Biz Crusader

 

Forgive me while I go on a tirade.

 

As you know, federal, state and local governments are suffering from major budget woes.  In CA, the franchise tax board (State IRS) is sending officials door-to-door to investigate if small retailers are properly collecting sales taxes.  Yes, they are going door-to-door to penalize small businesses and to levy heavy fines in cases where they might be operating as a retailer without a reseller permit.  Of course, they seem to be starting in lower income cities and in cities with a high-density of immigrants where tax codes might be difficult to understand or wade through.  The bright officials in CA have decided that this is a really good way to collect some revenues by kicking the small businesses while they are down.

 

When I learned of this, I was just outraged.

 

I really believe the “idiot level” of the federal, state and local governments have hit new heights in the past 6 months.  I don’t know any other group of people that can do more to stimulate an economy than small businesses.  I am referring to business with less than 25 employees—the real small businesses.  Every owner I know will almost immediately invest back in to their businesses whenever extra funds become available.  Small businesses are the “unsung heroes” holding this faltering economy together.  In essence, they are the duct tape. 

 

As idiots give other idiots billions of dollars of our tax money to companies on wall street and to the banks only to see them go on luxury retreats and to spend a million dollars to decorate an office, I am just astonished at the level of incompetence of our elected officials.  By the way, let’s not forget it’s these same companies who got us in to this mess in the first place.

 

In the meanwhile, small business owners work from dawn to dusk, 7 days a week, trying desperately to stay afloat.  They aren’t asking for bailouts.  They borrow from credit cards, ask their small staff to take pay cuts, cry quietly as they have to fire someone they consider family and their offices are decorated with a mix match of left-over furniture from luxurious places like Ikea and Staples.

 

 

Aside from the campaign trail video clips at some pancake restaurant, small businesses are pretty much being left alone to fend for themselves.  It’s kind of like how the smartest kid in the class gets the least attention from the teacher.  I think it’s fair to say that our officials have no idea what is going on in “real” small businesses.  We certainly shouldn’t be looking towards the SBA for help—the most useless organization in government.  For example, the news was all over the fact that the auto industry suffered a 50% decline in sales last month and mentioned the closure of auto dealerships across the country.  Of course this is bad news but the auto industry does not operate in a bubble.  What about the janitorial service who used to clean these local dealerships?  What about the diner next door who used to serve lunch to all of the employees of the dealership?  What about the guys who used to install the add-on stereo systems?  What’s happening to these businesses?

 

Instead of spending almost a trillion dollars in pork to grow the government, how about doing something meaningful and substantial for the “real” small businesses?

 

Here are some off-the-cuff ideas.

 

1)  Give 10,000,000 small businesses with less than 25 employees a pre-paid credit card for $10,000.  It would only be offered to businesses that have been around for at least 1 year and the card can only be used for a pre-approved list of vendors or product types (business expenditures). Cost = $100 Billion

 

2)  Loosen the rules for small businesses with less than 25 employees to be able to do business with the federal government.  These rules are cumbersome and have criteria many small businesses cannot clear like years in business, revenue minimums and initial filing costs.  Cost = Practically Nothing

 

3)  Offer no interest/unsecured loans to small businesses with less than 25 employees.  Have the businesses prove a track record of profitability.  Cost = Much less than the money we loaned to the auto industry and wall street

 

 

Do you have any good ideas?  Believe me… they need some good ideas.

 

 

 

In this year of 700 Billion Dollar bailouts, 85 Billion Dollar loans to companies that like to spend 500K on company retreats, and possible write-offs of loan amounts speculative homeowners willingly signed for because of greed and envy: I can’t help but fall back on my true to the core capitalistic principles.  The fact that our politicians are now taking the lead from financial market decisions made in Europe might have something to do with it as well.

 

Both Barrack Obama and John McCain have abandoned CAPITALISM for an election.  In a Capitalistic Society, some will fail and some will succeed based on decisions made by individuals and because of market conditions (Timing).  Government should implement policies to grow these principles and afterwards, GET OUT OF THE WAY.  Government should not serve as a deterrent to failure.  Without failure, success cannot exist.

 

Now, you know how I REALLY feel.  Would you expect a Biz Crusader to have any belief other than the above?

 

As an example…I would like to offer you a few quotes from another Biz Crusader.

 

 

“Property is the fruit of labor…property is desirable…is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built.”

 

“The prudent, penniless beginner in the world labors for wages a while, saves a surplus with which to buy tools or land, for himself, then labors on his own account another while, and at length hires another new beginner to help him. . . .  Many independent men, in this assembly, doubtless a few years ago were hired laborers. . . .”

 

 

 

 

 

The Dow fell 777 points yesterday.  This was the biggest single day drop ever.  In addition, Wachovia was forced by the FDIC to sell most of its assets to Citigroup.  And finally, the United States Congress failed to pass the heavily debated 700 Billion economic bailout plan.  WHAT A DAY!  I think it’s an understatement to acknowledge that we would all rather forget this week or all of 2008 for that matter.  I cannot recall a time in my adult life that has caused me this much concern about the U.S. Economy.

 

During this real crisis, I have a deep and genuine concern for our American small businesses.  As a result, I will dedicate all of my next several blogs to offering tips, tactics and strategies to sustain your business during these times.  The information will come from me as well as others with expertise in the respective fields.

 

 

 

 

In this economy, many businesses make the mistake of hunkering down to the point of detriment for their survival.  It is important not to cut costs in areas that are or will generate you direct income.  Here are some common mistakes to avoid.

 

1)  Avoid termination of employees that have a direct impact on incoming revenues.

 

2)  Avoid cutting back of advertisements that have proven to be reliable.

 

3)  Avoid looking to reduce overhead fees on services that have a direct impact on revenues.  For example, a restaurant decides to no longer accept credit cards to save on the credit card company fees.  We witnessed this exact scenario at lunch yesterday.

 

4)  Avoid raising prices and reducing the quality of your output product or service to save on material and process costs.

 

5)  Avoid buying inventory in small quantities thus paying more per unit even though your sales history requires otherwise.

 

6)  Avoid burning financial relationships with key primary vendors who have a direct impact on your future revenues.

 

7)  Avoid cutting your employee morale budget (not luxuries).  For example, when I was working as a District Sales Manager in 1996, my VP at the time ordered me to get rid of the coffee service for the office.  It would have saved us about $100 per month.  It backfired in a huge way and probably cost the company tens of thousands of dollars due to employee resentment.  Now more than ever, you need your employees to work as a team.

 

8)  Avoid being inflexible as a knee-jerk reaction.  Work with others and be flexible.  They are going through the same thing you are.  Value your vendor and client relationships and be flexible with them.

 

 

I’ll be the first to admit that these tips are “easier said than done.”  The point is that all small business owners must survive today but must not give up planning for the future.  The assumption must be that your business will survive this major downturn and go on.  Sanity will be on your side when it can co-exist with optimism.  And yes…The Glass is Half Full.

 

 

We’ve all seen the smart “Mac vs. PC” commercials.  Like most people, I thought they were really funny at first.  Here was the cool, fit and obviously self-confident Gen Y’er named MAC making fun of the slightly overweight, glasses wearing, badly out of fashion PC on everything from video capabilities to not being the computer of choice on college campuses.  It was a brilliant idea for an ad campaign and it certainly had legs.  We saw parodies on SNL and even some funny amateur remakes on You Tube.  And truth be told, it did help Apple sell more MACs.  This is especially true with the young aspirational audience that is always buying in to the latest “cool” gadget.  With this said, I believe that Apple underestimated the potential downside of this somewhat “snobby” campaign.

 

By starting this fight, Apple managed to do an amazing favor for Microsoft without really trying.  Steve Jobs and his cronies turned Microsoft in to an underdog.  And, no group of people loves an underdog more than the American public.  Just imagine how Rocky would have turned out if he didn’t live in the poor crime infested section of Philadelphia and if he didn’t have to train in a meat packing plant.  The bottom line is that we all have a soft spot for someone who is trying really hard but is against some formidable obstacles.  Compounding to this sentiment is the fact that MACs generally cost more than PCs furthering an aura of dare I say “elitism”.

 

Like many, I eventually grew tired of the commercials and began to root for the fat PC guy—subconsciously.  This past weekend, Microsoft finally retaliated against the barrage of Apple’s attacks by launching their “I am a PC” ad campaign.  Although the ads have only run for a few days, it has become the center of conversation at many marketing and ad agencies including our own.  It will be interesting to see how Apple responds.  I am sure they will answer in some clever Steve Jobs way.  But for now, the PC users are joining together to say to the world “I am a PC”.  Of course, the HUGE irony in all of this is we all know who the real bully is.  What is the point of this post?  Don’t turn your competition in to a crowd-pleasing underdog.

 

Check out the full commercial below.  By the way, I am a PC and I help businesses do more business.