Archive for December, 2008
December 31st, 2008
Check out barrymoltz.com for more good info as you move into 2009! He is a great buisness success motivator!
The formula for business success seems simple.
Okay, not so simple. Many of us get so caught up in our businesses on a daily basis that we don’t keep track of our revenue and expenses as well as we should. We don’t review our financial statements, project our revenues and cash flows as often as we can.
In this recession, we need to match every expense with a revenue source to increase our profitability. Ask yourself if every expense has a purpose. Examine every major item on your Profit and Loss Statement. Look especially at these categories:
1. Cost of Goods Sold (or Cost of Sales): Is this the lowest price you can get to produce the quantity you need at the quality your customers will accept? Can we reduce quality and still keep or grow our customers? The reality is that during tough times, we need to examine if there are “good enough” products will satisfy the customer. Are we providing excess quality the customer does not or won’t pay for?
2. Rent and other Utilities: Do you really need an office space or can your company go virtual? There are so many tools that are available that can enable communication among your team (Sharepoint, Groove, etc). If you are a retail store, you need to keep your space, but if clients rarely visit, is there a way out of paying rent? Rent usually accounts for 10% of the revenue of the company in major urban cities.
3. Marketing and Sales: How do you reach clients? Is that method providing a return you can track? What do you use specifically do to acquire suspects who may be interested? What is the cost? Forcing yourself to identify the return you get from all your marketing and sales efforts will ensure you are doing the right things to reach your customers.
4. People: Who at your company brings in the revenue? Who supports the revenue? Fire everyone else. If you keep other people to support the company’s “productivity”, test what that productivity actually is when they go on vacation. Furthermore, iIf you keep people around make you feel good, you are taking money out of your pocket and putting it into theirs. I hope it is worth it.
5. Phones and the Internet: When was the last time you checked your plan? Are you going over or under your minutes? Are you on the wrong plan? Use Skype more!
6. Health Insurance: Look at HMO options for your employees. You are not to bear the annual 20% increase every year. This is a burden you need to share with your employees.
7. Other Liability Insurance: Is the cost worth the risk you bear? Will the worst really happen? Consider cutting some of your insurance especially if you are a small company and there is not a lot someone suing you could take.
8. Office Supplies: Tell everyone its BYOS (Bring Your Own Supplies)! Forget the pads, limit the paper, and kill less trees. Your office will consume as many office products as you feed it. Set a limit.
9. Travel: Plan ahead for flights. Fly Southwest often. Use Frequent Flyer miles. Use Skype and only do face to face meetings when necessary. Combine trips so you can go to multiple cities at one time.
10. All Other Expense Items: If you zeroed out the other expenses, what would really happened to your business? Do without and see what happens. You will be surprised what you can do without.
December 30th, 2008
BEIJING — Consolidation in China’s battered steel industry took a step forward Tuesday with the planned merger of three major producers to create one of the country’s biggest steelmakers by output.
Tangshan Iron, Chengde Xinxin and Handan Iron said the merger will increase their market share and cut overall raw-material and research costs.
Shenzhen-listed Tangshan Iron & Steel Co. said it plans to merge with Chengde Xinxin Vanadium & Titanium Co. and Handan Iron & Steel Co., both of which are listed in Shanghai, through share swaps.
The merger of the three companies, which share the same parent company, fits with the government’s push to make its steelmakers more efficient, as well as to reduce pollution and energy consumption.
In recent years, China bulked up steel production to feed its booming housing market and to supply factories that were pumping out exports; the country is the world’s largest producer and consumer of steel. Now, amid the global financial crisis and the downturn in demand, the government is encouraging consolidation among China’s more than 1,000 steelmakers to deal with excess capacity. In November, Chinese crude steel output fell 12.4% from a year earlier, to 35.2 million metric tons. That production was 18% below October’s level.
The merger comes after Tangshan Iron and Chengde Xinxin’s parent company, Tangshan Iron & Steel Group, merged with Handan Iron’s parent firm, Handan Iron & Steel Group, in June to form Hebei Iron & Steel Group.
After their merger, Tangshan Iron will become the sole operating company of Hebei Iron’s major steel assets and will change its name. The company didn’t say what the new name would be or whether the merged entity’s listing would be on the Shenzhen Stock Exchange.
The merger of the three listed companies will increase Hebei Iron’s market share and cut overall raw material and research costs, the companies said. But they also warned low steel prices and slower economic growth may affect profitability.
Earlier this week, the official Xinhua news agency reported that Hebei Iron is raising its production target for 2009. The move shows Hebei’s “confidence in next year’s steel market,” it said.
In 2009, Hebei intends to produce 38 million metric tons of iron, 41 million tons of steel and 39.1 million tons of rolled steel; up from this year’s 30.1 million tons of iron, 33 million tons of steel and 30 million tons of rolled steel, Xinhua said.
In 2007, Tangshan Iron, Chengde Xinxin and Handan Iron produced about 21 million metric tons of steel products in total, compared with the 22.6 million tons produced by Baoshan Iron & Steel Co., China’s largest listed steel producer by output.
Under the share-swap proposal, Tangshan Iron will exchange 0.775 share for one share of Handan Iron, and 1.089 shares for one share of Chengde Xinxin.
The three companies’ shares fell on their trading resumption Tuesday, after being suspended since Sept. 5, partly because of the stock market’s decline in the past four months and also because of uncertainties surrounding the merger, analysts said.
Tangshan Iron’s shares dropped by the 10% daily limit to 4.10 yuan (60 U.S. cents). Handan Iron ended 8.8% lower at 3.52 yuan, and Chengde Xinxin closed down 10% at 4.95 yuan.
For Handan Iron and Chengde Xinxin’s shareholders who don’t agree with the share-swap proposal, Hebei Iron said it will offer them 4.10 yuan per Handan Iron share, and 5.76 yuan per Chengde Xinxin share.
Hebei Iron said it will buy back shares at an “appropriate price” from Tangshan Iron’s shareholders who don’t agree with the plan, but it didn’t give a figure.
Zhao Xiange, chief steel analyst at China Everbright Securities Co., said uncertainties about the merger weighed on the share prices, as the deal still requires the approval of the three companies’ shareholders, the state-owned assets regulator and the securities regulator.
Zhou Xizeng, an analyst at Citic Securities Co., also said Hebei Iron didn’t provide an asset-injection plan for the merged entity, which “remains a key question for investors.”
Separately, Liuzhou Iron & Steel Group said Tuesday it became a unit of Wuhan Iron & Steel Group, after the parties signed a letter of intent to cooperate in 2005. Wuhan Iron & Steel Group is the country’s fourth-largest steel producer by output, while Liuzhou Iron & Steel Group ranks 22nd.
—Juan Chen
Copyright 2008 Dow Jones & Company, Inc. Al
December 30th, 2008
Here is an interesting story about how one manufacturer said No! to Wal-Mart
http://www.fastcompany.com/node/54763/print
December 23rd, 2008
My friend, Scott Richert at The Rockford Institute, wrote an interesting article…here is an excerpt…”Ronald Reagan at least understood that, unless a country makes things, it has no economic independence. That’s why he was willing to act pragmatically, despite his own stated commitment to free-trade ideology”.
Here’s the rest of the story… http://www.chroniclesmagazine.org/?cat=6
December 23rd, 2008
An interesting article in today’s WSJ talking about weak job markets and some that remain strong. Here is an excerpt about….
Engineers in Demand
Engineering is another promising area for job hunters, says Art Lucas, chief executive officer of Lucas Group, a global recruiting firm. “Companies still need people who can come in and design products,” he says. “The manufacturing process also needs to be efficient, so people who have those technical engineering skills are always in demand.” Most sought-after are those who specialize in environmental, biomedical, civil, aerospace and industrial engineering, he adds.
More engineering jobs also are likely to open up in the next year or so, thanks to a proposed stimulus by the incoming presidential administration that will focus on improving infrastructure.
Some employers say they plan to fill more than just vacancies that occur in these critical areas in 2009. They also intend to create more positions and hope to benefit from the current job market’s vast talent pool. Among them is SRI International, a nonprofit based in Menlo Park, Calif., that specializes in engineering, public policy, life science and technology research. “This is a really good opportunity for us to grow,” says Jeanie Tooker, vice president of human resources. SRI will add about 100 new positions next year, mainly for research engineers, bioscientists, computer scientists, education researchers and software developers, she says.
Job hunters are also likely to find newly added positions at organizations that flourish in economic downturns, such as crisis-management companies, universities, career-services providers and law firms that specialize in bankruptcy.
New York-based CRG Partners Group LLC, which helps struggling businesses improve their operating and financial performance, has seen its revenue double in the past six months, says Stephen Gray, senior managing partner. “Demand for our services increases when companies get in trouble,” he says. The company has offices in nine U.S. cities and plans to expand its 100-person work force by up to 50% over the next six months, says Mr. Gray. Openings will be at all career levels, mainly for consultants, analysts and managers, and the firm has no plans to eliminate these positions when the economy rebounds, he adds.
School Still an Option
If you aren’t skilled in any of the areas that offer steady job prospects, it might be time to consider going back to school — particularly if you are in a field that is in decline. Not only will these types of jobs remain promising career options by the time you graduate, there may even be more available. The accounting, information technology, actuarial-science and health-care fields are expected to grow faster than the 7% to 13% average rate for all occupations by 2016, according to the Labor Department.
To help supply the expanding biotechnology sector with talent, North Carolina State University launched the Biomanufacturing Training and Education Center in 2007, says Rick Lawless, associate director of strategic support. Located in Raleigh, N.C., it’s also where big pharmaceutical companies Novartis Corp. and Merck & Co. Inc. are in the midst of building new biomanufacturing plants slated for completion in 2010. Mr. Lawless says about 500 jobs are expected to open up as a result.
December 23rd, 2008
My earlier post regarding the wealth creation of local area manufacturing…see it here….
http://blogs.e-rockford.com/manufacturing/2008/12/22/built-on-manufacturing-another-view/
was supported by the story written by RRStar staff in today’s news…see it here…
http://www.businessrockford.com/biznews/x1647202600/Workers-see-fatter-paychecks-in-2007
Manufacturing remains the top payroll generator than any other sector in the local economy…$2.4 Billion in 2007…yes, that’s $2.4 Billion. The next highest is health care just topping $1 Billion.
Don’t forget the multiplier effect, when we spend our money, it creates other’s wages which in turn gets spent on goods and services…until it goes round 5 - 7 times!!
By the way, the data shown in the newspaper edition shows that the manufacturing wages have been growing since 2001!
December 22nd, 2008
When I read the article headlined in this past Sunday’s RRStar Paper Edition, I said…hmmm. Here it is for your update, don’t forget the “photos” which are the charts…..
http://www.businessrockford.com/biznews/x16582006/Rock-River-Valley-Built-on-manufacturing-financed-by-much-more
I certainly agree that there has been a shift from the large manufacturing employers to other large organizations. But that was the end.
My observations about this article are several:
1. The basis for comparison in the above article is the tax base of various organizations. Admittedly, this information is easily obtainable. But is this the way to measure “wealth creation? Just because you have a lot of property, does that make you a “wealth creator?
2. When I saw the Airport Authority at the top of the list, I wondered…how many employees do they employ, as compared to the average manufacturing company in the Rock River Valley? (Answer: 100) .
Employees working in any industry generate a “multiplier” principal, something I learned, well, way back. It says, a wage will be spent on other things and that will generate other income, and they will spend on other stuff,…well you get the idea.
So what multiplier can you attach to real estate taxes? I guess we’ll have to ask John Lewis at NIU.
3. To see Wal-Mart at #2 position, well let’s see, it’s seems to me that manufacturers make more wages per hour than the retail person in Wal-Mart. So wouldn’t they (manufacturers) generate more wealth?
4. The latest data I’ve seen on RAEDC’s website still shows 21-22% of the workforce being in manufacturing, not the 17.1% shown in the article. Besides, according to John Lewis, there is conservatively a one-one relationship of supporting services.
While I don’t disagree with the premise of the article, I think it’s misleading to think that manufacturing is going away. Our region has too many small-medium companies that would fight to keep being a factor in our economy.
December 22nd, 2008
District 205, Mark Bonne, is making a great effort to inform students, teachers and counselors about Careers in Manufacturing. Their web site will undergo further improvements but a good start has been made. Check it out here…
http://webs.rps205.com/
Look at the left column and hit the “Manufacturing Careers” tab and look inside the next link.
December 20th, 2008
The Fabricators and Manufactures Association (FMA) Foundation, located right here in Rockford Illinois….merged with John Ratzenbergers’ Foundation Nuts Bolts and Thingamajigs. The Manufacturing Camps start here in Rockford Illinois became a focus for both organizations. It is a natural fit for them to come together! www.fmafoundation.com is a place to read all about it. But a fun note is this—John Ratzenberger has a new Hallmark Channel movie coming out today. Each time as he has been on TV and Radio promoting the new movie he gets to discuss his passion for manufacturing and the manufacturing camps. The response to this has resulted in his web site crashing, his servers crashing, the servers that serve his servers crashing and the FMA website almost crashing…..lots of interest for the future of manufacturing!
Way to go Supplycore MARRV! The first time we met with Peter Provenzano about his interest in quoting the FASI program it was exciting. To see them work so hard and land this 4.4 Billion dollar award (over the next 10 years) is GREAT! Congratulations to David, Megan, Peter and the rest! I hope the Manufacturing community can step up to help make it a success!
Merry Christmas to the local Manufacturing community! What a year we have had….In 2009 I hope you can find ways to partner with other RRV manufacturing companies so that you can be successful, make your present customers successful and make your partnerships look attractive to potential new customers. Looking together to find ways to service new markets is going to be the key! Keep your eye out for the Titanium event 2/3/09 sponsored by Supplycore MARRV and the Rockford Chamber Manufacturing Council. Other global events and new market opportunities sponsored by those who support manufacturing in this region… and don’t forget to ENJOY!
December 19th, 2008
Despite tough economic times Woodward continues to be a leader in the community. A partnership with RVC created the Golden Eagles Manufacturing (GEM) program. The program, akin to the old Woodward Academy, couples part-time work at Woodward with full-time school at RVC. The first graduates celebrated their two years together with a ceremony in RVC’s atrium. The graduates have the option of now working full-time or continuing their studies.
Even with the current economic conditions Woodward remains committed to continuing the program and will be looking for a new set of recruits. Upcoming high school graduates would be wise to call RVC Associate Dean Rich Gocken (pronounced go-kin) at 815.921.7821 to find out more information. RVC’s website is another source, too.
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