A friend of mine who is not a banker, yet has been involved in the financial world and is an educator made this comment to me. I think it’s great and worth sharing.

The quote has to do with predatory practices, and with the financial reform taking place, predatory lending is a focal point.

‘I hate the word “predatory” with anything related to economics, as it sort of absolves the “victimized individual” of responsibility for being stupid…’ MW

Predatory lending has a hype factor built into it as well. Lack of knowledge though is the real culprit; that’s why I’ve written “Barking With The Big Dogs”.

One of the biggest complaints about health care is costs. With the new health care bill, the talking points from the ones who want it are about lower costs. Talking points coming from the side that does not want the health care bill are about higher costs the new laws will create. In the end, all consumers want lower costs.

From business practices and seeing how competition works, competition leads to lower costs and innovation, which from a practical side won’t happen with the bill since competition, limited services, etc. are lacking and the government wants control.

In reality, efficiency is will lead to lower costs and can be done by both large and small businesses. I’ll get back to efficiency in just a minute, but for now. Let’s address something not in the health care reform. Lawsuits. (If we are going to fix the system, fix it all.)

No one wants to be sued, but apparently there is no such thing as an accident and everyone is to blame; at least that is a big perception of lawyers. Pharmaceutical and doctor practices are being reformed, but not the legal profession. Therefore, to go see a doctor, a referral must be given and endless forms to sign are necessary to “CYA” (for both liability and benefits purposes for instance).

However, when discussing referrals, this has happened to me twice!

First, when I had symptoms, I got all over the internet and discovered what I needed surgery for last year.

When I went to the doctor to describe the problem and what needed to be done, the doctor told me I had self-diagnosed myself very well. Okay, I don’t really have a problem getting a referral in this case, because I did want the doctor’s opinion to make sure what I had was right and was going to see the correct surgeon.

Next, a few weeks ago, I blew out my knee. Immediately I knew what happened. My knee was hurt in a big way. However, because I was out of town, my only choice was go to the emergency room and the time was during the evening or after hours. I didn’t mind going there, because I needed some help quickly.

This time, after X-rays, the doctor told my I had a knee strain, and my ligaments were strong, but gave me a referral to a specialist as well.

Once, again I got on the computer and did my research. I was positive the ACL was gone and maybe another ligament too. (Ligaments do not show up on X-rays.)

When I got home, I called my doctor, but couldn’t get in so I used the referral from the emergency room to schedule an appointment with a specialist. I also had to go get a referral from my GP doctor anyway for insurance purposes too.

After having all of the steps approved, I got to proceed. Then, after having a MRI, the ACL was torn and so was a meniscus.

Here’s the deal though and the point of the story.

I had to get a referral from a doctor to see a knee specialist when I knew I had a knee problem in the first place!

Without every looking at the internet, I knew the problem was in my knee, not my stomach, heart, head, ears, throat, etc. However, regarding my knee, the GP could only speculate since he couldn’t do the MRI anyway and the emergency room doctor was flat out wrong.

When I’ve had a blowout on my car, I didn’t have to go to the car dealer to get a referral to buy a new tire at the tire store, I knew what was wrong. The tire was gone. Therefore, when something is so obvious, why would I not be allowed to go to the source to fix the problem?

When I knew the knee was damaged, why not go directly to a knee and joint specialist?

With the first surgery, there were more possibilities and going to the doctor for confirmation is a wise thing to do. And sure, there are times when steps need to be followed, such as fraud and wasted time, but doctors are not infallible and all knowing, they are human too.

Speaking of wasting time, is a runny nose really an emergency worth wasting the doctors and nurse’s time and other people’s money just to avoid the GP?

The bottom line is efficiency will lower cost. Government bureaucracy sure won’t. Going to the doctor should eliminate steps and can do so, but when the obvious is at hand, why not get there the quickest way and save everyone money?

And one last thought on referrals; if I have to go see a doctor in my network, I know which knee doctors are available – they are on the list. I’m not generally going to get a referral outside my network. When having repairs done to the car, the insurance company says which auto body shops are on the list too. No referrals are necessary.

A little consistency and efficiency can make a huge financial difference; and referrals from customers (patients) who have had medical issues worked on would seem to carry more weight from a consumer standpoint. After all, when people recommend or do not recommend a business, the company can improve or someone else will.

Marketing is pretty simple. Sales. Well, not exactly.

I have spoken with many people, from business owners to HR personnel, about the subject of marketing. Many of the people in our conversations have a narrow view of marketing and generally relate marketing to sales.

Now, I would have to say marketing ranks at the top of any subject; and yes, nothing happens without sales.

Without sales, businesses do not need inventory, computers, delivery drivers, stockers and cashiers, computers, engineers, IT departments, accountants, etc. Yet the service of professionals and workers is not limited to business, nor is sales.

Sales must happen in non-profit business, schools and government institutions. These entities must solicit services or products to generate income. To give an example, the University of Texas at the Permian Basin offers a free, four-year education. Dillards, Best Buy and other retailers offer free services too. The idea is to get customers. Customers (students or the public) will spend money.

Other ways to solicit money is to ask for donations, investment money or get a loan. Even getting a loan requires pitching one’s self to the banker by showing personal financial statements or business plans in order for the banker “buy” your idea or needs. If you have ever been on a date or made a marriage proposal, you dressed up (or to the occasion) to promote yourself and asked the other person to go with or marry you.

As you can see, sales is in everything and eventually to close the deal, you must ask for the business, so-to-speak.

Going beyond sales, customer service and promotions, marketing includes more. Obviously, promotion includes sales and advertising, but also give-a-ways, rebates, etc. In order to know what amount of money or items can be given away or discounted, pricing is part of marketing and includes accounting functions.

The accounting side will take into consideration all costs, such as product costs, freight, commissions, rent, cost per mile (for delivery), utilities, depreciation, etc. in order to project the necessary amount of sales in relation to the changing margins from discounts and markup in order to break even or meet a desired financial goal. Therefore, to understand marketing, you must also understand accounting.

Moving from accounting and the pricing side of marketing, the next is place or distribution. The place is not just at the corner of 1st and Main, selling locally, but also includes the distribution of the products. Will you sell locally or regionally? Where does the supply come from? Imports, manufacturers, distributors, etc. Even manufactures must find their sources of materials, just as a bank has a pipeline for money and distributes throughout a channel. Speaking of distribution, will the products come by rail, LTL (less than truck load), ground or air service, etc. Do you buy by the box, case, or truckload. What are the dimensions of the container to know how the shipping will be priced so you can figure your costs? Service companies also distribute their products – fax, phone, e-mail, Fed Ex, online, etc. Can you download it? To sum it up, the place is a physical location but also a distribution method.

From distribution, pricing and promotion, the obvious thing to sell is the product itself. Is the product physical or a service. What makes one product better than another? Does the product satisfy a need or want and/or create a solution to a problem? Is there a demand for the product?

All products have life cycles…the initial or starting point, growth, maturity and decline. As a buyer once told me, “it’s not a sale unless it’s a saleable item” and a supplier stated, “don’t make my close-outs your close-outs”. Good points.

Ultimately though nothing happens without sales, but sales is just one aspect of marketing.

I was listening to a buyer ask the saleman, “Do I get a special non-profit rate?” to which the salesman replied yes.

That question has always been intriguing for a couple of reasons.

First, if I’m in line behind the customer getting the special rate for the same exact thing, why should he get a discount and not me?

We but the same things; we buy the same quantities, etc.

Just because a company says they are non-profit does not mean they do not make money. Non-profit companies have to make a profit in order to survive.  Without a profit on their products and services, payroll can’t be met and the utilities can’t be paid.

I’ve done business plans for non-profit companies and they buy products and resell them at higher prices, which is the gross profit.  Service prices are figured on the amount of people they serve and breakeven points on expenses too.

In reality, a big difference between the two business structures is a non-profit cannot pay shareholders; therefore, a solution is to pay more in salaries, which which is an expense, to disburse the profits.

Next, non-profits do not like to pay taxes.  Thus, the reason to be a non-profit is for tax status, not a goal for losing money.  The irony is for-profit companies pay taxes and can be a financial source for non-profit companies grant money, or subsidies.

Ironic maybe, funny – no.

The non-profit company wants lower costs and tax exemptions, but who doesn’t?  What struggling business wouldn’t want subsidies?  (The ones who realize their taxes pay them, I guess.)  Receiving lower prices and taxes exemptions can allow the non-profit company to stifle or eliminate competition – the very companies paying taxes in the first place.

The next time I see something like this happen, I’ll be seeing the manager of the company for the last time because taxes subsidize many things and people, and so do my purchases.

With all of the talk about jobs, the results of Obama’s efforts are not working.  In addition, massive taxes are on the way, Citibank has government ownership; we all know what GM stands for since the government took them over; bank and financial institutions, Obamacare, etc.  The list could go on and on.  After the inauguration, Obama has delivered on his “change” promises, that’s for sure, and reshaping America is happening at breakneck speed.

Is small business left behind?  Apparently since they are not unionized, I would say yes.  But there is more.

Take a look at the video I posted with an interview from the National Federation of Independent Business (NFIB) as well as read the letter from the Chamber of Commerce by clicking on the following link.  Chamber