You Might Be a Business Loser If...

I am on a Loudoun County Chamber of Commerce committee that is sponsoring a lunch in July on succeeding in the Chamber. We have assembled a panel of four successful, at least in my opinion, businesspeople. A number of people suggested one particular person for the panel. I decided, under the exalted authority granted to me by the remainder of our committee, not to pursue this person. I don't consider him either a success or someone to be emulated. Yet, if you asked a hundred other Chamber members, eighty would disagree with me.

I have been actively involved in the Chamber for three years or so. Jack has been an active member since well before I came along. He is a Chamber membership ambassador, who has sponsored a lot of new members. He has been ambassador of the month many times and, if I remember correctly, ambassador of the year. Everyone considers him a great success in the Chamber. What could I possibly have against Jack?

I don't consider Jack a success. Over the three years that I have known him, he has worked for probably half a dozen different companies as a salesperson. I don't consider any of these companies places where I would work as a salesperson. I don't want to identify any of the companies by industry, but I don't think of these companies as someplace a salesperson could succeed. The dollar amount of each transaction is too small to support substantial commissions. Not surprisingly Jack hasn't succeeded in sales for any of these companies.

How can I hold that against him? First, he isn't a good enough business person to accurately identify real opportunities. Second, he hasn't been able to land a sales job for a serious company. IBM isn't competing for his skills. Jack is a success for the Chamber, but he isn't a success in the Chamber for his employers. Therefore, he isn't a success to me. He is just a guy with a lot of time to attend Chamber events. That isn't the message we want to or should want to covey in a presentation about succeeding in the Chamber.

A couple days ago, I ran into another Chamber pretender. She is a very attractive and well-packaged woman in her forties – I am guessing on her age. She isn't in my beloved Jen Aniston's class, but who is? At first glance, this woman reminds me a lot of my wife, Laura. She is very pretty and comes across as very intelligent. However, I had an almost immediate negative, visceral reaction to her as soon as I learned a little about her. Why?

She has or had a whole bunch of businesses, none of which have amounted to anything. Her current business is providing advice to businesses on using social media. Hey – that's a unique business these days – isn't it? It's a lot like being a real estate agent in Florida during the boom. I had a bell hop at a hotel pitch real estate to me during a vacation trip to Disney World.

What is this woman's experience in social media? Her level of experience is apparently about the same as mine. She knows what a hash tag is. Her other businesses have nothing to do with marketing as near as I can tell. She is just another person waiting to be buried in the graveyard of stupid business ideas. Why should that upset me?

She makes succeeding in the Chamber much more difficult for the real businesspeople in the Chamber. When a real business person attends a Chamber event and sees the number of people like her attending the event, he / she gets turned off. I hear this comment a lot, “How many business losers do I need to know in a lifetime?” Not everyone uses the word, loser, but they all mean that.

Business networking is a lot like dating on a number of levels. If you want to get beyond first base with either a date or a potential business prospect, you have to bring something to the relationship. If you don't have a real business, you bring nothing to potential business contacts. You don't deserve even a kiss on the cheek.

With all due respect to Jeff Foxworthy and in respect of any royalties I may owe him – you might be a business loser if:

1. You have owned three or more different and unrelated businesses in the last five years.
2. You have been employed by three or more companies in the last five years.
3. None of your businesses has ever achieved more than $30K in annual revenue.

Business losers are guilty of not sticking with anything long enough to succeed. The lady with the social media company won't succeed, but her failure will have little to do with her social media consulting skills. Obviously, I don't have any faith in her skills, but skills can be learned. She will fail, because at the first sign of difficulty, she will be off to another business idea. I have no clue what trendy home business idea will pop up next, but I know she will be there.

If you are interested in non-snarky business advice, check out the Stitely & Karstetter tax and accounting blog at www.skcpas.com. Thanks for reading!

Get Your Priorities Hijacked – Solving the Population Crisis

Let's start out with an unfortunate fact. Seven billion human beings is too many for the earth to support. We have to find a way to decrease the surplus population. You can call me Scrooge if you want, but I am prepared to offer a real suggestion to save our overloaded, under loved planet. I suggest decreasing our population by ridding ourselves of all the people, whose jobs waste other people's time. Let me give you an example of just such a person.

My wife's patience is being sorely tested by an oxygen waster at work. Laura is trying to submit an expense report to her company to be reimbursed for her travel costs using our fine Washington DC metro transit system. She is entitled to receive $120 monthly to defray the costs of using mass transit. Since she is a thorough, due diligence type of gal, she got on her employer's web site and read the instructions for submitting the claim for reimbursement. Her employer's policy requires the submission of either a log detailing the daily commuting expense or metro transit receipts. Laura elected to submit a daily log since the metro system doesn't print a receipt every time you take a trip from Vienna to Foggy Bottom for example.

Laura submitted her expense report, which was promptly rejected by the “expense report auditor”, who exists somewhere deep in the bowels of an office complex in Tennessee. There is something you should know about someone with the exalted title of “expense report auditor.” This person is no more a real auditor than my left big toe is the Pope. My right big toe is the king of England and my nipples are named Jack Ham and Jack Lambert, but those are stories for another time. The expense report auditor is really a lowly accounting clerk with a ridiculous title. Of course, giving someone an exaggerated title is always less expensive than paying a real salary. In the accounting world, this auditor is lower than whale dung on the bottom of the ocean.

Why was Laura's expense report rejected? Ms. Whale Dung decided that she could require receipts in addition to the daily log despite the company's policy of requiring one or the other. You might wonder if there is an IRS rule requiring the receipts and the auditor is just being a good steward of the company's fine reputation. Since I am a bit of an expert in this area, let me research this. I'll be back in a minute........ The answer is that the log is sufficient for the IRS.

Why is this battle of wills between Laura and Ms. Whale Dung important? Because this battle is costing Laura's employer a lot more money than just a $120 travel reimbursement. This battle has tied up hours of otherwise productive, and did I mention yet – billable time. Ms. Whale Dung isn't just wasting her own time. She is wasting Laura's time and the time of a number of other employees, whose jobs are to produce revenue for the company. These employees are all six figure salary types. Their time is just a bit more valuable than Ms. Whale Dung's time. This expense report will end up costing the company five grand or so. Five grand isn't a whole lot of money to a large company, but Ms. Whale Dung is probably a repeat offender. She is a time thief who costs the company money by wasting the time of revenue producers. That wouldn't be her description of her job, but most criminals deny their guilt.

I am not suggesting that the company save money by harpooning Ms. Whale Dung. Well, maybe I am. A more reasonable suggestion would be sterilizing her and any descendants. That would contain the genetic mutation that would make someone desire a job as an expense report auditor and help decrease the population thereby saving planet earth. Quick - somebody call Al Gore. He could make another movie.

If you are looking for real accounting and tax advice, check out the S&K blog at www.skcpas.com. Thanks for reading!

Hire a Consultant - Business Vampires

Let's start out with a hypothetical question – at least I hope it's hypothetical. If you were a vampire, would you feed on healthy or sick people? I would feed on healthy people to get better quality blood. Of course, I don't have much experience in this area other than watching “True Blood” on HBO.


Two months ago, I met a business vampire (consultant), who sucks the blood out of sick companies. He focuses on sick companies, because no healthy company would ever invite him in. And, we all know a vampire needs an invitation to enter.

I have (or had as it turns out) a client in the construction industry, who has been in financial trouble for the last year at least. His business has suffered from the recession as have almost all construction contractors. But his business has a fundamental problem most other construction contractors don't face. He has to order and pay for his materials six and sometimes nine months before he gets paid. He has a custom product that requires a month lead time to get from the manufacturer. Then,he has to hold the material until almost all the other contractors on the job are finished to install his product. If the other contractors are late getting done, he has to wait. If they get done on time, and he isn't ready, he faces financial penalties. His business is a really tough business.

Of course, he needed good bank financing, and I helped him find a bank that generously provided that financing. But over time, his revenue began to trend downward with the recession. He faced serious problems keeping his bank line of credit within terms while still paying vendors to get material for new jobs. Eventually, he was forced to violate the terms of his bank financing, and the bank wanted a plan to get back within terms. That plan would almost certainly involve a new capital source. In case you haven't noticed, not many investors are interested in financing construction businesses in trouble.

When the bank became insistent on cutting its exposure, Fred began a desperate search for anyone, who could potentially rescue the business. I introduced Fred to a reputable investment bank, who began a search for potential merger partners. The investment bank actually had a couple of prospects. However, in the middle of putting together the financial information for the potential merger partners, Fred was introduced to Greg. Greg told Fred that he had investors just waiting to invest in fine businesses like Fred's – even businesses in trouble. Fred would only have to give up a minority ownership interest, and he could operate the business as before. All Fred needed to do was hire Greg.

Fred scheduled a meeting with the bank. When I showed up for the meeting, Fred introduced me to Greg, who had brought along his trusted accountant, who looked like the crypt keeper. He was so old, I wasn't certain he would survive to the end of the meeting. After exchanging a few pleasantries with the crypt keeper, I determined that he knew absolutely nothing about the construction business.

Before the banker showed up, the four of us had a brief pre-meeting meeting to come up with a plan to present to the bank. Greg and the crypt keeper had absolutely nothing in mind to present to the bank. I offered a plan where the bank would provide additional capital for new jobs in exchange for receiving all of the profit from those jobs. That way, Fred could get the material for new contracts, and the bank would be able to gradually reduce its exposure as the line of credit was paid down. My plan wasn't perfect. There ain't no perfect in this situation. Fred would have very little money for overhead expenses, which meant he would have to make deep cuts. But he would live on to fight another day. Greg opined that my plan was near genius. The crypt keeper wheezed in agreement.

When the banker arrived, we presented my plan. The banker, who is a personal friend and someone whose business opinion I greatly respect, was non-committal. I had anticipated this. He agreed to take the proposal back to the bank's other executives. I had told Fred this was going to be a tough sell. At least, Fred was still in the game.

After we completed the discussion of my proposal, during which Greg and the crypt keeper thankfully kept quiet, Greg launched into his presentation. He stood at the head of the conference room sketching out his vision of the world on a flip chart. His first phrase to the banker was, “You know you can trust me.” When I hear someone lead with that, I know the world is about to come to an end. Of course, the banker had no clue who Greg was or what he was up to.

Greg continued on, spewing forth about the difference between venture capitalists and vulture capitalists and how you never want to deal with the vultures. Of course, none of this was remotely relevant. The banker just wanted a plan to get repaid. He just nodded politely throughout. I was mortified that our good proposal might be forgotten after Greg's presentation. Any college professor would have failed even a freshman business student for giving that presentation. There wasn't even a hint of substance or a plan to pay the bank except with some unnamed source of either equity or debt capital, who was ready to invest in two weeks. Mercifully, the meeting soon ended, and the banker left.

Greg, Fred, the crypt keeper, and I walked from the conference room to Fred's office. On the way, Greg told me how impressed he was with my plan. He told me he had a lot of important friends – like Lindsay Lohan's father. Greg told me he had vacationed with Lindsay's father in the Hamptons, and that he would soon introduce me to all of his important and rich friends.

When I got home that night, I told my wife, Laura, “We are damned.” Instead of “damned” I actually used a synonym for coital relations that begins with the letter “f”. I think I also added “doggie style” to the phrase.

The two weeks Greg had promised the banker soon passed. Now we are at two months with no sign of any money. Greg hired his wife, Mrs. Dracula, to suck out all the blood even faster. Then he fired all of Fred's office staff. Of course, there is no investor and no money. Greg is a vampire, who feeds on nearly dead business owners. He isn't even a competent vampire let alone a real consultant. The moral to this story is simple, never invite a vampire (consultant) in to run your business.

On a happier note, I now get the popularity of yoga. A couple of days ago, I was doing my normal stretching routine at Lifetime Fitness. My wife was scheduled to take a 3:30PM yoga class. As I finished stretching, I smelled a familiar acrid odor, that could have come from the psychedelic 1960's, wafting out of her slightly ajar classroom door. Now I get it. Yoga is a bunch of women who get high, lie down to nap, and call it exercise.

I have started a new exercise class for men. It involves drinking beer, watching sports, and belching. I call it beerobics. Last Friday, we held our first class at Buffalo Wild Wings. Mike Otto, Neil Richman, Jon Butt, and I worked out together. We were exhausted afterward. I needed a good ten hours sleep and four Tylenol to recover.

Thanks for reading. Check out our real S&K web site at www.skcpas.com. You'll find real advice there. I promise.