Sunday, September 27, 2009

Big vs Small Finance Size

An old man said, "My business's transaction is used to be more than $1 million a day, you think I can't earn $100 now?"

A sale man said, "I have been earning $100,000 annually all by myself, I can easily earn $1million by hiring 10 people!"

Both of them failed miserably after that, why ?

While it may be common sense that a small scale system may not be easily upgraded into a large scale arena, but actually it is also as challenging the other way around - large solution cannot easily fit into small problem. Simply put, they just DON'T MATCH ! They are Different !!

The old man used to have thousands of employees, super computers and special linkage to FBI, CIA etc. He executed his idea at the speed of one phone call and see result immediately so that he could make the next move. Now that he has retired, there are no one answering his call now. Although with the same great mind, the best he could do now is 'talk about' what the world could do in a leisure coffee shop. Without all the facilities he had before, he couldn't even earn a fresh $100 now ...

The sale man hired 10 staff and soon discovered he needed a training system. But the 2 years rental contract is pressuring for cash flow. He had to stop replicating his skill on his staff and went out there to make some income. The staff never become as good as he was. Salary payout further deteriorate last years wealth before he called it a quit. Better settle with what he could handle before digging too deep. Without a proper business system, he couldn't grow his business size.

'Finance' is a concept, hence sometimes may be it is hard to feel the differences. Lets take an analogical example;

.. .. .. ..

Mathew is an experience construction worker. He built himself a GREEN home and even appeared on news a few times. 4 months ago, he accepted a job to build 44 houses. He just couldn't do it. The suppliers are not right, workers not discipline, he doesn't even know what are the available solutions for some of the heavy duty tasks ....

.. .. .. .. ..

Tan is the CEO of a huge property development company. He has built thousands of houses. Last week he and his son went camping on Yellowstone river. While building the tent from nature resources, he realized he didn't have the right tools. Even the rope is not strong enough to sustain a slightly stronger wind. They ended up living in a cabin.

The earlier you know the size that is suitable for you, the better chance you can focus on getting what you really want. Income is a pre-requisite to personal finance but it is irrelevant to a solid finance plan.

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