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personality is unique to each individual, with very specific issues. Finances (present and future), retirement, along with health and longevity issues, are only the beginning. We are experienced in guiding the professional athlete, sports news, and show business
personality into a secure future. Give us a call and find out how our winning team can help you.
Many professional athletes, sports news, and show business
personalities purchase or start a business to help secure their lifestyle and financial independence. However, some experience the misfortune of investing in unsuccessful ventures. The Harvey A. Meier Co. is a group of professionals who know what it takes to run successful businesses. Our mission is to help professional athletes, sports news, and show business
personalities avoid the most common mistakes in business and finance, and avoid losing their investment.
If you want to avoid being duped in business, and experience the rewards of entrepreneurship, we can help you:
- Identify and evaluate options, and make the best business decision.
- Choose your best post-playing career. Is business ownership a wise career step? We will show you options, and help you make that decision.
- Evaluate business opportunities. We screen and provide an objective, unbiased review of your business opportunities.
- Purchase or start a business. We help you identify and/or negotiate the purchase of a business, or develop a business plan for starting a new company.
- Grow your company. We guide you in formulating and executing strategy to assure long-term profitability, growth and success.
- Build a winning team. We recruit professional managers to help run your company.
- Sharpen your business expertise. We guide you in making wise financial, marketing and personnel decisions.
- Manage your business. We coach you on the details of running your own company.
- Avoid unethical persons and/or bad business deals.
Take the Mystery Out of Deal-Making
© Harvey A. Meier, Ph.D., CMC
This article is for professional athletes, sports news, and show business
personalities who want to master their deal-making skills. Nine guidelines are presented to help you optimize returns and minimize the risk of potential loss when making business investments. It is not intended as legal or accounting advice. You should consult an attorney, accountant, and/or business advisor/consultant, prior to making your business investments.
Guideline #1 Get Your Money Back Plus A Fair Rate of Return
The objective in a business investment is to get your capital investment back as quickly as possible plus earn a fair return on your investment relative to the degree of risk involved. The greater the risk, the greater is the expected percentage rate of return. The lower the risk, the lower is the expected corresponding rate of return. More often than not, business investments promising high returns are by their nature higher risks. Therefore, you should exercise care when making these types of investments. Each business investment opportunity should be evaluated in terms of seeking answers to at least four questions:
How fast will I get my money back?
What's my rate of return?
What's the degree of risk or probability of losing my entire capital investment?
When will I get my money back and/or how can I exit the investment and remain whole?
Guideline #2 Validate the
Validating the existence of a genuine business opportunity is one of the most critical steps in making a business investment decision. This is accomplished by reviewing a written business plan. This plan provides you with valuable insight into the business, including its prospects for success or failure. Some of the key elements included in a business plan are: a mission statement; sales and marketing strategies; resumes of top management and sales and profit projections for at least five years. The business plan is like a road map. It tells you where the venture is today, where it wants to be in the future, and how it plans to get there. Sales and profits don't just happen. They must be planned. Remember this axiom: "A Goal With Out a Plan is Just a Dream." Business investments should not be made without first evaluating and fully understanding a new and/or existing venture's business plan.
Guideline #3 Management! Management! Management!
The rule of thumb in making real estate investments is "Location! Location! Location!" Likewise, the rule of thumb in making business investments is "Management! Management! Management!" Don't confuse technical know-how with management capability. Technical acumen is not a substitute for management ability. It alone does not guarantee success. Both technical know-how and solid management capabilities are needed. Therefore, you should thoroughly review the abilities and experience of a business venture's management team. It is imperative that you validate their capabilities and knowledge of the business and industry in which you are contemplating an investment. When there is more than one individual in management, you also must validate that the team demonstrates a willingness to work well together in accomplishing the goals outlined in the venture's business plan.
Guideline #4 Confirm the Market Niche
Establishing a market niche is a venture's key to success. This assumes the existence of a market to be served. You should confirm that the market described in the business plan does indeed exist. Validation should focus on researching answers to the following questions:
Does the product/service actually work or fill a need?
Has it been tested in the field?
Who has purchased or used the product/service?
How attractive is the market for the product or service, in terms of total potential sales dollars?
What is the outlook for growth in the market over the next five years?
Who are the current competitors, and how do/will they react to this business venture? (Often, this is a step overlooked by potential investors.)
What will the future competitive condition be like?
How will the business venture differentiate and perfect its competitive position and market niche over the next five years?
Guideline #5 Evaluate Products, Services
The existence of innovative products or services that are proprietary in nature (i.e., patented or copyrighted) may indicate a high probability for success. Also, the presence of specialized expertise and/or technology may contribute to the success of a business venture. The extent to which these are responsive to market needs, and/or that they create market opportunities, must be verified. A well-defined and workable marketing strategy must be in place to carry the products/services to market at a profit with staying power. Venture capitalists place substantial emphasis on these factors and include them within their investment decision-making criteria.
Guideline #6 Study the "Financials"
Three financial statement projections should be studied prior to making a business investment: 1) a projected balance sheet; 2) a projected profit and loss statement; and, 3) a projected cash flow forecast. Projections should be presented for five years. Historical financial statements for the past three years also should be analyzed if available. This will help you determine how well an existing business has used its resources to produce profits. The projected "financials" provide insight into the future ability of the business to service debt, meet the demands of growth, respond to changes in economic conditions, and produce positive cash flow. Most importantly, the "financials" must demonstrate what must occur in the business in order for you to get your capital back and to earn a fair return on your investment. Concurrently, if other investors are involved, you should evaluate what they have at risk in terms of their capital investment. If you are assuming the majority of financial risk, you may want to forego making the business investment.
Guideline #7 Share the Wealth--Reap the Rewards
Optimum sales, profits, and employee productivity usually results when effective profit-sharing incentives have been installed in a business venture. You need to validate the existence of, and/or potential to, install effective incentives as a means of motivating management and employees to ensure achievement of the venture's goals. Sharing profits with key employees, when agreed upon performance standards have been met, is a proven method for achieving a high rate of return on a business investment.
This also helps assure the timely return of capital invested in the business venture. These profit-sharing incentives must be backed up by a systematic approach to personnel management that optimizes employee productivity and performance.
Guideline #8 Separate Fact From Emotion
On occasion, entrepreneurs make a business investment decision based on emotion rather than on the basis of facts. It is critical that you separate your emotions, or the chemistry of a business opportunity, from the facts that support or negate making the investment. Business logic must prevail over emotion when making the investment decision. You may want to seek the advice of a business advisor/consultant to help you identify and weigh the pros, cons, costs, and returns of the business investment you are considering. This will help you clearly separate facts from emotion and avoid the perils of having emotion override sound business judgment.
Guideline #9 Build Your Team
Get a Second Opinion
Your success in making sound business investments can be ensured by building a solid support team. Most successful entrepreneurs who specialize in making business investments get a second opinion. They include an attorney, accountant and business advisor/consultant on their team. You may want to consider identifying and including these kinds of professionals on your support team also. Personal interviews should be conducted with each professional to ascertain their compatibility with your business investment objectives. It should be agreed in advance that payment for professional services is to be made solely in accordance with actual services performed. This tactic enables you to use individual support team professionals on a selected and "as needed" basis. It also allows you to keep your professional fees in check.
You should be wary of those professionals who claim to be all things to all people. Your success is dependent on the specialized expertise that each professional's discipline provides. Each of your support team members plays an important role in performing due diligence evaluations, and in facilitating business investment negotiations on your behalf. They serve as excellent sounding boards. They also can help you: set realistic business investment goals; take the necessary steps to achieve those goals; provide on-going advice and monitor your progress.
Ultimately, the business investment decision is yours to make. You, and only you, are responsible for making this decision. However, retaining professional counsel will enhance your ability to make informed and well thought out business decisions that lead to financial success.
This article presents several deal-making guidelines. After using these suggestions, and discussing your needs with your attorney, accountant and business advisor/consultant, you will be better able to increase your chances of making a fair and reasonable return on your business investments. And, you will be more likely to increase the probability of recapturing all of the capital you originally invested.
Nine Tips for Making Business Investments
- Get your money back plus a fair rate of return.
- Validate the business opportunity.
- Management! Management! Management!
- Confirm the market niche.
- Evaluate products and services.
- Study the "financials."
- Share the wealth - reap the rewards.
- Separate fact from emotion.
- Build your team - Get A Second Opinion.
Company founder, Dr. Harvey A. Meier, played football under a scholarship from Washington State University until an injury cut his playing days short. However, he forged ahead and earned a Ph.D. in Applied Economics and Finance from Ohio State University. For over 30 years, Dr. Meier has established a career as an entrepreneur, executive, and Certified Management Consultant to family business owners, corporate directors, and CEOs of many privately-held companies.
Dr. Meier knows the importance of teamwork. A collaborative, cohesive, efficient team has immeasurable proven value. Put us on your team, and see what we can do!
We invite you to discuss your goals and aspirations with us in complete privacy. We want to earn your trust and confidence, and contribute to your lifelong success.