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Key Takeaways
- Track how every dollar of revenue is allocated against target percentages for labor, inventory and facilities, so you can spot problems before they become a cash crisis.
- Focus your resources on the opportunities where you have the strongest advantage, and judge success by whether the business is becoming a more valuable asset, not just by how much revenue it brings in.
You never forget your first big win in business. Mine came in the form of my first victory over my older brother in Monopoly. The game turned 90 last year, and it remains one of the greatest, most ubiquitous and supremely frustrating games of all time. For nearly a century, Monopoly has taught all of us ages 8 and up how to think about money.
Buy properties. Collect rent. Build houses. Accumulate wealth. Bankrupt your competitors. It’s one of the most successful board games ever created because its rules are simple and its objective is clear: Own the most, and you win. The problem is that many entrepreneurs carry those same rules into business.
Real business doesn’t reward the person who acquires the most assets. It rewards the leader who consistently makes better decisions. Success isn’t determined by a single big move. It’s shaped by thousands of small decisions that compound over time. Ironically, Monopoly hints at this from the start. Every player rolls the same dice, and no one controls the outcome. What separates players isn’t the roll. It’s what they do next.
Business works the same way. Markets shift. Customers leave. New competitors emerge. Economic conditions change. You don’t control those events, but you do control your response. After working with thousands of business owners, I’ve found that the entrepreneurs who consistently outperform their peers share three habits.
1. Know the board before you roll
My first sweet Monopoly victory over my brother came after I learned two invaluable lessons: Whoever controls the bank controls the game, and my brother cheats at board games. Everyone remembers the anticipation of rolling the dice. A lucky roll lands you on an unowned property. An unlucky one checks you into a competitor’s luxury hotel.
But the game was designed long before you picked up the dice. The spaces have different values. Some properties are easier to build on. Some cost more to own. The odds of landing on each space can be calculated. Luck matters, but statistics shape the game before your turn begins.
In business, one of your biggest decisions happens before you open the doors: choosing which game to play. Every industry comes with a built-in financial structure. A hospitality business may carry significant facilities, labor and inventory costs before the first customer walks in. A professional services firm can start with far less overhead. Both can become great businesses, but they start from very different places on the board.
That’s why controlling the bank, or knowing exactly where every dollar goes, matters so much. With clients, I build a financial scorecard using what I call TAPs, or target allocation percentages. Instead of looking only at whether revenue went up or down, I want to know how every dollar is being allocated:
- What percentage of revenue goes to labor?
- How much is tied up in inventory?
- What are you spending on facilities?
- What should those percentages be for a healthy company in your industry?
Those targets give you something better than a gut feeling. They tell you whether the business is behaving the way you expected. If labor is supposed to consume 35% of revenue and you’re consistently running at 50%, that’s a signal. If facility costs eat up a larger share of revenue every quarter, you have reason to investigate before the problem becomes a cash crisis.
he economy will still shift. A key employee may resign. A competitor may enter your market. New technology may change what customers expect. Those are the dice rolls you can’t control. The founders who outperform their peers don’t make decisions based on hope or instinct. They make them based on data. Before your next major investment, ask:
- What does the data say?
- Which assumptions are facts, and which are opinions?
- If I removed emotion from this decision, would I make the same choice?
Every entrepreneur gets lucky. Sustainable businesses are built by leaders who know what to do after the dice stop rolling.
2. Don’t buy every property
One of the first lessons Monopoly seems to teach is simple: If you land on an available property, buy it. In business, that strategy gets expensive.
You don’t need to offer the market every product or service it might buy from you. You need to understand your core competencies and become exceptionally good where you have the strongest advantage.
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Monopoly Taught Me
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