On Take it to the Bank,
00:00:01.36\00:00:02.70
you'll find ways
to get out of debt.
00:00:02.73\00:00:05.53
Solve your credit card problems.
00:00:09.57\00:00:14.58
How to make and
stick with the budget?
00:00:14.61\00:00:16.81
Simple ways to save.
00:00:19.88\00:00:21.45
Buying or selling a home
00:00:24.75\00:00:26.96
and many more financial
matters on Take it to the Bank.
00:00:26.99\00:00:31.99
Hi, my name is Cordell Thomas,
00:00:32.03\00:00:33.66
and welcome back to
Take it to the Bank.
00:00:33.70\00:00:35.90
We're excited that you're here.
00:00:35.93\00:00:37.87
We're talking about
finances and one of the things
00:00:37.90\00:00:40.04
we've been focused on
00:00:40.07\00:00:41.40
is the top reasons
for financial crisis,
00:00:41.44\00:00:44.47
financial concerns.
00:00:44.51\00:00:45.84
And we're finding out
there are just a few issues
00:00:45.87\00:00:47.71
that are out there.
00:00:47.74\00:00:49.08
They're pretty much six items
00:00:49.11\00:00:51.05
that you look at
when you look at crisis.
00:00:51.08\00:00:52.91
And what we'd like to
talk to you about right now is
00:00:52.95\00:00:55.85
to a certain
extent put you at ease,
00:00:55.88\00:00:57.82
to think you're
not in the minority,
00:00:57.85\00:00:59.59
but there's a majority,
00:00:59.62\00:01:01.09
a grand number of
middle class Americans
00:01:01.12\00:01:03.53
who are dealing was this
thing called financial crisis.
00:01:03.56\00:01:07.73
We know that people are dealing
with this issue, because why?
00:01:07.76\00:01:12.37
All you have to do
is do a quick search
00:01:12.40\00:01:14.27
on any one of the search engines
00:01:14.30\00:01:15.64
and you can find
the stories of people
00:01:15.67\00:01:19.01
that are dealing with this,
00:01:19.04\00:01:20.54
these issues all
relevant to things
00:01:20.58\00:01:24.35
like communication,
00:01:24.38\00:01:27.32
financial
crisis, personal issues,
00:01:27.35\00:01:29.95
and the stories are quite stark.
00:01:29.98\00:01:31.75
I was reading one in
reference to an individual
00:01:31.79\00:01:34.59
who was separated from
a previous relationship
00:01:34.62\00:01:36.86
had child support,
00:01:36.89\00:01:38.23
he had a great job in IT
00:01:38.26\00:01:39.59
and he met the
woman of his dreams,
00:01:39.63\00:01:41.50
they get married.
00:01:41.53\00:01:42.86
And now they have a
total of six in their family,
00:01:42.90\00:01:46.23
and they're dealing with
the foreclosure crisis in 2008.
00:01:46.27\00:01:50.11
There he loses his job,
their income is cut in half,
00:01:50.14\00:01:54.21
and you begin to
see some of the things
00:01:54.24\00:01:56.54
that begin to happen as
it snowballs out of control.
00:01:56.58\00:01:59.98
Now what we are talking about,
00:02:00.02\00:02:02.05
there are top three reasons
00:02:02.08\00:02:05.05
for crisis and stress
in life are threefold.
00:02:05.09\00:02:09.29
We're talking
about work environment,
00:02:09.32\00:02:11.19
that's number two.
00:02:11.23\00:02:12.56
The number three reason is
00:02:12.59\00:02:15.00
the issue of
personal relationships.
00:02:15.03\00:02:17.40
And then of course,
00:02:17.43\00:02:18.77
the number one reason for stress
00:02:18.80\00:02:20.14
that we're
dealing with are finances.
00:02:20.17\00:02:23.84
And it's interesting
as you read the story
00:02:23.87\00:02:26.11
and watch what's going on
00:02:26.14\00:02:27.48
because they
actually give a short video,
00:02:27.51\00:02:29.98
is they talk about
what they're dealing with,
00:02:30.01\00:02:32.15
and a lot of what
they're dealing with,
00:02:32.18\00:02:33.88
or a lot of what all
of us are dealing with.
00:02:33.92\00:02:36.42
Today we're gonna talk about
00:02:36.45\00:02:38.62
one of the major reasons
00:02:38.65\00:02:40.42
for financial crisis
is the loss of income.
00:02:40.46\00:02:42.96
We've talked
about loss of income,
00:02:42.99\00:02:44.59
but we are also gonna address it
00:02:44.63\00:02:46.83
from the standpoint
of business failure.
00:02:46.86\00:02:49.46
We each are
small business owners,
00:02:49.50\00:02:51.70
because each of us as
entities as individuals
00:02:51.73\00:02:55.57
bring in a
certain amount of revenue,
00:02:55.60\00:02:57.44
and each one of us
00:02:57.47\00:02:59.17
pay a certain
amount of expenses.
00:02:59.21\00:03:00.98
Corporations do
that, businesses do that,
00:03:01.01\00:03:03.38
and it's essential that
you understand the context
00:03:03.41\00:03:05.45
that what you're
doing for your family is
00:03:05.48\00:03:07.75
just as important
00:03:07.78\00:03:09.12
at what a business is
doing for his clients.
00:03:09.15\00:03:11.29
A well run business
00:03:11.32\00:03:13.76
can be seen from a far
based on how they do business,
00:03:13.79\00:03:17.66
and when you see
someone in business
00:03:17.69\00:03:19.96
for 50 years, 75
years and 100 years
00:03:20.00\00:03:24.03
and they're doing very well
00:03:24.07\00:03:25.80
and they're
transitioning their business
00:03:25.83\00:03:27.24
to different generations,
00:03:27.27\00:03:29.24
you can begin to understand
00:03:29.27\00:03:30.61
that they have the
nuts and bolts in place.
00:03:30.64\00:03:34.08
But as we see
the stories unfold,
00:03:34.11\00:03:35.88
we find that the nuts
and bolts are not in place
00:03:35.91\00:03:38.81
for personal families
00:03:38.85\00:03:40.92
that are
dealing with this issue.
00:03:40.95\00:03:42.72
So they go through
the foreclosure crisis,
00:03:42.75\00:03:45.35
that you see that
homes are underwater,
00:03:45.39\00:03:47.76
mortgage issues become a concern
00:03:47.79\00:03:49.96
and many people are paying
$2,100 plus on their mortgages,
00:03:49.99\00:03:54.70
those things that
have ramped up in interest,
00:03:54.73\00:03:56.60
those that couldn't afford
00:03:56.63\00:03:57.97
or couldn't get
their mortgages modified,
00:03:58.00\00:04:00.60
and they're dealing
with those expenses,
00:04:00.64\00:04:02.30
they're dealing with the
ongoing expenses of cars,
00:04:02.34\00:04:05.87
debt, food, and other elements.
00:04:05.91\00:04:10.15
It was
interesting, really riveting
00:04:10.18\00:04:12.31
when I read the story,
00:04:12.35\00:04:13.68
that one of these
families would tell you that,
00:04:13.72\00:04:16.72
our budget accounts
for what we bring in
00:04:16.75\00:04:20.96
and basically
00:04:20.99\00:04:22.92
the major expenses of the house.
00:04:22.96\00:04:25.19
That is not a complete budget,
00:04:25.23\00:04:27.10
because their budget
didn't incorporate food,
00:04:27.13\00:04:30.47
and water, and clothing,
and the necessities of life,
00:04:30.50\00:04:34.67
that should be an
integral part of your budget.
00:04:34.70\00:04:38.87
That should be
what you start out with,
00:04:38.91\00:04:40.61
the needs, the wants,
00:04:40.64\00:04:42.24
and those things
you can do without
00:04:42.28\00:04:43.61
or those things
you can work with
00:04:43.65\00:04:45.31
in lowering the actual expenses
00:04:45.35\00:04:48.52
is something that
should be considered secondary.
00:04:48.55\00:04:51.79
So when you see
little mistakes like that,
00:04:51.82\00:04:54.86
the major thing you
should do is address,
00:04:54.89\00:04:57.16
assess your debt,
assess where you're at,
00:04:57.19\00:04:59.03
immediately do so,
00:04:59.06\00:05:00.56
and then begin the
process of creating that budget.
00:05:00.60\00:05:03.13
And the budget is gonna be
00:05:03.16\00:05:04.50
the essential part of
getting you back in line,
00:05:04.53\00:05:06.03
because once you
know where you are at,
00:05:06.07\00:05:08.67
you can develop the
road map to success.
00:05:08.70\00:05:11.77
Now what I'd like to do
00:05:11.81\00:05:13.58
in this case is take
you to some of the questions
00:05:13.61\00:05:16.41
we ask to some
of our, the viewers
00:05:16.44\00:05:18.65
that we had at Venice Beach
00:05:18.68\00:05:20.32
and see what they see
as the top three reasons
00:05:20.35\00:05:24.02
for financial crisis.
00:05:24.05\00:05:25.55
If we could, let's go to video.
00:05:25.59\00:05:27.72
Well, most of the times
00:05:27.76\00:05:29.19
I probably would go to
my girl or my music pastor,
00:05:29.22\00:05:32.99
he's kind of
like a mentor I have,
00:05:33.03\00:05:34.86
music minister of one
church I used to go to,
00:05:34.90\00:05:37.27
me and my fiance usually.
00:05:37.30\00:05:40.84
When you consider
a stressful situation
00:05:40.87\00:05:43.41
or a crisis,
00:05:43.44\00:05:44.77
what or who do
you go to for advice?
00:05:44.81\00:05:47.21
I tend to go to
my friends and family
00:05:47.24\00:05:49.54
depending on
what the situation is.
00:05:49.58\00:05:55.18
Stressful situation or crisis,
who do you go to for advice?
00:05:55.22\00:05:58.62
God.
00:05:58.65\00:06:00.19
God and to myself.
00:06:00.22\00:06:01.56
You see the many
different responses
00:06:06.53\00:06:08.16
that people give in reference
to who they go to for advice,
00:06:08.20\00:06:11.27
going to people for advice.
00:06:11.30\00:06:12.87
And again I bring up this issue
00:06:12.90\00:06:14.70
and I see that very
clearly is don't go to a baker
00:06:14.74\00:06:19.51
if you need to build a building,
00:06:19.54\00:06:21.24
you need to build a
building by with someone
00:06:21.28\00:06:24.21
that understands,
00:06:24.25\00:06:25.58
not only an engineer
to put together the plans,
00:06:25.61\00:06:27.98
but someone who knows how
to construct the building.
00:06:28.02\00:06:31.02
And that is key to understanding
00:06:31.05\00:06:32.92
how we work this
issue called the...
00:06:32.95\00:06:37.63
One of the major
reasons for financial crisis is
00:06:37.66\00:06:40.56
business failure.
00:06:40.60\00:06:41.93
And that's what
we'll talk about today,
00:06:41.96\00:06:43.83
business failure.
00:06:43.87\00:06:45.83
When you're going into business,
00:06:45.87\00:06:47.20
there are several
decisions that you have to make.
00:06:47.24\00:06:48.84
I'm sure that when
you think about it,
00:06:48.87\00:06:51.27
what is the
simplest way to do things,
00:06:51.31\00:06:52.94
but one of the biggest problems
00:06:52.97\00:06:54.88
that people tend to
not concern themselves with
00:06:54.91\00:06:58.91
is the taxation issue.
00:06:58.95\00:07:01.58
Are we prepared to pay
taxes on a quarterly basis,
00:07:01.62\00:07:05.32
based on how much
money we bring in?
00:07:05.35\00:07:07.09
Are we prepared to be
organized in what we do,
00:07:07.12\00:07:10.66
so that we are able
to handle these things?
00:07:10.69\00:07:12.69
And you begin to see
00:07:12.73\00:07:14.06
some qualities or
attributes of those
00:07:14.10\00:07:18.30
that go into business failure.
00:07:18.33\00:07:20.34
And then we're gonna talk a
little bit about some things
00:07:20.37\00:07:23.00
that you can do to
mitigate any problems
00:07:23.04\00:07:25.71
within a business
00:07:25.74\00:07:27.14
that you might
want to begin with.
00:07:27.18\00:07:28.64
Now, developing a
business plan is key.
00:07:28.68\00:07:31.75
You can't just
come up with an idea
00:07:31.78\00:07:33.11
and think let's try it,
00:07:33.15\00:07:34.48
because there's several elements
00:07:34.52\00:07:35.85
that need to go on.
00:07:35.88\00:07:37.22
Would you go to Alaska
00:07:37.25\00:07:38.59
and try to sell ice
to Eskimos as a business?
00:07:38.62\00:07:40.89
Would that work?
00:07:40.92\00:07:42.56
I don't know.
00:07:42.59\00:07:43.93
Maybe if you're
great salesperson,
00:07:43.96\00:07:45.29
you could make
millions of dollars doing that.
00:07:45.33\00:07:46.76
But in most settings, ice
is already prevalent there.
00:07:46.80\00:07:50.50
There's an issue called
law of supply and demand.
00:07:50.53\00:07:54.07
There's a lot
of supply up there,
00:07:54.10\00:07:55.94
so there's
probably no demand for ice.
00:07:55.97\00:07:58.51
Thinking about these issues
creates an environment for you
00:07:58.54\00:08:03.04
to begin the
process of conceptualizing
00:08:03.08\00:08:05.71
and discussing strategy
00:08:05.75\00:08:07.08
with what type of
business you want to go into.
00:08:07.12\00:08:09.45
Are you planning to bake pies
00:08:09.48\00:08:12.22
and try to sell
these pies online
00:08:12.25\00:08:15.42
and deliver these pies
00:08:15.46\00:08:16.79
to those people in
a specific geography?
00:08:16.83\00:08:19.19
Can these pies
be frozen and mailed
00:08:19.23\00:08:21.66
and sent a long distance?
00:08:21.70\00:08:24.53
How do you plan to get
that strategic advantage?
00:08:24.57\00:08:28.57
That little advantage
above your competitors
00:08:28.60\00:08:31.17
and be able to
increase market share.
00:08:31.21\00:08:33.48
So what I thought I
would do for you today is
00:08:33.51\00:08:35.61
talk to you a little bit about
00:08:35.64\00:08:37.35
the top ten reasons
for business failure,
00:08:37.38\00:08:41.35
and then we'll talk a
little bit about them.
00:08:41.38\00:08:43.39
All right.
00:08:43.42\00:08:44.75
So you plan to go into business,
00:08:44.79\00:08:46.12
and one of the big things
00:08:46.15\00:08:48.96
that happens as the business
00:08:48.99\00:08:50.63
goes out of
business relatively soon.
00:08:50.66\00:08:52.96
Number one, take a look at
00:08:52.99\00:08:54.80
where you
incorporate your business at?
00:08:54.83\00:08:56.16
Where do you live?
00:08:56.20\00:08:57.53
What are the challenges
00:08:57.57\00:08:58.90
incorporated with that business?
00:08:58.93\00:09:00.27
Did you know that
00:09:00.30\00:09:01.94
the state with the highest
risk for business failure,
00:09:01.97\00:09:06.07
you know what that state is?
00:09:06.11\00:09:08.24
California.
00:09:08.28\00:09:09.74
California has a high likelihood
00:09:09.78\00:09:12.91
of business failure,
00:09:12.95\00:09:14.28
if you are not prepared
00:09:14.32\00:09:15.72
for what business
you're going into.
00:09:15.75\00:09:18.35
Now I say this for a reason
00:09:18.39\00:09:19.82
because many of
us have a great idea
00:09:19.85\00:09:22.09
and those ideas can work,
you as a work in progress,
00:09:22.12\00:09:27.10
you in the inner
cities of this country,
00:09:27.13\00:09:30.73
and those of that you
have challenges and demands
00:09:30.77\00:09:33.17
upon you in reference
to family and livelihood.
00:09:33.20\00:09:35.74
If you take a
moment and go to some place
00:09:35.77\00:09:38.07
that has a computer,
access to the internet,
00:09:38.11\00:09:41.48
if you don't have it at home.
00:09:41.51\00:09:43.08
Go to a library,
00:09:43.11\00:09:44.45
a public
library will provide you
00:09:44.48\00:09:45.91
access to that type of resource,
00:09:45.95\00:09:47.78
and you can begin the
process of developing an idea,
00:09:47.82\00:09:51.89
a business plan, a
concept of what you want to do.
00:09:51.92\00:09:54.72
Many people that
go out of business
00:09:54.76\00:09:57.86
tend to blame everyone
around them except themselves.
00:09:57.89\00:10:01.43
And a lot of things you can do
to prevent this from happening.
00:10:01.46\00:10:05.33
So I would ask you to
not blame the government,
00:10:05.37\00:10:09.77
not blame your
partner, don't blame the bank,
00:10:09.80\00:10:13.14
but take a look
inwardly and try to prevent
00:10:13.17\00:10:15.74
all of those
things from happening,
00:10:15.78\00:10:18.41
and or going wrong.
00:10:18.45\00:10:20.12
Top ten reasons.
00:10:20.15\00:10:22.08
Number one, the
math just doesn't work.
00:10:22.12\00:10:26.19
There is not
enough demand for product
00:10:26.22\00:10:29.06
or service at a price
00:10:29.09\00:10:31.09
that would generate
profit for an organization.
00:10:31.13\00:10:35.00
Pricing is key.
00:10:35.03\00:10:37.63
Is demand there?
00:10:37.67\00:10:39.47
Do you have the buzz
00:10:39.50\00:10:41.30
that's out there in the internet
00:10:41.34\00:10:43.00
to create that demand?
00:10:43.04\00:10:44.74
Did you know that if
you get one great interview
00:10:44.77\00:10:47.04
on a national
syndicated television show,
00:10:47.08\00:10:49.88
it's gonna knock
you out of the ballpark.
00:10:49.91\00:10:51.55
Then it creates a
whole different problem.
00:10:51.58\00:10:53.05
What's that?
00:10:53.08\00:10:54.42
Demand, people are gonna
start calling you off the hook
00:10:54.45\00:10:56.79
for what you have.
00:10:56.82\00:10:58.15
If you have an online business,
00:10:58.19\00:10:59.69
you're gonna see
hits to your website,
00:10:59.72\00:11:01.66
and visits to your
website, ramp up very quickly,
00:11:01.69\00:11:04.93
and I always go
back to that commercial.
00:11:04.96\00:11:06.66
Do you remember that commercial
00:11:06.70\00:11:08.03
where a business
gets started online
00:11:08.06\00:11:09.96
and then you see
the first sale come in
00:11:10.00\00:11:12.23
and then the
second sale comes in,
00:11:12.27\00:11:13.97
and then you see it
starting rattling off ways.
00:11:14.00\00:11:15.90
People come into the business
in order what they have,
00:11:15.94\00:11:19.01
but guess what?
00:11:19.04\00:11:20.38
They are not prepared
to deliver on that volume.
00:11:20.41\00:11:24.01
So you have a product,
00:11:24.05\00:11:26.51
you either don't have
demand for that product,
00:11:26.55\00:11:28.82
and there is that challenge.
00:11:28.85\00:11:30.25
Or you have a product
00:11:30.29\00:11:31.62
and there's a
high level of demand
00:11:31.65\00:11:33.36
for that product.
00:11:33.39\00:11:34.79
Law of supply and
demand tells you that
00:11:34.82\00:11:37.03
if there is not a lot
of demand for the product,
00:11:37.06\00:11:40.03
you might want
to reduce the price
00:11:40.06\00:11:41.83
and find some way to
introduce it to the market,
00:11:41.86\00:11:44.70
and then of course,
00:11:44.73\00:11:46.07
increase the
price as demand goes up.
00:11:46.10\00:11:48.14
If there's a whole lot
of demand for a product
00:11:48.17\00:11:50.77
that's out there,
00:11:50.81\00:11:52.14
you might look at increasing
the price a little bit
00:11:52.17\00:11:55.41
so that it would trigger
down much of that demand,
00:11:55.44\00:11:57.65
so you can
manage some of the sales
00:11:57.68\00:11:59.81
that may come in.
00:11:59.85\00:12:01.18
Little ideas that are out there,
00:12:01.22\00:12:02.55
but the number one issue
is that math doesn't work out.
00:12:02.58\00:12:04.65
I don't understand
how to price my product,
00:12:04.69\00:12:07.32
and don't know how to
get my product in demand
00:12:07.36\00:12:09.76
in the marketplace,
00:12:09.79\00:12:11.13
and so it doesn't work out.
00:12:11.16\00:12:12.49
This example for
example would include a startup,
00:12:12.53\00:12:14.86
trying to compete
against a large organization,
00:12:14.90\00:12:18.50
that's already
established himself,
00:12:18.53\00:12:21.10
and then looking at
its economies of scale.
00:12:21.14\00:12:23.20
Number two.
00:12:23.24\00:12:25.04
Owners who cannot
get out of their own way.
00:12:25.07\00:12:27.84
There are people that
want to please everyone,
00:12:27.88\00:12:29.71
there are people
that are risk averse,
00:12:29.74\00:12:31.15
there are people that
are hard to deal with,
00:12:31.18\00:12:33.11
there are those
that are conflict averse,
00:12:33.15\00:12:35.92
there are those
that are perfectionists,
00:12:35.95\00:12:37.55
there are those that are greedy,
00:12:37.59\00:12:38.92
there are those
that are paranoid,
00:12:38.95\00:12:40.29
there are those
that are insecure,
00:12:40.32\00:12:41.66
there are those
that are indignant,
00:12:41.69\00:12:43.02
and you get the idea.
00:12:43.06\00:12:44.93
Sometimes you can tell that
00:12:44.96\00:12:46.90
these owners will have problems,
00:12:46.93\00:12:48.86
they'll recognize
that you may be right
00:12:48.90\00:12:51.60
if you are able to
talk to them about it,
00:12:51.63\00:12:53.64
but those are things
that you need to be aware of
00:12:53.67\00:12:56.40
and don't prevent
success from happening.
00:12:56.44\00:12:58.87
You have owners,
00:12:58.91\00:13:00.24
and I've known some
that want to know everything
00:13:00.28\00:13:03.78
about everything
in the organization
00:13:03.81\00:13:06.45
and there's no way for you
00:13:06.48\00:13:07.88
to be able to run an
organization in a meticulous
00:13:07.92\00:13:10.82
and successful way
00:13:10.85\00:13:12.19
unless you are able to delegate
00:13:12.22\00:13:14.26
and trust those
that you delegate to,
00:13:14.29\00:13:16.36
to get the job done.
00:13:16.39\00:13:17.73
Managing is
something that's important
00:13:17.76\00:13:20.93
and people don't understand
00:13:20.96\00:13:22.60
what a successful
manager is all about.
00:13:22.63\00:13:24.27
Motivating
people to do something,
00:13:24.30\00:13:27.10
to accomplish something
without having to be personally
00:13:27.14\00:13:30.31
involved in the process.
00:13:30.34\00:13:32.64
Number three.
00:13:32.67\00:13:34.04
Out of control
growth, I hand it to that.
00:13:34.08\00:13:37.45
That one of the
saddest reasons for failure
00:13:37.48\00:13:40.38
is a successful business
00:13:40.42\00:13:42.28
that is ruined by overexpansion
00:13:42.32\00:13:44.75
or too much
demand for the product
00:13:44.79\00:13:46.89
of which they are
making more upset customers
00:13:46.92\00:13:49.89
because they can't deliver
on what they say they can do.
00:13:49.92\00:13:54.26
This includes
moving into markets
00:13:54.30\00:13:56.36
that are not as profitable,
00:13:56.40\00:13:58.27
so the same issue
of moving to Alaska
00:13:58.30\00:14:01.34
and jumping into
the ice business.
00:14:01.37\00:14:04.01
Experiencing growing
pains that damage the business,
00:14:04.04\00:14:06.74
and of course
borrowing too much money
00:14:06.78\00:14:09.34
in an attempt to keep
growth at a particular rate.
00:14:09.38\00:14:11.85
It's interesting as you
look at some of the stories
00:14:11.88\00:14:13.58
we see online,
00:14:13.62\00:14:15.35
and see some of the consumption
00:14:15.38\00:14:17.25
that happens is people
tend to try to do too much.
00:14:17.29\00:14:21.19
We go back to the verse in Luke.
00:14:21.22\00:14:23.36
What does that verse say?
00:14:23.39\00:14:24.73
"That take care against greed
00:14:24.76\00:14:26.53
because one's life
doesn't consist of the abundance
00:14:26.56\00:14:30.63
of what they have."
00:14:30.67\00:14:32.00
Luke 12 tells us clearly
that we need to watch our greed,
00:14:32.03\00:14:36.81
and many of us try
to jump into something
00:14:36.84\00:14:38.67
because we get too greedy,
00:14:38.71\00:14:40.08
and we lose sight of
the whole overall objective.
00:14:40.11\00:14:43.24
One of the key things
that I see as an example is
00:14:43.28\00:14:45.91
many people
nowadays are thinking
00:14:45.95\00:14:49.22
that they can
jump into something
00:14:49.25\00:14:50.79
and immediately be successful.
00:14:50.82\00:14:52.62
You see it in
the music industry,
00:14:52.65\00:14:54.42
you see it in so many
different parts of our society,
00:14:54.46\00:14:56.89
and people are willing to do
00:14:56.93\00:14:58.26
whatever they
can to be successful.
00:14:58.29\00:15:01.20
And they're
willing to spend money
00:15:01.23\00:15:02.76
that they don't even have
00:15:02.80\00:15:04.17
to get that
immediate gratification
00:15:04.20\00:15:05.90
for something.
00:15:05.93\00:15:07.27
What has happened to
the process of working
00:15:07.30\00:15:09.37
toward something,
00:15:09.40\00:15:10.84
saving for something,
00:15:10.87\00:15:12.21
and preparing for
something over the long term,
00:15:12.24\00:15:14.74
so that when you
establish yourself,
00:15:14.78\00:15:16.28
you can be successful.
00:15:16.31\00:15:17.65
Look at
successful business owners,
00:15:17.68\00:15:19.35
look at successful
nonprofit business owners,
00:15:19.38\00:15:21.88
because nonprofits
are a whole other beast.
00:15:21.92\00:15:25.55
When you think about it,
00:15:25.59\00:15:27.16
nonprofits have to rely
on donations that come in,
00:15:27.19\00:15:31.46
so they have the source of funds
00:15:31.49\00:15:34.00
that come in and
the use of funds,
00:15:34.03\00:15:35.96
and those things have to balance
00:15:36.00\00:15:37.77
at the end of the year
00:15:37.80\00:15:39.13
as they report
back to their board
00:15:39.17\00:15:41.00
and to their constituents
that provide donations.
00:15:41.04\00:15:43.57
What type of
business are you doing?
00:15:43.61\00:15:45.47
How are you
relating to the business?
00:15:45.51\00:15:47.28
And how are you planning to
grow the business to a place
00:15:47.31\00:15:50.85
that it can become successful,
00:15:50.88\00:15:53.35
and where your clients
and your donors can trust
00:15:53.38\00:15:57.09
in your ability
to get things done.
00:15:57.12\00:16:00.02
Okay, number four.
00:16:00.06\00:16:01.62
Poor accounting.
00:16:01.66\00:16:04.36
One of the things
I always recommend is
00:16:04.39\00:16:06.66
when you're talking about
getting into a small business
00:16:06.70\00:16:08.33
or doing
something on your own is
00:16:08.36\00:16:10.13
go into your
local business office,
00:16:10.17\00:16:14.87
administration office.
00:16:14.90\00:16:16.24
There is the EDD that
can point you to score,
00:16:16.27\00:16:19.27
and there are many
different organizations
00:16:19.31\00:16:21.08
that are out there that
can provide you resources.
00:16:21.11\00:16:24.15
And some of those resources
00:16:24.18\00:16:25.51
include training in
quick books or quicken
00:16:25.55\00:16:28.52
where you're able to have
a transaction in the business
00:16:28.55\00:16:31.65
and you report that transaction.
00:16:31.69\00:16:33.15
You have revenue coming in,
you have expenses going out,
00:16:33.19\00:16:35.89
and you track what is happening
from a business standpoint.
00:16:35.92\00:16:38.89
There are several
things that provides.
00:16:38.93\00:16:41.73
One which we always
talk about is it provides you
00:16:41.76\00:16:45.43
an opportunity to see
00:16:45.47\00:16:46.80
where your money is coming from,
00:16:46.84\00:16:48.27
get a snapshot of
where your money is going
00:16:48.30\00:16:50.64
and track where that is
00:16:50.67\00:16:52.37
because what does that give you?
00:16:52.41\00:16:55.28
It gives you the
ability to budget,
00:16:55.31\00:16:57.71
because I know where
the money is coming from,
00:16:57.75\00:17:00.45
I know where the money is going.
00:17:00.48\00:17:02.48
I can take a look at
these things on an ongoing basis
00:17:02.52\00:17:05.45
and ramp things
down that I don't need,
00:17:05.49\00:17:07.66
ramp things up in
an area that I do need.
00:17:07.69\00:17:09.69
If I'm spending too much here,
00:17:09.72\00:17:11.06
maybe I can take a
little of money out of this area
00:17:11.09\00:17:14.56
and put it into another
area, such as advertising.
00:17:14.60\00:17:17.83
Maybe need to ramp
up a little advertising
00:17:17.87\00:17:19.57
and make more people aware
of a product that I do have.
00:17:19.60\00:17:22.80
So poor accounting is key
00:17:22.84\00:17:24.97
to making for a
disastrous business plan.
00:17:25.01\00:17:27.81
If you have a plan,
if you have assessed
00:17:27.84\00:17:30.88
where you are at and now
you have a budget in place,
00:17:30.91\00:17:35.08
that budget can tell you
00:17:35.12\00:17:36.69
how much you can
spend in a specific area
00:17:36.72\00:17:39.75
and not exceed that
area for at year end
00:17:39.79\00:17:42.26
everything to be in balance.
00:17:42.29\00:17:47.00
Lack of a cash cushion.
00:17:47.03\00:17:49.70
Jumping into something
without having a savings
00:17:49.73\00:17:53.70
or having a cushion
00:17:53.74\00:17:55.07
that you can drop back
on in cases of emergency.
00:17:55.10\00:17:58.44
If we've learned anything
from this previous recession,
00:17:58.47\00:18:01.74
and for some people it's over,
for some people it's not over.
00:18:01.78\00:18:05.01
The business
cycle always happens,
00:18:05.05\00:18:06.92
you see in the
automotive industry,
00:18:06.95\00:18:08.45
you see it in many
different other industries
00:18:08.48\00:18:10.69
that are out there,
that there is a cycle,
00:18:10.72\00:18:12.52
the business where you
have challenging times,
00:18:12.55\00:18:15.82
where you have to
tap into your resources,
00:18:15.86\00:18:18.23
and you have the great times.
00:18:18.26\00:18:19.59
And the good
companies what they do is
00:18:19.63\00:18:22.00
they allocates a portion
of those revenues into a fund
00:18:22.03\00:18:26.20
that prepares for
those type of emergencies.
00:18:26.23\00:18:29.10
I had a conversation
00:18:29.14\00:18:30.47
with a vice
president of an organization
00:18:30.51\00:18:33.27
in the San Diego area,
00:18:33.31\00:18:36.04
and she was
able to paint for me,
00:18:36.08\00:18:37.41
that even though
this organization
00:18:37.45\00:18:38.78
may have revenues
of $18 million a year
00:18:38.81\00:18:42.05
and they have
expenditures of course,
00:18:42.08\00:18:44.55
sources and uses of
funds of upwards of that
00:18:44.59\00:18:46.79
same $18 million a year.
00:18:46.82\00:18:48.59
What they have chosen to do
00:18:48.62\00:18:49.96
as a part of
their budgetary process
00:18:49.99\00:18:51.93
is to allocate
certain portions of funds
00:18:51.96\00:18:54.06
into an area that can help
00:18:54.10\00:18:56.56
provide assistance in case
of a certain type of emergency.
00:18:56.60\00:19:01.14
These are key
things to be aware of.
00:19:01.17\00:19:04.07
Simple but we never
think about the fact
00:19:04.11\00:19:07.61
that we're gonna
run some emergencies.
00:19:07.64\00:19:09.31
And all you have
to do is go online
00:19:09.34\00:19:11.01
and see these
stories of individuals
00:19:11.05\00:19:13.21
that have run
into the same crisis.
00:19:13.25\00:19:15.82
I remember this one
story of a gentleman
00:19:15.85\00:19:18.52
that had everything.
00:19:18.55\00:19:20.32
I mean, his
children remember growing up,
00:19:20.36\00:19:22.62
they had all they
wanted, wealthy, had a job
00:19:22.66\00:19:24.96
that paid him a lot
of money, and of course,
00:19:24.99\00:19:27.33
he was able to
pay off their home,
00:19:27.36\00:19:29.20
and they were
able to buy a condo,
00:19:29.23\00:19:30.57
and they do what
they wanted to do in life.
00:19:30.60\00:19:32.53
And then of course,
the children grew up,
00:19:32.57\00:19:34.90
children left home,
00:19:34.94\00:19:36.27
and mom and dad
are planning to retire
00:19:36.30\00:19:39.71
and enjoy their retirement
on a beach somewhere in Tahiti
00:19:39.74\00:19:43.98
and nothing can go wrong,
00:19:44.01\00:19:45.75
except they didn't
plan for the stroke.
00:19:45.78\00:19:50.15
And then the stroke happens
and then emergency funds,
00:19:50.19\00:19:53.46
we talk about this.
00:19:53.49\00:19:55.22
What are some of the top issues
that cause financial crisis?
00:19:55.26\00:19:59.49
Health related is a
number four on the list
00:19:59.53\00:20:02.60
after that cause
stress on the list.
00:20:02.63\00:20:06.40
So you take a look at that
00:20:06.43\00:20:07.87
and it wiped out
all of his savings,
00:20:07.90\00:20:09.60
that wiped out
all of his earnings,
00:20:09.64\00:20:11.34
he had to go back in
debt to start paying off,
00:20:11.37\00:20:14.24
and he actually started working
earlier than he was supposed to
00:20:14.28\00:20:18.28
because he felt so obligating
00:20:18.31\00:20:19.91
and helping to pay
off this major debt
00:20:19.95\00:20:22.65
that had come up in
reference to his health
00:20:22.68\00:20:26.02
and the stroke that happened.
00:20:26.05\00:20:27.39
So that I think is essential.
00:20:27.42\00:20:30.13
Preparing for the
emergencies is key.
00:20:30.16\00:20:32.66
That is number five.
00:20:32.69\00:20:34.86
Operational mediocrity.
00:20:34.90\00:20:37.97
One thing the Bible tells us
00:20:38.00\00:20:40.27
is to be as good
as you possibly can,
00:20:40.30\00:20:43.71
to give your best effort.
00:20:43.74\00:20:45.77
And that comes out
in the story of talents.
00:20:45.81\00:20:48.54
How those that got five
00:20:48.58\00:20:51.31
and that got two
doubled the talents,
00:20:51.35\00:20:54.22
they worked at
something and did their best.
00:20:54.25\00:20:58.45
Whatever you cut
yourself out to do,
00:20:58.49\00:21:00.56
whatever business
you want to go after,
00:21:00.59\00:21:04.43
whether or not be your own
personal business and finance,
00:21:04.46\00:21:07.80
or your own personal things
00:21:07.83\00:21:09.63
that you're doing or
opening up a business
00:21:09.66\00:21:12.80
with partners and friends,
00:21:12.83\00:21:14.54
the key is doing it
the best that you can.
00:21:14.57\00:21:18.91
I go to the thing
that Rodney told me,
00:21:18.94\00:21:21.24
and Rodney said,
00:21:21.28\00:21:22.71
"Hey, if you're
looking to do something,
00:21:22.74\00:21:25.65
go to the expert and do the best
00:21:25.68\00:21:27.75
that you possibly can.
00:21:27.78\00:21:29.12
Don't get into
something you're not aware of,
00:21:29.15\00:21:31.12
so study the industry,
00:21:31.15\00:21:32.69
study what's going on
00:21:32.72\00:21:34.26
and study what you
can do to make it best.
00:21:34.29\00:21:37.13
Don't go into
something just to try it,
00:21:37.16\00:21:39.83
not give it your all
but put a lot into it."
00:21:39.86\00:21:43.40
As a personal business
owner, I would tell you this,
00:21:43.43\00:21:47.44
that it takes a lot of work,
it does not happen overnight.
00:21:47.47\00:21:52.27
There are struggles,
00:21:52.31\00:21:53.68
you have to struggle
with many different elements,
00:21:53.71\00:21:55.88
the grant writing,
whatever part of the process
00:21:55.91\00:22:01.02
that you deal with,
00:22:01.05\00:22:02.38
you must make sure
that you're working as hard
00:22:02.42\00:22:04.05
as you can day and day out
00:22:04.09\00:22:06.12
to ensure that you're
meeting your objectives
00:22:06.15\00:22:08.19
and making sure
that your revenues
00:22:08.22\00:22:09.96
come in to meet your budget.
00:22:09.99\00:22:13.13
Dysfunctional management
is a number eight reason.
00:22:13.16\00:22:17.53
Operational inefficiencies,
paying too much for rent,
00:22:17.57\00:22:20.84
paying too much for labor,
paying too much for materials.
00:22:20.87\00:22:25.04
Lien companies
are at an advantage,
00:22:25.07\00:22:26.88
so if you're planning to
compete with some companies
00:22:26.91\00:22:29.44
that are doing the best
they can in those areas,
00:22:29.48\00:22:32.05
it's best that you
start from the beginning.
00:22:32.08\00:22:35.45
Assess where you're at,
00:22:35.48\00:22:37.59
look at where you want to go
00:22:37.62\00:22:39.49
and create the budget.
00:22:39.52\00:22:41.02
When you have the budget,
00:22:41.06\00:22:42.39
then you will
know almost immediately
00:22:42.42\00:22:44.59
on a monthly basis that,
00:22:44.63\00:22:46.36
hey, we spent too
much on rent this month.
00:22:46.39\00:22:48.83
Hey, we're
overreaching our labor budget.
00:22:48.86\00:22:52.20
Hey, did we spend
something on materials
00:22:52.23\00:22:55.47
that we weren't
supposed to spend money on?
00:22:55.50\00:22:57.37
Did you know that's
one of the top scams
00:22:57.41\00:22:59.04
that are out there
for businesses right now?
00:22:59.07\00:23:00.84
That I'm gonna take a moment
00:23:00.88\00:23:02.21
and just take a little
side bar at this point of time.
00:23:02.24\00:23:05.81
There are businesses or
scams that are out there
00:23:05.85\00:23:08.52
to take your business
out of the competition.
00:23:08.55\00:23:13.25
You can create websites
that marry your own business,
00:23:13.29\00:23:16.83
you can do that.
00:23:16.86\00:23:18.19
You can create those websites
00:23:18.23\00:23:19.56
and even though you can deliver,
00:23:19.59\00:23:21.26
what it does it
creates a negative mark
00:23:21.30\00:23:23.83
on your business
00:23:23.87\00:23:25.20
because people
replicate your business,
00:23:25.23\00:23:27.04
put a site up on the web,
00:23:27.07\00:23:29.30
and who's going to control that.
00:23:29.34\00:23:31.34
You need to be aware of
so many different things
00:23:31.37\00:23:33.81
in this internet and
technology environment
00:23:33.84\00:23:35.98
that we live in.
00:23:36.01\00:23:37.35
And one of the things
that is very clear is ensuring
00:23:37.38\00:23:40.25
that you can take a look
00:23:40.28\00:23:42.58
at what efficiencies
of scale that you have.
00:23:42.62\00:23:45.09
Budget for what
you want to accomplish
00:23:45.12\00:23:48.46
and ensure that you follow that,
00:23:48.49\00:23:49.82
because that can help you
00:23:49.86\00:23:51.66
get rid of those
operational inefficiencies
00:23:51.69\00:23:54.33
that you may have.
00:23:54.36\00:23:56.67
Dysfunctional
management is another area
00:23:56.70\00:23:59.80
where people
aren't working together
00:23:59.83\00:24:02.57
in a cohesive way.
00:24:02.60\00:24:04.17
They lack to the same
vision, they're not planning,
00:24:04.21\00:24:07.18
their standards are different.
00:24:07.21\00:24:08.81
So you can see the
problems that can exist
00:24:08.84\00:24:14.02
when you have partners
that are fighting each other
00:24:14.05\00:24:16.02
and it creates more
of a stress than any type
00:24:16.05\00:24:18.79
that can help anything,
00:24:18.82\00:24:20.16
and that's one of
the other major reasons
00:24:20.19\00:24:21.82
for business failure.
00:24:21.86\00:24:23.46
Lack of succession planning
is another major concern,
00:24:23.49\00:24:26.83
where I told that many
people have, there's nepotism,
00:24:26.86\00:24:30.30
there are power struggles,
00:24:30.33\00:24:31.67
there're all
these type of things
00:24:31.70\00:24:33.03
with significant players
00:24:33.07\00:24:34.40
that get in over their heads.
00:24:34.44\00:24:36.77
And then don't take the
time to plan on what happens
00:24:36.81\00:24:39.64
if something negative happens
00:24:39.67\00:24:41.91
to one of those
partners in the organization.
00:24:41.94\00:24:44.61
And then of course, take a look
at deciding to open a business
00:24:44.65\00:24:50.32
that's not in a
declining market.
00:24:50.35\00:24:53.59
What am I talking about?
00:24:53.62\00:24:54.96
Well, let's
talk, I have an iPad.
00:24:54.99\00:24:58.69
Do you think it's competing
00:24:58.73\00:25:00.46
against the
bookstores right now?
00:25:00.50\00:25:02.50
Because I have, a Kindle
00:25:02.53\00:25:03.90
has all the books
on it that I'd like.
00:25:03.93\00:25:05.67
Do you think
that there's a decline
00:25:05.70\00:25:07.60
in the actual acquisition
of actual physical books?
00:25:07.64\00:25:10.71
What do you think is
gonna happen at college campuses
00:25:10.74\00:25:12.97
when they can have all
their books on a tablet
00:25:13.01\00:25:15.84
as opposed to have to pick up
00:25:15.88\00:25:17.21
50 pounds of
books every quarter.
00:25:17.25\00:25:19.21
There are these things
that you should be aware of.
00:25:19.25\00:25:21.18
What about music stores?
00:25:21.22\00:25:23.18
Digital downloads
now is a big issue
00:25:23.22\00:25:25.72
as people are
discussing those concerns.
00:25:25.75\00:25:28.46
Printing business for
example is another area
00:25:28.49\00:25:31.39
that you should
be concerned about.
00:25:31.43\00:25:32.76
And changes in technology
00:25:32.79\00:25:34.83
that can inhibit
your ability to grow.
00:25:34.86\00:25:38.10
All of these are concerns
00:25:38.13\00:25:40.44
that you and I
should be aware of
00:25:40.47\00:25:42.17
as we talk about
opening up a business,
00:25:42.20\00:25:44.57
because there are
a lot of parameters.
00:25:44.61\00:25:46.94
It's simple if you
think through the process.
00:25:46.98\00:25:50.25
So I'm gonna give you
four ideas here right now
00:25:50.28\00:25:52.61
when you're looking
at personal ownership.
00:25:52.65\00:25:54.38
Look at
incorporating a business.
00:25:54.42\00:25:56.38
Incorporating
will provide the owner
00:25:56.42\00:25:58.09
a certain level of
creditor protection.
00:25:58.12\00:26:01.59
Number two.
00:26:01.62\00:26:02.96
Always try to pay your
debts on a timely basis
00:26:02.99\00:26:05.36
whether that be
payroll source reductions,
00:26:05.39\00:26:07.30
whether it be goods
and services tax collected,
00:26:07.33\00:26:09.73
making sure you put that off
00:26:09.76\00:26:11.83
in an emergency fund
or as savings account,
00:26:11.87\00:26:14.50
that can pay those
taxes on an ongoing basis.
00:26:14.54\00:26:17.51
Of course, employee
wages in vacation time,
00:26:17.54\00:26:20.28
you'll make for happy employees
00:26:20.31\00:26:23.24
if they get paid
on a timely basis.
00:26:23.28\00:26:25.51
Additionally, number three,
00:26:25.55\00:26:27.45
take a look at when
you're putting money away
00:26:27.48\00:26:30.72
for retirement that you
do it on an ongoing basis,
00:26:30.75\00:26:33.82
you're serious about it
and you plan accordingly.
00:26:33.86\00:26:37.33
If you plan to invest
your own funds into a business,
00:26:37.36\00:26:41.43
I ask you in all of
this to go to a professional.
00:26:41.46\00:26:45.70
I ask you to talk to someone
that knows about incorporating
00:26:45.73\00:26:49.40
that can give
you issues about tax
00:26:49.44\00:26:51.44
and talk to you about concerns,
00:26:51.47\00:26:53.17
that are
relevant to the business
00:26:53.21\00:26:54.58
that you begin,
00:26:54.61\00:26:56.14
because many of us get lost
in the elements of a business.
00:26:56.18\00:27:00.42
We don't think about
all of these other items
00:27:00.45\00:27:03.12
that are out there
and people are out there
00:27:03.15\00:27:04.92
that are willing to help you.
00:27:04.95\00:27:06.55
And one of the things are,
00:27:06.59\00:27:07.92
if you would give
money to your business,
00:27:07.96\00:27:09.29
think about
investing in your business
00:27:09.32\00:27:11.29
by giving the business a loan
00:27:11.33\00:27:12.79
that the business
will have to pay you back.
00:27:12.83\00:27:14.80
Just an idea
because many people put
00:27:14.83\00:27:16.73
all of their
money into a business
00:27:16.77\00:27:18.67
and don't do it the right way,
00:27:18.70\00:27:20.94
and if the
business go out of business,
00:27:20.97\00:27:23.20
then they have to deal
with those type of issues.
00:27:23.24\00:27:26.68
And then of course,
00:27:26.71\00:27:28.04
avoid personal guarantees
of company obligations.
00:27:28.08\00:27:31.85
Don't go out and make
promises that you cannot keep.
00:27:31.88\00:27:35.68
This program for me
00:27:35.72\00:27:37.35
was also a learning experience
doing some of the research
00:27:37.39\00:27:39.42
and I think that it will be
00:27:39.45\00:27:40.79
a very
informative program for you,
00:27:40.82\00:27:42.16
if you take a look
00:27:42.19\00:27:43.53
and do your due diligence
00:27:43.56\00:27:45.53
and study what it
takes to run a business,
00:27:45.56\00:27:48.76
because when we talk
about Take it to the Bank,
00:27:48.80\00:27:52.17
we are very serious,
00:27:52.20\00:27:53.60
and you should be serious
00:27:53.64\00:27:55.44
as it is your
money and your time.
00:27:55.47\00:27:59.14
God bless you.
00:27:59.17\00:28:00.58