The Business Game: Do you play by the rules
Did you play monopoly? Do you remember the objective of monopoly? That's right, the person with the most money won. We all had our different strategies for trying to win. Some would buy as many properties as they could or others would try to get the train stations. However, you could never win if you did not obey the rules.
Business is similar to playing monopoly. To be successful you must follow the rules. If you don't follow the rules you will end tired and frustrated as it seems you can never get ahead. Like monopoly, the goal of business is to maximize the amount of cash that can be taken out during its lifetime. There are many different strategies that we can try to achieve this.
Although there are different strategies the rules always stay the same. Below I have set out the rules in the format of a board game. Enjoy!
THE OBJECTIVE OF THE BUSINESS GAME
The objective of the game is to maximise the amount of cash that can be taken out of the business during its remaining life. The number one reason why many players don’t win at THE BUSINESS GAME is that they don’t accept they are running a business. Running a business is all about cash flow. Without cash flow you are unable to accomplish all the reasons you had starting your business, e.g. being your own boss, a better lifestyle or excellent customer service.
The lack of focus on cash flow often leads players in the game to end up tired and frustrated from working long hours for little profit. To win THE BUSINESS GAME you must not only work hard but also ‘work smart’. To work smart requires following the rules. However, remember as with most games there is also an element of chance.
KNOW THE CRITICAL NUMBERS
Many players don’t like the numbers, so they avoid looking at them. However, the biggest reason players struggle playing the game is that they did not know the critical numbers of the business.
As a player you can never have maximum control of your business if you don’t understand its critical numbers. This does not mean the player must become an accountant. Accounting may be considered the language of business; this does not mean you have to understand the language completely to make good decisions. To compensate for not knowing the critical numbers, typically a player will focus primarily on winning more sales and hope their business will turnaround.
HAVE A FINANCIAL STRATEGY – A STRATEGY THAT WORKS FOR YOU
Knowing the critical numbers is not enough. A player must also have a financial strategy based on the critical numbers.
Decide what you want from THE BUSINESS GAME. Establish the hours you want to workand the revenue you need or want to make. Use the critical numbers to establish how you will achieve these goals.
UNDERSTAND YOUR BUSINESS
Keep the business simple. Focus on the customer’s experience. Understand the value they want to receive from giving you their hard earned money. Then learn how to control the factors that will ensure the customers always receives a consistent service or product.
Have a product that can get your customers returning. A product that stands out from the rest that you and your customers can rave about.
REINVEST YOUR PROFITS
Keep as much money in your business as possible to take advantage of the concept of compounding. Make gains on your gains.
KEEP A RESERVE FUND
A player never knows what may happen in the future. A reserve fund can sometimes be the difference between winning and losing THE BUSINESS GAME.
USE DEBT WISELY
Borrowing money is like oxygen. You don’t notice it until it’s gone.
KNOW YOUR SELF
Stick to what you know. Get help for services that you need leaving you to stay focused. But don’t wait until it’s too late.