The Sport of Business

I recently read Mark Cuban's book, "How to Win at the Sport of Business." It reinforced a lot of what I already believed about business and taught me a lot as well. I don't want to make just a single post about the book but little by little I'd like to share a few of the main points from the chapters. I hope it's both informative for all of you as well as inspiring just as it was for me. If I come across other books or information that I find compelling I'll be posting here as well.

I encourage everyone to also post here with their tips and opinions on how to run a successful (scrap) business.

All of us compete with other scrappers in some way or another. I think we all have dreams of expanding our businesses. And our competition is one giant hurdle that we need to jump over;

"Always ask yourself, how someone can preempt your products or services. How can they put you out of business? Is it price? Is it service? Is it ease of use? No product or service is perfect and if there are good competitors in your market they will figure out how to abuse you. It's always good to anticipate where the problems will come from."

And related to that;

"Always run your business like you're going to be competing with the biggest companies in your industry. They may not be direct competitors. They may be a vendor. They may be both. Whatever they are to your business, if you are in the same industry in any way, shape, or form you have to anticipate that you will compete with them at some point. If you are ready to compete with the big guys, you are ready to compete with anyone else."

Both of these hold true for us. In Hawaii, we compete with other scrappers, the scrap yards that buy our scrap (clients can just as easily take it down themselves), BestBuy (free ewaste drop-off), Office Depot (same thing), the City and County (customers can legally throw everything away here), and countless others. Even CFCS, whom a lot of people here use, is a competitor. He buys a lot of our goods and a lot of people here are dependent on him and I personally love the service he provides us with. But customers can just as easily sell to him without you. So whether its customer service, efficiency, accounting, or what have you. If you are hoping to expand your scrapping operation, you need to run it as if you are in direct competition with ewasted, WasteManagement, 1800gotjunk?, and even your own scrapyard. No matter how small your operation is, these are all your competitors on top of other scrappers.

The smartest thing I ever did in life was learn about business.

It doesn't matter what business you are in, it's all business. I work an what I consider what must be THE most ignorant bunch of business people in any trade or profession on the planet. They will argue at any suggestion that business skills are important or even necessary even though the business is hugely competitive and most ***** and complain how tough things are. The competition doesn't just come from other people in the game, it's being heavily eroded by the average Joe in the street. These same fools that will argue Business skills are unnecessary are the same ones asking the most basic Business questions over and over and not having the first **** clue about what they are doing.

They believe that being the best at what they do is enough. Only an idiot would think that. I'm not the best at what I do by a country mile but I make loads more money than a lot of these other clowns that work 5 times harder than I do.
People don't believe me when I tell them I rang a prospective client who told me they already had someone they were happy with, asked if I could drop off some sales material " Just in case they got busy or couldn't help them" dropped in, spent literally 4 minutes with the decision maker and walked out with a $10K deal. I stitch up $5K deals with a phone call and a visit regularly.

I'm not some super salesman, I'm not outstanding at what I do, I just have a good grasp on business basics and what really important to my customers and what pushes their buttons. That's enough to put me ahead of 90% of other vultures in my game.

I did do some small business consulting for a while and it was both amazing and too frustrating for me to go on with. I can size up most business people with one single question and cut them to shreds at the same time. All I ask is " Why should someone use you over your competitors and don't tell me quality or service because that's the cop out every other twit will use".

That one, simple, basic and very realistic question will cut the legs out from under most small business people in an instant. It's not a smartarse, clever trick thing to ask and that's the problem, it's what your customers ask themselves subconsciously every single time. The scary part is, most small business people never think about it! They have no idea why their customers use them but will put it down to the quality and service crap.
For the precious few that can give you a reasonable answer, you can ALWAYS take them down with the second question.... What's the 3 ways to grow a business? They always get the first one, get more customers but the other 2, NFI.
1. Sell to more people. ( get more customers) 2. Sell more often ( Sell to the same customers more frequently) 3. Sell at a higher price/ profit margin. ( raise your prices or increase your profit ratio by say buying at a lower cost).
Basic stuff but few small business people know it.

Most small business people think like customers but don't balance it from a business owner perspective. They don't understand or think through what their customers actually really want. There is an area I work in that I am very successful in and have now had literally a couple of dozen people see what I do and try to take me on and they all fail within 12 months and thats at the outset. Again, not because I'm so incredibly good at what I do no one can come near me but because I understand what my customers really want and the others don't. And like most businesses, its not actually what you do. People don't go to a nice restaurant because they are hungry. They go to Maccas for that. They go out to a decent joint for the experience. They want to feel pampered, indulge themselves with a delicious dessert and don't want the mrs taking up time at the sink or dishwasher when they could be spending that time on more romantic pursuits. If you market the restaurant as a place to go when you are hungry, you'll fail because you do not want takeaway customers which is what you will get with that mistake.

I have to say, I love business. To me it's 3 things, Sales, marketing and advertising. Have a grasp of those 3 things and you have a lot of knowledge and power and not just professionally.
18 Months ago I sold my house in one week for $50K more than the agent who had it 15 months and told me I was asking too much at the 50K less price than what I got for it.
Today I made my son go for a blue collar job interview wearing a suit and with his resume printed on heavy stock paper in a proper presentation folder. He said the guy hardly asked him anything. He looked over his apprentice level resume, looked him up and down and said when can you start? My son was taken aback and asked wasn't there anything else he wanted to know? The guy said I knew the most important things when you walked in the door and saw how well presented you were. I have been talking to guys all week that couldn't be bothered to shave and then you walk in like you want to be president of the company. What else is there to know?

And as laughable as it may be, I have even used my knowledge on a romantic level to pick up women. A mate of mine had a messy divorce which left him very despondent and lacking in self confidence. I signed him up to one of those dating sites and wrote him a profile and 3 replies, an initial approach, first reply and 2nd reply asking the girl out. He seriously had more women wanting to go out with him than he could handle. Instead of telling them how great he was and asking for a date or having a picture of his wedding tackle, there was a well dressed picture of him smiling and the initial contact was to complement the girl and tell her he knew someone as classy and beautiful as her was way above the league of anyone like him but he just wanted to say how pretty he thought she looked and wish her all the best in finding the right person and happiness. The women were asking him out and sometimes he met them within hours of making contact. He met some real nice ladies through that which lead to a couple of relationships over a few years till the new Mrs. right came along.

Sales I think is really ship easy. You know in advance what the objections are going to be. The same ones come up over and over and there is only ever a handful of them. You go over them, think of killer replys to steer the customer where you want and the next time someone lays that on you, your not thinking oh geezuz, here we go again and stammering and talking crap you know is lame, you are just dying for them to ask you that question because you have thought up the answer that you know, if they ask, you have them in the bag!
It's not magic, it's more like going for a test that you have already been given the answers to.

Marketing is important because it guides you into everything you say and do and where you aim yourself in the market. It tells you where to advertise and how to measure where your advertising dollars are best spent and giving you best returns. It tells you what clients to go after, what those clients look like so you can target them, how to present yourself. Should you do brochures, business cards, fridge magnets, a website, yellow pages ads or just go knock on doors?
Advertising ties in but is different. It teaches you how to write an ad and what the features of that ad, your business card and website etc should say and how they should say it. Most people do an ad and get the person at the newspaper or print shop to do it for them. How do you know what copy writing experience they have? They could ( and usually do) a crap job but you don't have the knowledge to recognize it or know how it should be done.

There are LOADS of sites on the net where you can pick up good sales tips and education for free. the only investment you need to make is in yourself and donate a bit of time.
You don't need to be some sales Guru, all you need to do is get a grasp of the fundamental basics and you will be miles ahead of your competition right there.

IMHO, the more competitive the industry, the bigger the edge business knowledge gives you.

Very well said! I'll be posting another tip in a few (there are lots to go!)

Ummm .... I'm a little uneasy about Mark Cuban. That big ego of his is a fatal character flaw for a man of his stature. It's bound to lead to some serious errors in good judgement.

I look at it this way:

Once you get to his level money stops being money and becomes power. There are two things you can do with power and a position of leadership.

1: You can be narcissistic, selfish and self serving and try to wield it ... in which case it will burn you up. You will invariably fall prey to the arrogance of power. It's very seductive !

2: You can be selfless and simply act as a conduit for power to flow through. You take yourself and your emotions out of the mix. You strive for objectivity and detachment. You base your decision making on reason,logic, and certain ethical principles. There's always that temptation to use your power selfishly but if you can avoid that and keep yourself grounded you'll probably be okay.

IDK ... Mark just strikes me as a category one kind of guy. He seems to love the limelight. Maybe another Donald Trump ?

I have owned a business for 20+ years and this teaches me lessons everyday. I also know if your not learning something everyday, you are not doing much to start with and probably not a very productive person.

The hardest part of running a business (IMOP), is anticipating potential problems. M. Cuban is 100% spot on with that point, problems come at us in all directions. In business this is true at a increased rate and from directions, that at times from sources almost impossible to determine. Competitors, vendors, employees, customers, governments and family members, the list of potential sources of problems is limitless (they are everyone and anyone)! It is a natural norm to desire what someone else has and to be competitive in achieving our needs. There is a right way and a wrong way to do anything, with many variables in between. Most people will desire to achieve, prosper and grow using acceptable and ethical methods. A percentage of people think they can take at any means possible and those types are a real threat to anyone or a business. These types don't give anything and will only take, so that's how to spot them!

M. Cuban is hard to take for for some. Yes his ego does get out of hand some times like a lot of other super successful people that dose't mean his thinking and business tac is wrong. If I took his advice I would be local instead of doing business 150 to 600 miles away I would be doing it 30 miles away. But my sharing mentality trained most of my compitition localy.

One of my pet peves is that 100% of us see the value in this forum and, only 10% see it as worth $35. I could not afford the $35 when I first started and couldn't when I scraped up the money. Sacraficing for the value found here.

In my opinion if you havent increased your profit by $35 you either need to find something else to do.

Stop being a taker, that is what you are in my book. sry for the rant, just some realism. mcw

Quote:

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Originally Posted by bigburtchino

I have owned a business for 20+ years and this teaches me lessons everyday. I also know if your not learning something everyday, you are not doing much to start with and probably not a very productive person.

The hardest part of running a business (IMOP), is anticipating potential problems. M. Cuban is 100% spot on with that point, problems come at us in all directions. In business this is true at a increased rate and from directions, that at times from sources almost impossible to determine. Competitors, vendors, employees, customers, governments and family members, the list of potential sources of problems is limitless (they are everyone and anyone)! It is a natural norm to desire what someone else has and to be competitive in achieving our needs. There is a right way and a wrong way to do anything, with many variables in between. Most people will desire to achieve, prosper and grow using acceptable and ethical methods. A percentage of people think they can take at any means possible and those types are a real threat to anyone or a business. These types don't give anything and will only take, so that's how to spot them!

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I bolded it for emphasis. See ... this is your typical shark. Think that TV show shark tank ?

I'm not much for reading but there was a book called " Strategy of the Dolphin" by Dudley Lynch. In it he sort of analogized the people in business as being either a carp, a shark, or a dolphin. He laid out the traits of each and made a pretty good point. He said that when a shark squares off against a dolphin he almost always loses. The shark is limited in his worldview. The dolphin is fast and agile. He knows the shark's blind spots and uses them to his advantage. The shark never sees it coming till it's much too late.

In my opinion business or even sports competitions are a metaphor for war. If you really want to succeed and make it to the top then it's about tactics and the use of applied force. The Art of War by Sun Tzu has survived for over 26 centuries and is still as relevant today as it was when it was originally written.

Something to consider if that's what you really desire.

Sports and business require many of the same traits, one needs to have a strong desire to be competitive, work harder than most, be tactical and be able to motivate yourself. The one thing most "big ego" types don't have, is the ability to be a team player. That we are a "team" attitude, will enable others to full-fill their goals, as well as yours (a real winner).

One of the biggest egos in sports, was Wilt Chamberlain, a gifted athlete, one of the all time greatest basketball players. Said about the skill of rebounding, "when I go for a rebound, I have nine enemies, when I get the rebound I have four friends". Wilt led the NBA in almost every scoring and rebounding statistic, led in minutes and games played, he won almost every award there was to win. He did not win the one that mattered and that was "Champion". He was not a good team player for the first half of his NBA career, one of his nick names was the "Big Loser". He refused to practice until after 4 pm, refused to talk to team mates and coaches he didn't like. Not until the 66-67 season when a coach finally stood up to him, convincing him he could be a better team player and win a championship too! That Sixers team had a 68-13 record (a then NBA record), won the NBA championship, Wilt the MVP award and made a lot more money. He had finally learned half way through his career, it was a business, a team and other people counted.

Evan if you are the "boss" there are people you will need on your team and you will need to be a "team player".

Something I think in business is important and certainly puts a smile on my face at the ease and regularity I can cut out my competitors is to be FLEXIBLE. Another way of saying this would be always have more than one string to your Bow.

I have won a lot of deals when I have walked into a place and they have told me, no, don't want to do that again, had someone here before, they did that, bloody mess. Hmm, OK, How about if I did this or that instead? Or, I just don't suggest anything, I say yeah, that's why I do it this way. Even if I have never done it that way before but have heard of it and figure I can make it fly.

Certainly different things come at you and that's why being able to tackle them different ways pays off big time. I often read things about case studys in business and think, Hmm, great but I'm not sure it would be applicable to me. I try to keep it in mind then lo and behold, something comes up that puts you on the back foot and you think, well, I'll give this a go and see what happens. I have never been dissapointed yet. If you have a way of approaching an opportunity or problem 3 different ways, you are laughing because you gave yourself 300% more chance of getting the deal or fixing the problem than what you would have had with just one solution.

One thing I did many years ago which was outside the box which makes people s******, was when I was designing my first web site. Knew nothing about them so looked to the best. What was the most competitive industry online and what did they do?. Well there is one king of the net and that's the Porn industry. It's is far and away THE most competitive online industry, it's where the most online dollars are spent ( or was back then anyway) and it was also the most cutting edge by far.
I discovered there were whole loads of Pornmasters websites full of info on new ideas, techniques, software and billing systems and information on how to get your website to the top of the search engines. BINGO!

Yes, I studied a lot about porn ( haven't we all? :0) ) but my first website debuted at Number 5 in the search engines. I tweaked it and under a week later it sort of floated from 1-3. Good enough! I was kicking the butt of Companies that had sites years longer with everything going for them and with loads of money spent and I knocked up some barely passable effort myself and I was right where everyone wanted to be. All I did was follow the lead of the porn sites with what was largely old hat and outdated things in their game but in mine, man I was off the planet. And importantly, with some knowledge of sales and marketing, I was very successful at converting those hits to customers because the site was designed to sell more than just look pretty. I still look at pretty sights and the coding and laugh to myself because they sure look great but I'll bet the amount of actual clients they bring in is woeful.

And from that I learned to constantly look outside the box. Don't get tunnel visioned in your own industry, look at what other industries do and how they approach the same fundamental problems you do. It's amazing how what is considered non viable or stupid or impractical in one industry is the bread and butter of another. If you open your eyes and tweak it to your game, you can take off.

I coined a phrase many years ago and I stick by it. " Often, just being different is enough to get you way ahead of the pack".

Myself, I LOVE test marketing. I change my pricing, my products, my approach every time out. I am rarely dissapointed. I listen VERY carefully to my customers and are direct to the point of being blunt with them. I ask them for feedback all the time and say don't blow sunshine up my backside, If you want to help me and anything was not to your liking, tell me because then I can fix it and not keep looking like a jerk. When I change products and pricing, it's through listening to feedback and keeping notes. I'll go out on a gig and say OK, we are going to try this product and see how it goes. Sometimes what I try might not work but then the CLIENTS will give me some great idea that takes off like gang busters.

I remember 2 notable things with that:
I was offering a product which was very cheap but time consuming to produce. I got a LOT of complaints from people that the product was overpriced and basically a rip off. Of course the people still bought it and the price in reality was very justified but I prefer to have a favorable opinion rather than a negative one. I work in a volume business and If I don't have 5 people lined up in front of me and an assistant, things are quiet. When people are lined up, you want them to see things are progressing quickly. I decided I'd try a new way of delivering the product which cost more but was significantly faster. I added the extra cost directly to the product with a couple of bucks to round it out. I thought I'd get a lot more back lash over the price but went with it anyway.

What a surprise!
I offered the exact same product only presented differently and at higher cost and I literally went from complaints about being too expensive to people questioning what they were getting because they now thought it was such outstanding value even though it was costing more and was faster and easier for me to deliver. I did not see that one coming at all. Here I am bracing for the storm and instead i'm on glassy seas with perfect weather.
When you get all these people disbelieveing of the price and looking for the catch, you know you are way underpricing the deal. I bumped the price of that product to double pretty quick and 50% of them still remarked at what a good price they thought that was. Amazing! Exact Same product, double the cost, Much higher profit, 1000 times higher customer satisfaction and a far easier sell.
On that product I initially bought a dozen units as the test. My girls ran out by 10:30 am and rang and asked when are you bringing more of those over? I was like, WTF happened to them? Did you loose or break them? No, we put a sign up we printed on a bit of paper up and everyone bought them. I simply replied, " I am on my way with 100 of the muthers!"
I did so well with those things, I started buying them direct from china for 1/5th the price I was paying here and had them styled and personalized which made them an even bigger hit.

Yeah. When people complain about something being a rip off, just repackage it and double the price and profit margin and they will be kissing your backside and telling you what good value it is.
That sounds like a totally logical and obvious solution to the problem doesn't it? :rolleyes: Only thing is, it's exactly what happened!

The other thing was at a gig we had a technical issue and could not produce a product. My girl found a work around that they could do and offered it instead and at a higher price than what it replaced. People loved it. It INSTANTLY became our best seller. I went to fix the problem and she told me, this is what I did. I was pleased as heck she used her initiative to come up with something. Then I said how have the customers taken to it, any complaints? and she showed me that one product was suddenly 83% of our sales and was also the most profitable thing we were doing at the time. YA!
If it would not have been such a disturbing experience for a young woman to have an old unattractive bloke hug and kiss her, I certainly would have!
I re wrote the price lists before I left and to this day, that is still my single most purchased product of it's type.

The thing is, DO NOT be afraid to test and try new ways of doing things. Don't go out on a limb and risk everything, just change a small facet of what you do and see what happens. Shake the tree, throw a curve ball, HAVE FUN, come up with some wacky ideas..... you'll be amazed at what happens and it will be things that if someone told you, you probably wouldn't believe them. It's all about fine tuning what is already working, not trying to re invent the wheel.

Possibly the biggest benefit of all is it keeps you interested and makes getting out of bed that bit easier because it puts more fun in the game.

Love your insights, Glumpy! Tell us more about you and what you sell &/or make, if you can,without giving too much away.

If anyone here is like me, they have tried countless different ways to run their business and have considered countless more. Do you take apart all similar scrap at once, regardless of when they came in? Do you have a first-in, first-out policy? Or do you disassemble whichever piece is closest? Who do you sell to? Someone miles away offering more or someone closer offering less? How do you ship? Literally an infinite number of ways to do things in our industry alone. But, like it does with most businesses, you only have to be right once.

"It doesn't matter how many times you fail. All that matters in business is that you get it right once. Then everyone can tell you how lucky you are."

Keep in mind, this doesn't mean to be reckless. Keep learning and educate yourself about business and the industry you're in. If things aren't exactly going your way, don't be afraid to try something new. No one is going to remember your failures. They will only see your success once you get it right.