Moving Words – Opportunity
Written by Timothy Brady.
The opportunity is often lost by deliberating. -Publilius Syrus
It can also be said that procrastination is the destroyer of many an opportunity. So whether you spend too much time deliberating whether an opportunity is worth pursuing, or procrastinating about researching the value of what’s offered, both approaches will cause it to die.
In the moving and storage business, we face many new challenges: from new regulations being implemented, to the problem of finding and keeping qualified, well-trained movers and van operators, along with being ready for peak season while maintaining a cash flow to pay the bills during the slower parts of the year.
Part of being prepared for opportunity when it knocks is having the cash reserves and the financial strength to take advantage of the opening. Building wealth (savings) to be ready when a profitable venture is presented to you takes a mindset that replaces the ‘increase revenue mentality’ with building net worth mentality. The line is so true: “It’s not what you earn that makes one wealthy, but what one keeps.” The person who earns twenty thousand dollars and saves 25% of it (and invests it wisely) is wealthier than the person who earns a million dollars but spends a million and one dollars.
It’s more about understanding that while increasing revenue is not itself a bad thing – unless you’re not increasing net worth at the same time. In other words, if by increasing revenue you fail to have a net profit increase that moves towards full capitalization, then the increased revenue is no more than an effort in futility. That increased revenue leaves you stuck on a financial treadmill, where you expend both energy and money to stay in the same place.
One statement of an accounting professor has stuck with me for several decades and it fits right into this discussion. He said, “Never go into debt unless increasing your net worth is the result.” Too many of us focus only on increasing our revenue with the misconception that having more money coming in will somehow prepare us for opportunities when they are presented. We must take the two-prong approach: when we look at increasing revenue, we make sure the result will be increasing our company’s net worth. If not, then it isn’t an opportunity, it’s a stumbling block we need to avoid.
Many small businesses would be far better served by looking at profit as an untouchable cash reserve only to be used in an emergency to sustain the company during difficult times or to be used to increase and grow the company’s net worth through diligent and calculated investment of those funds.
Most opportunities come along just once. Having the net worth to move forward is priceless.
