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If you want to listen to the Andy Williams’ classic while reading, here is the link on YouTube     http://www.youtube.com/watch?v=gFtb3EtjEic

Having spent a number of years in the toy industry, this time of year was always fun. How could you not smile even when putting in endless hours finalizing budgets? There were talking Alvin and the Chipmunk toys on the bookshelves or the latest edition of Matchbox cars on the desk.

One thing about the toy industry, many toys are not necessarily new ideas. They are an update of an older one. There is nothing wrong with that. People make a lot of money by updating existing ideas. Today, kids use paintball guns. Back in the 80’s and 90’s, they played Laser Tag (the gun emitted a light that set off a sensor on an opponent’s vest). When I was a kid, we used die-cast metal cap guns (there were a lot of arguments about whether you got your opponent or he got you). Even Rubik’s Cube has been updated (an iPhone-like electronic version).

Every so often, a company’s big idea to update or reinvent a product comes up short. New Coke anyone? Even Coca-Cola’s competition isn’t immune. Earlier this year, Pepsi’s Tropicana Orange Juice staged a major re-branding by updating its iconic image to a more contemporary one. Sales promptly dropped 20%. In less than two months they went back to the original image. The problem was that it was harder to find the product on store shelves. It looked like other more generic brands.

Many companies look to reinvent the way they do business. There is one company that comes to mind that has transformed itself a few times. It started as a time recording company, became an office equipment company, then computer hardware. Today it gets the lion’s share of its revenue from technology services. Ever hear of IBM?

Many small business owners find that they must reinvent themselves to compete in today’s world. An acquaintance of mine (an owner of a printing company) feels that in 5-7 years, his company will not be providing traditional print services, but will be more of a marketing design and consulting company. He is laying the foundation now.

The key to making changes in your business is to plan accordingly. The decision comes down to dollars and cents. To put it another way, it is your dollars and does the change make sense? Are the financial rewards sufficient and are you comfortable with the associated risks? Making financial projections and running “what if scenarios” will help in the decision making process. Will this exercise guarantee that you will make the correct decision 100% of the time? No it won’t, but it will help you access the risk associated with a given business strategy. It may not be as sexy as making a decision based on “your gut feel,” but at least you know you’ve considered various options.

If you need help accessing the risks in your business strategy, call Ed Baloga, at 914.474.9547 or via email at ebaloga@b2bcfo.com.

 This was a phrase uttered countless times by Ed Sullivan, an institution on Sunday nights. The Ed Sullivan Show ran from 1948 until 1971 (originally called Toast of the Town and renamed in 1955). Comedian Alan King once quipped, "Ed does nothing, but he does it better that anyone else on television.” The show was even immortalized in song, Hymn for a Sunday Evening, from the 1960’s musical, Bye Bye Birdie.

One lasting memory of mine is the plate spinner that would appear on the show (that and the puppet named Topo Gigio, an Italian mouse). The juggler had long, flexible poles and he would start to spin plates on top of them. He continued adding plates to the remaining poles. He didn’t have any trouble keeping the first few plates spinning. As a plate would start to slow down and wobble, the juggler would go back and vibrate the pole until the plate regained its momentum to stay in place a little while longer.

When the number of plates increased to 10 or so, he did a great deal of running around. Once in a while a plate slowed down enough that it fell and broke. He would quickly start spinning another plate on that pole. When the number got up above 15 or more, a few more plates would crash to the ground until finally, he gave up and they all came crashing to the ground.

I am sure many business owners can relate to plate spinning. In his book, The Danger Zone, Lost in the Growth Transition, Jerry Mills describes how owners (called Finders) create successful businesses by creating products and services to sell, building relationships with customers, and creating relationships with vendors. Finders perform activities that bring sales and cash into the company. This initial success causes the Finder to expand these activities. Eventually, this sales growth cannot be supported by the company’s infrastructure or the line of credit from the bank may be insufficient. Customer service may suffer and sales flatten. The cash needs of the business start to exceed the cash being generated. This is the beginning of The Danger Zone.

The Finder starts performing more and more administrative duties called Minding Activities. These might include:

• Preparing financial projections
• Meetings with bankers and lenders
• Additional meetings with attorneys and accountants
• Spending significant time deciding which bills need to be paid
• Spending time on HR matters

These are tasks that many Finders may not be good at, but more importantly, do not like doing. Think of a homebuilder that has a reputation for building quality homes with fine craftsmanship. They probably did not get that reputation because they knew how to balance a bank statement.

There may be other distractions that may even cause the owner to lose enthusiasm for the business or worse, lose customers. As these disruptions increase, the business continues to decline and suffer unless the owner takes steps to turn the situation around.

If you need help keeping all of your plates spinning, call Ed Baloga, at 914.474.9547 or via email at ebaloga@b2bcfo.com.

It is estimated that 8%-10% of the US population (24 million to 30 million individuals) suffers from diabetes. This includes both diagnosed cases as well as those individuals who may have the disease but have not yet been diagnosed.

Why should this be a concern to employers? Diabetes costs $116 billion annually in direct medical costs and is estimated to cost another $58 billion annually in indirect costs (loss of work, disability, loss of life). As an employer, you can make sure that your health insurer provides programs to help your employees manage their disease. This is something that won’t cost you anything. After all, it is in the insurance company’s best interest to make sure your employees maintain their health, i.e., less complications means lower number of claims paid. It also means that your experience rating as it relates to your employees becomes more favorable resulting in lower premiums.

Another reason why you should be aware of diabetes is the Americans with Disabilities Act (ADA). The ADA is a federal law that prohibits discrimination against individuals with disabilities. Diabetes may be considered a disability under the law.

Unfortunately, I learned about the ADA the hard way. My older son was diagnosed with Type 1 diabetes in 2002 when he was 6 years old and certain accommodations had to be made in school. Approximately 10% of the individuals with diabetes have this more serious form of diabetes.

Type 1 diabetes (juvenile diabetes)
This form of the disease can occur at any age, but most commonly is diagnosed from infancy to the 30s.  In this type of diabetes, a person's pancreas produces little or no insulin. It is an autoimmune disease and one does not “outgrow it” as they get older.  People with type 1 diabetes must inject insulin several times every day for the rest of their lives. Others such as my son wear an insulin pump that delivers insulin via a cannula inserted under the skin (24 hours a day, 7 days a week).

Type 2 (non-insulin-dependent or adult-onset)
Type 2 diabetes typically develops after age 40, but can appear earlier, and has more recently begun to appear with more frequency in children.  In this form of diabetes the pancreas still produces insulin, but the body does not produce enough or is not able to use it effectively.  Type 2 is a metabolic disorder and in many cases can be managed with weight loss and exercise.

Gestational Diabetes
About 2 to 5 percent of pregnant women develop high blood sugar during pregnancy. Although this type of diabetes usually disappears after the birth of the baby, women who have had gestational diabetes are at high risk of developing type 2 diabetes later in life.

Warning Signs for Type 1 Diabetes

Knowing the warning signs for type 1 diabetes (juvenile diabetes) could save a life as these may occur suddenly:

If you or someone you know exhibits one or more of these symptoms, call a doctor immediately. More often than not, the disease goes undetected until the individual goes into what is known as diabetic ketoacidosis (“DKA”). This can be a life threatening event and the individual must be taken to the hospital where intravenous fluids and electrolytes must be given while the diagnosis is being made.

Individuals with diabetes successfully perform all types of jobs from heading major corporations to protecting public safety to being a professional athlete (Jake Cutler, the starting QB for the Chicago Bears was diagnosed with Type 1 diabetes in 2008). Yet, many employers still automatically exclude them from certain positions based on myths, fears, or stereotypes. For example, some employers wrongly assume that anyone with diabetes will be unable to perform a particular job (e.g., one that requires driving) or will need to use a lot of sick leave. The reality is that, because many individuals with diabetes work with few or no restrictions, their employers do not know that they have diabetes. Some employees, however, tell their employers that they have diabetes because they need a "reasonable accommodation" a change or adjustment in the workplace to better manage and control their condition. Most of the accommodations requested by employees with diabetes such as regular work schedules, meal breaks, a place to test their blood sugar levels, or a rest area do not cost employers anything to provide.

If you need additional information or questions, do not hesitate to contact me at ebaloga@b2bcfo.com or visit www.JDRF.org.

…until the fat lady sings.

This quote was originally attributed to sportscaster Dan Cook. Cook used the expression in a television broadcast on May 10, 1978, before a Washington Bullets-San Antonio Spurs playoff basketball game and popularized by Bullets’ Coach Dick Motta. Later, first use of the quote was attributed to the late Ralph Carpenter, the former Texas Tech sports information director, commenting when the Aggies rallied for a 72-72 tie late in the SWC tournament finals two years earlier in March 1976.

The saying refers to a Richard Wagner opera suite, Der Ring des Nibelungen and its last part, Götterdämmerung. The "fat lady" is traditionally presented as a very buxom lady with horned helmet, spear and round shield. The aria lasts almost ten minutes and marks the end of the opera.

Obviously, the advertising department at the Philadelphia Inquirer isn’t familiar with the quote or another one by that great American philosopher, Yogi Berra, “It ain’t over till its over.”

The Inquirer ran this ad for Macy’s on Monday congratulating the Phillies on winning back-to-back championships. There was a minor problem; the Phillies trailed the Yankees, having lost three games while winning one (the earliest that the Phillies could win the Series is Game 7 on Thursday).

Dewey Defeats Truman anyone?

Hey, things happen.

We’ve all seen the occasional typo in the newspaper. Most people have at one time or another experienced spell-check gremlins when writing emails. You might use the word there when you meant to use their and spell check doesn’t catch it. However, this was not a “business card size” ad or an email. This was a three-quarter-page ad that appeared on the back page of the Philadelphia Inquirer's front section.

I’m sure the conspiracy theories are circulating. It was a deliberate attempt by some Yankees’ fan to embarrass the Phillies. Whether it was accidental or not is irrelevant. The question should be, were controls and operating procedures in place? This is something that all organizations, both big and small, face when evaluating their operations. Business owners and other management personnel should be asking themselves the following questions:

Do we have adequate controls in place to make sure the chances of business mistakes are minimized (or worse, possible theft of assets)? If not, then what must we do to safeguard our assets?

If procedures do exist, do my employees follow the procedures and guidelines? If they are not following them, do we have a larger HR issue?

If you need assistance with these and other issues contact Ed Baloga, Partner with B2B CFO®. 

I recently attended a seminar conducted by Skip Weisman. After completing a 20-year career in Minor League Professional Baseball management, Skip launched Weisman Success Resources to help small to medium sized companies improve their approach to their businesses.

"Champions do not necessarily do extraordinary things, but Champions always do fundamental things extraordinarily well!”

Think about it – it’s the little things that count. One of the most boring drills in spring training is the pitcher covering first when the ball is hit to the right side of the infield. The drill is repeated over and over. Can you recall a time when your team’s pitcher failed to cover first and the runner eventually scored?

It’s the little things. Even in this month’s playoffs, you can see examples. The Twins’ Nick Punto assumed that a ground ball up the middle went through to the outfield. He rounded third and headed for home. The Yankees’ Derek Jeter fielded it behind second base and threw the ball home to catcher Jorge Posada, who threw to Alex Rodriguez and caught Punto diving back to third.

Nick Punto was quoted as saying, “I wanted to dig a hole, crawl inside it and die. It was really embarrassing.”

One would have thought that the Twins learned in the fourth inning of a scoreless Game 2. Carlos Gomez fell rounding second on a single by Matt Tolbert. Delmon Young was heading home; Gomez failed to get in a rundown and was tagged out before Young could score, costing the Twins a run and possibly the game. We know what happened in the series.

It is when the little things are done correctly and become second nature, an organization proceeds to the next level.

In his article at WeismanSuccessResources.com , Weisman writes that there are five areas on which company leaders must focus to create a “Champion Culture" which results in a high performing, high morale workplace that will generate outstanding results and set you apart from the competition. With Skip’s permission I am sharing them below:

C = Commitment

Athletic teams become champions because their athletes are committed to the compelling Vision, Strategy and Purpose of getting to the championship game. In business, companies can create a similar commitment by creating and communicating a compelling Vision, Strategy and Purpose to their team members.

Are your employees committed or just complying with their job descriptions to collect a paycheck?

H = Humility

Athletes become champions because they continually improve as they face tougher competition every step of the way. This means they must be open to regular feedback and continually look for ways to get better.

Does your company culture espouse an environment where learning from mistakes is encouraged and asking for help is seen as a strength?

A = Accountability

There are two components to accountability that create champions, setting clear performance expectations and measuring job performance against those expectations. It works in athletics. But most companies fall short in managing specific job performance accountabilities in order to maintain consistent progress toward agreed upon objectives.

What is your company’s process for communicating specific upfront performance expectations and managing accountability to the desired performance?

M = Motivation

Champions are action oriented. When obstacles arise champions find a way through, over, around or under to stay on track. Procrastination (the opposite of motivation) is not in their mindset or habits. How many business owners, CEOs and other business professionals have significant challenges with the habit of procrastination.

How motivated is your team? How are procrastination and avoidance issues negatively impacting your company’s bottom line?

P = Preparation

Champions show up prepared. They practice almost every day in-season when not playing games. They review films of their opponents to learn the tendencies, strengths and weaknesses they can exploit. Yet in business, you've probably experienced far too many team members showing up ill-prepared. Not enough time is invested in preparing for the work week, the workday, key meetings, and sales presentations.

How can your company raise the bar on preparation to begin functioning as a CHAMP?

If you need help in creating a championship culture and mindset at your company please visit www.WeismanSuccessResources.com or feel free to contact Skip at Skip@SkipWeisman.com or contact Ed Baloga, Partner with B2B CFO®  at ebaloga@b2bcfo.com or at 914.474.9547.

A number of years ago, I was a partner in a small business. Our bank was sponsoring a one day workshop called Accounting for Non-financial Managers. My partner was going to attend. Jack, by education and training, was very much a marketing person (he was involved in a number of nationally known ad campaigns and slogans). More than anything else, he hated the idea of not being prepared. As a result, he spent several hours going through the course materials in the days leading up to the workshop. 

The night before the workshop, he came into my office. He indicated that he was unsure about the definition of cash flow. He spent the several minutes giving me a dissertation on what he thought it was. He ended it by showing me a formula that looked something like this:

It was officially known as the Woodstock Art and Music Festival and took place August 15-18, 1969. The concert was originally intended as a way for Michael Lang, John Roberts, Joel Rosenman, and Artie Kornfeld to establish and promote a recording studio in Woodstock, NY. Several recording artists had relocated there, most notably Bob Dylan (today Levon Helm has a recording studio there).

The concert was to take place in Wallkill, NY (about 45 miles south of Woodstock). The organizers told town officials that they were expecting 50,000 people to attend. A month before the concert, town officials grew nervous revoked the concert permit.

The organizers quickly partnered with Elliot Tiber, whose parents owned a motel in NY’s Catskill Mountains in the town of White Lake (the Catskills is a resort area about 90 miles northwest of NYC where many people from the city would spend their summers). Tiber had a permit from the town of Bethel, NY for a music and arts festival. He had conceived a festival as a way to publicize the family’s motel. The organizers rented 600 acres of nearby dairy land from Max Yasgur. Acts were quickly signed and fees were in the $8,000 to $12,000 range.  Jimi Hendrix was to receive $32,000. So other acts didn’t try to raise their price, organizers let it be known that Hendrix was to play two sets, one Sunday and a second on Monday, so it was really $16,000 per performance. In reality, Hendrix was only playing one set on Monday as his contract stated that no other act was to follow him.

A total of 186,000 tickets were sold in advance of the concert. Organizers thought they would get another 20,000 or so in walk-up sales. Word of the event quickly spread. Traffic jams on the NYS Thruway and Route 17 (the main highway through the Catskills) ranged from 10 to 20 miles. The crowd grew quickly and fences erected to control access were torn down. Most estimates put the attendance at 500,000. The organizers were not equipped to deal with sanitation issues, food shortages and of course the rains that came. Woodstock Ventures eventually lost $1.4 million related to the concert and the aftermath. In spite of the massive crowds, the numbers of arrests and medical emergencies were small as compared to the number of attendees.

Fast forward 25 years to 1994 – the original organizers staged a concert in Saugerties, NY (about 70 miles northeast of Bethel). Fees for musical acts were much, much higher. The promoters had the foresight to line up sponsors (Pepsi was the concert’s main sponsor) and sold TV rights to pay-per-view. However, they never did figure out how to prevent gate crashers. Approximately 300,000 tickets were sold. Another 50,000 of entered free. That was the difference between making and losing money. Michael Lang, one of the promoters of the 1994 event as well as the 1969 festival, said, "In true Woodstock style, the communal spirit lived, it rained like hell, Mud People abounded, and Woodstock ‘94 made money for everyone but us."

Did they learn? Not really. In 1999, Lang and John Scher organized Woodstock 1999. It was held in Rome, NY (about 200 miles north of Bethel) on the former Griffiss Air Force Base (declared a Superfund site in 1984). This event was criticized for its commercialization. Gate crashers weren’t a problem this time. The promoters were hoping for a crowd of 250,000. Only 200,000 showed up. Attendees were frisked entering the site to make sure that they weren’t smuggling food. However, food and drink vendors were happy to sell them slices of pizza for $12 or bottles of water for $4.

Unfortunately, there was no rain this time. Unfortunate because temperatures were in the 90’s and the event was being held on the former concrete airstrips with no shelter from the sun. Bathrooms were not built; port-a-pottys were used and trucks needed to service them could not gain access to them. Needless to say, things went downhill from there. The final night of the concert saw riots, fires and looting. ATM’s were being overturned and emptied, merchandise and food tents were looted.

This month marks the 40^th Anniversary of the Woodstock Art and Music Festival. There will be no major concert, no multi-day event. Lang attempted to have a free concert in Brooklyn’s Prospect Park, but couldn’t find sponsors to cover the estimated $8 million to $10 million cost. However, there is a Heroes of Woodstock Musical Tour including a web site to download music files (free for concert goers, $5.99 for others). None of the previous organizers are involved in the tour. Ang Lee’s movie, a comedy called Taking Woodstock is being released this weekend.

What happened to the site of the original event? It is now a museum and a performing arts center with outdoor style concert theater seating for 10,000 people - Bethel Woods Center for the Arts (www.bethelwoodscenter.org). Events there include a Wine Festival and musical acts like the Jonas Brothers. Not quite Janis Joplin or Jimi Hendrix, but hey, it is 2009 and most of the original attendees are at or approaching Social Security age and it is their grandkids who go to concerts.

Did we finally learn something? I think so – don’t try to re-create a once-in-a-lifetime event.

If you need help with that breakeven analysis and risk assessment before undertaking a major project, contact Ed Baloga at 914.474.9547 or email at ebaloga@b2bcfo.com.

You may recall the scene from the Wizard of Oz (1939), where Dorothy, the Tin Man and the Scarecrow enter the forest, not knowing what lies ahead. They start to repeat the memorable line over and over. Fast forward to today and business owners might be saying something similar. Only the line might go something like, "Accountant & Lawyers & Bankers - Oh My!"

Several years ago, a friend of mine related a story to me about when he was looking to expand his business. He talked to his attorney, tax accountant and banker. His attorney advised him to set up a new company. His accountant said to offer the new item as an expanded product line within his existing business. The banker said it didn't matter to him as my friend would still have to offer a personal guarantee on any monies borrowed (his insurance agent weighed in also, but that is a story for another day).

Needless to say he got extremely frustrated going back and forth between business advisors trying to understand their advice. Much of what was said to him was technical in nature. In addition, he was trying to reconcile their different points of view. Part of the problem was that he was trying to coordinate everything himself and still run the day-to-day operations of his business. He finally threw up his hands and said the heck with it. I asked him the background of his most senior accounting employee. He replied that she was a bookkeeper by training (a very capable one he added).

Many business owners feel that they cannot afford a CFO and must do everything themselves. Some aren't sure how a chief financial officer adds value. Among other things, a CFO is like a conductor of an orchestra. The conductor interprets the composer's music. The conductor needs to make sure that each section is playing the correct movement at any given time. He or she may not actually be playing the violin or trumpet, but they need to make sure that all of the musicians are working as one. This is like a CFO. They make sure that your business advisors and employees are on the same page and speaking the same language.

If your business is in need of a conductor, contact Ed Baloga, Partner with B2B CFO® at 914.474.9547 or at ebaloga@b2bcfo.com.