Archive for April, 2010

Nothing Great Has Ever Been Accomplished Without Passion

What is the true key to getting to the next level?  To coming out on top in your life’s journey?  There are many things that drive us to success; strength, faith, courage and perseverance to name a few.  What about passion?  From the light bulb and the car to the airplane and the computer, innovators became great because they were passionate about their ideas.   Its one thing to have an idea, but it is quite another to have the passion to make it successful. 

Amidst all of the negativity in the news, it is easy to get down.  With the economy in shambles and 401k’s a fraction of what they were just a few years ago, it’s easy to be depressed.   As unemployment sky rockets and the government has us on a collision course for hyperinflation, bankruptcy or worse, one could easily see the glass as half full. 

Perhaps now more than ever it is our passion that will define our future.   It’s not those who have become apathetic to the news, politics or economy that will be the stewards of tomorrow but rather those who have the solutions to the problems facing us today that will lead future generations. 

Unfortunately, we are now living in a day and age where pride and personal agendas take precedent over what is best for the American people, our economic recovery and our national security.  If you doubt me, have a conversation with Florida’s governor whose personal quest for power embodies all that is wrong with politicians today. 

But it’s not the politicians who are going to resolve our problems, it is you and I.  From the earliest days of our country people with passion found success in life.   The great writers, orators and trailblazers of all aspects of the private sector are responsible for the ingenuity that made us great and did so in spite of government.  

Passion is what will get those who have been kicked to the curb back on their feet again.  It will be through a personal passion that they determine their next step in life’s journey.  Through their passion for friends, family and community they will find the support that they need to be successful.  Most of all, through passionate faith they will find the strength to come out on top. 

Everyone is passionate about something and by understanding what that is it makes the decision making process all that much easier.   If there is a silver lining to the lingering recession it is perhaps that we have all been forced to spend a little less on material things that simply don’t matter to the bigger meaning of life.  It has given us time to sit back and discover all that we are truly passionate about so that when the economy turns and incomes increase we can all channel our resources and energy to things with greater meaning than the latest American Idol.

“If there is no passion in your life, then have you really lived?  Find your passion, whatever it may be.  Become it, and let it become you and you will find great things happen FOR you, TO you and BECAUSE of you” – T. Alan Armstrong

April 30, 2010 at 5:50 am Leave a comment

The Future’s So Bright I Gotta Wear Shades

Contributed by guest columnist and energy efficiency expert Susan Tidball

Everybody likes to get something for nothing.  Think of the last time you found money laying on the ground; what was your first reaction?  If you’re anything like me, you scooped it up and put it in your pocket while casting a smile at lady luck. 

Given the predictability of human nature when we stumble upon money it makes it all that much more puzzling why this behavior doesn’t carry over to the business world where billions of dollars are left on the table each year. 

In blogs past we have focused on process improvement, issue recognition and debt collection as viable ways to increase profitability.  Now it is time to endeavor in the realm of innovation that is typically outside of the average business’ wheelhouse; that of alternative energy. 

I am a fan of solar power and utilize it extensively at my house with a goal of someday being able to get off the grid as a buyer but remain as a seller back to the local utility.   From a residential perspective, there is substantial monetary reward in using solar that comes in the form of reduced bills and lucrative tax incentives and rebate.   From a business perspective, the financial benefit is exponentially higher.  

What is so intriguing about not only solar, but other forms of alternative energy including wind, lighting retrofits, PFC and geothermal is that they inevitably will provide a user with free electricity.   While there are costs associated with the initial start up, many monthly payments are more than offset by immediate savings which creates positive cash flow, or a new revenue stream.  

Consider a situation where a business has an electric bill is $10,000 per month.  With the proper energy analysis and customized system, they may be able to cut their bill by several thousand dollars though both savings and the elimination of demand charges.   In addition, the finance charges on new equipment are usually far less than the savings meaning that the business now has created a new revenue stream.  In some situations the business is even placed in a position of being able to sell back excess electricity, create yet another source of revenue!

When considering your bottom line there is perhaps nothing with more upside potential than alternative energy.   With the inevitable passage of cap and trade it is anticipated that the cost of electricity will more than double by 2016.   As the costs of electricity continue to rise, look for supply and demand to drive the price of alternative products up, as well. 

By investigating your options now, businesses have a chance to invest in the future of energy consumption and deeply discounted rates.   Not only is this good for business and the environment, but it is great from a PR and marketing perspective, as this type of innovation often garners favorable attention from the local media, which is great for advertising. 

As you are considering the many areas where money may have been left on the table in your business, don’t forget to pull out the electric bill and see how much was sent to the local utility last month.  Then consider the potential savings, the environmental benefit and your bottom line profitability by going green.  

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Susan Tidball is the owner of Energy Pure and provides customers with innovative new products to maximize their bottom line, often with no new money required.

April 29, 2010 at 8:01 am Leave a comment

Forging New Alliances Can Create Great New Business Opportunities

If the one constant in the world is change, then what steps can you take to make change work for you? First, the change has to be recognized; second, the results anticipated.  It is often said that history repeats, so arguably the best way to gauge the future is to look back through the annals of history. 

Through this prism, we know that certain things have defined outcomes such as decreasing taxes causing economic growth while higher taxes prolong economic downturns.   We also know that at any given time, on any given day, in good times or in bad, people left to their own devices can find ways to create wealth, in spite of the barriers thrown in their way. 

With the change facing Americans today, be it good or bad, there are many money making opportunities with some of the best involving strategic alliances.   As more and more “reform” comes to fruition, businesses will have to react as failure to do so could result in many enterprises, in particular smaller ones, being kicked to the curb.     

When considering potential alliances, it is necessary to think outside of the box and consider the many silos in the business world that are truly interconnected.  Many business owners often look outside their own four walls at others with a degree of suspicion.  With a slight change in paradigm, it is possible to being viewing those who you thought were competition as potential allies. 

Very rarely do businesses do the exact same thing.  Certainly many businesses have overlap, but when all is said and done, is each and every one of their products identical?  Also consider the economies of scale that can be gained through strategic alliances, and what the ensuing critical mass can do to your market positioning.

Even in situations where two companies make identical widgets, is there a benefit to sharing resources to produce those widgets but brand them differently?  Consider the joint venture between GM and Toyota to produce the Pontiac Vibe, which was also sold in Japan as the Toyota Voltz.  The key to success in any business is gaining market share which often means that two heads are better than one. 

The reality that all business must face is that they are being hamstrung by rules, regulations, mandates and taxes that often impede their ability to individually gain market share.   As the business climate gets more difficult in the wake of healthcare mandates, financial reform, cap and trade or whatever tax du jour comes down the pike next, innovation and creativity will prove to be the only salvation. 

Amidst these tremendous odds, there can be a light at the end of the tunnel when businesses work in conjunction with one another to gain economies of scale.  Consider the small manufacturer with 75 employees who is now faced with the real possibility of having to cease operations because the company can’t afford to comply with the healthcare mandate.   What if that employer formed a strategic alliance with another firm to share in the risks and rewards?  Perhaps the manufacturer only needs 40 people to produce his widgets with the other 35 serving in a variety of other non production  capacities.  

By leveraging a variety of strategic partners ranging from I/T companies to Human Resources, it is now possible to shrink the workforce of the primary company to less than the magic number of 50 while still providing all of the services and oversight necessary from the other staff, only they have become employees or contractors of other companies, enabling all partners in this relationship to continue to prosper and most importantly avoiding the massive layoffs that would have otherwise been a certainty. 

This is just one example of how strategic partnering can work to preserve jobs and keep America’s economic engine from stalling, even in the midst of a seemingly endless barrage of bureaucratic mandates. 

By no means is this the first time businesses have faced difficult times, nor will it be the last.  It is merely another day in another year during which strategic planning will serve to benefit those who opt to think outside of the box.  

If your company is looking for new and innovative solutions to increase your bottom line, give some consideration to what a strategic business alliance can do for you.

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“…companies should expand beyond their existing resources through licensing arrangements, strategic alliances, and supplier relationships.”
Business Week

“Alliances have become an integral part of contemporary strategic thinking.”
Fortune Magazine

April 28, 2010 at 6:53 am 1 comment

Taking Your Business To The Next Level

See full size imageOne of the key challenges to staying ahead of the competition is strategic planning.   Simply put, anyone can start a business but not everyone can make their business succeed.   Persistence, dedication and perseverance are what separate the successful from those who struggle, or in the worst case fail.  

Making your business succeed and taking it to the next level is about planning and detail.   I am currently involved with a small group in a start up operation.   While just in our infancy, we have a vision which is to bring revolutionary processes and technology to the insurance industry that will make our customers more efficient, more accurate and most importantly, more competitive in the marketplace.  This is not only good for the industry, but it is good for their client’s as these new found internal enhancements are sure to translate to lower premiums for customers.  

Two of the greatest stories of persistence, dedication and perseverance are undoubtedly Wal-Mart and Southwest Airlines; giants of their respective industries who started out with nothing more than an idea.   Their leaders took their ideas and dedicated their lives to transforming the way we shop and the way we fly.  A generation ago there were many who doubted whether either company would succeed in the long run; today all doubts have been erased. 

The first step that anyone venturing into uncharted waters should consider is the acronym SMART.   Is your venture: Specific, Measurable, Attainable, Realistic, Timebound? 

Any person looking to take their idea to the next level should have a specific understanding of not only what this idea is but what it will take to accomplish it.   The best way to do this is with a business plan, samples of which can be found in the free resources available at www.christidball.com.

As you bring this idea to fruition and shoot for the next level, will your results be measurable?  It’s easy to hang a shingle and produce widgets, but you will not have long term success if you cannot measure the fruits of your labor.  Implementing key metrics and constantly raising the bar will ensure both longevity and success.

When considering these metrics, they should be attainable and realistic.   If you run a six minute mile, setting a goal of running a five minute mile is probably attainable, but if the goal is to be achieved next week it is likely not realistic; hence the need to make it time bound.  Understand where you are today by benchmarking current results.   If you are a true start up, then set short term goals and do benchmarking every 60-90 days.   As you grow, make your goals bigger and bolder.   Neither Wal-Mart nor Southwest shortchanged what they thought they could do; even in the face of incredible skepticism. 

To move your venture to the next level, you not only have to be a step ahead but have a keen understanding of both your customers and changes in the marketplace.  The only constant in our world is change, and it is by strategizing and anticipating change you can reap huge rewards. 

In several blogs we have discussed areas of great opportunity, in particular with regard to providing outsourcing solutions.   This discussion began with the anticipation that Congress would pass healthcare reform and the associated costs onto employers who now have to make decisions.   By strategizing and developing outsourcing solutions, we were able to provide existing employers with the ability to reduce their internal workforce while improving bottom line results and avoiding many of the costs being mandated from Washington.  

This is just one example of helping client’s to stay ahead of the game, which is precisely what your venture should do in the quest to move to the next level.   As Abraham Maslow said, “You will either step forward into growth or step back into safety.”

 _____________

Chris Tidball is the author of Kicked to the Curb and provides businesses with bottom line business solutions to improve profitability, often with no new money out of pocket.  He can be reached at chris@christidball.com

April 25, 2010 at 5:14 pm Leave a comment

Business Opportunities Are Like Buses, There’s Always Another One Coming

An interesting question was posed as to what a person should do if they wanted to start their own business, especially in light of the tough economic times, excessively high taxes and undue government regulation?  As is usually the case, my response is what do you want to do?

In Kicked to the Curb I tell people in this situation to be a kid for a day and figure out what they want to be when they grow up.   There is no one answer that is right, as we are all capable of doing many things.  

From my own experience I was in a similar position and ultimately came to the conclusion that I had enough of the bureaucracy and red tape of “corporate America” as detailed in my book.

For years, people were often afraid of getting into their own venture out of concern of failure.  This fear has now been supplanted by not their own ability, but rather impediments put forth by the government on profitability. 

This is a very valid concern, but one that must be taken in context.  Innovators will make money in good times and bad.  In fact, there is often more money to be made in the latter as fewer people are willing to take risks, which is precisely why now is an opportune time to reach for your dreams. 

The key to success in your own venture comes down to your idea.   Would I open a restaurant now?  Probably not, as eating out takes a down turn during tough economic times.   What about an automobile repair shop?  A consideration, as people are fixing rather than buying new cars, but what happens when the economy turns around? 

Two realities of the times in which we live are higher taxes and more government.   As a result there are two key opportunity areas worthy of consideration.   With higher taxes, more regulation and intrusive mandates, businesses are looking for opportunities to cut costs.  

With cap and trade on the horizon, card check in the wings and a burdensome healthcare mandate, businesses are hamstrung if they don’t do something, so why not provide them with an outsourcing solution.  Currently about half of a typical budget goes to salaries and benefits, and is substantially higher when organized labor is involved.   By outsourcing staff, companies can dramatically cut their costs and become more competitive.  

When we discuss outsourcing, it doesn’t necessarily mean sending jobs overseas.  To the contrary, smaller companies, especially those based in “right to work” states can take on the tasks of everything from human resources to debt collection allowing larger companies to dramatically improve their bottom line.

As for dealing with a growing federal bureaucracy, it is critical to understand that this won’t change in the near future, irrespective of which political party is in charge.   Rather, building a business that can tap into the government as a potential client is a key to immense profitability. 

One need to look no further than the alternative energy sector to see the unlimited income potential, in particular with the government as a client.   With the impending cap and trade legislation there is little doubt that the cost of electricity will more than double in the next decade.  By providing solutions ranging from solar and wind to PFC and geothermal, your business stands a great chance of success even in light of a more intrusive government.  

For those looking for an opportunity, now may be a great time to make your dreams a reality.  As Virgin founder Richard Branson says, “business opportunities are like buses, there’s always another one coming.”

___________________

Chris Tidball is the author of Kicked to the Curb and works with businesses to find innovative solutions to finding new money. 

April 23, 2010 at 9:06 am Leave a comment

VAT Tax Won’t Solve Problems, It Will Subsidize Them

In keeping with this week’s topic of doing less with more, let’s discuss the Value Added Tax, or VAT, that the administration continues to consider despite widespread public and congressional opposition.  The VAT is a national sales tax on goods and services that would be tacked on top of local sales tax and sent to the federal government.  

Former Fed Chairman Paul Volcker, who served under Jimmy Carter and is now an economic advisor to Barack Obama, has suggested the idea as a way of controlling the deficit.   Senators, many  legitimately concerned about their midterm election chances, took this up in a Sense of the Senate hearing and voted 85-13 against, meaning that a large number of Democrats, in addition to all Republicans, aren’t willing to support such a radical concept that would launch us deeper into recession.  

The current economic state is largely the result of excessive taxation and regulation already in place.  One need to look no further than Western Europe to see what the future holds if we continue down the path of tax and spend government where double digit unemployment and eventually inflation will further diminish the lifestyle to which we have become accustomed. 

With unemployment still hovering in the double digits, it is time that Washington take the steps necessary to get our nation back on track and our people back to work.   Here are five simple solutions for doing less with more. 

  1. The current tax code is more than 56,000 pages; reduce it to a simple flat or fair tax.  Both have benefits far greater than what is in place today, and could dramatically increase the ease by which new entrepreneurs could enter the marketplace.
  2. Elimination of all “non-essential” government employees.  According to the Farflex dictionary non-essential means “having little or no importance; non-essential”.  
  3. Remove excess government oversight and regulation, including the myriad of redundancies and red tape that hamstring economic growth.    The Department of Agriculture exemplifies these bloated government excesses.  This department was formed in 1862 when 80% of Americans earned a living farming the land.  Today that figure is 1%, but this department has grown exponentially despite there being sixteen other agencies involved in food safety.   In the private sector, a department that provided so little would have been eliminated long ago.  
  4. Reduce spending on social programs that discourage people from finding work with the realization that our nation became great not because of government but in spite of it.
  5. We need to move away from corporatism, or monopolistic capitalism, which is actually the direction our nation is headed.  Unlike socialism, in which the government owns all business, corporatism leaves large private businesses in place that are subject to heavy handed government regulation that all but assures the failure of smaller enterprise. 

Five simple steps that are easily implemented and would have broad bipartisan and public support.  Through the prism of history we know that cutting the size and scope of government will create efficiencies, while the associated tax cuts will create economic growth resulting in more tax revenue.  Simply put, doing more with less with the understanding that no matter how much money is sent to the government they will find a way to spend it rather than doing what is right.  

________________

Chris Tidball is the author of Kicked to the Curb and provides innovative solutions to businesses looking to increase their bottom line with no new money required.  He can be reached at chris@christidball.com.

April 22, 2010 at 7:30 am 1 comment

Doing More With Less

A question was recently posed about the proper pending case load for a subrogation adjuster.  While this answer is specifically tailored to the insurance industry, everyone can benefit from the associated concepts of net back profitability and the importance of key B2B alliances.

To answer the question posed, the average pending caseload is going to vary by type of subrogation adjuster as well as the complexity of the claim.   In my twenty years running a variety of claims operations on the carrier side, I saw caseloads typically hover around 450 files, with about half the volume for litigation or large loss specialists.  

Rather than focusing on what the pending should be, carriers may want to consider focusing on incoming volume and disposition rates.   Staffing to pending often results in many unintended consequences as adjusters can use that metric to limit new claims.   “Hey boss, I already have 450 claims so I can’t take anything new.” 

On the other hand, incoming and disposition creates two metrics that effectively move the pending quicker, which increases recovery, compresses cycle time and has a positive impact on the company bottom line.  

Another critical component to the staffing model is differentiating between what should be handled in house and what should be outsourced.   Carriers are generally efficient at handling certain types of claims, in particular if there is coverage on the other end and liability is clear.   Where the difficulties arise are situations involving uninsured tortfeasors or disputed liability.   By removing these claims from the in house recovery process, carriers will see a substantial lift to their recovery rates.

Certainly there are recovery costs associated with outsourcing  the complex  or uninsured files from the daily mix of assignments, but that is more than offset by the 20% to 30% increase in capacity that  the carrier adjusters will now have, again creating more positive cash flow through the concept of “net back” to the bottom line.  

When fully understood, this concept can create a substantial lift in profitability.   In one case study, a carrier was spending roughly $1 million dollars in overhead, salary and benefits for their 10 person subrogation unit which handled everything in house, recovering roughly $4 million during the course of an average year. 

When they adopted a hybrid model based upon complexity, they were able to increase new daily assignments from 5 to 8 per rep.   In addition, they outsourced 30% of their claims that were defined as meeting a certain complexity level, including disputed liability, uninsured motorists and double dips, effectively cutting their internal costs by $40%.   Even with the costs associated with outsourcing, they were able to trim hundreds of thousands of dollars off their annual budget while increasing their overall recoveries by more than 30%.  

By analyzing internal workflow, opportunities can often arise that create an immediate bottom line lift, often with no new money required!  In today’s tough economic times there is no better way to gain a competitive edge against in the marketplace. 

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Chris Tidball is the author of Kicked to the Curb: 20 Essential Rules For Coming Out On Top When Your Life Has Been Turned Upside Down.   He also provides businesses with bottom line solutions to increase profitability with no new money required! He can be reached at chris@christidball.com

April 21, 2010 at 7:48 am Leave a comment

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Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at chris@christidball.com

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