Dollars and Sense


Financial Analysis may sound like a daunting task to some people, especially if the subjects have never really been explained to them in a common sense way.  I had an opportunity to teach a Finance student of mine what I like to call Common Sense Financial Analysis in 20 hours, and within that 20 hours, I’m confident he learned more than in four years at our prestigious local University.

Essentially we reviewed the three critical financial statements, the components of each, why those components were important, when a company reported, to whom they reported to, and essentially, what information you could get out of the numbers you were given.   Sure there are a million ratios and terms to make things sound fancy (like the beloved weighted average cost of capital) but common sense is where you start, and ironically, once you understand basics, the rest comes relatively easy.


Boiled down Financial Analysis:


An Income Statement tells you whether or not a company (through selling its goods or services) is making money or not.  Extended analysis will shed light on revenue trends, expense management, margins, consistency etc, but essentially it’s called a Profit and Loss statement because that’s exactly what it tells you:  during a period of time, did this company experience a profit or a loss.


Balance Sheet tells you at any given point in time, what a company owns, what it owes, and the difference, which is what it’s worth.    If your house was on a balance sheet, what you own (your asset) is worth say $100k.  What you owe (your liability) is $80k, and what you own (your equity) is $20k.  What you own, less what you owe, is what you are worth.   Assets- Liabilities = Equity.  Or on a balance sheet Assets = Liabilities + Equity.   They must equal so the sheet balances, hence the name.   Extended ratios from the balance sheet will tell you if a company is too leveraged (borrowing more than they should), has a good cash cycle (A/R and A/P analysis), Liquidity (can they pay their short term bills) and insights into ownership structures (is the company financed through stock, borrowing, owners capital etc).


Our third statement, a Cash Flow Statement essentially tells you, again over a period of time, what inflows (sources) of cash you had over that time, and what outflows (uses) of cash you had.  The interesting thing about a cash flow statement is it is created by the change of the balance sheet from one period to the next.  So, changes in what you own (buying or selling) would be uses or sources of cash.  Changes in what you owe (borrowing or paying off) would also be sources or uses of cash.  Changes in equity (selling stock, buying stock, and investing capital for example) are also sources and uses of cash.


As you can see, this is not rocket science, but you would be amazed at the number of financial and non financial people that can’t make these simple connections to their work and businesses.  The really cool thing about business financial statements is that they can be applied at a personal level as well.  You can calculate your personal ‘profit or loss’ for a given year, your personal net worth on your balance sheet, and your personal cash flow statement (changes in your balance sheet) over time.


Not understanding your financials is like driving with your eyes closed.  Sure you may be able to make it down the street, but I wouldn’t recommend the highway.





The Magic of One Good Idea

I came across this story on the internet, and it is a wonderful example of how one single good idea can have an immense impact for a business.  If you are still thinking ‘inside the box’, this story will inspire you to climb out! 

One of the successful businessmen I sought out at church for advice in starting my own business – is a 90 year-old gentleman named Floyd. Some 20 years ago, he and his nephew, Tom started a small manufacturing company here in town that makes kitchen blenders.

To test their blender’s durability – Tom would often ram a broom handle into the glass container – to see if it would “blend”. This little quirk of his would become significant later.

For 15 years or so, they had moderate success locally selling their blenders. Then, 5 years ago – along came an internet phenomenon, called “YouTube”. The marketing department suggested Tom & Floyd make their own commercials for YouTube.

Someone decided the image of Tom “blending” a broom handle might be catchy – so in a small room at the factory, they filmed Tom and his broom. They had him blend other objects – like a Chuck Norris action figure, a gun, a live video camera, an iPod . . . Their commercials went “viral”. Do a YouTube search for “Will It Blend?” and be prepared to laugh out loud.

Their YouTube commercials get tens of millions of views EACH. Last year, their little company, Blendtec did more than $50 million dollars in business. Tom & Floyd are recognized all over the world and have appeared on TV shows from Good Morning America to The Tonight Show.

It all starts with one good idea.   What’s yours?

Do Your Best

I was preparing for two very important presentations this week.  Each one could lead to a great business opportunity for our Free Enterprise Warriors team.  I was anxious about them.  In my life, as an aspiring person, I have often had a bad case of “preparation anxiety.”  I want so badly to do well that I stress out.  Often this causes “preparation paralysis” or worse yet “preparation procrastination.”  I don’t like the feelings of fear, so I just try to ignore them and distract myself doing something else.  It doesn’t work.  I end up not enjoying the avoidance activity, even if I normally would, because my subconscious knows and keep reminding me that I should be doing something to get ready.

I have often taught people to “let fear be your compass.”  Meaning: if you have a fear about doing something it means you care about the outcome; therefore, it is a sign that you should do it.  If you didn’t care you wouldn’t have the fear.  So, doing what you fear is the right thing. But, how do you not let that fear overwhelm you, cause you distress and interfere with your preparations.

People say, “don’t worry, just do your best – if you do your best, then that’s all you can ask of yourself.”  That sounds like good advice.  But, then I’m worried about doing my best.  What does that mean?  How would I know?  Can’t I always find some way in which I might have done better?  What if I don’t really do my best – what if someone else points out what I should have done better?  Isn’t “doing your best” just another form of mental pressure?

Yes, in my experience it is.  So, I have learned not to do it.  It took me a long time to come to a very simple self-awareness: I am always doing my best.  That’s just what I do.  Actually, that’s what we all do.  If we want to sincerely have things work out, we try to do whatever we can to have it work out.  We simply do our best.  That’s how we are motivated, that’s how we are built.

How well we do is determined, not by driving ourselves with critical or fear-based self talk, but, by preparation for the task.  Then, we just act, we just do.  We give it a try.  Sometimes it works out as we intended, sometimes it doesn’t – in which case we now have a great learning experience.

I’ve learned to not be attached to the outcome, but to enjoy the preparation.  I know I want to do well, but the only difference I can make in what I do, is how I prepare.  Steven Pressfield says “Do the Work” – in fact that’s the title of his latest book.  And, I loved it.  He says that if we are artists or entrepreneurs, the most important thing we have to do is the work – the preparation, the practice, the study, the rehearsal, the building of the skills.  Then we just create, we do, we act, we show up, we ship.

For me now, having pretty much left “anticipation anxiety” and “fear of failure” behind, I simply enjoy the game.  And, I get ready to play the game – I just prepare.  I remember that the definition of worry is “stewing without doing.” I have actually returned to my childhood Mad Magazine anti-hero Alfred E. Newman who always said: “What, me worry?”  Now, I just ignore the fear, detach from the outcome and do the work.

Are You Willing to Let Us In? A short study in Collaboration

Working with our “Virtual COO Services” clients has become for me an enlightening experience. We have clients in different industries, different financial situations and different motivations. Without a doubt, the most successful work we have done has been with those clients that are ready to collaborate with a team. When an entrepreneur is ready to open up, we can work together to create a process by which some of the most interesting and profitable ideas start. If the entrepreneur is not open to collaboration we have seen the energy just fizzle.

We try to keep to a weekly schedule of 45 minutes to 1 hour of team sharing. We do set an agenda for the meetings, but often we go off on tangents that produce some of the most creative action items. We then go ahead and implement those ideas and then meet back the following week to measure how that worked or didn’t work.

When everyone knows what the schedule is it also become a kind of accountability exercise. Everyone on the team knows what is expected of them for the next meeting. It has the strength of a boulder rolling down hill. It keeps building on itself until it has a momentum on its own.

When an entrepreneur is not ready to share or has not gotten to the frustrating and overwhelming tipping point when they know with all certainty they need a collaborative effort, we all just end up spinning our wheels. They may see minor results but not the intensity of sharing ideas that come from a committed team environment.

This for me has truly been a learning experience and continues to open my eyes to creative collaboration.

Lighting a Fire

A few weeks ago, I happened to start a conversation with another parent at my daughter’s lacrosse game. He’d been out of work for a year and was depressed about running up against the corporate HR wall and never even receiving a response to his resume. His nest egg was running out and he had just stopped looking. I decided to start talking about positive actions that he could take to jump start a job search.

First, since I have an HR background I recommended that he go straight to the Manager of the department he wanted to be hired into. I told him to do the research and connect with that person to see if they have any openings. This is where a personal network becomes most important. If you have a good reputation in your industry you can use that network to see who knows this person and help get you in.

Our discussion evolved into “thinking outside of the box”. What directions had he not pursued? One was working as a consultant for companies in his industry. When he spoke about the industry he was energized, he was passionate about safety and loved working with architects. I asked him questions about the network of people he could tap into for potential business.

Could he consult for building owners who need his expertise while they were bidding out that part of their construction? He could be paid for his knowledge. He remembered a contact who was a safety expert but wasn’t a good salesman for his services. Could he partner to bring in business for that expert?

The ideas started to come fast, I could see a light go on and felt that a spark was lit inside him. He really understood when I was told him about Free Enterprise Warriors and our vision for entrepreneurs to “shift” away from their old mindset and see where their passions and interests might take them.

It felt great to help make a difference in the way he was feeling and thinking. A week later his wife came up to me at a game and said “thank you” for helping him to get refocused on the job search. In fact, she said, they had become accountability partners, were feeling closer together and taking positive steps toward his “shift”. Both were excited about where this was going to take them. So please remember that a sincere and caring conversation can light a spark for someone else and yourself.  Try it!

The Master Motivator

For most of my adult life I have been fascinated by the idea of motivation.  In fact, my doctoral work in educational psychology, at the University of Albany in New York, was focused on “learning and motivation.”  I wanted to know what made people want to do things and how did they learn to do them. 

Recently, I read a very pragmatic book about workplace motivation: Daniel Pink’s Drive: The Surprising Truth About What Motivates Us.  He says that research points to three big motivators: autonomy, mastery and purpose.  I’ve memorized them by using the acronym: AMP.  These three things (Autonomy, Mastery, and Purpose) get us “amped” for action and achievement.

However, I think that just ONE of these three is really the key to high achievement.  Certainly all three are powerful motivators for taking action.  We all want to gain AUTONOMY: the freedom to do what we want to do, when we want to do it and in the way we chose to do it.  And, most of us look to follow a higher PURPOSE: to make a difference for and in the lives of others – friends, loved ones, colleagues, clients and the world we live in.

But, the key to high achievement, in my experience, is the middle one: MASTERY.  First, learning to master new skills, knowledge and techniques is inherently motivating. But even more important, mastery of the right things is what really leads to the highest achievements – in the arts, in athletics, in scholarship, in the professions and in business.  Those who make the greatest contributions must master the fundamental skills.  They must do it at the beginning and they must keep doing it along the way – continuing their mastery to an ever higher level.

In the end, if someone is not motivated by MASTERY, they may not fully gain AUTONOMY or fulfill their PURPOSE.  The willingness to put in the work, do the time, invest the effort and endure the failures on the path to mastery – that is what makes the biggest difference.  It’s walking the talk, putting rubber on the road, paying your dues and staying the course.

In fact, it is MASTERY that tells us what we are truly meant to do.  When we love the learning, the practice, the rehearsals and the feedback, we know we are in our “home zone,” our “sweet spot,” our “wheelhouse.”  If we’re bored with the repetition or tired of the labor – if we give up on the effort; we know that we are not doing that which is our true calling. 

We are best served when we seek those endeavors where we enjoy the work, the constant repetition and the slow but steady progress. 

That is the path to MASTERY – that is the big, sustaining motivator with big, long-term payoffs!

The War of Enterprise

We call ourselves “free enterprise warriors” for a very powerful reason.  Not because we are mercenaries or soldiers whose goal is to harm others.  Or, that we seek to gain from others losses or at their expense.  We are warriors in the classic sense of being guardians and protectors – we stand up for the values of human freedom, individual rights and common justice.

As entrepreneurs we seek to play fair and succeed based on our own skill, production and creativity.  We want to achieve our goals because we have the courage to aspire, the willingness to learn and the determination to persist.  We are willing to pay the price, make the commitment and do the work.

This is the challenge of launching, growing and sustaining a worthy venture; whether for profit or not.  In this age of social entrepreneurs and conscious capitalism, the goal is not always about money.  However, the wise uses of money and resources are always a part of the equation – do well and do good.

The reason we call it war is because, at the deepest level of heart, mind and spirit, it is.  There are a set of forces that work against the desire to create, to produce and to build.  In the natural world of science, these are the forces of entropy – anything left unattended falls apart.  Hot becomes cold, structures give way to gravity and life gives in to death.

The opposite of this entropic pressure is the life force- some philosophers call it extropy.  It is how things become organized, orderly and functional.  It is how new technologies are invented, new products are manufactured, new structures are built, new services are delivered and works of art are created.  It is that mystical, magical energy that motivates us, focuses us and empowers us.  It is LIFE in capital letters. 

As entrepreneurs, that is the battle we fight – to bring order out of chaos, to bring profit out of poverty, to bring competence out of confusion, to create and enhance life.  But, we are always challenged to take on and overcome that dark side – the forces of entropy: doubt, denial, distraction, discouragement and defeat.  We seek to be optimistic, enthusiastic and confident, but we must learn to overcome the forces of pessimism, lethargy and self-doubt.

Steven Pressfield calls this “the war of art” in his book of the same name.  And, he takes that theme even further, with solid and pragmatic strategies, in his recent book Do the Work. I highly recommend both – they are well written, concise and uplifting.  They show us how to have the courage to create that which we were meant to create; to overcome resistance; to embrace life: to be free enterprise warriors.


“A man’s work is in danger of deteriorating when he thinks he has found the one best formula for doing it. If he thinks that, he is likely to feel that all he needs is merely to go on repeating himself… ” ~Eugene O’Neill~

I’ve observed this time and again while working in HR for larger corporations: layers of people who felt entitled to a raise just for showing up or undermining the energy of the group with their complacency. They were “self-satisfied and unaware of possible dangers”.

Working with entrepreneurs, whose resources are stretched, you can see how crucial it is that their talent be motivated to do well and be their best. As an entrepreneur you cannot allow complacency to grow in your organization. If you do, you will end up spending double the time & energy to change that mindset. If the mind-numbing repetition of tasks sounds good to anyone, then you don’t want them working for you. They will not contribute new ideas, business or add to the culture of your organization.

The primary way to prevent complacency is to make the right hire in the first place. Surround yourself with like-minded people that share your energy and vision. But, sometimes even a great hire can slip into the “complacency” mindset. It’s the art of keeping them engaged and interested. You can find out through communication what makes them motivated. Schedule regular one-on-ones with employees and encourage open dialog. It’s a two way communication, you get to pass on your enthusiasm and passion, and they can share theirs back to you. You will light a spark and keep fanning it with the exchange of ideas, training and energy.

It’s a sure bet that if you are feeling frustrated, your talent is also. As a leader it’s your responsibly to bring it to the forefront and shake things up. If this doesn’t work, then it’s time to “cut bait”.- admitting it isn’t working and parting ways can be the right thing for them and for you.

Letting someone go is never easy, people sometimes looked shocked like it’s a surprise or they get upset. It can be very stressful for you, too. The first time I had to let someone go, they handed me the tissue box and they told me, “Don’t worry everything is going to be alright.” That person knew in their heart that it wasn’t the right place for them. (I have since learned to keep my composure.) Even if there is anger and tears (by both parties),you have to keep moving forward and do what’s right for the business. You must remove the complacency!

And, if making no decision is really a decision to do nothing. Then, the question is this: have you become a source of complacency?

Is Your Social Media Interrupting Your Social Life?

Imagine organizing your social networking accounts in one simple email.

About 6 months ago I received a link to a free service called NutshellMail.  So I gave it a try.  Nutshell packages all your social media updates from your Personal FaceBook page, your fan page, your twitter account, your linkedin account and even your Youtube account into one email.  You even tell NutshellMail when it’s convenient for the email to be sent to you.  You can filter each one of the accounts,so you only recieve the updates that you want.

Laurie and I have been using it ever since and found this to be a big time saver.  If you have any questions, email me at

The SWAT (Smart Women With Available Time) Team

I found this Wall Street Journal article extremely interesting and would like to pass it on to other “stay at home” entrepreneurs and business owners who are looking for dedicated, experienced employees for their positions:

The Wall Street Journal:
Lots of employers would like to be able to hire cheap, temporary teams of seasoned pros with experience managing $2 billion investment portfolios, running ad campaigns or earning Ph.D.s in neuroscience.
But few know the secret to finding temps of that caliber: Look on playgrounds and at PTA meetings.

The decision among some highly educated women to stay home with children is sparking a countertrend: The rise of the mommy “SWAT team.” The acronym, for “smart women with available time,” is one mother’s label for all-mom teams assembled quickly through networking and staffing firms to handle crash projects. Employers get lots of voltage, cheap, while the women get a skills update and a taste of the professional challenges they miss.

Skilled workers taking temp projects isn’t new, of course. What’s different about these teams is that they’re available on short notice because the women are usually at home; they tend to work cheap because their main motive is to keep their skills fresh; and they’re often extraordinarily well-qualified, having left the work force voluntarily when their careers were on the ascent.

This article sums up the win-win of hiring SWAT members who can multi-task and add value to a business.  I know, I am one of them.

Contact me if  you have any comments –