--Benjamin Franklin
Thursday, December 31, 2009
Thought for the New Year
"Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man."
Tuesday, November 24, 2009
What's the Score in your Business?
Imagine you are the coach of a football team. You’ve assembled a team of talented players, carefully scouted the opposition and have a solid game plan. You arrive at the stadium fully prepared and confident – this is a game you should win.
Now imagine that you are the only person on your team that can see the scoreboard. While the game is in progress, none of your players knows who’s winning and by how much. They can’t even see the time remaining or the down and distance without running over to the sidelines and conferring with you. How do you feel about your chances now?
Like great sports teams, great businesses often need more than the best players and a good game plan to compete at the highest level. They also need to run on relevant and useful information – not the feelings, personalities and egos that tend to drive a lot of entrepreneurial organizations.
Read More of this article - part IV in my series for the BGM Wealth Management Newsletter.
Now imagine that you are the only person on your team that can see the scoreboard. While the game is in progress, none of your players knows who’s winning and by how much. They can’t even see the time remaining or the down and distance without running over to the sidelines and conferring with you. How do you feel about your chances now?
Like great sports teams, great businesses often need more than the best players and a good game plan to compete at the highest level. They also need to run on relevant and useful information – not the feelings, personalities and egos that tend to drive a lot of entrepreneurial organizations.
Read More of this article - part IV in my series for the BGM Wealth Management Newsletter.
Tuesday, May 19, 2009
Gino Wickman on EOtv
See EOS creator and Traction author Gino Wickman on EOtv providing a brief introduction to these timeless concepts and simple, practical tools that help entrepreneurs get what they want from their businesses.
Tuesday, May 12, 2009
The Essence of Banking
As seen in today's New York Times:
"Banking should not be exciting. If banking is exciting there is something wrong with it."CLAY EWING, president of German American Bancorp., a community bank in Jasper, Ind.
This will be - and perhaps should be - the prevailing mentality of small business bankers for many years to come. You can not count on your banker to take the same kinds of risks with his or her capital that you take with your own. For one thing, the upside just isn't there. And, as the events of the last 12 months have clearly demonstrated, they're just not very good at making big, risky bets.
Truthfully, aggressive bankers have always been capable of doing more harm than good. The most dangerous thing a lender can do is extend credit outside the bank's risk tolerance. You may view it as a vote of confidence, but some day that aggressive decision is going to cause you some problems. You'll be sailing along "on plan," relying on the bank's capital to grow the business. You'll have made all your payments on time and met all the loan covenants.
One day an auditor or regulator may pull that file, however. They're going to see that - although you're performing as promised - that loan is technically outside the bank's standard lending policy. It's a "troubled asset." That's when your life (and that of your aggressive banker) suddenly gets exciting...in a very bad way.
Whether that seems right to you or not, it's probably best right now to expect your banker to LOVE boring, predictable credits and to avoid taking undue risks. Rely on your banker to fund the stable, predictable portion of your operation and seek alternative sources of capital for your more aggressive plays.
"Banking should not be exciting. If banking is exciting there is something wrong with it."CLAY EWING, president of German American Bancorp., a community bank in Jasper, Ind.
This will be - and perhaps should be - the prevailing mentality of small business bankers for many years to come. You can not count on your banker to take the same kinds of risks with his or her capital that you take with your own. For one thing, the upside just isn't there. And, as the events of the last 12 months have clearly demonstrated, they're just not very good at making big, risky bets.
Truthfully, aggressive bankers have always been capable of doing more harm than good. The most dangerous thing a lender can do is extend credit outside the bank's risk tolerance. You may view it as a vote of confidence, but some day that aggressive decision is going to cause you some problems. You'll be sailing along "on plan," relying on the bank's capital to grow the business. You'll have made all your payments on time and met all the loan covenants.
One day an auditor or regulator may pull that file, however. They're going to see that - although you're performing as promised - that loan is technically outside the bank's standard lending policy. It's a "troubled asset." That's when your life (and that of your aggressive banker) suddenly gets exciting...in a very bad way.
Whether that seems right to you or not, it's probably best right now to expect your banker to LOVE boring, predictable credits and to avoid taking undue risks. Rely on your banker to fund the stable, predictable portion of your operation and seek alternative sources of capital for your more aggressive plays.
Friday, May 8, 2009
You Don't Have to Outrun the Bear
In recent discussions with dozens of entrepreneurs from throughout the country, I've heard a common and encouraging message. Commerce is starting to happen again.
I'm no Pollyanna, and neither are these seasoned business leaders. For most of these folks, '09 revenues still may decline by 25% or more, profits have taken a beating, and they've had to make some devastatingly difficult decisions to let people go, close down business units and do without critical resources. But they've all begun to see signs of stabilization. Inquiries from prospective customers began increasing in early March, and orders began flowing again in mid- to late-April. They've begun to get a handle on how their business will look in this new world.
That, my friends, presents the most determined, decisive entrepreneurs with massive opportunity. If you're one of them, it's time to quit focusing on survival and look hard for ways to acquire market share from competitors who weren't prepared for a massive downturn and reacted slowly when the economy started to unravel. These companies may be ripe for acquisition, or they may be ill-prepared to serve their customers in a post-recession economy.
It reminds me of the story of two hunters that happen upon a grizzly bear. As the bear starts to charge, they drop their small-calibre weapons and start running. After 50 yards or so, one hunter turns to the other and says, "Why are we running? We can't outrun a bear!"
"I'm not trying to outrun the bear," says the other hunter. "I'm trying to outrun YOU."
If you're still trying to figure out what's happening with the economy, quit trying to outrun the bear. Focus 100% of your energy on what you CAN control - outsmarting your competitors, staying razor-sharp internally, delivering tremendous value to your customers and acquiring market share. You'll be the last hunter standing.
I'm no Pollyanna, and neither are these seasoned business leaders. For most of these folks, '09 revenues still may decline by 25% or more, profits have taken a beating, and they've had to make some devastatingly difficult decisions to let people go, close down business units and do without critical resources. But they've all begun to see signs of stabilization. Inquiries from prospective customers began increasing in early March, and orders began flowing again in mid- to late-April. They've begun to get a handle on how their business will look in this new world.
That, my friends, presents the most determined, decisive entrepreneurs with massive opportunity. If you're one of them, it's time to quit focusing on survival and look hard for ways to acquire market share from competitors who weren't prepared for a massive downturn and reacted slowly when the economy started to unravel. These companies may be ripe for acquisition, or they may be ill-prepared to serve their customers in a post-recession economy.
It reminds me of the story of two hunters that happen upon a grizzly bear. As the bear starts to charge, they drop their small-calibre weapons and start running. After 50 yards or so, one hunter turns to the other and says, "Why are we running? We can't outrun a bear!"
"I'm not trying to outrun the bear," says the other hunter. "I'm trying to outrun YOU."
If you're still trying to figure out what's happening with the economy, quit trying to outrun the bear. Focus 100% of your energy on what you CAN control - outsmarting your competitors, staying razor-sharp internally, delivering tremendous value to your customers and acquiring market share. You'll be the last hunter standing.
Wednesday, May 6, 2009
Jim Collins on Right People (from EOtv)
Great stuff from Jim Collins on EOtv this week. Jim's clip is at the end of the May 4-8 edition. Enjoy!
Thursday, April 2, 2009
Getting More from (the Right) People
I have asked hundreds of entrepreneurs what prompted them to start a business, and not one of them has ever said, “Because I just LOVE managing people.”
Even during a massive economic crisis, “people problems” seem to be a frequent and painful cause of frustration for business owners and leaders. They’re frustrated about employees, partners, vendors, customers…none of them listen, or get it, or care. Unless you’ve just joined the workforce or been working alone for your entire career, you know precisely what I mean.
Read More of this article - part III in my series for the BGM Wealth Management Newsletter.
-Paton
Even during a massive economic crisis, “people problems” seem to be a frequent and painful cause of frustration for business owners and leaders. They’re frustrated about employees, partners, vendors, customers…none of them listen, or get it, or care. Unless you’ve just joined the workforce or been working alone for your entire career, you know precisely what I mean.
Read More of this article - part III in my series for the BGM Wealth Management Newsletter.
-Paton
Wednesday, April 1, 2009
Gino's Passionate Plea - Phase II
Friends:
Some heartfelt words of wisdom from Gino Wickman based on what he’s seeing and hearing from entrepreneurs in Detroit, arguably the epicenter of this economic crisis. I hope you and your leadership team can put one or more of these ideas to work for you. Please pass this on to any friends and colleagues who might benefit from hearing this timely message.
Some heartfelt words of wisdom from Gino Wickman based on what he’s seeing and hearing from entrepreneurs in Detroit, arguably the epicenter of this economic crisis. I hope you and your leadership team can put one or more of these ideas to work for you. Please pass this on to any friends and colleagues who might benefit from hearing this timely message.
Tuesday, March 17, 2009
Promising News From Washington?
Whatever your political beliefs, yesterday's comments from the White House were encouraging. In words (if not yet in actions), President Obama seems clearly aware of the vital impact small businesses will have on our recovery. I urge you to read those remarks in their entirety and look for evidence that these promises are being kept in a way that positively impacts you.
There was one thing missing, though. If the administration really wants to free up capital for small business, they must immediately change the behavior of front-line regulators. Any banker will tell you that clearly knowing what loans will and won't pass muster during the next regulatory exam has a HUGE impact on the bank's ability to comfortably extend credit.
The Obama administration must help regulators and banks clearly (and perhaps more broadly) define "good loans" in this economy. Bankers must feel comfortable renewing or extending lines and loans to businesses that are struggling - temporarily - because of economic factors outside their control. Of course those borrowers must be able to demonstrate that they're committed to fully repaying those obligations AND have made the tough decisions necessary to survive the downturn and thrive once the recovery begins.
If regulators continue evaluating the quality of a bank's loan portfolio using the same rules and ratios as they did prior to the recession, real small businesses won't be able to access capital until long after they're through the worst and well along the road to recovery (as evidenced by comfortable margins and a healthy balance sheet). For some business owners that need acccess to their existing lines or new loans to help them weather this storm, that will be too late.
Mark Twain once said, "A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain." We can't afford to wait until this storm clears to give umbrellas back to our best small business owners. So consider the steps announced yesterday a good first step...and hope for more to come.
-Paton
There was one thing missing, though. If the administration really wants to free up capital for small business, they must immediately change the behavior of front-line regulators. Any banker will tell you that clearly knowing what loans will and won't pass muster during the next regulatory exam has a HUGE impact on the bank's ability to comfortably extend credit.
The Obama administration must help regulators and banks clearly (and perhaps more broadly) define "good loans" in this economy. Bankers must feel comfortable renewing or extending lines and loans to businesses that are struggling - temporarily - because of economic factors outside their control. Of course those borrowers must be able to demonstrate that they're committed to fully repaying those obligations AND have made the tough decisions necessary to survive the downturn and thrive once the recovery begins.
If regulators continue evaluating the quality of a bank's loan portfolio using the same rules and ratios as they did prior to the recession, real small businesses won't be able to access capital until long after they're through the worst and well along the road to recovery (as evidenced by comfortable margins and a healthy balance sheet). For some business owners that need acccess to their existing lines or new loans to help them weather this storm, that will be too late.
Mark Twain once said, "A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain." We can't afford to wait until this storm clears to give umbrellas back to our best small business owners. So consider the steps announced yesterday a good first step...and hope for more to come.
-Paton
Monday, March 2, 2009
Traction Review in St. Paul Pioneer Press
Matt Meents, CEO of the notable Minneapolis web services firm Reside (and a client), was kind enough to write this glowing review of Gino Wickman's book Traction: Get a Grip on Your Business. Check it out at the St. Paul Pioneer Press.
-Paton
-Paton
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