Tuesday, December 29, 2009

Howard’s Inner Circle No. 4: A Proliferation of Pop-Up and Virtual Brick-and-Mortar Stores

Here today and gone tomorrow. A strange philosophy for a store, but that is the case. A number of retail chains and those introducing new products are doing it in a big way to generate increased sales and media coverage

This holiday season Toys ‘R’ Us opened “pop-up stores ” in eighty shopping malls and added temporary toy departments in its Babies ‘R’ Us stores. Target has been doing it for a number of years. It opens up holiday pop-ups for fifty days offering some of its best-selling holiday products. As the Washington Post reports, “Products are displayed in windows, and shoppers mark their selections on the clipboard menu before bringing the order to a register to check out -- much like at a cafeteria. All stock is pre-wrapped and picked up next to the registers.

“The merchandise includes a Keurig mini coffee brewer for $89.99, a Liv Girls doll for $19.99 and a Sigg water bottle for $21.99.”

These pop—ups are usually opened up in high traffic areas such as Times Square in New York City. However, last year Reebok launched a pop-up shop at an art gallery. My favorite one is a Subway sandwich shop physically attached to the Freedom Tower as it is being built in its World Trade Center location in New York City. According to the New York Post, the sandwich shop is “fitted into a shipping container-like structure fixed to one of the tower cranes, alongside a bathroom and construction offices for the project managers.

“The concession stand will rise with the tower, eventually stopping near the 105th floor -- at roughly the height of the old Twin Towers.”

I expect this pop-up store trend to continue and expand going beyond national chains and those with new products. With so much retail space available, commercial retail landlords will find this option attractive. There also will be cottage industries including suppliers selling or renting display units that can be easily set up and taken down in minutes. Because of the high unemployment, there will be a ready workforce. Also expect the entry of franchisors offering turnkey pop-up store operations.

So don’t be surprised if you see a calendar store from October to December and stores geared to particular holidays only open for a month or two. It won’t be just for Christmas as you will have Halloween stores and stores for holidays only celebrated by certain cultures. Add to this mix, bicycle rental stores in the summer, and state tourism agencies opening up stores in adjoining states for a month to encourage tourism.

These pop-ups are often mobile in the form of vans and other vehicles moved from place to place preceded by advance publicity. Some pop-ups are basically showcases for a retailor’s Web site with limited products to sample and assisted kiosks allowing easy ordering and shipment to the store for pick-up if desired.

Brick-and-mortar retailing is undergoing a remarkable and rapid transformation as online retailing takes hold. This pop-up trend is just one of the ways it can survive and benefit the national chains and the individual entrepreneurs, formerly known as “the mom and pop store owners” with which many of us grew up and loved.

© 2009

For additional reading on the subject, check out:
The above is from the fourth issue of my newsletter, Howard’s Inner Circle, which periodically appears on the blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is given credit as the author.

Monday, December 21, 2009

Howard’s Inner Circle, No. 3: Two “Bicycle Condom” Business Models

Being unemployed and looking for revenue opportunities, I find potential ones in the weirdest places like standing in the rain waiting to meet someone in Hoboken, Jersey. It was by the PATH station, a commuter subway that goes to New York City. It was 5 P.M. and I was by a bike rack with fifty bikes locked up. Forty-nine bike seats were soaking wet, and one seat was bone dry as it had a plastic bag wrapped around it.

I pointed that fact out to an individual standing by me, whose name I later found out was Mike, and asked him why did he think only one biker protected his or her seat. His answer was, “It wasn’t raining this morning.” I asked a rider who was unlocking his bike and he gave me the same answer. By the way, the prediction was for rain in the afternoon.

I conferred further with Mike and asked him what he thought about the viability of selling plastic rain protectors for seats that could be stored under bicycle seats. They could be different colors and have logos from different teams, fashion houses, or retailers. Told Mike, I didn’t have a name for the product, and he suggested, ‘Bike Condom.”

Saw a brilliant partnership being formed with a 60/40 split of the profits. Just would have to draft a partnership agreement, write a business plan, check out the competition, hire a lawyer, find investors and financing, work out a deal with a manufacturer and a distributor, create a marketing and advertising campaign, develop packaging, and market test the product.

A quick Internet search found that the term “bike condom” was already taken as at http://www.treehugger.com/files/2009/01/bike-condoms-new-for-bike-sharing.php, there is the following statement: “In bike-sharing mecca Barcelona, there's a new way to make waste - put a pair of bike condoms onto the handles of the shared bike you are just about to take for a spin.” And at http://www.instructables.com/id/Bicycle_Seat_Condom, a rider tells us of a method to protect a seat from the rain, “During the Fall semester I started riding my bike to school and learned I hated riding in the rain after a seven hour class. I dreaded the idea of riding in the rain with a wet bike seat causing me to stand while pedaling. Luckily, being surrounded by Low density polyethylene (LDPE) cutoffs in the studio I began experimenting with vacuum forming this material to create a reusable bicycle seat cover that is durable, flexible, and waterproof.” My favorite bike seat cover was selling for $15 and made of durable urethane-coated ripstop nylon at http://www.rei.com/product/623806.

Looks like too much work and risk for Mike and me if we develop our own commercial “Bike Condom,” so let me offer an alternative business model in which we can immediately go to market today at no cost. We simply advise bike riders to stuff a plastic bag under the seat on their bicycle. So if there is a prediction or possibility of rain, they can wrap the plastic bag around the seat. If the rider must make a statement, he or she can use a plastic bag with a logo they like. And for those who decide to do so there is a charge, simply consider making a donation in any amount that you decide to charity or an individual that needs it more than you. With this second business model, Mike and I will still follow the same 60/40 split, but rather than sharing the profits, we hope to profit in a different way.
The above is from the third issue of my newsletter, Howard’s Inner Circle, which periodically appears on my blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is given credit as the author.

Monday, December 14, 2009

Howard’s Inner Circle, No. 2: Businesses Turning to the Independent Distributor Model

The greatest overhead expenses are often those associated with employees. This is why many companies are reducing severance benefits or eliminating matching contributions to 401(k) plans. Some are being more creative and instead minimizing the size of their workforces by utilizing so-called “independent distributors.”

I have recently seen this with an energy provider to businesses and personal residences as well as a company that sells video telephones. The attraction is savings on guaranteed salaries, payroll taxes, employees’ benefits, and many of the costs associated with supporting inside salespersons. These companies might provide some help on setting up a Web site by providing templates, but the ones I came in contact with didn’t even provide a uniform style for business cards for these independent distributors.

Businesses are doing a great job by promoting this new status, and rather than using the old term “commissions” speak of “residual income” and play up the fact that it is a new industry or a new product subject to exponential growth. In this tough economic environment, any source of potential income draws interest. Because younger individuals might not see the importance or availability of medical insurance and retirement plans benefits and have difficulty finding jobs, independent distributor opportunities have great appeal.

Companies like the fact that underperforming independent distributors won’t hurt their company’s bottom line as much as full-time underperforming employees and are likely to give up after awhile.

There are a number of downsides to relying on independent distributors including the expected government scrutiny asking if these individuals aren’t really employees and should be treated as such for payroll taxes purposes. “Look for an Obama administration to aggressively challenge independent contractor status.” is the prediction (at http://www.webcpa.com/prc_issues/2008_10/29348-1.html?pg=2) from Dean Zerbe, former senior counsel and tax counsel for the Senate Finance Committee and now national managing director for alliantgroup. Another potential disadvantage is the fact that an independent distributor might be working for more than one company at a time and place his or her maximum efforts and loyalty with the product or service that is generating the greatest revenue at the time.

This will be an interesting trend to watch and advisors to businesses especially lawyers and accountants are sure to benefit as they counsel the many businesses who might consider utilizing independent distributors, as well as defend those when federal and state agencies question this status.

The above is from the second issue of my newsletter, Howard’s Inner Circle, which periodically appears on my blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is given credit as the author.

Tuesday, December 8, 2009

Howard’s Inner Circle, No. 1: Polyglot Your Business Instantaneously

I bet most don’t know that everyone working in the pharmacy departments of the many CVS drugstores in New York City can understand Arabic, Armenian, Cantonese, French, German, Hindi, Hmong, Italian, Japanese, Khmer (Cambodian), Korean, Laotian, Mandarin, Polish, Portuguese, Russian, Spanish, Tagalog, Thai, and Vietnamese.

Unfortunately because of not sufficiently publicizing this fact, my guess is that most current and potential CVS customers aren’t aware of this. The primary way they would know is by seeing an 8-1/2” X 11” laminated paper posted on the cubicles where prescription consultations are conducted.

That paper reads at the top “Interpretation Service Available.” Below that title are 20 boxes for each of the above languages each with a hand with a pointed finger directed at 20 different foreign languages translations of “Point to your language. An interpreter will be called.” The Web site for the company, LanguageLine Services, which CVS utilizes is www.languageline.com. At this site you can see the many more languages available for translation and that an interpretation can be purchased on an as-needed basis. There are many other companies (e.g.,TransPerfect, www.transperfect.com/) out there that offer similar services.

Think of the marketing and business development advantages in offering this type of interpretation service. I have already spoken to someone at Staples and a number of managing partners of New York City accounting firms of the obvious advantages. Can you imagine if contractors and do-it-yourselfers knew at their Home Depot or Lowe’s they could converse via a third party with the expert staff at these stores in their own languages? Not-for-profits can benefit too. Although many hospitals have interpreters on staff, there usually are a limited number of languages available. Think of how many more citizens could utilize government services if they could converse in their language with government officials.

Most importantly, offering and publicizing this type of service promotes community among the various cultures that are part and parcel and make up our nation. With globalization’s continuing increasing impact, it is an imperative to be able to communicate in as many languages as possible. The belief that one language should be supreme to the exclusion of others really makes little economic sense. Hopefully, the expanded availability of reasonably-priced translation services will mean more companies, not-for-profits, and governments will understand and recognize it pays for these entities and their employees to become instant polyglots.
© 2009

The above is from the first issue of my newsletter, Howard’s Inner Circle, which periodically appears on my blog, “Instigator” at http://howardwolosky.blogspot.com/. It may be reproduced in full if that fact is stated and Howard Wolosky is given credit as the author.

Tuesday, November 10, 2009

President Obama: With All Due Respect, I Am Still Waiting

The following was sent to the White House via e-mail a number of weeks ago (I checked the box asking for a reply) and the only thing I received so far was a mailing with President Obama’s name on it asking for a political contribution.
“We as a nation need to publicize what an untapped and extremely valuable resource the unemployed are as they currently are. Rather than defining someone’s worth, “being currently unemployed” should be shown as equivalent to a respected profession. I believe the need to change perceptions is a key imperative especially because of the percentage of unemployed, the length of time they will be employed, and the ages of the unemployed. In my opinion, it is a priority similar to providing benefits and training.
“Governments at all levels should take the lead role in this regard by setting up programs where unemployed individuals apply their skills helping business, not-for-profits, and governments in a limited role for a limited time. In return, those individuals might be able to obtained reference and testimonials regarding their work. I written about one way the media can help in my October 7th entry in my blog entitled, “Might Seem Counterintuitive, But It’s Not at http://howardwolosky.blogspot.com/. Please read it as I couldn’t paste the text down because of the limitations of the White House system.
“G-d bless all including all the readers of the e-mail. Hopefully, the last reader will be President Obama
“Sincerely yours,
“Howard Wolosky”

Saturday, October 17, 2009

A $7.5 Million Open Letter to Michael Bloomberg and Bill Thompson

October 18th, 2009
Dear Future Mayor of New York City,

Complaint: Since it occurred on both of your watches and you are both running for mayor, I thought I would bring this matter to your attention. It involves the fact that in the adult section of the reconstructed Brooklyn Public Library Kings Highway branch there are no signs on the bookshelves indicating the range of the catalogue numbers for the books. To find the book on travel I was looking for I had to walk among the 14 different sets of multi-tiered bookcases.

As reported in the New York Times on June 11, 2009 “After a four-year, $7.5 million renovation that was held up by extensive construction delays, the Brooklyn Public Library is reopening the Kings Highway branch in Midwood — historically the second-busiest branch of the Brooklyn library system after the central library on Grand Army Plaza — on Thursday morning.”

I complained about this problem repeatedly. The latest being today. Interestingly in the children’s section on the second floor, there were signs (handtyped by a librarian) on each of the bookcases with the catalog number for the books

Suggestion: Go to this library and take out a book, In addition to the problem I spoke of, you will find other problems such it is hard to find the few books on travel in the New York State using the computerized catalog searching system at that branch and I doubt if many of the users know how they can reserve such a book from other branches which might be more useful. Additionally, you will find like it hard to check out a book with the self-checkout system. Adopting this hands-on walking-the-walk approach might ensure that $7.5 million is well spent

Respectfully yours,
Howard Wolosky

Wednesday, October 7, 2009

Might Seem Counterintuitive, But It’s Not

Yes magazines are closing down right and left, but here’s an idea for a new one. The working title is “The Unemployed.” The working tagline is “Harnessing Their Untapped Power and Wealth”

It will explore and publicize what an untapped and extremely valuable resource the unemployed are. Rather than defining someone’s worth, “being currently unemployed” could be shown as equivalent to a respected profession at which you can work at becoming better at.

Contributing reporters, copy editors, artwork submitters, and technical support would generally be those who are unemployed. There would be included extensive bios on these individuals. Each issue would have three or four features, departments, and commentaries.

Here are three possible features for the first issue:
“Tales of Charitable Giving” detailing individuals who increase their charitable efforts. E.J., who while searching for his next career opportunity, is delivering Meals On Wheels to the elderly; helping out at Cancer Action, and leading a weekly walking group of seniors.
“Seller’s Guide to Selling Gold” explains that most gold is purchased to be melted down so gem worth isn’t generally considered and offers vary greatly, easily as much as 75% to 100%. When selling, it advises to check with a number of vendors and ask that offer stay open for a stated period of time. It points out items should be grouped and weighted together by their carat type to get best value and applicable state law should be checked.
“Overcoming the Stigmas: Yours and Theirs” deals with the psychological and stereotypical aspects of unemployment from the viewpoints of the unemployed, family friends, former colleagues, etc. There would be a number of personal experience boxes where individuals such as Warren Buffet, Bill Gates, and an out-of- work 58 year old former steelworker describe how they or people they love dealt and deal with unemployment.

Departments could feature reporting on state programs that allow employers to combine reduced work hours for employees with partial unemployment benefits and how industries are combating unemployment such as contractors, landscapers and interior decorators turning to staging and rehabilitation of personal residences. There would be a books to consider section showcasing such books as “No More Mondays: Fire Yourself-and Other Revolutionary Ways to Discover your True Calling At Work” by Dan Miller

The magazine would be print and online and be a paid subscription model with a code of responsibilities and conduct for subscribers, advertisers, and contributors. The annual subscription rate would be from $10 to $250 as determined by the subscriber with a deferral, if desired, by those currently unemployed.

For the purpose of transparency and full disclosure, I am suggesting this publication in part so that I would be considered for the position of editor-in-chief. I was previously editor-in-chief of Practical Accountant, and what particularly qualifies me for consideration was my last column there, which in a sense of poetic justice, was automatically published on the day after I was told it was my last day.

Excerpted Text of WebCPA column
“’New’ Alternatives to Layoffs
(January 13, 2009)
“In these tough economic times, as in others, there are many news items on companies declaring bankruptcies and announcing substantial staff cuts. What is different this time is that I am also reading about a number of cost-cutting strategies that are gaining in popularity and aimed at reducing expenses without disrupting business operations or laying off staff.
“Fortune 500 companies, as well as smaller ones, have stopped their employer matching of employee 401(k) contributions. Factories are being closed down for a specified period of time with the unpaid furloughing of employees. Unpaid holidays are being given. Then there are those businesses that indicated there will be no salary increases in 2009. And I just came across a report that one of the largest accounting firms in Israel is reported to have made across-the-board pay cuts of 5 to 10 percent, except for certain lower-paid staff. We are also seeing the introduction of four-day weeks.
“These creative cost-cutting strategies indicate the economic downturn is impacting more, and they also reflect an expectation that it will continue for some time. On the plus side, in general, they also indicate that companies are developing an arsenal of intermediate moves short of layoffs or a declaration of bankruptcy.
“This aversion to staff reductions can be attributed to a number of factors, including that often operations would be impaired if cuts were made, skilled employees are difficult to replace, and once the economic times get better the company doesn’t want to be understaffed.
“Interestingly, there seems to be understanding and acceptance by many in the workforce who are affected by the end of employer 401(k) contributions, unpaid leaves, etc. It appears to be based on the belief that, ’At least I have my job.’

Sunday, September 27, 2009

Led to Gold

I can be pretty good at what I do and currently I am unemployed. The good thing is that it is the third time so I have experience.

However, many things have changed since the last time. Now a possible question during an interview, is, “Do you have any experience working in a matrix organization? Also, rather than mailing in resumes with targeted cover letters, you end up filling out a questionnaire and submitting your resume into a company’s computer system, probably never to be evaluated by human eyes, but eliminated based on one of your answers. Interestingly, many companies then continually send you e-mails about other similar job openings.

What’s also different is the growth of an industry targeting the unemployed. Job search sites, resume evaluation companies, coaches, and job fairs are examples. I have interacted with a number of them and the greatest benefit that I have received was at a free seminar that John Telep (http://www.smartresumetoday.com) conducted.

It wasn’t the good advice or the fact that he answered every question with great thought and care. The benefit is a book he recommended to the attendees, which included entry-level individuals to the most experienced.

The very deceptive title is “The Alchemist” by Paulo Coelho. After reading it, I conclude that alchemists have been given a bad rap. You see we are all alchemists searching to find what will make us happy. In the introduction, Coelho explains the importance of your personal calling. “It is G-d’s blessing, it is the path that G-d chose for you here on Earth. Whenever we do something that fills us with enthusiasm, we are following our legend.”

The problem is that there are many obstacles and where you end up might not be the treasure that you originally sought. The key to success isn’t just following your heart or your head, but paying attention to what Santiago, the book’s protagonist, discovered. “[T]hat intuition is really a sudden immersion of the soul into the universal current of life, where the histories of all people are connected, and we are able to know everything, because it’s all written there.”

Friday, September 18, 2009

An Unemployed Reader: The Best Kind

Each day I go on my computer searching for potential jobs, looking for job fairs, checking my push e-mails, doing a little social networking, making some calls, and perusing the many articles with advice on how I can get a job. This is the third time in my working life that I have been out of work. It is the longest and toughest in some sense because of the current status of industry I worked in and my age. In these tough times, many have similar experiences.

What I find now is that I have more time for reading, and those of you similarly situated probably do also. I recommend that you consider reading the following three books:

The Power of Kindness: The Unexpected Benefits of Leading a Compassionate Life” by Piero Ferrucci is a gentle reminder of how kindness comes and can be given in many forms. Separate chapters are devoted to honesty, warmth, forgiveness, contact, sense of belonging, trust, mindfulness, empathy, humility, patience, generosity, respect, flexibility, memory, loyalty, gratitude, service, and joy. An example he gives is a photographer who goes to an orphanage to take pictures of the children because a fine photograph makes adoption more likely. The author, a follower of Roberto Assagioli, who developed psychosynthesis, believes "K]indness and the goodwill of many is a resource, an energy on par with oil, water, wind, nuclear, and solar energy. It would be immensely useful (this is already happening) to pay more attention to it, find ways of evoking it, and harnessing it, organize training courses for it, teach it in schools, publicize it, use it in ads, turn it into a fashion." I concur.

Emotional Resilience: Simple Truths for Dealing with the Unfinished Business of Your Past” by David Viscott provides remarkable insight into what makes us and others tick and react the way that we do. I believe, for most, reading this book will help more than going to a therapist. Two concepts, "Emotional Debt" and "Toxic Nostalgia" will provide remarkable clarity and understanding for many for the first time.
Here are two excerpts from the book: "The pleasure of life often falls to the unresolved pain of the past. This is especially true when old characterological attitudes intrude, diminishing joy, spoiling the good, and finding injury where none is intended." –and—
"Being happy comes from accepting the past and taking responsibility for your part. That acceptance allows you to view yourself as a work in progress, so your imperfections do not argue against your worth.”

Working with Emotional Intelligence” by Daniel Goleman illustrates in extraordinary detail the importance of emotional intelligence and makes a compelling case for its preeminent role in the modern and changing workplace.

Wednesday, September 9, 2009

Neglected and Underdeveloped Knowledge Management

It’s no surprise that CCH recently announced the release of KnowledgeConnect, a knowledge management system for accounting firms. According to CCH, KnowledgeConnect is “a central, indexed, and easy-to-search knowledge management system that will empower staff to make faster and more informed business decisions, avoid work redundancies and reduce project cycle times. KnowledgeConnect will also allow you to, quickly find the best answers for improved customer service, eliminate work redundancies by documenting special knowledge, and easily identify subject-matter experts.”

I first wrote about knowledge management and accounting firms in my August 16, 2005 WebCPA column “Do You Have a Chief Knowledge Officer?” at http://www.webcpa.com/news/14079-1.html.

Knowledge shouldn't just reside with individuals, but needs to be captured and institutionalized within the firm so that it can be accessed easily by all. I gave the following examples in the column: templates for audit engagements, checklists and established procedures for tax return preparation, a sophisticated client relationship management system, and a knowledge database on the firm's Intranet.

You don’t have to be a large regional accounting firm, a business with hundreds of employees, or buy CCH KnowledgeConnect or a similar software application to take advantage of knowledge management. It doesn’t have to cost much as long as time is spent on developing an understanding of how knowledge management can be applied and training those that will utilize it.

I speak from direct experience. With only two-full-time editors and one part-time editor (including myself) working on Practical Accountant, the quality of our editorial content was directly attributable to our ability to take advantage of knowledge management. We used push technologies to keep informed of developments, blast e-mails to pre-qualify article interviewee volunteers, and an Outlook 1,200-plus contact database searchable by subject matter. Running lists of possible coverage for each department, profiled accounting firms, innovation award winners, and what appeared in recurring sections were also maintained.

In today’s world where accounting firms and businesses of all sizes are focusing on reducing costs and improving efficiency, knowledge management is an invaluable tool. Sophisticated software can be helpful, but that’s not the key. What’s necessary for effective knowledge management to work is getting buy-in and participation.

Tuesday, September 1, 2009

Savvy Buyers, A Misnomer?

There is an article entitled “Savvy Buyers Use Self-Directed IRA to Buy Homes” at http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/08/31/BUQI19FAVM.DTL that really scares me.

My discomfort begins with the title which runs counter to my thinking and continues then with portions of the article that give reasons why investing in real estate via an IRA might be ill-advised. As I read the article, I also noticed many of the so-called savvy buyers had simply purchased the property so I would say the jury is still out with regard to how “savvy” they really are. The article also cited those who promote self-directed IRA as support for investment by self- directed IRAs in real estate.

I am sure holders of distressed property would welcome an influx of new “savvy” buyers to take property off their hands. I am also sure that those with self-directed IRA, especially those that went substantially down in value, will be looking for new investments they can believe in.

It’s probably because I am the former editor in chief of Practical Accountant and WebCPA columnist that this article struck such a raw nerve. Luckily, in today’s age even without that platform, I can still publicly express my viewpoint.

Friday, August 21, 2009

Roy Rogers and the Age of Transparency

I have always been fascinated by codes of conduct and marketing, perhaps because I believe the two are compatible and aren’t mutually exclusive even though it might not often be easily implemented in practice
My favorite codes were the ones I discovered back in my childhood. The text of two are reproduced below from http://www.elvaquero.com/The_Cowboy_Code.htm:

Roy Rogers Riders Club Rules
1. Be neat and clean.
2. Be courteous and polite.
3. Always obey your parents.
4. Protect the weak and help them.
5. Be brave, but never take chances.
6. Study hard and learn all you can.
7. Be kind to animals and care for them.
8. Eat all your food and never waste any.
9. Love God and go to Sunday School regularly.
10. Always respect our flag and our country.

Gene Autry's Code of Honor
1. A cowboy never takes unfair advantage - even of an enemy.
2. A cowboy never betrays a trust. He never goes back on his word.
3. A cowboy always tells the truth.
4. A cowboy is kind and gentle to small children, old folks, and animals.
5. A cowboy is free from racial and religious intolerances.
6. A cowboy is always helpful when someone is in trouble.
7. A cowboy is always a good worker.
8. A cowboy respects womanhood, his parents and his nation's laws.
9. A cowboy is clean about his person in thought, word, and deed.
10. A cowboy is a Patriot.

When I was a kid if you joined a fan club you were able to get a copy of these so-called Cowboy Codes and you could carry them around so you could live by these rules of conduct. Marketers have a published code of ethics. The Statement of Ethics of the American Marketing Association may be found at http://www.marketingpower.com/AboutAMA/Pages/Statement%20of%20Ethics.aspx.

I wonder how many marketers and those marketing their products and services carry a copy of, live by, or are even aware of this code of ethics. In this age of the Internet where non-brick and mortar businesses abound, and a professional look can be obtained for a Web site for pennies, not to mention sites like Amazon and eBay where a millions of secondhand businesses have mushroomed overnight. And let’s not forget “reality” television and second life technology environments in which the image that we want to become reality becomes “reality.”

Yes, Roy Rogers and Gene Autry played fictional characters, so it too was a false world. And maybe I live in my own false world. But in my world, there is a professional marketing code of conduct that must be followed similar to those Cowboy Codes of yesteryear.

Monday, August 17, 2009

Questioning Our Consumption Accelerator

In an article that I wrote for Practical Accountant at http://www.webcpa.com/prc_issues/2009_1/30188-1.html entitled, “Money in Going Green,” I explained how greater environmental consciousness at accounting firms is increasing efficiency, generating revenue, and aiding in staff attraction and retention.

I believe this type of increased awareness is also evident in other businesses and with respect to individuals in a change in thinking and an understanding that “going green” isn’t a cause, but rather a possible and viable choice. This explains why reducing carbon footprints are being incorporated into many businesses’ long-term plans.

The economic recession is helping. Trading in gas guzzlers and, taking advantage of tax credits, and a turning to tap water are just two examples. Here are hyperlinks to four articles that conclude the economic recession is providing added support for going green: http://www.presentations.com/msg/content_display/incentive/e3i38bf3aadfb41b3f62638aed77e4ea253, http://www.cosmosmagazine.com/news/2751/consumers-going-green-despite-crisis-study, and http://www.associatedcontent.com/article/1748322/combat_the_economic_crisis_by_going.html.

Technology is playing its part as used textbooks are being sold on Amazon and second-hand reasonably priced clothing is widely being purchased at sites like eBay. This going-green trend is also evident with regard to charitable donations. Rather than throwing used appliance, cabinets, and fixtures away, those who are remodeling are making donations to charity for distribution to the needy. And there are the stadiums and restaurants donating prepared food that isn’t sold at the end of the day to charity. An article in the New York Times at http://www.nytimes.com/2009/08/16/sports/baseball/16stadium.html?_r=1&scp=1&sq=yankees%20food&st=cse describes a program that arranges for the food from Yankee Stadium to be delivered to a church for distribution following a game.

Changes in behavior and thinking are often caused by a change of circumstance. It looks like this economic recession’s impact will have long-lasting effects. It’s nice to see one of those will really benefit society long-term.

Tuesday, August 11, 2009

A Vital, Missing Soft Skill

Whether it is a professional firm, a business or a not-for-profit, many in upper management have a common complaint that workers and staff don’t deal with, or want, change. That rationale is often the reason why individuals are laid off or frozen out and not consulted. I wonder if the problem isn’t an opposition to change, but rather that very few people are skilled at managing change.

Interestingly, there is increased attention to the development and perfection of soft skills. Training is provided in such areas as listening better, negotiation, consensus building, project management, etc. However, I haven’t noticed much employee training on developing and perfecting change management skills.
How good are you and others at your organization at:
· Recognizing the need for change,
· Anticipating changes affecting your industry or profession short- and long-term,
· Identifying and evaluating the steps that need to be followed when making a change,
· Adopting to change,
· Encouraging others to change, and
· Making a change quickly?

The impact of new technology, commoditization of good and services, online communities, globalization, and the economic environment are just a few of the factors requiring businesses to be more nimble. By developing change management abilities at all levels, both the entity and the individuals will benefit

Upper management needs to understand that to change isn’t about getting rid of employees and staff, but rather about creating an environment where employees and staff are the contributors to change.

Friday, July 10, 2009

The Recession Psyche

In these tough times, understanding the psychology of human nature is paying economic dividends.

Restaurants are restructuring their menus offering specials such as “recession-busting burgers” and “bear market brisket.” There are also those frequent-buyer deals where the seventh or tenth meal is free.

Jewelry stores with sales plummeting are turning to buying gold. They and companies advertising mail-in services are promising quick and easy cash. The ads are enticing especially to those in need. Interestingly, if you go to five stores, there may be a 50 percent difference in the purchase price. This is a reflection of a buyers’ market awareness of desperate sellers.

Psychology is also seen in the limited employer-provided outplacement services for laid-off employees. Employers are hoping in part, that departing employees don’t bad mouth them hurting their reputations, and that the remaining employers’ are comforted by that benefit so their morale isn’t adversely impacted.

These psychological aspects are all at the surface. The recession is also causing deeper psychological problems. For people out of work, it is affecting their perceived self-worth. Many, at times, view themselves as failures, although they aren’t at fault. It is also affecting many of those with jobs, dramatically impacting and changing their spending patterns and investment philosophies. Many are becoming much more risk adverse and want guarantees. The growing appeal of annuities and the move from equities are proof.

There is a particular need for a greater study and understanding of human nature and psychological ramifications of this prolonged recession. How many of our parents and grandparents were identified as having a depression mentality and how did that impact their behavior and thought processes? Will there be generations similarly impacted by this recession?

In that regard, I expect businesses and professionals will be paying increased attention to understanding the psychological implications of this recession and how to capitalize on it. For example, some financial planners will incorporate so-called “financial-planning therapy” into their service package in various ways.

Thursday, July 2, 2009

The Real Technology Learning Curve

I am fascinated watching the newest technologies and how individuals and business experiment with them. There is a perception if you aren’t taking advantage of the latest technology you are totally out of it. The converse is that if you are utilizing the latest technology, you must be with it. Neither is true. Examples are Twitter, which often reads like a stream of consciousness, and those businesses encouraging their employees to experiment with new technology without providing guidance or effective evaluation and monitoring of the progress.

Just because you have mastered how to utilize a particular technology doesn’t mean you are promoting a greater good or using it in the best ways possible. Just think of all the text messaging going on including “talent” shows on television that allow viewers to vote for their favorite performer. People quickly vote and incur a charge, often a dollar a vote. Those in the media aren’t helping in their reporting on technology as often they are often just promoting the latest and greatest. You read and hear constantly on the newest, “improved” version which feeds a consumer-oriented culture.

Both the hype and wastefulness really turns me off. The technology learning curve that fascinates me is when a real problem is solved with technology. One example is remote tracking cell phones that allow you to log on to a Web site “to see the exact location the child is currently at. If the child changes location, you will be able to track and see the movements on the map. If the child is in or driving a car, you will be able to see the travel speed along with the direction of travel.”

Another one is Nationwide Insurance’s new mobile application for iPhones that acts as an accident toolkit. According to Nationwide, it:
· Calls emergency services,
· Helps you collect and exchange accident info,
· Stores your insurance and vehicle info for easy lookup,
· Locates Nationwide agents near you,
· Takes and stores accident photos,
· Converts your iPhone into a handy flashlight,
· Helps connect you with towing services,
· Helps you start the Nationwide claims process,
· Finds Nationwide repair facilities.

Giving a child a tracking cell phone might calm many a parent who is worried when there chiild is late in coming home. Similarly a cell phone application to assist when there is in car accident could be very useful and calming.

The bottomline of the technology learning curve should be figuring out a worthwhile use, not just about mastering a particlur technology.

Monday, June 29, 2009

Revisiting My Best Of

Out of the hundred of www WebCPA.com columns I have written, Here are my five favorites and the reasons for their selection.

1. “It's Not What, Rather It's How You Read,” at http://www.webcpa.com/news/21944-1.html stresses the importance of understanding how most people now read.
2. ”A Thought Follower, and Proud of It,” at http://www.webcpa.com/news/25852-1.html points to the advantage of learning from others.
3. “Bothered by the Silo Effect?” at http://www.webcpa.com/news/27603-1.html sees a need to focus more on integration and execution.
4. “Voting for a Two-Question Survey,” at http://www.webcpa.com/news/28178-1.html is a simple way for getting honest customer feedback.
5. “It's Time for an Efficiency Rating,” at http://www.webcpa.com/news/10237-1.html identifies five keys for improving effectiveness.

Tuesday, June 16, 2009

A Three-Part Answer to What Do You Do?

I am noticing more and more that when you ask someone for a business card, the individual pauses to decide which one he or she should give you. For example, an accountant might carry one that prominently shows a CPA credential and another one that identifies the individual as a consultant. I have also met two individuals who offer one card for resume writing services primarily to entry-level job seekers and another for career coaching aimed at more experienced workers.

These aren’t marketing ploys, but indicative of a rapidly changing marketplace. The assumption of many identities is a natural result. There is a need to have greater varied appeal in the marketplace so there is a willingness to be identified with a number of different descriptions.

In conjunction with this, there is also an increasing understanding that job security and employer and employee loyalty is rapidly disappearing. Cost-cutting is focusing on higher-salaried benefits and reducing benefits. Individuals are beginning to understand that to protect themselves it pays to simultaneously have three separate vocations so they aren’t reliant upon a single job for their livelihood. A good example is the individual that works for accounting firm, also does independent consulting on the side, and is the part-time editor of a magazine.

It used to be that individuals worked more than one job in order to provide for the immediate needs of their family. Now, it is in part because of the uncertainty of continued employment. The Internet helps as it is very easy to market oneself as a consultant, establish an online business presence, etc. These additional vocations provide comfort in knowing that you can hit the ground running immediately, rather than having to spend substantial time reeducating yourself and trying to begin a new career.

We keep hearing that most people will have many different employers and even careers in their lifetime. Won’t it be better some of these jobs and careers are concurrent?

Tuesday, June 9, 2009

If Cash is Really King, Then Off with Their Heads

Many businesses like getting paid in cash and many of their customers know it. There are obvious advantages including avoiding the added costs associated with accepting a charge card. Another reason, commonly known but rarely stated, for favoring cash is that it makes it easier to evade taxes. That is why some merchants will give customers discounts off the stated price or not charge sales taxes. It is a practice that I have observed for many years.

There are periodic crackdowns and this is one of those times. The evidence I point to are a number of jewelers in New York charged with evading hundred of thousands of dollars in sales taxes on cash jewelry sales in the million. This is probably overestimating of the dollar amounts of sales, but the jewelers were easily caught when prosecutors sent in undercover agents as customers to purchase jewelry for cash and no sales tax was collected on the sales.

A couple of arithmetical assumptions and a review of sales records were the basis for determining the amount of the alleged sales tax avoided. The jewelers can be convicted of a crime and could end up paying a significant amount in sales taxes, fines, and penalties, as well as being subject to additional liability for income tax evasion.

In these tough times, I expect more prosecutors to adopt a similar approach and go after the underground economy. Tax collections are down, and W-2 earners and those who are unemployed probably aren’t as eager to look the other way, so the political environment is ripe for these easily constructed stings and the resulting news conferences. I wonder if a prosecutor or two will even go after a tax preparer who signs a return for one of these businesses caught in a sting.

Monday, June 1, 2009

Eulogy: The Demise of Middle Managers

Extremely productive individuals are dying off in epidemic numbers and soon they will be extinct. Unfortunately, they aren’t dying of old age, but are being killed off figuratively by a number of contributing factors introduced in recent years to the business environment.

These individuals, known as middle managers, perform very important functions. They possess a vast working practical knowledge of the industry or service area in which they work. They came up through the ranks and had a keen understanding of what that means. They also act as an all-important buffer between workers and upper management, as well as insuring that the needs of customers are met. In part their success is attributed to their long-range view of things and an understanding that maximizing short-term profits isn’t the ultimate goal and that cost-cutting, a double-edge sword, must be handled with great delicacy.

So what is making these middle managers extinct? Here are just some of the tendencies of modern businesses contributing to their demise:
· There is little or no coming up through the ranks nor serving in the ranks by upper management to gain an insider’s understanding;
· Throwing up a lot quickly indiscriminately and seeing what sticks;
· A blind follow-the-industry-leader attitude;
· Big-picture closed-door planning becoming more important than and overshadowing execution and worker feedback;
· Upper management no longer knows the industry or service area that it is “managing;”
· A technology mentality is encouraging first-in-time marketplace pushes at the cost of quality;
· Bearers of bad news are punished;
· Little respect for existing products;
· No real supervision downward;
· Expertise expected instantly;
· Misplaced accountability at lowest levels;
· Responsibility scrupulously avoided at upper levels;
· Brain drain not feared;
· Making something look right overriding doing something right;
· High turnover accepted and encouraged;
· No apologies offered;
· Short-term view;
· Exit strategy in the forefront;
· Placating upper management has become a fine art form;
· Lower-level managers are working managers;
· A belief that technology can replace workers; and
· A lack of respect for the consumer.

This eulogy isn’t meant to lament the demise of middle managers, but to explain it and to celebrate all that the many middle managers accomplished. It is also to point to the legacy that was left behind and to encourage the generations that remain to build on that legacy so upper management and workers create a business world that would jointly assume the vacated roles that middle managers performed.

Monday, May 25, 2009

My Final Practical Accountant “Editor’s Note”

As of the February/March issue of Practical Accountant, my position as editor-in-chief was eliminated. I had worked on the magazine since it was acquired in the early nineties by Faulkner & Gray, a predecessor of the current owner (Source Media), and for well over a decade, I have been lucky enough to be its editor-in-chief.

It was a long and happy run, but I didn’t get a chance to say thank you to the many people who made Practical Accountant into a magazine that I was extremely proud of leading. These individuals include the many CPAs, marketers, vendors, consultants, profession leaders, firm administrators, and technologists who willingly contributed and shared their expertise and insight. It also, of course, includes those at SourceMedia (and the prior owners of Practical Accountant) whether in production, circulation, operations, and sales that helped put out the magazine. Most of all, I want to thank all the editors and reporters who worked with me, and in particular, Jeff Stimpson. In the last few years Jeff and I did most of the articles and departments, and Jeff did an absolutely marvelous job.

As editor-chief, I saw the magazine championing small to medium size firms, acting as an information filter, and identifying and analyzing trends that would help firms grow and prosper. Jeff and I often used regional firms as role models and highlighted innovations wherever we saw them. There was a particular emphasis on business development, and in that regard we owe a tremendous debt to the members of the Association for Accounting Marketing and firm associations like the Leading Edge Alliance for their support and assistance. During my tenure as editor-in-chief and with my WebCPA columns, I attempted to be a positive force, and other than government leaders, the AICPA leadership, and those who I considered unethical, limit my criticism.

I wrote this last “editor’s note” primarily to thank those who contributed to Practical Accountant and created a substantial body of work that I think will stand the test of time. I am also writing it so I can have closure, on my terms, of that chapter in my life.

G-d Bless!

Tuesday, May 19, 2009

Auditors: Doing the Right Thing?

Recently, I was surprised to see an older man walking in the street wearing a baseball-type cap that said, as I remember, “Special Forces.” I stopped him and thanked him for his service and pointed to the cap. He quickly said he hadn’t served with the Special Forces, but was recently honored by them for his service with the OSS in World War II.

Gus explained he had volunteered for the OSS after six months of service in the Army. He told me about his parachute training by the RAF, who took him and his colleagues up in an airplane, and when their number was called, each would move to the action station. Gus was No. 3. As he watched No. 1 and 2 each step up and be quickly sucked out of the airplane, Gus said that he found comfort in a quote from Mark Twain that “Courage is resistance to fear, mastery of fear--not absence of fear.” He explained the training was necessary so they could parachute behind enemy lines. I thanked him again for his service, and told him of my son’s gallant service in the Navy. He asked me to extend his gratitude to my son.

A couple of days later, as I was shopping in a fruit and vegetable store, I came across another individual walking with a cane and wearing a hat indicating he was a Korean War veteran. I asked if I could shake his hand to thank him for his service.

He was appreciative in a very kind and gentle way, and then told me he survived Pork Chop Hill, a battle of which I was probably aware because of the movie of the same name. He then said sadly that 2,000 of his colleagues were lost in that battle and he added that he survived a later battle on an unnamed hill in which another 2,000 lives were lost. I became even more upset when the veteran mentioned that second hill. But then he told me he had saved 161 lives in Korea for which he received the Silver Star.

We parted to get our fruits and vegetables. When I went to the cashier to pay, I saw the Korean War veteran again and asked him if he needed any help. He said no and indicated that he wasn’t in a rush as all he had to do later today was go to a meeting of Korean War veterans. I asked that he extend my thanks to each of them for their service.

These two individuals and many others--scarred, injured and, may they rest in peace, those who have passed on--did the right thing in the most difficult of times. The times in which we live are also difficult, although in a much different way. Like these two fine human beings did, we should all step forward and do the right thing.

For example, although many already do, all CPAs and non-CPAs at firms should step forward and help one another, their clients, and their fellow human beings in need. Just as importantly, they should examine closely what part, if any, they, as professionals, played in causing this economic crisis, the worst since the depression. In particular, CPAs should closely review and critically evaluate the way in which auditing of public companies is currently performed, beginning with the illusion of independence, rather than its actuality, that exists.

One commentator (at http://www.rgemonitor.com/us-monitor/256477/todays_financial_crisis_corporate_governance_and_the_issue_of_third-party_liability) suggests that, rather than having public companies select their auditor, regulators instead should make the selection. Ethan S. Burger, adjunct professor at the Georgetown University Law Center, states:
“Imagine if the SEC or federal Public Company Accounting Oversight Board (PCAOB) assigned accounting firms to companies. Do you think that the auditors might have shown some skepticism when individuals were being approved for mortgages for amounts greatly exceeding three times their income?‌ Would questions have been raised about “no doc” loans?‌”

I believe that this change is possible, and might even involve the regulator supplying a list of three to five auditing firms to the public company from which to pick based on industry expertise and the size of the company being audited. The auditing firm might serve for a stated term, say five years. There also could be a limitation of the damages that can be imposed in the event that an auditing firm is sued as a result of an audit of a public company.

Interestingly, I have heard about a bank that told a company which auditor it should use for audited financial statements, which needed to be submitted to obtain a loan. Adoption of this new auditing regime would allow auditors to be more aggressive, independent, and not to be fearful of losing an engagement because of its findings and statements.

In order to promote discussion, debate, and evaluation, I sent an e-mail to six individuals working at the AICPA, requesting the following:
“Because of these times in particular, I respectfully request the AICPA to consider doing the following two things:
1. Alert the appropriate AICPA members to the article.
2. Promote open discussion of this idea, with the AICPA not taking a position until the public discussion and debate has progressed significantly.
Thanks for the consideration of my request.”

As of this writing, almost a month after I sent the e-mail, there has been no response from the AICPA. I do hope, however, that I will receive a response from the AICPA in the near future.

Call to possible action: I further hope that AICPA members consider asking the organization to honor (or at least acknowledge) my request, and to push for open discussion and debate in order to evaluate whether a seismic change in the performance of audits is desired, necessary, and will help limit the severity of this and any future economic crisis.

Monday, May 18, 2009

Online/Brick–and-Mortar Business Development Acumen

“An Educated Consumer Is Our Best Customer®” is how an off-price clothing retailer positions itself. Although not similarly copyrighted, as of late, I have come across a number of other businesses that live by that slogan with a single word change, “An Educated Consumer Is Our Worst Customer.” Unlike that off-price clothier, they don’t publicize the slogan that they actually live by, and, in fact, do their best to hide that fact. Here are two of them:
1. A vitamin chain offers a particular supplement for 10 dollars more than its online price. A clerk at their store refuses to match the price for a regular customer. The manager insists that the customer must go home and print out the proof even though the store has Internet access.
2. A bank automatically renews you two-year CD unless you come in. The rate is one percent, while if you came in, you could obtain a higher rate by renewing the CD for only seven months. Additionally the bank is offering those that open a two-year online CD a much higher rate of 2.85 percent.

Contrast those two examples with a national department store chain advertising that customers can check on computer terminals in their stores for cheaper prices available from competitors on the brand appliances its sells, and that it will match the competitor’s cheaper price.

Clients will be needing help adjusting and prospering in this brave new world where technological advances are overhauling and significantly transforming the rules of the game. Is your firm ready to help? And more importantly, how deep is the firm’s understanding and knowledge of the virtual and brick-and-mortar worlds and the possible interactions.

To find out, how about giving a 12–question test to firm members from every level of the firm--the managing partner, partners, staff accountants, marketers, technologists, and administrative support (if applicable)? One key aspect of this test is that it is an “open-book” test, in which you can use any technological aid and ask anyone outside the firm. There should be a time limit, e.g., three hours or overnight. The typed answer sheets are anonymously submitted and assembled for review by whomever the management of the firm determines is appropriate. There is no marking of individual exams.

The 12 questions are designed to focus on testing knowledge of the use of technology, the ability to obtain competitive intelligence, and business development acumen.

1. Where on the www.AICPA.org site is a database of firms which is searchable by state, city, and size of professional staff, number of branches, AICPA practice monitoring sections, and AICPA centers?
2. Is it possible in New York and a limited number of other states to buy a long-term care insurance policy that will allow the insured to qualify for Medicaid without spending down their assets? If so, what is the policy commonly called?
3. Webcams are being used more and more by churches, funeral homes, and day care providers as a service? Briefly explain how.
4. Give three examples where enhanced cell phones and other handheld devices are being used to enhance a brick-and-mortar business. Hint: Might involve calling a number with recordings or entering a zip code where there is Internet access.
5. Name a Web site for a company that will give you 250 free business cards or more (except for minimal shipping costs) and lets you pick from over 40 different, distinct designs.
6. Name the tax service that allows the user to search for federal and state and local tax incentives by the address of the business.
7. Give three novel networking techniques used by other firms? Example: One firm offers a day at a spa.
8. How many members are there in the Young CPA Network group on Linkedin, and what are the names of four specific accounting firm alumni groups on Linkedin? (If possible, pick firms in your firm’s region.)
9. Name a well-known site for helping you create and maintain a free blog.
10. How might search engine optimization come into play when a potential employee submits his or her resume electronically?
11. Name five specific strategies being used by businesses and other firms in response to the economic crisis. (Don’t include any strategies you firm is using or advising clients to utilize?)
12. How did you obtain the above answers? Please indicate all methods that you used.
Personal knowledge
Internet search
Text messaging
Discussion group inquiry
Telephoned someone
Directly talked to someone
Other, please describe

I’m not providing an answer key as the test’s purpose isn’t to determine who scored what or even how well research can be performed; but rather, the purpose is for the firm, as a whole, to focus quickly and in a fun way on their knowledge, the tools available to broaden knowledge, and developing a deeper understanding of changing business trends that will significantly impact clients.

Final thought: I recommend that as soon as the answers are assembled and prior to management reviews, sets of the answers be distributed, as is, to each individual who took the test (better yet, all the firm members). The idea is by that doing this the community aspect of the virtual world is being further explored, instilled, and encouraged in a primarily brick-and-mortar firm.

Sunday, May 17, 2009

Are Ethics and Profits Mutually Exclusive?

“The Darwinian concept of the survival of the fittest has been substituted by a philosophy of the survival of the slickest.”

This Martin Luther King, Jr. quote still rings true.
It is particularly evident when you look at the alleged Ponzi schemes that we read about every day. Many of these individuals show a remarkable knowledge of how the financial marketplace works and are skilled at gaining prestige, obtaining political influence, and escaping regulators’ wrath. They also seemingly have an innate and sharply developed ability to manipulate individuals and entities to their advantage.

The marketing of adjustable rates and balloon mortgages with little down and no real credit checks coupled with the packaging of these mortgages into investments promising high return is the best illustration of where this philosophy of the survival of the slickest is taking us.

Martin Luther King was ahead of his time as now many are seeing the truth of that quote. This awareness, the developing community concept derived from the Internet, and the fact that the Internet ensures the uncensored widespread and quick dissemination of information, discussion, and debate, signifies change is coming.

Many in all levels of society including a few CEOs, consultants, and professionals are sensing a new business model is imminent in which ethics and profits aren’t mutually exclusive and in fact, compatible and necessary for a changing marketplace. To get buy-in from all the necessary stakeholders, businesses, not-for-profits, groups, and communities on the Internet, codes of conduct and responsibilities will have to be developed. There will also have to be actual transparency and demonstrated delivery of win-win to all the stakeholders.

CPAs, often identified as the most trusted advisor of businesses and individuals, can be one of the prime catalysts for this seismic change. Many firms are perfectly positioned, especially these very successful regional firms that have been “walking the walk” for a number of years. They created infrastructures, procedures, and safeguards to maintain quality and still experience sustained growth. Their focus is long-term, and most importantly, there is understanding that trust is constantly earned, and although profits might be the result, ethical means can always be utilized and makes business sense.