this business endeavor is worthwhile or working.

According to Forbes, 7 In 10 Americans Live Paycheck To Paycheck

7 out of 10 of Americans are living paycheck to paycheck.

18.4% of private sector businesses in the U.S. fail within the first year.

After five years, 49.7% have faltered

After 10 years, 65.5% of businesses have failed.

To continue with our analogy – the book is the business and the table is management’s plans and strategies; taking it further, these statistics are the results of the balance in forces between the book and table.  That being said, it stands to reason, this kind of balance needs to be gotten out of balance on an immediate basis.  To upset this balance, additional forces need to be applied in one direction to offset the balance and in this case, we are going to focus on management’s plans and strategies, aka the table.  

Let’s say for the sake of our example that we want to launch the book 10 feet in the air to a whole new level of production.  This would mean that management would have to create strategies and plans that bring about an increase in force.  No longer could the status quo be tolerated.  In other words, they’d need to create levels of production that go well beyond the current level.   

Maintaining the same speed, the same direction, the same level of production/success year after year will never serve an organization in the marketplace because there are always factors that are working against it – economic & financial policy, government interference, competition, etc.  

One must do whatever is necessary to bring unbalancing forces to the situation, to constantly work to obliterate the counter forces opposed to organizational success: calls to new clients must be increased each week, marketing efforts taken to new heights, way more contracts closed and in the books, manufacturing churning out products like never before, promotional materials flying off the presses and into the hands of future clients, social media campaigns like no one has ever witnessed before and employee morale that could win championships.

With this being done, future expansion will be yours and you’ll be assured with the guarantee that the organization will never become one of the aforementioned statistics.

Recession proof yourself.

Recession proof yourself.

Inflation appears to have settled in and the debate on whether we’ll enter a recession is all over the internet:  CNN warns of recession, CBS discusses the possibility of one , and Elon Musk had something to say.

Recession news aside, spend a few minutes checking out the economic outlook on mainstream media and it’s pretty much certain that you’ll end up feeling just a little less positive about the future of your business.  Now I’m not sure if that is their intention but such sensational headlines surely grab people’s attention and keep them consuming their content.

What is a recession?

Investopedia defines recession: “the National Bureau of Economic Research (NBER), which officially declares recessions, says the two consecutive quarters of decline in real GDP are not how it is defined anymore. The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales”.

Are we in a recession?  I don’t know, but I do know that if enough businesses read the headlines, begin to believe it and so conduct their businesses actions as if they/we are in one, and then enough business’s in the marketplace follow suit, then we are definitely in one because these are now manifesting themselves broadly in the marketplace.  

Great!  How do you navigate your way through such times?

At the recent Berkshire Hathaway annual shareholder meeting, When inflation is high, Warren Buffett says the best thing you can do is ‘be exceptionally good at something’, Warren Buffet acknowledged the toll that inflation takes but did offer some sage advice.  He does say that there is little you can do to avoid it at the cash register but that you do things to lessen the effects of it.

While holding court at the 2022 Berkshire Hathaway annual shareholders meeting, a shareholder asked for advice on what to invest in due to the high inflation.  Buffett responded    that one of the strongest protections against inflation is improving your skill set and setting the goal of becoming the top in your field.  “The best thing you can do is to be exceptionally good at something,”

“Whatever abilities you have can’t be taken away from you. They can’t actually be inflated away from you,” he said. “The best investment by far is anything that develops yourself, and it’s not taxed at all.”

It is often said that highly successful people take responsibility for every outcome in their life, they never look for excuses, they look to assign themselves as the cause in every situation and they never blame other people or other things.

Embracing this attitude puts you in the driver’s seat and puts the inflation-recession discussion in the back and more in your control than someone sitting there reading the garbage and sinking into some degree of fear.

You know it makes sense, all the great performers, athletes, professionals and business leaders are rewarded with pay that is demonstrably higher than the average.  People will pay to see them perform, hear them speak, purchase their books and eagerly follow their career trajectory.

As with every great change, it begins with a commitment.  A commitment to be the best at your chosen field immediately followed up with action.  Whether that be time or money or both.  

It is not enough to simply say “I want to be the best”.  It will require that you put in the hours to better yourself whether that is through training, drilling, rehearsing, practicing, education, etc.   Maybe you’ve heard of the 10,000 hour rule from Malcolm Gladwell’s NY Times best seller “Outliers: The Story of Success”.  Based on his studies in elite performance, Gladwell asserted that it’s “an extraordinarily consistent answer in an incredible number of fields … you need to have practiced, to have apprenticed, for 10,000 hours before you get good.”

Now, I really have no way to quantify his statement but I played tennis at a collegiate level and I would say that the level of skill I attained, I easily put in 10,000 hours.

So what is the take away?

  • First off, make every effort to steer clear of the mainstream media.  I don’t believe they have done much of anything to help make them more successful 
  • Make a commitment that you’re going to be best in your field
  • Follow that commitment with energy whether in the form of time, money or both
  • Consistently work to improve your skills either through education, study, practice or experience

Do these and your confidence will grow, the marketplace will reward you and a recession, inflation, or whatever the economic circumstances, will no longer define your success because you’ll be the only one that can chart that course.