Tuesday, July 21, 2009


French Union: Pay Us, Or We'll Blow Up the Plant

Sunday, July 19, 2009

As French unemployment creeps relentlessly higher, the country’s famously tough labor unions are getting even more aggressive. First, they tried “bossnapping” --taking their bosses hostage . Now, unions at a bankrupt auto-parts factory are threatening to blow the place up unless its two principal customers, Renault and PAS Peugeot Citroen, fork over some $14 million in severance payments to workers.

The unions say they have placed gas canisters throughout the New Fabris factory in the town of Chatellerault, about 200 miles southeast of Paris, and will detonate them on July 31 unless the automakers pay $42,000 to each of its 336 employees. “If we don’t get anything, they’ll have nothing at all,” a union representative told the newspaper Le Figaro, referring to factory machinery and inventory, valued at about $5.6 million, that either belongs to or had been ordered by the two automakers.

New Fabris, which entered bankruptcy proceedings last November, has few assets available to pay laid-off workers. But union leaders contend that Renault and PSA, because they have received nearly $4 billion apiece in government bailout loans, have an obligation to help. Not surprisingly, the automakers disagree. “We can’t be expected to support, by ourselves, the restructuring of 12% of the French economy,” a PSA spokesman told Reuters.

A High School Senior Sells Into Wal-Mart

Saturday, July 18, 2009

Jasmine Lawrence started her hair and body care products business when she was 13. She describes her speedy path to success

The Entrepreneur: Jasmine Lawrence, 17

Background: After chemical hair-care products caused much of her hair to fall out when she was 11, Lawrence began to research natural alternatives. Two years later, she started the hair care line Eden Body Works with $2,000 in seed money from her parents, after being selected to attend a business camp sponsored by the National Foundation for Teaching Entrepreneurship (BusinessWeek.com, 10/5/07). Since then, the teen has been featured on the Today show and Oprah. Her business has also been nominated by businessweek readers to our annual Best Entrepreneurs 25 and under roundup (BusinessWeek, 9/8/08) for the past two years.

The Company: Based in her family's basement in Williamstown, N.J., Eden Body Works has grown to 17 products that are sold online and via brick-and-mortar retailers including Whole Foods (WFMI). In 2007, Lawrence, then a junior at Williamstown High School, negotiated a deal to sell her products at Wal-Mart Store (WMT) nationwide.

Revenues: Over $1 million

Her Story: As if being a teenager weren't hectic enough—try being a teen and a CEO. That is the challenge that I am faced with every day. It all started four years ago, when I decided to start a company to make all-natural hair and body care products. Now I am managing national distribution chains and international online sales. At the same time, I am also trying to have a life. My day starts at 5 a.m. After school, I head straight to my room for an hour power nap, then pry myself awake for homework. On a normal day, after finishing my schoolwork, I answer e-mails, do interviews, and have a meeting or two with my four employees (one of whom is my mom—she is the head of business development).

On a not-so-normal day, I may be packing to take a trip somewhere across the country to speak at a school, a church, or a business event. At some of these events, I am surrounded by business people wearing suits and ties who are twice my age, if not more.

Miracle Chocolate from Swiss Maker?

Switzerland's Barry Callebaut, the world's largest chocolate producer, has devised a new product that doesn't melt and has 90% fewer calories

Serious mountain climbers know the problem all too well: Packing chocolate in your rucksack only ends in frustration when you reach the summit. If you're walking in freezing cold temperatures, the chocolate bar becomes a rock-hard block that's impossible to bite into without breaking your teeth. But, then again, if the sun is beating down, it won't take long before the chocolate melts into a gooey mess. In the worst-case scenario, you reach the mountain top, finally at your destination, and it's completely liquified.

And even if the temperature is just right, there's still the problem of weight gain. As most of us have finally realized, chocolate is not one of the staple foods of the skinny minnie.

But one Zurich-based chocolate manufacturer thinks it has a solution that could make these problems a thing of the past. Barry Callebaut (BARN.MU), whose annual output of over 1.1 million tons of cocoa and chocolate products makes it the world's largest producer of chocolate, has developed a type of chocolate with completely new properties. According to the company's head developer, Hans Vriens, the chocolate has up to 90 percent fewer calories than regular chocolate.

What's more, high temperatures can't touch it—unless, by chance, they soar higher than 55 degrees Celsius (131 degrees Fahrenheit). Depending on its composition, traditional chocolate starts to melt at around 30 degrees Celsius. And that's the inspiration behind the tentative name its developers have given the new product: "Vulcano."

The bar's creators want to use it to tackle a growing problem: In Western Europe and North America, chocolate consumption has leveled off and, in some cases, begun to decline. In the past year, consumers in the eight largest western European countries consumed 2 percent less chocolate. In the US, consumption decreased by 8 percent. Under these circumstances, manufacturers are forced to rely on emerging markets for future profits.

The calorie-reduced "Vulcano" will be made available in both bar and cookie form. In this stagnant market, Callebaut hopes that it will raise widespread interest, especially in diet-obsessed America. Thanks to its ability to withstand high temperatures, "Vulcano" has a realistic chance of making a dent in the market in warmer parts of the world, as well. As things currently stand, marketing a heat-sensitive product in such regions without setting up expensive "cold chains," as temperature-controlled supply chains are known, is almost impossible. A chocolate product that could withstand high temperatures would solve this problem. According to Vriens, the company wants to start by targeting India, China and southern Europe.

"The idea sounds intriguing" says Daniel Bürki, a financial analyst at the Zurich Cantonal Bank. But he's still not fully convinced about the chocolate's chances of success. "Past experience has shown that melt-proof chocolate cannot compete with traditional products when it comes to taste," he adds. In his opinion, the special product is more important for the draw it has on investors. "They love these kinds of stories," Bürki says.

But if Barry Callebaut really has solved the problem of flavor, he adds, "Vulcano" could become a huge success. "In the warm emerging markets, particularly China, there is a growing middle class, which can afford to buy chocolate—and wants to," Bürki says.

What Should You Spend on Advertising?

As a rule, emerging companies focus most of their time and talents on meeting the needs of customers, as well they should. If they don't take care of the customers they already have, everything else will be academic. Strangely, however, many neglect the function of winning customers in the first place. Others naively assume that if they simply provide excellent products or services, their reputation will precede them. Call it the "build a better mousetrap" syndrome. But the world has too many other things to do with its time than beat a path to your door. That means you need to structure your profit-and-loss statement in such a way that you can profitably allocate a reasonable percentage of your revenue to marketing.

The Big Question: How Much?

While there is no definitive answer as to how much any business should spend on marketing, there are general guidelines any company can use to develop a formula that works for them.

Your first step should be to try to find out what the advertising-to-sales ratio typically is in your field. Public companies in your industry may give a figure for their marketing spending in their financial statements (found in their annual reports). With a simple calculation, you can figure out what percentage of their overall revenue that represents. If you can't find any public companies that seem similar enough to yours, you might want to start at 5% and then adjust your projected spending up or down based on the size of your market, the cost of media, what you can learn about how much your competitors are spending, and the speed at which you'd like to grow.

You'll also need to ask yourself if your business is built to leverage volume or to leverage margin. Even within industries, there are substantial differences in the marketing spend of volume-driven companies compared with margin-driven ones. Volume-driven companies tend to spend a tiny percentage of sales on marketing, in part because their large revenues enable small contributions to add up fast, and in part because of the margin pressures they face in having to compete with other high volume companies. By contrast, margin-driven companies tend to spend a larger percentage of sales on marketing: They have room in their margins to afford it, and they're often working from a smaller revenue base.

The Retail Industry provides some good examples. While Wal-Mart (WMT) might spend a meager 0.4% of sales on advertising, the sheer size of the company turns that tiny percentage into a significant budget. Wal-Mart's nominally higher-margin competitor, Target (TGT), spends closer to 2% of its sales on advertising, while Best Buy (BBY), as a specialty retailer, spends upwards of 3%. Finally, more upscale stores like Macy's typically spend on the order of 5%.

The same kind of ratios can be seen in the car industry (automakers' generally spend 2.5% to 3.5% of revenue on marketing), liquor (5.5% to 7.5%), packaged goods (4% to 10%), and every other industry.

If you're in a services business, you might want to bump your starting point higher than 5%. For example, like most professional services firms, my company is more margin-oriented than volume-oriented, so fueling its growth requires that we spend a higher percentage of our revenues. Last year, our number was just over 8%, and I've seen companies spend upwards of 15% when warranted—especially young companies that need to invest to build their brand.

Marketing, Not Just Advertising

It's important to make a qualification here. Giant consumer corporations such as automakers, packaged food manufacturers, and retail chains spend a huge percentage of their marketing dollars on paid media advertising, the most visible (and expensive) tool in the marketing toolbox. Depending on the size of your company and the business you're in, advertising might not be the right (and certainly not the only) tool for you.

A professional services company like my own is a good case in point. While we serve a national clientele, we are much too small to effectively advertise on a national scale. As a result, we don't purchase paid media advertising. But we do have an aggressive marketing program built around tactics like direct mail, online marketing and public relations. For a variety of reasons, paid advertising might not be right for your company either, but events, vehicle wraps, point-of-sale displays, or other tactics certainly could be.

The important thing is intentionally and deliberately to set aside some rational percentage of your sales to get out there. That way, the question you have to answer isn't "How much should we spend?" but rather, "How do we spend most effectively?"

McDonald's to Install Electric Car Chargers

Want some watts with that cheeseburger? A North Carolina Mcdonalds location is giving new meaning to the fast-food drive-through. According to Raleigh, N.C.-based paper The News & Observer, the hamburger joint is launching its first electric car charging station at a location in Cary, a Raleigh suburb, on Tuesday, July 14. The location will feature two charging stations at the front or parking spaces that customers can use to charge their cars while they eat. There is no fee for the charge.

It's a brilliant concept--that is, when and if electric cars become common enough to see widespread usage. Restaurants with valuable parking lot space and real estate have a great opportunity to rethink what other services they can offer their customers. But I'm surprised McDonald's is offering it free of charge. Seems like a great way to reap revenue from part of their real estate. If I had a car like this, I'd happily put a few coins in the meter to charge it while I'm eating. What do you think--should McDonald's ask customers to pay for the watts they consume with their food?

Bankruptcies: What Happens When Your Loan Gets Sold?

creditors are less willing to work with insolvent businesses to return the business to long-term health, and more eager to liquidate and recover whatever they can on their debts immediately.

The evidence for this is anecdotal, to be sure. But most of the people I interviewed said that between the prolonged recession and slim chances of successful workouts for small companies, lenders have ever less patience for turnaround plans.

Here’s one more reason why creditors prefer liquidation: They’re often not the ones who originated your loan. I just came across this data from the a survey of 395 turnaround professionals by the Turnaround Management Association:

Half the respondents said distressed debt trading in bankruptcy or in out-of-court restructurings is stalling negotiations and 40 percent said quicker liquidations and sales result. …

“Buyers of secured distressed debt may be more interested in obtaining the assets of the borrower and turning a quick profit,” [Scott Opincar, an attorney with McDonald Hopkins LLC in Cleveland] said. “On the other hand, a traditional secured lender may be interested in a more conventional workout that leads to a greater recovery over a longer period of time.”

Last year BusinessWeek’s Amy Barrett explored this in a story about what happens when the original lenders sell to third parties. From her story:

Dealing with a hedge fund or other private firm is very different from working with a bank. While some creditors will be willing to work out a deal for companies that seem healthy, others are likely to move quickly to foreclose if a company seems vulnerable. The third option is “loan to own,” in which the loan holder typically agrees to some concessions in return for a sizable chunk of equity.

The world of trading in distressed loans is invisible to most entrepreneurs. Smaller loans are sold in pools; larger ones (usually with unpaid balances of at least $1 million) sell individually. The buyers study each borrower’s file and usually acquire the debt for a fraction of its face value. A loan to a borrower in decent financial health or one that is well collateralize may sell for 90¢ on the dollar, while others may fetch only 10¢. The borrower learns of the transaction via a “goodbye” letter from the bank, which says the loan has been sold. The new holder then sends a “hello” letter announcing the acquisition.

And that was before the financial crisis last fall. I don’t know if there’s any way to find out, but I wonder how much of the increase in business bankruptcies is a result of this trend. Your local banker might be willing to give you the benefit of the doubt and agree to a turnaround plan, if your business has a strong long-term outlook but faces a short-term cash crunch. But if that banker sold your note to a hedge fund investor for 30 cents on the dollar? Probably not so much.

An Online Work At Home Business Is A Real Business – Really?

I suspect that far too many people fall into the trap of thinking that an online business is easier to start and run than an offline business. It is possible that an online business could require less money up front to start but I’m not convinced less work is an option – unless you have that so-called “magic selling” product.

Most people starting out with an online business probably do not fully understand what they are getting involved with. They understand the internet, and that they can pretty much access the world from their PC. So then maybe it is true that if one starts an online business by setting up a website then the whole world will see it and buy from it - Right?

Unfortunately this kind of thinking leads many people into a trap, and they fall victim to many online opportunities which are promoted as “Easy Money”. Trust me, if it was easy money they would be making it without you.

Maybe it is easier to understand by comparing an online business startup with an offline business startup.

You don’t want to spend much money with startup costs, so you begin a business from your basement or garage. This would be similar to getting your own domain name or website in the online environment. Initially all you have is an online name with very little content.

Next, your offline business needs a product or service to sell. People are not real likely to just stop by and drop off money without getting something in return. An online business needs a product or service to sell also. “Opportunity” itself is not a product. Direct marketing (an offline business) used this same business model – they sold products as well as offering an opportunity for one to make an income generating business.

Ok, so now we’re legal and have our business started with a good product or service offered. Does the money flow begin now? Not really, since very few people will know that your business exists. You’ll need to do some advertising to make people aware of your business. An online business is very similar. You’re going to need to promote your website so that others will know you are out there.

As your offline business begins to grow, you’ll find the need to bring on other resources to assist with the additional business. You may also outgrow your space or need space with better accessibility for more people. An online business will also require more resources as it grows. More often the needs of an online business are “digital” or “electronic” versus the “physical” needs of an offline business. However, most of these “electronic” products or services have associated costs.

The point of this comparison is simply that an online business does not simply succeed overnight. Sure, there are always exceptions, but most new businesses take time and effort to succeed. If anyone tells you differently, then be careful! Don’t be too quick to pull out the credit card.

An online business can be very rewarding just as an offline business is for many people. Just be realistic as you approach it.

A Miracle At Bank Of America (BAC)

Ken Lewis will be CEO of Bank of America (BAC) forever. Even after being forced into a horrible deal to buy Merrill Lynch by former Treasury chief Paulson. the firm managed to post remarkable Q2 results.

The bank reported second-quarter 2009 net income of $3.2 billion. After deducting preferred dividends of $805 million, including $713 million paid to the U.S. government, diluted earnings per share were $.33. That compared with net income of $3.4 billion, or diluted earnings per share of $0.72 during the year-ago period.

Bank of America increased its Tier 1 common capital by nearly $40 billion through multiple actions during the quarter that included issuing shares of common stock, exchanging certain non-government preferred stock for common stock, and asset sales.

Sales and trading revenue, excluding credit valuation adjustments on derivative liabilities and market disruption charges, rose to a record $6.7 billion.

The firm did indicate that credit quality continued to drop, a potential Achilles heel going forward. The provision for credit losses was $13.4 billion, flat with the first quarter. Credit losses were higher than the prior quarter and reserves, which were increased by $4.7 billion, were added across most consumer portfolios and the commercial portfolio reflecting the impact of the weak economy. Nonperforming assets were $31.0 billion compared with $25.6 billion at March 31, 2009, reflecting the continued deterioration in economic conditions.

Douglas A. McIntyre

5 Ways to Lower Your Tax Bill

If you’re worried about your small business tax bill increasing, take heart in the fact that there are plenty of ways to spend money and avoid taxation on that money. Some of the expenditures serve you now, some will make your business better down the road, and still others help your employees. Here are five ways take a bite out of your taxes come April.

1. Buy insurance.
Health insurance is expensive. If you don’t already provide quality health coverage to your employees, start. This one action alone will go a long way toward eating up that extra income. And your employees will love you for it.

2. Invest in a retirement plan.
There are many small business retirement plans including SEPs, SIMPLEs, and even 401k plans. Chances are if you’re like most Americans, you’re not saving as much for your future as you could. And if you’ve never considered contributing to employees’ retirement, you should. It’s a huge benefit that can attract high quality employees.

3. Grow the business.
Got extra cash? Buy things to help you expand. This year’s Economic Stimulus Act bumped Section 179 depreciation to $250,000. What that means is that you can purchase certain assets and then subtract them right off your bottom line instead of depreciating them over time.

4. Give.
If you’re adamantly opposed to paying higher taxes to support an expanded governmental role, what better way to avoid the tax and ’spread your own wealth’ to the causes of your choice than to make a charitable contribution? In most cases you can give away half of your Adjusted Gross Income. That’ll take a chunk out of what you owe.

5. Complicate your life.
The more money you’re making, the more important it is to get good tax advice, and general business counsel for that matter. A good accountant will help you plan expenditures and structure businesses to your best advantage. For example, you may need to incorporate to take advantage of certain benefits, or to decrease your personal take home pay.

Bank Profits, Banker Pay and Other Banker Tricks

I'd like nothing more than to give the bailout scandal a rest — but the bankers won't let me! They just keep coming at us with ever-more-clever inventions of greed and deceit.

Their latest bit of hocus-pocus, accompanied by big puffs of smoke, is a dazzling show of profits. Yes, Goldman Sachs, Citigroup, Bank of America, JPMorgan Chase and other financial giants that only yesterday were insolvent basket cases now report that — poof! — in the first quarter of this year, they magically produced blockbuster profits. Absolutely A-mazing!

Of course, it's a con job. After all, magicians don't perform magic. They create illusions.

Hoping to con investors and the public into believing that the wizards running Wall Street have quickly and brilliantly restored these banks to financial health, the wizards did exactly what they've done in the past: They goosed up their books with accounting tricks and sleights of hand.

First — and most obvious — the "profits" are made possible only because you and I have stuffed the banks with massive infusions of tax dollars. Indeed, they wouldn't even be standing without our money. I don't mean merely the $700 billion straightforward bailout approved by Congress, but also the nearly $2.5 trillion in such backdoor subsidies as dirt-cheap loans and government guarantees quietly extended by the Federal Reserve and the Treasury Department.

Second, the banks lobbied for and won a regulatory break that lets them pretend that all of those bad housing investments weighing down their books like a load of toxic waste are worth ... well, worth whatever the bankers say they're worth. So — Shazam! — huge losses are wiped clean by banker fantasy.

-Jim Hightower


An Economic Slowdown: An opportunity

All around there is talk of the economic slowdown. In the Interim Management industry, this means planning for increased demand and working with forward thinking business leaders who proactively utilise interim resource to deliver short and medium term results.

It's difficult to not read or hear about the credit squeeze and the latest effects of the recession - we are faced with it on a daily basis. And if we believe the economy is cyclical, then this recession is overdue and likely to be deep. Most companies have entered 2009 with considerably more apprehension than for a number of years and some are already responding by reigning in expenditure and cutting costs.

Within the recruitment industry, recession means being a supplier in an ever-tightening marketplace as companies seek to freeze human capital expenditure at best or make large cuts to staffing levels at worst.

But one thing has changed significantly since the last recession, and that is the growth of interim executive management. With an industry growth rate of over 15% a year and a significantly larger number of CEOs, CFOs and HR Directors now recognising the flexibility and genuine value-add of using Interim Executives, there is every likelihood that, this time around, the call on these resources will reach an all-time high.

During a recession there are many compelling reasons for senior managers to turn to an experienced interim executive.

The most compelling benefit of using interim executives is the rapid (within days) access to quality executives proven in the management of transition and business change and experienced in working in a wide range of sectors and cultures on an intensive project basis. Interims are used to working independently to deliver results but also know part of their role is coaching and mentoring those around them to be able to take over once the Interim has left. This pragmatic use of highly skilled resource makes for a robust business case. Interims can be expensive but for any organisation which has become used to having management consultants around, a cost saving can be shown as an interim executive will be likely to cost about one third of an individual consultant. The comparable level of business experience you gain from an interim executive, 'pound for pound', is usually a clear benefit.

Working with interims requires something of a sea-change in planning but those who plan early will be well rewarded as the pool of high quality, career committed resource is far smaller than many would admit and demand is likely to exceed supply.

So for 2009, this could be an ideal time for organisations to consider introducing interims as part of their overall resourcing strategy.

Lighting By Gregory

Pixxlz - we print green

Green Thinking Can Jumpstart Your Small Business Recovery

Friday, July 17, 2009

Sustainability is all about meeting needs and seeking a balance between people, the environment and the economy. Green thinking promotes the well being of each of these components because the decline of one would mean the detriment of the others.

It may seem counter intuitive, but it will not cost small businesses more to be green. Green thinking is about cutting costs. It will save your small business money in both the short term and long term; but especially in the long term. In addition to this, it will boost your social responsibility ratings and increase customer loyalty. That in turn will boost your bottom line.

If your small business barely exists in survival mode, the best things you can do to think green is to act green. You and your employees can turn off lights that are not being used; unplug appliances that are energy hogs (even when not being used); raise the temperature on the thermostat (in the summer and of course reverse in winter); buy goods in packages that can be recycled (and meet the recycling criteria of your local recycling center - many of which are unable to process some types of packaging even though the recycle symbol is on it); reuse things through repurposing (get creative here), and consolidate driving trips. These activities are just a few examples of the free things you and your employees can do to go green and save.

Small businesses that have more resources will benefit from investing in green strategies which will have longer term cost savings. This includes buying energy efficient light bulbs, windows, refrigerators and other appliances with the energy star seal of approval. These do make a big difference in the long haul. Energy efficient windows cut down glare and heat in the summer and the effect is noticeable immediately.

Green thinking is most effective when your small business creates a culture of green. This means that employees are involved and given the go ahead to be creative participants. This has a number of benefits including: promoting innovation, being more effective in cutting costs because of full participation, and most importantly, increasing employee loyalty and productivity because their input is valued. Cutting back is much more bearable when everyone is on board. The message should be that your small business is going lean on "things" rather than on people. This is an important morale booster.

Small businesses will always fare much better in tough times when employee morale is high. The attitude of your employees always comes through to your customers. Positive employees are able to be genuinely interested in customers instead of just wearing a phony smile that masks their displeasure at working in a stressful environment. Customer loyalty increases when customers feel better served. This again is an example of how people, environment and economics need to be in balance; the essence of green thinking and sustainability.

One of the most important work trends today, telecommuting, reflects this balance. It considers the needs of workers and saves energy in terms of reduced commuting and office space requirements. Small businesses that are able to use virtual administrative secretaries and other virtual assistants (e.g. for outsourcing SEO and other activities that require expertise) will save significantly because they will not have to incur the costs of hiring and maintaining a large staff (in addition to the savings realized from reduced commuting and needing less office space). They will save because outsourcing will enable them to find expertise at prices that may not be available to them in their local areas. Small businesses who do this will be embracing green thinking, cutting costs, be more socially responsible and be more successfully positioned to emerge from the economic downturn.

Benefits Of Coconut Oil

Thursday, July 16, 2009

Coconut grows abundantly in tropical country like the Philippines. Its oil is edible and used by a lot of people in cooking for thousands years.
A lot of publicity lately pointing out that coconut is not good to our health because it linked to heart diseases, cancer and high cholesterol since it is saturated fats. But look at the people who live in tropical climates which used mainly coconut in cooking and diet, they are healthier and no colon cancer or diseases. There might be something in coconut oil which is very beneficial to our body that is not available in other oil sources vegetables. Some scientists recommend extra virgin olive oil and raw butter after coconut oil. Coconut oil will not change or rancid even if you stock it in room temperature in one year than other oil which will become rancid in just an hour.

Here are some health benefits of coconut oil:

1. Coconut oil will not rancid and believe to have antioxidant that is why it stays fresh for a long period of time. Though it has 9% omega-6 fatty acid. The good thing is, coconut oil reduces our need of vitamin E. In general, coconut oil stimulates thyroid function and has wonderful antiseptic properties.

2. It has thyroid stimulating effect that trigger anti-aging effect. According to researcher, a group of islanders migrated to New Zealand and stop using coconut oil in their main diet has acquired obesity and degenerative diseases and other diseases associated with aging.

3. It has weight loss stimulating properties. I observed this in our pigs while we were not selling our coconut meats because they were very cheap I found out that our domestic pigs are very active and lean.

4. It has anti-cancer effect. I observed that in our place, people are not familiar with the word cancer while in big urbanize city a lot of case were discovered. Same thing has happened to Albert Schweitzer operated his clinic in tropical Africa; it took him many years to discover a single case of cancer patient. He believes that the introduction of European diet to Africa has brought the malignant disease.

5. Antimicrobial and antiseptic effects were found in Coconut Oil. Coconut oil contains medium chain fatty acids such as lauric (C-12), caprylic (C-10) and myristic (C-14) acids. Of these three, coconut oil contains 40% lauric acid, which has the greater anti-viral activity of these three fatty acids. Lauric acid is so disease fighting that it is present in breast milk. The body converts lauric acid to a fatty acid derivative (monolaurin), which is the substance that protects infants from viral, bacterial or protozoal infections.

Wal-Mart Goes Greener With Eco-Labels

Wal-Mart (WMT) decided to evaluate its suppliers based on whether they were polluters almost before it became fashionable.

Going Green is a description used broadly in the business community as a badge of honor, however irrelevant. Creating products with materials that do not sustain the environment or pollute has become an unpopular and image-damaging way to do business. Wal-Mart is careful, being one of the world’s largest corporations with over one million workers and tens of millions of customers, to put on the best face it can for the green-minded.
Reuters reports that Wal-Mart will announce the “development of an index that will be used to measure the social and environmental impact of the products it sells in its discount stores.” This will probably give customers the opportunity to decide whether they want to choose products that are environmentally friendly over those that are not.

It seems cynical to question what may be very pure motives, but Wal-Mart does stand to benefit from its green credentials, and, provided that they are not too expensive to come by, at the very least they burnish the firm’s image which has taken some shelling due to perceptions that it underpays its workforce and sources too few products from the US and too many from China.

Green is excellent PR. GE (GE) has been the master of this art with its “Ecomagination” programs which it describes as “solving the world’s biggest environment challenges while driving profitable growth for GE.” It may be a matter of semantics and corporate communications skills, but GE makes a very large portion of its money by selling infrastructure solutions and it would hardly be wise for the company to be marketing major governments and corporations products and services which rank high on the polluter scale. That would be bad for business.

Wal-Mart needs to have its shareholders, the US government, and customers see that it can be counted upon to be well-behaved at the environmental table. The fact that the world’s largest retailer does so much business in China already deeply troubles some of the “green crowd.” Many Chinese manufacturing facilities cannot be counted upon to properly dispose of waste. The air in many Chinese cities is so bad that the denizens might as well move to the country and smoke four packs of cigarettes a day. Wal-Mart walks its credentials around to environmentalists while doing business with partners that have not the slightest interest in air or water quality. Wal-Mart has to hope that the world will believe that the Emperor does have clothes.

Chinese companies do not seek approval from Chinese environmentalists because they can be ignored. Wal-Mart is pandering to environmental groups in the US with clever marketing which includes its new process of evaluating its products based on their environmental impact. Wal-Mart knows that such measurements will never be precise. It may not matter if the public ever knows if Wal-Mart puts it finger on the scales of those measurements in any way that might make the company look better.
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Creating a Market with a Cup of Coffee

Howard Shultz was a poor Brooklyn kid struggling to make his way through college, and because he believed he could create a need for caramel macchiatos and chai lattes, he is now the head of a 30-something billion dollar multinational string of coffee shops. After interviewing Shultz, 60 Minutes reporter, Scott Pelley decided the entrepreneur is "creating his own subculture and intends to take the whole world along."

Shultz first became interested in Starbucks when as a plastic salesman he was intrigued by the volume of plastic drip-brewing thermoses it was buying from the plastics manufacturer that employed him. Shortly after coming on board with Starbucks he found himself in a love affair with the pulsating coffee culture of Italy. He suddenly was struck with the idea that U.S. patrons would be receptive to elegant gathering places with a spirit of community exchange, all the while sipping on connoisseur coffees to their heart's content.

In 1987 when Starbucks when up for sale, his inspiration swayed investors to fork over $3.8 billion and he eventually exceeded his goal of 125 outlets in 5 years with 165 stores by 1992. By 2008 there were approximately 11,000 stores in the U.S., with another 4,000 - 5,000 in foreign countries. With fiscal 2009 Q1 net earnings down to $63.3 million, the hot beverage mogul will be making some changes to streamline the operation and increase profitability.

Shultz is a firm believer that the success his empire is based on the philosophy behind the operations - that he created a place for humanity to meet and make human connections. It's an alternative environment to work and home. He says the reason Starbucks stores are opened across the street from each other is to cut back on the lines where something like 40 million people a week wait to imbibe 300 million plus gallons of brew each day.

Tuesday, July 14, 2009

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What should we call AIG?

AIG is changing its name. Again.

If you've been a longtime fan of the bruising sport of "Extreme Wall Street Bailout," you already know that AIG is the acronym for American International Group, the one-time high-flying insurance giant that has suffered a string of humiliating losses lately. Last year, it essentially went bust. Then it had to be bailed out by the government. Then it needed another bailout. Then another. The total taxpayer tally is now topping $200 billion. As a result, AIG is presently 80-percent owned by the federal government, and some of the star players who formerly ran it have been booted from the team.

Those who remain, however, came up with a brilliant play. A couple of months ago, they decided that the first step to making AIG a global player again was to switch jerseys. A new name – that's the ticket to a winning start! So, they switched their corporate moniker to – Ta Da! – "American International Underwriters." Yes, AIU.

New promotional materials were printed, new business cards were issued to employees – but, alas, this brilliant "repositioning" strategy also turns out to be a loser. As one top executive concludes in a flash of corporate insight: "The advice we've received is AIU may be a bit close to AIG." He added, "We don't want to appear as the same leopard with different spots." Wow, he's got a keen grasp of the obvious, doesn't he? This is the kind of leadership that has made the corporation what it is today.

So, AIU executives have plunged deep into the search for yet another name, acknowledging that they might even scrub the word "American" from the corporate moniker. How's that for irony? We Americans bail out this giant, and our thanks is to have our national name scratched.

How about just admitting that AIG's name is MUD?

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Old Age Is No Reason To Be Afraid Of Starting A Business

Wally Blume worked in the dairy business for two decades, first for grocery chain Kroger and later as sales and marketing director for a large dairy in Michigan, where he helped market new ice cream flavors. But soon after another company purchased the dairy, Blume decided that the once-innovative company was falling short, prompting him and a couple of colleagues to quit to develop and market their own flavors. In 1995 the partners had a national hit with Moose Tracks (a combo of vanilla, peanut-butter cup, and fudge), and within a few years Blume decided he'd be better off running his own company.

In 2000, Blume mortgaged his house and every other asset he could, plunking down what he says was "seven figures" to buy out his partners and start anew. That same year, he launched Denali Flavors, a marketing and licensing company that creates new ice cream and dessert concepts for independent regional dairies, allowing them to compete with the big national dairy brands. Looking back, Blume says: "I knew I could run it better than my partners. In my opinion there was just no downside to the risk."

While Blume's path from corporate suit to entrepreneur may sound familiar, his story has a twist: Blume was 61 when he went into business for himself.

In recent years, the number of individuals starting their own businesses during what is usually considered the "retirement years" has been rising, according to economists and small-business observers. And so has the age at which they are starting their own ventures: According to the nonprofit AARP Public Policy Institute, in 2008, 21% of the self-employed were between 55 and 64, while 10% were 65 and older. Of course, not every self-employed senior is an entrepreneur, but experts believe the stock market's recent brutalization of retirement accounts will prod additional older Americans to start their own businesses.

A combination of economic volatility as well as the growing number of baby boomers with time, energy, and money on their hands has redefined the starting age for new startups and has led to a surge in senior citizen entrepreneurs. This is a category that is only recently being studied. Five years ago, Boston's Putnam Research reported that some 7 million previously retired Americans had returned to work. Similarly, a 2005 study by the Center on Aging & Work/Workplace Flexibility at Boston College found that workers 50 and older are more likely than younger folks to own their own businesses.

While Blume concedes that betting the farm on launching a business in his 60s was a dicey proposition, he says his age and experience gave him an unparalleled advantage. "I always wanted to go into business for myself when I was younger," he says. "But I didn't have the money. At 61 if I was trying to get into a business that I didn't understand and spent that kind of money, someone should have put me in a home. But I understood this business, and I saw its potential." Moreover, he says his time in the trenches also left him with a strong sense of what not to do. "I paid off my loans in 25 months," he notes. And today, Denali Flavors earns about $80 million annually and has licensing agreements with a number of manufacturers. Denali's 40 different flavors can be found in all 50 states as well as Canada. Now 70, Blume is just getting started, having launched two additional ventures: a sauna business and a boat pontoon outfit.

Ashes to Ashes, Dust to Diamonds

Swiss company Algordanza memorializes deceased loved ones by turning their ashes into a ‘memorial diamond’. Why didn’t I think of that?

In what they’re calling a ’unique way for the bereaved to remember those who meant so much to them’, Algordanza has developed a process whereby the ashes or hair from a deceased loved one are turned into ‘genuine human diamonds’ that will last forever.

“Recently, a woman in Austin, Texas had a diamond made from her father’s remains,” Jared Parrish, director of sales and marketing for Algordanza, says. “The diamond was set in her engagement ring so her father could still walk with her down the aisle.”

How sweet. I’d sort of like a pendant made out of my dog when he passes so that I’ll be taking him for a walk as long as I live.

“What sets us apart from other companies that offer this service, is that our diamonds are genuine,” Jared Parrish, director of sales and marketing for Algordanza, says. “We do not use any chemical additives which makes these natural, not synthetic diamonds.”

Algordanza chemically draws carbon out from the ashes or hair and compresses it into graphite in a high pressure, high temperature-growth environment. The graphite undergoes the same process leading to rough crystallized diamonds which are then cut and polished.

The company states that while the memorial diamonds are primarily white, they may vary in color depending on the quantity of the element boron within the carbon. Just as no two human beings are alike, no two stones are identical.

If the deceases has a blue aura, will the diamond turn out blue? It’s something to consider if you’re going to be wearing the thing forever.

Add another C to color, cut, clarity, and carat. Now we have Creepy as well. But as for the Capitalism of it all, you have to hand it to them - they’ve got the emotional angle covered in what might be the ultimate in recycling. These will probably sell quite well, don’t you think?

Tax Day Tea Parties = Branded Populist Anger

Today’s Tea Party phenomenon left me scratching my head. On the one hand, I’m appalled at the mountains of money

being moved during the bailout process, and question the legitimacy of the entire process. If the Tea Parties had specific agendas relating to, say, auditing the Fed (a Ron Paul initiative) or kicking out Tim Geithner, I’d attend.

However, I don’t see what Barack Obama’s middle name, God, or Fox News have to do with the problem. The Tea Parties look like the same populist rage most people feel, but branded to fit neocons and libertarian sentiments.

In the influence economy , groups who want more power use common sentiments as biased platforms. This is what’s happening with the Tea Party, which could in fact be a unified forum. Instead, from what I’m reading online and in the MSM, it has become an outlet for frustrated conservatives, and an excuse for liberals to mock them.

The best take on the Tea Parties I found was in an InfoWars Post by Harold Gray. I found the article idiosyncratic, but liked this excerpt:

We just witnessed the liberal, anti-war, anti-Patriot Act movement, co-opted by the slick packaging of hope and change, coupled with Obama’s cult of personality. Another predictive programming operation has now been implemented in order to imprint a false neo-conservative overlay over the growing liberty movement. This will trigger a negative auto-response by those unaware of the neuro-linguistic keywords used by the media to falsely label the movement, thus preventing the next crucial growth period from happening.

The liberal newspapers and blogs are playing the part by going after their predetermined enemy, but now categorizing the Tea Party movement as a pathetic swipe against Obama by the right. I do agree in some sense that the failed and discredited republicans are basing these events around attacking Obama, while ignoring issues such as the private Federal Reserve system.

The problem is that the Orwellian newspeak media has left out the fact that the Ron Paul Tea Parties started under the Bush administration, and were not focused on attacking Bush, but instead were exposing the unconstitutionality of the Fed, IRS, NAU, Patriot Act, NAFTA, wars for empire and the list goes on. Our enemy is not a politician, political party or pundit, it’s the corporate governmental mechanisms of control that expand no matter who is in office.

But the corporate governmental control mechanism doesn’t have a name or face, does it? It’s the fabled “system.” So the same political game keeps replaying. GW Bush’s administration coopted the swelling sense of patriotism after 9/11, then twisted it: If you were a patriot, you were for the Iraq War; if you against the Iraq War, you weren’t into America. Obama coopted the national need for change, branded and marketed it, while keeping an old failed financial system.

I’d like to see something more substantive than “Obama is a socialist,” “To Hell With the Left,” “Teabagger party,” and “anti-intellectualism” (critiques from the right and left, respectively). I want to see bipartisan acknowledgement that the Obama administration is doing things wrong, and that some change just isn’t happening.

Name-calling ain’t gonna do the tric

There are 2.6 million jobs unfilled in the U.S. why??

Yes, according to the Bureau of Labor Statistics' JOLTS , there were just under 2.6 million job openings on the last business day of May. (The report was released July 7.) These are jobs that employers are actively recruiting to fill, not just slots they're leaving open until the economy gets better.

How could there be so many jobs going begging, when so many Americans are begging for jobs? the big problem is a mismatch. Often the mismatch is in skills: Workers don't have the skills that employers are looking for, or in some cases they're overqualified and employers won't hire them because they fear they'll bolt as soon as the economy revives. In other cases it's a geographic mismatch, which has been worsened by the housing bust. People owe more on their mortgages than they can get by selling their homes, so they can't afford to move to where the jobs are. Sad.

OK. You're wondering why this post is illustrated by a pair of cruise ships. It's to make the point that some of the 2.6 million jobs are actually pretty good. Here's an excerpt from a press release I got today from a public relations woman named Heidi Allison, who also runs a reference-checking service called Allison and Taylor. Three categories of jobs that cruise lines need to fill:

Wine & Cheese Sommeliers: Crystal Cruises was the first line (in August 2008) to feature professionally trained and certified cheese sommeliers who introduce travelers to samplings of new flavors, textures and cheese combinations that complement food and wine. These sommeliers receive intensive training and certification supervised by world-renowned authorities on this subject.

Gentlemen Host: Gentleman hosts exist for the simple reason that there are more single ladies than men on cruise ships and cruise lines like to provide dance partners and companions for their lady passengers. And while the criteria for gentlemen hosts are very strict, there are numerous vacancies available. Cruise lines offering gentleman host programs include Cunard Line, Delta Queen Steamboat Company, Orient Lines, Silversea Cruises, Radisson Seven Seas Cruises, and World Explorer Cruises. [A reader points out that some of these lines are defunct or have new names.]

Art Auctioneer: Over the last two decades, auctioning “fine art” on cruises, often to first-time bidders, has become big business. Park West Gallery of Michigan handles such a high volume of art sales at sea that it bills itself as “the world’s largest art dealer”, selling art on the Royal Caribbean, Celebrity, Norwegian, Carnival, Disney, Holland America, Regent and Oceania lines. (Princess runs its own auctions in-house.)

I asked Heidi Allison why these jobs are hard to fill. They all sound pretty cushy. She said the art auctioneer can make six figures a year. The gentleman hosts get paid less but have nice fringe benefits.

She said: "People don’t know about them. I’d say that’s the main reason."

A market imperfection! Now, that's an explanation an econogeek with a taste for cruising can relate to! Any unemployed economists who wind up on a cruise ship after reading this post should contact me by ship-to-shore radio, or whatever they use these days.

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Small idea turns into big business for Dallas girl

If there's a tween girl in your household, chances are you've heard of the latest rage: magnetic bottle cap necklaces.

What most Dallasites probably don't realize is that they're made right here, the brainchild of a Hockaday student.

Maddie Bradshaw, now 12, was doodling one summer when she came up with creative lapdesks, clipboards and frames, which she pitched to Camille's Creations owner Camille Murphey back in 2006.

"She gave me her little spiel," says Ms. Murphey, "so we put them on consignment. The bottlecaps came later."

The bottlecap necklaces actually started out as locker magnets when Maddie couldn't find any she liked for her fifth-grade locker. So she decided to make her own, and her uncle offered up bottlecaps from his gameroom Coke machine. Maddie says she remembers seeing bottlecap necklaces around, but none that were magnetic and could be easily swapped out.

Ms. Murphey, whose store is at 6110 Luther Lane, urged Maddie to sell them at Learning Express in Snider Plaza, where owner Kathryn Cook, a Hockaday alum, put them on consignment to see what would happen. "And, whoa. I just cannot tell you. We sell them like crazy, and continue to sell them like crazy."

As their popularity grew, Maddie's sister, Margot, now 8, got involved. The two girls and their mom, Diane Bradshaw, would pull up stools to their granite island and make each bottlecap themselves. As they worked together, their mom says, they bonded even more, the best part of the whole experience.

But when bottlecaps started taking over the house and consumed too much time, Ms. Bradshaw knew they had to make a decision.

"I'm not raising rock stars," says Ms. Bradshaw. "They have got to be kids."

So when sales reps the Klein Group approached Ms. Bradshaw, and Learning Express picked up the product nationwide, Ms. Bradshaw realized they were at a turning point.

Maddie's novel idea has now blossomed into a booming business, with 15 employees in Dallas, four sales reps and 30,000 bottlecaps being sold each month in 500 stores nationwide. They got a copyright on Snap Caps, which is patent-pending. M3 (Maddie, Margot and Mom) Girl Designs is now a limited liability company.

Meeting Maddie, one would never know of her accomplishments. She seems like a typical seventh-grader. She plays lacrosse, is on the swim team and takes tennis lessons. She is humble, shy and wise beyond her years.

And when Margot recently got a compliment on her necklace at a restaurant, she took it off and gave it to the little girl. "Margot is a real giving soul," says her mom.

While Maddie is the unassuming artist, Margot is the animated inspiration behind the bottlecaps' hip sayings such as Peace Out, OMG and BFF.

"They're always coming up with new designs, and that's what really makes it so fresh and exciting for the kids," says Ms. Cook with Learning Express.

Design categories include animal prints, recycling, diva, initials, fairy tales, sports and much more.

Now that Maddie spends less time on the production end, she's writing her first book. Beyond the Lemonade Stand will focus on how to start a business from a kids' perspective, including marketing, creating an assembly line, dealing with a patent attorney and patenting ideas – all while living a normal life.

"It needs to be a learning experience," says Maddie's mom.

"If this ever stops being fun, we're done."

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When ads don't lie

Can Food Spending Stimulate the Economy?

The federal government is ramping up the food stamp program by $20 billion. Now known as the Supplemental Nutrition Assistance Program, the expansion amounts to about 13 percent. This increased spending is hoped to stimulate the economy, but who will it really benefit?

Emory University finance and economics professor told NPR:

“This injection of funds ends up being spent on food, and that has a multiplier effect through the economy. As more people are employed in grocery stores, more people are employed to make the food, more people are employed to grow the food as a result of that stimulus.”

Will Increased Food Spending Really Help the Economy?

Economists say that every dollar spent on food will create a ‘multiplier effect’ resulting in $1.50 to $2 in stimulus. Experts, including Mark Zandi, chief economist with Moody’s Economy.com, agree that while it is difficult to measure the effectiveness of the plan, the food stamp increase is a good way to nudge the economy.

I’m no expert. But it doesn’t make a whole lot of sense to me.

  • People receiving food stamps are presumably getting enough to eat, whether the food they consume is purchased with the federal benefits they receive, picked up at a food bank, or purchased with cash.
  • I’m not saying increasing the benefit won’t make lives easier, but will increased spending really create jobs?
  • With a limited food budget, there’s not much room for convenience foods. If you’ve only got a few bucks, you’re going to opt for the dry beans versus the cans. And forget about prepared chili.
  • More to spend on food means more convenience foods. Therefore, forget the beans - go for the chili. Does the processing of convenience foods create more jobs? Maybe.
  • I wonder if instead of stimulating the entire food industry, there are certain large companies that stand to benefit from this particular stimulus.
  • I also wonder how much better off we’d be if we taught people to grow some of their own food. But that wouldn’t stimulate the economy. Or would it? Seed sellers, home improvement stores, and natural food cookbooks would surely benefit.

On the other hand, maybe given more money to spend on food, people will actually eat more, and the whole scenario will play out as the economists predict. Either way we’ll probably be fatter. Then we can spend our money on health care. And that’ll create jobs too.


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Bankers behaving badly

Monday, July 13, 2009

What is it that makes bankers behave badly? Is it genetics? Or is it just that no one ever taught them the golden rule?

You'd think that, these days, top Wall Street bankers would want to make nice with us. After all, their greed-fueled financial gimmickery wrecked our economy. Then, despite that bad behavior, we commoners have put up $12 trillion in public funds to save their sorry hides.

But is there gratitude? Noooo. Instead, top banking executives make whiney comments about the public "intruding" into their private business. Worse, many of the giants we rescued are now turning on us. For example, rather than rushing out loans to save or create jobs, Wells Fargo, has become an aggressive job buster. In January, This huge bank, which had just received $25-billion from taxpayers, cut off credit to Hartmarx, our country's largest maker of men's clothing. Hartmarx was a successful enterprise, but with no financing, it was forced to shut down, and 3,500 highly-skilled employees were thrown out of work.

JPMorgan Chase, on the other hand, is putting some of the $25 billion it got from us toward a new job-creation program. But the jobs are in India. Not Indiana, where unemployment is rampant, but faraway India, where Morgan says it can hire thousands of information technology workers for a third of what it would pay Americans. A Morgan spokesperson proudly announced that our bailout gave the bank the resources it needed to increase its ousourcing to India by 25 percent.

If this bad banker behavior doesn't move you, check your bank and credit card statements. Bank of America, Chase, Citibank, and other bailed out giants are suddenly assaulting us with a rash of sneaky and stout fee hikes. Apparently, this is the bankers' way of saying, "Thanks for the bailout, suckers."

-Jim Hightower
RiseSmart Inc.

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