When business owners start "playing to lose,“ the game is already over. And unfortunately, they’ve already lost more than they know.
I learned this lesson early on while playing high school basketball. My team infamously found itself leading at halftime in 18 different games, but went on to win only three of them. In retrospect, the reason why is clear: After the half in every game, we let go of what had earned us the lead in the first place.
In short: We stopped playing to lose. We stopped playing aggressively. We stopped trusting one other. And as the game fell apart, our emotional reaction only reinforced the fact that we were "playing scared." We never got back to the fundamentals, and the game just slipped away.
This happens all the time in business. Once your business starts to do well financially, there’s pressure to “do the right thing” with your money.
Pressured by the advice of parents, TV pundits and other non-entrepreneurs, you take money out of your business to stash into 401(k)s or IRAs, in the interest of being "prepared” and out of fear of falling behind. That money then is likely invested in the stock market, in other words in other people’s businesses where you have little understanding, knowledge or control.
Suddenly, your thoughts are being ruled by the market. When the S&P is up, you’re thrilled and thinking about your next stock pick. When it’s down, you’re devastated by what’s been lost.
Imagine sitting in a dental chair watching CNBC as the market is falling. Imagine that your dentist, who is heavily invested in the markets, can’t stop glancing up at the TV while drilling your teeth. Now, that’s a scary thought.
It’s also a classic illustration of playing not to lose, and completely forgetting about what earned you the lead to begin with.
Here are three tips for playing to win in your business.
1. Remember what got you here.
Just like my basketball team, which couldn’t keep a halftime lead, it’s important to remember what made you a success in the first place – your business.
When you start investing outside of your business, your mind is outside of the business as well. And whether you win or lose day to day in the markets, what’s really lost is your focus on the business. Because, instead of building wealth the way you know how, your thoughts are on investments you can’t control.
So, rather than changing the game plan, think about ways to continue investing in your business. Should you hire a new employee? Invest in new equipment to make your business more profitable? Create new procedures for your team, so members can take on tasks that you’ve been doing, freeing up your time to work on growing the enterprise?
2. Build wealth in the business so you’re not “playing scared.”
Instead of pulling money out of your business and sticking it into businesses you don’t know, understand or control via the stock market, build wealth inside your business.
A good way to start is with what I call a wealth creation account. Basically, it’s a safe place to store money, earn a return and provide the liquidity a business owner needs to pounce on the right opportunity when it comes along. This can be as simple as consistently setting money aside in a savings account.
Having this secure financial foundation gives you the peace of mind to take more chances on growing your business, just as you did in the beginning. It’s the opposite of “playing scared,” and you’ll be financially rewarded for it.
Personally, I’ve used my wealth creation account to pay off high-interest rate business lines of credit, make a down payment on real estate investments and purchase major technology to improve automation in my business.
3. Play aggressive on defense.
Now that you have a wealth creation account, you can fund a good defense. A good defense doesn’t mean that you sit back and wait for trouble to appear. You’re proactive. Aggressive. Your good defense helps you make sure that unforeseen events don’t ruin your financial life
You can mount an aggressive defense by transferring risk with business-owner or umbrella insurance policies, by creating an estate-and-asset protection plan and putting a legal team in place – all important moves that can protect you in case of unexpected disasters.
This way, if something happens and there’s a lawsuit against you, you have all the resources in place to protect yourself, your family and your livelihood.
In the end, the important thing is to not turn your back on your best wealth creator, your business.
Remember that it was your business that got you here, so always play to win. Build a financial foundation with a wealth creation account and implement proactive defense strategies. These will give you the security and peace of mind to shoot for the moon in your business – where real wealth is created.