What actually repeats in business, and where it stops.

• LO1.1Describe the parts of a pattern: context, cost, Shadow, Reversal and what would count against it.
• LO1.2Assign mechanism and business result labels to a claim and justify each one.
• LO1.3Apply the four advice filters to a success story, a framework, a neat statistic and a seller's claim.

Core content

Start with the Question Check, which asks one thing: which question is costing you the most this month? Whose advice do I believe? This module. Is there a market, or just a good idea? Module 2. The books say profit, so where did the money go? Module 6. Why has it stopped working? Modules 6 and 10. It is triage, so nothing gets scored, and the order here is for teaching, not a stage model of business. Read this module first, since every later one leans on it. This course is general information, not legal, financial, medical or psychological advice.

Picture a Tuesday owners' breakfast in Port Cardew. A consultant tells the table that of one Harvard class, the 3 per cent who wrote their goals down later out-earned everyone else combined, and that across 108 launches the 14 per cent that created new markets brought in 61 per cent of the profits. Nadia, who runs a pool service, writes it all down. Helen, who owns a fabrication shop, asks where the numbers came from. Nadia, Helen, Elena's music school, Tony's fruit shop and the town are invented, and every figure attached to them is illustrative, so nothing that happens to them is evidence. Helen's question is real.

A pattern is a recurring way of resolving competing forces, in a stated context, at a stated cost, with a stated condition for refusing it. The consultant's slide had none of those. It had an ending. Each pattern here also names a Shadow, how it goes bad, a Reversal, the observable condition for refusing it, and what would count against it, a check whose result means it is not working here. The patterns are filed under seven forces, Comparison, Uncertainty, Inertia, Lag, Repetition, Limits and Noise, a filing system built for this series of courses and books, with no test behind it.

Every pattern carries two labels, because a real mechanism does not establish a real outcome. The mechanism is how an effect is supposed to work. The business result is the thing an owner cares about, measured directly. Well supported means arithmetic and definitions, large replicated bodies of work, or a reasoning discipline that needs no study. Mixed means the size is uncertain, the finding is disputed or the evidence comes from another field. Anecdotal or weak means experience, one case, argument or analogy, and it is no insult, since most useful business craft sits there unchecked. A label belongs to a claim, never to a book, and a business result cannot rise above Mixed unless it is arithmetic. A pattern with one independent source is marked single voice, provisional. Of the series' 47 patterns, four business results are well supported, all as arithmetic. None of the 47 has been shown to change a business's result.

Four filters apply to any advice. The Survivor's Story asks how many tried the same thing and failed, because success stories arrive with the failures removed. Ros, Nadia's former workmate, runs an almost identical service and goes under through illness and the loss of one contract, with no error of hers. If Nadia ever writes a book, Ros will not be in it. The Rule for Every Outcome asks what result would show a framework wrong. Robert Greene's 48 laws are the cleanest exhibit: each has a licensed opposite, so the set can explain anything and forecast nothing. A client who grew followed the consultant's method, he says, and one who followed it and stalled misjudged the timing. A testable version would name a result, a date and a share, such as six of the next 10 clients finishing the year with more profit.

The Clean Statistic treats a neat figure with no citation as the cue to trace it. The goal study is false: no paper has surfaced, and the tellings disagree on the university, the decade and the numbers. The 61 per cent fails differently. W. Chan Kim and Renee Mauborgne report it themselves, selected after the fact, with no period or method given, so it tells no owner what to expect from a launch. These first three filters are well supported as reasoning, and what they gain a reader is unmeasured. The Seller's Higher Bar, anecdotal or weak, asks for more proof when the person making a claim also sells the cure. A commercial interest proves nothing false. It sets how much proof to ask for. That applies here too, since this course is the companion to a series of books.

Where it stops working

Each filter can go bad. The Easy Dismissal waves off any success you dislike and throws out the craft inside the story, when a story is fine as an illustration and fails only when asked to prove. A classification is fine for filing, and the filter applies once a filing system is offered as a forecast. Guilt by Statistic lets a bad number take good advice down with it: writing goals down has reasonable support from real research, and none from the goal study. A failed trace proves no figure false, and where being wrong costs little the trace may cost more than the belief. Follow the Money and Stop finds the commercial interest and closes the file, so a sound claim goes unexamined. And a Reversal worded so loosely that any outcome slips past it is decorative, which is the likeliest way for this series to fail.

• LO2.1Draw a value curve and read from it whether a business is on a comparison table.
• LO2.2Decide between naming the buyer and looking to noncustomers, using reach and size.
• LO2.3Calculate how a price change moves gross profit at different margins.

Core content

Buyers compare, and whatever can be compared like for like ends up decided on price. That is the force called Comparison. Planning her pool service, Nadia ruled a page into columns, copied down what each franchise offered, then added her own column. It could have been any of theirs, so price was the only column left to read. In Blue Ocean Strategy, W. Chan Kim and Renee Mauborgne draw how much of each competing factor a business offers as a line, a value curve, and set the curves on one chart, a strategy canvas. Same-shaped curves mark you as already on the comparison table. The curve reads your position today and predicts nothing.

Hungry Market First chooses buyers already in pain, then designs the offer. Nadia described one service to two groups: people who looked after their own pools asked about price, and people who kept returning over the same cloudy water asked when she could start. Nobody has checked this, so it is anecdotal or weak. The Named Buyer says the same work can carry a higher price once written for one identifiable group. With no figure given, that is mixed on mechanism and anecdotal or weak on results. The Customer You Do Not Have looks instead at what noncustomers share, and is anecdotal or weak. Those two collide. The series' untested ruling turns on reach and size: a small firm with no reach names the buyer, and an offer capped by the size of its market looks for what buyers share.

Leave the Comparison Table means changing what is being compared. Cirque du Soleil took out the stars and animals a better circus would have improved, and drew an adult audience circuses had not reached. Each such case is told by someone who knows the ending, and nobody says how many firms removed their stars and simply closed. So the mechanism is mixed and the business result anecdotal or weak. If buyers still ask for a like-for-like quote and decide on price, the move has not happened, however different you feel.

Leaving costs money, and removal is the usual way to pay. Most firms only add, so cost grows with nobody choosing it. Drop What Habit Keeps pays for a change by dropping what the trade keeps from habit and spending the saving on what buyers value. The cut and the addition are one decision. A four-box grid, ERRC (eliminate, reduce, raise, create), earns its place by showing when the first two boxes are empty. Nadia stopped pushing bottles of algaecide and dropped the vague Thursday window, and spent the minutes on a photo water report. Three unrelated sources put taking away ahead of adding, which raises the odds that something real is being noticed and measures nothing. The mechanism is mixed and the business result anecdotal or weak.

Gross profit is the sale price minus the direct cost of delivering that sale, and margin is gross profit as a percentage of the price. Margin Pays for Everything is well supported as arithmetic, on a premise that holds often and not always: that serving a client costs about the same at a low price or a high one. Nadia's first service sells for A$99, costs A$70 and leaves A$29. At 10 per cent off, delivery still costs A$70, so gross profit drops to about A$19, a fall of about a third. On her A$189 care plan, with A$110 of gross profit, the same 10 per cent moves gross profit by about 17 per cent. On Tony's A$28 basket, with about A$7, it moves it by about 40 per cent. The thinner the margin, the harder a small price change lands.

This is the first of six questions the series uses when good advice collides. Margin and cash asks whether the margin and the bank balance can carry it, and predicts that bonuses, guarantees, done-for-you work and prepayment hurt a thin margin in the same conditions where they help a fat one. The questions are untested, so they rate anecdotal or weak at best. Discounts Outlast the Sale claims more than the sum does, that a plain discount lowers the price people believe in. That is one voice with no measurement, anecdotal or weak. On raising the price or pricing for the mass, the series' untested ruling turns on copying and capacity. Where copying is easy and volume cuts cost, stay low in the range buyers already pay. Where delivery is scarce and outcome-based, go high.

Where it stops working

Most businesses stay in the contest they know, and on Kim and Mauborgne's own account that is legitimate. Contested markets are real places to trade, doing the same thing better is often right, and firms whose curves match the trade's can be profitable now. An owner whose position is paying, and who cannot say what a new shape would do for buyers, has grounds for refusing, and a water report can be stopped next month where a rebuilt business cannot. A removal fails if buyers, asked before the cut, say they would miss it. Elena nearly dropped her end-of-term notes as habit, until parents told her they were their plainest record of what the fees had bought. Anything required by law or contract is outside the pattern. A price rise with nothing added is only a worse deal, and where delivery cost rises with price, as on Helen's steel jobs, the sum has to be run job by job. Hungry Market First fails where the pain is real and the money is not.

• LO3.1Calculate how many extra sales one refund needs, and use the result to judge a guarantee.
• LO3.2Apply the smuggling test to separate a real trigger from an imported one.
• LO3.3Distinguish the truth question from the who decides question in a sale to one buyer and a sale to a committee.

Core content

Elena's marketing course tells her to install a countdown on her enrolment page, a red clock that restarts for each new visitor. Beside the laptop sits her room sheet, where every number is true: six rooms, classes of four, one chair left on Wednesday. Both signals say hurry. One is a count of chairs any parent could check by walking down the corridor. The other is a clock that will never reach midnight. This is the force called Uncertainty: buyers pay now and learn later, so proxies stand in for substance. A proxy is anything that stands in for what a person actually cares about, such as a review, a certificate or a promise.

Risk Moves to Whoever Knows says owners who last tend to carry the risk themselves once they know the product works, because they are the party able to judge it. Left alone, the risk stays with the buyer, who knows least. Moving it is called risk reversal, and the guarantee is the instrument. A guarantee, unlike a countdown, costs nothing while the work is good and real money when it is not, so the seller's bank balance rides on the substance. The evidence is mixed on both labels, since no study or figure is given. On a product that works, sold to one person, owners probably rate it too low. How much it is worth, nobody has shown.

A guarantee is a sum before it is a promise. Nadia checks each filter first, then promises that if the water is not clear after the first service, the A$99 comes back. The service costs A$70 to deliver and earns A$29 of gross profit, the price minus the direct cost of delivery. A claim hands back A$99 with the A$70 already spent, so one refund swallows the gross profit on about 2.4 other first services. Divide delivery cost by gross profit and you have the extra sales one refund needs. On her care plan, with A$79 of delivery and A$110 of gross profit, that is fewer than one. An owner who cannot say how often the work fails has a delivery question to answer before a guarantee question.

The Early Visible Win puts something real into the gap between paying and knowing. By the third week each of Elena's classes plays one short piece for parents at the door. It is sensible, cheap wherever something real exists to show, and anecdotal or weak, since Alex Hormozi asserts it and nobody has measured it.

The Trigger Matches the Substance draws the line between Elena's two signals. Robert Cialdini, in Influence, argues that nobody can think every choice through, so people seize on a single cue and respond without thinking. This series calls that cue a trigger. His smuggling test says using a trigger is fine when it matches something real, and importing one the situation does not contain is smuggling. The count of chairs passes, because stating a real limit is giving information. The clock fails. Another of six questions applies, truth: does the trigger match something real, and would the owner say aloud what is being done? It predicts that a discovered mismatch costs more than the sale, wherever the relationship continues. As a commercial rule this stands on reasoning alone, so it is anecdotal or weak.

A signal can pass truth and still do no good. Nadia put her guarantee in bold on a proposal to Ruth, a strata manager, whose committee wanted three quotes and something to put in the minutes. Helen told a procurement officer her price and slot would hold until Friday, every word true, and he took it as an insult. The question here is who decides: one motivated person on a short cycle, or a committee on an annual budget? Truth settles whether a signal may be used at all. Who decides settles whether it will do any good.

Nothing Outruns Delivery caps all of this. Selling techniques change how many people buy and what they pay, and leave what those people receive exactly as it was. Nobody has checked this, so it carries the lowest label, anecdotal or weak. General information only, not legal advice: under the Australian Consumer Law, claiming limited stock when it is not limited, or running a countdown that resets, is misleading or deceptive conduct. A was/now figure that was never genuine is a false representation about price. Consumer guarantees cannot be contracted out of where they apply, so "all sales final" does not override them.

Where it stops working

A guarantee fails in two conditions you can see in advance. If the product does not reliably work, it is a way of handing money back at speed. If the buyer is a committee, who decides matters more than who knows. Refunds that exceed the gross profit on the extra sales mean the promise is costing you. The Guarantee Nobody Can Claim buries so many conditions that the risk never moves. An early win stops where nothing honest can be shown early: some of Elena's students produced nothing recognisable for most of a term and played well by the end of the year, and parading them in week three would fake the very thing the pattern exists to show. A report that a technician called proves activity, not result. The practical half of The Trigger Matches the Substance needs the relationship to continue, so where buyers never return and cannot compare notes, only the moral half and the law remain. And a limit built in order to announce it, such as an empty room that makes other classes look nearly full, is The Technically True Limit: each word is accurate and the trigger is still imported.

• LO4.1Calculate cost to acquire for a channel with the owner's hours priced in.
• LO4.2Compare cost to acquire with customer worth and say what the comparison decides.
• LO4.3Assess a free offer against the design of a small complete fix, and say what its results can and cannot show.

Core content

On the 100th evening of posting a short clip a day, Nadia counted. She had a modest pile of views, mostly from people in the trade. "At least it was free," she told the breakfast table. "I can't afford advertising." Tony asked what she reckoned his rent was for, since a cheaper shop two streets back would have nobody walking past. Elena asked what one of Nadia's evenings was worth, and nobody could say. A stranger cannot see inside a business, so whatever reaches them stands in for everything they cannot inspect. This module's claim is narrow. Attention worth having is earned through a shown signal, a free proof or someone else's trust, and it is always paid for in money, time or both.

Attention Is Always Paid For says every channel is bought, because money and time are the only currencies. The mechanism is well supported, because it is accounting. The business result is anecdotal or weak, since nobody has shown that counting it changes a firm's result. A business that cannot afford advertising has decided to pay in time. The comparison that decides anything is cost to acquire, everything spent to win one new customer, against customer worth, the gross profit a customer brings over the whole relationship. By Year 2 Nadia's cost to acquire was A$120. A customer who stopped after the A$99 first service left A$29 of gross profit, so she was A$91 down. One who stayed on the A$189 care plan brought A$110 a month. Clicks, views and followers can show you where to look and decide nothing.

Alex Hormozi's map of channels, the Core Four, asks two things: does the person already know the business, and is the message going to one person or to many? Warm or cold by one or many gives four boxes, and no fifth can exist. That makes it a sound filing system, and it cannot say which box suits you. Interest Shown, Not Held corrects a word. A lead is a person who has shown interest by doing something, such as replying or booking, and the signal is the asset. The thing worth having in Nadia's 100 days was one message from a home owner asking about a pool gone green. This is anecdotal or weak, and no method is given for weighing one signal against the next, so it works as a sorting habit and no kind of measure.

The Small Complete Fix gives away one finished fix for one narrow problem, chosen so that solving it brings the next problem into view. Hormozi calls it a lead magnet. Complete means it works with nothing else bought. Narrow means small enough to be properly solved. The design makes sense once the free item is seen as evidence, because it is all the proof a stranger has. Elena's adult beginners believed they had left it too late, so she offered one free lesson in which everyone played a short piece from start to finish. The hour was complete, and it showed the next problem, because one piece learned by rote is not playing. Nadia's clip on clearing a skimmer basket does clear a basket, and it leaves nothing behind that needs Nadia. The mechanism is mixed and the business result anecdotal or weak.

Borrowed Trust says a referral lends the seller a trust not yet earned. Robert Cialdini's account is that people judge what is right by what others appear to think, and carrying that to referrals is by analogy. Hormozi's ranking of referrals as the cheapest leads is judgement, so this is anecdotal or weak. Nadia's customers began showing her water report to neighbours with pools, and some rang. Whether they would have found her anyway is unknown, because nobody kept a count.

Two parts of this advice shrink in a small Australian business. Cold email fails on law. General information only, not legal advice: unsolicited commercial email and SMS to people who have not consented is unlawful under the Spam Act, with civil penalties, and being helpful or personalised is no exemption. Unsolicited calls run into the Do Not Call Register. Content fails on audience. It has one real strength, that an old piece people still find is still working. It is also the slowest and least predictable channel, most of the rewards go to a few winners, and the examples come from people with huge audiences. Nadia's 100 days are what the median looks like from inside.

Where it stops working

The arithmetic has no Reversal, since no channel escapes it, but the source leaves the value of an owner's time open, so two honest owners can price one channel differently. The Free Channel is the shadow: unpriced hours booked at zero. A free item has no case if it would prove nothing once any sense of owing is gone, because buyers who read it as a device owe nothing. The Half-Solution does damage, since the stranger has nothing else to judge by. The check on a free item also cuts one way only. People who take a free lesson were keener to begin with, so a good result proves little and a flat one says a great deal. Borrowed trust stops where the lender cannot honestly vouch for the firm or the buyer is not like them. And much of this stays at Nadia's: Tony's frontage does the work, and a procurement officer has no use for a free sample of fabrication.

• LO5.1Identify the defaults in a business and separate the record each one moves from the outcome it serves.
• LO5.2Trace a customer's path and say whom each step serves.
• LO5.3Explain why a hard exit buys a better number that can no longer be read.

Core content

By accident, half of Elena's families got a new re-enrolment reminder with a bold line saying most had already re-enrolled, and half got the old one. The two piles of unreturned forms came out about the same height, so she rang them. One form was on the fridge, one had been taken for the concert notice, and one mother assumed her children stayed enrolled until somebody said otherwise. Nobody had decided to leave. This is the force called Inertia: whatever happens when nobody acts is what happens to most people. Richard Thaler and Cass Sunstein, in Nudge, call that outcome the default. The setting of any decision has no neutral version, since the trays in a school cafeteria must sit in some order.

The Default Decides says owners who last treat what happens by default as a decision they own, set it on purpose and check what it moved. When workers were asked to join a retirement plan, roughly half did. When they were enrolled and allowed to leave, participation reached roughly 90 per cent, with almost nobody opting out. Those figures come from administrative records across countries, so the mechanism is well supported. They concern pensions above all, so the business result stops at mixed. The extra people had never been opposed. Joining took forms and a decision, and the decision never got made.

Elena's form had been a small opt-in scheme. At A$144 of gross profit a term and A$90 to replace a student, every 10 lost to a fridge door came to A$1,440 a term, plus A$900 to find replacements. She reversed it, so a place carried forward unless the family said otherwise, and leaving took a one-line reply by a stated date. The chasing stopped and the roll held. Then a few families paid, came twice and asked for their money back. The rule had rescued families who had not got round to the form, and collected families who had not got round to leaving. A full roll is a record. Whether she had more children playing, week after week, she could not say.

The move into a business carries a catch the pension figures hide. A pension default puts a worker's own money aside for that worker. A business default usually sends the customer's money to the person who set it. On the authors' reading, the pension evidence shows how strong the force is and says nothing about who should be on the receiving end.

Friction Has an Owner turns to the path a customer walks. Every step was added by somebody for a reason, and that somebody rarely walks it. Owners who keep their customers tend to know whom each step serves, and to take out the ones that serve only the business. Thaler and Sunstein call such steps sludge when they stop people reaching what is good for them: the cancellation that takes a phone call after a sign-up that took a click, the rebate that waits on a form in the post. In government programmes simplifying reliably lifts take-up, so the mechanism is well supported, and what a private firm gains is mixed. A wholesaler's quarterly claim form beat Nadia two quarters running. Whether it was built to be missed she could not tell, and the wholesaler kept the money either way.

Exit as Easy as Entry covers anything that renews: build continuity into the first sale, and make leaving as easy as joining. The mechanism is mixed and the business result anecdotal or weak, since no figure shows what easy cancelling does to income. Nadia's partner Col suggested taking cancellations by phone only, in office hours. If the leak fell, some of the fall would be customers won back, and the rest people who found the office shut and forgot by morning. Nothing in the plan count separates them, so the owner has bought a better number and lost the means of reading it. Parity has a price too, since some customers will leave in an evening who would have drifted on for months.

Any lift outside pensions has to be tested, wording tweaks most of all. In the trial records of the two largest US government nudge units, effects came in several times smaller than in academic papers, so that evidence is mixed. General information only: in Australia, renewing without clear disclosure, hard-to-find terms and cancelling that is harder than signing up have drawn regulatory scrutiny. The reforms aimed at them are described as proposed, a word that dates quickly, so check their status before relying on it.

Where it stops working

A default can move a record without moving the outcome, and there the pattern stops. If you cannot name the outcome a default serves, apart from the list it fills, you have no way of judging it. A default can also hold people in place long enough to hide why they wanted to go, which at Elena's size would be a dull class with a full roll. Some friction protects the buyer, and the cost of being wrong shows which: a check before a costly or irreversible choice earns its place, as when Helen's customer signs off drawings before steel is cut. Retention by Friction is the shadow, where cancellations slow, the owner calls it loyalty, and what has been kept is someone who has not yet found the time to go. A genuine fixed term can be an exception to easy exit if it is clearly disclosed, knowingly chosen and priced as such, and the law needs checking first. One-off sales barely meet any of this: each of Tony's baskets is a fresh choice.

• LO6.1Calculate the earned ratio and the cash ratio, and explain what the gap between them measures.
• LO6.2Work out an undelivered total and test it against cash held through a bad quarter.
• LO6.3Name a leading check with a date, and price the leak in a recurring base.

Core content

Helen's A$180,000 job came in at the estimated A$140,400 of cost, leaving A$39,600 of gross profit. All that cost had already gone out, and the customer's habit was to pay near day 75. Six weeks after the invoice, one report showed a good job at a good margin and the other showed almost nothing in the account. Both were true. That is the force called Lag: cash and results arrive after the effort, and collapse arrives after the cause. Every business keeps two clocks. Profit comes from the one recording when work is sold and done. Bills get paid by the one recording when money moves.

Cash Lands After Profit is well supported, as arithmetic, and knowing it has not been shown to change any firm's result. Take cost to acquire, what you spend to win a customer, and thirty-day gross profit, what a new customer earns you in their first 30 days or whatever window fits the firm. Divide the second by the first for the earned ratio, which counts only work delivered. Nadia's A$105.70 over A$120 gives 0.88, or A$14.30 short per customer. Below one, more advertising digs the hole faster inside the window. The ways out are to spend less to acquire, earn more in the window or deliver for less. The ratio measures funding need, not lifetime loss, and her gap closed near week six. The Offer Sequence fills the window by treating a run of offers as one design. Its sum adds up, and its results are self-reported and anecdotal or weak.

Taking money early looks like the cure. The Customer Is Your Lender says money received for something not yet delivered is deferred revenue, a liability and not profit. That is well supported as accounting logic, though no real failure case is given. Nadia sold an annual plan at A$1,890 for 12 monthly visits, 120 customers switched, and A$226,800 landed. Three months in, A$170,100 of visits sat undelivered and would cost A$85,320 to deliver, and the bank held A$31,000. She was A$54,320 short even if nobody asked for a cent back. While sales keep coming, the same cash covers old delivery and the next customer, so the failure arrives suddenly, in the month sales dip. A bad-quarter model reruns the sums with new sales cut sharply, before the good month is spent.

Ask two things of any ratio: does it count money collected or work delivered, and over what window? The cash ratio is cash collected in the window, minus delivery cost in the window, divided by cost to acquire. When Nadia launched the plan it read 3.0 and the earned ratio read 0.84. Both were correct, and the gap, about A$260 per customer acquired, is the size of the customer's loan. On the series' untested ruling, a ratio permits growth and decides nothing further. Delivery capacity and the bad-quarter model decide it.

Results lag too. The Lag Runs Both Ways joins James Clear's point, that gains stay out of sight while they build, to the warning about firms that look healthy on prepayments. That join is the series' own synthesis, anecdotal or weak. Helen's best four months were good partly because a bay had stopped trial-fitting work, until a load of steel came back on the truck. What separates patience from denial is a leading check: a small sign, due by a stated date, that should have moved by then if the slow thing is working. It must come before the result, be able to fail, and be written down before you need it to say anything.

Output Becomes Input tests the word compounding by asking whether this period's output becomes next period's input. Retention passes, because the roll that closes one term opens the next. A one-off job fails, and a gain stops passing once rivals have it. This test is also anecdotal or weak.

The Leaking Base is arithmetic and well supported. The leak is the share of a recurring base lost each period, and replacement sales hide it. Nadia's 200 plans lost 3 per cent a month, which is six. About 40 per cent of new customers take a plan, so six replacements need about 15 new customers at A$120 each, or A$1,800 a month to stand still. The leak also sets a ceiling: six new plans a month can hold 200 and never more, and at 2 per cent the same six would hold 300. Selling more and leaking less are the only two ways to lift it.

Where it stops working

Cash Lands After Profit falls away where a firm is paid at the till and pays suppliers later, as at Tony's. The target of twice the cost to acquire in 30 days is a second-hand rule of thumb for high-margin, short-cycle services and is retired here as a standard, since Nadia's sound business would have failed it. The lender warning stands down where prepayment is chosen deliberately, delivery money is held back and a bad quarter has been modelled, though a bad-quarter model knows nothing about who falls ill. General information only: money taken well ahead of delivery creates exposure if the business fails, because those customers become unsecured creditors. The plateau story cannot be refuted from inside the plateau, so the patience argument is refused once the leading check named in advance has failed by its date. A thing can pass the compounding test and still disappoint most people doing it, because the test sorts and does not measure. No threshold for a dangerous leak is given anywhere, so what counts as too much stays a judgement, and with no recurring base there is no leak.

• LO7.1Apply repeat and exit to sort a relationship into an open market or a court-like corner.
• LO7.2Test whether a walk-away alternative is a real door or a painted one.
• LO7.3State a deal's terms simply with the how included: what happens, who does it, by when and who else has agreed.

Core content

Repetition is the pressure that says people meet again, and reputations travel. Open Market, Long Memory says that in trades where people can leave and talk, owners who last tend to deal as if the other side will be back and will compare notes. Mark McCormack, in What They Don't Teach You at Harvard Business School, argued from experience that client and seller both expect to sit down again next year. Robert Cialdini argued, without measuring it, that being found out costs more than the sale brought in. The labels are anecdotal or weak: sensible and unproved.

A royal court shows why meeting again is not enough, on the authors' reading. It has the same faces across the same table for years, and nobody would call it trustworthy. Two other things separate a court from a market. A courtier has one patron and nowhere else to go, while a customer can take the business down the road. A courtier's bad name stays inside the walls, while a customer tells a neighbour on the way home. That gives the question repeat and exit: will the two sides deal again, can they leave, and will others hear about it? It predicts that tactics which win a one-off sale lose more than they gain where all three answers are yes, and it has never been tested. Nadia's home-pool customers score three yeses.

Elena with the manager of the only suitable building in town scores yes, no and only if she tells them. That is a court-like corner: one landlord, one dominant customer, one regulator, or a small town with one of anything. Asked mid-term for two of her six rooms, she gave way quietly. The series' own ruling on power or reputation is that exit and information decide it. Where people can leave and hear about each other, the tactics decay. Where one party holds the only door, Robert Greene's 48 laws are worth knowing as detection, and most should still be declined.

Two smaller habits sit inside this, both anecdotal or weak. Track Record Over Pitch weighs what someone has done over what they say they will do, because the pitch is in the room and the record is somewhere else. Small Reliabilities means returning the call and keeping the small promise for long enough that outsiders take it for charm. Nadia returns every call, and so did Ros, who went under anyway. The case rests on price, since being wrong costs a few phone calls.

The Door You Can Actually Use carries this into deals. Owners whose deals hold tend to know, before they sit down, what they would do the morning after a no, and to have paid for that answer in advance. For McCormack, leverage means being genuinely able to leave, and no acting supplies it. Grant, a wholesaler's rep, offered Nadia a rebate if she stocked only his lines, knowing she held one trade account and it was his. A rebate with strings is often a bid to buy your door. She opened a second account at slightly worse prices, then said she would sign no exclusive. He dropped it and cut the rebate. A door counts only if it is there and you would really go through it. If an owner has bluffed one supplier for years and still gets the terms, that counts against the pattern, at least with that party. Two voices, anecdotal or weak.

The Unknown Fact treats negotiation as finding things out, mostly before the meeting: the other side's pressures, deadlines, alternatives and the people it must answer to. Nadia wrote a fair renewal for Ruth, never asked who on the committee counted, and it was rejected. Deals Simple Enough to Survive keeps terms short and states the how. Her rebate, settled in two sentences, became a year-end dispute over returned stock, the start date and cash or credit. The series' ruling is simple terms with the how stated: what happens, who does it, by when and who else has agreed. Both patterns are anecdotal or weak.

Chris Voss argues that no deal beats a bad one, and his hostage work reaches a pool counter by analogy only. On the series' untested ruling, standing firm often suits a stranger in a single deal, while in a long relationship an occasional visible move to the middle is maintenance. McCormack's founding handshake with Arnold Palmer, struck on the eve of televised golf, is a survivorship story, and timing is hard to tell from skill.

Where it stops working

True one-off dealings are the first limit. Where the two sides will not meet again and nobody will hear, repeat and exit comes back no and the pattern predicts nothing. A hard sell to a stranger passing through can work once, which settles nothing about whether it is lawful, and a buyer who never returns may still have neighbours. A record fails where someone has none, or where it comes from a different setting: Col's record as a workmate said little about how he would behave as a part-owner. Against a court-like counterparty the walk-away comes off the table. A threat to leave would be The Painted Door, an alternative that does not exist or that you would never pay for. Helen, with one contractor at about 45 per cent of her revenue, can only build a door over years, slowly and at a cost. The Long View as Alibi is the stronger party invoking the relationship to ask for one more concession. Where the cost of being wrong is high or the other side is unknown, the how has to be stated with proper advice, so a lease is no job for a handshake.

• LO8.1Apply the cautions on finite attention to a proposed expansion, and say who should check it.
• LO8.2Explain why a refused opportunity cannot be shown right or wrong without a counterfactual.
• LO8.3Run the person or room check and the control question on a workplace lapse.

Core content

Limits is the pressure that says one owner has finite attention, and other people's work cannot be fully specified. Money can be borrowed and hours hired, but the attention of the one person holding the whole firm in their head cannot. In Year 3 a consultant urged Elena to open a second site in a hired hall, paid for from term fees. Nadia, with a second region on offer that year, said she already had three new ways to stuff it up. Elena's hall closed in Year 4 and Nadia was still trading. Anyone telling that story would be sure what it meant, and this module exists partly to stop them.

All four patterns on finite attention are anecdotal or weak on both labels. One Rich Vein says owners who last tend to find one line and stay in it well after it has stopped being new, because extra lines look almost free and cost a slice of the owner's best thinking. Stop After the Win says a win changes what looks affordable and leaves capacity where it was, so hold still and put any large move past someone outside. A person urging a move cannot also check it, and Elena's only outside voice was the one proposing the hall. Lean Longer Than Feels Right is Mark McCormack on overheads, which get taken on in good months and paid in bad ones. What Builds It Will Not Run It says the skill behind a firm's rise will probably not run it. Helen's estimator's eye bought her the business, and she kept re-pricing tenders while supervisors queued at her door.

Read in order, those four seem to line up behind Nadia's refusal. Then Ros, restarting small after going under, took the same region three years later, and by Year 7 it was working. Neither ending counts, because the story could as easily have run the other way. The question needs a counterfactual, the result of the road not taken. Settling it would take a count of many comparable owners, some who expanded after a good run and some who declined, with the closed firms kept in the tally. No source offers that. A refusal also tilts the record: Elena's hall has an invoice and a closing date, and Nadia's region has no line in any book. So these patterns will look better in memory than they have earned, and they are best read as sensible cautions nobody has checked.

Once anyone else does the work, results depend on what they do unwatched. Nadia's page-and-a-half job sheet left out how hard to brush a step no customer would inspect. Three Propositions Aligned, from W. Chan Kim and Renee Mauborgne, says what attracts buyers, how the money works and what staff can and will do must line up. Her care plan's A$79 delivery cost is also a budget of minutes. Squeeze it and the margin improves, the reports keep arriving, and the unwritten part of the job quietly goes. One book and one example make that anecdotal or weak.

Fair Process means people get a say and can argue with the reasoning, hear why the decision fell as it did, and know the new rules and what will be measured. The base is one unnamed manufacturer's two plants, with no figures, so it is anecdotal or weak. It costs time and little else, and it is a civil way to treat people. That is the whole case for it.

Fix the Room Before the Person rates mixed on mechanism and anecdotal or weak on business result, with four voices and none tested in a workplace. When Elena's casual teachers arrived flustered she pinned up a growth-mindset poster, though her own roster sent them between towns with no gap to set up. James Clear, in Atomic Habits, argues that what people do depends heavily on where things sit, and his advice presumes a say over one's own space and hours. Where an owner sets those, a lapse cannot simply be read as a want of discipline. Hence the person or room check: before judging someone, ask whether the setting, tools or management caused the problem. With it comes the question control: who controls the time, the room and the company? It predicts that individual discipline tools work on people who set their own hours and fail on people who do not. The order of enquiry is worth believing because it is cheap. Nothing yet shows it improves a firm's results.

Where it stops working

No source says when a commitment is wrong, which is One Rich Vein's worst gap. The nearest condition for refusing it is one customer or one product that can end the business, as with Helen's contractor at about 45 per cent of her revenue. Holding after a win can harden into holding after everything. Moving anyway needs four things at once: a window really closing, capacity in hand, a small cost of being wrong and an outside check that agrees. Lean stops where the saving starves delivery or safety. The room is not always the reason, and the pattern goes bad the moment it becomes an excuse. A tight roster can explain a late arrival and cannot explain a false entry on a report. If tools, hours and training are fixed and the same person fails in the same way, the question has moved to the person. General information only: employment law, unfair dismissal and workplace process are not covered in this course. The people to ask are the Fair Work Ombudsman and a qualified adviser, and this note needs checking against the regulator's current guidance.

• LO9.1Judge whether a result rests on enough trials, one change and a fair starting point.
• LO9.2Separate the mechanism, the proxy and the outcome in a vendor's or dashboard's claim.
• LO9.3Use the cost of being wrong to set a review date, a measure and a stop-loss before a test starts.

Core content

At the bottom of the worst fortnight her business had known, Nadia raised the price of her first service, and two weeks later she had seven new bookings at the higher price. "Four years I've been undercharging," she told the breakfast table. Helen asked what else had changed. The rain had eased, Nadia had started ringing people back inside the hour, and she had begun the test on the day things looked worst. A small firm lives on small counts, each mixed with weather, luck and whatever else changed that month. That is the force called Noise, this time in your own numbers.

Enough Trials to Know says owners who learn from a channel give it enough tries to mean something, and fix that number before they start. The mechanism is well supported, because sampling error is a reasoning discipline that needs no study, and the business result is anecdotal or weak. About 40 per cent of Nadia's new customers take her care plan, which would make three of seven, or 43 per cent. One more sign-up makes that 57 per cent and one fewer makes it 29. If each of Helen's tenders is a separate one-in-five chance, five straight losses turn up about one time in three with nothing wrong at all. Alex Hormozi's rule of 100, such as 100 contacts a day for 100 days with no verdict until the end, uses an arbitrary number, as he says himself, and the sampling logic under it is sound. No source says how many tries are enough for any trade.

Three things moved at once, and she began at her lowest point. A worst-ever fortnight is partly bad luck that seldom repeats at full strength, which is regression to the mean, the tendency of an extreme reading to be followed by a less extreme one with no help from anybody. So almost anything tried at the bottom appears to work, an idea carried here by analogy from notes on a health book. The remedy is the one-change test: alter one thing, hold it for a period set in advance, and measure against a number set in advance. Nadia's bookings sagged and the price went back, so what it did to sales nobody knows.

Measure the Outcome, Not the Proxy keeps three tests apart: is the mechanism real, did the proxy move, did the outcome move. A yes on one buys nothing on the next. A proxy stands in for what you care about, such as a click, a score or a sign-up. The mechanism is well supported as a reasoning discipline, and the business result is anecdotal or weak. The cleanest exhibit is a chart from the first edition of Nudge. Registration as an organ donor ran near 100 per cent where people must opt out, and 10 to 30 per cent where they must opt in. The mechanism was real and the proxy moved enormously, but a name on a register is not a donated organ, and the 2021 Final Edition withdrew the recommendation. Elena's retention tool showed practice streaks climbing, and nobody knows whether it kept a single family.

Measuring can also do harm. Helen's on-time figure went up on the wall, and one bay held its number by shipping unfinished jobs. The series' ruling is to measure the outcome, and to ask of every other number whether it feeds a decision or is a target someone will chase.

Boring Basics First says to clear cheap explanations, such as slow quotes, unreturned calls and unsent invoices, before buying a fix. It is single voice, provisional, anecdotal or weak, and all analogy from health writing. The danger is a small improvement that delays the real diagnosis, as seven pleasant bookings did for Nadia.

No source says when to stop. That brings in the question cost of being wrong: how cheaply can you be wrong, how fast will you find out, and who pays if you are? It predicts that cheap, reversible actions pay off without proof and that expensive ones made on the same thin evidence do not. Nadia's fast call-backs needed no proof. Elena's second site rested on evidence no thicker, could be undone only by closing it, and ran on term fees. The series' own ruling on persist or pivot is to write down the review date, the measure and the stop-loss, the money and time at which you stop, before the start, and to let the cost of being wrong decide how tight they are.

Where it stops working

Enough Trials to Know assumes the offer is not the fault, so it is refused where the offer is the fault, and no source gives a test for telling. It is also refused where each trial costs too much to reach enough: Elena had one second site to learn from, and nobody opens 100 of them. The Endless Sample is the shadow, where a run ends badly, the owner extends it, and a sound idea about sampling becomes a way of never hearing no. General information only: 100 cold contacts a day cannot run here as a United States book describes, because of the Spam Act and the Do Not Call Register. Measuring the outcome gives way where the outcome is too slow or too costly to measure. The proxy then gets used, labelled as a proxy, and checked against the outcome from time to time. Basics are beside the point once a fault is diagnosed, since a firm with a known hole in its cash gains nothing from a review of its phone manner. An owner with few or slow trials, like Helen, gets fewer answers from all of this.

• LO10.1Redraw a value curve and read its drift as settler, migrator or pioneer.
• LO10.2Diagnose a fading offer as a tired name or a tired curve before changing it.
• LO10.3Write an original pattern with both labels, a Reversal and a check that could fail.

Core content

A customer held her phone across Nadia's counter in Year 6. On it was a photo water report from a franchise. "Yours does the same thing, doesn't it?" she said. For five years that report had been the peak of Nadia's value curve, the line showing what a business offers against its trade. Now it ran with the pack, while the care plan held its margin of about 58 per cent and the books showed nothing wrong. A pattern resolves forces in a stated context, so it can fail with nobody having done anything wrong. A condition flips and the fit is gone.

Move Before the Curves Meet says owners who outlast imitation keep drawing the curve and read its drift back towards the trade as the cue for a new move, before the accounts say so. W. Chan Kim and Renee Mauborgne's first claim is a comfort, that copying is slower than most expect. That looks weaker with age, and at small scale the barriers nearly vanish, since Nadia's report needed only a phone. Their second is a discipline: keep redrawing the chart, because margin reports on what buyers decided some time ago. They sort businesses as settlers, who track the trade's curve, migrators, who give more of what the trade gives, and pioneers, who have a new shape and a large following. Believe the signal and hold the timing loosely. Drawing the curve costs an evening. What it says about when to move is single voice, provisional, anecdotal or weak, reasoned from a list of winners.

Tired Name or Tired Curve exists because "this used to work" is what an owner says either way. Alex Hormozi describes a name going stale through overexposure while the offer stays sound, and Kim and Mauborgne describe the curve rejoining the trade. Neither gives a test, so look at the curve before you touch the offer. Elena's open-place notices drew fewer replies, but her classes of four in soundproofed rooms still ran a different line from anything nearby. She changed only what the notice said, and replies came back. Nadia could have renamed her report every season and changed nothing. The series' untested ruling: with a tired name, stay and do it better, and with a converged curve, move. Two voices, anecdotal or weak.

Why Did This Rule Begin is a question and not an observed pattern, taken by analogy from Friedrich Nietzsche's On the Genealogy of Morals. Ask two things separately: why this began, and what it does now. Tony drives to the markets himself because his father fell out with an agent decades ago. The grudge is a poor reason and the rule still earns its place, since he sees the fruit before he pays for it. The Wednesday early close began when the whole street shut. The street stopped closing, so the grudge stays and the early close goes.

On the authors' reading, growth flips conditions most often. An owner hires, a firm goes upmarket, or margin falls, so a Reversal needs rereading whenever size, buyer or margin moves. The sources also line up on market before offer, offer before leads, price before cost, and payback before more advertising. That agreement rates fair, and it suggests the next pattern is usually the earliest link not yet holding, and rarely the interesting one.

The six questions, collected: repeat and exit (will you deal again, can they leave, will others hear), truth (does the trigger match something real), margin and cash (can the margin and the bank balance carry it), who decides (one motivated person or a committee), control (who controls the time, the room and the company) and cost of being wrong (how cheaply, how fast, and who pays). They have never been tested, so they rate anecdotal or weak at best, though each states a prediction that could fail.

Rank all 47 patterns by their labels and you get a dull list. Sums, defaults, friction and counting sit at the top, and the ingenious ideas lower down. Part of that is editorial, because the labels rest largely on one library's judgement. A label says how sure anyone can be, and it cannot say whether a pattern is yours: The Leaking Base ranks near the top and means nothing to Tony. Across this course and its two companions, writing one pattern from your own business with both labels is the series' definition of having finished, and a learner who no longer needs the course has succeeded.

Where it stops working

Settlers can be profitable now and contested markets are legitimate, on Kim and Mauborgne's own account, so an owner who is paying the bills and wants no growth has no use for moving. A move the bank balance cannot carry through a bad quarter is refused, however clear the chart. The Restless Rebuild is the opposite mistake: one copied feature is rarely a copied curve, and an owner with several peaks who tears up a sound business has overreacted. A rotated reason must still be genuine. Where none exists the rotation is refused and the name stays tired, and as general information only, a false claim of limited stock or a resetting countdown is misleading or deceptive conduct under the Australian Consumer Law. A shabby origin proves nothing, so stop if you catch yourself dropping a rule that still does its job because of where it came from. And some things nobody here knows: how businesses end well, what happens to these patterns at 100 staff, and what successful should mean for you.