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?
Saturday, December 12, 2009
Tuesday, December 8, 2009
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?
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?
Friday, December 4, 2009
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?
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?
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