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Category: Business

SLOW BURN HIGH RETURN

 

IMPORTANCE OF MAINTAINING A LONG-TERM PERSPECTIVE

As a business attorney, one of the errors I often see a fledgling business commit is to focus their entire business model on achieving instant success.   In other words, the business becomes too focused on the one large client, opportunity, product, or other action that will lead to quick success and profitability.   Very similar to a gambler, the business is constantly looking for the “big payday.”   Also, very similar to a gambler, that big payday for the business rarely comes.    Instead, the business languishes and eventually fails.

From my practical experience, I rarely have seen a business be able to survive in the long-term with the instant success perspective.   Instead, most businesses arrive at success and survivability through a series of small actions taken over time.   This is a more organic approach where small actions slowly build up a critical mass that acts as a catalyst for sustained success.   It is what is often called the “slow burn, high return” approach.

“Overnight success” never occurs overnight.   Instead, it is long-term planning, preparation, and work that leads to success.  New businesses often miss the opportunities that come from this long-term approach.   In fact, the business often loses out on long term relationships with clients, customers, or others because its leaders are looking for quick success.   As such, they are losing out on long-term profitability.

My suggestion to individuals starting a new business is to look for potential business relationships that will foster a long-term approach.   For example, it may be a potential client, customer, or business partner that does not immediately need your product or services.   Instead of parting ways never to communicate with each other again, agree to stay in touch.   These communications over time, will often lead to a change of circumstances where you will be able to assist this potential client, customer, or business partner at some future date.   Oftentimes, it may be a referral by this individual or entity that does not need what you can offer, but a relationship has developed sufficiently over time where an entity is comfortable in its recommendation of your business.

Just as a business should foster these long-term relationships, business owners need to keep in mind that they will often be approached by individuals or businesses looking for that big payday.    Avoid relationships with these individuals or businesses because, like a traveling salesperson of old, it could be here today, but gone tomorrow.    You do not want to be the individual holding the bag when the dust settles.

Long-term success is more of a marathon than a sprint.   A successful business must focus its primary attention on the long-term approach.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

Unnecessary Sacrifices

 

In the current fast-paced world of business where communication is nearly instantaneous with the push of a button and where decisions need to be made quickly, I have often observed businesses languishing on the sidelines.   The businesses are not languishing because they have a poor product, non-competitive pricing structure, bad employees, or any of the other typical reasons why businesses cannot compete and succeed.   Instead, it is because they are not making the right decisions fast enough in today’s market environment.

When I have spoken to businesses and their respective owners, especially those who are languishing on a decision to be made, I often use the quote “you are sacrificing ‘very good’ and ‘great’ on the altar of ‘perfection.’”

What is the intent of this quote?   It is to place in the forefront what I have often observed.   There are many businesses and individuals with great ideas that could lead to success.    However, the idea makers are unwilling to commit to and move forward with their idea because it is not “perfect.”  As such, they then spend an inordinate amount of time and resources (financial, mental, labor etc. . . ) attempting to “perfect” the idea.  Consequently, their idea often never reaches the level of perfection they envision.   In their attempt to find  perfection from their perspective, the great idea is lost or delayed to the point where it is no longer useful.   A great idea that would have led to success, profitability, and increased business which could have continued to revise as circumstances dictated has now become worthless.   This scenario is a form of indecisiveness or “analysis paralysis” that I have discussed in previous articles.

One example of this situation I observed as a college student.   I had a classmate that I often interacted with because we had similar class schedules due to our respective majors.   He was very smart, achieved high grades, and was full of ideas.   One “idea” for a business concept that he discussed on a regular basis was creating a company where businesses use this new thing called the “Internet” to have a platform to perform software and other functions that a business would not have the ability or resources to organize themselves.   Essentially, almost 25 years ago, he was describing businesses utilizing a cloud network to provide software services.

It was a brilliant idea.   He talked about it regularly.   Unfortunately, it went nowhere past talk.    Why did it stall?   One reason why is that he was unable to get past the talk stage.   For example, when he would discuss this concept, he would often talk about developing a “mission statement” that he wanted his company to follow.   He believed this mission statement would be the catalyst to lead the company, and the employees, to success.   He spent a considerable amount of time developing this statement.   From semester to semester when I would review his statement there would be little change–a different word choice here, minor punctuation change somewhere else.   Unfortunately, at the end the day, his idea never moved beyond his search for the perfect mission statement.

Businesses and their respective leaders need to avoid the perpetual search for perfection which leads to nothing of value.   Do not delay and sacrifice potentially successful ideas in the elusive pursuit of perfection.  Sometimes having only an idea that is “good enough” is exactly that–good enough to be successful.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

A Small-Town Mechanic’s Wisdom

 

I was raised in a small city with a population of less than 15,000.   For most of my childhood, it was literally a “one stoplight town” that had eventually graduated to three by the time I left for college.   Growing up in a small town certainly has advantages and disadvantages.   One advantage is that a small town is often populated by unique individuals that you would never meet in the busyness of a large city.   These individuals, through tough times and personal experiences, have developed a common-sense perspective often missing today.

One group of individuals I remember who possessed this common-sense perspective were the owners and mechanics at a local gas station.   It was a Cononco station in an older building consisting of two sets of gas pumps (one full service and one self-serve) and two mechanic’s bays to maintain and repair automobiles.   It was my grandfather and father’s service station of choice because they trusted the mechanics and owners.  I remember as a child sitting in the chairs in the waiting area, which was also the office, cash register, old soda vending machine, and shelves to display oil cans and promotional materials.   While waiting for the oil change or other repair work on our vehicles to be completed, I noticed that it was often a stopping place for old-timers in the town who would purchase gas, a soda from the vending machine, and stay and talk for a while.

The desk in the office/waiting room included the service paperwork and cash register as well as pictures, stickers, and plaques.   Most of these consisted of humorous sayings about fishing, hunting, and cars.   One that I remember to this day was a plaque that simply stated:

Pay me a little right now

Or pay me a lot more later

This not-so-subtle statement was to highlight the importance of preventative maintenance from a car mechanic’s perspective.   They knew that keeping the car up to date on minor service and repairs (e.g., oil changes, tire rotations, filter replacements, etc. . . ) prevented the major car repairs from occurring.    In essence, paying the few dollars on occasion prevented the larger, unexpected, and unmanageable bill from ever occurring.   Through years of experience and multiple examples, the mechanics understood this fundamental truth.

I have often observed business owners not recognizing this fundamental truth.   Businesses and their respective leaders often either ignore and consistently choose not to perform this “preventive maintenance” on their business.   They justify their decision because it is a low priority or to save a little bit on the bottom line.   Rarely, if ever, does this approach benefit the business in the long-run.   Instead this approach eventually leads to events that jeopardize the long-term health and survivability of the company.

I often see this behavior when business leaders choose not to perform basic legal preventative maintenance.   Preventative legal maintenance for businesses includes areas such as, updating pre-existing contracts, modernizing employee policies and manuals, keeping abreast of new laws and regulations, the initial negotiation/development of new agreements, and the review and drafting of new contracts between parties.   In these circumstances, these business leaders/owners place legal maintenance at a low priority.  They assume that the status quo will continue to work, what they have now is sufficient, they can independently draft or negotiate the agreements on their own, and/or the legal work would be expensive.   Unfortunately, it is usually only a matter of time until this lack of proactive maintenance leads to a major legal dispute, complaint, or litigation that has the potential to lead to the ruin of the company.  Once a dispute has reached this stage, the legal costs of correcting the issue or defending the corporation in the dispute is now exponentially more expensive than the preventative legal maintenance costs would have been.

In that way both an attorney and mechanic’s approach is the same.   We do not want to see a business breakdown occur that could cost substantial fees, costs, and expenses to correct.   As an attorney representing clients, I will always prefer and recommend that regular legal maintenance occur.  The costs are substantially less than the alternative and it better protects the client when an unforeseen event occurs.

© 2017 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

 

THE IMPORTANCE OF A COMMON NARRATIVE

 

As a business attorney, I am typically involved in legal issues involving corporations and those who create and own them.    During my several years in practice, I have observed both successes and failures.   A question I have often though is “what is the formula that makes a group/business succeed where others have failed?”   Is there a secret ingredient that runs through individuals, groups, or businesses (large or small) that binds people to work together to achieve a successful end?

What makes some individuals, families, or groups of people effective, resilient, and happy?   Why are certain people or businesses able to overcome obstacles, challenges, and succeed when others have easily failed?  What are the proven counters to the forces that want to tear apart and how does one prevent entropy/apathy that often occurs? 

Researchers and business experts have been studying this question for over 25 years.   They have arrived at a few specific conclusions.  The research has universally arrived at the determination that the single most important element for a family, group, or business to counter the effects of the natural world may be the simplest action of all—the development of a narrative.

What is a narrative?   In basic terms, a narrative is a common history that a family/group shares.   The narrative describes who they are, where they came from, and what is important to them.   The narrative demonstrates what they are made of and highlights that one can navigate extremely difficult obstacles and survive (even succeed) because others before them have faced almost impossible obstacles and still could overcome.    Those with a common narrative are better able see beyond themselves and (because of their ability to do so) develop a core strength.

Researchers have demonstrated in multiple evaluations and interviews that people and groups who have a strong narrative fare better when challenges come because they have an “polar star” to guide them and an “anchor” when confronted by a serious problem or event.   A “polar star” is found in examples of a family or group’s shared history where individuals can see the successes of their predecessors and model their own lives by them.   An anchor is the ability, when difficult challenges arrive, which allows the individual or group to point to challenges that others have faced in the past as examples of how “this too shall pass.”   Therefore, these individuals and corporations are more positive and develop a resiliency to face problems head on.

Some of the early research in this area involved children and was later expanded to larger groups.   The observations made of the children demonstrated that the stronger the child‘s narrative and family history, that he or she had a stronger sense of control over their individual lives.    They develop a “strong inter-generational self” because they realize that they belonged to something larger than themselves.  As a result, they had higher self-esteem and believed that themselves and their family would be able to overcome the problems they faced.   The children became more resilient because they were part of something bigger than themselves.

When September 11th happened, the researchers returned to the children they had observed previously who lived in the area of the tragedy, who had witnessed the events, and many had family members affected by those events.   After this very traumatic incident, the researchers directly observed the ability of the children to cope was a direct result of those who had a narrative and those who did not.

The fundamental conclusion is this:  If you want to have a successful family, group, business environment, or corporation, there must be a clear telling and retelling of a narrative of both positive elements and the ability to bounce back from difficult ones.

How can concept apply in business?   When a group of individuals comes together for a common goal and purpose (such as working for a company), they are usually more effective in good times, adapt when changes occur and are resilient when negative.    A common goal is often described by utilizing a common narrative that everyone can understand and, in most circumstances, relate to.

The history of Harley-Davidson motorcycles is an excellent example of a corporate narrative.   The beginning of Harley-Davidson is a story of middle-America with William Harley and William Davidson developing and manufacturing their first motorcycles in a 10 x 15 wooden backyard shed.   It demonstrates the independent and inventive nature of the company, which most of its riders share.  It also helped in the development of a brand based on customer loyalty. 

The narrative is seen throughout the corporation.   The history is prevalent in their retail stores with displays concerning its founding, pictures of the shed, and classic motorcycles throughout the stores.  The black color, the logo, and font utilized in its early days continue be reflected throughout their products.   The look and style of their motorcycles also point to their past.   They are not just building and selling motorcycles to travel from point A to point B.    Instead they are building a brand that can be recognized and lore that is passed to future generations.

Through its various ownership changes, corporate restructuring, recessions, the Great Depression, and when times seemed bleak for the company, it often fell back on its narrative to keep in business.  In basic terms, the success of the company is based on the success of its narrative.

 I would suggest you take some time and think about your narrative.   What makes you and your business unique?   What can you point to that can become a foundation for success.   Developing a narrative will provide a north star for guidance in times of growth and success and an anchor for stability in times of difficulty.

© 2016 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.

Why Not? A Thanksgiving Business Story

 

From my experience representing companies and business owners, I often observe general themes that all successful businesses possess.    It does not matter the type of business, whether is started in a garage or with investors, or the actual business experience the owners hold.   Often a successful origin of a business begins with the question “why not?”   

Successful businesses are usually started as a solution to a specific problem.   Often when individuals see problems or issues that they determine  are insurmountable or unassailable, they give up, move on to something else, or decide to travel an apparently easier path.   Whether the problem is technical, scientific, or more general in nature, this mental barrier prevents progress.

The difference is that a successful businessperson sees a problem and reacts to it differently.   Instead of giving up, they ask “why not?”   “Why can’t the problem be solved?”   “There must be a way to overcome this problem.”   “What if we try this approach instead?”   “What if we think of the problem from a different perspective?”   Many successful businesses have been created out of attempts to answer these basic questions.

In fact, history is filled with examples of successful individuals and businesses with this “why not” outlook.    A quote by Thomas Edison highlights this attitude:

I have not failed 10,000 times.   I have not failed once.   I have succeeded in proving that those 10,000 ways will not work.   When I have eliminated the ways that will not work, I will find the way that will work.

A successful person does not see a barrier.   Instead, they see a problem that can be solved—the solution has just not yet been discovered.   Instead of an obstacle, they see an opportunity.

I am reminded of one example of this approach around Thanksgiving.   It involves a children’s book and an idea based on “why not?”    When I was young, my favorite Thanksgiving book was Cranberry Thanksgiving by Wende and Harry Devlin.   It is story about Thanksgiving dinner at grandma’s house, a handsome and charismatic stranger, and the uninvited and unsavory guest, Mr. Whiskers.   Grandma’s famous and secret cranberry bread recipe is in danger of being stolen, but is saved by an unlikely hero.    I still can picture the book being read to me in school as I made turkeys with the shape of my hand.   It always brings back fun childhood memories and was a favorite of my younger sisters and brother as well.

Years passed and my eldest child was born.   For his first Thanksgiving, I began my search to purchase a copy of this book.   Unfortunately, I quickly discovered that the book was out of print, the Devlins had passed away, and Cranberry Thanksgiving had been out of the market for several years.   In my search for the book, I found used copies of Cranberry Thanksgiving being sold for up to $150-$200 apiece.   These copies were being snatched up by parents, similar to myself, who wanted to share their favorite childhood books with their own children.

Where I saw a barrier to purchasing a cherished childhood book and memory, Jill Morgan saw a business opportunity.   She had a similar experience to mine when she attempted to locate her favorite children’s book to read to her own children.   Instead of moving on, she asked “why can’t these good children’s books be published and find new homes?”   With that question fresh in her mind she founded Purple House Press whose mission it is to locate and publish children’s books that have been out of print and lost to time.   With this purpose in mind, Purple House Press tracked down copyright holders to classic no longer published children’s books, usually by communicating with authors who had long-retired or the spouses and children of the deceased authors and illustrators.   After obtaining the appropriate rights, Purple House Press would republish and sell these books at a fraction of the cost for which the used copies were being sold on auction sites.  

The authors and illustrators (and/or their families) were happy that their books could find a new audience.  Parents were also happy that they could share their favorite books and memories with their own children.   The Purple House Press approach has been a success and attracted positive publicity from major publications and news organizations as lost children’s books are being rediscovered by a new generation of young readers.  As a result, Purple House Press has sold well-over 500,000 books and publishes several rediscovered books a year.  Where others saw a barrier or no solution, someone else saw an opportunity.   Success then followed.

One of the books republished a few years ago by Purple House Press was Cranberry Thanksgiving.   I eagerly purchased multiple copies and presented them to my siblings.   Now this beloved childhood story is being read by the next generation of my family members each Thanksgiving.

cranberrybooks2

This Thanksgiving I propose that you take a problem or issue that has been a barrier to your business.   Then, say to yourself “why not” and view the problem from a different perspective.    You will be surprised with the results. 

© 2016 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved

This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.