Are You Sailing Yet?

Today a friend asked me how to start a business.

They have an idea they think would work.

So began a conversation that went on for a few hours.

I think every human being has some kind of dream, or several dreams.

One common thread is likely the sense of financial security.

Jobs provide a semblance of this sense, but a job can be lost...and thus why most jobs are insecure and a cause for concern.

Sustenance in the city is a challenge, when taxes, rents, debts, food, energy and so much more is taken into consideration.

The balance of the machinations of society is a very delicate balance, yet there it is.

It somehow 'works' and continues to do despite ourselves.

The risk factor of pursuing a business, besides finding a job, can be quite high.

I think it is a matter of fulfillment vs regret, satisfaction vs fear, risk management vs excuses.

Besides a never-ending amount of advice that can be given, the short of it all is developing one's self for the beginner.

It is about who you are besides what you do or know about the things of business...although learning and doing is needed and will come.

This is arguable I'm sure, but this is my personal opinion and conviction.

Personality, integrity and ethics are integral...and the largest of companies, or countries, have been toppled when morals, ethics, integrity have been pushed behind a product or service...and a head of state is in the 'business' of service, but many people have many ideas.

My advice to this friend who is starting was basically 'work on your person'.

In contrast, when speaking with two friends last week who are a bit further ahead with their efforts, the advice was different while the basics were reminded.

Sailing Analogy

With these friends, the sailing depiction of financial literacy was mentioned.

For those who have sailed or have a basic idea how a sailboat gets from one place to another:

Size of the sail is the income / assets.

What is an asset and what is a liability?

An asset is some 'thing' which produces an income (inflow - net) after all expenses.

A liability is some 'thing' which causes money to be paid out.

Looking at all the numbers and exactly how money is moving from one place to another will tell you if you have an actual asset, or a liability that was 'sold' to you as an asset, or simply a liability.

Although taking on debt is a move that immediately incurs a liability (debt to be paid monthly), if whatever the debt - credit was used to purchase produces more income than outgo, that item goes into the asset category...if not, a liability was purchased.

Size of the hull is the outgo / liabilities.

If the sail is not big enough to pull the vessel (hull) over the water, or big enough to capture enough wind for the same purpose, the hull needs to be made smaller (lessen the liabilities) or the sail needs to be made larger (increase income).

The lessening is usually easier by simple decisions (cutting costs), yet those decisions can be painful.

Expenses / luxuries / wants (not needs) being removed...can be painful.

Wind and water are the constant change of the market, the world, and the challenge of doing business.

These two factors are beyond your control, yet they must be managed and dealt with.

Learning how to navigate the changes in wind and water is important, since change is guaranteed.

Change is good; so learning how to view change as good is important...because again, change will happen.

Lots of wind can be seen as an opportunity or a disaster, depending on your vessel, your sail, your experience and your knowledge.

Too much wind that is good, like demand for your service / product, but you have not the capacity, speed, or ability to respond to demand...could cause major failure.

Yet, even with a proper sail to vessel ration, even the smallest wind can propel you forward.

Bearing is the direction that keeps wind in the sails.

Small adjustments to the rudder keeps the wind filling the sails so the journey may continue.

Consider that if you are employed, your employer or those who run the business have to deal with these factors explained.

So, why not it be you who is the captain instead of the mate?

If you are to be captain (manager), why not the owner (asset owner) of the vessel and hire a good captain?

Just remember, absentee owners are usually last to learn of a major loss, or the condition of their asset...so the escaping of any amount of responsibility is truly never eliminated, and this is good...for we all have at least one purpose to fulfill.

Even the rich have the task of buying things and throwing their money around.

Advice can be never ending, especially on the topic of business since it absorbs our world, its politics, etc..

To now quote from the written form that reveals a fountain of wealth physically immeasurable, the source of insight beyond the concepts of mankind, and the basis of all things good found in a world in conflict with itself:

Listen, my sons, to a father’s instruction; 

   pay attention and gain understanding. 

I give you sound learning, 

   so do not forsake my teaching. 

For I too was a son to my father, 

   still tender, and cherished by my mother. 

Then he taught me, and he said to me, 

   “Take hold of my words with all your heart; 

       keep my commands, and you will live. 

   Get wisdom, get understanding; 

      do not forget my words or turn away from them. 

   Do not forsake wisdom, and she will protect you; 

      love her, and she will watch over you. 

   The beginning of wisdom is this: 

Get wisdom. 

   Though it cost all you have, get understanding. 

Cherish her, and she will exalt you; 

   embrace her, and she will honor you. 

She will give you a garland to grace your head 

   and present you with a glorious crown.” 

- Proverbs 4: 1-9