Golden opportunities lost

A ‘Golden opportunity’ in any business is to receive an unsolicited inquiry, or one directly through advertising or recommendation. These opportunities do not happen very often, and it amazes me how many people screw up these inquiries. It is vitally important that with all inquiries you take action by responding quickly.

More often than not, the inquiry you receive will have been given to several other companies. The first company to respond gets a positive head start. Companies that get inquiries and take their time to respond show the customer they are not on the ball and do not have enough care and concern for their customers.

Think about it, if you make an inquiry, how do you feel when you do not get an immediate response, or, worse, you have to call the company again? I know I would lose all trust in them, especially if I had to chase them again and they say, “We have been very busy.” Too busy to look after customers, is that ever a good excuse? What this says to me is that if they are too busy, why should I even use them? If I do, there is a likelihood they will let me down.

If the response is bad, you would go to the guy who responds quickly and offers you a visit or sends you literature. He then calls the next day to see that you have the information and if you require any more help. Now, this is the guy I want to do business with!

Build your reputation on excellent service and support. Treat all inquiries with a good attitude at all times. These individuals will remember this and perhaps they will become your loyal customers in the future. This is all part of building a good business reputation.

A positive attitude, even when things get difficult, will keep you on the right course forever. Treat all inquiries as a priority and respond to them the same day. This shows enthusiasm and care for the customer.
Here’s an example of good customer relations: you go to a restaurant and receive a warm welcome when you arrive. You are immediately taken to your table or asked to sit at the bar if your table is not ready. They offer you a complimentary drink for keeping you waiting. They are giving you good service, which you will remember.

The end result is that you will tell everyone how great the service was and they will tell others and so on. That establishment will grow their business because of the good service and the goodwill they have created. First impressions count, don’t forget this.

Is it wise to borrow the maximum amount of money?

Is it wise to borrow the maximum amount of money?Have you considered borrowing the maximum amount of money allowed from a bank or financial institution? Well, let me put this politely, “DON’T”! For a number of reasons, I would always borrow the minimum amount and here’s why.

Recently, I advised a business buying a commercial property to put down as much cash as possible. To my dismay, they did not agree, preferring to hold their cash and borrow as much as possible. Was this not a strange decision? Imagine it was you who had $1 million in cash and wanted to buy a $1.5 million property. What would you do? Look at this equation.

The cash you hold may be earning about 1% net (after tax deductions) from bank interest. If you put down $500,000 and borrow $1 million you will pay, let’s say, 5% interest. Essentially, you are borrowing your own money and paying an extra 4% to use it? Does this make sense?

In addition, your cash flow is committed before you get any of it!

Now, imagine if your business has a down turn and cash income is lower than anticipated.  No doubt, this will cause difficulty in making the repayments. And what will l result from such delinquency?

Pressure from the lender, possible penalties for late payment, or worse, being forced to sell the property as the lender wants his money back.

If the worst happens, the lender will look to sale, which will allow him to reclaim his losses. And with that, you would have paid for years and have nothing left to show for it.

However, if you had put down the extra $500k, you would have the majority shareholding with a great opportunity to re-finance if needed. Also, your cash flow income would be significantly improved.

Don’t use the common excuse that if I borrow, I get a tax break on the interest! Yes, you will but only if you have profits to set them off against. Surely, this cannot be the best reason to borrow money and increase debt and reduce cash flow?

More Taxes?

Government’s economical need for increased personal and business taxes is the same as any business. They simply must have more income than the amount that goes out.

This is not rocket science, just straightforward common sense and the only way to balance the books. Many people complain about paying any tax, let alone agreeing to pay more tax, even though it would help the Country that provides the services that we need and use every day.

If you take another view of paying tax, surely every one of us would like to be the largest taxpayer in the USA simply because we would be earning more than anybody else. So paying tax is not such a bad thing!

Before harsh austerity measures are used, consider the downside. Government cuts would affect the various services we take for granted, ceasing us to function as a successful society. Do we want a road full of holes, and our children in a class of 50? No firemen, police or paramedics to respond when we are most vulnerable? These are some of the consequences. If government income does not increase, it cannot maintain the excellent services available to the public.

Every business, including governments, face difficult times and looks for ways to increase sales income and reduce running costs. But they have to make sure that any cuts they make do not affect the vital services of their business and in return affect their sales income.

They must consider what tax increases can be made that would not cause too much pain. One easy target is to add $.10 to every gallon of gas that is sold, this would produce an income of $ billions. This additional income could be used to reduce dependency on oil and help produce research for alternatives fuels much quicker. It will also help reduce the country’s incredible debt deficit.

Perhaps it is time to take away, or reduce, the tax write-offs on loan interest. I believe the tax break on mortgages cause more harm than good. It encourages people to borrow the maximum amount of money, which everybody knows will only further contribute towards the mortgage meltdown and make more home empty due to nonpayment of mortgages.

Recently, the leader of the House said how complicated the tax code was and it needed simplifying. I don’t think anybody could legitimately argue against this. Instead of the House using the usual blame game that often rears its ugly head causing proverbial stalemate, both sides should get together and give this a priority. Just think of the advantages it will offer the public and put party politics to one side!

The US debt has to be reduced because the interest payments are off the scale. It’s what I tell people I mentor. When you borrow money, your income will be accounted for before you see it. The lender comes first, no matter the circumstances.

Government is no different. They may be able to delay interest payments, but all that does is rack up more interest. The only way to attack the financial deficit is more tax with some considered cost reductions. Particularly, increased taxes on expenditure will deal with the issue more effectively and quicker. Perhaps a 1% Federal sales tax would not be too painful.

Does education offer what it promises?

Does education offer what it promises?According to,, it is estimated that US student loan debt has surpassed credit card and auto-loan debt with some estimates putting it at $1 trillion. Current student debt will continue to grow and will be with students for years to come.

Nowadays, the general consensus is that students must obtain a degree or professional skill to have the best chance at employment. To me, this focus is skewed. Truth is, the result of their hard work would most likely be an increased risk of long term educational debt that than a guaranteed job at graduation.

There is a danger that skilled laborers will be filling shelves in grocery stores or going abroad to use their skills in another country. According to, more than 5,000 janitors in the United States have a doctorate or other professional degree, and more than 100,000 janitors have a bachelor’s degree or higher qualifications.
In the wake of a strong wave of academic inflation, graduates working in jobs unsuited for their skill level have rapidly increased. One in four amusement park workers have a bachelor’s degree or higher, and almost 20,000 parking lot attendants have earned at least a bachelor’s degree.
Large multinational corporations seek employees who have the highest degrees and have attended the most prestigious universities. This is on the assumption they will make the best businessmen by virtue of their education.

An example of how this theory failed is the Federal Reserve. They have numerous economists most of whom, if not all, obtained degrees from well known colleges/universities. Yet, with all this great academic background, none could foresee the prime sub mortgage meltdown crises. Where was the value in education and degrees then?

The US Department of Housing and Urban Development’s budget report for 2012 said the crisis lost 8 million jobs, plunging the economy and the world into a crisis from which we are still recovering.

In my view, a small businessman would have had his finger on the pulse and been able to clearly see the dangers ahead. He would not be immersed in statistics, trends and forecast, but would make his decision on ‘actual facts and happenings’ that he sees on a daily basis.

It is always difficult to put theory into practice especially when it comes to business. So many successful business decisions are made on instinct and experience gained from actually doing the job and understanding what it takes to make the business tick.

Relying on forecasts and views from analysts and researchers to make decisions for the future is not the way to succeed. After all, how many forecasts over the years have been correct? I often feel that these forecasts are obtained by looking into a reverse crystal ball that only tells you what happened yesterday instead of tomorrow!

Too often we are told what people think we want to hear in an attempt to blind us with statistics to try and prove their point. It is like the businessman who wants to borrow money and produces a cash flow chart that shows how wonderful things will be if he gets the loan he is asking for. From my experience, I have never seen a cash flow that worked according to the projections.

Having a professor tell students how to be successful in business is somewhat of an anomaly. If the professors were correct, then all the students, and the professors, would be multi-millionaires running their own corporations!

The solution to education is how do we teach ‘street smarts’, something that keeps millions of small business owners in business? This type of education is something you cannot get from any college or university; you only get it from the University of Life.

What do financial statistics really mean?

What do financial statistics really mean?When I dwell on the amount of news and information from the stock exchange, government forecasters and predictions from analysts, I start to wonder what they all really mean. Do they mean if there is an upward trend in exports, the GNP is getting better and inflation will decrease 0.1%, will the bulk of the nation’s population benefit? I don’t think so. To me it is just, ‘Lies, damn lies and statistics’. Perhaps ‘Libor’ should be renamed as it sounds, ‘Lie Bore’!

Can anyone tell me what difference it makes to the general population if the Dow Jones increases 100 points? Nothing. Those having it tough in business will still have it tough even if the Dow Jones increases 1000 points. So what’s the big deal?

The Dow Jones Industrial Average is a frequently quoted index of 30 of the nation’s top public companies. Yet, the stock market encompasses more than 12,000 securities from 76 countries listed, so why choose just 30 for the Dow Jones?

We are told that the Dow Jones is a barometer of the economy and if it is up, things are good and improving. If that is true, where and how can we see the improvements? We want to know in ‘real terms’ how the population at large benefits.

I can understand that a Dow Jones increase is good for stock brokers and major investors but hey, they are in the minority. The Dow Jones index does nothing to help small business grow. I ask again, what is the big deal?

It seems so difficult for the government to come to grips with the real situation: how to grow the ‘overall business economy’ and not just the major corporations who were bailed out by the government when they got into financial difficulties.

It is virtually impossible for a small business owner to get financial support from a bank, unless he has assets far in excess of what he wants to borrow.

Come to grips with the real situation and cut out the BS about statistics. Stop treating citizens like mushrooms: keeping them in the dark and then throwing them to the wayside.