Do Over.

[Gaspar]

Just a side note on the whole ATM topic. . .

The Automated Teller Machine industry is not happy about President Obama's comments that the development of ATMs has cost jobs.

Mike Lee, CEO of the ATM Industry Association, emailed me the following response:

'President Obama should never use ATMs as an example of how technology replaces human labor because ATMs today play a critical role in providing extensive employment in the ATM and cash-in-transit industries. In addition, ATMs provide an indispensible range of services to customers, including all-hours access to their own banked cash. With over 400,000 in America alone, ATMs have become the main distribution channel for the distribution of cash in all modern economies and cash remains by far the most popular form of payment by US consumers. The whole purpose of the invention of the ATM back in 1967 was to make cash available outside of bank hours, liberating citizens to access their banked money 24 x 7, a huge increase in convenience.  Given these major roles of the ATM, it would be quite irrational to turn the clock back to the 1960s to a time before ATMs.

Aimee Leeper, a spokeswoman for ATM manufacturer Triton Systems, "We're not in the business of taking American jobs. What I wish President Obama had thought of is that people want convenient access to their money. How crazy is that?"

[Red Arrow]

The GOP is trying to fight for what they believe will help turn the tide, Democrats are doing the same thing.  The problem is, there's no compromise happening and it's not just the GOP which needs to learn to compromise.

The modern definition of compromise is when you give in and do things my way.

[Gaspar]

The modern definition of compromise is when you give in and do things my way.

It used to be that they were both fighting for the same goal.  Now they are just fighting to be contrarian to each other.

[heironymouspasparagus]

That feedback loop is broken and has been diverted to China.  For decades, not just the last couple of years.

I, too, have two companies, one defunct and one active.  Have hired only about 15 people in the history of the two, and had to lose all but one in recent years.  Obviously, I am not a lawyer.  Maybe not even a very good businessman - probably not, since I'm not rich like guido.  That's ok, 'cause I still haven't given up and won't.  Am planning the "next big thing" early next year.  (The only question is where, not if/when.)  It will be a small operation with just 2 to 3 people to start (in addition to me).  I am becoming rich, even as we speak! 

In the meantime, will keep on working at the full time job, will keep working to get the OTC to recognize what a manufacturing operation is (goes to the "where" in the above...) and keep on looking for really good BBQ.  Oh, wait...mission accomplished on that last one!!  Got BBQ!!

As far as a lack of Corporate confidence being missing??  What a crock of crap.  Putting off hiring may be a political strategic method, or a means to overwork/overload people right up to the point where critical operations are not accomplished, but it is never a lack of "confidence".  "Oh, my...I have no confidence in my business, so I am going to let it whither and die or suffer from neglect..."!  Yeah, right.

What is really going on is the purchase of NAFTA, etc. and the exportation of work to the Pacific rim.  Every businessman knows that reality and just hopes the "great unwashed masses" don't figure out the truth.  But as we have started to see, when you put massive numbers of people out of work, there is no money to buy the stuff you had made cheaply in China.  Kind of a Catch-22 thing.  No,... exactly a Catch-22 thing!

[Conan71]

That feedback loop is broken and has been diverted to China.  For decades, not just the last couple of years.

I, too, have two companies, one defunct and one active.  Have hired only about 15 people in the history of the two, and had to lose all but one in recent years.  Obviously, I am not a lawyer.  Maybe not even a very good businessman - probably not, since I'm not rich like guido.  That's ok, 'cause I still haven't given up and won't.  Am planning the "next big thing" early next year.  (The only question is where, not if/when.)  It will be a small operation with just 2 to 3 people to start (in addition to me).  I am becoming rich, even as we speak! 

In the meantime, will keep on working at the full time job, will keep working to get the OTC to recognize what a manufacturing operation is (goes to the "where" in the above...) and keep on looking for really good BBQ.  Oh, wait...mission accomplished on that last one!!  Got BBQ!!

As far as a lack of Corporate confidence being missing??  What a crock of crap.  Putting off hiring may be a political strategic method, or a means to overwork/overload people right up to the point where critical operations are not accomplished, but it is never a lack of "confidence".  "Oh, my...I have no confidence in my business, so I am going to let it whither and die or suffer from neglect..."!  Yeah, right.

What is really going on is the purchase of NAFTA, etc. and the exportation of work to the Pacific rim.  Every businessman knows that reality and just hopes the "great unwashed masses" don't figure out the truth.  But as we have started to see, when you put massive numbers of people out of work, there is no money to buy the stuff you had made cheaply in China.  Kind of a Catch-22 thing.  No,... exactly a Catch-22 thing!

From where I sit, I can tell you the following:

We've got about a 12 week backlog on work.  Some of that is waiting on vendors to produce equipment or components, some of that is simply having enough hands on deck to get jobs finished quicker.  We could cut the backlog by about 1/2 with double the workforce in our fabrication and service departments.  We also do something we rarely did prior to three years ago: progress payments on the cash and carry sale of new equipment or on complete projects with a minimum 30 to 50% non-refundable deposit up front.

My boss won't hire anyone new right now unless we lose someone for the following reasons:

We have no way of knowing what the future is going to hold when now we've got the major economists predicting lower growth, possibly higher unemployment, and an unclear regulatory environment in some areas.  He's worried about a sudden plunge in the dollar if the debt ceiling is raised.  My boss is even more to the right of me on fiscal issues.  He typifies the type of business person who worries about payroll costs and what additional tax burden means to him.  He views the Obama administration is anti-business.  Right, wrong, or otherwise, that's his perception so that's why he's running the business ultra conservatively.  He's socking back cash for a protracted business drought in case things really slow down for us in the future.  He's not much different than many other small business owners. 

People can poo-poo that all they like, but so long as a lot of people who own and operate small businesses think like that, it will continue to defy any sort of economic theories.  They will continue to operate much like we are, make good profits, and be content to sit on those profits for a rainy day they still believe is around the corner.

Over the last three years, customers have gotten used to longer waits, tighter credit terms, and are just as nervous as we are.  We've managed to stay in business by being able to be lean through lean times and being able to hire smartly and manage well when we are going great guns.

[Cats Cats Cats]

From where I sit, I can tell you the following:

We've got about a 12 week backlog on work.  Some of that is waiting on vendors to produce equipment or components, some of that is simply having enough hands on deck to get jobs finished quicker.  We could cut the backlog by about 1/2 with double the workforce in our fabrication and service departments.  We also do something we rarely did prior to three years ago: progress payments on the cash and carry sale of new equipment or on complete projects with a minimum 30 to 50% non-refundable deposit up front.

My boss won't hire anyone new right now unless we lose someone for the following reasons:

We have no way of knowing what the future is going to hold when now we've got the major economists predicting lower growth, possibly higher unemployment, and an unclear regulatory environment in some areas.  He's worried about a sudden plunge in the dollar if the debt ceiling is raised.  My boss is even more to the right of me on fiscal issues.  He typifies the type of business person who worries about payroll costs and what additional tax burden means to him.  He views the Obama administration is anti-business.  Right, wrong, or otherwise, that's his perception so that's why he's running the business ultra conservatively.  He's socking back cash for a protracted business drought in case things really slow down for us in the future.  He's not much different than many other small business owners. 

People can poo-poo that all they like, but so long as a lot of people who own and operate small businesses think like that, it will continue to defy any sort of economic theories.  They will continue to operate much like we are, make good profits, and be content to sit on those profits for a rainy day they still believe is around the corner.

Over the last three years, customers have gotten used to longer waits, tighter credit terms, and are just as nervous as we are.  We've managed to stay in business by being able to be lean through lean times and being able to hire smartly and manage well when we are going great guns.

Minus the tighter credit terms its just room for somebody else to grab up some of the market.  Besides, he can fire somebody just because he doesn't like the color shoes they wear.

[Gaspar]

We have basically the same situation here.  We got the green light to hire developers, but during the interview process, the owners began to rethink that, and now want to contract development even though it will cost more.  The liability of bringing more people on when we have no idea where the country is headed is simply not a risk they want to take.

Our clients are now asking for SaaS solutions rather than purchased systems.  This is actually good for us, because we get paid for the implementation right off the bat and companies are willing to pay us significantly more a year for our products (up to 200% over 6 years). 

The focus has shifted to conserving cash-flow rather than making large investments and depreciating.  That signifies a big change from just 4 months ago.  Companies still want technology that mitigates the need to bring on additional labor, but they're not willing to take on the debt, or spend the cash.

[Conan71]

Minus the tighter credit terms its just room for somebody else to grab up some of the market.  Besides, he can fire somebody just because he doesn't like the color shoes they wear.

Not really.  We are finding a lot of other companies, plus our vendors we've done business with for years, are wanting money up front as they are just as worried as we are about a customer canceling a large capital project and being left holding the bag.  Five years ago, you didn't worry about things like that.  If they cancelled and you had no deposit, there was usually someone else who would end up purchasing the equipment and you wouldn't wind up with it sitting on your inventory for even six months.

We are also seeing large companies like Honeywell requesting 120 day payment terms when they purchase from their vendors because they are trying to keep as much cash freed up as possible so when they see an opportunity to make a large buyout, they can pay cash and don't have to incur any new debt.  We can negotiate that to about 1/2 along with a finance charge if it keeps them from getting essential equipment or projects finished in a timely manner.  These are interesting times for business.  

[Red Arrow]

We are also seeing large companies like Honeywell requesting 120 day payment terms when they purchase from their vendors because...

Not getting your money for 120 days can be rough on a small business.  A large company I used to work for went from 30 days to 90 days to pay vendors (mostly local machine shops) and wound up with vendors that would only take cash on delivery or up front or might even no-bid a job.

[heironymouspasparagus]

We are at about 4 to 5 month backlog in probably half the product line.  Have hired a ton of people in last two years.  Still have a sign up.  May was a disappointment, but June looks better (to plan).

I am watching these people closely.  On my small scale, I should be able to do some things they do, so am trying to learn.

Contractors;  true story!  Used to work at a place where there was a software developer who was hired for some embedded work - about 1991 - with the hope of getting on full time.  The guy who hired him never really liked him.  Kind of disliked him.  As consequence, he never would hire him full time.  Just kept paying him premium hourly rate for many years.  Last I heard (about 2 years ago), the coder was still there, while the guy who hired him retired last year.  Almost 20 years at very nice hourly rate.  Good manager!  I would go for that in about 1/10th of a second.

Same manager was mine for about 5 1/2 years.  Got 2 formal "performance reviews" in that time.  Each time, the conversation was, "Well, I don't really know what you do around here, so it is difficult to give a review".  This in spite of going to lunch together at least twice each week (sometimes more, and with other team members) so I could keep him up to speed with what/where/when/why/how, etc on projects, in addition to formal written monthly reports.  This at a large multi-national oil related company.  Anyone remember the "Peter Principle"??  Oil is God's way of telling you that you have too much money!!  (Derivative of, "Cocaine... God's way of telling you that you have too much money!")

I diverge... Conan, you all should not go out and double the work force, but one or maybe two extras could relieve the overtime, speed the pace a little bit (a backlog is a magical, wonderful thing to have), and be ready to respond a little more nimbly in case something new comes along.  Honeywell is great example of big guys squeezing a little harder.
Like Red said, it can backfire on them.  I know I am not going to be their bank!