AU Blogspot

While the “experts” continue to debate whether our economy is in a recession, the rest of us working in the real world have already determined that the semantic definition of this crisis is the least of our concerns.  In the following podcast interview, Dale Collie, a former corporate executive and elite U.S. Army Ranger shares the lessons he has learned throughout his life on how to cope with the stress caused by difficult circumstances.  Although focusing primarily on how the business manager of today can effectively lead, inspire, and provide stability to workers during times of economic hardship; this podcast also offers some “big picture” perspectives that anyone can apply in their personal lives as well.  I think you’ll enjoy this podcast. Please share your thoughts in the comments section of this post.  I’d also like to thank Bill Conerly for conducting this outstanding interview. Thanks…

Ryan Rode
Interactive Services Manager
Ashworth University  

 
           Thanks to Rashida Simmons for permission to use this Photo.

OK, I know what you are all thinking!  It’s spring; the daffodils are blooming; the cherry trees are in full blossom; the birds are singing their happy springtime songs; the sweaters have been packed away; love is in the air; so, what is the problem?  Why would someone begrudgingly say, “It’s THAT time of year, again?”  What could possibly be the problem with spring? 

April 15^th is upon us and this is a date which strikes fear into the fiercest of hearts!  It is a time when the good citizens of our country must file their income tax returns.  “The National Bureau of Economic Research has concluded that the combined federal, state, and local government average marginal tax rate for most workers to be about 40% of income” (Wikipedia, 2008).   According to Brigham and Houston (2000), that figure could reach about 50% for some taxpayers (p. 61). What does this mean for all of us?  It means that a large portion of your total earnings are due in the form of tax payments.  In other words, you must work from January through April or May to pay your tax debt. 

Those of you who have been working for several years understand this concept more than some who have not yet held a job or filed their first income tax return.  For the entrepreneur, this concept takes on an additional meaning.  Not only will you have to file income tax returns for your own personal income, but you will also be responsible for filing corporate tax returns.  This is the reason why folks, who are about to start their own small business, need the services of a qualified tax accountant. 

If the thought of deciphering tax laws makes you a little crazy, do not worry!  According to Eugene Brigham and Joel Houston (2000), authors of Fundamentals of Financial Management,  “Taxes are so complicated that university law schools offer master’s degrees in taxation to lawyers, many of whom are also CPAs” (p. 61). The good news?  We don’t have to know all of the tax laws to own and operate our own businesses and to be successful; we just have to hire the right CPA.   

As an entrepreneur, you should be aware of the following taxes: Payroll taxes, Corporate, State, Local, Government, Income, Sales, and Property taxes. To emphasize the importance of understanding the objectives of taxation, let’s take a closer look at just one form: payroll taxes. 

Payroll taxes include Social Security and Medicare tax.   Employees are required to pay taxes on all wages and salaries from their place of employment; however, individuals must also pay taxes on investment income and on profits which are generated by proprietorships or partnerships.  The Social Security tax, listed as FICA on your paycheck stub, is a 6.2% tax of the income generated by the employee and matched by the employer. How does this affect the small business owner?  You actually have to pay double tax on your earned income to the tune of 12.4% because you are the employee AND the employer.  One piece of good news, this tax is not applicable to income which has not been earned (i.e., income from interest, dividends, or royalties). (more…)

Photo courtesy of Hussein Alazaat

The Small Business Trends blog has an interesting article, Four Mistakes Entrepreneurs Make in a Recession (the title of which I’ve modified for the title of this post, for SEO reasons).

I’m going to add another mistake, but first let’s review Scott Shane’s four mistakes:

1.  Failing to take advantage of decreasing costs.  [good point; I made this in Businomics]
2.  Thinking the only way to increase demand is to cut price [also a good point]
3.  Failing to recognize increased competition.  [sometimes true, especially across normal industry lines; for instance, residential contractors may move into non-residential work when their sector weakens.] (more…)

 
                   Thanks to PQZ for permission to use this Photo.

With regard to marketing your residential property, it is imperative to remember that first impressions can be made only once.  That is why curb appeal is so important.  Renters want a clean, attractive, safe, and comfortable environment.  When you provide that environment, potential renters will leave with a positive image of your complex.  

You have 30 seconds to make a positive impression on the prospective renter.  Be polite, positive, and interested in their specific needs when you’re touring prospective tenants through the property.  “Read” the customer to see what he or she is interested in when renting.  If you can find out what interests renters, you can gear your presentation to their needs. 

Marketing is essential for the success of the property.  Most residential properties lease units for a term of one year.  Even though many residential renters continue to rent the same unit, there is still the possibility that each unit could become vacant if the existing renter does not renew.  With that in mind, you need to be prepared to fill a vacancy at almost any time.

When preparing your budget, look over the past year’s expenses to get an understanding of what the needs of the property are.  However, never simply take last year’s expenses and add a percentage to predict the next year’s expenses.  Properties age differently, and you must perform periodic inspections to determine what fixtures and components are starting to wear out and when they will need to be replaced.Some properties host excellent tenant social functions that the renters love.  Give them entertainment and a way to mingle with each other, and you can create a very solid community of people who will stay year to year even when the rental rates increase.  Remember, some groups of people like apartments for their social life, and capitalizing on that could reap your owner excellent financial returns.

Chuck Perme
Property Management Instructor
Ashworth University

                Thanks to Len Peralta for permission to use this Photo. 

As the deadline for completing 2007 tax returns approaches, more and more people are filing returns each and every day. Once the headaches of making sure all your information is accurate and all your paperwork has been submitted, you should know in advance if you can expect a tax refund this year. As with any income, it’s a good idea to think about what you’re going to do in advance and make a plan for how you will use it. We always quote the saying that “no plan is a plan to fail,” and it seems true that many of the worst financial decisions are those made compulsively. Since tax refunds are getting turned around more quickly than ever these days, take the time in between when you file and when you receive your refund to really think about what you’ll do with the money you get back. 

Here are seven ideas we at 22Dollars brainstormed to help get the wheels turning when it comes to your 2007 tax refund: 

* Deposit it in your savings account to help you meet your savings goals.

* Spend it on something you’ve needed to buy for a while and that will help save you money in the long run – like a fuel efficient car for example.

* Invest it in your retirement fund or in stocks you’ve researched.

* Pay it toward debts you have such as school loans or credit card debt to help yourself avoid spending additional money on interest payments. (more…)

              Thanks to Luis Ramirez for permission to use this Photo.

It isn’t adequate to say ‘I am a long-term investor’ and I don’t need to pay attention to the impending financial turbulence.

But how do we deal with this? How do we respond to as well as anticipate market action? How do we preserve our capital during market corrections while being able to maximize our exposure to equities during market bull runs?

After many years of investing (I actually purchased my first stock as a 13 year old back in 1967), I have come to believe that a strategy is possible to accomplish this if you are willing to be disciplined and observant of your own stocks and of the market overall.

First of all, try to identify a universe of stocks that you believe are ‘investable’. I have my own criteria of consistent revenue growth, earnings growth, free cash flow, stable shares, and a solid balance sheet. But my criteria may not be yours. You might develop a list of stocks that exhibit good value, that exercise responsible stewardship of the earth, or whatever your particular preference might be. It doesn’t really matter. But stay consistent.

Next of all, decide what the size of portfolio would be ideal for you. I initially settled on 25 different stocks. Currently I have switched to a 20 position portfolio as a maximum number of stocks I wish to own. It doesn’t matter what the size will be. But pick your maximum and stick to it.

Now bear with me as I go through this strategy. It makes sense to me and I think you will understand my thinking as we review this.

Let us assume that our investment posture will vary with our ‘exposure’ to stocks. That being fully invested is ideal in a strong market (20 positions). And being minimally invested is best in a weak investment environment (5 positions). And I vary my investment exposure based on the market’s effects on my own holdings. That is when my own portfolio is acting ‘healthy’ I am moving from cash towards equities and when my own portfolio is acting ‘ill’ I shift from equities towards cash. (more…)

                  Thanks to Mattia for permission to use this Photo.

We’ve been fortunate enough to share the insightful perspectives of economist and entrepreneur Bill Conerly with our student community since this blog first launched in 2007.  Mr. Conerly is not only a contributing blogger, but someone we consider a friend of the greater Ashworth University community as well.  He was recently interviewed on the Small Business Advocate Radio Show on the topic of business planning after the recession.  The issues covered are of vital importance to anyone one with small business aspirations, so I highly recommend listening to this very informative podcast interview.  You can also visit Bill’s Businomics Blog to show your appreciation for his efforts on behalf of our Ashworth Blogspot readers.  Thanks everyone.

Ryan Rode
Ashworth University

  
               Image courtesy of Stanley Donwood/Radiohead.

Monday’s Wall Street Journal  had columns by Hillary Clinton and Barack Obama’s advisors.  In a post last week I chided Mitt Romney for glib generalities.  Now Clinton gives us the opposite extreme:  government by laundry list.  Remember some of the awful State of the Union speeches, in which the President (pick any recent president you wish) says: “There’s a problem with X; I have a new program.  There’s a problem with Y; I have a new program.  There’s a problem with Z; I have a new program.”  Well, that’s Hilary’s column.  I liked the internal consistency of her message at first, in that she presented a broad area of concern, then specified action steps to deal with the area.  That appeals to my analytical side.  But she shows no real philosophy about how government should operate, merely that for every conceivable problem there should be a new government program.  Gag.

If you don’t like laundry lists of specifics, then Obama is your man.  He apparently believes in content-free leadership.  His major theme: bringing people together.  Ending the divisive partisanship that infects Washington DC.  I’m not sold that a) he can end partisanship, and that b) we’ll get better policy without partisanship.  He has not made that case (it would require specifics, which Obama isn’t in to).  I confess that I really miss the Bill Clinton administration, when gridlock prevented action and we were all focused on that blue dress.  Remember, the economy was strong and the budget was in surplus while Congress was gridlocked.  Sigh. (more…)

 
                          Thanks to theskokieten for permission to use this Photo.

With one of the most critical takeovers in the history of business-tech hanging in the balance, there is predictably no shortage of rumors, innuendos, and overnight prophecy to keep anyone with even a passing interest in Microsoft’s bid to acquire Yahoo rather distracted. This brand of spin campaign is not entirely motivated by misdirection though. As you can imagine, deals of this magnitude are negotiated on multiple levels.  There are internal games within each empire’s own walls, strategies within strategies, many with their own internal logic; some may even be contradictory in relation to one another’s objectives. You then consider the number of different visions attempting to exploit emerging market opportunities that may not even be recognizable at this time. Recall the downfall of Apple in the 1980’s. The genius himself, Steve Jobs, was even fired from the company he co-founded. Apple almost went under. There were factors beyond product development mistakes, marketing errors, and market conditions that brought Apple into the dark. The company itself was at war internally. Marketing vs. Sales vs. Design vs. Finance vs. Jobs vs. Sculley and around the loop again.

The short-term endgame of Microsoft’s takeover can be anticipated in certain respects, i.e. the Yahoo brand will largely stay intact, Microsoft/Yahoo’s search capabilities will be integrated with Live search carrying the day—but I suspect that the long term implications of this deal will also be determined by the psychology of the individual players involved and how their respective agendas run productive or counterproductive to rapid market shifts. After all, we’re talking about an information game that’s played at light speed. There’s no longer enough time to make mistakes and recover from them. No one has a mastery over the fundamentals like Bill Gates and Microsoft. The rules of the game change, but they’re also cyclical. This is partly why Google has every right to be concerned about Microsoft’s latest move. Concerned in a responsible way.  Google’s not going to be spooked.  They’re already in close discussions with Yahoo.  It wasn’t a gamble, so rest assured that Page and Brin are ready to go.  The move fits within Gates’ fundamental playbook.  Consistency sometimes appears surprising or original because our memories are short and selective.  We forget so easy…

The following video provides an overview of this developing story.

Ryan Rode
Ashworth University

 
                 Thanks to Thomas for permission to use this Photo.

I have been surfing a few traffic exchanges for some time now, even though it’s been a while since I have been active, I have thought about an interesting feature that I would like to see.

A Traffic Exchange is a great way to drive free traffic to your websites. A standard traffic exchange is a way to show people your advertisements. The more advertisements you see, the more people will see your advertisements. Usually, you get points for viewing other advertisements, and you use the points to get other people to view your advertisements. You can show people a splash page, banners or text links. Usually, this is all there is to it. The traffic exchanges I recommend using are also the ones I am using:

• StartXchange
• I Love Hits
• TS 25
• Traffic -Splash
• Traffic Swarm

I am always (well, it’s been a while) testing new traffic exchanges, the list of traffic exchanges I recommend might be different in a few months from now, but at the moment I am suring the five above. Now, to the feature I would like to see.

I have been told that you should never use a general splash page at traffic exchanges, this is because a lot of people are using them. And the more people who are using the same splash pages, the more people will have seen yours, and the less likely it will be that they click on yours. To me, that sounds reasonable. (more…)