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Home ReportingStimulus Package
February 2009 Just today our Speaker of the House of Representatives said that every month that goes by without passing the "Stimulus Package" we lose five hundred million American jobs. Not only is this woman, a graduate of Notre Dame High in Maryland and Trinity Washington University pro choice, but if she is right about those jobs we will lose more jobs in one year than the entire population of China, Europe, and, oh yes, the USA. I hope she isn't the one adding up the numbers for the so-called "Stimulus Package" that will save us from financial disaster, duhh. As a Catholic and an educator I am ashamed and embarrassed by this woman. I believe she is the most dangerous person in Washington D.C. Unfortunately, we have other Washington D.C. "characters" trying to "fix" us, and I fear that if we let them, we will be giving up the freedoms many have fought and died for. Please write your Senators and Congressmen and tell them we prefer to spend our own money rather than have them do it for us, especially considering many of them aren't much brighter than Mrs. Pelosi. November, 18, 2008
Who wins with bailouts? $25 billion, $700 billion, who know where it stops. This is obviously a rhetorical question since no one really knows the answer. Consider this: Every industry evolves over time, but it is the truly well managed businesses that survive in a free market. General Motors set the standard for developing the automotive manufacturing business. Ford created the assembly line that made automobile ownership possible for the vast majority of Americans. Chrysler became known as the engineering automotive company. Over time they all became very successful, so much so that they allowed unions to fill their expenses with wonderful employee benefits. The question is whether they really understood the long term implications of those increased costs. When three companies have 95% of a market they may feel no need to be concerned about expenses, that is, until competition enters. Due to the high cost of entry into the field of automobile manufacturing it was felt nearly impossible for that competition to happen, but, alas, it did. We now have three domestic auto companies bloated with costs making them no longer competitive and we are being asked to donate to their failure rather than let them fix it. Recently, the members of the board of directors of GM said they had faith in the current management team. If that is so, that management team should find ways to fix their problems or go out of business. Will there be lost jobs? Yes. Will these unemployed people be permanently unemployed? No. There are still opportunities for them with other successful automobile companies if they want to stay in that industry. Or, perhaps they should consider reevaluating their skills and retraining to enter other areas of our economy. When I was a business owner we were constantly looking for new products and better ways to operate, shouldn't you? October 11, 2008
Who's responsible for the economic meltdown and how it affects your business plans? Pointing fingers smacks of the "Blame Game" all the politicians and so-called economic experts love these days. So I might as well join them. I feel the need to do this in order to help you look forward. If you want to start a business one of your primary sources of seed money is your home. Up until now using the equity in your home as collateral for obtaining a second mortgage or an equity line of credit from your bank has provided that needed cash reserve or cash investment money. If you have already established that source, and your bank is still around, you still have access to it. Here's where I must now take a look back as a warning. For the past almost twenty years banks have been willing to loan up to and actually exceeding 100% of a home's value. They have done this with the idea in mind that inflation of home values would continue and it would actually result in the homeowner gaining equity over time. Some banks preferred to refinance the original mortgages that were based on an initial equity requirement of from five to twenty percent equity ownership maintained by the home buyer. The refinance deal sometimes actually exceed the current home value by up to twenty-five percent. That is absolutely throwing good lending practice out the window. I won't go into all the reasons for the lenders doing this because that is not my purpose here. My purpose is to tell you that NOT accepting such a loan offer is your responsibility, especially if you plan to use the money to start a business. Don't add the high risk of a new venture to the risk of not only losing your home, but of owing more that the value of that home. That type of situation is called "upside down" by the real estate community. You MUST be able to focus on the business and not the cash flow needed for the financing. Doing this is a sure recipe for failure on both fronts. Remember, it is not only the banker's fault for the stupidity of bad lending practices. It is also your fault for accepting them. July 30, 2008
The executive summary of your plan. 1) Assuming this is your initial plan: The purpose of this section is for the reader to gain a quick idea of what you have accomplished in past business operations and to briefly explain what you intend to accomplish with your business in the near future term of one to five years. 2) If you have been in business, then this part of your plan should provide a brief summary of your accomplishments during the past year and your plans to build on this during the next five years. The key to writing a good executive summary is to know what you want to accomplish and to whom you need to show the plan to achieve this objective. Typically your first plan will be written to acquire funding and so your reader will be a banker, a venture capitalist, a business "angel", or maybe a rich relative. They all have one primary objective. They want to know how much you need and how you will repay them. More on financial plans next time. Plan writing commentary 03-Jul-2008 Not to long ago I read the executive summary in a annual report I had received from a publicly held company. I found sixteen (16) grammatical errors in the first four pages. What kind of an impression does that provide to the millions of shareholders of this company? I also recently had the opportunity to read a newsletter written by the CEO (Harvard MBA) to all his business partners around the United States. Now I know this man personally and he is a very intelligent individual, but I nearly threw up when I read the newsletter. Its content not only contained grammatical errors but had many confusing statements. Syntax is extremely important to meaning. Why write if the reader doesn't understand your message? Business plans contain the executive summary, marketing and operating plans, financial projections, form and organizational structure. There are seven parts to a complete marketing plan. It must include things such as advertising methods and support, form of sales (eg. direct, representative, internet, etc.) How much money are you willing to invest up front? Do you have collateral? Do you have partners? What form of corporation will work best? NOW - once you have considered these things, how do you put it all in a format that a potential investor will like? My fees are based on many factors such as how much work in writing the plan will you do and how many rewrites will be required to get it right, etc.? My specialty involves working with small businesses and start-up operations. fwconsult@ |
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