In today’s challenging environment employers are taking a hard look at which employees help generate income and which ones are what some refer to as fluff or puff.

Income generators are treasured because they are a critical part of the team relied upon to help the company stay afloat. Other key team members are those that produce the products/services, develop and implement procedures for company efficiencies (make things run smoother and save money) and those that help the company build strong working teams to position the company to attract investors and/or lenders to stay afloat.

Take former BET CEO, Robert Johnson or Apple Computer’s CEO (currently on leave), Steve Jobs. Their innovative ideas and income generation strategies put their companies on the map many years ago.

Johnson and Jobs had tremendous vision and dedication, but are there strategies for others who do not wish to take on the risks of business ownership?

Be worth more than what you are being paid
Make sure your employer can determine his/her returns on the salaries you are being paid.

In other words, understand what department your salary is paid from, how it is being justified (i.e. is it a percentage of the sales you generate or are you paid based upon the division’s overall performance or based upon some budget figure from several departments).

You are in a positive position if you have unique talents and skills that can’t easily be replaced and you take the time to research your options both within and outside of the company.

Bottom line, make sure you are adding value to the company that employs you and know your worth or rest assured you will not have to worry about scheduling vacations or punching a time clock ~ you will be on permanent unpaid leave.

Ethical behavior is back in style
With the Enron and many other scandals and the implementation of Sarbanes-Oxley and company-wide anonymous whistle-blower hot-lines, ethical behavior (at least on the surface) appears to be coming back in style.

It’s amazing that bad, unethical decisions companies made affected hundreds of thousands throughout the country and the world. Take the bad decisions that were made extending loans to individuals who the lenders clearly realized were not in a position to pay-off loans and often times used fraudulent documents to approve these loans.

Don’t be one to let commissions or a thought of continuing employment cloud your behavior. A simple fudge or oversight can easily be viewed as criminal intent in the eyes of a fraud investigator.

Clearly in many instances, this unethical behavior (maybe not illegal if they followed the actual rules in place at the time) has caused the markets to falter and we are still experiencing the fall-out from these bad decisions.

Do the right thing to avoid not just firing, but to maintain your solid positive personal reputation.

Remember, if you get released for unethical behavior this might prohibit or lengthen the time it takes for you to find new employment.

During challenging times whistle blowers are in full force and if the company offers rewards, this would be just the incentive needed to convince someone to tell (snitch).

Loyal customers stick around
Do you want to increase your chances of keeping your job in a down-turn market?

Help be part of the team who caters to the customers because loyal customers refer others and stick around, even when times are challenged.

It’s great if customers write in positive experiences they have with you as an employee and how this helps them spend money with your employer.

Continue to perform quality service, even when there are reductions in staff adding to your work-load. You will hopefully be rewarded with continued employment and/or an opportunity to jump ship if someone views you as a team member they want to have at their company instead.

Try to document the value you bring to your clients and if you are able to increase customers and create more efficient ways to serve them. I’m not suggesting that you should waive a
flag and remind your employer everyday that you’re a great client attraction magnet, but certainly have relevant documentation of positive customer experiences ready to discuss during annual reviews.

Remember, creating efficiencies with the work you perform and helping the company make more money and cut expenses will help in the long-run and might save a job or two (hopefully yours).

Employee’s Loyal Tendencies
There used to be a time when employers expected employees to be loyal if they treated them fairly and provided a stable work environment.

Employers now evaluate employees on what some call “loyal” tendencies. In many management circles, an employee’s performance expectation is based upon whether you’re a short-timers or a longer team player. There is an understanding by most employers that the term loyal employee refers to someone who will not disclose trade-secrets, will hang around as long as they are making a competitive salary and have work and fellow co-workers who interest them.

During more positive economic times top performers are always being recruited by other companies so employers typically determine the status of a prospective employee during the interview as a:
- Job seeker who can’t find work elsewhere within their chose profession.
- Climber who is only interested in building a resume.
- Hard worker interested in finding a better opportunity.
- Name dropper impressed by the company and who he/she might be able to affiliate with if hired.
- Seeker who has evaluated the company and determined that he/she can add value and fit-into the company

Speaking to many clients they tell me that it’s the co-workers and office culture that attracts employees to a particular company and if you want to be successful you should seek to find an employment situation that is mutually satisfying and if you are in-between opportunities take what’s available and seek a better opportunity.

Genevia Gee Fulbright, CPA is President & COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com.

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Before she visited with me she had already gone through most of the grieving stages of a job loss including confusion, shock, anger, guilt and fear. Sue now felt hopeful that the time might be right for her to either start her consulting practice or sign-up to take a few more classes to obtain additional certifications to prepare her for a career change.

Sue finally asked the critical question, “What about the government’s stimulus package, should I wait because I have not had time to determine if I will benefit?”

Have you developed your action plan?
I’ve talked often about how critical it is to establish a direction for your professional life and create an action plan to handle your finances and income opportunities.

Establishing a Plan B or a fall-back plan is one segment of your action plan. You never know for sure if your initial projections and circumstances for your initial strategy will go as planned.

This process is not easy, but to start…

Rank where you are in your career considering your skills, education, training, etc… (using a scale of 1-5 with 5 being best ~ i.e. 5 meaning that you are at the top of your game).

If you are not employed, determine how you compare to other applicants (ask the recruiters to provide some feedback such as how your skills rank, if there are skills and/or education levels that appear to be missing for the jobs that you are applying). Also review in detail job descriptions for positions you feel you are uniquely qualified. As a side-bar, make sure you do not appear desperate when applying for positions as recruiters often share that they can sense this and depending on the job might have some reservations about hiring you.

If you are employed, how do you rank among other employees performing similar tasks in terms of income, responsibilities and feedback? Are you the go-to person that everyone in the department and/or company relies on for input, idea sharing, assistance with projects (i.e. you stay busy with real projects and not busy work)?
How much in assets, debts and income increase potential are you anticipating for the future?
Write out options of how you think you can achieve these future goals (i.e. starting a business, obtaining additional education, spending more time developing professional relationships inside and outside of your company).

Start developing a self bail-out plan today
Depending on where you are on the economic food-chain (i.e. whether you’re a student, clerk, entrepreneur or executive), establishing a solid personal plan of action will help especially when times are troubling.

Many are trying to determine whether or not the stimulus package or bail-out plan from our government will benefit them personally.

Let’s be honest with ourselves, do you really think that any plan will solve all of our woes? I don’t have that unrealistic expectation because there is no one-size-fit-all package.

We must all get involved to help the economy turn around.

Start establishing your self bail-out plan concentrating on activities that will generate income, secure your job, help you advance in your career and save on taxes, expenses and bottom-line add additional funds to your personal coffers.

Don’t forget to get to work early, work late, communicate with your boss, read the company’s financial information, refer to previous Only Money blog entitled “Surviving the Economy, Part I.”

Are your true skills and talents going untapped too long, establishing a plan will help you start to realize, appreciate and expand your financial dreams.

If you’re like me you are working to establish a solid plan that allows for enough flexibility so you can take advantage of whatever government plan exists.

Current Conditions
Yes, we are currently in a recession. I personally do not know of anyone in today’s current economic climate that has not been affected in some way by the financial challenges of the market.

Companies have implemented RIFs (reductions-in-force ~ a polite term for lay-offs) and many of our governmental agencies have issued furloughs and cut-back in hours at all levels. Companies continue to seek outside investors including partners not based in the United States.

As a realist I am currently implementing short and long-term financial strategies so I can position myself to be better prepared when the economy turns around.

Over the years there have been times when the stock markets have experienced significant slides, commonly referred to as “bear” markets and normally a positive recovery follows. During these bad markets you will find a significant increase in unemployment with the great news again that there will be an eventual recovery so we have to be very patient.

Right before the economy starts to turn around there are always opportunities for those who have implemented an action plan and have taken advantage of some great deals during the hard time and held onto them.

Genevia Gee Fulbright, CPA is President & COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com.

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Your labor costs are 50% of sales, gross profit is 20% and net income is 1/2%.

What does that mean?

What’s wrong with posting a loan you received from your favorite bank to your books as income?

Last month’s column provided some tips and resources related to financial statements for publicly traded companies.

This month’s column highlights some ideas for small businesses.

If you’re in need of a loan, budget, taxes filed or potential investors you might feel that you need help in interpreting your data so you can make some better informed decisions.

Yes, it’s time to break out the financial statements that you’ve been keeping on your computer for your business and consider resources available to you.

How do you start interpreting your records?

If you do not have a professionally trained accountant internally preparing your financial records, consider having a CPA or qualified professional bookkeeper visit your financial records and provide the “clean-up” entries if needed or enter the adjustments for you.

Ask your accountant to walk you through the financial statements highlighting the key numbers you should be watching and trends to consider for your industry.

What if you’ve been keeping manual records or the 12 bag-method of accounting?

Quickly go on-line or to the nearest office supply store to pickup a software program to process your business records. Check with advisors or if you belong to an industry association such as the Bar, Realtors or others ask for recommendations and referrals.

Simple software programs such as QuickBooks, Peachtree or another industry specific program can help you process your data on a regular basis.

What might our records tell us about our company?

Imagine you’re a beautician, what makes you more money, a perm or a dye treatment?

If you’re a professional speaker, is it better to perform a customized session for fewer than 20 participants or a general gig for 100 participants?

It depends!

If you track your financial records to keep up with direct costs related to various revenue sources you can track data and create some budget models that will help you make a decision whether or not to accept certain projects and standardize your bidding and project cost projection process.

Gross revenues versus gross profits

Where many entrepreneurs have challenges is accepting too many low profit-margin projects.

Concentrate not just on the gross revenues collected from projects but the gross margins (difference between gross revenues and cost of goods sold/direct costs).

Are you a low-cost leader or a high-end provider?

Again, understand what a project costs you internally including time deployed and associated supplies and make informed decisions on your strategy.

Hopefully the take away for this segment is that as a small business you don’t have the ability to float very long without taking action to plan for profits. Unless you have angel investors available to provide unlimited funds, you must remain profitable and positioned for growth.

Genevia Gee Fulbright, CPA is President & COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com.

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Apparently yes according to a client who builds mixed commercial/residential real estate developments up north.

According to him, not all real estate is in the dumper. He shares that as long as you have time on your side (i.e. can hold onto the properties for 3-5 years), adequate capital, access to credit and the “right” real estate inventory, you will survive this major market correction.

I checked with another client, a successful commercial real estate broker, who shared the same sentiment.

MARKET CORRECTION?
Your interpretation of the market depends on how you are personally positioned.

You probably feel that the economy is moving towards a recession if you are over-leveraged and can’t wait out the real estate market pull-back. Many real estate investors used the “no-money” down strategy or did not take the time to calculate the estimated amount of funds needed to make repairs or maintain the properties in case of vacancies. Unfortunately, some have also lost jobs and not planned for this contingency to cover negative monthly cash flow properties.

On the other hand, you might not be feeling as much pressure and interpret that the economy is experiencing some pull-back or a major market correction if you are holding onto properties that have positive cash flows and manageable debts. Your lifestyle has probably not been altered significantly.

WHAT IF YOUR 9-5 IS SUBSIDIZING YOUR SIDE-LINE REAL ESTATE BUSINESS
Don’t panic. If you are not in foreclosure but starting to feel the stress of your real estate investments, you must take action. immediately.

At a minimum, do the following:

• Assess where you are (i.e. determine the estimated fair values of all of your real estate, loan positions, cash flows, vacancy rates).
• Establish a realistic plan of what you feel you should do, based upon your current and most likely future personal situation (i.e. you want an exit strategy if you can’t afford to continue to operating in this manner).
• Communicate with your lenders if you are behind on your mortgages or think that you will be become delinquent soon to renegotiate.
• Contact your real estate broker if you are not an experienced or savvy real estate investor.
  If you want to check out a few sources for real estate investors, visit your library and pickup the following books: “The Peebles Principles: Tales and Tactics from an Entrepreneur’s Life of Winning Deals, Succeeding in Business and Creating a Fortune From Scratch,” by Don Peebles; “The Weekend Millionaire’s Secrets to Investing in Real Estate: How to Become Wealthy in Your Spare Time,” by Mike Summey and Roger Dawson; and “Beyond the Bubble: How to Keep the Real Estate Market in Perspective and Profit no Matter What Happens,” by Michael Thomsett and Joshua Kahr.

Real estate investing can be a great investment vehicle to include as part of your portfolio as long as you plan, track and make realistic decisions.

Genevia Gee Fulbright, CPA is President & COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com or call (919)544-0398.

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Unable to secure employment, he contemplated his options and decided to open a business and became what I would call a reluctant entrepreneur.

Are you a reluctant entrepreneur?

You are a reluctant entrepreneur if you:

* Have plans to only run your business until you find a new full-time position.

* Avoid planning for the growth or prepare basic business projections beyond six months or so.

* Fail to invest time or funds on professional advisors or visit small a business center’s for guidance in areas that you do not have expertise such as law or accounting.

* Use your credit cards instead of checking with bankers to see if you might qualify for a line or credit or small business loan to finance your business.

In order to weather the storms of self-employment, you will have to take some basic steps to increase the probability of success.

Economic uncertainties always exist and as many have experienced, no positions are beyond down-sizing. Sometimes it’s a good idea to have a side-line company just-in-case you have to make it your full-time gig.

It is what it is.

If you identify yourself as a reluctant entrepreneur consider that until you find full-time, permanent employment you will need to generate positive cash-flow in order to pay the bills.

You may not feel that you can carve out the time to establish a complex or formal strategic plan or have a meeting (with yourself if you are a solo-business owner) to establish the company’s mission.

Improve your chances of making it by implementing a basic action plan. Establish some quick basic plans in writing so you have a map.

If you put some of your plans in writing, it’s the first step towards successfully surviving, as shared in the excerpt from my latest book “Make the Leap: From Mom & Pop to Good Enough to Sell” (Infinity Publishing).

I fundamentally believe and have learned from experience that getting the right people is more important than strategy. The right people will literally point you in the direction of the right strategy.

In regards to strategies for companies, particularly for small companies, I think the following steps are key (again assuming that the right people are on board):

- Recognize the strengths of your competitors. What customers will they fight tooth and nail not to lose?

- Recognize that going after their prime customers may trigger a vicious response. Therefore, it may be better to pursue a market niche that competitors will not or cannot enter.

- Figure out what competitive advantage you have or what competitive advantage you could create.

- Think about what you would enjoy and what would be fun.

Eventually, a viable strategy will evolve from talking to customers, suppliers, competitors, and, most importantly, by listening to your employees.

You can get what you want!

Remember, whether you are just hanging in there until you find a job or running the business for the long-haul, utilize this opportunity to network, re-discover related industries and improve your skills.

Joe was able to leverage his business and find a permanent job, while bidding on a project. Last I heard he was making more than he did with his former employer and now feels more confident that he has a growing network and should not hit the unemployment line again. If he does, at least he has a great strategy!

Genevia Gee Fulbright, CPA is President & COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com.

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I enjoy the song by Calloway, “I Wanna Be Rich,” but let’s enhance this anthem by changing the last word so we can recite instead “I wanna be wealthy.”

Are some so obsessed with becoming rich in order to appear on the series “Lifestyles of the Rich and Famous” or their own reality shows? Consider a title change to “Lifestyles of the Wealthy and Legacy Builders.”

My position is that you should strive to become wealthy if you are willing to put forth the effort to become rich.

What is the difference?

Rich is:
Life-style based upon current cash-flow/income
Possessions newly acquired
High income/cash flow not necessarily accompanied by high net worth
Purchased social prestige and privilege

Wealth is:
Generational/legacy focused
A lifestyle not based upon current work or income
Abundance of assets and net worth that generates cash flow and income
Affluence/social prestige not purchased

Even before the recent mortgage meltdown, how many times have you heard about someone you thought was wealthy suddenly lose assets including homes and cars and started battling with the IRS?

Wealthy people are typically:

Able to purchase cars for cash…financing only for a short-term period until funds are transferred.

Consulting regularly with “advisors”…Attorneys, Investment and Insurance Brokers, CPAs, personal assistants, etc…

Working because they want to work…living expenses are not dependent upon them showing up for work daily.

Invested in diversified assets that they are willing to sell…that have the potential to grow in value and/or disburse income and cash flow.

If you have not already read the “Millionaire Next Door” by Thomas Stanley and William Danko, visit your local library or go on-line to pickup a copy to familiarize yourself with additional characteristics of how wealthy individuals live differently than rich or others.

Whether you’re rich, wealthy or working-class, the life choices you make with your spending plan and investment strategies affect your finances. If you were not one of those who hit the gene-pool lottery (and were born into a wealthy family) taking steps now to save for a rainy day and adjust your lifestyle to make sure that you are investing in assets that will grow in value and not growing debts will help in your quest to become wealthy.

Making good financial choices are especially important during challenging times, so make sure that you are evaluating where and how you live. Depending on what region you live, your expenses will be a certain percentage of your income. Understand how much it takes of your income to live. For example, if it takes 45% of your income for housing, 20% for food and entertainment, 38% for federal and state income taxes, 10% for charity, 15 % for clothing and personal expenses, etc… it’s time to evaluate how you are going to save some money for future or emergency expenses (you’re already negative cash flow by 28%, this means that you are either borrowing or using the principle of your investments). It’s time to increase your income, cut back on expenses, and re-balance your portfolio or all three.

Again, as you work towards wealth to make your desired lifestyle affordable and comfortable, remember you want to have a future lifestyle as well!

Think about it!

Genevia Gee Fulbright, CPA is President & COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com.

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