Small and/or Family Owned Business

Warrem Buffet does it again

2011-08-29T13:48:00.004-05:00

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.

2011-07-27T15:34:00.003-05:00

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

2011-07-19T12:47:00.003-05:00

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.

2011-07-07T10:18:00.001-05:00

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

Shall I start again?

2010-05-11T12:27:00.003-05:00

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

2010-01-02T17:00:00.003-06:00

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.

2009-12-12T13:00:00.003-06:00

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?

2009-12-08T15:48:00.003-06:00

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?

2009-12-04T12:41:00.003-06:00

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

2009-11-22T20:29:00.003-06:00

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?

2009-11-20T12:34:00.003-06:00

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?

2009-11-16T14:11:00.003-06:00

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!

2009-11-12T14:53:00.002-06:00

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.

2009-11-01T15:48:00.003-06:00

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

2009-09-21T08:38:00.004-05:00

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.

2009-09-08T13:17:00.005-05:00

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!

2009-08-19T12:53:00.002-05:00

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

2009-08-13T15:31:00.005-05:00

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

2009-08-10T13:33:00.003-05:00

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!

2009-08-06T14:52:00.004-05:00

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.

2009-08-01T13:40:00.003-05:00

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

2009-07-28T07:58:00.003-05:00

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?

2009-07-23T14:37:00.004-05:00

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

2009-07-18T07:59:00.004-05:00

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

2009-07-16T14:17:00.006-05:00

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.

2009-07-13T08:58:00.006-05:00

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?

2009-07-02T08:54:00.003-05:00

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?

2009-06-23T07:53:00.002-05:00

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?

2009-06-15T10:52:00.004-05:00

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?

2009-06-10T16:07:00.004-05:00

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?

2009-05-21T17:26:00.002-05:00

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.

2009-05-18T13:46:00.005-05:00

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!

2009-05-12T15:05:00.005-05:00

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.

2009-05-04T13:18:00.003-05:00

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

2009-04-29T09:59:00.003-05:00

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?

2009-04-25T11:55:00.004-05:00

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.

2009-04-13T13:34:00.004-05:00

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?

2009-04-06T13:10:00.004-05:00

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?

2009-03-31T09:35:00.004-05:00

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?

2009-03-27T11:58:00.004-05:00

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?

My Gosh! Banner Bank in Oregaon

2009-03-24T17:01:00.003-05:00

Small business people! May I have your attention, please! A bank is being creative! Really!

A bank in Oregon called Banner Bank received $134 Million in stimulus dollars. And guess what. They did the right thing (Attention Mike Huckabee) and put the money to work generating jobs and providing for the future. They took $50 Million and set it aside, so to speak, to provide loans to home buyers at a rate of 3.875%. They expected 10-12 calls when the program was annouced. They received 60 calls and it is growing. In this town there was a glut of expensive, new homes. They are selling and the developers have put people back to work to build more or finish what was started. The people buying are buying appliances and putting in landscaping and the people supplying those things are buying inventory and re-hiring people laid off. Amazing!

Is that how the stimulus is supposed to work? What do you think?

In this economy have you........

2009-03-16T14:31:00.002-05:00

Although I think that all the "crisis" and "fear" is overrated and blown out of proportion by the media and the politicians, these times still call for being prepared. So, I ask:
1. Have you written a Strategic Plan or reasonable facsimile thereof?
2. Have you saved money for a rainy day like our state's Rainy Day Fund?
3. Have you evaluated your margins? Pricing?
4. Are you overstaffed?
5. How are your customers? Are they in trouble too? If so, should they pay up front? Or, if you only have a few customers, can you work with them on such things as payment terms and buying cycles?
6. What would you do if you lost your major customer/client?
7. What employees are expendable/absolutely necessary? Can you keep them all employed by reducing hours/pay? Most employees would rather keep their jobs/benefits than be unemployed and without anything.
8. Do you want to sell out? Probably not a good time to do so unless your business is booming.
9. How are your facilities. Time to shrink? Time to enlarge? Stay where you are?
10. How many relatives are dependant upon you for their livelihood? Can you run your business with just relatives if you had to?

Now, absolutely do the following:
1. Aggressively sell.
2. Be positive and upbeat.
3. Be practical and pragmatic.
4. Don't quit until the fat lady sings.
5. Quit while you are ahead.
6. Pick either number 4 or 5 and plan accordingly.
7. Remember what got you into this business. Is it still a worthy effort?
8. Be frugal where and when you need to be. Possibly in all aspects of the business.
9. Pray for wisdon.
10. Tell your wife/husband and kids that you love them no matter what!

What do you think?

What is the point?

2009-03-06T13:45:00.002-06:00

Discussing the book The Peter Principle may seem odd. But for family owned and small business it is very important to realize that big company fiasco's can attack your business too. You are not immune. As a matter of fact, you are vulnerable. Many small and family owned business owners think that they are immune to big business problems and it is quite the opposite.

Take, for example, health insurance. Because of the smaller size of your group, you might be paying higher rates but health insurance as a benefit is so important to your employees these days. At my current consulting arrangement (they have 5 employees and sales of about $500,000), the primary and most important benefit is health insurance. The employees here are all family and they are all desperately in need of this benefit and are willing to pass up other things like vacation pay, some holiday pay and raises to make sure they keep the health insurance.

You might think that is not a problem for big businesses. Well, look at General Motors. One of the things that has them in trouble is $98 Billion in unfunded retirement plans and $43 Billion in health care costs for retirees and others. It may be what puts them in bankruptcy. That number is mind boggling. It is one of those things that their management should have been thinking about a long time ago. Instead, times were good, cars were selling and credit was easy. Not now!!! Sure they cut many jobs and closed plants. It was too little, too late. Just wait until they go into bankruptcy and all current contracts are now open for discussion. Guess what will be most important to the unions and the rest of the employees. Cut their pay, reduce their hours, don't contribute to their 401(k) BUT do not get rid of our health insurance. Just watch and see.

The Peter Principle endeavors to get all businesses to understand that they must be sharp. Constantly watching their customers, their market and their employees needs and be ready at a moments notice to change gears. Quit spending so much time worrying about who has what title and concentrate on your planning, strategic planning, and running a lean, mean, fighting machine.

What do you think?

Percussive Sublimaton and Lateral Arabesque

2009-02-28T12:50:00.004-06:00

These are terms, usually recognized as first appearing in The Peter Principle and are generally defined as follows:

1. Percussive Sublimation: promotion to a position only apparently further up the hierarchy.
2. Lateral Arabesque: A new position with a longer title but no hike in rank or pay.

What is meant by Percussive in "Percussive Sublimation" and Arabesque in "Lateral Arabesque" ? I am not totally sure and I do think that Larry Peter was either when he wrote the book, but here is what I think about each. You tell me if they do not apply .

Percussive Sublimation happens all the time. A person (very commonly a relative in a family owned business) is apparently promoted but they really do not change jobs but become higher up. Although this can be good if you are grooming someone for more responsibility, in family businesses, if you are not careful it will be taken by others as just a way to give the person a bigger title and more money . Generally, the term comes from a sudden and not needed promotion and it fools no one. I think that sometimes top managers think they are fooling all the people in the company but no one is fooled or they just believe they need to move the person up to keep them. Percussive Sublimation, besides being sudden, usually carries the message that it is being done on "the sly" or "for no apparent reason". Like most things, it could be good in a case where the change occurs so a person can be evaluated at a higher level where it is in preparation for another person on the way up. Usually it isn't good though. It is just a way to not deal with reality.

Lateral Arabesque is usually when a company does not want to do the right thing. A position is created and the person moved off to the side so as not to have to fire or retrain them. In most businesses it is a person who has been there a long time and has outlived their usefulness in the job because they have not kept up with technology or have outgrown their knowledge needed for the job. Or, in family owned businesses, they will not or cannot do their job or work with others, so they are moved off to a place where their either do not interact or cannot interact. This too is usually a "chicken" approach by managers with no guts to do the right thing. Even worse, in a family business, it moves the problem and does not eliminate it. However, this too can be good. If there is a person who has a wealth of knowledge and experience and needs to be moved away to allow for a younger or more savvy person, promote him to a top job of a consultative nature until they retire or leave. I have seen it work well in both small and family owned businesses provided the business can afford it. Do not do it if you cannot financially afford it.

Read the book. The Peter Principle by Laurence Peter. It is short and very satirical but very informative and contains information that is timeless.

What do you think?

Level of Incompetence

2009-02-25T13:19:00.005-06:00

This descriptive item by Laurence Peter in The Peter Principle describes a laterally moving a person who has reached their level of incompetence. The entire book is basically given to highlighting an effect that occurs in all businesses but especially in larger conglomerates whereby people reach their level of incompetence. However it occurs far too often in small and family owned businesses.

So, what is it? Let's say that at your company you have a salesperson doing a great job. They are outstanding, probably the sales leader and loved by your customers. A Sales Manager (or Product Manager or Director of Sales or Marketing Manager, etc.). So, you look no further. This top notch sales person has done an great job, they should be promoted into the opening. Right? Not necessarily. How are his management skills or training? How are his people skills? How well does he interact with all the other departments especially supervision and management of those departments? Success selling is not success managing.

We will describe in more detail some specific ideas from the book, but the basic principle is that just because a person is doing well in one job, it does not mean they will do well in another or in management. That is why, if you are a small or family owned business, management talent should be developed or hired not assumed just because they have done well in one position. If you are training an heir apparent, certainly let him function in all departments. That is good training, but do not assume that they are ready to manage until you have seen them in action.

Many companies, once a person has reached a level at which they are performing well, continue to promote them and then wonder why it did not workout and a previously great employee now must be demoted or terminated because they had reached their level of incompetence. So many companies do this because it is easy. Just promote a person they know. Or, it maintains their philosophy of promoting from within. That is a great idea but make sure the person is management material first before making the commitment. It will save everyone a lot of grief.

What do you think?

Basic Peter Principle

2009-02-23T11:16:00.003-06:00

The overall subject of the book The Peter Principle is that companies, by various means, allow people to reach their level of incompetence. It is so true in small and family owned businesses. Rather than deal with a person and do the right thing, many times they will move them into a position for which they are not qualified, move them into a position laterally that is beyond their capabilities or beneath their capabilities or even promote them (usually family) under the guise of "training" or giving them another chance.

What really needs to be done is that they need to be told to improve (receive a not so good review) or given specific improvement items or maybe even termination. Another thing that might need to happen is training/education for real. Not a conjured up seminar that deals in such high level abstractions that it is no earthly good, but training to specifically deal with the problems that keep the person from being what they need to be. Training/Education seldom really works because what management is looking for is to "fix" the person and the person may not be "fixable". Surprisingly, I have seen it work though. Especially for an ill-educated or non-educated family member. One of my clients had 3 sons one of which was in the business. One of the sons was incompetent, irresponsible and a liar and thief. The Father recognized it and would not allow that Son in the business. The third Son was in college and bound for medical school. The Son in the business was the middle Son and he was very helpful in all aspects of the business EXCEPT accounting/finance. When I came in to help the Father reorganize the business, it was obvious that the Son was a very smart young man, had a great work ethic and knew the business almost as well as the Father. He had worked in all aspects of the business EXCEPT accounting/finance. Sooooooo, I asked him to go back to school and take some accounting courses. He did not want to do it at first, but he did and he did well. Now he is finishing his degree and is handling all aspects of the business. I had shown him how to work in QuickBooks and initiate and follow through with transactions, but after going to school he understand what and why these transactions were necessary. So, it can work.

The point is that many times the person cannot be trained, cannot work with others and/or cannot or will not do their job. Rather than doing the right thing, many companies make "maneuvers" to "save" the person when they should have canned them or demoted them. Like Mike Huckabee says, "Do the right thing"! I agree.

What do you think?

The Peter Principle again

2009-02-18T09:50:00.003-06:00

Do you know what the Peter Principle is? It is a book by the same name written by Laurence Peter probably 30 years ago. But like many of those era writings, it still applies to business today. The book was written, primarily, to call attention to the stupid and inane things managers (at all levels) do in companies rather than do the right thing for the company and the person.

Over the next few days or weeks, I am going to write about some of those main topics and attempt to get your reaction. With unemployment very high and businesses shrinking rather than expanding (at least until you get all that government money to help you out) and people less hopeful and less excited about the future than in many years, it is important to look at your business and determine what you are going to do and where you want to end up. Even if you are a 2 or 3 person company, it is time to prepare a strategic plan. Nothing as sophisticated as the what he auto makers did for Congress, but "what if" scenarios like:
1. What if my business mostly or totally dried up?
2. What if I cannot pay my employees?
3. What if I need to cut work hours and wages?
4. What if my customer base changes?
5. Do I have other options. Can I change or shift my business to meet current needs?
6. Should I take less money and put as much as possible in a "rainy day" fund?
7. What is the competition doing that I should or should not do?
8. What are my companies strengths, weaknesses, alternatives and terrors?
9. Is my strongest asset Customer Service? How can I make it that way?
10. Have I prayed about the business and sought God's help and direction?

Try the exercise even if your business is doing well right now and the future looks bright. So did the auto industry 2 years ago.

What do you thing?

Ice Cream for you and your business!

2009-02-16T15:01:00.001-06:00

This is one of the best explanations of why Obama won the elections that I've heard yet.From a teacher in the Nashville areaWe are worried about "the cow" when it is all about the "Ice Cream."The most eye-opening civics lesson I ever had was while teaching third grade this year. The presidential election was heating up and some of the children showed an int erest. I decided we would have an election for a class president.We would choose our nominees. They would make a campaign speech and the class would vote.To simplify the process, candidates were nominated by other class members. We discussed what kinds of characteristics these students should have. We got many nominations and from those, Jamie and Olivia were picked to run for the top spot.The class had done a great job in their selections. Both candidates were good kids. I thought Jamie might have an advantage because he got lots of parental support. I had never seen Olivia's mother.The day arrived when they were to make their speeches, Jamie went first. He had specific ideas about how to make our class a better place. He ended by promising to do his very best. Every one applauded. He sat down and Olivia came to the podium.Her speech was concise. She said, "If you will vote for me, I will give you ice cream." She sat down. The class went wild. "Yes! Yes! We want ice cre am."She surely would say more. She did not have to. A discussion followed. How did she plan to pay for the ice cream? She wasn't sure. Would her parents buy it or would the class pay for it. She didn't know. The class really didn't care. All they were thinking about was the ice cream.Jamie was forgotten. Olivia won b y a land slide.Every time Barack Obama opened his mouth he offered ice cream and fifty-two percent of the people reacted like nine year olds. They want ice cream. The other forty-eight percent know they're going to have to feed the cow and clean up the mess.

What do your think?

What about this bailout for your business?

2009-02-13T13:26:00.002-06:00

Although I believe the $800 Billion "reinvestment" plan is pure nonsense, it appears to be ready to be passed and send to President Obama. So how many jobs will it create for your family owned or small business. Probably none unless you are in the business of handling federal contracts relative to buildings, roads, bridges and schools. Even then, don't hold your breath.

There are some tax incentives that you might take advantage of once we know for sure what they are. We should know today and certainly by next week. This bill has gone through so fast that it really has not received the scrutiny that is normally allowed a bill of this magnitude and its far reaching nature. It should have gone through far more scrutiny than it did and I am praying that the lack of oversight does not once again bite in the backside.

If you are unemployed or an illegal alien, this bill really helps you. Also, if your business is raising and analyzing East Ethiopian Pygmy Mice. Also, there is several million dollars in there for determining if, in fact, Pancakes are fattening! Not really, but maybe it should. Another thing that would help is if you are already on the government dole. Then you will be able to retain your job at current pay or more whether you are performing a needed function or not.

Lastly, if you grip and complain and moan and groan about how bad things are, you should do just fine. If you are a hard working, self motivated, unselfish, great American worker, you will get nothing. Did you see the President in Peoria, Illinois yesterday. What a joke.

I live in a State that does not need any help. We have "rainy day" funds set up to get us through. Our Governor, a Democrat, did come up with some make work jobs and there is no doubt that we need help with bridges and overpasses as well as road maintenance. If he gets the money to do the "make work" projects he has outlined to our Senators, maybe it will help put some people out of work back to work. We will have to see.

What do you think?

Number 7. Who is your replacement?

2009-01-31T11:05:00.007-06:00

During my consulting career with small and family owned businesses, I have been amazed at how many times an owner is in his/her sixties and have not thought of who will replace them. This is especially true in businesses where the owner does not have a relative interested in being in the business.

When should you begin your search for a successor. As soon as you can but not later than 5 years before your anticipated retirement date. Why because things change, times change and the economy changes and if you do not begin to groom someone to take over and something happens to you, what happens to your business. Or do you care? I have a friend who who owned several hotels/motels and various oil producing properties. He had 9 kids. He tried them all and none of them worked. He found out that his dogmatic "I am the king" attitude could not be replicated. So he got very frustrated and sold the business to a competitor this locking the kids out.

Another example is a CPA friend of mine who had built up a nice little practice. He met with his kids and none of them had the slightest interest in Accounting. He met with his top CPA's in the firm and agreed to transfer ownership over a 5 year period to that group. The transition is going very smoothly and because of his forethought and business style, by the time he leaves all the clients will be re-oriented to the new owners. They have agreed to have him stay for a year afterwards on a purely advisory basis.

What do you think?

Swearing In done now back to business

2009-01-20T14:39:00.004-06:00

Well I just finished watching Barak Obama be sworn in as the 44th President of the United States. Quite historic. I know that there are those who are mad because he is black (well, not really. Half black), and those who are mad because his middle name is Hussein (I do not like that either but he did not give it to himself and I HOPE it does not define him), and those that are mad that he is Democrat (me too and we will see), and those who are mad because he is so young and inexperienced (he is young and idealistic and the office will be a hard reality and, unless the person taking the oath is doing so for a second term, no comes to the office experienced. The closest would be a Governor who has run a State but that is still not POTUS) and some people are mad because he hasn't proclaimed a church home yet (but I bet he will) and those that are mad because he will not produce a birth certificate (this bothers me too but remember, the American people voted him in and they can vote him out if that question does not get answered) and some people are mad because they are mad at everything (with the possible exception of the Lord himself, there are some people who cannot be happy).

As I have said before, I did not vote for Obama but now he is my President and I will pray for him and his family and for all our elected officials most of whom are so superficial we do not know what they stand for. But, the President can count on my prayers. I personally believe that you cannot tax and spend our way out of this economic crises. I guess we are about to find out. I will continue to pray.

From here on, I am going to try to stay on theme and relate things relative to family owned and small business matters. I am going to delete previous blogs in a few weeks that do not relate to that subject.

What do you think?

Happy New Year I guess

2009-01-07T10:25:00.003-06:00

HAPPY NEW YEAR. 2009 looks like it will be a mixed bag. But, I think that it will be great for all of us. Now I guess that depends on your definition of "great". Here is what I think is "great":
1. We are still alive!
2. We live in a great country. It may not be getting greater but it is truly a great country.
3. My wife is great. She is the best and I am the most blessed man on earth to have her for my wife for 42 years. She has always been the best wife and mother ever she is now the best Grandma ever.
4. My state (Oklahoma) is great. Although with the price of oil lowering the economy is beginning to impact Oklahoma, we do not have the economic terribleness being experienced almost everywhere. On top of that, we were not caught up terribly in the "sub prime" and housing debacle. Our prices have remained very stable and you can still buy a great house in Oklahoma for far less than the national average.
5. My city is great. We are regularly considered one of the safest cities in the U.S. and one the "best" cities in the U.S. Our city even gives us a years supply of trash bags to use for the garbage collectors.
6. My sons and their wives are great. I am 63 years old and pretty much retired. Both my boys treat me great and with respect. I do not always see that in the grown children of older parents. 7. My daughters-in-law are great. One is a stay-at-home Mom and the other a 5th grade teacher. Both seem to love their husbands and their kids. Both girls came from different backgrounds but both came from small towns and both are Christians as are my sons.
8. My grandkids are great. I have 4. They are all smart, creative, articulate and they like school. All attend Sunday School and church and two of them have accepted Jesus Christ as their personal savior. Hayley, 7, will be baptized this week. We get to see them all often. PTL.

So this will be a great year because I am surrounded by greatness not the least of which is the Holy Spirit of God and the salvation of His Son, Jesus Christ.

What do you think?

Merry Christmas. Yes we say Merry Christmas

2008-12-24T23:04:00.002-06:00

Merry Christmas. To my thousands of readers and followers. What a year. I would call it a good year not a great year. However, it could have been a lot worse except for my portfolio. I talked to my Broker this morning (he is also my nephew) and he informed me that my investments had increased by $14 in the last 30 days. Now I can retire.

Number 6 and you thought I forgot.

2008-12-17T16:08:00.005-06:00

6. Progressively increase their responsibility until you name them President and COO. You remain Chairman and CEO until you retire. When you do this, be there to help not direct and let them lead no matter how hard it is.

Even after you have given them the title, the heir apparent should be responsible for specific things with enough responsibility and authority to make a difference yet be accountable to you and others until you see them in action. This includes being involved in Marketing Plans, Sales Initiatives, your outside council, your outside CPA and your insurance broker(s). Other than day-to-day decisions, they should not unilaterally make decisions without discussion with your team. Obviously, you and the heir apparent can, probably decide anything. However, it is always advisable to "seek the council of the wise" prior to making major, life changing decisions.

When you decide the time is right for them to assume the throne, do it right. Don't just say that you are no longer the President (or whatever). Do what you would do if you hired someone. Give them credit for a job well done, write a letter to "All Employees" announcing the change and don't joke about it. People will take it as seriously as you present it. By the way, the heir apparent will appreciate being treated as a top manager not as your relative.

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

ps: My wife says that I do not always have good grammer and spelling. I think I am perfect. What do you think?

The Auto Makers Bailout AGAIN!

2008-12-05T13:54:00.003-06:00

Yesterday and today, I took a little while to listen to the automakers present their case for a "bailout". I thought that they were especially forthcoming and to the point........this time! You remember the boondoggle of arriving in Washington with hat in hand after having flown in on their private jets. I agree that was pretty dumb, they should have "jetpooled" I guess. The bigger deal though is the need to ask for money. I do not believe it especially given their propensity to largess. Let them go into Chapter 13 and reorganize.

What was more interesting was the incredibly stupid questions from the Senators and Congresspeople most of whom have not one minute of business experience. A few did, but not many. One of the interesting points was that Senator Dodd had met with a large number of car dealers ( I think 300) in Connecticut prior to the sessions this week. Smart. He found out what the car makers were telling them was true. NO ONE IS BUYING!!!! Even with outrageous incentives, no one is buying except that few people in the country can get a Dodge Charger. There is a waiting list. Why are they not buying. It is an amazing and mind boggling problem and reason for not buying. THEY DO NOT HAVE ANY MONEY AND CANNOT GET ANY!

Another case for the bailout might be that with gas prices coming down, people may soon begin to buy cars too. That is true in my view. One of the main keys to economic recovery is 'REASONABLE" gas prices. Next, stop all the government involvement except for interest rates. Rates are low, but banks aren't lending or at least they are not lending to normal people. Typical banking, if you do not need the money, the banks will lend it to you. They frown on people borrowing because they need to!!

What do you think.

A Different Christmas Poem

2008-12-03T10:09:00.003-06:00

I really do not have anything to add to this but to say God Bless America and God Bless our troops.

The embers glowed softly, and in their dim light, I gazed round the room and I cherished the sight. My wife was asleep, her head on my chest, My daughter beside me, angelic in rest. Outside the snow fell, a blanket of white, Transforming the yard to a winter delight.
The sparkling lights in the tree I believe, Completed the magic that was Christmas Eve. My eyelids were heavy, my breathing was deep, Secure and surrounded by love I would sleep. In perfect contentment, or so it would seem, So I slumbered, perhaps I started to dream.
The sound wasn't loud, and it wasn't too near, But I opened my eyes when it tickled my ear. Perhaps just a cough, I didn't quite know, Then the sure sound of footsteps outside in the snow. My soul gave a tremble, I struggled to hear, And I crept to the door just to see who was near.
Standing out in the cold and the dark of the night, A lone figure stood, his face weary and tight. A soldier, I puzzled, some twenty years old, Perhaps a Marine, huddled here in the cold. Alone in the dark, he looked up and smiled, Standing watch over me, and my wife and my child.
"What are you doing?" I asked without fear, "Come in this moment, it's freezing out here! Put down your pack, brush the snow from your sleeve, You should be at home on a cold Christmas Eve!" For barely a moment I saw his eyes shift, Away from the cold and the snow blown in drifts..
To the window that danced with a warm fire's light Then he sighed and he said "Its really all right, I'm out here by choice. I'm here every night." "It's my duty to stand at the front of the line, That separates you from the darkest of times.
No one had to ask or beg or implore me, I'm proud to stand here like my fathers before me. My Gramps died at ' Pearl on a day in December," Then he sighed, "That's a Christmas 'Gram always remembers." My dad stood his watch in the jungles of ' Nam ', And now it is my turn and so, here I am.
I've not seen my own son in more than a while, But my wife sends me pictures, he's sure got her smile. Then he bent and he carefully pulled from his bag, The red, white, and blue... an American flag. I can live through the cold and the being alone, Away from my family, my house and my home.
I can stand at my post through the rain and the sleet, I can sleep in a foxhole with little to eat. I can carry the weight of killing another, Or lay down my life with my sister and brother. Who stand at the front against any and all, To ensure for all time that this flag will not fall."
" So go back inside," he said, "harbor no fright, Your family is waiting and I'll be all right." "But isn't there something I can do, at the least, "Give you money," I asked, "or prepare you a feast? It seems all too little for all that you've done, For being away from your wife and your son."
Then his eye welled a tear that held no regret, "Just tell us you love us, and never forget. To fight for our rights back at home while we're gone, To stand your own watch, no matter how long. For when we come home, either standing or dead, To know you remember we fought and we bled. Is payment enough, and with that we will trust, That we mattered to you as you mattered to us." PLEASE, would you do me the kind favor of sending this to as many people as you can? Christmas will be coming soon and some credit is due to our U.S service men and women for our being able to celebrate these festivities. Let's try in this small way to pay a tiny bit of what we owe. Make people stop and think of our heroes, living and dead, who sacrificed themselves for us.

LCDR Jeff Giles, SC, USN 30th Naval Construction Regiment OIC, Logistics Cell One Al Taqqadum, Iraq

By the way, we say Merry Christmas and we celebrate the birth of our Lord and Saviour Jesus Christ. If you do not know Jesus as Lord, I would invite you to comment to this blog post and give me a way to contact you and I will be happy to explain how you can have eternal life in Jesus Christ.

What do you think?

The Auto Companies Bailout

2008-11-20T12:37:00.003-06:00

RIDICULOUS!! Just like the AIG and Wall Street, this is crazy. LET THEM FAIL or go into Bankruptcy. That is what it is for.....REORGANIZATION. Now for those of you who think that I just do not understand how the big guys work since most of my career has been helping the little guys, the principles are the same. They are out of touch with reality, they are in cahoots with the UAW and they think they are above the law (law of supply and demand). Rubbish. The principles of honesty, integrity, less is better and a living wage still apply.

Here is what should happen:

1. The regular, hourly employees make too much. Their wages are far higher than average America. Do not cut their wages but FREEZE them for at least three years. If the UAW won't go along, let the workers vote to keep their jobs or not.
2. Simultaneously, stop making cars so fast. Either slow the line down and/or work less hours. Keeping their jobs and benefits would be better than no job at all.
3. Reduce finished product inventories. Move cars around the dealers rather than continuing production. Make what sells. If people want particular cars or really big ones, get in line. Remember when you "ordered" a car and it was a big deal to order it and wait. It was fun. If someone does not want what is in inventory, order it OR find it at another place.
4. Eliminate about 5 layers of management, especially top management. Really. It appears that the guys at the top have forgotten who they work for. Because shareholders are so diluted today because of millions and millions of shares outstanding, the guys at the top do not have to really face the shareholders so they say "screw them". We will use their money to pay for our corporate jet.
5. For the next 3 to 5 years set the maximum pay for the top guy at say $1,000,000. Now, even if your house payment if $25,000 per month, you should be able to live on a million. Then set the maximum for any other officer at half that. Reduce Directors fees to say $5000 per meeting, etc.
6. Virtually eliminate perquisites. Come on. These are tough times. Perks are supposed to be for when things are great. No planes, trains and only cheap automobiles. No Chauffeurs UNLESS they are used to car pool I am serious. Figure out ways of doing ONLY the essentials.

Remember when Lee Iaccoca went to Congress for money? A whopping $1 Billion at the time. He took no salary, lived and acted frugally and made money after Chrysler became wildly profitable, had great new ideas and everyone in the company had learned to live on what the company could make. Eventually, everyone did fine and he paid back the money not on time, ahead of time. Now I know that the CEO"s of GM and Chrysler have both agreed to be paid $1 this year. However the CEO of Ford said his $9 million was "where is should be". Maybe but I doubt it. Remember, Ford went through tough times before GM and Chrysler (because Chrysler was being propped up by Daimler Benz).

Remember it is not $25 Billion they want. It is $50 Billion. They already have $25 Billion from the Department of Energy for re-tooling to Hybrids. They want ANOTHER $25 Billion. No way. Let them file for bankruptcy protection and see what the court requires them to do in order to reorganize. Just what we need is for government to determine how they succeed. Let me go up there and run Chrysler, they will be profitable next year!!!

What do you think?

Number 5, Let the Title Begin

2008-11-17T11:03:00.003-06:00

After some time in your business or if the heir apparent has obtained great experience somewhere eles and is coming into the business, give them a title that will let everyone know who the heir apparent is. For two reasons:
1. If you have other high level managers in the business and you know that they are not likely to become the President (top guy), you let them know so that they can either decide to stay knowing that they are not the choice OR they can go somewhere else. If they are really valuable people and you do not want them to go, tell them that. If they decide to go anyway, help them in their search by being a reference and continuing to have confidence in them.
2. People need to know what is going on and the heir apparent needs to gain the authority to go along with the responsibility of the job. Do not phase them into the job. You should have already done that in their training or experience. They either are or they are not. You will know soon enough if they get the big head over the title. If they do flaunt their position, demote them or terminate them. A very little of the big head can destroy years of building a business. Have the guts to tell them what you see and ask them(tell them) to stop and change. If they suddenly won't fwork or don't think that they should have to work as hard as everyone else, you have made the wrong choice. Now do not make the mistake of mistaking delegation for not working. Your heir apparent may be a better delegator than you are and he may have other priorities. Evaluate that BEFORE you promote him. A good delegator is usually a good manager with forward thinking and strategic mindedness.

So, give 'em the title and set them up to succeed. If their significance gets tied up in their title, they are the wrong person for the job and change it. NOW!

What do you think?

Veterans Day

2008-11-08T09:34:00.008-06:00

Earlier today I sent an e-mail that I had received from a friend from church in which it reminds us tht we have our freedoms not because of the people performing that freedom but because of the veterans who have insured our freedom from tyranny over the years. I sent this e-mail to people I know who have sons and daughters in the military right now in a feeble attempt to say thank you.

In our church, we had a couple both of whom were Dentists. We had their daughter in Sunday School. When the Iraq war started, they sold their practice and both joined the military and both have served together and separately in Iraq and Afghanistan. I am so proud to know them and their commitment to our country. When they left, our church prayed over them and I am glad that we did.

My son, who is a surgeon, just left the military in July. He was deployed to Kyrgyzstan. Even though he was not in the main battle theatre, it was a scary time for him and for us. But, he wanted to go. His education was provided by the military and he felt and obligation to serve. Secondly, he wanted to have been where he could help. I am proud of him for being a soldier and willing to protect our freedoms.

God Bless America and God Bless our Vets! What do you think?

Number 4 is for Sales and Marketing

2008-11-08T09:34:00.007-06:00

Well, Well. This may be the toughest one. Your heir apparent must "carry the bag' or, in other words, must be in or have experience selling. Not Marketing, selling. What is the difference. Selling is going out and talking to customers face to face or on the telephone with the objective of building a relationship and SELLING them your product or service. Marketing is the effort to inform the world of who you are and what your products are via brochures, ads, training/education and most significantly, is planned. How are you going to get to the market you are after. I have asked this question of all the companies that I have consulted with. Most had not idea except the same ol', same ol'.

If possible, I would suggest that the Strategic Planning effort include the basics for the Marketing Plan. Having your heir involved with Strategic Planning and Marketing and then, actually, selling is the best possible experience and will provide them with the "global" view of your buisness that you have, probably, always had. They may not want to do it, but make them. NO matter what! I promise that it will be the single best thing you do for them in their training.

Number 3 in the series

2008-11-08T09:34:00.003-06:00

I was caught between wanting to get this blog caught up and commenting on the Mr. Obamas first news conference yesterday (November 7). The fact is that I saw a different Mr. Obama. Perhaps for show, but I saw him as well organized, decisive and prepared. A reporter asked him about his security briefing the previous day and wanted to know what he might have learned. He told the reporter directly that he did learn somethings and no he would not discuss any of it. Period! When they asked him about an economic stimulus package this year or next, he said he would like to see it this year but this country has only one President at a time and right now it is George Bush so it was in his court; and it is. In typical, liberal reporter style, they asked him about his input into who will be his Senatorial successor. He said it was not any of his business it was the Illinois Governors call. Right on man, keep it up!

Now for number 3 on preparing your successor in a small or family owned business. In number 3 in the earlier blog, I indicated that the heir apparent should would in all functions/departments within the company and be paid accordingly. They may be good at sales or accounting or productioon or other functions, but if they are going to manage when you leave, back off or retire, they need to appreciate the fact that it takes all the departments working together to get the job done. Probably the biggest thing to remember is that what you do to keep track of your business, your heir needs to do too. They may do it differently, but they will do it on some basis, or they should.

In my experience there are two major battles to deal with.
1. Sales people think that they are far and away the most important aspect to the business. To some extent they are. No sales, no business. However, if you had all the sales in the world and no accounting, no production/purchasing, etc., so what! It takes everyone. After saying all that, no one should ever run a company, in my opinion, with having "carried the bag" so to speak or, in other words, have ACTUAL selling experience. This is especially true if your sales people travel. Travelling and selling on the road is not the glamorous job everyone thinks it is. I know. I had over 200,000 miles in the air one year.
2. Accounting people tend to be "bean counters" and are viewed as disruptive to the business. The heir needs to understand a balance sheet and P&L aw well as the accounting people, in my view. I am not an accountant but I bet I understand and know the ins and outs of accounting better than most accountants. Not because of formal training necessarily, but because of EXPERIENCE. Proper accounting is of monumental importance. And, if you are large enough, the Sarbanes/Oxley Act requires controls and a CFO position and that is good.

So make them work in all departments. If they don't want to, they are not the heir apparent. They do not have to like it, but they have to do it.

What do you think?

Wew! The election is over!

2008-11-05T13:41:00.001-06:00

Well it is over. Obama has won, unfortunately. However, I will support Mr. Obama as our new President and pray for him regularly. (He needs the prayer and I need the practice!)

As I have mentioned in this blog before, there is really very little a President can do without the approval of Congress. Of course, in Obamas case, the Democrats have a majority so he can, hopefully, make good on his promises. My personal opinion is that if you think spending was great under Bush, hold on!

The enormity of the task and the shear power of the position will, in all likelihood, cause Obama to surround himself with competent staff. Again, hopefully, he will not fill his staff with yes men. My personal opinion is that he will do that. His campaign was very well organized and very well run. Probably not by him, but by his selections to run the campaign. That is a good sign because he delegated responsibility and granted necessary authority to his head honchos. No President can succeed without that.

Thanks for stopping in and I would like to know what you think. Respond where it says "comments" below or e-mail me at dennispcarey@yahoo.com.

Number 2 begins now

2008-10-29T14:40:00.004-05:00

You should begin training the family member who is going to take over now. Many times I have gone into a company and Dad is really frustrated because Son or Daughter are not ready in his opinion. Usually it is because he has been treating them like a Son or Daughter rather than an employee/heir apparent.

If they are in the training phase and in some department or function within the company, they should be held to the same level of competency that any employee would. If they are acting like children or cannot do the job, either transfer them or discipline them or maybe both. They will never learn if you coddle them and allow them to be not held to the same level of maintaining the rules as anyone else. If they are doing well, promote them like anyone else, pay them like anyone else and give them the praise they deserve.

After working in all the functions in the business in one capacity or another, then bring them along with increasingly responsible positions. Remember you should have already told your top management what you are doing. They should know your intentions. That may create a problem. If you have someone really good and you really trust them and they are doing a great job. increase their responsibilities too. Probably, have your heir apparent report to them to learn how to manage and gain the respect of others. Your family member may become frustrated because they have to follow someone else's orders and, after all, they are family, they are flesh and blood. Well too bad. Until they act like and perform like the best employees you have, they should not be promoted or given any special treatment. I promise you, the children of owners that have been left to their own devices loose the respect of the employees, never get the respect of suppliers/bankers/investors and they never experience the business like they should. Sure it is tough, but was it easy for you? Did you have to work hard for what you have? So should the kids.

Finally, if the family member is anxious to take over, you should be excited for them and glad they are so interested, but do not give in. Make sure, no matter what, they are fully integrated, have the respect of their peers and are as knowledgeable as anyone else in the company on its products/services, methodology, strategic plan, strategic initiatives and the budget/financial statements. They can do it, but you must be the overseer of their training and make sure they become an owner at the right time.

What do you think?

The Family Business Helper Part 1

2008-10-24T15:19:00.003-05:00

As a consultant and business owner, I have been in 12 family owned business in one capacity or another-23 different assignments. In that time, I have seen good ones, bad ones, successful ones, unsuccessful ones, well run and poorly run, profitable and unprofitable, those that keep up with the times and those that do not and, unfortunately, most of all....... businesses that were fairly well run and profitable turned over to the kids only to be run right into the ground. Some times I have come in to save them, some times to reorganize them and sometimes to put them in bankruptcy and see what could be salvaged (have actually salvaged the entire business on occasion).

So here is my advice if you have a family business:
1. If you have a successor, decide who that is right now. If you do not, see #7 below.
2. Begin training that person to replace you right now.
3. Make that person work every function in the company until they realize that it takes all the functions in the company to make it work. Pay them like everyone else in those categories. If they need special treatment or arrangements, do that only if you have to and do confidentially even if you have to do it personally.
4. Make sure, no matter what, they get sales experience and know the difference between sales and marketing. Even if they are not sales people, make them do it, make them "carry the bag" if you will. It would be great if they had to make cold calls and travel.
5. When the time is right (I will describe that later) give them a title that lets everyone know they are the heir apparent. Not such a large title that they cannot be promoted through a series of events, but something significant.
6. Progressively increase their responsibility until you name them President and COO. You remain Chairman and CEO until you retire. When you do this, be there to help not direct and let them lead no matter how hard it is.
7. If you do not have a relative that is going to take over, begin looking for your heir at least 5 years before you are going to retire. It might take more than one to work out. Family owned businesses have their own idiosyncrasies usually some of which are not normal business methodology so be ready to change.

So lets elaborate on #1. If you have kids in the business and you want one of them to take over (they cannot all take over) make sure that they REALLY want to stay in the business. Do not ASSUME that they all want to be in the business. All of Warren Buffets children could have been in the business I suppose, but only one is. If there is more than one, without regard for age/education, pick the one who works best with your people after you have seen them all in action. If you only have one child and he or she wants to be in the business, get them a great education (as far as they can go) and begin training them right now. Let them work summers, Christmas holidays, etc. Then start them out learning the product/service and work their way up through all facets of the business. If you are 20 years from retirement, it is not too early to start.

Next make a plan for the heir apparent to assume the throne (the job not the executive bathroom LOL). Identifying the person becomes the easy part, training them according to a plan may be tougher, but in my experience the single biggest reason children assuming the helm of a company is that they were not properly trained and the owner/founder/parent was so busy running the business the way they always have that when they were ready to back off/retire the kids were not ready to take over. Most of the businesses that the kids ended up running into the ground were because they did not know the intricacies of running the business that the owner held dear and did not pass on OR the business needed so much upgrading that by the time the kids tried it was too late. Even more common was the kid had be coddled through the business and put in charge right away. They were GIVEN EVERYTHING and then GIVEN the business and they had no idea of the fiscal responsibilities of the business.

So choose early, train properly, treat them like employees at first and then as owners and then get out of the way!

What do you think?

I was asked, so here is my answer on election and economy

2008-10-13T14:13:00.007-05:00

My nephew sent me an e-mail that said "I have a friend is is unsure who to vote for and she is very concerned about how they might handle the economy in the next 4 years.". I wrote the following answer:

Well, I would tell her not to panic, first of all. The market will survive and so will the economy. Neither candidate for President can do ANYTHING on their own. Whoever is elected must work with Congress to make things happen. So be very careful who you vote for for the House of Representatives and Senate. The President, by himself, can do nothing!!!

Secondly I would tell her to vote for the person who is telling the truth as best we can determine it. Thirdly, vote for the person who is a proven leader who will keep us safe and will surround themselves with the most experienced people who are not yes men. Lastly, I would vote for someone who has a proven record of working with both parties in the country's best interest. (By the way, Sarah Palin might be the best leader of the bunch!) Someone who is not afraid to pray and allow God to be part of the process.

We should pray for the country right now and for this election. Remember the Bible says that the effective, fervent pray of His people avails much!

I do not have any problem not voting for Obama but I did have a problem voting for McCain! Then I heard his interview with Rick Warren at Saddleback Church early in this campaign. Obama talked from the theoretical, McCain talked from the experiential. Once I got past the rhetoric of Obama (I still think he is a closet Muslim and aspires to Rev. Wrightesq view of America and only talks patriotically when is to his advantage) and became very satisfied with the decisiveness and relative candor of McCain.

Sorry for the long answer. You are probably sorry you asked, huh?

Thanks for asking! In the next couple of days I am going to deal with this from the small business perspective in my blog.

From a small businessman's point of view and also that of a "normal" citizen, I blows me away to hear the candidates telling us what they are going to do for the economy. As President, by themselves, what can they do?!? NOTHING. They cannot change laws, pass legislation, interpret the Constitution, set up new methods, add or delete departments or determine what government intervention is going to occur tax-wise or economy related. In order to do these things they must cajole, collaborate and work with Congress. IT TAKES LEADERSHIP NOT RHETORIC! Can he add staff, move staff, eliminate staff, sure---below a certain level. Above a certain level that also requires Congressional approval. I mean no disrespect to the President at all. As a matter of fact, I have incredible admiration and respect for the position of President of the United States. Bill Clinton was a terrible person with little or no morals and he was a scheming, conniving and impeached person, but I still respected him in the position of POTUS (President of the United States).

See, all the promises they are making and all the speeches they are giving and all the things they say they are going to do are not worth the air they take up if the person is not honest, of great character and has integrity. Incidental, honesty and integrity are not relative terms. You either are are you are not. Someone told me once that they were "basically honest". That means they were dishonest. You either are or you are not. So, instead of listening to what they say they are going to do. try to determine who is being honest and who has integrity. Who would lay their life down for the country, who would put country first no matter what, who has experience (not experience being President, nobody has that until they get in the office unless they have been President before) in life and who will stand up for "what" is right, not "who" is right when it comes to our national security and our electorates best interests.

Next, basically leave the economy alone. The panic we are seeing in the minds of the Congress is conjured up in order to cast blame on party lines. Are there problems? Absolutely. Does it require government intervention? Possibly but not permanently. Do we need some more regulation on Wall Street? Unfortunately, yes. Without some restraint, GREED takes over. The entire Wall Street debacle that is really hurting Main Street, is as a result of GREED. GREED! Not George Bush or the last 8 years (2 of which had a Democratically controlled Congress remember). What can a guy do who makes $130,000,000 per year that he could not do at $3,000,000. I could easily live on either couldn't you? I am a Free Enterprise person, but the people we trusted in business got GREEDY and it affected us all. That is exactly what is happening to the automotive industry now. GREED but this time not only by the CEO's but by the unions as well. Sure they should want the best for the people they represent, but not a the expense of everyone else in the country and maybe the world.

As Kelly Ogle (Oklahoma City news anchor)would say, "That's my 2 cents"! What do you think?

Family business-how is nepotism working?

2008-10-08T10:27:00.003-05:00

I have been in several family owned businesses. Some of them good, some of them not so good, some of them bad. No matter what the assignment is that I have taken at the family owned company, almost always, the owners want me to comment (or analyze) how the family is doing ESPECIALLY if they are employing their kids. It is very dangerous for a consultant because seldom do the answers please the owners.

Let me give you my perspective on employing family members in a family owned business. It is threefold:
1. If you do it, do it right. The best way is for the relatives, especially kids, to function in the business is for them to start at the lowest levels in the company and gradually move up. It is really good if they can work is many areas of the company. I was involved with one company where all 3 sons were in the business and all 3 had to work in Sales, Accounting, HR, the warehouse, go out in the field and work all shifts. Soon they discovered who was there to build a career and who was there to get on Daddy's dole.
2. If the family member is getting special treatment, tell everyone up front. When I coached Baseball, I would have a meeting every year with the parents. It was a mandatory meeting. In that meeting I told the parents that although I loved Baseball, I was coaching because I wanted to coach my son. I told them that he would play every game unless he was hurt or ill and if they didn't like that, they might be better served by another team. I coached that team for 13 years and had 8 of the original 14 boys the last year. If your kid (or other relative) is going to get his positions because he is related to you, tell people and then they will learn to live with it. If your kid or relative is a jerk, either terminate them or otherwise remove them. My son understood on our ball team that I expected him to set the example for everyone else. If your kid cannot do that, do not put them in a job of any kind.
3. Blood is thicker than water, as the old adage states. It really is. If you cannot terminate your relative, especially your kids, do not hire them at all. I recently had a client that had children, brothers, uncles, and a grandfather employed. They, except for one, were model employees because they had seen their Mom and Dad terminate relatives who thought that they were entitled to their job and above the rules. The employee manual should apply to everyone including the family or you will loose the good employees and others will just tolerate the family.

What about pay. Pay them according to their need and what you agreed to. Pay them what everyone else in that job would get. If you are going to pay them more or give them more or different benefits, don't brag about it and don't let the relative brag about it. If they are getting an extra few days vacation because they are family, when someone asks why, tell them it is because they are family and being part of the family does have it's privileges. That assumes, of course, that the relative isn't rubbing every one's nose in his being favored. If he does, fire 'em.

So, with that said, it has been my experience to be very careful answering the question about how a relative is doing, especially a kid. But answer I must and I do it frankly and to the point. What I usually try to do unless the kid is a total jerk, is tell them what the relative is doing that is good and what is bad and what can be done to improve them. Improving them might be suggesting that they go to work for someone who is not family and see what the real world is like. Usually relatives coming into the business after having worked at other places are respectful of others and understand their position. If they do not understand how to assimilate themselves, terminate them quickly.

What do you think?

Shake things up!

2008-10-07T10:18:00.006-05:00

Really? Not usually. In small and family owned businesses, the owners/senior management are usually proud of what they have done and bring a consultant in to hear that said to them. In my experience these people (especially owners) may have a single problem that has their attention and they do not feel that they will get an objective opinion from the current staff (or they lack adequate staff) so they call me. With a few exceptions, when we agree on what I am going to do, I am almost always asked to "shake things up", "look at what you need to" for resolving this problem and while you are at it, look at the management staff and do not be their friend.

One of the things, among many, that I do well is that I am a quick study. In my last assignment, for example, they wanted a preliminary report in 30 days. They had one in 6 days. We had a plan in place in 2 weeks and were working that plan almost immediately. At the end of 30 days I called a meeting and presented a comprehensive plan that included not only solving the problem and a reorganization plan for that function as well, but also a plan for the future that would help them grow or be ready for growth. The plan was approved and we moved on to the "shake things up" part of the deal. That is where the rub came in. I received accolades, complimentary e-mails and they discussed the possibility of me coming on board as a full time employee. Things were great.

A couple of weeks later I had a meeting with the CEO, President and EVP. I had had individual meetings with each of them and had told them about organizational flaws I had discovered, procedural and policy inconsistencies that existed and little or no real honest to God Sales and Marketing effort (most of which was, ostensibly, being done by the owners kids). Now I was in trouble. I gave them a "shake things up" plan and suggested methods for developing a Strategic Plan supported by certain Strategic Initiatives. It was my opinion that they had built a good business based not on sound business principles, but by the grace of God. Although they responded well to Strategic Plan idea and hired a person to spearhead that effort, they did not like being confronted with decreasing market share, little or no sales training, at least one top manager who was so enamored by his title and power, the CEO had, over the years, taken away all departments reporting to this person except for one. Why? Because no one could work for him. He thought that he was "second in command" and acted like it. Although everyone in the company respected his title, they did not respect him.

So, they decided that I should continue the Interim Executive position until a determination could be made about the person they wanted to take the job. They had actually given him the job and then taken it away from him. I worked with the guy and determined that their criticisms of him (lack of initiative, poor leadership, too much attention to detail, family problems and ability to manage) were only partially well founded. They had provided him no training, had done what Laurence Peter called in this book "The Peter Principle", lateral arabesque by promoting him rather than deal with him. He had tremendous knowledge of their computer system, the departmental functions but had always worked for someone who made the decisions for him. I changed that, worked with the guy, gave him necessary training, made him be involved in all decisions and refocused his view from that of a Supervisor to that of a VP. I taught him to have a company view rather than only a department view. When management asked him a long term question, he answered it with details rather than a plan. Finally, I told their management that this man was capable of being the head of the function. However, they needed to set the example by having company goals and objectives based on Strategic Plan. They needed to invest in him and provide him with the opportunity to be successful not just dutiful.

So much for shaking things up. Remember the e-mail to the President from yesterdays posting? That, coupled with the "shake up" plan did me in. They enjoyed talking about what a great company they had, what hard times they had had, how well known and respected they were among their clients (the 4 largest of which had left for the competition in the last 12 months) and they were perfectly organized as is. End of contract! You know, the fact is that they did have a very good company but not a great company, they had business for the foreseeable future, but they were not built to last and they had some really good people, but many had reached their levels of incompetence (see "The Peter Principle" again). They did not want help they wanted to be stroked. I tried to do all the stroking I could, but, if my objective was a long term deal, I should not have taken the "shake things up" instruction seriously. They will still tell you today that I really helped them and they are doing the things I suggested. I received an e-mail from the President last week saying those exact same things. Amazing.

The beauty of consulting. You get paid whether or not they agree. But, it is hard not to be personally disappointed when you know what you are telling them will work and the reason they do not do what needs to be done is because of ego or just no guts!

What do you thing? Tomorrow number 3!

Tell me what you think? How to do it.

2008-10-06T12:21:00.004-05:00

Probably, my most asked question from a client. Usually clients say three things to me at the outset of an assignment:
1. Tell us what you really think.
2. Shake things up. We are tired to the status quo!
3. This is a family owned business. I want to know about my kids (or other relatives) in
the business and how they are doing.

Very seldom, maybe never, do they really mean that. What they are really saying is:
1. Tell me what I want to hear!
2. Things are just fine the way they are, do not rock the boat.
3. My kids (or other family members) are immune from criticism or evaluation.

I thought that I would give you an example of all three of these from actual experience. Obviously, I have changed the names to protect the innocent. There have been many times that I believe that I have had my contract terminated because I answered these questions honestly and directly. Most of the time I try to "speak the truth in love" (that is from Ephesians in the Bible for you heathens LOL). Does not matter! It is always taken personally and usually dreadfully. Not always though. Some people appreciate not being a "yes man" and those have been really rewarding for everyone.

I wrote a letter to a company CEO that I had heard was having some internal problems. He and his wife owned the company and had done a very nice job of building a company with a great product/service, fair pricing and some pretty good people. The CEO called me and asked me to come in. I did and we agreed that I would be hired as an Interim Executive on a consulting basis. After being there about two months, I received an e-mail from the President (wife of the Chairman and CEO). She asked me to tell her my heart on an issue. I made two mistakes:
1. I should have called a meeting and talked to her face to face. That is what I am known for and what I usually do. But this time I responded via e-mail.
2. She did not want to know my heart, she wanted me to say that she had handled the situation well and everyone else was wrong. I did not do that. She was dead wrong and I told her so.

Should I have been kinder? Maybe. Should I have been less direct? Never. She took my comments as an accusation of misconduct and if we had been face to face, I am sure that what I was trying to get across would have been much clearer and much less accusatory. She could have seen my reactions and body language and I could have seen hers. She was a very direct person too. Usually direct, senior management people do not like being dealt with directly. They say they do, but what they really want is to be stroked for their brilliance or for building such a wonderful business. Usually, they do not like being wrong. In this case, the entire company had a huge problem with their identity as people being tied up in their titles. That is a subject to be dealt with later.

Always tell the truth, always be straight forward, but always do it in person.

What do you think? Tomorrow number 2.

Owners: Do you want the truth?

2008-10-04T09:46:00.003-05:00

I was talking to a small business owner client of mine the other day and he was complaining about what a terrible problem he was having with business falling off rapidly because his customers were so "annoying". I could not believe my ears. They were his customers, CUSTOMERS! Let them be annoying provided they still are customers and provide his living.

So I met with an associate of his and it turns out that the employees look bad, act bad and are condescending to the customers. They cuss, smoke and when they do provide service it is begrudgingly. So, I talked to the owner again. It was time for an attitude adjustment. Guess how the employees got such a bad attitude? From the owner and his management team. They all act like they are doing the customer a favor by being in business.

As usual, the owner asked me to "tell me what you really think". When am I going to learn. What they are really saying is "tell me what I want to hear", which I do not do. So I told him and his staff that they were the problem. They need to be customer oriented and provide the best possible service available. After all, what separates them from the other choices they have for the same service? The level of customer service and the desire for customer satisfaction.

Well it is too early to tell if they are going to take my suggestions or not. The beauty of being a consultant is that I get paid whether they take my advice or not. They appear to have understood and there are changes in process. I just hope it is not too late.

What do you think?

Executive Compensation

2008-09-30T14:13:00.002-05:00

Well with all the yelling and screaming in both Washington and New York, it appears that the "emergency" requiring "immediate" action will have to take at least a little more time. The measure did not pass. Although I say "good" it is tempered by the knowledge that something will get done. I hope the markets and the financial industry figures it out on their own without the "help" from the government. One of the provisions that needs to be in whatever they finally do relates to Executive Compensation.

Having been around, mostly, small and family owned businesses all my business life, what some of these people get paid and the Golden Parachutes" they negotiate is pure greed. I am a free market person, but this is crazy. What can you do with $30 million that you cannot do with $15 million, or $5 million, etc.Can you imagine a company that is doing say $20 million in annual sales paying its CEO $1,000,000. Probably not. At this level the President would have to live on say, $300,000 per year or $25,000 per month. I could make it on that. Let's say the company is doing $50 million in annual sales and the CEO is getting $1 million or a little over $80,000 per month. Can you live on that?

The bill Congress proposed would have limited executive compensation to $500,000 if they were a bailout company. I think that is to low and maybe the limit should be maybe $4 million per year (or so says my barber). I agree. Again the Congress went overboard. How are we to believe them. They react so irrationally. Perhaps because of the Treasury Secretary and the head of the Federal Reserve did so too? Could you imagine Alan Greenspan reacting like this?

If you own or are involved in a Small business (annual sales of less than $25 million) or a family owned business of any size, use reason not greed to determine executive pay. Sure there can be perks, and should be, but if you keep it within reason nobody will fault you for being excessive and then at the end of the year if you have a pile of money left after all accruals and saving for a rainy day, do what Lincoln Electric (largest maker of arc welding equipment in the world) divide it up among all your employees. You want loyalty and quality, try doing that and see what happens.

What do you think?

The Bailout

2008-09-26T10:56:00.005-05:00

Since it is in the news so much, I decided to give you my opinion of what should be done relative to the "Bailout". I believe that the government should let them fail if they will. I do not think they will and I do not think it would be bad if they did. For years they made millions and evidently did not believe that the bubble would ever break. SURPRISE! Especially with Mortgage Backed Securities and Derivatives and default swaps(really unregulated, unloss reserved insurance); all of which are side-bets in my mind. I guess they did not "hedge" well enough. Based on the money that they made during this time, it seems that they would have amassed a large "loan loss reserve" in their own books and made arrangements for failure. Aren't these investment houses suppose to be able to help us plan for the future and increase real wealth? Huh, huh, huh?

So let them fail. I do not think that will happen. I think that they will find a legal and creative solution to the problem without government intervention and my $5000 dollar commitment. That is what it will take for each person in the US over 18 to pay for this Bailout. I am not sure of the details of the House Republicans plan submitted in contrast to the Treasury Secretary's plan, but it sounds pretty good. Granted I do not know all the nuances of this deal, but using fear tactics and moving so fast is also not good. In my business career there were very few situations where my senior managers came to me and said "We have to do this immediately" where I didn't say "well, then let's wait a day or two!"

The basic fear is that credit will dry up and businesses will not be able to do what they need to do credit-wise to meet payrolls, buy goods and services and purchase adequate inventories. Baloney!! If liquidity is the problem, and it is, they operate with less, sell off assets, reduce staff or in other words "hunker down" (Those are words being taught in finishing schools instead of the words cut back and spend less). Remember those words big, big investment banks! You have operated with such largess and lack of self control that you now want to be bailed out by small business and family owned businesses that operate day to day. Again, Baloney!

And finally. The word that describes the whole mess? GREED!

What do you think?

Here we go.

2008-09-23T11:00:00.000-05:00

Well I have wanted to do this for some time. After having been a consultant, business owner and top management employee for over 40 years, I decided that the world needed to hear what I have to say. That is not to say that I am always right, but I almost always have an opinion that is either right or very close to right.

So who am I. What follows is my brief Functional Resume. This will give you some idea of the scope of my experience and the industries I have worked. What is does not show is all my consulting assignments. Some of those companies are confidentials but the situations/problems handled have provided (along with the experience) an extremely wide variety of solutions, answers, knowledge and practical ways of managing.

I am going to tackle various business situations and areas of ongoing concern for small (under $50 million in annual sales usually) and family owned (includines spouse, children, inlaw and outlaw participants) businesses. So, please ask me anything. Really, anything about problems, planning, accounting, finance, HR, sales, marketing, supply chain, infighting, poor performance, hiring, firing, anything. If I do not know the answer (highly unlikely), I will find out or direct you to the right place.