Monthly Archive for December, 2012

Jim’s 2013 crystal ball predictions

Here are my 2013 predictions. Buckle up, especially if you suffer from triskaidekaphobia.

Prediction: Whether before or after January 1, the political class will claim “fiscal cliff” avoidance, but the unleadership product will be more postponement than policy.

Prediction: The two dominant factors in the 2013 economy will both be government-created headwinds: tax increases and Obamacare.

Prediction: Small business uncertainty as a decision-making factor, now worse than during the Carter administration (according to NFIB), will continue for the fifth consecutive year and produce the following specific behaviors:

  • Continued reluctance to hire full-time employees.
  • Capital investment more for maintenance than growth.
  • Continued bank loan demand below recovery levels.

Prediction: The NFIB Small Business Optimism Index has been recorded below 93 points 58 times since 1973, with 34 of those in Obama’s first term. There will be more in 2013.

Prediction: Chronic unemployment and persistent under-employment (U6) will continue due to the following factors:

  • Small business’s ability to adopt technology as a productivity alternative to hiring.
  • Obamacare’s compliance floor of 50 full-time employees.

Prediction: The unemployment rate (U3) will remain above 7%.

Prediction: U.S. GDP in 2013 will remain moribund, below 3%.

Prediction: For the first time in history, the national debt will exceed GDP, putting the U.S. on a short but ignominious list that includes Greece.

Prediction: The U.S. credit rating will be reduced for the second time in history during the Obama presidency.

Prediction: State insurance exchanges, structural platforms for Obamacare, will not be ready for the 2014 launch.

Prediction: The 2014 Obamacare “guaranteed issue” mandate will artificially cause increases in 2013 health insurance premiums.

Prediction: Israel will be under more regional pressure, and able to count on less global support, than ever in its modern history.

Prediction: While feckless and fecklesser - the U.S. and the U.N - watch, Iran will take the world across a nuclear Rubicon.

Prediction: At a price too great, the Newtown tragedy will create a comprehensive national conversation on violence in our culture, not just more gun laws.

Prediction: Alabama will defeat Notre Dame in the BCS Championship game in Miami.

Alas, 2013 is shaping up to make us think of the Mel Brooks movie, “High Anxiety.” Just the title; not the comedy.

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In defense of scrooges everywhere

Some say I’m a scrooge; they might be right. But here are three exhibits in my defense:

1. The early part of my career was spent in retail, which is tough on the holiday spirit. There’s a syndrome for everything else; why not one for retail survivors? Let’s call it PTHSS: Post-Traumatic Holiday Shock Syndrome.

2. Since I don’t wait until the holidays to give someone a gift, I just don’t get all worked up about holiday giving. Not that the ladies mind getting stuff all year (let’s not lose our heads!) — it’s just that they want me to be giddy about giving at Christmas-time. Giddy? Bah! Humbug!

3. As an avowed contrarian, it would be antithetical for me to feel obligated to do what everyone else is doing. And one thing that is part and parcel of the holiday season is obligation. For example:

a) If someone gives my significant other and me a last-minute gift before Christmas, “Other” feels obligated to reciprocate. I don’t. I’ll do something nice for them in March.

b) After the holiday cards have been sent, if a card comes in from someone not on your list do you rush to reciprocate? Not me – maybe next year. In fact, to a scrooge, not reciprocating is endearing.

It’s not that I don’t like the holidays. As a Christian, this is an important time in my faith life. As a capitalist, the importance of holiday spending to the economy is not lost on me. But I just don’t care for what we self-absorbed humans hath wrought on the holiday season; and if that makes me a scrooge, guilty as charged.

On behalf of my misunderstood brethren and sisteren (I heard of a female scrooge once), let me clear up a few things.

1. Scrooges can be lovable – even cute.

2. Some are actually generous, but without the giddiness.

3. Scrooges can be compassionate without saying, “Bless their hearts,” over and over.

To influence my acquittal, I offer two challenges into evidence; one for me and one for us:

1. I challenge myself to be more receptive to, and tolerant of the silly parts of the holiday season. But please, be patient; the mill of a scrooge grinds slowly.

2. I challenge us to be more generous, loving, thankful and spiritual all year long, not just during the holidays.

Imagine what would happen if we all practiced peace on earth and goodwill toward everyone, every day. It might sound something like this: “Let’s help those people right now, in the middle of July!”

Peace to you and yours. Shalom. Salaam. Que la paz este con ustedes.

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What’s worse than evil?

My wife and I were driving on a road trip when we first heard the news about what happened at Sandy Hook Elementary school in Newtown, CT.

As the news came in over the radio, I realized there isn’t a word in the English language that adequately describes the level of evilness that causes someone to execute small children. Either we have to create a new word that means something worse than evil, or we have to stop using it for anything else.

From hundreds of miles away and only connected to the reality by media reports, just the mere awareness of such a Godless act produces an involuntary feeling that makes you sick, angry, and cry, all at once. After the 9/11 terrorist attacks, whenever I thought about what those murderers did, for days I couldn’t stop shaking my head in disbelief. The news of Newtown makes me shake my head, even today.

As our nation shakes its collective head and wipes away the tears, one thing will result in the days, weeks and months ahead: There will be a national conversation about what caused such an act and how to prevent another one like this and so many others in the past few years, especially since Columbine. Indeed, President Obama has promised it and we should all contribute to this conversation.

But here’s what we shouldn’t do: We shouldn’t focus on objects as the problem. A gun didn’t create this nightmare, a human being did. Before we let ourselves and what our society has become off the hook, let’s remember that the worst school massacre happened in Bath, Michigan in 1927, and the tool was dynamite. Let’s remember that fertilizer was the active ingredient in the Oklahoma City attack by McVeigh and others. In a school of unarmed women and children, a man possessed of evil could have killed many helpless children with a single kitchen knife.

Guns are not our problem anymore than dynamite or kitchen knives are. What you and I care about – our values – govern our behavior. And our values manifest from what our minds consume. Just this weekend, one high school student in Oklahoma wanted to kill students in his school, but his plan was thwarted by another student who, obviously, was grounded in better values.

If we’re going to have a national conversation about preventing mass murders, let’s be honest enough to ask what role the following are playing:

  • Increasing violence on TV and movies
  • The proliferation of video games where real people push buttons to kill imaginary people
  • Reality television programs that appeal to the most base human emotions and characteristics
  • Political rhetoric that attempts to divide us as Americans, instead of appealing to what Abraham Lincoln called, “the better angels of our nature.”
  • The diminishing of religious faith as a foundational component of American society
  • (Your example here)

Nothing we do can bring back those precious angels or the heroic and selfless adults who attempted to save them, knowing they would probably die in the process. But we can honor their memories, and possibly prevent other such tragedies, by demonstrating the courage to turn the responsibility on ourselves.

Objects are neither good nor evil – they’re just tools. Only humans are capable of intentional good and premeditated evil.

When the 18th century Irish philosopher Edmund Burke penned this wisdom, “All that is necessary for the triumph of evil is for good men to do nothing,” his was not a technological world. Perhaps today he would add, “And since evil is easier to leverage than good, the good people have to work harder.”

On 21st century planet Earth, all good people have to work harder to fight evil. And surely, our first job is to seek the truth.


On The Small Business Advocate Show I talked more about the conversation that needs to be started on how society - and it’s laws - may have contributed to the ability for people to leverage evil easier than good. Click here to download or listen.

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Ask the owner of your business where it’s going

Do you know where your small business is going next year?

The best way to find this answer is to ask your business’s owner. But do you know the right questions to ask yourself in order to increase your ability to accomplish next year’s business goals?

To help you get started, here are five questions proposed by John Dini, one of the top management experts I know. Following John’s questions, I’ve added my thoughts to give you a little jump-start.

Question One: How much sales revenue do we want to achieve next year?
If you want to grow, it all starts with driving the top line on the profit and loss statement (P&L). How does your prior sales performance, organizational capability and ability to grow customer relationships support your new sales projections?

Question Two: What gross profit goal do we need to achieve to accomplish our operating goals?
Gross profit is sales revenue minus cost of goods sold (COGS), and it’s what covers operating expenses on the way to net profit. Be sure to align this goal with your new sales projection, because increasing revenue at the expense of gross profit is a fool’s errand.

Question Three: What are the most important things we can do to achieve this performance?
Better marketing? More advertising? Better sales training? Staff changes? New products? Better online capability? Expand market penetration? Start with the one that looks the most like low-hanging fruit and proceed from there.

Question Four: How should my own role in the company change in the coming year?
Each year, every business owner should fire themselves from jobs they no longer have to do and promote themselves to new jobs only they can do. Delegation and professional growth is the key to management success and ultimately, business performance.

Question Five: What is the most desirable personal goal I would like to make for myself?
If a genie gave you one wish to make your personal life more fulfilling, what would it be? More family? More golf? More bridge? More fishing? More whatever-the-heck-I-want-to-do-whenever-I-want-to-do-it? You’ll be a better manager with healthy outside interests.

Of course, these aren’t the only questions – just good ones to start with. Our job – John Dini and me – is to help you climb out of the trenches long enough to ask the owner of your business where it’s going.

Ask yourself these, and any other questions you think of. Then write down the answers and make it happen.


On The Small Business Advocate Show I regularly talk with John Dini, founder and operator of the most successful peer group franchise in North America, overseeing 15 monthly meetings of business owners’ groups under the auspices of The Alternative Board®, about growing your business - and your employees. Click on one of the links below to listen to our conversations on starting the New Year off right.

Starting the New Year off successfully

How can you grow revenue and profits?

Evaluating your role as the leader of your business

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Small business and the “fiscal cliff”

The only thing that exceeds the lack of leadership in Washington, D.C. these days is the level of partisanship.

For most of the last two years, the political class has demonstrated proof of these two ignominious distinctions by failing to minimize the damage – if not provide solutions – to a number of fiscal challenges facing the U.S. government. Democrats and Republicans have continued to walk away from the negotiating table with nothing more than a temporary fix and full knowledge that on December 31, 2012, the calculus created by expiring governmental laws and the rude laws of economics, will cause the government to go over the dreaded “fiscal cliff” and take the economy with it.

And now, with the drop-dead date looming, the economic implications of political dysfunction are filling up the windshield of every small business as we race toward the year-end precipice. They know on the other side are multiple tax increases and mandatory budget cuts that will drain cash from consumers and businesses, which many economists predict will lead to another recession. As a consequence, way too many small businesses that barely made it through the Great Recession won’t survive a Double Dip.

With the November 6 election producing little change in the balance of political power, or the players, can we expect the same unleadership dynamic to fix in a matter of days what didn’t get fixed when there was plenty of time? Isn’t that Einstein’s definition of insanity?

We wanted to know what our small business audience thinks about this issue, so recently, in our online poll, we asked, “How do you feel about the ability of President Obama and Congress to avoiding the ‘fiscal cliff?” Here’s what we learned:

Just over a third said they were “Confident” of a fix, with the “Undecided” coming in at 7%. But the big group - 57% - allowed that they had “No confidence” the fiscal cliff would be avoided.

Alas, with precious little time left, it appears that our poll majority may be the accurate one. Meanwhile, small business owners still can’t make informed budget, pricing, and growth decisions for 2013. Here’s some rich irony: If we ran our businesses the way the government runs its affairs, there would be no private sector income to tax.

And yet the political class still wonders why businesses of all sizes aren’t hiring more workers and making more investments.

The 19th century French philosopher de Tocqueville said, “In a democracy, we get the government we deserve.” Rude, but sadly, still true.


This week on The Small Business Advocate Show I talked more about the impact of the fiscal cliff on small businesses with Chuck Kadlec. Chuck is a member of the Economic Advisory Board of the American Principles Project, and former Managing Director of J. & W. Seligman & Co. Inc. and Chief Investment Strategist for Seligman Advisors. He was also Jack Kemp’s economic advisor during his 1988 presidential campaign. Click on one of the links below to listen to Chuck’s fiscal cliff predictions.

Republicans should retreat from fiscal cliff talks

Boehner should take what he can and fight another day

The fiscal cliff dysfunction is already hurting small business

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Recapping Jim’s 12th annual predictions, his results and score

Here are my 2012 predictions, what happened and my score.

Prediction: U.S. GDP will improve from 1.7% in 2011 to 2%.
The most recent Dept. of Commerce report has 2012 GDP at 2%. +1

Prediction: Small business optimism will improve.
The NFIB Index showed optimism barely improved, but still better. +1

Prediction: Unemployment will remain above 8%.
7.9%.  -1

Prediction: Expect reports of unfilled skilled jobs due to lack of qualified applicants.
Multiple sources indicate up to 1.5 million unfilled skilled jobs openings. +1

Prediction: The European Central Bank will prevent a financial melt-down, but not a European recession.
The EU recession continues and is deepening. +1

Prediction: Iraq will prove unworthy of the price paid to liberate it.
Al Qaeda has returned to Iraq and Iranian weapons are crossing Iraq to arm Syria and Hezbollah. +1

Prediction: Iran nuclear program will continue to influence oil prices.
Avg. 2012 crude prices, $103 PPB, from $99.85 in 2011. +1

Prediction: Obama will approve the Keystone Pipeline.
President Obama proved he is more committed to a war on carbon fuel than lower energy costs for businesses and consumers. -1

Prediction: Occupy Wall Street participants will increasingly look more like anarchists than reformers.
With the motto, “World Revolution,” OWS is searching for relevance, like attaching to Wal-Mart protesters. +1

Prediction: Wall Street will continue to be a leading indicator only of itself, not the economy.
U.S. economy is barely growing, yet stock indexes are at near record highs. +1

Prediction: The Supreme Court will rule Obamacare unconstitutional.
Chief Justice Roberts literally rewrote the law for a contrived ruling. -1

Prediction: Mitt Romney will be the Republican presidential nominee.

Prediction: Joe Biden will not be on Obama’s 2012 ticket.
They actually did talk about it. -1

Prediction: Barack Obama will be a one-term president.

Prediction: Republicans will retain control of the U.S. House.

Prediction: Democrats will lose control of the U.S. Senate.

Prediction: Alabama will defeat LSU in the BCS Championship.
Bama 21, LSU zip. +1

This year, 65% accuracy. Underestimated the president and his Chicago machine, and overestimated the electorate.

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