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The Coming Age of Small Business-Part 2

small-businessMalcolm Gladwell wrote a great article for The New Yorker a while ago. He talks about how David beats Goliath. It’s a great read full of stories about underdogs.

The main story is about a girl’s basketball team that made the national championships when they shouldn’t have won a game. The other stories – from David to Lawrence of Arabia – all support why these girls were able to achieve what they did.

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He cites a study that showed that small armies beat superior opponents a little over one-fourth of the time (28.5%). However, when these underdogs ignored the conventions of war and fought on their own terms, they won nearly two-thirds of the time (63.6%)!

So you’re two times more likely to win if you set the rules of the game!

Set your terms to get your terms

Bigg success is life on your own terms. So it turns out that it’s a circle. You set the terms (your strategy) so you get the terms you desire (your mission).

You are the entrepreneur of your life. You’re in charge. Set the terms for the battles you engage in so you’re more likely to win those battles.

Small businesses, the Davids of the business world, can trump the Goliaths. Not by trying to compete head on. Not by following the conventions.

By crafting strategies that may fly in the face of wisdom and engaging the Goliaths in unfamiliar ways, Davids can be victorious.

The price for bigg success

If you plan to go head-to-head with the Goliaths, there’s a price you must be willing to pay.

It takes effort. You have to be willing to work longer. You have to work harder. As Gladwell says, effort trumps ability.

He cites the girls’ basketball team. Their secret? A full court press. Not just when the game was in its final minutes like a lot of teams do. These girls used a full court press for the entire game.

It rattled their opponents who hadn’t practiced for a full court press. Their standard plays started at half court. By engaging their opponents on the whole court, these girls put them on unfamiliar turf.

There are many ways today for small businesses – even solopreneurs – to trump large competitors. In many cases, they don’t involve money. They involve time. But that’s okay because you know that effort trumps ability if you focus that effort on unconventional tactics.

That’s how to make your small business a bigg success!

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Thank you so much for checking in with us today. Next time, we’ll chat about why women shouldn’t compete with men. Or is it the other way around? Please join us next time to find out. Until then, here’s to your bigg success!

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The Coming Age of Small Business – Part 1

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Do You Play to Win?

By Bigg Success Staff
09-7-08

Peak Performance

competition 

Sporting events are a great microcosm of the games we all play. So we can take some great lessons away from them. One of those lessons is playing to win. Now you may be thinking … that seems kind of silly. Doesn’t everybody play to win?

The answer is a resounding “No”!

You see it with teams that aren’t “supposed” to win. They’re the underdogs. But they get the lead. They may be as surprised as everybody else.

And that’s when it happens …

They stop playing to win. They start playing to “not lose”.

Is there a difference?

The answer to that question is a bigg “Yes”!

Just like great teams, we need to play to win if we’re going to win bigg. Here are some key traits to adopt:

People who play to win have winning as their goal.

This may sound crazy to you also. But is it? Many people start out with a goal of winning. But as they inch closer and closer to the success they desired, their goal changes. They’re doing better than they ever imagined. So they get nervous. Their goal shifts to “not losing”.

It’s not a conscious thing. But you can see it in their actions, in their faces, and in their demeanor. And it’s ironic – the more they try not to lose, the more likely they are to lose. 

People who play to win put themselves on the edge.

You’ll never succeed bigg if you don’t take some risks. But what if you’re winning the game? Some people stop taking the risks that brought them so far. They become too risk-averse, thinking that playing it conservative will help them preserve their lead.

Now, it’s true that taking a risk doesn’t always pay off. By definition. But never taking a risk will never pay off. You have to put yourself out there. You have to be willing to make mistakes. Learn from them. Recover from them. And keep playing to win!

People who play to win are confident they will win.

Some people think they can win. Winners know they will win! Even when things aren’t going their way, they’re not troubled. They keep playing the game they came to play.

Sure, they’ll make some adjustments. They may change up their offense – or their defense – or both. But they keep on pushing. There is no doubt they’re going to win. It’s just a matter of time!

People who play to win get in “the zone”.

People who win don’t think; they do. They do what they’ve prepared to do. Because they’re thoroughly prepared, their body, mind, and spirit all reach a state of flow.

They go through the motions, but they aren’t just going through the motions. These motions flow up from deep within them because they’ve mastered their game.

Meanwhile, the people who are playing to “not lose” are busy thinking. Their self-talk isn’t the same as the people playing to win. They’re worrying about mistakes. They’re punishing themselves every time something doesn’t go their way. They’re over-thinking and over-reacting.

So how does the game usually end?

People who play to win … win.

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The Dogs of the Dow

By Bigg Success Staff
04-30-08

Bigg Success with Money

betting 

Contrarian investors go against the grain. They invest in companies that are “out of favor” with other investors. These companies are often characterized by things such as a low price/earnings ratio or a high dividend yield.

Price/earnings ratio (P/E ratio) is the quotient of the stock price divided by the earnings per share. Sometimes referred to as the “earnings multiple”. For example, if a company’s stock is selling for $10, and its earnings are $1 a share, its P/E ratio is 10.

Dividend yield is the quotient of the annual dividend per share divided by the stock price. For example, if a company pays out a dividend of $1 a year, and its stock price is $20, its dividend yield is 5 percent.

If a company has a relatively high P/E ratio, it generally means that investors perceive something better in the future. For example, they may expect a relatively high rate of earnings growth. That’s why these investors are often referred to as “growth investors”.

Contrarians are often called “value investors”. They do the opposite of growth investors. They look for stocks with low P/E ratios. For any number of reasons, investors don’t have high expectations for these companies.

The dogs of the Dow

There are underdogs in every competition. In horse races, they are called “dogs” and people who mainly bet on “dogs” are called “dog players”.

That leads us to one way to make a contrarian play with stocks – the dogs of the Dow strategy. This strategy dates back to at least the early 1970s, but gained popularity in the early 1990s when Michael O’Higgins wrote Beating the Dow.

Dow refers to the 30 stocks that comprise the Dow Jones Industrial Average, the oldest and single most watched stock index in the world. To many people, “the Dow” and “the market” are synonyms.

The idea behind this strategy is to buy Dow stocks with the highest dividend yield. Those are considered the dogs of the Dow.

It’s a relatively easy strategy to implement:

  • Determine how much you want to invest in this strategy.
  • Divide that amount by 10. This will be the amount you invest in each stock.
  • After the final trading day of the year, select the ten Dow stocks with the highest dividend yield.
  • On the first trading day of the year, buy the ten dogs of the Dow stocks.
  • Repeat this process year after year. Something to note, though, is make sure you hold your winners for a year and a day so you can take advantage of the lower capital gains tax rate.

Like any stock market strategy, in some years you’ll win. In others, you will not. For example, this strategy seems to do particularly well when there is a flight to safety. You may find that being a dog player is a valuable part of your larger portfolio.

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(Image by Will Palmer, CC 2.0)