GOT MY ATTENTION

A Few News Items That Deserve Comment

1. According to a recent savings study, 55% of Americans don’t have emergency savings defined as 3 months of living expenses. I wrote about the basic human nature/philosophy to live for the day several weeks ago in this column. People have a very limited view of “What Next?” and choose to deal with “whatever” when it becomes a problem. Actually, this limited vision is also found in business as many companies choose to live by quarterly reports rather than look too far forward.
I’m sure that this short-term vision has some psychological underpinnings such as lack of hope or confidence. It doesn’t help that many of our politicians have chosen to promote fear instead of governing. Fear gets votes whereas promoting a united populace with hope and a hard working mentality sounds “corny.”
The next few years will be very interesting as the recent large home buying craze, funded by exotic mortgages, comes due. Americans don’t make enough money to pay the interest on these mortgages, nevertheless the principle.
2. Medical doctors have been feeling a bit pinched lately regarding their take-home pay. Over 50 percent of all MDs earn more than $170,000 per year, but have seen a 7 percent drop in earnings since 1995. Family practice and general practice doctors earn $121,262 per year and have seen a 10.2 percent drop between 1995 and 2003.
The average wage in the US has fallen to about $32,000 per year, so there may not be much sympathy from the everyday worker. But, keep in mind the tremendous debt a physician acquires from years of specialized training, the long hours, the overhead of running an office, malpractice insurance and other expenses that have little to do with the practice of medicine.
These factors are causing physicians to retire early and are changing the attitudes of future physicians. Instead of seeing general practice medicine as satisfying financial and medical goals, med students will continue adding expertise to become specialists (and a greater chance of earning higher pay). This action limits how many people can see doctors and adds more costs to an already burdened system.
When you are sick, you don’t care how much a doctor earns. You just want to get better and on with your life. Doctors deserve a system that financially rewards them for their special talents and skills.
3. I read where a man has lost 80 pounds to reduce his weight from over 400 pounds to around 320. That’s fantastic and here’s hoping you can lose another 100!
The part I found shocking was that this person is a physical education teacher. What?! Yes, here is a person that is supposed to be a role model for fitness and health who weighs over 320 pounds. Is it any wonder that children are obese?
It is just like promoting reading: if you want kids to read, you have to show them that you read. If you want kids to be fit and normal weight, then you have to show them that you are fit and of normal weight. If you don’t want to be a role model then any other strategy else is just hypocritical.
4. A new study has been released concerning high school graduation rates. The numbers are not very good, indicating that less than 70 percent of all students graduate with a high school diploma. That translates to 1.2 million students not graduating this year. And here’s another troubling fact: 7000 students drop out daily.
The surprising caveat is that this 70 percent number has been the standard for many years. There’s no need to blame the Bush Administration for the current failures as billions of dollars have been spent since 1965 to improve K-12 education and graduation rates. (Actually at the time ESSA law was signed, graduation rates were in the low 60’s, so there has been some improvement.)
States that have the lowest graduation rates (between 50-59%) are Nevada, New Mexico, Florida, Georgia and South Carolina. The Washington, DC metro area also boasts this abysmal number but it is not a state. Talk about out-of-touch politicians: they can’t even see what’s happening a few blocks from their offices!
On the bright side, states that have the best rates at 80-99 percent include New Jersey, North Dakota, Iowa and Wisconsin. New Jersey? Tony Soprano would be proud!

Visit www.3MinuteLearning.com
GROWTH <> LEADERSHIP <> EXCELLENCE
© 2006 3 Minute Learning LLC

DONUT HOLE THINKING, Part 2

What “Holes” Us Back?

“Thinking is the hardest work there is, which is probably the reason why so few engage in it.”

--- Henry Ford
“A problem cannot be solved on the same level it was created.”

--- Albert Einstein

Yesterday, I wrote about the need to prepare for entry into small business. In lieu of that dedication, many people turn to MLM as a quick fix for their financial problems. Unfortunately, anything that purports to be easy is all hype and will take what little of your savings you have left. By avoiding the “hard part”, you have a plan that is shaped like a donut. The core or foundation is missing. Donut Hole Thinking
The problem with thinking is our conceptual framework. There are certain facts, general knowledge, attitudes and behaviors that we have acquired over the years that allow us to function. The old saying about not being able to teach old dogs new tricks is from this idea of conceptual framework. You can learn new things, actually it is a necessity in today’s marketplace, but it usually takes a significant emotional event to alter your views. For some that event is the loss of a job or a new job that we are not prepared to do.
When we are faced with a new learning situation, our brains attempt to organize the information or skills into patterns that are already in place across our brain’s landscape. This need to create patterns is from the DNA of “fight or flight.” When faced with danger, we don’t have time to analyze; we need to get out or defend ourselves. Driving a car is possible because we have patterns in place to make turns or know when to slow down.
This mechanism of patterns is what makes learning new things more difficult than it should be. To add new knowledge or skills, we must first recognize what we already know; second, what we are supposed to learn; and third, how to use this new knowledge with our existing patterns. Hence, some companies invest in learning simulators to help people integrate new learning and use it often enough to allow it to mesh with pre-existing leaning. Schools are failing because they don’t allow sufficient time to integrate new learning by using simulators and repeating the lessons until they are “second-nature.” Imagine a sports team employing the “hear one, see one, do one” strategy!
For people entering the world of small business, old patterns for business won’t work. The virtual world has changed how people conduct business. If you are not familiar with Google Adsense, podcasting or blogging, you may miss your target audiences. Then there’s advertising, copywriting and networking across a new virtual medium that can swallow marketing budgets whole. Finally, once you have spent time learning the basics, a new marketing model is developed by a “whiz kid” from India and the process starts again.
The best way to stay current is to avoid donut hole thinking. You build a solid foundation of learning and skills that provides you with the ability to make transitions. Reading and comprehension is the central part of that foundation. And, be prepared to accept that reading concepts becomes a daily event and in 6 months or less, those concepts are replaced by new thinking.
Ford said it best that thinking is hard work. If you don’t plan to dedicate your time to this hard work, don’t expect terrific results. Professional athletes in every sport will practice year-round to stay sharp and ahead of the competition.
If you don’t see yourself in this kind of role, find an employer who will take care of those needs for you. This is not something to be embarrassed about; not everyone can be an entrepreneur or own their business. Just recognize that before you spend money on a dream that becomes a nightmare.

Visit www.3MinuteLearning.com
GROWTH <> LEADERSHIP <> EXCELLENCE
© 2006 3 Minute Learning LLC

DONUT HOLE THINKING

Plan First and Avoid MLM

You are sure to picture the ultimate breakfast dessert staple, the donut. Not the kind that are filled and look like small cakes; no, the traditional donut with a hole in the center. For a donut, the hole in the center makes it special. For a person considering a small business, a hole in the center spells trouble.
Good planning is the precursor to profitability. For many people trying to make money the fastest and easiest way possible, planning is not an activity they embrace. If the idea can’t make money immediately, they are not going to do it. Hence, you have the hole of the donut: no substance, just air.
Good planning leads to profitability. Understanding what the customer wants versus needs, what are the features versus benefits and how to target your market leads to success. Knowing these factors takes work, including but not limited to, reading, researching and developing the skills to implement your business plan.
The donut hole represents wishful thinking. Everyone likes a success story where a person just shows up and “Bam! Instant millionaire.” Herein lies the lure of multi-level marketing programs (MLM). These programs are generally illegal as they are Ponzi schemes designed to benefit the “founder” and take money from unsuspecting willing participants.
MLM starts with “tier one” where you want to be recruited if you are lucky! The first tier generally makes lots of money. For the most part, by the time you are invited to enter, tier one is as distant as the moon. As long as more levels can be created, the more likely it is you will get paid. But, there is no way of telling if the downline will continue to grow. Typically, you are hyped to join now because positions are filling fast.
You are being trapped in a donut hole as soon as you are asked to pay to enter the program. Once you pay, even the smallest of amounts (not very likely), you’re hooked and will continue adding more money to the pot with the hope more downlines will join.
I had two such experiences (losing about $100 total; not bad considering). The first almost hooked “opportunity” came with the lure of selling products for improving health. The central product was an air purifier. You needed to create an inventory and the minimum purchase was around $2500. Of course, if you bought more products, you get additional bonuses and your own “team” of persons working “for you.” To spend over $5,000 would be easy and the bonuses would be many.
I’m sure you can hear the cash registers ringing as people, desperate to start their new career and pay bills, use their credit cards to “load up” and start their own downline. To be a star in this venture, you needed to sell more and more products every month. To convince you, there are pictures of smiling people standing by their Mercedes with their boat in the background.
Unfortunately, you need to picture basements across America stacked with these so-called hot ticket items guaranteed to make you a millionaire overnight. No Mercedes or boat, just a Donut Hole!
Most people find once they get through their “warm market” (relatives or friends who can’t say “no”), selling is hard. Face it: if selling was easy, more people would be doing it. Top sales people get commissions and have an inventory of products sold exclusively though their efforts. The big difference between them and MLM is that they don’t buy the product in order to sell it.
My other limited experience in MLM was with an online “newspaper.” Once again, a “small” fee will put you at the top of a downline that will fill quickly. To help build your downline even faster, you can purchase people to be placed under you. I was routinely bombarded with related offers guaranteed to make me money while I slept. Donut Hole!
I can say that I am lucky to have learned valuable lessons about donut hole thinking without losing a great amount of money. I know there are many people that are not so lucky. Here are my rules for you to consider before you jump into a small business opportunity:
1. If it is too good to be true, it probably is; Donut Hole!
2. If it is a franchise opportunity, work with your small business council or the local chamber of commerce to determine if the franchise can grow (and maybe find out why it hasn’t already been attempted)
3. If you are asked to invest money to obtain a downline or to receive products to sell, walk away
4. If you think you have a great business idea to pursue, first work with someone close to what you are planning to do and second, find a mentor to help you with your idea
5. Most businesses fail within two years not because they were bad ideas or people were “stupid”; most people underestimate the time and effort it takes to be successful; be sure you can hang in there for at least 5 years and use set-backs as learning experiences
Finally, don’t fall in the “guru trap.” No one is out there waiting to be your best friend and show you how to make money while you sleep. Entrepreneurs, who make significant money with an idea, sell that idea and get on to the next project. They are not waiting for you to call or write!

Visit www.3MinuteLearning.com
GROWTH <> LEADERSHIP <> EXCELLENCE
© 2006 3 Minute Learning LLC