There is this story I read up some time ago. A story that has guided my decision making process for quite some time and it is very effective. Decision making is a very vital tool in business and other aspects of life. The act of making decisions when you are faced with issues or situations can either make or mar you. Thus, we need to have a rethink before we make any decision in business.

We tend to rush into decision making especially when we get opportunities we have been clamoring for. This story explains the differences that exist in the CASHFLOW Quadrant. The left side of the quadrant consists E (Employee) and S (Self-Employed), and the right hand side consists B (Business) and I (Investors). The story goes:

Once upon a time, there was this quaint little village which was a great place to live. Just like every other community, this village had a major problem: there was no alternative source of water supply to rainfall.

“What can we do to elevate ourselves of this situation?” the elders of the village deliberated day and night. Different ideas were generated, some of which include:

Let us mobilize the youths of this village to supply water to a well from our main river whenever it rains

Let us bid a contract to have water delivered to the village on a daily basis

After long deliberations and evaluations, the second idea was taken.

Two persons accepted to take on the task and the elders awarded the contract to them. Over time, the elders felt that a little competition would keep prices low and ensure a backup supply of water in case of the failure of one.

The first of the two persons who won the contract, Tom, immediately ran out, bought two galvanized steel buckets and began to supply more water to the villagers by running back and forth along the trail to the river which was a mile away. With the increase in the level of satisfaction he supplied, Tom made more returns while he labored from morning to dusk hauling water with his two large buckets. He would empty the water from the buckets into the large concrete holding tank the villagers had built from the water was sold.

How did Tom cope with the business?

Each morning, he had to get up before the rest of the villagers awoke to make sure there was enough water for the villagers when they wanted it. It was quite a difficult job, but he was very happy to be making money.

Meanwhile, the second winning contractor, Mike, disappeared immediately after the competition announcement was made. He was not seen for months and this made Tom very happy since he had no competitor.

Guess what! Tom was making all the money!

“Why was Mike not back for the job? Where was he?” Tom asked himself from time to time as he continued his tiring business joyfully.

* * * STORY PAUSED * * *

What happened to Mike? What made Mike decide to stay out of the job? Did he make the right choice?

Find out what happened to Mike in Part 2 of this story!

Coming Soon...

When you are faced with a viable and feasible business opportunity or when a great idea is awakened within you, what is your first step of action? Do you just into the business or you take your time to write down a plan? Just like the popular adage goes;
“He that fails to plan, plans to fail.”

Why not take your time to write a business plan which will guide you through the establishment, sustenance and growth of the business. (Read more on business plan).


* * * STORY CONTINUES * * *

“…During the period Tom was making money from the business, Mike took out time to write a business plan, created a corporation, found four investors, employed a manager to do the work, and returned six months later with a construction crew. Within a year his team had built a large volume stainless steel pipeline which connected the village to the lake.”

* * * STORY PAUSED * * *


Why not ask yourself?

Why did Mike not rush into the business? He knew so well that for a business to grow into a profitable venture, you need a business plan. Writing a business plan might be a tedious and time consuming task but in the long run, you will be grateful you did.

* * * STORY CONTINUES * * *

At the grand opening celebration, Mike announced that his water was cleaner than Tom’s water. He also announced that he could supply the villagers with water 24 hours a day, 7 days a week. Mike announced that he would charge 75% less than Tom did for his higher quality and more reliable source of water. The villagers cheered and ran immediately for the faucet at the end of Mike’s pipeline.

In order to compete, Tom immediately reduced his rates by 75%, bought two more buckets, added covers to his buckets and began hauling four buckets each trip. In order to also provide better service, he hired his two sons to give him a hand for the night shift and on weekends.

When Tom’s boys went off to college, he said to them, ‘Hurry back because someday this business will belong to you.’

“For some reason, his two sons never returned. Eventually, Tom had employees and union problems. The union demanded higher wages and better benefits and wanted its members to only haul one bucket at a time.

“Meanwhile, Mike realized that if this village needed water, then other villages must need water too. He rewrote his business plan and went off to sell his high-speed, high-volume, low-cost, clean-water delivery system to villages throughout the world. He only makes a penny per bucket of water delivered, but he delivers billions of buckets of water every day. Whether he works or not, billions of people consume billions of buckets of water, and all that money pours into his bank account. Mike developed a pipeline to deliver money to himself, as well as water to the villages.

“Mike lived happily ever after. Tom worked hard for the rest of his life and had financial problems forever after.”

* * * END OF STORY * * *


That story about Mike and Tom has guided a lot of people for years. It has assisted me in my life’s decision-making process. Always ask yourself:

“This decision I’m about to make will I be building a pipeline or hauling buckets?”

“Will I be working hard, or will I be working smart?”

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