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Newsletter #19, September 2004

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Juggling business and artistic activity

I had the pleasure of making the acquaintance of Michelle Newman of San Antonio, Texas, while sitting next to her on a flight from Atlanta to New York City. During the course of our conversation we found that many of the frustrations encountered by artists in her profession of clothing design are quite similar to those in my specialty of musical instrument design, manufacture and sales. In both cases the artist frequently has a difficult time juggling the seemingly conflicting activities of product design, production and dealing with customers to take orders and sell products. Many artists simply do not wish to be bothered with, or they feel overwhelmed by, the demands of business management, promotion, bookkeeping, billing and collections, taxes and other such activities.

I started collecting guitars as a college student in 1963. I had no money at that time to pursue such an expensive hobby. I quickly found, however, in the course of pursuing my "addiction" of looking for guitars, that for every one or two instruments I encountered which were suitable for my personal collection, I would uncover dozens of pieces which were good deals that I could resell at a sufficient profit to support my hobby and make it self-sustaining. What started out as a few guitars in my dorm room quickly grew to fill one wall of my room in a small apartment. By the time I was in graduate school I had a bedroom filled with guitar cases to a depth of over three feet. Eventually it became clear that my avocation was becoming more than simply an obsession - it had become a profitable profession. My hobby now occupies a four-story building in downtown Nashville and employs almost two dozen people.

When I started the business in early 1970 I had the notion that I could buy, sell and trade instruments and learn guitar building and repair. At the time I had a very fine craftsman on staff who was quite willing to teach me his techniques. I quickly found that as soon as I would immerse myself in engraving, inlaying or lacquering, the phone would ring or a customer would come through the doors to "interrupt" me. This would not only break my concentration and train of thought but was quite stressful. My automatic response was to treat these customers as irritants when in fact they were the individuals who were supporting me. It soon became evident that my skills as a dealer financially far outweighed my personal talents as a repairman. While I could make a modest income by personally doing craft work, I could hire people who were more talented in that field than I was, and no employee was able to equal me as a wheeler/dealer. In addition, it was evident that while one can build a good guitar in a hundred hours of labor or do repair jobs in multiple hours of labor per instrument, it was frequently possible to buy, sell or trade an instrument in as little as five minutes. I made the transition to becoming a full-scale dealer rather than a repairman. I continued to be interested in guitar design but found that this activity needed to be confined to non-business hours. It simply was not possible to draw patterns and design new, innovative products while wheeling and dealing or waiting on customers, any more so than it had been possible previously to juggle repair work with the other aspects of running my business.

The manner in which I approach business has been very much influenced by my academic training. Rather than having a traditional business background or having gone to an MBA training program and studied so-called proper business procedure, I started out at the University of Chicago in pre-medicine and switched quickly to animal behavior psychology. I went on to do a year of graduate work in zoology at Duke University and did further graduate work in animal behavior psychology. From early childhood my interests were zoology rather than anything relating to business. My approach to running a business has been modeled on biological concepts rather than those typically taught in business administration circles. I tend to view fine vintage guitars, banjos and mandolins as biological specimens which can be categorized in a zoological taxonomic system. Reptile anatomy and classifications systems work superbly when applied to musical instruments. The dilemma of the conflicting demands of craftsmanship versus customer relations and business administration caused me to kick in my training and background in psychology. While I frequently joke that my training in this area helps me to better understand my customers and deal with temperamental artist syndrome on the part of my staff, the reality of the matter is that many of the business situations I encounter are indeed quite amenable to the techniques studied in psychology and zoology.

While a stockbroker or commodities trader frequently seems able to handle multiple telephone lines and computer screens and transact hundreds of separate deals during the course of a day without loss of efficiency or concentration, the painter, sculptor, potter, musical instrument maker or clothing designer needs to give undivided attention to craft activities and is severely disrupted by any interruptions. On the surface, it frequently appears that the business broker is more disciplined and efficient. However, the reality of the situation is that even if the broker had artistic skill, if he were asked to write poetry or paint a picture while simultaneously taking phone calls from clients he would be under tremendous stress and would be no better able to perform either task under these conditions than the artist or sculptor who is constantly interrupted. When the broker is going full swing at his activities, he is using primarily one side of the brain and a fairly specific set of brain chemistries, whereas the creative artist is using a different side of the brain and quite different brain chemistry. It simply is not possible to quickly flip back and forth from one such activity to the other. It is quite possible for the broker to handle numerous activities which involve the same area of the brain and the same brain chemistry, but he can not switch swiftly back and forth from one side of the brain and one set of brain chemistries to the other.

In feudal Japan some of the Shoguns were famous not only as statesmen and warriors but also as artist and poets. They did not, however, paint beautiful landscapes or write poetry on the battlefield. Some highly successful businessmen have hobbies in the arts. It is quite possible to engage in such widely diverse activities if one knows how to structure one's time. Tasks need to be organized into compatible groupings. A person can engage in business during a part of the day, take a break and "shift gears" and then engage in a new set of activities. A stockbroker, for example, can wheel and deal all day, come home and have dinner, perhaps a glass of wine, and read, write, paint, sculpt or engage in other artistic activities. Conversely a painter, sculptor, clothing designer or musical instrument builder can engage in design or craft work, take a break such as a meal or physical exercise and then shift gears and take care of customer relations, ordering supplies, bookkeeping, sales, etc. The key is to organize compatible activities and to avoid juxtaposing those that involve different areas of the brain and brain chemistry. One must recognize that it takes time to shift from one set of activities to another. Rapid shifts back and forth between incompatible activities will cause not only poor performance but undue stress.

While it is possible to fill an entire library with works on business organization, stress management and coordinated planning, I shall attempt to offer three basic concepts:
1. A business can be viewed as a biological organism. It needs to perform many of the same functions as a living entity.
2. One must clearly identify and prioritize necessary tasks.
3. It is essential to group tasks according to their compatibility with each other.

It has frequently been noted that the vast majority of businesses fail within the first two years. The typical reason given is that they are "under-capitalized." In my opinion, this is not only an over-simplification but it is blatantly false. Most businesses fail because the budding entrepreneur creates a caricature of a business rather than a business organism which is properly constructed for survival. Just as a caricature in a political cartoon may have a huge head attached to a tiny body or have various physical features greatly exaggerated while others are understated, the typical novice opening a new business tends to overstress the areas of his interest while under-emphasizing many needed functions. Just as an animal needs a body larger than its head in order to survive, a business must be properly proportioned such that all the needed functions are provided for.

Quite typically when a sales-oriented person opens a retail shop he devotes 90% or more of the space to the sales floor and has virtually no allotment for storage, offices, packing and shipping, repair or service. When a craftsman opens a business there is often a well-appointed workshop but no office or sales area. In the course of my business I have had three buildings. The first one measured 20 x 60 feet on one floor. The first 15 feet were devoted to the showroom, the remainder was office, storage and repair. My second building had approximately 6,500 feet on three floors. The showroom occupied 20 x 45 feet (900 square feet) on the first floor. My present building has 12,000 square feet of space on four floors. The first floor is primarily showroom with some office area. The second floor has a violin showroom and office space. The rest of the building is devoted to offices, storage, packing and shipping, and repairs.

When customers or even media reporters are given a complete tour of the building the most generally voiced comment is an expression of amazement that there is so much going on beyond the showroom. In my opinion this demonstrates a basic failure to comprehend what really makes for success in business. Certainly a showroom is important in a sales-driven organization. However, the showroom is much like the head of an animal. It does not function well with an undersized body to sustain it. In order to provide a good impression to the customer walking through the door or to provide proper service for the mail-order consumer, one must take care of all the functions, ranging from purchasing, maintenance and restoration of inventory, secretarial, managerial, packing and shipping, onward to computerization and maintenance of an Internet web site. Even activities as mundane as janitorial services are absolutely essential to the success of a business. A breakdown on any one system cause stress throughout the entire organism. An excellent analogy would be Walter Cronkite on the evening news. The audience sees an anchorperson from the waist up. Viewing the screen, one doesn't even know for sure if he is wearing pants. One certainly does not see the field reporters, cameramen, soundmen, satellite technicians, ad salespeople, secretaries, janitors, etc. The fact is, without the staff of thousands to make him look good, Cronkite would not have been the success he was.

In constructing a business one must identify the functions needed and provide both space and personnel to perform these tasks. In a large organization with multiple employees it is critical to have people specifically assigned to the tasks necessary and to which these people are best suited. In a small organization, it may be necessary for one person to perform multiple tasks. However, there still needs to be physical space set up which is compatible for the performance of such tasks, and one must organize time in such a manner that the tasks can be done with efficiency.

Just as many people in both business and art over-emphasize the areas of their interest and de-emphasize critically important but "boring" or "stressful" activities, many individuals simply do not properly identify the necessary tasks that need to be performed in the course of the day, week or month. It is helpful to write a list of all the activities one needs to perform and, insofar as is possible, to rank them in order of priority. Just because a task isn't "fun" doesn't mean it isn't essential. If a task is worth doing, even if it has low priority, it should be recognized that it is still important. Many people fail in business or the arts simply due to the fact that they never clearly set forth the tasks they must perform.

Once tasks are clearly stated, it is essential to group them on the basis of compatibility with each other. Creative design differs from the actual productive craftsmanship of making a piece of art. In turn, dealing with customers who wish to place orders is quite a different activity from bookkeeping. Any good artist knows that it feels different to be creatively designing a new product or painting a picture than it does to be sitting down and preparing one's taxes. Some people actually enjoy accounting. For them it is almost an art form, but it certainly is a different activity from painting a picture. Other people get a charge out of sales, buying or promotion. It is quite a different feeling psychologically and physically to sell versus paint a picture. While there have been a number of studies on the psychological and physiological difference in brain function and on chemistry or artistic versus scientific and computational activities, I am not aware of any studies that break down the differences in brain functions and chemistry in selling, buying, bookkeeping, and business management. The fact remains, however, that these activities do inherently feel different. My advice for the artist or businessperson is to group together activities that feel the same. Needless to say, this will take some trial and error. With practice one should be able to find which activities mesh properly and which ones clash. Perhaps the greatest challenge is to avoid the pitfall of indefinitely postponing all activities one does not like such that they accumulate and leave one buried in an insurmountable mountain of unpleasant but necessary tasks.

As a budding entrepreneur or artist will soon find out, as business grows, in spite of careful time and stress management, there is a limit to how much one person can reasonably be expected to accomplish. Different individuals have their own specific best talents. One man's meat is another man's poison. In my own case I prefer to concentrate on design, longterm business management, purchasing vintage collectible instruments and writing. Rather than trying to handle all aspects of the business myself, I find that I am far more creative, happier and more productive for having hired a business manager and excellent staff. It has been my goal to hire people who enjoy their work and can do their specific tasks more efficiently and better than I could. Using a biological model, one might say that I prefer to perform the cerebral brain stem functions and a staff to serve as a body. I don't want my manager's job. Fortunately for me, she doesn't want my job. We have great respect for each other, and neither of us would be nearly as successful without the other. Conversely, my secretary does her task infinitely better than I could do it, and all of my repairmen are better than I am at their tasks. On the other hand, no one on my staff can do my job as well as I do. I am free to spend full time doing what I like best. This still involves having to carefully organize my time. Musical instrument design, promotion, longterm business management, buying, selling and writing are quite different tasks. I find that I do my best design work and writing late at night when I have no interruptions from customers, staff or family.

In the past at Gruhn Guitars, our repair staff dealt directly with the public. We soon found that fully half their time was involved in talking to customers rather than actual creative craftsmanship. They were constantly being interrupted such that their efficiency was, at best, questionable. Today we confine our repair work to servicing those instruments which we buy and sell. The sales staff handles contact with the public. Repair estimates are done once a day rather than interspersed throughout the course of the day. On rare occasions, if the showroom is absolutely swamped, we may call a repairman to help with our sales. We do not, however, ask people to randomly flip and flop from one task to another every five to ten minutes. The amount of completed repair work per man has virtually doubled under this system and employee morale is better than ever. An independent craftsman cannot totally avoid contact with the public. However, he can and must learn to budget his time and organize his activities to be efficient. If a group of craftspeople are working together it is possible for them to rotate the task of being the "front man" to deal with the public or to hire a person to perform this task, thereby freeing the others to concentrate on their work.

My advice for those in artistic fields is to keep in mind that they have a business as well as artistry. It is necessary to budget time and attention. Sometimes it is best to learn how to delegate tasks. Accounting and tax preparation are usually best contracted to a professional. Unless you are an expert on tax law and have plenty of spare time, you will save money and reduce stress by concentrating your efforts on tasks which are central to your business and those which cannot be subcontracted. Some of the most successful artists engage an agent for sales or promotion. While an artist may be hesitant to pay a commission to a broker or agent to handle his work, frequently this may be an excellent choice. A good agent with proper experience and connections can not only frequently do a better job of promotion and get higher prices for the commodity, but the agent devotes full time and attention to what he truly enjoys the most, freeing the artist to do his or her thing. If an agent gets even as much as a 20% commission, this can be well worth it. It frees the artist to spend full time on creative activities rather than 40% or more of his time trying to do sales and promotions and constantly interrupting his activities, thereby reducing his efficiency. At the very least, even if one does not utilize an agent, it is critically important to separate creative time from that which is used to answer customer requests or make sales. One must confine business activities to certain times of the day and train the customers and suppliers to do their transactions during that time. Business hours should be clearly stated to avoid confusion and hard feelings. The rest of the time it would be best to leave the answering machine on with a message letting them know when you can be reached and when to expect messages to be returned.

While in actual practice these rules are not necessarily cast in concrete and may be amenable to some flexibility, if the guidelines are followed, creativity, productivity and profitability should be dramatically improved.

Sincerely,
George Gruhn