Tuesday, December 15, 2009

Fraudulent Veteran's Organizations

Nothing, nothing gets my blood boiling faster than to stumble upon an organization claiming to be non-profit and raising money for veterans when the facts prove otherwise.

I wrote an article a couple of years ago and today that article prompted a call from the Veteran's Administration in NY. They called and asked me what I knew about the The Veterans Alliance Service Center or the American Veteran's Alliance. Have they not heard of the Internet?

I told them I knew enough to call both of these organizations fraudulent to the core and anyone who has ever throughly checked out these organizations would know that to be true. When you don't list a mailing address, when you don't publish annual financial reports, and when you give less than 50% of what you raise to veterans then in my opinion as a veteran you are perpetrating a fraud - plain and simple!

What is really sad is that these organizations and others as well (most try and use the word veteran or soldier in the name) continue to operate and raise money all around the country. How do they do it? it is simple.

They approach the manager of a grocery store and say they are raising money for veterans. Most of these managers are encouraged by their corporate headquarters to become involved with the community so when the Boy Scouts, the Girl Scouts, the local softball league or even a local gymnastics team wants to set up a table outside the store they almost always get permission to do so. The same holds true when these managers are approached by someone claiming to represent veterans.

The mere fact of being allowed to collect money outside of the grocery store automatically acts as an endorsement of the organization. Unfortunately, some of these organizationa are not what they seem, certainly in the case of these veteran's groups.

What is really sad is to see people leaving the grocery store and dropping $5 or $10 into a jar believing it will go to help veterans... the only person that money is going to help is the guy working the table as well as the person he is working for... that's about it... in a few cases they may donate 4% or so to keep it legal...

So, if you are Ok with giving $10 to one of these groups knowing full well that only 40 cents or so may end up helping a veteran then be my guest, but you are both a fool and doing a disservice to veterans around the country.

Labels: ,

Working for the "Family"

A couple of recent consulting jobs reminded me of an on-going problem I have observed in this industry - family members, typically second generation, working and managing the businesses (for parents and/or parent-in-laws) with no written agreements as to how, if ever, ownership of the business will be transferred or sold to the next generation.

A classic case, repeated many times, is the best described as an example with fictitious names.

Steve married Karen 19 years ago. Karen's parents owned Quickie Print. About eight years ago, Steve was invited to join Quickie Print and soon became its manager. Under his direction and management, the company experienced healthy rates of growth and profits, with sales in 2009 projected to top $1.6 million. Steve has been well rewarded with an excellent salary package and benefits.

During the past five years or so Steve has discussed with his in-laws on numerous occasions the possibility of buying the business. The in-laws, especially his father-in-law, have always tended to be vague about what they thought the business might be worth, or even whether they were really interested in selling it.

About two years ago, Steve's in-laws decided to semi-retire to Colorado, drawing out healthy dividends from the business. In the meantime, Steve continued to manage the business full-time. Buying the business had slipped to the back burner.

Well things changed dramatically about six months ago. Steve and his wife got a divorce. The divorce was amicable, but it highlighted Steve's tenuous position in the business. He wants to buy the business, but his father-in-law, when pushed for an "asking price," has mentioned a totally unrealistic price.

Now, what does Steve do? In one sense, he has the in-laws over a basket. For all intents and purposes he is the business and if he left and took some accounts with him Quickie Print might not survive, short of the in-laws returning back home and taking over all management responsibilities. On the other hand, Steve has invested his heart and soul into this business for the past eight years but still has no stake in it whatsoever - he's just another employee and he has no equity in the business.

Comments - In eight years neither party really sat down and put in writing how the business might be valued and when and how the business might be sold. Sad! Steve is in full-charge of the business and makes a healthy salary but has absolutely no ownership stake in the business.

If you recognize your own situation in the above, whether you are a son, daughter, daughter-in-law or have any similar relationship and you are working in a business owned by parents, you need to clarify exactly where you stand, when you can purchase the business, and agree on a specific method for valuing the business. Of course, the same situation would also apply to a long-time manager who has been promised time after time, as an inducement to remain with the business, the opportunity to buy it "some day." Days turn into months, and months turn into years and still nothing is put in writing.

One good start, at least in terms of valuing a business, would be to purchase "Print Shop for Sale." Another idea might be to email me and discuss your specific situation. I will be glad to help if I can.

Labels:

Friday, December 4, 2009

Employee Theft Leads to Company Closure

EUGENE, OR—An ex-bookkeeper of a now-defunct printing company faces upwards of 100 felony counts for allegedly bilking the firm of more than $1.5 million, an act which may have contributed to its demise.


I just read the above in an email blast from Printing Impressions. I really have to wonder, despite the fact that I know this happens hundreds of times a year to printers around the country, why the owner didn't suspect or catch the thief a bit earlier.... you know, maybe started wondering about where $250,000 had gone, or maybe the first $500,000 or even $1 million.

One thing is for sure, I will bet (based on profiles of employee thefts of this magnitude) that she was a long-time employee, very dedicated and if true to form probably didn't want to take time off for vacations. Of course if you've working for a firm from which you can steal $1.5 million before getting caught you ought to be pretty loyal and dedicated!

You can read more about the story as it appeared in PI by going here:
http://www.piworld.com/article/former-employee-charged-15m-theft/1?sponsor=newsletter/pi-weekly

Labels: ,

Wednesday, December 2, 2009

I too can see Russia from my back door!

I just had cataract surgery performed on my right eye yesterday, and I mentioned this to a conservative friend of mine.

My friend emailed me back suggesting that if my surgery went well I would probably be able to see things much clearer now and would thus, by definition, probably become a Republican!

I wrote him back and said he was right. I can now see so clearly that when I go to the back of my house and look west across the Intercoatal Waterway I can see all the way to Russia just like Sarah Palin.

P.S. I know a lot of soccer moms and most of the ones I know are a heck of a lot smarter than Sarah Palin. In fact, she has given the term "soccer moms" a bad connotation. Just my thoughts.

P.P.S. By the way, cataract surgery and the medical advances it represents is nothing short of amazing. To be able to operate on such a small, complex organ and to be able to do so on an outpatient basis with little or no pain whatsoever is a testament to how far we have come in medicine in such a relatively short period of time.

Labels: , ,

Significant Statistical Changes Expected

We are in the early stages of preparing the 2010 Operating Ratio Study for the Printing Industry. Although the availability of customized one-on-one reports (introduced for the first time in 2008) is still in question, the study itself will be published in full as it has always been.

What is both exciting and intriguing will be uncovering changes in levels of productivity and sales wrought by the changes in the economy during the past 24 months. Thanks in large part to the huge data base available to NAQP and Q.P. Consulting, we will be in a unique position to provide special insights as to how the economy has impacted printers and different ends of the spectrum. Specifically, we will be comparing printers of all sizes and types and examining how the economy has impacted their sales and profitability in the past two years.

I can only speculate at this point, but I would surprised if those previously in the top quartile will continue to report healthy owner's compensation in the 22-24% range. I won't be surprised, however, if these same firms report either minimal sales growth or even some decline. The smart firms, I suspect, will have concentrated on profitability. I also suspect that the lower profit firms at the other end of the spectrum will have concentrated their efforts sales at the expense of profits, and in many cases failing at both.

For those who participated in the 2008 survey and received a customized report, I would be interested in your input as to the overall value of those customized reports, as opposed to the more generalized ORS reports published previously.

Labels:

Tuesday, December 1, 2009

Great Time For Setting Goals

I love the holidays because I can always find some "quiet time" to sit down and reflect on the year just ending as well as to project what changes we might be able to bring about in the coming year - in this case 2010!

You shouldn't have to wait for an accountant to get a preliminary P&L and balance sheet for 2009. Even an 11th month statement will provide you with all the data and ratios needed to set some new goals for 2010.

You need to take a yellow highligher and circle key ratios such as cost of goods, cost of paper, total payroll expenses, overhead, etc. and then compare them to what the leaders in this industry (in your sales range) have reported.

Where do you get this information? Well, I hope you have a copy of NAQP's 2008-2009 Operating Ratio Study. There is no more important or useful document than this study and if you don't already have a copy you should order one today from NAQP. Call them at 1-800-234-0040.

Holidays and Competitor Surveys

For many printers the holiday season brings with it a slowdown in sales. So how can you fill this time with a beneficial project that will help you in 2010? Conduct a survey of competitors that will reveal not only their pricing practices but the cleanliness of their facilities and the friendliness of their CSR staff.

As I write this blog I have a client who is undertaking just such a project. He has chosen 11 competitors in his market area. He has avoided choosing "garage" printers, and instead has selected printers with good reputations and longevity in his local community.

He has selected approximately five items, with two quantities for each, that he would like to survey. He has prepared an informal looking bid sheet and has hired a woman to conduct the project for him.

She is a local graphic artist and has been instructed to spend the next five days personally visiting each location under the guise of starting up her own graphic services business, and thus needs to get some printing done. She has also been instructed to tell each printer that she is not necessarily looking for the lowest price, but rather she wants to establish a long-term relationship with a local printer.

In addition to recording all prices and estimates she receives, she has been instructed to take notes on the overall appearance of the location and how she was treated by the CSRs who assisted her. She is also to record exactly how long it takes to receive quotes from these printers.

The goal of this market survey is to establish where this client fits in regards to pricing specific items and the measure how competitors rate when it comes to overall customer service and responsiveness to requests for quotes.

We expect that at least 2-3 printers on this list will fail to get back to our shopper in the 3-4 days allotted for this project.

I will report back on our findings. Happy holidays.

Labels: ,