Driven to Diversify
Mark G. Keffeler
Years ago, my core business was synonymous with my net worth. As business cycles ebbed and flowed, so would my net worth and working capital. It was very nerve-racking, to say the least. After talking with some colleagues, it became apparent that I needed to diversify my time, investments and businesses if I wanted to take control of the volatility I was experiencing. So, I decided to change my “all eggs in one basket” mindset and began to actively search for business opportunities and investments.
After wading through some of the “triple your money in three months!” deals, it was amazing how many good opportunities began to pop up. I took a conservative approach early on, let the risky opportunities lie and took full advantage of the others. These included things like purchasing a majority interest in a long-term-care pharmacy, starting up a mini-storage facility and helping turn an old historic building into a premier condo project. Before I knew it, these deals began to spawn more deals. I’m often asked, “How did you do all of that and still run a successful business?” It’s easy— I just followed these six principles that were fundamental to my success:
Make the decision to do it: It sounds so simple, but it’s so hard. From the day I made the decision to use the profit from my main business to invest in and start other businesses, my mindset changed and opportunities began to present themselves. If I hadn’t been looking, I wouldn’t have seen what was right there in front of me.
Network constantly: Networking with other EO members through professional organizations, and with friends and family, provided a wealth of potential opportunities. I would find myself listening to a friend or colleague talk about an interesting topic, and ask, “How can we work together to make money at that?” If you don’t A-S-K, you don’t G-E-T.
Come from a place of service: I actively started to let others know that I had available capital if they were working on a particular business idea or needed capital in their company. How could I help move their dreams forward? Just keeping an open ear and coming from a “How can I help?” perspective turned up many opportunities. And I knew that the financial returns would come as long as I invested in passionate people with a solid business idea.
Evaluate the opportunity: This may be the most important part of my diversification strategy. I was able to evaluate many of the deals myself, but I also used my attorneys and accountants when I felt I needed a deeper analysis. I chose not to stick my neck out too far and instead went for the more conservative or “no-brainer” deals. If I could determine that the worst-case scenario was that I would only make a little money, I would typically invest. Conservation of capital with a lot of middle-of-the-road wins allowed me to stay in the game and get a few big wins along the way.
Free up time: Within my core business, I added key management personnel to reduce the time I was spending on day-to-day operations. That decision created the space for me to pursue my other investments, while still hitting my goals in the core business. I used this time for networking, and opened up more investment channels. I also created a lot more time to spend with friends and family. By adopting these principles, I have allowed myself to dream bigger and consider many more factors than I did when I was concentrating all my effort and energy on my core business. Now I am scanning the entire horizon for profitable ventures.
Prepare to leverage: There are two types of leverage I used in my investment strategy: time leverage and financial leverage. I already mentioned how I created time leverage. I also used financial leverage by not only investing directly from the profits in my core business, but also establishing lines of credit with my banks based on my core business and other acquired assets that I could use to execute quickly on a good opportunity. Leverage is fundamental to large increases in net worth, and I considered it key in formulating my net-worth-creation plan.
Mark G. Keffeler is the president and CEO of Rx Care Assurance, and is a certified public accountant. Fun fact: Mark operates BizOwnersUnlimited.com, a website that helps business owners achieve their goals and dreams.