SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Keynote Case Studies: Mistakes Millionaires Make
Harry Clark
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
FAIL
TOP 500
of US businesses
80%
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
We won’t fail!
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
JOURNEYMY
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
I had it made.
Top Education
Two INC. 500 companies
450 employees
$100 million net worth
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Or so I thought…
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
I LOST
EVERYTHING
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
NOWISDOM
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
We are on our own.
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
30ENTREPRENEURS
INTERVIEWED
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Varying from SOP Rapid
growth (over
50%)
Weak CFO
Nonfunctioning family
relationships
Limited operating
cash
Highly complex
business modelsNon diverse clients
Innovation in highly
governmentally
regulated business
Sole owner and/or
investor
No advisory board
Primarily one time
project based
revenue
“Bleeding edge”
technology
Under insurance. No
E+O or D+O
Use of mezzanine
financing
Aggressive use of
debt
Overspending,
personally and in
business
Uber optimism
Acquisitions of other
companies
No cash reserves
(literally, as in a
safe)
BUSINESSRISK FACTORS19
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Personal Guarantees Illiquid
assets
Non-diversified
assets
Overspending,
personally and in
business
Aggressive use of debt Uber optimism
No asset or lifestyle
protection
No cash reserves
(literally, as in a
safe)
PERSONAL RISK FACTORS8
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
MIKEBROWN
Tripled sales to $300 million
350 employees
CEO of Brown Family Communities
Founded by Mike’s father
Mike implemented process
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
WHATLESSONSDODETECTMIKE’S
?YOUIN
STORY?
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
BRADADAMS
Founded by Brad’s father & CEO at 26 years old
20 years of company growth
CEO of Solid State Stamping
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
WHATLESSONSDODETECTBRAD’S
?YOUINSTORY?
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
20 years of hard work each
600 employees
$300 million personal wealth
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
I can’t change their stories …
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
… but I can
guide you through
YOURS.
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
LESSONS
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
#LESSON
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
REDUCERISK
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
His company and family was
UNPREPARED
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Shift focus to
ASSET DIVERSIFICATION
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
#LESSON
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
There’s no place for
OPTIMISMin acquisitions.
of Acquisitions80% FAIL.
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Verify 80% of the revenue.
Be fundamentally realistic or pessimistic.
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
RISKTAKER
RISKMANAGER
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Ego
Driven
Uber
Optimis
m
Invincibilit
y
Inappropriat
e Risk
Tolerance
Not living
within a
budget
RISK TAKER RISK MANAGER
Selflessness Realism
Vulnerability
Appropriate
Risk
Tolerance
Lifestyle
Protected
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Selflessness Realism
Vulnerability
Appropriate
Risk Tolerance Lifestyle
Protected
YPO-RISK MANAGER
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
13 Best practices once you’ve made it
Protect your family not your ego
Make a financialplan
Lifestyle protect your family (asset protection)
Act as a risk manager not investment manager
Have at least one years income in cash, gold, in a safe
Maintain sufficient D&O and E&O insurance
Don't do business with friends unless they have as much to lose (similar terms and resources)
Diversify your assets
Irrevocable trusts for your children
Starting another business: Use OPM or co-investors
Eliminate or limit all personal guarantees
Hold assets in separate entities (LLC's, etc) with other owners
Do not be optimistic, be realistic
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Much more included in my book- Oct 18th
& YPO e-learning modules
SEPTEMBER 21-23, 2016WYNDHAM GRAND RIVERFRONT, CHICAGO
Please take the 12 minute (Questions)Entrepreneurial Risk Assessment (ERA)
http://pathwaypartnersllc.com/
Survey at
