LizBizBuzz

The Recession is Over. So Where Are Your Customers?

Okay, so now you've heard the recession is over. I don't know what exactly what it means, jobs are scarce, credit card lenders are raising interest rates and banks aren't lending money to small businesses. I wonder what it would look like if the recession wasn't over? 

Maybe more of the same?

As the Newsweek article puts it: "When the economists proclaim a recession is over, they're celebrating a technicality: they mean economic output has stopped contracting. And while that's good news, you might wait awhile before adding Judy Garland's rendition of Happy Days are Here Again to your iPod."

What's the point? It doesn't matter whether the recession is over or not. What really matter is when will your customers be back and why aren't they buying from you? Most likely they're not buying from you or anyone else.  If you can acknowledge this, you"re on the road to recovery. If you're still in the unbelieving stage, your business is in trouble. There are still businesses out there that believe if they continue doing the same things the same way the customers will come. There are lots of businesses out there that believe it will all go back to the way it was. To believe this is to believe in fairies and warlocks.

Einstein's definition of success was doing the same thing over and over again and expecting a different result.

Many of the companies that exhibit these behaviors are companies that have been successful. They believe that success still awaits them no matter what they do. Unfortunately they are wrong. You've probably heard the expression, "what got you here will not get you there." Clinging to the past and what worked before will not move you forward. What will get you there there will be your ability to change, not your ability to cling to the past.

I speak to business owners every day; I admire the ones who call and say, "I don't know about that kind of stuff, meaning the Internet, but I hear it's where my customers are congregating."  These are the ones who will probably survive and grow to be different companies. They will be lean, mean and accountable.

I spoke with a business owner the other day who apologetically said,"When this is over, we won't look like the same company." I asked why he was upset and he said because his company was always looked upon as leaders and now they would have to  downsize. Let's face it, there are fewer customers in the marketplace and probably more businesses than ever who are chasing these customers. As a country we have never been here before and there's no blueprint for success. Smart business owners will have the guts to look the problems in the eye and say, it's time to move on. The bottom line is the bottom line and that's  pretty much it. I know that doesn't sound revolutionary, but neither does "we're waiting around for them to change" or "I'm waiting for the customer to come back." 

By the way, in case you didn't know it, customers haven't been on vacation. Customers are just apprehensive.  

So how do you change? Change is never easy; in fact, the more you know the less you think you have to change. While times are good many business owners stood waiting for their "payoff." Unfortunately it never really came. In fact, many of those who sold their businesses had to scurry back to reclaim what was left of their failing business. Why did this happen? Most of them sold the business to someone who was like the: running the business the same way. The new owner didn't think about changing either. 

One of the things that happens to owners is what Marshall Goldsmith calls the Paradox of Success: "I have succeeded, I can succeed, I will succeed and I choose to succeed." It reminds me of another powerful expression: "veni, vidi, vici" -- I came, I saw, I conquered. Why doesn't it work? Because it's not that simple. What is happening in the marketplace requires a new mindset and can't be conquered by old strategies such as dropping prices or selling cheaper merchandisers. It's too late to try and do it faster and better. It's time to do it differently.

There are some things that might help but ultimately the answers to this problem have not been written.

• It's time to seriously start talking to your customers. Ask them what do they think about the economy, how has the economy changed their behavior, are they spending the way they did prior to the recession? Everyone I know -- even those with good jobs -- is apprehensive about spending money. Ask what they're doing to enjoy their lives, probably staying home. This is a good reason to make some changes to the interior.
• Ask your staff what' they're feeling: if they're apprehensive you can be sure this is influencing their interactions with the customers. It's called "misery loves company" syndrome. It feels good but neither party actually benefits. Coming up with solutions works, suffering together doesn't work.
• If new customers are scarce, call your old customers. Offer them an incentive to make a purchase or invite them in for a party. We can all use a little fun.
• Hold a networking party and invite neighboring businesses and past customers. I recently spoke at a networking party in New York City where all types of business people came to make new friends.
• Meet with other businesses and find out what they're dong to get new customers. Partner with them and hold an event; any kind of event, just bring in customers.

This is the season to be jolly and raise money for your favorite charity; collect toys, coats for kids and adopt a needy family. When your customer gets ready to shop you want to be noted for something other than the lowest price. If you don't do something, you'll be out of sight -- and out of mind. 

Remember that one?

Financial Tips: Getting Through Tough Times

Budget for a new reality

If you have an uncertain future, or think you might, then “scrub”your budget.

Build emergency savings for yourself and look at your major obligations. If you don’t want to give up your outside expenditures -- trips to Starbucks, picking up a new cosmetic, that trip to the dollar store that never turns out to be a dollar -- then plan to take less money with you and leave your credit cards at home. Take only enough cash to spend or make one less trip.

See how long you can keep that $20.00 in your wallet.

Refinance your house?

Take a look at the rates, what you save in both the short and long term. Sometimes the closing costs are as much as what you will save over the long run. This isn’t such a good deal.

Where is your money going?

Too many trips to the supermarket, buying large quanties and half gets thrown out because it doesn’t get used? Maybe this is the time to lose that weight your’ve been complaining about. You don't have to eat less, just eat smart.

Get rid of your debt

Put away the credit cards, period. Start looking at what you’re buying and why. In the meantime, just don’t add anything to your debt. In times like these, since there is so much uncertainty, plan to make it easier in the future -- not harder.

Check out these classic articles from Zen Habits on managing your finances in hard times.

• 8 Ways to Make Huge Savings in Your Budget
• 73 Great Debt Elimination Tips

Having Trouble Doing Business? Maybe It's Not a Lack of Customers

I keep hearing how business is so terrible and how there are no customers. And then I run into retailers like Taylor Flooring and Homevalue who tell me there are fewer customers but they’re doing good business and are seeing new ones.

Of course during this time you have to trim down your costs but you still have to have a plan for attracting new customers.  As I recall, when times were good you didn’t need a strategy to attract customers; there were so many customers coming in the door that you didn’t even have to be a good salesperson to get these customers to buy. You just had to be there. You know the old "build it and they will come" saying. Well, it was true. They just came.

Now they aren’t coming, and for lots of reasons. Maybe it's a lack of trust in the "system" or less money and more re-prioritizing of their lives and financing. If you didn’t have a plan before, you’re in a pickle. Those who are doing well or getting through this recession without losing their shirts have always had a plan. Plans have to be altered but your plan should have the basics of what’s necessary.

So let’s talk about your "brand plan."

You’ve relied on your brand and others' brands to get you through but has the message changed? The customer sure has, so your brand must change if you’re going to connect.  Customers are worried, and certainly see trusted brands as a safe bet. They're comforting in times when everyone’s all wondering, who can I trust? For those of you who have taken sales training classes you all know that "empathy" is the most important trait of a good salesperson or anyone or anything who’s trying to sell a product.  

Reducing quality, changing prices, taking away "value" that you have always given the customer will not increase your brand value.  These empathetic messages must say to the customer, we understand, I’m with you. The message "you should buy because things are cheap" or "we’re the only game in town" just makes you look like you don’t care about what your customer is experiencing. Don’t take out your frustrations on the customers.

Tactics such as rewarding only big time spenders or reducing quality so customers get to play less won’t build trust. Expanding your product offering at lesser prices is still value added. But reducing quality on items when you know they need better is not a good strategy.  Quality is still quality and value is still value, always keep that in mind.

Educate your customers on how to shop your products. Tell them warranties do matter and installation standards certainly make a difference. It’s time to go back to those values. Old time, new customer service.  In my book, Red Hot Customer Service, I talk about things most people have forgotten but that can still impact your sales and bottom line.

Remind your customers that buying the brand certainly does matter because it can be trusted. Don’t forget in times like these, your brand and your connection is what really matters. What are you doing to support your brand?

• Look at your warranties, do you remember to give them to your customers after the sale?
• Do you explain to customers how to take care of the products they’ve purchased?
• Do you call them after the job to say hello and make sure the job is perfect?

Do you do small things like show up on the job and talk with the customer? If the customer isn’t home do you go to the job and video the rooms that are complete and send it to the customer while they are at work? (This is a very creative move on retailer’s part.)

Realize that consumers have changed and this shift may be long term. Customers are very unhappy and untrusting and may insist that you prove who you are. Customers tired of the greed and lack of company ethics will demand accountability. I saw an interesting ad for insurance company RM Global. They wrote about the tornado that tore through Atlanta in 2005, leveling everything including the Atlanta Motor Speedway.  Three-and-a half months later the fall race weekend opened as plan. How? Because of the partnership between the Atlanta Motor Speedway and RM Global. More and more ads are showing connections. Oil companies talk about how they can reduce carbon footprints; Men’s Warehouse is offering to let the customer "keep the suit" if they lose their jobs, and most car companies are willing to take the car back if you lose your job -- or help make the payments for you.

Will the recession end some day? Yes it will. The longer it takes the more damage it will do in the customer's mind. According to John A. Quelch, a professor at Harvard Business School, "During the recession of 2001, there was no decline in overall spending, although many cut back. It should be noted that this recession shows consumers being very frightened, which means that they will carry the sting for many years."

In other words, during the last recession we had, in 2001, consumers didn't change their spending habits! It's different this time, so it's time to get in step with your customer. We may be doing this dance for a while.

Resources:

• Age of Conversation 2 - Why Don't They Get It on Amazon?
• Harvard Business Review, How to Market in a Downturn
• Get to the Point: Small Business

Lis Calandrino is a sales trainer and marketing consultant who speaks around the country on topics ranging from retail sales to online marketing and social media trends. She can be reached at lcalandrino@nycap.rr.com or 518 495-5380.

Accountability? Why Bother.

Okay, I don’t want to review the rants that are out there regarding AIG, I’m not the news reporter, but I do want to review good/bad business principles. 

Maybe like me, you’ve had enough of excuses and incompetent people running things. Corporate jets for companies that are in the poor house and salaries so high I can’t even count. AIG United Guaranty posted an operating loss of $485 million in the fourth quarter of 2008. For all of 2008, losses at the private mortgage insurer totaled $2.48 billion. Wow.

Me, I always thought that businesses should be run like businesses -- and this includes government. I always wondered why New York state could never pass a state budget on time, which cost us hundreds of thousands of dollars over the years, maybe more. I wondered why we pay these people or don’t penalize them for “over runs” or not meeting completion schedules. It was even brought to my attention recently that our governor just bought a $200 toaster. He must make alot of toast! In addition, the governor has also just replaced the historic carpet in the Mansion. Really? Now?

Can we reduce the bonuses, please? The general public just seems to be generous benefactors to the high-end welfare cheats. I like that  Attorney General Andrew Cuomo is investigating those getting the bonuses. It might be a little late to back track but we will all take heed.

We all know in business what happens when you have one big customer and they dump you. What about when you have one big customer and they don’t perform? Do you pay them for work not done or shoddy work?

Do you follow up on your contracts, or read the fine print? I remember an associate who didn’t count the number of items in an order one day. He signed the bill and then found himself short. Luckily the manufacturer realized that they had unintentionally shorted the customer.

Who reads your contracts and do they know what they are doing? Wasn’t it the federal government’s responsibility to read the contract and be clear of the terms before advancing the money to the big companies? Now I’m wondering about our responsibilities. Should I have read the fine print or insisted that the federal government conduct due diligence? Isn’t that why we elected them? Whose job is it to see that everyone does their job?

What's Google and the social networking sites saying about your new contractors and business partners? Would you pay commission if you found out that the people you hired to do the work were partially responsible for the downfall of your company? I don’t care what the contract stated; wouldn’t you examine what you had done? Now let’s get to the part where if you had “earned” the commissions, and I use that word loosely, would you give it back? I wonder how long these people have been paid for non-production.

Now let’s talk about “talent.” I’m listening to NPR and there is someone defending what they call "talent.” That is: those who are getting the bonuses, the ones who if they're not paid will put the final nail in the company's coffin. Hm, ok, so maybe the talent quits. Where would they go? Would they make the same income? Me, I would overhaul my human resources department and look at their hiring practices. Next I would head to the training department and take a look at their "talent." They must not be getting paid on output.

If they’re incompetent, let’s hope they go to your competitors and maybe you can start all over with some new talent.

There is plenty of blame to go around; it certainly is a lesson in accountability. Resources:

• Financials Watch: AIG Brouhaha Distracts from Other Improprieties - Mar 18, 2009
• AIG Furor Turns Attention to Retention Bonuses

Who's In Charge of Your Future?

I didn’t used to like Suze Orman. When she spoke of having an unhealthy relationship with your money I wondered if she was speaking directly to me. Then I read You’ve Earned It, Don’t Lose It and The 9 Steps to Financial Freedom and the more I read the more I knew she was speaking to me.

How many of us have grown up knowing exactly what to do with our money? Maybe we get an allowance and maybe it’s connected to work. In fact, some kids get allowances for no good reason (I think that’s the stimulus package in disguise).

I remember asking my dad, how much money do I need to rent an apartment? He sat down with me and went through common costs of living: electric, phone (there was only one at the time), food, transportation (I didn’t have a car at the time), clothing, savings and the costs of rent in Washington D.C., where I was just finishing school at American University.  It became very clear how much money I could spend and how much would be left. The formula seemed simple. And then of course things happened, I wanted to go on vacation and I wanted a new so-and-so and so on.

Lately I have been thinking about how many people have an unhealthy relationship with their business and their lives. By unhealthy I mean a refusal to really look at their business or personal lives, fooling themselves by pretending to understand the difference between cash flow and profit or refusing to work out a commission structure for their salespeople because "it's too hard." How many salespeople talk about not wanting to work on commission as if it were a bad thing?

So with everything being cheap these days, should you fill up your closet, buy a new car or get a new house? This weekend they were having a liquidation sale at a nearby Holiday Inn: belts for $5 or $10 -- surely I could use five more belts -- and a bunch of other things. Congratulate me, I didn’t go even though it was very appealing.

Sure everyone is saying we should spend our way out of this, but didn’t we spend our way into this? People bought houses they couldn’t afford and are blaming it on “the deal.” The thought of not having a place to live should be more frightening than having the right place to live.

Maybe since I have lived alone for so long, and having had several businesses, and knowing that things “happen,” makes me more cautious of spending. You just know that things happen and you need a good back up plan called “cash.” Or maybe having been born after the depression my head is filled with the "you must take care of yourself because no one else will" mentality.

So hang on to your butts and invest in things that will provide a return.  Should you buy a house? If you can buy one that lessens your monthly payments and it's a steal then buy it. But if it’s the vacation house that you’re buying and now you’re taking on another mortgage and who knows about anyone’s job, I say think twice. But I come from the mentality of the 40’s -- at least my parents were from there -- and they said pay your bills and don’t spend more than you make. They sure knew how to take the fun out of livin'!

Should you buy a car with some “two-fers” out there. I have heard of the buy one and get one free; is it really what you need or would you be better happily driving your eight-year-old paid-for auto than picking up another payment?

I read that they are lowering the financing scores necessary for us to buy cars so that if you don’t quite meet the financing scores, you can over extend yourself there. Doesn’t this sound like the housing thing again? Someone needs to come up with some new plans. Did they forget that the old ones got us into trouble. Hyundai is saying if you lose your job and can’t make your car payments then you can return the car. Note, I don’t think they are giving back your down payment if you default because you lost your job.

The real question is, how do you take care of yourself with the economy the way it is, and what do you do with your money if you have any? Despite what the President says -- spend, spend, spend -- there are things that are worth it and things that are not.

For all you women out there, shoes are not considered an investment unless you are the Batas family and you happen to own a shoe museum in Toronto.  (Yes, there is a shoe museum in Toronto which houses 1000s of pairs of shoes depicting the history of shoes since the 1940s.)

But back to Suze. When it comes to money her suggestion is that if you have plenty of time to wait, such as five years or more, then there are plenty of deals in the stock market. If you don’t have time then the stock market is a bad place to be. I don’t think hiding your money at UBS is such a good idea; I used to hear about people having their money in Swiss banks, but now they will have to give up the names of their depositors that have been avoiding the IRS auditors.

Jobless rates may hit 8.8 % in 2009.  Ben Bernanke says that Walt Disney is giving buyouts. Does that mean that Mickey and Minnie will be out looking for jobs? Mickey and Minnie have pretty specialized skills, maybe they should think about expanding their skill level to UBS?

Things to think about:

• Investments should provide a return. Very few personal goods do, like clothes, but I found a new consignment shop down the street that is pretty hot and they offered to take my “disco” stuff that I've been holding for the next wave of Saturday Night Fever.
• Offer to trade some things. One man’s trash is another man’s treasure.
• How about a “gold show” in your store? A retailer told me they had an appraiser come in and buy gold on the spot. The retailer said it was a grand night.
•  Clean out your old storage bin. I have so many friends with stuff they’re holding on to “for when they move the next time.” Furniture doesn’t spoil but it gets moldy and out of date unless it’s period pieces. And if they are, what are they doing in your storage bin getting warped?
• How about having a “bring it in for trade” at your store, or a “cleaning out the storage/warehouse/garage/trunk sale at your store?
• Old tools, books, purses: put them on eBay or have an estate sale; everything is an estate. Mix your estate with the next door neighbor’s estate.
• Really need to buy furniture and accessories? Check out the local hotels that are refurbishing and you might be able to pay pennies for pictures and accessories. You might be able to resell them.
• I have friends that go to the "nearly-new" shops and buy clothes that have been donated by TJ Maxx or Marshalls and resell them.

Have any other suggestions? Let me know in the comments!

Photo credits: Turkish Stilts courtesy of Bata Shoe Museum

Recession? Not for Everyone!

I had the opportunity to talk with John Wells, General Manager for the past seven years of Taylor Flooring in Halifax, Nova Scotia. Taylor Flooring was awarded Mohawk Color Center Dealer of the year at the Mohawk Color Center Convention February 7, 2009. Taylor Flooring consists of four stores and has been in business for 16 years.

John Wells is in charge of hiring, training and ongoing coaching for his salespeople. The first thing you notice about John is his energy and focus. He knows what to do, how to do it and how to get it done. He talks about how important all employees are to the company and his connection to his salespeople. John is filled with passion about the business, the customers and the employees.  He talks about coaching as being an important part of his ongoing training program.  From my experience, it is rare for businesses to focus on coaching; but with the right coaches, people are able to make immediate and long lasting changes.

I asked John about the recession and what it means to their company. His reply was quite interesting. He said “in the United States, it’s real, in Canada there is more of a misperception about what’s going on. The news media just scares everyone so we become petrified.”

John’s solution: stop listening and stop focusing on the bad news. If 32% of homes are in foreclosure, John looks at it as an opportunity.  According to John, these homes will have to get sold and there’s his opportunity to go in and update the flooring in them. As we all know, it’s the half-full / half-empty attitude.Taylor Flooring works at using financing for flooring to help customers sell their homes.  The trick is to apply for the credit so it doesn’t get in the way of the customers other loans, and to time the closing of the loan so it coincides with the sale of the house.  Taylor aggressively seeks realtor partners by providing sliding scale commissions to realtors that offer good client referrals. The larger the flooring sale, the larger the commission.

The key to staying cool while the rest of the world is talking doom and gloom? According to John:

• Don’t panic. Leave that for your competitors. If you panic, it will send shock waves through your sales staff and make it difficult for them to concentrate on doing their best. (Interesting that John should make this statement. On February 14, one of the writers from the Wall Street Journal made the comment that it is essential that our President tell us the truth -- but to not rub our noses in it. Everyone needs to know that there is hope, no matter what’s going on.)

• Focus on what works well and do it over and over again. Your team should be on auto-pilot for survival skills. Cut unnecessary overhead and focus on what brings in business and more profitable customers. This is the time to dump the unprofitable ones and to give more to those that are supporting your business.

• Have 'pit bull' persistence in follow through to close deals. Hold on to what works and don’t let go.

“Retaining a leadership position requires internal positioning," John adds.  "You are constantly improving the processes.”

These processes encompass the following:

• Having systems in place that keep the wheels turning. Everyone needs to know what to do and how to do it, consistently. All the pieces must fit together.
• The leaders must have positive attitudes and initiate the changes they want to see if they are to create believers. Once people believe, positive things will happen.
• Proper behavior must be identified and monitored. This includes professional presentations, keeping the store looking great and looking professional. Everyone knows what’s required to promote, differentiate and support the brand.

As John says, “it’s all about promoting great relationships with your customers and your employees and living the core values.” 

Want to Build Your Customer Base? Learn How to Stay Close to Them

Everything you read, no matter where you turn, is a story about a retailer cutting their workforce or closing their doors. The latest cuts include Home Depot, Starbucks and Macy’s. The reasons are largely due to the disappearing cusotmer, but a large part is simply a lack of vision and an understanding of one's core customer.

For these companies, the problem is not knowing how their "bread gets buttered” or who butters it. Survivors will be those who can move, turn on a dime and embrace new technology. The good ones know if they don’t take care of their customers someone else will.

Even good retailers are having to “bare bones” it and many find themselves back on the sales floor, in the warehouse with little time left to think about growing their business. They're in survival mode.

It’s always about supply and demand. In tough times, threre's less demand and more supply. Fewer customers and more products. If you are a supplier and want to win your customers over you will have to get smarter and change the rules. Everyone gives lip service to relationships but most of the time that’s a cover-up for selling more products. Selling more products is the name of the game but if you’re desperate the customer will get an uneasy feeling, not trust the message and ultimately not trust you. Forget the sale.

Today, if you are a supplier of products, you have two problems: there's more of you and fewer of them. Even more important, as a supplier you have to rely on your customer to sell your products to the end user. When times were great and there were more end users -- if you were a supplier -- you didn’t have to worry if your product got sold.

For now, this party is over. Suppliers are watching their customers dwindle in size -- not only because customers are zipping up their purse strings but because suppliers are not employing efficient strategites to get those who are willing to spend.

The New Supplier

Enter the new savvy supplier, ready to pitch in, support, and educate their customer.

The strategy? Seeing themselves as more than a supplier and investing in tools that will help their customers be more profitable.  They're ready to do what it takes, to step out of their supplier box and belly up to the bar with money and information.

The payoff? Keeping their customers by keeping their customers profitable.

A couple of weeks ago I was invited to provide a presentation for United Tile on the West Coast. This is a supplier who gets it -- gets the partnership, gets the “out of the box” thinking and wants to be the supplier of choice. Their mission is big, to be the major supplier of product and knowledge for their customers.

“I want us to be part of the solution," says Ron Cook, Executive Vice President of United Tile. "I want to provide our customers with useful information that will help them stay in business as well as plan for the future. We also want our sales reps to be well versed in our customer's world so that we can get through these trying times with them.  It means we’re going to learn more about our customer’s business as well as our own."

"Most of us," Ron continues, "are far from an ability to change the economy, but through education and training mixed in with a little fun we can put ourselves and our customers in a better position when things turn around."

His is one group that gets it. Here are a few tips on how they're doing it:

• Let your customers know you’re in it for the long haul and on the same team.
• Genuinely want to help your customer, pitch in and find out what it will take to help them build their business.
• Educate yourself on best practices in your customer’s world.
• Provide ways for them to learn and share their learning.
• Make it fun; there’s enough doom and gloom out there already!

It’s up to you and me: no one has yet come to bail us out!

The Economic Bailout: Who's On Top of the "Gimme List" This Week?

The nation’s second largest bank in the nation, Citigroup, will cut 50,000 jobs in coming quarters and join a number of others in the growing “gimme group.”

It seems every time we turn around there’s another demand for hand-out money.

The world must have forgotten the cry at the Titanic: "women and children first!" But the people who are crying the loudest, “The Big Three,” are the same ones that accuse women and children of sitting with their kids milking the system. The only difference is this bunch is sitting in their limos telling the nation how we owe them.

The Auto Industry

Sure I know Detroit is in a mess; years ago upstate New York experienced the loss of GE, Carrier Air Conditioning, IBM, and others. It will never be the same. Nothing is. This is the problem. We hate to change, we want things to remain the same and be easy. It doesn’t matter, time marches on as they say and it will change whether we want it to or not. I heard in New Jersey this week there was a small-car rally. Did Detroit miss this?

It sounds like high-end welfare to me. If we bail these companies out, can we require their management to go to rehab and get new job skills? If we give them the bail out, do they have a plan to compete with Honda or Toyota? McDonald’s seems to be working hard at focusing on their customers. Can we require that the big three attend Hamburger U or seminars expounding on the The Toyota Way?

In a Wall Street Journal article this past weekend, David Yermack cites the following about a speech given by economist Michael Jensen in 1993 to the American Finance Association.

Mr. Jensen's presentation included a ranking of which U.S. companies had made the most money-losing investments during the decade of the 1980s. The top two companies on his list were General Motors and Ford, which between them had destroyed $110 billion in capital between 1980 and 1990, according to Mr. Jensen's calculations.

So if we don't bail them out, the world will go to hell in a handbag? It doesn't make sense. It feels like everyone screaming for the gimme is standing over us with a sledge hammer promising the end of the world if we don’t give them what they want.

State workers are upset because they’ve been asked to take a week’s vacation without pay, or that their copay on their insurance has been raised five dollars.

Tishman Construction, the largest construction company in the US, says they employ 20,000 more than the auto industry and that our infrastructure is falling apart, bridges and roads are in sad need of repair.  We know that’s true, but does that put them on the top of the list.

My own personal gimme: let’s go for the construction industry. Of course this is self-serving but aren’t all the gimmes self-serving? Let’s get in line.

It’s not the question of who needs it, it’s more of who will push the economy forward and how we hold them accountable for the money.

Sure I know that the city of Detroit is in a bad way, but can the big three fix that? It may not be fun but upstate New York had to move on when GE, IBM, Kodak and Carrier Air Conditioning cut jobs or moved on. Not great but the world has been changing, did you miss it? No more big trucks, we want small and green.

Hey what happened to the ninth ward in New Orleans? There are still sad homes with no inhabitants, numbers still on the door explaining how many people and animals lived there and how many died. Another mismanaged bailout.

I was there not long ago and the ninth ward is a still reminder of a gimme gone bad -- and then forgotten.

Outsourcing

Speaking about mismanagement, we wanted everything cheap and we got it. We’ve outsourced the skilled jobs to India, Manila and wherever else people work for peanuts. I really do have a hard time understanding the Delta agent and the Hewlett Packard rep. The last straw, however, is the technician from Time Warner Cable. Sometimes I get so frustrated I just hang up in the middle of the conversation.  Why aren’t these people located in Detroit or Las Vegas or New Jersey somewhere? Why are all the skilled people driving cabs in NYC and the jobs they are skilled for being done by someone way out of the country?

I’m afraid that when these people come around for their gimmes, the jobs will go out of the country.

Should Anyone Get Bailed Out?

So let’s go back to the real issue: who should get bailed out? Why would anyone bail out a business that was in the toilet, losing money and didn’t have a good business plan? I don’t know any bank that would give a business money without a product to sell, a way to sell it and a track record. I shouldn’t say that because apparently that’s one of the problems.

Free money, is it really free? In 1985 I wrote a grant which I submitted to the Charitable Venture Foundation. The grant was for a targeted group of women, to teach job skills and get these women back in society. My idea was to develop a pilot program for women who wanted to pull themelseves and their children out of poverty. I was told I was embarking on the first grant of its time: a live-in program that included job, education and emotional skills. It took me one year to get this grant, it was in the neighborhood of $140,000 and contained numerous stipulations.  I had to raise a matching amount of $140,000 worth of in-kind gifts as well as employ people with the skills to make this work.

I supplied an extensive business and marketing plan and was held accountable for every dime and reported monthly on my spending. An accountable gimmee. A lot of work -- not a huge success. But movement forward may not have to be a huge success.

Getting Back to Basics

Before we do anything, how about some basic rules of business?

• One, know your customer. If they want little “green” cars, build them. The new "rich" is green and eco-friendly. Rich is less about showing off and being big. I’m not in the car business but I can read and follow the consumer.

• Have a plan. How will it work? Who will do it and what kind of track records do they have? How are they planning for the future? Do they have the skills for the future?

• Know when it’s time to change. If your business doesn’t change it will be history.

• “Know when to hold em, know when to fold em.” Good for poker and business.

• Train your employees for the future; have them be part of the solution rather than the problem. What has GM been doing over the last 10 years?

Not much time to worry about how it all happened but we better be sure we have a better plan for the future