When you decided to become buyers of shares in companies, you did it for a number of reasons including ideally growing your wealth. For most people, they started off with a junior company because it is relatively inexpensive under $5.00 a share or less than the price of a pound of hamburger. As you get more experienced in how the markets worked, you look at more expensive companies. Somewhere along the line you bought shares and over the years added more and if you owned a profitable company for a number of years, likely your wealth went up. If you bought a consumer orientated company, one of the reasons was you could see if the promise it made, was the promise it kept on a day to day basis.

In a book written by Tilman Fertitta which highlights the continuation of the promise kept on a day to day basis. Mr. Feritta book was published by HarperCollins Leadership, NY, 2019. Mr. Feritta owns the Houston Rockets, five Golden Nugget Casinos and Hotels as well as 50 restaurant chains. In his book he offers advice to keep the promise on a day to day basis.

Hospitality

Every successful business in one way or another is built around hospitality.

To me, the definition of hospitality is simple. It is how you handle the customer. How you treat him or her, how you respond to what he or she asks for, and your ability to stay flexible. The ultimate goal of interacting with a customer is to make him or her feel like the only customer you have in the world. Why? there are no spare customers.

The rule is simple: when talking to a customer, be sure to make the conversation all about them, Let them talk about their needs, what they hope to get out of buying your product or service. They want to be heard more than anything, try to make them feel like they are the only customer you have, act like it.

Try to be nice.

Follow through is another aspect of hospitality. If you going to commit to doing something, do it.

You are in business to make money. If someone wants something special, know what your costs are and charge accordingly.

Nobody’s product is that great. Nobody’s product is so amazing that it stands out completely from everything else. You have a perfectly good product, but you are competing against a bunch of other perfectly good products. That is the reality of business. How do you separate yourself – attention to customer needs and wants – that is hospitality.

Why is it so easy to say no when you can say yes to a customer.

Never tell a customer no. Remember there are no spare customers.

Understand the difference between being unable to do something and choosing not to do something.

If you can not say yes, offer alternatives.

Know Your Numbers

Working Capital is Everything.

Working capital is the difference between a company’s assets and liabilities. Current assets are those that can be turned into cash within the next 12 months, liabilities are expenses, costs, and other charges within that same 12 months.

A company’s working capital situation is determined by a number of factors. Some companies need more because they need greater supplies to make products. How long it takes to make those products is known as the business’s operating cycle – the longer the cycle, the greater the need for cash on hand. Operating cycle is the entrepreneur makes a sale but needs a couple of weeks to be paid.

Solution every business needs a revolver or a revolving line of credit to fill in the gap. The trouble is for a new business getting one can be difficult. The banks have cycles too and sometimes they cut back. Many banks only give lines of credit to those in business for 2 years or more. During down cycles use your cash to expand your business, during boom times, save cash for the next downturn.

If you are a new entrepreneur, never put lifestyle ahead of the growth of your business. Lifestyle can be and is expensive in downturns.

Bank financing, try to get it before you need it. If you need it, there will be many delays. When you go to the bank for financing come in with a 3-year plan, not 30 days.

Run a best case, worst case and a likely scenario for your business. Remember economic cycles go up and down.

Know your numbers, for instance know if their utility bills are 4% so if it higher you can do something.

You should know with 5-10% where you are all the time. It is essential you put the numbers in perspective, so you know whether the numbers are where they should be.

Linking to dividend paying stocks, when you buy stocks you buy a share in the company which you hope will do well both in the short term and long term. The longer you own your shares, the more you will see the business they are in and if they are better than the competition. What drew you to them over someone else? Recently went to an AGM to listen to management and see if they are excited about the business and they know their numbers. At this particular company it was doing very well and it was easy to see they have many opportunities for the future, hold the stock.

There are more questions than answers, till the next time – to raising questions.