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Gasoline prices are up sharply and have doubled since Obama’s first election. Who or what is most responsible for this price hike?
13% - It’s the greedy oil industry - refiners, producers, OPEC
42% - Obama’s green agenda and anti-carbon policies contribute to high gas prices
24% - We’re all responsible because of our dependence on carbon fuel
The average price for gasoline in the U.S. has essentially doubled to almost $4 a gallon since President Obama began his first term. We wanted to know who you thought was the most responsible for this increase, so in our poll last week we gave you four possible options.
As you can see, one-fifth of our sample thinks the price of gas is just market driven, with 13% blaming oil producing countries and corporations. Almost one-fourth of you allowed that our collective dependence on carbon fuel makes us all to blame for high gas prices. But the big group, 42%, puts the blame on President Obama and his ideology and policies.
On that last response, there is precedent for a president’s behavior affecting oil prices. When crude prices last reached a high level, President George W. Bush merely announced his intention to encourage more oil drilling in the U.S. and prices dropped like a stone. I believe if Obama wanted lower gas prices, he could do something similar, like reverse his position on the Keystone pipeline and his opposition to drilling. Remember, Bush didn’t do anything different, he just announced his intentions. I think the president should give that “announce” thing a try, don’t you?
One of the things that has become abundantly clear about modern humans is that there are definite rewards and consequences for the way we live our lives.
The most obvious example is the way we treat our bodies — this stack of protoplasm that drives our spirit around. Surrounded by plenty and extravagance, our eating habits can lead to longevity or brevity. We know that smoking shortens life, as does drug and alcohol abuse. And since more and more of us pursue a sedentary profession, lack of exercise can affect our quality, as well as our length of life.
Recently, a cardiologist friend told me that over half of his practice involved treating patients who were sick because of their lifestyle alone. A sobering statement.
But that is an example of what we do to our flesh and blood. What about that thing I mentioned that is driven around by our protoplasm, the spirit?
At this stage in my life, I’ve noticed that many people my age are emotionally and spiritually adrift. When I use the word “spiritual,” I’m not talking about theology, although that could be part of the equation.
In my anecdotal observation of this phenomenon of humanity, I’ve noticed that everyone I know who fits this “adrift” category has one thing in common: They have lived their lives without having anything in it that was more important than themselves.
This group was more likely to not have an active faith life. They were more likely to have not volunteered over the years for some social, community or religious cause that allowed them to contribute to people whom they would never meet. In short, they had spent very little of their lives putting others first, including their own children.
What have I learned from my observations? I’ve learned that just as we should nourish and exercise our protoplasm, making sure we avoid things that harm our flesh, we should also nourish and exercise our spirit. And in my opinion, one of the best ways to do this is to spend as much time as possible putting other people, and worthy beliefs, above our own immediate gratification.
What does this mean for small business owners? I think it means that we should take care not to let our precious business, that we have nurtured from birth and love so much, become the single most important thing in our life. This is a challenge I make to you and I also make it to myself.
Oh, and cut back on the doughnuts and get yourself to the gym a couple of times a week.
Anyone who has ever tried to grow a small business knows that it has at least one behavior almost exactly like a teenager: It’s always asking for more money than you can fund. But unlike a teenager, your business doesn’t have one outstretched hand – it has dozens.
Indeed, Blasingame’s 3rd Law of Small Business states: “It’s redundant to say ‘undercapitalized small business.’”
As children approach adulthood, their parent’s personal gratification is increasingly deferred. That beach-front condo or new sports car can’t compete with paying for braces or college.
Similarly, for the owner of a growing small business, the gratification that is typically deferred is funding a personal retirement plan separate from the business. Too often, funding a 401(k) plan, for example, takes a backseat to making payroll, expanding the online strategy or funding sales growth.
We wanted to know how small business owners were handling retirement planning, so we asked my radio, Internet and Newsletter audiences to select the option that best describes their plan. The good news is that four-in-ten said, “I am funding a retirement plan (IRA, 401(k), etc.) separate from my business.”
Unfortunately, the other 60% of our sample conformed to the teenager metaphor. For example: “I haven’t established a plan because my business always needs more cash,” was chosen by 23%. One-in-five of our respondents said, “I have a retirement plan, but currently am not able to fund it.” While slightly fewer, 17%, said, “I am counting on my business to provide for my retirement when the time comes.”
On this last point, whether through a sale or continued operation, some business will produce enough dependable income to fund the successful retirement of the owners. But the reality is, for many reasons, this is not a basket to put all your retirement eggs in.
There comes a time when a growing company’s operational and market critical mass should produce sustained profitability. At that point the business owner should act like a parent when the last kid is out of college – stop deferring gratification and start accruing it, like funding a separate retirement plan.
Just like weaning an adult child off of the family payroll, allocating profits to the personal retirement plan of the owner requires intention, planning and even some tough love.
An earthquake is arguably the rudest of nature’s reminders of how insignificant we humans are. And even though we’re no longer shocked to hear about one happening somewhere else, still, it’s difficult to imagine how devastating a 9.0 earthquake can be. Even though footage of the associated tsunami, further emphasizing the awesome power of nature, may take our breath away, we’ve come to expect this one-two punch when the planet’s tectonic plates shift near an ocean.
But when nature performs the hat trick by unleashing its force under, around and over volatile man-made devices called nuclear power plants, as recently happened - and is still happening - in northeastern Japan, the needle of our disbelief meter pegs off the chart.
Here in the U.S., it was looking like the more than 30-year nuclear power plant construction moratorium, created by the 1979 Three Mile Island accident, was just about to end. Now what? Is this a sign from God, or just a disastrous coincidence.
Political and environmental interests seek desperately for non-carbon energy alternatives. But in the face of what’s still unfolding in Japan, what is the nuclear energy appetite of Americans? We wanted to know what you think about this, so we asked the following question last week in our weekly poll in the Newsletter and our website. “The Japanese disasters have put the potential risks of nuclear power in focus. Do you think we should continue to build more nuclear plants?” Here’s what you said:
Those who thought we should put things on hold at least until we see how things turn out in Japan represented 5% of our respondents. Surprisingly, only slightly more, 8%, said the Japanese disaster proves that nuclear energy is not worth the risks. But a resounding 88% of our sample said the U.S. should continue to develop nuclear energy, acknowledging that no energy alternative is without risks.
We continue to live the Chinese curse, “May you live in interesting times.” It will indeed be interesting to see how the alternative energy debate plays out over the next few of years. And while thinking about where you want to take your small business, remember what a wise person once said, “Life is what happens when you’re making other plans.” And, as we’ve come to know too well, nature is a big part of life.
On The Small Business Advocate Show, I talked with Andrew Sherman, partner at the global law firm, Jones Day and author of many books, including Be the Truck, Not the Squirrel, whether the events in Japan could have been predicted.
Japan and Middle East Black Swan events with Andrew Sherman
Please click on the interviews and take a few minutes to listen to our discussions. We’re also interested in your comments, so please tell us what you think.
The beginning of a new year is the perfect time to revisit tried-and-true operating fundamentals that have served businesses well since Og traded skins to Gog for shells.
Regardless of where your business is on the economic recovery time continuum, focusing on these fundamentals, and others, will produce positive results quickly.
1. Declare war on excess inventory. Don’t miss a sale; but don’t let one piece of inventory spend the night in your building unless it’s essential.
2. Review all operational steps, and eliminate or fix inefficient ones. Focus on the pennies; the dollars will take care of themselves.
3. Review all contracts for services received to make sure you still need them. Your customers are doing the same thing, so get ready.
4. Interest rates are still low. Talk with your bankers about adjusting any outstanding notes to the new rates.
5. Keep your bankers informed about how things are going. The title of the shortest book ever written is Loan Officer Courage. An uninformed banker is a scared banker, and no one ever got any help out of a scared banker.
6. Employees spend most of your cash. Have a meeting, and ask them to help you identify ways to maximize margins and cut expenses. Write those things down, and put them into the new budget and your operation. What’s their motivation? How about job security?
7. If you rent, have a pow-wow with your landlord. Get any concessions you can, and don’t be afraid to be creative. But remember, the more the landlord moves in your direction, the longer the lease commitment will be expected.
8. Convert non-performing assets to cash, even if you have to short-sell something. What things were worth last year has no bearing on what they’re worth today, and they will be worth less tomorrow. If it’s not performing, cut it loose.
9. Profit is the Queen of business, but cash is King. Tighten up credit terms with customers. Have a meeting with your sales staff to make sure they understand the new policies. Stay close to your accounts receivables – real close.
10. If possible, personally call on every customer soon to have a business visit, not a sales call. Lay out your case for how you will serve them in the coming year, but also reveal what the relationship needs to look like for it to be good for you. Think partners, not adversaries.
Focus on the fundamentals, and claim your own economic recovery in 2011.
I talked more about focusing on small business fundamentals recently on The Small Business Advocate Show. Take a few minutes to listen and leave your comments.