“The Thank You Economy” Gary Vaynerchuk,

November 16th, 2011 No comments

For MeetUp Claycord hosted by Mike MacPherson
The Book: “The Thank You Economy” Gary Vaynerchuk, Harper Business, 2011 ISBN 978-0-06-191418-8
This book on social networking, branding, and marketing is deceptively breezy and affable in its tone. The theories espoused are revolutionary to Marketing as a discipline, however. It is organized for the non-reader, (theory, then story): repeat ( for you programmers, terminate@ p. 230). The parts are : Part I Welcome to the Thank You Economy, Part II How to Win, Part III: The Thank You Economy in Action, and Part IV, Sawdust. For reference, The Thank You Economy is hereafter referred to as “TTYE”.
In having read marketing texts for over 30 years, I find this refreshing and fairly low on the Balderdash Scale (indicated by an involuntary gagging reflex & decreased desire to finish said book). His novel hypothesis is that clients are not idiots, sincere & timely communication reaps increased sales & fosters customer loyalty, admitting errors in Strategic Planning rapidly and truthfully offsets said errors, one should reallocate 3-5% of the Marketing Budget exclusively towards Social Media; and keep the lawyers and Public Relations hacks out of the loop. Oh, timeliness is very important in managing your Social Media Program.
This Social Media is new both as an academic discipline within Marketing and as a business expenditure within your diversified media portfolio (p.81).” What are you (the business attempting to go online and not make a fool of yourself) trying to DO? Create a “legacy building culture”. Huh? In non-marketing speak this means using your interactions on FaceBook, LinkedIn, Twitter, Google+, etc. to create a corporate culture that the clients, & would-be clients remember you for. In a way that makes them pull out the Plastic. It is up to you whether you generate a response that is
Desired To Be Avoided
Sincere or ‘Madison Avenue Mad Men’ prepackaged and slick, low on content
Cool or Lame (drop the ball after initial contact, betray lack of empathy), sound
like their G-Parents (insert boring authority figure)
Funny or Serious, Pompous, Fortune 500, lawyer-vetted Public Relations speak
Timely or slow to respond or non-responsive.
As a chronological Geezer, I understand the fear that touching a keyboard has to the tyro. You are sure that the GenX’r sitting next to you, helping you, whom you are paying to GET THIS DARNED THING DONE is silently laughing at you. Get over it! They MAY BE, but YOU are the Boss, you are paying THEM & this is just another case of managing your Vendors. Your lack of experience may be an advantage because of your sincerity in reaching out to new customers. Why? Sincerity and Humor in communications will telegraph ( pardon the 19th Century metaphor) itself to people Who Do Know You. They will say “Wow! Old Ted finally got an online presence. I should read this.” To potential customers, who will read/hear of you through your customers’ feedback, your initial and feeble message will be amplified. Take the initiative (p.142), they will get it.
About the corporate culture, Gary (Ch IV) says it comes from: 1. Being yourself, 2. Committing whole Hog (not my phrase),3. Set the tone yourself by example, 4.Invest in your Employees, 5. Trust your People, and 6. Be Authentic. Did I mention this Social Media thing is pretty inexpensive?
The point is this is a new medium, but old fashioned traits like sincerity, caring, and humanity will impress clients: new and old. The lack of “human touch” that we fear through the use of the computer is non-existent. Your using Social Media like an old fashioned “party line” where everyone is listening to your conversation may be the metaphor that demystifies and humanizes this to a newcomer.
How do you address online whiners and complainers? Use old fashioned manners that would make your Grandmother proud. Now is NOT the time for invective. You should encourage customers to speak up, rather than shut up. You might give them an incentive to “try you again” with a discount or freebie. This feedback loop is no different than ‘brick and mortar’ interactions. If someone is legitimately upset at your service/ product YOU CAN TELL, can’t you? And if you give a few ‘comps away, what difference does it make in the Blogosphere/TTYE IF the record shows that you TRIED to Make It Better, rather than badmouthing or ignoring the dissatisfied customer? The difference is YOU are directing the dialog by being involved. As Gary says “take every customer seriously. (sic) Listen, engage, give them what they want when you can, if NOT (emphasis mine), tell them why.”
What does “caring” look like? respond to online criticism, make good on your promises and products, address complaints, be flexible in your responses. Remember although this is a daily conversation with your clients and potential clients, you are in it for the long haul. As to measuring success (in the TTYE), I have a minor quibble. Gary critiques the current metrics of marketing campaigns (Ch II p.38) because they lag the nascent medium. More criteria to assess TTYE success would have been good here, but I guess that makes ME a whiner.
Gary addresses ‘controlling your message’, i.e., what your online corporate profile will be. He realistically says that not everyone will like you. He also insightfully says “if you’re afraid of your customers you might want to get a closer look at how you’re doing business.” These pithy phrases elevate his book from the New York Times Book of the Week, to one I added to my Kindle Library.
Some Of the Axioms of Vaynerchuk are:
Strong customer relationships are the Key to Success
Communications should be honest and open
Good Manners+ High Touch +Integrity= Rewards on Social Media (p.83)
If you want to compete in this TTYE, you must change your approach
No relationships should be taken for granted
Outcare your Competitors
People will always spend time (Money) around people they Like
Social Media’s aim is to turn customers into friends
This book is about leveraging and scaling the relationships made possible by social media
You will win (↑ sales) with open communications in a personal and caring way.

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Yes, I am Old, Grey Haired & Lame

November 16th, 2011 No comments

Hey Guys & Gals: thanks for reading me. I am aware the RSS Feed thing is ‘taking a holiday’. I have just contacted my God ‘O Technology to fix said dysfunction.
Bear with me.

Is our House Burning?

March 22nd, 2011 No comments

In dealing with this Challenging Economy, I have found few things to be interesting, inspiring and noteworthy. If I can stand more than 15 minutes of news, it is a good day. The Republicans are making things as difficult for Obama as possible. Liberal Democrats like myself wonder why he cannot stand up for worker rights and the needy. No solutions are forthcoming from our legislators. The TARP bill gave a small “bump” to the economy, but basically indemnified and enriched the Financiers who created the Financial Crisis. The word ‘Gridlock’ implies stasis, the affect is defeating and ultimately alienating.
I end up fatigued by the inability of our Leaders to solve problems. We Americans are more alienated and partisan, listening to our own drummers- my listening to Bill Maher, my family to Bill O’Reilly. The net effect is that our opinions do not change, the leaders (if we can call them that) are speaking to the ends of the Political spectrum. They are not speaking to the solution of conciliation and agreement. The result is an Economy that has created and reinforced class lines not seen since the days of the Robber Barons. Let’s see that is One Hundred Years ago.
So, this blog addresses the repeating of History (“if we do not learn from we tend to repeat”(Santayana)) of one century ago. The poverty, the class distinctions, the Puritanical belief that ‘God rewards the Just with Wealth’. What made me want to write this, and hopefully bring it to your attention?
The HBO Documentary “Triangle: Remembering the Fire.” I had heard of this in the Sunday New York Times, and with Monday network Television being slim pickings I thought I might watch it.
The quick ‘n Dirty recap of the Triangle Shirtwaist factory Fire is as follows: Garment workers were crammed inside a highly flammable building, with no fire safety training & no fire protective apparatus. On the 7th floor a fire started, and quickly spread. The owners on the 10th floor escaped; the switchboard operator who notified Management on the 10th Floor failed to notify the workers on the 8th Floor of the Fire. The doors on the 8th Floor garment worker’s workroom opened “in’. Because they could not get out by the workroom doors, they had no escape except one elevator. The elevator operator worked rescuing the employees until the elevator would not work, saving hundreds of lives. The trapped employees either burned to death in the fire, or jumped to their deaths on the Street. 146 employees died, while the Owners escaped from the roof. The owners were acquitted in a Trial, but public outrage necessitated workplace safety and fire safety regulations – on both a local (NY) and national jurisdiction. That’s the story, and the 25th of March is the One Hundred Year Anniversary. This is remembered in both Labor and Fire Safety history as a The pictures and stories are very grim.
What grabbed me from the first minutes was the appalling lack of responsibility of the Rich Business Owners, the sickening and horrifying deaths, and the similarities to our present day. The analogies between Then- the quaintly dressed, sepia-colored history and Now: internet-connected and Twitterified.- the present of too much content, and too little responsibility.
‘Riches’ and ‘responsibility’, in the same sentence? I know, I know, there are Philanthropists with Foundations everywhere. Rich people meet in Davos, Switzerland to talk about giving away Billions, while eating sustainably and getting a big tax write-off. Their philanthropy is disassociated from the present problems in the United States and the responsibilities of wealth. We need help for the 24,000,000 unemployed, the underemployed here. If Andrew Carnegie gave away Libraries, why can’t the Gates Foundation give away food in our neighborhoods?
Let me recap and bring to your kind attention the similarities between the United States of 1911 and 2011.
Extremes of Rich and Poor
Business Complaints of the Costs of Safety and of Livable Wages
Media and Republican Enmity towards Unions
Lack of and lackadaisical Enforcement of Consumer & Worker Safety
An Underclass working in underpaid and unsafe conditions.
No, it’s not just Liberal Democrats in their Foundations that are the problem. From what I can gather the Republican, Tea Party and conservative platform on both a National and State level seeks to disenfranchise workers, loosen regulatory constraints upon workplace and consumer safety, fail to discipline rampant Upper Class fraud and the theft of public monies. They fight sharing their wealth, and lobby to oppose the tax increases that would force them to share it. They avoid prosecution (“Inside Job” Charles Ferguson, Director, available on Netflix Instant Queue), and tax increases – a pretty slick platform, huh?
The Robber Barons are still here, they are just called Multinational Corporation shareholders, Venture Capitalist and Financiers. The impunity of the wealthy Bosses who, in the case of the Triangle Fire escaped from the roof, and who in the Economic Meltdown of 2008 enjoyed the weak scrutiny of the SEC with billions of dollars in profits without being brought to Trial. For anyone who watched the escapist Oscars™ in February, the Director of the “Inside Job”, in his acceptance speech stated that “to date no one has been held responsible”. The owners of the Triangle Shirtwaist Factory, where 146 employees burned in a gruesome death, got a “not guilty” judgment, whereas the contemporary Robber Barons escaped indictment.
The result of the gruesome Triangle Shirtwaist Factory Fire one hundred years ago on March 25th, 1911 was Labor and workplace regulations. It was regulations meant to protect those who lack the means to protect themselves. The IGLU, the DOL, the FLSB were created in an era when the Public Conscience demanded the wrongs be addressed and redressed.
What is happening now? Unions are being dismantled, funding for the poor/ children/disabled/infirm and old is slashed. We are told “It will take a few decades for the jobs to come back”, while Washington and Sacramento debates whether it is acceptable to increase taxes on the Robber Barons. What is wrong with this scenario?
Who is running the shop? How do we get the legislator’s attentions? And better, what are the responsibilities of Wealth?
The Documentary: Triangle: Remembering the Fire
HBO, March 21 at 9, Eastern and Pacific times; 8, Central time.
Directed by Daphne Pinkerson; produced by Ms. Pinkerson and Marc Levin; written by Michael Hirsch, Richard Lowe and Ms. Pinkerson; Nancy Abraham, senior producer for HBO; Sheila Nevins, executive producer for HBO; narrated by Tovah Feldshuh.


HBO website;


Lesson Guide:


Activism: what further steps you can take


email address: info@rememberthe trianglefire.org
Steve Zeltzer LaborFest
The New York Times Review of the two documentaries:


““sic” The narrators, Michael Murphy (PBS) and Tovah Feldshuh (HBO), supply the sad, heroic and outrageous details of the disaster: the exit door kept locked to prevent theft; the ladders that reached only the sixth floor; the elevator operator who kept returning, through the flames, to the ninth floor, until his car was halted by the weight of the bodies that had fallen into the shaft and onto its roof.
But it’s the images of corpses stacked on the Greenwich Village sidewalks where they fell, as a crowd of thousands helplessly watched, that get to you, as dreadful now as they were a century ago, when they inspired a wave of workplace reform in New York State. The parallel to 9/11 is inescapable; it’s made explicit in the HBO film, in the observations of a fireman who was at the World Trade Center and whose grandfather was on the sidewalk outside the Triangle factory.
Where the two films vary significantly is in tone. The title “Remembering the Fire” is a clue to the HBO film’s intentions: It focuses more closely on the fire itself, and many of its interviewees are descendants of fire victims or of others who played a role. (A great-aunt of Sheila Nevins, president of HBO Documentary Films, died in the fire.) It’s the more emotional and impressionistic of the films, and its narrative is more fancy, moving back and forth between the fire and events in the larger world.
Either film, or both, could spur you to want to learn more about the history of unions, garment workers and an earlier, rougher New York City. If so, a pilgrimage might be in order: the Asch Building, home of the Triangle factory, still stands at Greene Street and Washington Place, now owned by New York University and called the Brown Building of Science. “

end of citation

Après Le Deluge

November 4th, 2010 No comments

Après Le Deluge

After the Election, when the Democrats got spanked, the President is holding out the Olive Branch to the Republicans, saying “The American people don’t want us just standing still. They don’t want us engaged in gridlock.” He is even, according to the ©Washington Post₁, willing to dine with them.
Meanwhile, the Republicans are loaded for bear, vowing to undo all legislative achievements of the Administration. They have a hard-on for the Health Care Bill, and anything that would extend unemployment benefits to the 20,000,000 unemployed people in the United States. Am I surprised? Not at all. The Republicans are vengeful when they are in power, spiteful when out of power. They are the Party of “I’m going to keep all my money because I earned it… but don’t forget the Tax Breaks and throw in my Social Security too”. In essence they are cheap hypocritical old coots who complain about Big Government but still take every possible tax break, the Social Security and Medicare payments. They feel they are entitled, but not the poor or the unemployed or the uninsured. They are insured by Medicare, but object to the poor having healthcare. What does “hypocritical” mean? Oh, yeah: “Saying one thing and doing another.”
So it is politics as usual. The Democrats are in power, marginally, but feel put upon because the Republicans aren’t playing “nice.” News Flash: the Republicans will never play “nice.” They will roll out the fear mongering, racism and class warfare whenever it suits their needs. Their needs this November 2nd were to get back in power, and their prerogatives. The Tea Party followers think the Republican Party cares about the Constitution, and the Common Man. What they do care about are extended Tax Cuts on their precious capital gains, continuation of Estate Tax holidays, and continuing wasteful and unpopular wars.

Now we (speaking for Democrats and Liberals) liked Obama because he was truthful, sincere, and wanted to help. Nearly 2 years into the 2nd Depression his TARP handed big checks to the guys who drove it (the Economy, stupid) off the road; his Unemployment Benefits did not help all of the unemployed ( I for one paid into UI but because I am self employed did not qualify for benefits); and the jobs are invisible. Securities and Financial Reform? Toothless and as effective as Sarbanes-Oxley (will make work for CPAs but will not stop collusion & fraud), and it still did not restore confidence.
I still like Obama but what he needs to do is create jobs domestically by changing the Tax Code (no tax breaks for employment abroad) and force the banks to start lending (how about an Excess Profits Tax?). He looks grayer and sadder because the man cares…. But stop trusting the Harvard/Stanford MBAs who learned how to ship millions of jobs abroad, and get the jobs back home. Keep the tax breaks on capital gains for those making less than $250,000. Adjusted Gross Income. Llet the others tax breaks expire and make rich guys finally pay some taxes. The insane argument that low capital gains tax rates help employment is untruthful: the money goes into their bank accounts and does not come out again except to go into their grandkids Trust Funds. I know, I am a Tax accountant. Albeit a poor one.
So, let’s play hard ball with the Republicans and get the unemployed some help, and the jobs back home. No more Mr. Nice Guy, Dear Mister President.

₁Obama invites GOP leaders to White House for bipartisan meeting

Obama: It ‘feels bad’ seeing Democrats lose
President Barack Obama says it feels bad to see his Democratic allies lose their House seat in droves, and makes him question what he could have done differently. (Nov. 3)
By Anne E. Kornblut and Perry Bacon Jr.
Washington Post Staff Writers
Thursday, November 4, 2010; 2:08 PM

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Letting Go, Holding On

July 31st, 2010 No comments

Yesterday on Terry Gross’ Fresh Air™, and in today’s (August 2nd) New Yorker, Atul Gawande spoke about his amazing article “Letting Go- What should medicine do when it can’t save your life?” Anyone who reads loves the in depth articles in the New Yorker, but this one is praiseworthy.

I am one of millions of Americans living without health insurance. It’s a simple economic decision: reduced circumstances and hard decisions. I had not used my health insurance for over 10 years and could only afford coverage with a 2,000 deductible. Now I can no longer afford that. Western medicine and the American healthcare industry has ministered to rich, insured people who ignored their bodies for decades and expect the magical medical machine to “fix them”. My Mother got shingles, and after being misdiagnosed and overmedicated she is now marginally ambulatory, and soft-in-the-head. What homeopathic or alt med could have treated has turned into chronic disability. At least she has full medical coverage- because my father was a government employee. I have been self employed for over a decade and can no longer afford coverage. This week I got a gum infection and treated it successfully with calendula tincture, massage and silicea. I have to pay attention to my body.

Back to the article- what struck me was Dr. Gawande’s empathy. In the Doctor’s office they seem to be counting the minutes they have to spend with you. They don’t pay attention to the patient, but to what they or their practice can bill and get paid for. I have done taxes for a recent medical school graduate and they do have hundreds of thousands in student loans to pay back. I understand their financial burden, but not to the detriment of the patient’s quality of care. It seems that they regularly do procedures that do not benefit the patient, but only cause further suffering and increase revenues.

Once you enter a Hospital the assumption is, “What else can we do?”. If the insurance is paying, why not do anything and everything? America’s love affair with medical technology leads in the wrong direction. Dr. Gawande’s firsthand experience with death and dying offers a new option: paying attention to the quality of life of those with terminal illnesses. His descriptions of painful, unnecessary, and costly procedures that add to pain and still do not save the patient’s life are harrowing.

I am an accountant and have advised business owners on how to stay in business for over 28 years. I look at Income versus Expenses because that is what keeps one in business. Somehow looking at expenses in medicine and medical care is verboten, sacrilege, and anathema. Dr. Gawande’s thoughts were heartening for one who would welcome the “public option” and a reduction in spending on healthcare. A rational review of cost-benefits for end-of-life healthcare expenditures is needed. Let’s discuss costs without name-calling and hyperbole. The criticism of ‘death committees’ which muddied the healthcare debate appears silly and illogical in this context. We need cool heads and clear priorities in this conversation

Americans who have coverage often expect Sisyphean efforts to save lives. The difficulty in ‘letting go’ is both logical and obvious. In Dr. Gawande’s article the American public is rarely told “he/she is dying”, or are counseled on how to make the transition into a peaceful death. How many of us have sat at the bedside of a loved one who was insensate, plugged into tubes and machines and really not ‘there’? I have, and my family vowed not to be put into that position ourselves.

The fact that we don’t want to admit that death is coming, is a symptom of our current predicament. My Opinion is that we do not want to look at our, or a loved one’s, death because we think that everything is “fixable”. The fact that Medicare spends billions extending painfully lives of people who have never paid attention to their bodies other than to indulge and never exercise is appalling. Not facing the reality of poor health and death is stupid and appalling. We must face reality, take responsibility for our actions and our health ourselves. We are mortal.

We are fixable. The Economy is fixable, unemployment is fixable, and the war in Whateveristan is fixable. They are not – our Gods have feet of clay, and are generally unwilling to tell us the truth. Whether that truth is “Your wife is dying and we need to do everything to make her comfortable”, “we bailed out the wrong guys and don’t know how to get your job back”, or “we’re not so sure we can win this war” – it would be welcome to hear the truth. However, the truth remains unsaid because we only want to hear what makes us comfortable.

Dr. Gawande’s article addresses the lengthy process of making death a peaceful transition. His practical experience details the lengthy and difficult methods of preparing patient & family for a placid and less painful end-of-life. ‘Arriving at an acceptance of one’s mortality and a clear understanding of the limits and possibilities of medicine is a process – not an epiphany.’₁ Do you think the problem might also be our short attention span? Our unreasonable expectations that everything can be fixed quickly? One of the downsides of specialization of professions (and the dearth of a well-rounded education) is that we think what professionals can do is limitless and guarantees a “happy ending’. Our current predicament, both financially and medically, proves that throwing money at a problem will not ensure a positive outcome.

As a Big D Democrat but a financial realist, I applaud Dr. Gawande’s truthfulness and his empathy. We need doctors and politicians to give us the hard realities; to make difficult, not emotional decisions; and admit when they are flummoxed. If Greenspan could have said “I fucked up, and I don’t know what happened” before Congress perhaps our faith in the economic system and our politicians would be higher that it is.

We need more truth tellers and professionals like Doctor Gawande.


p. 47, col. 1; Annuals of Medicine, “LETTING GO’, Atul Gawande, the New Yorker, August 2nd, 2010 (Vol. LXXXXVI, No. 220, Conde’ Nast, New York, New York.

TARP, Part II (Deux)

October 21st, 2009 No comments

Economic Stuff
They said today that the Economic Stimulus Plan would be targeted at Small businesses. You know as a small business consultant and an accountant, I have considered that the SBDC does what I do FO FREE. They are the public arm of the SBA. You know the Small Business Administration: those people who give you a loan when everyone on the block would already give you LOAN, Duh? The hoops they put you through and the lead time to funding you had best ask dad for a advance on the inheritance.
Yeah, like we ( the Taxpayers) who bailed out the Hedge Funds, the Bankers (like B of A and Wells Fargo need my help raising consumer interest rates), with no strings, and no teeth. I heard some pundit with the NYT saying Paulsen “did a good job” and I almost choked. A good job? What, bailing out his friends with no strings? Yeah, I good Job for THEM. For us, small business owners, no Love. Now they have a few Billion dollars left and maybe they realize the Economy is still in the Pits, and now they are trying to help the small businesses. I’m from Missouri, if you get my drift…
What would actually help the Economy?
Since the friggin pundits think the Recovery has already happened, they are not going to say anything is other than rosy. I, on the other hand, lost my largest client in August (for being too vocally honest & hiring a CPA to help them, who stole my client out from under me) and have been living cheaply, and hoping someone in Washington does something. Like what, exactly?
How about Unemployment?
Unemployment: Increase the monthly benefit, include self employed person who prove their revenue are down by at least 40%. We self-employed pay self-employment taxes, don’t we? Then raise the Monthly Unemployment from $960.00 to 2,500. If they loan (ahem, GIVE) money to Vulture Capitalists to cover their bets on the downside, why can’t we give some help to poor people who actually need some help? Besides, we pay wayyyy more taxes to the States and the Federal government per dollar earned than they do.
About those Juicy TARP Bonuses
Why don’t they pass a special bill to raise the Ordinary Income taxes on those who got bonuses under TARP? Why not increase the OI tax rate on TARP Bonus from max 36% to 75%? And make them pay Social Security on ALL the earnings, not just the first 106,800. Why leave anything on the table with these greedy folks. That way if they wanna keep their bonuses, they can pay through the nose. Oh, and make it so they cannot offset this income with ANYTHNG ELSE? Do not leave any loopholes: the guys who wrote TARP were asleep at the wheel, but the barn door is not closed until they file their 2009 1040s, which is April 15th, 2010. ( May I mix more metaphors, please, sir?) We still have time, Folks. You know I am only a lowly tax accountant, but I have seen enough high net worth tax returns to see what REALLY EXPENSIVE CPA firms do so that the rich guys do not pay any taxes. Tighten up those loop holes, Dude!
Back to the SBDC and the SBA
That is the Small Business Development Corporation, and the Small Business Administration. These guys are retired execs from Fortune 500 Companies who give away the services that I do away for free. They teach people that the only way to succeed is to act like a multinational corporation ( yeah, buy crappy CRM software and treat employees like cattle ,ship jobs abroad and sell the business to a VC and then get out). Why don’t they actually take some risk and really help people start jobs HERE, and take a bit of Equity in exchange for Capital? Why aren’t they giving MicroLoans ( don’t brown people do that?) instead of telling people unrealistically “ pay down your credit cards…? If people could get loans, they would not have to use their Home Equity Lines (who has one lately, do you?) and their credit cards. If the Federal government is willing to bail out the Fat Cats, with zero accountability, why not help the small guys with a bit of risk involved?
Just a thought. Ok, more than one.

Addendum: Sat thru a three hour seminar at SBDC this AM by Paula Groves-Hawthorne: awesome. She is worth the time and money- her email paula@acsbdc.org. The panel afterwards was lame: she is top notch. A VC with a heart, who would have thought?

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The California Economy

October 20th, 2009 No comments

The California Economy
Those of us who live, own property, vote and pay taxes in California we are dealing with a very Bad Economy, Politicians who can’t make hard choices, and decreasing services.
Governmental offices are closed, there is no phone service in many offices, social services are slashed, and revenues are not forthcoming. Because of the thoughtlessness of legislators who passed ballot initiatives mandating fixed funding for prisons, education, and homeland security the poor and needy are being thrown to the wolves.
One of my meager skills is managing businesses on a tight budget. I was thinking: “If the State of California was a small business, what would I suggest they do?” I came up with a few things.
State Employees: Travel & Entertainment
No Travel & entertainment. Have you heard of companies who cancel the Christmas Party when times are tough? Well, if times aren’t tough NOW, I don’t know what would be tough. Ipso facto: it is definitely not the time to travel, not the time to party. I use Skype for meetings, why can’t you? You have no need of Expense account lunches, unless they are dutch and everybody buys his/her own. And, come to that, there is a wonderful Internal Revenue Form that State EE can use for their own lunches: Form 2106 Unreimbursed Employee Business Expenses.” Use it. Otherwise brown bag it, you’ll lose weight to boot. Oh, and don’t drive the State car home. That’s not State business, that’s your business.
State Employees: Retirement Funding
Retirement. Very few private Industry employers offer defined benefit retirement plans. One of the few who do is the government, along with full healthcare ( dental & optometric included) low co-pays, and dependent coverage. If times are so tough why is the government paying benefits we as employers could not offer? This reality check needs to start somewhere.
If the State is bound by contracts, then the new hires don’t have the same benefits. The Unions have to realize this Budget Drama will make any pensions disappear in a few years if they- AND THE STATE, do not come home to Jesus. What I mean is you cannot pay people what you cannot afford. Period.
Am I cold hearted? Not at all. My father was a government Employee, and now lives on a very nice retirement with benefits and full reimbursement of his medical co-pays. We can’t do it anymore.Time to get real.
The Film Industry
Next, the Film Industry. Does it seem strange to you that our Governor (I will not use Governator, ever) came from the Film Industry and most movies are made in Canada? Why can’t he call a few of his old Buds (have you ever seen Cigar Afficinado?) and offer the same deal as Canada? Since movie people don’t like traveling North (Canada is still North, isn’t it?) unless they are on Holiday, I bet if the Margins are the same they would rather stay in State. There are even legal pot clinics for the crew. No hunting for meds in those cold, dark streets. And when the Film Industry comes back we need to ask the Film Unions for some love. Not kvetching, kvelling: but Love. The hundreds of millions of dollars that would be spent in California might make the Unions be grateful (unlikely, but it’s a thought) and loosen their ridiculous rules that helped drive the Film Industry out of State. No, I am not anti-Union.
Ahem, about the prisons. We are paying a lot of money to lock up marijuana offenders. We should try to have job training (CalWorks could use the funding) to employ them in an Industry they already know : marijuana. They certainly know the market price for an Eighth, and probably already have a patients’ ID cards. Employer tax benefits exist for hiring former offenders, and if they are on Unemployment the training salary in on the State viz-a-viz EDD. Really. Why do you think I study Payroll Accounting? Because it’s fun? Not so much. But it does help nice people stay in business.
Lawyers Fees
About the lawyers. Have you ever seen the big buildings downtown San Francisco, Los Angeles, and Sacto owned by the major law firms who do business with the State of California? How do you think they bought those big scary edifices? You are right, taxpayer dollars.
Lawyers, ad naseum, ad absurdo: Ideas: hammer them on their rates, deny T&E reimbursement, disallow Travel Time (Skype again). Another idea: have them employ lower labor rate paralegals and law school seniors for lower level work (anyone knows interns love the training, do it for free). Have you ever seen the charges for Xeroxing as $135.00 an hour? I have. You cannot tell me the person who does the Xeroxing is actually getting paid ( including OH, Social Security, Medicare, ETT, SDI taxes, Workers’ Compensation and the 401K they don’t match) one hundred and thirty-five dollars an hour. Where do you think the money goes? The difference between what that xeroxer DOES make and the one hundred and thirty-five dollars an hour goes? Yup, to the bottom line of the lawyers. Bad idea. If we are gonna hurt, let’s spread it around. Many people who are doing the work of three employees hear “You’re lucky to have a job.” Someone with a spine who can count should use that one on the Law Firms.
“I’m not feelin’ it”, as the kids say.

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Brought To You by the Department of Justice

October 19th, 2009 No comments

Enforcement or Continued Harassment?
The Department of Justice today promulgated a ruling ( memorandum) about the Federal Government and their prosecution of Medical Marijuana Clinics. We all know that in some states medical marijuana is legal, a palliative tool for those with chronic pain and wasting diseases. The Federal government, how ever, considers medical marijuana clinics “fair game” for prosecution of seizure of their drugs & their mounds of cash, regardless of what local jurisdictions decide. In these difficult fiscal times busting a “drug dealer” for his cash is a ‘win-win’.

Lately in Los Angeles and in San Diego overzealous District Attorneys, in an Election Year, have closed licensed clinics seizing both cash and product. This in effect puts them out of business: because they’re rarely insuring the Product ( yes, Insurance is available at Lloyd’s),with defense costs and their coffers emptied, the clinics generally do not re-open.

Is the public interest being served in these raids? Who are the Bad Guys? In reading the DOJ memo ( see attached URL) the purpose of the Memo is to encourage the Police to go after Bad Guys. The Bad Guys are the Mexican Drug Cartels, in the Dept of Justice’s opinion. Is this true?

What is the Source of the Product/Medicine/Inventory Asset on the Buyers side( at legal clinics)? From personal knowledge in the Northern califiornia legal medical marijuana clinic universe NONE of the Product/Medicine/Inventory Asset is purchased from large ( or even small) drug cartels. The vast majority comes from individuals who grow and know the Buyers at the Clinics personally. If you think of the Berkeley Gourmet Ghetto ( say the CheeseBoard), the patients are gourmands of cannabis, and are discerning buyers. No clinic would stay in business in this uber competitive environment if they purchased Product/Medicine/Inventory from strangers. I.E., Cartel members from South of The Border. They (clients/patients) want very specific strains ( the names are moot, but picturesque in the extreme), not stuff smugggled across the border by strangers, sprayed by hades-know-what-chemicals, and illegal to boot. No way! The growers are individuals know to the Buyers at the Clinics, and they are not Mexican Drug Cartel owners. Why buy dubious product from strangers? That stuff is sold on the Street, NOT in Clinics.

So, what in fact is the DOJ Memo saying? It is kind of an “don’t ask-don’t-tell” for legal clinics. This is Step One of ( of hopefully many) a national policy of decriminalization. Next Step the Feds have to address is that street drugs are not the same drugs that are offered in legal medical marijuana clinics. Although the public probably thinks clinics are run by BP ( see Blog #1: Bad People) who are thugs, they do offer quality Product /Medicine /Inventory in a generally safe environment. They may be sketchy about paying taxes, overtime hours to their Employees, hiring unqualified relatives and girlfriends, but they do know good drugs.

If the government is trying to go after Mexican Drug Cartels maybe they need to look South, not North? Or teach kids who could buy Product/Medicine/Inventory for their legitimate medical needs that licensed Clinics are the safe and prudent way to do it. That would dry up demand, and the Bad People from the South would sell their wares elsewheres ( sorry, the alliteration got to me). Eh?

So is it possible that the Federal Govement could start an informed rational drug policy that would increase public safety and train the oh-so-qualified-guns of the Department of Justice and the DEA on the actual B.P.? One has hopes.

Managing Cash Flow in A Bad Economy

October 12th, 2009 No comments

Managing Cash Flow in A Bad Economy
They say one should write about what one knows: otherwise it’s not believable or interesting. So, what do I know about? Keeping people in business. Since 1991 I have operated as an out-sourced CEO managing small businesses. Before that I was in Finance, Insurance and Technology, and watched Dilbert World™ first hand. Even married a certified Crazy Scientist needed to get up-close and personal. Either that or I like guys who know a Fourier Transformation from a Rolex Datejust.
What do I know?
Hard times required hard decisions. Like, I need that new server but my wife/GF wants to redo the kitchen so she can entertain her Girlfriends (and let them know you are In The Zone). Ummmmm: if you say the server, you might stay in business long enough for when the capacity becomes stretched: and then sell/sell/sell with your infrastructure in place BEFORE THE TURNAROUND. Oh, and keep your margins UP. Wife creates nothing but debt that cannot increase your capital with her stoopid girly kitchen. You should, in tough times spend nothing UNLESS IT HELPS THE BUSINESS.
I wanted it noted at this time: I am girly myself. I do like to cook, garden, do electrical work, plastering, painting, and make jewelry as an avocation. However, I am the one who sees the Books at month end and tells you “You gotta let someone go or give them all a 10% pay cut.”OK?
So, what do I think you should do? Well, if you are an employee pray a lot. If you have your own business I have more concrete ideas.

Receivables vs: Payables or, why you do need a budget
I am not a CPA. I have been a working accountant, controller/ risk manager, financial analyst since 1984. I have done due diligence on LLC and partnerships, wrote indemnification contracts (and priced them for Oil men, offshore drilling platforms and movie partnerships), and managed small businesses (including paying all the bills, managing Insurance & IT, and making payroll across 3 time zones, )and kept nice people in business. If they are idiots or A-Hs I fire them.
So, if things are tight what to do? You owe= Liabilities. You own= Assets/Income. When things are tight get the money in hand, charge or penalize if they cannot pay immediately, and watch your margins. Be firm and polite with clients who are slow pay. Do not hesitate to add interest and bill a deposit of at least 20%. Invoice at least monthly: send copies of invoice: text and call when you do. Do not work for people who have not paid for work already done. You deserve to get paid for your efforts.
When you spend time collecting on work already performed it affects your margins. Do not under price yourself. If you lose money on one unit selling 10,000 units is NOT going to turn a profit. I know more friends and family discounts that put people out of business than embezzlement or fraud.
Getting that One Big Client
If you have had your own business, you have clients that give you 5-7% of your Income, and you have clients that give you > 50% of your Income. You love that Big, Fat House Account that gives you regular and large income.
Beware! You are guaranteed to get lazy and stop marketing to get new clients (‘cause you don’t need to). And you will start giving your small clients less and less love- giving all the Love to THAT ONE BIG ACCOUNT. Most clients last from 9 months to three years. You will think that you will get new clients before you lose that Big One. But you will go from easy times to lean times in an hour. What is the solution? Keep marketing, don’t let that one client exceed 40% of your Income, and treat all of your clients with the same standards of service. Why do I know this? First hand experience.
Budgeting is not for Wheenies
Having been in Technology since 1991 I have repeatedly had clients who were Engineers with MBAs.
They are very good with numbers, but think they are above having to plan & adhere to a Budget. Their superior intelligence leads them to disallow protocols ( like Budgets), which leads to bankruptcy and unacceptable outcomes. Conclusion: use Budgets, adhere to them and have back-up plans and wiggle room.

Of course I trust him, He’s a Friend

What else causes small businesses to fail? Trusting people who are untrustworthy, and assuming that friends will do a competent job. Case in point: a small Macintosh consulting firm owned by two friends: one the Marketer/Sales guy, one the Geek. The Geek managed the technical side and the technicians: the “people-person” was responsible for Finance, Operations and Strategic Planning.

The Geek trusted his friend, who had a bad drinking problem, to watch the shop. His friend never wanted to know anything about accounting, only wanted to get drunk with the reps from Apple and attend Trade Shows- often leaving the Office by 11AM to go to the Slow Club up the hill.
What happened? After 4 years of losses they tried to sell the business. Due diligence showed irregularities in the Expense account of the “Friend”. Bankruptcy ensued.

Conclusion: regularly ask what your partner is doing, get cross trained, expand your skills to include “boring accounting” ( or whatever you are not good at)and do something other than file that 1120 in a drawer.

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What is the function of Accounting?

October 8th, 2009 No comments

What is the function of Accounting?
To tell the Truth: to pay taxes, to disclose to lenders/ regulatory bodies what they need to know to make decisions. Is your firm credit worthy? Did you pay your taxes in full? Oh, and are you making money?
But what happens when there is no money to be lent? When the Regulatory Agencies are asleep at the Wheel? The answer then is full employment for accountants: function be damned. The result of Enron was the full employment for accounting firms viz-a-viz the Sarbanes-Oxley Bill. Serves no function but to employ accountants, let the regulators believe they are serving the public interest, and let cheesy CFOs off the hook.
I cannot tell you how many times I have sat next to a small business owner as he/she looks at his/her bank balance (checking) at the end of the Year, and says “Is THAT my net income?”. How did the owners, who come up with the ideas, make the calls to get the seed capital, sell the customers on an unheard-of Product, come not to know whether they are making or losing money?
The answer is specialization. We go to college, get a Degree, work for an Industry for thirty years. What do we get? Maybe a pension worth a pittance, and a head full of specialized knowledge that let’s us do ONE THING FOR THIRTY YEARS. What? Is that all we can do?
If you are in Finance you may get an MBA but spend your working life looking at maybe two screens, and never see the Big Picture. MBAs can torture the hell out of a Macro (sure passed that test, didn’t ya?) but can’t do the calculation by hand of what the ‘formula line’ is. Having audited the work of Interns at Big Companies who crank out work, text in their sleep, and have no idea what- times- what- equals- what is an all too familiar sight. Neither can they pay bills, do payroll or buy an Insurance Package.
I personally think that is bogus. Why? It separates us from the actual running of a business. It means we are not cross-trained, and after a few years, if anything changes WE ARE VIRTUALLY UNEMPLOYABLE. There are very few generalists (if you can’t tell, I am one of them) because from High School on we que up by Industry: Law, Accounting, Science-Engineering/Artiste.
Why am I on this rant? I had to explain to a business owner today the difference between Book and Tax, various classes of Assets and the difference between a Profit & Loss Statement and a Balance Sheet. He had an MBA, but no idea what went into his accounting system, why his Balance Sheet was appalling, or what he should have asked his bookkeeper or his CPA months ago.
So then. What am I going to do about it? From now on, when there is no imminent disaster, I will write about the basics of business. Accounting, Business Start-up, Risk Management, Marketing, Technology, Web and online marketing, and yes, Taxes. I would like to demystify our overly specialized economy and let’s solve some of these problems together. I swear to God(ess) Almighty not to take money from any financial firms. No fingers crossed. Are you up for it?
My cat wants my lap back, and I know there is at least one more cheap beer in the fridge.
Peace Out.

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