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Archives for February 2007

Greenfield Guitars: The Stradivarius of Guitars

Greenfield G1Last week I started a new category here on Zoomstart called Whatsis. It’s just a place to talk about cool and interesting stuff. Today I want to talk about acoustic guitars because I love sitting down and jamming on one of mine every once in a while.

Let me get this dumb joke out of the way first.

I play a little guitar. Actually, it’s a full size guitar. I just don’t play it that often.

What Makes A Great Guitar

There are only two things that you need to make a great guitar:

  1. Great craftmanship
  2. Great tone woods

If there were one more thing that makes a great guitar I would say it is time. Over time, if you keep your guitar stored properly, the wood ages well and the sound gets sweeter. This means keeping it clean and storing it where it won’t get too cold or too warm, and where the humidity is stable (not too dry and not too damp).

My Guitars

I have two guitars. One is an Ovation Custom Legend. It’s a beautiful guitar and it’s better quality than the ones they’re making now. I bought mine back when they were still putting hand-carved walnut bridges on them. It’s a shallow body so there’s not much bass, but it sounds great plugged in.

My other guitar … my first guitar, is a Samick. My Samick SW-115 has a laminate top and was made in Korea. Basically it’s a budget plywood guitar made before Samick hired Greg Bennett to do a complete makeover on their guitar lines and move them into a higher quality market.

I paid 200 bucks for my plywood Samick and I love it. It’s aged well. The best thing about it is I can take it to the beach and not care if it comes home full of sand and covered in hamburger grease.

Greenfield Guitars

Michael Greenfield lives in Montreal Quebec and he crafts what are some of the best guitars being built today. He only makes 12 guitars a year.

Every guitar he makes is hand crafted using the best tone woods available; Aged Brazilian Rosewood, Honduras Mahogany, Big Leaf Maple, European Spruce and others. The wood for each guitar is selected for that specific guitar and he assembles them with animal hide glue which has been used by master craftsmen for centuries to build the finest instruments.

Even though Greenfield guitars are made using many techniques of the traditional masters, they have some amazing modern design features. Check out the beveled armrest in the picture.

He really is making the Stradivarius of guitars. It’s so hard to find craftsmanship like this in anything today. If you want one, you can only buy them through his selected dealers like 12th Fret and The Music Emporium.

Check out Michael’s website. You can see how he makes a guitar from start to finish with the online shop tour. He also has audio clips and a gallery of musicians like Don Alder, Melissa Greener and Keith Richards who love his guitars. Digg it! Reddit Yahoo Comments (6)

The Negotiation Ain’t Over Till It’s Over

Sold SignYou might have noticed a little something going on called the housing boom over the last few years. (Or housing bubble), however you want to see it. It’s been a sellers market.

A friend of mine, Richard “The Rocket”, moved out to Calgary for a while. He bought a pretty typical four bedroom  house. After about a year he sold the house and came back to Vancouver.

Adding Value To The Property

Richard is a salesman and a very good one. The first thing he did before putting the house up for sale was add some value to it. He cut up one of the living areas and added a fifth bedroom. Now he was selling a five bedroom house instead of a four bedroom.

He also decided to put new carpet in the rec room. He ordered the $1200 carpet and called a real estate agent to get the ball rolling.

The Sale

It took one day to get an offer on the house. Did I mention it’s a seller’s market?

The offer was firm and it was a pretty good offer. He was selling the house because he was moving, but he was going to make some money on the deal as well. And this is where the story gets interesting …

To experienced salespeople, having a good offer on the table is not the time to rock the boat. He could have waited for a better offer to come along or he could have told the buyer “no deal” to see if he would up the offer (sometimes you can squeeze a little more, even out of a firm offer).

The hurtle in doing either of those things involves losing the buyer and having to wait for another buyer to come along. It’s always better to sell something quickly because the longer it’s up for sale, the more questionable it is to potential buyers. That’s especially true with real estate.

So it’s a done deal right? Not quite. There were two more opportunities to make some extra money on the deal:

Richard told the agent he would accept the offer on two conditions:

  1. He would cancel the $1200 order for the new carpet
  2. The agent would cut his commission in half

The carpet was a no-brainer, and even though the agent didn’t like losing half of his commission, Richard argued “Hey, it only took you a day to sell the house”. The realtor agreed, took the cut, and The Rocket sold his house.

Creative Negotiation

Creativity during negotiation always brings interesting results. When you’re near the conclusion of a deal there’s often an opportunity to find some extra money sitting on the table. Sometimes it’s in the form of upselling. Sometimes you can take something out of the deal that’s worth money to you without lowering the price. If there’s a middleman or a broker, you can often cut the costs of putting the deal together with a little pressure.

Don’t just negotiate with the buyer. Negotiate with everyone involved in the deal. Digg it! Reddit Yahoo Comments (1)

Contracts, Intent, Integrity, And The Road To Hell

ContractsContracts, by their very nature, put people on opposite sides of the table. Friendships and long established relationships of all kinds have been destroyed by bitter contract disputes. But this also happens when there is no contract where there should have been one.

The intent of the person or company you’re doing business with is just as important as the paper sitting on the table between you. Someone who wants to do shady business and take advantage of you will try to do so whether there is a contract or not. In fact, they might use the contract to back you into a corner.

The road to hell is paved with good intentions.
~ Samuel Johnson

Sometimes people start out with good intentions and then they lose themselves along the way. So, even better than good intention is integrity. At the end of the day, good people do good business. That’s what they intend to do from the beginning. It’s what they do in the end. And they’re always the best people to do business with.

A Little Story About Agreeing To Disagree

A supplier I have done a lot of business with decided to buy a machine I was selling for one of his other clients. We had a verbal agreement that the machine was to be paid for in full before it left my door. I had no problem with this because we had an ongoing business relationship, and a very good one.

His client took forever to make the final purchase and I missed several other opportunities to sell this machine. He assured me that his guy was going to buy it and so I waited. And waited. He even sent me a purchase order which I accepted. And then I waited some more.

A few months later his client was ready to take the machine. He said he was going to send over a check for 10% of the price and pick it up. I told him no — we agreed on full payment up front (because it was used equipment, I was selling it as-is, and I didn’t know anything about his client).

Then he tried to pull a snafu on me.

The purchase order (which I trusted was in order and hadn’t really looked at) stated that he would indeed pay 10% and follow up with the rest 30 days later. He was adamant that this was the agreement. I was a little ticked off at his disregard for our verbal agreement. I felt like he was backing me into a corner.

Luckily, there’s usually something you can find wrong with most contracts or agreements.

He had not put a delivery date on the purchase order, probably knowing full well that this deal could have taken a fair amount of time to complete.

I called him back. It was November and his client really needed to get this machine quickly by this point. I said “There’s no date on the PO, so if you don’t want to give me full payment up front, I’ll release it to you … in March.”

The next day he came by with a check for the full amount.

This was a little hiccup in our business relationship. I’m glad it didn’t sour it completely because we’ve done a lot of good business together since.

Clarity Is What Makes Intent and Integrity Happen

I’m not sure why he tried to get away with not paying the full amount up front. Maybe he forgot what we had discussed. Maybe his cash flow was a little weak at the time.

Regardless, whenever there’s a dispute with a contract or agreement, written or verbal, it’s usually because one or both parties are not clear on what they are agreeing to do. Verbal sticking points are easily forgotten. Written clauses that are unclear become ambiguous or prone to multiple interpretations.

Everybody involved needs to have absolute clarity about what is being agreed to. Clarity makes it easy to preserve both intent and integrity. Clarity makes it easy to work together to make a deal go smoothly from start to finish. Digg it! Reddit Yahoo Comments (2)

Behind-The-Scenes Corporate Branding Wars

Red Yellow and BluePreviously, I wrote about a story of industrial espionage in the cola wars.

I think everyone knows that large companies like Coke and Pepsi are always engaged in a branding war with their rivals. It’s mostly a game of advertising and it’s waged in front of us everyday on TV, radio, in print, on billboards and over the internet. But there are a lot of little things that happen behind the scenes too.

Here are a couple of interesting behind-the-scenes facts:

Lets Do Lunch

Grocery and convenience stores all carry both Coke and Pepsi. You have your choice of either company’s products when you go shopping. But restaurants only carry one or the other. Since both companies have a turn-key selection of pop, juice, sports drinks and bottled water and restauranteering is a tightly margined business with a need for efficiency this all works out well.

When executives or managers with one these soda makers are taking people out for lunch to a new restaurant, there’s one thing they absolutely have to do first …

They have to phone ahead and make sure the restaurant is carrying their brand. If the restaurant doesn’t, they’re not going there. It might sound a little petty at first, but branding is vitally important to success. And how embarassing would it be to take someone out to lunch only to have them be served your competitors product.

Fly The Flag

Every company has it’s corporate colors. For Pepsi it’s blue and for Coke it’s red.

A high-speed canning line for bottling pop or beer will typically produce 2000 cans per minute (no, that’s not a typo). It’s a really cool thing to see, especially if you like mechanics or automation.

Some of the main manufacturers of the plastic conveyor that’s used to move the bottles from one machine to the next make their stock conveyor in blue. It’s not a problem with independent companies. It’s certainly not a problem for Pepsi. But it is a problem for Coke.

An equipment dealer that took me on a tour of a Coke plant a few years ago pointed out that there were no blue conveyors. Whenever Coca-Cola buys conveyors or equipment that has conveyor in it, they specify no blue conveyor in the contract.

The only reason is that blue is the corporate color of their main competitor Pepsi.

Isn’t This All Kind Of Ridiculous?

Maybe. But not to them. And not to a lot of major companies in industries where there are a few top rivals all competing to be number one. Branding is crucial to success. Whether it’s on your product on the shelf, at the lunch table, or back at home base, hyper-competitive companies are always thinking about branding, corporate colors, and who might see it, and where.

ps. The picture is Barnett Newman’s 1966 painting entitled Who’s Afraid Of Red, Yellow And Blue? It seemed to fit the post. Digg it! Reddit Yahoo Comments

Investing In Waves

Calm WatersCalm days are not very good for sailing.

Funny enough, they’re not very good for investing either.

Housing Prices Vs Inflation

Robert J Shiller, A Professor of Economics at Yale, showed how housing prices (after being adjusted for inflation) have not changed much since 1890. There were ups and downs, but overall the price of housing has remained steady for over a 116 years. With two very big exceptions …

  1. Between WWI and WWII (during the great depression), housing prices were actually averaging about 66% of what they should have been.
  2. From 1999 to 2006, prices have risen steadily to reach 200% over what they should be if they were to stay in line with inflation.

What this means is that if you bought a house in 1890 for the equivalent of 100,000 1999 dollars and sold it in 1999, you would have made 100,000 1999 dollars. There’s absolutely no profit. But as of 2006, because of the largest housing boom in history, it would be worth $200,000 in 1999 dollars.

Stocks Vs Inflation

Over the long term, a portfolio of well performing stocks like the S&P can beat inflation. One study showed that from 1926 to 2005, the S&P index annually returned 10.42%. Inflation during this period was about 3.25% annually. So every year you could increase your wealth by 7.17% or $7.17 for every $100 you invested.

You also have to keep in mind that the companies listed in the S&P index have changed many times over the last 80 years. These changes are little waves and the 7% return you get over the long haul has plenty of better and worse periods.

So, What’s A Wave?

You can see by looking at housing and stocks over the long term that if you park your money in one spot, you’re going to make no to little return on your investment. The only strategy that wins in the end is to move from wave to wave.

If you bought Google shares during their IPO for $85, you potentially made 500% on your money in the first year. That’s a lot better than 7% and that’s a nice wave to ride.

Between 1999 and 2006, housing prices have pretty much doubled. Not as big a wave as the Google one, but a nice ride all the same.

Catching Waves

If you’ve ever done any surfing, you know that catching waves is all about location and timing.

First, you have to be in the right place. At any given moment in time there’s a wave happening somewhere. While the dot com crash in 2000 shook the stock markets, the real estate wave was just heating up.

Next you have to be there at the right time. If you’re too late, you might miss the opportunity. Too early, and it might turn out that what you caught wasn’t much of a wave at all.

So the secret to catching waves is to be on the lookout for them. Always.

Dangerous Waters

There’s always a certain amount of risk when you’re investing. Nothing is a sure thing until after it’s happened. Hindsight is 20/20 right? It’s easy to get mesmerized by a wave, a potential wave, or a wave that’s about to crash into the rocks.

I never buy at the bottom and I always sell too soon.
~ Nathan Rothschild

Nathan Rothschild’s rule for successful investing is great advice. Make sure you’ve got a rising wave before you jump on. And then jump off while it’s still rising and look for a new wave. It’s a lot easier to sell an investment while the price is still climbing because that means people are still buying it up. Once the price peaks, it’s going to be harder to sell.

To Sum It Up

  • You want to keep moving your money into rising waves rather than keeping it parked in one spot. One way you can hedge your bets is to stay diversified. Mutual funds are popular because a fund manager’s job is to find a diversified collection of waves and change them up as needed.
  • Don’t get greedy. Ride your investment and jump off before it crests and you get caught in a crash.
  • Rough seas are necessary for sailing and investing. Wind creates momentum. And waves. And good things come from waves. Digg it! Reddit Yahoo Comments (6)

The Breitling Emergency Watch

Breitling Emergency

The Swiss Watchmaker Breitling makes watches that are popular with aviators. One of their watches is also popular with some boaters; It’s called the Breitling Emergency.

The Emergency has a built in ELT (emergency location transmitter). If you become stranded as the result of a downed aircrash or a boating mishap, you simply unscrew the protective cap and pull out the antenna. The Breitling will broadcast a signal on the 121.5MHz aircraft emergency frequency for 48 hours. How James Bond is that?

You can get the Emergency in gold, white gold, or stainless. There are different models; some are more dressy and others are more sporty.

Breitling Emergency back

The analog/digital models feature calendar and 1/100th sec chronograph functions. It has a rotating bezel, a sapphire crystal, and its water-resistant to 3 bars (about 65ft underwater) even while transmitting.

The watch comes with a video to explain the use and function of the transmitter. DO NOT JUST “try it out”. There are heavy fines for sending a distress transmission in a non-emergency situation and in some cases you’ll get both fined and charged for the cost of deploying rescue personnel. Besides, what are your neighbors going to think when people start rappeling out of a Coast Guard chopper onto your roof.

Since it’s transmitting range is limited to 100 miles and can reach aircraft flying up to 20,000 ft, it’s not a substitute for a full GPS Sarsat locator. But it does work and it has saved lives, so it’s not just a great conversation piece. It could be your backup locator if you really want to be found. Digg it! Reddit Yahoo Comments

How To Create Your Business Plan

Business PlanningA business plan is a launching point. It’s an idea of which direction to travel in. And it becomes obsolete almost as soon as it is completed.

Unforeseen events occur. Assumptions are proved wrong. Markets shift. Financing falls apart. Still, and for all the reasons that render a business plan irrelevant, it is the most important document a business will ever produce.

The Value Of The Planning Process

Business planning is a process, and it provides many invaluable things:

  • Direction. Focus. Strategy. It’s easy to know where you are. To know where you’re going requires goal setting. When everyone knows which direction to go in, the effort to get there is unified. People don’t trip over each other trying to reach their own idea of the destination. The right decisions are known before situations are encountered. And when things are moving at a dizzying pace and your time is consumed by putting out fires, the only thing that can break that cycle and get you back on track is having a clear direction.
  • Metrics. Actual progress towards various goals can be measured against the plan. A business plan is the guide that tells you sales are going well and costs are under control. If things don’t measure up it alerts you to take action before the business enters the danger zone where it runs out of capital before it can produce it’s own positive cash flow. The timelines and budgeting in a business plan not only tell you if something is wrong, but where it is going wrong, and who is responsible.
  • Options. The planning process requires that you answer hard questions through brainstorming, problem-solving, and research. All these activities bring to light new information and new ideas. Ways to increase revenue and decrease costs. If the numbers don’t add up, planning allows you to explore other options before capital is committed to a doomed-to-fail idea.
  • Credibility. Real credibility comes from previous successes and is renewed with every new success. But even the best business people make bad decisions and take the wrong action sometimes. A business plan shows that you’ve done the work to maximize success and minimize the risks. It proves that you’re not flying blind. You have the answers to the hard questions. You know how to bring value to your customers. You know how to bring value to potential investors.

Keep It Real

The planning table is a place for absolute truth.

The facts are arranged into a strategy and determine the figures, and in turn the figures determine profitability. If a plan looks bad, the first tendency is to tune the numbers until the bottom line is favorable, irregardless of what the facts say. And then the plan is doomed to fail. The proper way to rework a troublesome business plan is to explore the facts. Find new information. Find new ways to increase revenue. Find ways to lower capital requirements. Re-strategize the facts. Let the facts determine the numbers, and the numbers won’t lie.

Another danger during business planning is that reality can sometimes be discouraging. This is the time to search for options. Expand your research and explore different strategies. Think outside the box. If a workable plan still can not be formed then the people don’t fit the business. You need new people with the right skills and expertise or you need to pursue a different business idea.

Write A Plan That Can Be Executed

Every plan has an intended audience which is what defines its purpose. Whether it is an internal strategy document or a proposal to outside investors, a good plan is easy to understand, believable, logical and enlivening. Many people jump into a business venture without a comprehensive plan. They scribble some notes down. They make it up as they go along. At the very least, it costs them valuable time and capital. Most often it costs the failure of the business.

Plan your work. Work your plan.
~ Norman Vincent Peale

Learn Your Lessons The Easy Way

Going into business without a plan is costly in time and capital. When companies jump in with both feet, the lessons bring about realities. The business plan is the homework about what the industry is all about. Utilize trade organizations, trade shows, and market / industry reports which can cost hundreds or thousands of dollars but can give you a great “big picture” view of your industry and a starting point to continue your research with potential customers and suppliers in your area.

Organizing Your Business Plan

This is a list of the sections I like to put in a plan. You can think of each of these sections as questions. Answer them. Find the answers to them. Discuss the answers to them with your team and your network of connections. Get as much outside, independant and expert information as you can.

  1. Table of Contents
  2. Executive Summary
    • Purpose of the Plan
    • Summary of the Plan 
  3. Business Background
    • Company History
    • Current Situation
    • Direction
    • Overall Strategy/Philosophy
  4. Products and Services
    • Offering
    • Product Development Issues
    • Training
    • Manufacturing and Operations
    • Quality Control and Ongoing Service
    • Regulations
    • Costs
  5. Market Environment
    • Target Market(s)
    • What Motivates Those Buyers
    • Assessment of Competitors
    • Positioning
    • Trends
    • Obstacles and Opportunities
  6. Sales Strategy
    • Selling Methods
    • Supporting the Sales Force
    • Product Promotion
  7. Financial Information 
    • Funding Request
    • Past and Projected Financial Performance
  8. Timetable and Metrics
  9. Supporting Documentation

Start Writing It

Write your Executive Summary last. Both components of the summary should fit on a single page. This is your “sell” page. The plan should be optimistic and go-forward, but completely realistic. If you’re an expert in the industry, you’ll want to budget a contingency fund of 8-10%. If you don’t have a lot of experience in the type of business you’re planning, you might need to budget as high as 15-20% for unforseen cost over-runs.

Just to say it one more time because I can’t stress this enough: Determine the facts and let the facts determine the numbers. Next to having the right people, this is the single most important aspect of business planning. You can tweak the numbers to work, and fool yourself on paper. But only on paper. Digg it! Reddit Yahoo Comments (8)

Sales, Capital, Purchasing … In That Order

Bill GatesOr, How Microsoft Almost Didn’t Happen.

It’s counterintuitive to sell something you don’t have.

Most people start a business by building or buying something, and then they try to bring in sales afterwards. Sometimes they succeed. A lot of times they don’t. To ensure success, you have to sell first, raise capital, and then make your purchases.

The Microsoft Story

Here’s a very famous story. If you’ve heard it before, read it now with the perspective that putting sales first always wins.

In 1980, IBM approached Bill Gates to provide an operating system for their new personal desktop computers. The fledgling Microsoft didn’t even have an operating system to sell them, and sent IBM to a company called Digital Research. This was a huge mistake.

The idea, which most people have, that you need to have something to sell before you can make a sale, almost rewrote history. Fortunately for Microsoft, IBM and Digital Research could not reach an agreement so IBM approached Microsoft again. This time Bill Gates said yes.

He still didn’t have an OS, but he had a customer. So he purchased an OS from a company called Seattle Computer Products to fulfill the contract. That OS eventually became MS-DOS and then evolved to become Microsoft Windows. Bill Gates became the wealthiest man in the world because he made the sale before the purchase.

Sales Before Purchasing

Companies that sell first know how much capital they need to conduct business, and how much they can purchase and still make a profit. Any type of business can practice sales, capital, purchasing in that order.

Here are some examples:

  • I have a friend who invests in rental properties. When she finds a property she likes, she advertises the property in the “for rent” section of the paper to see how many calls she gets. If she gets multiple calls, then she knows the location is good, her asking price is good, and she swoops in and buys the property. She already has a list of tenants wanting to move in when she buys the property.
  • Department stores and boutiques sell gift cards or certificates. There’s a time lapse between when the gift card is purchased and when it is redeemed. They get to make interest from banking that money during the time lapse. It’s an extra income stream. During the holiday season, they can purchase a lower amount of inventory because a certain amount of their sales will be in the form of gift cards. They can purchase more inventory later, when the cards will be used. And some of the cards will be lost or forgotten and never redeemed.
  • Outlet warehouses, golf courses, and fitness centers sell club memberships. They get cash up front for services that they provide later. All these businesses have a certain percentage of customers that use the membership sparingly, or even not at all. That’s money for nothing.
  • Hotels and restaurants require you to make reservations. Their fixed overhead costs are the same, but they can hire more staff and buy more food when demand is high. They purchase according to sales.
  • Preorder your copy of that new bestselling novel before it hits the shelves or that Academy Award winning DVD. Experienced sellers know that a certain number of pre-sales equals a specific number of off-the-shelf sales once the item is released. They know how many they need to purchase. That’s sales before purchasing.
  • Manufacturers pursue sales contracts. Supplier agreements lock in volume forecasts and pricing for a specified time period. The manufacturer purchases as needed to fulfill the forecasted demand.

Generating Sales Before Buying The Company

Some business people like to buy an existing business rather than starting one from scratch. A failing business can often be purchased for a bargain. The first thing smart buyers look at is sales potential. If the company has great sales but can’t get costs under control, they look to see if they can cut costs to make the business profitable.

If the sales are bad, they look to see if they can increase the sales with their expertise, and connections to other businesses. This is why management usually changes when a business is sold. The new owners have the right people, and they have a sales plan. When they know they can get the sales, then and only then, they raise the capital and purchase the company.

Generating Sales To Raise Capital

When a company has trouble raising capital, it’s because lenders or investors don’t have confidence in the company to get the sales to pay back the debt or make a return on the investment. It’s that simple. If you can secure sales first, people will throw money at you. And then you can purchase exactly what you need to fulfill the sales, and not more than the sales support.

Sales, Capital, Purchasing … In That Order

A sale is never completed until the transaction is completed and payment is received, but securing the sale, with memberships, supplier agreements, and other mechanisms gives a company a huge advantage, even if only a portion of their sales come through. Utilizing sales, capital, purchasing in that order means that you start small, suffer through the growing pains, and best of all, succeed. Digg it! Reddit Yahoo Comments (8)

The US Senate Votes To Raise The Minimum Wage

InflationThe debate over whether or not to raise the minimum wage is always heated. Politicians always talk in circles on this (and most) issues, so most people don’t get a full understanding of why it’s so controversial or how it affects them.

A lot of people see this as big business vs the little guy, but it’s more complicated than that.

Raising The Minimum Wage Causes Inflation

Since the minimum wage is the bottom or base wage, raising it creates an increase in the cost of many goods and services. This inflation eventually trickles out over time to other goods and services that are not directly affected by the increase. Inflation also causes other, higher wages to increase over time as people look for better compensation to pay for the higher cost of living.

To combat a rise in inflation, the Senate is proposing to package an increase with a number of provisions as follows:

Besides increasing the minimum wage from the current $5.15 an hour, the bill would extend for five years a tax credit for businesses that hire the disadvantaged and provide expensing and depreciation advantages to small firms. The tax breaks would be paid for by closing loopholes on offshore tax shelters, capping deferred compensation payments to corporate executives and removing the deductibility of punitive damage payments and fines.
~ AP Article

How Inflation From A Minimum Wage Hike Affects You

For minimum wage earners. Over time, inflation will erode the gains made from an increase in wages. In the short to medium term though, this is a great thing for many minimum wage earners. But, there are some businesses that will be forced to lay off employees because they simply can’t afford the increased costs. After a lay-off, the remaining employees will be tasked to get more work done, and will most likely have less capital assets (like new equipment) available from the company to make their jobs easier.

For higher wage earners. Wage increases for higher income earners will most likely be held back or will not be as high as they otherwise might be. The number of management positions could also be pared back because the savings from laying off one management position could pay for the wage increases of several minimum wage workers.

Rainy day and retirement savers. A lot of personal and corporate retirement funds include stocks or mutual funds (collections of stocks). The performance of these investments is directly tied to the earnings performance of large public companies, otherwise known as “big business”.

Small businesses. Inflation hurts the small business owners ability to expand the business and employ more people. This is important because small businesses are responsible for many new jobs for the ever growing population. Small businesses that get hit hard by minimum wage increases may have to lay off some workers. Some of them may even be forced out of business. Many small businesses have a hard time passing on increased costs to their customers unless they have very specialized goods and services with little competition and good demand.

Large businesses. Like small businesses, the amount of cost increases that a large company can pass on to the customer depends upon their market competition and the level of demand for their goods and services. If they have trouble passing on the increases then the decreased profits they earn adversely affects their stock price. This not only hurts the companies ability to grow, it also hurts private investors who are saving for retirement and large pension funds that are invested in the market.

What It All Means

An event like increasing the minimum wage changes the landscape for everyone. Some people will find a way to make it work in their favor and others will be hit hard by inflation and cost increases. Whether you do well or not is more dependent on business savvy and your understanding of how money and markets work rather than how big you are. Of course, the bigger and more successful you are, the more resources you have to make good decisions.

In the end, increased population and competition for wealth, land, and natural resources creates a wider divide between the haves and the have-nots. At the same time, the entire economic system relies on growth just to remain stable. The need for growth and the friction caused by growth is what makes this and other issues so complicated. Digg it! Reddit Yahoo Comments

Huffington Post Starts The “Political Digg” With Huffit

Huff ItHuff It? Huffing? Are you a Huffer?

There are no heated debates or flame wars on the internet like there are on political blogs like Huffpo. Usually they only happen on Liberal sites like Huffpo because most of the Conservative blog sites mediate out a lot of criticism.

Voting And Politics … Hand In Hand

Huffpo Is Going 2.0. I recieved an email the other day about something new they’re starting. You might be familiar with a little site called Digg. Everybody wants to be Digg. Submit stories. Vote on stories … but it is kind of an interesting idea to allow people to vote on a political blog.

Here’s an excerpt from the announcement:

HuffIt is still in its very early stages and we will be making lots of improvements in the coming months but we want to invite you to be among the first group to use it.  As soon as you register, you can start:

  • Reading the most interesting stories found by the Huff Post community.
  • Voting for stories you think should be on the Huffington Post
  • Saving and sharing your favorite news stories on your own personal page on the Huffington Post site.

When you see a news story you like, you just press the “Huff It” button to vote, share and save–all with just 1 click. It may take a few minutes to get the full scope of the site but you will be huffing like a pro before you know it.
~ Wendy Cohen

Of course, with all the talk about Digg-rigging these days, you have to wonder; who’s going to be stuffing the ballot boxes on HuffIt?

Start Your Own Digg Site With WordPress

Just kidding. It’s not going to happen unless you’re a mad, mad programmer. The closest you’re going to get is by using a poll plugin like democracy or wp-polls.

If you seriously want to start your own Digg clone, then you’re going to have to abandon WordPress and go with a CMS package like Pligg that supports story submissions and voting. And just like WordPress, Pligg is completely free. Digg it! Reddit Yahoo Comments