Archive for July 2010
“Made in the USA” Those words are very rare these days and that is a shame. Over the past 20+ years manufacturing jobs have left the United States for various destinations. To be fair, the loss of jobs has been offset to a degree by lower priced imported products. The move away from manufacturing to a service economy has been lamented for years but I believe we are now seeing the problems this can cause. As our dollars go overseas to buy foreign products the new middle class in the emerging markets are now becoming consumers. The problem with that is we have very little to sell them.
Large markets in China and India can be magnificent opportunities for US companies that make products in demand. The Chinese are reportedly big fans of Cadillac’s, we can only hope to take advantage of this and create demand for our other products like Chevy’s and Ford’s. I would settle for exporting steel coils, pipe, tubing and other raw material inputs. A 10% increase in demand for our products in a country of 1 billion people is 100 million more potential customers. That is the equivalent of a 33% increase in our country.
We need to increase our exports to these countries! That is the only way we can take advantage of the rising middle class that we created when we exported our jobs over the past 20 years. This is a classic example of the pendulum swinging back in our favor. In Economics this is called equilibrium. If we are able to export products we can grow our GDP and get the nation back to work. This is not going to happen overnight but everyone needs to realize that it no longer has to be a one way street when dealing with China or India. I believe that the American business community will surprise us with its ability to find markets for its products. I know it may sound hard to believe but as long as we do not get too much government interference (Foreign and Domestic) we will start to see it. If we don’t take advantage now I don’t see how we can grow and prosper.
Have a great week and tell a friend about the coming export driven job creation boom.
We have had a hot summer so far in most of the USA this year. What is better to cool you down and fill you up than an ice cream cone? Who does it better than Baskin-Robbins and their 31 flavors? They have a flavor waiting for you for every day of the month. I have been going there for as long as I can remember and my personal favorite is Daiquiri Ice. It debuted in 1962 and was discontinued for a while but has been back in stores since 2009 as a seasonal flavor. It has been a long time since I have had a Daiquiri Ice flavored cone so just like my Luigi Pizza memory, I am going to make it my goal to get my favorite cone this summer. I hope it still rings the same bells with my taste buds as it did years ago. I will keep you posted if I get one! Since it is so hot, here is a tempting list of the original flavors from Baskin-Robbins. I have to go now. I need some ice cream. Have a flavorful week. Yum…
1. Banana Nut Fudge
2. Black Walnut
3. Burgundy Cherry
4. Butterscotch Ribbon
5. Cherry Macaroon
7. Chocolate Almond
8. Chocolate Chip
9. Chocolate Fudge
10. Chocolate Mint
11. Chocolate Ribbon
13. Coffee Candy
14. Date Nut
15. Egg Nog
16. French Vanilla (retired in 2010)
17. Fudge Ribbon
18. Green Mint Stick
19. Lemon Crisp
20. Lemon Custard
21. Lemon Sherbet
22. Maple Nut
23. Orange Sherbet
25. Peppermint Stick
26. Pineapple Sherbet
27. Raspberry Sherbet
28. Rocky Road
31. Vanilla Burnt Almond
Today’s topic comes from a question I received this week from someone asking my opinion about the value of the CPA credential. He told me he was interested in pursuing the certification but wanted to know if I felt it was worth doing given his limited “free” time. I think this is a good question and very relevant as we all are busy making ends meet and meeting demands in our personal life.
Below is a summary of the answer I provided:
If you look at it strictly as cost vs. benefit it will probably be worth it to invest the time. If you invest 150-200 hours over 15 or 20 weeks to study at a $50/hr “cost” plus the cost of the study materials ( I assume self study) and the exam cost; I think the payback might be 2 years.
That also assigns no value of having the CPA designation in your title or on your business card – what is that worth? To some it is worth little to some a lot. The CPA designation does increase your value in the market place and will increase your billing rate to clients or your salary from an employer.
I am only guessing 10 hours per week is what you will need to study perhaps you are able to cut that down if you are a fast learner. If you have the discipline to tough it out for 3-4 months you will reap the benefits for the rest of your career.
When responding, I could have done a little more research to determine the estimated increase in salary that a CPA earns over a person without the certification. For this discussion, let’s use $3,000 per year as the premium for being a CPA. The present value of that over the course of a 20 year career as a CPA would yield a $21,782 return AFTER deducting $10,000 for the present value of investing 200 hours of study at a cost of $50 per hour. (I used a discount rate of 7%)
In my opinion, the value of investing in yourself is worth it. For anyone who is studying for the CPA exam perhaps this will give you that extra incentive to hit the books. In this case I used a very modest premium of $3,000 per year. It is estimated that having the CPA certification is worth a 10% premium. In my response I guessed that the payback would be 2 years. I would say that using a baseline salary of $60,000 (this was a person with over 10 years of experience) a 10% increase would probably be about right to break even after 2 years. That may not be instant gratification but it is pretty close to it.
Whether you are in the skilled trades, the medical profession or anything in between and you want to get ahead or stay ahead of the competition in the workforce – hit the books! In today’s economy it is good insurance to increase your value. In addition to the monetary rewards, you will have the satisfaction of bettering yourself. Good luck to everyone out there studying and trying to improve your skills.
Have a great week.
What Zone are you in? I am not talking about your time zone, your gardening zone, the strike zone or the Twilight Zone. I am not even talking about being “in the Zone”. Before I get into today’s brief topic allow me to give you some background on the seed from which this idea germinates.
I enjoy bicycle riding and have conservatively logged 50,000 miles since I began riding in 1989. I racked up most of those miles in the 90’s when I averaged over 3,000 miles a year. I hope to attain a lifetime total of 100,000 miles before I hang up my biking shorts forever. I am counting on a lot of miles in my retirement years to get to that number. In the pursuit of that lofty goal I need to ride on a regular basis and can’t afford a lot of down time due to weather or a malfunctioning derailleur. Unfortunately, in every one’s life some rain must fall and mechanical breakdowns will occur. I had one such mechanical failure last week and had to take my trusty bike into the shop.
Fear not dear reader, I do have a backup plan for these catastrophic occurrences. It is called a back up bike. What you do is get a bike for your spouse that you can also ride during those critical breakdowns. I happen to think it is a clever plan but I am hoping my lovely wife will not read this week’s blog and discover my secret. After putting countless hours on the regular bike a switch to the back up takes some adjustments to get it fitting just right – especially when it is configured for a woman a couple inches shorter than you. The handlebar must be reset to the correct height, the seat (or saddle as bike nerds like me call it) needs to tilted, raised or lowered moved forward or backward so that the back up fits like a comfortably worn shoe. Once you have it dialed in, you can ride the different bike and you will be back where you want to be – your comfort zone. Now, let’s finally get to this week’s topic.
Just like a perfectly fitting bike, a business also needs to run like a well oiled machine to be successful. Many times we hear that the comfort zone is a place you must get out of and I agree that complacency is a bad thing. However, I caution you to be careful not to disrupt that smoothly running machine that is your business. If you do, there will be some pain like sore muscles from a poorly fitting bike. My advice to you is to take baby steps when getting out of your comfort zone. Never wander too far from your core competency in search of extra revenues. I also subscribe to the adage “if it’s not broke don’t fix it”. A very extreme case of failure in this area is the New Coke disaster from the mid 1980’s. If you are searching for ways to increase your revenues let me refer you to my blog on the topic which I posted in January. It may give you an idea to get out of your comfort zone without a “New Coke” type disaster. I have placed a link to that blog on ways to increase sales below. Have a great week.