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Follow up to compromising

February 21, 2019

This is a follow up incorporating some comments I received about my previous blog and some other observations.

  • Compromising is always a good strategy when negotiating a contract, enacting laws or even when deciding with your spouse where to go for dinner or on a vacation.
  • The blog was precipitated by the 16 senators that voted against the compromise bill to keep the federal government from closing.
  • We just went through a terrible time in our history – the federal government shut down because our elected officials could not agree on a deficit extension bill since it included many unrelated extras they could not agree on.
  • Congress actually stayed home or sat on their hands for the five weeks of the closure since the only bill that was voted on was the final compromise law that the President signed. Nothing was passed before then. Comment: What are we paying them for if they do nothing? Another comment: They were paid in full during the period the 700,000 federal employees were not paid.
  • There comes a period in every business negotiation when either party can walk away. In a negotiation where 700,000 employees will not be paid, or in matters affecting the national good, the parties cannot really walk away – they need to resolve their differences. In this case it was petty differences since the final deal was probably not too different from something that could have been worked out without the shutdown. I consider this action irresponsible by all parties, i.e. all of the Republicans and Democrats in the two chambers of Congress. Nowhere were the people considered. Shouldn’t the public have been considered? Pure self-centered callousness and just not being nice.
  • There are some things where compromising is not appropriate. In matters where the actions are illegal, not honest, immoral, could needlessly harm others, be against strong good intentioned personal convictions where the person is consistent and steadfast in those principles [which very few are], against strong religious principles by sincerely religious people [which few actually are], or where confronted with obviously ridiculous positions.
  • I was asked why I did not name the 16 senators. I could have, but decided not to in order to keep the blog on a level of Congress doing the right thing rather than looking like a personal attack on some of them. Also, not all of the 16 will be running for president or ran for president and I did not want to add to the verbiage. I did provide links so those that care could easily look it up with two clicks.

In the words of one of my friends, “your premise is that compromise is the preferred option to resolve disputes, but I question if all disputes lend themselves to compromise.” Not all lend themselves to compromise, but in the situation of the recent legislation to keep the government open, this certainly did.

Trusting People that Cannot Compromise

February 19, 2019

Families, businesses, and governments run based on compromises. Even kids in the playground. Yet we have just seen, in my opinion, abhorrent actions by some of our legislators. 16 Senators voted against the bipartisan bill to keep the government open. Obviously there were many compromises and I cannot believe anyone was completely happy with the final result – yet the bill passed overwhelmingly.

There was a big picture here and a VERY big picture if you were one of the 700,000 federal workers that did not get a paycheck for a month and one of the over 1 million others that were contractors, support people and peripheral business owners and workers that lost earnings during the shutdown period. I estimate that over 5 million people including family members were directly affected. Yet there was an insensitivity, lack of empathy and a brash callousness by the 16 senators that voted against that bill. My question is why?

I don’t care why – they have their pea brained reasons probably steeped in self-righteous indignation that they did not get everything they wanted, and probably worse, that the other side got something they wanted. Likely their egos also got in the way, as did what they hypocritically believe their beliefs in how the government should run, stand for and not permit. Bull doody!!!

Over 5 million people’s lives were affected and they did not see fit to compromise to make sure that they would not be hurt again in such a short period after the last closure.

Life is not perfect. We would like it to be, but it isn’t. We try to do the best we can and get along the best we can and while we always try to look out for ourselves, there is no reason to go out of our way to hurt someone else – especially when it doesn’t tangibly or even intangibly benefit us.

The big picture is the over 5 million lives were needlessly hurt; and sixteen mean spirited senators could not look past their petty agendas.

Now, seven or eight of them either want to become president or thought they could in the last presidential primaries. What type of leader would they have been and will be if they have an inability to compromise when it is so overwhelming for the public good? Narrow minded partisanship is just not good for us and our country. Who, in their right mind would vote for these types to be our leader? As far as I am concerned, every one that voted against that bill should be disqualified to become our president – or disqualified to remain as a senator if and when they run for re-election. We need bold leaders – with a vision, a sight on the greater good while protecting the lesser among us, with the guts and courage to lead even when it requires compromising to get some of the good things they want without begrudging what they need to give to the other side who likewise is compromising, assuming all are acting in good faith and legally.

In the larger sense, we need strong leaders and the sixteen that just voted to shut down the government are disqualified to be our leaders. I just cannot trust a leader’s judgement that won’t compromise under this type of situation.

The House vote was 300-128. If you want the exact votes by person here are two links:
https://www.govtrack.us/congress/votes/116-2019/h87
https://www.govtrack.us/congress/votes/116-2019/s26

WIIFM for personal attributes

February 14, 2019

My previous blog about why New Yorkers should be concerned about WIIFM rather than what Amazon was getting with respect to establishing a headquarters in Long Island City. WIIFM is a good way to look at a lot of things. One area I don’t understand is the excess concern some people have about other people’s personal attributes such as race, gender, sex, religion or nationality.

We need to agree that an individual’s personal characteristics, whatever they are, can have no effect on anyone other than that individual and possibly their immediate circle of acquaintances. The problem that I see is that too many do not see it that way and become overly concerned with people that have characteristics contrary to their views. An individual’s “difference” can make no “difference” on anyone else. A difference perceived by one doesn’t mean it is a valid difference except in the mind of the person that notices or recognizes that there is a difference worth paying attention to and enough so to be offended or annoyed by it. That makes no sense to me, but these prejudices are the subject of numerous daily media headlines and uncalled for harmful actions including some by government officials.

Nothing can be accomplished by someone being upset by someone else’s individual characteristics that are different than theirs. This is especially so because the bias can cause no detriment to them.

Sometimes it pays to ask yourself “What’s in it for me?” regarding other people‘s individual characteristics and then putting them out of your mind, which is where it belongs. WIIFM!!!

WIIFM Re: Amazon

February 12, 2019

The consternation regarding Amazon’s deal to build its headquarters in Long Island City seems misguided to me. It appears the local politicians are upset about the almost $3 billion giveaway other politicians made to bring Amazon into New York. I think it isn’t being looked at properly.

Let’s agree that $3 billion in benefits is a lot and lets also agree that Amazon with a market cap of about $800 billion and Jeff Bezos with a personal net worth making him certainly one of the richest people in the country don’t really need those benefits. However, let’s also agree that over 25,000 new jobs will be created by Amazon (and many more in peripheral and support employment) bringing billions of business and taxes into New York City and New York State for at least the next generation and probably much longer. So the question is, why are the local politicians so upset?

My contention is that they are upset because of the large benefit being granted to Amazon. Another contention of mine is that they are not looking at it properly. They need to ask themselves WIIFM – “What’s in it for me?” Instead of looking at what Amazon is getting and making themselves crazy about that, they need to concentrate on what they are getting.

I personally think Amazon is nuts moving into the third highest taxed state (NY is only behind California and New Jersey and also not considering the added New York City taxes on its residents and the high sales tax in Long Island City) when they could have chosen a much lower taxed area. What were the Amazon geniuses thinking?

Business and human feelings are too often based on what the other guy is getting rather than what you get – rather than WIIFM. It would seem the benefits to New Yorkers are far disproportionate to the benefits they are conferring on Amazon. The local politicians should really look at what it means to New York rather than what Amazon is getting

I am not privy to any of this deal; I own no Amazon stock; I do not live in New York; and do not know any of the people involved; so have no interest in whatever finally occurs, and actually I do not care. I just find it quixotic that the focus is on what Amazon is getting rather than what New Yorkers are getting.

The next time you are in a negotiation or making a deal, spend some extra time on WIIFM rather than what the other side is getting.

Seventh Anniversary of Blog

February 7, 2019

This is the 726th blog that has been posted here on a twice a week schedule since Feb 8, 2012. Thank you for reading them and contacting me with comments. So far I haven’t figured out how to monetize the blogs, but I am getting value in other ways.

The value is in my pleasure writing them as a form of creative expression; helping people with applicable bits of information drawn on my experience; and some blogs are focused toward people I want to engage me on that topic. I enjoy sharing what I believe is helpful information; spotlighting some of our firm’s activities with interesting people or interesting services; and some posts I just have fun with. The blogs have also made me a thought leader in certain areas and also a better writer and better able to express myself succinctly and to get to the point clearly. They have also provided public expressions of my expertise in some issues of concern to clients and people they might refer me to. A lot of the blogs are relaxing to write – actually the first drafts are all very relaxing; the editing to tighten them up, not as much.

Being obligated, at least in my mind, to write two blogs a week has made me more aware of my surroundings, what goes on and the complexities, ambiguities and craziness that occurs. This awareness is the fuel for what I write, and perhaps a reason for writing the blogs.

Last year I expressed the hope that I could organize the blogs and have them published as a few books. The posted blogs are over 350,000 words filing over 825 pages. They could easily become three books, but it would take time, and I would rather spend my writing time creating new blogs and articles than rehashing and editing what I already recorded. While I am an accountant, and we are associated with numbers, much of what I do professionally other than the time at consultations is with written prose with some accompanying numbers. I no longer prepare financial statements – there are plenty of people at Withum that do that excellently – but if you look closely many financial statements have about five pages of numbers and twenty or more of writing.

Back to why I do these blogs – I like to, and I hope you like reading them and can put some of them to good use.

Not everything we do has to show a bottom line profit.

Concierge services at store front prices

February 5, 2019

It is unfortunate that some clients complain about fees and it is a distasteful part of being in business.

The reality is that fees must be paid – that is how we earn our living – and that regardless of the client’s perception, most fees are not excessively high. If they were too high we would have long ago ceased to be in business – either because clients could get the same services and value elsewhere at lower prices, or we would have made so much money that we no longer needed to work. When clients think fees are too high it seems there is a disconnect by them with the value of the services. My advice is that if there is no value, or no special value, then go to the lowest priced provider. If there is value, then it should be measured by the cost and alternative providers of the service. The reality is that you cannot get concierge services at store front prices.

Regarding taxes, we sell a product – the tax return – and we also sell an invisible feeling. The value is usually created by the degree of feelings the client places on the invisible we provide. Will we do a better job; keep the client out of trouble; not do something that would cause an audit; and do we go out of our way to make it easy for the client to deal with us and the tax return filing process? Further, will we use the tax return as a guide to perform tax planning for the current and future years, help the client with financial planning or to formulate, determine and crystalize their goals and then present a plan on how their dreams could be realized and implemented; and will we be there if there is a problem or if the client needs us for something extremely critical. No accountant can measure the feeling, but we can control it to some extent by the way we act with the client and react to the client’s concerns and by how we are proactive in helping the client achieve their goals, and feel more confident and more secure.

How we act matters, and how those actions create value to the client is a determining factor in the pricing. Do we price the invisible services with a tag-along product; or do we price the product with the tag-along invisible. I know from experience that pricing the tax return with the tag-along invisible is less costly to the client, and less profitable to me, than the other way around. However, we live in a world where there are much more providers of the tax return than the invisible; but people being people they look more closely at the tangible deliverable, and also that many will not pay much for the invisible if it is sold as a separate service, regardless of the value conferred. The invisible needs to be bundled with the tax return with the pricing reflecting part of the value of the invisible, though not all of it, but the process works. We, i.e. the accountant AND client, are in this for the long haul and it is not necessary to get full payment for full value on every transaction, but the totality of the relationship becomes profitable for both parties. It is a collaboration designed to make the client more knowledgeable, wealthier, more confident and more secure.

Store front tax preparers do a good job on the tax return; but accountants that provide concierge services create sustainable value far in excess of the tangible deliverable for a far longer period than for which the payment is remembered while the benefits become ingrained in the fabric of the client, making the interaction into a value filled relationship which value cannot be separately priced or determined, but which certainly provides extraordinary value to the client.

Of course there are some exceptional clients that recognize the value of the invisible and are willing to engage the accountant for that value, but I believe what I wrote expresses the views of many clients.

Succession Planning for Real

January 31, 2019

Many clients need succession planning but neglect it until it is too late. Recently I met a young lady that had succeeded to her family’s business that was established in 1935. She is the fourth generation and I would like to share her story.

Kimberly Denis grew up in her family’s business and started working there when she was 8 years old. They owned a floral and liquor store called Wine & Roses. She would come in and sweep floors, fill the water tubes for roses, file orders and even fill up the beer fridge. She always enjoyed the aspect of helping customers and getting to know them. The customers were like family and she always loved being a part of all the important moments in their lives, both happy and sad.

Here is the rest of the story in her own words:

“I started helping customers as soon as I was allowed on the sales floor. It probably wasn’t the best idea in some instances, I mean who wants a 12 year old recommending a smooth flavorful Pinot Noir to them. But, I have to say I sold a lot. Also flowers were easy to sell; our designers were amazing.

Fast forward some years, I went to college at Penn State and in 2014 graduated with my degree in Marketing/International Business. I didn’t quite know what I wanted to do career wise but I had interned with Kohl’s the previous summers and they made me a good offer so I took it. While in college, I noticed the tension building back home and within the family business. When I returned home I started working at Kohls and in between my shifts helping out at Wine & Roses. Although I had no clue how to fix the mess we were in with huge debt and the business in steep decline, I knew I needed to try. Something in my heart was keeping me there and told me to keep pushing. I firmly believe things happen for a reason and that God has a plan for us. That same fall Kohl’s transferred me to open up a new store in Long Island. No offense to any Long Islanders but, I had no desire to live there. Plus, I had just met Will and we were newly dating [they were married last September]. It just did not feel like the right fit or career move. So after working my 22 hour shift for Black Friday, I told them I was leaving the company. I then went home to my family and told them I was going to take over part of the business. I was met with very mixed reactions and multiple family members actually thought I was insane. But my immediate family, my brother Stephen, dad and mom banded together and we decided to forge ahead.

With a lot of blood, sweat, tears and drama (It was owned by my Dad and his brother and the split was not as pretty as we would have liked) Denis Flowers LLC was re-born. I say re-born, because my great grandparents started the flower shop in NYC in 1935 and that is where our story began. We sold off the liquor license to pay back debt and returned to our roots and the original name. In the spring of 2015, My brother and I found a little location in the back of a building down the block from where Wine & Roses was. As soon as I opened the door to the space, I envisioned the shop. Although it was completely gutted and nobody had ever had ever had a store there, I knew this was our space and it also had ample parking so that was huge. We had no money for the build out, but thankfully my brother is an electrician and with a lot of great friends you learn to be resourceful when you need to be. Together we built the store. Again, many people doubted us, I was 22 at the time with no real life business experience and we were renting a store in the back of a building, but I honestly think that was they best motivation. The majority of our business was over the phone, online and everyone uses Google Maps to find you so we weren’t scared of the location. It was also the best way to keep overhead low. We could not afford a prime location.

So that was 2015, and we are entering our 4th year in this location. The business has grown tremendously, we do floral parties and we are adding new designs, products and special services. I am still working out some kinks, this industry is tough with low profit margins and very high competition. But I still have that gut feeling in me that I am doing the right thing and to continue to push through. I have a wonderful team with me, which includes my Dad, two amazingly talented designers who took this journey with us from Wine & Roses even when I could not pay them what they deserved. We have added a few other key team members along the way and without them, we would not be here. There have been a lot of obstacles, tears and doubts, but I think that if we keep pushing we are going to find our sweet spot.”

This is a great story and thanks, Kim, for sharing it. It just goes to show that the entrepreneurial spirit still shines. BTW, if you are in Bergen County NJ, check it out at 185D Madison Avenue, New Milford, NJ, 07646, (201) 262-9463 and their great website www.denisflowers.com. They accept orders on line and by telephone, and deliver everywhere.