Warrem Buffet does it again

He is amazing. Buying Bank of America (BAC) stock. I actually bought it BEFORE I knew about his arrangement to invest $5 Billion (almost as much as I bought). I called my nephew, who is my broker (swheeler@metlife.com), and we agreed that it might be time so here we go. However, the most important part of the decision process cam from my wife, Pat. She thought it was a good idea too. Guess what, we are already doing well in it. For your information and reading pleasure, her blog is http://www.patcareyanoldwifestales.blogspot.com/. It is very good and very funny.

Speaking of Pat, Saturday, September 3rd, we will be married 45 glorious years. Next to accepting Jesus Christ as my Savior, Pat is the best thing to ever happen to me. PTL for a wonderful, loving wife.

That is what I have to say. What about you?

August 2nd...what should small business do.

August 2nd. What should small business do? In a word, NOTHING. This thing will get resolved. Come on. the United States of America has been through worse and survived and we will survive this as well. I am ashamed of the fear mongering being done by President Obama, Harry Reid and the media.

The other night I listened to Michelle Bachman, Presidential candidate and Tom Coburn the outstanding Senator from Oklahoma talk about this. They both had practical approaches and both said, rest assured, it will be resolved. In a nutshell, pay the interest when due (only $300 billion), avoid default, and them negotiate a solution. Come on people in D.C., stop posturing and get to work. Especially, those of you on the public dole and out campaigning on our dime!!!!

Well that is my opinion, share yours with me.

My wife the blogger

A monster has been created! My wife has started a blog. It is really good. Not much about business, but a lot about her and the family. She is at http://www.patcareyanoldwifestales.blogspot.com/. Try it you will like it.


Concerning business. What about it. It sucks, it is good, it sucks, it is good, etc. This debt ceiling crisis has every one up in arms thanks to the liberal media that has panicked everyone. Really it is panic by reporters/TV stations again. Use your heads people. The right thing will get done. There will be compromise or something. I think the Tea Party is right. I think Cap, Cut and Balance is right but I also feel that there are people in this country that are getting breaks they should not. Believe it or not, I think Obama might, MIGHT, be right on something. Big oil for example, should not get the same tax breaks little oil companies get. So, set an amount, say, $1 Billion in sales companies or less get them. I don't know what the number should be pick it and get on with it.

That's my opinion, what is yours.

I might be back.

I am going to come back and begin this blog again. Is there anyone out there still following me?

Shall I start again?

It has been awhile since I have blogged. I have missed it but Pat had breast cancer surgery several times and that has kept me busy. Also, I have 2 consulting clients that have, from time to time, kept me busy as well. I have got to get these bills paid so I can retire. To learn more, please go to our FaceBook page.



Both of my curent clients are interesting in their own way. Both are in "wind down" mode, both have uncertain futures, both involve regular businesses with real estate investments involved and both have been plagued by the economy and the building/leasing/selling situation that hit our region of the country last and will be the last area to pull out of it. The areas in which they differ are interesting as well. One is highly intelligent and the first real know-it-all I have met. I know several people who act like it, but this guy, I think, believes it. The second person also knows a lot but fains not knowing some things so as to get your reaction and then pounce on your lack of knowledge or expertise. Each presents its own challenges. The big difference? One is open to suggestion and new ideas, the other says he is open to new suggestins and ideas but is not really.

So how do you handle these divergent personalities as a consultant? Screw them both! Really, just be myself, tell them what I believe or know to be what is right and if they want the help fine, if not fine. I get paid either way or I go home. Either way, I win. What about the client. It is their choice. By knowing everything, it is hard for them to make changes. Especially, the guy who was extremely successful and now sucks but still thinks he should act like he knows what he is doing OR he is crying about his troubles to everyone and anyone who will listen. Listening! Ah, that is my job! Listening. Novel idea, huh!

Try it you'll like it! What do you think?

Happy New Year

Well, here we go into 2010. I am ready for 2010. 2009 was not that bad especially healthwise, but I need 2010 to be better. I really would like to work more. I just went on Medicare and if I made that my only insurance my wife would have lost her coverage completely and finding and individual policy for a 62 year old would have been astronomical. So, I am keeping my employer coverage by making Medicare my primary coverage and my health carrier secondary. That way my wife stays on the employer plan until she can go on Medicare. The cost: $630 per month. Ouch! But what are you going to do? We have to have insurance especially now that my wife is having surgery.

Imagine how this will impact most employers. Not only people like me but the cost of health insurance has got to go up. I wrote in this blog last year about our health insurance and that it did not go up 1 penny in July, 2009 which was the beginning of our plan year. Now that the company makes us responsible for our health coverage through them, it is really tough. If "ObamaCare" is passed and becomes the law of the land, watch out. All the rhetoric and BS coming from the President himself and the Congressional leaders is absolutely ludicrous and a bold faced lie. The only guy on Capital Hill with any concept of what is going on is Dr. Tom Coburn the Senator from Oklahoma. The man is brilliant and he knows what he is talking about. It is just not true that this is landmark legislation.

Another thing. the monkey for supplying health care coverage will be on the backs of small and family owned businesses because the so-called "co-ops" only contain those who cannot or will not be covered by an employer sponsored medical plan. They tout that "30,000,000" more Americans will have health insurance. Bologna!!!!! Two things:
1. There is going to be a penalty for not signing. Who gives them the right to do this. This is American. If someone chooses not to have health insurance, so be it. Of course, those people become a drag on Society if they get really sick and have to get charity or help from the government.
2. The penalty is stupid. It does not amount to anything. It is really just a propaganda tool for the government to say they are tough. No really. It is a pittance and will not make one bit of difference and is just another way for the government to give the IRS something else to do to promote the bureaucratic nightmare that already is out of control.

Oh Well. That is what I think. Probably should not say what I think. Someone might think that I am a right-winged weirdo! GUILTY!!!!!!

What do you think?

Here is an amazing business principle.

Actually, there are 3 amazing business principles to pass to you from the far reaches of the great intellect and superb intelligence. These principles, although not new to me, seem to be at risk from some incredibly intelligent business people.....your President, Congress, and other people in all forms of government. You realize, of course, that the government is knocking on your door and they are here to help, like it or not.

These principles need to be in place now. If unemployment is to be reversed and the economy is to get going, these principles must be in place. I am not sure they can be though given the far reaching efforts and long arm of the law. Here we go:
1. You are in business to make a profit. Gouge people? No. Make as much profit as you can no matter what you have to do? No. Be profitable though. You cannot expand or hire more people, if you need to, with profitability. Notice I said profit. Not borrowing. I am somewhat glad that money is tight right now for there are those who believe that a business can borrow to success. Certainly some loans are necessary to fill in when receivables are slow and equipment is needed now, but you cannot borrow your way to profitability by itself. You must be making a profit that is income AFTER all expenses. Not accounting tricks, but real, honest-to-God profit.
2. If you are in a business that sells things then you must buy low and sell high. Certainly that is true with cars and trucks (especially used) but it is true with almost everything. Do you think McDonald's makes money on their dollar ($1) menu, you bet. So they must buy ingredients low and sell for that dollar. Do you think Wal-Mart by selling at low prices is doing so because they are a benevolent corporation. They may be, but their objective is profit. They buy as low as they can and sell at a price they know will sell and make them some money. In both these instances the amazing thing is that they are profitable because they make their money on the buy. They buy things right so they can sell them right. You know what else, they are not greedy. They make reasonable money, pay their people reasonably, provide decent benefits and work environment and are successful.
3. Don't be greedy. Make money, make a lot of money, but do not be greedy. Wall Street is learning a valuable lesson. They were greedy and people made unconscionable amounts of money, waived it in every one's face and guess what? The government is going to now regulate them to death. If they had been reasonable, given back to the community and distributed profits to everyone, and I mean everyone in the company at the same rate, they would all still be rich. Should you be rich? Sure. But not at the expense of your wife and kids, God and giving back. Remember, making money is the name of the game. If not, go to work for someone else. But do not be greedy. Be humble and honest and take care of the people who got you there. Usually, your employees.

Now how is that for 3 principles you can live with? What do you think?

Downgrade, downsize, down in the dumps?

I just read a good article about Sprint (stock symbol "S"). I have had an order to buy in for about a month at what I thought was a good price. But, the stock has just kept going up recently much to my chagrin as I am a bottom fisher. My thought process was that after purchasing Nextel and trying to expand that and that not working well and loosing customers and market share the stock would go down and it did. But, then they had a resurgence and there was news that the parent of T-Mobile (a German firm) was going to buy them. Then, yesterday the stock was quoted by Nightly Business Report as being "undervalued". I thought, well I guess that one is gone. But today, it was downgraded because the T-Mobile purchase looks grim. That may change tomorrow but for now the stock is declining which I like until I buy it. So there is downgrade.

4 mornings a week, my wife and I ride recumbent bikes at a local church that has a small group of workout equipment which they let the public use for free. We like it and it is helping raise our good Cholesterol. We were talking to a man there who walks and runs their track and does it for 3 miles each day and he said that he had lost 60 pounds. I asked if it was just diet and exercise. He said "just exercise". That was amazing to me. He said that the exercise made him not want to eat as much but that he ate whatever he wanted. So do I and I exercise but not the same result. Yet! I guess you could say he downsized.

Recently I talked with a guy who had built a small empire 3 times. Made a ton of money and lost a ton of money each. Now he was getting ready to loose his latest fortune again. He had done a lot of things right, a lot more things wrong (most of them in his personal life). In talking with him I detected that he was mad at himself, mad at his employees, mad at the government, mad at the economy and mad at his situation which he, of course, created for himself. Everyone was at fault except for guess who? Himself! He was at fault. He was down in the dumps to say the least. Guess what his business is going to die because..............................he has taken his eyes off the target. What is the target? GET MORE BUSINESS EVEN IF HE HAS TO DO IT HIMSELF. Which, at the end of our meeting, he said for himself. He really is a capable and very smart. He must get rid of his sales guy and go selling himself. He is amazingly capable but he thought he had arrived, he had done all the right organizational things, all the right downgrading and downsizing but he got down in the dumps and forgot that nothing matters if you do not have sales.

Many businesses today need to downgrade their opinion of themselves, downsize the business and themselves and realize they are down in the dumps (just like the economy) but what an opportunity. Like the way I buy stock. Unless the company is in Chapter 7 or 11, it will come back. So will your business. Don't Quit yet! Do what you have always done best. Go back to the basics. If you do not trust God, do it now! Some of you may not appreciate this, but the Bible say to "Trust in the Lord with all your heart and lean NOT on your own understanding. In all your ways acknowledge HIM and He will direct your paths". Do it.

What do you think?

In a pickle? Want a pickle? Pickled Pigs Feet?

When I was growing up, my Mom went to the grocery store weekly. Usually we walked there or, if she had some money, we took a cab. We did not have a car until I was 10. Anyway, We would go the Butcher who was in the National Food Store and he would package up whatever meat she was buying for our family. When I went with her the thing that always caught my attention was the large jar of Pickled Pigs Feet that sat up on the meat counter. It always looked like body parts in juice to me. Yuk!

My Mom used to buy them occasionally though because they were cheap. We had them in beans and sometimes she scrapped them and made something like ham salad for sandwiches. They were awful to m and nasty to look at. I think this recession is like Pickled Pigs Feet. Nobody likes to look at them but some people have to have to live on because they were cheap! Sometimes people just have to cut back to make ends meet and they learn that when they cut back, they really can get by with less or less expensive.

Small and family owned businesses are like that today. Many large businesses too. They have learned, when business went away, to cut back, lay off, reduce inventories and live with less than what they thought they MUST have. Good! Now they are not hiring and are buying slowly because they are being cautious and because they have learned to do without and to make the best use of what they have. Unfortunately, that means they will not be hiring quickly but it also means that the people they have are more important to them and the people they do have WANT their jobs and are not necessarily needing someone like a union to make sure they keep their jobs. I say, small business unit. Dump the union if you have and can, keep on being careful, make sure your inventories are cut to the bone (use JIT, MRP, Kan-Kan, RFID whatever) and replenish previous levels of finished, saleable goods only as you can justify the increase with......... ORDERS, SALES AND SHIPPING!!!!!!

President Obama just had a job summit. Huh? Is that crazy or what. What can he do to create jobs? Force employers to hire people like he forced the stimulus on us. No way. However, they did talk about doing something that might actually save jobs. Cut taxes (either payroll or other) so that the small business can again be profitable enough to expand and, eventually, hire people. I know what he is trying to do and I applaud the effort. However, if he would butt out of the Free Enterprise System and let it recover from here on its own. I saw the other day an alarming statistic. In the Presidents cabinet, staff and their staff, only about 5% of the people have any business experience at all. They are all good, however, at Chicago type politics and gangster methods.

That is what pickles me. How about you?

Sarah Palin and business

I like Former Alaska Governor Sarah Palin. She is honest and a breath of fresh air, I think. Also, she has run something and been involved with business for years. In our current administration the reason they are so stupid about how to get the economy going is that they have never been more than a neighborhood organizer or an attorney. Some of them are so inexperienced that they have been business wanna be's all their life and now Barak Obama has given their first shot at anything and it is affecting us all.

I heard Mrs. Palin on Sean Hannity's show (he is OK sometimes, real good at throwing a football) and when he asked her about business she knew exactly what she would do and how to get it done. Unfortuanately, the jokers we have in this administration, can only think about providing everything to everybody. This is America. Not Sweden, Finland, Russia or even Saudi Arabia. It is free enterprise. As I have said before in this blog, my vote goes to American ingenuity every time. Not Chicagoland politics. Thank you Richard Daly.

What do you think?

What is going on anyway?

Amazing how many small and family owned businesses are so afraid to do anything. Now is the time folks. Now is the time. Once this recovery gets going full bore, watch out on prices. You can get people, raw materials, real estate, supplies, etc. at really low prices. Now is not the time to back down. Now is the time to get after it! Except, if you have to borrow 100% to do it. That might not be a good idea UNLESS it is real estate.

Did you put back anything. Did you cut people and expenses and are now running "leaner and meaner"? I hope so. It was very interesting to me when the Nightly Business Report (PBS) said that small businesses are making money, lots of money, with less sales because they have made the cuts necessary to do so AND they are finding out that they were blotted......overstaffed and not lean on expenses and now that they are they do not want to go back HIP HIP HOORAY!

If you have done that, then now is the time to expand or do some of those things you always wanted to do. Get that equipment or building or start a new product or division. Do it carefully and leaner. But, do it! Prices today are great in real estate and equipment. Many equipment suppliers have bigger inventories than they should. They will sell and finance cheaply. Try it!

Unless our illustrious President screws it up further, things could be good. Not because consumers are buying more right now, but because small business and even big business has learned to operate leaner. You don't think so. Look at Ford. $900 million dollar profit in North America not because sales have reached levels of 2years ago, but because they are leaner and meaner everywhere.

Start thinking right now. What should I be doing. Where should I be going. Where am I in my Strategic Plan? Don't have a plan, do one. Right now!

What do you think?

Hey Dude, what do you know about business?

That is a question I would like to ask President Obama and anyone on his staff. They do not have a clue. NOT A CLUE! Cap & Trade, Stimulus, Healthcare Reform,treatment of our troops, how to wage and then end this war, etc., etc., etc. Not a clue.

from a business standpoint, Mr. Obama would make a good neighborhood organizer. This guy doesn't not have the know-how or the forward thinking to understand what is going on beyond the end of his nose. I recently watched a discussion between Warren Buffet and Bill Gates at Columbia University Business School. Now these are two business icons. I mean giants in the business realm. However, they do not have a clue how the small business guy works. They used to because at one time they were small business people. Buffet is funny and appears to be practical. After all he still lives in the house he lived in 30 years ago and eats cheese burgers for lunch. Gates is sincere and forward thinking and, through his foundation, wants to help the world. However he, like Buffet, wants to do so by giving extremely poor people throughout the world what they need. If they were talking about medical treatment only, that would be good, But they are talking about GIVING them whatever they need. Remember the fist story. Give a man a fish and he eats for a day. Teach a man how to fish and he eats for a lifetime.

Their problem (besides being Obama supporters) is that they both have forgotten how small business operates and now live in ivory towers. I respect both of them for their business prowess, but they have forgotten that the Berkshire Hathaway's and Microsoft's, as big as they are, are not mainstream business. SMALL BUSINESS IS!!! Not big business. Sure they do lots of business with small businesses, maybe, but they do not have a clue what "Joe the Plumber" is going through and what these government debacles are doing to those guys. The surprising thing? Both Microsoft and Berkshire Hathaway are run more like small businesses than the "too big to fail" guys. That is why they are successful. Both these guys have forgotten that in small business requiring things like health insurance, minimum wage rates, etc. really hurt. In their businesses they say that they just pass on the increased cost to the consumer. In a small business, those additional cost may be what precludes them from getting the work at all or sends them down the street to the big guys because they can absorb those additional cost in profits. The little guy cannot.

That's what I think. What do you think?

I will keep you posted!

Well some interesting things have happened recently from a business standpoint. Huge amount of stimulus money from our benevolent dictator has taken credit for a "recovery" from the recession in the USA. To quote one of my sophisticated speaking graduate school professors "Hog Wash!". In my mind, the only real significant indicator of the recession ending is...............? Can you guess it? Drum roll please! UNEMPLOYMENT! That's right. Unemployment. You know why? Because if you are employed everything is cool and if you are unemployed, it is not. Period. So, the latest numbers indicate 10.2% unemployment nationwide and about 7.9% where I live.

To me it does not matter if the unemployment rate is 10% or 3% because if you are one of the unemployed guess what. You are in trouble probably unless you are independently wealthy or have a relative who just loves giving you money. I know. Most people say that if the unemployment rate is under 5%, most of that is unemployables. Maybe. But guess who it also contains. The largest segment unemployed next to teenagers is old guys. People from 60-65. Nobody that I can find wants to hire in a career position (top management, middle management, etc.) at that age. Obviously, you can send your resume and are even encouraged by employers to do so. But when you send in a resume that shows 40 years of experience, they know you are old. Not just lots of experience, old. You have no future with the company. They want someone who can "grow" with the company, someone who is creative and "up-to-speed" on all the latest and someone who can relate to all employees.

Now if you do not want to work much, you can be a greeter at Wal-Mart I suppose or try to sell insurance (or as it is now known-financial advisor), but if you have to have the income to live, that may not work. Well I digress. My point is that the extended unemployment benefits that are part of the stimulus gift from the American taxpayers has, or should I say, had, limitations. The first extension tied to stimulus was only available to states with an unemployment rate of 6.5% or greater for 3 consecutive months. That left out millions of unemployed. This time, however, the extension applies to everyone for 14 weeks, and if you are in state with unemployment greater than 8.5%, you can get an additional 6 weeks. Thanks Uncle Sam, that is a little better in my view.

So that is my rant for this week. What do you think?

By the way, I am going to continue this blog after all. I am going to start a new one too. This one will be on child raising/family, serving God and others and church. Why do I have the right to comment on such things? Because this is still American and not Obamaland.

So long, farewell, etc.

I have not written for a long time. I have been trying to decide what to do. Initially, it was intention to write a blog to small and family owned business people to whom I could give advice based on 43 years of experience; almost all of it in smaller businesses. Then I made political comments, a few family comments, a few child raising comments and even a little biography of one the most interesting people I have worked for and known in business.

I never really picked up many followers (thanks Scott and Bill for being the only followers) and a few regular readers (my wife and my sons and occasionally a friend in Indiana) but mostly nothing. Sooooooooooooooooooooooooooo, I have decided to delete this blog and perhaps start another one that is more general in nature and one that deals mostly with families, child rearing and church membership. I do not want to rant all the time, although I do enjoy that, but I hope to be helpful. For years I have wanted to write books on these subjects and never had or would take the time. Now is my decrepitness, maybe I can do it.

So in a week or two, unless something dramatic changes my mind, I will delete this blog and start over. What do you think.

I'm back again! Don again

My wife and I have been sick. Usually we are sick and tired. Sick and tired of ObamaCare. Sick and tired of representation in Washington with no guts. Sick and tired of representation in Washington that have not backbone and are led around by the nose by Obama and others like him. Sick and tired of more government and less people. Whatever happened to government of the people, by the people and for the people. Huh? What happened. Anyway, we were sick. Thought it might be the flu, but it was an infection and we are both doing better.

Don Dreiske was not a very good example of how a husband should treat his wife generally speaking. He thought that by getting her bigger and better things was love. His life as it relates to wives was not great. However, he is now married to Elaine. He is happier than I have ever seen him and she is a great catalyst for his driven personality and success at all cost mentality. Now retired, they live well and do well. Travel and keep up with the kids and grandkids. He is proud of most of them and is certainly proud of Elaine. She is such a calming influence and such a brilliant mind.

Although his personal life has been a roller coaster in most respects, his life is marked by success in business and he has built some long standing relationships. He was especially committed to his long term employees and was involved in their personal lives too. He had a couple of people who have been, almost, life long friends and still are. He has a friend who was his VP of Operations for decades. However, he has been screwed (that is a euphemism being taught in finishing schools for being taken advantage of) especially so by an employee that he took on when she was nothing, had nothing and was going nowhere. He trusted her, helped her buy homes and vehicles, helped her in many ways. All the while, she was embezzling money from him. He even took that and tried to help her make good. Instead, when he moved the corporate headquarters, she left the company and got her CPA(without a college degree) and went to work for someone else. Guess what? She still stole and served time in jail. She is now a waitress.

I really do not talk to the people who used to work for Don and do not frequently talk all that frequently to Don. Sometimes I wish I were his kid so I could have a paid for house too but most of the time I am just thankful for the experience of knowing him and for the terrific principles of small and family owned business I learned from him. Some of it I learned from him, some of it learned what not to do from him. Either way, I am better for it and indebted to him for being my friend. Thanks Don. Thanks for the memories, the attainment of knowledge, seeing wisdom at work and for learning what not to do all at the same time. Amazing!

What do you think?

I'm Back. Now Don personally.

I am back after a short hiatus. My wife and I celebrated our 43rd anniversary with our kids and grandkids and it was very enjoyable. I love my wife and my kids and are amazed by the kind of kids they are. I am proud of them and proud of my daughters-in-law too. Both of them had their own struggles growing up, but are alright and doing well. My grandkids are all in school now and that is fun to see. They are great and doing outstanding in school.

When I met Don, he was living in a small town in Oklahoma where he was well known. He lived in the biggest and nicest house there and had 180 acres for livestock, barns, his office building and his horse operation. He was married to his second wife and he claimed to have 9 kids. Some of the kids were, indeed, his but some were adopted or just strays that had lost their way. He picked them up from time to time and attempted to get them on their feet or reconciled to their families. He was a tough Dad, very tough, probably too tough. None of his kids really wanted to be around him but they were all amazed by him. At one time or another, they all tried to work for Don or one of his businesses. To no avail. Did not work out well. There were some bad apples but now they are all doing pretty well. One is in serious trouble, but he is the odd man out.

If the kids went to college and wanted his help, he would give it. However, if they wasted money or time, Don did not handle that well. In the end, some went to college, some went to work and others distanced themselves from him for a plethora of reasons. But he did do one thing for them all. He bought them a house. One of his kids was presumed to be backward. One he adopted. However, he loved Don and his wife and, even though he did not do well in school, he did well in work. Don got him a house in a very nice neighborhood in a bigger city where he worked. He was so appreciative and worked hard. Sure he frustrated Don, but he hung in there and built a new life for himself and is a great guy.

Don was generous to the local school system and he helped people especially at Christmastime. For years, I dressed up as Santa and visited the children of couples in my Sunday School class. Each year I would go to his annual Christmas Party, in which he invited hundreds, He would provide Christmas presents for all the kids and some of the adults. Then he and I would jump into his BMW and deliver Christmas gifts to kids all over the county that were either not going to get anything or would have a meager Christmas. Some people said he was trying to buy love. Others said he was buying friendship. Possibly, But I think he remembered his life growing up on the streets of Chicago, fending for himself and did not want others he cared for to have that experience.

More later. What do you think?

Final on Don and business!

Mr. Dreiske, as lenders called him, understood what most well educated, small and family owned business people do not understand. Debt is a necessary evil to be paid off as soon as physically possible. Don always paid his people fairly and on time. However, he paid himself when he needed to. By that I mean, most of the cash generated from his businesses went back into the business especially towards loans. He loved to pay cash and, if he had to borrow, he loved to pay it off as agreed and, usually, as fast as he could.

He was amazing in his ability to tell a property with potential from a bad one. As soon as he heard about the possibility of a property being on the market, he was on it. Lots of times, he got the deal because he had CASH! Imagine that. If he did not have all the cash he needed plus the cash he was going to need for the next 6 months or so, he borrowed. Banks and insurance companies lined up to loan to him. For two primary reasons: 1. He always paid as agreed or better, and 2. they trusted that if he wanted a property, or business, or whatever, he knew what he was doing. Did he ever miss? Sure, but rarely. And when he did miss, he did the right thing always. Fix it up and sell it OR sell as soon as possible to avoid increased exposure.

Don did take care of his managers and top management staff. Not outrageously like today, but adequately and sometimes surprisingly. Once when I was in financial trouble, he showed up at my office with a check, a large check. I told him thanks and how would I pay it back. He said not to worry. Get on my feet because I would do the same for him if I could. You know what? I would. I would do whatever I could if he needed anything. Businesswise or otherwise.

What do you think now?

DRD continued

Don is a very, very tough businessman in the sense that he very seldom, maybe never, just bought something. Almost always he got bids or checked prices at several places before buying anything. And, he taught us to do the same. Once when he was overseas, we had an inspection at a property and got in trouble for not having a First Aide Kit. So, I bought one from Zee Medical, a well known brand name. When the bill came in after he got back, I thought I was going to loose my job because he knew of at least 3 other places that had basically the same thing cheaper. I never made that mistake again. I may have had the degree but he had the brains for business. That is not to say he did everything on the cheap. On the contrary, he knew what he wanted and looked around until he found it at a good price.

Once we went to a hotel/motel auction in a very nice but relatively small town in Oklahoma. He always was in a position of strength at an auction because he had cash to back up his bid and could prove it to the auction people. He bid and won the property. As soon as the bidding was over a man came over and offered him $50,000 for the contract. Don did it on the spot. I told him that he was passing up a good deal the property could be really good. He said, "But I have $50,000 right now and I know that is good"! I learned a valuable lesson, never be greedy. He was never greedy in anything, Even when selling properties, he tried to make the best deal that he could and then he would sell. Some people might have said he could get more, but he knew what he needed and probably what he wanted to spend on a new property and would list the property and sell it and never look back.

Don, bless him, had the crassest, crudest mouth anywhere. His reputation was for being a jerk, being fowl mouthed and for being crude to everyone. But you should have seen him in action around people he needed to influence and people he respected very highly. I told him once that when you swear like he did, nobody listened to what he said only how he said it. He said that was pure BS and then proceeded to get a call from the President of Holiday Inn because he sat on their advisory board, and he was amazing and oozed confidence and knowledge about their product and what was in development. Although he was never short of crass joke or two, people in high places had learned that it was just Don and, usually, did not take offense. Sometimes they did. I never heard him apologize. Did that keep him from doing deals. I do not think so. In the 27 years I have known Don, I have seen some really upset people especially lenders. But you know what? They lived with it, generally, because they knew that no matter what, they would be paid and paid on time. Usually, almost always, loans were paid off early.

Another thing. Don required accurate books and as much automation as possible. In an era when computers were relatively new, Don wanted to latest and the best. He wanted accounting and management software that was really good and comprehensive. He wanted numbers when he wanted numbers so he could apply his "Rules of Thumb" daily, sometimes hourly. He was really ahead of his time in that regard. The same with CPA's, attorney's and insurance people. They were advisers. They did not tell him (and do not tell me) how to run his business. He would always ask if what he was doing was legal, moral and ethical and if if was, even if it walked the edge of envelope, he did it. He was right. Those guys give great advice but none of them could run a real business and usually could not run their own. Sorry for you guys out there doing those jobs, but it is the truth!

What do you think now?

Don Dreiske the businessman

Don's business philosophy was simple. Make money, lots of money!Do it with integrity, do it with the help of your team, take care of the little guy, BUT make money no matter what. He once told me that money is all that matters. Make money. And he did. His properties were better than most, more up-to-date than most, cleaner than most, the food was better than most and his General Managers were more scared than most. It was a good scared or a bad scared depending on the GM and if he was meeting the objective Don (and only Don) had set for him

He had these Rules of Thumb. Maids cost should be a certain percent of room revenue. Food should be a certain percent of food revenue. Payroll should be a certain percent, management a certain percent, maintenance a certain percent, etc. Amazingly, almost incredibly, he was spot on, dead right. If those numbers did not come in, the GM (or those in corporate office) had big time explaining to do. The GM's were always amazed that he knew as much about their property as they did. You know why? Because he, basically, left them alone to run the property as they agreed. Did he talk to them? Every day! Every single day, no matter what. Sometimes about the numbers, sometimes about their people, but every day. And most of all, he controlled the purse strings tightly yet evenhandedly (is that a word?). No one had authority to spend over $100 without Don knowing about it (unless there was an emergency and even then after cell phones were popular). Really! And, if your numbers reflected the percentages according to his Rules of Thumb, maybe no questions were asked.

And, if the property did well, guess who Don took on a cruise to celebrate. The maids and waiters and waitresses. Management from other properties would come in when they were on the cruise and fill in until they got back. There were people on those cruises that had never been out of their hometown. Do you think that might be what endeared the "little guy" him and virtually eliminated turnover. Interesting. It is not that GM's didn't get rewarded. They did. They got to keep their jobs!

What do you think so far?

Don Dreiske is the Man!

You are probably asking yourself, "Who is the heck is Don Dreiske"? Well in the next 2 or 3 posts I am going to tell you. Today it will be about how I met him. Next, Don in business and lastly, Don personal life.

Don Dreiske is a self made man. More about that later. I had never heard of him in my life until I was introduced to him when I was a Mortgage Broker/Mortgage company owner. He was the owner of a few motels and the one he had in Norman, Oklahoma needed to be refinanced. He had his corporate headquarters in that Ramada Inn and was an up and coming hotel owner. I was looking for people who needed financing and he needed financing and we hit it off. We were and are very different people. He was getting rich, I wasn't. He was a self made businessman, I was trying to be. He was a highly knowledgeable hotel/motel person, I was not. He drove a BMW, I drove a Cougar.He was not well educated, I was. He walked the edge of envelope in everything, I did not like to be "out there".He was extremely business smart and I was a novice. He was mean and I was nice (or so I thought). I was a Christian, he was not. But we both had one thing in common. Nothing.

When I met him at his property, he bought me lunch. The restaurant (Kathie's after his wife Kathy) was exceptional. There was a real chef, outstanding food, it was very clean and it was very well run. We talked about his property and his plans for the future and what he needed in financing. We talked about family and cars, traveling and people, and financial information on the property. He was very open and very knowledgeable. As a Mortgage Broker, you are always trying to get the information you need for your package to send to prospective lenders and you are always fixated on having the client sign an agreement so that you get paid. I asked Don to sign the contract and he said we did not need one. He told me that as long as I was doing what I said, he would do what he said and for some reason I believed him. As a Mortgage Broker it is important to get them locked up in that you do not want others looking at the deal or the client talking to others while you are trying to make the deal. Don said he would not do that and he did not.

So here I go on the adventure of a lifetime. Just by meeting this one guy, it changed my life forever. Not as life changing as coming to know Jesus Christ as my savior or meeting my wife, but life changing nonetheless especially in the business sense. Little did I know what was in store for me in the future. It was an amazing partnership. We still talk today and a are good friends. If I ever needed anything, I would never hesitate to contact Don. And yes, I did arrange the requisite financing and yes I got paid. Most of the time you make sure that when the loan closes, your fee is on the closing statement. Don paid me before closing!

What do you think so far?

Cash for Clunkers.

You are, by now, well informed on the governments "Cash for Clunkers" program where you can get up to $4500 if you trade in your old car and buy a brand new one. President Obama's idea on how to jump start the car industry after gifting GM and Chrysler with a speedy bankruptcy and money that, I bet, will never be paid back in full.

Be that as it may, this program appears to be working and the government is going to throw more money at it. For you Small and Family Owned Business owners, I would like to propose a new government program. Cash for Whatever! If what should be done to make the economy right is throw money at it, they why not just throw some to small businesses who need to get jump started again. Or, give them money if they have too much debt and it would be better if they didn't so lets eliminate their debt and make the banks suck it up.

It aggravates the snot out me that Washington is now mad at the salaries and bonuses paid to banks that were in trouble. I am not. Several of them have paid back their TARP funds (a few were not allowed to pay back the money because the government deemed them to not have enough equity if they paid back the money. And of course we know that he government is the best person to determine how solid a bank is and to establish equity requirements.) and are now profitable and the government doesn't like it one bit. Do you know why the banks are paying it back faster than first thought? Because they are risk takers every time they make a loan and they are doing that. Because they do not want the eyes of the government controlling them and limiting their pay. As long as they have TARP funds, salaries at the top are limited. And lastly, because they are creative business people who understood that the economic situation was not a depression or even near one and they just pulled up their boot straps and did what they had to do. One bank I read about, took their recent profits and divided equally to all their employees. How novel. Lincoln Electric has been doing that for years.

What does that have to do with Cash for Clunkers? I am not sure but I decided to rant about it.

What do you think?

House Painting your business

Recently, I needed to have the exterior of my house painted. We looked around for painters thinking that we would find someone who needed the work in these tough economic times. We called a couple of people who had small signs at intersections and a couple of companies. However, it was hard to get them to give us bids in a timely fashion. One day, we were telling the people that maintain our yard that we were getting bids to paint the house and they said that they wanted to bid. So, we let them. The difference in the amount of the bids was amazing. We selected the lowest bid, in this case (only $50 difference) which was nearly 1/2 of the highest bid. Some people we called did not get back to us for 2 to 3 weeks after we requested a bid. Guess what? Too Late!

I hope that in your business you get bids. So many companies get used to using the same people and just call them for the job that needs to be done. There are good reasons to do this:
1. You know them.
2. You know their work.
3. You know their cost.
4. It is easier.
5. Usually, they are faster to the job.
6. They may give you terms which could be helpful from a cash flow standpoint.

Let me suggest that during this economic situation, for sure, get bids. In my painting scenario mentioned above, the bid required painting and some minor repairs and one, not so minor, repair. The people who wanted the job really came after it. Even the high priced guys. They were shocked, in some cases, when I told them we were getting bids. They almost immediately wanted the chance to "re-do" their bid. I told them that they were too late. The people now doing the work have done several small maintenance things while they scrapped and caulked my house. The same thing happened at a clients business. Upon getting bids they discovered they were, in fact, getting a good deal from their current supplier but if they had not gotten bids, not only would they have not known that but the bids indicated what the cost of doing business with an unknown might have been.

It is always worth getting bids in these times. Some ideas for bidding:
1. Always get at least 3 bids.
2. Always get an odd number of bids (3, 5, etc.)
3, Make that your bid request contains a date for the bid to be in and a date when you want the work to start.
4. Do not pay any money up front EXCEPT for the possible exception of paying for materials up front if the materials are particular to your specifications.
5. Require Workman's comp and liability insurance or make them sign a waiver BEFORE the work begins. Even for small or individual contractors.
6. Pay them when the job is complete and you have had a chance to inspect the work thoroughly.

What do you think?

You and Health Care reform?

Well here we go again. Another emergency! The health care reform bill MUST be passed before Congress goes on break! Why? They will be back in a month for crying out loud. As a matter of fact, they should take the month and read the bill. I mean really read it. I bet that there is not a single Representative or Senator who has read anything but an abstract of the bill. They should read it all unlike they did with the stimulus bill. Everyone is still reeling over that one with all the "earmarks" and special interest insertions. Hog Crap! That bill should not have been passed either because no one read it. They may have by now but they had not when they voted for it.

From a small business standpoint, health care is a serious matter. Most surveys show that employees would rather have paid health care than raises in pay if it came down to that. In my case, I have insurance through a small business I am part of (6 employees). Each year our health insurance program is renegotiated in July. The insurance company tells us what the plan we have now will cost and some options to reduce the cost which has usually meant less coverage unless we wanted the accept the 30% to 50% increase in premiums. This year, however, guess what our premium increase was? 0! Really, 0%. Same as last year for the same coverage! Amazing!

The reasons for no increase are pretty simple:
1. No covered employee or their family member had a serious event or required a huge difference in their medications.
2. Our insurance company, Community Care, is local. They are not a big national company with huge overhead and poor judgement. I know the people over there including all their top management. I made it my business to know them. We have had some serious fights but guess what, we worked it out. Did we always win. No. Sometimes they won. But what is important is that they gave us a fair hearing and we worked it out.
3. They have a practical bone in their corporate body. I am diabetic. Before some serious surgeries, it was very hard for me to see the numbers on the syringe I had to use to give myself insulin before each meal. My Primary Card Physician prescribed an insulin pen and I could count the clicks it made to determine the correct amount of insulin if I was in situation where I could not see the numbers. The insurance company said they did not cover that. I called my agent, who knewthe President of the insurance company, and he explained my dilemma to him. He met with his staff and agreed to cover insulin pens for anyone who needed them.
4. Four years ago we switched from a PPO to an HMO and that was hard for everyone. But guess what? We got used to it and now we all think it is terrific. All the horrific stuff you hear about the national company's HMO's may be true, but not for our local group. Different? Yes. Terrible? Not at all. When the President of our company was diagnosed with cancer, Community Care assigned someone to him and gave the family the green light to take him to M.D. Anderson or wherever they wanted to go. They would fly him there. Unfortunately, he died within 7 days of diagnosis, but the insurance company was there and it made a tremendous impact on the family, myself and my family. Imagine that? An insurance company that cares! So do not lump them all in the same category.

So, get off the national kick and find out what is available locally. Seriously, find out before you are sucked in by the Presidents Socialist agenda and Nationalized medicine.

What do you think?

Now Fox Business News

Fox Business News is really very good. However, they are disjointed and seem to be not very well put together. Less, shall we say, professional. However, the news they report is good and, usually, pretty accurate. I especially like it when they talk to people who did not get what they know from being a news anchor but from actually worked and risen through the ranks even if it is on rising through the rands of Fox Business News with increasingly responsible positions. Not very likely in most networks.

I like their simple approach though and their explanation of what something means. One day they had a real business guy explain Derivatives. Do you know what they are, how they work and how they affect small business? Do you really? Why is it important. Because that and Credit Default Swaps brought down AIG. That melt down has affected us all. There are people in brokerage firms everywhere making these bets and affecting market segments that may hurt your business. So learn about stuff like that and not from the national media either. You are much better off watching Fox Business News and listening to their real business people. The national media makes people who make a profit (no matter how high) look like the bad guys and companies that pay back stimulus money as cheaters or less than good people and top managers who make big salaries as blood suckers. Not true for sure. Sure there are Bernie Madoff's in this world and there are real crooks and there should be some regulations, but remember we ARE NOT SOCIALIST! THIS IS FREE ENTERPRISE!

On the subject of top management salaries, I will deal with that at some point. I have mentioned it in the past. Let me just say here that I think the top guys should earn what they can but I also believe that boards filled with cronies have allowed those salaries to go to far. How much more do you need or how much more can you do if you made, say, $50 million over, say, $10 million. I could live and give on $10 million and help a bunch of people in need too. How about you.

What do you think?

Nightly Business Report on PBS

Do any of you that read this blog watch Nightly Business Report on PBS or Fox Business Network. Both are excellent. Although they tend to deal mostly with big companies and big ideas, they are up on a lot of changes in legislation, changes in trends and, especially, the Stock Market. If you area small business owner, it is very important to keep up with what is going on in the Market because it will trickle down to affect you shortly.

NBR has been around for decades and some of the people on there have as well. However, they also have some young reporters who do a great job talking to people in the business world like Warren Buffet and real people affected by the economy, poor judgement, Bernie Madoff, changes in the law and rules of employment, etc. It is really worth watching. Additionally, they take a look at stocks every day that are of importance and worth looking at. As you know, I am a "bottom fisher" of sorts and they deal with those stocks too and why they are where they are today. It would be especially interesting if your major customer, major vendor or market segment has been affected by legislation, crime, poor judgement or plethora of other things that might end up helping or hurting your business.

From your business standpoint, the big companies have gotten in trouble by being bloated, by being greedy and by leaders who feel that they are untouchable. Also, many companies have saturated their boards and officers with yes men and cronies. Now that may not be what they planned but it is what happens. As a small business owner, you need to surround yourself by "seeking the council of the wise" as it says in Proverbs (that's in the Bible for you unfamiliar with Scripture). As the owner, you do not know it all and cannot be everywhere at once. You need to have a board and officers who will tell you what is right not, necessarily, what you want to hear.

NBR does little to take a stand on anything however. And , they cannot. Their charter does not allow that as a non-profit organization. They do not take a position they just (really, honest to goodness they do) report the news. Imagine that! Reporting not trying to "make" news.

What do you think.

Anyone out there? Also, FoxNews comments.

Is anyone reading this blog? Huh? I have always asked for comments and one of two things is abundantly clear:
1. Everything I say is perfect and needs no comment, or;
2. No one is reading this blog.

Now part of it is my own fault. I am irregular in writing this. I just do not feel that I should write anything unless it is salient, poignant, pertinent and incredibly intelligent. Also, I do not feel that what I say should always be a rant. Like on FoxNews.

Speaking of FoxNews, their business reporting is pretty good and very well investigated. However, their regular news is really beginning to bug me. Day time stuff is pretty good and so is early evening. Although I like Bill, Sean and Greta, they do not report the news, they attempt to make the news and Bill does it rudely and argumentatively. I hate shows where the panelists all yell at each other. They are obviously there to push there own agendas and not debate the issues. Sean, at least has the right perspective. Bill is demeaning and Greta thinks she is always on an interrogations and, thereby, pushes the person she is talking to in an attorneylike manner. Immagine that. Sometimes she is nice but sometimes she is just "trying" to be a real reporter. CNN and MSNBC are much worse though. For me, the best part of FoxNews is Huckabee. Never miss that.

What do you think?

Have you noticed the car industry lately?

Yesterday, the numbers came out for car sales. They were generally dismal. Chrysler down 41%, GM down 33%, Toyota down 33% and Ford down 11%. Do you notice anything specific? Ford, of all company's is doing better, much better and WITHOUT GOVERNMENT BAILOUT! According to news reports, they are also gaining market share. Interesting!

They too, were too big to fail. But Ford had been in trouble long before the others. They were blotted, greedy and their quality was okay but not great. Their cars were about as appealing as me in a bikini. So their board and their top management began making the hard, hard decisions of laying off, closing plants, negotiating with the UAW, reducing management staff and INCREASING marketing and re-engineering their cars to meet the market. They did this long before the others. The others waited until it was too late and then they ran to the government for help. Why? GREED by the top people. Greed! They were so big and successful they were invincible. Wrong!

The other thing Ford has done is realize that they are only as good as their people. They manged through the problem. My personal belief is that when the CEO of Ford was asked to take a $1 a year to run the company by Congress, he said "I'm good". What did he understand? He understood that the government was bout to get in their pockets big time and he said no thanks to bailout money and they have re-invented them selves.

Small and Family owned businesses do the same. Look at where you are NOW! Take action. Make the hard decisions now. They will not become easier in the future. Honest! Do it now. Don't know what to do. Call me. I will help you.

By the way, I bought Ford stock at a little over $2 per share. It is right at $6 a share now. I expect that by next quarter they will be close to even in sales, gained market share and have learned a valuable lesson. More is not necessarily better, sometimes less is.

What do you think?

Do you have a plan?

If the government decides to "manage" health care in this country, do you have a plan? Of course you don't because we do not know what the heck is going on. The proposals be talked about are sometimes interesting and sometimes stupid. Typical government methodology. But, you should determine now. what your stand on health insurance will be especially if you are a small business. I honestly believe that most employees would give up some pay to have health insurance. The costs to them are so high if they do not have health insurance that they simple do not get care and it results in needing more expensive care later.

Let me give you a couple of ideas:

1. Tell your employees to suck it up and learn to live without it. Be helpful in the sucking it up part though. Find out what kinds of government largess is available to them and help them get it. You are paying for that at the Federal or State level now anyway. Might as well take advantage of it. Right?
2. Find some health insurance that is very cheap (relatively speaking) but only covers the most critical needs and has a $25,000 deductible. Therefore, when they go to the doctor, there would only be a 4150 co-pay and the rest is applied to the deductible. No cut in pay either.
3. Find health insurance that is pretty good. $2500 deductible, $50 co-pay and Rx coverage too based on the insurance companies list of acceptable drugs. Probably the only covered drug is Aspirin and Tylenol the rest have a $100 co-pay. 8% cut in pay for this coverage.
4. Find good coverage. $1000 deductible and $25-$25 co-pays, Rx coverage that has a $50 copay. 25% reduction in pay.
5. Great coverage. $500 deductible, $10 co-pay on doctor visits and Rx. 50% reduction in pay.
6. Best coverage on earth. 100% coverage on everything. 90% reduction in pay. That is okay because now you live in a Socialist country that is emulating Norway or Canada.

What do you think?

Do you like Baseball?

I really do like Baseball. I coached little league for 11 years for my youngest Son. It was great fun but I did not do it because I like Baseball. I did it because I like my Son and he liked playing. I used to tell the parents of the kids in our first meeting each year what my coaching philosophy was. I told them each year that, no matter what, my Son was going to play. I told my Son that he would play and that, although I liked coaching, I was doing it because he wanted to play. If he ever did not want to play, we could quit. But I wanted the parents to know that my Son was going to play all the time up front. I also told them that if they had a problem with that, I would help them find another team. I did have a couple of parents choose to go to another team and that was fine.

Most of the teams I had were not the great ball players. My Son was great, of course, and there were others that got better and better. Some of those kids played for me for 11 years. Of course, some moved away and new kids came and went. The guy who ran the league used to call and say that he had a kid that other teams wanted to get rid of or that they had a kid that signed up late, etc. and would I take them. I almost always did. Some of those experiences were good and some were bad. Lots of times I had kids that wanted to play and their parents did not have the money for the fees, uniforms, gloves, etc. I took them anyway. I kept pretty good records and can prove that during those 11 years I spent $5835 to help out kids in some way. Almost always, I took the kids out for Pizza, Ice Cream or something after a game: win or lose. Many times, that would be the best meal some of those kids got. That came to another $2995. Remember, this was 1980's and early 1990's. So, it was less expensive than today, but so was my income. Then we had parents that could afford anything. I had one who helped coach whose kid had everything on earth and, believe or not, the kid was a pretty good kid. He not only helped me coach but he helped buy after games several times.

Now what does this have to do with Small and Family Owned businesses? First of all, if you have a family member or selected person that is going to replace you as owner, tell everyone up front, right now. If it is because they are family, say so. No long diatribes about their terrific qualifications and tremendous education. They are replacing you because they are family and that is okay. Second, if there are people in your company that are pretty good, determine what it would take to help them be great and coach them into doing that or getting what they need. Thirdly, once you know what they need, if you can, help them pay for it.

Lastly, most companies frown on helping employees financially, but I think that you should. You should limit it to the equivalent of about a weeks pay (or two weeks pay if you pay every two weeks, or a months pay if you pay monthly). That can change if you have an employee that has been with you a long time and has a problem. If you are not able to help them, try to find them help elsewhere. They have invested in you, now you invest in them. If they need time to pay it back and them have been a steady, good employee, let them make payroll deductions. (By the way, if you are not using ADP for Payroll, you should. No I am not paid by them, but I have used them for years and years and they are great.)

What do you think?

What is up?

From a small business perspective, what is up with the Chrysler bankruptcy deal? Everyone looks at Chrysler because they will end up "leaner and meaner" with less debt and less wages and less baggage. However, the creditors and small businesses supplying things to people who supply things to the suppliers will be just fine. With the takeover by Fiat, there will be influence from the Italian auto maker, but the really small and family owned businesses will come back and will do well PROVIDED the cuts and changes required by the court continue. In other words, if Chrysler does not go back to their greedy top executives and unions. One thing Chrysler has to remember when they are out of Chapter 11 is DO NOT GO BACK TO WHAT YOU WERE AND DO NOT TRY TO. You must depend not on unions and not on banks but on your own creativity and the creativity of what got you there in the first place. Your cars and trucks and your employees and your suppliers. Not the government. Dependence on the government is what wiped you out and will in the future if you allow it. Getting out from the governments hold will allow you to succeed. Remember Free Enterprise?

If you are a small or family owned business supplying things to Chrysler, get in there now and make the best most cost effective product you can and do it in a positive and constructive manner. Should you give them terms? I do not know. Can they get your product elsewhere? If so, yes. If not, maybe. Negotiate the best deal you can REMEMBERING that "what goes around comes around". That, friends, is a fact of life. Hang in there, be aggressive and be interested in what is going on around you.

What do you think?

Tax on Health Insurance?

A tax on health insurance. Sound familiar. Remember John McCain's proposal? This proposal is worse. Only when McCain proposed it Obama went nuts. Now it is okay because it is Obama's idea. What is up with this guy? Besides be a socialist, he is crazy!

From the perspective of a small or family owned business person, it you have struggled to be able to give your employees health insurance, now they want to tax it. How stupid regardless of the basis or principles involved. From what I know, about the proposal, it is a way to tax "income" without raising basic rates. It is a way of getting to the little business person AGAIN! under Obama, small business will be taxed higher than ever. That is certainly a way to STIMULATE the economy.

I am not sure there is anyone in D.C. who knows what is going on any more! What do you think?

Yikes! Keep a close watch on health Insurance.

I like buying from and getting to know various small and family owned businesses. Recently, a small business that I consult with regularly received notification from the insurer that provides health insurance to their employees, to me and my wife and to their related entities that the rates for the year beginning July, 2009 and last for a year, would not change. REALLY! Would not change. I have been hearing of 30% and 40% increases and we were prepared for the worse, However, NO CHANGE. Rates would stay the same as they were in 2008!

Amazing? Maybe! But not for our insurer. They are a locally owned health insurance provider that is owned by the two major hospital groups in the state. Although many companies that they insure did receive increases, they made a concerted effort NOT to increase the rates for the businesses hardest hit by this recession, the smallest of the companies and those that had managed their health plans to insure that employees were well educated about what they can and cannot do with their health insurance. Thank you CCOO.

Now what do I mean by saying that they were trying to help companies that had managed their health plans. A lot of companies just provide the insurance and the employees go to the doctor, deal with the insurance provider and try to charge whatever they can to the health insurance. In a company I am familiar with, the employees were trained twice a year on what they could and could not do with health insurance. The employees were required to come to the coordinating person in the company if they disagreed with the health provider or had a problem or just did not understand. 83% of the time, the company person was able to solve the problems saving the health insurance carrier time and money in the meantime. An added benefit, relations between the company and the insurance provider was and is great. The insurance company was happy to provide documentation and information for the training sessions and they only had to, in most cases, deal with one person to resolve an issue.

If you do not provided health insurance but would like to, several states now have state supported plans that pick up some of the cost for employees making less than certain amounts of money. In Arkansas, Oklahoma and others, the plan is simple. You send your health insurance bill to the state office, they reimburse you for eligible employees up to 90% of the cost.

So, don't give up on health insurance, manage it. What do you think?

Be glad you are not GM or Chrysler-Maybe!

My nephew Scott handles my investments for me. They are meager but important to me and my wife. He sent me an e-mail today that said "Aren't you glad you did not buy GM"! A few days ago I had asked his advice about GM because I am a bottom fisher of sorts right now. He said "No" then and I am glad. Our entire portfolio consists of stocks that reached their lowest price ever between January and March of this year. So far it has paid off. I guess the long term will tell. My oldest Son does not call it "investing" he calls it "gambling".

Anyway, all automotive stocks plummeted today based on the announcement that GM was issuing 300 million new shares of stock to fund their debt to the UAW and Chrysler had banks, that it expected to follow the lead of their big banks, that demanded a majority stake in the car maker now in bankruptcy. It is such a shame caused not only by the greed I have written about here before, but because of their incompetency at the top and fear of doing the right and hard things last year and years before. Ford made some of those hard decisions last year and the year before when they were in trouble and everyone knew about it. GM and Chrysler were in trouble too but were not talking or taking action.

So why am I saying this other than to rant. Because you as a small and/or family owned business person should be doing that right now. If things are bad, do what you have to. The pain will not get easier. If things are going well now, plan, plan, and do more planning and saving. Really, not only could things get bad they might stay good and that may be an even bigger problem. Seek some advice and counsel from competent people such as I am. It is more important than ever to do the right thing for you and your employees!

What do you think?

Interesting! First 100 days.

Is it too soon for you to evaluate, as a small or family owned business, President Obama on his job as President based on the first 100 days in office. No it is not. President's have been evaluated on their first 100 days every time and new President comes to office. As a business person, it is important to see "where he stands". In my humble opinion, he stands for everything that sound business does not stand for and, as a person, he stands for a weak America, tax the daylights out of the people who make this country run (small business) and give in to those who really do not want to work and have an entitlement mentality. Sure, there are those who CANNOT work and they need to be taken care of, but our President wants to be King and, therefore, a Socialist. "I am the government and I am here to help". Hogwash, Balderdash, Nonsense and other words too strong to interject here.

So far he has shown a lot of motion and little substance. The liberal media is touting all the things he has a "tackled" in his first 100 days. He has "tackled" nothing but has spoken (even eloquently) about a lot. In Scripture (Proverbs) it says "where words are many, sin is at hand" (My translation). It is os true of this guy. Do I think his stimulus will work? Possibly. If Wall Street and the banking industry are smart, they will follow Ford Motor Company's example. When Ford went to the government with hat in hand, so to speak, with the other car makers, they saw the writing on the wall. "We are the government and we are here to help" really means "we are the government and we are here to control you if you take our money and turn you into a socialist enterprise". Ford said thanks but no thanks. We do not need your money and they have made hard decisions, hard choices and are going to come out of this stronger and better without government intervention. The Ford CEO took a voluntary 30% pay cut, they are leaner and ready to proceed. Look at Ford stock as opposed to GM. Wall Street, Bankers, pay attention!

By the way, more oversight might be needed for Wall Street unfortunately. You know why? Greed! Greed! Greed! Unfortunately President Obama is right in that they cannot regulate themselves as President Bush had hoped for. Remember Wall Street, you brought this on yourself!

What do you think?

Protect your employees

What do you do to protect your employees. Not only protect them physically, but protect the employees who really make your business run. Many employers do not understand that without their employees they do not have much. And, if you depend on yourself to do everything, your business will never reach it's potential and you will burn out. Good employees are hard to find and really hard to keep.

First of all, protect them by making sure that they know they are doing well. Be encouraging and positive especially about the business and how they fit in. If they are doing well, make sure their evaluations show that WITHOUT giving the highest grades on everything which would indicate they are perfect in every way and not even I am that perfect. If you can give them a raise. Does not have to be huge but give them something. I am an advocate of several smaller raises throughout the year rather than one larger raise (or not raise) at the end of the year. I am also in favor of performance bonuses rather than contracted bonuses (a la Merrill Lynch). As a matter of fact, I would take the bonus pool in its entirety and whack off some for managers and divide the rest up equally over all employees which would get everyone the same bonus at Christmas. If you cannot give them any money, tell them and tell them why! Be up front. It may cost you an employee or two, but if they are going to leave you might as well find out now.

The employees that are doing bad show know that. Besides just being told they are doing bad and in what areas they are doing bad, you should come up with an improvement plan with attainable steps to accomplish that can be monitored and a determination of what will happen if they accomplish the goals and what will happen if they do not. If they accomplish the goals, you have created a good employee, if they do not, send them out the door. Do what you say and say what you do. No BS. Seriously. If they are not doing it, do not hesitate to terminate them.

Physical protection int he workplace is serious business these days and during these economic times. Where I live a woman was killed recently at the counter where she worked as a clerk. A guy came in and shot her for no apparent reason other than to rob her of the $28 in the cash register. Amazing! If you are located in a bad area or if you handle a lot of money OR if you have disgruntled employees who make threats, make sure you have some security in place and procedures in place on what to do in case of emergency. Train you employees on what to do in case of emergency. That might be one of the most boring things I do as a consultant, but I have been in situations where it was extremely important.

So think about it and take action. What do you think?

What about the tax code?

I guess now that the stimulus plan is semi-implemented, your employees are much better off with the reduction in their employee withholding. Right? Probably wrong! Although getting anything may be better than nothing, I suppose. It might be too little too late or too little for not long enough. As an employer, you should be outraged by our tax structure and tax code anyway.

I have always been in favor of a flat tax. !0% for everyone and all businesses. You make a dollar, you pay a dime. You make a million, you pay one hundred thousand, etc. There would be no deductions at all. I could live with deductions for mortgage interest and contributions/donations to certain organizations like churches, Goodwill, Red Cross, and many local charities provided it did not exceed say 20% of their gross income. If my calculations are correct, there would be a surplus especially with the reduction in costs at the IRS and CPA's and tax attorneys.

HOWEVER, the more I hear about Mike Huckabee's proposed "Fair Tax", the more I like it. It would be a consumption tax paid the same by everyone. Some have called it a National Sales Tax for lack of a better term. It might eliminate the IRS and provide the basis for everyone to participate equally. Under Governor Huckabee's plan, there would be deductions for charitable contributions and mortgage interest, but little, if anything, else. If you buy a new Chrysler 300M, you pay the same tax as for new computer or new sofa. I am not sure, but under his plan food might be treated differently as well. Overall, it is a good idea. Then you and your employees can determine what they will do with all their money because they would know what the tax ramifications are upfront!

What do you think?

Some more thoughts on getting money.

If you cannot get money from your bank and the amount you need is just to small for the big guys like General Electric Capital, Barclay's Capital, ITT, etc., then you might consider one of the following:
1. Borrow the money from yourself. Yes, borrow, do not give. However, if you do this write up a note with an interest rate that is competitive with current rates and make payments. If you get into trouble and cannot pay, then don't. I have written into clients notes the provision that the client can be late a certain amount of times per year. If you really get into trouble, you can write off the note, It is very hard to write off un-documented "loans" so do it right!
2. What about relatives. Not unless you ABSOLUTELY have to. Then if you do, remember to document the loan with a note and lien (if applicable) and make payments. Do NOT take your relatives last dime. If they can afford to loose it all, okay. Otherwise, it is not worth. Honest. I have been there and done that and it is very difficult.
3. Take on a partner or sell stock. Certainly if you have a family owned business, do this as a last resort and NEVER, I SAID NEVER, give up a controlling interest. Go out of business first. Now having said that, if you have already given up control or there are many shareholders already, then go ahead. You just have to remember that when you give up controlling interest you give up your right to do whatever you want and you can be called into scrutiny for your actions as the CEO, President, etc. If you just own a sole proprietorship, then taking on a Partner can be a real pain or a real benefit depending on the how well you work with others after having to not "report to" or get opinions from anyone else. It can be really tough, so be careful You may have to do it if all else fails.
4. Sell the business. In today's market that is tough because everyone is expecting to get a bargain and even if your business has been steady or good but needs to grow, the bottom fishers are out in droves. Be careful. The other side of the coin is that if you can find someone who really wants to buy and you do not care to keep the company (especially if you do not have any heirs), then sell out, quit or close up shop and work again for someone else or retire.
5. Lastly, go to a Venture Capitalist. They all talk like they are here to save the day. Few, if any, of them are. If they like your business, then be prepared to give up 60-90% even if their adds say "keep majority ownership, we want to be minority partners". That is not true. After reviewing your business, they will tell you how bad it is and why they need to own it all. If they say that, hold your ground because if it is good enough for them to want to do for a large ownership position, they see something worth keeping. So should you!

Call me if I can help! What do you think?

Are you the next GM/Chrysler?

Recently the government fired the GM CEO. Appalling! What Obama and his cronies will say is that they were protecting the taxpayers money that they loaned to these giant auto makers. BS! (That means baloney sandwich and it is now being taught in Finishing Schools instead of what you thought it meant! I do not want to bend to the Obama level and use those words.) What is happening is Obama is planning his next re-election bid and trying to garner brownie points if he says this. He hasn't yet, that I have heard, but he will.



Whose fault is it that government is involved with these businesses to such an extent? Is it government? Is the it the companies? Is it the CEO's. How does this effect small business?

1. It is the businesses themselves fault to the largest extent. They should have never gone to the government with their hat in hand or should I say their hat in their private jets! By borrowing from the government with President Obama at the helm, they were asking for trouble and they got it. Obama has no business acumen at all and his team is a group of government trained and funded nincompoops. I bet that Obama's first comment when looking at a P&L or Balance Sheet would be "huh!" and his cronies, who cannot do their taxes properly and were too sophisticated to hire someone and when they did hire someone they lied to them, can easily criticize GM and Chrysler because they have NO STAKE IN THEIR success. Supposedly, they are protecting our money. BS! THEIR ONLY OBJECTIVE IS TO IMPROVE THEIR POLITICAL STATUS!! There is a lesson, do not borrow from the government, die first! Who is the smartest of them all right now? FORD! Yes Ford Motor. They did not take any money, they have cut back, their CEO (through his board not the government) took and 30% pay decrease and they are doing find! FINE! Did you hear me, FINE!

2. They should have handled it themselves. I bet they thought that since Chrysler was bailed out years ago when Lee Iaccoca had government come to their aide. The difference is that Chrysler was in trouble but still viable. These guys are not viable any more and should have filed for bankruptcy under the provisions of Chapter 11. Under the provisions of Chapter 11 they would continue to operate inside the auspices of the court and all contracts and agreements would be subject to renegotiation and/or restructuring. The objective of Chapter 11 is to come out of it reorganized and ready to operate again. I have been involved in several bankruptcy situations in companies. Sometimes they made it out and are healthier and sometimes they did not and were liquidated. Either way, it is better than government intervention.

3. Sure the CEO's are partly to blame but they can only get paid what they get paid with the approval of their Board of Directors. Inside the Board of Directors, what they got paid probably had to get past a Compensation Committee of the Board and the Executive Committee of the Board and they by the full Board So are the Boards at fault! Yes they are. Are they at fault for the greed? Yes! Too many Boards are full of buddies and friends. Should some of those be on the Boards? Sure. But the Boards should contain a majority of none company people who understand business. Not necessarily the car business, but business so they can ask questions and demand answers. No one in a company should be above scrutiny, nobody!

4. From a small business perspective, how does this affect you. It effects everyone! The trickle down effect of government intervention, corporate greed and loosing track of your objective can be massive. Too many small businesses, and especially family owned businesses, do not have regular Board meetings, do not have outside Directors and have taken their eyes off the fact that without their employees they would not have much unless you are a 1 person business. Now is the time for small business to take notice of what you have. If the government has its way, they will be telling you next how you can run your business because they are putting "stimulus" money into your business. Make a decision right now. Do you want that kind of oversight?



I do not think we can have the Obama Affect for very long. It is going to demolish the Free Enterprise systems and Socialize everything we stand for and why? Because they know how to lead us better than we can lead ourselves. Not me!! What do you think?

Still Need Money?

Depending on the type of business you are in and depending on what you have for collateral and depending on how good your credit is, there may be other choices besides the bank. Also, if you want an unsecured (signature only, no collateral) loan, that is also available but probably not from your bank. If you think your bank's interest is high, just wait until you see how much an unsecured loan or line of credit is. Let's pursue that a little.

1. If you have a long standing banking relationship and have always paid as agreed or in advance of the terms and never bounce a check, I would ask the bank for a signature only loan especially if the all you need is a relativelsmall amount of money. The same is true with a line of credit. You probably already know this, but an "bank line", as it is referred to, is a loan that you use as you need it. Let's say you have a $100,000 bank line and you are buyig something for $25,000. When you spend the $25,000 you have $75,000 left on your line of credit. Typically, you just call the bank when you need some of the money and they deposit it in your account.

2. Another type of credit line is associated with your credit card or a credit company associated with a bank like Wells Fargo Credit, Barclays Credit, CitiGroup Credit, etc. Sometimes they have names like Barclays Business Credit or BankAmerica Business Credit. Usually these are unsecured loans for a very credit worthy company and it is expensive. However, some of these credit companies take a larger risk than your bank might entertain, but it will cost you.American Express has a business line of credit. I talked to them for a client who had an AmEx credit card for his business and they gave him a $10,000 line in a couple of days unsecured. He had a pretty good credit history and, like most AmEx card holders until lately, was seldom late. My client only needed about half of that to make sure he had payroll covered from time to time and it worked find for him. AmEx charged a $99 annual fee and the interest began the moment you wrote a check on the line. AmEx provided the checks and made it very convenient. It was not cheap!

3. If you have your own personal resources, you should consider borrowing from yourself. BUT, you should set it up just like any other loan with a Promissory Note and regular payment terms. Obviously, if it gets difficult to make the payments, you won't get mad at the company if they are late and your can write the note so that late payments may be allowed periodically. Also, if times get tough and you need to not pay yourself, pay your employees first and if you have money left, make a payment to yourself on the loan. Becareful to document the loan from you to your company because if it is undocumented the IRS will consider it a sham. Also, if the company goes under or is bought out at a loss, undocumented loans are very difficult to write off especially if you have never made a payment.

Do you need money?

If you are a small or family owned business looking for short term borrowing for inventory, a capital purchase, cover payroll, buy a computer (or several computers), a vehicle or even a line of credit, be of good cheer. Money is here! Really. Let me give you some suggestions.
1. If you truly need it short term, your bank's rates should be the lowest right now. Many banks are not, really, lenders for long term items. However, if you are just wanting to borrow because your A/R is not yet due or slow or you want to meet payroll and anticipate other cash needs simultaneous to payroll needs, then go to your bank. Especially, if you have a long term relationship with them. Make sure you tell your banker in advance you might need the money and make sure your financials are up to date if he might need them. If you have a strained relationship with your bank, it is important to let them know you might need money and ask them to let you know if they will do it or not. If they will not, try credit companies like GE Credit, ITT Credit, Barclay's Credit or even the SBA in combination with your bank.
2. If you do not have a banker or bank, get one now. Get someone to recommend a bank or go to one where you have personally banked for a long time. When you approach them, just have a meeting where you talk about your business, what you need to borrow and why and when. If they will generally consider doing the loan, ask them what they will need. Probably, current business and personal financial statements, 2 years tax returns and, if you are going to use A/R or Inventory as collateral, they will need your A/R Aging Report and your Inventory Stock Status Report or your Fixed Asset Inventory Report. Remember, if your A/R shows huge amounts of customers over 60 days (unless you have government contracts to back them up), your lender will likely only loan based on current balances so figure in your loan needs what you will need beyond just what you need now and attempt to get an open credit line for the difference.
3. I have had several clients and know several people who feel that it is none of the banks business about their personal information or tax returns. Too bad! You are the one wanting to borrow the money. If you are a very strong company, have no debt and enough Receivables to cover the loan, oh let's say, 5 to 1, then maybe you won't have to do it. That is a big maybe because banks must have all the information to meet the criteria for bank examiners and keep their FDIC insurance in tact. Usually your personal guarantee is "additional" collateral. The bank will use whatever assets you wish to pledge first and then use your personal statement to shore up the deal in case of a default.
4. If the assets you want to pledge are "free and clear", then you MIGHT have an argument for not personally guaranteeing. However, the bank should request and receive from you your personal statement so that they can see how you have valued your interest in the company and does it appear that you might be using some of the borrowed money personally. If you have no previous relationship with the bank, they will want more than that. Remember, they do know you from Adam, so be transparent. (Not like the governments transparency which is really defined as you be transparent we will be secretive.) Also remember, if you have had your checking account and even savings at the bank for years and even if you have pretty substantial balances, that does not mean as much as it used to. Also, if you run a lot of checks and deposits through the bank, that does not mean what it used to. Banks, if they are new to your, will want your accounts, but they are not going to loan you money just because you do a lot of demand deposit account business alone with them. That is why, you should build a relationship with the bank and a specific banker far in advance of needing money.

In my experience, banks are NOT always the best choice. Over the next couple of days, I will discuss some others. It has been said that your bank is a good lender if you do not need the money. They brag about being "Business" lenders and in truth they are just not really good business people they are just good paper pushers because all banks have their own criteria for making loans and bankers have little or no flexibility in their lending. HOWEVER, if you have a relationship with the bank, you are much more likely to get them to consider something that is creative PROVIDED your banker has any guts. Most of the bankers I have known do not have a creative bone in their body, but a good one will listen to what you propose, get all his paperwork together and, at least, present it to the loan committee for action. If the loan is small enough (like a vehicle or a copier) he may have credit authority within those limits without going to committee. MAYBE.

That is my experience. More on other lenders is coming. What do you think?