The Biz of Pacelinebiz

Turning things on end to achieve results!

Archive for April 2015

You Don’t Need A Smartphone

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Is Your Smart Phone Making You Dumb?

Is Your Smart Phone Making You Dumb?

You really don’t need a smart phone.  OK, I will speak for myself – I really don’t need a smart phone.  Those of you that know me personally are probably thinking; yes, you are already pretty smart so why do you need a smart phone?  My questionable intelligence aside, I will repeat the words.  I DON’T NEED A SMART PHONE.   Sorry for yelling but I thought I needed the emphasis.

Why I don’t need a smart phone is simple – the majority of the time I use it as a telephone or to text message.  My Nokia flip phone from 10 years ago could do that AND play music.  OK, I hear the snark but be honest with yourselves.  Do you really need to update your Facebook status or post a picture on Instagram with your smart phone?  No you don’t.

I enjoy using my phone to check emails, navigate with the on-board GPS but I can do without those features especially now that I have my WinBook TW100 tablet-PC.  Do I need to pay with my Starbucks app or play solitaire on my phone while I wait at the airport?  How important is it to know my elevation at any time?

I have had a Samsung Galaxy S3 for over 2 years now and I can honestly say I can do without it.  I might miss the phone for a while but if I saved $30/month on my phone bill, I might get over it by spending a weekend out-of-town creating memories that will last forever with the savings.  I am sure I am in the minority but I just have a built-in resistance to adding more “must haves” to my budget.

So what is my action plan to take from this declaration?  Not much really.  I think the only thing I can do is to resist upgrading my existing phone until it is broken, works too slowly or the operating system will be too out of date to do smart things.  I will spend most of my energy getting the best price for my service since I am paying for data that I don’t use.  Much of the time I can connect to Wi-Fi so I am leaving data “on the table”.  Do you think I am kidding about my data usage? Check out my recent cell phone bill below.  By the way, you can call that number and I will be happy to Turn Things On End To Achieve Results!

I Don't Need No Stinkin' Smart Phone

I Don’t Need No Stinkin’ Smart Phone

Have a great week breaking free of your smart phone – it is making you dumb!


The Owner Is In The Store

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Paceline's Owner

How May I Help You?


There is a value in doing business with small businesses in which the owner is on the premises every day actively participating in its success.  Unfortunately, this type of business is becoming increasingly rare.  If it is not competition from national or regional companies it is the multi-location local company that also competes and often wins by taking advantage of economies of scale in advertising.  Being big is not the bad thing; in fact it is a good thing that many times is the product of doing things right when small. The problem is when a company gets so large that customers are looked upon as a metric such as the number of dollars of recurring monthly revenue.

I think once the owner is insulated from daily contact with customers a sense of anonymity takes over and it becomes easier to focus on the numbers and not on the customer.  It becomes easier to increase the value of each transaction by selling items that may not be necessary or needed.  The temptation to pounce on an unsuspecting victim/customer is harder to resist.  Sometimes the need to “feed the machine” and cover overhead is a justification for cutting corners or overcharging.  Perhaps this is a too cynical view of things but I have personally been a target of the hard sell approach.

Before the “owner in the store” concept is gone, I suggest you seek out these types of businesses and give them a try.  You might be surprised at how refreshing it is to find someone who is happy to do what you ask and stop at that.  One reason for their success and lack of reliance of the hard sell approach is that they rely on repeat business from loyal customers.

I will finish with a story.  Last year I had trouble with my air conditioning unit.  It was making a horribly sounding high-pitched grinding sound.  It was a sound that seemed like certain death to my compressor.  After all, the unit was almost 10 years old and was probably not the highest quality to begin with.  I decided to call someone who I was familiar with who I knew was like me – a single man shop.  At the time I knew him, but not very well.  I called and asked him to send me a quote for a new unit and he immediately stopped me short and said he knew what the problem was and it was not a new unit.  He was in the middle of another job but said when he was done he would come over and look into it.  A while later he arrived and checked things out and left having fixed my unit for about $100 – parts, labor and trip charge included!

I had already sold myself the new unit and all he had to do was write-up the quote for a reasonable price and he had the sale.  That is what I am speaking about when I talk about the owner in the store concept.  It is the integrity of the man who is the one who takes your call and then comes out and completes the job.  I would have never known that I did not need a new unit and he knew that but did not take advantage of the situation.  I am sure that some larger companies would also do the right thing but for my money, I am a champion of the Owner In The Store Concept because I am one.

Have a great week.  Shop local and shop small.  I think you will be glad you did.

It’s Time To Take Inventory

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How do you spell February?

How do you spell February?

After writing over 290 blogs I hope you will excuse me while I take a week off from giving any thought to my writing and simply take an inventory of the contents of the top of my desk.  It will not be a complete inventory just items I find interesting, strange or otherwise note worthy. Ok, maybe I am giving some thought to this but not very much.  It may be interesting none the less.

  • 10 batteries – 2 D cells and 8 AA’s. One of which is a rechargeable. I think they are all uncharged.
  • A battery charger.
  • A 2015 calendar from Wells Fargo that has the second month of the year misspelled as “Febrary”.
  • 9 highlighters in 5 colors a few are not completely dried up.
  • A two-hole punch that I use less than once a year. Some people might call that a paperweight.
  • An adding machine with no adding machine tape in it. I still use this almost daily.
  • A bobblehead of Richie Hebner – probably the best baseball player in history who had to change his number because Pie Traynor got into the hall of fame and the Pirates retired it.  All I know about Pie Traynor is that he was the pitch man in the early 70’s for a company that advertised on local Pittsburgh TV.
  • A Canon LiDe-25 flatbed scanner I bought in 2006 for $50 when I started Paceline Business Consulting. It might be the best $50 I ever spent on technology.
  • A compass – a damn compass! I don’t even know how to use it and don’t know how it got there.
  • An electric pencil sharpener even though I use a mechanical pencil to write.
  • Two 7 mm mechanical pencils – my “go to” and a back up that was my former “go to”.
  • A 2014 desk calendar that I use to write on for a better writing experience versus a hard desk. Don’t ask I just have a thing about writing on a hard surface.
  • An unused sanitizing hand wipe from Chick-Fil-A.

I hope you enjoyed today’s blog and a look into my desk top.  Have a great week; I have to learn how to work a compass.

Written by pacelinebiz

April 13, 2015 at 8:01 am

Extended Warranties

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Roll the dice!

Roll the dice!

Should you offer extended warranties or other insurances or “protection” against an unlikely event?  Should you take advantage of an extended warranty as a consumer?  Let’s take a look at the second question.

The reason I thought of this idea is I recently experienced something that made me consider extended warranties.  The event was an unfortunate one that I have not yet resolved.  I bought a de-humidifier on June 27, 2013 at a large, big-box home improvement store and it has not worked since I turned it on this spring.  It came with a 1 year limited warranty which expired last summer.  This unit was designed for basement use and can de-humidify down to a temperature of 41 degrees.  I paid $200 plus tax and I believe a 2 year extended warranty was $25. I lost my bet this time.  The lesson today is I had really bad luck with this de-humidifier.

If you do some quick math, to break even on the deal for the big box store they must have placed a 16.5% chance of it going bad over the 2 year period covered.   Let’s assume the cost of the unit to them is $150 then I arrive at about a 16.5% chance – this would mean that if they sold 6 warranties 1 would be used and the 6 warranties at $25 each would cover the $150 cost they have in the unit.

But wait a minute.  They are not in business to break even; they are in it to make money.  So, we need to re-visit the numbers.  Let’s assume that extended warranties are a good margin business.  For this hypothetical example, let’s assume a “good margin” is 50%.   If they want to make 50% on the extended warranty; that means the chance must be half of the breakeven of 16.5%.  So, 1 In 12 would be redeemed NOT 1 in 6.  To re-cap, this is how the math would work.  12 sold at $25 yields $300 and the cost to replace the 1 bad unit in 12 is $150 so they make $150 on $300 in sales – 50%.  I suspect the margins are higher than 50% but even still I was the 1 person out of 12 who picked a loser unit off the shelf.

But wait another minute.  If the failure rate is 1 out of 12 that means 8.3% would need replaced in 2 years.  Let’s be realistic, the big box store would not do business with a company that had a rate that high.   Manufacturing standards used by a big box retailer would require a failure rate of something in the low single digits – maybe 2 or 3%.  If that is the case, I was the one out of 50 that picked a bad unit.  This also means that their margins are higher than 50%.  A question you need to ask yourself is this; if the warranty is such a good deal for me, why would they try so hard to sell it to me?

So what does this mean to you and your business?  It means if you know your product and its reliability you should offer a warranty and price it as an additional revenue stream.  In some situations, even a service provider can off “protection” to their customer.  When I was working in a CPA firm, I can recall one firm in the market offering IRS “audit protection” on 1040’s.   This firm knew that the IRS audit rate was under 3% and they also knew what their own experiences with audits were – which was much less than 3%.  For $25 they offered this and it gave peace of mind to clients and made enough money to have a nice after tax season party each year.

Have a great week exploring new ways to get more revenue while providing extra value to your customers.

Written by pacelinebiz

April 6, 2015 at 8:01 am