Archives July 2020

Business – Five Tips for Business Startups

Today’s article is a guest post from Howie Bick.

Howie Bick is the founder of The Analyst Handbook. The Analyst Handbook is a collection of 16 guides created to help current and aspiring Analysts advance their careers. Prior to founding The Analyst Handbook, Howie was a financial analyst.

Things To Keep In Mind When Starting A Business

Building or creating a business is an endeavor that incorporates a variety of different factors, and touches upon multiple different topics. Within the building of a business, there are lots of ideas to think about, like the amount of capital you may need in order to begin, the type of overhead or expenses you may have on a monthly basis, the type of market or demographic you’ll be catering to, and the type of competition that’s out there. The business landscape is one that requires business owners or managers to manage and handle a variety of tasks and wear multiple different hats at once. Keeping these things in mind, and having a good idea of what’s ahead, will be beneficial for anyone trying to build or create a business.

The Market or Demographic You’re Catering To

Each business or company has a particular demographic or market that they are looking to cater to. The market or demographic a company or business is looking to cater to, is often a group of people who have something in common, like a problem, an issue, or a desire they’re looking to solve. It can be something they need, desire, or want, but the business is looking to provide a solution or deliver the type of results their customers are looking for. Figuring out the market or demographic you’re looking to cater to, is a great place to start. That way, you can get an idea of the types of services they may be looking for, the type of products that may interest them, or the type of solutions they may be looking for. The way a business positions themselves, with their offerings to their customers, plays an important role in the way potential customers view them, and the way they’re viewed within the marketplace.

Competitive Advantages or Competitive Edges

Businesses that are able to carve out a particular niche, or area where they’re successful, often have a competitive edge, or a competitive advantage over the competition. A competitive edge is something that a business does better or more effectively than their competitors, or something that allows them to differentiate themselves within the marketplace. It’s an important element to any company or business, that’s looking to compete in a market where there are lots of options, and many parties looking to fulfill or satisfy their customers desires. Companies can develop competitive advantages through their prior experiences, the type of packages or services they offer to their competitors, or the type of knowledge or information they may have that others don’t. It’s something that’s important to keep in mind, when you’re evaluating whether you may be successful in a certain market, or whether you’re capable of differentiating yourself among the competition.

The Initial or Upfront Costs Associated With Starting

Every business requires a certain amount of investment, or capital in order to begin operating. Whether it’s getting a space and signing a lease, or acquiring the type of machinery you may need to operate, the costs associated with creating or building a business depend on the type of company you’re looking to build, and the types of products or services you plan to offer. It’s important to have a sense of the amount of capital or investment it may cost to create a business. It’s a tough situation when you decide to start a business and invest the capital or resources you do have, to later find out that you don’t have enough, or need to obtain more. By having an idea or a sense of the type of investment a certain business requires you can prepare or plan in advance or prior to creating the business and be better situated to develop or create the business you were looking to build.

The Monthly Costs or Expenditures

Similar to the amount of capital or investment you may need in order to start or build a business, having a sense or an idea of the types of costs or expenses that your business may accrue or cost on a monthly basis is an important metric to keep an eye on. The age-old business equation is revenue minus expenses equals profit. By having an idea of the type of expenses you may accrue, you’re able to get an idea of how much business you need to do, or how much revenue you need to generate in order to make money in a month. You’re also able to have an idea of how much capital or money you need to keep on hand to continue operating and continue running the business. The monthly costs or expenditures associated with a business is an important figure to keep an eye on, and to monitor during the operations of a business, and prior to starting or creating a business.

Personal Expenses Continue to Accrue

Whenever you’re starting something new, a new job, a new company, or a new business, it’s important to keep in mind that your personal expenses continue to accrue. In the beginning stages of building a business, it often takes a bit of time to get going, and to start making the type of money you’re looking to make. That’s why, it’s important to consider that even though you may be starting a new business or a new company, which is great and congratulations, that you’ll still need to find a way to pay bills and provide for yourself. It’s something that’s a bit of a struggle for a new business owner, who’s truly looking to build a business to support themselves, or to generate the type of income they’re looking for. Preparing and planning in advance is something that can be very beneficial to lightening the load and making the transition an easier process or ordeal for you financially.

Conclusion

Building a business is something that comes with lots of different ideas to keep in mind and brings in to play lots of different factors as well. The market or demographic you’re trying to cater to, is an important part of any business, as it’s the group of people or companies you’re looking to interact with and find a way to provide value to. The competitive edge or competitive advantage a company has, is important in a company’s efforts to stand out within a marketplace or find a way to differentiate itself among its competitors. By having a sense of how much capital or investment you might need to start a business, you can have an idea of whether you have enough to begin, or whether you need to wait longer, or figure out another way. Having that sense of how much investment it might require, can save you spending lots of your money on something that may not be feasible just yet, or a bit out of reach. The monthly costs or expenditures that a business requires, is important to know how much revenue you need to generate, and the type of capital or money you need to keep on hand in order to continue operating. A lot of what corporate finance is, is managing the finances behind a business, making sure that the business has what it needs to continue operating, and finding ways to continue to grow and develop the business as well. Even though you may be starting something new, and you need time to bring it into fruition, personal expenses are something that continue to accrue, and are important to keep in mind when building a business. All in all, creating a business is something that comes with lots of different factors, a lot more than the few we were able to highlight. We hoped this helped and shined light on some of the important factors to consider when starting or creating a business.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my articles, please share them with others and subscribe to this blog.

Personal Improvement – Habits and How to Change Them

I hope everyone is doing well. I am learning the ins and outs of being a REALTOR®. The kids are preparing to go back to school with a staggered schedule and a blend of virtual and in-person learning. AND, no extracurricular activities such as marching band, various band and choir competitions, etc.

This will be far different from what they are used to. They hesitant about their ability to do school work consistently outside of a classroom environment. We will have to help them to develop new habits to successfully reach their goals. Which brings us to our topic: Habits and How to Change Them.

Habits & Productivity

I recognized that habits are responsible for productivity at a young age. I grew up with undiagnosed ADHD and had trouble focusing on any given task. I would generally get bored and move on to something more exciting.

My maternal grandfather, whom I am named after, recognized this and pulled me aside to tell me a story one day. He told me of Bethlehem Steel and how they worked and worked, but just couldn’t seem to make progress. After continued diminishing profits and increased backlogs, the CEO brought in a consultant to tell him what the problem was. The consultant studied the company’s business and reported back to the CEO. His findings were that across the company, tasks were started, then paused, to jump to other tasks. This happened over and over again, delaying production.

His recommendation was to prioritize the tasks needing to be accomplished, with the most important task at the top of the list. But the biggest change was that they could not move on to another task until the current task was completed.

This practice was implemented and Bethlehem Steel went on to become the second largest steel company in the US.

This story had a big impact on me in that it drove me to develop the habit to focus on a task until either it was completed or nothing more could be done with it.

In researching the details of the Bethlehem Steel story, I discovered some interesting things. This happened over 100 years ago, (1918), Charles Schwab was the CEO, and the practice that turned things around is called “The Ivy Lee Method”. While Mr. Schwab may sound familiar, the ILM did not, but I recognized it as the basis for a lot of time management programs. Making a prioritized list is now a common approach for productivity.

The ILM requires that at the end of each day, you make a list of the six most important tasks that need to be accomplished the next day. Then you complete the first item before moving on to the next item. Any leftover items on the list move to the next day’s list.

This method is lauded as being simple to follow, so that makes it effective when practiced. But sometimes, having too many “To Dos” becomes daunting. It can become an impenetrable wall discouraging you from doing more.

Gary Keller ran across this when he was building Keller Williams Realty. What he realized, is that your list should only be comprised of one thing, as described in his book, The One Thing. That method involves doing the one thing that makes everything else in your day easier/better/more productive.

Knowing vs. Doing

Based on the ILM, The One Thing, and various models, it seems we have many models to follow to accomplish our daily goals. We know what needs to be done. Or at least can easily find out/figure out those things.

Some people find the real struggle is actually doing them. I find that it all boils down to what you are willing to do to achieve your goals. Excuses get made as to why you aren’t, can’t, or won’t do something. But they are just that: EXCUSES.

Here is something else that stuck with me from when I was younger: a Stephen King short story called “Survivor Type”. The story is a bit disturbing and somewhat gory, as Stephen King stories are want to be.

Synopsys: A doctor is stuck on an atoll after some bad decisions that ruined his life. He is determined to live. He then proceeds to do disturbing things to survive.

When I read this story, the question that kept running through my mind was “What would you be willing to do to accomplish your goals?” To me, that is the take-away.

If you are in the habit of staying in your comfort zone and your focus changes like a leaf blowing in the wind, it will be hard to accomplish your goals.

Habits

The first step is to have a goal.

Then have a heart- to- heart with yourself to determine what you are willing to do to achieve your goal.

Start practicing a model that will help you reach your goal. Do it daily.

Eventually, the practice of the model will become a habit. This is how you succeed.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

Automation – Fluids Automation: A Primer

This article was originally posted on SOURCEZON‘s Knowledgebase.

I was asked to write a series of articles covering Fluids Automation, real time hydraulics, and automated fluid property sensors for addition to the knowledgebase at a friend’s company. I decided to cross-publish it here and plan to do the same with the other articles in the series. Please let me know what you think about it.

This is the first in a series of articles on Fluids Automation and associated topics. The intent is to provide some background and a current state of the topic in the industry. The plan is to cover General Fluids Automation in this article, then follow with articles on real time hydraulics software and automated fluids testing equipment.

Fluids Automation is a subject that covers segments including equipment, software, and services. It is mainly focused on the automation and enhancement of manual processes of fluids maintenance and optimization with regard to drilling and completing oil and gas exploration wells. 

Fluids Background

Traditionally, fluids are maintained by a technician commonly referred to as a “Mud Engineer”, “Fluids Engineer”, or “Completion Fluids Engineer”. They are responsible for maintaining physical and chemical properties of the particular fluid(s) being used, tracking fluid volumes, wet and dry chemical inventory, and making recommendations for drilling operations to maintain downhole pressures within the “Goldilocks Zone”. 

The Goldilocks Zone is where the pressure is less the amount needed to fracture the formation, which could lead to fluid losses, and more than the amount needed to balance the formation pressure, thus keeping the formation fluids from entering the wellbore and potentially causing a catastrophic “kick” situation. 

Part of maintaining the physical and chemical properties involves conducting tests. Some are as simple as filling the cup on a mud balance, taking the temperature with a thermometer, or heating the fluid to a set temperature then using a rheometer to determine how the fluid reacts under levels of shear stress; whereas others are as complex as extracting filtrate from the fluid under pressure, then conducting various chemical titrations to determine the chemical properties. 

In addition to testing, Fluids Engineers also must run hydraulic simulations under various operational conditions to confirm that the fluid’s current property set does not cause an excursion of down hole pressures outside of the Goldilocks Zone. 

This does not take into account the time spent on doing reports, actually counting inventory, attending daily safety and operational meetings, participating in evacuation drills, overseeing fluid treatments, and any special rig operations like cement jobs or displacements. 

For a twenty-four (24) hour day, a minimum of six (6) hours can be taken up by conducting the basic tests for a non-aqueous fluid, assuming one check each of the fluid going in and out of the hole every twelve hours. That is twenty-five percent (25%) of the day consumed by just testing.

For those six hours, you get four snapshots of what is going on with your circulating fluid system. To possibly make things easier to visualize, imagine your fluid system as a timeline that repeats every twenty-four hours. You get to see what is happening at 08:00, 12:00, 20:00, and 00:00, every day. 

That would be fine if you had a homogeneous fluid system. The problem is that most systems are not. Whether caused by “dusting up too much” or dumping all of the treatment in at the end of the tour (shift) instead of continuously feeding it in, this causes a variation in the system. And with only four snapshots a day, it is hard to determine if this is going on. This could lead to over or under treating the fluid depending on the representative sample that was tested. If the treatment was put in all at once and the sample represented that situation, then the treatment recommendation might be to either not treat, because the properties tested where they should be or to treat to reduce the properties, because they are too high. In either situation, the rest of the fluid set does not represent the sample tested, it gets no treatment or the wrong treatment. Luckily, experienced fluids engineers conduct spot checks to verify specific properties in between running the full fluid checks.

Fluids engineers also do hydraulic simulations, based on fluid properties and current or proposed drilling parameters, to determine downhole pressures, cuttings loads, (the volume of cuttings drilled and still being carried within the wellbore), and safe tripping speeds, (how fast you can move the drill pipe or casing in the wellbore without getting out of the Goldilocks zone of pressure; think of it like a syringe plunger). This used to be calculated by hand many years ago, but is now simulated by software. The fluids engineer is able to do multiple snapshot simulations based on different inputs, providing options for a go-forward plan. This software has the ability to simulate how long it would take for cuttings being generated at the start of the simulation to be carried out of the wellbore. This allows users to “see ahead of the bit”, understanding what their hydraulics and cuttings loads might look like under the inputted parameters.

Fluids Automation

The idea for fluids automation has been around for years. Companies have tried to develop “black box solutions” at a time when the required computing power was just not there. This resulted in limited outputs and only narrow scoped scenarios being able to be handled. 

Fast-forward to the aughts (2000-2010), where significant progress was made on developing accurate real time hydraulics software. This software was able to provide the same information that a fluids engineer’s snapshot simulations could provide, but instead of repeatedly inputting minor changes to the drilling parameters, it received a real time data feed from the rig operations. This allowed for continuous simulation of down hole pressures that real time actual measurements from PWD, (Pressure While Drilling tool), could be compared to. 

These early versions would just run continuous snapshots based on manually entered fluid parameters. It would not reflect changes in density until the software operator received notice that the density had changed. This would lead to differences observed when comparing the measured down hole pressure to the simulated pressure because the actual measurement would change as soon as the density started to change, while the real time hydraulics software output would not change until a new density was entered. 

Another limitation was that only a single wellbore fluid could be simulated at a time. This presented issues when pumping sweeps or doing displacements, causing those situations to not be modeled correctly.

There were other issues in how the cuttings were treated in the simulation. Since results were a series of snapshots, it did not take historical actions into account. If the rig stopped pumping, the simulation assumed no change during that time, then started from where it left off when the pumps came back on. It did not reflect cuttings migrating down the wellbore during this lack of flow.  

More recent generations of real time hydraulics software have all but eliminated these issues. They can still provide the snapshot lookahead, but additionally track cuttings transport in the wellbore over time, taking into account migration when not pumping. They also handle multiple fluids in the wellbore, pipe rotation effects on ECD, and gel structure effects on rheology. 

As implied above, fluid properties have an impact on down hole pressures, otherwise known as ECD (Equivalent Circulating Density), the down hole pressure when circulating or ESD (Equivalent Static Density), the down hole pressure when static or not circulating. The biggest influencers are density and rheology. Changes to these properties have the biggest impact on downhole pressures. 

Having automated sensors for density and rheology allow for data frequency to better reflect how the fluid system varies as it is being circulated through the system. The key is to have accurate API-specific measurements that can be consumed by the real time hydraulics software. This allows for the measurements to be utilized by any software or calculation that relies on API density and rheology as inputs. 

This fluids data can also be combined with the rest of the real time data from the rig to determine several things: 

  • What is currently going on (on the rig)? 
  • Is it being done as efficiently as possible? 
  • Are there any hazards occurring or likely to occur in the near-term?

Currently, these things are determined by trained specialists who monitor the data twenty-four hours a day. This allows them to pay attention to a maximum of three jobs, when operations are running smoothly. This capacity drops as soon as operations or events become difficult, requiring more focus from the individual.

Eventually, when the right minds get together, these questions will be able to be answered by algorithms. This will allow a single specialist to monitor ten or more jobs simultaneously, increasing capacity and efficiency. 

Such is the state of Fluids Automation as of the summer of 2020.

And, as always, let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this blog.

Personal – I Passed!

As I have stated in previous articles, since leaving the oilfield I intended to move more into real estate. Part of working towards that goal is to become a real estate agent.

I began attending an online Louisiana Real Estate Salesperson course and successfully completed it over the course of a month while taking a week vacation during the same time period.

I have now completed the next step required to become an agent by passing the state and national portions of the exam.

I will begin onboarding next week with a local office of a national franchise.

That’s all for now. I just wanted to let everyone know about my progress.

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