Dumb Tax – Don't Pay It: What NOT To Do When Building Your Business

Specific to the fx business there are four things to avoid when building out your operation, known as "Dumb Tax".

There are several ways to create a thriving workplace culture that people enjoy and positively impact, as I touched on in my previous article. However, any would-be entrepreneur should note that while there may not be one right way to do things, there are several things you should avoid doing. Specific to the forex business, whether you’re a happily content IB, aspiring white label provider, brokerage owner, or money manager, here are four things to avoid when building out your operation – I speak from 20 years of sales/trading experiences that has been at times both good and bad, and sometimes ugly:

First lets look at the math…by even the most generous estimates, 50% of business fail in the first year. This figure is even gloomier five years out, which leads to an 80% failure rate, with only about 4% ultimately “making it”.  Thus, based on this damning axiom, the longer you are in business the more likely you die. So, being an entrepreneur is not for the undetermined, weak, or wannabe. In this line of work, mistakes are GOING to happen and its how “Resourceful” you are on solving them is going to make the difference between (cataclysmic) failure and success. Thus, I have found that over time you come up with a strategy to not pay the “DUMB TAX”.

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DUMBFORMATTEDDumb Mistake 1 – Losing track of the score

Don’t take your eye of the prize – business is an intellectual sport and you must watch the SCOREBOARD. Many people can’t read the dial and treat business like a game of Pin the tale on the Donkey or Words with Friends. They spin around haphazardly and hope things work out because why in this utopian business wouldn’t they? If you ever read “Think and Grow Rich” the keyword is THINK. Understanding your business is the key of becoming successful. Management must be able to measure and quantify results. For example, what are my profits per employee? What are my expenses? What is going on in the market? What is our strategy? Think of it just like going to a doctor – he just doesn’t come into the room, look at you and say what he thinks (Or perhaps maybe he does, in which case you might have far bigger problems). No, he runs a series of examinations, reads the results, THEN forms and opinion. By this same token, if you don’t measure or analyze your business how do you know what to improve?

Dumb Mistake 2 – Putting Off Problems 

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Problems are the biggest drug in the world. They will completely pacify you or make you numb until you deal with them. Moreover, it’s also pretty hard to solve problems when you don’t even notice them – no you are not omnipotent. This is the real world and in this business, you WILL have problems. If you are an effective leader you need to define the problems fast and focus on the solution. I have learned a saying that I live by, “spend 5% of your time to define the problem and 95% of your time on the solution.”

Dumb Mistake 3 – Not Trusting People

Simply put, learn to trust others before they trust you – there is far more upside than getting taken advantage of. Take a look at Zappos.com, they have the world’s greatest shipping policy. If you don’t like what you ordered ship them back for free – Nordstrom’s Return policy: “Don’t love it? Don’t worry – returns and exchanges are easy. Simply send your item back or bring it to a store near you.” They send a message of trusting people so much that it makes placing your trust in them an easy thing to do.

Dumb Mistake 4 –Hiring Liars

I can’t stand when people lie…especially new employees. DON’T lie – you’re not a teenager telling a story to your parents about not staying out all night or why the windshield of their car is inexplicably shattered. I would rather people tell me the truth if they were out all night painting the town red, or just playing hooky than to write me an email or call me about some “debilitating” sickness they have. The worst is when they actually bring in a fake doctors note when I know they are lying, true story. Credibility is everything. If people lie to you, it most likely means they also lie to your most important asset, your clients!!! You must have sales Pros that have the courage to handle problems, always tell the truth, and get clients the answers they need.

Now that you are aware of and will not be making these mistakes, the last thing I wish to leave you with is the adage, “You must have Faith”. Have you ever watched a stone carver? – Probably not because its a long event.  Assuming you did for the sake of this point, they hit the stone in the same spot all day and nothing happens. You walk by a day later and still nothing. At that point you are thinking this guy must have a mental illness and why is he wasting all this time. However, luckily for him he has “Faith”. He keeps hitting the stone until BAM…it cracks fully on the 10,000th hit. People do what they believe and in this business you must have a very strong belief system.

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