Story time…
One of the greatest success stories of all time, is with the company which is based on the glorious golden arches we still see today.
Mc Donalds…
It all started in 1940 where, two brothers, Maurice and Richard “Dick” Mc Donald’s made a small fortune selling hamburgers in San Bernardino, California…
They took a product and an idea and turned it into a fast, convenient and consistently profitable business.
Once they mastered their strategy and system then they introduced Ray Croc (a shrewd American businessman) into an agreement to build more Mc Donalds…
However, he barely made enough profits to sustain, find more franchisees and even pay off his expenses…
That’s when Harry Sonneborn came about where he made Ray Croc realise, he was in the land business rather than the restaurant business…
Ray Kroc explained…
“Pretty simple, really. Franchisee finds a piece of land he likes, gets a lease, usually 20 years, takes out a construction loan, throws up a building, and off he goes.”
Sonneborne then said:
“You don’t seem to realize what business you’re in. You’re not in the burger business. You’re in the real estate business.”
This conversation lead to the global expansion of McDonald’s, turning it into the most successful fast food corporation in the world.
In this article, I’m not going to talk about Ray Kroc, but instead how the brother’s starting concept applies to trading.
Here are three lessons I learnt from Mc Donald’s Success
#1: Less is more…
The brothers were geniuses from the start…
When something didn’t work, they threw it out… When something showed to work, they harnessed it, optimised it and improved it…
They did this with data.
The brothers took sales data to compare which products were making more money.
They found that 80% of their sales in the last 3 years came from simple burgers.
Each burger was made with precise ingredients.
Any deviation and this caused sales to drop.
The rest of the 20% were drinks and barbeque.
So the brothers made their life easy and got rid of the barbeque pit completely.
They also cut their menu down from 25 items to just 11 items.
It mainly had
Burgers
Fries
Milkshakes and
Soft drinks
They said let’s do less of what’s not helping sales and focus on what is making the most revenue.
Once they got rid of the barbeque pit the brothers later on systematised the burger making process.
So how does this relate to trading…
Less is more is one of my most powerful quotes when it comes to trading…
You need to cut out a LOT of data to maximise your returns…
Find one or two systems that suit you.
Minimise the number of markets, time frames and charts to look at.
Cut out unnecessary indicators that conflict with the systems signals and frequency.
Choose a certain time that works best for your system.
Stick to 1 or two financial instruments to trade.
Only have 1 or 2 or max 3 trading accounts with reason.
It will take time and effort on your side to cut out what needs to be cut, but you won’t regret it in the long run…
As Mc Donald’s did… Take a product improve it drastically then sell it to the masses.
#2: Find a system to repeat over and over
With Mc Donald’s did you know…
They took a tennis court and drew out the compartments of making a burger.
They then orchestrated it with their employees until the flow and speed was at the most optimised level.
Once they found a winning system, reduced the time to make a burger and optimise the process – they were able to even drop the price to appeal more demand…
At the time, they could drop the burger to 15 cents…
With trading, you know this…
You’ll need to find, adopt, follow and repeat your turn-key system.
It doesn’t matter whether it takes you 2 months, 2 years or even 7 years to get right.
Once you have it, you’ll be able to generate consistent results year in and year out.
Just like the cycle of burgers, you’ll have your very own consistent cycle of success through trading…
Also, with your one system you’ll be able to optimise it and improve it when conditions change…
This brings us to the third lesson…
#3: “We love to see you smile”
This was one of Mc Donald’s campaign they used from 2000-2003, which has stuck…
Not only does Mc Donald’s keep to their winning formula, systems, products and manner – but they also adapt to change…
They continue to offer new items on the menu’s as time’s change…
From Happy Meals, Toys, Lollipops, Café’s, Ice creams, food cultural adaptions to even Vegan food… They think of everything to adapt to change…
BUT! They don’t stop offering their winning products that bring in revenue.
With trading you need to also evolve as a trader and adapt to change.
Sure, your system will remain consistent.
Sure, your risk management won’t change…
But there are certain elements that require change such as…
New markets:
You might want to incorporate your system with new markets i.e. AI, Electric Vehicles, Metaverse, Cannabis, Energy alternatives, Crypto, NFTs and so on…
New instruments:
Also, we might need to evolve from the current financial instruments we’re trading… Once day, CFDs and Spread Betting might be a thing of the past. I personally have evolved from shares, warrants, futures to ETFs. You never know what will be next…
New automations:
We might soon have robots and AI to use out system to find trades and execute them. With the MATI Trader System Programme this will work with Pattern Recognition. I personally can’t wait for that day to come…
You get the point…
If you want to be successful with trading you have to understand the power of systems to repeat…
This way the system will do the job for you…
Next time you’re at Mc Donald’s, you’ll see what I mean.
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