Monthly Archive for June, 2013

SBA Poll: Are your small business profits up?

The Question:
Some surveys indicate that small business profits are up. What is your experience?

17% - We’re profitable and are seeing profits increase lately.

57% - We’re profitable but are not seeing any improvement.

14% - We’re not profitable, but we’ve started heading in that direction.

12% - We’re not profitable and it doesn’t look like we’re going to be soon.

My Comments:
As you can see, less than one-third of our sample said they were seeing an improved profit trend, while the rest of our respondents refuted the news. Small business profits have always been an elusive beast - almost mythological to many. I’m going to have more to say about this in my column in two weeks. Stay tuned.

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Listen to my latest interviews with Sam Norwood of Tatum, LLC. We discuss the latest Tatum Survey of Economic Business Conditions.

Tatum Survey: Cap Ex and borrowing are not growing

Tatum Survey: Sales and hiring are up

Tatum Survey: Business conditions are improving

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Video-Are you prepared for a business interruption?

In this week’s video I list the top three business interruptions that you should focus on for your small business.

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Don’t forget to listen

Perhaps the two most important things salespeople can understand is:

1. The information in their own head is not as important as the yet-to-be-mined information in their prospect’s head; and

2. Knowing how to talk little enough and listen long enough, to be able to mine that gold.

The lesson is similar for small business owners who’ve gone to a lot of trouble and expense to hiresmart employees. We already know what we know; we need to know what’s in the heads of the members of our brain trust. We need our folks to be open and productive with their ideas about problem-solving and business strategy.

How do we do that? Not by behaving like we’re sitting on our throne with all the answers, that’s for sure. Instead, let’s consider the thinking of author and management guru, Peter Drucker, who said, “My greatest strength as a consultant is to be ignorant, and ask a few questions.”

I know you’re very proud of what you’ve learned and how much you’ve accomplished; and you should be. But if your business isn’t hitting on all cylinders; if your plans just aren’t coming to fruition like you intended; if you don’t seem to be getting the most out of your investment in the other humans in your business; perhaps you should try acting ignorant and ask a few more questions.

And don’t forget to listen.

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The ironies of small business and democracy

One of the great ironies is that while businesses flourish in a democracy, a business cannot flourish as a democracy.

By definition, stakeholders in a democracy vote on issues and the majority rules. But while this process is one of the greatest inventions of mankind with many applications, business is not one of them.

Pure democracy isn’t practical in government, either. But a group of visionary malcontents solved that problem over 200 years ago by creating something new: a constitutional republic, where an elected few represent the interests of all.

A business can be like a dictatorship in that an individual will likely make the final decision. One desk, as President Truman so famously said, where the proverbial buck stops. But here’s another irony: Even though a business may have characteristics of a dictatorship, it likely won’t be successful if the team is managed by a tyrant. The dominator management model is as old as humanity itself, but it requires subordinates to dutifully follow the instructions of superiors. As a withering vestige of centuries past, this model is no longer competitive.

The 21st century management model must look more like a partnership. Just as effective government requires that elected representation augments pure democratic principles, an ultimate decision maker in a business must be alloyed with the experience, brainpower and engagement of the team.

The Founders envisioned a nation that could be as dynamic as it was enduring, and as powerful as it was benevolent, but only if the stakeholders believed their investment in such an ideal was justified. Our republic — warts and all — essentially does this. And even though Americans outsource the management of their government, the classic principles of democracy come to bear with regularly scheduled elections to see if the majority wants to change its mind.

Employees change their minds by seeking work elsewhere. And while they always had the right to leave a job that’s managed by tyrants, past generations swallowed their pride in favor of what we now know was the illusion of job security.

Today, employees have no such illusions. And while they accept the reality that someone has to make final decisions, they also expect to contribute to the basis for those decisions.

In the 21st century, a business still can’t be structured as a democracy or dictatorship. Today employees expect to be led, not driven; they want to contribute, not just take orders, even if the last order wasn’t their favorite.

The 21st century workplace does not abide tyrants.

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Need more information about management and leadership within your small business? Check out the links below to listen to my latest interviews with management and leadership expects

Interviews about Leadership

Interview about Management

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2nd term - the curse of presidents

The Question:
What do you think about the numerous scandals the Obama Administration is facing?

12% - It’s just politics - these things happen to presidents of both parties.

82% - Obama Administration abuses are finally being uncovered.

6% - These are just Republican witch hunts.

My Comments:

Almost every U.S. President in recent memory who was re-elected had a dicey second term. Even the venerable Ronald Reagan had his 2nd term issues, like the Iran/Contra scandal. It is now evident that President Obama will not be an exception to this ignominious trend.

We wanted to know what our small business audience thought about what has quickly become a trifecta of scandals (Behghazi, IRS, AP/Fox) for the Obama administration, so we asked this question: “What do you think about the numerous scandals the Obama administration is facing?” Less than one-in-five of our respondents attribute Obama’s problems to “just politics,” or “a Republican witch hunt.” The remaining 82%, however, lay the president’s problems at his own feet.

You will remember that the Watergate scandal, which was associated with Nixon’s 1972 re-election, ultimately led to him becoming the only president in U.S. history to resign. People called Reagan and Bill Clinton a lot of names, but I don’t remember anyone comparing either one to Nixon.

There is one thing that makes Obama’s scandals different from those of Reagan and Clinton - they all seem to be associated with his 2012 re-election. It’s not good news for the president when political thought-leaders and members of the media, including those who are in no way aligned with the Republican Party, have invoked the name “Nixon” or the term “Nixonian” when discussing what we’re learning about the Obama scandals.

Amid Reagan’s second term scandal he accomplished many things, including landmark tax reform. Even the Lewinski scandal of Clinton’s second term didn’t prevent him from negotiating landmark welfare reform.

Obama’s scandals are serious. But he will not be impeached, nor will he resign. But he has almost four years left on his second term and the more his unfolding scandals sound, smell and/or look Nixonian, the less he will be able to accomplish any of his goals or secure a desirable legacy.

Regardless of what has gone before, what will be said about President Obama in 10 or 20 years will depend upon what happens from this moment forward.

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Video-Seeking the essence of entrepreneurship

In this week’s video I explain what to expect when taking a business risk.

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