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

Investments and the Debt Ceiling Debate

You may be concerned about the impact of the debt ceiling on investments. Polls are showing that 70% of Americans do not want the debt ceiling raised. This is interesting, and completely untenable. The US government currently has a structural deficit. It spends more than it takes in each day. Sadly, this is not new. This has been our post WWII practice for the most part in times of recession or expansion.

We cannot afford to default on our debt as this would send interest rates the federal government pays on its debt skyrocketing, making the deficit worse. With the world economy in malaise, the US is currently benefiting from the worldview that we are the safest place for money. This means around the globe investors have been willing to buy US debt at every low interest rates. That is an advantage we want to keep.

The only short term option is to raise the ceiling. Politicians know this. What you are seeing in Washington is political maneuvering to determine who gets the blame and who gets the credit in the next election.

No one is strong, be it governments, companies or individuals, when they continually spend more than they make. The most practical way to reduce our deficit is to cut spending and raise taxes. US income tax rates are at historical lows, and are full of inequitable loopholes or more correctly stated, pot holes.

We have to look to all parts of the budget for cutting and sacrifice. We cannot all have our part of the pie unscathed. This is the price of binging on debt. When individuals do it, they must ultimately tighten their belts and do without until they reduce their debt. The government must to do the same.

The media loves to point out that Social Security is going broke. Yet study after study shows that fixing Social Security is pretty easy. If we eliminated the wage ceiling on taxes and meaningfully raise the retirement age, the Social Security issue would be solved for years to come. The answers are within our grasp. They are unpopular and require Congress to act in ways that may not play well in the next election.

We also need to restore the power of the President to cut pork spending that Congress pads into legislation. Every President, Democrat or Republican needs this power. Congress has proven incapable of compromise that does not include favoring those who put a price on their votes by adding pork for their districts. This must be stopped.

At Mackey Advisors we use a diversified, asset class approach to investing. That means your portfolios are well balanced, holding a variety of asset classes, from large cap US stocks, foreign stocks, real estate, commodities and bonds. Our current bond allocations US Treasury debt, corporate debt, foreign debt and mortgage debt.

Our investment approach is to look for long term trends that add value to certain market sectors and to overweight those sectors. Short term, markets will do what they will, and in times of uncertainly that means volatility. Historically, patient investors are rewarded for being non-reactive to the short term noise. We advocate and encourage this path.

What can you do?

Call or write your Congressman and deliver a clear and concise message that you want to see the debt ceiling raised, along with a bi partisan plan for significant and meaningful debt reduction.

It Takes All Kinds

With so much content coming at us on a daily basis from TV, Magazines, Radio, Websites & Blogs it’s hard to know where to turn for valuable, honest & entertaining information. I have scoured (googled) the internet for the best (first page results) green blogs out there and this is what I found….

• Coming in at numero uno on the hippy hardcore scale is "No Impact Man" a blog started by Colin Beavan in 2007 when he and his family decided to go off the grid for 1 year in the middle of NYC. Since then there has been a "No Impact Man" book & movie. Below is a link to an article on how to setup & maintain your own worm composting operation.
  • No Impact Man: Worm Composting
    http://noimpactman.typepad.com/blog/2011/05/slimy-pets-to-eat-your-garbage-and-entertain-your-kids.html
• Second on my list is a hard-working DIY blog called "Young House Love". Sherry & John Petersik are full-time bloggers. They do not consider their site a green blog, but they have a love of reuse & a fair amount of articles they wrote about how to make your own rain barrel.
  • Young House Love: How to Make a Rain Barrel
    http://www.younghouselove.com/2009/03/how-to-make-a-rain-barrel/
• Last, but not least is a fun, free spirited blog composed of small, crafty activities to keep you and/or your children entertained. The link below goes to an entry on how to make your own bat house. Bats are a great green way of keeping the unwanted insect population down around your home.
  
  • Crafting a Green World: Build a Bat House in Your Backyard
    http://craftingagreenworld.com/2011/06/13/how-to-build-a-bat-house-in-your-backyard/

Whatever your green goals are there is a blog out there for you. Go toTechnorati.com to find more blogs that may tickle your fancy.

Gracie Mohr

The Price of Dying

We're going to talk about death and dying in a moment, so you might want to prepare yourself with a short break that you might find entertaining. You might even try dancing along with this video by motivational speaker Sean Stephenson: http://www.youtube.com/watch?v=TAibh3SqRUo.

Funeral costs have risen so far and so fast lately that people who have been through it tell what may be the unfunniest joke in history: they say that dying has become so expensive that nobody can afford it any more.

One reason for these cost increases is that many people fail to plan for the funeral, the burial plot or cremation, the flowers and everything else before the fact. Suddenly, the grieving family has to make complicated arrangements, and in the highly-emotional moment, they are in no mood to bargain over the cost. In fact, it was so easy for funeral directors to sell unnecessary add-ons during these moments of vulnerability that the Federal Trade Commission created a "Funeral Rule" which requires mortuaries to present a price list of services to consumers before showing them products such as caskets. More recently, the FTC has created not one but two brochures, one that summarize the rights of consumers (http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro26.shtm), another that functions as a guide to planning funeral arrangements from a consumer standpoint ( http://www.ftc.gov/bcp/edu/pubs/consumer/products/pro19.shtm). Among the little-known regulatory provisions: a funeral provider may not refuse, or charge a fee, to handle a casket you bought elsewhere.

Why do people fail to plan? Children of aging parents are often reluctant to bring up the difficult subject of death, even though in many cases the parents would greet the discussion with relief. Spelling out the funeral preferences is not normally part of a person's will or estate documents, and few people understand their choices, which can be complex. Do you want a traditional full-service funeral which includes a viewing and formal funeral service (the most expensive option), a direct burial (no viewing and therefore no embalming) plus a graveside memorial service, or a direct cremation?

And if you do use a funeral home, which one should you use? The nonprofit Funeral Consumers Alliance (FCA) has estimated that the exact same package of services at different providers can cost anywhere from $2,500 to $6,000. The FCA is offering a new book, "Final Rights," which offers tips on how to navigate what it calls the "death industry," which takes in $15 billion a year.

Having this conversation could not only save money for the heirs of loved ones; it could also reduce the confusion and emotion around making difficult decisions at a time of grief. It can be part of the discussion about a medical power of attorney – another important safeguard of everyone's well-being.

by Andy Pulsfort

Leverage Technology to Increase Productivity

If you are looking to increase productivity (and who isn’t?), consider upgrading the use of technology in your business. Implementing and learning to use new software and hardware will be well worth the investment of your time. Just ask one of the many trailblazing small business owners who have already done so. Here are three options:

• Mobile Apps
  • According to a recent survey conducted by TechnoMetrica for the Small Business & Entrepreneurship Council, an estimated 1.28 million small business owners are saving 372.8 million owner hours a year by using mobile applications or “apps”. They’re also saving an estimated $17.6 billion on employee payroll. [1]
  • Mobile apps allow you to perform a variety of office functions from your mobile device, leading to increased revenue and more time to devote to other tasks.

• Cloud Storage
  • Have you heard of the cloud? It’s what we call online or virtual servers that store your information so that it can be readily accessible from anywhere with an internet connection. It also ensures that your data is protected in the case of computer failure.
  • A recent survey by cloud provider Egnyte, Inc. reveals that small businesses have led the trend toward cloud file storage, but larger businesses are starting to follow suit.[2]

• Social Media
  • In the past few years social media has emerged as a great way to quickly and cheaply advertise your business and increase your marketing scope. The key is not only to have a presence in media networks like Facebook but to incorporate it into your marketing plans.
  • According to The Business Journal, 68% of business owners over 40 use a social network, but only 47% incorporate social media into their marketing plans.[3] Put your business above the crowd by making social media work for you!

[1] “Saving Time and Money with Mobile Apps.” May 2011. .Conducted April 21-27, 2011. A total of 304 surveys were completed with an overall margin of error of +/-5.7 percentage points at the 95% confidence level.

[2] “Small Businesses Trail Blazers in Cloud Storage.” June 6, 2011. . 6,500 users were surveyed across the United States, and 4.5 million file operations were tracked in a 24-hour period.

[3] “What’s Age Got to Do With It? Plenty.” June 6, 2011. .

9 lessons from Jell-O about High Performing Teams

In my Vistage meeting a few months ago, a fellow CEO spoke about his theme for the year. The idea resonated with me, so I spent some time thinking about what “theme” would support Mackey Advisors in reaching our goals for the year. What I can up with is, To Gel.

We have tons of talent and initiative. We have great technology and systems. It seemed to me that the only possible roadblock to achieving our goals was to move from being a group of fantastic individuals to a high performing team. Thus the theme, To Gel.

I kicked off the campaign by purchasing a package of Jell-O for every person in the office. It was Valentine’s Day and I arrived early and put all the packages of Jell-O out on the conference room table, so people would see them when they came in for the Monday team huddle.

To make it fun, I decided to make it a participative opportunity. So I announced the theme, To Gel, and went on to explain that each week we were going to explore the question, what does Jell-O have to do with a high performing team?

When it was your turn, you would give us your ideas on how Jell-O modeled a high performing team and you would make a package of Jell-O. Not only did we learn a lot about high performing teams, we also learned a lot about each other. The insights were great and it was fun!

Here is quick rundown of the lessons we learned from Jell-O:

Commitment: Jell-O is committed to sticking together and hanging onto its shape. -Mackey

Structure is required: Jell-O needs structure to give it shape just like we need policies and procedures to let us do our work more easily and efficiently. -Grace

Team mentality: Jell-O sticks together to hold its shape. -Tom

Resilience: Jell-O bounces back. -Andy

Be more than just Jell-O, be unique: you can use Jell-O in many ways to create different things, just like we are not just accountants. -Natalie

There’s something for everyone: we don’t offer just one service like Jell-O doesn’t come in just one flavor. -Justin

Consistency based on manuals: anyone can make Jell-O if they follow the directions, just like our manual allows anyone in the office to work on any of the different projects because we know exactly what needs to be done by having directions. -Laura

Marketing and branding: not everyone likes Jell-O but through their excellent marketing and branding they can have many different types of products all associated with the brand name, just like we have many different services under our name. -Caroline

Be a star: Jell-O takes something ordinary and allows it to be shaped into a star just like we can take someone ordinary and help them to become a star in their own life. -Julie

Who knew Jell-O had so much to teach us at work?

May you find the theme to rally your troops and achieve your 2011 goals. As always, we are here to serve you in expanding and growing your wealth and prosperity. Please let us know if we can help.

Mackey

Practical Prosperity: May 2011

The Unexpected Recovery

Did you know that the Internet can now read minds? Here's the proof: http://www.youtube.com/watch?v=Hc1WXBtum2o&feature=related.

Just two months ago, the world celebrated an unusual two-year anniversary: 24 months from the low point in the global markets, the point of maximum pain and panic following the 2008 economic meltdown and so-called Great Recession.

On March 9, 2009, the S&P 500 had fallen to its low of 676, which is about where it had been in October of 1996--13 years before. Since then, the S&P index has gone up about 107%, bringing it within 13% of its record high in 2007. The Russell 2000 index, which tracks small cap stocks, has gone up 139% in the same period, and the MSCI Emerging Markets Index is up 149%.

If you look back at the economic forecasts and market reports in March two years ago, you don't find, anywhere, a prediction that the markets would recover as they have. There was even some doubt whether the U.S. economy would survive intact, and the most common prediction was deflation, continued recession and more downside in the stock markets.

In retrospect, this most frightening time was the ideal time to shove all the chips on the table and bet everything on a stock market recovery – but who had the intestinal fortitude for that? After the losses that virtually all investors had sustained, no matter where they had deployed their assets, few had the stomach, or the heart, to bet on a robust recovery. This is a terrific lesson in the value of disciplined investing; the consensus and our own gut feelings are often wrong and inevitably point us in the opposite direction from where the returns are going to come from next. In the past, every long-term upturn has been greater than the losses sustained in the prior bear market. We don't know how this one will end, but it seems to be following the same seemingly unlikely, but not unusual, course.

As an investment advisor, it pleases me to see that clients stayed the course with us. The investment world is more complicated now than ever, which makes it even more fearful for many. High yielding, United States value stocks are still great investments, however as the United States slips in world market share, dozens of additional asset classes must be considered part of the mix.

At Mackey Advisors™, we would love for those of you who have not been introduced to our investment philosophy to stop in and see us. For those of you who take the “do-it-yourself” approach, never leave a stone unturned. There is opportunity abounding everywhere, even in a changing global economy, so seize the moment and let prosperity thrive.

By Andy Pulsfort