Are Mistakes Good?
"Experience is a dear teacher, but only a fool will learn from no other." Benjamin Franklin Business owners learn a lot from their experiences. As a friend says, "Experience is what you get when you don't get what you want." In many companies, you can trace the history of their employee issues through their handbooks. The dress code says that Fridays are casual days. Then it goes on to say that casual dress does not include ripped jeans, low-cut blouses, flip-flops, shorts, sleeveless t-shirts...more
Tax Deductible- So What?
We have done ourselves a disservice as business owners. Too often we have justified an expenditure to non-owner friends as "tax deductible" to show how clever we are. In doing so, we have confused the public. They see the Federal Government throw billions at favored projects, and they think it is the same money that we are discussing. Tax credits are not tax deductions. Tax credits are for companies that make a profit, and are then forgiven from paying the taxes on that profit. As many small...more
Employees aren't Partners
Many of my clients are recovering from the recession. They are running lean, and have restored their profitability, even if at lower revenues than prior to 2008. Those that had to reduce or freeze employee compensation are seeking ways to share their recovering success. When cuts were made, whether layoffs, wage reductions, curtailed working hours or just freezing costs, profitability was the universally quoted reason. "We are losing money" or "We have to maintain a safe operating margin" were...more
Another Lost Generation?
I had the opportunity to present "Beating the Boomer Bust" twice this week, one of which was recorded for a Texas Public Radio show this weekend. For those who aren't familiar with the piece, it discusses the massive changes that are unfolding as Boomers retire from their businesses. As usual, members of the audience said afterwards "I knew all those things, but I never thought through the implications before." A quick recap before I get into today's topic. "Beating the Boomer Bust" is a look...more
A Return to the Handshake?
There are five words that strike fear into the heart of every business owner. They are "Let me call my lawyer." I'm not talking about threats. If I had a nickel for every person who threatens "I'm going to call my lawyer" I'd be very rich. I've found that to be a tactic used by those who really don't understand how to talk through a problem. Something goes wrong in a business deal. Someone has a fixed idea of what the problem is, and what the solution just has to be. When the other side demurs...more
Do Goals Make a Difference?
To start the New Year right, let me tell you a true story about a goal. It was a little goal; or at least it started out that way. It certainly wasn't a goal that was intended to be life changing, although it looks like that will be the result. For the next few weeks my morning workout at the gym will be tougher, as I'll have to get to machines around all those folks who will dissapear by mid-February. It's a new year, and millions of people will make tens of millions of "resolutions" that have...more
Turning Plans into Realities
We've discussed some simple steps to getting started on your annual business plan. (see previous post: The Seven Questions of Simple Planning). Once you have the questions answered, you can begin moving towards the actions that transform your plans into realities. The first two of the Seven Questions ask what your revenue goal is, and what needs to happen for it to be reached.Let's say the target is a 10% increase, and the "need to happen" is expanding to a new geographic territory. For most business...more
The Seven Questions of Simple Planning
The Creation In the beginning was the plan And it sprang from the assumptions And the assumptions were without form So the plan was void of substance And darkness fell upon the face of the workers And the workers spake unto their supervisors, saying “This is a crock of shit, and it stinks!” So the supervisors went to their managers, and told them “This is a pail of dung, and none can abide the odor.” So the managers went to the division heads, and said “This...more
Thanks for Everything
A British friend was commenting to me on how "odd" he found the American celebration of Thanksgiving. "There is no equivalent holiday in Europe, or anywhere else in the world." he said. "You have an entire day devoted to conspicuous consumption, where everyone anticipates eating and drinking far more than usual, and boasts about how excessive their indulgence was. It's so quintessentially American." Of course, Thanksgiving Day is just a warm-up to what follows; the holiday shopping season. How...more
When is the Right Time to Sell?
In the last few weeks I've had several conversations with owners about selling their companies. In one case a professional firm with whom I've worked for the last 4 years completed a merger with a large national company. That was a "Boomer Bust" transaction, driven by an ageing partner group and a lack of willing successors in the next generation. In another, a relatively young client received an unsolicited offer for the company. He wasn't planning to sell for at least another ten years or so...more
Three Circles of Family Business
What is a "Family Business?" A large percentage of small companies have some family involved. For most, it is simple a case of providing employment to family members. If the founder of the company is also the principle revenue generator, it may be a spouse (most often the wife) who keeps the books and runs the office. Employment of children who can't (or won't) find another job is common, and more so in the current economy. In most instances it is just a matter of income transfer with some value...more
Never, never, never, never give up.
I kind of see everything as connected. Last week we hosted Larry Linne, author of "Make the Noise Go Away," a book about the roles of first-in-commands and second-in-commands. I will be writing about a couple of things Larry said in his presentation in the next few weeks. One Larry's key points was about the tendency of a first-in-command to give up. Not giving up on the business, or on working hard, but giving up on change. We get so much push back from those we employ. "Not another change!...more
Fighting on Level Ground
Poland has been conquered numerous times in history. Since the 11th century, it has been partially occupied, partitioned, or fully subjugated by the Germans, Russians, Austrians, Mongols, Tartar Muslims, French (under Napoleon), Prussians and Hungarians. The Poles aren't a timid people, and they have given good account of themselves in numerous battles. Their role as repeated door mat is largely due to a single factor. Bad luck. First, Poland straddles a historical divide between western Europe...more
Being Brave in a Brave New World
In the first three posts in this series I've outlined a number of reasons why the American economy is unlikely to grow in the next few years. All of my reasons are factual. The numbers don't lie, and these numbers can't be fixed by looser monetary policy, or stimulus bills, or consumer confidence. They will only be cured with time. One client accused me of trying to "scare" him out of expanding. Nothing could be further from the truth. There is an old trader's axiom: "When there is blood in the...more
Changes in the new landscape
Last week we talked about an economy where we can expect things to stay flat, or at least feel like they are flat, for a long time. The ageing Boomers, a long recovery in real estate and construction, shrinking government spending, weakness in the financial markets and increasing global competition will prevent anything like former fast recoveries for the forseeable future. What does that mean for the business climate? It's one thing to say that things will be flat, but another to translate "flat...more
"When everything is flat, you can see a long way."
That statement was made by Van Palmer of Palmer Technology Systems after a lengthy discussion about economic trends. It perfectly describes why we should be positioning our businesses differently from how we did it at the end of previous recessions. Since World War II, the United States has enjoyed a growing number of working adults as a percentage of the population. This was an effect of both the baby boom, which added 58% to the US population in only 20 years, and the baby bust, the trough in...more
Dealing with "Malaise"
This starts out sounding like doom and gloom. It isn't. I have come to the realization that the world of small business ownership is changing, and we have to change with it. For the next few weeks this column will discuss how we have to be different. Please read through the depressing part- it gets better. I promise. On July 15, 1979 President Jimmy Carter delivered a nationally televised speech on the "crisis of confidence" facing the American people. It has become widely known as his "malaise...more
Raises and bonuses- sharing a recovery
Your business is starting to recover. You are again profitable. If you were smart and agile, you remained profitable or perhaps even increased margins during the downturn by being "lean and mean." One advantage of a financial recession is that employment trails the recovery. So while businesses rebuild their earnings, jobs remain scarce. Most small business owner don't see their employees as part of a statistical anomaly, though. If you froze increases in 2009, they haven't had raises in what seems...more
Can Startup America revive US small business?
A couple of weeks ago in my opinion blog "Awake at 3 o'clock" I pointed out that politicians pronouncing small business owners as the saviors of the economy is a misplaced strategy. ("SMB isn't the cure for the economy") Most SMB owners are ageing Boomers, disinclined to take big risks as they seek greater retirement security. Now the government is rolling out a new program "Startup America" to foster the development of innovative entrepreneurs. The program will support early-stage companies by...more
The Catch 22 of IT management
Are you big enough for an "in-house" IT professional? With the rising cost of service by outside firms, many smaller businesses are trying to hire someone to take care of their technology needs. Of course, many small businesses are still trying to ignore their technology needs. I am surprised at how many times I get a belated answer from someone that starts "Sorry, but our email has been down for a week." Those companies are simply playing roulette with their business. I'm talking about the ones...more
