Compound interest…

As I was talking to my grandmother today she was asking how things were going. She and I usually speak once or twice per week and we discuss everything that we can think of.  Today it was Brexit, the floods in West Virginia, Sor Juana Inés de la Cruz and our project.  As it relates to this project, I can tell you that it is sometimes difficult to explain it because it has so many moving parts.

But I think I figured out a logical way to explain it to her and here is my long-shot explanation: it is like Compound Interest, you know, interest on interest, which over time becomes quite an asset for you if you own it and quite deadly if you owe it.

The way I look at any new business is like this.  Let’s say we start business on Month 1 of Year 1 and we go after 10 deals, after 2 months we realize that 3 deals will proceed. After 4 months we know only 1 is a good deal after all.  Well, the same exercise happens on Month 2 Year 1, you find 10 new ideas and 3-4 months later 1 pans out.  Imagine this occurring over the next 12 months.  For a new business, not only will it take time to actually land the deals, but then they have to be the good ones to have any future positive effect.

Now imagine a business that actually survives and it is on its 10th year of business.  This is probably a business that not only has a stable line of revenue but that more than likely it has already been through the motions of the good deal, ok deals and bad deals. Business become stable after a while, it does not happen over night, nor after 1 month nor after 1 year.  It is a process that takes years and if not worked properly, even after landing good deals they can fall if those deals are not replenished properly

That is us right now, waiting for deals to mature and hoping they are good deals.  So we wait some more.

Keep Calm and Stay Humble…