Know when to hold ’em

 

BY RICHARD DiTOMA, L.M.P.,

contributing writer

 

If you don’t believe in gambling, but are in business, I have a surprise for you. You are a gambler. Denial of that fact will hinder your own ability to succeed in your business.

 

People in business and gamblers are part of the same makeup. Each bets an amount of money on the outcome of an event to have an opportunity to earn a monetary reward, which is larger than their wager on that event. It could be a horse race, roll of the dice, hand of poker, or fiscal year of a business. Some are good at it. Most are not.

 

In each instance, the outcome is unknown until it occurs. In business, the event constitutes the business activity during any period in time, usually a fiscal year — and the revenue acquired from that activity. The question to ponder is whether the business will bring in more money than it cost to operate the business for that period.

 

Like the result of a game of chance, you can’t predict your business activity with any degree of accuracy. Therefore, you are a gambler. Obviously, you should always aim to win. But hopes are not often realized by most contractors because of the flawed actions of those people running contracting businesses.

 

The most prevalent is the use of the “going broke rate” of others. Most gamblers lose because they are bad gamblers. Most contractors do not succeed to their fullest capability because they are not good business people. Mimicking the actions of people (especially through the use of the “going broke rate”) who are not good at what they do is foolish at best. It will cost you money.

 

The fact that some people in business don’t believe in gambling is proof positive that everyone is not really cut out to be in business. Non-belief in the fact that people in business are gamblers linked with flawed business practices are the main reasons most businesses fail or never reach their intended goals. After all, it is difficult to hit the target when you don’t know how to aim and take into consideration the effect gravity, trajectory and cross winds will have on the projectile you have just launched as it makes its journey toward the target.

 

Many contractors think they are running their businesses correctly. They believe they hit the target because they bring in to their business money from their clientele. However, if the accumulation of revenue from their clientele doesn’t cover their true cost of operation for the time period, they have in reality missed the target completely.

 

Those who do hit the target once in a while almost never even come close to the bull’s eye. They usually hit the target by working longer hours (more than 40 hours /week) for no pay to make foolish numbers and absurd business protocols seem to work out. If they actually paid themselves (as they would expect to be paid if they worked for another contractor) for those hours they too would not hit the target.

 

The similarities

 

There are many similarities between a contractor and a gambler. The gambler must understand the correct rules of gambling games. Contractors must know the correct rules of the contracting business game both technically and administratively. The gambler must know the odds any hand, roll of the dice, spin of the wheel etc. has of making him/her a winner. In poker, knowing the value of each hand (e.g. two pair is better than one pair etc.) is imperative. Contractors must recognize the chances of making a profit on any job.

 

In Texas Hold’em (a popular variation of poker), each gambler, to start, is dealt two cards, for their eyes only. Each gambler must then make a decision to check his/her hand (stay in the hand but not bet), bet on his/her cards, call or raise another player’s bet, or fold that hand, and wait to play the next hand.

 

If he/she remains in the hand, he/she will see three more cards dealt at one time to the middle of the table for the common use of all players in the hand. Those three cards are referred to as the “Flop.” Then, another check, bet, call, raise or fold decision must be made.

 

Those players who stay in the hand will then be shown one additional common card in the middle of the table called the “Turn.” Next, another check, bet, call, raise or fold choice must be made. Then, the same process is repeated. This time the next additional common card is called the “River.”

 

Each remaining player must decide whether his/her hand (best five cards using two or one of his/her individual cards in combination with the choice of three or four of the common table cards) is better than the hands of other players still involved in that hand. Then, the gambler must choose to check, bet, call, raise or fold. After the betting is done, the showdown takes place. The cards of the remaining players (those who did not fold) are shown to everyone and the best hand wins the pot. This process is continued for each hand played during that session of poker playing.

 

In the contracting business, your gambling session is that time period which is usually considered your fiscal year. Each task you perform for your clientele can be compared to a hand of poker. During the session you will win some hands and lose others. The object is to have more money than you started with at the beginning of the session. In both poker and contracting, the better you play, the more money you will have. The more money you have, the happier you will be.

In Texas Hold’em, the “pot” is the accumulation of chips (which have monetary value) gathered in the middle of the table from blinds, antes and bets. “Blinds” are the chips from two players (in rotation) for each hand to start the pot. “Antes,” if any, are additional chips from all players to increase the pot. “Bets” are the chips added to the pot during the play of each hand. The operational costs of contractors for any job can be considered as their blinds, antes, and/or bets for each hand (job) in the contracting business game of chance.

 

If no one bets during a hand, the pot will only consist of the “blinds”, and the additional “antes,” if any. The amount of chips won will be low. And, the winnings dependent upon the number of hands won in the session may not cover the cost of getting to the game. Many of the players, if not all but one, will be actual losers.

 

That’s similar to contractors who charge artificially low selling prices based on the “going broke rate” set by other contractors who don’t know their true costs and buy jobs, in part, with their own money rather than sell their services at proper profitable selling prices.

 

In your contracting business, the first two dealt cards to you can be compared to the call from the consumer, which gives you the opportunity to sell your company’s services to them to address their requests for that hand of your session (fiscal year).

 

Using proper numbers and strategies for your prices and business protocols is similar to the gambler’s ability, playing style and decisions to check, bet, call, raise or fold after seeing the first two cards, and likewise, for the “flop,” the “turn,” and/or the “river.” And, they will determine whether you recover your cost to perform the service; lose money; or earn a profit on the job (hand).

 

In other words, to give yourself the opportunity to win the hand, you must know the cost you incur and the risks you take being in business. Then, you must be able to attribute the proportion of that cost as it pertains to each individual job (hand).  And, you should take into consideration the value you deliver to society in the performance of your services.

That’s just like the gambler who must know the odds of winning or losing each hand. Truly successful contractors know which jobs to take on (whether to play a hand or not); and, at what price they must charge to be profitable (their betting strategy). Kenny Rogers’ song, “The Gambler,” says it all. “You gotta know when to hold ’em, know when to fold ’em, know when to walk away, and know when to run.”

 

Bluffing or not

 

In the game of Texas Hold’em, aside from the obvious luck factor surrounding the cards dealt to you and your ability to evaluate your hand, you must also be able to read the demeanor and methodology used by other players in the game.

Bluffing is a strategy by which other players with hands of lesser value than yours try to make you believe that their hand is better than yours. That’s similar to consumers who try to make you believe that contractors are a dime a dozen and you had better cut your price to the bone if you want to do their job. However, you should keep in mind that prices that are cut to the bone are usually losers so there is no logical reason to want to do the job.

 

Some consumers won’t use you if your price allows you recover to your cost and earn the profit you deserve. But by knowing your cost and the value of your hand, you can call their bluff. You can decide not to play that hand. You might even consider raising the bet, which puts the pressure on the bluffer. You may be pleasantly surprised to become the winner. To accomplish this “you gotta know when to hold ’em” and “know when to fold ’em.”

 

Winning the game

 

Obviously, not all players who raise the bet are bluffing. If the raiser’s hand is better than yours you will lose at the showdown. Therefore, at all times you have to know the game, the odds and the value of each hand in which you are involved. That’s the difference between being a good gambler and a loser. Both types of players are in the game. But, only one will win. A good gambler knows which hands to play. In the contracting business, when you know the game, the costs and the value you deliver to society, you will know when to take on the job or let it go.

 

In poker, no one plays the game with the intention of losing. No one goes in the contracting business, with the intention of not earning the reward they deserve for the value they deliver. But, more often than not, contractors lose rather than win. That’s because they don’t know the odds and proper protocols that will show them when to hold ’em or when to fold ’em. It’s your choice. Do you want to be a good gambler or just another loser?

 

All players but one, in any poker session, lose or are not the big winner. If you are in business and realize you are gambling, you have an upper leg on the non-believers in business who don’t believe in gambling. You know who you really are. The only thing left to do to become the big winner is to play the game intelligently. That requires knowing, inside and out, the rules of game, the odds of the hand and how to read the other players at the table.

 

If you want to discover how to figure the odds and implement protocols that will help you to be a winner in the game of contract business gambling, give me a call at 845/639-5050. I’ll show you how to calculate your true cost, develop proper profitable selling prices and utilize strategies that take into consideration the odds and people relations needed to give you the opportunity to be the big winner. If you don’t want to have a chance to be the big winner, or are satisfied with the results your business produces, don’t call to learn a more profitable and better way. Good Health! Good Luck! Good Gambling! The game is starting. It’s time to ante up!