A buy and hold approach has a number of advantages over actively buying and selling investments.

More Choices: Buyers have more choices about what to buy than sellers have about who to sell to. Sellers are often under more pressure to do a deal than buyers are.

Negotiating Power: Due to the above difference in choices, buyers often have more power in privately negotiated transactions than sellers do. Buyers can usually hold out for a good deal. Sellers may not have that luxury.

Lower Transaction Costs: Every transaction (buy or sell) involves transaction costs. Trading commissions and bid/ask spreads apply to exchange traded investments like stocks. Legal fees and due diligence apply to private transactions. Buy and hold means far fewer transactions. It adds up.

Favorable tax treatment: Gains on assets held at least a year are subject to long-term capital gains taxes, instead of ordinary income tax rates on short-term capital gains. For investors in high tax brackets, this is a huge difference. Compounding that difference over 40 years means an investor in the top tax bracket who pays long-term capital gains tax on his gains every year will have about twice the total at the end than an investor who pays ordinary income tax on his gains every year.

Deferred Gains: This is perhaps the biggest benefit. Capital gains taxes are not incurred until the gain is “realized” by selling the asset. If this is 50 years after you bought it, that’s a long time to continue earning on what otherwise would have been siphoned off to the IRS. In other words, buying and holding can create a Roth IRA effect for your whole portfolio, not just the few thousand a year you may be allowed to contribute to a Roth IRA. And if philanthropy is your goal down the line, capital gains taxes can be avoided entirely by donating appreciated stock.

Fewer Decisions to Make: If an investor buys and holds for ten years, she has to make one good decisions over that ten years – buy the right thing. If she buys and sells once per year, she has to make twenty decisions over that time period that are as good, on average, as the one. That’s much harder. And that’s many more opportunities to make a big mistake.

Higher Buying Standards: Knowing you plan to keep what you buy for a long, long time is good incentive to be thoroughly selective up front. Telling yourself you can sell it if it doesn’t work out can be an excuse to rationalize a deal that shouldn’t be done. And if you are buying and holding, the number of winners you need to find each year is much lower, so you can afford to be picky.

A Bias Toward Saving: The purpose of investing is to increase the number of pennies in the piggy back. Buying and holding means your savings has to stay invested and can’t be spent.

Credible Reputation: People trust the decisions of an investor who sticks with them for a long time more than those of someone who changes the plan frequently. Many business owners prefer to sell their business to someone who will keep it stable and intact, not flip it. These translate to big advantages when it comes to raising capital or getting a first look at an acquisition.

The biggest disadvantage to buy and hold investing? It’s boring. The returns may be higher, but the adrenaline level is much lower.

Business is an active competition. Other businesses are working hard to beat you ever day. Businesses must perform, or cease to exist. Nonprofit organizations aren’t exempt. They must compete for donor money to survive.

For an organization to perform, it’s team members must perform. Good morale, flexibility from leadership, positive communication – these are important. So are standards, measurement, and consequences.

Do your team members know what levels of performance will meet your standards?

Are you measuring individual performance so it can be compared objectively and consistently to those standards? Can everyone see it on a spreadsheet, or better yet, a visual graph?

Does something happen when a team member or a whole team doesn’t meet the standard? Is there a consequence? What about when they exceed the standard?

Performance management needs defined metrics, accurate measurement, and specific standards. And if the standards are real, not just wishes, the experiences of the team members must be different when they fall short, meet, or exceed the standards. These are part of what it takes to be a team that wins and lasts.

When I decided to seek publication of my book, I had no idea what I was signing up for. I didn’t know the process would provoke my personal demons into fresh uprisings. I didn’t expect it to prompt so much soul-searching about what I’m doing and why. Here are some things I’ve learned.

I originally allocated 50 hours to writing the manuscript. Try 500 to 1000 hours. I was low by a factor of 10 to 20. Oops.

I reached out to assemble a team of people to help make the book proposal and sample chapter great. I got connected to a sweet set of professionals. A network of mutually trusting relationships is a priceless resource.

I thought I’d hate having someone edit my writing, and having to draft and redraft. My actual experience has been the opposite. The editor I hired not only made my writing much better, she made the process more enjoyable too.

For the most part, publishers are not looking for authors who can write a good book. Most publishers don’t take a good book and go sell it. Publishers are looking for authors who have the twitter followers, the speaking audiences, the blog readers, to sell the book themselves. It’s the author’s marketing ability, much more than the author’s meritorious content, that most publishers are looking for.

As we speak several publishers are evaluating my book. I don’t know if my book will “get picked” or not. In this age of Amazon, Kindle, and the Internet, I don’t know if it even needs to get picked. The relevance of traditional publishing is in flux, and its future is unclear. My sense is nobody knows what to do about that. I’ve decided my book’s impact is likely to be greater with a publisher than through self-publishing, so I’m still pursuing that route.

The best writing comes from an honest and vulnerable place. Putting a book out there guarantees it will be rejected by agents, publishers, and critics. It will also get flamed by outrageously unkind Amazon reviewers and other anonymous Internet trolls. One bestselling author and mentor of mine has received death threats, and even had a reader burn the book and mail him the ashes!

Offering honest and vulnerable writing up for rejection is not a naturally inviting thing to do. It’s a test of confidence and personal identity. This is a cost of entry to broader impact. It’s an invisible filter that silences a whole lot of people with something worth saying. There’s a fork in the road. One sign points to “safety from rejection” and the other to “opportunity for impact”. Sending one foot down each road will split something.

Most books fail to sell. Something like 80% go out with a whimper shortly after they are released. Investing a lot of time and energy in something that will likely be ignored by the world is an uncomfortable risk for me. And if it does get attention, that virtually guarantees a big flood of criticism. If I somehow make it really big, maybe I’ll even get death threats or ashes in the mail. Good times.

So why put myself through this? I’ve asked myself that a lot lately. Bottom line, I have conversations almost every day with people who tell me what I have said helped them. As odd as that sounds to me, I can see it’s true. And if I can be helpful to a broader audience, it’s not ok with me to let my raucous collection of fears, demons, and imagined critics stop me from doing that.

Onward I go. I’ll keep you posted.

The profits of a business flow through a funnel. All profit improvements come from improving one of these six.

1. Volume of New Customer Leads

2. Percent of Leads who Buy

3. Percent of Existing Customers who Buy Again

4. Average Sale Amount

5. Gross Margin (Sales minus costs of what was sold.)

6. Net Margin (Gross margin minus overhead costs.)

It’s hard to generate ideas for really broad goals like “increase profit”. Sometimes it helps to use this list to divide and conquer.