Who wants to be in sales?

When you ask kids what they want to do, you hear lots of replies. Firefighter, astronaut, chef, ballet dancer (my daughter at 5 years old announced she wanted to be a “vegetarian” because she likes to help animals). But I can’t remember a kid ever telling me that they wanted to be in sales.

And yet.

Aren’t we in sales no matter what we do? If you own a business, you are in sales – or you won’t be in business very long. And unfortunately rejection is a part of sales.

I generally don’t watch the program 60 Minutes, but I saw this story about cartoonists for the New Yorker magazine. For 90 years the magazine has been known for it’s cartoons.

The story followed several of the regular cartoonists. Every week they create many cartoons, most of which are rejected. The magazine reviews hundreds and selects only seventeen. One cartoonists said that out of 700 or 800 cartoons they draw, they sell about 30. So in effect they have a 4% closing ratio.

So if you ever get tired of rejection from sales for your business, you could always be a cartoonist, but you’d probably find the rejection to be worse.

60 Minutes





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Funding Your Startup

I’ve been doing “thought work” on updating our website at www.fitleasing.com.  The site is dated and doesn’t address how we best help our clients.  As part of that, I’ve been reviewing lots of information about start-ups, business funding, etc.

I found this great video sketch about funding from Kauffman Sketchbook https://www.youtube.com/watch?v=U470xXKfDyE.  My only quibble with it is that it doesn’t explain the problems with the various types of funding (especially credit cards).  This link at Entrepreneur Magazine does a better job http://www.entrepreneur.com/article/228193  The money quote in the whole article is also from Kauffman: “every $1,000 in credit-card debt that a small business takes on, its chances of long-term survival fall by more than 2 percent.“  That’s huge and something that a beginning business owner just never thinks about.

Finally, neither of these talk about other alternative sources of funding.  Our leasing company provides equipment financing for both start up and existing businesses.  We think as part of due diligence in your business, that’s worth taking a look at as well.

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2013 Economic Recap & 2014

It’s that time! The annual year end review and forecast for 2014. Let’s see how we did last year, shall we?

Here’s the whole post from last year in all it’s gory detail http://fit-biz4u.com/blog/2013/01/  Suffice it say, as a forecaster I’d better not be spending my time in Vegas.  In short, I guessed that 2013 GDP would rise by 2.7%, Unemployment would drop to 7.2%, interest rates would rise by year end, housing prices would increase and stabilization in the US would lead to a more stable Europe and growth in Asia.

So how did I do?  Well GDP is coming in at 1.9% http://www.bea.gov/newsreleases/national/gdp/2014/gdp4q13_adv.htm, so I was way off here.  While there are many

What was your forecast?

reasons, a big one is reduced government spending caused by the sequester.  The unemployment number in December came in at 6.7% a full half point lower than my prediction http://www.bls.gov/news.release/pdf/empsit.pdf.  Not only did home prices increase, they were almost off the chart with average increases of 13% and some places growing close to 20%.  Interest rates did not rise and I don’t think they will in all of 2014 but expect them to do so at the beginning of 2015.  Europe has stabilized, but not because of leadership from America.  China, India and Brazil continue to slow, but surprisingly Japan has experienced significant growth.  In short, the economy in general continued on a positive glide path but was very uneven.  Now on to some details.

GDP/Stock Market.  While I continue to overestimate GDP growth, it’s not just me (honest).  In 2013, the stock market had it’s best year in the last 5 years.  In 2013 the S&P grew 20%, while both the Dow and Nasdaq hit all time highs.  I believe we will continue this trend, but expect stock market growth to be half that.  Corporate earnings will continue to be strong, but the equity markets will waffle as the Fed starts to restrain the amount of money they are pumping into the economy every month.  I’ll double down my GDP expectations and shoot for 2.3% growth for 2014.

Jobs.  The 6.7% unemployment rate was a welcome surprise, but like each of the previous years, it just doesn’t feel as good as it should.  Part of that is that many people have quit looking for work so they are not counted in the official statistics.  The other is that many of those jobs pay less than before, at least in the short term.  My prediction for 2014 is that the job picture will continue to get better.  That by end of 2014 we will be at 6%.  I also think that as we get closer to “full employment”, we’ll start to see wage pressure and real incomes will begin to rise by year end.

Business Lending.  Last year I said that growth in this sector would continue and that lending restrictions would loosen and that has happened.  However, business customers are still reluctant to invest so business lending is not a full capacity.  I would expect customers to be hesitant through the first half of 2014 and then start to invest more as their confidence grows.

Housing.  This sector grew much faster in 2013 than I anticipated.  2014 should moderate somewhat, but still have reasonable growth – perhaps in the 8% range instead of 15%.  Some markets are actually considered overheated and talk of another real estate bubble is occurring.  I don’t think that is accurate; housing will grow, but slower than last year.

Internationally.  I’ll lump the whole world together rather than break everything out.  Emerging markets have begun to slow down, we expect that to continue.  Industrialized economies will continue to have some growth, but slower than the US.  Unless there is a major terrorism or other geopolitical event, things should be modestly better.

US politics.  This is the gift that keeps on giving.  Previously I said that it would be hard to see how they could make anything worse.  Then in October, they shut the government down rather than find common ground.  Additionally the sequester, a poison pill amendment designed to make things so bad that Congress would have to negotiate was enacted.  If there was any sort of silver lining it’s that the sequester did indeed reduce the US deficit significantly.  What does that mean for 2014?  Impossible to say.  We reach the debt ceiling in about a month.  It’s probable that Congress will pass an increase, but I was certainly wrong about the shutdown last year.  I think that the political tone will not get better and certainly get worse as we come into the 2014 midterm elections.

So to wrap it all up.  After experiencing the worst recession in 70 years, we have had the worst recovery ever.  It has been slow, painful and the subject of partisan infighting of the worst kind which has exacerbated the process.  Having said that, American businesses, individuals and governments have reduced debt, lowered spending and are generally in much better economic shape than before the recession.  This bodes well for the long term future, although short term will continue to feel rocky and difficult.

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The 5 “R’s” – Referrals

I thought the day after Halloween would be a good day for a post. Today we’ll continue on the 5 “R’s” – this time on referrals.

Friends do what friends do

I confess, this is the “R” that I do the least, but it is one of the most important.  A referral comes by asking if someone knows anyone that could use your services.  Here’s the reason it’s important.  A referred prospect is one that has the greatest reason to trust you.  Someone they know has suggested that you would be good for them.

I can’t understate the importance of that.  If a trusted person refers you as a trusted person, you avoid all the problems that come with cold contacting.  Right before I started to write this blog, I got a cold call for a service that I actually have a need for.  Because of that I listened to the salesperson.  I ultimately did not continue the call because (a)  It wasn’t clear that he understood my problem and (b)  I didn’t know him and therefore did not trust him.  A referral takes care of the latter issue for you.

So how do you get referrals?  The reality is that most referrals go to those business people who are intentional about it – those who ask.

If you have current clients, ask if what you provided was helpful.  Then, ask if they know anyone else that could use your products or services.  Finally, ask if you could have the person’s contact information.  Sometimes you’ll get it, sometimes you won’t.  Even if you don’t get anything today, it doesn’t mean you won’t get something from that person in the future.

Here’s a key point.  Don’t let the fact that someone or even that most people won’t have a referral for you stop you from asking every person you encounter.

The next referral may be the one that leads you to the biggest job or biggest sale ever, so keep asking.

Some companies use promotions for referrals “fill out this list of 10 friends and get a free bottle of wine.”  Those are okay, but the quality of the lists you’ll get won’t be as good.

When a referral turns into an encounter, either a successful sale or not, remember to thank the referring person (Hey Jake, I spoke with John yesterday.  He doesn’t need our widget today but might be interested in the future – thanks for recommending me to him).  It shows you were both paying attention and appreciative.

People who use your products or services are more likely to know people who would want to use your products or services.  Friends do what friends do.

Wouldn’t it be great if more of them did it with you?

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Rule of Law

Yesterday I finished serving on a jury – my first time.  I have been called to serve before but was never selected.  This was a criminal case (Conspiracy and Attempted Grand Theft).  Based on the evidence, the jury unamiously voted to convict the defendant.

What was most remarkable about the process to me was the value and strength of the system.  We’ve all heard “innocent until proven guilty“.  In this case the judge was very clear that the defendant was

This is what our court looked like

in fact innocent and that status would only change if we, the jury found there was enough evidence to convict.  Also that evidence had to be strong enough to be “beyond a reasonable doubt” – another phrase we’ve all heard.  The judge described that as an abiding conviction that the defendant was guilty that would last forever.  Finally, the decision on this case was made by a jury.  Not the judge, not the attorneys or police – it was 12 people who had absolutely no connection to the case and no personal stake in the outcome.

Since this is a blog about business, here’s the point.  I remain grateful that I live in the United States of America.  Our system of laws and justice is far from perfect; but the principles our country is

A privilege to serve

based upon are sound.  In many other countries, elected officials or powerful people use the government to steal from you or to enrich themselves at your expense.  We have protections in this country.  Protections for both you and I.  That makes this a pretty good place to do business in.

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The 5 R’s – Retention

This seemed a good time to continue the series on the 5 “R’s” .  The third R is Retention.

Most businesses work hard to develop customers.  The question is then how do you keep those customers coming back?  The short answer is, make sure you have a product or service that they need or want.  However, that obscures the truth of client motivation.

For retention the customer must have a rich experience, one that makes them want to come back.  Here’s some tips:

1.  Did the customer have fun?  Was the interaction an enjoyable experience for the customer and they want to repeat it?

2.  Was there a personal connection?  Did you or your staff get a first name and use it?  Do you or your staff know something personal about them and share something related and personal about you?


Are your customers coming back for more?

3.  Did you give them a reason to come back?  Perhaps a special discount or a benefit for repeat visits.  Possibly there is a task for them as part of your services and an accountability?  Maybe you have asked for a referral and now they are your partner in promoting your products and offerings.

Finally, let’s ask this question.  If you were your client, would you want to come back?  Are you getting such a great customer experience that you can’t wait – and if not, what can you do to change?

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2012 Economic Recap & 2013 Predictions

A year ago, I gave my 2011 review and 2012 predictions (after leaving my tryptophan induced coma, remember?) http://fit-biz4u.com/blog/2011/12/27/joes-economic-predictions/. Now it’s time to see how I did.

Last year, I estimated that 2012 GDP would grow by an enemic 2.5%, that unemployment would drop from 8.6% to 8.2%, that housing would remain stuck until 2013 and so would business lending.  Also that Europe would struggle and the political season wouldn’t help, but shouldn’t hurt.  In fact I was both right and wrong on so many levels.

Let’s start with GDP.  While all of 2012 numbers are not in, GDP appears to have come in at a paltry 1.9%.  Third quarter came in at 3%, but Q1 and Q2 were 1.3% and 1.4% respectively.  It appears that Q4 will come in at 1.9% which is pretty bad given that Q4 in 2011 came in at more than double that amount.

Jobs.  So here is the upside surprise.  At the end of 2011, the unemployment rate was 8.6%.  However, as of November the unemployment rate had fallen to 7.7%.  That was better than most people predicted a year ago, but because most of that drop happened in the second quarter, it doesn’t feel all that great.

Business lending.  This one feels like Groundhog Day, although it is also better than it feels.  Business lending grew tepidly throughout the year and then pulled back near the end.  This was due to a variety of factors, but Europe, fiscal cliff and political stalement were largely to blame.  Defaults and delinquencies have stablized over the last two years.  Low rates are actually a problem, because it means for lenders there is little profit so there is little appetite for risk and still only the best business credits are getting loans.

There has been some loosening for less than “A” credits, but the pricing for those products is still excessive and credit restrictions are still too difficult.

Housing.  A year ago, I thought this was the most troubling weight on the US economy.  That is no longer the case.  Housing has begun to right itself.  The areas of the country where housing had not been such a problem are doing quite well.  Even areas that had huge gluts of unsold homes have largely sold off that inventory and new building and new growth was starting.  Home prices are still at low levels, but we expect those to start to grow along with the rest of the economy.

Corporate interests.  Large US companies are doing extremely well.  In the third quarter of 2012, corporations reach all time record profits http://money.cnn.com/2012/12/03/news/economy/record-corporate-profits/index.html.  Additionally, US companies could be sitting on as much as 5 trillion dollars in cash, both US and internationally http://blogs.reuters.com/david-cay-johnston/2012/07/16/idle-corporate-cash-piles-up/.  Companies will start to invest this cash in plant, workers and wage increases when they become convinced that doing so will generate more profits than letting that cash sit on the sidelines.

Europe.  Talk about Groundhog Day.  A year ago, we were talking about how bad Greece is and what will happen with Spain, Portugal, etc.  Today it is exactly the same.  Germany is supporting the  ”PIIGS” (Portugal, Ireland, Italy, Greece and Spain – especially Greece), and France’s economy has serious issues that haven’t come to fruition but might soon.  Europe is dancing a line between funding countries so they don’t collapse and imposing fiscal restraint that will guarantee those countries do collapse.  Seems to me that the only cure is for other economies (US and the BRIC’s) to pull Europe out of recession by increased spending. But that won’t happen anytime soon.

China and others.  So this was an unwelcome surprise for the international economic community.  China is not immune to reality after all.  China’s announced growth of 8% is enormous by US standards (400% higher than ours), however, it’s a 50% drop from their 12% growth.  China is also having to deal with an aging population that is demanding higher and better support in their declining years.  This same thing is happening in India as well (without the aging issues).  China will continue to be a dominate player, but fears of an imminent new world order are overblown.

US Politics.  A year ago, I said the following “While I don’t think that the political system will do much to further hurt the US economy, a government shutdown or default on paying its obligations would be a problem.“  The reality may have actually been worse.  With both Democrats and Republicans insisting on “my way or the highway”; fiscal cliff, debt ceiling and other debacles continue to tell businesses large and small and foriegn and domestic, that the US political class is not interested in US economic recovery, they are interested in playing to their power bases.  In this writer’s opinion, this is the number one drag on the US economy.  If the US showed strong leadership by putting aside partisan posturing and crafting sound economic policies that included pain for all  constituents, this would give businesses both in the US and abroad the courage to invest.  This however, would require leadership and political courage to oppose the interests that helped put them in office.

Summary and predictions.  I said that in 2012 we would have 2.5% GDP and 8.2% unemployment.  In fact GDP was only 1.9% but unemployment dropped to 7.7%.  Housing is getting better quicker than expected but Europe is worse and the US political equation continues to lurch from manufactured crisis to crisis with no end in sight.

So here are my 2013 predictions.  I’m an optimist.  I believe that within the first quarter the politicians will get their act together, and  resolve taxes & spending in a manner that will in general last for the remainder of President Obama’s term.  This will lead to greater business confidence both here and abroad and the US will get it’s triple A credit rating back by the end of the year (but not before).

The result will be a US economy that grows GDP by 2.7% and unemployment will drop to 7.2% in 2013.  Interest rates will begin to rise, but that will spur lending because margins are better for banks and businesses will be ready to borrow to lock in rates before they increase.  Housing will gain in importance and begin picking up steam by the end of the year.  US growth will help provide leadership to Europe, which will begin to correct, but about 6-9 months behind the US.  The growth in the US and later the EU will help with China and the rest of Asia.

So those are my thoughts.  What are yours?

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Job Creation

I generally don’t promote our company on this blog, but every once in a while it makes sense.

I started with this company in 1990.  We were a general equipment lease and finance firm.  For 9 years I worked for the company learning my craft and then purchased it when the founder passed away.  As I begin my 23rd year in providing business solutions, it’s caused me to think about what we accomplished.

Over time we began to specialize in providing equipment solutions to mostly small businesses with an emphasis on start ups, especially in the fitness industry.  During the last two decades we provided funding for over a thousand new businesses and close

Many hands make light work

to 100 million dollars in equipment.  Those 1,000 new businesses hired employees, some just a few, some many.  But, I’d have to say that the companies that we helped have added as many as 10,000 jobs to the economy.  Those workers took their hard earned pay and bought stuff, including food, cars, insurance, house payments and on and on.  The companies that the employees bought stuff from hired people in order to supply those goods and services.

I’m proud of our legacy of helping to grow the economy.  I wonder what we can do in the next two decades?

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How to pick good charities

If you’re a small business owner like me, you probably get multiple

You CAN make a difference

calls per week from telemarketers wanting you to donate to their charity. So how do you know which charities to support?

First, not all charities are created equal.  A few are very good, many are bad and lots are simply scams designed to separate you from your money.

Several years ago, I determined I would evaluate a charity by it’s efficiency – how much money went to programs versus how much went to administration and fundraising.  So everytime I get a call I say, “I don’t give very much, but I always require that you send audited financial statements to review before I give“.  90% of the callers won’t send you any information (or send you an invoice!).  Of those that do, it’s amazing how many are bad charities.  My personal rule is at least 75% of funds should be for programs and no more than 25% for admin & fundraising.

Recently however, I’ve learned that financials aren’t the whole story.  It’s easy for a charity to list an expense as program related when it’s really not.  The other important issue is how effective are they?  A charity could invest 90% of their funds on programming and yet still have all that money wasted.

Several entities provide ratings for charities.  The most well known is http://www.charitynavigator.org/.  The Better Business Bureau also evaluates charities http://www.bbb.org/us/charity/ and Guidestar http://www.guidestar.org/ collects information about non-profit groups.

These charitable evaluating entities won’t answer all your questions however.  A charity I work with isn’t listed on Charity Navigator and another I have supported has only an average rating because they don’t do at least 2 board meetings per year and they don’t send Charity Navigator an advance copy of their financial disclosure instead they just post it on their website.

So the takeaway is that if you intend to give, ask for transparency.  Can you get financials?  Can you get a sense if that entity compares favorably with other charities that operate in the same space.  At the end you want to feel that your support is making a difference.

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Not to be political, but…

While I am passionately interested in politics, I do my best not to  promote a personal point of view. However, this is an issue I feel is especially important.

Our country has been spending more than it takes in for many years.  The result has been a public debt that will be crushing for future generations.  The response of the politicians has generally been to blame the opposing party and kick the can down the road.

Some courageous public servants disagree and think we ought to look at responsible solutions now.

Here is a link to the website “Fix the Debt“.  It is a bi-partisan effort to address this long-term and difficult problem.  Supporters include Judd Gregg, former GOP Senator, Ed Rendell, former Democratic Governor and many other respected statesmen.

I strongly urge you to review the information on the website and if you are in agreement, sign the online petition.  I never sign online causes but I have this one.


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