There’s an old adage “think like a person of action and act like a person of thought”. A key part of that theorem is the concept of taking action. But how do you do that responsibly and minimize risk and embarrassment? In this Billboard Mastery podcast we’re going to review some strategies to this effectively.
Episode 72: Taking Action Responsibly Transcript
There's an old saying, "Think like a person of action and act like a person of thought." But the thinking part's a whole lot easier than the action. This is Frank Rolfe, the Billboard Mastery Podcast. We're going to talk about how to overcome your fear of taking an action, so you don't miss out on opportunities. And let's first note that when we're talking about taking an action, the key component is responsible action. It would be stupid to go out and start building a billboard without a ground lease or a permit on someone's land, you have no permission. It'd be way crazy to build a billboard out there that you have a ground lease on but no permit.
Now, we're not asking to you to do that, that's just dumb. But what happens when you see truthful opportunities, how do you get comfortable with taking action on those? Well, the first thing you have to remember is that fear is a good element to life. Fear, that adrenaline rush of fear has two aspects, good and bad. The good part of fear is it makes you try harder to mitigate your risk, to do good due diligence, that's all good things. But the bad part of fear is sometimes you just get frozen in your tracks and you can't really move? So how do you overcome that inability to move forward, how do you create the ability to make responsible positive actions? Well, the first thing you have to remember is that without taking some risk in life, you can't really get anywhere. There's another saying that, "Behold, the turtle, it only makes progress when it sticks its neck out."
Because the way a turtle walks, a turtle can't walk unless its neck is stuck out of the shell, but then another animal might come and bite it, so you have to have some risk in life. You can't drive your car to the store without having the risk of running out of gas or having a car accident or many other factors, so life is about risk. But you mitigate your risk in your car, you make sure that's got plenty of gas and the tires are good, and you try to buy a car in reasonable condition, you put your seatbelt on.
So you can take action, as long as you do it responsibly. Now, here are some tips on how to take responsible action. My favorite is to look at everything you do in life under a best case, worst case and realistic-case scenario. The best case would be what if everything you wanted to have happen on that billboard worked out just like you planned and even better. You thought if you built a sign, you can rent one side for $2000 a month and the other side for $1000 a month for $3000 total, and lo and behold, on your best-case scenario, you were wrong, it's a much better sign than you ever thought, and you're able to get $4000 a month. That's the best case. But then you also have the worst case, and that's what if you can't hit any of your targets appropriately, what if instead of getting $3000 a month on your budget and you only get $1000 a month because one side, you just can't find anyone to advertise on. And then the question is, what happens to you? What happens in your worst-case scenario, does it at least cover the mortgage at the bank and your ground rent, or would you actually have to come 'out of pocket' and feed the sign every month to pay the bills.
If you can't survive your worst case, don't do the deal. And there's a third case, the middle ground, between worst case and best case called the realistic case, and in that scenario, we're not hitting everything perfect, but it's also not horrible, so it's pretty much a little less or even at your budget. Are you happy with that? If the answer is, "I can survive the worst case, I would be ecstatic with the best case and happy with the realistic case," then you can go forward. But if the answer is, "I can't survive the worst case," don't ever do the deal, it's not going to work for you.
Now, there's a guy named Sam Zell, he's not in the billboard industry, he's in the office building, apartment and mobile home park industries, but he's been the largest real estate owner in America for decades. And he always talked about the issue of risk and reward, that you have a low risk and higher reward, you should always do the deal, and if you have high risk and low reward, you should never do it. But many deals fall in between that with high risk and high reward. You also, in addition to having your best, worst and realistic-case scenario, you also need to understand how much risk you're taking and whether or not that risk is appropriate. You don't want to do high-risk situations, unless they have insanely high reward.
Most of the time you want to stick with deals that have a low risk and high reward, cases where you can build the sign for not a whole lot of money or buy the sign for not a whole lot of money, but it theoretically could end up being a real financial windfall for you, those are your safest and best deals. And also never enter into any agreement with anyone whether to buy a billboard or build a billboard without having some kind of escape clause, if you change your mind at some point in the future, as you're putting together the due diligence, trying to get the financing and those type of items. Because you don't want to have it where you're afraid to sign something on the front end where you want to have the adrenaline rush, the fear is after you've had the time to analyze it and it comes time to either actually write that check to buy it or write that check to get someone to build it.
The bottom line to it all is you can take action, but you have to think about it, you have to make sure that it's smart, that it's safe. Responsible action is the key to life, if you don't take responsible action, you can't get anywhere, but if you do take responsible action, if you mitigate the risk, you'll soon find the opportunities abound and they're very, very healthy for you. This is Frank Rolfe, the Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.