Lessons learned

I have started two businesses, a large restaurant and a computer services firm.  The first was successful and the second wasn’t.  Both were tremendously challenging.

While I learned a lot from each business, most of what I learned came from my failed business.  Here’s a laundry list of those learnings:

• Manage cash flow
• Pick great people
• The buck stops with me
• Most people want to be led
• Not everone wants to be an owner
• It doesn’t need to be perfect
• Negotiate well
• There are dishonest people out there, my gut is right most of the time
• Never know what will happen if you ask
• Find effective and interested mentors
• Do what you love and the money will follow
• You can make money doing anything
• Make a plan
• Financial projections are just that, projections
• Understand financial statements
• Hire slowly, fire quickly
• Competition is good
• A day spent on competitive research is not a day wasted
• Don’t lose focus on your own business
• Being scared is okay
• Hire a good accountant
• Find a trusted advisor
• Treat critical feedback as a gift
• Persistence pays
• An “A” team is more important than an “A” idea
• Ideas are meaningless if you can’t execute
• You don’t have to have a professional skill
• Entrepreneurship is a lot of work….and a lot of fun
• People are self interested
• It is not that hard to be exceptional
• Make raving fans out of your customers – they’ll sell you
• Help your staff accomplish their personal and professional goals
• Have wide open lines of communication
• It’s okay to tell your team how the company is doing
• Communicate early, often and honestly
• It’s okay to ask for help

This list is only a very partial list.  Had I known some of these things before I started my second business, I’m convinced it would have been a successful company (in fact, had I known these things, particularly the “do what you love” piece, I would never have started my second company).

As I go through the process of finding my next opportunity, I keep these things top of mind.  In fact, I’ve turned down at least two business opportunities as a direct result of some of these learnings.  Now the trick is to make sure I don’t miss the “right” opportunity because of this learning!

Bush to Nation Building is like Obama to Light Touch

George Bush was often maligned for his “I’m not interested in nation building” comment in the 2000 election. He couldn’t foresee the 9/11 attacks and, unfortunately for him, he had to deal with the aftermath.

In today’s Wall Street Journal Barack Obama is quoted as saying, “I actually would like to see a relatively light touch when it comes to the government”. This from a man who is presiding over one of the largest expansions in US government, including effecting a 60% equity position in what was once a bastion of American capitalism.

Many armchair quarterbacks accuse politicians of double speak, speaking out of two sides of their mouths and lying. I’m sure some politicians do lie, (one can find a liar in any profession). But in many cases, elected officials are doing what they think is right in the face new circumstances and data. This is reality. Bush’s reality was the 9/11 attacks and Obama’s reality, while predicted, is the very serious economic downturn.

For a variety of reasons, I don’t agree with much of Obama’s approach. I think my generation is going to be paying dearly for it during our peak earnings years and thereafter. Nonetheless, I express my admiration for both Bush and Obama for having to deal with exceptional circumstances facing their presidencies.

Here’s a link to the WSJ piece: http://tinyurl.com/n9psba

I am dumbfounded

In a recent Globe & Mail piece it was written that a group plans to approach government for public funds in support of a new mosque in BC’s northern community of Prince George. Cultural diversity is part of Canada’s fabric and I have no issue with the concept of building a mosque.

The issue I have is with a point made in the article that the case being made for public funding is supported, at least in part, on the basis that Prince George is losing professionals, such as surgeons, because of the absence of a mosque. The article goes on to indicate that the belief is that, if a mosque is built, Prince George will recruit and retain more surgeons. Special reference is made to a plastic surgeon who decided to move to Ontario and an orthopedic surgeon who chose the U.K. over Prince George. In both cases the article infers that this was strictly because Prince George didn’t have a mosque.

This is pure folly and shows how out of touch the policy makers are with what is really going on with recruitment and retention of surgeons in the Prince George community. Those of you who know me well also understand those issues well.

The matter of recruiting and, more importantly, retaining doctors in Prince George has about as much to do with a mosque as it does to do with the US government’s investment in General Motors.

If you’re interested, take a look at the article and draw your own conclusions. I have linked it below:

http://tinyurl.com/n737z8

A bit of fun

Rebecca and I purchased a ten week old Wheaten Terrier puppy late last year.  Cobalt (dba “Coby”)  has been an excellent addition to our lives.  Yes, he’s a bit of work, particularly when he was less than six months old, but now that he’s into his groove it’s just great.

He sits, stays, shakes a paw, stays down and comes (most of time) when we call him.  We’re now working on keeping his attention when there are lots of distractions such as other dogs or people.

Now for the “bit of fun” part.  There’s an off leash dog park near our place in Vancouver where I try and take Coby to play at least once daily.  Generally speaking, he runs around for twenty or thirty minutes and burns off most of his pent up energy.  And, generally speaking, we get home with a clean dog and a clean Mark!  Not yesterday.

As evidenced in the photo below, Coby decided it would be a first rate idea to chase ducks through their swamp.  This translated into one puppy caked in thick goop.

It also translated into a thirty minute bath!

Tax freedom day

Here in Canada we work for the government for more than five months out of every year.  The Fraser Institute, one of Canada’s leading think tanks, has long published “Tax Freedom Day” which tells us Canadians how long we have to work each year in order to satisfy our tax burden to various levels of governments. 

That day is tomorrow in Canada (nice that it’s Saturday).  To commemorate this, FI created the following video, check it out:

The size of government

Regular readers of my blog will know that I am concerned that governments in the US and Canada are using the current economic malaise (and our associated fear) to temporarily increase the size of governments.  Of course, in this context, temporary is defined as permanent.

Here is one Opinion piece and one Comment piece from Canada`s National Post.  They`re both worth a read.

http://tinyurl.com/r6k663 

and

http://tinyurl.com/r2vcgc

No doubt, there is a role for government in society.  However, when I drive through downtown Vancouver and see prime downtown real estate owned by the federal government, I ask myself, “should a federal government be in the property devleopment and managment business?”  My answer to this is a resounding “no”.  

Governments, in my view, shouldn’t run surpluses, nor should they run deficits.   They should aim to have balanced budgets.  If there is an excess of revenues over expenses, return the cash to taxpayers in the form of reduced taxes.  If there is a surplus of expenses over revenues, reduce the size of government.

Unfortunately, governments drink their own kool-aid and believe in their own destiny to right society’s wrongs.  In areas like protecting our borders, extending a helping hand to those who truly need it, enforincing the rule of law are all areas where government can have a very positive impact.  

Owning and running gas companies, rail roads, real estate, airlines, insurance companies and power producers are not areas where government is best equipped to participate.

May 12, 2009 – a very important day in British Columbia’s history

I am volunteering on the current provincial election campaign in British Columbia. I decided to help out because I think this is likely the most important provincial election during my adult lifetime. For those of you who know me well, you know that I have been saying this for about a year now.

Tomorrow is election day in British Columbia and we have two choices. One takes us forward and the other takes us backward. One will ensure pragmatic management of our province’s finances, the other will squander them through populist leadership and ingrained special interests. One will expand upon eight years of rebuilding, re energizing, refocusing and re-establishing British Columbia as a leader in Canada.

I am a third generation British Columbian was born in Vancouver in 1973. I went to elementary and high school here and have attended both the University of British Columbia and Simon Fraser University. I’ve boated our entire coast and driven a lot of the province as well – as far north as Prince George and as far east as the Albertan border. I’ve worked in small business most of my life having owned two of my own. 

British Columbia is a great place – indeed, it is the best place on earth. I believe that fervently. 

The only time in my life when I felt I didn’t belong in my home province was in the 1990’s. It was a time when, for the first and only time in our province’s history, British Columbia became a have-not province – our real GDP per capita was $4040 less than Canada’s. It was a time when record deficits were run and our province’s debt load ballooned. It was a time when our income per capita was more than $500 less than Canada’s. And while we as taxpayers were making and keeping less of our own money, it was also a time when our money was squandered on pet projects like the BC Ferries fast cats. Those were dark days for BC.

Where are we now? 

1) We are in the grips of a worldwide recession. 
2) Our baby boomers are aging. The leading edge turned 62 in 2008 – that means they are going to start retiring, earning less income (and paying less tax) and consuming more services, particularly health care services. 
3) Our health care system is stressed.
4) Our universities are struggling under the pressures of deteriorating endowments from thew economic downturn. 
5) Our forestry sector, particularly in the northern region where Rebecca and I maintain a home, is dealing with the devastation of their crops with the mountain pine beetle infestation.

But with all this there is a sense of optimism. Notwithstanding our current pressures, British Columbians believe our future is bright. Why? In part, it’s because of the resilience of the people of our province. But I also believe it’s because our provincial government has managed our affairs well. 

When I look around and the see the kinds of capital projects our province has been able to undertake even in these difficult times I’m amazed. The Sea-to-Sky highway, the Olympic Oval, the new Skytrain infrastructure, the Port Mann bridge project and innumerable road and highway improvements all over BC (I know, I’ve driven it). We see a BC Ferry operation that has seen remarkable improvements (with boats delivered on time and well under-budget), a port in Port Alberni that is growing leaps and bounds, an airport in Prince George that now has one of longest runways in North America (allowing it bid for the valuable air freight traffic that currently stops in Alaska) and I could on.

With the current government we have leadership that understands there is “no such thing as government money” and we have leadership that has the experience and the track record in successfully managing through difficult economic circumstances.

These are my thoughts. The most important thing to me, though, is that you vote in tomorrow’s election. 

Exercise your franchise and make your choice!

The size of government

One of my greatest concerns about the current economic malaise has been that various levels of government will use our fear and uncertainty to ‘temporarily’ increase their spending.  Canada has been described as a beacon of fiscal management when compared with other developed nations.  I hope that we are able to maintain this moniker.

I append below a piece which appears in the Financial Post and challenges the assertion that more government spending is effective tonic for difficult economic times.

http://network.nationalpost.com/np/blogs/fpcomment/archive/2009/04/28/canada-s-advantage.aspx

My Hedgehog

Jim Collins writes about the “Hedgehog Concept” in his book titled Good to Great.  I’m over simplifying it, but he concludes that great organizations focus only on their Hedgehog and nothing else.

So, what is the Hedgehog Concept?  It suggests that individuals and organizations alike can succeed beyond their wildest expectations if they maintain laser focus only on where the following intersect

(1) Their passions.

(2) Their skills.

(3) Things that can make money.

I’m fortunate to belong a private monthly supper club comprised of what has become a personal board of directors for each of our members.  I asked our group to tell me what they thought my passions, skills and money making opportunities included.  It was a great exercise and, frankly, one that I think everyone should go through.  This is what they concluded:

My passions

 

• Looking at the big picture
• Advising
• Seeing things work
• Executing on my own dream as opposed to fulfilling someone else’s
• Politics
• Management
• Setting goals and measuring success against them
• Financial independence/flexibility
• Independence

 

My skills

 

• Managing and motivating people
• Developing strategy
• Relationship building
• Process
• Developing goals and driving to them
• Execution

 

Things I could make money doing

 

• Acting in an advisory capacity
• Starting a new business
• Buying a business
• Running a business 

 

Some of these are going to be correct and some are going to be incorrect.  But going through the exercise with impartial third parties who know me well was fascinating.  However, it doesn’t end here.  I plan on taking this back to the group and refining it into more specifics.  Running/buying/starting a new business could mean anything.  What kind of business?  How big?  Start up or part of the first management team?  In what area: technology, seniors care, tourism, the boat business (all areas that intrigue me)?  It’s a fun and fruitful exercise.

If you’re interested in learning more about the Hedgehog Concept then drop me a line.  I’m becoming a bit of an expert in it!

It’s all about me

I attended the University of British Columbia’s Commerce Undergraduate Society’s 2009 “Me Inc.” conference as a speaker this past Friday and, wow, what an impressive group of students and what a well run program.

The Me Inc. conference is organized by UBC’s commerce students for UBC’s commerce students (www.sauder.ubc.ca) and helps them to think about and research various career options available to them. Over the course of one day students can participate in various tracks including banking, finance, non-profit, entrepreneurship (my topic), real estate and others. Visit www.meinc2009.com to learn more.

They also organized a neat “power networking” session where speakers like me move from table to table over the course of lunch. It gave me an opportunity to meet and talk to far more students that I would have had otherwise. Hopefully the students found some value in it too!

By this post I send a hearty “congratulations” out to the organizers. They put together a topical, well run and effective conference. I only wish they were around when I was doing my degree at UBC!