Monday, December 7, 2009

She Felt Bad About Her Neck

Why I went for neck lipo...

http://www.marieclaire.com/health-fitness/news/articles/neck-liposuction

Friday, November 13, 2009

New BusinessWeek Post from George Cloutier (With Samantha Marshall)

Problem: A Sweatshop of Her Own Making
The owner of a $10 million garment factory in South Carolina has the kind of work ethic we like to see. This 60-year-old woman, the matriarch of a third-generation Vietnamese family, lives and breathes her business, working through most evenings and on weekends. She treats her workers, including relatives appointed to various management positions, much better than she treats herself, making every kind of fiscal sacrifice to meet payroll and keep the business solvent. While Mrs. Nguyen's husband and son are enjoying their weekends off playing golf, she's there on the factory floor doing quality control down to the last stitch and making sure orders are ready to be distributed to her retail customers on time.

To read more, go to:

http://www.businessweek.com/smallbiz/content/nov2009/sb20091111_997791.htm

Wednesday, October 28, 2009

From BusinessWeek Online: The Turnaround Ace October 27, 2009, 10:15AM EST text size: TT

By George Cloutier
Small Biz

Editor's note: This is the eighth in a series of case studies about business turnarounds. The name and identifying details of the company used as the example have been changed.

Problem: Too Much Cash Is Flowing the Wrong Way

Wendy and her husband Ted own a gourmet potato chip factory in Oregon that's been seeing some steady growth in sales over the past few years. Their company, which we'll call "Artisanal Crunch," insists on only using organic ingredients to season their hand-cut potatoes, and this approach has made the brand popular with major retailers of so-called natural snack foods, as well as dozens of high-end grocers on the West Coast.

Today, the company has close to $10 million in sales. But it has no cash. Overheads are gobbling up any profits they make. It's getting to the point where Wendy and Ted are worried they won't make payroll for their staff of 10 workers. The couple have foregone their own salaries and mortgaged their own home to bring in enough cash to operate the business. They have, in effect, become slaves to their business. It makes no sense when they are not even losing major customers. Far from it. Demand for their products continues to be high, despite the recession.

As it turns out, this well-meaning couple delegates their day-to-day bookkeeping to a friend of the family, an elderly lady looking to earn some extra income after her retirement (I've already told you what I think of hiring family in a previous column, and that goes for their friends, too).

When we drilled down into her files, we realized the ratio of receivables to payables is way off kilter. Bills to vendors are getting paid at three times the rate that money owed to Artisanal is getting collected. Receivables are paid as soon as they come in, but payment on outgoing invoices isn't getting collected for months. One large organic foods chain owes six figures on an order it placed six months ago. No wonder this business is operating at a huge deficit!

Solution: Never Pay Your Vendors On Time

Managing your company's cash flow is daily, hand-to-hand combat, and Wendy and Ted need to fight hand and tooth to maintain liquidity. It's not good enough just to collect the cash they are owed. They also need to hang on to whatever cash they do have for as long as they can possibly get away with not paying their vendors.

This idea that you have to pay your bills on time is a mindset among business owners that's all too common. If you communicate honestly with your vendors and explain to them that you have a cash flow problem and need to stretch out payments 60 or even 90 days, they may kick and scream, but ultimately they will accept the terms. No one wants to lose a customer in this economy, and ultimately vendors would rather know they are going to get paid at some point than not at all if your business goes into bankruptcy.

Wendy is balking at the idea because she is under the false impression that paying on time will help her maintain a good credit rating. She also wants to keep her good relationship with vendors. But this has nothing to do with her credit score. Her financials will be in far worse shape if she maxes out her line of credit at the bank or she can't cover her taxes because she used up all her cash to pay vendors. And who cares if she doesn't get a Christmas card from her peanut oil supplier this year? There's no such thing as a favorite customer. Your vendors won't bail you out if your business fails. Same goes for your landlord. Pay him late, too. He'll scream his mortgage is due, but that's not your problem. He won't evict you because he needs the rental income, especially in these times. Send him a check at the end of the month, not the beginning. He'll soon get used to it.

Over the years, my turnaround firm has found millions of dollars in extra cash for companies by delaying payments this way. In good times and bad, it's simply good business practice to stretch out payables. If you have $500,000 in cash expenses and you can find a way to delay paying these bills by 30 days you are, in effect, giving yourself a permanent, interest-free loan. All the big retail chains do it, so why shouldn't you? You are not in business to pay your vendors. Use them and abuse them as much as you can, legally, to maintain cash flow.

Wendy and Ted need to take control of their finances and either get on the phone themselves, or stand over their bookkeeper's shoulder while she negotiates new payment terms and follows up on unpaid invoices. They need to stop being so nice. Once they focus on the numbers and track what is coming in and out of their business checking account daily and weekly, they'll find they have a nice soft cushion to pay themselves a living wage and keep the business running. Because healthy sales are meaningless when you don't have two dimes to rub together.

—with Samantha MarshallCloutier is the founder and CEO of American Management Services, a management firm that specializes in financial turnarounds and profit development for small and midsize businesses. He is the author of the tough-love business advice book Profits Aren't Everything, They're the Only Thing, published in hardcover by HarperBusiness. The book is now a New York Times and Wall Street Journal bestseller.

Friday, October 23, 2009

WHY US? How the New Commuter Tax Chips Away at the Self-Sufficient Self-Employed

Today I wrote a check for $400 to the New York State tax department and I'm not sure why. The form says "Estimated Metropolitan Commuter Transportation Mobility Tax," and it requires me to pay 34 cents on every $100 I earn above $10,000. Ouch!

Apparently the cost of the MTA's malfeasance and mismanagement has fallen upon the shoulders of small employers and the self-employed. The assumption, I guess, is that we use subways, trains and buses far more than anyone else, and we must therefore bear the burden. This must be true; otherwise the extra tax would be random and unfair, right?
Wait a minute, it is random and unfair!

Now I'm all for paying my share of taxes. As high as they are in New York City, and as much as they put the squeeze on entrepreneurs who are trying to build something and be self-sufficient, this is an expensive town to run, and I made the choice to live here. As a non-citizen who lived in New York for seven years on a work visa before getting permanent residence status, I also accepted the hefty taxes I paid to support public schools, even though, if I had children, I wouldn't have been entitled to send them to those same public schools my income supports. This is my home and I, like everyone else, should pay for government-run services. I'm Canadian, I get it.

But this commuter tax makes no sense. It's only requiring freelancers, single proprietors and small business owners to cough up. People who work for large companies, and who often enjoy tax breaks in the form of transit checks, are exempt. As entrepreneurs, we create wealth and jobs. We get no breaks, and we carry all of our own expenses. We don't siphon off the system, and if the work dries up, as it often does, we don't qualify for unemployment benefits. Many of us also work from home and rarely commute. (I bike and walk, and almost never take the subway.) So what makes state legislators -- along with hapless mayoral candidate Bill Thompson -- think we're the perfect source of revenue to close the MTA budget gap?

I'm surprised by the meek protest to this tax. The Freelancer's Union has complained, but they're already worn out by the dozens of other battles they have to fight to protect the rights of their members -- like pushing back the 4% unincorporated business tax levied by the city, even on people who earn less than $100,000 a year.

This latest hit adds up to a few hundred, and in some cases an additional few thousand dollars a year in expenses. For some self-employed people I know, including many struggling photographers, writers, musicians, actors and artists, it's forcing them to make the choice between buying groceries, paying rent or filling up the gas tank.

Last year I became a freelancer. I quit my full-time job as a reporter at Crain's New York Business because I saw a chance to build a business as a ghostwriter and co-writer of books. I was tired of working harder and harder as a business reporter for effectively less pay (our raises were almost always below inflation), and I wanted to take control of my own destiny. I could also see what was happening in the world of print media, and I knew I needed to come up with an alternative plan. I didn't want to be a wage slave living in constant fear of layoffs.

This is the position many of my former colleagues in the media find themselves in now. They're either stressed, overworked and terrified; or stressed, unemployed and terrified. Several downsized journalists are running out of their unemployment and health care benefits, and trying to establish their freelance careers just as magazines are slashing budgets. The same is true for people across all industries. Now, more than ever, the little guy should be encouraged and given incentives (like tax breaks) to start businesses and strike out on their own, not penalized!

I've never collected unemployment and I hope I never will. I pride myself on generating business and contributing to the local economy. I've been especially lucky. I've produced a bestseller and snagged a couple of tidy book deals despite a troubled publishing market. I hope this good fortune continues. But as a newly self-employed person I do notice my expenses run higher. Health care, for example, is a killer. Living and doing business in Manhattan, entertaining clients and promoting my services as a writer, are also costly pastimes. So this commuter tax comes as an insult at a critical time, just as I am getting ahead and establishing my enterprise.

If we all had to pay (at a much lower rate) fair enough. But if the MTA can't afford to operate our decrepit transportation system with fare hikes alone, they should spread the additional cost to everyone living in the metro area. Don't just stick it to small business people, single proprietors and the self-employed.

Targeting this particular subset of earners is a slap at all the dynamic, self-starting people who are the backbone of this economy. It says to me that my government doesn't care if I succeed on my own, and will continue to chip away at everything I've achieved.

And the irony is, one of the big appeals of launching out on my own was the fact that I would no longer be commuting every day. I used to hate that 40-minute ride on the A train. Who knew I'd be paying for it anyway?Read more at: http://www.huffingtonpost.com/samantha-marshall/why-us-how-the-commuter-t_b_331068.html

Tuesday, October 6, 2009

Test Blog

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