Wednesday, March 30, 2011
Thought for the Day: 30th March, 2011
“Facts are stubborn, but statistics are more pliable.” - Oscar Wilde
Tuesday, March 29, 2011
Earthquakes, Tsunamis and Meltdowns
What happens on the other side of the globe doesn't usually make too much of a difference in our day-to-day activities. But with a cataclysmic event this is not so true.
The triple-whammy in Japan is yet another reminder of this truth. Their problems are now starting to generate problems in the United States. Some things are obvious: reports in the media this morning are saying traces of radiation from the Japanese nuclear reactors were found in the atmosphere in Florida and North Carolina. Some things are not as obvious: you may not be able to get your Toyota repaired if the supply chains are disrupted and parts become scarce. And, some things are unknown: manufacturers such as Nikon may be forced to delay the rollout of new products that are normally made in northeastern Japan.
Any of these consequences could be large or small for individuals. Are you susceptible to health issues from the radiation? Can you drive to work if your car can't be repaired? And are you going to invest in a new camera now or just wait for another six months?
Of course the consequences for individuals also impact businesses. Health care providers, auto mechanics and professional photographers are now starting to realize that they may have to make adjustments to deal with all of this. How much will change is tough to know, but as the days go by and the news remains grim, it appears that the odds are increasing that the impact will be felt.
Keep in mind that is also happens in reverse. The rest of the world was not the subject of the attacks on the World Trade Center on September 11th. Yet it impacted financial markets, tourism, and many other areas of commerce in most countries around the globe. In fact, one estimate at the time said that approximately four percent of the entire United States economy was located in the devastated city blocks of New York. It's almost impossible for an event that large not to be felt internationally. More recently, the BP oil spill in 2010 had effects well beyond the Gulf of Mexico.
So how does Japan relate to your business activities? In my practice I am asking my clients if they sell anything from -- or to -- Japan. I am also keeping abreast of the news to identify the possibility of "collateral" impact - the health of employees, currency exchange rates, seafood prices, etc. Any of these issues can change the value or viability of a business.
A Side Note ... The crisis in Japan is much like many others. It is not just one event that increases the problems. Instead, it is a series of calamities that occur in a short span of time. Remember that Japan had an earthquake and tsunami which caused the nuclear crisis. On September 11th it was one plane crash, another plane crash, a building collapse, and then another building collapse. In the Gulf of Mexico it was an oil rig explosion, followed by multiple months of leaking oil, which caused extensive disruptions to the environment and the regional economy. My contention is that if any of these events had only one problem (just an earthquake, just a plane crash, or just an oil rig explosion) then much of the disasters that we experience would have been avoided.
.
The triple-whammy in Japan is yet another reminder of this truth. Their problems are now starting to generate problems in the United States. Some things are obvious: reports in the media this morning are saying traces of radiation from the Japanese nuclear reactors were found in the atmosphere in Florida and North Carolina. Some things are not as obvious: you may not be able to get your Toyota repaired if the supply chains are disrupted and parts become scarce. And, some things are unknown: manufacturers such as Nikon may be forced to delay the rollout of new products that are normally made in northeastern Japan.
Any of these consequences could be large or small for individuals. Are you susceptible to health issues from the radiation? Can you drive to work if your car can't be repaired? And are you going to invest in a new camera now or just wait for another six months?
Of course the consequences for individuals also impact businesses. Health care providers, auto mechanics and professional photographers are now starting to realize that they may have to make adjustments to deal with all of this. How much will change is tough to know, but as the days go by and the news remains grim, it appears that the odds are increasing that the impact will be felt.
Keep in mind that is also happens in reverse. The rest of the world was not the subject of the attacks on the World Trade Center on September 11th. Yet it impacted financial markets, tourism, and many other areas of commerce in most countries around the globe. In fact, one estimate at the time said that approximately four percent of the entire United States economy was located in the devastated city blocks of New York. It's almost impossible for an event that large not to be felt internationally. More recently, the BP oil spill in 2010 had effects well beyond the Gulf of Mexico.
So how does Japan relate to your business activities? In my practice I am asking my clients if they sell anything from -- or to -- Japan. I am also keeping abreast of the news to identify the possibility of "collateral" impact - the health of employees, currency exchange rates, seafood prices, etc. Any of these issues can change the value or viability of a business.
A Side Note ... The crisis in Japan is much like many others. It is not just one event that increases the problems. Instead, it is a series of calamities that occur in a short span of time. Remember that Japan had an earthquake and tsunami which caused the nuclear crisis. On September 11th it was one plane crash, another plane crash, a building collapse, and then another building collapse. In the Gulf of Mexico it was an oil rig explosion, followed by multiple months of leaking oil, which caused extensive disruptions to the environment and the regional economy. My contention is that if any of these events had only one problem (just an earthquake, just a plane crash, or just an oil rig explosion) then much of the disasters that we experience would have been avoided.
.
Friday, March 25, 2011
NYT.com Into the Darkness
In a few days the New York Times website converts to a paid subscription format. Although this was attempted a few years ago, they are trying a new system that they believe is better for the current Internet environment.
I am reluctant to subscribe. Although I read the New York Times regularly I have a policy of not paying for news content on the web. There are just too many free websites where news is constantly available.
It is understandable that the Times must try to increase revenues. Journalism is expensive to produce. Especially great journalism. But the solution is not to limit the readership. It is to increase the traffic on the site which, in turn, allows the advertising to produce more revenues. My question to the publisher: have you done everything possible to promote the site before you started charging for it?
I am reluctant to subscribe. Although I read the New York Times regularly I have a policy of not paying for news content on the web. There are just too many free websites where news is constantly available.
It is understandable that the Times must try to increase revenues. Journalism is expensive to produce. Especially great journalism. But the solution is not to limit the readership. It is to increase the traffic on the site which, in turn, allows the advertising to produce more revenues. My question to the publisher: have you done everything possible to promote the site before you started charging for it?
Maximize Your Profits: Declare All Your Taxes
There is a restaurant near my office that is extremely well-run. It makes more money than any other restaurant of its size that I know. It was surprising to me when I learned how this is accomplished.
The owner declares all of the cash in the business.
This is counter intuitive. Especially in the restaurant industry. It is common for owners of small eateries to hide some of the cash by not depositing it in the bank. This allows them to declare less revenues on their tax returns and, supposedly, avoid paying some taxes. It is difficult to find a small restaurant that files a correct tax return.
But not this business. Every penny goes through the bank and is reported to the IRS at the end of the year.
Does it cost more money? Actually, no.
For this restaurant it helps them make money. The approach to running this business is that everything is done correctly. Not just accounting for the cash, but purchasing the food, preparing the dishes, serving the meals, clearing the plates, greeting the customers, cleaning the floors, etc. There is a discipline throughout this business. Nothing is left to chance.
It would seem as though an operation this tight might not be a good place to eat. That is not true. It is a friendly place. The staff is well-trained and personable. There is no coldness. The food is good and fairly priced. The dining experience is solid and you leave the restaurant believing that you had a good experience.
It's quite a contrast from the old-style, expensive, snooty (French!?!) restaurants where the waiters were snobby, the wine stewards were snobbier, and the atmosphere was so heavy that most customers actually felt intimidated. There was no value since the prices were outrageous -- "the most expensive in town!"
Here quality, service and value are in perfect balance. And the restaurant makes money. A lot of money.
It's not easy to accomplish this performance. The owner must know the best way to perform each function. And the owner must train and supervise the staff to ensure that each function is never performed in a way that is less than the best. Consistency of quality is king.
Part of this consistency is found in the handling of cash. As with everything else, there is no cutting corners. Each penny is counted and deposited. Why? Because if it were done any other way the employees (and maybe the customers) would sense that there were limits to the discipline of quality and consistency. And that little bit of a shortcut would send a signal that other little shortcuts were also acceptable. The staff would then start taking liberties.
Think of it in another way: the strength of this business is the lack of hypocrisy of the owner. It is all by the book Without exception.
We've all seen it the other way. In fact, many of us have worked in such businesses. Think of the time you had a job where management said that the customer was king ... but the employees were nothing more than the dirt underneath their feet. In these businesses morale was weak and it filtered down to the customer service. Eventually profits suffered.
Now consider your own business. What corners are being cut? How much does it really cost you?
The owner declares all of the cash in the business.
This is counter intuitive. Especially in the restaurant industry. It is common for owners of small eateries to hide some of the cash by not depositing it in the bank. This allows them to declare less revenues on their tax returns and, supposedly, avoid paying some taxes. It is difficult to find a small restaurant that files a correct tax return.
But not this business. Every penny goes through the bank and is reported to the IRS at the end of the year.
Does it cost more money? Actually, no.
For this restaurant it helps them make money. The approach to running this business is that everything is done correctly. Not just accounting for the cash, but purchasing the food, preparing the dishes, serving the meals, clearing the plates, greeting the customers, cleaning the floors, etc. There is a discipline throughout this business. Nothing is left to chance.
It would seem as though an operation this tight might not be a good place to eat. That is not true. It is a friendly place. The staff is well-trained and personable. There is no coldness. The food is good and fairly priced. The dining experience is solid and you leave the restaurant believing that you had a good experience.
It's quite a contrast from the old-style, expensive, snooty (French!?!) restaurants where the waiters were snobby, the wine stewards were snobbier, and the atmosphere was so heavy that most customers actually felt intimidated. There was no value since the prices were outrageous -- "the most expensive in town!"
Here quality, service and value are in perfect balance. And the restaurant makes money. A lot of money.
It's not easy to accomplish this performance. The owner must know the best way to perform each function. And the owner must train and supervise the staff to ensure that each function is never performed in a way that is less than the best. Consistency of quality is king.
Part of this consistency is found in the handling of cash. As with everything else, there is no cutting corners. Each penny is counted and deposited. Why? Because if it were done any other way the employees (and maybe the customers) would sense that there were limits to the discipline of quality and consistency. And that little bit of a shortcut would send a signal that other little shortcuts were also acceptable. The staff would then start taking liberties.
Think of it in another way: the strength of this business is the lack of hypocrisy of the owner. It is all by the book Without exception.
We've all seen it the other way. In fact, many of us have worked in such businesses. Think of the time you had a job where management said that the customer was king ... but the employees were nothing more than the dirt underneath their feet. In these businesses morale was weak and it filtered down to the customer service. Eventually profits suffered.
Now consider your own business. What corners are being cut? How much does it really cost you?
Hello.
This blog is a forum for me to express thoughts on my current and former professions (selling businesses, photography, business consulting, crisis management and financial communications), my sporting and entertainment interests, volunteering, and a variety of miscellaneous topics ranging from current events to evolving philosophies. Is it any different than thousands of other blogs? I hope so.
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