Cleaning Business

The excellent book “Cleaning Up” by Barry Minkow offers a way to escape one of the most serious business problems we face. At first glance this is a book about investing and a cleaning business. Minkow was a boy wonder businessman who started his own cleaning business while in high school at age 16. Yet his cleaning business was not cleaning up in the way it seemed.

By the time he gradated from school at age 18 he had nearly a hundred employees. Then he built the cleaning business to over 1,000 staff, took the company public and raised tens of millions of dollars before he could legally drink. By his 21st birthday he had a Ferrari, a mansion and the value of his business shares was 24 million dollars.

Yet this book is about more than money and a cleaning business because his cleaning business was a total fraud, a huge Ponzi scheme. Minko was immature and lost money from the start. When the bubble burst his wealth not only dissolved, but investors lost 26 million bucks. He was sentenced to 25 years in jail and 26 million dollars in restitution. He lost everything, his house, his car and his freedom.

Barry’s transformation in jail, his parole and reentry into the world as a Christian minister, seven years later and the obstacles he faced tell a compelling tale. At second glance the story is not about the wrong way of running a cleaning business either. As we read deeper we see the real underlying cause. Barry Minkow’s rise and fall gives us a deep business philosophical lesson.

These lessons from his cleaning business begin in high school when Barry discovered that the in crowd had one of three things, good looks (he says he was no Brad Pitt), to be good in some sport (he was not) or to have money and a great car (his was a beat up Buick).

His downfall began early when upon forming his cleaning business he was (at age 16) sent a Diners Club card. Word spread quickly that Barry had a credit card and loved to invite lots of people to nice restaurants. His popularity soared and he learned what he thought was a valuable truth about people, “money imputed respect” and his doom!

From this point Minkow was hooked on debt. He begged, borrowed, then lied and stole just to stay ahead of his mounting losses and loans until they finally overwhelmed him five years later. This was not cleaning up in business!

Barry’s story does not end there. After jail, a divorce, another failed business, plus pressures in his ministry and the rebuilding of his credibility tell an interesting tale. Minkow came to realize that his problems, before and after jail, were caused by trying to please a society of people with shallow values (money imputes respect).

The threads leading to his early steroid use (which caused him to be sterile) and early debt were all attached to giving external appearances rather than building internal values. This is a grave error that most investors and business people make as well. But Barry Minkow’s drive, energy and cunning allowed him to highly leverage this mistake until he was caught.

Minko’s story is about the quest for the Three Ps, Position, Possessions and Popularity. This tale shows how this pursuit in his cleaning business ruined his health and wealth.

We in the West are indoctrinated on these 3 Ps. They form the foundations of too many lives and are precursors for stress, tension and poor health as well as financial doom. These structural flaws create a template for self slavery and a potential failure that we see all the time. We voluntarily become chained to our desk or jobs and are willing to even cheat (ranging from small fibs on loan applications to doctoring Enron books) to gain position, possession and popularity. Why?

Barry Minkow also shares how to use the 3 Ts (Transparency, Truth plus Time) to create the Ultimate Fourth T, Trust.

This lesson alone makes Cleaning Up worth reading, but there is much more you will gain about cleaning up in business and all of life in this fun, easy to read story of a smart man who bares his inner self to light the road he followed from being cunning to becoming wise. The minute we realize that “but for the grace of God there goes I” this book becomes a great primer of success guidelines.

In fact Minkow makes such important points about cleaning up in business that we will continue this thought and share what may the greatest risk we face in business and investing today in our next message. This huge danger is the Perfect Storm of Fraud that is here (due to 911) and is threatening us all now. Until then have a good weekend and may all of your business and investing be profitable and clean!

Gary

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