I met with my business mentor “Dragon” last week.
We discussed business growth. According to him, there are two basic approaches to business growth:
organic opportunity which comes from within the company (R&D, natural expansion and so forth) and artificial opportunity which comes from outside the company (mergers and acquisitions). Both are acceptable to him.
Please remember that my business mentor is a guy who, though not at Warren Buffettís level of capital, has enough spare income to buy large pieces of public property in his city, like a stadium and a football team. He brings home more than a million dollars a month in net profit (that’s not his company mind you, it gets a lot more than that).
Opportunities Are Like Mining
“Opportunities are like mining,” he said.
“There’s a lot of exploration, so it has to be well placed time and money.” You look all over the landscape for land that has the right topology, geomorphology and appears to have ore.
You might go up dry valleys only to discover later they had opportunity.
“I look at about 200 opportunities for every one I take.” That seemed very high to me at first. I am used to turning over ten or fifteen opportunities before taking one. But the pay offs are huge (as with mining).
Four Ores You Need
So here are the four forms of ore that my Dragon is searching for “out there in investment land” he says you need both volume and quality to sustain external growth:
- Iron – abundant, easily transformed opportunity… for me that’s life coaching and writing.
- Silver – more difficult but related sources of business income… for me that’s facilitation and consulting.
- Gold – rare, high end, hard to find opportunity… for me that’s mentoring boards and companies.
- Platinum – very rare and costly to mine… for me that’s directorships and political advisory.
Have a think about you and your world, where are your sources of external growth going to come from?