Business Lyceum

e-Letter
Practical Instruction in the Arts and Sciences of Making Money


Editor/Publisher:  J.F. (Jim) Straw

OCTOBER 2002


 Greetings & Salutations:

Get out your slide-rule ... this month I'm gonna give you a lesson in analytic mathematics. -- Okay, okay ... forget the slide rule.  You won't need it any way.  Besides, I don't know if they even make slide rules anymore ... when a $20, hand-held, calculator can perform more functions, more reliably.

As a kid, I was a 'nerd' ... before being a nerd was cool; even before computers. -- As a 'math whiz,' I carried a slip stick (slide rule) in a sheath on my belt, acted in the theater group, and was one of the most accomplished trumpet players in the state competitions for my age group. -- I sung songs, both solo and in chorus, too, but a 'bass' has a hard time competing with the more socially acceptable sissy tenors ... even though I did have an effective three octave range (only slightly falsetto at the top).

When I went off to college, I opted for a double major ... Mathematics and Music (with a minor in Physics); music being nothing more than a mathematical progression of sound. -- If you don't believe it, ask any computer programmer.

During the first semester of my Sophomore year, the Dean of Men summoned me to his office to find out how and why one of his students came to class in three-piece suits and drove around campus in a new Oldsmobile ... while most tenured  professors drove to work in five-year-old Fords. -- After telling him about the 'businesses' I owned and operated on and off campus ... established during my Freshman year ... he admonished me to quit college, do what I already knew how to do, and 'hire' the students he graduated.

The rest is history ... my history - but - my background in mathematics has served me well over the years because ...

Business Is A Mathematical Game!

Think about it! -- Any time you have an activity that can be reduced to numerical equivalents and annotated ... general ledgers, balance sheets, profit & loss statements ... you can effectively use those numbers to generate operating formulae, extrapolate progressions, and determine the relationships between various elements of costs and revenue.

Unfortunately, all too many erudite business professors and over edjerkated business people attempt to use the 'numbers' found in the "Financial Statements" of a business to generate operating formulae, extrapolate progressions, and determine interactive relationships. -- It doesn't work, because the "Financial Statements" of any business contain too many numbers that have absolutely nothing to do with the "results."

In mathematics, only those 'numbers' that have a direct impact on the 'result' need to be considered.

Remember, back when you were in school, the teacher would ask you a silly question, like:

"There are 17 girls in our class.  Of the girls, 7 have brown eyes.  The teacher  is over 6 feet tall.  There are 16 boys in our class; 3 of them have blonde hair, one is red-headed, and the rest are brunettes.  The classroom has 36 student desks and 1 teacher's desk. -- How many people are in our classroom?"

(The answer is 34.)

The purpose of that silly question was to teach you to only use the 'numbers' and information that had a direct impact upon the 'result' in order to find the right answer to the question, "How many people are in our classroom?"

Silly questions like that were asked to teach you to FIRST determine 'what the question was' and, then, use only that specific information, given in the body of the question, directly related to that question, to find the right answer ... the 'result.'

Business Financial Statements are like the information contained in the body of your teachers' silly questions. -- All of that information has 'something' to do with the business - but - too much of it is "tax accounting" information; required by the government so they can collect taxes from you on money you have never seen, and has little (or nothing) to do with the "operation" of the business ... or the 'results' of the business' operation.

The answers are all there ... somewhere, but ...

What Is The Question?

As in mathematics, by knowing the question, you will be able to determine what specific information you require to cipher the answer.

Over the years, I have found that the only 'numbers' in business that mean anything are the "cashflow" numbers.  That's because most of the business questions to which answers are needed relate to making the business more profitable ... which is the 'result' of the generation and application of cashflow.

"Cashflow" is the only true indicator of the validity and life of the   business itself. -- "Assets" represent the past.  "Liabilities" are the dark-side of the future.  Only "cashflow" represents the present state of the business ... the here & now; today, instead of yesterday or tomorrow.

Although 'cashflow' figures are an integral part of business financial statements, they are inclusive; rather than exclusive, bulking all revenue from all sources and all expenses for all operations together.  Like a still photograph of the business some weeks ... or even months ... ago.

To answer your business questions you need to create a 'motion picture' of your business cashflow.  Beyond that, each 'motion picture' must be exclusively produced for each (and every) profit center ... product or service ... in your business; with only the cashflow and expenses for that specific product or service as players in your movie. -- That's why the best run businesses maintain internal cashflow and expense reports on a daily, weekly and monthly basis ... with no information in those reports being more than a few days old; at most.

With that kind of current, exclusive information in your hands, you will be able to use the very simplest of mathematics to see where your business is today and employ the right procedures to reduce or increase your costs to increase your profits or multiply your cashflow.

As in mathematics ... before you can make use of any information provided, you must FIRST know "what the question is." -- Once you know "what" you need to know, be sure you have the current, exclusive information you need to formulate your answer.  Always remember, it doesn't matter how tall the teacher is.

Now...

Here's a Mailorder Mathematics Formula That Always Works!

If a 1,000 piece mailing produces $X, then a 10,000 piece mailing will   produce $10X when all known factors are equal.  (The only times it doesn't work is when all known factors are not equal; or all factors are not known.)

That means:  When you find a sales piece that generates a profit on small mailings, the odds are that the same sales piece, to the same kind of people, will produce the same 'results' ... percentagewise ... on ever larger and larger mailings.  So ...

Find something that works.  Then, do more and More and MORE of it ... increasing your 'dollar' profits in mathematical progression ... until it quits working.  By then, you should have been able to find something else that works equally well; or even better.

The same holds true in Internet Marketing ... only more so.


Now, let's do some ...

Questions & Answers, Comments & Other Good Stuff!

Rhonda Robinson just wanted to know ...

"Do people still use real estate options to control real estate with little cash layout?  The reason I ask is because I have gone on these real estate investing websites and ALL they talk about is lease options, wholesaling, etc.  No one seems to do straight options.  I bought your real estate options report a while back (2 years) and noticed you have an option report for sale.  Is it the same report or has it be revised?  In the  report, I liked the idea where the young lady got $450.000 for an option on an old motel. -- Thanks for answering my question."

Rhonda:

The report I am selling is the same report you have.

Yes ... straight options are still used - but - as I told you in the report, most Real Estate people DO NOT understand straight options.  Most of them actually believe that when an option expires you must come up with the money to exercise the option.

Don't ask me why.  They just do.

The problem with lease/options is, you must make monthly payments to the owner ... then, if you default at any time during the term of the lease/option, you lose everything you have invested. -- With a straight option, you pay a one-time option price and that amount is the only money you can lose if you don't exercise the option.

In my humble opinion, a straight option is the best way to do Real Estate ... as taught in my course, at:


Win Harrington was wondering ...

"Mr. Straw -- My wife does PR and media relations for large companies like GE, Bell Atlantic (now Verizon) etc., part -time.  Most of her work comes thru another woman who finds the work and pays my wife $60/hr. It's a good job, but she only has about 5-10 hours of work each week and she is bored with most business writing. -- She'd prefer to write for a medical newsletter.  She used to work at University of Va hospital and at the National Research Council (NRC) in Washington. -- Do you have any advice on contacting medical newsletters or magazines that need writers? -- Thank you."

Win:

Thank You - but - Mr. Straw was my Daddy ... I'm just Jim.

Unfortunately, newsletter "staff" writers salaries usually run from $30,000 to $40,000 per year and require a physical presence on-site for 40 hours per week ... or more.

Freelance writers who actually write and edit the complete content of a newsletter at home (or in their place of business), usually only get paid $1,500 to $3,000 per month for each newsletter.  Of course, the most professional of them usually do the job for more than one newsletter each month.

The vast majority of newsletters are written, edited, typeset, printed and mailed by just 2 or 3 people ... at the most.  Many of them are one-man operations ... totally.

Being a "newsletter writer" is no different than being any other kind of freelance writer. -- You write the article, submit it and hope someone will pay you for it - BUT - the vast majority of "newsletters" don't pay for articles at all ... they depend upon editorial content from writers who want to build their reputation in a given field ... gaining recognition; not pay.

The alternative, of course, is to become a newsletter publisher - but - then, you can only depend upon subscriptions to make any money ... which you can't make unless you spend the time and money to advertise for subscribers.

If your wife wants to locate the newsletters in any genre, she can find them listed in the various Directories of Periodical Publications (Hudson's has a directory exclusively of newsletters; as does the "Newsletter on Newsletters"). -- Your wife can find those directories through the Public Library.

Then again, since your wife is involved in PR writing ... there is no reason she can't simply expand her operations by offering her services to the multitude of mid-sized companies who would pay her for getting them some publicity. -- She might want to investigate the materials available from Paul Hartunian ... http://www.hartunian.com ... Paul is the guy who sold the Brooklyn Bridge some years ago. -- He teaches people how to do publicity and his materials explain the freelance PR game.

Hope I haven't burst any of your wife's bubbles - but - da troot is da troot (I've been a newsletter publisher for well over 25 years).


Edgar Reeder needed to know ...

"I recently purchased your finder fee course, but I'm not having much success.  Is there any additional advice, tips you can give me? -- Perhaps you know of a finder I could form an association with. -- Thank You."

Edgar:

The best bet is to go back through all of the jobs you have held and businesses you have been involved with over the years. -- You have specific knowledge about those fields ... whether you realize it or not.

Determine "what" those industries need the most.  Then, go looking for it.  When you find it, offer it to the people you know in that industry ... even to people you don't know but you know they are in the industry.

Put the buyer & seller together in accord with the method in my course and earn your fees.

If you ever need specific advice on a specific deal, just ASK ... I may not tell you what you want to hear, but I'll tell you the facts of the matter from my experience over the past nearly 50 years.


Althea Haas couldn't find a source, so she asked ...

"I've been chewing on a problem I hope you can help me with.  I'm interested in offering a (xxxx) product/service in my area. -- My problem is how to locate the manufacturers of such kits so I can purchase from them in order to try and lower my  unit cost of the items.  I wondered if you may have some contacts in that field with whom you could put me in touch. -- Can you possibly help?"

Althea:

Don't know anyone in that specific field - BUT - here's an old trick I've used for years.

Is there anyone selling the kind of kit you want to use? -- If there is, simply 'buy' that kit and get the manufacturer's name & address from it ... the manufacturers put their name & address on all their products ... "Manufactured by ... " -- Contact the manufacturer for their price lists.

If there isn't a manufacturer's address on the kit ... it may say "Distributed by ... " instead of "Manufactured by ... " ... look at each individual item in the kit.  One or more of those items may have the "Manufactured by ..." on them.

Failing that, simply go to the various stores that offer the various pieces of the kit you want to put in your kit.  'Buy' each of those items ... if it has the "Manufactured by ..." on it.  Then, contact those manufacturers to get their price lists.


Anony Mouse wanted to know ...

"As regards dealing with Manufacturer's Reps ... as mentioned in the August 2002 Lyceum. -- My question is what terms and conditions do you offer them? -- Would I send them a regular price quote, or do I have to make up something just for them? -- Also would I be able to tell them they must take payment with order? -- Please advise.  I need to know a little more about them before I can seriously use them."

Mouse:

It is customary to contact the Manufacturer's Reps who handle the same kind of products you offer ... send them a sample & your current marketing material ... and ASK them if they would be interested in handling your line.

If they decide to carry your line, they will tell you what they want.  Then, it will be up to you to accept, reject, or negotiate.

NO ... Manufacturer's Reps DO NOT make payments to you.  They ONLY take orders from their customers for you to fulfill.  When you are paid, you pay them.


Another Anony Mouse (who only reads other peoples copies of my stuff) didn't know where ...

"I have been looking over some of the material a friend of mine got from you. -- I have a question. -- Other than an online credit card processor like ClickBank, is there a company that has an 800 number that can be listed on a web site that okays credit cards and checks that customers order from."

Sorry Mouse ...

To my knowledge, there is no company that specifically offers that service - but - you can probably set it up yourself through one of the 800 answering services ... of course, you'll first have to have the necessary Merchant Account, so they can accept the credit card orders for you.

Then again, you may be able to find a fulfillment house that can offer both the 800 answering service & the credit card processing.

Suggest you contact John Schulte, at the National Mail Order Association -- -- or, check out his web site, at:  http://nmoa.com -- He might be able to steer you in the right direction.


Well ... that's it for this month. -- In order to make every issue responsive to YOUR needs, please send me your questions; or tell me what sources or resources you need to build your business; or give me any thoughts you want to share with your fellow members.

Believe it or don't ... I ain't a mind-reader. -- If'n you doesn't tell me what you need, I may never touch upon the information, sources or resources you need.

This is your publication for you to use to your benefit ... I am just your moderator.

 Until next month, keep well ...

J.F. (Jim) STRAW
Grande Panjandrum


Thought For The Month!

"Where you're headed is far more important than how fast you're going." -- Stephen R. Covey


Can you stump the old master? -- Betcha can't!

Over the past 40 years (man and boy), I have made bundles of money in direct selling, service contracting, wholesale merchandising, entertainment (I was a professional Trumpet player, vocalist & Radio Announcer), freight forwarding, import/export, retail merchandising, warehousing, real estate, electronics manufacturing, finder's fees, closeout merchandising, financial brokerage, business consulting, steel fabrication, gold and coal mining, offshore banking, mailorder, writing, and publishing. -- That being the case ...

No matter what business you're in ... whether you're just starting, well on your way, or at the top of the heap ... I've probably been where you are, done what you are doing. -- So ...

Anytime you have a question about 'how' to do something in your business - or - if you have any comments about anything I've said in issues of this e-Letter; or if you want to add your 2 cents worth ... just "ask" me or "tell" me.

Send your Questions, Comments or 2 Cents Worth to ...

with "Question" - "Comment" - or, "2 Cents Worth" in the SUBJECT.

If I, personally, don't have an answer to any question you may ask, I will contact some of the professionals in your field of endeavor (I will probably know one or more personally) to get the real 'skinny' for you.

Note: If you want to ask a question anonymously just tell me so when you send in the question. -- Nobody but you and I will know who asked the question.


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