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Where Did They All Go?

Strategery

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Here is the absolute minimum I would recommend in terms of accounting and financial education for any business owner (or aspiring business owner):

- Learn to read a Balance Sheet. This is the best long-term measure of your business health and success. I would recommend picking a dozen or so medium and large public companies, and looking at their balance sheets. That will give you a decent idea of what's on them, how they vary, what they tell you about how the company operates and where it's value comes from, etc.

- Learn to create your own Net Worth Statement (Personal Financial Statement). This is basically your personal Balance Sheet. And like the Balance Sheet, it is the best long-term measure of your personal financial health and success. Create yours and update it at least once a quarter (I update mine weekly).

- Learn to read a Profit and Loss Statement (P&L). This is the best indication of the profitability of your company, and will give you an indication of how efficiently your company is being run (and where it's not as efficient as it should be).

- Get your business in QuickBooks. You don't have to be a QB guru -- just hire a decent bookkeeper to set up your books and teach you how to enter the most common transactions you'll encounter in your business (you can "memorize" those transactions to make them very easy to enter). Worst case, spend $100-200/month to get your bookkeeper to enter the tough transactions for you. But, having all your books in QB will allow you to easily see your own Balance Sheet and P&L.

- Learn how to calculate Gross Margins. This is an indication of how efficiently you're creating your product or providing your service. Once your business is in QB, it's easy to calculate your gross margins. Then, figure out what the gross margins are for your leading competitors (or big companies in your space), and compare yours to theirs. If yours are much lower, figure out what you can do to increase your margins (it may just require scale, but this is important to know). If your gross margins are much higher than your competitors, it's worthwhile to ask yourself whether your product/service is meeting the standards your customers will expect.

- Learn how to calculate Operating Margins. This is an indication of how efficiently your business is being run overall. Once your business is in QB, it's easy to calculate your operating margins. Then, figure out what the operating margins are for your leading competitors (or big companies in your space), and compare yours to theirs. If yours are much lower, figure out what your competitors are doing differently in terms of managing their business.

- Understand Cash Flow Management techniques. By far the biggest reason I see entrepreneurs struggle is due to short-term cash flow issues. Understanding how to forecast and manage cash flow will keep your business from hitting situations where it can't grow inventory and it can't grow revenue...or worse yet, where it can't meet its financial obligations.

- (Optional) Read the book Profit First, by Michael Michalowicz. If money and financial management of your business isn't something you're comfortable with, this book will give you a formula for ensuring that you generate profit in your business from day one. More experienced entrepreneurs may not be a fan of some of these techniques, but for new business owners, this book can be a game changer. Btw, Michalowicz is one of my favorite business authors (he has 5 books), and he was on my podcast a couple weeks ago...I think the episode is most definitely worth listening to.

In terms of getting your head around the financial aspects of your business, I would say that the above is the very minimum every entrepreneur or business owner should understand before (or while) jumping into business.
I've been secretly hoping for a post like this but have been too dumb to know what to ask for... "Umm, Mr. Rich Guy, how do I business?"
 

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SteveO

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And THAT'S my biggest tip! Just take action!!!

Amazing how many people don't take that most important step...
And that is exactly how I started. I kept asking this guy "what do I do first? How do I start?". He just kept repeating "just buy one", "just do it". I finally got the message and bought an apartment building. He just looked at me and said "was it that hard? "
 

JScott

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And that is exactly how I started. I kept asking this guy "what do I do first? How do I start?". He just kept repeating "just buy one", "just do it". I finally got the message and bought an apartment building. He just looked at me and said "was it that hard? "
The sooner you start, the sooner you fail, the sooner you learn, the sooner you succeed.
 

JordanK

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@JScott has a podcast 'The BiggerPockets Business Podcast' with his wife. He has been providing super helpful information for a long long time. You guys should check it out. I know it's really helped me on my journey so far. I don't post much but I realized a few weeks ago when talking to my Dad (Also an entrepreneur) who said with almost tears in his eyes that he wished all this information was available when he was my age.


Looking forward to meeting all of you when I fly over with @Fox for the summit so I can put a face to the names. Nothing compares to meeting people.
 

JScott

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@JScott has a podcast 'The BiggerPockets Business Podcast' with his wife. He has been providing super helpful information for a long long time. You guys should check it out. I know it's really helped me on my journey so far. I don't post much but I realized a few weeks ago when talking to my Dad (Also an entrepreneur) who said with almost tears in his eyes that he wished all this information was available when he was my age.


Looking forward to meeting all of you when I fly over with @Fox for the summit so I can put a face to the names. Nothing compares to meeting people.
Thank you for those kind words!

The podcast has taken a bit to really get into the groove, but we're starting to feel really good about it, and we have some great guests coming up in the new year!

Here's the Michael Michalowicz episode that I highly recommend to everyone here, especially the new entrepreneurs:

 

BellaPippin

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You know how when you go to Disneyland you get those little autograph books for when you take the pictures with the characters? Gotta get me one of those for the summit, except this ain't people in costumes nuh-huh

I hope alot of people are like me setting up to crush it in 2020 with 2020 Vision .
I got you fam! Also totally stole that expression, running to FB rn

I remember people telling me that my views on money and success would change as I got older -- I thought they were nuts...until I got older.
One day the barista called me ma'am and after that I started saying things like "Omg look how much you've grown!" "This didn't happen when we were teenagers" and I understood everything my parents said. I'm 30 and don't even have kids.





I spat my coffee thanks


Conclusion: It was a good thread after all, all things considered
 

Ocean Man

Just like you, I'm Human
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You know how when you go to Disneyland you get those little autograph books for when you take the pictures with the characters? Gotta get me one of those for the summit, except this ain't people in costumes nuh-huh
I know exactly what you mean haha, a family member has one. After reading @vigilante’s thread (don’t have the link off the top of my head), I’ve been carrying a yellow legal pad with me.
 

Vadim26

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Here are two posts to get you started (see the whole threads for more context):

Some of the traits that indicate an aspiring entrepreneur has potential (in my opinion):


How a really smart person can make 7- or 8-figures pretty reliably in the "slowlane":

Thanks!
 

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IlseVdG

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Thank you for those kind words!

The podcast has taken a bit to really get into the groove, but we're starting to feel really good about it, and we have some great guests coming up in the new year!

Here's the Michael Michalowicz episode that I highly recommend to everyone here, especially the new entrepreneurs:

This post got me listening today to the very first podcast, the one with Joshua Dorkin. Loved it! Thanks @JScott ! I will certainly check out the Michael Michalowicz one too.
 

Patrick Hughes

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I've been reading through some old threads from around 2014. Multi-page GOLD and NOTABLE threads with people posting every day like maniacs dropping value bombs like nobody's business.

Every now and then I check the user's profile and see that they haven't logged on in months or even years. It's like they just stopped coming here or gave up on the Fastlane dream altogether. Maybe life just got in the way, had kids, or found a job they were happy with?

Even gold contributors, people who showed up daily, took action, hustled and gave back to the community like a family...it's just...a bummer...

I would've liked to talk to these guys and gals back in the day!
I know this response may get ridiculed but I believe its because there isnt an app. At least to my knowledge.

It's a lot easier and convenient to hop on my phone through an app and talk with you guys. Just clunky on my phone. Galaxy S9 here.
 

Walter Hay

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I always question @biophase why he takes the time to post. To me, it looks like a waste of time. You're helping dudes who don't think they need it, who won't follow through anyways, and who probably will not even be on the forum a few months later.
It's not a waste of time because often someone genuinely wants information and gains benefit from the replies, but sadly I see many cases in which a newbie wants help with a problem, and because they have not bothered to learn anything about the forum and such things as Gold threads they ignore the advice offered by very experienced members.

I have sometimes thought that some of these new members think that Legendary, or Epic, or Gold, are badges that can be bought, just like the status badges on Alibaba et al.

Occasionally, I do feel disheartened when providing advice. But luckily for me I move on. My hope is that people do reach out to me. There are just enough people who advance their agenda with action after we converse. Luckily I'm relatively new to the forum, and working through issues with other people helps me as an entrepreneur as well. I can imagine over time losing the energy to help others though.
From time to time I have posted advice to help newbies out of a deep hole that they have dug for themselves, and seen them blunder on, heedless. Once I see that they are just digging their hole deeper, I don't go back to those threads. Yes, you have to move on.

Walter.
P.S. It should be mandatory for every new member to answer a couple of questions by using the search facility. At least that will teach them that there is a search Icon 29007 at the end of the top toolbar.
 
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