Sloan Creative

I’ve just created a new blog focussed on the many benefits of using blogs as the basis for an organization’s web site.

I called it The Sloan Blog About Blogs

It’s based on my years of web development and consulting experience, as well as my more recent experience with blog software. In fact, this entire site is built within a blog.

If I can help in any way, let me know.

Here’s a site full of interesting ideas.

www.lifehacker.com

here’s a guy who’s pushing the envelope in terms of using technology to live an interesting, productive life.

www.fourhourworkweek.com

I find his blog the most interesting part of all this. To get a sense of how and who he is, watch his chat with Google staff in London.

When I was four, my father started a business.

While I was young he was building that business. It took everything he would give it. With five kids, he had little choice but to succeed. Of course, it all came at a cost.

After college, and some time travelling and in real estate, I negotiated to buy my father’s business. He was burned out. I was 24 years old, younger than most of the employees, but I was committed to earning my money before I had a family.

I ran that business up, via organic and M&A growth, to $5 million in revenues, doubling revenue while doubling productivity all while Office Depot and Staples spent hundreds of millions trying to put us, and others, out of business. I sold that business in 2000, the year before our first child was born.

Before I sold it, I bought a small marketing firm, and started a software company… my lily pads.

Now, I’ve closed the software firm (not every venture succeeds, but every ventures teaches!) and I’ve sold the marketing side of Sloan Creative Group to my key employee.

Now, I do what I love.

I help small business (and NGO) leaders live the lives and have the businesses they desire. I know the hopes, the sacrifices, the worries, and the rewards. I’ve learned the skills required for success.

Why I work on an hourly basis:

• It keeps things affordable, controlled, and flexible for my clients
• It lets me control my schedule and commitments
• It lets me move quickly through projects, the way I work best; intensely on, intensely off.

As I write this, in my little office shed out in the yard (my jobba hut), I hear our children playing in the yard. I see the sun shining over the Grand Forest and the Brothers. It’s a long way from my days zooming down freeways multi-tasking.

I’ve arrived, but I know that there are fellow travelers, like you, who could use a hand here and there from someone who’s been down the road before.

Contact me if there’s anyway I can help, or if you’d just like to chat.

The malaise

The overwhelming pile of unproductive details and frustrations created by

the demands of customers, vendors, governments, employees and simple logistical reality

lead to confusion, distraction, and discouragement and away from the energy and clarity to execute your creative vision.

The antidote
A weekly two-hour conversation might help balance out the 40-plus hours of other, often distracting influences. I enjoy the process of helping you return to clarity and motivation about your most important and valuable work.

Free samples
Contact us to set up free half-hour sample session.

Wondering if you deserve help?

If your most valuable employee suffered from the bolded items above, investing 5% of their time in staying focussed and motivated would simply seem like good, caring leadership.

You are your most valuable employee. Don’t you think you owe it to yourself and your business to stay focused on your highest and best creative work?

Free sample

Contact me for a free half-hour sample session.

Here’s a voice worth listening to. A bright and amazingly experienced economist and author, Loretta Napoleoni. That’s her most recent title there >>>>>>>>

I just caught a bit of her interview on KUOW.

The idea that the US economy is now, by her definition, a rogue economy, one operating outside of laws and regulations, is startling and seems surprisingly accurate.

Business leaders beware!

She is worth a listen because her analysis explains much of what we are seeing these days in the news:

Our government has found it necessary, today, to seek to rewrite it’s oversight of the financial system. Why?

How did Bear Stearns, a crucial piece of the banking system, borrow more than it was worth as it invested in hugely risky assets (CDOs of sub-prime mortgages)?

The problem is…

She sees things getting a lot worse before they get better as these rogue practices come to light and are sorted out.

All this unregulated fun is leading to a hang over. The bartender, the banks, sounded last call late last year. Now, many are taking aspirin and vitamins, drinking a lot of water, and going to bed in hopes of avoiding what they fear is probably inevitable. See my blog post on one of the biggest causes of our hangover.

Warning: Tunnel and metaphor change ahead!

This is one of those moments in life that I think of as hurtling toward a very tight tunnel entrance in a fully loaded semi you’ve just learned how to drive. Am I lined up correctly? Am I going to clip my mirrors off, or worse?

I’ve developed a new tool to bring greater clarity and understanding to your financial statements.

Of course, these exciting times create opportunities as well as challenges. If you’d like to take a bit of time to get clearer about your current alignment, let me know.

Contact me for a free consultation.

It seems to me, that most small business owners glance at their operating statements every few months to make sure that:

• They are accurate
• They’ve got enough receivables to cover their payables
• Their expenses have not gotten out of line

This is certainly enough to keep the business running and moving forward. but is it all that operating statements can offer?

3 questions:

• Deep down, do you think that only bankers and CPAs really care about financial statements?
• When was the last time you looked at the ratios between various parts of your balance sheet and you’re operating statement? The current ratio? Return on investment? Return on sales?
• Before you make decisions about how you and your staff spend your time, do you ever look at your balance sheet?

Whispers

Your financial statements, are speaking (well, maybe whispering) words of wisdom (Let it be. Let it be.). Are you listening?

Amid the clang and bang, steam and heat of the daily busy-ness of business, how can you?

Financial statements -just numbers
Double entry bookkeeping and its resulting reports, financial statements, were first codified by an Italian mathematician, Luca Pacioli.

If you are not a math person (and how many entrepreneurs are?) they probably don’t speak very clearly to you. If we were so great at math we’d all be well-paid engineers! Alas, we need a translator.

A new view

I’ve developed a new tool that allows mere mortals, like us, to hear, even see, what our financial statements are trying to tell us about our current situation, strategic direction, and priorities for today and tomorrow.

Wouldn’t you want to listen to the best source of insider information about your business? To hear not only what your customers are saying with their voices, but what they are saying with their pocketbooks?

Free sample
if you’d like to start listening to your financial statements in a new way, contact me for a free half-hour sample consultation.

No comments

As small business owners we need to make decisions that will have long-term consequences.

Therefore, we need to make long-term assumptions about what will happen in our industry and to the economy in which we work. There is a huge amount of financial data and news these days. There are so many signals that it is hard to keep up with absorbing and analyzing them all.

I look for simplicity. Here’s a simple financial indicator to watch.

Debt Service Ratio.

First, I start with the following assumptions:

• Most Americans don’t have much net worth (see chart below)
• Most family’s net worth is tied up in their house
• Most houses, and other large items, are purchased on credit (if our net worth is low, how else can we buy things?)
• Housing has had a huge run up lately- lots of sales, lots of appreciation
• 2/3rds of the US economy is based on consumer spending

Therefore, most Americans live either paycheck to paycheck, or close. Here’s an indication, the data is from 1996, but I’m confident the numbers have changed little of late.

Source

If so, then folks who loaded up on debt will have to cut back on spending.

If that’s true, then the spending will have to drop pretty dramatically to let folks get back down to a debt level they can comfortably manage.

Based on the Debt Service Ratio (basically debt payments divided into income) chart below, good times and easy money in the 80’s and 90’s, led Americans to take on debt payments of around 12% of their monthly income before recession forced them back down to a more comfortable level of 10% during the recessions of the early 80’s and 90’s.

Source

Notice that the debt service ratio has now risen to over 14%.

Are we that much more sure of our jobs now? (A: No)

Is America in a much better position in the world? (A: No)

Does the government have budget surpluses to spend in hopes of creating a soft-landing for the economy? (A: No)

Unfortunately, since our last tough time in the early 90’s, the following has occurred:

• We have gone from the being the largest creditor nation in the world to being the largest debtor… that’s our government, not just us as citizens.

• We’ve shipped a lot of manufacturing jobs overseas.

• We’ve spent a lot of good lives, hard cash, and international goodwill on some questionable military adventures. (whether we had any choice but to do so is outside of the scope of this article.)

• Our government has relied on the Chinese to buy the bulk of its debt for the past several years, now they hold over $1 Trillion of it. As the dollar has weakened, they have lost a lot of value, so it makes sense for them to buy less of it in the future.

Cycles of Creative Destruction
As an undergraduate, I studied economic history. One thing that became clear was that as economies expand, shift, and contract there are always winners and always losers. Here’s the good part, the economy expands and contracts in somewhat predictable cycles, based on human psychology and a number of other factors.

There are a number of cycles, a general business cycle and also a real estate cycle (among others.)

These cycles are generally created by times of easy money and speculation leading to rising prices and lots of investment, expansion, and building followed by all the excesses of the previous years coming home to roost; poorly-run businesses folding, companies and families with too much debt losing a grip on the assets they were so excited about grabbing up while things went up, up, up.

As this starts, the banks who made so much money lending on the way up suddenly decide that the climate is too risky and make loans much more difficult to get. Suddenly, you can’t sell a property or refinance a business if you have to, so prices begin to drop. No one wants to be the one left with the expensive house or business still on the market while, logically, no buyer wants to sign on the dotted line when the price next month will probably be lower.

Is any of this sounding familiar?

Suddenly, the market just dries up and some folks take big losses and business close their doors. Some economists call this churn Creative Destruction.

Amidst all the rubble, some folks get rich. My great grandfather owned an auto body shop in Michigan during the Great Depression. He made money fixing the cars no one could afford to replace. He rolled that money into buying up shares of local banks that no one else dared to buy. Of course, when the economy finally recovered during World War II, he reaped big rewards as suddenly those banks seemed like the greatest investment around.

Musical Chairs
Take a look around. Is there a chair close by that you’d feel comfortable in?

The needle is lifting off the record, the music is stopping. It’s time to find a nice place to sit while our nation recovers from this easy-money induced hangover. It may take a few to several years to get our debt levels down to more manageable levels.

Of course, I may be wrong… but I’d hate to be the one who bet against history. Take a look at that chart again, what’s the shape of that curve? How far above the average band are we?

Oh, and today, a big shocker, non-farm payrolls shed 63,000 jobs last month, far more than the markets and economists expected. So, how are those folks going to pay their bills next month? It’s no wonder that foreclosure rates hit a 23-year high last month.

What do you need to do to prepare yourself and your business for the coming days?

What might you do to position yourself to benefit from the Creative Destruction ahead?

Do you wish your business was making a bigger contribution to your personal net worth?

Stephen Sloan is the Extendo-CEO. He not only advises small business owners on leadership issues, he helps them with their work on a project basis. Learn more here

Now. Now. Now.

Business creates busy-ness. There’s simply no way around it. People to see, things to do, bills to pay.

Once you open your doors and start making promises to customers and employees your to-do list grows into a nearly unmanageable snarl. For me, it was “the stack.” My stack of miscellaneous papers, forms, mail, and ideas seemed stuck at 12 inches high. Add a bunch of employees, often lined up outside my door with a variety of important issues for me to address, my e-mail and voice mail, and the situation started looking desperate.

I was greatly relieved when reading Peter Drucker’s, The Effective Executive, in which he says that for a leader, these interruptions are a natural and important part of the job. Each was an opportunity to learn and to teach. Each urgency holds within it clues about where your market is headed, where your systems are broken, and where your staff needs more training or empowerment.

Re-contextualizing helped but, as a creative person, my interest was in moving the business towards my vision. The effort, the struggle, the joy of creating something new, whether a marketing campaign for an operational system, was my psychic reward in business. I craved the flow experience described so eloquently by Mihály Csíkszentmihályi in his book Flow: The Psychology of Optimal Experience

Working in. Working on.
How on earth could I ever get into flow working on the profitable projects I found fulfilling with all those interruptions and urgent important items created by others (whether customers, employees, or the IRS)? I hate to admit it, but I started resenting my employees and the job I had created for myself. I was becoming the prototypical bitter small business owner; busy working IN their business but never really connecting with the potential for profit and fulfillment made possible by working ON the business.

The machete
Rather than continuing to be bitter about my situation, I took the anger is a call to think.

First, I realized that I had to become aggressive about my time. This was not about neatly paring out a few minutes here and there. Real creativity, our unique genius, requires real focus, probably in 2-3 hour chunks. These don’t come easily in our modern, connected, engaged, world. Emerson, in his essay Self-Reliance, call upon us to put real vigor into our commitment to our own work, our own goodness:

“Your goodness must have some edge to it, - else it is none. The doctrine of hatred must be preached as the counteraction of the doctrine of love when that pules and whines. I shun father and mother and wife and brother, when my genius calls me.”

OK, Emerson’s a bit harsh, but the point is valid, you have to be to make room for your best work to get done. Around the edges of your busy day, use a machete to chop out the time you need to deliver on your visions. It might not be easy in the moment, but in the long run you gain the fulfillment and profits of your vision. The type of folks who will resent you also resented Howard Roark in Ayn Rand’s The Fountainhead. Rand’s and Emerson’s messages are the same: that no one can protect you and your vision, except you and your own will. So now, how committed are you to your vision?

I remember, very early in my career working as a Realtor, talking with an acquaintance who was then one of the top salespeople nationally in the heyday of Century 21. After listening to me whine about how hard it was to get started as a Realtor, he exhorted me to,

“Grab the business by the throat!”

I wasn’t sure what he meant at the time, so I committed myself to working 12 hour days 6 days a week until I figured it out. I started by cold-calling apartment building owners to discuss listing their properties for sale. After a few months of getting nowhere, to the point where I was picking up applications for retail clerk jobs just to have some income, I stepped back, and got out my machete again.

The machete, again
I had put in the time, but the results were still not coming. I was desperate. A college graduate with no income and no deals in the pipeline. My pride was on the line.

I got out my mental machete and started looking at what I had been doing and what other opportunities I might have. I looked clearly at who I was and who I might serve.

As a young Realtor, I quickly realized that I needed to find first-time home buyers looking for small condos and homes. There were two good ways of connecting with them: open houses and answering the telephone for people who called in to the office looking for information about properties. I would simply find out what the buyers were looking for and would check the new listings each day for matches.

Within three of months I sold five homes and bought one as an investment, never working more than a few hours per week. I had figured out the formula, I had found what was essential to do, and left all the other work behind.

For me, the machete is a two-step process.

I must invest the time to bang my head against reality until I’m desperate enough to get the machete out again, this time the analytical machete, and really take a hard look at what is essential. Hopefully, this experience becomes less brutal and more artful as the years go on. But, for all of us, in every new situation, our commitment will be tested and we will have to make difficult, sometimes ugly, choices between honoring our own vision and responding to “love that pules and whines.”

So,

Have you invested the time required to find out what’s essential?

Have you taken the time to look at what’s essential and how you might do more of that? Only that?

Next time, we’ll take a look at the challenge of keeping the essentials in mind as time unrolls and distractions mount each week.

Stephen Sloan is the Extendo-CEO. He not only advises small business owners on leadership issues, he helps them with their work on a project basis. Learn more here

Michael Gerber in his wildly popular book, the E-Myth Revisited, gets one thing exactly right. E-Myth Revisited

Every small business owner must walk a fine line between working in their business versus on it.

Why own a business with all of its headaches if all it does is give you a job and a boss who’s not very nice to you?

Working in our businesses is quite natural because we’re good at providing the products and services that make our businesses successful. But, working in your business too much can destroy its value.

The problem
Someday, we will no longer be able to lead our businesses. At some point, our health or motivation will fail.

I knew my moment had arrived when, after installing a new computer systems before New Year’s Y2K, I never thought of my business once while I was on vacation for three weeks in Africa over the millennium. I have 35 employees running around in orange county and I never gave it a second thought. Six months later I had sold the business profitably and was on to my next venture. I was 36 years old and burned out.

A happy outcome
Luckily, I had been working for years to maximize the value of my business as an asset. I had worked hard to make myself a fifth wheel to the daily operations. The happy way that I drove this process was by simply leaving for a month every February and going to Europe. This forced me to develop my staff and systems to support them. Once I decided to sell, the transition was easy because I was unimportant to the operations.

After the fact, the one thing I regretted was not focusing even more on the asset that I ended up selling, which in my industry and situation was simply sales volume.

Since 2000, I’ve moved on from two other businesses. Of course, I’ve learned a few lessons along the way.

Free samples
If you’d like to discuss changing your daily life and maximizing the value of your business by working on it, rather than in its everyday, please contact me to set up free half-hour sample session.

Sometimes a decision is we don’t often think about are the ones that affect our lives the most.

Many years ago, a friend of mine asked me, “How can you go to Europe from month every year?”

He’d begun to notice my pattern of quietly leaving for Europe in the first days of February for the past several years. He was successful, a young attorney, with a nice house in a cool neighborhood near the beach and a hip car. I had a business, a house, and her car too, but…

The difference was, that I had realized several years earlier that if I could keep my ego out of two decisions I could maintain a fair amount of freedom in my life. The key decisions were:

House and car

If I could keep my ego out of those decisions and do only what was practical, I would have the financial freedom to do many other things. So, rather than live in Laguna Beach like most of my friends, I lived in a tiny, bland house in a less expensive area about a 20 minute ride in my used, generic car.

So, as a small business owner what are your key decisions?

Of course, the house and the car still matter. But what small business related decisions affect your experience of freedom? So many times I’ve noticed small business people who experience, behind the pride of business ownership, the horror of feeling owned by their business. Their business sets their schedule, or controls where they live, and interrupts their peaceful enjoyment of life both day and night.

The key decisions for most small businesses seem to be:

Wages paid to staff

• Well-managed staff can free owners from most time and space constraining business demands.
• Poorly-managed staff can be the heaviest anchor an owner experiences. Sometimes the best management means letting them seek employment elsewhere.

Growth curve

• Growth requires investment in product development, sales, marketing, improve operational systems, additional staff, and receivables financing.
• Our current business culture glorifies growth as our popular culture glorifies painfully thin youth
• The right size and growth rate for your business depends upon many factors. Ignoring or sublimating any can lead to uncomfortable or even disastrous results.

Have you been is conscious of the decisions that you’ve made in these areas as you would like to be? Have your prior decisions lead you to some place uncomfortable or even potentially disastrous?

If this resonates with you or someone you know please let me know. I’d be happy to chat.

Stephen Sloan offers small business consulting from Bainbridge Island, Washington, 98110 (near Seattle, on the Kitsap Peninsula) to small business owners all over the world.