First, why would someone who writes and speaks predominately on business and economic trends write an article like this? Isn’t this somewhat out-of-character?
If you use the modern definition of economics, i.e., “the science that deals with the production, distribution, and consumption of commodities”, then you would have a valid point. But, by using the classical definition of economics —- “the study of human behavior in its historical setting” —- the article fits this definition. In addition, an understanding of the classic definition yields the interesting result that psychology is a branch of economics.
As both economic and political mortals, we live and work in an environment that is in constant motion or movement. This movement is, by its nature, turbulent. There are a few consequences of this.
The first is that turbulent motion has no predictability. In other words you do not know where it is going or what the results will be. A good example of this would be the stock market. How many “experts” eventually wind up with “egg on their face”. Therefore, in the business of life do not make any detailed plans. Plan only in broad strokes and even then your plans will shift and change. The old saying that when man plans, God laughs is still true. The second consequence is more oriented towards this article.
If both our economic environment and we are in constant motion (turbulent), how could you always maintain a positive attitude, or as the popular literature states, a PMA (positive mental attitude)? You simply can’t. Mortals are not designed that way. Your attitude, like our environment, is always in motion. Then, if attitude is not the most important criterion of success and advancement, what is?
The primary criterion that separates success from failure is action, namely positive action. Your attitude or state-of-mind can be in the gutter. So what! Nothing stays the same forever.
What do I mean by positive action? Or, to put it another way, what positive actions should you take.
In some of my business presentations I explore a few of the great business myths that dominate our thinking. One of the more interesting “myths” deals with the widely accepted belief that the purpose of any investment is to make money. NOT TRUE! The purpose of any investment is to increase your NET WORTH. There is a big difference between thinking in terms of making money and increasing your net worth. Thinking in terms of net worth forces you to think more rationally and gives you a long-term time horizon. The term “any investment” can include your business, your family, and even your community. By increasing the value of your investment, you increase its net worth.
Therefore, to restate the question, what positive actions should you take? You take the necessary actions today that will increase the net worth of your investment (business, etc.) tomorrow.
From a business perspective, though, there is an important point to consider. In this highly competitive and turbulent economy, building the value of your business can be achieved by focusing on increasing the free cash flow of your enterprise. Free cash flow is the real money after all expenses that can be returned to the owners of the business. The value of a business is a direct function of its free cash flow. By building the cash flow of the business, you now have the resources – the stuff– to take advantage of opportunities that will present themselves.
Famous Amos, the chocolate chip cookie king, had two words to express his business philosophy. These two words are “Do It”. Taking the necessary actions to build the value of your investment will always be of paramount importance. Good fortune favors the bold. Attitude follows action.
Sanford Kahn is a Business Author and Professional Speaker.
For more information on my programs please contact me at www.businesstrendspeaker.biz/contact-me
My latest book is The Thirteen Great Economic/Business Myths That Dominate Our lives.The book is available on most popular book web sites (amazon.com).