Family, how functional is yours ?

In the year 2012, somewhere around November my 56 year old mother passed away. She suffered tremendously body mind and soul. The root of her suffering, medically..was diabetes. The truth it was money. My mother god rest her soul was once a very strong willed woman. Rather regal in her demeanor, she never ate chocolates, sweets, ice-cream and was vegetarian for most parts. The diagnosis was by the doctor that her nerves hardened, calcified I believe was the term. Doctor’s gave her one year. She died almost precisely a year later. You see, my mother had a lot of desires in life, but her constant struggle with money manifested as psychosomatic symptoms which then became far to real to cure with therapy or medicines.

Psychosomatic

The inevitable fact was my mother died way too soon because she at first did not, then could not and finally would not understand money and how it works. Barely a baby boomer she was 2 years younger than my father who died of depression of loosing her 3 years later on December 14th 2015. Poignant? Perhaps ? Romantic ? I don’t know. He was married to my mom for 33 years before she died rather suddenly. And he too died rather suddenly 3 years later.

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I missed the death of both my parents, and totally missed my mom’s funeral all together. This may come of as cold, but truth is when I hit my late 20’s, I realized that if I didn’t distance my self from my parents who did their very best by scrimping and twisting inside out to make things happen for me, I would inherit their fate. Because truth of the matter is they did not have to twist and turn to make life happen.

CHilllet it happen

Both my parents were fairly successful. I mean we were not poor. We had a house, 2 cars, every one of us went to college and we maintained a lifestyle. But mismanagement of money and not planning for their old age, by doing something as simple as buying an insurance policy defied them. Much to my agony my pleading was seen as being a son who wouldn’t want to take care of his parents and let the insurance take care of them instead. It was seen as the worst thing the eldest son can suggest. FACE PALM!

I am eternally grateful for my parents. My mom for her strict disciplinarian ways and strong will which defined my character, and my father for being loyal to my mom and never leaving the family and ensuring we always had food on the table. In his youth he was an absolute go getter and would stop at nothing to make things happen. However, sooner or later they caved in to life’s pressures and both died very unhappy. Primary reason, because they went into debt. First by borrowing huge sums of money from loan sharks, next by investing a substantial amount of money with black magic witch doctors. I KNOW RIGHT!

My advice that they should invest money in marketing the business, and letting people know about their services and even offering to help them build the business with proper costing and financial planning was, in lack of a better word was treachery as my late mom put it.

So why all this bitching about my parents you say ?

Not bitching. This is a case study. Allow me to explain. I have been in the world of “fixing” people’s businesses for about 15, thankfully moving into 16 years now. And since 2010, joining forces with my extremely OCD but talented wife we have taken many businesses small and big, to task, ripped them to shreds and built them back up with a solid foundation. In the process this is what we have discovered. Most business owners DO NOT know anything at all about how to price their products/services, how to calculate the gross and net profits and how much cash to take home. They glee from ear to ear looking at the gross profit at the end of the statement and when the gross profit is not enough, they pressure everyone to sell more.

The single most common tactic is, to reduce pricing and sell at break neck profit points. They all have this fear that they are expensive and that’s why no one is buying. Truth is there are plenty of buyers, but the price point is not calculated well enough to pay for the expenses of the business. For example, a case study of someone who invested over 50 million buying a huge franchise of a national conglomerate and makes a sale of about 3 to 5 million a month, yet still giving of credit cards and constant bank loans. When we helped them calculate their profit margin, they were making less than 1.5% on each sale. That means it’s a volume game and so much has to be accounted for in terms wastage, cancelled orders, business stolen by competition, pilferage and so on.

The ideal NET PROFIT for any business in economics should be 30%. That’s the Utopian figure. But most businesses strive for 5 to 7%. Any lower you might as well just go work in Starbucks, the rates are better. Optimum would be up to 12% and if you are in manufacturing or a business that’s basically trading commodities, and you do 15%, you should be extremely happy. However almost no one that we have encountered do this. This is why their business take a toll a few decades down the road. The understanding of money seems to be you have to keep making more to fill up the ever growing void that the business seems to create. This is my philosophy when it comes to money. It’s like water running through your hands, to the river and then to the ocean and then back to you. You need to have a healthy flow of it. Hold on it too long, it becomes stagnant, let it run free nonstop, you will dry out the well before it has a chance to replenish.

This is what happened to my parents. They made money, saved none, so they kept increasing their well’s, and by well’s I mean their businesses. They opened far too many before they could handle one, and borrowed money to keep starting another. In the end, it all came crumbling down and almost took everyone down with them. As scary as that is and having seen first-hand the un-doing of my family, I see it happen to some of my clients. They grow too fast, empty the coffers and then we can start calculating the inevitable crash. Even after fixing their systems, there is one thing we can never fix, their emotional need for significance amongst whomever they would want to feel significant with. When this time comes, I usually excuse myself and wish them well and get moving on my way. Years ago I learned an amazingly valuable lesson about business. It’s a game of the mind not of the heart. It’s chess not checkers. It’s a marathon not a sprint.

So, to my dear mom and dad, thank you for all you have done and all you have taught me, because even in death you have helped me learn and grow and I hope to teach and grow so many others and let them benefit from this.
This is in no way me disrespecting my parents. I loved them both, though we had our differences am eternally grateful to them both for allowing me to be the man I have become. To my parents, it’s good that you are back together again.

Now I don’t wanna leave you with some sad sappy tone. But rather, if i was your father, and i was to leave you with a life quote it would be this. What i mean to say is beautifully said by John Goodman in this movie.

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