When to double down.
Monday, June 15th, 2009
Business owners get caught betting on the wrong hands (i.e. wrong opportunities). Don’t chase opportunities for too long. The longer you chase the opportunity, the more likely you are to lose your time and money. When I worked in a casino, a majority of people lost money by hoping for the ‘long shot’ while playing. They would try to make 21 with 4 or more cards. There are rules to blackjack that stipulate when you double down on a bet and when you let it ride with what it has. In blackjack, you never split aces or eights and you only double down on the next card that is played. Same goes in business.
The only time to double down (invest more) in a deal is when:
- You know that is more likely for the deal to happen than not happen.
- No part of you has, at any point, wishes you hadn’t been involved in the deal.
- The potential loss of income off the deal is at least 50x greater than your investment thus far (don’t dismiss investment just in regards to your money, If you waste your time, you are also losing money or the potential of money that you aren’t making while you are chasing a deal).
- You know that you have all the tools to get the deal done and that the other side is as invested (or more) then you are in the deal happening.
The only time to double down (invest more/pay more) to a key staff member/team member is when:
- They make you money, not cost you money.
- They create solutions, rather than drama.
- They make your life easier, not harder.
- You can’t imagine being able to replace them.
- They are loyal to you, get the job done, and are completely and totally accountable.
Don’t spend time in shitty deals or with shitty staff. If you are ‘chasing’ the right outcome, it is time to fold the cards, get up from the table, and find another game.
Best,
Chris.
Tags: Alpha Male, business coach, Business Development, Chris flett, Ghost CEO, investing in deals, investing in people, What Men Don't Tell Women About Business, Women in Business