Disadvantages of Franchise Ownership

                                        

Do you know what should be the two major reasons for buying a franchise? Advantages it’s hard for most franchise seekers to get?

                       

One is name recognition. The other is the training that they ought to give you. However, few franchisers give you real name recognition and training.

                       

Moreover, franchises are not cheap. You pay up front for a license, and the royalties thereafter will be a big cut of your bottom line. In fact, those royalties may equal half your net profits, if you ever manage to get any real returns for yourself.

                       

I usually don't recommend the purchase of a franchise because franchisees hardly ever get true name recognition, nor the required training from the average franchiser. Only a handful of franchises are worth buying. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                    

   

Why Chase After an MBA?

                                                

An MBA or Master of Business Administration degree is available for almost any college program from accounting, business management, criminal justice, education, engineering, finance, government, politics, real estate, to a variety of arcane subjects.

There’s an overabundance of MBA students and graduates with MBA degrees.They have become relatively useless, except, for their use in a resume.There are simply too many to attract the attention they formerly did.

                       

MBAs are expensive to get and, someday, students may realize they are not even worth their use on a resume. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Government Stimulus is Always a Bust

Using alleged Keynesian estimates, the government-sponsored past stimulus was supposed to create 5 million jobs. This was estimated at the time to be $1.50 of economic activity for every $1 spent by the government.

                       

But that estimate never considered the economic costs of borrowing or higher taxes. The stimulus plan to create 5 million jobs actually resulted in a loss of 3 million jobs instead. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

                               

        

Avoid Business Fraud

   

Business fraud grows despite internal and governmental vigilance. Regulatory laws are expensive and time-consuming for industry to enforce; still industry fraud remains a problem.

                       

Whether you operate a small shop or a section of a very large business, there are some corrective rules of thumb. Check and double-check the background of those you hire. Once they’re on staff, constantly educate employees about fraud. The idea is to show them you are strict about the subject, as there is a strong psychological element to the educational process.

                       

As for large corporations: Despite Sarbanes-Oxley and annual audits, fraud is a business constant. A change of auditors every year is one solution. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Businessman Justice is Questionable

 American justice can be questionable when it concerns businessmen.

 Thus it’s time again to note a problem about the lack of civil rights for citizens who are involved in business. Whether as entrepreneurs, small business operators, merchants, or CEOS of small and large companies.

                       

They really ought to be protected as a minority, as compared to the majority who work for others as employees.

                       

To those unfortunates: Beware of Hanging Juries and Judges, should you wind up in court as a defendant. Whether in a civil or a criminal case. Whether you are innocent or guilty.

                       

Because many members of the jury, including the judge, may well be inclined to consider you guilty before you can prove yourself innocent. And just because you are an entrepreneur, merchant, or CEO of a small or large company.

                       

Most Americans. as well as college graduates, lawyers and judges, have little knowledge of business and finance.

                   

Therefore, they are influenced by the media’s negative attitude towards business and finance and they tend to harp on “greed” of those involved in industry. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Venture Capital Refusals

 I commented yesterday on the basics when applying for venture capital and the need for a suitable business plan.

If you get turned down, as you will often be, keep coming back with follow-ups. Few seekers of venture capital are successful in their early attempts. You must be consistent and persistent to get attention. So stick to these basics and keep trying. Good luck; it counts.

                       

I have found that venture capitalists are not brighter or sharper than most in the financial community. Those who have made fortunes at what they do, mostly have stumbled upon the big winners. They have been taking unmerited bows the way lottery winners do when they pick winners.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

The Acute Shortage of Technically Skilled Workers

                      

The media constantly refers to how many manufacturing jobs are being lost to get lower costs overseas.

                       

Could it be that we actually have a shortage of technically-skilled workers? Could that be because we are educating too many kids with the wrong skills?

                       

The Organization for Economic Cooperation and Development has a study that indicates that less than 10% of teenagers in the U.S. study skilled trade careers for jobs with manufacturers and utilities.

                       

We have had this shortage for over twenty years. As a result, there aren’t sufficient qualified workers in many areas of essential work. And the workforce is getting older, so the problem is becoming more acute.

                       

We get more unemployable college grads, more lawyers, and more manufacturing jobs sent overseas where the skills may be. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Looking For Venture Capital? Have a Sensible Business Plan

   

When making a proposal for venture capital always use reasonable numbers in your proposed Business Plan. At the same time, you must show that your business is scalable. That business can become big enough to attract enough attention.

                       

Venture capitalists make money by eventually selling their equity interest to the public on a large scale. They think in terms of hundreds of millions in potential profits. Your business therefore has to grow fast in just a few years, in order to be an interesting investment for them.

                       

There has to also be what venture capitalists call an ”exit strategy.” When that eventual public underwriting or IPO, or a sale to a large corporation can take place. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Corporations Generally Don’t Hoard Cash

                    

Politicians who argue U.S. corporations hoard cash are not looking closely at balance sheets.

                       

They are looking at cash deposits only, and  are not aware of business operation principles. Thus, they  make it a practice to overlook normal business obligations. The latter may be direct or pending debts, or contingent costs, All represent liabilities that companies currently or eventually have.

A business man cannot conveniently sweep debt under the rug. He gets fired or jailed for doing so. A politician simply gets re-elected for such action.

(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                    

Venture Capital Investing is Dicey

There is plenty of venture capital around. However, the problem is that venture capitalists worry they have little escape opportunities with which to make their eventual profits.

                       

Venture capitalists make their big profits only when they can sell their ownership through a major Wall Street underwriting, or with a private sale to a major corporation.

                       

And that is now a long shot in today’s recessionary/tepid recovery economy. Exit strategy is now more problematic. Some skeptics may say the Bigger Fool Theory is lagging; would-be buyers are not as eager to buy in to as many venture capital propositions. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)             

                               

                       

                               

   

                  

   

                               

                      

                                    

Does Europe Need the Euro?

Over the last couple of years, the Euro has become more of a political device than an economic requirement. Dreamt up and managed by the French, with the Germans called on to foot the bills as they come due with each country-member’s fiscal mismanagement of the European Community’s monetary debacles.

                       

Yes, the Euro makes it easy to travel about among member countries because it eliminates the need to convert local currencies. But each country goes its own economic way with its own ingrained cultural and spending habits.

                       

The Euro has not been able to change those habits and, therefore, problems persist. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Making Banks Fail-Free

                                   

Banks in Europe and America are always under pressure to add to capital, under stress rests, in order to withstand any potential, future credit problems.

                       

Risk-weighted assets can be assumed to be as high as 70% of total assets in the large U.S. banks. The stress figure in Europe is half that for various accounting reasons; which are not that strong; the assessments are pretty much subjective.

                       

Yet, it’s all nonsense. Panic-driven problems will negate supposed cushions as will a tendency to have mark-to- market accounting.

                       

Much of what goes on is political maneuvering and posturing. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Government Medical Data Will be Stale

                       

Government data are always far behind current information. It occurs with labor statistics; it’s certainly true in the case of medical practice.

                       

The medical profession has up-to-date, practical knowledge. Doctors are aware of the nuances of medications and techniques which government data lack. Yet laggard government data will be the basis upon which ObamaCare will be dictated by panels.

                       

This is not a scare tactic by those who do not want government-administered decisions. This is the way medical decisions are made in the UK and elsewhere, under government health care. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Public Unions’ Pensions Fleece the Public

The main problem with public pensions is, unfortunately, hardly ever explained by the media. If it were, taxpayers would be truly aroused.

                       

If the employer, or locality, funded by taxpayers gives a 5% contribution toward pensions of a union member and does it as a 401(k) as would most private employers today, that employee would invest it. That same contribution is given to the public employee, but with a major difference. He gets a defined benefit. He does not invest it. The state or locality must do it.

                       

And because of one-sided, pressured negotiated terms, the negotiator is in a position of getting favors from the union he is dealing with, that is, political contributions.

                       

But that is not the whole story. The taxpayers must also assume the defined benefit; the public union retiree earning as much as 8% on retirement funds when that is impossible these days, and will be, perhaps, for the next 20 to 50 years. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                    

                       

        

Yet Another ObamaCare Health Coverage Alternative

 Health care can be cheaper without ruining the entire system with a nationalized, socialized version.

                       

One way, among many, in accomplishing this, would be for doctors and hospitals to set their bills at the lowest rates now being charged insurance companies. That discount would be given to the non-insured.That usually is a fraction of what the insured and non-insured now pay.

                       

Cannot afford that? Those who cannot, can get free vouchers. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Can You Promote Expired Patents?

A U.S. district judge has said its unconstitutional for plaintiffs to sue on claims that expired patents have appeared on defendant products. That the matter, instead, was a function of the federal government.

                       

This type of lawsuit had become another profit center for aggressive lawyers.

 There are many issued patents, particularly on consumer items. And patents have a limited life. It isn’t always convenient to get the patent notice off a label soon after expiration. Or, is it a crime to let folks know you had the original patent in the first place?

But it’s hard to stop lawyers from trying. There are so many of them. And they have to make a good living the best way they can. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                       

MBAs Are Now in Over-Supply

About 150,000 MBAs graduate each year. Our graduate schools have accommodated demand for the degrees.

                       

It’s easy to come up with what academe suggests a business executive or financial expert ought to know. At the same time, the educator must be certain not to make the course too difficult or classes will not be filled. Schools are a growth industry, after all.

                       

So we get a happy medium. Lots of students, and graduates. All with degrees, which in the real world of business and finance, have become relatively useless.

                       

Except for their use in a resume. However, we are reaching the stage where there are simply too many MBAs to attract the attention they formerly did. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                    

Selecting a Well-Paying Future Job

Don’t select your career on the basis of what is easiest to train for, as too many other job-seekers are doing the same. That’s the reason so many college graduates find their degrees are meaningless when it comes to the job market.

                       

Find out what will be needed ten and twenty years ahead. Not necessarily knowledge gleaned from college courses. There are plenty of research studies along these job and career opportunity lines.

                       

And don’t fall for the excuse that when all else fails, the country can always use another lawyer, or a historian, or a political science grad. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Why Does Every Americans Need ObamaCare?

All Americans get medical help now, even if destitute, when they go to hospital ERs.

                       

In dealing with the relatively small uninsured group, should we tinker with the entire health insurance system?

                       

ObamaCare could have the entire health system collapse. What we like today should be kept; what we would like corrected can be changed. The use of doctors and medical treatment when we want it, and when we need it can be retained.

                       

A solution: Give the poor uninsured a free membership card for private insurance of their choice. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Government Insurance’s Dubious Cost-Cutting Ability

                       

ObamaCare’s argument is that government health insurance will be cheaper than private health insurance. That’s not true, and defies past experience wherever practiced, overseas or in Massachusetts.

                       

Take a look at Medicare and Medicaid if you want to see costs rising far beyond health expense estimates. The many reasons are conveniently overlooked when it’s politically necessary to do so.

                       

Private insurance does a far, better job of preventing fraud than do government programs.               

                       

Private administration is more efficient. When government attempts to cut its overhead costs, it does so by paying questionable bills. Efficiency is a lesser option.

                       

Private insurers also create effective doctor and medical networks that government has heretofore not done, to avoid errors.

                       

Government reduces operating costs by delaying or simply not paying for certain coverage. Rationing may be done by age or what a consulting board says should be treatment standards. We know it causes a loss of lives;  compare American statistics with those of countries with socialized medicine, such as the UK and Canada.

The facts are there. The willingness to learn them isn’t.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Small Consumer Loan Politics

Payday loan providers are always under attack from government liberals. Usually the fee is about $15 for a $100 two-week loan. That’s o.k. as a temporary loan, if it is not repeated fifty two times a year, when the rate would become outlandish. There is therefore room in the economy for such emergency service.

                       

Left-leaning government observers never like this, because they think folks with poor financial ratings should get the same terms as those with top credit. Default rates are never considered as government liberals don’t foot the bills.

                       

But folks with bad credit have always needed emergency funds in good and bad times. We know why so many in the past patronized mobsters for funds, paying, enormous interest charges plus limbs and lives. as a penalty for non-payment.

                       

So when legitimate services charge what some say is too much, an attempt is made to stop the business, and go back to the old days. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

        

The Lower-Cost Way to Health Care

                               

 Credible estimates say obesity costs about 216,000 lives annually. It’s been also estimated that universal health coverage, with its enormous costs and drastic overhaul of the health system may save just 18,000 lives. And that can cost trillions.

                       

What is needed is education in schools, public forums, and media about general health habits. (Note: I said educational efforts and not mandatory government diktats worthy only of socialist or fascist societies.)

           

Rather than attempting instead to fine tune our present health care system, with trillions of unavailable health dollars,that can bankrupt our entire economy for generations to come. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                       

The Political Definition of Rich

The administration’s definition of who is rich hovers about an annual figure of $250,000. Sounds like a lot, but it’s not. If you live in New York City you can cut about half of it for federal, state and local income taxes. Then there’s an enormous cost-of-living hurdle to overcome, if any of you have visited that city.

                       

But that argument for taxing those "rich" is primarily based on outmoded figures, at a time when families depended on only one of its members working. That may have been the norm twenty years ago. Today, women have careers, especially after their children are grown, when both husband and wife, and sometimes single youngsters, add to household income, it’s easy for a middle class family with costs that add up, to gross $250,000 annually. 

Their net income, after taxes, is well below half the figure. Those self-employed must often use that income as business working capital.

                       

Family total income may reach what this administration calls “rich” and get taxed accordingly, only when you add up a total of very modest earnings. These individuals are not after-tax rich by any definition. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)    

Mandatory Layoff Announcements Are Harmful

              

Corporate disaster is always possible when tipping off creditors and employees well in advance of plant closings. Yet, liberal politicians and their union backers have legislation where employers of a certain size and type must notify employees well in advance of possible close-downs.

           

Employees would like to know early on if they are to be trained for other jobs. But such action may unduly scare them in the event the plants are not eventually closed.

           

Often, financial conditions are poor, and finances cannot be arranged properly until the last minute. However, once a notification has been made, companies may have already lost employees with which they would have been able to salvage operations.  

                     

Furthermore, once the mandatory plant closing announcement is made, the company’s credit may be permanently damaged. Stockholder values, including those of pension holders and similar institutions, may be adversely effected. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                    

When Uncle Sam’s Your Medical Adviser

Too large a segment of the public still doesn’t understand what happens when the government is in charge of spending funds for health.

           

It can never be even-handed when there are budgets and limited funds to consider.

           

Example: We already have this to a degree in the United States, when more research is done on breast cancer than on prostate cancer. That happens because of political pressures. In turn, AIDS research had always received more funds than did breast cancer.

           

In Europe, rationing of drugs and treatment results from chronically limited funds. Medical research in the U.S. will eventually be curtailed as well, when funds are constrained. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                       

Private Health Competition

The political left loves to say private insurance companies, or any private business, should be able to compete with any entity that is government-run, especially with regard to health insurance. So why not let Uncle Sam compete as well?

                       

But we know that government entities are not operated at low cost. The Post Office is one example. Medicaid and Medicare are government insurance coverage run amok.

                       

What pro-government enthusiasts never tell you, is that government has no capital costs. The taxpayer subsidizes capital as well as operational outlays.

                       

All private health insurance companies must provide expensive capital and funds and yet have only a few percentage points of profit to show for it.

Never fall for the argument that having a government agency option to choose from, in health insurance especially, will help the consumer. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)                                     

Health Insurance for All- Even Aliens?

                       

At least twelve million illegal immigrants may now qualify for free health care, for themselves and relatives, under ObamaCare and present local law. So-called undocumented immigrants still get medical care when they ask.

                       

Only about eight million Americans cannot afford health insurance premiums. The media dwells on a number of well over forty million that includes many who do not want coverage or do not need it for any number of reasons.

                       

It would be far cheaper to give the needy group health coverage free of charge, without revamping the entire system. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)