Bail out the big 3?
Well, what do you think?
Should the Federal Government bail out the big three auto makers?
Yes and no.
Yes, because it would be the end of American business if the big three didn’t get help. Think about it. No help would end American business. It just would.
It’s a ripple affect. The big three will not only release workers but would also not need their suppliers.
No because the big three should have paid attention to consumer behavior.
Why isn’t Toyota, Hyundai and Honda not feeling the affects of the global economic crisis?
Because they planned ahead…a long long time ago.
Either way, the big three auto makers and the larger lending institutions should be helped but only if smarter monkeys are allowed to operate those businesses.
What do you think?
Do you think a monkey is smarter than Bill Ford or Angelo Mozillo?
- Toyota or GM?
- Shame on IndyMac
- Bad Loans
- What does it cost?
- Is Your Small Business Going to Survive this recession?
Bad Loans
I met up with a client I hadn’t seen since June (2008) as I have been crazy busy. Back then he wanted to get his finances in line so he could buy the building in which he operates his auto service business out of.
Back then, we discussed how he did not qualify for a loan ($1 million) to buy the building. Not only did he not qualify, but he did not have the proper accounting structure to present substantial financial data to any lending institution.
I had been working with the SBA in Los Angeles where they also determined he did not qualify for a million dollar loan.
Long story short-someone qualified him to buy the building, which he did buy and now is three months behind in payments!!
Come on people!! You know better than some laon shark, I mean some loan officer at a bank.
This story relates to another blog I wrote about American Capitalism. Someone at a bank lent him the money knowing very well he did not qualify.
Why?
Because there is commission tied to this deal and if the borrower defaults, the bank gains an asset.
Hello. The asset is not worth fair market value!!
Why are we lending people money who cannot afford it?
Better question: if you know you do not qualify for a loan, why do you take the loan?
You are better off “managing” you business better than you have been.
Ladies and gentlemen, there are better ways to manage your business financial posture. Stop taking loans!
Is the U.S. in recession or not?
No, we are not.
Ladies and gentlemen, the U.S. needs requries three consecutive quarters of negative growth to be in recession. Despite what you hear via the American media, we are not in a recession.
Japan and Europe are in recession as they have different criteria to claim recession.
I believe Japan requries two quarters of negative growth, where the U.S. requires three consecutive quarters.
We missed a recessionary environment back at the end of Q2 ‘08, where we now have to start over.
Do not listen to the media.
Educate yourselves via the Internet and inform yourselves.
Small business will not survive if we do not do something for ourselves. The information is out there, find it, study it and learn from it.
- Is The Media to Blame for the Recession Rhetoric?
- Economic Hard Times for Business Owners?
- Is Your Small Business Going to Survive this recession?
- Gas Prices! Gas Prices! Gas Prices!
- What does it cost?
Know Your Business
So we know now that things are tough and we must manage our business as best we can.
What does that mean? How do we manage our business as best we can?
Maybe we should hire a consultant.
No, don’t do that…yet.
There are allot of consultants out there and in tough economic times like these, there are a million consultants claiming to know what is best for your business.
Recently, I noticed a television commercial of a consulting company that professes bringing successful results to it clients over the years.
I am personally familiar with this consulting company and know for a fact they only hire kids out of college to send on project where the veterans of their business are more focused on bringing on new clients. This is very similar to what attorneys at big law firms do, bring in new clients.
So, how do all these so called consultants help? How do you determine who is the best consultant?
That is a tough one, where I would say your first and primary consideration is a consultant’s success record. Call references and find out exactly what the consultant has helped other businesses with.
Personally, I don’t trust any consultant that is not me. I’m really not impressed with which school a consultant might have graduated from because the real proof of a consultant’s ability is in his ability to provide superior references of his/her work.
I have a list of things to look for when hiring a consultant from the Institute of Management Consultants USA I can email you if you like and I also have a list of superior references if you need our help.
When considering getting help for you business, think hard and take it seriously. The macroeconomic environment will not get better over night, where we have to manage our way through these tough times.
Thanks George W. Great job!
- Shame on IndyMac
- The Rising Cost of Managing Your Small Business.
- Organizational Management
- What does it cost?
- Business Plans for Your Small Business
What does it cost?
I thought this an interesting topic to cover.
The cost of information.
What is it you are wanting to know about your business, rather what would you like your business to tell you?
Some business owners operate off a “gut feeling”.
Hmmm, it might rain today, business will suffer.
Ladies and Gentlemen, that is not the type of information you should be using to make business decisions.
Ever heard of that old saying, “you’ve got to spend money to make money”?
Sure you have. In this context I am refering to you investing the money in your business you will need to garner valuable information that will support your business in the bad times, as well as the good times.
I recently spent time with a client who was a little reluctant to assign the task of gathering particular data (labor, material, time) to a full-time employee. The client was even reluctant to spend any time gathering data.
Ladies and Gentlemen, if you don’t take the time or spend the money to gather data that is of paramount importance to your survival, I say it is a matter of time before the financial posture of your business puts you into a difficult cash crunch.
I have seen it time and time again. Trust me…it will happen.
For those of you who are not aware of what is going in the macro/global economy, banks are afraid to lend each other money!
That means that if banks are afraid to lend to and from each other, they sure as heck are not willing to lend to us, the small business owner.
I find this ironic.
Small business is the back bone of the U.S. economy
Without the ability to borrow cash, most small businesses who rely on monthly loans to make payroll, will simply not have the money to make payroll.
Believe it or not.
As small business owners, we must get organized and spend the time and money to hear what our business is telling us.
In nine clients this year alone, I have been able to save them over $700,000 i operating costs and generate almost $200,000. in realized gains - not seen before.
How did we do that? Investigate, analyze, implement.
We have to be prepared for the tough times to come.
- What do we do now?
- Bad Loans
- U.S. Consumer Debt
- Is the U.S. in recession or not?
- Is Your Small Business Going to Survive this recession?
What do we do now?
These are tough times ladies and gentlemen. Be prepared for things to get tougher.
Tougher that is if the media doesn’t put a lid on it.
Yes, there are issues at the macro level of the U.S. economy where we may not feel the effects of those issues until early 2009.
What is at issue is that all those banks that “banked” on less than marketable home mortgages are now fearful of lending money.
What does that mean to you and I?
Not much for now.
But, for small business owners who rely on bank loans to make payroll, it’s going to be tough.
Very tough.
Not to pose doom and gloom but if small business suppliers and vendors cannot supply each other because there is not way to make payroll…then. Oh well.
Thanks George W.
Instead of focusing on Domestic issues, we have spent $2 billion a week fighting a war that is 2,00 years old.
Could we have seen this coming?
I’m not sure but it doesn’t take a rocket surgeon to figure that if you lend someone money who doesn’t have money, there is a good chance you won’t get paid back. Duh.
Instead of policing Domestic issues, George W. thought it best to police other countries.
So for all of you small business owners who will soon feel the pinch of no working capital to fund your operations, you can thank George W.
What a great President…not.
- What does it cost?
- U.S. Consumer Debt
- Economic Hard Times for Business Owners?
- Know Your Business
- Shame on IndyMac
Organizational Management
As we all move toward making our businesses better and managing the difficult times ahead, we cannot discount the value of our human resources.
Our businesses depend on all of our employees where we need to foster the development of those employees rather than struggling through difficult employees or poorly developed management techniques.
There are many ways to foster employee development and there are probably millions of articles and books on how to do this but know that whatever technique you use, this process can be overwhelming.
More than any consultant you hire or more than any book you read it is important to take into consideration human development.
It is important to understand the development of a human (employee) prior to implementing dramatic change in your business.
Basically, humans do not like change. Any change.  Large or small, humans do not like change.
Rather than running through your business demanding change and getting negative results, it is best to analyze and understand the humans that work for you BEFORE you try to change their comfortable work environment.
This topic is huge where I will not get into the details here but I do recommend getting to know your employees and their expectations before considering a change for your business.
You can post a reply to this blog and I will try to respond with specific examples from client case studies.
- The Rising Cost of Managing Your Small Business.
- Small Business Brand Building
- Toyota or GM?
- Know Your Business
- What does it cost?
American Capitalism
As we go into yet another week of turbulent economic swings, we must take into consideration what is actually occurring, rather what are the root causes of the failures of such giants as Lehman Brothers and Merrill Lynch?
I know what it is.
It is the inherent flaw that is the American capitalistic drive.
The sad thing is that as many economists who know this, Alan Greenspan and the like, are not apt to letting us all in on what is the flaw in American capitalism.
But, my fellow Americans, it is not rocket surgery (Bush-ism).
Publicly traded American businesses have only one goal in their life…increase shareholder value.
That’s it people. Increase shareholder value.
I wrote about this once before and I discuss the concept with my students at the university.
The sole objective of any CEO is to increase shareholder value..at all cost.
Ladies and Gentlemen, this is what we teach in graduate school!
INCREASE SHAREHOLDER VALUE. That’s your job as a CEO.
So now the market is correcting itself, or giving itself an enema because the reality is that most Americans cannot in fact afford to pay back the money they have borrowed.
Merrill Lynch, Countrywide, IndyMac, Lehman Bros and others knew this from the get go.
But they still “banked” on it.
Shame on you.
- Shame on IndyMac
- Bill O’Reilly, Bush and Oil.
- Retail sales rise much more than expected
- Know Your Business
- Toyota or GM?
Bill O’Reilly, Bush and Oil.
I was channeling surfing for news on July 17, when I heard Bill O’Reilly thanking Americans for listening to him when “he” requested that we all cut back on our fuel consumption to send a message to “big oil”.
He mentioned that it was working!
“Americans have done what I asked them to do and that was to reduce our dependence on oil”. This is a paraphrased quote of Bill O’Reilly.
Is this guy kidding or just plain ignorant?
Americans have reduced dependence on oil because we simply cannot afford it!
And this genius is taking a little bit of the credit?
On another note, President Bush was asked on Tuesday how Americans are supposed to cope with the rising cost of fuel.
Guess what his rocket surgeon’s response was?
 Hmm, that is comforting Mr. President.
Rather than doing something about the rising cost of fuel, in your last months in office, let’s just appease everyone with a typical Bush idiotic statement that at least proves my point that he is an idiot.
- American Capitalism
- Shame on IndyMac
- Economic Hard Times for Business Owners?
- Gas Prices! Gas Prices! Gas Prices!
- Small Business Brand Building
Shame on IndyMac
As I recently discussed with students, IndyMac has no one to blame but itself.
Shame on you Mike Perry!
You too Angelo Mozillo!
For those of you who do not know the realtionship between these two rocket surgeons, IndyMac Bank was the brainchild of Mike Perry and Angelo Mozillo when they were both at CountryWide almost 17 years ago.
At least, that’s what I was told when I was on a consulting project for IndyMac Bank in 2006.
Let’s pose a critical question someone should have asked prior to funding seed money for IndyMac Bank.
“How can you lend less than perfect credit borrowers money for home loans when these borrowers cannot, have not and do not know how to manage money”?
Simple, shareholder value.
This is kind of oxy moronic thinking.
It is the job of the CEO to increase shareholder value for stockholders of a company, but at what cost?
Mike and Angelo simply didn’t care about the home borrower and really just wanted to increase shareholder value.
This, my fellow Americans, is a flaw in American capitaism.
- American Capitalism
- Bail out the big 3?
- Bad Loans
- What do we do now?
- What Next? The State of The U.S. Economy