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Seeds For Thought Having money will not automatically make you happy. Money should serve as a means to an end. Money can expand possibilities. At a certain point, your investments can be your job. Deciding What Wealth Means To You    As you put the Action Principles to work in your career, you will become financially successful. You will have money. As always, it is important to stop and think about money. How much do you need? What is a realistic budget? How much can you save? What are your investments? When will you be able to retire? Where is the balance point between earning a living now and enjoying your life now?    Bottom Line. You want to be in control of your finances and not the other way around.    Being rich is about having a lot of money. Having a rich life is about much more.    Being consumed by money, your life would be a treadmill. You would be compelled to work and work and work to earn more and more and more. Treadmills head nowhere.    Do your friends own homes and vacation homes? Do they have stock portfolios? Do they own investment real estate? Do they have retirement accounts? Do they have money saved for their children's college educations?    Most people associate with people in a similar economic bracket.    Do the same.    You should spend your time with people to whom hard work and investing aren't alien concepts. If your typical friend's idea of good living is to work hard enough work to not get fired and then to get home open a six pack and watch four hours of television, they probably will not be able to relate to your goal of becoming financially independent.    Money may bring you power but it will not automatically bring you happiness.    Money does not bring everybody security. For some it just adds to their insecurities.    First, they worried and worried about not having money.    Then, they worked as if possessed and made money.    Now, they can't stop, and are worried that they might lose the money that they've made. Some people use making money as an excuse to mask other problems. They may be very successful financially but they actually avoid living a full life, using work as their excuse.    A sensible person views money not as an end in itself but as a means to an end. In your planning, a sensible goal might be to have enough money so that pressure for more money becomes a secondary concern. Money should allow you the time and provide you with the resources to develop your potential and to spend quality time with your family.    Money can give you the opportunity to accomplish worthy goals. You will have time to volunteer your services. Many non-profit organizations need the enthusiasm and business skills of successful entrepreneurs. Having accomplished your financial goals at an early age, you can live a comfortable life and still have a life that makes a social difference.    Money can also give you the opportunity to relax and develop your talents and interests. For example, let's say that you always wanted to learn to play the guitar. Now you can do it. And, you can buy the best guitar. And, you can hire the best teacher. And, you can have a lot of time to practice. And, you can spend time in Nashville and Austin. And, when you get good enough, you can make a record. And, ... who knows? Having money provides with you many pleasant options.    Rather than working on an endless career treadmill, you might be better served by setting your sights on a specific financial course with a definite monetary aim. In 2002, a $70,000 annual income would put a family of four in a solid middle class position. At this income level, you could have a nice home, two cars, maybe a second vacation home and the usual accoutrements of comfortable middle class living. Of course, you would have to have a good job and work hard to make $70,000 a year. And, you would have to keep working hard, year after year to make that $70,000 year after year, unless you had investments.    If you had enough of the right investments, you might not have to work at all. A knowledgeable investor who monitors his or her investments carefully, should be able to achieve an annual return of at least 10% per year. This is especially true if most of your investments are related to your area of business expertise.    Let's say that you made your fortune owning several bookstores. You know a lot about books and bookstores. Wouldn't it be smart for you to invest based on your knowledge of books and bookstores? You could become an expert on the stocks of companies like Amazon.com or other publicly traded Internet booksellers. Invest in what you know and your investment returns should be 10% or more.    Back to our example. With a 10% rate of return, a $700,000 investment would pay $70,000 to the investor each year.    John Franklin, 34, is a smart, hard-working computer analyst for a large company. John is at his desk five days a week plus he must put in overtime on Saturday in order to make a $70,000 per year income.    Alicia Evans, 36, was a smart hard working entrepreneur. Last year, she sold her five area floral shops for $700,000. Now, Alicia enjoys her own garden. She doesn't work. She doesn't have to work. She makes $70,000 a year from her investments.    John and Alicia were both smart and hard working but each took a different career path. Probably, John will be at his desk working hard for at least the next thirty years. Probably, Alicia will never have to work again.    The point is not that it is easy to make $300,000 or $500,000 or $700,000 from developing your own small business. The point is to keep your options in perspective. If you are very successful, these net worth numbers may be a realistic goal to be reached after a few decades of work and investment and re-investment. In other words, through entrepreneurship, your lot in life may not be a lifetime of toil. Source Five - He talks with his mentors    Kevin has learned that an excellent approach to learning about a business is to talk to successful people in that business.    Talk to successful people in your field and you will hear confidence. These people have their successes as a frame of reference to discuss your success.    On the other hand, talk to people outside your chosen field and you will likely hear caution. These people do not have a successful frame of reference to offer you encouragement.    You can expect to hear pessimism if you talk with failed people in your industry. Their failures will frame their advice to you.    This is important. Talk to the winners. Avoid the slackers and losers.    Kevin remembers that at his sister Susan's wedding last summer to Mike, he met Uncle Giro. Uncle Giro is Mike's uncle. Uncle Giro owns "Uncle Giro's" a large Italian restaurant in the city. Kevin recalls that Uncle Giro was not a man to go unnoticed. He rivaled a professional wrestler in the gaudy department and could dance and sing with the best of them.    Kevin asks the help of a reluctant Susan.    "Susan, Mom and Dad might have mentioned to you that I am planning to open up a pizza shop. Your Uncle Giro has a big Italian restaurant in Dover, doesn't he? I'd like to talk over my plans with Uncle Giro, if you or Mike would do me a favor and call him for me."    "Kevin, everyone is worried about you."    Susan voices the concern of others,    "All you seem to be doing is going to one pizza shop after another and talking to people. How is that going to help you open a pizza shop?"    "I'm doing research."    Susan shakes her head, "Well, Mom is worried that you're going to quit your job."    "I will be quitting when I'm ready to open."    "Well, anyway, Uncle Giro runs a big restaurant, not a little neighborhood pizza shop." Susan, obviously, thinks little of her brother's plan. "I really don't want you embarrassing me. Do you understand?"    "Susan, will you call him?"    "I'll call him and I'm sure that he'll talk to you but please don't embarrass Mike and me. Uncle Giro has been very good to us."    Of course, Uncle Giro would be happy to help one of the family. And, after an introductory call by Susan, Kevin calls and makes an appointment to see Uncle Giro.    At this point in his planning, Kevin has an equipment list and floor plan based on the size of the store he anticipates opening, 1,000 square feet. He will have a back room with bathrooms and a mop sink. And behind his front counter will be the two double pizza ovens, grill and coffee machine. In front of the counter will be four tables with four chairs, a side eating counter with eight stools, and a self-service soft drink/milk chest.    Feeling that he's helping a family member, Uncle Giro welcomes Kevin with a big smile and handshake,    "So Kevin, tell me about this pizza shop you want to open."    Kevin doesn't want to waste Uncle Giro's time and gets right to the point, "Uncle Giro, I would like you to review my equipment list and floor plans."    Uncle Giro shakes his head in acknowledgment,    "Good, good, good. I'll take some time and look these over for you. Now, tell me if you are buying new equipment and how are you are going to decorate to make your shop attractive."    Kevin seems to know exactly what his restaurant will look like and answers,    "Well, I'm going to look at both new and used equipment. For my decor, I am going to try to stay simple. I'm going to have red and white checked fabric cafe curtains on the outside windows. The tables will be plywood on a black pedestal, covered with a red and white checked plastic tablecloth. On the tables will be salt, black pepper, red pepper and grated cheese shakers. Also, I'll have a small white vase with silk flowers on the table. The chairs will be inexpensive but very serviceable, plastic-covered, white metal with cushioned seats. On the white walls, I'll have an Italian flag and prints with Italian scenes. I think that I can handle the decor and I have friends that I can enlist to help me build the counters, so all told, I should be able to have a nice shop for short money."    "Good, good, good." Uncle Giro replies nodding, "Sounds like you're going to have a nice little shop. I'll be anxious to see it. Now, other than looking these papers over, how can I help you?"    "Well, let me be direct." Kevin gets to the heart of the matter, "Uncle Giro's does a tremendous business now. But, can you tell me in a nutshell how you built this business up?"    This question was right up Uncle Giro's alley,    "Kevin, here's my secret. I know my customers. I run mostly a family business. I serve good food, not great, good. And, I serve large portions and charge a fair price. You don't find anybody leaving here hungry. But, listen to me and this is most important. I never take my customer for granted. I owe them. They don't owe me. I am really grateful for their business. I walk around. I ask them if everything is all right. I try to know as many of them by name as possible. Remember this; you owe them. They don't owe you. You don't forget this lesson and you'll make money, the same as me."    "In other words, Uncle Giro, you're saying that the customers made Uncle Giro's and not Uncle Giro?" Kevin summarizes Uncle Giro's advice.    "Of course that's what I'm saying." Uncle Giro answers waving his hand in a broad expanse, "What's the difference between me and another restaurant? I have the repeat customers. Some of them come in two nights a week for the specials."    "I noticed in your windows that you run a lot of specials," Kevin continues his interview.    Uncle Giro emphasizes,    "Sure, that's another reason they keep coming back. Right now on Monday nights, I offer a free carafe of Chianti, costs me less than $2 a carafe. Tuesday, I have a free soft drink and a spumoni for dessert with each entry, costs me $1 per meal. Wednesday, you get all the pasta you can eat. Thursday, the kids' menu is half price. Friday and Saturday nights, I have violin and mandolin players taking requests around the room. Sunday night, I have a beautiful all-you-can eat Italian buffet with 40 items for $16.95. They're lined up around the block on Sunday. I had to hire a cop to handle the parking. And, Sunday used to be an off night."    "Could I do the same thing?" wonders Kevin.    "Yes, yes, yes." Uncle Giro taps the table. "You got to give people a reason to come to your shop. You owe them. Don't ever be afraid to give a little back. What can you do? I love my specials. One night you offer a free small pie when they buy a large pie. The next night you offer the second large pie for half price when they buy a first large pie at full price. The next night, you work in the drinks. Then, let's see..., you offer a special on your submarine sandwiches. You get the idea. Promote, promote, promote."    "But, don't you find that if you run specials that all your competition matches them?" Kevin asks.    Uncle Giro answers, letting Kevin know that he has already resolved this problem,    "Listen, the other restaurants can't out special me. Yes, maybe they'll try but they get scared and greedy. Bob O'Malley, a good guy, owns another popular restaurant here in Dover. He sees my lines on Sunday and says, 'Giro, I've got to start one of these buffets.' So, Bob starts his buffet and it's going along for a few months and I hear that he's doing pretty good and, then, I hear that he stops. The next time I see him I ask him what happened to the buffet. He says that on an average check he makes $5 and that on the buffet, he was only making $1 and that he was serving about 400. So, to his way of thinking, he was losing $1,600 in profit every time he had his buffet. So, to make up the difference, he raises the price of his buffet from $15.95 a head to $19.95, and what happened?"    Kevin nods, "The buffet business fizzled out?"    "Of course," Uncle Giro holds up one finger for emphasis, "He priced himself out of the market. He didn't see himself making $400. He saw himself losing $1,600. He didn't see the buffet as an opportunity to showcase himself and his restaurant and to build new business off the buffet. What have I told you? Promote. Give a little back and you'll win in the long run. It all boils down to investing. Investing means giving a little now to get back more later."    Uncle Giro continues,    "And, you're a young man. You have the long run ahead of you. If I were your age again and opening up, I would be hustling up and down the street, handing out flyers and shaking hands like I was a politician running for office. 'Hi, I'm Giro Mancinni. Please try my restaurant and thank you very much.' Who is doing this to sell pizza? I tell you who: nobody. You do it. You show the people in Newton that you're really interested in getting their business. You do it and I'm telling you it works."    Uncle Giro tells Kevin that some business will come easily and other business he'll have to work hard to get, "Let me tell you something else. You open up your little shop and you'll do some business just because some people are lazy. Your shop will be the closest pizza shop to their homes and that's why they'll come to you. Lazy. OK, you get the lazy business. Who else do you get for customers? Maybe nobody.    "Let's be frank here. Where are you going to buy your dough and provisions? Midland?"    Kevin answers, "Probably, Midland. Yes."    "Ok, I know Dave Shapiro who owns Midland." Uncle Giro gets Kevin another boost, "I'll make a call for you and make sure that you get a smart guy to handle your account at Midland. Now, listen. We're in business, right? And, between Correy Foods and Midland, they have 90% of the Italian food trade. What am I saying? I'm saying, now I don't want to insult you, but you buy from Midland, everybody buys from Midland. You buy your bakery goods from Appleton. Everybody buys their bakery goods from Appleton or a company very similar to Appleton. What happens? Everybody ends up serving pretty much the same food.    "But, that's OK. You aren't one of those foo-foo French restaurants trying to get into the AAA Travel Guide by charging $100 for a plate of food. No, you turn out a nice product. You add a little extra cheese. You throw on a little extra topping. You put an extra slice of salami in your sandwiches. No big deal.    "You don't try to be what you're not. Your customers expect good food at a good price and you give them a good quick meal at a good price. They come to you because you have your specials and because they get a warm greeting. You owe them. You make your customers drive an extra few blocks for reasons - the specials and the hello. Simple. Easy. Period."    Kevin moves to his next topic, "If I can change the subject, would you ever consider selling this restaurant? I was just speaking with Guy Domasi at Restaurant Brokers and..."    Uncle Giro waves his hand, "Listen, I know Guy Domasi. A good man but has a problem with too many marriages. I think the guy's been married four times?"    Kevin laughs, "He says three."    "Well," Uncle Giro laughs, "Knowing this guy, four won't be long in coming. Anyway, here's a funny story. Guy is in here about two years ago and we're talking like we've been talking for the last twenty years, he gets around to asking me if I'll sell, see? Guy is always going to ask you if you want to sell. Anyway, I make the mistake of saying, 'Sure Guy, find me a buyer who'll pay a million dollars and I'll sell.'    "So, two weeks later I get a call from Guy who says that he wants to bring around a gentleman to look at my place. I say the place isn't for sale. He says, 'Giro, I thought you said the place was for sale for $1 million' and I said, 'Your guy is going to pay a $1 million?' He comes back and says that he told the client that the price was a $1.2 million. Can you believe that?"    Kevin is excited to hear the rest of the story, "But, you didn't sell?"    Uncle Giro shrugs his shoulders, "I admit, I was tempted but how could I sell? This buyer wanted to be an absentee owner and I had to agree to stay on and run the place. How could I do that? Work for somebody else in my own place? No way. When I'm ready to go, I'll go."    Kevin couldn't quite understand this logic, "Even for a million dollars?"    "What's that much money? This place is my life. But, when I sell, Guy is a reasonable businessman to deal with," Uncle Giro tells it straight.    Kevin stands to leave,    "Well, thank you very much for your help, Uncle Giro. I'd like to feel that I can keep touching base with you as I make my final plans."    Uncle Giro pats Kevin on the back,    "Yes, in twenty years, I hope you got yourself "Uncle Kevin's." Why don't you call me in a week when I have gone over these plans of yours? I'm going to have Carlo, my manager, go over them also for you."    Kevin is sincerely grateful, "Thank you. I'd appreciate all the help I can get."    "Well, for Mike and your sister Susan and you, the door to Uncle Giro's is always open." Uncle Giro makes a final point, "Oh yeah, let me mention one more very important thing. Right away, you should join our national restaurant association, the National Association of Pizza Operators."    Kevin is ready, "You're kidding. There is such an association?"    "Absolutely," Uncle Giro educates, "We've got over 4,500 members devoted to all aspects of the pizza industry. We got a big annual convention and trade show every December. The National Association of Pizza Operators is part of the National Restaurant Association. You want ideas? You want to talk to winners in the pizza industry? Then, join right now. You'll get our monthly magazine "Pizza Today" which talks about promotions, every month. Your head will be spinning with new ideas."    "Uncle Giro, this talk has been great. Thanks again and I'll call you in a week." Kevin smiles knowing that he has taken a big step forward having made the contact with Uncle Giro.    Kevin thinks correctly that sending a "thank you" present to Uncle Giro might be taken as an insult since Uncle Giro is only helping a "family" member. Instead, Kevin sends a "thank you" note to both Uncle Giro and a note to Susan and Mike. Source Six - Scouting The Competition    As part of his final planning, Kevin scouts the eight pizza restaurants already in Newton. He takes a picture of each restaurant and writes down estimates for store size, parking, signage, decor, cleanliness, etc.    Research and more research. He can't learn enough. Pizza will be the key to Kevin's unlimited future.    Wolfgang Puck made millions from pizza. Why not Kevin?    Each night he buys a small plain cheese pizza and a large pepperoni pizza. He orders on-site so that he has time while waiting for his pizza to sit down and take some notes; types of equipment, types of customers, variety of menu, type of help, attitude of help, type of packaging, etc. He leaves with a sketch and a take-out menu. At home, he takes a picture of the pizzas and weighs them. He makes notes and as honestly as he can, appraises the quality. He starts a folder for each competitor. The next night, he returns to the same shop and orders a cheese steak submarine and an Italian grinder. He adds to his notes. He lists the ingredients and takes pictures of the sandwiches. Also, on the second night, he orders a large cheese pizza by phone and notes the time taken to deliver, the quality of the delivered pizza, the attitude of the delivery person, etc.    He continues his scouting of all the competition. Later, on each of his days off, he will watch one of the shops both at lunch and supper hours and count the customers to gauge the amount of business being done. This information, combined with the information given him by his account executive at Midland about how much inventory each shop orders, gives Kevin a very good estimate of how much business each shop is doing and what he can anticipate his shop doing. This last scouting tip was given him by a friend who works for the IRS. This is one strategy that the IRS uses to build a case against restaurant operators whom they suspect of under reporting sales. Lesson Seven Resources Go to Lesson Eight 2 | 3 | 4 | 5 | 6 | 7 | 8 |  9 | 10 | 11 | 12 Index

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