Free Market Economy?

As a business consultant, money drives most of my activities everyday - making money, saving money, chasing money, cutting costs...

This proposed government bailout of major US financial institutions scares me. While I certainly don't want to see our economy collapse, I also think that allocating taxpayer dollars to benefit companies that have been reckless and fiscally irresponsible heads us down a slippery slope. Even worse, it sets a precedent that if large corporations take huge risks and spend all their cash in good times, they can trust that when there is a downturn in the market the government will save them.

Every parent understands the principles of positive and negative reinforcement. If you are trying to train a child to make wise choices and accept responsibility for their behavior, you use incentives to teach them accountability. If they make good decisions, they are naturally rewarded with good things, but if they make bad decisions, bad things happen to them. These same core accountability points hold true for individuals, families and small businesses. If you choose to blow the last dollar of your savings on a trip to Hawaii and your car breaks down, you might have to take the bus or get a loan to cover repairs. If a small business spends a bundle on an ad campaign that is a total flop, they may have to fold.

Now I understand basic economics, and I know that every major US financial institution going bankrupt all at once would be catastrophic, but I don't think that is what would really happen without government intervention. These are companies that somebody will be very willing to take a gander on - if the terms are right. Consider Warren Buffet's recent investment in Goldman Sachs... he's taking a chunk of the company, but infused $5 billion in capital to keep them afloat. It's a good deal for both sides and it protects the basic principles of capitalism and a free market economy. If the government was not an option, most of these companies could find creative ways to stay in business!

One of the single most destructive trends in big business today is massive executive compensation that is not linked to results. Note that I did not say that 'massive executive compensation' alone is the problem. I believe that if you put yourself on the line to lead a Fortune 500 company and it performs well, you deserve to make a ton of money. But I have deep reservations about all the CEOs who have simply run their companies into the ground due to mismanagement, poor fiscal oversight, greed and corruption. These guys should not walk away from devasted companies with hundreds of millions of dollars. Again, it sets the wrong precedent. Do a good job and work hard - get paid a bundle. Do a bad job and take risks with other people's money - get paid a bundle. Where is the accountability? Where is the incentive to make the right decisions? How is pay linked to job performance?

Without all the inside information that folks in Washington have, I truly don't know whether or not government action is the only recourse in this situation. As I stated before, I believe that free markets tend to work themselves out. We've gotten spoiled in recent years and we can't accept the reality that good economies are often followed by periods of inflation, tighter credit and lower values on real estate and stocks. Things won't always be looking up! But here's the real issue:

If our government takes taxpayer dollars to bail out private institutions - what's in it for the tax payers?

No one is helping us right now - the little people. Why don't we bailout good people who are losing their homes... small business owners who are drawing no paycheck to keep their companies afloat... people who are in bankruptcy due to skyrocketing medical costs and a lack of health insurance coverage... people who have been laid off from these same organizations while their CEO's walk away loaded.

What's in it for me to help CitiGroup or AIG?

If the government aids these firms, I believe that politicians should do to banks what they have been doing to the American public for years - stick it to them! Don't give bailout funds - make a high interest loan with tough terms and an upwardly adjusting rate. Take enormous blocks of shares in exchange for assistance, so that the taxpayers can recoup their investment many times over when the market turns around. Demand that CEOs and executives are held accountable for their role in allowing this global crisis to happen. Change the rules so that institutions are forced to save money in safe, low risk places during times of plenty. And make sure that everyone understands that this bailout is a ONE TIME EVENT, and will not be duplicated no matter what happens.

Wall Street is a spoiled, bratty child right now. Willing to accept the rewards for taking risks, but not the responsibility for bad decisions. A free market isn't a free market unless it exists in both good times and bad times.

Accept Mess for Lower Stress

Learning to tolerate an acceptable level of mess and chaos in life can help you feel happier, reduce stress, make breakthrough discoveries, and even earn more!

I grew up with an amazingly neat and organized mom (probably so neat and organized that she should have gotten some therapy along the way). So mess tends to stir up anxiety and guilt... making me feel like my life is an out-of-control train wreck, especially when it creeps beyond my cluttered desk to the kitchen, living room, bathroom floor and bed. Sometimes I gaze around at it all and waver between complete overwhelm and jumping up in a panic to clean until I collapse.

Magazines and TV don’t help at all. Homes and offices are supposed to be color coordinated, meticulously furnished and Spartan to the point of sterility. Does anyone really have nothing but a computer monitor and a potted plant on their desk? According to Consumer Reports, Americans spent more than $2 billion in 2004 to impose external order on their life. Filing systems, shelving, stackable bins and professional organizing services… whatever will make them feel more ‘put together’.

For most of us, our never-ending quest to be neat has less to do with our stuff than the state of our lives. When life events, finances and family issues feel ‘messy’, we strive to master the one thing we can be truly in control of – our surroundings. But although it's possible to impose neatness (at least temporarily) exerting control over life is not so simple. And perfection is as illusive as a ghost… it never lasts for long.

Contentment has been proven to be a common trait of the happiest people on the planet. Joy and inner peace are not so much achieved by orchestrating every detail of our lives to suit our preferences, as they are about accepting that which we cannot change and keeping our priorities in order. While we all have a ‘mess threshold’ that we are miserable below, we also have to be realistic about how much time, money and effort we want to expend in an endless quest for perfect tidiness. Isn’t a certain level of mess OK if it gives us time to work, play, be with our families and enjoy life?

Hyper-organization and compulsive neatness take a huge amount of time. So ask yourself, is it really more efficient to painstakingly file every single scrap of paper immediately into a complex filing system - or is it more reasonable to have a few general files and update things every few days or weeks? Letting the paper accumulate a bit and making one trip to the file cabinet is truly much more efficient. Is it worthwhile to clean the whole house on Friday if your kids are having a sleepover that night - or does it make more sense to do it Saturday after everyone leaves? Although you might be inclined to have things in order before company comes, the kids don’t care and they’re going to dirty up your nice clean house anyway – so why bother!

Besides allocating our time wisely, mess can also spark creativity. When you're looking at a variety of things spread out in front of you, your mind naturally starts making connections and leaping to intriguing places. The same thing happens when you mix diverse types of people. Companies tend to cluster staff members who do the same things together, and that isolation actually stifles creativity and prevents the new ideas from flowing freely. This is certainly not to say that we shouldn’t care whether or not we can find things… or let dust coat the entire house… or allow grimy dishes to pile up. The point is to find the level of dirt and clutter and diversity that feels optimal for your lifestyle, work habits and peace of mind.

For some folks a lot of mess might be OK, for others it will drive them crazy and become a roadblock to success. The trick is to make an honest assessment based on your own values and style – not based on what a book, TV show or magazine says you should be.

Disorder can open you up for more random moments of beauty. Within reason, don’t castigate yourself for your lack of focus, your disorganization, or your sloppy house. When you let go of the need to be perfect, ideas can flow and you can enjoy life fully. The Japanese tradition of wabi-sabi is about the beauty of imperfection - appreciating the beauty that can be found in a chipped bowl, a wilted flower or weathered rocking chair. Our western craze for consumerism and material wealth has made us a throw away society, obsessed with new trends and always chasing the unattainable.

To be honest, a minimalist, perfectly clean, ultra-organized house may be beautiful in a photograph, but it's also cold, generic and sterile. If you feel empty and unfulfilled, do you truly believe that a cha-cha house will make everything better? If you hate your work, do you truly believe that a neat desk will cure the void in your soul? Accepting human frailty and the inequities in the world is a lot saner than constantly seeking perfection!

So, what of your professional success and earning potential? Don’t you have to be neat and organized to get ahead? Albert Einstein was probably the most brilliant human being to ever to walk the earth, and this genius was an advocate of messiness. He once said, “If a cluttered desk is a sign of a cluttered mind, of what, then, is an empty desk?” A 2005 survey actually revealed that people who call themselves neat freaks are likely to earn less than individuals who don't describe themselves that way. Another great example of the value of mess is Alexander Fleming, who discovered penicillin. The man was a great thinker but his laboratory was filthy. He made his life-saving discovery after he left for vacation without cleaning cultures out of some Petri dishes. When he returned, he found that there were some interesting fuzzy growths that bacteria couldn’t live with, and that mess-driven breakthrough has since saved many millions of lives. In a funny aside… years later Fleming was given a tour of a pristine, well-organized lab, and a fellow scientist gloated, “Imagine what you could have discovered here!” The sage Fleming dryly replied, “Not penicillin.”

Be a little forgiving of your mess and disorganization, both internal and external. Not much in life is of eternal significance, and I certainly don’t believe that God will be giving out awards in heaven for the shiniest floor or the best organized office. Instead of belaboring bad habits and normal clutter, focus on the things that will truly improve your life at its core. Chances are you’re quite organized enough to make those things happen in good time. In the movie City Slickers Jack Palance plays a gritty trail boss with an excellent grip on what really matters. He wisely says, “You city folk… you worry about a lot of s**t. Do you know what the meaning of life is? One thing. And that’s what you’ve got to figure out.”

What’s your ‘one thing’? Probably not a stack of post-it notes.

10 Ways to Respond to Any Event

My friend, Cheri Ruskus, just shared these 10 great pointers from Thomas Leonard's book 'The Portable Coach'. I think they are simple, practical and profound techniques for incorporating conscious change and wise choices into even the toughest situations. Enjoy!

1. Every time you're surprised, make a significant personal change. When you are surprised, you usually react. And react some more. Then overreact. Then react to the intensity and consequences of your overreactions. What if every time something surprising happened in your life - whether good or bad - you made a big change of some kind, even bigger than what that surprise event seemed to call for?
2. Look for the five choices you have, in every single circumstance. When faced with a difficult situation, most of us look for two or three options. But there are at least five options in every situation.
3. Never decide, rather, let your body choose for you. There are a lot more cells in your body than in your brain. They know more about you, as a totality, than your brain does. They work in simpler and more direct ways. All you need is enough trust in your feelings, as expressed through your body to let them guide you.
4. Become extremely curious about your reactions. The last time you got frightened or angry did you ask yourself, "Why did I get so scared or ticked off?"
5. Make over responding a personal strategy. If you are alive, creativity interests you. Especially your own creativity. Become creative in how you over respond. In other words make it your personal strategy and, as such, work it.
6. Stop spending time with reactors or nonresponders. Some people are an emotional meltdown waiting to happen. Others are numb and could hardly care less. People who strike you as falling into either of these categories are people who are stuck.
7. Turn every problem into a nonrecurring event. Here's a way to flex your new muscle: One, identify a problem in your life; two take up to ten steps to make sure that it, or anything remotely like it never happens to you again for the rest of your life.
8. Experiment as you over respond. When you are over responding to an event, you'll start by doing the obvious things that comes to mind. But why not over respond in very different ways as well?
9. Evolve, don't just improve. When you improve, you do somthing smarter or better. Not bad! But when you evolve, you fundamentally and permanently change a part of who you are. Improving is good, evolving is better.
10. Over respond immediately, not gradually. This is the trickiest part of this principle - over responding in the moment instead of later.

Synapse3Di - A New Twist on Speaker's Bureaus

I'm very pleased to have the opportunity to partner with Synapse3Di - an organization providing live speakers, subject matter experts and virtual training to corporations and private groups around the globe. This is a great new model for infusing exciting speakers, cool presentation formats and new life into the tired world of traditional speaker's bureaus!

Synapse 3Di connects industry and topical experts with employees in a way unlike any other organization. They can put on incredible events that will dazzle, engage and create long lasting results that positively impact organizations. But, they also go beyond the live event to share information and transfer knowledge with digital media and within virtual environments. This eliminates the typical barriers that challenge organizational communication. Synapse3Di can be a bridge to connect physical locations across the globe and generational gaps within a company. Training sessions and events can be transformed into wildly successful and popular educational summits.

All programs are followed up with on-demand knowledge sharing resources that dramatically raise retention and encourage ongoing education. In fact, everything is designed to make teaching, learning, and communicating more cost-effective, efficient, and eco-friendly for corporations, groups, and individuals. Welcome to the world of limitless learning.

Visit the website at www.synapse3di.com.

"I Have a Dream" of Boulder County

This year I'm happy to participate in the 2008 "I Have a Dream" Golf Tournament to benefit the "I Have a Dream" Foundation of Boulder County, Colorado. Here's a little bit more about this great organization and the good work they do...

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Here in the affluent Boulder County community, there are “invisible,” impoverished communities whose young people face tremendous obstacles to academic and life success. The “I Have a Dream” Foundation of Boulder County is dedicated to helping these low-income youth achieve a brighter future.

The program “adopts” groups of 50 low-income students "Dreamers" (students eligible for free and reduced lunch or who live in low-income housing sites) in third grade who are deemed to be at high risk of dropping out of school. We hire a project coordinator and establish a learning center exclusively for that group and provide the Dreamers a year-round program of tutoring, mentoring, after-school enrichment, computer technology training, life and social skills, and college and career preparation until they finish high school.

The ultimate goal of the long-term program is to provide these youth with the guaranteed comprehensive support and trusting relationships they need to complete high school prepared for higher education or a fulfilling career. When they do, they receive a four-year tuition-assistance scholarship for college or vocational school.

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2008 "I Have a Dream" Golf Tournament - The 2008 6th Annual "I Have a Dream" Golf Tournament will be held on Thursday, June 26th at the Vista Ridge Golf Course in Erie. For information on sponsorship opportunities, contact Priscilla Gonzales, Director of Development at 303-444-3636 x 15.

Small businesses fighting to survive

This is a great article I read this morning on MSNBC. It just goes to show that business owners have to be proactive and rise above the crowd to make it in tight economic times.

Enjoy!

PITTSBURGH - Small business is risky business these days.

Costs are rising, profits are shrinking and the ability of the big guys to keep prices relatively lower is drawing away customers.

Things are so bad that many small enterprises, which account for about 99 percent of the country’s businesses, say they are hanging by a thread that may soon snap.

“We are basically losing money every month, about $1,000 a month. It’s been about two, three months now,” said Tom Weisbecker.

Weisbecker owns Isaly’s in western Pennsylvania where patrons sit on green barstools at a Formica countertop and gobble the legendary Slammer, a sandwich stuffed with a half-pound of chipped ham and smothered in onions and cheese. Prices for many of those ingredients have skyrocketed in the past year.

“We know our customers are already feeling the pinch with the gas prices and when they go to the grocery store. We’re trying to hold out, but we can’t go on much longer,” said Weisbecker.

In barely a year, the cost of pork has jumped by 50 cents a pound, while beef is up 20 percent; a five-gallon jug of canola oil that used to cost $15 is at $40; a 50-pound bag of flour jumped from $7 to between $20 and $25.

And then there are fuel surcharges of between $5 and $9 that have been added to nearly all deliveries during the past six months.

In the meantime, wages haven’t grown and the job market is tepid, at best. On Friday, the Labor Department said the nation’s unemployment rate jumped to 5.5 percent in May — the biggest monthly rise since 1986 — as wary employers cut 49,000 jobs. Average hourly earnings for jobholders rose to $17.94 in May, up 0.3 percent from the previous month.

The feeble employment market may be making consumers less willing to spend. Also, paychecks aren’t going as far as they did before food and fuel costs rose.

“In a good economy, you can makes mistakes. But in a bad economy ... you can’t afford to make a mistake,” said Larry Lagattuta.

“I am three very bad decisions away from bankruptcy at any given time,” said Lagattuta, who has been running Enrico Biscotti Co. on the Pittsburgh Strip for 15 years.

Over Christmas, he made hundreds of shipments; 2007 was his best year ever.

The last quarter was his worst.

A National Small Business Association survey of 500 small business owners in February found that sales and profits had dropped and job growth was at the lowest point in 15 years, problems that could have a significant impact on an already shaky U.S. economy.

The survey also found that 71 percent of business owners have a “negative outlook” on the economy compared to 43 percent a year ago; confidence in their business’ success dropped from a high of 81 percent a year ago to 70 percent now.

A separate survey done by the National Federation of Independent Business found that for the first time in 25 years, small business owners cited inflation as their single biggest concern, rising from 4 percent a year ago to 14 percent in April.

The survey of more than 1,765 businesses showed that for the first time in a decade, skyrocketing insurance costs were not the No. 1 concern.

As gas and food prices climb, consumers are bypassing small businesses and seeking out bargains in places like Costco Wholesale Corp., which reported a 32 percent jump in its fiscal third-quarter profit, surpassing Wall Street expectations.

“The bad thing that’s happening to us, is the economy is driving people to shop at the big-box stores ... They can buy their staples and pick other things up so they don’t have to use gasoline,” said Cindy Baker, who has been a gift shop owner for 20 years, half at her current location, Collage, in Pittsburgh’s bustling Strip District.

“This is the first time, even taking 9/11 into consideration, I can say I’ve really seen a pinch in my business,” she said.

Just like airlines and car companies, some small business owners are shrinking and letting people go to survive the squeeze.

Last month, the Oklahoma City gas station owned for 22 years by brothers Harley and Hadley Hintergardt shut its doors for good because of rising gas prices. Harley Hintergardt said the station suffered because unlike big chain gas stations, they didn’t have a convenience store or full-service auto shop to fall back on.

“We were the victim of high gas prices,” Hintergardt said. “Everybody thinks that we were making the money selling at the pump at the gas station. And trust me, we were not.”

Small businesses, measured by the U.S. Small Business Administration as those with fewer than 500 workers, employ some 58.6 million people, more than half of the total U.S. labor force. In the past decade, they have generated between 60 percent to 80 percent of new jobs, and in 2004 all the new jobs.

While no data is available on how many small businesses have gone under in the past six months, federal officials are reporting a decline in the number of loans they guarantee, a consequence of both lower demand and tighter standards.

Experts say the shrinking demand indicates businesses are reluctant to take on debt and expand. Many would-be entrepreneurs are hesitant to open new businesses.

Eric Bradlow, a marketing professor at the University of Pennsylvania’s Wharton School of Business, said that historical data suggest that 90 percent of new small businesses shut down in the first year. Meanwhile, a Small Business Administration study found that one-third of new small businesses close within two years and only 44 percent survive four.

“Anecdotally, you hear that this is a very difficult period because of higher gas prices and higher component prices ... definitely in the past 10 to 15 years,” says Bradlow, who is also a director in Wharton’s Small Business Development Center.

It’s an environment that also makes it difficult for small businesses to raise prices to cover their costs.

The Pittsburgh Popcorn Company is feeling that pain. It opened on March 1, since then, the price of packaging tins has tripled. Other food costs have risen between 5 percent and 30 percent, the hardest hit being canola oil and chocolate.

The company’s owners, Janelle and Rob Day, are reluctant to raise prices, though. The enterprise is new and they are afraid of driving away patrons.

“I want to attract customers, that’s my primary goal,” Rob Day said.

Only when it is certain people will keep buying, will Day raise prices. “Whether that’s a month, or two months or three months, I don’t know,” he says.

Not all small businesses are feeling the pinch, however. Those that cater to the wealthy or have niche products may be having a less hard time right now than food or apparel stores.

“Business has actually been steady for us. We haven’t seen a large drop-off,” said Bradley Bodart, who owns Daly’s Pen Shop in Milwaukee. “Our customers tend to be more well-to-do, people who don’t shy away from a $600 pen, so they’re not too affected by gas prices.”

Bodart understands that people are surprised by his success.

“I see people walk by the store and they whisper, ’How does that place stay in business?”’ he said. “It’s because it’s a niche business. There aren’t too many people about to start up a pen shop.”

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Common Pitfalls in Obtaining Grants

SO, HOW DO I GET A GRANT?

First and foremost, unless your business involves the development of new technology or is a non-profit organization, you will probably be wasting your time looking for a grant. Foundations typically fund nonprofit organizations that qualify under section 501(c)(3) of the Internal Revenue Code. These are organizations whose purposes are charitable, educational, scientific, religious, literary, or cultural. By and large, foundations do not make grants to for-profit enterprises. Generally, the same holds true for corporations and private organizations that give grants. However, there are a few funders who will give money to a for-profit business if they are on the cutting edge of technology or are having a profound impact on society in some way.

To be successful in winning a grant, there are a number of important steps that you will need to take. First, you will need to do research in order to identify appropriate funding organizations. Once you have identified potential funders, you will then need to determine how to approach them. In many cases, it is best not to submit a grant application to a funding organization that knows nothing about your activities. So you may need to take the time to cultivate relationships with these organizations via phone calls, visits, and/or letters of inquiry. Finally, you will need to provide each funding organization with a well-written proposal which clearly states your objectives and sets forth a plan and budget for your activities. And don't expect to receive money right away. Funding organizations often take many months to review and process grant applications.

Getting a grant is hard work. There is a lot of competition for grant funds. Grants are "free" in that you do not have to pay back the money. However, if you are awarded a grant you may be required to provide periodic program and/or financial reports to the funding organization.

COMMON PROPOSAL PITFALLS

1. Failure to follow the RFP instructions regarding organization of the proposal, inclusion of required information, page limits, etc.
2. Failure to take evaluation criteria and allocated points into consideration when preparing your response.
3. Failure to understand and to demonstrate an understanding of the problem (i.e., the reason why the agency is issuing the RFP – what do they expect you to accomplish?).
4. Failure to submit your proposal on the required date and time.
5. Failure to include all of the information requested by the grantmaker.
6. Failure to tailor your response to the specific RFP.
7. Costs/budgets are unreasonable (too high or too low) or incomplete.
8. Costs/budgets do not provide any detail or breakdown information.
9. Failure to include specifics of your proposed approach to the project. What makes your theory or strategy different from another person’s?
10. Proposal is unprofessional in appearance (e.g., typos, blank pages, unnumbered pages, smudges, no whitespace, sloppy-looking, etc.).
11. Proposal is poorly written (e.g., information is not presented/organized in a logical manner, proposal is difficult to follow, poor grammar, etc.).
12. Proposal merely repeats or paraphrases the RFP without offering an original approach and methodology.
13. Proposal does not explain how or by whom the project will be managed.
14. Proposal does not contain information about your firm, its capabilities, its management and staff.
15. Proposal does not demonstrate that your firm/organization and personnel have the experience and capability to carry out the project.