Category Archives: General Business
Reflections: Success, Failure, Donald Trump and Thomas Edison
Warning, the language in this video is a bit rough in some spots.
How does someone achieve success? I notice one of the things Richard St. John brings up is “persistence”. He even specifically mentions pushing through failures.
Blogspot.com (Blogger) Blogs and Why I Rarely Recommend “Free” Web Hosting
Well, this was an exciting (?) weekend around John D’s place this weekend. OK, “frustrating” might be a better term. However, it points out why I rarely recommend any company go the “free” route when it comes to web hosting.
Sure, there are lots of places out there that give you a page or more for free web hosting. Microsoft Live Spaces, Google Sites, Webs, etc. Ask yourself, though, if that is really how you want to run your business.
Just like at Blogspot.com, you are under the control of another entity who may or may not decide to yank your page with or without cause at any moment. While that strictly is true anywhere you go, the likelihood of it occurring and occurring without notice on a paid hosting facility is much smaller. Plus, even if it were to happen, you hopefully picked a company that really does have someone on call at all times you can get ahold of by phone, chat or email.
Ohio Taxes and Why Ohio’s Recovery Will Take Longer (Editorial)
Tax season is upon us. While this is on our minds, it is fair to ask: Does Ohio’s tax structure help or hinder the economy in the current climate?
We don’t just focus on technology here, as technology is really a tool to get things done. Seeing as taxes affect both individuals and small businesses, I hope you don’t find this article too far off topic. I have to warn you, though, this is definitely an editorial piece.
According to Google, the unadjusted unemployment rate for Ohio peaked just shy of 12% and as of December 2010 was 9.3%. That’s still pretty high, when you think about it. Chances are that out of ten of your friends, one of them is unemployed.
What is Ohio doing about this? I want you to consider a few things:
- Many more people in the past few years have been drawing unemployment. State taxes are not withheld from the checks. We certainly could debate the morality of taxing the unemployed, but more to the point is how moral is it to hit them at the end of the year with a huge tax bill? Let’s be realistic: If someone is unemployed, then they are probably doing all they can do to pay the bills, keep the house, clothe and feed their families, and so how likely are they going to be able to set aside money to pay a huge tax bill?
- Many more people in the past few years have had to dip prematurely into retirement funds. Often, it is a choice between that and their home. They get hit with 10% federal taxes and a 10% penalty. Then again, the state then comes along after the fact wanting its share.
- Many areas in Ohio have a sales tax on top of all of this, whereas some states seem to get by with only a sales tax. If someone spends roughly 40% on a mortgage and utilities, then in theory they could be paying as much as 6% on the remaining 60% in sales tax. That’s an effective tax of 3.6% on your income.
It quickly becomes obvious that individuals, especially the 9% unemployed, are feeling the heat. What is Ohio doing to attract more jobs then? Good question!
According to the paper “2010 State Business Tax Climate Index An Executive Summary” by Kail M. Padgitt”, Ohio is ranked #47 as far as favorable business climates go. It is only over California, New York and New Jersey as far as the worst of states goes! While the rank has not changed from 2009 to 2010, the same paper shows that the actual score went down 0.08 points. The same report says:
Tax competition is an unpleasant reality for state revenue and budget officials, but it is probably the most effective restraint on state and local taxes. When a state imposes higher taxes than a neighboring state, business will cross the border to some extent. Therefore states with more competitive tax systems score well in the SBTCI because they are best suited to generate economic growth.
To be fair, there are changes being undertaken, according to the Ohio Business Development Coalition. However, when I look at the link to the “impressive menu of incentive offerings", I come away with the feeling that it is all temporary stuff. A lot of it is to attract new businesses or attract existing businesses into expanding into other areas. Where is the long term plan to keep businesses here in Ohio? Are artificial incentives attempting to steer business in an artificial direction really going to work?
Having a Valid Support Network
Seth Godin’s blog post about “Maybe you need new friends” caught my attention recently. It’s a short read, so I’ll just ask you to go read it.
It caught my eye because I’ve been looking at various networking groups of late. I’m still in the research stage, but there are some interesting and not so interesting prospects. I have been advised to make sure I get into one that is the best fit. There are groups out there with varying degrees of commitment and personalities, so, while there are some good ones, it is important to get off on the right foot with the best one for my business.
Networking is important obviously for the customer/client leads. However, I quickly began to notice that there is much more to it than that. It is important for educational opportunities because a guest speaker will pass on knowledge that you did not have before. However, perhaps most important, it is a place you can get emotional support as well.
Members are there for a reason. In a great group, it will be more than drinking coffee and shooting the breeze. They will meet together to encourage each other, give each other advice and keep each other accountable.
What’s your support system?
IRS Time
For individuals taking deductions and small businesses, it might be worthwhile to check out the article “Tax Audit Red Flags” on the Bargaineering site. Not only does Jim Wang discuss red flags, but within the article are links about child care credit and how the IRS picks returns for audit.
The bottom line is take your legitimate deductions, but make sure you have proper documentation. Make sure you know what is “legitimate”, though!
Should We Give the Customer What They Want?
Brad Egeland of Project Management Tips wrote “Should We Give the Customer What They Want?” about the dangers of IT concentrating upon what the customer is asking for instead of why they want it.
Is IT a profit center or a cost center? Who cares?
In the article “Is IT a profit center or a cost center? Who cares?”, TechRepublic revives the age-old argument of how accounting for IT should work.
The problem, of course, is that in most companies IT really is a cost center albeit a very necessary one. I don’t think anyone would disagree with that. The question is how to do accounting for it.
After all, if IT is treated as a profit center with the justification that it is required in order to get the work done, then why isn’t Human Resources a profit center? If you are a shipping company, then purchasing all that packing material is a requirement, and so it too becomes a profit center.
The arguments don’t get a whole lot better if you are arguing that the “profit” is because you “save” due to more efficiency either. Again, a purchasing department can “save” money by purchasing recycled paper for packing rather than foam peanuts. That adds to the bottom line, or profit, right?
Where does it all end?
On the other hand, I’m also a big proponent that support organizations really need to think of themselves as being customer oriented. The only difference is that your “customer” is internal to the organization rather than external. The concept, or at least the terms, of internal and external customers seems to have fallen out of favor, but the idea of charge-backs and treating IT as a profit center seem to be an attempt to do that in a very tangible way.
When you think about it, any method that makes IT, and any other support organization for that matter, treat other departments like customers, then the other departments are much more likely to get what they need. In a bureaucratic, stodgy, top-down organization where your area of support has a monopoly mentality, it is a very real probability that departments will not get what they need. By treating them as a customer, though, they may not always get what they want (although as a bonus they might some of the time), due to affordability or other priorities, but they will almost always get what is needed if the rest of the organization is healthy.
When they get what is needed, they do their jobs better, which hopefully translates into happier external customers as well. That’s what you want, right? Happy customers are much more likely to buy from you, after all.
Some companies have taken it to extremes where IT itself is outsourced, cosourced or whatever-sourced term is in vogue these days. Contractors became the norm during the 1990s right before Y2K.
I can remember when BP decided it was an energy business. To an outsider, that sounds like a “duh” statement, but BP looked at its assets and decided it was not in the building business and it was not in the IT business. So, they sold the building downtown and outsourced their IT to companies that put up bids on it.
Before that, BP was one of those monolithic organizations whose IT had become marginalized due to its monopolistic attitude. After years of neglect, various departments were setting aside money to purchase their own computer equipment, printers, etc., and some had even gone to contracting their own programmers for custom software. It was a real hodge-podge mess. Therefore, the first initiative for the winning contractor was to consolidate some of that mess.
BP took the extreme approach to making IT a profit center, since the external contractor really is its own profit center. Of course, there are very real limits on doing that in a large organization like BP.
There are downsides to treating IT like a profit center, of course. An internal IT department can look really bad if its bids on projects are consistently higher than external contractors (i.e., its “competitors”). This can be made worse by unscrupulous contractors that may intentionally underbid on various projects. Then again, an IT department that still goes overbudget all the time when it should be turning a “profit” is likely to get a change of leadership after a while.
Then, there are all the chargebacks and various accounting headaches. It can quickly become nothing more than a numbers game.
What makes something like this work in one place but not another? I feel the missing element is corporate culture. Some companies treat their employees like children, and so they act childish. Some companies give lip service to treating employees like adults but are constantly gossiping behind each others’ backs.
Companies that just don’t get it do things like make IT a profit center because they heard it was a good idea. Then, when it fails, they go on to the next fad. You can usually tell when a company doesn’t get it because they are doing really well for a while and then suddenly fall off. While nothing is stagnant, neither should earnings and employee turnovers bounce up and down like a polygraph test.
I could go on about company culture, but when you look at the best, when you look at very highly rated companies, you tend to see that the ones rated highest for employees are also rated highest for their earnings potential.
So, in my opinion, the way you organize should support the culture. Otherwise, you just wind up being in the re-org of the month club.
Avoid Bad eBay Ratings – Pack It Up Right
eBay is a great way to get good deals. This is especially true with electronics. Naturally, there is some risk involved, but eBay and PayPal take care of a good portion of that risk. Frankly, I’ve had more bad luck with companies outside of eBay than the other way around.
Part of that risk, though, is that you have individuals selling items alongside companies (or eBay “stores”). While these eBay stores are generally ran by individuals, they are still professional companies. They are there to make money. Individuals may have a variety of reasons to be selling online, though. Many of them are not professionals, but they are rather selling items to clear space, they don’t want to throw away something that someone else might use, or perhaps they just want to replace some of the money they spent on an upgraded item.
There’s nothing wrong with that, either. However, since they are by definition not “professional”, you sometimes get what you get how you get it.
Frankly, in all the years I’ve been on eBay, it is only in the past month that I’ve actually had a problem. I mean, a little common sense goes a long way, and packing things up to be shipped or mailed just is not that difficult. Pack it up like you would like me to pack it if I were shipping the item to you!
I don’t want to get elaborate here, and I’ll just hit some highlights. The basics of packing are:
1. Suitable container. Old cardboard boxes might be fine for moving in a U-Haul, but they might come apart being moved from loading dock to truck to truck to loading dock. Be sure the container is durable.
2. Make moveable items stationary. Often, you can use some type of foam material to immobilize moveable parts. In an inkjet printer, for example, it is a good idea to put some type of sturdy material around the bar where the cartridges move back and forth to prevent the print heads from moving should the package be suddenly shuffled from one side to the other. Things like cords are moveable items and should at least be wrapped up so they don’t dangle (where they can catch on something during either packing or unpacking).
3. If it is an electronic item, it needs to be cushioned. Even if it isn’t electronic, proper cushioning is important. However, electronic items are normally more sensitive to any type of force. If it can bang against the side of the box, it can be broken. If it is near the container’s wall, any force applied to the container will reverberate through to the item. Again, foam is good. Foam peanuts or foam popcorn is OK, but please read the next item before you go that route. I actually received a hard disk in the mail where they took the time to put it into an electrostatic bag, but then put it on a cardboard envelope. It didn’t even have bubble wrap to protect it!
4. If it is an electronic item, wrap it in plastic. If it is vulnerable to electric shock, then put it into an electrostatic bag. At minimum, you need to protect the item from dust and debris from the packing material. I actually got a printer packed in foam peanuts, and it wasn’t wrapped up in any manner whatsoever. The peanuts got into every crevice in the printer, stuck behind gears, blocked the out of paper sensor and generally made the printer unusable. And, don’t forget that those foam peanuts stick to everything and anything, so once there, they are very difficult to dislodge.
5. Put a packing list with the address it is going to inside the box. If anything does happen to the outside of the box, the shipping company can still identify where it is supposed to end up at.
6. Seal the box. You don’t have to get ridiculous here, but if you’re going to go too far one way or the other, it is better to overseal than to underseal. Use a good strong tape (not masking tape or regular tape), but do be careful that you leave room for labels, postage, etc, as some of these items will not stick to plastic tape very well. A properly secured container will not have any flaps, etc, that can dangle or get caught on machinery or other box corners.
7. And, of course, properly label the box with the shipping and return addresses and with the correct postage.
8. PLEASE let the receive know the tracking number! When you buy an item, you want to know when it’s supposed to arrive so you can keep an eye out for it. You also want to know whether or not you should start inquiring about it so it can be tracked down as soon as possible if it does become lost.
References and more information:
UPS, “How to Prepare for Shipping”
CBS News, “How To Pack Gifts for Shipping”
Discount Box, “How to Pack for Shipping”
About.com, “How To Pack a Cookie Jar” (good tips for fragile or painted items)
Americans Working from Home: Have Attitudes Come Full Circle? – Associated Content
I have published on Associated Content “Americans Working from Home: Have Attitudes Come Full Circle?” on working from home. Have attitudes changed? Have they changed so much they have come 360 degrees?
Maybe, maybe not. People still ask, “You work from your home?” as though I grew a third eye. Yet, as I point out in the article, there are advantages to working from home, and many of those advantages are irrelevant to whether you are an entrepreneur or you are working for a company.
One thing is for sure is that it can represent a cost savings, and that can be passed on to your customers. This is why I point out so often that the “brick and mortar” guys are not charging you fees that are representative of the actual work being done. Rather, those fees represent the costs associated with paying employees enough to be able to afford to drive into work, the lights, the heat, the security system, all associated with only that business.
Contrast that to someone’s home. You have to pay for the utilities in any event, and the additional amount required for being there longer for most types of jobs just is not as great as paying for it in an entirely different facility. In addition, you are not paying to keep the heat on in a facility that is not even occupied part or perhaps even most of the day.
If you are a sole proprietor starting a new business and if you have sufficient space to convert into a work area, why wouldn’t you at least weigh the pros and cons?
Outages and Such
Well, I take it that everyone survived both of the BlackBerry outages last month. What is interesting is that some have become so accustomed to using the BB instant messenger that they didn’t even have others’ phone numbers programmed into the devices.
We are looking at a single point of failure here. When it comes to electronics and computers, single points of failures sooner or later do fail. Without an alternative, which in this case could have been done even with the same device since the voice phone service wasn’t down, communication is just plain broken.
Those who haven’t studied the Internet are probably not aware of its military origins. It was invented as a way in which communication packages could be routed to the destination even if several nodes had been blown up. Redundancy is the key to the web’s success.
Servers are single points of failure as well. That’s why server backups are very important. Often, when we think of backups, we think of file and system backups, and that is an important ingredient. However, in mission critical situations, a server backup might be an entire server sitting there ready to take over if the primary goes down.
All companies, large or small, need to weigh the risks of when, because it isn’t if but when, things go down. What do you do when your server breaks? Your Internet connection doesn’t work? What will you do if the electricity goes out?
I’m not kidding.
FedEx didn’t become a success by twiddling their thumbs. I remember a story told in a class where shipments were backing up because their computer system went down. The president of the company walked into the distribution center and found everyone idle. He asked why they weren’t doing anything. They told him the computer system was down. So, he asked them what were they doing so that when it came back up they could quickly catch up. He then further asked what did people do before computers were so common.
He went into the store room, got some markers and Post It Notes, wrote package numbers on the Post It Notes and put them by the terminal and had the packages marked with a marker and moved into the aircraft. When the computer system came back up, they knew where every package was. All they had to do was to enter it into the computer.
Could you react as easily if a key technology wasn’t available?
