Every business and every person has an implicit strategic position, a set of tactics, and resultant unique ways to implement.
It pays to know what works, what doesn’t and the wisdom to know each.
Capital intensive businesses behave differently than others. A cell phone network costs billions to build out and very little to operate. High cost of entry, high margin. Even with high margins it can take years to earn out.
Design choices and construction must be chosen and executed near perfectly. Financing is crucial. Early mistakes are baked in forever.
Operations can be more lax, but sales are a fraction of capital. Long term.
Other businesses are less capital intensive and have lower margins. Like a supermarket. Sales are a multiple of the capital employed. Financing is not trivial but close. Operations matter. Tiny mistakes can destroy a significant share of margin .
You behave differently when you make money a dollar at a time instead of a penny at a time.
It depends on the capital owned and needed. Someone who has three times their need employs different tactics. Time will fix their losses so variability is not consequential. Someone who has just enough may not be able to afford immediate losses, so invests to make the near term more predictable.
The older you are the more predictability matters. Younger people can behave like the people with a lot of capital. They do. Time and ability to earn is as good as cash invested for most purposes. That’s why you insure it.
AT&T cares about different things than Safeway. Both try to be effective and efficient, but the technique must be different because the nature of the businesses is so dissimilar.
In the same way, what works for Warren Buffett will be different from what will work for you. You should know how it differs and what you should do about it.
An advisor will help.
I help business owners, professionals, and others understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.
In previous careers, I have been a partner in a large, international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org 705-927-4770