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Exciting News from an Unlikely Source

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on Wednesday, 11 December 2013
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This past weekend I uttered an odd sentence: I’ve read some exciting news from the US Bureau of Economic Analysis!

The correct response to such a sentence is usually “Nerd!”

For the first time, it turns out, the US government has studied the contribution of arts and culture to the county’s economy. The results are in, and in 2011 (the most recent year for which statistics are available), arts and culture contributed $504 billion to GDP. To put that in perspective, 3.2% of the total US economy was attributed to arts and culture, which is even more than the travel and tourism industry that represented 2.8% of the US economy.

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Value Your Talent

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on Thursday, 05 December 2013
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“The value of an idea lies in the using of it.”Thomas Edison

In his book “Outliers”, Malcolm Gladwell speaks of “The 10,000 Hour Rule”, which I understand is based largely on the work of Dr. K. Anders Ericsson.  I certainly can’t explain The 10,000 Hour Rule as well as Mr. Gladwell, but I’ll try to summarize this rule by saying it states that any person who becomes quite proficient at a complex task must first dedicate about 10,000 hours to intense practice of that task.  Mr. Gladwell uses examples of top tier athletes, performers, and even Bill Gates as a computer programmer to demonstrate his rule, showing where individuals cross this 10,000 hour threshold early in life, the proficiency attained by these individuals provides them with a significant advantage over their peers and competitors.

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The “Golden Rule” of Inventory Management

Posted by Super User
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on Friday, 15 November 2013
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art storageThere’s a popular misconception that stringent business practices are detrimental to customer service.  OK, that’s a pretty boring opening line to a blog post, so I’ll back up, a bit, and tell you a tale.

When running a small business, it’s very easy to manage exceptions.  Here’s a typical scenario for a small artistic business:  A friend of yours may see some of your artwork in the back of your car, and ask to buy it.  She’s a friend, and you trust her, so you agree, and you make a mental note that she owes you a bit of money for the artwork.  This is good customer service in action, as your customer happily has your artwork, and your business management system (your brain) can handle remembering that your friend owes you for some art.  Because your business is not too busy, you can easily handle the little complications that arise, such as keeping track of what pieces your friend took, accounts receivable, and maybe even paying sales tax.

Jump forward into the future, a little bit.  Now, instead of selling a piece or two a week to a friend, you’re selling a couple of dozen pieces a week.  Some are original pieces of art, others are limited edition prints.  Now your Aunt Matilda drops by your place to say “hi”, sees some of your pieces on a table, and says she would like some.  You’re an obliging artist that’s not so far removed from the “starving artist” stage of your life that you forget how good a sale feels, so you agree, and Aunt Matilda takes some pieces with her when she leaves.  Oh, oh.  Did Aunt Matilda take an original with some prints?  Did you remember to number and sign any of the prints?  If an original just walked out the door, you usually charge a lot for that, and will Aunt Matilda be agreeable to a large amount?

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The Value of Mistakes

Posted by Super User
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on Wednesday, 13 November 2013
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"Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep."
- Scott Adams, American cartoonist

value-of-mistakes-1The other day, my wife Shannon and I took a short flight to Stuart, Florida. Martin County maintains a great airport in Stuart, and each person working at the airport seems to be friendlier than the last.

Shannon brought along her new camera for the trip, and took hundreds of pictures throughout the day. The Florida Everglades and the Atlantic coast of Florida are absolutely beautiful from above, and Shannon is a wonderful photographer.

Upon getting home, we reviewed the many pictures taken during the day. Some of the pictures were absolutely spectacular, but amongst the great pictures were also some that were not quite as good, such as those that had wing-strut in the way, or those that caught the sun’s glare through the windshield.

It’s absoltely wonderful that with digital cameras, an amateur photographer such as Shannon can take hundreds of pictures, without being hindered by the cost of both film and development, so that she can feel free to experiment. The result is that amongst the photographs that were not the best were some gems.

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Creating a Business Plan

Posted by Super User
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on Monday, 04 November 2013
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screen shot 2013-11-04 at 9.15.57 amI’ve noticed that the creation of a business plan can seem like an overwhelming task for those of us that were not business majors.  Sometimes it seems as though business plans are only developed under duress when they’re needed as a business seeks funding, however, taking the time to put together a business plan can be a useful task for a business in any position.

Know Your Audience

While there’s no “secret formula” to creating a business plan, I suggest that the first step be to determine for whose consumption you’re developing the plan.  Identifying who will be reading the plan, and for what purpose, will answer questions relating to what should be included, and how information should be presented.

If, for example, you’re putting together a plan to present in hopes of obtaining funding from a bank or investor, you should consider including an executive summary, and definitions of terms that may be unique to your industry.  On the other hand, if you are developing a business plan solely for use within your company, summaries and definitions may not be as important.

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Marketing Arts & Entertainment

Posted by Super User
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on Tuesday, 22 October 2013
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rbMarketing arts and entertainment businesses poses unique challenges and opportunities.  For example, our world has tremendous wealth, but that wealth is not very evenly distributed, leading to challenges in identifying customers for non-essential goods and services.  Some entertainment businesses have found success in maximizing distribution in order to find success, and as I’m writing this blog in October, it’s probably a good time of the year to use baseball as an example.

Looking at your typical major league baseball game, it’s clear that admission, hot dogs and beer do not cover the cost of the teams’ operations such as a huge stadium and players’ salary.  Here is some quick math using the San Francisco Giants as an example:  According to ESPN, the team’s 2013 home attendance was 3,326,796.  Reportedly, the Giants’ average ticket price this year was $27.21, meaning that revenue from the sale of home tickets was $90,522,119.16.  That’s a lot of money, for sure, but the team had expenditures this year, too, not the least of which was player payroll at $136,042,112, thus ticket revenue fell short of covering payroll by $45,489,992.84.  If we only look at the above figures, it would certainly appear as though this team is not a very successful entertainment business, but to the contrary, baseball is successful in the United States, in part, because they’ve expanded their distribution – first through radio, and then television.  Baseball has found a way to sell their product to a lot of people, for a small amount of money each.

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Cheers from Oakland Park, FL

Posted by Super User
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on Friday, 18 October 2013
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opThis past weekend, some friends of mine introduced me to the Funky Buddha Brewery in Oakland Park, FL.  Those of you that know me probably are not surprised that I was enjoying a beer on a Sunday afternoon (I do come from Canada, after all), but the surprise of the afternoon came from Oakland Park, itself.

Oakland Park, Florida does not have the best of reputations.  It’s one of those neighborhoods that one would make an effort to drive around rather than through.  So, when I arrived at my destination this past weekend to find a vibrant, busy, and not at all scary part of town, I was more than a little surprised.  It turns out that the City of Oakland Park has made a commitment to community redevelopment in a unique way by creating the Oakland Park Culinary Arts District.

This is a wonderful example of successful niche marketing.  Let’s face it, there are countless examples of cities promoting community redevelopment, but few are bold enough as to do so by focusing on such a narrow pursuit as “culinary arts”.  Oakland Park has done it right in that they’ve apparently devoted considerable resources towards investing in the arts.  It’s a smart investment for a community – just ask almost any Miami Beach tourism business during Art Basel how much they appreciate their local government’s investment in the arts.

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The Five Stages of Hiring a Business Manager

Posted by Super User
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on Tuesday, 15 October 2013
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denial1. Denial
“I don’t need anyone’s help. I can do it all! After all, I’m an intelligent person.”

2. Anger
“How am I supposed to get any work done when I’m spending all my time dealing with bankers (ugh!), lawyers (‘nuff said), and H.R issues? What the heck is a collateralized asset, anyway?”

3. Bargaining
“OK. If there’s a greater being somewhere out there, please hear my plea. Please magically manage my inventory, move my office, secure financing, and hire a new assistant for me. In exchange, I’ll make the world a better place, I promise!”

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Measure What You Manage

Posted by Super User
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on Thursday, 10 October 2013
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As with many old adages, “you can’t manage what you don’t measure” holds true throughout time. Certainly, management is more than mere analysis of metrics, but managing without an objective way to answer the question “how are we doing?” is needlessly difficult, at best.

Every business is different; however, if you keep the following three metrics on the top of your list, you’ll have a good foundation for management by measurement.

1. Margin

Margin is defined as Gross Profit, expressed as a percentage of Income. If, for instance, you have $1000 in sales, and the cost to your business for these sales was $750, your business’s margin is 25%.

Monitoring your margin allows you to make informed business decisions about many important aspects of your business, including expenses. In addition, planning and maintaining margin allows you to measure your business much more effectively through periods of both high and low sales.

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Three Gs Followed by an E Flat

Posted by Super User
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on Monday, 07 October 2013
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One of the many lessons we can learn from music is that a composition can be greater than the sum of its notes. Nowhere is this more apparent than with the first four notes of Beethoven’s Fifth Symphony; three Gs followed by an E flat. Taken separately, these four notes are completely unremarkable. Their durations, part of this symphony’s “short, short, short, long” motif, are even more routine, and seemingly more useful as morse code for the letter V than as an opening to a grand composition. These four simple notes, however, are instantly recognizable, and convey far more than almost any other combination of four notes.

So, Craig, how does the opening of Beethoven’s Fifth Symphony relate to me?

I’m glad you asked.

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Top 3 Things of Which to be Weary

Posted by Super User
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on Thursday, 03 October 2013
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I’ve come to realize that for me, impatience comes with experience. That may sound like a strange statement, so please allow me to explain before passing judgment.

I’ve always strived to be honest and ethical in business.  “You’re only as good as your word” is more than just nice-sounding phrase to me; it’s how I endeavor to do business.  I like to think that for this reason, over the years my clients, business partners, colleagues, and friends have placed a great deal of trust in me.  I’m truly grateful for having been the recipient of such trust, and I work every day to ensure that this trust has not been misplaced.

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What Napster Taught Us

Posted by Super User
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on Monday, 30 September 2013
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First thing’s first:  I’m not a proponent of stealing someone’s goods or services just because they’re sold for a price that seems unreasonable, or via methods that aren’t agreed with.  I no more support the theft of music via file-sharing services based on the idea that “$14.99 is too much to spend on an album” than I support the idea of stealing a Ferrari 458 Spider because “$260,000 is too much to spend on a car”.

Theft is theft, and it’s wrong.

That being said, there were certainly some important lessons learned when music file-sharing became popular.  The most important lesson, and one that seemed to be lost to most of the established music industry at the time, is that the industry’s customers were generally dissatisfied with the prices they were being asked to pay, and the methods of purchase they were being asked to follow.  Most people are good, and probably disagree with theft, so the fact that so many consumers became frustrated with what the music industry to the extent that they resorted to theft should have been a wake-up call to the music industry.

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Division of Labor

Posted by Super User
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on Saturday, 14 September 2013
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Years ago, as a freshman at Berklee College of Music in Boston, I attended a lecture given by Felix Cavaliere formerly of “The Rascals”.  Felix delivered an interesting talk detailing his career in the music business, and conveyed anecdotes that one would expect from a member of one of the more popular rock groups of the late sixties.

Eventually, the lecture changed to a Q & A session, and the ubiquitous, albeit unimaginative “what advice do you have for a musician who is just starting out?” question was asked by one my fellow students.

Without hesitation, Felix answered that all attending this lecture were music students, and as such, he felt we were all poor business people.  Felix pointed out that in the greater Boston area, there were numerous colleges and universities full of business majors, and he suggested that as musicians, we should go and make friends of the business types, so that we could rely on them later when business decisions affecting our careers would have to be made.

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Starting the Creative Business

Posted by Super User
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on Sunday, 08 September 2013
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Taking It From The Top

As with any business, the start of a creative business is often associated with risk.  This risk may be as simple as the decision for musician to move out of his or her parents’ basement in a small town to make a go of it in “the big city”, or as complicated as a theatre company deciding to open up their own theatre.  In both of these examples, the uncertainly of “am I good enough to make it”, or “will anyone actually buy a ticket to our productions” can be quite stressful.  Complicating the decision to start these businesses is the likely fact that stressed-out musicians and theatre companies are often not the best musicians and theatre companies (insert your own “why The Beatles broke up” theory here).

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