Tag Archive for 'Jim Blasingame'

Identifying the elusive entrepreneur

If you venture into the marketplace jungle, you may be able to observe that rare wild creature, the entrepreneur, in his or her natural environment (darting is not necessary, entrepreneurs are very gentle - just rub their stomachs). As you study them, you will find levels of vision, curiosity, courage, tenacity, and faith. Here’s what to look for in order to identify this elusive critter:

Vision: Entrepreneurs see things and consider the possibilities before they exist, even as the world is telling them, “It won’t work.” When entrepreneurs are deep into their vision they go into what their families call a “zone,” which is when it’s easiest to slip up on them.

Curiosity: Entrepreneurs ask questions other humans don’t. They can’t help it. If someone asks you a question and you have no idea what they are talking about, you are probably having a close encounter with an entrepreneur. Don’t be irreverent; you might be at ground-zero of the 21st century equivalent of Velcro or the microchip.

Courage: Entrepreneurs attempt things that other human species won’t. As you peer through the triple canopy at your subject, look for death-defying acts in the face of conventional wisdom. Entrepreneurs eat conventional wisdom for breakfast.

Tenacity: Entrepreneurs keep trying when other humans give up. They have a high pain threshold, which when combined with a visceral desire that can only be compared to the maternal instinct, delivers a primal display of tenacity which often is frightening to other humans. If the entrepreneur you are observing is crouching, lie down quickly. You probably aren’t in danger, but fainting is a possibility.

Faith: Entrepreneurs believe in themselves and their vision. The great writer and even greater curmudgeon, H.L. Mencken, once said, “Faith may be defined briefly as an illogical belief in the occurrence of the illogical.” That’s our entrepreneur! If you see someone demonstrating an inordinate commitment to an “illogical belief,” congratulations. You’ve found your entrepreneur.

Catch and release, please.

How to prevent your small business from being the next named disaster

Ever since World War II the U.S. government’s weather service has given official human names to tropical cyclones (hurricanes and typhoons). Everybody knows that. But am I the only one who didn’t know we were anthropomorphizing winter storms?

It turns out the Weather Channel has unofficially been naming winter storms since 2012. “Jonas” was the most recent winter wallop by Mother Nature, and it earned a moniker due to the magnitude of forecasted disruption. We now know the forecasts were pretty darn accurate: record snows, hurricane force winds and up to 60 million people impacted. Sadly, there was loss of life, and the yet-to-be-determined economic impact will surely be great.

But we knew that storm was coming. Almost 13 years ago a single outage in the electric grid cascaded across eight northeastern states, putting 55 million people and thousands of businesses in the dark for days. The Great Blackout of ‘03, was a catastrophic reminder that we’re all one nosy squirrel in a transformer away from an instantaneous, put-you-out-of-business event.

As business owners we can be forgiven if we aren’t hip to how storms are named. But shame on us if we don’t prepare for disasters like Jonas and the ‘03 Blackout. Sadly, surveys reveal most small business owners believe they will have a business interruption event in any given year, but way fewer say they’re prepared for one. If the latter group sounds like you, use these tips as a starting place. Start now.

Operational: What would you do if your building became unavailable to you or your customers?

  1. Instead of desktop computers, purchase laptops with docking stations that allow key employees to work and connect remotely, both internally and with customers. Make sure the laptops have Wi-Fi and a mobile modems in case your broadband connection goes down. This costs a little more, but it’s good connectivity insurance.
  2. Adopt applications in the cloud as alternatives for any installed programs that may become unavailable.

Financial: Most small business working capital is tied up in operating cash flow. What would happen if your cash flow was interrupted?

  1. Purchasing a business interruption rider on your property and casualty insurance policy that will pay you cash upon the acceptance of a claim. Be sure to read the fine print - all policies are not created equal.
  2. Maintain a close working relationship with your banker so you won’t have to introduce yourself to the person you’re asking for a disaster loan.

Data: More of your assets are now in digital form and less physical. Are you prepared to protect your data as comprehensively as your building, equipment and inventory?

  1. Assign one person to be in charge of keeping all computers enabled with proven digital security and keep it current on all units.
  2. Regularly copy critical data from your hard drives and store it offsite, plus protect your data with a cloud-based data backup and recovery firm.

Don’t become the next named business disaster.

Write this on a rock … The only people who never experience a business interruption event are those who don’t have a business.

Risk failure to enjoy success

Here are three pieces of wisdom which can only come from those who have known failure and from that acquaintance, found success:

In Uncommon Wisdom, my friend, Tom Feltenstein wrote, “When winners fail, they get up and go again. And the very act of getting up is victory”.

Robert Allen, author of Multiple Steams of Income, wrote, “There is no failure, only feedback.”

Paraphrasing Thomas Edison just a little, “Failure is successfully identifying what doesn’t work.”

And since I certainly am no stranger to failure, here is Jim Blasingame’s contribution to understanding its value, “Failure is the harness mate of success, and I expect to be acquainted with both as long as I live.”

You will never enjoy success until you are prepared to risk failure.

Poll Results: What grade would you give President Obama?

The Question:
From the standpoint of the impact on your business, what grade would you give President Obama for his time in office?

5% - A
6% - B
6% - C
9% - D
74% - F

Jim’s Comments:
As you can see, President Obama is a failure to three-fourths of our small business audience. It’s been clear from day one that the president has been ambivalent to the Main Street economy atbest, and against us at worst. In seven years in office, the only policy he’s proposed that looks anything like pro-business is the Trans-Pacific Partnership trade deal he cut last year.

On the other side of the coin, the anti-business stuff is a long list, which I’m going to innumerate in an article in the near future. Stay tuned. Thanks for participating.

And thanks for your abiding support of our poll each week. Check out our new one on how you would vote today, click here.

To listen to more about these poll results, click on the link below.

Small business owners have give Obama a grade

Is 2016 trending as the year of our next recession?

One of the distinct markers of the United States is what has been termed our “consumer economy.”

It’s pretty intuitive.

Having a consumer economy means that the main driver of GDP (gross domestic product), and therefore, the engine of economic growth, comes from spending by consumers. Other major elements that make up the entire U.S. economy include private investment, government spending and trade.

America is not unique in this distinction, but no other major economy in the world compares to the U.S. in this definition. For example, American consumers represented 71% of GDP in 2013, having risen from 62% in 1960. Around the globe, Japanese consumers are 61% of their economy, with only 36% in China. And in the major European countries, consumers average less than 60% of GDP.

The U.S. has experienced an increasingly robust consumer economy for generations. But one of the implications that has arisen for, let’s say, the past half century is that consumers are more likely to spend their money than save it. There are many reasons for this imbalance: America is the strongest economy in the world; has a diverse credit industry with creative products; and produces and imports a lot of cool stuff, which Americans want even if they have to borrow, instead of save, to get it.

The world economy has long benefited from the exuberance, rational or not, of the U.S. consumer. Indeed, during the global slowdown of the late 1990s and early 2000s, the U.S. consumer almost single-handedly kept the global economy from collapsing. But today, with a declining global economic scenario, will American consumers reprise their earlier role as economic champion? A new data point may provide that answer.

Recently, in our online poll, we asked small business owners if the significant drop in gasoline prices ($1/gallon in six months) was manifesting as increased spending by their customers. Less than one-fourth of our respondents reported such a trend was evident or slightly evident, while almost half said they saw no such evidence.

One of the reasons for the consistent moribund U.S. economy since 2008 has been the debt-reducing behavior of both American businesses and consumers. But it now seems the consumer’s cash conservatism continues unabated because, in addition to our poll results, other surveys indicate people are using the gas price dividend to reduce debt and save.

During the first quarters of 2014 and 2015 the U.S. economy went negative, producing one half of a technical recession, while the Dow Jones Index rose to new record highs. But 2016 has begun with stock indexes retrenching toward bear territory, a decline in both imports and exports, and no apparent help from consumers. Consequently, a negative Q1 this year may prove to be just the first one, rather than a one-off like the past two years.

Write this on a rock … The best way to not participate in a recession is to be prepared for one.

11 financial fundamentals every small business CEO must know

Regardless of the size of the business, ultimate responsibility for success lies with the CEO. If you’re a small business owner, that’s you. And the most critical CEO tasks that result in success or failure lie in the knowledge and practice of financial management fundamentals.

Statistics show that over half of small businesses fail within the first four years. Clearly that mortality could be significantly reduced if, before a business opened, the founder/CEO was required to pass a course that teaches business financial fundamentals and how to operate a business with them.

If you could use a little help in this area, allow me to identify some of the key elements that would be part of the curriculum of such a course.

-  CEOs shouldn’t do their own accounting, but successful ones learn how to manage with regular (at least quarterly) financial statements (balance sheet and profit-and-loss) that an internal and/or external accountant produced.

-  Successful CEOs know what their gross profit margin needs to be and what it is.

-  Smart CEOs track monthly sales-to-expense ratios in order to know when to adjust spending.

-  Savvy CEOs monitor inventory levels against projected sales, receivables and cash.

-  Real CEOs know how to calculate Accounts Receivable days and Accounts Payable days, understand the relationship between the two, and the impact of that relationship on cash.

-  Disciplined CEOs develop a capitalization strategy that blends retained earnings with short and long-term capital sources, like bank debt.

-  Capable CEOs identify the critical financial indicators and ratios that are revealed on the balance sheet and its relationship with the profit-and-loss statement.

-  Surviving CEOs believe and prepare for the cruel irony of how sales growth becomes dangerous when not properly funded, indeed, that you can succeed yourself out of business.

-  When a business isn’t profitable, professional CEOs identify the top impediments to profitability and deal with them quickly, decisively, and without emotion.

-  Perennially successful CEOs delegate many things well, but they stay close to the company’s cash picture from tomorrow to the next 12 months.

And finally, arguably the most important financial management CEO discipline:

-  Understand and monitor the relationship between Blasingame’s Three Clocks of Small Business: The Expense Clock, the Sales Clock and the Cash Clock.

If you already own a small business and cold sweat is popping out on your forehead right now that should motivate you to kick your financial education into high gear and become an expert on these fundamentals.

If you haven’t started your business yet, don’t until you can pass this course.

Write this on a rock … The ultimate responsibility for your business’s financial performance belongs to the CEO - that’s you.

To listen to Jim talk more about the 11 financial fundamentals for CEOs, click on one of the links below:

6 financial fundamentals every small business owner must know

5 of the 11 most important small business financial fundamentals




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