Book: Business Brilliant
Book Synopsis –In Business Brilliant, Lewis Schiff combines compelling storytelling with ground-breaking research to show the rest of us what America’s self-made rich already know: It’s synergy, not serendipity that produces success.
He explodes common myths about wealth and explains how legendary entrepreneurs such as Richard Branson, Suze Orman, Steve Jobs, and Warren Buffet have subscribed to a set of priorities that’s completely different from those of the middle class.
Schiff identifies the seven distinct principles practiced by individuals who may or may not be any smarter than the rest of the population, but seem to understand instinctively how money is made. This guide also reveals how these business icons excel in areas of team building, risk management, and leadership development to accumulate their wealth.
He offers a practical four-step program, from choosing one’s livelihood and pinpointing skills to focus on, to negotiating job terms and salary, in order to bring upon greater success.
Business Brilliant by Lewis Schiff, coauthor of The
Book Review –
Rating (1-10) – 6
Notes:
Chapter 1 – “Business Brilliant”
Middle class views on wealth creation (50k – 80k household income)
- Do what you love, the money will follow
- Cut back on little expenditures
- Put your own capital at risk
- Diversify the ways you make money
- Have a success attitude
- Think like a millionaire
How the wealthy view wealth creation (Net worth of 1M – 10Million)\
- Follow the money not necessarily what you love
- Cutting back on little expenditures isn’t a priority
- Get
ownership stake in your work - Persuade others to invest with you
- Get to know a lot of people
- Learn from your bad business decisions
- Most are entrepreneurs
Chapter 2 – Do What You Love, but Follow the Money
It’s not bad following what you love to do but make sure that you’re also doing what you love that can produce money.
8 in 10 self-made millionaires have a substantial ownership stake in their work.
“Work environments that are driven by monetary incentives and close supervision tend to sap worker enthusiasm for tasks that they might otherwise find interesting. Productivity can drop because employees feel an overwhelming need to reassert their personal sense of autonomy. So they get passive, withhold their input, or fail to give a full effort.”
To be autonomous, to do what you love and follow the money, you need to make choices most people are too afraid to make and ask for things most people are afraid to ask for. When you do these things, you impact your surroundings and help create a new reality.
Autonomy-supportive in the workplace – The hope is that if organizations set up systems that allow employees to derive more intrinsic joy from their work, the employees would be more productive because they would feel as though the workplace was supportive of their autonomy.
Do what you love doing but continue to follow the money.
Chapter 3 – Save Less, Earn More
You don’t create wealth by just saving more but by making more. To self-maid millionaires say that cutting back on little luxuries or reducing expenses has anything to do with accumulating wealth. Financial success
Savings are a fine thing, but those who have gotten wealthy didn’t get there by saving. Savings and investments only preserve what you’ve gained by others mean, by working and following the money.
If you have a job, be willing to ask for more money. 9 out of 10 hiring managers are ready to pay more if they’re asked. Tips on negotiating salary
Most job offers are intentionally low because the hiring manager is expecting you to negotiate a higher salary. They would rather offer you a salary where you are accepting of it happily versus being dissatisfied. They also can view it that you have a level of self-confidence.
Because of compound growth, just by increasing your salary by 3-4% you could make significantly more than if you never negotiated a salary increase.
The key is raising your salary through negotiations is knowing your true current value in the workplace and in your industry and then “asking high” during salary review time.
9 out of 10 self-made millionaires agree that “it’s important in negotiations to exploit weaknesses in others.
Chapter 4 – Imitate, Don’t Innovate
It pays to be a latercomer, an imitator. Bill Gates used a chopped up version of an existing operating system, CP/M, to expand his company.
88% of Inc. Magazine’s 500 fastest-growing private firms in the U.S. said they didn’t invent anything new. They simply took something existing and had exceptional execution.” Nearly 9 out of 10 in the Business Brilliant survey said that “it is more important to do something well than do something new.”
“The notion that you can get rich from one brilliant idea is such a commonly held dream that whenever someone actually seems to have done it, the media eagerly embrace the story. Unfortunately, media coverage offers an extremely distorted view of reality. More people die from bee stings than shark attacks every summer, but you’d never know that based on the hysterical coverage devoted to occasional shark sightings. The same holds true with fatal lightning strikes, which always make the evening news, while many more people are killed each year by falling off ladders. Clever ideas are the shark attacks and lightning strikes of business success—they are dramatic, exciting, and very rare. You’re more likely to make headlines with a big new idea, but you’re more likely to succeed without one.”
“The garage belief” – Most people think that companies were created out of garages because those are the stories that the media tell because it’s the rags to riches stories that draw interest. In reality, most companies started out by relying on knowledge, partners, and funding sources that their founders had identified in their previous jobs.
“These successful startup entrepreneurs weren’t lonewolf inventors pursuing big ideas. They were imitators working from their areas of expertise, borrowing or stealing what they learned from their former employers.”
Learning from Bill Gates – Find the field that interests you the most, work with the biggest and richest player willing to partner with you, and then do everything you can to help that big, rich partner succeed.
Growth strategy for startups or even in a company – Seek out and offer help to the most powerful patron or mentor who will have you.
Persuasive efforts, the commitment, and creative problem solving to deliver on any idea. Even an ordinary one.
Chapter 5 – Know-How is Good, “Know-Who” Is Better
Use other people’s money to invest so you reduce your own capital risk. Tip the odds in your favor. It’s about who you know and the ability to use other people’s money.
“Heads I win, tails I don’t lose.”
Surround yourself with other people that are successful. The middle class tend to favor know-how over know-who.
Chapter 6 – Win-Win Is a Loser
Least-interest principle – In any relationship, especially a business relationship, the person with the least interest in continuing the relationship is the one with the greatest power for setting its terms. The weaker your interest, the stronger your leverage.
“All other factors aside, being ready to walk away from a deal is you rbest guarantee that the deal will work for you.”
“The best negotiators always project an appearance of least-interest, indicating that they could walk away at any minute, even on deals they would really like to close.”
The hard part about the least-interest principle is actually executing it when you really want a deal to fall through.
Win-win isn’t a bad thing. Lose-win is for losers. If you feel like you’re trying to get a win/win situation and all you’re doing is conceding to the other parties demands, it’s really lose/win. If you feel like you’re getting the short end of the stick then you’re not creating a win/win situation according to Stephen Covey. It’s either win/win or no deal.
Three-step negotiation preparation process:
- Identify and write down a specific goal or set of goals for the negotiation (High goals).
- Thoroughly study the other party and its bargaining position
- Determine in advance at what point you’ll walk away.
Writing down your goal before negotiation can help when you’re in the heat of
If you’re seen as the weaker party and you concede to all the demands of the other party, they can view you in a negative light. Their thought process could be, “Why are they so willing to concede? Is something wrong with them?”
“You don’t get what you deserve in business. You get what you negotiate.”
Self-made millionaires are more comfortable than the middle class when it comes to advancing their interests over those of other people.
Most self-made millionaires believe that being Machiavellian is essential to becoming wealthy. Machiavellianism has been described as being cool, rational, detached, and opportunistic in attitude. They are not as emotionally affected as others by social norms and social pressures.
*I personally don’t like what this book is saying about how multi-millionaires gain their wealth.
Why do most people fail at negotiations?
- Set goals that are too modest
- Fail to prepare
- Lack desire
- People feel bad for negotiating
- People are afraid to set high goals because they maybe be rejected and get less than they want.
90% of managers said they are willing to negotiate a high enough pay level to ensure that a new employee at least feels satisfied, but only if the employee offers them a number.
Selling out your goals you’ve set for yourself doesn’t mean you are reasonable or considerate. I means that you lack courage. Negotiators who worry too much about the other side’s judgments of them are setting themselves up for disastrous “lose-win” deals.
Chapter 7 – Spread the Work, Spread the Wealth
Your ability to delegate and trust other people to do the work that you aren’t good at is important to success.
Self-made multi-millionaires have the desire to delegate tasks they are not good at.
“Anybody can sit around an office thinking about what people were doing wrong. My job was to get out and find out what people were doing right — and exploit it. Then I tried to spread those practices throughout the Kinko’s network.” – Paul Orfalea
“Every major success I’ve had in my life has come about because I knew that somebody, often any body…could do something better than me.”
Business owners should ideally delegate everything involving day-to-day operations so they can free themselves to set strategy and deal with tasks that have a longer-term impact.
Chapter 8 – Nothing Succeeds Like Failure
Giving up and focusing on others projects or trying again but in a different field is the same as quitting. Self-made millionaires pick themselves up and try again in the SAME field.
“If you fail to appreciate this relationship between failure and success, you’re likely to keep switching project, every time the going gets tough. A lot of hardworking and talented people make this mistake because it’s only natural to feel like quitting when it starts to hurt.”
“Success belongs to the rare people who focus, who overcome the pain of failure and push through.” – Seth Godin
“I have to conclude that for most fo the middle class, failure is so painful that they don’t want to hang around it long enough to learn from it.”
Learning lessons from David Neeleman:
- Overcapitalize
- Do what you love
- Be your own boss
- Retain voting control over the board (don’t get sucker punched)
- Focus on yourself when you fail and figure out what you can do better next time
Learn from failures and figure out how to fix systemic issues rather than coming up with quick workarounds that mask the problem in the future.
Failure is good if you learn from it and it’s usually what paves the path for success.
“Failure Faith is the belief that failure is necessary for success. The Failure Faith tells you to ask more than once for an equity share in your work because there’s no downside risk in asking. It tells you to ask for a raise and to leverage the request by getting job offers elsewhere. You invite other people to invest with you because it protects you if your business fails. You negotiate hard to make sure a deal is just right because you need to maximize your upside and protect your downside because every deal carries a risk of failure. You delegate everything you can and focus on what creates the most value. And, finally, if you believe that failure is necessary to achieve success, then you will look at every hiccup in your operation, every missed call, and every screwup a little more carefully, with an appraising eye of “What can we do with this?”
What if you don’t have failure faith? “…you will always tend to hang back and keep a lookout for low-risk pain free opportunities. You won’t ask for equity or even a raise at work unless you feel sure the answer will be yes. You dream of a big idea that will be your can’t-miss score, instead of trying to grind out your success in a field that you already know well. You invest only your own money because asking someone else to risk their money with you bears too much risk of rejection. You try to settle negotiations on a win-win basis because it matters what the other side thinks of you. You don’t like delegating any of your work because you fear giving up control. And finally, you quit whenever you’ve failed at something because you think that’s the reasonable and logical response. The face you failed is evidence enough that the project was a poor fit for you or wasn’t worth the trouble. No need to look deeper. No need to cry over spilled milk. Just try to forget that it happened.”
Chapter 9 – Mastering the Mundane
Can business brilliance be learned? Schiff believes so and he outlines four daily activities that successful self-made entrepreneurs undertake more effectively and consistently than most people. He calls it L.E.A.P:
- Learning – means that self-made millionaires expend more time and effort discovering what they do best and pursuing opportunities related to what they do best.
- Earning – means they take on projects and make deals that maximize the dollar potential of those opportunities while limited downside risks.
- Assistance – means that they actively cultivate networks of friends, associates, and partners so they can get help and advice on all the tasks beyond the bounds of what they do best.
- Persistence – means they take an authentic interest in their set backs as important and necessary aspect of the success process.
Learning
- Essential 1: Write down your goals
- Essential 2: Commit to what you do best
- Find the things that you do best and focus on those things.
- Essential 3: Follow the money
- Take an equity position in the things you do
- Start a business
- Essential 4: Climb the line-of-money ladder
- Premium pricing – Setting high rates for your hourly service like consultants.
- Project pricing – Getting paid for working on a project that isn’t dependent on time but rather
outcome . - Percentage pricing – Getting a percentage of the deal. This can be added
onto project pricing. - Proprietor pricing – Taking equity in the work you do.
Earning
- Essential 5: Run the numbers
- What will it cost to play? Calculate everything it will cost to get the project going.
- What will it cost to stay? Cost for continued operations. Add up monthly bills and labor costs. Add the dollar value of your hours too.
- How high is the ceiling? Estimate potential income.
- How hard is the floor? What’s the worst possible result? How hard will it be for you to take a total loss?
- How big is the cherry on top? You get a lot of “soft-benefits” from starting a project regardless of success or not. high public profile, respectable track record, more connections etc. How much would it take for someone to buy how your shares in the project for you to leave minus what you put in is the cherry on top pricing.
- Essential 6: Protect your bottom line
- Step five will give you your own personal bottom line. The minimum reward and maximum risk you must have in order to participate.
- Don’t ever take on so much risk that if a project fails, you will lack the resources to try again.
- Essential 7: Press your advantage
- Bring people to the table according to their strengths. Negotiate with them according to their weaknesses
- The more you know your vulnerabilities, the better able you are to press your advantage
- Know the weaknesses of the people you are bringing to the table.
- Before negotiating price or equity, figure out as much as you can about the opposing person’s side. What are the soft benefits for them? How have they limited their own downside risk?
- Essential 8: Plan the divorce in advance
- Don’t forget about opportunity cost. Build in a clause into the contract that lets you get out if things aren’t moving in your favor.
- Everyone is happy in the beginning but you never know where things will go. It’s important to build in clauses for unknown circumstances.
Assistance
- Essential 9: Keep your network small and focused
- On average, self-made millionaires have a circle of six people in their network.
- The small network of people should be a way for new business. i.e. if you’re in the cake business, a wedding planner, party planner, etc is a good network.
- Keep strong relationships with these people.
- Essential 10: Manage your network upward
- Continue to look to remove and add to your network as your goals change. If someone isn’t adding value to your network consider removing them and finding someone else that would be more beneficial.
- Essential 11: Build a team
- Once you know what you do best and enjoy doing, outsource the rest to a team.
- They don’t have to be employees. They can be contracted, outsourced, consultants, bankers to get you loans, etc.
- Essential 12: Get a coach
- Finding a coach to keep you accountable
Persistence
- Essential 13: Make friends with failure
- Learn from your mistakes and continuing trying again.
- Essential 14: Keep your changes to yourself
- Don’t try to change your partners. Focus on what you can change about yourself.
- You should assume 70% is your own fault for failure and 30% on circumstances.
- Those are the only two factors you can control or change.
- Essential 15: Try, try, try, try again
- It’s very unlikely you can figure out all the variables that would determine success for whatever endeavor you take on. Instead, take an iterative approach.
- There aren’t enough hours in a day or in your lifetime to find the precise method of getting it right on the first attempt. You’re better off starting out today with iterative expectations.
- Essential 16: Don’t Procrastinate
- Procrastination is also about perfectionism. Lots of people put off pursuing their dreams because it can be more fun to imagine achieving something great than to endure the difficulties of achieving anything even reasonably good. Putting off making decisions and taking actions are the two most certain ways to avoid bad decisions and poor results.
- Essential 17: Make your own luck
- Millionaires are lucky and they know it. Only career choice and persistence ranked higher on the success scale.
- You create luck by putting yourself in the position to get lucky. That means following the 16 essentials. That means following best practices and learning from what others have done.
- Double down on what you do best. Press your advantage whenever and wherever you have the advantage. Work your network. Try and try again. Above all: Ask. Ask for what you want. Ask even when it feels uncomfortable. Ask for more than
what you need. Ask for what you’re afraid to ask for, and ask for it more than once. Ask until the word “No” loses its sting. When you can laugh at “No” and look at each setback as a source of instruction.
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