Inauguration Week, a time to stay focused

I have written on this topic several times over the last 12 years: Inauguration Week. More specifically, what happens to the business world after Inauguration Day. When Bush 43 took over in 2001, there was hand wringing. Before Obama took over in 2009, there was hand wringing. And now, with Trump’s takeover days away, the sound of hands (w)ringing, toll yet again.

The problem? That new President-elect. “He / his policies / his party’s policies will ruin my business.” . Doesn’t matter which President-elect, even though it’s hard to imagine that the last three or four president-elects could be more different from one another. Even so, I hear the same refrain I’ve heard every four to eight years.

I can’t start a business with so-and-so / whichever party coming into power.

My business is in trouble with so-and-so / whichever party coming into power.

Sure, there is some impact

I don’t mean to say there won’t be some impact. This time around, like every time, there is likely to be some impact on the energy business, on taxes, on healthcare, etc. Thing is, they’re impacted seemingly all the time by legislation from both parties, by world events (war, finance, technology changes, OPEC) and more. Is the price of gas / diesel different than it was before Obama? Before Bush 43? Sure. And it will be pretty much every week for years until some point way off in the future when technology matures past the use of those fuels.

However, when it comes to most businesses, the impact is usually trivial and the concern overblown. How you serve your customers and how effectively you sell and market to them has a much bigger impact in most cases than anything some randomly chosen President can do.

Sure, there is a lot of change in Washington. There will be, as always, a lot of pieces moving around on the chess board, and there will be plenty of drama in the news. As there always is.

Little, if any, of this has anything to do with the success of your coffee shop, sandwich store, plumbing business, clothing store, software consultancy, etc.

Don’t let Inauguration Week and a new President distract you and your team. Stay focused on your plan and your goals.

Step away from the drama

There is plenty to look at in the news that can make you take your eye off the ball. Don’t let it win. There is plenty to distract and worry your employees and contractors. YOU have to maintain momentum and leadership. not the TV news. It’s your job to make sure your team doesn’t get distracted and lose confidence over whatever’s going on in the news.

Use all the change as a reason to refocus and stay focused. Use it to rally your team. Remind them that no President has ever had a dramatic effect on your business. Be sure they know that you believe that the group of people working there now will not be the one to allow this (or any) President to be the first to negatively impact your business.

I know this might seem silly to some, but the thought processes are out there. People are always worried about their future when these kinds of changes occur. It’s easy and the news doesn’t help.

You have a plan for the year, right?

I’m sure you have a plan for the year. We’re already halfway through January. Remind your team of where you are toward your January and 1st quarter targets. Given the lack of likely impact by the changes in DC, it’s an opportunity to show your team what early trends look like.

Your team and your market has had over two months since the election to settle down. If your business is down since that time, I hope you know why. It might be normal for this time of year. If it isn’t, determine the cause and share it with your team. The last thing they need is to let the belief that four or eight years of that is inevitable.

For the same reason, if your business is up over the last two months, be sure to explain why. Your team needs to know why and how their work is affecting results and not that something completely out of their control (like political change) is driving your business’s performance.

Keep them up to date on the plan, its progress and course corrections you’re making. Keep your eye (and theirs) on the ball.

It’s the day after the election…what do you believe?

Regardless of your level of happiness or dismay with the results of the 2012 elections, you have at least one thing to do today: Refocus.

The election is over.

Whether your candidate won or lost, take five minutes to deal with the results however you wish.

After that, get back in the game. It’s time to refocus on your business, on your customers, and on improving what you do / how you deliver it.

Regardless of what you think of local/national changes (or not) that came out of the election, none of that should matter much to a well-run, strategically managed, market-focused, customer-oriented business.

What you allow yourself to believe about an election’s impact on your business will drive your behavior – conscious and otherwise. Your behavior drives your results.

Get to work.

 

It’s a bad time

Time Bandit
Creative Commons License photo credit: Ian Sane

Over the weekend, I had a brief conversation about a Wall Street Journal article I had posted to Twitter about the average nationwide earnings of a partner in a U.S. law firm.

I almost didn’t post the link because I had the feeling it would generate a political conversation. Politics was not the point of the post, but given the season…it was bound to go there.

The reason I posted it was to note that someone who typically has started at an entry level position and worked 60-80-100 hour weeks for a decade or more, was doing quite well for themselves and that this wasn’t just Wall Street lawyers.

The number is a nationwide average rather than a “gotta-live-in-a-city-of-5-million to make this kind of money” number. Successful firms with 15-20 lawyers – even those in a town of 50,000 people – will have partners. Maybe even junior partners, even if they aren’t at this “average” pay level.

Oh, the politics

The political end of the conversation was actually a good thing. It turned to us vs. them and executive vs new graduate – specifically that the executive rakes it in while the new graduate struggles to find a lawyer job.

Tell me, if you worked your tail off for a decade after going to college for seven years, would you expect to make what a new grad makes? Would you expect to make what the manager of a successful local restaurant makes? Probably not. When you make partner, you get a percentage of the firm’s profits in part because you are responsible for producing your fair share of them. Responsibility.

Today’s law graduates are probably looking forward to that juicy partner salary, as they should. Unlike the made-for-TV movie where junior graduates on Friday and starts at $200K with a glass-walled office on the following Monday, the “average” new law grad is reportedly in a tough market, according to a June 2012 story in the WSJ.

What prompted me to write about this situation was the assertion that it is a “bad time” to graduate from law school and pass the bar.

In my mind, it’s a great time. Better than next year. Better than the year after that. Frankly, there’s never a bad time to pass the bar, given the gatekeepers that depend on checking that box.

It’s a bad time to be average

I do agree that it is a bad time for some things. It’s certainly a bad time to be an “average” law school graduate. Not because there are 18 quadrillion lawyers and the world doesn’t need another one. Not at all. The world could probably use thousands more great ones. What we don’t need is another average one.

Just like we don’t need another average anything else. Today, “average” means you’re going to struggle.

What else is it a bad time for? It’s a bad time to be average. At ANYTHING. Note: Don’t confuse average with inexperienced.

The conventional wisdom is that it’s also a bad time to start a business. Either the economy is bad or you should just be happy you have a job and wait things out rather than working toward getting a better one or egads, starting a business on the side. Waiting is comfortable. It’s easy.

Yet if you wait, a year from now you won’t be any closer to having that business. Hopefully you’ll still have the job.

The conventional wisdom says “Wait.”

It seems to make sense. “Don’t start something now when the economy is down and the holidays are coming.” Will the economy be better in a year? You have no idea. Oh, but there’s an election coming, so you should wait. Except that there’s another election after that.

Next year, all the people who are starting to look at buying what you would be selling will already have their first vendor. Taking someone away from another vendor is harder than being their first vendor, even if their current vendor isn’t making them happy.

Next year, you’ll have the same job and the same excuses (or corollaries to them) and your biggest regret will be that you didn’t start last year.

It is a bad time for one other thing. It’s a bad time to wait.

Indivisible

Coffee
Creative Commons License photo credit: Selma90

Howard Schultz is doing what few large corporate CEOs have done: Following up rhetoric with leadership, action and money.

While I prefer freshly-roasted beans from local roasters and rarely do Starbucks outside of airports, I will stop in this week in order to support this.

The post title? It’s inscribed on a wrist band you get if you donate $5 to the job creation fund the Starbucks Foundation started.

http://www.reuters.com/article/2011/10/03/us-starbucks-idUSTRE7921M320111003

 

Lucy and the Aluminum Football

World's Favorite Sport
Creative Commons License photo credit: vramak

Lately, there has been a lot of talk in the news and around the Flathead Valley about the Bonneville Power Administration (BPA) offering a four year power supply deal to Columbia Falls Aluminum Company (CFAC).

The deal is subject to environmental review and other what-ifs, so it isn’t a done deal quite yet.

Given the economic struggles facing Columbia Falls, any news of new jobs is good news. Really good news, in fact.

The topic of CFAC concerns me – it always has. Folks who have lived in Columbia Falls far longer than I know the history of CFAC first hand. To summarize for everyone else: It opens. It lays off / closes. It changes hands. It opens. It lays off / closes. And so on.

Again, Lucy pulls it away
CFAC has at times been our employment Lucy (from the “Peanuts” comic strip). Just as Charlie Brown approaches to kick the football, Lucy pulls it away and Charlie goes flying through the air, screaming and lands flat on his back. Imagine having that done to your career and family -  several times.

No matter how good things are when CFAC is rocking, a shutdown ripples through the financial well-being of our fair town’s families and the businesses that serve them. The impact of the historical ups-and-downs of CFAC on those families is unimaginable.

To their credit, CFAC’s troubles haven’t always been bad news for the valley.

In at least one case, their troubles have generated substantial benefits. Several years back, CFAC paid their people to do what amounted to volunteer work for a number of groups that couldn’t have otherwise afforded the labor. Many organizations benefited big time from the hard work their employees provided back then – and continue to benefit from the work done back then.

Don’t be a commodity
It isn’t as if these troubles were created on purpose (feel free to argue about that in the comments).

While it may not have started that way in the 1950s, the CFAC of modern times is incredibly sensitive to the whims of commodity prices. Many businesses deal with commodity prices somehow affecting some part of their business. CFAC’s business has it as part of their raw materials supply, energy supply and their finished product. As things sit today, it’s a tough, tough business they’re in.

Imagine having someone else setting the prices of every major component of your business. Now imagine that the ingots you ship are not substantially different (speaking very generally here) from those shipped by a Chinese firm using labor that works for $10 a day, ore that’s mined locally by workers paid similarly, and so on.

Advice to everyone else – do whatever you can to avoid getting yourself into a commodity market. If you’re in one, work on your business model to get out of it.

In fact, that’s my advice to CFAC, though they didn’t ask. Let’s call it a wish for the betterment of Columbia Falls and the entire valley.

The Whole Valley
Wait a minute…the whole valley? Absolutely. It’s about airline seats, hotel rooms and rental cars. It’s about cafes and catering. It’s about grocery and clothing stores. It’s about car dealers and construction work. It’s about the schools that get property taxes from an active thriving business instead of the waiver-level taxes of a dead one.

My wish is that in four years no one cares what electricity costs CFAC. Not because they are gone, but because whatever they sell has so much value that people will pay whatever it takes to get it. It worries me deeply that in four years we’ll be right back where we are now.

What I’d like to see is for CFAC to add a ton of value to the aluminum they produce, *before* it hits the rails. I’m told CFAC had some of the best millwrights anywhere who could create “anything”.

I wonder
I wonder what CFAC could make that would allow them to sell a product that doesn’t get sold on commodity markets based on someone else’s price control. I wonder what they can manufacture with the skills and backgrounds of the people who worked there for the last 20-30-40 years.

I wonder what would happen to a community manufacturing valuable products for today’s economy, rather than commodities from my grandfather’s economy.

I wonder what would happen if Charlie got to kick the ball.

The Freedom To Hire

O OUTRO LADO DO MEDO Ã? A LIBERDADE (The Other Side of the Fear is the Freedom)
Creative Commons License photo credit: jonycunha

I‘ve been listening carefully over the last month as a number of people offered their analysis of the jobs problem in today’s economy.

One thread of discussion from a sizable number of folks really stuck out.

“It’s health care reform. No one is going to hire anyone until that’s resolved.”

Generally speaking, I understand the fear, but I think it’s uncalled for in the U.S.

Over There

In some countries, you can be stuck with a new hire “for life”.

Such policies were designed to grow employment and increase consumer spending, but like many things viewed from only one angle – they’ve also had (and continue to have) a slight to significant dampening effect on hiring.

Think about it – if you knew that the next employee you hired was yours “for life” (or say, 10-20 years), you might choose to either contract out that work – or just avoid the work altogether if you can.

Avoiding profit-generating work doesn’t exactly sound like a way to grow your business.

Not in the U.S.

That isn’t what we’re facing here in the U.S.

While you could argue about the pluses and minuses of the Affordable Care Act (ACA / HCR ) forever, what I’m hearing is a genuine HCR-driven fear of hiring.

The primary reasons stated revolve around employers concerned with ever-increasing health care benefit costs. Thing is, these costs have been rising at about 10% per year since at least 2004 in both good and bad economies without ACA / HCR.

Or they hear about the penalties for not having health insurance, which are $2000 per full-time employee per year. While that is LESS than the annual cost of providing a qualifying health insurance plan for employees, even that is misleading because the penalty doesn’t apply to everyone. Back to that in a minute.

Until you know the details, it’s EASY to see how it might make someone think twice about hiring an $8-12 an hour part-time clerical employee. Adding that $2000 cost to their $8 an hour salary effectively adds another $38 a week to their full-time pay, moving them to about $8.97 an hour.

Normally, I’d suggest that you shouldn’t have an employee who isn’t generating at least three times their wages in revenue, but in lean times, I suspect most employers have figured that out.

Still, that $2000 still sticks out.

Did I mention that many of you won’t have to pay it?

The Smallest

In addition to being exempt from penalties, the smallest businesses (with less than 30 full-time workers) get a tax credit for the coverage they provide.

According to IRS form 8941, the Small Business Health Care Tax Credit for Small Employers:

“an employer or tax-exempt organization must have fewer than 25 full-time equivalent employees (“FTEs”) for the tax year, and pay less than $50,000 in average annual wages per FTE. As explained in an IRS press release, the maximum credit available under this program for tax years 2010 to 2013 is 35 percent of premiums paid by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. The maximum tax credit will increase starting in 2014 to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible, tax-exempt organizations for two years.”

Escaped Goats

Larger employers worry about the penalties for not providing a plan – but those don’t apply until you have at least 50 full-time employees (or the equivalent) excluding seasonal workers who work fewer than 120 days. For some employers, it will be cheaper to cancel your business insurance and pay the penalty than to offer an employee health insurance plan. Go figure.

Will this change? Like everything in business, probably.

While you take the wait and see approach, your competition is strategically growing their business.

Be Unpredictable

I’ll make it easy for you.

For the sake of argument, let’s assume that you don’t believe a word of this and that you think the ACA / HCR bill is going to get a lot tougher for employers.

Still, you’ve got that pesky mortgage.

Sell the work. Contract out what you have to. Bullish? Go crazy and hire someone whose work might transform your business.

The political stuff will be unpredictable no matter what you do. May as well go kick some butt.

One way to create sustainable jobs

Recently, the Flathead Beacon published a story about a global tech-oriented business that continues to grow right here in rural Montana.

This business started from scratch and achieved critical mass…

  • Without tax breaks that often encourage unsustainable business models.
  • Without specially crafted laws that treat their industry or part of their industry “more fairly” than others. Rhetorical sidebar: What exactly is “more fairly”?
  • Without the work of half a dozen lobbyists in Helena or Washington.

In other words, they started just like your business likely did, probably using the same methods most small business owners use – the same thing that I suggested when we talked about the fitness center just a few days ago.

They found a need and they filled it.

Several years back, I remember sitting in a coffee shop next to someone interviewing a candidate for a job with what was then the startup roots of the company discussed in the article.

The discussion and the numbers I overheard told me they were serious, sustainable and positioned well. I’m really glad to see this business continue to grow.

In good economies and bad, your business model has to make sense on its own, no matter what’s going on in the state capitol and DC, and no matter who is in the White House.

What’s on your plate?

Imagen de Hola Gourmets 2009
Creative Commons License photo credit: jlastras

As I spent the last month mulling over my strategic plan for this year, I started by looking at what I was doing operationally as if I was my own client.

In the software business, it’s called “eating our own dogfood“. In other words, a vendor using their own software for the task it was designed to perform.

But it isn’t limited to software.

From a day-to-day operations perspective, that process quickly tossed a few things in my face.

I thought I’d mention some of the higher level things in case they happen to spark a ToDo item for you.

Technology

I need to automate WordPress updates across several dozen sites (some mine, some not). It was semi-automated, after today, I have it down to one button, right down to opening the site WordPress admin page to make sure I know whether I need to hit the “Database upgrade” button in the WP admin interface. No, I don’t use the built-in update process because I’d have to manually go all over the place to make that happen. Old school.

The upside of systematically handling this critical task is that I can finally hand this task off to an intern because there’s a system in place to make the work happen. Can you say “E-Myth”? Yes, I thought you could.

Last year, I moved all my web and other development work (including marketing/strategic client documents and even blog posts) to source-controlled environments after a few fits and starts in the past. This year, the software projects will get further screw-tightening by adding automated build and test processes.

Accountability

I’ve had some trouble with getting consistent action out of some folks this past year. Dan says I shouldn’t care because I can’t control the actions of others, but it isn’t about control. It’s about encouragement. Worse yet, client results reflect on me and I don’t like seeing folks failing to take advantage of my best efforts. I think I’ve found a way to solve the problem. We’ll see.

As for me, I need to lean on the calendar even more than I have in the past, especially on projects important to me.

The result of pondering this is that…

  • I’ve already chosen my charitable time commitments for the year.
  • I’m actively seeking a new mentor. Yes, pretty much everyone who is getting anything done has a mentor. Even Dan Kennedy has a mentor. Think about that for a minute.
  • I have to be more demanding of my marketing clients in 2011. You may have figured out that I have a certain level of expectation of my clients after creating a strategy, tools and other materials for them. When they don’t get used (regardless of the reason), that hurts them and me (eventually). That level of accountability will rise markedly later this month as I complete a few tasks that will help me “enforce” it. Those who are willing to take their business seriously will be glad I’ve done this. The rest will probably end up working with someone else, if they do anything at all.
  • Because I had to more or less ignore the needs of several prospective clients in 2010, I will be narrowing the clients I personally serve in 2011 while expanding the number of clients that can get my personal help. Yes, I know that sounds like opposite directions. Stay tuned, it’ll make sense as I roll it out. Planet Dan folks – think “ladder”.

Focus

John Haydon mentioned the other day on Twitter that his boss was a jerk. Of course, John works for himself. The hardest person to manage is yourself.

Focus comes up because a few personal projects slid last year. This was mostly due to an abundance of customer work. While I’m grateful for the work, I’ll be more demanding of myself in the selection of projects this year because these other things MUST GET DONE.

That’s already being corrected, partly via the accountability change noted above, partly via the mentor thing, partly via kowtowing even more to the calendar and via a few other steps I’ve taken. Like Jim Rohn said, when you say yes to one thing, you’re saying no to something else.

My existing clients will get even more attention this year. If you aren’t a client now and you’ve been thinking about it, now would be a good time to make a decision.

Writing

My writing (in the blog) has suffered immensely the last two years. I think it’s gotten better, but the frequency has really fallen off due to my workload.

The upside of this is that it’s given me time to think more about what I write and how you guys consume it and take action on it. That has resulted in the BIP book taking a few turns strategically. Now that I’ve finally, really (no kidding) figured out what I want to do with it, well, it’s moving along much better now.

I’ve also waded most of the way through an editorial calendar for the blog for the year, something I’ve never taken the time to do before. I suspect that’s pretty obvious to long time (it’s been 6 years this week) readers.

Bottom Line

One of the things that stood out in my mildly-freaky conversation with myself was that I need to put even more effort into doing for me what I do best for others. Imagine that.

Oh yeah, by now you should be asking me why you should care. “Boy, doesn’t that seem all about you and not at all about your readers?”

Yes, except that most of what I talked about is…for my readers/clients. And I hope it has made you reflect on what your plans are.

Do your clients know where you’re going? Does your staff?

Do you need a Groundhog Day?

Today’s guest post from Paul Hannam does a nice job of using the movie Groundhog Day to illustrate a point about personal change.

Changing from your worst day to your best day (his example), changing your business, even changing you.

It’s a good read.

Check it out it here.

Innovation breeds profit? Who knew?

New corsair
Creative Commons License photo credit: psiaki

Profit is an evil word in many circles these days, but I used it anyway.

Are you the innovation leader in your market?

It seems to work for Apple.

Think back to your last real innovation. Yes, that one.

Remember that product or service that made customers and prospects flock to your office, store, website, trade show booth or reseller displays?

Once you got to that point, business sure did seem easy, didn’t it?

Think a little farther back. How’d you get there?

Follow the thought process that made you decide to reach out a bit more than normal.

Isn’t it worth being your market’s or even your industry’s thought leader again?

Sure makes those trips to the bank a lot more fun.