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Archive for September 2011

A Business Lesson – From Wine Tasting?!

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Wine, it's what's for dinner...

Before I begin this week’s blog, I want to let everyone know about some recent developments.  I was honored last Monday to have my blog, What We Did For Fun Before The Computer, from June 27, 2011 featured on the front page of WordPress.com in the Freshly Pressed section.   WordPress is the company that hosts my blog and about 400,000  others. This is how WordPress describes this feature:  

“Each weekday, we hand-pick and promote approximately ten new blog posts to the Freshly Pressed section of the WordPress.com homepage. These posts represent how WordPress.com can be used to entertain, enlighten or inspire.

Why should you care about being featured? Well, let’s put it this way: Getting promoted to Freshly Pressed is a major traffic win because WordPress.com receives a high volume of page views. And, we have a feed set up so people can subscribe to Freshly Pressed. Why do we do all this? It’s our way of saying we like you. We really like you.”

I want to thank WordPress, all the readers and fellow bloggers who commented on, liked and subscribed to my blog as a result of the exposure. I had hundreds of comments and will be unable to reply to them but do appreciate all of you taking the time to make a comment.  It was a very pleasant surprise.

Since I now have a larger audience that are new to this blog let me briefly tell you that this blog alternates between a business and non-business topic for most of the year but in the summer months I generally post non-business topics.  Today is a business related topic.  Next week I will be discussing the Toy Hall of Fame and that should be fun.

Yes, this week I am going to offer a lesson for our businesses that we can learn from wine tasting.  Let me begin by saying that as I write this I have not been tasting wine. 

For the purposes of today’s discussion I will abbreviate the process of how to taste wine.

  1.  Look and look again.  What color is it, is it clear or cloudy?  If it is a white wine is it pale brown or clear as water?  Is there sediment evident?  This gives you an expectation of what to expect when you taste.
  2.  Smell and smell again.  What aromas can you detect by swirling it in the glass?  Is it like berries if so what kind blueberry or cherry or perhaps jammy stewed plums.  Does it have a citrus aroma or is it like flowers?  Can you detect a hint of oak?
  3.  Taste and taste again.  Hooray we are finally tasting!  Sip it and roll it around in your mouth and notice the alcohol content, acidity, tannins and sugar content.  Taste more deeply and see how it develops.  Does it change from an apple taste to pear to peaches?  Are there other earthy flavors such as minerals, leather, tar or other surprising elements?
  4. The finish.  In a way this can be described as the aftertaste.  Does it linger and if so how long?  What impression does it leave after the wine is gone? By breathing out through your nose can you detect other things in the wine?

Now, let’s relate this process to our businesses and how we are viewed by our customers and potential customers. 

  1. Look and look again.  What is your website, business cards, advertising and physical appearance of your building, vehicles and employees like?  Is it up to date or out dated? Is your office or outside of your building tidy and neat?  Is the grass cut or landscaping neat?  Does it need a paint job or renovation?  What signal are you sending if your vehicles are dirty and have trash on the dash-board and on the floors?  Do your employees dress appropriately?  Do they scare your customers?  Remember, you only have one chance at a first impression.
  2. Smell and smell again.  This is your pre-sale process.  How are your prices, credit policies and interactions with your sales people and other employees?  The customer has not yet made the commitment yet at this point don’t lose the sale here.  Do you have monitoring activities to see how well you are doing at getting the prospect from here to a customer?  Do you have a process in place to weed out prospects from “suspects”?  It is important that you not waste time in the sales process chasing a dead-end.  Get a yes or no as soon as you can.  Eliminate “maybe” by changing them into a yes or no.
  3. Taste and taste again.  This is the point where the sale has been made.   They looked and smelled and decided to jump in.  How are things going throughout the sale?  Is it easy to do business with you?  Do you have an E-commerce site, do you accept credit cards, are your business hours adequate?  What are your return policies if applicable.  Do you need a return policy or satisfaction guarantee?
  4. The finish.  This is the post-sale phase.  Did you deliver on your promises?  How well are you executing?  Is your product or service as good as YOU want it to be?  Is the customer happy?  Do you make sure you are keeping them happy with follow-up feedback?  It is usually many times easier keeping a customer than getting a new one.  What is the lasting impression you leave with your customer?

Have a great week, I think I am going to uncork some wine and do some more blog “research”.

Written by pacelinebiz

September 26, 2011 at 5:04 pm

Products Most Guys Don’t Understand

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I don't get it

I may be generalizing and opening myself up to ridicule but that never stopped me before so here goes! I think most products are made and advertised to appeal to women.  Let me give some examples related to food of why I feel that way. 

The snack size candy bar.  If they were marketing this product to men it would be twice the size of the regular bar not one-fifth the size.

Fruit juice that has vegetables in it.  No guy would ever get near this product.  First of all, drinking fruit juice for a guy is a big enough step to take toward epicurean maturity but adding vegetable juice to it is simply gross.

Snack foods measured in 100 calories size.  No guy cares about calories we want quantity – and plenty of it!  If it tastes good that’s a bonus.  How is a caloric measurement a size?    It is about weight or as I like to call it; heft.  For example, this is how I would indicate my approval of a snack food.  “Wow, this snack bar is great, it has plenty of heft.”  Note that I never once mentioned it tasted good or was only 100 calories.

Light anything.   A far as I am concerned the only light I am aware of is the one I leave on when I depart from a room.  Light is the opposite of heft so that must mean it is a bad thing so why would a guy buy it?

Items that are high in fiber.  The only fiber a guy can think of quickly is fiberglass and we don’t want to eat any of that.  Speaking of fiberglass did you see the new Corvette?(made of fiberglass)

Things that have vanilla or chai in front of their names.  Heaven forbid if they have Vanilla-Cinnamon-Chai in front of it.  The only thing I like with vanilla in it is ice cream with chocolate syrup generously smeared on it. Vanilla-Cinnamon-Chai sounds like something that a woman uses when she is bathing.  Definitely not something a guy will put on the table.

I hope you now understand my point of view.  I need to go, it’s time for me put on a pot of lilac-chamomile tea and watch some football.  Have a great week.

Written by pacelinebiz

September 19, 2011 at 7:18 am

Corporations and taxes – Part Two

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Corporate Fat Cat

For a moment let’s pretend that we reduced corporate taxes to zero – what would happen?  For one thing, profits would go up by as much as 35% and if all things remained the same that would lead to mountains of excess cash in the hands of corporations.  Is that a bad thing?  I don’t think so because the cash that accumulated from the tax savings would be distributed or re-allocated in some way that would lead to a taxable event.  Corporations could do the following with all that cash:

  • Pay out juicy cash dividends to stockholders who would get taxed and probably spend a good bit of the extra money left over which would increase companies’ profits that would sit in their bank accounts waiting to be distributed and this would continue over and over again
  • Use it to invest in equipment or other expansion efforts to grow their businesses which would stimulate the economy and create jobs
  • Pay bonuses to corporate fat cats and maybe some of the “little people” all of which is taxed and generates spending similar to the dividend pay out
  • Hire salespersons to get more sales so they can make more profit and inevitably add employees to keep up with demand.  If they were competing in a global environment they could also lower their selling price since they have a tax advantage so that they could gain market share and bring more jobs to the United States.

One thing corporations won’t do is sit on the money because as is evident today, wall street analysts and brokerage houses will not allow excess cash to remain on the balance sheets of corporations.  They will want return from the investment and want the cash put to good, productive use.  They will force them to pay a dividend, make investment in assets etc. as described above.    

This is a very complicated issue as many factors come into play but I believe the first place we need to look is to downsize government to solve our debt crisis.  We also may have to accept the hardship in reduction of services that a leaner government provides.  I for one can do without another study on the affect that cow belching has on greenhouse gases!  The less money we allow the government to take (yes, it is up to us as we have the power through the vote) the less they will waste through corruption, inefficiency and other follies too numerous to mention.

I hope my examples gave you a different perspective on this issue.  Have a great week.

Written by pacelinebiz

September 12, 2011 at 11:37 am

Corporations and Taxes – Part One

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No more taxes - or Taxed Enough Already

Happy Labor Day.  

Please note that this blog will resume alternating between business and non-business topics as the end of summer is now approaching.  I will start  the business topics off this week and next with a two-part series related to Corporations and Taxes which seems to be a hot topic as it relates to reducing our national debt.  I am sure taxes will become increasingly in the forefront of political debate as the Presidential campaign kicks in high gear after Labor Day. 

The past decades of deficit spending and the recent explosive growth of our budget shortfall by our Federal government has the Unites States trillions of dollars in debt.  Today I am not going to dwell directly on why it happened and whose fault it is but I am going to give my opinion of what not to do to solve the deficit.  Speaking as a voice for business owners everywhere, I say do not raise taxes on businesses as the primary way to solve our debt problem.  One side says that we need to raise taxes to pay out a “stimulus” by giving people their money back.  One side says keep taxes as low as possible so the individual can most efficiently allocate their money in the free market.  I ask; why let the government be the middle man?  No one likes the “middle man” and we always try to cut out the “middle man” unless it is the government.  That seems odd to me.

Let me explain why I believe we don’t need to raise taxes by using some examples the effects that taxes have on behavior.  I will also briefly discuss the effects that taxes have on corporate behavior.

Some believe that taxing corporations at a higher rate is the answer to collect more tax revenues.  This may seem intuitively correct but the taxing of profits has a behavioral response; which is to avoid paying taxes.  Let me give an example from my youth.  I grew up in the western Pennsylvania town of Hermitage near the eastern border of Ohio.  As a result of living in proximity to another state, I was able to observe and learn a lesson that I am able to share with you today – people avoid paying taxes.  Ohio had sales tax on clothing and at the back to school shopping season, Ohioans would flock to my lower taxed Pennsylvania community and spend freely on clothing and take those clothes back to Ohio feeling like smart shoppers with more money in their pockets.  (Let’s not talk about the use tax issues they may have had with the state of Ohio)  Another way the taxation issue was played out before my very eyes was the difference in state gasoline taxes.  Back in the 1970’s the difference between Ohio and Pennsylvania gasoline tax was about 5 cents if I recall correctly.  That may not seem like much today but remember that back in the 70’s the price of gas ranged from about 30 cents in 1970 to as much as a dollar per gallon by 1979.  For gasoline that cost 50 cents per gallon, the tax difference was 10% and a tank full might save you nearly a dollar.  I know a dollar doesn’t sound like much but it went a lot farther than it does today.  In fact, a dollar in 1975 is the equivalent of about $5 today due to inflation.  Pennsylvanians in my town would often run their tanks low when they knew they were heading over to Ohio so that they could fill up and save that dollar on gasoline.  Some would even make special trips to fill up on the cheap stuff.   

Many of you would applaud the people who were able to gain an advantage by avoiding the taxes.  If it is acceptable to avoid paying those taxes by individuals, then why are corporations disparaged when the do the very same thing?  To me that does not make sense and those in government should get wise to the fact that our tax rates that we apply to corporations need to be competitive in the global marketplace or they will tend to avoid the higher taxes.  After all, the corporations have an obligation to its stockholders to return the highest amount on their investment.   Those stockholders are you and me.  We may own them in our 401k plan or other retirement vehicle or in a taxable investment account.  Incidentally, our corporate tax rates are the second highest in the world.  Only Japan has higher corporate rates

Another example of taxation which discourages behavior is when a tax is applied to things like cigarettes to get people to stop smoking.  How effective the cigarette tax is remains to be seen but it is generally accepted that taxing a behavior will reduce that behavior.  If the cigarette taxes did not stop smoking it certainly did change behavior by moving smokers down to cheaper generic s, bulk tobacco to “roll their own” or to buy from Indian reservations when possible to avoid the higher prices.    The lesson to be learned here is that higher taxes do not necessarily lead to higher tax revenues in the long run as corporations will do whatever is necessary to pay the lowest amount of tax just like you and I do.

I will continue this discussion next week and explain what corporations do with their after-tax profits and offer an extreme example that may open your eyes.  Have a great week.

Written by pacelinebiz

September 5, 2011 at 12:30 pm