Stop worrying about the credit market…get creative

Tom Schlafly is one of the most successful business people (and human beings) I have had the pleasure of talking to. He built the St. Louis Brewery in the town that has…um..you, know… THE Brewery. However, since InBev came to town, Schlafly now enjoys status as St. Louis largest locally-owned brewery.

As Tom points out in his witty column Top Fermentation, “In any discussion of local industry in St. Louis, Schlafly is now The Brewery.” The irony is thicker than the head on one of Tom’s stout winter brews.

The man who:

• claims that he “would never have started his business if he knew anything about business”
• attracts an entire team of people with liberal arts degrees and no business background
• had to change Missouri laws on microbreweries to grow his business
• holds an irrational love for St. Louis
• continues to bring a creative wonder to his business

…is now wildly successful against all odds and in the shrined shadow of a St. Louis darling – Anheuser-Busch.

Entrepreneurship is a lifestyle choice and a way of thinking differently about:

• what it means to be in business
• what it means to have success
• what it means to be professional

Many times at the root of this decision (to rip the employee label off your life and think in this manner) is a very emotional and peculiar drive. As my friend Richard Sacks (author, consultant and entrepreneur) puts it, “most entrepreneurs are on plan B.” They are creative, innovative, passionate people who got ticked off at the way that their industry was working, or feel that some population is grossly underserved.

If there is this distinction between an entrepreneur and a manager or executive, then why do entrepreneurs constantly feel they have to behave like the rest of business world when it comes to financing their business?

I have heard many entrepreneurs complain:

• The banks don’t take me seriously.
• I don’t have the right contacts.
• The credit market has dried up.
• Venture capitalists aren’t giving out money.
• Angel investors are watching their portfolios dwindle away.

This reaction to our current economy is not an irrational response. This is fear-based thinking that will be a secure lockdown to any growth that your business could hope to have.

To survive the slowdown and the limited access to capital, you must see this fear, name it and move along on the path.  You must be irrational. (For more on this see Dixie Gillaspie’s article on moving through fear.)

You are an entrepreneur…be creative. Here are some practical steps that I have seen the best entrepreneurs take to make long-term financial goals. (All of these steps were taken assuming that you had the right attitude, have had solid business ethics and want to grow your business.)

• Get skin in the game. This is a battle. If you can’t stomach a big personal loss, you may need to find a job. While it does not sound pleasant, I have yet to meet a financial backer who is comfortable taking on all the risk. Collect up your capital and what you have of value. If it was a comfortable process, then everyone would do it. Two retailers I know have doubled their business in the last year by leveraging collateral to get credit.
• Negotiate and make terms with your vendors. Make it as simple as possible. “Hey, things are slowing down for me. Can I pay you $x amount per month?” Most folks will allow you some latitude.
• Find easy ways to monetize what you do. This is dangerous because you may end up going down sales paths that can distract you from a primary purpose. What do you do already do that adds value and you can easily charge for? This could be scaled-back versions of a larger service for a reduced rate. However it looks, find new ways to make money at what you are already doing.
• Find like-minded folks that share your vision. They may not be instant sources of money, but you can certainly find advise, empathy, friendship and accountability. The monetary value of true friendship is immeasurable. The most successful people that I know found and inner circle that they went to in good times and bad. You start finding these people by becoming an approachable person.

It may seem as though the universe is conspiring against you, but take a look at Schlafly’s situation 17 years ago. You do not face nearly the odds that he did. He made it. You can too. It may not look the way you thought it would, but your company will be better for it.

And, if you are a St. Louis-based entrepreneur, then you have access to at least 49 growth opportunities that are unique to your city.

TRY THIS ONE ON:

If you wanted to hear what it was like for a passionate, eccentric business owner, then read Tom Schlafly’s book, A New Religion in Mecca. There is a great deal of hope in there. It seems that Schlafly contends that the universe conspired to make his business successful, but, someone who knew what she was talking about once said: Luck is the residue of rigorous, persistent action.

- Jeremy Nulik, Creative Energy Officer, St. Louis Small Business Monthly

A framework for innovation

As a species, it is in our nature to adapt. That, along with the whole opposable thumb thing, has lead to incredible creation and innovation.

However, there are people like me stuck in today’s world of rapid innovations that constantly find themselves saying, “I don’t get it.” If my brain has any “elasticity,” then I am feeling it stretched to the brink.

This pain point is an awesome opportunity for entrepreneurs to design ways to interpret this constant innovation.

I ran across an article in Seed magazine that discusses the importance of elasticity and design as it relates to creativity in today’s culture (I know it’s a bit long, but, dammit, it’s worth it):

Adaptability is an ancestral distinction of human intelligence, but today’s instant variations in rhythm call for something stronger: elasticity. The by-product of adaptability and acceleration, elasticity means being able to negotiate change and innovation without letting them interfere excessively with one’s own rhythms and goals. It means being able to embrace progress, understanding how to make it our own. One of design’s most fundamental tasks is to help people deal with change. Designers have the ability to grasp momentous changes in technology, science, and social mores and to convert them into objects and ideas that people can understand and use. Without designers, instead of a virtual city of home pages with windows, doors, buttons, and links, the internet would still be a series of obscure strings of code, and appliances would be reduced to standardized skeletons of functions.”

What does this mean for leaders of businesses and organizations?

To thrive in today’s marketplace of ideas – entrepreneurs, leaders and professionals need to understand the importance that design language plays in relation to innovation and creativity. The sheer amount of innovation is too much. If you can offer people a framework through which they can view, categorize and better understand it, then you will thrive.

I don’t think that this means that we need to run out tomorrow and become “designers.” What this means is that the framework is actually equally important to the content of innovation. Teach someone how to interpret all this data in a different way that helps them solve problems or achieve greater success, and you are bound to succeed far better yourself.

Great companies that I talk with have an interesting view of change. They understand its importance in sustainability, however, even more importantly, they had a purpose – a clear design – that allowed for change to be interpreted. The struggle is in making the design clear and understandable – making it sticky enough so it can be applied.

HOMEWORK

If you want to see someone who is really shaking things up with visual thinking, then check out XPLANE CEO David Gray’s blog. Through visual thinking, people are given a framework to interpret change. My friend, Matt Homann works there are well and doesn’t do such a bad job at blogging either.

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Jeremy Nulik, Creative Energy Officer (CEO), St. Louis Small Business Monthly

The blue circle on small business

“Do we have blue circle?”

The signs hung all over the offices of the Baton Rouge Business Report, one of the fastest-growing and most successful business media outlets in the country. I avoided asking what that was all about at first, but, after a few days I couldn’t help myself.

“What is the deal with the blue circle?” I asked Julio Melara, president of the Business Report. Julio’s entire face lightened into a smile.

“I’m glad you asked that question,” he said. “Often when I am in a meeting with my sales team or other folks, I will ask, ‘Do we have blue circle?’”

He then asked me to vision a blue circle in my mind. “Draw it on a piece of paper,” he commanded. Here’s what I drew:

“Did I answer correctly?” I asked, slightly nervous that I had done something wrong.

“That is perfect. Of course, that is a blue circle. But, look at the one that I had in mind,” he said as he turned my piece of paper around and drew this:

“So, we could have had a conversation about the blue circle that could go on for hours, days, weeks or even years, and we would never be talking about the same thing,” he says. “Do we have blue circle?’ has become a part of how we do business around here. It means, are you with me? Are we talking about the same thing? Because the biggest hurdle that we continue to face as we grow is communication.”

I was struck at the simplicity and apparent effectiveness of this model of communication. One definition that I have been struggling with lately is (embarrassingly) “small business.”

This has been especially true since I have had many meetings with bankers, lawyers and other service industries about their “small business programs.”

Some say 100 or fewer employees are a “small business.” Others said 500 or fewer. While some thought that any firm under $1 million in revenue was a small business, others said $5 million in revenue still qualified a company to be “small.”

This approach of using revenue or employees is problematic when you look at the numbers.

If you are using a revenue figure to gauge the size of a business, then most are surprised to find out that only 4% of businesses make over 1 million in revenue. The same is true for number of employees – 95% of firms have 20 or fewer.

Given that an overwhelming majority of firms fit into what most define as “small business,” perhaps we should change the name to just “business.” If being small is the norm, then the abnormal ones are truly the larger firms.

Are employees and revenue the only way that we can define the size of a business? Does being considered “small business” refer to more than size? How does “small business” relate to entrepreneurial thinking?

Scott Ginsberg (The Nametag Guy), an author, speaker and entrepreneur thinks that “small business” means more than size.

It’s an attitude of individuality and a lifestyle of freedom. Small is the new big. ‘Size matters not,’ as Yoda once said. Think about it. Craigslist is the 56th most visited site in the world. They don’t try to be big or look big. They just help people get what they want. So, comparatively, who would you rather be: the CEO of Innitech or Craig?”

Bo Burlingham, editor-at-large for Inc. magazine and author of “Small Giants,” also feels that size is necessarily a good way to distinguish what a business is or isn’t. He suggests that outside of “small” and “large,” there is a third type of business.

Some people refer to these companies as ‘gazelles.’ They are run by entrepreneurs who are very interested in growing, although not necessarily in terms of employees or revenues or geography. Some of these companies are the ones I call small giants: They could grow much faster and get much bigger but have chosen not to because they have other goals they consider more important. Others are, in fact, trying to grow as much as possible and get as big as possible. A few have already passed the threshold of bigness. Though they look like other large companies from the outside, they are still run by the entrepreneurs who founded them and still have a small business feel to them.”

A small business “feel.” An essence that cannot be easily defined.

Seth Godin has a straightforward definition that also is void of any “number of employees” or revenue figures:

I define it as a company in which the person who runs it acts like she owns the place, and in which all the people who work there understand that they have a stake that’s got leverage in the final outcome.”

So here is what I ask you:

• What is a small business, and how do you define it as being different from a regular “business?”
• How does the multiplicity of meanings of “small business” affect the way that businesses are perceived?
• How does entrepreneurial or innovative spirit relate to small business?
• Can we ever hope for “blue circle” on our definition of small business?

Write to me at jeremy@sbmon.com and I’ll publish the results in another blog.

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Jeremy Nulik, Creative Energy Officer (CEO), St. Louis Small Business Monthly