October 20, 2020

Thinking Entrepreneur: What the President’s Job Plan Means to My Business

Thinking Entrepreneur

An owner’s dispatches from the front lines.

I am trying to decide when exactly small businesses became the official poster child of the latest economic disaster. This is a relatively new phenomenon, but it’s been building for a few years. Sometimes, the attention feels good. I didn’t know everyone cared! Sometimes it feels like pandering. I have a suspicion that some of the people who are always arguing that we will destroy small businesses if we raise income taxes on the wealthy don’t really care that much about small businesses, but it sounds noble.

Over the last 33 years, my business and I have been through numerous recessions, and this is the first time I have seen so much attention given to small businesses. It feels both flattering and insulting, comforting and unsettling, honest and disingenuous. Sometimes it feels like a mother talking about her troubled teenager. “He’s a good kid, just misunderstood.” For all the attention and good intentions and well-meaning efforts to help, I do think small businesses are often misunderstood.

Running a small business can be very simple and very complicated. The simple part is how to be successful. Deliver a good product or service, price it properly and learn how to market it effectively. The hard part is avoiding all of the pitfalls along the way. Even in the best of times, we small-business owners run into and create plenty of our own pitfalls, but these last three years have been a pitfallapolooza. Many business owners, including some I’ve known very well, have taken pay cuts, lost lots of money or gone out of business. Too many have done all three.

For a long time, many people didn’t seem to care or even notice. Then somebody proclaimed that small businesses are the engine of job growth in this country. All of a sudden, the spotlight is on helping small businesses recover so they can create jobs. Why aren’t we talking more about getting big businesses to hire more people. After all, I keep reading that big businesses have generally recuperated quite nicely, and many are making record profits. Oh, but they aren’t the engine of job growth. We need small businesses to do that.

Enter President Obama, with his jobs plan. Here’s my take on what I, as a small businessman, heard in his speech: He recognizes that the politics of Washington have made the problem worse. Good. He says he’s going to try to help people who are struggling with mortgage problems. That’s good, too. He knows that the solutions to these problems can’t wait until the 2012 election. That’s certainly true. He wants to close a few tax loopholes for big corporations. I think I could live with that. He wants to rebuild schools and roads and bridges. That’s probably a good idea. And he says he wants to cut more unnecessary spending. Hallelujah.

You hear a lot of people talking about how taxes and regulation are choking small businesses, but many of these people are always talking about taxes and regulation, regardless of whether the economy is good or bad. Right now, my picture-frame and home-furnishing businesses employ 110 people, and they have certainly felt the effects of the recession and the housing meltdown, but if I have a problem it’s not with taxes and regulation. It is that I don’t have enough customers with money to spend. That’s why the most important aspect of the president’s plan is that it would inject $450 billion into the economy.

At a time like this, it’s hard not to be a little nervous about the government spending that kind of money. I am not an economist, but it does appear that many economists think this kind of stimulus makes sense. I noticed that Paul Krugman, a liberal, and Mark Zandi, who was John McCain’s economic adviser, seem to like the plan. I know a lot of people think the last round of stimulus didn’t work, but I’m not so sure. Has everyone forgotten how bad things were? Does anyone know how much worse things might be? I used some of the stimulus tax breaks to free up cash in my business. I invested in new machines, and I hired new people, carefully. Obviously, unemployment is still way too high, but there has been improvement.

Still, there are a few details that concern me. Once again, I have the sense that not everyone in Washington understands how small businesses work. Part of the plan involves an across-the-board cut in payroll taxes, for employees and employers. I think that will help. It will get money into the system. Perhaps some of it will be spent on picture frames and home furnishings. That combined with the break on depreciation may well allow me, for example, to replace my incandescent light bulbs with LED bulbs, which could cost $50,000 but be far less expensive to operate. The tax breaks may also allow me to expand my market, which will result in my hiring more people. Mission accomplished.

There are additional tax breaks in the plan that are meant to encourage the hiring of new employees. An employer can get a $4,000 credit for hiring someone who has been unemployed for more than six months. It’s a little hard for me to imagine not feeling sympathy for people who fall into this category. There are additional breaks for hiring veterans, and I don’t know how anyone could oppose giving an advantage to someone who left the work force to go to war. And yet, I wonder if, in general, these kinds of targeted breaks really work. Or are they better politics than business.

I guess I would need to see more details, but I have my doubts. Will paying a bonus for the hiring of someone who has been out of work six months be fair to someone who has been out of work for only four months? What incentive does this offer a person who has been laid off for five months? Is this fair to an employer who managed to make it through the last three years with minimal layoffs, but now has to watch a competing company be rewarded for hiring back the people it let go? How long will the person have to remain employed for the employer to get the $4,000? There will probably be a whole industry started on how to game the system.

Rewarding someone for hiring is playing with nature. There really are only two possibilities: either you are rewarding employers to do something they would have done any way, or you are rewarding employers to do something they weren’t sure they wanted to do. Do you remember my comment about avoiding pitfalls? Bad hiring decisions rate right up there with the most serious. A business should hire because of demand, not because of an incentive. Think about this: If a kid’s father offered you $4,000 to hire his kid, would that have any bearing on your decision? Of course not. Why should it be any different if the money comes from the government?

Some people suggest that this credit might help if a business owner is “on the fence” about hiring someone. Here is what I have learned: If you are on the fence about hiring someone, DON’T. Get off the fence. Call more references, interview the person again, make sure you really need someone. Hiring is serious business. If it turns out that you don’t really need someone, you eventually will have to lay off this person. You will be the bad guy, the responsible guy, the guy who pays all of the unemployment insurance. You will have done no one any good. An incentive to hire might not be an oxymoron, but the word moron may enter the equation. Sorry. It has been a long three years.

So, yes, the incentives to hire new employees make me nervous. If we’re going to inject money into the system, I’d much prefer to do it across the board. Don’t try to pick winners. Don’t play with nature, especially human nature. But maybe this is just politics. Maybe this is the price we have to pay to get the boost that the president’s plan offers. I don’t know – and I don’t want to know – the politics.

On balance, I hope the plan passes. But I think I liked things better when small businesses were ignored but did well. This too shall pass.

Jay Goltz owns five small businesses in Chicago.

Article source: http://feeds.nytimes.com/click.phdo?i=f1481a7ded27b279f6825f7ed4aa8682

President of HBO Sports Leaving After 33 Years

Ross Greenburg, who has run HBO Sports since 2000, is leaving the network after 33 years, saying he is fatigued by his work on its boxing business.

He said he was not renewing his contract and was not being dismissed.

“I’ve accomplished everything I hoped for,” he said in a telephone interview.

He denied reports that he was fired for losing Manny Pacquiao, one of HBO’s strongest pay-per-view stars, to Showtime for his fight on May 7 against Shane Mosley.

“That’s a silly rationale,” he said. “That added to my angst, but one fight doesn’t determine whether I stayed or didn’t stay.

“I lived through the loss of Chavez and Tyson,” he said, referring to Julio Cesar Chavez and Mike Tyson, and he added: “I’ve been through a lot of wearing negotiations. I spent a lot of time appeasing promoters and managers.”

He said that he was not renewing his contract, which was expiring soon, and that he had been thinking of leaving HBO for the last three months.

But one promoter, who spoke on condition of anonymity to avoid losing business with HBO, said: “He was absolutely fired. The guy’s been twisting in the wind for months. They’ve been looking for a replacement.”

Richard Plepler, the co-president of HBO, and Michael Lombardo, the president of HBO programming, said in a statement that Greenburg “helped redefine the sports programming genre and set an extraordinary standard of excellence in the industry.”

Greenburg, 56, became the executive producer of HBO Sports in 1985 and followed Seth Abraham as its president 11 years ago. Greenburg created the “Real Sports,” “24/7” and “Hard Knocks” series, and he oversaw production of dozens of documentaries.

His last deal for HBO was a collaboration with Major League Baseball Productions on a documentary about Derek Jeter’s 3,000th hit, to be shown soon.

Greenburg has won 51 Sports Emmys and 8 Peabody Awards.

“That’s who I am,” he said, referring to programming other than boxing matches. “I create programming that makes people laugh and cry.”

Greenburg said that the toll of dealing with promoters and managers made him want to leave. One promoter in particular, Bob Arum, has criticized HBO and Greenburg, saying they exert too much control over boxing and do not make the most competitive matchups.

Arum’s displeasure with HBO led Pacquiao, whom he promotes, to fight on Showtime Pay-Per-View, which got a marketing assist from CBS’s heavy promotion. “The problem HBO Sports got into,” Arum said in May, “is they became defenders of the status quo.”

The bout generated a reported 1.3 million to 1.4 million pay-per-view purchases.

Greenburg would not discuss Arum or his criticism.

“I love the sport; I grew up in it,” Greenburg said. “We made the sport relevant when people thought it was dying.” He cited HBO’s productions of Pacquiao, Floyd Mayweather and Oscar De La Hoya’s bouts as having helped to breathe life into boxing.

Article source: http://feeds.nytimes.com/click.phdo?i=b3bd517e1946b97db6ddcacfc8f0a9aa

You’re the Boss: A Plan for Working on (Not in) the Business

Thinking Entrepreneur

Lots of business owners wish they could be less involved in the day-to-day operations of their businesses (see “It’s Never the Employee“). When you have 10 or even 20 employees, you can be intimately involved in all aspects of the business from sales to finance to operations to purchasing. But if you want the company to grow and perhaps get to that elusive “next level” everyone’s always talking about, you have to build an organization that can get the job done without you managing every detail.

Over the last 33 years, I have gone from running my business with one employee to five, 10, 20, 50 and now 105. For many years I felt like the old-time entertainers who would spin dinner plates on poles, running from one to another as the plates started to slow down and wobble. For me, it wasn’t entertaining at all. It was stressful, it was frustrating and it was exhausting.

Today, I have an organization, and I have less stress and aggravation with 105 employees than when I had 10. It has allowed me to work on marketing, new business opportunities, this blog or absolutely nothing (which I don’t do often). Below are what I believe to be the issues that must be hurdled to make the transition from doer to manager to executive. Naturally, surmounting these hurdles is easier said than done and can take years to accomplish. This list does not have all of the answers but should at least provide you with the right questions to ask yourself.

1. You. You really have to want to get out from under the day-to-day. It requires getting out of your comfort zone, learning new things, and unlearning old habits.

2. Hiring.
If you don’t learn how to hire the right people, you will continue to chase your tail. (This does not come from a fortune cookie; if anything, it comes from a no-fortune cookie.)

3. Standards. A company’s reputation and its customers’ satisfaction will be determined by what a company expects of itself. Setting standards should not be done casually by  whoever happens to be in the driver’s seat. The standards should be well thought out and aggressively communicated, and they should be lived. Whether it is response time or product quality or how clean you keep the bathroom, there are numerous things that define a company.

4. Training. People are not going to figure out everything on their own. And if they do, it will be after messing up orders, customers and your reputation. How many different kinds of customer problems can there be? How many solutions are there? Money back? A credit? Free shipping? An apology letter?

5. Systems, Procedures, Planning and Tools. There are ways to avoid mistakes, to keep track of things and to be more effective and efficient. Every time something goes wrong you should ask yourself, is there something we could have done to avoid this? In my picture-framing business I had special tape measures made that have a one-inch space at the beginning of the tape. People frequently measure from the one-inch mark because it is easier to hold the tape without scratching the art and is more accurate. Guess what? These people sometimes forget to subtract that one inch from the measurement, and everything is cut too big — by one inch. I’m sure our tape measures have saved thousands of dollars and many late orders that would have had to be redone.

6. The Wrong People. Sometimes it is bad hiring, sometimes it is just a bad fit. I used to put out fires all of the time. I finally figured out that it was better to get rid of the arsonists. That doesn’t mean these employees don’t mean well.  It may mean, assuming they have been properly trained and managed, that they can’t do well. This step requires will — as in you will do something about it. Is there anyone working for you that you would be happy to see quit?

7. Delegation. This one seems pretty obvious, doesn’t it? But delegation only works when you have the right people. And the hardest part is accepting that some of the things that you delegate will not be done as well as you could have done them yourself. You can afford to fix occasional mistakes more easily than you can afford to do everything yourself.

8. Compensation. It is difficult to run a smooth operation if you are constantly losing good people. What is your turnover rate? Do you pay enough, respect enough and provide a pleasant work environment?

9. Feedback. Have you surrounded yourself with yes men and women? I have numerous (15?) people who I believe will tell me the truth. Of course, you have to be able to handle the truth! Sometimes I am wrong, sometimes I am oblivious, sometimes I am delusional. The last thing I want is to stay that way. This is where fear of the boss can do the most damage. Don’t get me wrong, I am not naïve enough to think that no one is afraid of me because I am the boss. I do feel that the lonely-at-the-top thing is very, well, lonely. But there is no greater feeling than knowing that people are with you on a common cause, and you don’t have to read their minds.

10. You, again. Maybe you really like being the sales rep, the production manager or the one doing the work. Maybe you are trying to be someone you are not. I have learned that there is such a thing as big enough. It can be liberating to people who are ambitious to recognize that they have limitations, and that they do not have what it takes to be the next Bill Gates — and that it is O.K. More than O.K.! I have also learned that many entrepreneurs want to hire someone to take care of the things they don’t want to do. I would be very careful about thinking that one person is going to come in and handle everything. Build the organization. Or not. Small can be beautiful.

Bonus Round! Do you find yourself getting mad at employees all of the time? That is a waste of energy and bad for the moral of the company, including the people you never get mad at. It guarantees that no one will want to make decisions. There are three possibilities: you haven’t trained people properly, or you have some people who should be working in a different job (for you or for someone else), or you still think that everyone should think like you. If everyone thought like you, they would own their own business. And then they could have the opportunity to be mad all of the time.

Article source: http://feeds.nytimes.com/click.phdo?i=32e1c151aa0d914306ffc1b85273e8ce