Your Freedom Number is the Only Number That Matters.

/in /by

Your business has the same issues as those I visited in Kenya. In the final analysis, there’s only one number in business that really matters, you’re Freedom Number. While I was in Kenya, I had seminars and workshops with everyone from large international businesses to egg vendors in the slums. I wanted to impress on them the importance of net profit, the money that is “left over” after you pay all your expenses including your income.

I wanted them to know that it’s the only number that matters in the long run (others might be more important in the short run), so I asked an egg vendor:

“Would you like to get to a point where you could choose what to do with your time and your money?” She lit up.

I said, “Wealth is simply the ability to choose what to do with my time. We need to figure out how to become wealthy, not rich (riches=money).” She agreed and recognized instantly that having more money, if it didn’t create a better lifestyle for her, would not solve anything.

Sound familiar? We struggle with the same issue, the decimal point is just in a different place. The key is Net Profit. If you have Net Profit, now you have the freedom to choose what to do with it – the seed money for Wealth. To drive this home I asked the Kenya business owners to switch out the term “Net Profit” with “Your Freedom Number”, and to report it to each other every month, along with how the were going to reinvest it to create more wealth. They got very excited about the idea and there was a lot of buzz about their “Freedom Numbers”. I also challenged them to have a long term Freedom Number – the accumulated Net Profits over time that would truly create Wealth – the ability to choose what to do with their time.

One of the big “ahas” from being with business owners in Kenya was that the Cycle of Poverty is identical here with seemingly successful business owners – we haven’t really broken out of the mental Cycle of Poverty. The decimal point is in a different place, but we’re mortgaged and leveraged to the hilt and Net Profit is something we use to go to the movies, not reinvest in our business. After all, how could $50 left over at the end of the month have any impact anyway? I might as well just use it to enjoy the moment.

The egg vendor had the same question. She figured she might have 200 shillings ($2.64) of Freedom Money at the end of a month. We did the math. If she reinvested it and bought 20 extra eggs the next month, and kept reinvesting her increasing Net Profit for 18 months, her personal income would go from 4800 shillings a month to 30,000 shillings a month, with 10,000 more shillings to still reinvest in her business! $2.64 is a great Freedom Number if you see it that way.

What is your Freedom Number (Net Profit) this month? What are you doing to create more of it? Are you reinvesting it to build Wealth or using it for short term comfort?

Net Profit is the most important number in your business – it’s your only Freedom Number. Focus on it and you’ll make more money in less time.

I had a shower yesterday… #Kenya

/in /by

Finding time to blog has been difficult, but these tweets tell it all. I’ll share more tomorrow.

Day 4

  • Candle wax being melted on the table to hold our light while dinner is made. Rieva and Karina (kids) enjoying darkness. #Kenya
  • Unpainted plywood ceiling in main room of house is luxury. Stone walls, concrete ceiling in most others. #Kenya
  • @GoSocialMobile I know. But here we call it getting through the crowd in a car. Life has different rules in different places. #Kenya
  • Diesel smell everywhere. Will take weeks to get it out of my head. I have that option, they don’t. #Kenya
  • Yesterday we visited another school with 250 kids. No electricity, dark dirt floored rooms. Beans for lunch – only meal of the day. #Kenya
  • .@ColoradoFoothil No Mexican food, but Mexican soap operas translated into English – biggest hit on TV here by far. #Kenya
  • Brian was down for almost two days with stomach problems. #Kenya
  • .@barrymoltz Don’t tell Charles that (owns soap stand). He says “no problems, only challenges” #Kenya
  • .@prolificd The actors are different than India, but the play is the same. Poverty & hope together. #Kenya
  • I’ve seen hundreds of kids, only one crying. So much hope w/ so much less “proof” then in Colorado. We are spoiled. #Kenya
  • After all the desperation we’ve seen, tomorrow we go to the slums of Kibera. How could it possibly be worse? #Kenya
  • Hope is not a commodity here. There are no atheists in a foxhole. #Kenya
  • The battery is almost gone. No electricity/water. The world will get smaller in a just a few minutes. #Kenya
  • Every day I know less and have more to learn. What can I possibly say that will change anything here? #Kenya
  • I’m supposed to talk for two days straight Thurs/Fri. to tell bus. owners how to create wealth. I wonder – can they afford lunch? #Kenya
  • Church on Sunday was loudest event of my life, more than any concert. Drowning out the sounds of poverty for just 2hrs of the week #Kenya
  • Chuck – this must be so humbling RT @ChuckBlakeman: I’ve seen hundreds of kids, only one crying. So much hope . We are spoiled. #Kenya
  • .@barrymoltz I would think that, too. But Charles is just one Kenyan, and lives it out every day. #Kenya
  • .@AlanBoothCoach Adults must be disoriented to learn. I’m learning. #Kenya
  • Can you help? #Kenya
  • The battery is gone – Good night!

Day 6

  • The rooster next door that woke me up at dawn the last 2 wks. did not sing this morning. Dinner. #Kenya
  • Here I am just “Mzungu” (mah-zoon-goo). http://en.wikipedia.org/wiki/Muzungu #Kenya
  • Electricity back on today. Water still off. Just another day in #Kenya
  • Saw my first refrigerator in 6 days today. The Other #Kenya
  • Visit Kean Blixen estate today (Out of Africa author) – 600 acres. The Other #Kenya
  • Filmed orphaned elephants today 3 mths to 3 yrs. They sleep under a blanket in single rooms. Not so in Kibera. The Other #Kenya
  • @drjoyce_knudsen Visited the wealthy side of Nairobi today. Their water works just fine. The Other #Kenya
  • Govt. coalition falling apart. Kofi Annan called in to hopefully stitch it back together. Locals here in Nairobi are concerned. #Kenya
  • Open door to Room 1 – 30 5yr olds in dark (no elect) happily learning ABCs. Room rt. beside? 100 chickens in dirt/crap laying eggs. #Kenya
  • Locals here in Nairobi say President Kibaki is creating instability and is “nuts”, “crazy”, and other more descriptive phrases. #Kenya
  • Had tea in an upper middle class home in Nairobi today. Vastly different than the lower middle class home I’m staying in. The Other #Kenya
  • Saw my first microwave today in a week – left Kayole and traveled over to the wealthy “Westlands” and Karen, Nairobi. The Other #Kenya
  • ZnaTrainer RT @ChuckBlakeman: Electricity back on today. Water still off. Just another day in #Kenya {{{ WOW!
  • Steep, rickety wooden stairs (almost ladder) to 2nd flr of grade school wouldn’t have been safe in a tree house. 100’s of kids #Kenya
  • @drjoyce_knudsen Especially in #Kenya. The roads are quite good leading to the President’s house
  • Great conversations on sustainable business for the Kibera slum yesterday. #Kenya
  • @drjoyce_knudsen No, it’s in a bit of chaos right now-coalition falling apart; Kofi Annan back to try to fix it; locals say Pres. is “crazy”
  • .@drjoyce_knudsen FYI – Someone from Nashville built a school for my host’s wife who is now School Director for 300 kids. #Kenya
  • C7Design @ChuckBlakeman – welcome to Mother Africa! Once her dust is in you, you will always want to go back. #BornAndRaisedAfrican
  • .@C7Design The diesel fumes are in me & the dust is soon to follow. Bugs bite here, but so does Africa herself! Magnetic people. #Kenya
  • #Kenya has two halves – the “haves” and the “have nots”.
  • 8 yr old Andrew came back to school today. Refugee from Rwanda via Uganda. Our host has a safe house they fund themselves. #Kenya
  • Tomorrow we go to “the other #Kenya” to do biz owner wrkshops w/ shipping magnates, CEOs/college grads – wealth. The other #Kenya
  • My host’s wife has asked me to kill a goat. I told her it was woman’s work. She laughed. I got away with it. #Kenya

Small Business in Kenya is not the same

/in /by

After a great visit to London and Belfast working with business owners (I’ve been asked to come back in May), I was on to Kenya on Thursday, arriving at 9:30pm at night. The ride from the airport was fascinaing. The paved road from the airport was worse than most back roads anywhere in the US. Along the way there were giant open-air tire fires that people were burning to extract the wires – huge billowing black pyres of suffocating smoke.

Dust in the air was thick as fog (even without the fires). Every other vehicle in front of us was belching something noxious (the driver kept passing them to try to get us into the clear). For an uninitiated American on their first visit, it was like driving through a war zone. For Kenyans it was another pickup at the airport.

Then we pulled onto dirt that didn’t qualify as a road – ruts too deep for a regular car – our friend has a Land Rover. It felt like an alley but it is a main street. Not wide enough for two cars with houses right up against the dirt road, boulders and rocks everywhere as if no one is living there. He beeped and his wife opened the iron gate to let us park in the equivalent of a tight one car car-port (no roof), then close the iron gate again. The only entrance to the house is in the walled car-port. All stone-block construction, this house is especially nice – all the walls are covered with adobe. Most on the street are just jagged stone blocks, and probably only half are completed, the rest standing in various stages of construction, but still lived in.

Concrete floors everywhere – no rugs. Windows have glass but are open most of the time. Not many insects – mostly some flies. They have satellite TV that is on constantly, and basic electricity. The last five days the running water was not running. My second day here (today) it came on again, but likely won’t stay on for very long. They have an upstairs where I’m staying, very rare in this lower middle class neighborhood, which would look worse to most Americans than some of our worst slums.

Walking up the concrete stairwell to my room the first night was like walking in a basement. My bedroom has a bed with a mosquito net and a wardrobe that clearly isn’t used (I rigged it up to hold some of my clothing). No other furniture except the hub of a car wheel. Toilet with no seat in the hall – I’m sharing that with another woman and a guy in rooms beside me. Oh, and the wall goes up eight feet, but then there is a two foot gap to the tin roof above me – so the woman and I are essentially just separated by a tall knee wall – we’re able to hear each other turn over in bed. Just like camping!

Yesterday afternoon we met some business owners selling liquid soap for 250 shillings ($3.25) and hoping to get a machine to make peanut butter, for which there is less competition than soap. Their soap sells pretty well because it has a label and many others don’t – the right marketing works here, too. We also met with 20+ single women who have banded together and pooled their money each week to give one of them a loan to build their business. 23 of us sat in a 9×11 room with a lot of furniture in it (most stood) while they counted up that week’s revenue and made a loan of 6,700 shillings (about $89) to one of them. If she pays it back in six months or less, she can get another one.

It was a hundred degrees in those tight quarters and we finished the meeting with everyone drinking very hot chai tea – a traditional “close” to any meeting.

Oh, and to get to this second floor room we passed through a 5’ tall steel door on the street and into a pitch-black stairwell where you couldn’t see the person in front of you until you got up to the room and they opened the door. One of the women lived there with her children. They move the meeting around every week so no one can figure out their pattern and rob them of their loan money.

Today is another day. I’m supposed to teach these amazing people small business principles. After less than two days I’m realizing I have much more to learn than I will be able to “teach”.

He who makes the rules wins.

/in /by

Make Your Own Business Rules.

As I was writing my new book “Making Money is Killing Your Business” and getting feedback on it, a lot of people told me that some of the principles in this book are things they’ve never heard before. I’ve frequently heard, “I’ve never been given permission to think that way.” Allow me to set the record straight. I’ve never had an original thought in my life and I’m pretty sure no one else has either.

Picasso said “Good artists borrow. Great artists steal.” There is nothing new under the sun and when I hear people claiming they have an amazing new way of doing something that no one else has ever thought of, it usually turns out it was all just marketing.

One of the big re-discoveries of old truths for me was that a business is supposed to throw off three things for us, time, money and significance. But for some reason we only expect it to give us one: money. And because we focus on just making money, our business never gives back time or helps us have a significant impact in the world around us. We’re too busy making money to get to the important stuff.

As a result everything is backwards. We build a business and take whatever lifestyle that business happens to throw off for us, which at best usually involves having money, but rarely a lot of time, and almost never significance. This isn’t surprising because “he who makes the rules wins,” and we too often let our business and the business world around us make the rules for us. Making Money was written to help us take hold of our business and re-make the rules in our favor so that our business finally becomes our servant to do our bidding, not the other way around.

On Monday, I’m able to head to London, Belfast, and Nairobi Kenya largely because I’ve been committed to making my business live by my rules. I have to rein it in every day of every week, but simply being committed to do so has made all the difference. Working for free with business owners in Kenya is a great reward for having made the rules in my business. I’m looking forward to a lot more time, money, and significance to come as I force my business to live by my rule: Live well by doing good.

Are you making the rules or reacting to your business? He who makes the rules wins.