The title refers to a very good book about what it takes to be an entrepreneur and build a great business. The authors of the book are Anthony Tjian, Richard Harrington and Tsun-Yan Hsieh and the book is called Heart, Smarts, Guts and Luck published by Harvard Business Review Press, Boston, Mass, 2012. The authors tried to figure out the basic components of what it means to be an entrepreneur.

The letter in the title refers to luck. Luck matters, it is necessary and the harder you work, the more luck you will have. The reason for this saying is luck is often brought about by the interaction with other people. You are working on something, you talk to other people, you watch internet videos or you are at a conference and listen to other people. Something you heard, makes a connection to your what you are working on. The connection allows you to see forward to a solution. If you had not been working, you would have missed it. In order to be open to luck you needed the right attitude and the right relationships. To have the right attitude you need a mixture of humility, intellectual curiosity and optimism.

Being people we go through a range of emotions daily, we are not always curious or optimistic, there are pressures on us from a variety of sources. Business goes through cycles, sometimes everything we touch is great, sometimes no so great. To staying open to ideas from all sources is a challenge, most of us tend to limit what we read and who we associate with, it is a normal thing. The challenge is to be open to ideas.

Linking to dividend paying stocks, when a company is profitable and has been paying dividends for a number of years, its senior people should have a wide number of relationships into the community and business. Most dividend paying companies have a venture capital fund to invest in new ideas, many senior executives serve on boards or committees to broaden their networks, one method is check their social network site. Who are they connected to? If the people at the company are very isolated, unless the company has a monopoly and high barrier entry you might want to find other alternatives.

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

The title refers to a very good book about what it takes to be an entrepreneur and build a great business. The authors of the book are Anthony Tjian, Richard Harrington and Tsun-Yan Hsieh and the book is called Heart, Smarts, Guts and Luck published by Harvard Business Review Press, Boston, Mass, 2012. The authors tried to figure out the basic components of what it means to be an entrepreneur.

The next stage is Guts refers to initiating, enduring and evolving. Anyone that has vision of bettering a process is automatically battling the status quo or very slow change. The status quo is where most people are at because you rarely get fired for not changing the status quo or not rocking the boat. If you believe and see a different vision for what can be, structures will have to be changed to implement your vision. In most companies, there is a limited opportunity to do so and you have to find the right people. One of the reasons why companies are started is the Guts category – few would believe in them or it was easier to start a new company.

Guts is divided into 3 categories to initiate; to endure and to evolve. To initiate is to start to take the ultimate leap of faith where little evidence suggests your venture will bear fruit. This is a large step for there is more ideas to be found, than people with the desire to actually do them. Many ideas come with only  … or waiting for the time is ripe … or something along those line. To actually make the step needs confidence, passion and conviction.

The guts to endure refers to the long journey necessary to test your idea and see if it works. If you understand that many ideas will not pan out, then failure is not an option but a reality. Not trying, not going forth is the failure and the market will tell you if it is a success or not.

The guts to evolve is the ability to enact change within themselves. To bring an idea to reality involves different skills than thinking of the idea, the idea maker has to understand that and be able to change themselves. There is a fine line between perseverance and being stubborn. The change involves risk to both the idea person and the company trying to do the change, until it is accepted by the market and than everyone sees how good the idea is. Conversely if the market is not accepting then the idea needs to evolve.

Linking to dividend paying stocks, the success of the these companies is the opposite of guts driven, for staying profitable and paying dividends tends to push the company towards what has worked. For many years, it may have worked and how does the company transform itself to reflect what now exists. One tried and true method is the profitable company has the ability to buy new companies which are involved in more rapid change. How the combining of the companies works is something for the dividend paying shareholder wish to pay attention to. What type of companies are bid for and being bought and what does that say about the company strategy. If you like it, the company can continue to be a hold.

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

The title refers to a very good book about what it takes to be an entrepreneur and build a great business. The authors of the book are Anthony Tjian, Richard Harrington and Tsun-Yan Hsieh and the book is called Heart, Smarts, Guts and Luck published by Harvard Business Review Press, Boston, Mass, 2012. The authors tried to figure out the basic components of what it means to be an entrepreneur.

Smarts is all about pattern recognition. Whether it is book smarts, street smarts, people smarts or creative smarts. Most people fit into one or more categories and all have advantages and disadvantages depending on the stage of the company and what they are trying to do. The smarts refers the ability to organize, simplify and prioritize.

Those with book smarts tend to want to analyze everything, that is a great attribute but if you over analyze, there is no action or you do not see the answer in front of your nose. If you do no analysis, you will not receiving funding to grow, or there needs to be a balance in the analysis.

Street smarts is learning what it is like for your customer. Street smarts relies on observation, experience, being practical to ensure things get done. Often times the common sense solution which those with street smarts see is often not seen by book smarts, because of regulations that were put in for good reasons. Street smarts is often called thinking outside the box or what is it like in the trenches, where many decision makers do not go. (an example is Undercover Boss).

People smarts is dealing with people – both good and not so good, but generally they care about the people. Theses people engage a pattern recognition that decodes and intuits how people will react. There are multiple advantages – how people make decisions; building and maintaining strong relationships; breaking down the cynicism that people have; and managing people for the good of the organization.

Creative smarts includes the ability to grasp patterns that other do not These people are idea generators or innovators. They have the ability to change the game and see what others do not see. The result can be magical customer experiences.

The perfect blend is each type of smarts comes with its own risks and shortcomings. Business smarts is about mixing and matching different types and not just seeing the patterns, they see the big pictures and move to take advantage of it.

Linking to dividend paying stocks, companies that are profitable are often move to conservative method of operations – they like risk when it makes money otherwise they do not want too much. The smarts of the company is what you listen or read about when senior executives express their outlook for the future. Do you agree with the balance or is there one? what innovations are the companies looking at? and could they expand to bring in addition segments of how the company has defined itself?

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

The title refers to a very good book about what it takes to be an entrepreneur and build a great business. The authors of the book are Anthony Tjian, Richard Harrington and Tsun-Yan Hsieh and the book is called Heart, Smarts, Guts and Luck published by Harvard Business Review Press, Boston, Mass, 2012. The authors tried to figure out the basic components of what it means to be an entrepreneur. The four attributes the authors came up with are heart, smarts, guts and luck.

Each of these attributes must be seen if the business is to be successful and it is as simple as the passion for something (heart), the ability to be able to do something about it (smarts), the guts to do (just do it) and meeting the right people at the right time to make it work (luck). Each of these attributes have to be in place to be a success, but once the attributes are in place, it seems like the stars are unfolding they way they should be. The next few blogs will be referenced from this book – it is very good one to have in your library of materials. The group also has a website.

The Heart refers to passion and purpose. It is wonderful to be passionate, it is better to have a idea what the results of the passion will take you. You have a great idea, that is wonderful, but what do you want to do with it? What achievement are you working towards. It is important to note, a survey in the book showed more than 70% started their successful business without a business plan. The business plan is needed to raise money after people can see your vision and sales/profit growth. To start with and to stay with the business day in and day out, there needs to be passion about what you are doing and why you are doing it. In theory there are other non passionate jobs you could be doing that earn you similar income.  The next part of heart is the nuance or what makes your company different and better than the competition – or why you? The nuance is the tangible proof of your passion and purpose of the company.

Heart is not lust or merely to make money from what is hot at the moment. It certainly helps to make money, however every hot market cools, then what? not interested, why would you continue unless you are driven by passion and purpose.

Linking to dividend paying stocks, besides being profitable and able to pay a dividend, it is important to read the Chairman’s message or the Principles and Values of the company. As a profitable one, the principles and values are readily seen and reflected in the Chairman and President’s messages. In many dividend paying companies the senior level of executives are well paid, why do they continue to come to work? why this company? was is the passion and purpose of the company and does it do what it says it is doing?

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

At this time of the year, the holiday movies are in the theaters and people tend to go to the movies during the holidays. If you want to know how Hollywood operates, a book called Moneywood by William Stadiem, St. Martin’s Press, NY, 2012 will help you understand what goes on in Hollywood. Although times change a bit, when Democrats and Republicans look for money to fund the increasing high cost of running for President, Democrats often went to Hollywood, while Republicans went to Orange County for big cheques. Hollywood was and is where the actor/actresses lived and that is where most people focus on. The book Moneywood focuses on the studio bosses who are well compensated, have large expense accounts, and move between studios retaining their positions.

Similar to most industries, Hollywood started heavily orientated to the domestic market and as time went on, people learnt diversification into the non US market or foreign markets. Although every year there will be great movies, not all movies made are good ones. Hollywood tends to go through cycles where there is a disconnect between the public and the studios of what is good and marketable to the those that are or could be avid movie attendees. Similar to most industries, the box office results are seen quicker and the costs to make, market and distribute the movies have risen. The book Moneywood focuses on the lives on those who make the decisions of what we see at the movies. If you wish to be a studio executive, having a law degree helps.

Linking to dividend paying stocks, while many in Hollywood seem to have excessive lives, when you buy a dividend paying company, the lives of the executives should be non excessive. They should have what is generally accepted  as normal lives for their job is to ensure consistency, finding innovations to remain close to the consumer and ensuring high margins to remain profitable. The studio bosses may be entertaining as some of the actors, but executives of dividend paying companies do not have to be.

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

You have a business which is great because you are servicing a need and making money. Another side of the business is protecting yourself from fraud – everyday there  are people who are trying to feed off your positive energy you have in order to have your money go into their pocket. Fraud protection is part of business that you need to take into account or you will have no money in your pocket. A book which helps small business not to get ripped off is by Carla Carr called Business Predators, Insomniac Press, London, 2009.

Fraud is one of those areas where it will save you and the company money, but it will not make you money. If you have never been hit with fraud, congratulations, but there are great many stories to heard. Part of the protection is simply delaying decisions, if someone wants you to make a decision in an instant, slow the process down to next week or next month. In your business, part of the process is you have to trust someone, and those doing the fraud, will go to great lengths to sound and feel very similar to the legitimate businesses. We all use the internet, it is a great tool and our lives would be different without it, but you can not assume everything on the internet is legitimate. Every year it cost less to do a website, there are free ones, information is collected and can be used. The large companies tended to collect millions of names are not necessarily concerned with yours, fraud is the opposite – it is concerned with your name.

Linking to dividend paying stocks, these are the companies which are profitable and have been in existence for a number of years. While there is fraud in various divisions of all large corporations, we have seen the large banks in the US pay billion dollar fines but are not guilty, most of the people are trying to do a honest job. As long as most people are still trying to do a honest job, owning the stocks which pay a dividend means the likelihood of avoiding fraud is very high.

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

The title refers to the book Decisions by Jim Treliving, Doubleday, Toronto, 2012. While there are many life lessons in the book and ideas about operating a business the focus for this column is a checklist for making decisions about money. Money in itself is a merely a exchange for goods and services. Everyone understands the concept, the more difficult aspect is when you have excess or owe  money. At some point, you can  make more money and there is a number which you do not want to be below which is an individual basis. This is why you see some people wondering if they will have enough money to live even though they have well into six figures of assets and other people seemingly have enough and their main support is the basic government pensions. In both cases, the less debt you have the more options are open to you.

Mr. Treliving checklist particularly for entrepreneurs is:

Finances are a Face-to-Face Deal. go see your advisors, your investors and creditors or do not hide behind technology. Put a face to the name.

When in Doubt (and Debt) Choose Transparency It is easy to be transparent when things are going well, it if harder when they are not going well. However the more transparent about your ideas on repayment, you schedules, what you are trying to do to repay, the better for everyone. It is usually not the money, it is the lack of information that causes concerns.

Readjust, do not Renege  When you are transparent, payment schedules can be adjusted to what is going on. Does your business have a sound financial structure? In personal life often you want to pay bills near the day received. In business does your cash flow match your expenditures? are you taking advantage of the discounts being offered?

Financial Uncertainity Breeds Ingenuity  In all businesses not everything works great, some things work better than others, what works best in your business? In Mr. Treliving’s case regarding restaurants, his business, the food was priced too low resulting in very thin margins, his solution was to raise prices and to increased quality and value that his customers recognized. The work was to maintain and exceed quality and value.

Linking to dividend paying companies, when investing in profitable companies, they should be very transparent, if they are not red flags should be waving. All companies and industries go through cycles, it is very hard not to, when doing your homework you want to know how the company fared when it was hit with a downturn in the economic cycle. If the company was not transparent and circled the wagons, it is not worth holding, unless something was clearly changed.

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

The title refers to Jim Treliving’s book called Decisions, Collins, Toronto, 2012. Mr. Treliving is the co-founder of companies such as Boston Pizza and Mr. Lube as well as being involved in a host of other things he finds interesting. From watching him on CBC’s venture capital show called Dragon’s Den, he is generally seen as the nice Dragon. As December approaches January and New Year’s Resolutions – this book is a one you may wish to read.

Mr. Treliving path has gone from a police officer to multi-millionaire as a owner of a franchised restaurant chain. The path has not been a straight one, there were many twists, turns, sleepless nights and an exciting journey along the way. Looking back on the journey, Mr. Treliving believes simplicity is the key to success and his pattern of making decisions is “I make decisions about my work with my heart, about money with my head, and about people with my gut. In other words, I am emotional about work, practical about money and instinctual about people.” The outcomes are about work enthusiasm, about money being disciplined and about people loyalty trust. For example, in terms of work – he wants to be with people who love their jobs and can see both the big and small pictures. In terms of money – be rational and disciplined, and in terms of people do you want to work with them? to partner with them? do you like them?

Mr. Treliving talks about his training as a police officer helps to be able to look over a person and make a decision. From then he flushes out questions which gives the ability to affirm or change the decision. If you need help in this area, taking a course about police investigations procedures or how the police read people is something you may wish to consider, Mr. Treliving believes the skill to be invaluable and has remained a cornerstone of his decision making process.

Linking to dividend paying stocks, one of the reasons for choosing these types of stocks is they are profitable which helps you make a better decision. Everyday you are presented with many opportunities, if you start with does the company make money? has it paid and continues to pay a dividend? these questions will narrow the field and ensure a return of your investment. The capital gain will become the secondary part, yes we all want the wonderful capital gain, but if you focus on the return on your investment you can choose a healthy return with a low risk, and as a bonus, history shows all profitable companies stock will rise in value.

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

One of the routes where the author walks the institution is in the process of changing its walkway again. Originally, the institution had no walkway, but for walkers it was easier to walk across the lawn as a shortcut, which meant a well worn path was soon to be seen. Next the institution installed paving stones – the big square type and although a few cracked and had to be reset, the stones held up well. For the past few weeks a new brick walkway is being installed. There are a number of advantages of the brick walkway including decorative, as well as the theory is the bricks would not cause as much a runoff when it rains or they are more environmental sound. The disadvantage is cleaning the walkway is more of a chore and when the bricks become uneven after a few years, extra work has to be done to reset the bricks. The answer to which is the best one is it depends.

Linking to dividend paying stocks, it also depends on what result you wish. It is possible to buy some dividend paying stocks and double your money, most years that will not happen. The reason why it is possible is the entire market or industry has to fall in price because of outside forces, if you bought and held, the best companies including the profitable dividend ones would move back to where they were before and increase. If you want long term value for your money – the collecting of the dividends plus the capital gains will increase your investment. The dividends ensure the company is not too reckless, it ensures profits remain and in many stock market cycles – sustaining profitable companies should be worth more than companies trading on a lot of hope.

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