The Next Deal

Seminar Idea

2011-09-08T11:07:00.000-04:00

I am getting the urge to put together an entrepreneurial seminar. This would be either a one or two day lecture program for people who want to start their own business or wish to improve their existing business.

I am still working out the details, but I have a general idea of what I want to do. First, it would be held in the theater. I have great conference space for large and small groups. It would have to be classy, which means actual course materials, take home spreadsheet templates and lunch provided.

The seminar would cover as much real content as I could come up with. This is in contrast to the "Wealth" seminars that have a bunch of big name speakers and even more low level speakers who want to sell your their DVDs. Most of the content coming out of those programs is useless hype. I want my seminar to contain specific, useful information.

Of course, I need to figure out how much to charge for the program.

Concession Menu Boards

2011-09-07T17:20:00.001-04:00

Since opening Zeus, I have been really unhappy with my concession menus. Yes, I did put in six 42" screens. They are lined up and mounted at the right height. (Getting them at the right height had more to do with luck than skill. I just guessed at the height.)

I started out with a text board and ran everything on powerpoint. The menus are on two screens and repeated 3 times. Yes, the menus were easy to read, but they lacked that certain kick that would make them interesting. I had changed the backgrounds to something with columns, but it still didn't work.

So over the past couple of days, I have been taking pictures of all my menu items and reworking the menus. Here is the the end result:

Quality Sells

2011-08-27T13:31:00.000-04:00

Since opening Zeus Digital Theaters last October, I have been put to the test on my beliefs that quality sells. When I designed the theater, I made the leg room of every seat to be 12" greater than any other theater in the area. In addition, I put in stadium seating, rocker leather chairs, a great sound and projection system and expensive carpet.

The carpet, in my mind is the most important feature of the lobby. It isn't the huge columns or even the nice furniture. The carpet is something that you see and feel constantly. If the carpet isn't clean, you will notice it. Heaven forbid the carpet is sticky (which can happen in a theater).

A huge portion of my quality proposal to my guests actually is in the carpet. So it is no wonder that I will spend better than $15,000 this year in cleaning and maintenance on the carpet.

Another big part of our quality is the bathrooms. A smelly bathroom, regardless of how clean it is can kill your theater. A dirty bathroom that doesn't stink is just as bad. Some national chains get their baths cleaned every night by an outside crew. I have my regular staff clean the baths every 30 minutes. It makes all the difference.

Finally, the concept that quality sells is shown in how a nice theater performs, even at a higher ticket price, compared to a run down theater. We have a theater nearby that charges $7 for every show. We run our prices at $8-$13 with the average ticket price just below $10. So if the price was "elastic", then a lower price should mean greater attendance. Right? Wrong! Our theater does anywhere from 20-30 times the revenue of the lower priced theater. Price is not everything. Quality is what really matters.

The challenge is keeping the quality up. That means constant maintenance and improvement. Painters should touch up every 6 months. Carpets get professionally scrubbed every 90 days. Broken seats are fixed immediately.

To steal the old tag line: Quality is Job One!

My List of Business Startups

2011-08-20T16:34:00.000-04:00

It's no secret that the economy is in tough shape. Locally, we enjoy a 6% unemployment rate, which compared to the national rate of 9.1% is pretty good. However, the fact remains that opportunity is hard to come by today.

Of course, everyone would love to have some big company roll in and put in a shiny new manufacturing plant which would employ thousands of people at a livable wage. However, the odds of that happening are slim to none. Real job growth will have to come from the little start-ups. I would rather have 100 companies start up that employ 10 people each over 1 company that employs 1,000 people.

Of course, not everyone is suited to go out and start up a dot-com or other tech company. Access to capital, knowledge of the technology and realistic chances of success push those types of businesses into the realm of impossible for most of us.

Instead, I say there are real needs in the local market that could be satisfied by someone who just puts one foot in front of the other. Below are my favorite first-time startup businesses with the estimated investment required. Feel free to use them all you wish.

Under $500 Investment
Pressure Washing

Go buy a nice pressure washer, print up some good looking fliers and business cards, then hit the street. Look for the houses that face the South. That means their back decks face the North. What happens when you have wood that never gets direct sunlight? That's right! Mold and mildew. People are more than happy to pay someone a reasonable rate ($100-$200) so they don't have to deal with it.

Under $1,000 Investment
E-Bay Consignment Store

I am a pretty tech savy guy, but I hate selling stuff on E-Bay. In fact, I have a whole bunch of stuff I would happily sell if it weren't for the hassle. To sell on E-Bay, you need an account with E-Bay and an account with Pay-Pal. You need to take lots of pictures and write up the description. You then need to answer questions from buyers, watch the bidding, collect them money and ship the product. That's too much for most people to go through.

However, if someone would get off their butt and provide this as a service, they would do well. The secret is to make it easy. That means pickup service for the seller. Full service on getting the thing sold, shipped and paid for. Once the sale is done, you simply collect your fee and send the remaining amount to the seller. Do a good job and they will open up more stuff for you to sell. There is no need for a storefront since you would be picking the stuff up. Eventually, you might add a store front or better yet, set up a drop off location at the local UPS Store.

Under $500
Lunch Delivery Service

I work long hours and often forget to eat. Wouldn't it be great if I had a website I could pop onto that had the menu's of all the restaurants in the area where I could select what I wanted and have it delivered to me? Simple business idea. You charge a fee for delivery, collect tips and build from there. The secret is to treat each of your clients like they are staying at the Four Seasons. That means getting them to accept your text messages with simple decisions such as "Good Morning Mr. Hayes, would you like Chinese or your usual Mexican lunch today?"

Under $500
Personal Servant

I know this sounds like a crap job, but hear me out. In everyone community there are people who are too busy to handle the little things. These people would love to have someone run errands for them, but don't have enough work to keep a full time assistant occupied. Plus they don't want to have to deal with all the hassle involved in hiring someone.

Along you come with a cool service: Personal Servant. You or one of your employees would be available to take the car to get the oil changed, pick up the dry cleaning, shop for groceries, or whatever is needed. You would be paid and tipped according to an hourly rate. Even if this remains just you doing it, it sure beats sitting around waiting to find a job or working fast food.

To get started, you would simply need a nice looking polo shirt with your logo, a box of business cards, and some fliers. Hit the street and find some clients who would fit your profile. They are out there and would be more than happy to hand off the mundane items to you.

I know, these business ideas sound like a job. They are just that. That's the whole idea. You need to start with something that doesn't take a huge amount of money. If you treat these like real businesses with good record keeping, marketing, operational improvements, etc. you will quickly find them growing into something more.

One of my earliest businesses was just me doing desktop publishing for other people such as the PennySaver and others. The benefit is that I eventually had several clients. The more clients you have, the more secure your income stream. Face it, the normal job is not very secure.

Blog Back Up & Running

2011-08-19T15:58:00.000-04:00

I am finally getting my blog back up and running again.

Since we last spoke, I have completely changed around my businesses. First, I shut down Black Bear Title. It made sense give the crappy housing environment. It fell into the "don't try to go against the current unless you are a salmon" rule.

Then I sold RentQuick. RentQuick had been my baby since I opened it in 1998. However, my focus was shifting to Zeus Digital Theaters and I knew I would not have much time for RentQuick anymore. This one fell under the "you can only stare at one thing at a time" rule.

So now I have Zeus up and running. We just had a great summer. July was way above my target numbers and we are hitting on all cylinders. We had a run of big block buster movies that brought out all kinds of new guests. I am still tweaking the business a little, but I expect it to be fairly stable going into next year and beyond. Not too bad for a startup in the middle of a global financial meltdown.

That brings us up to date pretty well.

The Need for Focus

2011-04-18T09:07:00.000-04:00

As my regular readers (all 3 of them) know, I have a few businesses. Over the past 6 months, since opening Zeus Digital Theaters, I have been working crazy hours. My day starts around 8 or 9 and I get home sometimes after midnight. Most of that time is spent in the theater working on details, details, details. When I opened Zeus last October, I had Hayes Investments, DeWitt Crossing, BlackBear Title and RentQuick.com on my plate.

In November, I shuttered BlackBear Title since I knew I wouldn't be able to "push a rope uphill" in the current housing market. Just last week I sold RentQuick.com, a company I started 13 years ago. RentQuick needs a full time owner and I could not longer spend proper amount of time on it.

So as of right now, I have Zeus, Hayes Investments and DeWitt Crossing left. This feels about right.

Once you start one business, you find it easy to start another. Some businesses grow by expanding their market. However, as an entrepreneur, there is an urge to create new businesses to diversify the income streams. So after a few years, many active entrepreneurs end up with a group of small businesses. I am here to tell you that, for me, is the wrong approach.

To be successful, you must have focus. With multiple businesses, you cannot be focussed. There just aren't enough hours in the day. Also, as we age, we lose some of the vigor we all have when we are young. I don't consider this slowing down. Instead, I see it as expanding in a single direction.

The Finest Man I Ever Knew

2011-03-07T10:40:00.001-05:00

On Saturday, we buried my Father-in-Law, James R. Jewett. He was just shy of 80 years old. He was a farmer all his life. He has a 400-acre farm in Madison County, Virginia where he grew corn, soybeans, and barley. For decades he also had dairy cows.

Saturday was both a difficult day and a wonderful day. I had known him for 22 years and considered him a friend and mentor. When he would visit, he and I would ride around in my truck and look at various projects I had going on. He was always supportive.

After all the guests had left and just the family remained, I marveled at the bonds and quality of the family he left behind. We were happy to report that of all his kids and grandchildren, there was not a single black sheep. In fact, they are all excellent people. I am honored to be a part of the family.

The most poignant moment was during the service when the Reverend stated that Jim Jewett was "the finest man I ever knew". Not many people can honestly have that said about them. He was in fact the finest man any of us ever knew.

The very best part of the whole thing is that he was buried on his farm that he loved. To make matters even better, it looks as if his son and grandson will continue to farm the land and keep it whole.

I will miss Jim Jewett terribly. He was the finest man I ever knew.

My Unfounded Economic Predictions

2011-02-24T17:06:00.000-05:00

As I watch all the "experts" predict everything from the price of oil to the growth of the economy, I am reminded of how often they are wrong. In June, 2008, the experts predicted that oil was going to hit $200/barrel. Six months later it was around $35. In 2001, the experts predicted the Dow Jones Industrials to hit 20,000. It is still in the11k to 12k range today.

As it turns out, you don't have to be right to make predictions. In fact, you can just blurt out some outrageous statement in the hopes that it will turn out that way and you will be hailed at a seer. So in my hopes of meeting Oprah (and her subsequently buying me a car), I thought I would make some wild predictions as well. It is important to put these things down in writing so there is proof that I made the prediction beforehand. Then if it comes true, I can hit pay-dirt.

1. China will have a civil war and drop back behind Japan in terms of GDP.
2. Osama Bin Laden will be found hiding in a Super 8 in Ohio watching pay-per-view wrestling.
3. The price of gold will drop below $1,000/oz. as the economy recovers.
4. Upon the death of Fidel Castro, a huge influx of American investments will turn the country into a Caribbean Vegas.
5. The next bubble will be in apartment construction.
6. 3D Televisions will not sell well. In 2013, they will cease to make them.
7. Apple Computer will buy Microsoft.
8. Microsoft will accidentally buy a part of itself that it already owns.
9. Out of the Middle East turmoil, a true leader will emerge who focuses on ending hunger and suffering of his people.
10. We will find a path to cold fusion which will change the political dynamics of the world much the same way that finding oil in the Saudi Desert did 70 years ago.

If I Were To Write A Book

2011-02-19T21:58:00.000-05:00

First, I don't presume to be able to write a book. I don't have the dedication to finish a writing project of that size. Furthermore, I am not so full of myself that I would think that in writing a business book, anyone would want to read it. Of the thousands of business books written each year, only a few are worthwhile. There is a reason for that: business books are dull.

To do a good business book you almost have to make it a simple story such as Who Moved My Cheese or something like that. Most business books sit unsold in warehouses.

However, if I were to write a business book, I would say the following:

1. Entrepreneurship is not something you can just pickup when you are laid off. You need to prepare for years to get it right. Many think the road to riches lies with their first business. It doesn't with the exception of a just a few businesses, it isn't until the 2nd or 3rd do you actually make money. Just because you did well as a manager in a big company, doesn't mean you have the tools to start up a small business.

2. The ability to raise capital is huge. If you cannot raise debt or equity financing, you will starve for cash quickly.

3. If you cannot sell, you shouldn't try to be an entrepreneur. Selling helps with raising capital, getting customers, hiring good employees, and leading others. I would put selling at the top of the list for a startup business. Of all my businesses, the biggest issue has always been revenue growth. Handling costs, employees, government red tape or even product delivery is easy by comparison.

4. Whatever your business plan says, you are wrong. I have yet to see a business plan be right. Period. Costs are always higher and revenues are always lower. Never trust what your numbers are until they are real.

5. Listen to others, but believe in yourself. You will hear every expert in the world tell you that you can or cannot do something. Of course, they are nowhere to be found when the chips are down. Listen to them and add it to your base of knowledge, but ultimately you need to depend on yourself and what you believe. Don't let them talk you into or out of doing something.

6. Nothing pays off like hard work. If you think that owning your own business involves a lot of free time and traveling, think again. You will need to do more work for less pay than any of your employees, at least at the beginning. After the business is successful, you will have plenty of time for relaxing. But don't go into this thing thinking you can have weekends and evenings off.

7. Once you get the business running right, your next job will be to get yourself out of the day-to-day business. If you are stuck in the day to day running of the business one year after starting, then you aren't doing your job right. Ultimately, you should be replaced by employees.

8. Finally, once you are successful, you should stay paranoid. Success breeds complacency. Staying paranoid keeps you sharp and increases your energy.

Supporting The People of Egypt

2011-01-29T14:02:00.000-05:00

The events over the past couple of days in Egypt create a huge problem for the United States. The Obama Administration wants to be able to come out for the will of the people against a dictator, but at the same time want to support that dictator because it benefits the US in their efforts on the Middle East Peace Process with regard to Israel.

So what to do? We want to support freedom and democracy. But what happens when that democracy results in an Islamic Republic (such as Iran) or an anti-Israeli government such as Hamas in occupied Palestine? The simple fact is that the will of the people does not always result in a pro-American government.

Personally, I think we should stay out of it and allow the chips to fall where they may. We made mistakes with Iran in the 70's that haunt us today. Our support for the Shah of Iran resulted in the takeover of the US Embassy and to a lesser extent the rise of Iraq and the Iran/Iraq war.

Possible outcomes may result in coming to arms over the Suez Canal or even an eventual shooting war between Israel and her neighbors. Of course, those are worst case scenarios. Hopefully, a moderate government will emerge from Egypt. Only time will tell.

Finally something to talk about

2011-01-23T12:17:00.000-05:00

This past week, the Chinese President visited the White House for a state dinner. It has brought up understandable concerns over the rise of China and what that means for the US.

It is estimated that by 2025 or 2030, China will overtake the United States as the largest economy in the world. The US surpassed Great Britain in 1877 as the largest country in the world. Ever since, the foam finger industry has been going strong making "We're Number 1" foam fingers. America has enjoyed a long run as the strongest and richest country in the world. Losing that number one spot will be tough to our national psyche, however, we should actually start to question what we have done to earn that number one spot.

We American's have been riding the wave of previous successes for a while. The real question should be, "What have we done lately?"

There is no doubt that China is hungry and ambitious. But just how ambitious are we as a nation? Most of what we do now is respond to problems. No longer are we racing to the moon, learning to fly, creating new inventions, or building the big dams. It doesn't mean we are dumber than our ancestors. It does mean we are not as ambitious as they were. Our hunger has been calmed by plenty of food, loads of leisure and comfort. We don't take the risks we once did largely because we have so much to lose or we have too much stuff already and don't need to go higher.

I was visited by a man this week who wants to build his own business. He is about 40 and makes good money working for someone else. After a very long talk, I realized he won't actually follow his dream because he is comfortable now. He won't take a risk for something bigger because what he has now is good enough.

Multiply that across an entire generation and you will see why we Americans have a problem. In order to grow as a country, we must take risk. But individuals don't need or want to take that risk for the possibility of something big.

The missing element is ambition. You cannot teach it. Either you hunger to achieve something or you don't. It is tough to act hungry when your belly is already full. I don't know what the answer is to this dilemma. Of course, we will all point the finger at someone else for America's decline in the world. Luckily, there will be a huge supply of foam fingers to fill the demand.

The Calm After The Storm

2010-12-09T15:21:00.000-05:00

Over the past 18 months, I have been completely engaged in the construction and now running of Zeus Digital Theaters. My previous posts about the project have given a little insight into what I went through in order to get the project done. However, now that is over with, it is time for me to start paying attention to the rest of the world around me and where I think things are going on a medium-macro level in the mid term.

First, I think this part of Virginia has seen the worst of the recession. Nationwide, unemployment is rising still (latest is 9.8%, but that will be adjusted as it always is.) Much of the increases are from the economy not creating enough jobs to both feed the supply of new entrants and re-employ previously unemployed workers.

I believe a part of the sluggishness in employment growth is tied to Corporate America's resistance to new investments in new bricks and mortar locations is a tie over from the down turn where companies increased their operating profits by cutting costs (employees). All the blood is gone from that turnip. Now, the only way to increase profits is to either make some miraculous increase in productivity or to invest in new market growth in order to increase revenue.

So I do predict that corporate investment activity will increase in the next year. Of course, some of that cash sitting on their balances sheets will and should go to either stock buy-backs or to dividends. However, neither will increase revenues which is needed to increase profits. As a result, investment into market growth will happen this year. It has to. None of the executives want to be the guy sitting on the sideline with a pile of cash while their competitors gobble up market share. Once one moves, the others will follow.

Once the investment starts, we should see a jump in construction spending and related jobs. Once we start to see job growth again, then the Fed will start to un-wind all the liquidity programs, long term bond purchases and ultimately the Fed Funds Rate will rise. Once that happens, order will be restored to the universe. Of course, once interest rates rise, growth should slow a bit, but the dollar will strengthen as money flows into the US economy for debt investment.

Simple right? Publish Post

So the key right now to getting job growth is in the hands of the big corporations. They need to invest some of that cash to grow their revenues. That will in turn spur hiring, etc. etc.

The Trouble with Mixing Economics and Politics

2010-12-06T13:17:00.000-05:00

Last night 60 Minutes ran an interview with Federal Reserve Chairman Ben Bernanke, who seems to have requested the interview to straighten up some of the misunderstandings concerning the Federal Reserve's QE2 program.

The QE2, (Quantitative Easing 2) program is a plan for the Fed to buy $600 Billion in treasuries in order to push down long term rates which help lower the cost of mortgages which would help with the housing crisis.

Of course, the general problem is that people think that the Fed is printing $600 Billion in order to push long term rates down. This is false. The Fed is just buying 10 and 30 year t-bills in order to push long term rates down. The money supply is staying the same. People further believe that this will cause hyper inflation. This too is false since we are close to deflation and the Fed has so many tools available to slow inflation if it should show up.

The underlying issue is a push by some politicians to rein in the Fed and bring it under the control of Congress. However, like all modern economies, an independent central bank is absolutely necessary. Otherwise, we would have the same silliness going on in our monetary policy as is in our fiscal policy.

Back in 2008, during the meltdown of the world economy, you saw the real limits of the political understanding of macroeconomics. They didn't understand the banking crisis, nor the Fed's response to it. They didn't truly understand TARP. They still don't understand most of the tax policy that they actually wrote.

Nothing could be more dangerous than to have the power of the Fed subject to the ebbs and flows of political favor. The Fed is charged with keeping inflation in check and maintaining full employment. Most people in know, accept that there are few tools available to the Fed to keep us at full employment. They cannot affect demand or supply. All they can do is affect the money supply and to some extent the interest rates which impacts economic activity through the cost of financing growth and investment.

The actual growth and investment must start with a market in need of a product or service. Interest rates could be negative, but without demand for goods and services, there will be no growth. (example: Japan).

Economics can be hard to understand. Yet, it is understandable with a little effort. Those who drive public opinion would do well to understand the subject before pushing an agenda. Leave politics out of monetary policy.

Long Time, No Update

2010-12-04T16:51:00.000-05:00

I ran into an old friend who reminded me it has been a very long time since I blogged. This happens from time to time as I get too busy to eat, sleep or blog.

So over the past year, I have been focussed on designing, building and now operating the new Zeus Digital Theater in Waynesboro. This has been a very interesting, exhausting, stimulating, challenging and rewarding year.
Over the past year, I have pretty much worked every day 10-18 hours. I have learned a great deal and hopefully implemented those insights into running the theater.

Of course, the financing was tough from the beginning. Trying to finance a huge project like this during the worst economic downturn in the past 80 years was tough. I was able to pull it off by building on that "loyalty banking" I have written about before. Banks don't lend money to projects, they lend to people. Your reputation for success will either hurt or help you in this endeavor. I like to think that my past performance helped, but also my past loyalty toward my banker played a part.

The construction phase was fantastic. Yes, there were challenges and setbacks, but we brought the project in close to budget and on time. Jon Sweringen was great to work with as the GC. I have to admit, building this huge theater was alot of fun.

Since opening on October 8th, I have been putting together processes, systems and controls to make sure my vision actually exists. I can't say it has been easy, but nothing worth doing ever is.

I am still a little new to the complainers. Most guests are fantastic, but there are just a few that ruin my day. For these people, I have a hard time not reverting to my old Marine days. I will say that generally, people are reasonable and polite. We won't get everything perfect and they understand. Those that complain the loudest usually have never done anything difficult in their lives, but expect perfection in others.

So here we are, 8 weeks after opening the new theater. I am still working to tighten up my staff and what they do from hour to hour. However, I am very pleased with the project and the business. Waynesboro and the surrounding communities have been very welcoming. I am now waiting for a restaurant to go in front of the theater, which will make the site a real entertainment destination.

Zeus Theaters Opens

2010-10-17T20:54:00.000-04:00

Wow, I have been pretty busy. We are now 9 days after the opening of the theater and things are starting to fall into place. Over the past year, I have been working full time on planning, financing, building and now operating the new Zeus in Waynesboro. I can honestly say that I have never worked so hard in all my life.

Looking back on the construction, things went pretty well. My GC, Jon Sweringen was fantastic to work with. He kept me sane during a hectic schedule. We had shot for an opening on October 1st but ended up hitting October 8th. The punch list is short and the building looks great.

I would like to point out that there were plenty of the "old guard" and so called experts who happily predicted our failure. They were wrong on all accounts. Jon and I brought the building in pretty close to a tight budget and timeline. I doubt any of the old money builders could have done better. So there.

On the theater, it looks great. The lobby has a sense of community. It really feels like a fancy hotel lobby. We now have leather seating in the lobby. I have met many people who enjoy just sitting in the lobby and talking.

The theaters are fantastic. Seating is great. Sound is great. Not too much bleed from one theater to another on the noise. The HVAC is working well.

We still haven't hit full capacity yet. This week will be a real test. We are running Paranormal Activity 1 and 2 on Thursday/Friday Midnight showing. I expect to run two screens full for that one show.

The retail store is doing fine. Christmas will be the big rush I think. The party room will get going this week. Groups and fund raising start this week as well.

So far, everything is going according to plan.

The best part is when people ask me what chain Zeus belongs to. I love pointing out that this is the only one. Normally, they are shocked to hear that a single entrepreneur can just make up a brand, finance it, build it and run it all by himself. We have go to stop saying that the American Dream is dead. It isn't. The dream is there for those who are willing to risk everything they have and to work 100+ hours a week.

What Happened to the Entrepreneurs?

2010-05-26T16:47:00.000-04:00

During every past American Recession, the recovery was always led by the return of the entrepreneur. People would move from the large companies and jump into their own startup which would fuel the next expansion. However, there doesn't seem to be a resurgence of the start-up during this recovery.

Now, this may be because this recession was pretty bad or it may be due to a lack of demand for new services which startups would find. I think it has to do with the lack capital available to the entrepreneurs. In the past, they would get a business started by running up credit cards or pulling cash out of their home with a second mortgage. However, across the nation, housing prices have dropped about 30%, which would be enough to wipe out most 30-something's equity. Add that to the tight lending environment, and you kill off new business startups.

In some cases, there will be startups funded by a third party. For instance, where people get tired of watching their stocks portfolios drops or of getting 1% on CDs, they might lend it or invest in someone's startup. But this cuts out the first-time entrepreneurs since they are not likely to get private funding without a track record.

The fix on this would be an expanded and simplified lending system for startups. The SBA has some programs out there, but they are slow and difficult to get going. A better method might be to bring back the business plan competitions of the 90's.

The Limits of Social Networking

2010-05-08T10:37:00.000-04:00

As a practical matter, I have been using facebook to both build buzz and gain market knowledge for my new Zeus Digital Theater project. I started the facebook page in November at the behest of my 15 year old son, John.

John was right that it would be a good way to reach out to the theater's main demographic, teenagers. With the facebook page, I have been able to get teen boosters talking about the new theater which should open October 1st this year. In addition, I have been able to gain significant insights into how people viewed the new theater, what they expected from it and what they disliked about the competition.

While the Facebook page works for the market analysis and the buzz building, it fails in the traditional "call to action" marketing. If I put up some call to action on the page, I do get some response. However, without a strong reward (such as a t-shirt give away), it does not register as high as one would expect from "fans".

As a result, I believe the theater will need to use a reward based call to action system that is based upon email and text messages instead. You see, with facebook, fans see a stream of updates on their wall. If you post something on the Zeus page, it is posted by date (default) which means that if the fan has lots of other activity after my post, then my post will be buried way down their wall. If the fan only gets on their page once or twice a week, then they don't see it at all. In other words, Facebook has lots and lots of noise. Noise, as any marketer knows, is the enemy of messages.

So while Facebook gets lots of press, it is only one tool in the arsenal of the modern marketing package. And just like any marketing message of the past, a call to action must have some time related benefit to the consumer. Otherwise, it is just noise.

A Little Discussion on Planning

2010-05-01T18:02:00.000-04:00

Over the past 8 months, I have been involved in the planning of my new theater. Unlike my other businesses where I could make adjustments and investments as I went along, the theater requires that all the investment and planning take place at the beginning.

For instance, I started RentQuick out of my basement in 1998 with $3,000 worth of investment. As I went along, I would use income to buy new equipment which I would then rent. There were times when I had orders for rentals and did not have any equipment. So I simply bought a projector or two on a credit card, had it shipped to the location of the rental, then figured out a way to get it back to me.

The theater project is completely different. With Zeus Digital Theaters, I need to build the theater, put in every single seat, then run it. Once it is open, it will be very difficult to make major changes since the theater is open every day. Yes, even Christmas!

So now the pressure is on to not only make all the investments from the start, but to get it all right. It is a fine line between what I can afford to put in and what I want to put in. The sign is a great example. Would I like to put in the mac-daddy of all signs on the street? Sure! Can I afford it on my budget? Nope. So I have been spending the past couple of days trying to come up with a workable solution.

Where the investment affects the quality of the experience to the visitor is where I put the money. As a result, we have nice carpeting, great projectors, fantastic sound, top-end seating.

Of course, there will be some things I can change after the theater is open. I am really interested in getting the thing put together as nice as I can with what I have available.

As I have said, my first theater is likely to be a Chevy, not a Cadillac.

Old Friends and How Much We Change

2010-04-20T14:27:00.000-04:00

I just got off the phone with an old friend, Pete, whom I had not spoken with in a very long time. Pete and I worked together in the mid-Nineties at Framatome selling computers in the lead up to Y2K and the internet boom. At the time, I was still in my 20's and a little bit of a hard-ass. Pete always seemed wiser and calmer.

As a result of my more "offensive and aggressive" personality traits, I moved out of the corporate world. At the same time, Pete flourished in it. Like water, we each seemed to find our own level.

The interesting thing about our talk is just how much I had changed. Pete still seems calm and wise. When I was in my 20's, I had just come off of 6 years in the Marines. That tends to have an impact on one's attitude. However, even the Marines thought I lacked tact. Although, my definition of tact and their's was very different. I thought I was being honest. Whereas, all my military superiors thought I was a wise-ass.

Over the past 14 years, since Pete and I worked together, I realize that I have calmed down a good bit. Politically, I have changed drastically. I read more now than ever. I don't blow my top like I used to.

To find a point in my latest ramble is difficult. I guess we all grow up at different rates. While I am sure I still have a good bit of growing up left to do, I don't think I am as bad as I used to be.

Oh, the other point is it's great to talk to old friends. They are like book marks that show you where you were and how far you have come.

Zeus Update: April 12, 2010

2010-04-12T15:54:00.000-04:00

Right now the theater construction is finally moving along. We are about half way through the footer stage, and expect the outside walls to be up by mid-May. I am still shooting for an October 1, 2010 opening night. Much of that will require the contractors to work 6 days a week, but I keep telling them to make hay while the sun shines.

The process thus far has been smooth. That isn't to say that there haven't been surprises, though. Whenever you deal with dirt, there are always surprises. Sometimes you hit rock. Sometimes you hit mush. The only way to be sure is to core drill the entire site, but that gets pretty expensive too. I figure at some point, I am going to buy a core drill machine and just drill holes in my spare time.

The weather has finally turned nice. Once we get through the next two weeks, the weather won't affect us too much.

Zeus Update: April 3, 2010

2010-04-03T17:44:00.000-04:00

We are finally under way with the construction. The weather has broken and we have enjoyed a full week of moving dirt to the pad. On Monday, we will begin the footers which will be a very nice thing.

In other news, the theater plans are pretty much complete. Steve will begin working on an employee handbook next week. I will be focused on getting the building up.

On the rest of the project, I have a feeling there are just too many signs. This week, I will be going "dark" on my marketing for the remaining commercial real estate. The signs have been up all through the recession, but I now feel it is time to take them down. If someone wants to buy or lease land from me, they will have to seek me out. I will no longer call these national companies and beg them to consider my property for their next expansion. If they are interested, then they can call me.

As for the rest of the timing, it looks like October 1, 2010 will be our grand opening. Once we get the building under roof, weather won't be a factor any longer. We should be able to work 6 days a week and finish everything on time.

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2010-04-03T17:23:00.001-04:00

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Yet Another Zeus Update March 21, 2010

2010-03-21T16:52:00.000-04:00

Okay, I have gotten some questions regarding Zeus:

1. When will you open?

Thanks to the wet winter, we are looking at an October 1, 2010 opening.

2. Will you have first run movies?

Yes, we will carry the major, first run movies.

3. What will it cost for admission and concessions?

We will be matching the same prices that you see at the area Regal Cinemas.

4. When will you be hiring?

We expect to be holding "casting calls" in August and hiring people by mid-September.

5. Will you carry 3D movies?

Yes, we are starting with 2 3D screens and will quickly ramp up to 4 screens based upon Hollywood releases.

Zeus Update: March 4, 2010

2010-03-04T15:34:00.000-05:00

Lots happening on the theater. First, the weather is finally breaking. It has been the worst Winter on record here which has stopped all our work. That is about to change.

While this was going on, we made some changes to the building. Now, instead of using 9 1/2 inch concrete tilt up walls on the exterior perimeter of the building, we will be using a steel stud system that is skinned with 2" of concrete. It is way lighter, which will allow us to save money on the footers and foundation.

The lobby designs are done. I am using a cool laser show to put the stars up over the open area. This is far more economical than putting thousands of fiber optic strands up in the ceiling. It looks awesome.

Steve LeRose, our new General Manager, is finishing his move from RentQuick to Zeus. We have hired his replacement at RentQuick and things are transitioning well.

The seats have been ordered. The stadium seating is ordered. We are waiting on the final numbers for the projectors, but I expect to have them ordered by the end of the month. I am still unsure about some of the concession equipment, but that will fall into place quickly.

A good thing is that 52" LCD 1080p screens are dropping in price. I need to put in a bunch of these, so the better prices help.

All in all, I am looking at spending close to $6 Million on this project. I need to work day and night at the printing press to put that out in $20 bills. (Just kidding Secret Service guys!).

After Osama Bin Laden Is Dead

2010-02-22T20:15:00.000-05:00

I normally don't do politics on my blog, but I wanted to put these thoughts down.

What happens after Osama Bin Laden is dead? Over the past four weeks, with the help of the Pakistanis, the US has captured or killed a number of high ranking terrorists. They have made a break through on where the bad guys are hiding at and are getting some traction. Eventually, our old buddy Osama will be killed or captured by somebody. I think they still have the $25 Million bounty on him. Just like the Mafia, someone will flip on him. It may not be this year, but it will happen.

So when Osama Bin Laden is dead, what will become of America and her allies' resolve in the "War on Terror" (a stupid name since terror is a tactic, not a people)? The easy answer is that everyone will have a ticker-tape parade and call it a victory. While it will be as such, it will not be the end. Just like Bobby Kennedy's fight against organized crime, it will be long and unending.

It is possible that the Muslim world will tire of the constant suicide bombings that generally kill more of their's than ours. Maybe the chain will break like it did with the Black Panthers, the Weathermen or other domestic terror groups in the U.S. Maybe a two state solution will stick in Israel and the Middle East will settle down for a much needed period of peace. These "what-ifs" are all possibilities, but are not likely.

What is likely, is that after Osama is dead, that the "War on Terror" will follow the same path as the "War on Drugs" where we never really win it, but is just settles into a lower intensity than when it first started. Think back to the 80's when the drug runners were everywhere. Today, they are still around, just like the Mafia, but they are at a lower volume level and therefore not as much of a threat.

I do think that Osama will be caught, killed or die of disease before long. When that day comes, we will be faced with a problem of not having a face and a name for our ultimate enemy. And without a nemesis, the American people will lose interest. Of course, if history repeats itself, there will be some unintended consequence to rise up to replace it. There always is: WWI and Hitler, Hitler and the Cold War, The Cold War and the Russian invasion of Afghanistan, the Russian invasion of Afghanistan and the Mujahidin, the Mujahidin and Al Qaeda, Al Qaeda and 9/11, 9/11 and Afghanistan. So we will have Afghanistan and something else.

The Jobs Bill

2010-02-01T20:24:00.000-05:00

Since I am a big proponent of entrepreneurism, I thought it might make sense to give my opinion of the Presidents jobs bill ideas. Now keep in mind, the bill has not been written yet. So the final bill might not have all the parts in it that are currently being proposed. Based on the big three issues, here is my take:

1. Tax Credit of $5,000 per New Employee: This would be fantastic for creating new jobs. Any business would take advantage of this if they could. However, the is a real issue with fraud and abuse. What happens if someone just shuts down one LLC and starts up another one under a different name thereby firing and re-hiring everyone on staff? How this is worked out, remains to be seen. If they can fix the fraud question, then you are likely to see serious job creation this year.

2. No Capital Gains Taxes for Small Businesses: This to my mind (and experience) would not really be stimulative. A business has capital gains when they sell something for more than what it is shown on their books. For instance, if you have a pickup truck that is fully depreciated and you sell it for $1,000 then you have a capital gain of $1,000. I guess this would reduce the cost of replacing older equipment with newer stuff. That would kinda be stimulative. But the problem is that sometimes you might just sell the truck and not replace it since you laid off the guys who would drive it. The tax reduction is only helpful if people really see the correlation. If it is complex, like capital gains taxes, most won't even know about it and therefore they would not make the actions you want them to make (sell the old truck and buy a new one.)

3. Increase Lending to Small Businesses: This is huge. Right now, the only way to get new money (not loan renewals) is to get a federal guarantee. The feds (SBA, Stimulus and USDA) only have so many people on staff to review all this stuff. That means that there is currently a serious backlog in the lending and borrowing. I know plenty of businesses that could get going if they could just get the money. Increasing the lending is going to be key, but then you need to figure out how to back the feds out of the lending relationships so it will go back to banks and entrepreneurs. Once you are on the i.v. it is hard to get off.

The American Entrepreneur

2010-01-24T11:10:00.000-05:00

We have all heard about the American Business Hero. You know, the one who goes out, risks it all and creates a new business. You can name some of the names: Ford, Edison, Jobs, Gates. These guys, in the beginning were pioneers who reached out to make the better mouse trap. In doing so, they made themselves very wealthy.

However, along the way something happened. Something changed in who they were and what they were doing. In the end, it was no longer them, but the company that had control. They had each created a monster. Today, there are many very large monsters lumbering about the country feeding at will and leaving a wake of destruction behind them. Doubt it? Here is a short list: Enron, AIG, Northern Rock, Walmart.

All of these companies have become so large that they no longer represent the personality or wishes of a single founder. These companies are now mostly run by hired guns who are experts at process, reporting procedures, hierarchy structures and financial manipulation. They are filled with average workers (no free-thinkers except on corporate retreats, please) who do an average job managing an average product for the average consumer. Not too hot, and not too cold.

The shareholder is just a nuisance to these companies. Once a year, they hold an annual shareholder's meeting in some hotel and there the average titans are forced to listen to the average shareholders bitch about their less than average returns. Of course, the company will pay lip service to the shareholders, who ostensibly own the company. Of course, no single shareholder has enough shares to do anything serious about it.

So the average company is very average indeed. Even the self-appointed kings of the boardroom are very average. Their main goal is to move the ship without too much list or lean in the cargo area. Or in other terms, don't rock the boat baby. They accomplish this by creating a system where no single decision can be made by any single person. As a result, you must make all decisions as a group, committee, board or up the chain of command.

None of this is new, of course. This is bureaucracy: a system of management that allows average people to perform averagely.

Juxtapose this with the concept of the American Entrepreneur. In the beginning, Bill Gates did not create a company that would try to monopolize markets, instead, he wanted to make some money which would help him get laid. When Henry Ford started, he wouldn't have formed a committee to see at what point he should recall a dangerously flawed vehicle or not.

In our society, we honor the individual who starts a business. However, we do not separate that individual out of the company as the company become a giant bureaucracy.

So to the point: It is my belief that the individual will be returning to the American landscape. We will see more entrepreneurs emerging from their corporate cubicles of mediocre malaise and walking into the bright sunshine of risk and reward. Twenty-Ten will have more business startups than we have seen since 1999 during the dot-com breakout.

Why? Well, first it will be out of necessity. Those big companies are all smaller in staff now. They cut their staff down last year. It will take a little while before they bloat back up. Secondly, people will find that all the tools needed to start a business are right at their finger tips. Third, the recent collapse of some markets will open opportunities for new debutants.

So break out those spreadsheets. Start working on that business plan. Seek out the answers to your questions and then execute. People will try to dissuade you from doing it, but press on. You know that deep inside you want to be a little above average. The average person always wants to be above average, don't they?

First Theater Seats Are In

2010-01-22T14:31:00.000-05:00

Here is the first set of seats for the new theater. I like these, but will likely like the black ones a little better.

My typically interesting day

2010-01-21T19:05:00.000-05:00

Today was a very interesting day, but strangely enough it wasn't unusual. Here is a sample of what I dealt with today:

8-10 am
Spent most of the morning on the phone and hung out with the wife at the house. Phone calls were about footers, tilt up walls and Haiti relief. I played with my cat, watched some news and listened to some music.

11:00 am
I dropped by Mark's house to discuss the Rotary meeting at noon. Mark is the current club President. I give Mark a ride to the meeting.

12:00 pm
At the Waynesboro Rotary lunch I met with Laurie on a loan renewal, discussed Sarah's trip to Mexico and Paige's new teeth whitening plans. I then spoke for a few minutes about raising funds for la Gonave in Haiti. I supported a matching funds request from the Foundation in what was the quickest Trustee meeting ever. Ten minutes later we had $6,600 raised. I make a recommendation to someone for an attorney. John mentions a secret party that he should not be talking about.

1:15 pm
I drive Mark home after Rotary and then check to see that I have four messages: two contractors looking for work, a reporter, and an architect in Michigan who wanted to give me some ideas on the theater.

1:45 pm
I arrive at RentQuick and assemble the first of the sample theater seats. I meet with a possible new hire. Steve and I talk about the theater, RentQuick and a bunch of other things.

2:15 pm
I talk with Linda about the Haiti funds. She and I brainstorm on ways to get stuff to la Ganove. She has been talking with Cuban rebels about using their sea-plane. I suggest using a large dive boat that operates in the area. I regret not knowing any Columbian drug lords who owe me a favor.

3:00 pm
I talk with the architect from Michigan. We discuss efficiency ratios on the theater, structural steel and how he would change my plans. Ultimately, I am happy with the plan I have.

3:19 pm
I check on BlackBear Title and there is no answer. They are on the phone.

3:25 pm
I contact some Scuba shops and see if any have contacts in the Caribbean who would have a dive boat for hire. No luck.

3:35 pm
I talk with Jerry in LA about the new seats. The maroon will not work with the logo. Other than that, it looks good. LA is getting bad rain. I still need to see the seats from Irwin.

4:16 pm
I drop by Jeb's home office. He runs a new business idea by me. It sounds really good. Very viral. I pay him for paintballs and we plan to do a match soon on his course. His kid played Chopsticks in the next room while we spoke.

5:15 pm
I return home, pick out some cabinet colors and corian tops for the concession stand. I catch up on emails, write a little, eat dinner and hang out with the boys.

6:15 pm
I get the updated concession plans with the equipment cut sheets. Still no pricing yet. The files are huge and would kill my printer if I tried to print.

7:00 pm
I finish writing this blog post. About to go play Modern Warfare II if I can get my wife off the internet.

Zeus Update: Jan 16, 2010

2010-01-16T10:33:00.000-05:00

We now have our building permit and will be putting footers in as soon as the ground is ready. The thaw over the past few days has done wonders for the site. Steve Lilley with S&K Excavating did a great job getting the site clear of the snow so it would be dry and ready to roll quickly.

Just to give you an idea of how big this project is, the footers will be 3' deep. The footers on your house might be 12-18" deep. The cost of the footers, just the footers, is right under $100,000. I had a Realtor tell me that putting in footers didn't mean anything. That I could be bluffing. He clearly did not understand the value of money.

That brings up another point, for some reason there are a number of people who don't think this theater is real. Well, it is and we will be open on September 1, 2010. Just to back up some of the questions of how serious I am about this, here is a list of some of the professionals already contracted with on this project:

General Contract: Jon Sweringen, Platinum Construction
Architect: Robert Pilkington and Dennis Stevens, Balzer & Associates,
Site Engineer: Ray Burkholder, Balzer & Associates
Site Contractor: Steve Lilley, S&K Excavating
Interior Designer: Hiedi Cupka, Interior Creations
Integrators: Jerry Van de Wright and Beven Wright, MIT
Concessions: Proctor Companies
General Manager, Steven LeRose
Banking: Laurie Landes, First Bank & Trust

There are others, but I think you get the point. We are serious, we are coming and we are Zeus!

Help Wanted at RentQuick

2010-01-12T14:31:00.000-05:00

I know this is not the best venue for posting a help wanted ad, however, I figure it is worth a try.

RentQuick.com is seeking an organized individual to join our team. This person must be very focused on our clients. That means when the phone rings, they answer it and do whatever they can to help our clients. They should have experience in inside sales or customer service, sound great on the phone, be willing to learn our system and our products.

The hours are Monday - Friday 9 am to 6 pm. They would be required to carry the after hours phone for occasional late night sales calls and technical support calls. We will train them on all the technical aspects of the job.

We are a small team and work very hard to cover each other's backs. There is no negative culture here. We all get along and support each other.

The pay will be in the $30K-$35K range with paid vacation.

If you are interested in this position, please email your resume to steve@rentquick.com for an interview.

Lobby Interior Designs

2010-01-11T10:53:00.000-05:00

In looking at the interior of the lobby, I have been working for the past few days on a design that will work well.

I know that I will have some (not many) Doric Columns in the lobby. For instance, at the ticket booth and the entrance to the retail space. The bigger problem has been how to handle the ceiling. Unfinished the ceiling is 30' tall. So we have a lobby that is 60x60 with a ceiling of 30' tall. That is pretty big. The huge space overhead would be a noticeable void.

To fix it, I have come up with a new idea. I will drop platforms at 20' high. These platforms will be 10x10 with a 2x2 grid inside them. The tiles in the grid will be as below:

Hanging from the center of these tiles will be a pendant bowl light fixture. There will be two sizes. One will be 60" wide the others will be 36" wide.

Once we add some LED accent lighting on the platform, we are underway. I would put five of the platforms in the lobby with the remaining space open to the 30'. You won't be able to see the upper ceiling since it will be painted black and there will not be any lights up there. This should fill the space, lower the ceiling, give the ceiling depth and interest and add lighting to the lobby.

I am in the process of running this by the architects. If it works, then we are way cool.

Update on Zeus Digital Theaters

2010-01-06T20:23:00.001-05:00

Much has happened since my last post.

We have started work on the site and are about to begin construction of the building. The weather has been awful, but that is okay. We will continue to work around the snow, ice and rain. I have been through and seen worse.

Steve LeRose, my long time friend and confidant, will be the General Manager. He will be leaving RentQuick in March and moving over to the Zeus payroll. Rick Burns will take over running RentQuick.
We have selected Barco digital projectors for the theater. We will use Dolby 3D in two of the auditoriums.
We will have full rocker seats. Each seat will have the Zeus logo on the head rest. The seats will be black leather.
Total seats in the theater is 1,106.
We are about to get a parking variance from the city, which will leave us with 278 parking spaces.
The facade of the theater will be brick with accents.
I am still evaluating whether or not to have a coffee bar in the lobby with cappuccinos.
We have Zeus t-shirts that are showing up all over town. Only the coolest kids are wearing them.
We still expect to open the theater on September 1, 2010.

Zeus Digital Theaters

2009-11-11T15:38:00.002-05:00

Zeus Digital Theaters is my new project. Zeus is an 8-screen, all digital theater being built in Waynesboro, Virginia. The theater is going in on my DeWitt Crossing project.

When I do a new project, people have a hard time catching up with the concept. So below is my little Q&A Interview with myself on the subject.

So, you are building a new theater in Waynesboro. Why there and why now?

Waynesboro is the perfect market for a new movie theater. Why there isn't one already is beyond me. I think the easy answer is that most theater companies overlook Waynesboro because the demographics don't look right on a map due to Skyline Drive and the Blue Ridge Parkway. However, I know the market very well and expect it to perform nicely for this theater.

Why did you call it Zeus?

We all know about the Apollo Theater and the Mercury Theater, but there is no Zeus Theater. Greek gods are great for theater names simply because they invoke the fantasy that is shown in the movies. Zeus works especially well since his icon is the lightning bolt which loosely translates into digital projection.

What is special about the theater?

First, it is the only all digital, stadium seating theater that I have found in Virginia. Second, it will have more Digital 3D screens than any other theater within a 2 hour drive. Finally, the theater will have a retail store inside that focuses on movie related tshirts, toys and accessories.

What is so great about digital projection?

Since 1929, theaters have been showing movies using film. This 35mm film project has held up well for 80 years, however, the movie studios are moving to digital systems which have a number of benefits. With a digital movie, there is no physical print which means that the quality of the image does not decrease with each showing as it does with 35mm.

Also, digital gives us the ability to show 3D films. Finally, digital allows us to show locally produced movies from the public.

Updates on my projects

2009-09-30T10:24:00.002-04:00

Okay, I will admit that I am not very committed to the whole blogging thing. This should not surprise me. I seem to have the same committment problems with writing that novel, pulling weeds and filing paperwork.

Anyhow, here is what is going on:

DeWitt Crossing, my commercial real estate project in Waynesboro, is moving along nicely. I just completed a consulting job with Weaver Insurance to project manage their building on Lot 4. It looks great.

I am well underway with the movie theater project. I expect to have the site plan approved by the end of October.

The restaurants are starting to get interested in the site. Right now, we have 4 looking at lots.

The W. Adin Hayes building is full. In Fishersville, we welcome Dr. Christensen to the J. R. Hayes Building.

Things are moving along nicely. I personally believe we hit the bottom in the recession during July and August. That doesn't mean we are shooting straight up, but it does mean that the worst is over.

Is Inflation a Problem?

2009-04-02T10:47:00.002-04:00

Over the past 6 months, the US government has been pumping liquidity and new cash into the economy. In the 4th Quarter of 2008, consumer prices were deflationary which reflects the drop in demand as shown in the 4Q GDP growth rate of -6.4%.

So here is the issue, at what point will inflation become a problem?

Obviously, there are many other people out there who understand these issues better than me. All I need to know is what to look for to see when inflation comes back.

First, what is the fed doing with the fed funds rate? They have it at 0% to .25%. There is no where to go but up. When they start to raise this rate, it means they are trying to slow the growth rate (demand) and control inflation.

Second, what is the 10 Year Treasury doing? Right now, it is yielding around 2.6%. When the yield gets back above 3.5% and stays there, you can expect more normal inflation to return. It will jump everytime the Treasury prints money but it is the longer term that I am interested in.

Finally, what are the commodities doing. We cannot avoid inflation if oil gets too high. Right now it is in the $45-$55 trading range. If you see this get up into the $60-$70 range, then that will move into the rest of the economy and push up core consumer prices.

I look at inflation for a number of issues:

1. I have lots of money borrowed at Prime + which is tied to the fed funds rate and therefore, tied to inflation.

2. I own lots of commercial land. I need that land to keep increasing in value over the long haul for my equity to grow.

3. Finally, inflation will let me know how the overall economy is looking. (Except in the case of stagflation where the economy stalls and inflation spirals up.)

Dealing With Dirt

2009-03-20T16:03:00.002-04:00

Since I work with dirt quite a bit in developing commercial land and buildings I have learned a few things about it. Here are the major lessons learned in dealing with dirt, excavation and site work:

1. Try to get your dump, fill or storage sites as close to where the dirt is coming from in the first place. It will save you money on the hauling.
2. Include all the seeding and stabilization work in the originial contract with your site contract.
3. Be sure the RLD (Responsible Land Disturber) is the site contractor and not you.
4. Retain at least 5% until the erosion and sediment permit is closed by the governing body.
5. When dealing with rock, it is always better to blast it than to hammer it since you generally do the hammering at an hourly rate. If you can get the rock removed based upon the cubic yards for a flat price, take that. In my area it is typically $60 for mass rock.
6. Watch how much top soil is put down in the finish grading. I have been ripped off by contractors who put only 1-2" down when the plans called for 6". You need at least 6" to grow grass in all seasons.
7. Finally, sell your excess fill dirt. Don't just give it away. Clean, compactable fill is hard to come by. You should be able to recoup those costs.

A Cash Flow How To For The Entreprenuer

2009-03-16T14:03:00.002-04:00

Okay, this year the economy sucks. Yes, we all know it by now. However, for the entreprenuer, it is especially dangerous. The worst thing a small business can do is file for bankruptsy. Of course, you can only go bankrupt if you don't have enough money to pay your debts. The secret is cash flow.

I use a simple process that helps me see where the cash is coming from and going to. For a small business, cash truly is king. Here is how it works:

1. I create a spreadsheet showing all the months across the top row.
2. Then down the side I list all the sources and uses of cash. For instance, free cash flow from RentQuick is listed by each month. If the cash flow is income it is listed as a positive. If the cash flow is an expeniture, then it is listed as a negative. Other items are estimate tax payments, personal use payment, property tax, investments, insurance payments, etc. I list the net cash flow for each business I have. So a startup might be negative and a cash cow might be positive.
3. I then add up all the sources and uses by the month. The resulting spreadsheet shows when I need money and by how much.

Pretty simple.

It is time to get to work

2009-03-14T20:02:00.004-04:00

Over the past six months, I have been holding back like most people. I started to believe that the commercial real estate market was dead so I didn't try anymore. No longer! Come Monday morning, I am going full bear on finding buyers, builders and tenants. I am not going to wait until everyone is on board with the economy. I will start calling everyone in my prospect list to get a deal going.

Everyone gets into a slump. I think I have been allowing too much of the negative market data to hold me back. I am going to get to work on Monday and make something happen. If there is nothing out there, then at least I will know for sure.

Anyone who is ready to do a deal in the Waynesboro area should get in touch with me asap. The rest of the world can sit by while I make something happen.

visit http://www.projecthayes.com for my contact info.

Where does real wealth come from?

2009-03-05T08:18:00.002-05:00

As we are all in a world of crap because of the financial meltdown, I thought it would be relevant to discuss where wealth actually comes from. Over the past decade and a half, it seems that people believed that wealth was created by speculating (they called it investing) in the stock market. In 1997, had you invested $1,000 in a basket of DOW Industrial stocks, you would have lost about 30% after adjusting for inflation.

Where is the wealth? It is gone, but it never really existed in the first place.

Real wealth comes from real profits which are created by real value for a consumer. Buying stocks is not investing except in the rare instance where the company is on the other end of the transaction (IPO and stock offerings). So unless the company is getting the money you are paying for their stock, you are not investing.

What you are doing is buying something that someone else thinks is going to go down in value. Otherwise, why would they sell it?

You aren't investing. Instead, all that has occurred is that the owner has changed.

New Career Choices

2009-03-04T17:17:00.002-05:00

Today, I snuck up to Wintergreen to get a morning of skiing in. While there, I met a great guy named Mark. Mark is about 65 and a retired executive. We rode the lifts between runs and struck up a conversation about the economic changes.

If you were born in 1944 like Mark, then you would have been entered the job market in the mid-60's. At that time, the best place to work was likely GE and IBM. These companies offered defined pension plans for employees who worked there for their entire careers. This is where the retirement parties included a gold watch. The contract between employee and company was straightforward: work here for your entire career and we will take care of you until you die.

My generation is a little different. I was born in 1968 and entered the Marines in 1986. Had I gone straight to college, I would have entered the career mode in 1990 or so. My generation figured out that the defined pension plans were a thing of the past. Big companies made matching contributions to a 401K which I could roll over to another if I were to leave. The implied contract was not for life. My generation was the "free agent" employee. They moved from job to job after anywhere from 2 to 4 years on the job.

Of course, the current market is messing that up for a number of people. If you are sitting on a 401K then you likely have seen the value drop in half over the past year. Companies are now stopping their contributions to 401k plans and if enough time passes, they might not restart them.

My kids are going to have a tougher time putting together a career than I did. I hope to guide them to see the big picture and make choices based upon what works best for them. However, we can agree that the safe old days are over and risk is shifted to the workers away from the companies.

Who pays analysts?

2009-03-02T13:56:00.002-05:00

It seems there are plenty of analysts out there who are paid to make financial predictions. These guys go on CNBC or other shows and make their predictions with a completely straight face. However, if you look at their actual performance, their bosses might want their money back.

Here are a few of my favorites:

May 21, 2008 Arjun N. Murti, analyst at Goldman Sachs predicts oil to hit $200/barrel just before oil peaks at $147 then falls back to its current level of $40.23/barrel.

Jim Cramer predicts Bear Stearns is fine and healthy just before it goes completely under. http://www.youtube.com/watch?v=gUkbdjetlY8

AIG (AIG) "could have huge gains in the second quarter." —Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008. AIG wound up losing $5 billion in that quarter and $25 billion in the next. It was taken over in September by the U.S. government, which will spend or lend $150 billion to keep it afloat.

So whats the point? Simple, just because someone makes a prediction, doesn't make it so. Most of these guys are making guesses. They don't know anymore than anyone else really. This isn't a complete insult to them since they know they are really frauds.

The big point is that you need to weigh all the advice, predictions and data then make as best a decision as you can. If you run your own business, focus on the little things and plan for the big things.

There are more at:

If Obama Fails, Who Wins?

2009-03-01T10:54:00.002-05:00

Lately, Rush Limbaugh has been called to the carpet over his line that he hopes Obama fails. Now, since that statement was made, Mr. Limbaugh has clarified this to mean that he hopes Obama's policies fail.

While this blog is not a place for political discussion, it is a place for explaining economics. It is important to look at the alternatives to the statement, "I hope Obama fails". (I call this "game theory light")

Alternative 1: Obama fails and the economy suddenly improves.
Alternative 2: Obama fails and the economy continues to slide.
Alternative 3: Obama succeeds and the economy improves.
Alternative 4: Obama succeeds and the economy fails.

Based upon these options, we are really only happy with #1 and #3. Obviously, we all want the economy to improve and for people to get back to work. I do have a problem with Alternative #4 because by the administration's metrics, success is gauged by job creation. So it doesn't make sense that Obama and his policies could succeed without the economy improving.

Now, let's look at it from the Republican point of view. Clearly, Limbaugh is interested in getting the GOP back into power. So here are the alternatives for the Republicans:

Alternative 1: Obama fails and the economy suddenly improves.--GOP Wins
Alternative 2: Obama fails and the economy continues to slide.--GOP Loses
Alternative 3: Obama succeeds and the economy improves. --GOP Loses
Alternative 4: Obama succeeds and the economy fails. --GOP Loses

This will take some explanation.

#1. If Obama fails and the economy improves, then the GOP would be the political winner.

#2 If Obama fails and the economy gets worse, then the GOP loses because they could only claim to have caused Obama to fail, but without an improved economy and no real plans other than for the government to stay out of it then the GOP will lose.

#3. Self explanatory

#4. This is similar to #2, but in this case the GOP may win politically and the country would lose economically. You could argue that the GOP would win here simply because Obama lost, but the human costs would be pretty high. This alternative is still flawed because Obama's success is tied to job creation.

What is Stimulative?

2009-02-27T17:11:00.003-05:00

This morning, I was watching Fox and Friends to see what Donald Trump had to say. Included in the group on the couch was Geraldo Rivera. As they were picking apart the stimulus plan and discussing about the pork in the law, something really strange happened: I agreed with Geraldo.

This is pretty weird. It is right up there with seeing a goat flying outside the window of a 747. If you ever find yourself agreeing with Geraldo, then you might go a little dizzy as I did. Just sit down, collect yourself and try to regain your composure.

The Donald was saying that all this spending is going to destroy the economy. All we need is time and everything will be fine. Then Geraldo said it. Stimulus spending is any spending. He used the example of a grape juice museum (which is not in the plan). If the government builds the grape juice museum, while not necessarily what we need, it would still be stimulative. He is right!

Anytime the government borrows money and then spends it is in fact, stimulative in the present time or when it is spent. Yes, over the long haul that money needs to be paid back which will come from higher taxes or inflationary repayment (printing the money). But the immediate effect is stimulative.

So while we may not agree with all the things that are being bought, we should agree that any money that is spent and not immediately paid for with taxes is stimulative.

Status on Projects

2009-02-23T12:03:00.003-05:00

For all those of you out there who care, here is the status of my business projects:

RentQuick.com: RentQuick is starting her 11th year and things are going well. Compared to the last recession, we are holding our own. Much of this has to do with the better inventory (Our new Durabooks are a great hit) and a pretty good reputation among our clients. Ultimately, the best part about this company is that after a number of years in trial and error, I have the best team ever. They do more for the continued success of the business than I do.

Hayes Investments: Right now, Hayes only has one empty office space, which is fantastic. In 2008, Hayes Investments started doing project management consulting. We broke ground last week on a 12,000 sq/ft building for a client. Pretty good looking building too. I expect the project management side to continue to grow. We will see how it goes.

DeWitt Crossing: In 2007, the phone was ringing steadily with interest in the project. Right now, I don't think I have had a real phone call on property sales since December 2007. This is where the economy is really being felt. Commercial property is just not going to move while people are retrenching. The unbelievable interest rates help though.

Black Bear Title and Settlement: In November 2008, I purchased Home Front Title from the previous group of owners. We are just getting things where I want them. The office looks great and I expect the revenues to continue to grow this year. Of course, the refi boom will be a great help.

People ask me what I think of the current economic situation. My answer is simple: serve your clients to the best of your ability, pay attention to expenses, try to keep the revenue in line and everything else will work out.

It's Economics Silly!

2009-02-22T12:06:00.003-05:00

Last night I had some friends over for our regular nickle-ante poker game. As the night went on, comments were made about how bad the stimulus package is and how all of this is going to cause rapid inflation.

Of course, the guys saying this stuff were just parotting what they heard on television or the radio. Honestly, do you really think that Rush Limbaugh understands macroeconomic theory?

So what is the effect of the stim and how will it affect the broad economy? To understand this, we must first look at where we are now. In October, the money market pretty much siezed. This caused a ripple effect that quickly caused the failure of Lehman Brothers. Once that hit, then the Treasury Department got involved and pushed through the Toxic Asset Recovery Program (TARP).

After everyone saw that the economic meltdown was underway, then there was a rush to liquidity. You can tell this by looking at the 3 month treasury bills which went to almost 0%. When there is a rapid movement away from leveraged investments to cash, you will see asset prices drop. In other words, lots of people who had stuff that they owed money on sold that stuff at a reduced price. That is part one.

Part two is the forclosure issue. As homeowners go through foreclosure, they lower the value of their homes and their neighbor's homes. This is because when you have an appraisal done on your home, the appraiser looks at the comparable home sales in the area. If Joe down the street sold his home for 30% off then it will affect your home and subsequently what you can borrow against it. This is part two.

Put parts one and two together then you get deflation. Deflation, the opposite of inflation, means that asset prices are moving lower, consumer prices are moving lower, wages are moving lower. It is very, very bad. If you get into a deflationary spiral, then people will hoard money because it will be worth more later. If people don't spend money, then the demand continues to drop and prices keep droping. If prices continue to drop, then deflation increases and people don't spend. I think you get the idea.

So back to the stimulus plan, anyone who understands these forces knows that you cannot let the market fix this on its own. Will the market correct eventually? Sure, but at what cost? This mess will cause massive unemployment, loss of capital, bank failures, hoarding, and eventually price fixing.

As for what it will cost the taxpayers, the choice is simple: either invest in something now, or face lower revenues which will cost the taxpayer just as much.

Here is how it all works:

1. Prices are falling, demand is off causing the risk of a deflationary spiral.
2. The government prints money then uses that money to buy bonds from the government.
3. The money is then spread across the country and is spent. (it really doesn't matter where)
4. As the new money is introduced into the economy, it causes inflation.
5. The inflation counters the deflation which as discussed above is very very bad.
6. Because the treasury actually printed the money, the real national debt does not really increase.

Any questions?

Pray for Recovery

2009-01-31T13:05:00.002-05:00

This afternoon, as I drove down a local road, I saw a sign on the side of a business that said, "Pray for Recovery". Now, I don't know about you, but prayer may not be the best method for getting the economy going again.

So at the risk of offending everyone who believes in the power of prayer, I would like to list some other things that will have a more imediate impact without divine intervention:

1. Get something fixed around your house that needs to be done. This past week, I hired a local handy man, Stu, to put in some more insulation in the attic and fix some leaky doors upstairs which was running up my heating bills. I have needed to do this for some time, but now made sense. He did the work in just a couple of days and was ready to get on it as soon as I called.

2. Refinance your home. Right now, 30 year fixed rates are the best they will ever be. Yes, you need to have some equity in your home and decent credit, but if you do, then you will add hundreds of dollars monthly to your wallet that can be used for things you need. Not to mention, everytime you refinance one of those loans, it is one less loan that is sitting bundled in with the toxic mortgages.

3. Provide a better service to your employer or client. Since we are in a national malaise, it is understandable that people aren't working at their fullest. Now is your time to shine. Focus on what you do and do it better than you ever have before. Think about it. The best and brightest never are in want.

4. If you are spending your money, spend it on services before imported goods. I am talking about consumer electronics mostly here. If given the choice between a $1,000 HDTV and $1,000 in services (get your will redone, have a room painted, have your car repaired, hire a shrink, get a massage, etc) then the money spent will go much further to help the economy. This is because on the TV most of that money is being sent overseas and thus is leaving your local economy.

Pray all you want, but the real way out of this recession is by collective action.

Preparing for the downturn

2009-01-28T11:56:00.004-05:00

By now, if you have not put your small business in a strong position for the economic slowdown, then you are likely having sleepless nights. We can all hope that the worst is over, but chances are that it is only beginning. Keeping in mind that the overall goal for you, the small business owner, is to come out of the recession with what you went into it with, then you may want to do some of the following:

1. Be sure you have plenty of cash. This means talking to your banker to be sure you have a line of credit to carry all the business expenses for 3 months. If you don't have this line set up already, get to work on it now.

2. Keep your receivables down. Everyone is feeling the pinch, so make sure you are collecting on all your invoices quickly. Anything that passes 30 days should be pursued with all your strength. The longer it goes, the worse it gets.

3. Make sure you aren't paying for deadwood. I know it seems heartless, but if you have employees that aren't performing, then you need to get rid of them before they pull your good employees and you down.

4. Get back to being a guerilla. Don't forget to beat the bushes for new business. Now is the time that all that great customer service you have been working on for years should pay off. Provide a needed and valuable service to your clients and they will use you. Call people and talk to them like people. You don't need to spend money to do this, just time.

5. Keep your employees informed on where you are and where you need to be. I never subscribe to the secret finanancial planning. If you need to hit a number in revenue to make things work, let everyone know. They won't ask for a raise, they may just rise to the occasion.

4Q GDP expected to be horrible

2009-01-25T18:04:00.004-05:00

This coming Friday, we will see the US GDP number come out for the fourth quarter of 2008. The expected number is -5.1% annualized. That is pretty horrible.

Based upon a GDP of $14.4 Trillion that means we are looking at a loss of about $185 Billion in lost GDP for the fourth quarter alone. Since countries can only increase their GDP in two ways: increasing the number of workers or increasing the productivity of the workers, we are facing a serious productivity and employement situation.

Theoretically, if you increase the number of people on the job while keeping productivity the same, then you should have an increase in GDP. Likewise, increasing the productivity of workers while keeping the number of workers the same also increases GDP. In all cases, it is always a little of both. More workers and increasing productivity means more GDP.

Right now, it is pretty obvious what is happening. People are being laid off (less workers) and those that are still employed are producing less (lower productivity).

Normally, we could blame all this on consumer demand. But this time it is different. Over the past year or so, credit has tightened. As a result, projects and investments have been put off. Since people could not borrow the money to say, build a new office building, then that translates into lower GDP.

Way back in October, we saw then Treasury Secretary Henry Paulson make the case for the TARP (Toxic Asset Recovery Program). The idea made sense, buy up the bad assets held by banks and get the banks back in the business of lending. The original plan did not happen because of a problem with pricing the assets. So instead, the banks were given money in exchange for stock warrants. Thus partially nationalizing the banks.

Today, we have a new administration. I call on them to get back to the original TARP idea which is to take the bad assets off the books of the banks. If this is done, then the good loans can be pulled out and the bad loans can be renegotiated.

I don't expect anyone to listen to me, but it feels good to say so.

Recession Rules

2009-01-24T12:23:00.004-05:00

Okay, so we are in a recession. That feeling that we had in the Fall of 2007 when people began to talk about the failings of the economy, the upcoming burst of the housing bubble and the eventual slowdown that would soon follow has now turned into the worst downturn since the Great Depression.

So what is a small business owner to do? Well, first you want to remember that a drop in overall GDP will affect your business, but it likely won't eliminate your business. A drop in revenue of 20% while bad, should not destroy a healthy business.

The main goal is to come out of the recession with what you went in with. In other words, you want to keep your net worth the same. That means your assetts should remain stable as should your debt. Just keep it together and weather the storm. This is easier said than done.

Rule 1: cut out all dead wood early and quickly. If you have an employee who is not productive and will likely never be productive, stop carrying them along. The livelyhood of your good employees are at stake when you keep around a lousy one. Just cut your losses and drop them. They will have to adapt and become productive on their own dime, not yours.

Rule 2: Review every expenditure. Look for monthly recurring bills that can be eliminated. Ship things ground instead of over night. Turn down the heat. Cut off lights. Put off purchases until you really need them. (Never cut corners when it comes to serving your clients.)

Rule 3: Invest your time in revenue growth. Now is the time to reach out and get more business. Any idiot can make money in an up economy, but your prove your worth in a down one.

Rule 4: Stay up on the economic news. You want to know when the Fed meets and what they are likely to do. Pay attention to your interest rates and where they are heading. Pay off the high interest rates first.

Rule 5: Talk with your banker at least twice a month. Let them know good and bad news. Be sure they know what you know. Your banker likes knowing who you are and what you are doing. Right now, you need them and they need you.

Rule 6: Be honest with yourself. Don't fudge your income statement. Take and honest assessment of the business and how it is truly doing. Look at cash flow and pay attention to the little things.

You can and will survive this downturn. Like most small businesses, you are a dreamer and a doer. Lot's of people are counting on your success, not the least of which are your family, employees and clients. Just remember you need tough times to make it great.

It is great to be an American

2009-01-20T14:03:00.002-05:00

Today is a great day to be an American. We all just whitnessed the peaceful transfer of power from one President to the next. Regardless of your feelings on either of them, you have to admit that our system, while flawed, is still very impressive.

Since I am a former Marine, you would expect me to be fairly patriotic. But nothing moves me as much as what we have had today and during the past few months. If you have kids, be sure to point this out to them so they understand: America is great because of our laws.

Hoo Rah!

How We Can Fix It

2009-01-13T16:16:00.002-05:00

Over the past several months, the news about the economy is getting worse. Some people would look at this and blame it on a so-called "media bias" who is just talking about the bad news. But if you have lost your job, or know someone who has lost their job then things are quite so theoretical. Reality become very real.

The problems with the economy are huge. These are big problems that are being handled by the big people. The greatest economists, financiers and political leaders are hard at work on a solution. Right?

Does that mean we little people have no ability to fix things? Or is our only role in this as consumers who must go shopping?

My answer is that we "little people" have lots of power. Collectively we are the ones who control the economy anyway. Last year, the United States produced $14.4 Trillion. Most of that money was produced not by the big time investment bankers, but instead by small business. Don't believe me? Look around for all the big companies in your neighborhood. Now ignore them and look at all the little companies. You can do this in a phone book too.

Sure, Walmart is there. But so is S&K Mini Escavating and DDR Engineering. Most of the buildings in an average city (not NYC or Chicago) are owned by private investors. Do you think there is an equivalent to Walmart in the architectural field, or dentistry, or title company? Nope, they are all little guys doing big things.

So while you hear about all these big companies failing and costing the tax payers big money, just remember that the little guys are holding in there. They are the ones who can fix the economy by simply doing what they already do: thrive regardless of the economy.

In Uncertain Times, Opportunity is Everywhere

2008-09-30T13:29:00.003-04:00

Last night, I had a long talk with my 14-year old son about the current unheaval in our economy. For both of my sons, I talk freely with them about any and all issues. From economics to politics to religion, anything is fair game in my house. All I ask is that they have an understanding of the issues and back your position with facts not just opinion.

Anyway, John and I were talking about how the financial crisis will affect our family. He is understandably concerned about the future. My (hopefully) reassuring message to him was that we are in a major turning point in our country. This turning point is very similar to others in history: October, 1929; Pearl Harbor; the atomic bombing of Hiroshima and Nagasaki; the assasination of JFK, Watergate, Falling of the Berlin Wall, etc.

With historical understanding of present conditions, you will see that ultimately our country will prevail. I told him that with every change comes an opportunity to grow and fix the problems that face us. If life were boring, there would be no challenges. Without challenges, there would be no greatness.

Of course, these words come from a person who has be pretty conservative in his financial dealings in the past few years. As a result, we are reasonably prepared to deal with the economic changes. There are many in our economy who are not. For them, the changes are terrifying and they may need help from their friends and neighbors.

My final message to my son is that we are all in this together. Hopefully, we as a nation can come together to deal with the crisis and resulting economic downturn. We have done this before, and we can do it again.

An Understandable Expanation of the Credit Market Bail Out

2008-09-21T13:03:00.002-04:00

This past week is a pretty big deal. If you are paying attention, you would know that the Treasury and the Federal Reserve have a plan to address the failing investment banks on Wall Street.

This plan will work to free up the credit markets and may help avert a larger disaster. However, the press seems to focus on the taxpayers bailing out rich banks. In fact, this has little to do with saving the banks. I will explain further. I will say, that the taxpayers are as much a part of the problem as the banks. It takes two to tango. Likewise, it takes both lenders and borrowers to make a mess this big.

Before I go further, please don't use the usual ADD response and say that this stuff hurts your brain or is too complicated. It is important and the more people who understand what is happening the better.

What has happened before this week:

In the past five or six years, we have seen access to mortgages open up in a way never before seen. Home prices rose at fantastic rates across the country. People who had never bought a home before were able to get adjustable rate mortgages with no money down and no mortgage insurance. Brokers, underwriters, and Wall Street happily took the money and passed on the risk to others in what is essentially, mortgage backed securities.

What went wrong:

Obviously, the problem was bound to happen. People started defaulting on their loans. Everyone has known there were bad loans out there for the past year. The problem is that no one knew where those bad loans were. They were mixed in with good loans and traded from one bank to another as securities. Everything limped along until investors (depositors) at the big investment banks started wanting their money back. Those big banks (Lehman Brothers for example) needed to liquidate (sell) their holdings in mortgage backed securities to give the money back to their investors. The problem is that no one wanted to buy them (they were illiquid). So with the investors screaming for their money back, the only answer was to file for bankruptcy (in Lehman's case). As more investors demand their money back, more banks face failure.

Since the investment banks are giving all their free cash back to their investors, then they are no longer loaning money to good companies for expansion, working capital or other projects. This will threaten to cause non-banking businesses to fail if not fixed quickly.

What the Treasury wants to do:

The fundamental problem is that banks cannot convert these securities over to cash. Treasury Secretary Paulson wants to use federal money to buy these securities from the investment banks. That will fix the run on the investment banks as well as thaw the frozen credit markets which will enable other businesses to borrow money for expansion or working capital.

Here is where the reporting is wrong. People are saying that the taxpayers are bailing out the banks and getting stuck with the bill. But in reality the taxpayers are the ones who owe the money back to the banks in the first place. (Circular market). With the Federal Government owning the mortgage paper, there are a number of things they can do which will help.

First, they can separate out the good loans from the bad loans. They will then sell the good loans back to Wall Street for a pretty fat profit.

Next, they can take the bad loans and work them out. This may mean changing the interest rate back to the first year rate for that loan. This would allow time for the homeowner to refinance or sell their home. In either case, they would avoid foreclosure.

Finally, since the banks are the ones selling the loans to the Fed or Treasury, then they will have to play by the rules set up to make this fair. That might mean the CEO's of the banks are limited to their pay. It may mean they have to take a big hit on the sale price. It might mean some other security is given. In any case, the banks are not going to "win" under this proposal. The banks will survive, but certainly will not make money on this thing.

Going Forward:

In the future, it is going to be like the past. For instance, when I bought my first home, I had to have 20% down. I had to prove that I didn't borrow that money. If I had only 10% of the purchase price, then I had to pay for PMI or Primary Mortgage Insurance. In other words, I had not only the security of the house, but the insurance plan to protect the lender.

This means that going forward, it is going to be much harder to buy a home. It means that people will have to save for years before being able to afford their homes. We can count on some 20-30% of the buying market not able to qualify for a home loan.

So in a nutshell, the American Dream will go back to being something you worked for 20 or 30 years to attain. It will no longer be something a typical 25 year old will be able to achieve.

The Dog Days of Summer

2008-08-13T11:15:00.002-04:00

August is typically a very slow time of the year in the meeting and events industry. It makes sense. With so many people on vacation, it is hard to get meetings and events filled with participants.

During this time of the year, we work pretty hard at retooling and cleaning house. I am amazed at how much stuff is created by our little company.

Anyway, right now we are in the process of working on a new marketing video. In addition, we are testing some new screens which are a bit lighter than the current screens. You may not realize it, but screens are a big part of our business.

In other update news, we are happy to say that we have kept our shipping costs stable throughout the massive increases in fuel over the past year. In fact, we haven't increased our shipping charges at all during the past 10 years.

Projector Smash

2008-07-25T12:56:00.002-04:00

Here is the updated video:

Laptop Rentals

2008-07-16T10:07:00.002-04:00

Over the past few years, we have seen a tremendous increase in laptop rentals. Of course, we built the company on projector rentals for meetings and seminars. The laptop rentals were really a surprise.

At first, I avoided buying and renting laptop computers. I thought the opportunity for catastrophic failure was too great. But just like always, our clients made the decision easy.

Ultimately, we were able to add and maintain close to 400 laptops to our inventory. Today, we carry the Durabook which is a rugged military grade laptop.

Private Space Launches and Satellite Hunters

2008-07-08T10:38:00.002-04:00

I saw the movie Walle yesterday with my youngest son. The movie was fantastic! While the aim of the movie was to entertain, there were certainly "green" issues shown. This is a good thing. However, there was one part of the movie that made me think a little.

At one scene, the hero Walle holds onto a space ship as it launches. When they pass out of the Earth's atmosphere, they break through a solid ring of dead satellites.

Currently there are some 500 working satelittes in orbit and several thousand that are dead, space junk. We rely quite heavily upon satellites for things such as gps, meterology, earthquake study, communication, television, radio, and national defense.

These satellites are pretty safe from bad guys. Trying to damage or shoot down a moving satellite is pretty difficult. However, in recent years we have begun to see new technology move us closer to civilian population of space. This will start with Virgin Galactic and other space tourism ventures. In these, thrill seekers will go into space for a few short minutes of weightlessness.

Over time, the technology will become more reliable just as the airplane did in the first part of the 20th century. Eventually, there will be loads more people and stuff in low earth orbit. This presents the problem. If you can get people into space, then you will be able to put satellites into space cheaper too. What if someone designed a small "hunter" satellite that could seek out a target and push it out of orbit or simply damage it by getting close enough and exploding.

The resulting space terrorism would mean constant interruptions in our communications and financial systems and so much more. It would present all sorts of problems for those entrusted with protecting these things. (How do you protect a 20 pound, flimsy satellite from an attack?)

Now for the scary part: The FDA is moving forward with replacing the outdated radar systems at airports with GPS systems. Without GPS, pilots would be able to revert to using visual navigation, however, air traffic controllers would be blind.

Okay, so my prediction is that within the next 10 years, there will be an attack upon a satellite in orbit.

How to Respond to an Economic Slowdown

2008-05-22T15:41:00.002-04:00

The press is going nuts over the economic slowdown here in the US. Everyday I hear talk of higher gas and food prices. People are worried about losing their jobs. The credit markets are frozen. So what is any respectable entreprenuer to do?

The answer is simple: invest and grow. Going into this slowdown, I have replaced 70% of my rental inventory with new, better projectors and laptops. This required us to take on some significant debt. I have effectively lowered prices on projector rentals across the board. Is it a big risk? Nope! Not at all.

In fact, doing nothing is a bigger risk. By investing in new equipment, I can give my clients a better rental experience. Happy clients means more business. It is really very simple.

On my real estate side, I have a new building that has three empty spaces. These are office spaces, so the build out isn't special for each tenant. Over the past several months I have invested in finishing these spaces out with the best interiors I can afford. The payoff is finding great long term tenants who would otherwise pass my building over because the spaces were concrete floors and studs. Now, they have wood floors, kitchenettes, lots of interior glass doors and windows, and fiber optic internet service.

While everyone seems to be pulling back, I choose to push forward. The payoff is very good in the long term. In the short term, I am not wasting energy pulling back.

Website Improvements

2008-05-13T10:17:00.002-04:00

Over the past several months, I have been working on the Rentquick website (www.rentquick.com).

There have been some nice major changes. First, the site is centered instead of left justified. Second, we now have a css site, which I am still working the bugs out of. Finally, I went through and got rid of the thousands of old pages which date back to 1998.

There were files on the site which were just dead. It was a nice walk down memory lane, though. Since RentQuick is now 10 years old, this was a good time to clean things up.

Projector Rentals

2008-04-29T10:51:00.002-04:00

I thought it might be a good time to talk about what we really do. At RentQuick, we provide projector rentals, laptop rentals, and other audiovisual rentals for the meeting, training and corporate markets.

We operate differently from other AV providers since we are not actually on site when the rental is taking place. Instead, we ship the equipment to arrive the day before the rental begins and have the client ship it back on a premade airbill on the day after the event.

We support our equipment with a 24/7 technical support line. All our rentals are guaranteed--no questions asked.

Many of our clients use our services daily for their national training programs or seminars. Other clients call us when their own equipment is overbooked or being serviced.

We have been doing this for 10 years and really enjoy serving the needs of our clients.

Thanks for listening to my keyword filled plea which is entirely designed to make the search engines happy!

It is time for an energy solution

2008-03-09T10:42:00.003-04:00

From 1939 to 1945, the United States and her allies Canada and the UK, worked on a secret project unlike anything ever seen before in modern history. It was the Manhattan Project, a government research and development project with the intent on finding a way to build nuclear fission weapons.

In 1959, the USSR launched Sputnik. The act sparked what would become the space race between the two great super powers. For the first few years, it appeared that the US was way behind. It was not until May 25, 1961 that Jack Kennedy propossed sending a man to the moon and returning him safely to earth.

In 1945, when the Allies entered Germany, they found the Autobahn. The Autobahn to them was unlike anything they had seen before. It consisted of four lanes on a well-built highway divided by a median. Of course, today we take the Interstates for granted. But the inspiration for the Interstate system came from the Autobahn. From the early 50's until the 80's new interstate highways were constructed. It fueled and supported an economic expansion still felt today. In fact, the interstate highway system may well be the greatest economic infrasture improvement ever.

The Manhattan Project, Kennedy's Moon Challenge, and The Interstate Highways are three examples of what good government can do and how problems can be solved. The efforts made by those previous administrations will be felt for generations to come. The spin off technologies and scientific and engineering development from these efforts are inumberable.

I challenge Congress and whichever candidate wins the Presidency to support and fund a research and development program unlike anything seen before. I challenge them to create a Manhattan Project for energy independence.

Imagine a world where oil no longer mattered. Imagine automobiles who do not polute. Now imagine the economic and technological benefit a country who develops the solutions would have.

All of our foreign wars since Vietnam have been connected to oil in some way or another. Iran, Iraq, Lybia, Kuwait, Saudi Arabia and even Afganistan (Bin Laden was pissed about the troops being in the holy land during Gulf War I) have been tied to oil. If we no longer needed oil, those conflicts and occupations would stop.

I believe that if left to the major energy corporations or to the automakers, we will never see a break from oil. They have too much invested in the older technology. Barriers to entry are very significant in both energy and automobile manufacturing. Expecting a major investment of this size to be carried by industry is unreasonable. That is why we need to have the best and brightest in the country and among our allies to go on the government payroll, move to a single research center, and develop a solution. Once the solution is developed, the technology can be licensed to private industry to market it.

It has been done before. We have the infrastructure to do it. We have the money to do it. (Take the savings from no more oil wars) When gas reaches $4 a gallon, we will have the political will to do it.

The plan is simple: Invest $1 Trillion into a research and developement program which will have the stated goal of getting the United States to be a net exporter of energy withing ten years.

Government Gone Wrong

2008-03-07T18:55:00.001-05:00

This June you will hear of a modern day Scopes Monkey Trial in my own
hometown of Staunton, Virginia.

At issue is the local prosecuter charging both the owner and an employee
of an adult video store with indecency.

Regardless of your opinion on the subject of porn, you should be worried
about the government, any government, arresting people based upon the
content of the media they possess.

If they are successful in defining crimes based upon content rather than
actions, then they become free to define any content as objectionable.
When this happens, the book burnings and political executions are quick
to follow.

The Need for a Better Cell Phone

2008-03-03T16:11:00.002-05:00

I have been using the Motorola Q for about 15 months now. To be honest, it is both the best and worst cell phone I have ever had.

In the best column: It has email, internet (slow), calendar, syncs with my outlook on my desktop, and a blue tooth head set.

In the worst column: It eats battery life like crazy. I am lucky if I can get 45 minutes of talk and 3 hours of standby.

In an attempt to fix the problem, (I have 9 months left on the current contract) I spent Sunday tracking down various fixes and hacks for the damned thing. What I found was that for about $40 I can get the extra large battery. I ordered it today.

After that, I made some adjustments (http://www.everythingq.com) found online. These include a handy little program called Candlelight which lowers the back light but makes it impossible to see in sunlight. I also learned that I need to kill all the programs all the time. Apparently, when you start your mail program, for instance, it runs forever. You need to "kill" through a messed up series of menus.

So if you are looking for a smart phone, stay the hell away from the Q.

Ten Years of RentQuick

2008-02-29T09:52:00.004-05:00

RentQuick has been in business now for 10 years. Recently, I took some time to look back at where we started and what my predictions were about the meeting industry. What I found was that I was wrong more than I was right.

For instance, I believed that costs of delivery would increase with normal inflation. So my math models showed a 3% increase in shipping each year. Instead, we have seen the actual cost of shipping increase 8% per year (close to 125% total). The main cause has been the fuel surcharge. The secondary cause is the oligopoly that is UPS and Federal Express. During the entire 10 year period, we have only increased our shipping rates to our clients 8% in total.

In my predictions, I believed that the equipment rental industry would eventually go through a series of mergers or consolidations. This has not happened. It is likely because as an AV company gets bigger, the margins compress. In any case, I don't have competitors calling me regularly about buying me our or wanting to be bought out.

Fundamentally, our model for delivery of projector rentals and other AV equipment has not changed. We hopefully have become more efficient and better at what we do, but the basic rules still apply. We send it out, it is used and it is sent back. Pretty simple stuff.

Over the past ten years, I have truly enjoyed serving the needs of my clients. I can honestly say that my small crew are the best employees I have ever had. In fact, I would say they are the most customer-centered people I have ever met. That is no reflection on me. I believe they are caring people who love serving others. I am lucky to have them on my side.

As an entreprenuer who has several irons in the fire at any given time, RentQuick, my crew and our clients are the best business I could ever hope to have.

Updates to ProjectHayes Site

2008-02-19T16:51:00.001-05:00

I just spend the afternoon doing two things:

1. Making changes and updates to the projecthayes.com site (http://www.projecthayes.com)

2. Getting a filling fixed by my dentist.

I can honestly say that the dentist trip was the more enjoyable.

I have found that my ability to convert my ideas into a web page have diminished greatly since I did my first site in 1995. The main issue is that there are far more options now than there were then. In those days, all you needed to do what follow the narrow set of constructs and make sure you spelled everything right. Today, with the Cascading Style Sheets, the possibilities are endless.

Of course, I am dealing in rather boring business sites. It isn't like I am selling the latest luxury cologne. However, I still would like to be stylish, but not off-putting.

Who knows?

On Finding Competant Contractors

2008-02-18T19:43:00.002-05:00

It has become apparent to me in recent months that finding good vendors is extremely difficult. People who should know exactly what they are doing, tend no to be so competent when pushed.

I could name examples, but it would only make matters worse. During my work as an entreprenuer, developer and investor I have found that most of the licensed professionals who I hire are mediocre at best and impressively incompetant at worse. I am sometimes at my breaking point when dealing with these guys.

The logical solution is to check references, follow up on details and dump bad vendors quickly. However, recognizing that they don't know what they are doing early is difficult. We are talking about a group of people who somehow continue to earn a living while performing their work very poorly. They know how to hide things. That is the one thing they are good at.

So I will trudge on often paying double for someone else to fix the mistakes of the first guy. In the future, I will try to less forgiving of failed promises early on. When a hired professional fails me, I will cut them before they destroy the entire project.

I want to go into space

2008-01-31T17:38:00.000-05:00

I was so excited to read in the Economist about Virgin Galactic's progress on space tourism. In the next year or so, they will begin taking regular ol' people up into space for a few minutes. Virgin is using an interesting system whereby the space ship is dropped from a mother plan then launched into space. Very efficient. As it turns out, they will be able to launch from any commerical airport.

I know what you are saying: Only the super rich can afford the $200,000 to go up. Yes, that is true. However, it has been that way for a long time. You could risk you life and go up in a Russian rocket if you paid enough. However, this is different. In this case, it is the goal of Virgin Galactic to get you into space. Whereas with the Russians, it was just about the big payoff.

For those of you who think this is just a waste of money for people to get shot into space, consider this: you need the early adopters to pay the big bucks early so later on, the regular guy can do it.

Just like in the case of air travel, early on only crazy people and the rich could go flying. Now, everyone with teeth has flown at some point in their lives.

Would I spend big bucks to fly into space? You bet! What an opportunity! Imagine doing something that was only dreamed about two generations back. Even if it is only for a few minutes, the idea of breaking the confines of this planet would be incredible. Yes, it is tourism and a little kitchy. Who cares? It is space...the final frontier and all.

Bin Laden's son or Klingon?

2008-01-22T13:55:00.000-05:00

Try to see if you can pick which of these guys is Bin Laden's son and which is a Klingon?

Millenials On 60 Minutes

2007-11-12T11:24:00.000-05:00

Last night, 60 Minutes ran a story about the "Millenials", which refers to the new generation of workers born between 1980 and 1995. In the peice, they discuss how the "new" workers are very technologically savy, but lack the traditional work loyalty and drive that previous generations have had.

While we all have dealt with the slacker-20-something in the workplace, it isn't really a new thing. If you go back to the boomer generation, you had the hippie set who weren't really that motivated or ambitious. Before that you had the beatnicks, bums and village idiots. The fact is that every generation looks like lazy little bastards to those who are older.

I don't want to defend the little jerks who walk around with ipods, text message constantly, spend thier days on MySpace, YouTube or whatever else they are doing. However, they are just young and don't have the responsibilities that a 42 year old guy with an ex-wife, current wife, combined 5 kids spread over 3 states and credit card debt up to his double chin has. If we just give the 20-somethings time, they will eventually get themselves into crappy life circumstances where loyalty to the company and the job will override their selfish desires to be happy.

The media has to come up with some way to segment people to make broad generalizations about generations since they can no longer generalize according to race, ethinicity, sex or any of the previous groupings.

Am I concerned that the fat little kids who are self involved are going to run our country into the ground? No, not at all. By the time these guys are in charge and in a position to screw up our economy, we should have the GDP of Paraguay thanks to the current crop of morons running our macro economy.

Getting into commercial real estate

2007-11-09T10:31:00.000-05:00

I am now completing my third commercial building. The three projects have been the Industrial building, the John R. Hayes building, and the new W. Adin Hayes building. I sold the industrial building this past summer. So I have two buildings that I am keeping.

Everything I have learned about commercial real estate has been through doing and reading. I should mention that very little in my MBA prepared me for the commercial real estate world with the exception of a couple of finance classes.

Since I always enjoy sharing what I have learned, here is the first lesson.

Everywhere you look, you will see commercial properties. Some of these are owned by the company who is occupying them. However, most are rental properties. I define commercial rental properties into two groups. The first group is the multi-tenant property. These are everything from strip malls to high-rise office buildings. The second group are single tenant buildings.

While this is a very simplified way to categorize commercial real estate, it works for this lesson.

Making money in commercial real estate as a property owner is not too difficult. First, you need to find a location and secure it someway. I recommend either putting a contract with a few contingencies or purchasing an option on the land. Options are good since they give you more time to bring a deal together, however you are at risk of losing the option and what you paid for it if you take too long to make something happen.

After you have some land locked in, you need to put together a proposal on that land. Maybe it is a speculative building with five office spaces in it. You would want to put together a site plan so you can figure how big the building can be and how it will lay out. Then from that, you could hire a designer to lay out your building. I recommend finding an existing building in a nearby town (similar building codes) and buying that design or modifying it with the original designer. By the way, in some areas you don't need to hire a full architect. A designer who subs out of the structural engineering will do fine.

So now, you have some land that you don't yet own, a site plan (preliminary) that gives you an idea of how the building will lay out, and a building design (exterior only) which gives you some nice 3-D pictures. This is where you need to hustle. First, you should be contacting potential tenants. At the same time, you should be getting cost estimates and financing. All you are going to finance is the shell part of the building and the site work. Make it clear that any tenant upfit will be financed and built after you sign tenants.

Obviously, I have skipped the market research part of things. However, you should know your market very well. Understand what the vacancy rates are, the typical rents, what businesses are there and what is missing. The "missing" is your market. I could spend days talking about this part.

Okay, now you have lots of things going on:

1. An option, contract or piece of land that you have bought.
2. A site plan that is ready to be submitted or has been submitted. (You should already have the proper zoning before you buy the land. Never buy land without the zoning done first!)
3. A shell building design and lots of pretty pictures of it.
4. Bids or estimates of the construction cost from a Class-A contractor (No, you shouldn't play general contractor unless you are one.)
5. You should get some tenants signed up. I recommend a minimum of a 5-year lease.
6. A financing package for 100% of the project cost including interest.

That last part is where people have trouble. This is not your house. This is a commercial building. Therefore, you should be able to build it for a lot less than what it will be worth. That is because you should ultimately appraise the building based on the net operating income it produces. For instances, nationally, commercial properties are valued at about 6.5 to 7% capitization rates. A Cap rate is the rental income after all expenses except for interest, depreciation and taxes divided by the purchase price. So say a building generates $120,000 per year, has operating expenses of $20,000 per year, and was purchased for $1,400,000. Then the cap rate would be 7.1%.

Here is the neat part, if you are building right, you should be able (depending on your market) to get a building going for less than what it is worth based on the cap rate. That is the goal anyway.

If you can build a property that generates $100,000 per year for about $800,000 and borrow $900,000 then you would have a loan to value of $900,000/$1,400,000 or 64%.

If you achieve your financing goal, then you have been able to build your property without any money down. Now you have to figure out how to make money at it.

Using the example above, let's get you a $900,000 note with a 20 year amatorization at 7% at your local bank. They will likely put a 5-year balloon on it so they can milk points out of you every now and then. With that funding, you would have a mortgage payment of $83,732 leaving you about $12,000 in free cash. But wait, there is more. You get to write off the interest, and depreciate the building over 39 years.

If you are smart, you will get leases with inflation kickers that move the rent up a little each year. This is very important since you will want to increase your rents over time. Once your building is full, you can either sell it based on the cap rates or hold it and eventually pay down the debt to have a nice retirement nest egg.

I could go on more about this, and I will--later.

Giving 110%

2007-10-26T09:46:00.000-04:00

Last night I was watching Survivor. (Don't even ask!) On it, the Lunch Lady stated that she always gives one hundred and ten percent. Not to sound like a jerk or anything, but how is that possible?

If someone tells me they give 110%, my response is always, "Why not 195%? Why are you holding back?"

This seems to be a habit for jocks more so than others. Although whenever an employee is in trouble, they are quick to point out that they give it 1,000%. No kidding!

For me, I like to give it 5%, but have that increase at a rate of prime + 1 then have that amount compound daily with a balloon on Fridays. Ha! Beat that!

Why I Am A Raging Libertarian

2007-10-25T10:43:00.000-04:00

When I tell people that I am a libertarian, they often mistakenly believe that I am a liberal. So before I go any further, let me explain what a libertarian generally believes.

A libertarian believes in small government, less intrusion, private property rights, fewer laws, less regulation, more independence, more logic, and more freedom. It is actually pretty simple, really: Leave me the hell alone!

Here are a few of the major gripes I have:

1. If I own property, I should be able to do with it what I wish, so long as I am not hurting anyone else. However, the codes, zoning, restrictions and regulation put on my private property are getting onerous. Thirty years ago, there were no zoning regulations. If you wanted to put a hotel out in the middle of now where, then you could. You took the risk that it would be successful. Today, I can't so much as add a parking space to my building without going through a lengthy approval process with the county staff. I am not asking to be able to build a fire-death-trap building, but lay off already.

2. Our prisons are filled with people who are not criminals. In the United States, we have a greater percentage of our population locked up than any other developed country in the world. This isn't because we are all godless killers. It is because we have so many crimes that lack victims. If a guy is smoking weed (a natural plant that grows in the ground), then who is the victim. It is his body. He didn't kill anyone, hurt anyone or steal anything. Our government locks this guy up for 3 to 5 years, takes away his ability to make an honest living, and puts him in an environment where he will become a real criminal. America is supposed to be the land of the free. Let's actually let people be free. Lock up the guys that hurt others, but if there is no victim, then there is no crime.

3. Conservatives say they are for smaller government, but they actually want more government intrusion. Libertarians say, "If there isn't a victim, then butt out." Liberals want to take away people's right to fail. Everyone is a winner. Libertarians say, "Let me succeed or fail based on what I can or cannot do." All this is based upon the concept of freedom. Freedom of movement, freedom of expression, freedom of thought, and freedom of risk.

If a couple of men want to own property together and do the dirty in their own homes, why is that a problem? If I choose to paint my house blue or red or pink or yellow, why can't I? If I want to start up a business to make money, why should I need to check with the government first?

I could rant about this stuff all day long. The biggest frustration I have is that my voice is not heard. There are no national candidates that speak the way I think. I am an American without representation.

The Trouble With Databases

2007-09-06T11:09:00.000-04:00

Over the past 9 years, RentQuick.com has been in the business of providing projector and laptop rentals to the meeting and conference industry. Whenever we do business with someone, like all businesses, we add them to our database. Over the years, we have built up a very large database that in my mind has become a bit of a problem.

Way back in the 20th century, employees would stay at the same company for their entire careers. Today, it looks like people spend two to three years before moving on to another job. I know this, because every year our database loses 20-30% of the contacts.

As a result, our database must be constantly "weeded" and "pruned" (don't you just love the horticulture related jargon?). It takes a good bit of time, because you don't want to just dump data. You need to be sure that the person has really moved on. And if they did move on, you need to find out who took their place.

Finding out any information from most companies today is pretty hard. Yes, you can go online and search, but you really need to make a telephone call to confirm the data. If you send an email, it likely won't be answered. But telephone calls are a pain too because no one actually answers their phone. The let the voice mail do it for them. Then they don't return the call.

All this is very frustrating and costly to a company trying to communicate with the clients. This is the main reason why we no longer do mailed advertisings. Most of the mailings come back undelivered.

So on one hand, I hate my database. It has gotten very big and cumbersome. However, on the other hand, it contains very important information about the most important people: our clients.

Sub-Prime Mortgage Victim Joe

2007-09-05T10:10:00.000-04:00

This past week, President Bush argued that the Federal Government should help the homeowners who are at risk of defaulting on their loans which they can no longer afford.

Over the past month, we have heard the media describe the borrowers as victims. They say that the mortgages were pushed upon them. They were tricked into taking out more money than they could afford.

It is easy to blame the mortgage companies. Yes, they did try a number of ninja loans that were risky. Yes, a bunch of those loans will default. And yes, the homeowners will lose their homes. All terrible stuff, right?

Wrong. The homeowners don't actually own anything. In fact, some of them will make a good bit of money out of their little mess. First, if they have a 125% loan-to-value deal, that means they never put any money into the house. If they have been paying interest only, then they have zero equity to lose. They are glorified renters. When the bank forcloses on the house, they will end up keeping that extra 25% of the loan. Why? Because it was used to pay off their credit card debt (Victims of the subprime mess were also victims of the credit card debt mess too).

So here is a little example:

Joe buys a house for $300,000. He takes out a ninja loan for $350,000 to pay off and "consolidate" his credit card debt which he ran up in his wild 20's. His monthly interest-only payment starts off at $1458 per month. All is well in the world. Joe is a fancy guy in a fancy house.

But wait! The evil lender pulled a fast one. (Not really, it was all spelled out in their loan agreement and Joe had an attorney do his close so he should have known it was coming!) The lender tied the 3rd year of the loan to float with prime. Now Joe is paying Prime +1 which makes his interest only payment $2890. How ever will Joe be able to get that new HD-DVR he has been wishing and praying for over the past 2 weeks.

Of course, this is when the Today show comes out with the sad story and the sad music about Joe. Joe who has already lost his dog to a Michael Vick dogfight. Joe who is a good guy and likes to work 40 hours a week. Joe who is an American just like you and me. (I apologize to our international readers, but being an American today means you never fail. That is why we have a government) Joe who is about to lose his house to a foreclosure.

After all the tears and sad commentary only briefly interrupted by a Flomax commercial, we all feel a little less secure.

If Joe, who is an American just like you and me, can lose his house then so can I!

On and on it goes with no end in sight. Here is the straight talk:

1. Joe is an idiot. He should never have bought a house without a down payment.

2. If Joe had not spent his earnings of his 30's while he was in his 20's (credit card debt) he might have a down payment.

3. Joe is an idiot (again). He never took the time to learn about how floating rate mortgages work. Nor did he ever learn how to plan beyond the next week.

4. Did I mention Joe was an idiot? By the way, Joe will make money by walking away from his loan because he is effectively paying off all his credit card debt when they take the house. You might say, but his credit would be destroyed. Duh! This idiot didn't have any credit. That is why he needed a sub-prime loan in the first place.

5. Finally, the government needs to butt out. Keep liquidity where needed. But forget about the Joe's of the world. Don't bail them out or the lenders or anyone else. Allow people to fail. It is part of life. It is how we grow and learn.

And this isn't even the reason I am so pissed today!

Helping the Helpless

2007-09-04T17:21:00.000-04:00

I have been in the business field for most of my adult life, less 6 years in the Marine Corps. As a result, I have developed a wide range of business experience. As a result, I tend to get a large number of people who come to me for advice on thier businesses.

Although I have never charged for this advice, I put alot of effort into helping these guys out. Recently, I did some advising to a family business that I have done work with in the past. These guys had gotten themselves into a mess and they needed to make some tough decisions to get out of it.

I evaluated the deal and came up with what I thought was a pretty good route for them to move past the problems. I even pulled in some of my resources to help them refinance their business. The recommendations I made were agreed to by all the parties and it looked like a solution was in the works. Then...kablamm! They went a completely different route.

By different route, I mean they did nothing. They faced and continue to face total extinction, but they don't seem to worry about it at all. They have not moved on any of my advice and are in the process of actually working backwards.

The moral of this little story, and the only part that matters in our conversation is this: it is not the idea that matters, it is the execution. You can think things through, but if you don't act then you are going nowhere fast.

As a result, I have defined this as helping the helpless. They don't really want any help.

The Waiting Game

2007-08-13T10:05:00.000-04:00

Right now I have several projects which are being done by other people. These are:

1. Earthwork construction at DeWitt Crossing
2. Building Construction of new office building
3. Engineering work for a stormwater detention pond
4. RentQuick.com website re-design

Here is my problem: I hate waiting on other people to do their work. Now, I know sometimes problems arise or other work interferes with getting my jobs done, but it always seems to be that way.

I have spent the better part of my Monday morning trying to get a handle on where everything is and what is going on. To be honest, I think I am at the same stage I was a month ago. Things are not progressing fast enough.

The word of the day is frustration.

Learning to Embrace The Global Marketplace

2007-08-01T16:04:00.000-04:00

As we grow up, depending upon our upbringing, we tend to develop a fairly narrow view of the world around us. We tend to think of the world as those people whom we know and relate to. Sure, we see the rest of the world on television and read about them briefly in the press. We all feel sad for the impoverished, but don't actually feel the pain as if it were our own.

We think we know what it means to be French, Japanese, or even Chinese. Some of us, from the comfort of our own living room, learn to hate people based upon the language they speak or the country in which they live.

I know people who have never been more than two hours from where they were born. In fact, this is the majority of the world. Yes, there are many people who have never ventured from the unknown. They have never been in a position of being the "alien". It is interesting to talk with these people to learn where they get their beliefs from.

If you have never been to Spain, never met a spaniard, and cannot even find the country on a map, how can you have any beliefs about it. However, this is exactly what people tend to do.

I have never been to North Korea. I do not speak the language. I can find it on a map however (it resides just North of South Korea!). I am sure that many of the talking heads on television have not been there either. Why is it that they know so much about the country and the people there? In fact, if you weren't paying attention, you may not have known that the United States was on the verge of a shooting war with North Korea until moods changed and now they are on the verge of a shooting war with Iran.

This leads me in a round about way to a neat little book I am reading called China Road by Rob Gifford. Mr. Gifford takes us on a journey through the center of China from Shanghai to the Gobi desert. If you think you know who China is, this book shows you just how little you do.

I highly recommend this book to everyone. (no not anyone, everyone!) China is on the verge of becoming the dominant economic power in the world. They will stay that way for a very long time. As a result, understanding a little more than the sterotypical picture of this country is important.

Next, I started outsourcing web and programming work to international talent. Why? Why send work to someone who lives in India, China or Russia? The answer is simple: they want to work and they do work. Yes, they are cheaper than their American counterparts, but that is only part of the benefit. With American technologists, I find they spend an awful large amount of their time learning on my dime. And that really pisses me off. (I'm talking to you Civil Engineers who work for a private engineering firm in Waynesboro.)

Finally, a quick update on DeWitt Crossing. We are slowly finishing up the road and sidewalks. There is still a little more work to be done, but things should be all wrapped up and finalized by October.

You Might Be Dumber Than Paris Hilton

2007-07-18T15:41:00.000-04:00

Over the past few months, we have seen and experienced the day-to-day trials of that waifish moron known as Paris Hilton. The media keeps covering her while at the same time apologizing for doing so. The main attraction to all this news coverage is not that Paris Hilton has adoring fans who are concerned with her well being. Nor is it because she is particularly pleasant to look at. In fact, she is kinda scary.

No, the reason why the media gives us 24/7 coverage of Paris is the same reason why we all watch: We want to feel smarter than someone who is richer than we are.

Yes, the American dream has changed a little bit. No longer do we wish to pull ourselves up by our bootstraps (or 5" designer heal-straps). Today, we seek contentment and happiness by telling ourselves and each other what a considerable dumb-ass twit Paris Hilton is. You see, this makes up for the fact that a young lady who looks like a fence post but lacks the IQ of a fence post is god-awful rich. She is a heiress for crying out loud. Which is all the more reason to hate her.

However, I submit that Ms. Hilton is not as dumb as she might first appear. Take for instance the following career building moves:

1. A sex tape is released just before her lousy TV show is first aired. Prior to that, none of us had heard of her.

2. On the show, she acts dumber than is humanly possible. (Everyone, including Paris Hilton has heard of Wal-Mart. If you bought that line then you are right down there with her.) But this only propells her popularity forward.

3. When she is tossed in and out of jail, she gets even more coverage. Hell, OJ had to kill two people to get that type of coverage. All she had to do was drive without a license or something and Whammo! she is on every news channel.

As dumb as she is, she is still doing better than most of us. Keep in mind that she is paid $100,000 to show up at a night club and get drunk. I have been doing that for free!

Okay, now to our little test: Are you dumber than Paris Hilton. Answer these questions honestly:

1. Have you ever taken out a payday loan?
2. Do you routinely get big refunds with your tax return?
3. Do you have more than three kids to three separate partners?
4. Did you really believe George W. Bush when he said that Jesus was his political role model?
5. Do you have pictures of you drunk or high on your MySpace account?
6. Are you the person in Homeland Security who came up with the color coded threat conditions?
7. Do you eat fast food more than once per week?
8. Are you counting on Social Security as part of your retirement planning?
9. Do think Ben Franklin was a US President?
10. Do you still watch MTV waiting for someone, anyone to play a music video?

Scoring:
Add up all the "yes" answers and if you scored:
1-3 Yes'............pretty dumb
4-6 ...................really dumb
7-10..................You should get ready for a career as a rich and famous person.

Deflation and Other Interesting Econ

2007-04-11T13:50:00.000-04:00

I just finished a fascinating book on Deflation (Deflation: What happens when prices fall by Chris Farrell). I have always enjoyed economics and this book is about the most compelling econ book I have ever read.

The main premise of the book is that we are moving into a deflationary period thanks to the following factors:

1. Federal Reserve Policy
2. Overproduction (Mostly from China)
3. Productivity advances in the service sector
4. Outsourcing

He looks at previous deflationary periods such as the deflation of the 1870s-90s, the Great Depression and Japan's deflation of the 90's.

Of course, if you look around you will say that he is nuts. Fuel prices, education, health care and raw materials are all higher. However, in total, he is correct. Prices for finished goods and services are dropping. This has tremendous impact on what will happen in the future.

First, the Federal Reserve has only theories on how to combat deflation. They have no real experience in counter-deflationary policy. Second, if deflation were to get out of hand, it would devastate our system of high personal debt. Debt in inflationary periods is good because the money used to pay back the debt will be worth less in the future. However, during deflationary periods, it will be the opposite.

Being in the technology industry, I am accustomed to falling revenue and prices. In fact, if RentQuick were still able to charge the same service rates that we did back in 1998, then we would be a significantly larger company. It is just something you learn to live with.

However, in the world of real estate, falling prices will be devastating. The only good part is that you won't have a supply side deflation (you cannot really make more land).

So where is the best place to be during a deflationary period? Mr. Farrell asserts that cash, i-bonds or corporate bonds will do best. Stocks apparently stink during deflationary cycles, which makes sense because revenue will drop first and payroll will be "sticky". Hence, earnings will drop.

Are we headed for a deep deflationary period? That is unlikely for the following reasons:

1. Fed policy will at least try to stabilize prices unlike during the depression where the federal government balanced the budget and the goal was adherence to the gold standard. (The gold standard is deflationary since there is a limited supply of gold available, thus money supply is restricted.)
2. The US is no longer on the gold standard. As stated above, this would allow more flexibility in Fed policy although at some risk to the dollar's exchange rate.
3. If prices are dropping, then there will be a point where the producers will move out of those products which do not offer a positive return on investment. This should reduce the supply of these products and stabilize the prices.
4. As the barrier to outsourcing drop, you will see wages in white collar outsourcing rise to meet those of the US. This makes sense that there will eventually be parity across borders once all barriers are removed. Yes, US salaries will drop, but others will rise. (Reference China's increase in executive pay in those companies that have taken over foreign firms such as Lenevo's purchase of IBM's PC division.)

So what should the individual do to prepare for deflation?

1. Reduce consumer debt. Pay off credit cards .
2. Adjust investment portfolios to favor bonds and cash over equities.
3. Continually increase knowledge, skills and certifications to increase your productivity and performance to counter lower wages.

There, I played an Economics Professor for a day. To think I got a D in Econ in the 11Th grade!

On Delegation

2007-03-02T12:43:00.000-05:00

As a follow up to the octopus metaphor, which I was not too happy about, I thought I would talk a little more about delegation.

So much of what we are is based on what we have done and experienced. In my earlier days of entreprenuerism, was very independent. By independent, I mean that I did all the work myself. It comes from hearing my Dad say all his life "if you want something done right, do it yourself". I guess that stuck with me.

Doing it yourself is a great way to learn the ropes, however, at some point you reach diminishing returns. You cannot possibly be the best person to do everything. There are some people who are simply better at things than you are. Delegating tasks to contractors, engineers and other professionals frees me up to do what I can do best.

Of course, this is not without it's costs. Delegating to others involves paying them. When I put together my business plans, I look at the areas that I am going to be delegating and I double whatever the costs are that I expect. This is just my rule of thumb.

The big rule in delegation is that although you don't need to do the work, you are still held accountable for what gets done. So it is important to watch the job closely and follow up on every assigned task.

When I delegate or hire a pro to do the work, I make it clear that I am only paying for the result. If they screw up and have to do the work twice, I should not have to pay them for the repeated work. Likewise, if they are learning as they go, that too should not be on my dime. Of course, there is a gray area here as well. Getting an engineer to understand this requires some work. Some only want to be paid for the time they are doing the work and not for the results. But it is the results that add value, not the hours put into the effort.

Me as the Octopus

2007-02-28T11:06:00.000-05:00

Over the past two years as I have been working on my real estate project, I find myself acting as an octopus. By this I mean that I am in the center coordinating and coercing engineers, contractors, City officials and others in an effort to create the new commercial development.

I spend most of my time calling, leaving messages and giving instructions to the various parties that are needed in order to get the job done. This can be vexing at times, since people don't always cooperate.

When doing a project of this size, I cannot do it all by myself. In days gone past, I would try to do everything in house. Those days are over. Now I am dependent on other people to get the job done.

The key to working as an octopus is to understand what everyone's role is. This means understanding what they can and cannot do.

I am now more comfortable in my role. I look for how the timing of the different pieces fit together and I keep copious notes on every conversation and communication. I am up front with someone if they don't respond quickly enough and I drive the work flow toward the goal.

Lots of fun down here in the deep blue sea!

Working in the mud

2007-01-03T13:13:00.000-05:00

Today, my trusty contractors, March Construction, have begun work on the stormwater pipes in the DeWitt Crossing project.

Since it seems to rain every 7 days lately, we have mud everywhere. Of course, if this weren't such a warm winter (thanks alot Al Gore!), all this rain would be snow and we could just push it out of the way.

The mud affects a project like this in a number of ways. First, the moisure content of the fill material must be below about 20%. This means that even though the sky is blue and the grass is dry, we cannot fill on soggy mud. Mud minus water equals dirt. Dirt is good, mud is bad.

The mud also affects the nearby paved roads. If we drive from the mud to the paved roads, then everyone freaks out. Putting dirt on the pretty pavement isn't appreciated by those who drive cars they cannot afford because the cars get dirty. As a result, I spend a great deal of my time trying to get the mud off of my truck tires.

Anyway, if you care, I have included a pic of the guys putting the cap on one of the stormwater manholes.

Me as the Blogger and Reader

2006-12-29T10:56:00.000-05:00

Okay, so I suck at sticking to this blogging thing. To be honest, I equate blogging to the "message in a bottle" method of communication. Here I am on a little island writing all this stuff, but with little feedback from those that are reading it.

Therefore, this year, I am going to change my tone a little bit. Instead of assuming there are readers out there, I am going to assume that no one at all will be reading this crap. When you think about it, it is very liberating. It kinda makes me feel like Nancy Drew and her little diary. (Of course, I never ready any Nancy Drew books!)

Alright, so just in case I wake up with amnesia one day, here is what is going on in my little business world:

DeWitt Crossing is still moving along. I have gotten the road plans approved and am heading into the deepest debt of my life in order to swing for the fences. It is a real joy to see this place being built. I believe it will be great addition to the community.

RentQuick is in the process of re-tooling. I have developed a Access database that allows us to track our inventory through the special world of meetings and event rentals. This much I do know from this project: Access is a powerful program and I don't know enough about it.

As a result, I have hired a specialist, John Raleigh (http://www.jraleigh.net) to help with some of the more technical parts of the system. When complete, it should make our lives here much better, plus give us more information about the movement of the inventory.

We have a new tenant: Bradford and Catchings Dentistry. They are great people who have moved from New Orleans to be in the beautiful Shenandoah Valley of Virginia. They are in the process of building out their rental space and should be moved in during February.

Finally, I have returned to teaching. The Augusta Regional Chamber of Commerce put a call out for anyone wanting to do seminars. I thought it would be nice to get back into the classroom again. When I was in the Marines, I taught quite a bit and always enjoyed it. My first seminar for the Chamber was "The First-Time Manager". I had 13 students, (all women!) and had pretty good reviews. Although I did get one bad review, but I blame the reviewer on that one. (Note: if you consider yourself a seasoned manager, don't take a course called First-Time Manager!)

So now Christmas is over and 2007 is fast approaching. I wish I had some words of wisdom for myself, but I don't. My resolutions are to work out three days a week and to delegate more.

I will not make any promises on when I will post again. For all I know, I may never talk to myself again!

Dirt Moving Update 2

2006-09-13T11:12:00.000-04:00

Over the past two months, we have been moving some serious dirt! It is so cool!

On the 10 acre portion of the site to the East, we have moved close to 30,000 cubic yards of fill material. Everything has gone very well.

If you are not familiar with the exciting process of fill dirt, then allow me to explain. The dirt must first be dry. Since we are digging it up and moving it directly to the site, it is pretty dry. Then a large dozer spreads the dirt out in a 6 to 12 inch "lift". After this, roller known as a "sheeps foot" compacts the dirt. That is what creates the little foot prints you see in the picture.

For the fill to be good, there can be no large rocks, debris or organic material in the fill. And, yes there is a big difference between top soil and fill dirt. Top soil is very bad fill.

The idea is to create a filled space which can be built upon. In order to build on it, it cannot compress or move. You can imagine what trouble that would create.

We are very close to having our construction plans approved so we can start on the really fun part: the road construction.

Happiness from Running

2006-08-23T09:54:00.000-04:00

When I was in the Marine Corps, I would run 6 to 8 miles 4 days a week. I can honestly say I was in the best shape of my life. Running was just a part of the job and I got pretty good at it. However, after leaving the Marines in 1992, I stopped running. It was mainly the lack of structure that did it. In the Corps, you always ran when your platoon ran. In addition, every six months, you had to perform in a physical fitness test which involved a timed 3 mile run.

Now, after being out of the running world for 14 years, I am back at it again. I feel better. I sleep better. I look about the same. But the good news, is I feel better.

If you have the opportunity to run, even a mile at a time, do it. Running may be the cheapest sport you can every do. You get more excercise per minute than any other exercise. Finally, running is a great way to experience the outdoors.

Run, Forest Run!

Dirt Moving Update

2006-08-21T17:49:00.000-04:00

It has been a while since I spoke about the DeWitt Crossing project. As you may remember, DeWitt Crossing is a 33-acre commercial development located in Waynesboro, Virginia. I am in the process of creating 20 commercial lots for resale.

Right now, we are involved in filling 10 acres of low-lying property on the eastern side of the project. This portion of the project is huge. We are moving 38,000 cubic yards of dirt from down the road to the property and compacting it. To give you an idea of how big this is, it will take about 4,000 dump truck loads to move the dirt.

Every day or so, I head over there and watch the trucks move. For a former Tonka kid, this is great.

While all of this is going on, I have been in the process of getting the construction plans for the other side of the road approved. We are in the final stages of getting this done. The big lesson is how much longer this takes than what I expected. However, it will happen eventually.

In the coming weeks, I should be able to go public about what is going on out there. Although everyone seems to think it will be an Olive Garden. That is pure speculation. I would love to have an Olive Garden there, but I don't think the market meets their requirements.

I should have thought of this

2006-08-16T16:32:00.000-04:00

Today, I have found something completely amazing. Obviously, if you are reading lots of blogs, you may have noticed an increase in the number of bloggers who are pushing websites, products, candidates, etc.

This is because they are paid to do it. It is so cool!

There is a site called payperpost.com that sets advertisers up with bloggers. The advertisers post an opportunity which offers payola to the bloggers. You can may a few bucks each time you run a short post about a new fangled something or another.

Wow! Who says bloggers don't have journalistic integrity. It's like we are back in 1953 all over again.

Now duck and cover!

Wounded Warrior Project

2006-07-05T11:18:00.000-04:00

This past January, I was skiing at my local hill, Wintergreen, when I saw signs and banners welcoming the Wounded Warrior Project. This is a non-profit group that helps wounded American servicemen and servicewomen recover from amputations. The day was dedicated to teaching a group of amputees how to ski. There is something wonderful in seeing someone who has every reason to feel sorry for themselves, get up and do something like this.

The numbers are stagering. Over 18,000 young men and women have been wounded since the war in Iraq began. Of those, close to 500 are amputies. Since the weapon of choice by the insurgency is the improvised explosive device, arms and legs are lost frequently. Furthermore, the number of brain related injuries is much higher than other conflicts.

Regardless of your polititical views, these numbers are troubling. Most of the press does not keep a running tally on the wounded. As a result, the wounded are often forgotten by the American public.

The Wounded Warrior Project provides a much needed service to those wounded and their families. They provide assistance to every wounded warrior from the time they are put into the hospital. These support services include a handy backpack with essentials which help the young soldier or Marine deal with their situation. The WWP also provides counselling and rehab services provided by other wounded service personnel.

Please help these brave men and women. You can learn more at http://www.woundedwarriorproject.org

Finally Something to Talk About

2006-05-01T15:01:00.000-04:00

It has been over a month since my last post. As a cyber-personality, I truly suck. The fact is that I have not had anything interesting to talk about. Other blogs are about mundane things, whereas I try to write mine like Op-Ed pieces.

Over the past few weeks, I have been doing more business in nearby Charlottesville. Fishersville and Waynesboro, where I live, are located about 30 miles to the West of Charlottesville. Charlottesville is home to the University of Virginia, Thomas Jefferson, Monticello and lots of rich wealthy people. There seems to be a Charlottesville-centric belief there that the world revolves around Charlottesville. Case in point: I attended a meeting of the Charlottesville Venture Group last month. This is a nice group of business people both entreprenuers and investors that meets at the Darden School in Charlottesville. The seminar was about statistics of the surrounding area. The instructor asked people what they thought the average income per household was in the area. An educated guy actually thought it was around $110,000. In fact, it was in the mid-thirties.

It seems that everytime I meet someone from Charlottesville, they name-drop. Things like I knew Dave Matthews before he could play a guitar. Or "John Grisham and I used to go cow tipping together". The concentration of rich and famous people in Charlottesville makes the rest of the residents think they are all rich and famous. More power to them.

The problem comes when they put the rest of the state down in bragging about themselves. Charlottesville is a very nice city. But believe it or not, other parts of the state do have running water and power.

Where this comes into the business fray is that with so many people in Charlottesville thinking that the rest of the world sucks, it opens opportunities for us peasants. For instance, commercial land in and around Charlottesville is really expensive. However, in areas such as Waynesboro, opportunities to get in at the ground floor are still available.

This is my "out-edge" theory. It goes like this: every booming area has a center. At some point, you are out of the center and reach the outer edges. That is the place where you should be investing. Paying too much for real estate or labor or anything makes it very difficult to make any money. If you open your eyes, you will find buildings, land, and people who are not in the center of a high growth area that are just as good. Buy low and sell high. If you only look in the hot spots, you will be buying too high.

Why No Brain Enhancements

2006-03-21T14:14:00.000-05:00

You know, it is really interesting what modern medicine can do today. You can get a new heart, a new liver or a replacement kidney. If you don't like your nose, you can change it. If you don't like your breasts, you can enlarge them. According to the million or so emails I get everyday, you can increase the size of your johnson with a little pill.

You can straighten your teeth. You can correct your vision. Your hearing can be improved by a hearing aide, although why they advertise on radio, I don't know.

You can get an instant tan or fake nails. You can add or remove tatoos with ease.

Luckily, you can get replacement limbs if you lose one.

You can fight the signs of aging with a face lift. You can fight the signs of overeating with a tummy tuck or a liposuction. You can enlarge your butt, put hair on your bald head or remove hair from your upper lip.

It is amazing what you can do today. However, one area is missing. We don't yet have the technology to make you smarter.

My challenge to the scientific community is to develop the technology to make people smarter. I need to challenge the scientific community to do this because I currently lack the brain power to do it myself. Its the whole chicken-egg thing.

Here is the goal: I want a device that allows me to learn new things quickly and without much effort. It should be small and convenient. I don't want it to be too cheap though. If everyone can get smarter, then it kind of defeats the whole benefit of me being smarter. Its the same as everyone getting a million dollars, it diminishes the value through rapid inflation.

I have thought this through and figure that a small USB port in the head should work well.

Although I don't want everyone to have access to this device, I think there are a few people who should be early-adopters. To avoid politicizing this too much, I will not say their names. Although I will give you a hint: He is elected, from Texas and is the leader of the free world. But I want to be second in line.

So get to work smart guys. I expect a product on the shelves of Office Depot or WalMart by Christmas.

Self Learning

2006-03-15T16:56:00.000-05:00

It's amazing how fast technology is changing. I am in the process of re-building the RentQuick.com website from scratch. It seems that everything I used to be good at is now obsolete. Therefore, I must learn a whole new bunch of stuff.

Specifically, I am referring to cascading style sheets. If you haven't done anything with them, then you are going to be amazed at what you can do. Not only can you layer the images on the page and control the overall look and feel of the site with one little file, you can also put things exactly where you want them without those pesky tables.

So I have spent the last few weeks learning and implementing all kinds of new stuff for the website. I am still testing it, but thought it would make for an interesting discussion: self learning.

Over the years since finishing my MBA, I have found that I spend a great deal of time learning things to perform a specific task. Whether it is the ins and outs of stormwater detention facilites or it is the latest design tools, I have been forced to learn without the aid of a classroom or an instructor.

In fact, most of what I consider to be important knowledge has come from learning on the job. This has been such an important tool for me, that I assumed everyone did the same. However, in my interviews with others I found the opposite to be true.

Obviously, people learn differently. Some excel in the the classroom environment. Some do better by trial and error while others prefer to learn through books. I learn best through a mixture of trial and error and reading.

The great thing about learning is that it is limitless. The problem with being limited to learning in a classroom environment is that you are so dependant on finding a class that teaches what you need to know and taking the time to attend.

Of all the tools I have in being the do-all entreprenuer, self-learning is the most powerful.

Finding a way through the red tape

2006-01-31T08:43:00.000-05:00

Over the past six months, I have been working on getting Adin Circle accepted by Augusta County and the Virginia Department of Transportation. Adin Circle is a residential street within Silver Ridge Subdivision. This road was constructed four years ago, but is only now being accepted into the road system.

Here are my lessons learned:

1. Get a very clear understanding of what the government wants before you start. Know who the players are and what their role is in the process.

2. Find out what all the fees are. You would be surprised how many secret fees pop up during any acceptance process.

3. Determine the payout and release of any surity bonds. With bonds, you can set them up a number of ways. For small bonds, it is often best to post a Certificate of Deposit with an escrow agent (attorney or bank). This way, you are getting the little bit of interest on the money.

4. When you get comments back from the agency, be sure the information is in writing. Never go on the verbal comments of a government employee. These people like paper and if it isn't on paper, it didn't happen.

5. If you are working with an engineer, surveyor or contractor through the acceptance process, be sure to specify that you are hiring them to get acceptance by an agency. Then get a price for them to reach that acceptance. Paying by the hour will kill your budget since you will never get it right on the first step.

6. Unlike the real world, working with government agencies is seldom negotiable. The rules are the rules. Don't look to get any breaks. Treat the entire process as professionally as possible. Remember the government employees really don't care about your timeline or budget. All they are interested in is being sure they do their job by the book. Keep that in mind and your frustration level will drop considerably.

Tribute to a real man

2005-12-27T15:02:00.000-05:00

This past week, a good man died in a freak accident. Norman Kaiser, a local businessman and community leader passed away after being struck by a car at his carwash.

Norman was a great businessman. He owned CVR Rentals, a local tool and party rental company. He had his hand in numerous other businesses and always rose above the current economic conditions. I found him to be evenhanded in his business dealings and a man of his word. Which is hard to come by today.

His success as a community leader made him that much more a hero of mine. He helped start the Waynesboro Boys and Girls Club, was instrumental in the local United Way and was always there when people needed him.

Norman died at the age of 70, but you would never have guessed his age by his energy.

He was a real star who will be saddly missed.

Approval for DeWitt Crossing Project

2005-11-29T17:33:00.000-05:00

I appologize for taking so long to post. I have been pretty busy and am just now catching up.

Last night, the Waynesboro City Council approved my request for rezoning on the DeWitt Crossing Project.

I am now working on getting Adin Circle, from the Silver Ridge Development accepted into the state road system. This is unlike anything I have ever done before. There are way too many details. Of course, I won't go into how I got screwed over by a guy who was supposed to pay for this work. I will leave that until after all the dust settles.

Back to blog stuff:

I have found that using Microsoft Project is really helpful in these large projects. Just being able to map out the dependent tasks is worth the price tag. I have built a pretty hefty plan and timetable for the DeWitt Crossing development. Of course, you can take it too far, but having a plan and measuring it make life alot easier. For instance, when will you need financing? Or when will you be able to sell a lot? All these answers come from the time table.

I promise to keep the updates coming more frequently.

Proud of my Rotary Club

2005-11-10T16:37:00.000-05:00

Today, I made a pitch to my Rotary club to raise funds for relief in Pakistan from the earthquake. This has been a terrible disaster that has already killed thousands and may kill even more as winter sets in.

Rotary is a great organization where clubs work together to aid those less fortunate. In our 101st year, we have seen quite a bit of natural disasters. Rotary has stepped up to the plate. Spefically, so has my club.

I am very proud of them. Our foundation board approved sending $5,000 to the affected areas directly. Today, in a matter of 20 minutes, I raised more than $6,000 additional from our club members.

This isn't the first time I have seen these fine men and women dig deep to help. After Hurricane Katrina, they quickly passed the hat and raised a good bit of money that went to the Salvation Army.

After the Tsunami, our club raised better than $25,000 in a matter of a week.

Bad things happen, but how we deal with them defines who we are. I am proud to say that I am a past-President of the Waynesboro Noon Rotary Club in District 7570.

Funding Your Business with Angel Investors and Banks

2005-11-03T15:34:00.000-05:00

Since I am a professional entreprenuer (self-annointed), access to capital has always been important. Here are a few ways that I have gained access to capital over the years.

Angel Investors
In the early days of RentQuick, I knew I would run into a problem where I could have a nice big order, but not enough projectors to fill it. So I needed to have a "war chest" to buy equipment on short notice. Of course, with a new business, banks were out of the question. Funding a business on credit card debt is stupid. The obvious choice was to find an angel investor to loan me money.

Luckily, I had some contacts who could help. I started by putting together a nice little proposal that showed income statements and balance sheets. I was able to cut a deal with two angels who would be paid interest annually. The loans amounted to $75,000.

Why debt? Debt is far superior to equity at that level simply because I would be able to retain 100% ownership and pay them off over time. Interest is deductable, unlike equity deals. Finally, I would not need to worry about having a partner in the business.

Banks
Later, when the business was more mature, I was able to start working with banks. The normal method of working with banks is to walk in to the branch with your hat in your hand and wait until a loan officer would meet with you. Usually, you would need to fill out lots of forms and wait until some faceless loan committee tells you if you can have some money.

I found that building a relationship with your bank, not just your loan officer, was helpful. Get to know the higher-ups in the bank. Let them know what you are up to. Let them see you in action. Talk to them weekly so they know about your during good times and bad. Don't just call them when you need the money. Banks take risks in lending to people. You can help them mitigate that unknown by letting them know you better.

On my earliest real estate deal, I needed alot of money to pull it all together. So what I did was pledge my savings (stocks, bonds, and CD's) as collateral. This helped reduce the risk to the bank and give them the assurances that I was committed to the project.

Another thing I have done with the banks is make sure they are paid back quickly. Paying the banks back quickly reduces the monthly interest expense and reduces the overall risk of the project. Sometimes, this upsets the banker, who only makes money when you pay interest.

Money Matters and Banks

2005-11-03T15:07:00.000-05:00

Since I am a professional entreprenuer (self-annointed), access to capital has always been important. Here are a few ways that I have gained access to capital over the years.

Angel Investors
In the early days of RentQuick, I knew I would run into a problem where I could have a nice big order, but not enough projectors to fill it. So I needed to have a "war chest" to buy equipment on short notice. Of course, with a new business, banks were out of the question. Funding a business on credit card debt is stupid. The obvious choice was to find an angel investor to loan me money.

Luckily, I had some contacts who could help. I started by putting together a nice little proposal that showed income statements and balance sheets. I was able to cut a deal with two angels who would be paid interest annually. The loans amounted to $75,000.

Why debt? Debt is far superior to equity at that level simply because I would be able to retain 100% ownership and pay them off over time. Interest is deductable, unlike equity deals. Finally, I would not need to worry about having a partner in the business.

Banks
Later, when the business was more mature, I was able to start working with banks. The normal method of working with banks is to walk in to the branch with your hat in your hand and wait until a loan officer would meet with you. Usually, you would need to fill out lots of forms and wait until some faceless loan committee tells you if you can have some money.

I found that building a relationship with your bank, not just your loan officer, was helpful. Get to know the higher-ups in the bank. Let them know what you are up to. Let them see you in action. Talk to them weekly so they know about your during good times and bad. Don't just call them when you need the money. Banks take risks in lending to people. You can help them mitigate that unknown by letting them know you better.

On my earliest real estate deal, I needed alot of money to pull it all together. So what I did was pledge my savings (stocks, bonds, and CD's) as collateral. This helped reduce the risk to the bank and give them the assurances that I was committed to the project.

Another thing I have done with the banks is make sure they are paid back quickly. In all of my land projects, I paid 100% of the net proceeds against the loan. This way, they were paid back faster and I was the last to benefit from the project. Of course, banks don't always want this. They only make money when they are paid interest. However, I prefer to keep the debt as low as possible to reduce the overall risk of the project. Debt means monthly or quarterly payments. If you aren't careful, too much will cripple you.

Interviewing for Fun and Profit!

2005-11-01T16:00:00.000-05:00

Sometimes interviewing people is fun. They are usually quite nervous and you are usually hoping you aren't wasting your time. Interviewing people for positions is a necessary function of any business owner, however, it can be vexing sometimes.

I have had one at least three occasions, the interview questioning to go something like this:

Q: Tell me one of your faults or something you would change about yourself.

A: Well, sometimes I get into trouble because I care too much. I really try too hard to make the customer happy and to be the best employee possible. My co-workers sometimes hold this against me because they don't care about the company like I do.

At this point, I know I am dealing with a special someone who read a book or an article on interview questions. The people make life fun! So here is where I pull out my super-secret question that is sure to stump them:

Q: If you were a co-worker of yourself, and you, the co-worker, were to interview you, the other co-worker, for a possible promotion to be your new boss. (Not your boss, but your boss.) What questions would you not like to hear from yourself about you being in charge of you and as a second part to this question: how would you answer yourself in those questions in order not to completely answer those questions... that you asked... of yourself?

To this, the candidate would either freak out or worse, try to answer the question.

I also like the questions that ask people to think a little bit. I have tried this before after learning how Microsoft hires only the smartest people. (We know this because the employees of Microsoft in their PR department told us how smart they were. )

Here is my intelligence tester:

Q: Explain to me why manhole covers are round.

To this I have had a wide range of answers. Here are the best:

A: Manhole covers are round because they need to be round to cover the round hole.

A: They are round because that is what shape the holes are. (Same as above)

A: Manhole covers are round because the government requires them to be round.

A: Manhole covers are round?

Of course, the answers are pretty logical:

A: They are round because the round cover will not fall into a round hole. In addition, round covers require less material (steel) than square ones. Round covers fit regardless of how you turn them. A worker's body fits best into a round hole. The pipe system that they go into is also round thereby being easier to connect than a square hole.

Drop me a line or message this post with your favorite interview questions. I should note, I only ask the silly questions of jerks and arrogant SOBs.

DeWitt Crossing Passes Planning Commission

2005-10-19T13:15:00.000-04:00

Last night we took the DeWitt Crossing project before the Waynesboro planning commission for a recommendation for rezoning and preliminary plat approval. It passed 5-2 for rezoning and 6-1 for preliminary plat approval.

Our next step is to get final approval from the City Council.

Last night was interesting to say the least. It was described to me by one gentleman as the toughest planning commission meeting he has seen in 20 years. Of course, most of these types of meetings I have been to before are unpredictable.

Here is what happened:

As soon as the agenda item was described by the City Planner, a commissioner made a motion to deny the request. I had to hold on to my seat to avoid jumping up and asking on what grounds. The commissioner said during his remarks that the corridor needed to be studied more before commercial development should be approved.

This came as a complete shock to me and most of the others in the room for the following reasons:

The comprehensive plan clearly calls for that area to be commercial.
The City annexed that property from Augusta County for the sole purpose of increasing their tax base (commercial).
VDOT built DeWitt Blvd expressly for the purpose of commercial development.

After each of the commissioners had a chance to talk, the chairman allowed me to stand up and clear up any confusion. That was very much appreciated. I hate note being able to defend my projects.

This project is great for Waynesboro. I am building stormwater detention facilities which are far superior to those required by the code. The traffic improvements are being made by me. I am protecting the flood plain and the wetlands that are on the property.

I think many of the comments made against the project were from the lack of understanding about what the City has already planned for. It is easy to deny, based on emotions. But the facts support this project and luckily the majority of the commissioners agreed.