The Future is Your Decision

From our July 2011 Creating Confidence Newsletter.

Last Tuesday the 12^th, I spent the morning at the Vistage All City meeting. Our speaker was Brian Beaulieu, a respected economist from the Institute for Trend Research. Brian’s talk, The Future is Your Decision, offered perspectives for CEOs and individual investors based on his trend research.

I found his information useful and have summarized his thoughts below.

Overview

There are 3 mega-trends to be considered when making decisions about your businesses or when investing:

1. Demographics, the World and the US have increasing population. More people = economic growth
2. Inflation, not hyperinflation, but easily 4.5% to 6%
3. Taxes are going up

2011 and 2012 will be periods of modest growth, with continued high unemployment. At the same time, it will be increasingly difficult to fill certain knowledge based positions because our workforce is a) immobile due to being unable to sell their existing homes and b) inadequately trained for the type of jobs available.

2013 and 2014 will likely be a modest recessionary period like the early 1990’s but not as deep as 2008.

Commodity prices are on a temporary rest. 2012 will see increasing commodity prices on items such gold, copper, oil and agricultural products.

The US represents 26% of the world economy. While we are the largest economy in the world, our share of the pie is growing smaller and opportunities exist in emerging economies for investment and doing business. Think Brazil, Australia, and India.

There will be ongoing weakness of the US dollar.

Housing will no longer be in recession but will not be in recovery. Over the next 5 years people will rent and not buy.

Interest rates will remain low and may creep up in 2012 and 2013. A 2014 recession may provide a temporary restraint on rates. Currently we have the lowest rates we will see in our lifetime. Borrow long term, taking advantage of fixed rates now and repay with cheaper inflated dollars.

Remember that normal today is tomorrow’s abnormal.

For Businesses

Look for customers in these growth segments:

• Exporters
• Alternative Energy
• Health care
• Professional services such as law and accounting
• Higher education
• Overseas in India, Brazil, Canada and Australia

Inflation will hit the labor market in 2012. You will need a strategy to employ a mobile workforce. Training programs are more critical than ever, given that you may not be able to find the skill you want in the workforce.

This is a good time to buy other businesses. If you have not positioned your business for sale, you likely do not have time to do so before the next recession. The next good selling season will be 2017 and 2018. Position now to be ready.

Do not let the pain of the past color your vision for the future. Find a sector of your business that is entrepreneurial and expand that segment.

In periods of inflation, metrics and monitoring are critical.

If you cannot raise prices, sell that business unit. Raise prices more frequently and in smaller increments. Think 1% to 1.5% per quarter instead of 4% a year.

For Individuals

The stock market will continue to be volatile thru 2011. Brian is bullish on 2012 and then expects a lackluster market. Position portfolios to take advantage of the 3 megatrends noted earlier.

Invest globally and position your portfolio to include commodities and other investments that do well in periods of rising interest rates and inflation.

Refinance your home if you have not already done so. If you are young and have equity in your home, consider borrowing the equity and investing it outside your home.

Summary

Brian closed with a quote from Dr. W Edwards Deming. “It isn’t necessary to change, survival is optional.”

That sort of says it all. If you can’t love change, at least accept it and position yourself for it. As with any of these ideas, it is best to a) run the numbers for your personal situation and b) consider the impact based on your personal goals.

As your Wealth Advocate, we are here to guide you and your business thru the coming changes. If you have questions or need our assistance, please contact me at Mackey@MackeyAdvisors.com or our team at 859-331-7755.

May prosperity be yours,

Mackey

Banking News You can Use

From our July 2011 Creating Confidence Newsletter

Your regularly scheduled Go Green article has been interrupted for this important announcement…..

Last week I attended Vistage’s All-City Meeting. It’s a day of great presentations & great networking opportunities. One of the last speakers of the day was Mike Prescott, President of US Bank. I believe he was supposed to speak about the recession, but what I got from him was so much more valuable.

First & foremost he spoke about four cheap services that can protect your bank accounts from fraud. I honestly didn’t even know these existed, but now that I do you can bet your sweet bibby Mackey Advisors will be utilizing these services!

1. ACH Block: ACH blocks are the simplest of all the products to use. They allow companies to notify their banks that ACH debits should not be allowed on certain accounts. With a block in place, no ACH debit, even one that is authorized, will be able to get through on a given account. Everyone is advised to put blocks in place on all accounts where ACH activity is not likely to be used. Quoted Source

2. ACH Filter: An ACH filter allows organizations to give their banks a list of companies authorized to debit their accounts. The banks will then “filter” incoming debits and allow through only those that are on the list submitted earlier. This filter does not check for dollar amounts or whether the particular transaction has been authorized, only that the company doing the debiting is on the approved list. Quoted Source

3. Positive Pay: Positive pay is a service whereby the company electronically shares its check register of all written checks with the bank. The bank therefore will only pay checks listed in that register, with exactly the same specifications as listed in the register (amount, payee, serial number, etc.). This system dramatically reduces check fraud. Quoted Source

4. Reverse Positive Pay: Reverse positive pay is similar to positive pay, but the process is reversed, with the company, not the bank, maintaining the list of checks issued. When checks are presented for payment and clear through the Federal Reserve System, the Federal Reserve prepares a file of the checks' account numbers, serial numbers, and dollar amounts and sends the file to the bank. In reverse positive pay, the bank sends that file to the company, where the company compares the information to its internal records. The company lets the bank know which checks match its internal information, and the bank pays those items. The bank then researches the checks that do not match, corrects any misreads or encoding errors, and determines if any items are fraudulent. The bank pays only "true" exceptions, that is, those that can be reconciled with the company's files. Quoted Source

Secondly, he spoke about 8 questions to ask yourself when choosing a banker. I feel you should ask all of these questions about any company or person you go into business with, whether personal or professional.

1. Do I trust this person?
2. Do I like this person?
3. Does he/she understand my business?
4. Does he/she add value to my business?
5. Is this person an Advocate for me & my company?
6. How is this individual viewed within his/her company?
7. What sales method are they using? Is there transparency in the sale?
8. What is this person’s next job (e.g., promotion within current company, move to a similar company, retiring, changing career paths)?
9. (Personally added) Does this person align with my values?

Thank you Mike Prescott for handing down your worldly banking wisdom. It will not soon be forgotten.

by: Gracie Mohr

Creative Ways to Cut Costs

From our July 2011 Creating Confidence Newsletter.

1. 1. Go paperless

Choosing email over mail, and electronic file storage over printing, can save you money on paper, ink, postage and more. There are free online project management tools that can help you organize your documents and share them with your team members, making your business more efficient.

2. 2. Pay bills on the due date

When you pay late you incur fees, but when you pay early you’ve unnecessarily limited your cash flow. Pay on time, every time, and maximize cash.

3. 3. Tackle your receivables

Identify your slow-paying customers and get proactive. Offer an incentive to those who pay quickly. If you accept credit cards, you should shop around for the best price on payment processing. And send out invoices as soon as the product has been delivered or the service completed. Why wait?

4. 4. Hire a student instead

College students will work for less, or just for course credit, and you can hire them on a short-term or as-needed basis. Set one to work and you might just be getting a bargain.

5. 5. Review your insurance coverage

Are you still paying to insure assets that have been sold? Are you over-insuring on the ones you still have? How much might you save by increasing your deductibles?

6. 6. Don’t make seminars a group event

Instead of having several people attend a seminar, save money by designating one person to go, and then report back to the team on what they learned.

7. 7. Program your thermostat

You may have heard this before (thanks Grace!) but it works just as well in the office as it does at home. And while you’re at it, make sure everything is turned off when no one’s in the office.

8. 8. Make your advertising expense go further

Whatever your chosen method of advertising, make sure you include a coupon, special code or offer and encourage people to use it. That way you will know which marketing strategies are the most effective, and you can eliminate the ones that aren’t.

9. 9. Make the most of your office space

Consider cutting back on non-essentials and moving into a smaller office space. And if that isn’t feasible, you can rent out that extra desk to a local entrepreneur for some extra cash.

10. 10. Design and print your own business cards

Save money and make a statement. This would be a good project for that new intern.

11. 11. Compare profit margins

Calculate the gross profit for each product or service you sell. Then focus on the ones with the lowest margin and consider discontinuing them, allowing you to focus your efforts on your more profitable segments.

12. 12. Assess your inventory

Do you have old or obsolete inventory? See if it can be sold, or even re-worked into something useful.

For continuing assistance with cutting costs and growing your business, consult your Wealth Advocate at Mackey Advisors.

by: Laura Pratt

Strategic Decision Making

by: Mackey McNeill

Throughout New Year’s Day, I began to emerge out of “holiday time” and into “business focus time.” As the possibilities of the new year began to take shape in my mind, I found myself both excited and overwhelmed. In my entrepreneurial world, there are always so many options and possibilities.

The really good news is that I love what I do and the people with whom I work. For me, this means that the lines between work and play are sometimes blurred, as work is a joy. The downside is that I can get carried away by my enthusiasm, over-commit to action and put my entire team into overwhelm. This quickly turns joy into chaos.

Over the years, I have created chaos more times than I care to admit. Thankfully, I have also matured in my entrepreneurial capacity. Wisdom has come with age, along with the ability to use it consciously and deliberately to shape my future. I have developed three qualifying questions to sort through my ideas before committing to action.

First, I ask myself: Does the idea forward our strategic plan and is it in alignment with our three, five and ten year goals? Most of my ideas fail to survive this question. They may be exciting, fun and innovative, but do little toward meeting the firm’s goals for the coming year or beyond. They are quickly dispatched to the round file.

For ideas that survive the first cut, I ask: Do we have the capital in terms of money, personal time and team time to take this idea from imagination to results? If I am unable or unwilling to commit the necessary resources, this tells me that while it is an interesting idea, I lack the passion to make it successful. Again, to the round file.

My third question revolves around balance and fairness: Is the idea fair to those who are impacted by it? This question is especially important when I am faced with decisions brought on by recessionary pressures like those in 2009. In that particular case, when all other options are exhausted and the decision comes down to cutbacks in wages, benefits or hours, I ask: Are the cut backs fair and balanced across all levels of the organization?

Those ideas that survive my three-pronged attack move into the action realm. What must I do over the next three to five years to make this idea a reality? What must I do in 2010? What must I do in the first quarter of 2010? What must I do tomorrow?

Once an idea turns into an action plan, it may or may not manifest. If the energy builds as it develops, we nurture it into reality. If the momentum wanes, we let it fade without forcing or subsidizing it.

At the end of this process, I am left with a few precious, well deserving seeds that, when planted, will create an abundant future for Mackey Advisors.

May the New Year bring you an abundance of ideas, and a few precious seeds deserving or your time and attention. May your prosperity increase with grace and ease in 2010.

Quit Whining and Get Financially Healthy

Rarely does a week go by that I don't hear about some small business person who cannot get a loan. PLEASE! The main reason we are in the mess we are in now, is that access to credit was too easy. If you could fog a mirror you could get a loan.

Now you have to actually be credit worthy. For a small business owner, that involves going the right things financially, like building equity either from your personal funds or from retaining earnings in the business. It means managing your business. Treating it like a business and not just a job.

Today if you have a healthy balance sheet, you can access credit. If you don't, instead of complaining about it, why not just get busy doing what you need to do to make yourself credit worthy. Lower your debt. Build your equity. Manage your cash flow. Watch your numbers like a hawk. Grow your market share.

Quit whining and get busy!

Mackey McNeill, CPA/PFS
Mackey Advisors
www.CultivatingProsperity.com

Growing through the Recession

At Mackey Advisors we have two main lines of business. Our personal financial planning division and our business services arena offering financial advisory services to small businesses in the area of tax, accounting, Controllership and CFO consulting.

As President of the company, the bottom line is my responsibility, which has been no walk in the park this year. I have updated our revenue forecast and reprojected our budget more times this year than in all the 27 years of my business career combined. As business clients cut back their budgets, some cut their service level with Mackey Advisors. We took that time and repurposed our efforts to marketing.

Having more time to tell our story has paid off. We are now experiencing a higher level of growth than at any time in our 27 year history. Recession? Maybe it is just another word for opportunity.

Mackey McNeill, CPA/PFS
President and CEO
Mackey Advisors
www.CultivatingProsperity.com

The Most Important Thing

For 2009, at the top of every CEO’s financial goals, should be one thing, survive.

Staying cash flow positive and preserving capital is the name of the 2009 game. There are brighter days ahead, and your company will benefit when they arrive. …. if you are still in the game and on the playing field.

Challenging economies make for difficult decisions. This week Mackey Advisors CPA chose to lay off a new hire to insure our survival and long term health. Last summer, we hired for growth based on our strategic plan. Today and in the near term, the economic environment is not supporting our plan. We could have stayed the course, and burned through precious capital, putting us in a weakened state for the recovery. Instead we chose to trim back to profitability. This decision offers the company the ability to maintain its strong balance sheet and allows us to continue to invest in technology and other resources to improve effectiveness and efficiency.

And while all the numbers support the decision, there is also the emotional carnage from a layoff. People are personal and it is hard to make a termination decision. This means listening and being present to the concerns and fears of the team with open and transparent communication.

The first goal of the business is to take care of the business. Some of the other moves we made (and are still making) this year to preserve cash while at the same time aligning the company for the opportunity that will come from the economic recovery are:

• cut the fat -we have carefully looked at our overhead and trimmed fat, careful not to slice into any muscle
• reduced CEO compensation
• increased our service to clients (our goal is that none of our clients go out of business!) without raising our fees by leveraging our time with web technology
• frozen pay short term
• added to our knowledge by learning more about web marketing
• monitor receivables like a hawk

The mantra for this year, yes we can. Will you join us?


May prosperity be yours,
Mackey McNeill, CPA/PFS IAR
President and CEO
Mackey Advisors
www.CultivatingProsperity.com
859-331-7755
Mackey@CultivatingProsperity.com

The world is different

Things have been changing and until this recession few were noticing. The recession is a wake up call. Especially for those of us in business. We must begin to think differently.

I recently received an e mail with a Tom Peters post that said it well.

click here to read the post

May prosperity be yours,
Mackey McNeill, CPA/PFS

President and CEO

Mackey Advisors

525 W 5th Street Suite 318

Covington KY 41011

859-331-7755

Mackey@CultivatingProsperity.com