Escaping The “Time Trap”

June 4th, 2014

ethrTime traps, you know them. I can’t take the time to install memory because I have so much to do that five minutes out the window will break me right now. And who knows? If I don’t finish project A today and get started on project B, I won’t finish it tomorrow, and I’ll spend all weekend trying to sort out the mess.

While your brain races forward, you can hear this little voice in the back of your head, the voice of reason that is always so faint, telling you that five minutes now is nothing more than a trip the refrigerator, but it will be worth lions over the next year. Invest now! Enjoy a yearlong payback.

The time trap–once you’re in, you’re in deep, and it’s hard to get out. Let me, if I may, play the little man, the voice of reason, and speak those quiet truths we all know but all too often ignore in the heat of battle. Even escaping the trap for one day can make a big difference in your attitude toward work.

Take breaks. When I start losing energy in the late afternoon, going for a run revives me for another couple of hours. That kind of exercise during work hours is a timesaver because I end up accomplishing more than if I sat at my desk, nodding off. Of course, there are several techniques you can employ to energize yourself, such as sitting in a chair and catching up on reading, fixing a cup of tea, taking a Kennedy nap (a 5-to-10-minute doze at your desk), and so on. What you do is immaterial, as long as it works; knowing when to take a break is the secret.

Turn off the phone. I have received much flak from readers and friends since writing a few months ago that I had succumbed to the cowardly practice of screening phone calls. But guess what? It’s a real timesaver. If you have to get work done, shut out the world, excepting those you absolutely positively must talk to. Besides, if you talk to people when you don’t really want to, you may come across as rude or short.

Clean office at end of day. Spend 10 or 15 minutes at the end of the day cleaning off your desk and you’ll get a much faster start the next day. I know this because I’ve lately fallen into the time trap of working until I can’t stand to be in my office a minute longer and walking out on a mess. The next morning I not only face a mess but spend precious time organizing the day’s work. Like most people, I can get twice as much done in a given time period in the morning, so it makes sense to apply that precious energy to productive work, not the mindless task of cleaning up. You’ll not only save time, you’ll produce more work in less time than you did before. The same theory applies when finishing one major project; clean up and file before getting sucked into the next one.

Invest In needed equipment. It’s not hard to convince yourself that you can get by without a given gadget. In some cases it may never even occur to you to buy it. But consider the extra memory I referred to above. If you’re on the phone and trying to locate a piece of information, but have to close several programs before you open your database, you’ve lost several minutes. You then have to close the database and open up the programs you were in and find your place. With a few more megabytes you could have located the information, hung up the phone, and returned to work. How many times does that happen a day or week? How many times do you print a document, trudge to the fax machine, and send it off? Wouldn’t a fax/modem save you gobs of time each day, by allowing you to fax documents directly from your computer with just a few keystrokes?

Brutalize your to-do list. Don’t carry to-do items forward forever. Do them or cross them off the list. As philosopher William James said, “There’s nothing so fatiguing as the eternal hanging on of an uncompleted task.” Next time you hear the little man in your head, accord him the respect you would a philosopher.

Do Postcards Still Work?

May 18th, 2014

dpcswBy 10:39 a.m., Roger Lazier had reached the UH@#$%OH! point of his to-do-today list at his Arlington, Texas, home office. Too much for one regional sales manager to do, too many simultaneous follow-ups, too many lucrative opportunities he’d worked too hard to obtain.

The most pressing problem was an upcoming on-site demonstration at Sandia National Labs in Albuquerque, New Mexico, the Department of Energy’s development-and-testing complex. Big opportunity. Big need.to convince the 125 Sandia design engineers that they should come see his computer-assisted-design (CAD) software. And big communication problem. Two CAD software competitors were also scheduled–before him. And both had already sent invitational/informational letters to the same 125 design engineers.

Now it was Lazier’s turn to write an invitation, except he couldn’t seem to turn a phrase. He needed to get the design engineers’ attention as well as their attendance. He needed an announcement with features that translated to benefits. He needed something to stand out.

FAMILY HELP COMES CHEAP

Lazier picked up Iris phone and dialed 1-NEP-OTISM. His sister. Me.

“I need a sales letter, and it’s just not working!” he blurted. “Can you help? Gimme a lead. Say something, anything. And make it good.”

And the Postal Service delivered. Letter? Nah! The competitors had done that. (Acckk! I counseled. Same look, same style, one size fits none! Boring! No differentiation!)

Postcard, I wisely intoned. Do a postcard. And we did. And it delivered. And it can for you too.

The happily-shortly-thereafter ending: In two days, an oversize quick-print postcard was written, desktop-designed, printed, and posted. It was designed to stand out from ordinary-size mail: 5.5 by 8.5 inches on corporately tasteful light-blue card stock. One that eliminated the ordeal of envelopening. One that could be poked into an appointment book or tacked onto a bulletin board. One that used a recognizable scheduling format: a takeoff on a desk-calendar page, with a “handwritten” reminder memo to meet Lazier at such-and-such a time and place. One that quickly, easily, and creatively gave the benefits of this program over the others. One that cost $18 to print.

One that delivered-even after distribution delays at Sandia, even with a last-minute change of the announced meeting location, and even though Lazier was the third guy in for similar software, Lazier’s 10 percent return (12 prospective buyers showed) kept him busy during the entire session.

THE MOST DIRECT OF DIRECT MAIL

These toe-in-the-door communiques are too often overlooked–by senders, that is. Postcards are easy to write, to typeset, to print, to mall, to read, to keep. They’re appropriate for information-deluged recipients and for various contents (reminders, invitations, tips, updates, professional expertise, motivational ideas, humor). They can be impressive-looking (colored ink on colored paper) without the impressive price tag. They’re lowcost–heck, you can print four cards on one 8.5-by-11 sheet of card stock, or print two large 5.5-by-8.5 cards instead.

And postcards are creative. Messages on the front, messages on the address side. The ease of desktop publishing offers unlimited graphic-design opportunities. Low-cost but high-quality programs like Publish-It! for Windows and the Macintosh (Timeworks) are powerful enough for postcard production. Nearly all Windows and Mac word processors, with their basic graphic capabilities, would also suffice for these projects. Even if you use a DOS word-processing program such as WordPerfect 5.1 (with scalable fonts), you can create professional-looking messages for instant, easy, differentiating, standout interaction. In all these cases, output quality is essential, so you’ll want to laser-print your postcards if possible.

Don’t let the small size of postcards scare you. Simple stylistic devices–borders, lines, scalable fonts, arrows and bullets, 5 to 10 percent shading–will stand out in this reduced-size format and can create simple yet powerful, in-your-face messages. Plus, the size pretty much prohibits all those empty, automatic business-letter phrases. Postcards are like little billboards. They force the sender to collapse all the b.s. (business-ese stuff) into pertinent particulars. (Remember that sage advice about being able to “write your idea on the back of my business card”?)

A PLETHORA OF POSTCARDS

Postcards are ideal for follow-ups and stay-in-touch messages. How often can you send yet another letter? And what do you send once you’ve sent the one-shot brochure? What if you don’t have the time, stamina, budget, or editorial content for an ongoing newsletter? Or the talent to concoct a convincing case study or solutions scenario?

Consider the potential and possibilities of the (not-so) humble postcard. Enlarge your business card for a larger-than-life reminder. Or do a giant Rolodex postcard. Or a series of keeper postcards that offer important tips.

Upcoming meeting? Get scenic postcards of the site and print your invite or reminder in a script font on the back.

Or use postcards for surveys, contests, or feedback. Fold a 5.5-by-8.5 card in half to mail–using a sticky tab to keep it closed, not a staple–with one half for the announcement message and the other half for the return/reply card. One client used this method to announce a new catalog. Those replying not only qualified themselves but helped reduce overall mailing costs. In addition, it allowed the sender to concentrate on his best prospects (also providing additional mail and follow-up opportunities).

How about a monthly series of postcards containing inspiring, motivational, read-it-and-keep quotes, messages, and insights that pertain to your field? Or ones offering synopses of current articles in your field? (Postcards are great for demonstrating expertise or authority without being too obvious about it.)

THE BIG TEASE

Or, as a small advertising agency struggling against the big guys did, why not send a series of postcards containing teasers and the promise of a payoff?

The Badertscher Communications advertising agency in Marion, Ohio, was small and wanted to be bigger. It was up against established agencies in the state capital of Columbus. And it faced the same problem: All agencies sent the same stuff–brochures proclaiming philosophies, creativity, case studies, and their general greatness.

But Badertscher had a think-different, do-different copywriter named Michael Flegle. He had an independent photographer friend who dug out his backyard for a deck one day and uncovered some fascinating trash–old bottles, old marbles, another era’s junk. Flegle saw something more than excavated items. He looked at the reminders of a past life and saw a still life–a big photographic picture and a way to convince prospective clients that his agency could provide them with the big picture.

The photographer shot a gorgeous photo. And the agency cut it into fourths and used each portion of the picture on the front of a series of four 4-by-6 postcards, timed to arrive (unidentified) every three days. Each carried a different curious question, starting with:

“Why would an advertising agency show a high school girl inside a boys’ restroom, in order to get a school levy passed?”

The last card identified the agency and its philosophy of providing attention-getting messages and the “big picture”– plus an offer to tape, glue, or staple the four postcards together and return them for a limited-edition poster (in one piece), suitable for framing. It also gave details that answered the case-study questions. The results? “Tremendous,” says Flegle, now a creative director for Gibson Greeting Cards in Cincinnati.

OK, you’re saying, but that was probably a four-color printing. Well, yes, it was. But there are companies out there offering four-color postcards for small-budget people. Check the classified sections of advertising trade magazines such as Advertising Age for supplier listings or your own yellow pages for printers. Most quick printers, such as Kinko’s, don’t offer four-color work, but many instant printers have certain days when color ink is no additional charge, allowing for some pretty spiffy two-color work.

TWO-FOR-ONE POSTCARDS

Costs, headaches, and hassles can be offset through cooperative efforts with another independent businessperson if both parties use the same postcard to pitch different audiences.

A home-based Indianapolis graphics-design firm, Antenna, pooled efforts with Tamara Zahn, then an Indianapolis retail-marketing consultant, who called asking for a not-your-ordinary holiday greeting. Something to stand out from the Christmas clutter. And maybe something with some additional life after the seasonal mail-out.

They opted for a New Year’s postcard, one designed on a Mac in what Antenna partners Jim and Laura Lacy Sholly explain was “high-tech graphics with low-end printing.”A photograph was photo-copied, type was composed, and what was to become an award-winning card was printed with blue plus one-color on chipboard (a cousin of cardboard) by letter-press printers.

Both the designers and the consultant were able to use the card all year long–for thank-yous, glad-we-met-at-that-meeting follow-ups, project updates, and other keep-in-touch communications–for both new clients and those who had received the original mailing.

WHAT IT TAKES

Beyond the savings in creating postcards yourself, beyond the ability to copy several on a standard-size page, beyond the elimination of envelopes, don’t forget you also save money on postage. It’s only 19 cents for a standard-size card (3.5 by 5). Anything above that, from the larger standouts (5.5 by 8.5) all the way up to 11.5 by 6, is still just 29 cents, the standard first-class rate. For even larger cards, there’s only a 10 cent surcharge.

Postal rates are even cheaper if you use bulk mail, which requires a mailing of 200 pieces at a time, an annual permit fee, proper printing of the bulk-rate indices, and specialized sorting procedures.

Another postage option–especially important when using return-response cards (you pay the postage, not the sender)–is Business Reply Mail, which has its own set of permits and specific format guidelines for the postcard. Ask your post office for brochures on preparing Business Reply Mail. This option costs more than standard postage, since you’ll be paying a handling fee, but it ensures better response for comment cards, survey responses, order cards, and the like.

Other home-based communicators use postcards monthly to send jokes or quirky cartoons. Some send reminders or hints. But all agree–when brochures and letters and sell sheets and all the complicated options aren’t quite appropriate or possible, and when you want to keep in touch or quickly convey expertise or information, postcards are an easy, affordable well-received alternative.

It’s Presentation Time: You Ready?

May 13th, 2014

ipyrPresentation graphics software has evolved to the stage where even a computer novice can create an effective and artistic presentation in a few hours. These programs offer an extensive lineup of charts, tables, text effects, colors, clip art, graphics, and slide transition effects. The presentations they help you to produce can be printed, converted to 35mm slides and overhead transparencies, are run directly from a PC.

A quick ramp-up time is essential to the success of any presentation product, as the typical person who uses such software is usually a first-time buyer looking to perform an overnight miracle. Even those who are familiar with such packages often use them infrequently: Unlike your word processor or spreadsheet, presentation software is not something you use every day, so getting up to speed quickly is to success. Consequently, these programs are designed to be straightforward and inviting. They offer outlines and templates, consistent background opinions for charts and graphs, and thumbnail views of your presentation. Tutorials and advisers supply detailed information about each step of the process, speeding you through seemingly complicated tasks.

For this review, we’ll look at three major players in the windows-based presentation graphics arena: Lotus Freelance Graphics for Windows 2.01, Harvard Graphics 2.0 for Windows, and Microsoft Power Point for Windows 3.0. PowerPoint with its roots on the Macintosh platform-virtually defined the desktop presentation marked and is one of the most popular presentation software packages available. But Freelance Graphics and Harvard Graphics are serious challengers for the lead in the Windows marketplace, combining the best features of the aging PowerPoint with their own advancements in charting facilities and online tutorials. Both Freelance Graphics and PowerPoint list for $495, whereas Harvard Graphics is listed at $395.

In order to help you determine which package best suits your needs, we evaluated each in the six areas that typify the steps involved in the process of creating a presentation: file importing; slide creation and effects; text, graphs, and tables; drawing capabilities; interface, help, tutorials, and support; and output opinions.

FILE IMPORTING

If you are new to presentations, you might think it’s difficult to come up with an impressive slide show. Not so. With desktop presentation graphics packages, it’s simply a matter of filling in the blanks: You enter the material for each slide (by importing a word processing outline or typing directly in a text box); add, delete, or move slides to get your material into the proper presentation order; and press an icon or select an item on the menu to run your slide show.

Importing text and spreadsheet data into each package was a relatively simple procedure (for our evaluation, we used Word for Windows 2.0, Excel 4.0, and Lotus 1-2-3 for Windows, release 4). Harvard Graphics imported text only in ASCII format, but had no problem with Excel’s XLS or 1-2-3′s WK* file formats; Freelance Graphics imported word processing and spreadsheet files with ease and offered a great deal of flexibility in its dialog boxes, providing more predefined file types; PowerPoint, however, did require a few extra steps to format the imported data-particularly spreadsheet files-which are imported directly into the program’s Graph module.

SLIDE CREATION AND EFFECTS

You will also want your slides to be eyecatching, so a wide variety of slide design options is crucial. All three packages have slide masters that let you apply one consistent interface-with color scales and ornaments like boxes, lines, countries, landscapes–to all or a selected number of slides.

Freelance Graphics and Harvard Graphics provide you with an automatic dialog box each time you add a slide; this dialog box asks you to select the type of slide you want to create (title page, chart, bulleted text, chart with bullets, table, custom, and so forth). Next, the dialog box places a toolbox or boxes onto the slide, from which you can select the tools you need to build your items, such as a data sheet for creating a graph. All let you view slides individually, simultaneously, or in outline form.

As we’ve come to a long way from merely advancing to the next slide, look to add some fancy transition effects between slides. These effects include screen wipes–such as sweeping one slide up to the left and the next slide in from the right–and horizontal or vertical splits. Slides can be separated by theatrical curtains that open and close, or they can dissolve into checkerboard or rainlike fades. During presentation, you can manually advance to the next slide by clicking the mouse or automatically by predetermining a time limit of, say, 30 seconds between slides. Automatic slide advancement frees you to attend to your notes and also helps to maintain the pace of your presentation. Additionally, an automatic build feature in each package lets bulletd text apper on consecutive slides. With each slide, a new bulleted item gets added and the previously bulleted points appear dimmed.

TEXT, GRAPHS, AND TABLES

Text manipulation in Freelance Graphics, Harvard Graphics, and PowerPoint is a breeze. All three programs come with spell-checkers and a speaker’s note option that lets you add reminders to each slide. TrueType and PostScrip font support as well as color text options in eact let you design text effects that will have your messages leaping off the screen.

Expect the standard set of graphs: area, bar, column, pie, high-low-open-close, scatter, and stacked bar charts. Freelance Graphics and Harvard Graphics also have organizational charts, and Freelance adds radar charts that let you compare individual datum to group results. PowerPoint has no organizational charting facility.

You can also create combination charts. All graphs are created through a data-entry form–essentially an elementary spreadsheet–on which graphs are based. All three let you import data when you’re in graphing mode, but Freelance and PowerPoint provide the most detailed previews in that mode.

DRAWING CAPABILITIES

The drawing tools available include the basic line, circle, and polygon options. Manipulation of these tools is especially good in Freelance Graphics and Harvard Graphics, but PowerPoint carries extra shapes on its tool palette, such as trapezoids and stars. If your first attempts at drawing an object fall short of your expectations, don’t worry. Freelance has 10 levels of undo (that is, you can undo up to the last 10 actions). Harvard has four levels of undo, and PowerPoint has one. Harvard is the only one with a redo option. Each package also includes more than 525 different pieces of high-quality clip art, with subjects like business, environment, industry, animals, and international symbols. All the clip-art libraries allow you to browse through thumbnail and full-size views of images that can be resized and added to slides. Powerpoint’s clip-art libraries are actually PowerPoint presentations themselves.

INTERFACE, HEP, TUTORIALS, AND SUPPORT

Each of these three Windows-based packages has an intuitive interface. They provide a drawing and charting palette as well as icons and pull-down menus for basic slide functions, such as running slide shows, creating new slides, and changing views.

Freeland Graphics and Harvard Graphics both sport online tutorials, which makes creating that first presentation a real snap. PowerPoint’s tutorial, however, is the documentation. Both Freeland and Harvard have toolbar item descriptions: With Freeland Graphics, you place the cursor over an item and click the right mouse button to bring up the item’s description; with Harvard Graphics, you simply place the mouse cursor over the item and a description appears. PowerPoint, on the other hand, suffers from a lack of online tutorial and toolbar descriptions.

Harvard Graphics wins the usability battle with its online, hideable Advisor, which supplies detailed advice for each step of your work. The advice includes both how-to tips and presentation design techniques. It even tells you what charts are appropriate for specific types of data. Freelance Graphics also has online, context-sensitive help for each step of your work, though it is not as extensive as that in Harvard Graphics.

As simple as these packages are to master, you may occassionally find yourself in need of more help than the tutorials and documentation provide. Lotus offers unlimited toll-free support of Freelance Graphics for 90 days after the first call, then you have a choice of either 800-number support for $129 per year, or 900-number support at $2 per minute. Software Publishing Corp. provides unlimited support for Harvard Graphics. The Harvard Graphics Advisor Service also offers advice on building a presentation. Microsoft provides unlimited support (not toll free) and a FastTips advisory service with prerecorded PowerPoint presentation tips. Microsoft also has something truly unique among the

packages we reviewed: a 90-day money-back guarantee.

OUTPUT OPTIONS

Slid shows can be printed or sent to a service bureau to be made into 35mm slides or overhead transparencies. Freelance Graphics and Harvard Graphics provide utilities to prepare your work for the Autographix slide service center. PowerPoint includes a utility for the Genigraphics slide service.

You should always print a hard copy of your presentation even if you’re planning to produce transparencies, 35mm slides, or a screen show. With a printout, you can perform the final manual proof-reading of the spelling and grammar in your text and slide headings. While all the reviewed packages include spell-checkers, it is always a smart idea to do the final check by hand. You might also consider asking a friend–one who was not involved in the creation of the presentation to proofread your printout. Also, if you plan to provide audience handouts, be sure to print in landscape mode–the human eye can cover a horizontal area faster than a vertical one.

The special power in these packages is the ability to run a slide show from a PC. All three allow you to incorporate both sound (WAV) and video (AVI) clips into a presentation. You can also use a run-time module supplied by all three. Run-time modules let you run presentations on any PC without having to install the package.

YOUR BEST BUY?

All told, any one of these packages constitutes a ready answer to your presentation demands, but Harvard Graphics and Freelance Graphics both stand out as the tools of choice for their power and ease of use. If you use Lotus 1-2-3 for Windows, Ami Pro, or other Windows-based Lotus programs, you’ll find that Freelance Graphics is the best choice for moving items from one Lotus application to another. In fact, the default toolbar in Freelance includes launching tools for Ami Pro and Lotus Notes.

On the other hand, Harvard Graphics is the wisest choice for people who like having the best online help and design tips they can get. Between the two products, Harvard Graphics slightly wins out for its advanced, fool-proof interface.

PowerPoint 3.0 remains a popular choice among professionals primarily for its cross-platform file compatibility on both Windows and Mac, as well as for its excellent presentation outliner and tool palettes. The program is feature rich, although somewhat spartan in its external appearance. It’s beginning to show its age, however, and suffers from a lack of any online tutorials and toolbar descriptions as well as a lack of any organizational charting facilities.

These packages not only simplify presentation making, they enable you to create the materials you need to communicate your points clearly. Of course, if you have more time, you can spend hours tweaking the details of each page of your slide show. Chances are good that you’ll wind up making presentations a regular part of your business, a part you’re bound to enjoy because of the impressive tools at your fingertips.

Self Assessment: How Strong Is Your Business?

May 8th, 2014

hsiybWhat is success? And how will you know if you are there? That’s more than a philosophical question–it’s one we entrepreneurial types grapple with regularly. Sometimes we struggle emotionally, as when we worry that the energy used building our businesses would have been better spent hunting for a real job. More often, our questions are practical: Am I making enough to justify hiring an assistant? Will my business qualify for a bank loan? Can I afford a new laptop? Am I on track here?

TAKING STOCK

Self-assessment is a crucial part of management, regardless of the size of the business. Unless you know how you’re doing, you really don’t know what to do next. Realistic financial self-appraisal makes for better decisions; it can also help you beat back the dragons of selfdoubt. A spreadsheet that says you’re doing OK is a potent weapon against the discouragement that can develop on a bad day. And a spreadsheet that’s disappointing can push you toward the renewed marketing efforts that might be just what your business needs.

“It helps to evaluate your business every quarter and to take a close look at the end of every year,” says Steve Cranfill, a principal in Management Advisory Services, a Seattle business consulting company. “It is a very, very useful and valid tool.”

According to Cranfill, there are three primary ways to take stock: You can measure yourself against your own goals, analyze the trends, and compare yourself to other businesses. It helps to do all three.

To do a good review of your business, start with a clean desk, a clean spreadsheet, and a clear head. If you stayed up all night worrying about your bills or arguing with your spouse about money, pick a different day.

Go easy on yourself if your business is new, notes Norman Boone, a San Francisco financial planner who has run through these assessments for himself as well as his clients. “You have’to judge with the life cycle in mind. The standards for someone in the first couple of years are going to be different than for someone who’s been doing things for several years.”

TRUTH OR CONSEQUENCES

With those reassuring thoughts in mind, here are nine tests you can put your business through to find out how you really, truly are doing.

1. The “You’re eating, aren’t you?” test.

You are covering your expenses, and then some. “If you are in your first year of business–or even the second or third– and you are paying the bills and keeping your head above water, you are doing pretty well,” notes Boone. After that, the test gets a little harder because you have to start adding in other expenses. By the time you’ve been in business for five years, your self-employment income should cover a comfortable lifestyle, including occasional vacation trips, nights out, disability, health, and life insurance, and a retirement savings plan.

2. The “real job” test. How much could you demand on the open job market? The best way to find out is to retain contacts and gossip. How much is the person who has your old job making? How much do the want ads offer for people with your skills? Several magazines publish annual surveys of salaries for employees in your chosen field. Add about 25 percent to that figure to cover fringe benefits. If you don’t stack up, don’t worry: For many of us, it’s worth a premium to work for ourselves in our own homes, and you’re probably saving money on career clothes and commuting. But if you find yourself putting in 16-hour days and seven-day weeks and not making what you could in a 9-to-5 job, it’s probably time to rethink the way you’ re working.

3. The return-on-investment test. If you were a publicly held company, would you be better off investing in yourself or in a bank account? This key financial calculation tells you how well your business is using your money, notes Cranfill. First, figure out how much money you spent to set yourself up in business, including the computer, phone bill, and business cards. Then, figure out how much profit you made in your first year by subtracting your salary from the amount of money left at the end of the year. If you are a sole proprietor and your profit is commingled with your salary, go back to the last test to figure out what portion of your earnings is a comparable salary and what part is profit.

Divide your profit by the money you spent to set up your business. Your return should be 12 percent to 15 percent of the money you’ve invested in yourself, says Cranfill, or you might as well just put your money in Treasury bonds and go find a job. (Or run your business leaner next year.) If, for example, you started your business with $6,000, you should have $720 to $900 left after taxes and salary in the first year to get into the 12-to 15-percent range. For the second year, just add new expenses to the bottom of the equation and new profits to the top.

4. The by-the-numbers test. There are rules of thumb for recognizing healthy businesses, Cranfill concedes, though he cautions that circumstances vary by business and situation. A “quick ratio,” for example, would divide your cash and receivables by your current liabilities, and “1 to 1 is acceptable,” he says. Another useful figure is the current ratio, which includes inventories among the assets that get compared to liabilities. There, “2 to 1 is a pretty well used guideline,” says Cranfill. What about debt-to-worth? That’s tricky, because debt does add risk, but a debt-free business might be one that isn’t growing enough. “The whole reason that debt is used is to help grow the business and increase the owners’ return on capital,” notes Cranfill. These days, a debt-to-worth relationship of 2 to 1 or below is considered good for a business.

5. The bend test. Keep a spreadsheet on a quarterly basis that figures all of these ratios, return on investment, salary, and profits. Set it up to compare like periods: third quarters to third quarters, full years to full years. Is your business moving in the right direction and fast enough? Growth-company investors like to see sales and earnings growing around 15 percent a year. Can you say the same for your business? At the very least, you should be moving up with the inflation rate (3 percent in recent years) and then some.

6. The I’ll-show-you-mine-if-you-show-me-yours test. Comparisons are among the most accurate measures of success, and many trade associations and professional groups allow us to compare our progress with that of our peers by taking surveys. Robert Morris Associates publishes reference books that give key ratios for many types of businesses, including small service businesses. You can make it part of your get-to-know-your-banker-better plan by asking her if you can look through the “RMA books.” Your banker will be impressed that you know what to look for; you’ll get a peek at how some of your competitors are performing. You can also make friends with people in your own field through national bulletin boards such as CompuServe and America Online. Discussions of rates and incomes are helpful–informal enough to stay this side of price-fixing conflicts, anonymous enough to skirt envy and client-poaching issues.

7. The profit centers test. Take some time to break down your business by clients, activities, and products. What activities and products make you the most money, and how much of your time do you spend on them? Which clients are the most profitable, and how much of your workload do they provide? You can look at this data and figure out if you’re focusing too much attention on small clients or on one large one, or whether you need to put more marketing energy into the one service you provide that really brings in cash.

8. The personal benchmark test. You probably are self-employed for a variety of reasons that aren’t all financial. Maybe you want to spend time with your family, maybe you enjoy the freedom of working in your pajamas, or maybe you hate commuting. Set your own goals and then see how your business matches up to them. Says Boone: “The issue is that you need to sit down ahead of time and say, ‘This is how I define success for myself.’ You might want to talk about income, liquidity, free time, and the quality of life. If you know what you are trying to accomplish ahead of time, it becomes easier to set up plans, and if you don’t know where you are going, you probably won’t succeed.”

9. The all-important gut check. If you don’t have time for all the number-crunching and self-contemplation, take a moment to ask yourself how it all feels. “If your business is growing, if you are seeing new clients and customers so that your business is moving in the right direction, and if you feel comfortable, then you are a success,” says Boone. In the final analysis, you have to feel good in your own skin. Or, if I may be permitted one more quote before I put down my books and get to work, as American writer (and Bartlett’s Quotations editor) Christopher Morley once said, “There is only one success–to be able to spend your life in your own way.”

Harvey MacKay Talks Business and Sharks

April 19th, 2014

hmtbWhen we last interviewed Mackay four years ago, the economy was still growing, home offices were starting to come into their own, and he was finishing his second book.

Since then, the economy has fallen on its face, the number of home offices has grown explosively, and Mackay has completed his third book, Sharkproof. These are not isolated events. As Mackay puts it, “While the Fortune 500 companies were losing 4.1 million jobs in the ’80s, small businesses created 1.5 million jobs in the last two years alone. It’s what saved this country.”

While Sharkproof is primarily about getting and keeping a job in today’s sluggish economy, Mackay has plenty of advice for those who want to create their own jobs by starting their own businesses (also see accompanying excerpt from Sharkproof).

No matter what Harvey Mackay has done, from being an envelope salesman to owning an envelope manufacturing company to writing best-selling books, he has always relied on one principle: Do your homework. As a salesman, he located prospective customers by following competitors’ delivery trucks on their rounds. As a business owner, he compiled comprehensive profiles of all his customers and prospects (based on a list of 66 questions). And as a prospective author, he interviewed successful writers and editors to find out what it takes to bring a book from rough manuscript to national bestseller.

“I am a firm believer in superior information,” says Mackay. “Try to get your hands on people who have done exactly what you want to do. Ask them what they would do differently if they had to start over again. Listen, take copious notes, and thank them with a beautiful follow-up note. Get a mentor if you can. Read everything there is to read. If you get only one good idea from every book or article, it’s time well spent.”

UNDERSTAND YOURSELF

Mackay also advocates getting a second opinion from an industrial psychologist. “You go and take four hours of tests and find out your strengths, weaknesses, what you are truly interested in. It’s not cheap, but it can steer you away from a bad decision or toward a better one.”

Although he admits that no one could talk him out of his youthful ambition of being a pro golfer until reality set in, he contends that starting a business without serious thought can have more significant consequences. For him, understanding yourself is as important as understanding your prospective business.

He is quick to add, “If you have gathered the information you need and you know your business idea has potential, but you still haven’t decided whether to take the leap, you should know one thing. I have never, and let me emphasize never, met anyone who has gone out on his own, who has taken a crack at it, even if he failed, who has been sorry he did it.”

Interestingly, as long as you have sound information and a sound idea, Mackay feels that no time is a bad time to get started–even if the economy is in the tank. He states, “Sometimes the worst of times are the best of times. There are one million people who quit looking for work. They’re waiting for Dan Rather or Peter Jennings to tell them that things are OK again. In tough times, a lot of your competition has already given up, leaving you the opportunity.”

However, Mackay is furious at the government for making tough times tougher by enacting restrictive legislation and saddling entrepreneurs with mountains of paperwork. Mackay minces no words when he says, “I think the IQ of our legislators, senators, and congressmen sometimes borders on 88. Legislators don’t understand small business. They’ve never understood that it’s the backbone of America. Entrepreneurs saved this country. Of the new jobs created over the last couple of years, 70 percent of those were by companies with fewer than 20 employees. Years from now some of those businesses will employ 20,000 if they are given the fight incentives.

“You cannot saddle these entrepreneurs with red tape. You have to make money accessible to them, which it hasn’t been. Applying for a small-business loan takes two years, 2,000 forms, eight days a week.

“The solution is not to take the incentive away from the risk takers. Sometimes it’s risky not to take a risk–if you walk backward you never stub your toe. These are the people who are going to save America. If only the politicians understood that.”

When asked about the recent Supreme Court decision limiting the home-office deduction, he pauses thoughtfully before saying, “This deduction has been abused sometimes.” He pauses again, seemingly concluding that he supports the decision, before he continues, “However, if an entrepreneur is using his home office full-time, even if he does much of his work out of the home, that’s a crime. That again is total ignorance and outlandish discrimination against a risk taker who might eventually be out there creating jobs. It’s just putting up more barriers and more obstacles. When you take incentives out and raise taxes on the entrepreneur, all you’re doing is jeopardizing the future.”

ON YOUR OWN

And what of the .entrepreneur who has a great idea and information and who is willing to brave the economy and government-imposed hurdles? What abilities are important in building a successful enterprise? Mackay has several things to say on the subject. “The skills necessary for success in a small or home-based business are identical to those needed by big companies. Excellent communications skills are fundamental. The number one skill lacking today is the ability to make a solid presentation. You can’t make a sale if you can’t make a presentation.

“You must pay fanatical attention to detail. You have to know the market, the competitors. You must be a self-starter and continue to educate yourself. You have to enhance your skills. Here’s the bottom line: Ultimately, what you earn is directly proportionate to what you learn.

“You must remember that no matter how good the business is, nobody is insulated. There are lots of entrepreneurs who do real well for one, two, three years. Then they get soft, they get fat, like the big corporations. It’s like swimming across the ocean: As long as your arms keep flailing it’s OK, but as soon as you rest you will sink or get eaten.

“You have to keep abreast of the trends, the marketplace. If a business is in trouble, most people think, ‘If only we can get the cost of goods sold to 26 percent, we can turn the company around.’ It doesn’t work like that. You don’t do just one thing, you do lots of things. If something is seriously wrong, there is always more than one cause.

“If you want.to sharkproof yourself as a home-based entrepreneur, there are 15, 20 things to do. Get constant advice, keep educating yourself, stay focused, build your network … I swear to you that President Clinton would not be president without his Rolodex file.” Judging by the long list of people endorsing Mackay’s books, he owes some of his success to his Rolodex, too.

Mackay has become successful both by society’s and by his own standards. He points out, however, that success is less about money and fame than about “state of mind.”

“If you find something you love to do, you’ll never have to work again for the rest of your life.”

SIX STEPS FOR STARTING A BUSINESS

OK, you’ve had it with working for someone else. You’ve decided to start your own business. There are thousands of things to consider. Here are just a few of them:

1. Think small. It is a lot cheaper, easier, and smarter to grow bigger than it is to grow smaller. Keep your overhead to a minimum by having your office at home. Hang on to your day job as long as possible or at least until you can begin to see some light at the end of the financial tunnel in your own business.

2. Get advice. Put together an outside advisory team. Find people who know how to do what you don’t. Keep your team in place after your start-up phase is over. You won’t stop making mistakes just because you’ve gotten bigger. You’ll just make bigger ones. Remember, he who rides a tiger can’t dismount,

3. Draft a business plan. You don’t build a house without a blueprint. And you don’t start a business without a business plan. Don’t kid yourself by overestimating or wishing the numbers higher. Be realistic. In fact, don’t be realistic, be pessimistic. Be a devil’s advocate. Make a worst-case scenario and see if the answers still work. Don’t proceed unless they do. Here are the elements you need for your plan:

* Situation Analysis. What is your market? If your answer is “everyone,” you need a new business or a new plan. What area will you serve? How many people or businesses comprise your target market? What makes you certain there are enough potential clients to support your business? Who’s the competition? Why will people do business with you?

* Financing. Where is the money going to come from initially? Where will it come from when that runs out? Can you handle a negative cash flow? For how long? Do you have a cushion if it takes longer to become profitable than you expect? Most overnight successes in business are like overnight successes in show business … they take years. Studies show more businesses fail because of poor management and underfinancing than for any other reason. Don’t start a business unless you have staying power. Your savings should be adequate to support you for at least two years before you have to dip into your new business for income.

* Product Analysis. Who needs it? Why? What makes it salable? Price? Quality? Service? Convenience? How will people learn about your product? About your business?

* Personnel. What talents are absolutely essential to the success of this business?

Where will you find them? Have you priced their services accurately ? Are you considering hiring anyone who is not totally necessary to your success?

4. Be ready to adapt to change. Be prepared to handle the unexpected: an employee who doesn’t perform, a product that doesn’t sell.

5. Get the detalia right. George Will has a great quote: “We need people who have read the minutes of the last meeting.” Insurance, payroll, licenses, permits, leases, legal advice, taxes. Don’t try shortcuts that can get you into trouble.

6. It all depends on yon. Do you have the temperament to work 16 hours a day for months, or perhaps years, when things never seem to be going right? Are you prepared to work longer hours for less money than you ever have in any job you ever held while still maintaining traces of normal human behavior, like laughter and patience and having fun?

If so, maybe you can handle your own business. After all, we work for dozens of reasons…money is only one of them.