Wednesday, December 26, 2007

'Tis The Season

What serves children better? Fifty gifts that mean they have to eat sparingly for months until they are paid for, or one or two gifts they can cherish and enjoy without their parents going into debt? In this season of giving and receiving, it is easy to get caught up in the need for more. I have seen it so often - parents who feel they must show their children how much they love them by drowning them in gifts. My children received plenty of gifts this Christmas, but they have few enough they can actually play with all of them in a day. I like to live by the philosophy that less is more - when it comes to gifts. The quality is definitely more important than the quantity. If anyone doubts this axiom, consider this challenge: name five gifts from Christmas in the past. The ones that come to mind first are rarely the most expensive, but more likely those gifts that came from the heart. The blanket made by a grandmother's hand, the horse carved by a father... those mean so much more than the next video game system, Barbie, or toy bazooka.

I realize this post comes a tad late for Christmas, but it was on my mind as I looked around this year. I am thankful our Christmas will not be causing bills for months to come, but instead will give us lovely memories to cherish. Good tidings, Merry Christmas, and Happy New Year to all.

-- Robert

Thursday, December 20, 2007

When In Doubt, Go Green

No, this post is not an environmental plug. It's Christmas time, and people are wondering what to give each other for Christmas. If there's someone on the list who's notoriously hard to get gifts for - they have everything, they give no input, they have strange tastes, whatever the reason - then I suggest going green. Give the gift that folds - cash. Gift cards, in my opinion, have a tendency to say one of two things to me: "I have no idea what to give you, but I hate to admit that so I bought you this card" or "I expect you to buy your gift at THIS store." Either way, it's giving money that's assigned. I've used gift cards, so I'm not offended when people give them to me, but it doesn't make me feel any more (or less) loved that cash. When my wife and I got married, a lot of people from my hometown hated to give us gifts that we had to ship to where we lived (or hated to have them shipped and something going wrong). We told them that my wife wanted a sewing machine, so they could contribute to our fund for it. We got a lot more cash gifts than items or gift cards, and we got a very nice sewing machine (check out its handiwork on my wife's blog -

One more reason to give cash over cards? According to several reports in the news and on talk radio, last year, Americans failed to use $8 Billion in gift cards, giving free revenue to corporations. If the card gets lost, if it expires, or if it is for a place inconvenient to the recipient, then it may go unused. Cash is good anywhere (last I checked) and therefore won't be so easily misplaced or unused. So, to sum up, give the gift that everyone will love the most, share some Ben Franklin, Ulysses Grant, Andrew Jackson Abraham Lincoln, or George Washington framed pictures with those you love.

-- Robert

Tuesday, December 18, 2007

Okay, Wake Up Out There

All right, the last two posts were a tad dry. Okay, they make Alan Greenspan seem like a motivational speaker. I guess I really should have majored in accounting after all, since I have so much fun sharing tidbits of knowledge about it. I've wondered since college if finance wasn't better for me, though. Instead of reporting on the past, you get to play weather man with dollars and cents. Okay, I'll stop before I begin explaining the fun I had using Net Present Value to analyze a truck purchase we made this summer.

Right now, our business sees the "season" much like anyone else. We just get to see it from the perspective of what stores are stocking up on. We haul yams (sweet potatoes), pumpkins, Christmas trees (though not any this year, from what I've seen), frozen meats... lots of the things that populate a holiday feasting table. And, much like the feeling one gets after eating such a feast, there is always a sense that it is time to stop eating for a few days. We have one of our two deadest weeks right after Christmas. The other is after the Fourth of July. Drivers go home for several days, few loads seem to be moving... there's just a lull. There's just the feeling that things are winding down in a real way. They don't completely pick back up until late January to early March (depending on the year). With all the weather smacking the country in the middle and the northeast, I'm surprised things haven't already come to a stand still. Hopefully people survive those rough conditions and come back out ready to buy out the grocery stores.

This post does not have a real point. I just thought I'd write a little about office life at the end of the year. I imagine most businesses tend to follow a similar pattern. Then comes January, and the accountants (and various tax preparation companies) come out of the woodwork. One woman who works on an accounting office in our community says that January first her body just automatically wakes up at 5:00 AM and she goes to work for the tax season.

Enough of this rambling post. Enjoy the holidays, everyone. Merry Christmas.

-- Robert

Saturday, December 15, 2007

More on Profit Versus Cash

The following is according to one of my professors:

What is the goal of major corporations? To generate earnings (i.e., profits) for its stockholders. Those earnings can increase the value of the stock itself, they are in some cases distributed to stockholders in the form of dividends, or they can be reinvested to generate even more earnings in the future. Major corporations want to maximize their earnings. Those earnings and dividends are both taxed by the government.

What is the goal of small businesses? To generate earnings for its owners, while shielding them from paying taxes on those earnings by allowing them to expense other items that employees in corporations may not get to expense. For instance, a small business can allow its owners to write off their automobiles, some travel expenses, home offices, and other items used in some way to help their business. Small businesses want to minimize taxable earnings while maximizing incoming cash.

I will note (for any IRS agent reading this blog) that I do not run my business with the specific goal of having little to no taxable income. I run it to maximize earnings. I do, however, use legitimate tax rules to minimize my tax liability, and some decisions I make might not make sense in a major corporation. We, for instance, started prepaying our insurance at the end of each year for the next year so we could reduce or tax bill. Those sorts of choices are not available to major corporations because they are required to report all income and expenses on an accrual basis.

Uh oh, those are accounting words, what does accrual mean? Accrual basis accounting means that income and expenses must be accounted for in the period they occur, regardless of whether cash was involved or not. So, if I prepay a year of insurance, I accrue it as a prepaid expense to be spread over the year (instead of all at once). Income must also be reported when the sale is made instead of when the payment is received. The difference for small business owners is they are allowed to use cash basis accounting. They record transactions when they receive the cash for or spend the cash on an item. The only exception being large assets, which are required to be expensed over time unless a special election of expense is made (which is, again, only allowed for some small businesses). What it comes down to is that large businesses must report their activities as they happen, whereas small business must report their activities when cash changes hand.

This post turned into a tax accounting lesson, but hopefully it is helpful to anyone considering opening their own business.

-- Robert

Friday, December 14, 2007

But I Have More Money in the Bank Than Ever!

So often, small business owners get fooled into following their bank balance. They think, "Well, I know at the end of last month I had less than I do right now, so of course I'm making money."

Cash is not a measure of profitability. I know accounting to most people is Greek for math voodoo, but without understanding some basic principles of how to account for transactions, many a business owner is lost in the sea of numbers. The fact is, cash rarely has any correlation to profit. For instance, what happens when a company dramatically increases sales suddenly? They're hoepfully increasing their profit at the same time. But what about cash? If they sell on credit, then their cash may actually decrease. They may have to purchase more inventory, pay salespeople their commission, or otherwise use cash while they wait to get paid. In my business, I pay a driver the day he gives me his paperwork for a load, but I wait thirty days (in most cases) to get paid. During our heaviest billing periods, we have to borrow on a line of credit to keep up with our volume of sales. If we only watched our bank balance, we might do something silly like reduce sales to avoid losing money. The other danger of not understanding this inverse relationship that some companies face is selling themselves out of business. One competitor of ours hired someone they knew would bring in a lot of new freight, hoping his increase in sales would save them since they were running out of cash. Instead, his increase in sales destroyed their business as they were forced to change payment policies and drivers lost all trust in them. Not long after, they closed their doors.

Cash is definitely important to monitor. Cash is definitely nice to have, too. Understanding how little it has to do with profit, though, is paramount to grasping what a business really does day to day, and whether that business is profitable or not.

-- Robert

Thursday, December 13, 2007

Workin' for the Man

My professor of entrepreneurship explained that the only way a person can legally be paid less than minimum wage is to work for himself. What did he mean? Starting a business has become the American Dream, the ideal to achieve for so many people, but self-employment is not always so wonderful.

First, why do most people want their own business? Some people think it will be nice to not have a boss to answer to. Instead, though, every customer can become like a boss. Some people think they don't want to work as many hours as their jobs require. I have only met one person who has successfully worked fewer hours because he owned his own business - and he was doing the hard physical labor of carpet cleaning with industrial machines. I know before he got to that point, though, he worked a lot of hours to get to where he could just work twenty a week. Most of the time, small business owners find themselves spending most of their waking hours (and they increase the number of those waking hours) developing their business.

This post is not to complain about owning a small business. My company is fifteen years old and does not demand the time it did in the early years. I write now simply to serve notice to anyone thinking, "I could quit my job and sell [pick a product] and be done with the sixty hour work week!"

That may be true, the sixty hour work week may become a thing of the past. It may be a fond memory as the ninetieth hour slips by.

-- Robert

Monday, December 10, 2007

Sinatra Never Set Up His Own Piano

I decided to write this related post, because I wanted to juxtapose these two schools of thought in one place. Thus the reason for two posts on one day.

"Frank Sinatra never set up his own piano," explained an inspirational speaker to a club I was a member of one day in our meeting. He then explained what he meant: great talent rarely comes from being a generalist, but from a person developing a particular skill to its utmost and performing it. If Frank Sinatra had spent a lot of time knowing what it took to move a piano from place to place and then tune it after the move, then he might have been a great lounge act somewhere, but because he focused his talents on his music, we know him as Old Blue Eyes. The speaker was encouraging us as businessmen and community leaders to reduce our involvement in the minutia of our lives that kept us from being the Frank Sinatra of our field.

Managers often have a tendency to micromanage - to make sure every detail of every project is reported to them - because they want to be in control. If, instead, they would learn to delegate to people with a talent for different parts of a project, they could use their talents to expand their businesses.

"Find a job you love, and you will never work a day in your life," he also told our group. By finding a field that insipred us to work harder, think broader, or reach further, we would not find our job such a daily grind. One of my church leaders recently explained how his father realized he should change fields. His father was a scientist, and they often worked problems together in their home. One day, as they were working one such problem, his father reminded him they had gone over some aspect of the problem before. Then he asked, "Hank, haven't you been thinking about this problem since we last worked on it?" When he admitted he had not, his father said, "Then you need to find another field of study. The men you will compete with in this field will constantly be thinking about it, and you need to find something that inspires you to think like that." He ended up studying business at Harvard and teaching it at Stanford, and he was grateful for a father who gave him such great advice.

Right now, since there is no professional bridge tour (I'm sure it's coming, since they already have Poker and Blackjack), I continue to spend my days imagining better ways to move freight. All kidding aside, I would love to one day teach a course at a college or university on civic leadership, and another one on entrepreneurship or consulting that teamed students with businesses so they got a feel for how those businesses functioned. I took two courses like the second - consulting and small business management - and I know the first one exists at my university. I just don't have the experience yet to really teach those subjects as well as I would like to. For now, I am quite happy learning more about business as I work in my own.

-- Robert

Sometimes It Isn't What You Know, But Who You Know

A good lawyer knows the law, a great lawyer knows the judge. That's one of my Dad's favorite lines, and it definitely has rung true in my experience with the court system. While it pays to know your field, it often pays more to know someone important in your field. One example I like to give people from my college days refers to "legacy" students - students who get to attend a college mostly because of their relation to alumni.

"The only student I knew who got into UGA as a legacy shared a last name with at least one street and one building," I tell people. What do I mean by that? Since her grandfather had given many thousands (if not millions), she got to attend the school even though some of her classmates in high school with better scores did not. To her credit, she did graduate, which suggests she belonged there in the end, but many people never get that chance to show what they can accomplish. They were not "born with a silver spoon" in their mouths or, more likely, did not have the privilege to encounter people who could help them move up more quickly. Unfortunately, most people do not get to the top simply by their own merits. They knew someone who knew someone or who had a company that did something.... and then one day they became CEO.

One of my best professors in accounting told our class what he considered the two most important classes a business student could take outside the business school (he may have even asid outside of accounting): golf and ballroom dancing. If you can golf, you can impress your boss or your clients on outings. If you can dance, you can impress his wife, which is often equally important. My MBA classmate who had the highest salary before coming back to school was a B/C or straight C student in accounting, but he had drive, charisma, and knew how to sell. I would not be surprised to see his face on BusinessWeek or some other periodical some day. He knew how to recruit good people to accomplish his tasks. The best leaders do not necessarily know how to do everything well, but they know who can do a particular thing well, and they find out what enticement will get that person to do that thing well for their business or project.

I think genius is beautiful. I appreciate seeing someone with a wonderful skill or particular acumen for some subject achieve great things. I just hope the next great thinker to come along knows well enough how to work the system to let me be able to watch their life story on some cable channel some day - or whatever great invention it is they bring along to let me watch it somehow or somewhere new.

-- Robert

Sunday, December 9, 2007

Crazy Things Heard on the Phone

The following is a list of things I've actually heard from Tech Support, Customer Service, or other individuals who I got to talk to after sitting on hold for hours:

"Sir, can I call you back, I need go bathroom very badly," in a strong Asian accent that added to the effect of making me fight laughter.

"As soon as I get off the call with this jerk, I'll come out there," said to someone else regarding me, to which I said, "Can you finish helping this jerk before you leave?"

"Sir, you will have to pay $75 to receive support at this time," said after the previously free support tech had told me to format my hard drive and call back.

I know constantly answering support questions must be very taxing, but sometimes I wonder if on the job description it says, "nasty attitude a must" or lately if it says, "must speak in heavily accented English" on the job listing on Monster. I have a lot of experience making phone calls for charity groups or for a living, and I have been called all manner of names in those endeavors. I know it probably gets really old for some people who work in support to deal with people's ridiculous requests. They have my empathy and gratitude. I just think I have had some amazingly bad luck with tech support over the years, and those are just a few of the crazy comments I've heard. Probably among the funniest things I ever got to hear while making calls, though, came when I was working for the University of Georgia as an assistant to the Institute for Leadership Advancement. I was calling various companies to let them know about an upcoming event, and I misdialed one digit from some corporation and got:

"You have reached the Fordham Group" in a thick Northeastern accent. I realized I had misdialed one digit and dialed 1-800-FORDHAM. An even funnier call from that same list went through the automated attendant to someone who said loudly (on a recording), "I'M FINISHED."

And, with that, so is this rambling post.

-- Robert

Saturday, December 8, 2007

Cash Isn't King

Well cash IS king, right? No, I'm not driven only by cash. I seek to improve my quality of life in general, which (unfortunately) often requires cash, but cash does not achieve it on its own. Without the other forms of "money" as Todd described, my life would be a void. One thing I think I've learned in my working life is that there is "drive capital", that a person needs something to drive them. For instance, my wife's brother was an eternal underachiever, capable of perfect scores on tests while unwilling to do the mundane homework in between them. Then along came his wife, and then he finished a degree in record time, and a Masters shortly thereafter. Those who are drive solely by a larger bank account tend to find that enough is never enough, but those driven to improve the world around them - or at least the life of their spouse and children - tend to find greater overall satisfaction, which to me is a much better measure of success.

In my life, seeing my children grow up, finding ways to help them do so with a broader view of the world, that drives me. I want my business to succeed, but a large part of why is because I want my children to have a better quality of life, and perhaps one day they might want to work in that business and learn some skills. If all I cared about was improving my bottom line and nothing else, my life would be a lot less full, and (to me) more miserable. As it stands, I have good working relationships with my fellow employees, a great work environment that is family friendly (at least, as much as any trucking office can be), and a wonderful relationship with my children (and the rest of my family). I guess you could say I am Making That Money.

-- Robert

Thursday, December 6, 2007

Where do we MTM from here?

What are we doing here anyway?

Robert gave you a good introduction, but its useful for us to talk a little bit more about what exactly "Making that Money" means. MTM as you'll here us refer to a lot, means a lot more than just accumulating wealth or prestige. Let's look at one of the broadest definitions I could find for "money." says one usage of the word "money" is "any article or substance used as a medium of exchange..." So, in layman's terms if we take something--a piece of gold, a note, a rock, etc. and we can use that item to exchange it for something else, we have money.

So what in our lives would we consider "money?" Don't we use our emotions with others to exchange for better, stronger, more intimate relationships? Don't we reasonably use our skills to exchange for things like better pay, better jobs, more security, etc.? Follow along with us here at this blog and you'll understand what we mean when we talk about "money."

As idealistic college students we thought that the production of more, more, more was the way to a happy and fulfilling life. More cash, more investments more real estate, more security. You know what? We were absolutely right. Let me temper that a bit. More cash doesn't always mean more peace and more happiness. The opposite may actually be true. But it's silly for us to imagine that human beings don't always attempt to procure more in their lives. We shouldn't be ashamed of this, because it isn't necessarily a bad thing. We contend that as long as we're looking for healthy money as opposed to bad money, we are always improving ourselves in healthful ways.

So what we're doing here is pretty simple. This is a way for us to make more money, and for you to make more money. Don't be afraid of it say it loud, "we're into money and we're proud!"

We all love emotional money because that helps us interact with our loved ones better. We love social money that we save up and use to strengthen our relationships and appreciate our communities more. We all love health money because we exercise and eat right to build up the money we exchange for longer life and more energy. And who doesn't love cash money? We love cash money because it helps us do more for ourselves, our loved ones, and our world.

In these coming months and years we'll talk about the adventures in making money in all its forms. Most of all we want you to spend a little of your intellectual money with us, and we promise we'll spend a bunch with you.


Wednesday, December 5, 2007

Overselling Revisited, Selling a Product That Is Not Number One

Recently I encountered a salesman who knew very well that his product was not the most sought after in the market. In trucking, Peterbilt and Kenworth are soomewhat like BMW and Mercedes in terms of how much drivers want to drive them. They are definitely considered the premier trucks on the road by many drivers. Freightliner, by comparison, is more like driving a Buick or a Dodge. Well, when my company was deciding what type of trucks to buy, we seriously considered the Kenworth first because of its appeal to drivers - which would help recruitment - and because of its resale value. Then we met the Freightliner salesman. His argument went something like this.

"Do you like to overpay your taxes? he asked. Of course the answer was no.

"Well, buying a Kenworth is like overpaying your taxes. Sure, you can get more for the Kenworth when you're done with it. Resale is a huge selling point for them. But you pay more for it up front. I'm willing to let you keep that extra money now."

Obviously the man knew that trying to sell us on all the great things about a Freightliner was not the way to go. He openly admitted there is a product available that is more widely sought after. He just knew how to sell his product. By appealing to something good about his product without pretending it was the best available, he helped us decide to buy from him. And we did.

Selling a product in a dishonest or misleading fashion can be even worse for a business that overselling its qualities. If a salesperson convinces a person to buy an inferior product and denies a better one exists, when that consumer sees the better product he might never return to the store where he bought his inferior one. If the salesperson instead points out that the better product exists but makes a reasonable comparison of the costs versus the benefits, he will likely sell more of his own product and improve his store's reputation.

-- Robert

Monday, December 3, 2007

One of Your Drivers Just Ran Over My Car!

"I wanna speak to whoever is in charge!"

Whenever those are the first words in a conversation, a complaint is about to be lodged. I had been on the job maybe a month when I received my first such phone call.

"What is it that you need, sir?"

"One of your drivers just ran over my car!"

"Well, are you all right? Are you injured?"

"I'm fine, but I'm following him down the road and he's laughing at me!"

"Wait, if he ran over your car, how are following him?"

"You know what I mean!"

"I have no idea what you mean, sir."

"He clipped me."

"There is a lot of difference between clipped and ran over. Which is it?"

"Look, I want to talk to whoever is in charge, are you gonna let me talk to your boss or not?"

Since my "boss" was not in the office at the moment, I explained that no one there was over me. He calmed down a bit when he realized he had someone in charge.

"So, what are you planning to do for me?"

"What do you mean?"

"Who's gonna pay to fix my car?"

"Sir, I will call me driver and ask for his side of it. If you will call me back later, we can discuss this further."

I got information enough to identify which driver he was claiming hit him, and I talked to the driver. It turned out the man was making the whole thing up. I learned in time that it was a common scam in New York City (where the supposed incident happened) for people to read the phone number off the side of a truck and call the company looking for a payoff. The sharpest of these individuals know how to take an advance the same way a driver might ordinarily get one and avoid using a bank account that would allow their victims to track them down. I was lucky I did not immediately capitulate, because it clearly was a lie. The amazing thing? The man had the gall to call back and ask again what I would do. I told him to file a police report and we would be ready to listen to him. I never heard from him again.

-- Robert