for the business types out there
I was at a SCORE picnic the other week on the bay. Nice home, nice boat, nice setting.\The speaker was talking about the duties of the board of directors and it responsiblities to the shareholders. After a 15 minute 1970's type lecture on the shareholders "rule" message, I got up and said bull **** Now a bit of background on the speaker. He is Fisk grad., retired GE upper manager, and a writer living the good life on the bay. Me just a an asshole from middle somewhere. My degree is so outdated, I cant use in press releases anymore.
The bull **** stood and I ask the lastest and greatest "morning Joe" question . Have you ever made payroll and where do you think the customer ranks in this responsiblity equation of yours? A referenced answer that was on page 112 of one of his books was given. Nobody had a book.
My response was from my notasyet published book "Gut check" edition 2009
When your company is in the red and you're laying off people, when does managements compensation reflect its judgement? AND IF ever wondering how important the numbers are for the shareholders just think NO CUSTOMERS no numbers. CUSTOMERS RULE Refer to GM playbook 12th floor Ivory tower for reference.
I got a few pats on the back but most of the SCORE members are academics, middle managers and govt retirees not business people. I placed my counselor status on hold for a year or so til they feel the experience of a bad business cycle and find a new playbook .
Just a R/R about the stupid but very well paid advice thats out there and I cant spell
If the last eight or nine months won't convince someone to change business patterns and thought from the top down, and not just screw those toward the middle and bottom, then nothing will.
Of course, I have a "skewed" vision of what is important - relationships, community, loving your neighbor, and all the stuff other than "it's all about me, me, me, me and me". As an example, if life is only about me, me, me, me, and me, then we all should only lurk here on the board to get what we can get out of it and never share our thoughts and experiences by posting. Wouldn't take long before there was no board and no Men's Forum community, would it?
Thanks for having foresight and principles.
Brian Burke - Wellington OH
Also don't get me started about SBA loans. The next shoe is about to drop on those things bigtime. And I mean bigtime!! So many of your franchisees (Quiznos...Blimpie) are just being turned back to the company. If your business (francisee) is still there, you have become a slave to it...an indentured servent!! 50-60 hour weeks...making no money...losing money hand over fist!! Don't quote me...but I think these numbers are correct. 50% of Blimpies, 15-18% of Quiznos, and 15% of Cold Stone Ice Creams have been turned back to the company!! Of course they will try and resale back to someone else!! Brian
SCORE has its place. Most of the counseling I did was for start-ups. That was simple. First question I asked was how much money do u have? Usually the meeting ended soon. Filling out business plans, pro-formas etc was the norm. In fact I did'nt have a face to face meeting until I saw a verifiable business plan. I did'nt want to bust their bubble, but cash is still king.
SBA loans usually are for the guy who wants a new benz fast.
I mentioned in an earlier post about my friend trying to sell his fat shacks (2). He was earning good money, but his brain was fried and his family was gone.
Running a midas muffler or jiffy lube means hands on and you usually need 2+ to make a living
Tutor children. Move furniture. Serve pizza. Sell flowers. Style hair. Repair cars.
That's what some small-business owners dreamed of doing in the Northern San Joaquin Valley. To make their dreams a reality, they and other would-be entrepreneurs turned to the U.S. Small Business Administration for financial backing.
And the SBA came through, guaranteeing their business loans so they could open a company or keep their existing venture going.
Unfortunately, things didn't go well for many of those companies.
At least 95 businesses defaulted on more than $5.2 million in SBA- guaranteed loans in Stanislaus, San Joaquin and Merced counties from January 2007 to May 2009.
Many of those businesses have closed, their phones are disconnected and their employees let go.
That's the case with Huntington Learning Center on Modesto's McHenry Avenue. It defaulted on a $313,267 loan, which the SBA gave up trying to collect in April.
The Huntington loan was one of this region's biggest SBA failures.
"For us, it was a tragedy. We lost one of our top producers," said Russell Miller, Huntington's national vice president of business development. For several years, the Modesto center generated more revenue for the tutoring company than any of its other U.S. franchises.
But in 2006, the Modesto franchise "sold to a gentleman who probably should not have owned a business," Miller said. With the SBA's financial backing, the San Francisco buyer paid top dollar for the fully staffed tutoring service and its clients.
Miller said before long, there were problems and the 16 tutors started leaving. Paying clients soon followed. Then loan payments stopped. The tutoring center closed last year, leaving the SBA liable for the loan.
The government agency also got stuck with a $568,262 debt left by the Southerlands assisted living center in A****er, $630,913 owed by Linden Associated Growers in Linden, $424,608 owed by Jimboy's Tacos in Manteca, and $167,480 owed by Max Muscle & Tanning in Turlock.
Most of the defaulted SBA loans, however, were for far less. Many were for existing businesses that needed more capital to keep going through tough times.
That was the case with McGrath Moving & Storage, which has been in business in Modesto since 1949.
"We've been struggling to keep our doors open," said owner Terry McGrath, whose company has about 10 employees. "When houses stop selling, people stop moving."
Two years ago, the McGrath company got the SBA to back a $50,000 loan it borrowed from U.S. Bank. But the local economy went from bad to worse, and the moving company fell behind on its payments last year.
"We were still trying to pay back the loan," said Mike McGrath, Terry's son. He said his company sent a loan payment as recently as June, but the bank sent back the money, saying the defaulted loan had been turned over to the SBA for payment.
The SBA had determined in February that the outstanding $45,507 McGrath debt was a "charge-off." Without informing McGrath, it paid U.S. Bank $23,352, the guaranteed portion of the loan, and classified the rest of the debt as something it could not collect.
Such a "charge-off" isn't supposed to take place until the SBA has exhausted all methods to get the borrower to pay what's owed.
"They get tired easy," Terry McGrath said of the SBA's efforts to collect. "They didn't even write us a letter."
SBA spokesman Mike Stamler said that because the McGrath loan was an SBA Express Loan it was made without the moving company putting up any collateral or personal guarantee to repay it.
Stamler said the SBA was satisfied that U.S. Bank did all that was possible to collect the loan from McGrath, so because there was no collateral to confiscate, "it is presumed there is nothing there."
"We haven't heard anything from them yet. We've been waiting," said Mike McGrath, who expected the government agency to put his company on some kind of repayment plan. He said he didn't know the loan was classified as a charge-off until The Bee told him. "I'm not convinced it's all over."
He's right about that.
"McGrath is still obligated for the debt," Stamler said. But it won't be the SBA that asks for the money. "The U.S. Treasury Department does the follow-up with collections."
