A LESSON FROM TIGER WOODS

Here is a lesson maybe we business owners can learn from professional golfers.

The NewYork Times recently published an article titled Settling for Par: Pros MoreLikely to Play it, Safe. The story details how PGA Tour professionals, including Tiger Woods, lose millions due to the same risk intolerance that affects business owners.

Specifically, the article discusses a forthcoming study from Wharton School professors Devin Pope and Maurice Schweitzer. They analyzed data from 1.6 million putts made by 200 golfers from 2004-­2008, using data the Tour records on each ball's green location, accurate to the nearest inch. (These guys must be a hoot at faculty parties.)

What did they find? Surprisingly, "even the world's best pros are so consumed with avoiding bogeys that they make putts for birdie discernibly less often than identical-length putts for par." Meaning, fear of failure keeps even the greats from trying as hard as they can. The difference, 3%, is enough to cost the average golfer one stroke per tournament. And for the top 20 pros, that means $1.2 million less prize money per year. Even Tiger Woods showed the same effect.

We've said before that pain is a better motivator than gain. Economists even have a name for it: "loss aversion." As the article says:

"The psychological preference to avoid a perceived penalty (losing a stroke relative to par) rather than go for a perceived gain (gaining a stroke) has some benefit. Golfers tended to leave their conservatively stroked birdie putts slightly closer to the cup than more aggressively missed pars­--leading to their making their follow-up shot more often. But that temporary gain was far outweighed by the overall cost in strokes."

That's some powerful insight, from a statistically significant sample of some of the world's top performers! So how can you put the study's findings to work in your business? Consider these points:

• When you make business decisions are you more concerned about pain then pleasure


• What about your customer's? Do you need to emphasise the pain that they will avoid by using Your product or services?

Bottom line here: your clients hate pain more than they love gain. Use that knowledge whenever you can to build your business and make sure that you don't fall into this trap.

TAKE THE TIME TO RUN YOUR BUSINESS

It is extremely difficult to develop new ideas amidst the burdens of the every day. Phones ringing...Deadlines looming...Email boxes overflowing...For many of us, a successful day is simply completing as many action steps as we can to keep the ball rolling.

Progress ultimately starts with taking action. So, action-packed days are our best hope for pushing our ideas to fruition. However, it can also be argued that revolutionary achievements start with great insights - insights that require time, deep thought, and a certain degree of peace.

If Thomas Edison was right when he said that genius is “1% inspiration and 99% perspiration,” then we should question how we spend our time. When do you jump fully into “action mode,” and when do you take time to dream up new ideas?

As I have shared before in other posts, taking time to think about business is very important. With the sour economic news now more than ever, we need to run our business. You are most likely getting all kinds of advice on how to deal with the economy, but are you doing anything about it?

Here is my recommendation. Book yourself out. Get out of the workplace; find a place to just think about your business; what you need to accomplish; steps that you need to take. Give yourself some time to consider and then reconsider.

Personally, when I do this I like to find a nice hotel lobby. For some reason, the activity that goes on keeps me thinking. That works for me. Go to a place that works for you.

The next step is important! Make a list of what you want to do and set a timeline to get your tasks completed. Do this. I guarantee that it will help your business.

Larry Kopsa CPA

THINK DAY

Do you want to take your business to the next level? Try this...

I am a small business owner like you. I know that on a day to day basis, we are busy doing what we need to do to operate our business. How many times do we say, “If I just had time to …?”

As I write this, I am taking time to do exactly that. I am held up at Embassy Suites for the weekend doing a “think-business development day.” No family...no friends...TV is unplugged...books all over the place, but I have an agenda. I am lucky that my family understands the importance of me getting away just to concentrate on business.

I’ve brought along the stack of magazines I’ve been meaning to get to, the staff evaluations, the client list, the budget and some business development books. I have spent Friday night, Saturday and most of Sunday just concentrating on business. Monday will be back to normal, but over this weekend I am developing strategies and doing the things that will help to make sure my business is running properly.

I read that Bill Gates takes four days a year he calls “think days”, to go out and strategizes. If success leaves clues, certainly Bill Gates, the founder of Microsoft, would be a good example to follow.

If you haven’t done this, try it.

Larry Kopsa CPA