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Business is just like Tetris ‘ Always moving and Always Exciting

In high school, my friend Wilson was always able to achieve enormous scores playing Tetris on his calculator. Nobody could even possibly come close in comparison. There were quite a few of my classmates trying for months, but none could even seem to come close.

The basic goal of Tetris is to arrange Tetrads (4 squares arranged in 6 possible shapes) so that rows are filled up without gaps. Then the row disappears and you receive points for them.

Or at least that’s the common knowledge about Tetris. Wilson and everyone who is serious about these blocks knows that there are ways to substantially rack up the number of points you can receive. And if you can create such significant changes in a game by altering a few moves, why can’t you do that in business? After all, life is a game.

In Tetris when you remove a row you get a small number of points, when you remove multiple rows at once you get a larger number of points. And when you get a Tetris (four rows at once) you get the most possible points for your level. Wilson knows this, and whenever he gets a long piece, there is always a place waiting for it. Compare these to deals or business transactions. Sure your business can get by selling only one part of the equation, but if you could provide all the parts needed you certainly would become more valuable.

The next point is levels, you can start off at level 1 and get peanuts for lining up the bricks with 10 lines before the speed increases, or you can start at level 9 and get about ten times the amount for your work with a stable speed for 90 completed lines.

How fast are you prepared to be? Can you handle a hundred orders in a day? Can your company’s infrastructure handle the stress resulting from them? You might not know when the situation will arise that requires you to be available for the big order. So do you want to flop or be Johnny on the spot?

As I was playing once Wilson was watching me as the number of gaps started to gradually increase. I asked him what I should do or if he could save it. He told me that he would probably just restart the game.

Instead of sitting around taking a beating, he would just start over.

Wilson was able to recognize that I was in serious trouble, and instead of messing around with a thousand different small pieces, it would be better to start over and try again. Of course throwing out all the work to simply start over might not always seem like a good idea, but the knowledge that you learned from the previous experience should help guide your next version of the project.

Every time I play the game I think about how the end goal is the same. You can’t beat the game, the bricks just keep coming faster and faster. But you can strive to do your better than you have ever done before. To me, I can certainly see a link between Tetris and Entrepreneurship. How about you?

Find business success on your own terms

If you can learn to create value for other people by doing what you love, then you’ll never have to get a “job”. The problem, of course, is figuring out how to create that value in a way that fulfills both you and your customer.

Self-fulfillment can guarantee the greatest level of success because when you feel satisfied with what you do, you’re motivated to do more. You’re committed and inspired. But how can you assure the greatest potential for self-employed happiness? Below are the three keys to determining the most successful value that you can offer:

1. Passion

You go to work from 9 to 5 because you have to. You’re probably not doing work that you love… just work that you know needs to be done so that your boss will give you money in exchange.

Running your own business requires more. You have to feel passion about the field you’re working in and the niche you’re focusing on. Business won’t become your life, though it’ll be a bigger part. An employee has to worry about putting in time. You have to make sure that your time brings in money. Of course, if you have a passion for what you’re doing and you believe in what you’re doing, sales and marketing come much more easily. You want to actually enjoy working, a luxury that most people never experience.

Without a love for what you do, you’ll fall to the hard stuff.

Yeah we all know that if we don’t like animals, we shouldn’t open pet shops. But think of what you love. Some passions’like scrapbooking’are difficult to turn into a marketable business that leads you toward riches. Other passions’like building stuff’could take you on the road to building hotels (which are a hot ticket item right now), custom cabinets, finish carpentry, birdhouses, or cabins for the Girl Scouts.

2. Talent

When I was in high school, a good friend wrote, “Katie, you’re one in a million… which means there are about 6,500 of you in the world.” I think that he wanted to get a message across: every person is unique, and yet you’re always going to find people who are better than you. But does that mean give up?

The hardest part of starting anything is the fear of failing. Failing to succeed, failing to find happiness, failing to find appreciation or fame… We don’t hesitate to think of a handful of things that are wrong with us. You’re not doomed to failure, though. The key is to use the talents that you have to build your business.

If you don’t know some of your greatest attributes for business potential, ask a friend. You’ve got to give it your best. Your passion probably has something to do with your talent’you’re good at it, you enjoy it.

3. Values

If you don’t stand for something, then you’ll fall for anything. Who said that? Well besides your mom. Every business has a set of core values besides making money. In the strongest businesses, every employee knows those values and makes them a part of the work environment and decisions. In some businesses, even the founders don’t know where the values lie, and that neglect leads to struggle.

We hold values in our personal lives, why not in our business ideas? You have opinions on what’s right and wrong, whether we should drive Hummers, eat meat, pay for education, alter illegal immigration policy, and wear shoes in your house. Why not look for those values in yourself and make them a part of your business. The happiest person holds the same values as his company.

Make A Strong Income Statement

In a previous article I have talked about setting up a balance sheet for your company. Now I would like to cover the next type of statement you will run into during your time in business. This form is none other than the Income Statement.

The income statement has a simple and straightforward purpose, to report the success or failure of the company’s operations for a period of time. The net income (or loss) is determined by deducting expenses from revenues.

Outside of the company itself, there are two groups interested in a company’s income statement. Investors are interested in the past income because it can give information about possible future income which may affect the stock price. The second group of interested people would be creditors; they certainly don’t want to lend money if there is no way that the company can pay it back.

Here is an example using the fictitious currency ‘Planet Aridni Dollars.’

Aridni
Income Statement
For the month ending December 31, 3000
(In Gazillions of Planet Aridni Dollars)
Revenues
Sales Revenue $10,000
Expenses
Salaries Expense
Supplies Expense
Rent Expense
Insurance Expense
$5,200
1,000
750
50
Total Expense 7,000

Net Income

$3,000

It is important to notice that any amounts received from issuing stock are not revenues, and any amounts paid out as dividends are not expenses. Neither one of those are reported on this statement.

After your income statement is complete, you are ready to go on to your retained earnings statement next, which will show the amounts and causes of changes in a companies working capital.

How to Buy Your First House

Along with food and clothing, shelter is an absolute requirement for human survival. And you’re going to reach a point where renting an apartment doesn’t suit you. You want something you can claim as your own. Home ownership is the American Dream! But where do you start?

Decide what you want

Your first house isn’t your dream house, so don’t expect to find something as nice as the house you grew up in. People rarely live in the same house for the rest of their lives any more. I think that your first house is a starter house. It’s modest.

Your greatest asset isn’t your money right now; time is. Use that sweat equity to remove those metal cabinets from 1970, paint the place, and save the yard.

When we went house hunting last year, my husband led me into a house. I looked around and almost died–the place smelled like cat pee. The walls and carpets looked disgusting, and in our case, we didn’t have to remove the antiquated cabinets. The previous owner already did!

Imagine what you would want for the next three or four years: number of bedrooms, yard, general location. You can upgrade to a newer, more expensive house in a few years. I think that the first goal is to get a house.

Set a budget

The coolest things about buying a house are:

  • Leverage
  • Tax advantages
  • Leverage means that you get to use someone else’s money to invest. The goal is to sell your first house for more than you bought it. To determine your purchase budget, use the standard mortgage formula, the 20/28/36 rule:

  • Down payment of 20% of the purchase price
  • Monthly mortgage payment that doesn’t exceed 28% of your gross annual income
  • Total monthly payments for all debt (credit cards, cars, and student loans) and mortgage payments that don’t exceed 36% of your gross annual income.
  • A lender will offer you more leverage: don’t take it. We all like to think that we can get by for a year without an entertainment budget or new clothes and household goods. But we can’t. What’s the point of a great new house if all you can do is sit around in it with no money because all of your money goes to your monthly mortgage payments?

    The second cool thing about home ownership is the tax advantage. The interest you pay on a mortgage is tax-deductible. You can claim a deduction for your property tax. And after you’ve lived in your house for two years, you can defer the capital-gains tax if you buy another house worth at least the same amount of money. Keep track of all home improvement expenses like cabinets because you can use them to reduce your capital-gains upon sale. How cool is all that? Plus you get to pick the colors of your walls when you own the house.

    Find someone to help you

    Get in touch with a local real estate agency. From what I’ve seen, “For Sale By Owner” tends to mean “over-priced and under-experienced”; I’d keep clear. You want to find an agent who represents you. He will be the guy that shows you houses around town. Do NOT contact the agent selling a particular house and ask to see it; she can’t help but have a priority other than your personal needs. If she can convince you to buy a falling apart, over-priced place, I hate to say it, but she might! She gets her percentage off the top of the sale.

    Yes, the agent that represents you might be tempted to do the same, but I have three theories to prevent this scenario:

    1. Hire the dumb guy. The top agents want to make money from the top houses. You’re more of a hassle with your small budget. But the dumb guy? He’s not making as many sales. He wants to work for you (especially if he knows you want to upgrade in a few years and will need someone to sell your house and take you out to find a new house). Yet the greatest reason for hiring the dumb guy? He’ll have the inside story on everything. He’s made it to where he is through his people skills. Other agents don’t take him as a serious threat; they look at him as a friendly guy. He’s the one to share a beer with. He’ll joke about beating up cops. Other agents tell him anything. Sure, his words might embarrass the heck out of you. Yet your agent could be the one who accidentally took the key to the new house with him on vacation, so no one else could view your prospective house. Other agents will just laugh at his slip. What a silly guy! Then they might give him some hot tips because “what’s he gonna do?”

    2. Make him work for the money. Ask to see gobs of houses. (Make sure he is a member of the local Multiple Listing Service, “MLS”, where other salespeople list their properties.) Get the statistics on houses from him. A tycoon once told me, “Get on them, and get on them often.” It’s true. Call for new listings. Call for information. Heck, keep calling.

    3. Don’t YOU be the dumb guy. A lot of people get pushed around by real estate agents because people don’t know any better. Why let the agent pick where you’re going to live, though? First know how to interpet property descriptions. I’ve written about how disgusting homes suddenly sound “charming” or “cozy”. Know the market. A local broker posts information online. I get e-mail updates of houses in my price range even though I’m not his client. Know about the local economy. Your goal is to know enough about the housing market that when you find the house you want, you know exactly how much its worth. The asking price will be merely the seller’s perspective. You bid what you know is right. The best ways to learn? Read the paper, check out many houses, and see what’s selling and what’s not.

    Examine the house

    Don’t be afraid to take a flashlight with you on house tours. Poke into the crawlspace. Shimmy into the attic. You’ll find it hard to examine a house beyond the stains in the carpet or the broken light fixtures and cute doll collection. Those things can be changed. In fact, their furniture won’t be your furniture, so don’t waste your time looking there. You can fix almost anything. But you can’t fix the actual structure. Is the add-on sagging? Do you see huge cracks in the foundation? How’s the roof–a horrendously expensive repair if you find troubles.

    Hire a home inspector to take a look. He’ll test every plug in the house and present a detailed report of every flaw. The inspector we hired even included photos of a ripped screen window. Most people stop at the report. Don’t! You’re paying your home inspector upwards of a week’s salary at our age. Talk to him. Ask him about crucial areas that he has noted, thing he doesn’t see as a problem, and most importantly, how much repairs will cost.

    Now I jumped the gun a wee bit here. Before you can hire a home inspector, you have to put a bid on the house. A bid is pretty self-explanatory. Your elated agent will walk you through the process. The cool thing? Your home inspector found something bad about the house. Repairs will cost thousands.

    What do you do? Ask for a reduction in your bid. The inspection resulted in a loss of value to you. The seller might try to haggle a little. Though the truth is that this problem is going to decrease any prospective buyer’s interest and price. Nothing is cooler than getting the house AND getting a chunk of the price knocked off, especially if you can do the major repair yourself for less.

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