Tywin Lannister’s Business Plan — A Leeds Accountant’s Analysis
Author: Russell SmithJuly 7, 2017
Wondering how Tywin managed to keep the Lannister House so wealthy? Our Leeds accountant dissects this cunning financial model and reveal some interesting Game of Thrones business lessons.
Do you know how much gold was mined in the Westerlands this past year?
You can guess in pounds, tonnes or ounces. It doesn’t matter. The answer will always be the same.
In season four of the hit HBO show Game of Thrones, the fearsome Tywin Lannister freely admits to his adoring daughter Cerci that their gold mines had run dry, and had been so for years.
The precious commodity that had made the Lannister House the wealthiest in Westeros, the very gold that was guided into their sigil, was gone. Yet, here they are some three years after their very last mine was picked clean of gold, operating still as the richest of the rich.
If three years has passed since they last got an ounce of ore from beneath their home of Casterly Rock, and the mines had already been struggling well before that, how in the name of the Seven are they still able to always pay their debts?
As most of those reading this blog will be business owners, you’ll probably be asking the same question as our Leeds accountant. If all our staff suddenly lost the ability to do maths, and we couldn’t sell our service anymore, we’d be washed up. It’s the same for all industries — if you cannot sell what makes you money, you go bankrupt.
Yet the Lannisters did not. How? What did they do and how can we ensure we have the same level of protection?
Our Leeds accountants were eager to find out these mysterious Game of Thrones business lessons, so we did some digging. Turns out, it’s all about Tywin’s genius business model.
Tywin Lannister has been playing the long game. It is likely he knew that his gold mines were running out of precious ore and instead made other moves to solidify his wealth while he had the chance.
So, how can we apply these Game of Thrones business lessons to our own companies?
Risks Are Required for Reward
If Tywin were to have stayed in Casterly Rock, picking off the last supplies of gold, his family wouldn’t be in the position they are now. Instead, he took risks. He invested his resources into a hostile takeover that he knew would bring about more opportunities for financial gain.
Luckily, he won and was able to secure a more stable future for House Lannister than if he’d just hoped for more gold to appear. The risk was big, but the reward was greater. His family took control of a continent, and all the power, wealth and assets that come with it.
If he’d lost? Well, he’d have crumbled, but he would have likely crumbled anyway.
In business, you have to take risks to gain reward. But risks don’t have to be like the toss of a coin. Tywin took a calculated risk. He used his resources, pooled them with another’s, and struck at a time when he knew he was running low on gold.
If you want to succeed and last like the Lannister House, you must be prepared to put your neck on the line. However, make sure you are only risky, not reckless.
Secondary Income Can Provide Long-Term Stability
Most small businesses have a laser focus. Gardeners garden, bakers bake and accountants account, but Tywin, as a gold retailer, had other ideas.
Through his actions, he ensured he had numerous avenues of income alongside his retail business. He acquired money through other ventures, such as his bid for the crown, using his capital investments and his lending streak.
The result was that, when the gold ran out, the money did not.
Finding secondary sources of income is a powerful method of securing a stable future, as it allows for movement and versatility in your business. For example, retailers and manufacturers often let out parts of their business premises to other businesses or individuals, and mechanics may do contractual work for other companies.
Smart Business Moves Ensure Indemnity
Tywin knows his business law.
As a sole trader, or a Westeros family, borrowing means borrowing under your name. Loss of profits means the same and if your business goes bankrupt, so do you. All money held against the business will be held against your name. In Britain that’s worrying, but in Westeros that’s downright terrifying.
However, third-party indemnity offers the savvy business owner protection. Establishing your business as a limited company means that if it does go under, your personal assets are not liable for covering those costs, which keeps yourself, your family and your home — even if it’s Casterly Rock — safe.
Tywin, being the shrewd businessman he is, has found a way of protecting his family while still borrowing excessive quantities of money. He’s borrowing against a third-party organisation, the crown. He chooses his words carefully when stating that ‘the crown owes the Iron Bank of Braavos a tremendous amount of money’.
By borrowing against the crown, not his family name, he has been able to carry on his Empire without risking the ruin of his House. This is a smart move, but it is not without its dangers. Lending against a business isn’t a get-out-of-jail-free card, but it does allow for some protection. To borrow, you must have a plan to pay off the debt. Tywin planned to forge an alliance with the second wealthiest house in Westeros, the Tyrells. Make sure if you borrow against a limited company, you also have a way of paying it back — or at least, a wealthy medieval family to marry into.
Tywin Lannister’s Biggest Business Mistake
Tywin largely played his hand well, but he made one massive mistake. We know it as the Red Wedding.
On the day Tywin saw much of the Stark lineage butchered, he broke sacred rules about the treatment of one’s associates. He undercut them with a dirty, backstabbing deal.
Once you gain a reputation for being underhanded, you lose your credibility and respect. People don’t want to deal with you anymore, and you make enemies of those you betrayed.
Tywin’s dodgy dealings resulted in a rise in support for his ‘competitors’. The North will always remember, and the North will invest elsewhere…
Smart, tactical decisions are one thing. Being overtly ruthless to the point that it tarnishes your reputation and impacts trust is another.
Need some help keeping your business model as tight as Tywin Lannisters? Our Leeds Accountants are finance and business experts, ready to help support your future.
Russell Smith is an award-winning accountant and founder of RS Accountancy. With over a decade of experience running his company, he has worked with countless small businesses just like yours, helping them grow profits and manage their finances. Russell is also a prolific financial writer, having contributed to such publications as The Guardian, The Telegraph and The Daily Mail.