Category Archives: Advice

Memorial Day, Draft Lottery, Reality TV, Flags

Advice, Current Affairs

It seems like it often rains on Memorial Day where I live, in Western Oregon. Today is no exception; it’s cold and rainy. And it rained all night, so there’s a thick mist cushioning the quiet hills I live in. From my house, across a small valley, through the tall trees, I can see the flags on a cemetery on the other hill. A lot of the graves have flags today.

I’m thinking about the flags. How many from this century, Afghanistan, Iraq? Hard to tell. They’d be so young, somebody said.

Whether they died in 1943, or 1969, or 2007, they were all so young.

Switch to reality television. 1969. The draft lottery. They put the 366 possible days of the year in transparent plastic eggs, one each for each possible birthday. The put them all into a giant transparent barrel like we see in lotteries these days. They spun the wheel. They drew a date. Those of us born on that date got a number.

My number was 243. I didn’t get drafted. I didn’t go to Vietnam.

By 1969, most of us opposed the Vietnam war. We talked about what we’d do if drafted. Al became a conscientious objector, emptied bedpans for two years. I was engaged to be married, but that was not going to get me out of the war. But a January birth date did.

It turned out later that somebody did a statistical analysis on the draft lottery and the dates. They started on January 1 and threw them in from there day-by-day to December 31. The later birthdays tended to be on top. Or so I read later.

But we didn’t oppose the people, our peers, who fought. Whether it was their choice, or not.

Few in my generation chose to go to war. One who did, who graduated with me from Notre Dame, chose ROTC. Traveling around Europe, he collected military paraphernalia. His father was in the army. His grandfather had been in the army. He volunteered to be a helicopter pilot, and he died in Vietnam. In his helicopter. We weren’t that close, I heard about it later. My memories of him are of a 20-year-old kid having a wonderful time during a year in college abroad, laughing, drinking Austrian beer, learning; as alive as any memory could be. What a terrible loss.

Memorial Day, patriotism, flags, wars. Protests, anti-war, opposition. Memorial Day isn’t about war, or politics, or patriotism, or whatever might be the opposite of patriotism. It’s definitely not about flags. It’s about young people who died, and the people left behind who loved them. And all the people who endured it, risked their lives, went through the hell of it, for whatever reasons.

I lucked out. I won the reality TV of the last half century, the 1969 draft lottery. And I thank God for that. And honor and respect the ones who went, for whatever reasons. And hope that we can end the present war without causing chaos, and more death and suffering; and that we never fight another war again.

Save the Patient. Make Exorbitant Profits. Is This Okay?

Business Ethics, Business Planning, Current Affairs, , , ,

How do you feel about projecting excessive profitability in a health care business plan?

Over the weekend I saw the pitch for a brilliant business plan, with great technology, for developing medical electronics that could significantly reduce some kinds of complications in some kinds of surgeries.

Soaring Health Care Costs Time Magazine Bitter Bill

“The world needs this,” I thought. “I hope these people succeed. I hope they get the investment they need.”

But then they got to the financial projections.

Their sales forecast soared to tens of millions of dollars, but their technology was so good that it seemed credible. They had PhDs and patents and a strong team. No problem there. 

But they also projected 80-85% EBIT (earnings before interest and taxes). And that got my attention. It’s not just my chronic skepticism about absurdly high projected profits in business plans; it’s also about intentions, exploitative pricing, what Wikipedia calls price gouging. And about ethics. 

It reminded me of the Steven Bill cover story in Time Magazine a couple of months ago, called Bitter Pill. Or if you want the short version, watch this Jon Stewart interview with Steve Brill. He says: 

It’s the people who organize the care, who sell the equipment, who sell the drugs; they’re the ones making the money. 

Later I asked the inventor about the ethics of pricing. He understood the problem. He gave me a sensitive respectful answer. He said he trusted his more-businesslike co-founders who set the prices. He explained that pricing is set by the whole system, pretty much what Brill’s piece suggests. He didn’t say that profits from this one product would go straight back to research for other products, more inventions, and more improvement in surgical equipment. Insurance companies set the price. His company can beat the existing costs with something much safer. So, if they can execute their plan, they’ll make huge profits. 

Medical costs will still go down, if it works, because it reduces complications. Patients will benefit too, with less pain, illness, and death. But according to their own numbers, they could charge a third of their planned price and still make healthy profits. 

What do you think? 

(Editorial note: I’m not giving specifics on purpose. I don’t want to make this about a specific company. And at this point it’s all hypothetical anyway, just a few numbers in a business plan.) 

Q&A: I Need a Loan to Fill Orders

Business Financing, Q&A, ,

This is another question I received via the ask-me form on my website:

I have master service agreements with [omitted for confidentiality] in the midwest.  I am also working on an agreement with a company in South America.  I have a great reputation with upper management and they want to use my services.  The only problem I find is carrying payroll until the invoices start coming in, in this case they are net 60.  I literally have facilities telling me here are multimillion dollar contracts, but I cannot afford the payroll.  Any suggestions?

Yes, I do have suggestions. And the problem that solutions depend a lot on who you are, what resources you have, and your past history. Still, here’s my offer of help: 

cash flow working capital Shutterstock pot of gold

  1. What you’re running up against is banking law that prevents banks from taking risks with depositors’ money. Banks can loan money for a business plan or a possibility. 
  2. The SBA (small business administration) can guarantee up to 70% of the risk so banks can loan you that money without violating the law. You need to submit paperwork, a business plan, and an application. More than 1,000 banks work with the SBA, so there is probably one near you. Ask the small business banks in your area. The deal is done by the bank, but guaranteed by the SBA.
  3. What most entrepreneurs do, if they have the resources, and they can deal with the risk, is borrow off of existing assets. For example, my wife and I had a lien on our house for years to support a credit line for Palo Alto Software. We didn’t like it. It was risky. But we did it, and it worked out, because the company survived and grew. But you can lose your house or whatever assets you pledge, so be very careful. Never bet something you can’t afford to lose. And business is betting. It’s not something I haven’t done myself, but it’s not something I recommend comfortably.
  4. Before Palo Alto Software, when I was still doing business plan consulting, I found a local non-bank financial company to loan me against invoices from a major local corporation. They charged high interest but they advanced me 80% of every invoice and they didn’t take the risk because they had a hold on my bank account and if an invoice hadn’t had been paid (that, thank goodness, never happened) they would have subtracted the amount from my bank account. Google credit line on receivables to see what comes up. And the difference between that situation and yours is I was getting advances on invoices for finished work. 
  5. Some people find investors to advance them money for a non-bankable situation in exchange for a high interest rate, a small share of ownership (called an equity kicker), and drastic guarantees that give them your company if you can’t pay the loan. All of the terms are negotiable. Search the web for “angel lending” and see what you come up with. Ask your local small business development center (SBDC), chamber of commerce, or business school if they have any leads. There is no paved road for this kind of transaction, so you have to beat the bushes. This is hard to feet, and a lot will depend on who you are, your resources, your business plan, and your past history. It’s asking people to bet on your future. 

(image: shutter stock photo)

Q&A: Keep Your Business Plan Simple and Short

Business Planning, Q&A

I received this question on my ask-me form at timberry.com

I have a question about writing a business plan for my [business]. How do I write a business plan reflecting very little start up costs and a loss so far? I have been putting off writing a business plan, but I feel as if I need to set specific goals in writing to strive for.  Most of the business plans seem so complicated for my very small business. Since I am trying to keep my costs very low, I’m wondering if it’s worth paying the monthly fee to create a plan or there another more economical (free) option?  Thank you for your time.

My answer:

Questions ask Tim Berry

Thanks, I’m glad you asked. Coincidentally, I just posted Business Plan Yes, But Comprehensive and Detailed, Not So Much earlier this week. But I’m happy to go over this again because it’s so important for real businesses to plan, but the myth of the big formal business plan so often gets in the way. What a shame.

That’s what my last book, The Plan-as-you-go Business Plan, was about:

  • The plan is for you, to help you manage, to set specific milestones and manage results with plan vs. actual analysis. 
  • It’s a collection of modules. Simple strategy summary, milestones, basic numbers, and so forth. Start anywhere. Get going. 
  • You do only what you need, just before you need it. Only what you’re going to use. 
  • Let it grow organically. 
  • When you have the business plan event, which means you need to show it to somebody outside your business, then you dress it up. Keep it on your computer until you have to print it. 
And regarding that monthly fee question, I have two points:
  1. I’m biased. You’re talking about LivePlan, published by Palo Alto Software. I’m the conceptual author. I believe everybody should be using it. 
  2. Does “keeping your costs low” mean you want to save $20 a month on a planning tool that makes the planning easier, simpler, and better? How much is your time worth? How many hours do you want to spend to save $20 per month?  

(Image: iStockphotos.com)

Love, Sex, and Small Business. Wait … What?

Work Life Balance,

I received an email today, Valentine’s Day, with this juicy data from a Manta survey on marriage and business: 

Snails by Adam Foster Flickr cc

… a new study … shows small business owners are mixing business with pleasure. The survey of more than 1,100 small business owners shows one in four work with their significant other and nearly 60 percent say they would recommend it. In fact, one-third of those polled say their family life and relationships have actually improved as a result of owning their business.

But then, just when you thought it was safe to start a business, they followed that with this:

Unfortunately, that hasn’t extended into the bedroom. SMBs rank their sex life last in the areas of their life that have gotten better with business, saying their business and personal relationships are of higher importance. 

I think that proves, once again, that surveys prove nothing. 

(photo credit: Adam Foster | Codefor via photopin cc)

A Must-Read Piece on What Really Matters

Work Life Balance, ,

This morning I’m just plain grateful for what I just read. Towards the end it includes this quote containing two quotes:Bruce Turkel Turkel Talks Blog

In his beautifully crafted The New York Times article, You Are Going To Die, Tim Kreider writes, ‘You are older at this moment than you’ve ever been before, and it’s the youngest you’re ever going to get. The mortality rate is holding at a scandalous 100 percent. Pretending death can be indefinitely evaded with hot yoga or a gluten-free diet or antioxidants or just by refusing to look is craven denial.’

As Erma Bombeck wrote in her 1979 book Eat Less Cottage Cheese and More Ice Cream, ‘If I had my life to live over again I would have waxed less and listened more. I would have cried and laughed less while watching television… and more while watching real life. But mostly, given another shot at life, I would seize every minute of it… look at it and really see it… try it on… live it… exhaust it… and never give that minute back until there was nothing left of it.’

That’s from near the bottom of Bruce Turkel’s What Was So Damn Important Anyway?. You should read this. 

Are You Guilty of One-Size-Life-Fits-All Thinking?

Advice, Entrepreneurship, Leadership,

I was talking to my older brother the other day, about startups, siblings, raising children, and he shocked me, right in the middle of an otherwise smooth conversation, with this: 

Now you’re guilty of one-size-life-thinking. You do that way too much. You want everybody to do things the way you did. 

make your own pathThat took me aback.  It sounded insulting. But (damn) it’s also true. 

What’s more important is how much writing on startups and entrepreneurship and business stories flows from that same basic premise: 

You should do what I did. It worked for me. It should work for you too. 

There are so many problems with that. They are too obvious to list, all about different times, different worlds, resources, goals, and so forth. 

Conclusion: beware of best practices, recipes, checklists, and anything a successful entrepreneur is too sure of. Trust uncertainty. Make your own way. 

photo credit: jenny downing via photopin cc

True Story: Social Media Morality Tale

Advice, Social media, True Stories, , , ,

The Chronicle of Higher reported last week on this news item on a social media director getting caught lying about her resume and exposed via social media: 

… social-media director quit her post on Monday after it was alleged that she had lied about graduating from college on her résumé—an assertion that, ironically, first bubbled up on social media.

Somebody went to the trouble of getting her resume from public documents and paying to have it verified (or not) by the National Student Clearing house; then posting the proof over a Reddit site:

According to The Michigan Daily, a recent thread in the university’s Reddit community alleged that [she] had not graduated from Chicago’s Columbia College despite claiming a degree on her résumé and job application. The user making the allegations, who signed the message as a “Concerned Taxpayer,” posted [three] images as evidence, asserting that they had been obtained through public-records requests.

So there we have both transparency and authenticity in the new post-social-media landscape. We talk about it. We write about it. Lying is more likely than ever to come out. 

The story here isn’t just about social media. This is also about people, revenge, and karma. The real story hidden here is the what-did-who-do-to-whom story behind the scenes. Clearly “concerned taxpayer” spent time and money on a quest. Why? Jealousy? Getting even for something? Relationships gone bad. There’s a story there. Right? What motivates a person to go exploring in the resume and job situation of another? 

Live by authenticity, die (or lose a job) by authenticity. No way out. But damn! That’s a nasty piece of social media behavior. Was it justified? All for good? We’ll probably never know. 

Old Chinese proverb: “He who seeks vengeance must dig two graves: one for his enemy and one for himself.” 

(Based on my previous post on my other blog at smbplans.com)

Q&A: Who Do I Follow For Business Twitter

Q&A, Social media, Twitter, , , ,

(Note: This is my post from smbplans.com, where I posted it yesterday. I was asked to repost it here.) 

Here’s another good question I received from my Ask-me form on my Timberry.com website: 

If I’m trying to build my Twitter presence to support my [omitted] business, who should I follow? How do I find them? How to decide? 

I’m happy to answer that one because I think it could be useful to a lot of people starting to look at real-world business use of Twitter. Following in Twitter is important for several reasons:

  1. Who you follow determines what you see. Your Twitter stream is the collection of tweets from the accounts you follow. 
  2. Who you follow is who you are. Other people can see how you follow. That means they see what you like, believe in, care about, listen to, and so forth. c
  3. Who you follow is who’s likely to follow you back. For most businesses, following is the best way to be followed. About a third of your follows will follow you back — more if your tweets are interesting, less if they aren’t.   

So, with that as background, here’s who I think you should follow for your business twitter account, in order of strategy value:

  1. Leaders. The influencers you respect, want, and need. The people, businesses, and organizations you’d like to have knowing and liking and trusting you. It’s hard to generalize so think strategically for your specific business. For example, a restaurant would want local media, local organizations, hotels, food blogs, night out blogs, restaurant guides, travel guides, reviewers, and local people who comment on restaurants and have followings. The chamber of commerce, restaurant association, chefs’ schools, local university groups might be good targets too.
  2. Media, writers, bloggers, and experts in your field. Authors whose work you like and respect. People who you’d like to see writing about you. Our sample restaurant would look for food, dining, restaurant, travel media. 
  3. Social media stars who turn up in keyword searches. Search the web, search Twitter, using important keywords. The restaurant example might search for #dining, #gourmet, #organic, #vegetarian, #chefs, #fastfood, #slowfood, #meals, for example. And if it is located in Eugene, OR then it would search for #eugene and #oregon too. See who tweets with those hashtags. See what content they tweet. Decide whether you are compatible with them. 
  4. Local organizations, groups, and institutions. The schools, universities, community colleges, public theater, development groups. 
  5. Some general news and bloggers and information sources on idea, places, topics, and people that interest you. This is just because you want to see what they’re offering. They’re not strategic. 
  6. Friends, family, and compatible business associates.