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July 30 2014
6 Secrets for Creating Fierce Employee and Customer Loyalty
Why do companies exist? Is it solely to enrich their owners or do workers and customers matter as well?
I think the answer matters to entrepreneurs: In 2003, I argued in my book Value Leadership that doing well by employees, customers and communities enriches shareholders over the long run.
In the United States, the answer usually ends up being that all these groups are important but when resources become scarce, shareholders and debt holders are the ones who matter most. (In Germany, things are different: Workers also have a seat on corporate boards.)
So the thousands of workers on strike at Market Basket, the Tewksbury, Mass.-based, 25,000-employee grocery chain, probably won’t be enough to convince its board of directors to reinstate the CEO, Arthur T. Demoulas, it let go last month.
What probably will make a difference is whether the board – which last fall paid out a $300 million special dividend to shareholders -- accepts the offer by Arthur T. Demoulas to acquire the 50.5 percent stake in the $4.6 billion company now controlled by his cousin Arthur S. Demoulas and other family members.
Whatever the outcome, the 71-store Market Basket offers lessons for running a successful business that are very important. Former CEO Arthur T. Demoulas has demonstrated that a company should serve all of its stakeholders -- that is, workers, employees, shareholders and the community.
This is particularly significant for companies where many of the employees are in contact with customers, such as the in the grocery industry: Cashiers, butchers and all sorts of other people interact with customers. And if those employees have deep functional expertise in the business, develop relationships with customers and convey a positive attitude about the company, shoppers will keep coming back.
Moreover, even employees without direct customer contact -- like those purchasing the goods stocked on shelves -- will be more productive if they are happy and loyal. The reason is simple: They know the business so well that they can do their jobs more effectively.
A closer look at Market Basket’s operations under Arthur T. Demoulas suggests that its industry-beating 7.2 percent operating margins in 2012, cited by the Boston Business Journal, derive from six secrets: long-term employee relationships, low overhead, bulk purchasing, low prices, no debt and treating employees and customers like family. Here's a look at these six key variables:
1. Developing long-term employee relationships.
As Kevin Griffin, publisher of The Griffin Report of Food Marketing, explained to The Boston Globe, Market Basket has some employees at its headquarters who have been at the company 40 years. Market Basket accomplishes this by promoting from inside the ranks, with “once-grocery baggers ascending to senior positions.”
And the company pays staffees more than rivals do: Experienced cashiers earn more than $40,000, while full-time clerks receive salaries that start above the minimum wage at $12 an hour, according to theGlobe. Four-times-a-year bonuses are granted, amounting to as much as to six to eight weeks pay.
The company contributes 15 percent of each employee’s pay to a retirement plan (worth $552 million in 2013). Market Basket made $43 million in contributions in 2012, the Boston Business Journal noted.
2. Keeping overhead low.
The long-term employee loyalty seems to boost productivity. Compared with its rivals, Market Basket had only six employees working as grocery buyers, about one-fifth the number of grocery buyers as would be found at a similarly sized chain, the Globe reported.
“By the time they’ve reached leadership positions, employees have been with the company long enough that they are deeply experienced across many levels of the company, meaning they’re able to operate more efficiently from a staffing perspective," the Globe noted, summarizing Griffin's reasoning. "The lack of turnover also cuts down on the costs of recruiting and training."
3. Buying in bulk at a discount.
Like many successful large retailers, Market Basket takes advantage of its size to negotiate volume discounts, the Globe noted, with Griffin explaining that the company builds long-term relationships with suppliers to assure it can deliver low prices.
4. Maintaining low prices.
Market Basket has a reputation for low prices. As shopper Nathan Mudhall emailed me: “I always wondered how low margin products could vary so much in price from company to company." He singled out Market Basket's price for Land O Lakes Butter, $3.79, as considerably lower than other stores'. "There is no other market that is even close to them in price, selection, service, and cleanliness."
July 25 2014
Cutting-edge marketers, here’s why you don’t want to miss GrowthBeat (pre-registration ends today)
GrowthBeat is coming up on August 5-6, and it’s shaping up to be one of the most provocative marketing-tech events of the year.
We’re bringing you some of the best and brightest in modern digital marketing for a series of never-before-seen case studies and sessions designed to help you declutter the landscape, simplify functions, clarify your goals, and find your way to success.
Today, we’re announcing another fantastic round of speakers, including top marketing/growth execs from 7-Eleven, Adobe, Airbnb, ClearSlide, DocuSign, Eventbrite, Facebook, HootSuite, Jiffy Lube, LinkedIn, Oracle, Salesforce, Walmart, Zappos, and a host of the hottest marketing-tech players.
NOTE: Ticket prices increase by $200 today (7/25) at 5 p.m. Pacific, and seats are very limited.
Check out the speaker and program updates below, and make sure to register here by 5 p.m. to save.
Questions GrowthBeat will answer:
- What are the best case studies showing how marketers have used the latest software to retain and acquire customers?
- What are the big data and analytics apps that help disqualify leads that are a waste of time and that highlight only those leads that are the most attractive?
- What apps work specifically well for consumer businesses versus enterprise businesses?
- What are the leading tools that help you find possible growth potentials by monitoring data across your various activities and units?
- What are the use cases that vendors such as New Relic, AppDynamics, and Mixpanel showcase — all of which help you find useful profit-yielding patterns of unstructured data without you knowing about them?
- What software tools require real data scientists and other trained professionals to help achieve profits? By contrast, what are the best tools business executives can use with little training?
- Where do the emerging big data applications tend to work best in marketing and sales?
- What are the cutting-edge developments in fields such as behavioral science that will help you optimize lead generation and qualification?
- What are the other new rules, from creative to analytics, that marketers need to follow in order to succeed?
July 23 2014
PROOF THAT YOUR MOONLIGHTING GIGS CAN EARN YOU MORE THAN JUST EXTRA CASH
I am on a quest to stay passionate and productive in my day job.
By day I am a business consultant, but by night--not to mention during the wee hours of the morning and on weekends--I become a freelance writer, yoga teacher, and photographer.
On my journey I have met a number of inquisitors who ask why I toil away the hours before and after work to master crafts that are seemingly unrelated to my day job.
For instance, I work in consulting, so my pursuit of an MBA was embraced, even enthusiastically promoted to clients by my colleagues. But the mere mention of my other jobs provokes an inquisition of epic proportions.
Here are four lessons I’ve learned from moonlighting that may inspire you to render your own lessons from a side gig:
“If you don’t know how to pronounce a word, say it loud!” said William Strunk, infamous author of the definitive English style guide, The Elements of Style. Co-author E.B. White explained this piece of advice in the book’s introduction: “Why compound ignorance with inaudibility? Why run and hide?”
Businesses are already plagued by rapid shifts and uncertainties of market, technology, and resources. You can only make matters worse if you can’t muster the courage to admit when you don’t know something; it’s practically a criminal offense if you make definitive assertions instead. There is a place for guesses, but declare that you are stating an assumption not a fact.
As an over-simplified example to illustrate the point, imagine that your team poses the following question: “How often do consumers purchase products of category X without customizations?”
Each answer below sets the team on a different track:
- “We don’t know. But it is our assumption that 9 out of 10 times our consumers may buy the product without any customizations.”
- “9 out of 10 times our consumers buy the product without any customization.”
The first version drives the team to find ways in which to answer the question more definitively. Alternatively, the team may launch an offering but incorporate robust mechanisms to quickly validate this underlying assumption. Even more important, the surrounding business processes could be engineered to respond with agility if the underlying hypothesis is discovered to be wrong.
The second version guarantees that the team is caught unprepared if the solution hinges on this information and business reality contradicts it.
Listen to the English professor and be brave. If you don’t know something, say it loud.
In your jobs you develop insights underpinned by complex analysis. A surprising insight, however, is only useful if your clients and colleagues are capable of utilizing this new knowledge with confidence and elegance.
Consequently, you must tailor a journey to take others along for the ride efficiently. This aspect of my craft benefited most from my leading others in yoga. It reminded me of the value of delivering complex information with an economy of words.
Consider the below options for guiding a yoga class from one move to the next, in one breath. With the first option, I excluded those who are unfamiliar with or uninterested in the jargon of yoga. With the last option, I delivered excessive information, and the class consequently lost its momentum as individuals struggled to apply the numerous instructions I had offered.
July 21 2014
5 Reasons to Make Friends with Your Competitors
When I owned my coffeehouse (2001-2004) people frequently asked me if I hated Starbucks. I didn't. After all, Starbucks is responsible for re-introducing the culture of coffee in the United States and for establishing it in countries where the cafe culture never before existed. Starbucks put the romance into the coffee experience. Without those romantic notions consumers wouldn't have given a second look at my drive-thru, or stop by for a fireside chat over a delicious cuppa joe with their friends. Thank you Starbucks!
Still, the truth is that the coffee giant made it impossible for an independent coffee retailer like me to compete, so I didn't. Instead my business became what Starbucks is not. It too became a household name but for reasons far from its convenience and fast service.
Stop viewing your competition as the enemy and instead use it as the catalyst to brilliance. Instead of investing your precious energy into hating or envying your competitors use it to become the very best entrepreneur you can possibly be. Here's how.
Give your customers another reason to choose your brand.
I knew that my delicious, fair trade coffee wasn't enough to bring customers through the door so I gave more dimension to the consumer experience. I added open mic nights, brought in great bands, and did art shows and book signings. I even opened a private conference room to local businesses and organizations.
What can you offer in addition to your products or services? When you stand out from the competition by offering something of value that your competitors don't, you give your customers a better reason to choose your product or service. How can you help your customers go beyond a simple purchase and truly experience your brand?
Keep the price down to remain competitive.
When I purchased my coffeehouse I knew that I would have to bring down the cost of goods. It forced me to move outside of my comfort zone and negotiate with vendors. In many cases I found new suppliers, and I never stopped negotiating.
Don't get complacent about costs. Just because your suppliers have served you for years doesn't mean they can't do better. Also keep an eye out for new materials, parts, or products that will create a cost savings.
Innovate, innovate, innovate.
What sells today may not sell tomorrow. I've had too many entrepreneurs come to me for coaching because their once successful business became a cash drain.
Watch what your competition is doing to stay ahead and learn from their wins, as well as their failures. Don't get complacent! Don't get so caught up in the day-to-day operations that you neglect coming up with the next great idea. That's the mistake these entrepreneurs made and, sadly, it's often too late to breathe life back into the brand.
Upgrade your skills.
When you allocate all available cash and human energy to your business it's virtually impossible to invest in training and education for yourself. Keeping abreast of the latest technology and trends, and constantly honing your leadership skills will help you gain and maintain the competitive advantage.
Make a list of your weaknesses and make a plan to build upon the skills you need to overcome them. If you cannot acquire those skills yourself, then outsource or hire someone who can provide necessary skills to compete effectively.
July 17 2014
Visa Checkout isn’t an online wallet — it’s an online credit card
SAN FRANCISCO — Swiping a credit card is easy, and in its quest to make online payments just as easy, Visa announced today the release of a product called Visa Checkout.
It puts Visa plastic cards on the Internet through integration into merchants’ websites and mobile shopping apps. It’s similar to a prior Visa product, V.me, but we’ll get to that later.
The idea with Checkout is that if you want to do something like ordering from Pizza Hut online, you will be able to “check out” with Visa right from these merchants’ websites and apps. The credit-card company designed it to be simple and as quick as possible, only requiring a username and password to check out once you’ve registered.
People shop and pay for things all of the time, “but what they don’t want to spend their time doing is paying,” Visa senior vice president of digital solutions Sam Shrauger said at a press event.
“A lot of what was traditional e-commerce … is migrating either to the tablet environment or migrating to the small screen or the mobile phone,” he said.
It looks a lot like V.me, which Visa launched in late 2011 to compete with PayPal’s online payment tools. Checkout is a new incarnation of V.me, which the company said it learned a lot from, and is now replacing with the entirely re-engineered and redesigned Checkout. And just like V.me, Checkout lets customers store non-Visa cards as well, a bit as one does with PayPayl and other digital wallet-like products.
But Checkout is not a wallet, Shrauger said. It’s a digital representation of your Visa card, and the company even stressed how closely it’s worked to make even the branding feel like the classic Visa brand its customers are used to. When you check out online, a thumbnail of your Visa card shows up right next to the Visa Checkout button, for the express purpose of helping you feel comfortable.
“When you look at the real pain point for consumers … they don’t want a wallet,” Shrauger said. “They just want to pay and be done.”
This rings very true. A few months ago, during a small roundtable event American Express senior VP of digital partnerships and development Leslie Berland said that although American Express has experimented with mobile wallets, she has yet to find something that is not clunky and that’s “as easy as swiping.” American Express recently announced a partnership with ride-sharing company Uber that lets American Express cardholders using their card with Uber to earn extra points and even pay for rides with their points. This is exactly the sort of seamless and quick payment experience Visa is going for with Visa Checkout.
Competing financial services company MasterCard also recently launched its own product, MasterPass, on mobile to help MasterCard customers easily pay from within mobile apps.
July 15 2014
How to Pay Off an Ex-Spouse When Seeking a Mortgage
Net Yet Divorced or Separated?: First, if you and your ex are still legally married, but are not yet legally separated or officially divorced, this can pose problems related to the scope of the desired split when separating property and liens (loans). If you're buying a home for yourself, your spouse would have to sign a quit claim deed releasing their interest in the property you are buying since you are still legally joined with that person. The key is that the spouse must consent to releasing their interest in the transaction.
Divorced & Still Tied to Another Property: Let's say you're trying to purchase a home, you are legally divorced and the previous property has been awarded to your ex-spouse in the divorce decree. However, for whatever reason your ex-spouse is not able to qualify for a new mortgage to refinance you off of it. Your credit report shows a mortgage that your name is tied to on a property you no longer own nor have responsibility for. In the eyes of the mortgage lender, because the liability (loan) is tied to the property and has not been paid off with your name associated with it, the liability is still considered to be joint.
The problem here is that your credit history and credit score are directly affected by your ex-spouse's sole ability to make timely mortgage payments on the joint credit account. The only way to remove the responsibility from you, beyond the divorce decree, is for the other party to sell the house or refinance the mortgage, and taking your name off the loan, thus omitting the liability from your debt-to-income ratio on your new purchase.
Refinancing to Buy Out the Ex-Spouse: Say both you and your spouse own a home together. Without the divorce degree and without a separation agreement, both parties collectively agree that one spouse will stay in the property and will buy out the other, who is vacating the property.
Consider the following scenario:
- A couple bought a house a couple of years ago for $400,000.
- The spouse leaving the property originally contributed $50,000 toward the down payment and wants their $50,000 contribution reimbursed.
- The spouse who is staying refinances, cashing out $50,000, and takes out a new loan with a market interest rate and term to buy out the other party.
Other things to consider:
- If you are presently separated, in most loan scenarios, the lender will consider any joint debt as the marital union is still in effect, and this could spell trouble for qualifying purposes.
- If you are in the process of a divorce, it is ideal to complete any mortgage-related activity after the divorce has been finalized.
- If you're planning to divorce in the future (but the process hasn't yet begun), possibly completing the mortgage transaction/buyout before the divorce has taken place could be ideal as the transaction could be wrapped up sooner for both amicable parties.
- Also, if you're divorced and trying to buy a home, a lender will want to know whose property is whose when itemizing all real estate owned. To do that, provide a copy of your previous divorce decree -- no matter how old it is -- including all pages, all schedules and the marital settlement agreement rider.
July 11 2014
4 Types of Stretch Assignments You Should Turn Down
If you're like most professionals, you'll eventually reach a point in your career when you realize that you can't advance to the next level without being able to show that you have relevant experience — a lot of it.
One way to demonstrate that you have potential to grow beyond your current role is to take on "stretch" assignments. In 2003, Catalyst reported that a whopping 40% of women in corporate leadership positions said that seeking out difficult, highly visible assignments had been a very important advancement strategy. It makes sense: By volunteering for additional responsibilities, you can learn new skills, make your talents visible to your leaders, and demonstrate your readiness to step into a role that goes beyond the one you're currently in.
But despite all the benefits of volunteering for stretch assignments, there are times when the extra workload can actually work against you. In a recent coaching program, one participant told me, "A mentor told me that volunteering for stretch assignments will help improve my career. I took on three new projects, and now I'm not getting any sleep. Help!"
This woman's mentor had given her good advice, but it has to be applied within reason. We have to learn to put guardrails around accepting stretch assignments so that we don't get stretched too thin by them!
But how? How can you say "no" to stretch assignments without also saying "no" to furthering your career?
The key is to be highly selective. One common misstep that many high performers make is accepting too many low-visibility assignments that require them to work overtime without gaining the benefits of recognition and new skills that such assignments should bring. To avoid stretching yourself too thin for no visible career benefit, here is a checklist for when to diplomatically say "no" to extra assignments.
1. Assignments That Stretch You Too Thin
Before saying yes to a stretch assignment, do a risk assessment. Be brutally honest with yourself: Is there a risk you'll overreach, take on too much, and compromise your ability to fulfil your regular responsibilities well?
Start by weighing the obvious factors, such as whether this side project will suck time away from your core priorities and what trade-offs it might take in your personal life to accommodate extra hours at work.
For example, Andy, a technical project manager, had recently earned his MBA and was looking out for opportunities to build a reputation as a strategic thinker. When invited to take on a stretch assignment to combine numerous products into a single product line, he said, "I weighed the probability of being successful against the workload and lack of a cohesive business plan, and saw a no-win scenario." Ultimately, he declined to participate.
Don't ignore the possibility of unexpected emotional costs, either. Will saying yes to this assignment mean working with a leader who is known for burning people out? Will it require you to collaborate with co-workers who are notorious for slacking off in the face of a looming deadline?
Look for projects that stretch you without overwhelming you, so that you can deliver a consistently high quality of work. Focus on the quality of assignments, not quantity — and take them on at a cadence that allows you some recovery time between deadlines and deliverables.
2. Assignments That Don't Build Your Strengths
The best stretch assignments are those that require you to build business acumen, new technical skills, or leadership ability. Don't volunteer yourself for a project unless it has the potential to expand your skill set and lets you demonstrate your potential to go beyond the job you're currently in.
After turning down the first stretch assignment, Andy noticed that his business unit lacked a single point of contact for coordinating requests for new product development investments. Whereas the previous assignment would have used his existing project management skills, this one required him to develop new skills, such as strategic thinking and engaging stakeholders across the organization. He volunteered, shouldering an additional full-time workload for a month. "I built credibility as a strategic leader, which helped me land the higher-profile role that I'm in today," he said.
3. Assignments That Don't Meaningfully Expand Your Network
Stay away from projects that are all about work and have no relationship-building opportunities. Go after projects that allow you to build stronger working relationships and demonstrate your expertise to leaders, sponsors, potential mentors, and peers.
For example, say your company's annual charitable giving campaign is spearheaded by a leader you admire, who is responsible for an increasingly important business division in the company. Even though the campaign isn't directly job-related, taking a lead role in it can be a way to show that person that you are smart, energetic, and reliable — and to convey that you'd like to work for him or her one day. And the random collection of colleagues you'll meet and bond with? If you stay in touch, you can become each others' eyes and ears for what's going on in different departments.
July 09 2014
Out in the Open: The Crusade to Bring More Women to Open Source
July 07 2014
From Employee to Entrepreneur: How to Get Ready
A successful business can open up opportunities, options and freedom like very few jobs can offer. Starting a business will take time and require you to re-examine your priorities. The only thing we all have the same amount of is hours in the day. High-income business owners use their 24-hour allotment differently than employees.
Small businesses are a huge factor in the growth of the U.S. economy. True, the recession hit wannabe entrepreneurs hard. According to the U.S. Small Business Administration, the rate of new start-ups went down 12 percent from 2007 to 2010.
Getting the Money
Most businesses are started with a large investment -- made with owner equity, borrowed funds or both -- in goods, space, equipment, labor, marketing and other factors.
When you think of borrowing money, banks of course come to mind. Find out what banks specialize in your type of business. Network with others in your industry and find out who is helping them with financing. To get a loan, be prepared with a business plan, personal financial statement, an explanation of your experience in this type of venture, additional collateral, relevant industry facts about growth rates and demand and other pertinent information.
Finance companies and venture capital firms might be a better fit. Be very wary of companies wanting large upfront fees to simply review your application. Files for many small business ventures can be reviewed and underwritten with very little upfront costs other than an appraisal.
The Unique Selling Proposition
The most important part of any business is getting many people interested in what you have to sell. One critical point is a "unique selling proposition" that can separate you from most of your alleged competition. Some famous examples are Domino's (DPZ) "Fresh, hot pizza delivered to your door in 30 minutes or less or it's free" and Subway's promotion of healthy subs with its Jared weight loss campaign.
A USP should quickly tell prospects what's in it for them, and it should be used in all of your marketing messages. The USP is not necessarily a slogan but could be a mission. One of mine is helping families all over the country create tax-free generational wealth. It is simple and to the point, and many prospects want to know more.
July 02 2014
Crowdfunding Challenges Most Startups Don't Expect
It seems that almost every day, there's another startup proudly announcing that it has reached its crowdfunding goal. With so many success stories out there, it's easy for other aspiring entrepreneurs to believe that sites like Kickstarter are their golden ticket to launching a business. But the reality is, crowdfunding isn't always as simple as it seems.
"New entrepreneurs often believe that crowdfunding their venture or project is an easy endeavor," said Sang Lee, founder and CEO of Return on Change. "However, it requires much groundwork as well as a strong support network to truly make it a success. As they say, there's no such thing as a free lunch."
Whether you're looking to raise a small amount of startup cash or acquire a larger sum through equity crowdfunding, there are a few challenges you might face during the process that you may not have expected. Four crowdfunding platform executives shared the four biggest challenges that entrepreneurs face during their campaigns.[Equity Crowdfunding: 3 Facts Entrepreneurs Should Know]
Choosing the right platform
While all crowdfunding platforms serve the same purpose — raising money online from multiple donors and sources — not all of them are created equal. Consumer-use platforms like Kickstarter or Indiegogo are great for raising smaller amounts of money, but equity crowdfunding portals are best for entrepreneurs looking for sums in the millions. If you're interested in the latter, it's important to do your research and find the platform that will meet your needs.
"For new entrepreneurs, the biggest challenge is accessing investors to fund the capital ventures," said Matthew McGrath, CEO of Optimize Capital Markets. "There is an enormous number of investors who are willing and seeking to invest in these startup companies. It's a matter of allocating the opportunity."
McGrath advised thorough and diligent research into the size of the crowdfunding marketplace, the types of investors who are active, which sectors the portal focuses on, etc. From there, you can make an educated decision about the right portal to use. Choosing the wrong one can result in a loss of time, money and value, he said.
Planning a realistic goal amount and time frame
Many entrepreneurs, especially those new to the crowdfunding scene, tend to think that they will be able successfully raise all the money they need and then some by the time their campaign ends. It's important to be realistic about time and money when it comes to planning your campaign.
"One challenge area is when to begin raising [money] and how much to target via the crowdfunding site," said Shereen Shermak, CEO and fund manager Launch Angels. "Entrepreneurs often don't have a rule of thumb of how long a runway to create."
Consider how much capital you would need to take your business to the next major proof points, Shermak said. This is the starting point for the magnitude of your crowdfunding campaign.
"Entrepreneurs often believe that the crowdfunding sites will take over the fundraising process," Shermak added. "They should instead be prepared to fundraise in parallel to the online raise. This will create momentum for the online raise."
So you've got a great business idea, and all your friends and family think it's great, too. That means the donations will come pouring in once you launch your campaign, right? Not necessarily. Doing a lot of prep work before your campaign will help create and maintain interest in your project.
"Gauging interest for your investment opportunity or project is a critical part of the process before you start mass blasting via social media," Lee told Business News Daily. "This implies an allocation of time as well as resources both beforehand and during the campaign. It's definitely a process that requires budgeting out the time and the manpower needed to have a successful fundraising campaign."
Lee noted that, even though people have told you that they would support the campaign, it gets lost in their email inbox. Without specific requests, it's difficult for people to actually pull the trigger on an investment or funding opportunity. Make sure to have personalized outreach to your first degree networks, and remember to ask for assistance in spreading the word when you ask for funding commitments, he said.
June 30 2014
Homebuying: 4 Must-Do's Before You Even Start Shopping
Thanks to the Dodd-Frank Act that took effect this year -- requiring more proof from consumers that they can afford a home, along with helping to protect them against bad lending practices -- getting a home loan is more difficult than ever. Getting your financial house in order before buying a home is always a smart move, but tighter credit makes it almost a necessity.
The total number of purchase mortgages originated in 2012 is down 44 percent from 2001 levels, according to a recent report from the Urban Institute. A large portion of the drop -- as many as 1.2 million loans -- can be attributed to low credit availability, researchers found, disproportionately affecting African-American and Hispanic borrowers.
Getting a home loan with tighter credit restrictions in today's home loan market can be more difficult, but it's a lot easier if you're prepared financially. Here are four things home shoppers should do before attending every open house they can get to on a Saturday afternoon:
1. File your taxes. With tax filing day around the corner, this is a must because a lender will want to see your most recent tax returns to show your income, says Wendy Cutrufelli, sales and marketing administrator for the mortgage division of Bank of the West in San Francisco. Even if you owe taxes and are making a payment now, but are filing an extension with the IRS to file a return up to six months later, you'll need to show a lender alternative documents to show your income, Cutrufelli says. But ultimately, the bank will want a copy of your federal tax return.
2. Gather other financial documents. These include anything that can show your full income for the past two years, such as W-2s, old tax returns and tax forms such as a 1099 IRS form to show self-employed income. If your family owns a business together, you'll need a corporate tax return for two years, Cutrufelli says.
To get a "qualified" mortgage under the Dodd-Frank rules, you'll have to prove you can afford the home with enough assets and show an ability to repay the loan, along with mortgage insurance.
"In the current world, the more assets you can show, it's more helpful," Cutrufelli says.
A borrower's debt-to-income ratio can't exceed 43 percent, and they must have enough reserves for two months of mortgage payments and insurance. A firm bid for homeowner's insurance must also be in hand, she says.
"The last thing we want anybody to do is wipe out themselves to buy a home," Cutrufelli says of the importance of having two months of reserves after buying a home.
3. Check your credit report. Doing this six months to a year before buying a home is smart, partly to check your credit score and try to improve it. But the main purpose should be to check for errors and fix them, Cutrufelli says.
"Credit report errors do happen. It's important to repair those errors," she says.
For example, a credit agency may say you've missed a payment, but you can prove you weren't late. Errors can take 90 days to fix, Cutrufelli says. Get a free credit report at AnnualCreditReport.com.
June 26 2014
How Facebook employees use Facebook at work
Does knowing your colleague has three cats and likes to snowboard on weekends really boost productivity? Maybe it does. Here’s why.
When Mike Rognlien joined Facebook three years ago, about 1,700 people worked for the company. That number has more than tripled since then to almost 7,000 employees scattered across the globe, from Menlo Park to London to Sydney.
With such rapid growth, “we were concerned about maintaining the same entrepreneurial culture,” says Rognlien, Facebook’s chief of learning and development. (His official title: Builder of Awesome Managers.) “That hasn’t been a problem. But if people didn’t feel free to communicate openly, we couldn’t have done it.”
Facebook FB 0.68% has used its own site to preserve its original startup vibe in three ways, he says. First, “some employees are half a world away and only come to headquarters maybe once or twice a year. Working remotely can be very isolating. You start to feel you’re out there all by yourself.” Not at Facebook, he adds, where coworkers who may rarely lay eyes on each other “friend” each other to keep in touch, so “they feel like part of the team.”
Facebook also has groups on its site for almost every department so employees can instantly direct feedback or questions to “the people who can do something about it,” Roglien says. “It’s quick and efficient. There’s no wasting time trying to contact the right person for a solution to a problem”—just like in the old days, when the company had a far smaller staff.
But Roglien believes that the biggest way Facebook helps its employees hold on to its culture is also the most ineffable. “Everybody here is Facebook friends with everybody else,” says Rognlien. “We want people to be themselves and get to know each other as people, not just as coworkers.”
Why? “What people do on the weekends, where they come from, what they like, what they find funny—all of these things remove the barriers between colleagues and make it easier to communicate,” he contends. “The better you know someone, the better you can relate to them. It reduces friction at work.”
It’s no surprise, of course, that a Facebook executive has gulped the corporate Kool-Aid. What’s interesting, though, is that people at a few hundred other companies seem to agree with him.
Consider: In a survey of 2,698 full-time U.S. workers in a broad range of industries, more than two-thirds (77%) say they use social media, chiefly Facebook and LinkedIn, to “connect with colleagues at work”, and 61% say that has resulted in “new or better relationships”—even at companies where social media use is officially discouraged at the office.
That’s according to David Maxfield, vice president of research at training and development firm VitalSmarts, who conducted the poll. The same study also found that only one in four employers offers any formal training on how to use these sites productively. Few employers (only 11%) ban social media outright any more, however. That’s probably because, as Rognlien points out, such policies have lost their teeth, since smartphones and tablets mean “we all have a computer in our pocket now.”
Maxfield believes most businesses are missing a big opportunity by not teaching employees to make the most of their online connections. “Social media’s potential as a business tool remains untapped,” he says, adding, “It surprises me, because collaboration between knowledge workers in distant locations is so important these days.”
The main hurdle, he says, is that “managers fear that employees will spend work time on the sites, which companies still see as exclusively about people’s personal lives. But if we could break down this fear that letting people’s outside life ‘intrude’ into their work life is always bad, I think we’d discover a huge breakthrough in productivity.”
June 24 2014
4 Ways Disorganization Costs You a Mess of Expenses
1. Unnecessary Purchases
More than once, you've found yourself having to buy a replacement simply because you lost the first item.
You know you have some phone chargers, but who knows where any are. You just keeping buying new ones. You also know you had an awesome gift stashed away for your brother's birthday, one you snapped up three months ago because you knew he'd love it. You just can't remember where you stored it, and his birthday's fast approaching, so you'll just have to buy a gift card.
Solution: Purge clutter and institute organizational systems for the things you do keep. You'll find your belongings easily when they're not buried under a heap of clutter, and if you always keep things in designated spaces, you'll know right where they are when you need them. Devote 10 minutes every night to putting things back where they belong.
2. Shopping Gone Wild
Shopping trips are normally a guessing game for you because you keep forgetting to mark down items when you run out of them, or you're so rushed you never have time to put together a shopping list.
Instead, you grab things willy-nilly, buying tons of stuff you don't need because you're not sure if you're out of it -- while simultaneously managing to miss several key things (like toilet paper) that you desperately require.
Solution: Write everything down. When you're low on a household item (don't wait till you're out completely), put it down on your shopping list. When you're about to head to the store, inventory what you'll need for the upcoming week (or weeks) and add it to the list. Never shop without a plan.
It may take a few extra minutes, but it will be worth it when you don't have to rush out at 2 a.m. for that unfortunately forgotten TP.
3. Late Fees
You're not paying late fees because you don't have enough money. You're paying late fees because you just never get around to mailing the checks.
You don't know where half your bills wound up, anyway, and it seems impossible to track all those different due dates. Sure, you had the money in your account. You could have paid on time. But who can keep track of everything?
Solution: Set it and forget it. Set up automated payments directly from your checking account so you'll never miss a deadline again. No need to track which accounts you need to log onto when, or running to the post office hoping your check will go out in time. Your bills we be paid by due date every month, and you won't need to worry about it.
June 20 2014
5 Major Differences Between Cheap and Frugal
In response to my recent post about splitting expenses with friends, one commenter wrote that there is a fine line between cheap and frugal. I happen to agree.
For example, when dining in a group, I recommend that each individual calculate tax and tip based on what they ordered, but I would never dream of leaving less than a 18 percent tip on my tab, unless service was abysmal. I skip the drink order and stick to an appetizer to save money myself, but saving money at the expense of the wait staff or my other friends by failing to account for taxes or "forgetting" to leave a tip would just be cheap. Here are five more key differences between cheap and frugal:
2. Frugality is about assessing the bigger picture and having the patience to cash in on the simple savings strategies. As an avid runner, I'm not willing to buy second-hand, worn-out running shoes. I buy a new pair of sneakers at least once a year because I value the health of my feet and my joints and I'm not willing to sacrifice that to save a hundred bucks a year. I will, however, gladly buy the children's version of the same shoe or wait until last season's model goes on sale to get the cheaper price.
I adopt a similar philosophy with the rest of my workout clothes. After buying cheap yoga pants from Express (EXPR) or Gap (GPS) every year and watching them fall apart after a few uses and washes, I made the switch to more expensive, but quality workout wear. Sure, I try to cash in on a sale or even try to find those items cheaper on eBay (EBAY), but I'm happy to spend more money to ensure better product quality with a longer shelf life. In the end, it's abetter value.
3. Cheapness uses price as a bottom line; frugality uses value as a bottom line. TLC's reality TV show "Extreme Cheapskates" is possibly one of the best examples of cheap versus frugal I've ever seen. In one episode, a man spends several hours searching for change around his home and around town. By the end of his search, he's come up with over $7, which is admittedly impressive, but begs the question, "Is your time really worth less than $7 an hour?"
June 18 2014
5 Ways to Maximize Your Rigged 401(k) Plan
For starters, most 401(k) plans are bundled and lumped together with administrative fees and expenses charged by the funds in the plan.
The 401(k) vendor (mutual fund firms, brokerage houses or insurance companies) controls the investment options available in the plan. In most plans, actively managed funds (where the fund manager attempts to beat a designated benchmark) dominate the available options. Because these funds charge significantly higher management fees (called "expense ratios") than lower-cost index funds, the expected returns of active funds are lower than comparable index funds.
Mutual fund companies often pay a kickback (euphemistically called "revenue sharing") to be included as an investment option. Most index funds, exchange-traded funds and passively managed funds don't pay revenue sharing, so including them would require the company to kick in some cash to cover the overhead. That is unlikely to occur.
The primary beneficiaries of this cozy system are the mutual fund companies charging high fees for their actively managed funds. Participants are often confronted with a dizzying array of actively managed mutual funds, with few or no index fund options.
It would be fairly easy to fix this flawed system. In fact, the federal government has already shown us the way. The Thrift Savings Plan is a defined contribution plan administered by the Federal Retirement Thrift Investment Board, an independent government agency. The board is required to manage the plan "prudently and solely in the interest of the participants and their beneficiaries."
What's so great about this plan? All of the investment options in the plan are extremely low-cost index funds. The plan has no actively managed funds and uses the leverage of its huge size to negotiate extremely low fees. Net administrative expenses in 2013 for five out of six Thrift Savings Plan funds were less than 0.03 percent.
Your 401(k) plan should emulate the features of the Thrift Savings Plan. It should offer portfolios of index funds, ETFs or passively managed funds at various risk levels. It shouldn't have any actively managed funds as investment options. It should negotiate the lowest fees it can, based upon the size of the plan.
Unfortunately, this is not going to happen. You are likely going to be left with trying to make the best of a bad 401(k). Here are some suggestions to do so:
1. Look for index funds. Although most plans are dominated by poor investment choices, many of them will toss in a few index funds for optics. If you can find a domestic stock index fund, an international stock index fund and a bond market index fund, you will be able to put together a portfolio with a suitable asset allocation (the division of your funds between stocks and bonds).
2. Focus on fees. If you are stuck with choosing from investment options consisting only of actively managed funds, pick the ones in each asset class with the lowest expense ratio. Avoid all funds that hit you with a sales charge.
3. Avoid company stock. Some companies encourage the purchase of company stock in 401(k) plans. They may even make matching contributions in company stock. You should avoid purchasing company stock in your 401(k) plan. You are already "invested" because you depend on your company for your paycheck. It would be a devastating blow if your company went out of business and you lost your job. Don't compound that risk by adding company stock to your 401(k) plan.
4. Be wary of financial advice. The same fund families that manage high-expense-ratio, actively managed funds in your plan often offer "financial advice" to plan participants. You should be wary of this advice. It is rife with conflicts. The fund family increases profits by steering you into its more expensive funds (including its proprietary funds) and away from low-cost index funds. It is in your best interest to focus on fees and select low-cost index funds if they are available.
June 16 2014
Did Your Home Go on the Market Before You Were Ready?
Your home is listed for sale but you aren't getting showings, let alone offers. It's been six weeks and even though you've listed your home with an agent and put the sign on the front lawn, you aren't seeing any action on your home. Meanwhile, all you hear is that the real estate market is back. It's now a seller's market and homes are selling quickly with multiple offers. So why isn't your home feeling the love?
To better understand this, it helps to take a step back and look at how you came to the decision to list your home for sale in the first place. In good markets, when a home is priced right and shows well, it should see positive action within four weeks. If not, something's wrong.
A serious, motivated seller doesn't simply list their home on a whim. It's something that happens over the course of time. A life change generally dictates a home sale and, although there are times when life changes happen abruptly, generally you know about them in advance and have time to plan. Deciding to sell your home, whether you've been there two years or 22 years, is a decision not to be taken lightly.
What role did you play?: In these situations, it's easy to blame the real estate agent for not doing enough to market and sell your home. Of course, there are bad agents out there as well as good ones.
But what role might you have played? Were you truly ready to sell? Ask yourself:
- Did you interview multiple agents prior to signing a listing agreement?
- Did your agent (or other agents you interviewed) suggest changes or modifications to the home to show it in its best possible light?
- Did you listen to those suggestions or ignore them?
- Was the ultimate list price you chose in line with what the agent suggested?
- Did all the agents you interviewed come in with similar prices?
If you just spoke to one agent, dictated the price and didn't do any work to get the home ready for sale, you're probably not a 'serious' seller. That's OK; it happens to a lot of people. But in the next generation of real estate, going on the market when you're not truly ready to sell and you're not putting your best foot forward will result in a lower selling price on your home.
If you go on the market overpriced, with poor listing photos, cluttered rooms, outlandish paint on the walls, and toys sprawled all over the place, you're not ready to sell. As a result, your home will sit on the market and the days on market, known as DOM, will start ticking for all the buyers in town (and their agents) to see. Everyone will know your home's history. The chances are you'll receive only low offers. And no buyer will take you seriously.
June 12 2014
Modern Motherhood: The Truth About Being a Working Mom
June 10 2014
5 Tips For Better Conversion Rate Optimization
In the world of inbound marketing, conversion rates are a very important ingredient. Just like a great chef working to perfect his recipe at every step, a great inbound marketer has to optimize every single piece of the puzzle. This includes conversion rates. Many different types of conversion rates exist but we are optimizing them all for the same end goal, converting people into customers.
Your calls-to-action, landing pages, email campaigns, blogs, and even your website itself have conversion rates. Inbound marketers have the power to optimize these every entire step of the way. Below are 5 tips to help you obtain a higher conversion rate.
1. Enticing Calls-to-Action
Calls-to-action are a centrifugal part of the inbound marketing world. We use them all throughout our website, emails, blogs, and thank you pages. It’s safe to say they are a pretty big deal and we should do everything we can to optimize them as best we can. Testing, testing, testing! The copy, colors, images, size and borders should all be tested. When you create a CTA for an offer, never create just one. Create several different ones that have different copy, different color combinations, different images, different widths/lengths, and rounded versus edged borders to see which CTA performs the best. This will help you know what copy, colors, images, sizes, and border entices a viewer to click on that CTA rather than not.
2. Landing Pages that Land Customers
One important place that a call-to-action lands a visitor on is a landing page. Most of the time, this is where a call-to-action drives a viewer. Every part of a landing page influences the decision of the visitor to either fill out the form and receive the offer or hit that back button. Your headlines need to be compelling, your copy needs to show the benefits very clearly, and your copy needs to be very actionable. Remember this, you have 5-8 seconds to capture that reader’s attention, convey the benefits of your offer, and convince them to fill out that form before they lose interest.
Keeping all of your information above the fold is a good technique as well. You prevent your viewer from having to scroll and not making them do a lot of work to get a good offer is a great tactic. Testing is very important here as well, not just for the copy and appearance of the landing page but for form placement as well. People may like the form on the bottom of your page better than the right, you’ll never know until you test it.
3. Emails that Nurture
We have to give our contacts what they want and give it to them fast. Emails are already annoying to most people and even though they can be vital for communication, they are still a royal pain. Lots of emails never even get opened and out of the emails that do get opened, an even smaller percentage of them get clicks. A 2-4% click-through rate is a good email click-through rate. That seems bad but it’s true. That’s why first you need a short, one sentence killer that really hits home for the viewer. You have to get them to open it, and a captivating subject line is where that happens. Once they have entered the body of the email, you need to nurture them quickly. Provide a quick, easy path to what you are offering, alert them on the purpose of the email, and tell them exactly what they are receiving from this email. Short and sweet is the way to go here.
4. Blogs that Captivate
Great content will always capture customers. Don’t forget about your blogs. Your blogs are a great way to drive visitors to your site so they should also be a great way to convert these visitors into leads and customers. What are you blogging on? If it’s not the pain points of your target consumers, then you need a change. Blogs are a great opportunity to write detailed pieces on problems that your target customer experiences. Speaking directly to them and solving their problems will convince them to buy from you. Even the layout of your blog could improve conversion rates. You can employ call-to-actions along the sidebar of your blog to move them down the inbound funnel or in your blog at different sections to capture them once they read a vital piece of information.
May 29 2014
S&P 500 sets another record closing high on growth bets
(Reuters) - The S&P 500 index climbed to its third record closing high in four sessions on Thursday as traders shrugged off data that showed the economy shrank in the first quarter and bet on improvement in the second quarter.
New claims for unemployment benefits fell more than expected last week, pointing to a strengthening labor market and giving investors a reason to buy U.S. stocks. Data from the Commerce Department showed that gross domestic product contracted for the first time in three years in the first quarter, although signs indicated it has rebounded.
"The headline figure was weaker than expected, but it was mainly due to slower inventory growth, which bodes well for future growth, future orders, new orders," said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida.
Saut said that unless a decline materialized this week, the S&P 500 is "probably not going to come back below (the) 1,890 – 1,900 (level), which is where the near-term support is."
Citi analysts said the U.S. economy could grow nearly 4 percent in the second quarter, while Goldman Sachs raised its estimate to 3.9 percent.
The U.S. 10-year Treasury note yield touched 2.40 percent, its lowest level since last June, on expectations of further policy easing by the European Central Bank next week. Low yields could keep pulling investors into dividend-paying stocks, with high-yielding utilities .SPLRCU widely outperforming the S&P 500 so far this year. [US/]
"If we continue to stay weak for whatever reason, then these bond proxies are going to keep doing great, the bond market will continue to defy skeptics, yields will continue to stay low, and the indexes will stay at their highs - or close," said Doug Foreman, chief investment officer of Kayne Anderson Rudnick Investment Management in Los Angeles, California.
Hillshire Brands (HSH.N) surged 17.7 percent to $52.76 after Tyson Foods (TSN.N) offered to top a bid from Pilgrim's Pride (PPC.O). Tyson shares rose 6.1 percent to $43.25. Pilgrim's Pride fell 1.1 percent to $25.09.
May 27 2014
Who are Hunter Biden's Ukrainian bosses?
The appointment of Joe Biden's son to the board of Ukrainian gas firm Burisma has raised eyebrows the world over. The names of the company's actual owners are being protected like state secrets.
Who does Hunter Biden really work for? It's the question the media has been asking since Wednesday (14.05.2014), when it was revealed that the son of the US vice president joined the board of the Ukrainian gas company Burisma Holdings in April.
The former Polish President Aleksander Kwasniewski also sits on the company's board, but his photo only appeared on Burisma's website on Friday (16.05.2014), even though he joined the company in January. Then the president of Ukraine was still Viktor Yanukovych, with whom Kwasniewski had previously negotiated on behalf of the European Parliament to secure the release of imprisoned former Prime Minister Yulia Tymoshenko.
The remaining board members include two Americans, two Cypriots, and four young Ukrainians, almost all of whom spent stints in Russia during their careers. The bulk of the company's management was replaced in 2013, and Oleksandr Kharchenko, director of the Energy Industry Research Center in Kyiv, says this may indicate a change in ownership. "It simply wasn't reported," he told DW. He sees Burisma as a company with a lot of potential, as does Hennadi Kobal of the Kyiv Center of Oil and Gas "Newfolk": "They've secured good land for themselves."
British PR firm takes care of media
Anyone wanting to know more about the company needs time. Burisma's modest website says the firm was founded in 2002 and grew to become "one of Ukraine's largest independent gas producers." There's no mention of the owners.
London-based PR firm Bell Pottinger handles Burisma's media relations, though they failed to respond to a DW request about Burisma. One of Bell Pottinger's founders, Lord Timothy Bell, once advised former British Prime Minister Margaret Thatcher, as well as the first Russian President Boris Yeltsin. Prominent customers in recent years include Asma Assad, the wife of the Syrian President, and the government of Belarus.
Read more: Who are Hunter Biden's Ukrainian bosses?
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