Montana Jones

Things I have learned about running a business

I have friends that want to start a small business. I want to give them advice and help them understand what they are getting into, but they are optimistic and enthusiastic and somehow think my insights don't apply to them. I sigh and roll my eyes at them just as they sigh and roll their eyes at me. We are very good friends.

Thinking about the adventure they are undertaking has given me a lot of insight into the adventure I am going through. It has helped me understand some things I have learned. So whether you take it or not, here is my advice for people starting a new business. The things I have learned by running a business.

Everything takes longer than you think it should.

Almost everything I have tried to do in my business has taken longer, and sometimes a lot longer, than I thought it should. Things like hiring employees, changing the menu, printing business cards, making repairs. Nothing terribly hard, but they just take longer than I think they should.

Sometimes it is because you end up waiting on other people. You Email out a question to someone and they take several days to respond. People have to check their schedules, finish their projects, do something in their lives before they can give your issue any attention.

Sometimes it is because you are busier than you think you are. Most jobs have a regular routine with lots of things to do and fitting that one new and extra thing into the schedule is just plain tough. It may be a simple thing, but you still can't stop everything else just to do it.

Sometimes is because of something unpredictable. Road construction delays the trip to the bank or forgetting that one important document and having to go back for it. Your delays could be from illness, or snowstorms or other more important things cropping up. The universe just messes with you sometimes.

I have seen this phenomena before when I was someone else's employee. It was a minor nuisance then, I thought it was an example of the business not being as well run as it ought to be. Now that I am the employer I see it more and more in almost every aspect of the business. It is not just a nuisance, it is a serious obstacle that needs to be planned for and dealt with.

When you are planning your business and your schedule, budget extra time for everything. I don't care what you are trying to get done, be it great or small, everything will take longer than you think it should.

Pay yourself and value your time.

The pay yourself part is hopefully common sense. It is a key point to starting a business in the first place. I have heard from some entrepreneurs the idea that they can just live from the company bank account as needed. When business is good they will draw more cash and live well, in poor times they will draw less for themselves. I'm sure there are many small business people that live this way successfully, but I think it defeats an important part in business decision making; the value of your time.

My philosophy is to put myself on the payroll as the business manager and draw regular paychecks just like any other employee. This has advantages in budgeting, both business and personal, and it makes accounting and tax preparation a little easier. If you ever want more money when the business is doing well, there are ways to get it. Bonus checks or dividends are easy enough.

The real advantage to being on the payroll is that you will know very precisely the value of your time. There are a million things to do when you run a business. Everything from balancing the checkbook to sweeping the floor. If you are paying yourself $10 per hour you can put value on each of those tasks. You can ask yourself "is it really worth it for the business to pay $10 per hour to have the floor swept?" If there is another employee that makes less that $10 per hour it usually makes more financial sense if the lower wage employee did the sweeping while the higher wage employee handles more valuable jobs.

I have seen many business owners trying to save some payroll money by doing the menial chores themselves. Perhaps it saves money, but it also costs time that could be spent on something more profitable.

Another example of the value of your time is in chasing pennies. Comparison shopping can be a fools errand. Say you need something done, like servicing all the fire extinguishers in the warehouse. Start by checking the yellow pages for someone to do this. The first price quote is usually higher than you were hoping for. It is a small business after all and money is tight and if we can just knock a little off this price, things will be better. So you call another service and another and do an internet search and really research that whole fire extinguisher thing. When you finally settle on a contractor you can pat yourself on the back because you got the best deal you could get and saved thirty bucks off the first guys rate. Except for the fact that you blew all afternoon doing it. At your $10 per hour wage it ended up costing $40 of your time to save $30 on an invoice. There comes a point where you will need to quit chasing a good deal because it ends up costing too much. The only way to know where that point is and make a good business decision is to put a dollar value on your time.

Don't take shortcuts.

I remember back in school getting writing assignments. We were supposed to turn in an outline and then do it again and turn in a rough draft and then do it again and turn in the final copy. Talk about a sucky homework assignment, you have to write the same stupid thing three times. A friend of mine had the perfect system for doing these assignments. He would just write the paper. Then he would go through it and take out every third sentence to make the rough draft, and then he would edit that down to the first sentence of each paragraph and make the outline. Submit the parts at the appropriate deadline and you spend way less time doing the homework.

People that know about quality writing are probably squirming at that description. The reason the teacher was so emphatic about the long and ugly process is because those are the steps that are required to produce good writing. The point to the assignment was never the final document, but to learn the process for creating a high quality written work. My friend never understood why he got poor grades in english class and to this day his Emails are painfully difficult to read.

Business is the same way. Making the deposit to the bank is not the point. Closing the sale is not even the point. When you are in business you are going through a process. Planning, supplying, creating, fixing, polishing, selling, servicing, and finally putting the money in the bank. Each step is crucial to what you do before and after. Then you have to do it all again to keep the revenue up. How well you succeed has everything to do with the process and nothing to do with your prowess at making bank deposits.

Some might say that they are improving efficiency, but be very careful that what you are really doing is efficiency and not a shortcut. Efficiency improvements are a similar change to the process, but with a very different outcome. Some rules of thumb: Efficiency will cost you something; shortcuts won't. Shortcuts hurt the quality; efficiency won't.

You can always tell when a business takes shortcuts in their process. These are the businesses that the quality is just not there, or the service is wanting, or you walk away thinking "I can't believe I wasted time on that piece of crap."

This is your business for crying out loud. You should be proud of how well it runs. Your reputation depends on how well you do your job. There are people, customers, employees, suppliers, that are relying on you to do a good job. When you shortcut everyone can tell. Your employees don't want to work as hard, your suppliers stop caring and your customers stop buying. It hurts your business, your reputation and all the people around you when you shortcut the process.

Plan your work and work your plan.

When you first start your small business, you will need a business plan. The only ways you can get by without one is if you are filthy rich and can finance the whole enterprise out of your own pocket, or if the business is so small that you can finance the whole enterprise out of your own pocket. For everyone else you need either bankers or investors to supply the needed money. These bankers and investors won't give you a single damn dime until they see the (formal and written) plan for how you will earn the money to pay them back. In my opinion, if you can't spend four weeks making a business plan you do not have the patience or attention to detail needed to run a business for a year.

The business plan is just the start though. When you get into the nitty gritty details of running a business, having a plan is huge. Sometimes it is as simple as planning the route you will take for your daily errands. When you need to hit the bank, the hardware store, the Costco and the grocery, there is usually a route that is most efficient. It helps to have a plan for what you need at each stop too. The big picture needs a plan too. When you need to do hiring, advertising, procurement and maintenance there is usually an efficient order to do them in. Having a plan for how you will execute each of these items is also pretty key.

Working without a plan means you do things less efficiently and sometimes do things two or three times. This makes your work more expensive and that is death to a small business.

In high season for my business, I depend on a lot of people being in the right place at the right time. That calls for planning. Dinner goes into the oven at a certain time, so supplies have to get delivered at a certain time. For that to happen supplies have to be acquired at a certain time. To make that happen they have to be ordered at a certain time and knowing what to order involves an inventory at a specific time. All these little micro deadlines need to be planned in advance or everything goes to shit in a big hurry. Dinner becomes a fiasco without a detailed plan. Because I spend so much time planning I spend less time dealing with crisis. And because I follow the plan religiously everyone else's job becomes predictable, routine, and dare I say, easy.

Some of these plans get written in big formal looking documents with cover pages and appendixes. Other plans get written on posty notes. Some plans are verbal agreements between people. I have never seen time spent on planning wasted. When you try to do something without a plan, that is when time gets spent fruitlessly.

You are not really the boss around here.

A successful business is all about people. There is the business owner. Sometimes multiple owners. There is staff, could be large or small. Then there are the suppliers. The goods you sell come from someone else. Even if you sell a service you will still need supplies, so the people that supply you count. And then there are other support people around the edges; the landlord, the accountant, the lawyer, the banker. And let's not forget the government. The taxman, the police man, the city council and the governor all have an interest and a say in your business. Last, but not least, let us also count the customer. Every business involves a lot of people.

The smallest business I can imagine effects the lives of only three people (not counting the taxman). A business owner who is also the sole employee and accountant working out of his own home and keeping his money under a mattress. He will need one supplier and one customer to be in business. While I can imagine a business of this small size and structure I cannot imagine what the business does and I would be surprised if the business owner can even earn a living.

A more typical small business will touch the lives of hundreds, if not thousands of people. My own small business has multiple owners, multiple managers, dozens of employees, dozens of suppliers, a reasonable cadre of support from accountants, lawyers, bankers and so forth, and a good deal of oversight from regulatory agencies. When I make a business decision it can touch the lives of easily a hundred people. This does not even take into account the thousands of customers I serve. There are lots of small businesses that touch more people than mine.

There is a romantic notion that the boss is lord of his business realm. That his needs and decisions are the only ones that matter and he can use his capital and decision making power to lord over employees and all that interact with him. Rubbish. Anyone that runs a business this way, especially a small business, is in for troubled times.

The people of a business bring with them a complicated web of cause and effect. For example, if the boss decides to change the budget by cutting wages, then the help becomes disillusioned. Since the boss is not looking out for them they either quit or productivity goes down or quality goes down. This ripples through the company and everyone from the secretary to the customer has to deal with a change in how things are done. So in making decisions, the boss needs to watch out for the interests of the workers if things are to run smoothly. And also watch out for the suppliers interests and the accountants and the city council and so on. Every one of those hundreds of people has the power to make the business owners life more difficult and the power to hurt the company.

When running my business I very rarely feel like the lord of my domain. Sometimes I don't feel like the boss of anything. It is more like everyone else is the boss of me. When I make a decision it is rarely about what I want; it is usually about what is best for the people around me. Strangely enough, that is as it should be for the business to succeed. Business is about people after all. My life does not get easier until I put effort into making life easier for the people around me. I don't succeed until the people I rely on succeed.

Labels: advice, boss, business, employees, Employment, entrepreneur, how to, job, plan, shortcut, small business, time

Posted by: Montana Jones / 9:39 AM 0 comments

Fire and beer

Woman:

Hey guys, that fire is about to jump the road.

Guy:

Need help?

Woman:

Yeah. Z_ called the fire department, but we need to make sure it don't jump the road.

Guy:

Hey Jones, how's your fire fighting skills?

Me:

Never done it, but I'll come along.

When I got out of the truck I took the time to look around carefully, noting where people were and where there was smoke and flame and survey the terrain. A safety check. My friends went to consult someone they knew raking at the burning grass near the road. The consensus was that the fire would only cross the road if the wind picked up and at the moment no ones house was in danger. More importantly, did anyone bring beer? There is only the one here and it's warm.

Another pickup truck arrived with an assortment of shovels and rakes in the back. The tools were handed out but no one moved to the fire. "Good thing you brought these" someone quipped, "we didn't have anything to lean on. Did you bring any beer?"

Another pickup truck arrived. The driver leaned out the window and joked "Typical goddamn Montana fire crew. Standing in the road and bullshitting. I'm surprised you aren't drinking beer."

The next half hour went much like that. People arriving, leaning on shovels, chatting up their neighbors, occasionally glancing at the fire and complaining about the lack of beer. When the fire truck arrived and men with yellow shirts and hard hats started surveying the scene it was apparent that they had not brought beer either. The tools were returned to the pickup trucks and the gathering broke up.

She:

How long have you been in Montana?

Me:

About three years.

She:

Does it surprise you how obsessed with beer everyone is?

Me:

No. I'm not surprised. I picked up on the beer culture real quick after moving here.

Labels: Beer, conversation, culture, fire, neighbors

Posted by: Montana Jones / 8:15 AM 1 comments

Ephemera

Labels: credit, credit card, ephemera, junk mail

Posted by: Montana Jones / 8:44 PM 0 comments

Vice President

She:

Wait, I don't get it. Don't you have to be a shareholder to be a director?

Lawyer:

No. You have to be a shareholder to vote for the directors, but a director does not have to be a shareholder.

She:

So we can put Jones on the board of directors?

Lawyer:

Yes. In fact you have to do either that, or elect someone else, or amend the corporate bylaws so that there are only two directors. You will have to do one of those at this meeting.

Me:

Just one question? What does a director do? What are the responsibilities?

He:

Not much. The directors just tell others what to do.

Lawyer:

The board of directors will set the direction for the company. They will approve requisitions and purchases and so forth. Legally they will have the right to speak for the company, like in securing a bank loan or some such thing, a director can sign those documents.

He:

Mostly they just appoint officers and employees to do the actual work.

Me:

So the board of directors basically sits around and thinks big thoughts, then tells everyone else what to do.

He:

You got it.

Lawyer:

The directors will also vote for officers, which your company needs three; a president, a vice president and a secretary/treasurer.

He:

Sounds like a summer club house where the kids get together and say "Hey I'm gonna be president and you be vice president and we aren't gonna let girls join."

Lawyer:

Yeah, it's a lot like that only with more money involved. So how do you want to arrange officers?

She:

Well, I'm happy with how you have handled the secretary/treasurer bit, why don't you just keep that up.

He:

Okay.

Lawyer:

So who gets president and vice president?

Me:

You have seniority, you be president.

She:

Okay.

Me:

Wait. What does the president and vice president do?

Lawyer:

Mainly the president will run the meetings and the vice president will take over in the presidents' absence. The officers also have some powers, you will have the ability to call a meeting of the directors.

Me:

So I can call you guys together if I ever want to show off how many Jell-O shots I can do?

Lawyer:

Yep.

Me:

Sweet! I'm in.

Lawyer:

Congratulations on your appointment Mr. Vice President.

Me:

Thanks. Do I get a special hat or a cookie or something?

Labels: business, conversation, corporation, director, lawyer, meeting, money, shareholder, vice president

Posted by: Montana Jones / 12:19 PM 0 comments

Hiring

He:

So are you one of those that hire all the Russian kids?

Me:

No that's the ski resort. It's less paperwork to hire domestically so I prefer that, but I will hire foreigners if I have to.

He:

Why do they have to do that?

Me:

Because Americans are not taking the jobs. I have been recruiting up a storm for the past couple months and I don't have enough applications right now.

Labels: conversation, employees, Employment, foreign, jobs, paperwork

Posted by: Montana Jones / 8:41 AM 1 comments

Presidents Day

Dear George,

Happy Presidents Day! Well here we are at your last ever Presidents Day. Next year you will have to give the holiday to the next guy (or gal). Don't feel too bad about that, giving up your own holiday is not so bad. After you retire every day will be a holiday. Just think of all the time that you are going to spend on the golf course next year. I know that golf is not nearly as exciting as landing fighter jets on aircraft carriers and telling the generals how to fight wars and spending time in the dungeons torturing people, but you can't be president forever. At least now the secret service might let you go hunting with Dick Cheney again.

You have left the next president with some pretty big shoes to fill when it comes to this holiday. I think that most presidents would have been cool with a backyard barbecue, possibly a ski trip. But not you; your Presidents Day celebrations had some serious festivities going on. Like games of hide and seek with weapons of freakin' mass destruction. Woot! No small stakes party games for you. There is no way a democratic panzy president can top that. What are they going to play? Find the tree hugger in the forest? They probably won't even let you use clearcutting.

I know you don't like to make your Presidents Day celebrations all that big of a deal. I'm guessing that is why you give so many people the day off along with you. That way everyone is busy enjoying their own ski trip or barbecue and don't pay so much attention to what you are up to. Good thing too, all those poor people and newspaper reporters raised an awful stink when no one found those WMD's. Sheesh. Just because they didn't find the big prize is no reason to get their panties in a twist.

So what are you planning for this year? For your last Presidents Day holiday are you going to have a big blow out with games of pin the terrorist to the waterboard and playing nuclear chicken with Iran? Or do you have in mind a quieter celebration with a few of your close oil buddies swimming in a big pool of money?

Whichever it is, I'm gonna miss your larger than life style. You have inspired me to live as if there will be no consequences. Enjoy your holiday.

Montana Jones

Labels: holiday, party, president, presidents day, retire

Posted by: Montana Jones / 9:05 AM 0 comments

Things I have learned volunteering at the food bank

• You can usually get a little more if you just ask.
• You can also get toothpaste, soap, diapers, deodorant, tampons and other stuff. But you have to ask.
• Muffins tend to be more popular than doughnuts.
• It feels good to give someone something extra that they did not ask for.
• It is easier to give and to receive when you smile, are courteous, friendly and say thank you.
• Most of the volunteers are retirees that need something to do, teenagers, or people that have used the food bank and want to give back.
• In general, rich people tend to donate money, poor people give time and money, and middle class people donate food.
• Some people have no qualms about donating food that they would not eat themselves.
• I was surprised at how much meat is given out and how little rice and potatoes.
• There is little to no effort put into choosing healthy foods. At the food bank edible is more important than healthy.
• It is frightening how many people don't understand that dented canned goods can be dangerous.
• It would be political suicide for the health department to audit the food bank. They don't go near the place.
• The food bank is very clean anyway. Volunteers are constantly cleaning, raw foods are handled with gloves and there is easy access to hand sanitizer everywhere.
• People with new and expensive clothing do use the food bank, but I have never seen the same person twice. People with worn and cheap clothing are the repeat customers.
• Creating more rules and regulations with the intent to deter people abusing the system will stop some of the abuse. It will also stop some of the people that need help.
• People that think the world owes them something are more likely to need a handout.
• Some of the people that think the world owes them something don't need the handout, but they take it anyway.

Labels: charity, donation, food, food bank, health, learning, list, observations, volunteer

Posted by: Montana Jones / 9:40 AM 0 comments

Google mojo

Does anyone know how to do a Google search (or any other search engine for that matter) that will return a list of colleges and universities that begin fall classes in September?

I have pulled out every bit of Google mojo I know and I can't find what I am looking for.

I even tried using a SQL statement.

Your search - SELECT "Acedemic Calendar" FROM "United states colleges and Universities" WHERE "Fall Classes Begin" > "September 12, 2008" - did not match any documents.

Labels: college, google, question, schedule, school, search, SQL, university

Posted by: Montana Jones / 10:59 AM 5 comments

It's the economy...

He:

you know the big media outlets. ABC, NBC, FOX, CBS, and so on. You know those guys.

Me:

Yeah.

He:

Well, they have successfully predicted 40 of the last two recessions.

He:

The mortgage crisis is not dying off, it is only going to get worse. You know all those international investors that bought the subprime mortgages, well, they are going to start suing. They were sold unsecured loans as though they were secure loans. They are going to sue the middle men banks to get their money back. These banks are going to get screwed from defaulted home loans on one side and get screwed by lawsuits from international investors on the other. There are some banks that will not exist anymore in a year.

He:

Keep an eye on the real estate markets this year. Around June things will start shaking out and it might be a good time to buy that house you want.

Me:

I have been watching. I was doing a search last night in fact. I am starting to see the cracks in the ice. Six months ago I was seeing the $600,000 houses drop price to $500,000.

He:

Big woopty.

Me:

Yeah, not very useful. But just now in the past couple weeks I have started seeing the $250,000 house drop to $200,000. There are even a handful for less than $200,000 come onto the market. We might just see the starter houses become affordable again this year.

He:

That is what we need. Get those $250,000 houses back down to $175,000 and people might be able to afford to live here again.

He:

I can't believe how short peoples memories are. I still remember what happened right after Vietnam. The economy was in the shitter. LBJ spent all our money in Vietnam and there was nothing left for ourselves. The same thing is happening in Iraq.

Me:

Only more so.

He:

Yeah, more so. George is throwing money away in spades. Do you remember what happened back in the 70s? Back in 1978 and 1979?

Me:

Not much economically. The word stagflation comes to mind.

He:

In 1979 the interest rate was 16%. No one could borrow any money without these incredible fees on it. The government had to do it, they had to charge these huge interest rates to try to make back some of the money that was thrown away in Vietnam.

He:

I'm starting to change my mind about switching banks?

Me:

Oh?

He:

The big question right now is which banks are going to still be here in a year. Ever wonder how Glacier Bank got so big so fast? I bet they were dealing in those shady loans. If so, they are going to take it hard too. So I want to wait and figure out who is going to buy out whom and which banks will be left standing in a year.

Labels: affordable, bank, conversation, economy, mortgage, real estate, recession

Posted by: Montana Jones / 9:07 AM 0 comments

Complacent

I have been three years in Montana. Three years in this apartment. The clutter stands as testament. That pile of consumed magazines has changed from a good intention to recycle to the spot that I toss the next magazine; and in my minds eye it is invisible. Along with the dusty crud on the floor by the fridge and the piles of office work and the piles of printer cartridges. It's like my home has become stale. Even the view out my window feels tired.

Part of it is the winter doldrums. That malaise that comes across me this time of year when it is dark and cold all the time and nothing sounds good. Another part of it is complacency. Three years in the same home is 1095 days and counting. When I moved in I had big plans, buying furniture, self improvement, lofty goals. Eleven hundred days later and I still don't have a couch or a bookshelf.

Complacency is not mustering the enthusiasm to recognize what I learned today. Complacency is not bothering to try a new recipe for dinner. Complacency is keeping all my books in boxes. Complacency is forgetting to notice when the world around me changes. Complacency is when I forget to enjoy my good deeds and just do them out of habit. Complacency is the dead bugs on the windowsill that I will deal with when spring comes or when I get that new vacuum cleaner or when I realize that they have been there for a fucking year and a half. Complacency is going through the same motions as last year.

Life is not bad. Things are going well in fact. I have just become complacent.

Labels: complacent, enthusiasm, furniture, ramble, winter

Posted by: Montana Jones / 10:14 AM 0 comments