Final on Don and business!

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

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

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

What do you think now?

DRD continued

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

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

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

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

What do you think now?

Don Dreiske the businessman

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

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

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

What do you think so far?

Don Dreiske is the Man!

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

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

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

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

What do you think so far?

Cash for Clunkers.

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

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

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

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

What do you think?

House Painting your business

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

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

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

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

What do you think?

You and Health Care reform?

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

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

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

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

What do you think?

Now Fox Business News

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

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

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

What do you think?

Nightly Business Report on PBS

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

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

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

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

What do you think.

Anyone out there? Also, FoxNews comments.

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

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

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

What do you think?

Have you noticed the car industry lately?

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

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

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

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

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

What do you think?

Do you have a plan?

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

Let me give you a couple of ideas:

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

What do you think?

Do you like Baseball?

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

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

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

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

What do you think?

What is up?

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

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

What do you think?

Tax on Health Insurance?

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

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

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

Yikes! Keep a close watch on health Insurance.

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

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

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

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

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

Be glad you are not GM or Chrysler-Maybe!

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

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

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

What do you think?

Interesting! First 100 days.

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

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

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

What do you think?

Protect your employees

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

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

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

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

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

What about the tax code?

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

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

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

What do you think?