Archive for September, 2011

Peanut Butter and Petroleum Prices…

PEANUT BUTTER AND PETROLEUM PRICES

 By: Jake Jakubuwski

Here’s the way I see it…

 Even with petroleum prices easing somewhat — although we’re still paying more for gas then we were last year — it’s easy to lose sight of the fact that what we pay for gasoline does not represent the full impact of steadily increasing fuel prices on our pocketbooks. When we buy gas, we tend to see only the immediate and personal shock of those prices when it costs us more to fill up our tanks today, then it did yesterday.

So what if you don’t drive, own a car or a gas-powered lawn mower? Even if you don’t buy gasoline or heating fuel — today’s petroleum prices are going to hit you square in your financial fanny! 

The higher fuel costs that cities, counties and states pay to operate their fleets, repair roads and build sewage systems, in turn, will ultimately trigger increases in property taxes, and “user fees”.

Increasing fuel costs will result in higher insurance rates for your cars, homes and businesses because the increased costs of manufactured, processed and salable commodities—including car parts and building materials—will affect the insurer’s financial risk. If it costs an insurer more to repair, replace or refurbish cars or cottages after an accident or disaster, those costs will be passed on to the policy holders!

When the higher costs of fuel inhibits travel and the motel industry suffers declining occupancies, they will not require as many maids to clean and “make-up” the rooms each day. Those unemployed maids may file for unemployment benefits which puts further strains on governmental coffers. Demands that will, in one form or another, be passed on to the consumer and taxpayer. 

Restaurants, movie theatres, pizza joints and paint stores will be affected by increased petroleum prices. The effects will be two-pronged: It will cost the businesses more to get the food, film and finishes that they sell delivered to the store —— and they will (If they are not already) suffer from declining sales because consumers who are putting more money in their gas tanks, will have less money to spend on discretionary purchases.

The peanut farmer is forced to pay more for fertilizer and tractor fuel to make their crop. When the peanuts are harvested, the crop is put on trucks and sent to co-ops, buying stations, or processors; where they might be turned into peanut butter, peanut oil or snacks. Then the jars of peanut butter and other peanut by-products are sent by rail and common carrier to wholesale distribution centers where it is loaded onto other trucks for delivery to your favorite grocery store or retail outlet. Each step in the process; from the farmer’s field to the grocery store shelf adds to the price the consumer will be required to pay because of increased petroleum prices.

At the grocery store we discover peanut butter is forty or fifty cents higher per jar then it was the last time we bought it. The maid who was laid off from the motel can’t afford the more expensive peanut butter unless she receives food stamps from a social agency. The cost of those food stamps will be borne by the consumer and taxpayer — that’s us!

Dow Jones, General Motors, Ford, lKimberly-Clark, Proctor and Gamble, Pete’s Plumbing and even the Solo Cup Company have fallen victim to higher energy costs and supply chain costs.

Obviously, nothing can be grown, manufactured, picked, processed, packaged or sold without considering and factoring in higher fuel costs—costs that are added at each successive stage of the chain from seed to sale—causing the prices of those items to escalate at an exponential rate.    

Since we, as consumers and taxpayers, are at the very end of the “supply chain”, we are stuck with the bill.

Every load of laundry, every flip of a light switch, every Big Mac and every stick of chewing gum will, and is, costing us more.

The cost of gasoline, at the pump, is only a small part of the inflationary feeding frenzy higher petroleum prices are creating. Even if you don’t drive, the peanut butter sandwich you had for lunch will cost you more: because petroleum prices are taking a bigger bite out of everyone’s wallet.

Free Lunches and Nickel Beers

 

NOTE: Although the target of this article  are locksmiths, the message and intent of the article is applicable to any small business that provides services or merchandise to any other business or individuals that expect, or often demand, credit privileges. When I see a sign advertising “Going Out of Business!”  I wonder if their sign should read: “GOING OUT OF BUSINESS DUE TO BAD CREDIT!” Not the company’s bad credit but their customers’.

 

FREE LUNCHES AND NICKEL BEERS

I wouldn’t think there’s anyone who reads this who can remember nickel beers. But, in my granddaddy’s time (of course, he always told me how much better things were back then) not only could you get a beer for a nickel; many establishments offered free lunches as well! Yep! Walk into the local watering hole, plop down a nickel, pick up a large mug of draft beer; slide down the bar a bit and fix yourself a sandwich. On the house!

By the time I was old enough to patronize the neighborhood bistro, a small draft was a quarter and there might be some peanuts or pretzels (heavily salted, of course) in bowls along the bar. Today, I imagine a draft beer’s at least a buck-fifty and a small bag of peanuts or pretzels will add another buck to the tab. If the establishment you’re in happens to serve food; then a sandwich will probably cost you four or five dollars. The point?

‘THERE REALLY ARE NO FREE LUNCHES!”

Everything costs us money. When we go to the grocery store, we have to pay by cash, credit card or check. If we take our family out to dinner — ditto. If we go to the movies, McDonald’s or a meat market — we have to pay for the pleasure of doing business with those establishments we patronize. We have to pay for the tires on our service vehicles, the gas we put in the tanks, the licenses and insurance we carry and often a tax on the inventory we carry in those vehicles!

Since that’s the case, how come so many locksmiths feel it’s necessary for them to subsidize (The Free Lunch Syndrome) multi-million dollar enterprises with multiple outlets scattered throughout the country that won’t give that same locksmith a nickel’s worth of credit for fifty cents? Never mind a free lunch — I’m talking quid pro quo, tit-for-tat and like-for-like.

How about a small example?

Well, let’s say you get a call to rekey some locks for Mickey D’s or KFC. You go down, do the job and when you present your invoice, you find out that it “has to go to the main office for payment”. Oh….

Okay, now, walk into the same establishment, order some groceries and when the cashier says: “That’ll be six dollars and ninety-seven cents.” Then try telling her that the bill “has to go to the main office for payment!”  I’ll bet you don’t get lunch — free or otherwise — unless you come up with some cash or acceptable plastic.

In other words, your “customers” want to eat at your trough on credit, but you can’t eat at theirs unless you pay cash. Do you see anything wrong with this picture? Have you ever wondered why you have to extend credit terms (If you ain’t getting paid when the job’s done, you’re extending credit to the customer) to a bank with a zillion dollars in assets? A bank that won’t even let you open a checking account unless you deposit a minimum of twenty-five hundred bucks?

To my way of thinking that entire concept is a little one-sided. I’m realistic and practical enough to know that there’s a certain amount of business that you will do where you’ll have to “extend terms” (It’s still credit, no matter what euphemism you use). There are situations where you can’t demand payment on completion. I also know that each of us can reduce the risk of losing our shirts if we just keep one thing in mind:

Never Extend More Credit Then You Can Afford To Lose!”                                                                                     Jake Jakubuwski

In other words weigh the risks involved!

If Cheap Eddy of Cheap Eddy’s Pre-Owned Motor Cars calls you out of the blue and has six cars he just bought from the auction that he needs keys made for — you might want to think a minute before you rush down to the lot. Your first question (even before you agree to do the job) should be: “How do you intend to pay me for my services?”  If Eddy tells you “not to worry none ‘bout that, son “— worry! Because not only is he getting ready to have a free lunch at your expense, he’s gonna make you buy the beer!

Eddy might be talking a good show, but you have to recognize that he is, after all, a used car salesman! He’s programmed to tell you that doing “bidness” with you has been his life-long ambition and he’s always admired folks that can fix keys and stuff. He’s blowing smoke. He’s misdirecting your attention from the issue of billing and collecting. If you’ve ever been flimmed or flammed, you know Eddy’s blowing smoke and he’s the one looking for a free lunch — at your expense. So, naturally, your antenna should be vibrating.

On the other hand, if the local school board, hospital, or a Federal facility requests you do work and “bill” them — the chances are a whole lot better that you’ll get your money from any one of them faster and easier then you would get it from Cheap Eddy.

But how do you level the playing field? How do you know when to “hold ‘em or fold ‘em”? What criteria do you use to determine who you give “terms” to and who you don’t? One way is to pay attention to your instincts. If it don’t feel good — don’t do it! 

Another way is, as mentioned earlier, to weigh the risks. Weighing the risks might include running a credit check through a credit reporting service. It might also include sitting down with whoever’s in charge (or whoever’s asking you to do the work) and asking them to explain their company’s payment policy. Just make sure they never worked for Cheap Eddy

The most practical way for a small business person to figure out who to trust and who not to trust is to do a small job and see how well the company pays. Let Mickey D charge the rekey, get the paperwork signed and also get the name of the individual that’s responsible for paying bills for the restaurant. Then see how long it takes them to pay. Two things happen when you do this. One: they’re only into you for a relatively small amount of money. Two: if you do have to start collection procedures, you’ve got a starting point and a name to go with it.

If Phasion Phreaks calls you for a rekey and wants you to bill them; and you find that their billing department is two major rivers, one mountain range and one International boarder away from you — decline the job or insist on payment on completion of the job. Or, accept the job if they can produce a current company credit card in lieu of cash.

Remember: Just because a company has an outlet in your area and several hundred scattered around the country; they are not necessarily credit-worthy. They pay their rent on time because if they didn’t they’d lose their location. They pay their primary suppliers on time because if they didn’t they’d have no inventory to sell. They pay their employees on time because if they didn’t, they’d run afoul of Federal, State and local guidelines.

With vendors like us and a myriad of small service and maintenance vendors they may take their time or not pay at all. Don’t think so?

ust read the financial news and see how many gold-plated businesses were only operating on brass-bound gall and crashed with the clank of tin cans being dumped in a landfill.

Using a favorite ploy, the folks controlling the purse strings may not hesitate to tell you that “the store manager did not have the authority to obligate us for any service work not approved by our facilities management department”, and you wind up buying another free lunch!

So, what’s best for you? You decide! That’s not a cop out but you are going to have to determine who, when, where and for how much you’re willing to extend credit to the dozens of folks that want to feed at your trough.

The decision will not always be easy. Just keep this in mind: more small businesses get sunk every year because of out-of-control receivables than for any other reason aside from being grossly undercapitalized and mismanaged.

That means your decisions regarding credit-worthy (or unworthy) customers can easily be hazardous to your financial health and well-being. As I mentioned earlier; whatever you decide, don’t extend more credit then you can afford to loose!

Otherwise, you won’t have enough loose change in your pocket to afford a nickel beer and you definitely won’t find anyone willing to give you a free lunch!

*****************************************

Want to find out how other locksmiths handle their “credit problems” or keep credit from becoming a problem? Check out http://www.clearstar.com/ It always helps to network with others in the craft to find your way through the mine fields of the small business world.

**************************************

 

 

Dear Mr. President,

According to what I’ve read about your speech on job creation, one of the pivotal points seems to be lowering employee, and employer, contributions to Social Security. I can see how that might stimulate the job market and put a few bucks a week in many paychecks.

My problem is this: Since Social Security is already teetering on the verge of bankruptcy, wouldn’t a reduction in tax payments to the “plan”  hasten the demise of Social Security?

Now, Mr. President, I admit that I have some strange ideas about the economy and what is and is not good for it (Especially in light of our government’s determination to try to reduce our debt by increasing it) and I admit that I am not an economist and probably not even a good bookkeeper. So, maybe I’m missing something really important in all of this spendthrift syndrome that seems to have overtaken our entire government — starting with your office, sir.

I also readily admit that I have a hard time wrapping my mind around the concept of a Trillion Dollars. But recently, I read an analogy that I could understand. Basically, the writer said that if money was water and one dollar represented one drop of water, then an Olympic-sized swimming pool would represent a trillion dollars. Mr. President…that is a LOT of water! 

And, sir (Correct me, if I’m wrong), we  have something like THIRTEEN Olympic-sized swimming pools to fill …

So, I have to wonder, Mr. President, how does cutting income for the goverment (Reducing Social Security taxes and extending tax credits — even for only a year, or two ) help us create enough jobs and pay off the biggest National Debt we have ever faced.

Oh, one other thing I would like to know…how many jobs will your new(?) American Jobs Act actually create. I think we have lost, over the last four years or so, something like 15,000,000 jobs. If your proposal would asssure that a minimum of 5,000,000 jobs would be created, I think it might be worthwhile to consider. Otherwise, I think we will, economically, continue shooting craps with heavily loaded dice.

Unfortunately, Mr. President, in the same article about your speech, I read that “the White House” offered no figures on the number of jobs that would be created by the American Jobs Act.

I know, sir, that it’s easy for the Rebuplicans to blame the Democrats for our financial problems — and vice-versa — but I say that  it doesn”t matter who’s to blame. What I want to know who’s gonna fix the problem — and how? 

In the meantime, Mr. President, I sit here and read all the stuff about why the economy is tanking and I have to wonder how you and all of our other ELEC TED officials can even sleep at night. I mean, most folk’s consciences would be giving them the night sweats. Oh, well that grist for other mills.

 So, Mr. President, I am looking forward to your help (helping me) understand what’s happening. By the way, sir, I don’t drink beer which would preclude meeting you on the White Hose lawn;  so I guess you”ll have to either email me your response or post your answer in my blog…

With all due respect, Mr. President, I remain

Scared witless. Not for me but for my kids, grandkids and great-grandkids … they’ll be paying off this deficit for the rest of their lives. You know trying to fill one swimming pool (one drop at a time) would take a really long time — but thirteen?

Now, Mr. President, I will point a finger because this is debt that you (In the sense that you’re the main man at this point) have created with no rational thought of where it will lead us…

On second thought maybe it’s not a good idea for you to try to explain all of this to me beccause I firmly believe that you can’t spend your way out of debt. Admittedly, that’s a concept I learned in school some 60-odd years ago, so maybe taking three away from two doesn’t give you a minus anymore.

Jake Jakubuwski (Pronounced: “JAKE-uh-bus-Key)

 

Jake’s Jabber

Jake’s Jabber:

Okay, I guess this will make the launch of the new PURE JAKE website official.

As you can see, if you’ve  been following along over the years, the entire site has been revamped. Hopefully, it will be easier then ever to navigate. I guess the term is “user friendly.” I even had Kelly post a new, and updated, picture of me. Sorry, but you can’t have all the fun!

The biggest change is that PURE JAKE now has a blog! The blog is going to be where I can tell you about new things happening, new eBooks and videos and rant a little about politicians and the sad state of the economy. Boy! That part will be easy.

Speaking of new eBooks. I have two that are not locksmith related. 10 Secrets Your Attorney and Insurance Company May Not Want You to Know About Your Worker’s Compensation Claim.”

If you know anyone who has been injured on the job, they should read this eBook.

The second eBook is How To Sell Successfully At The Flea Market This Weekend”. This is a really great eBook for the person that’s looking for ways to make money in a tough economy. I won’t bore you with descriptions of those eBooks here as you can click on the titles and go directly to each web page and read about them there.

The other big news is that with the revamping of PURE JAKE eBooks & Videos I will not only be talking about locks and locksmithing — I will be ranging far afield to give you articles on anything that strikes my fancy and that I think might tickle yours. In addition, I’ll be giving you a lot of hints, tips and ideas that can help you make money.

Please note that readers will be able to comment on my articles — whether they agree with me, or not! However, I do reserve the right to read, censor, delete or block any material that I feel would be offensive or constitute a personal attack against anyone. In other words, you can accuse me of being full of horse feathers and disagree with my politics, policies and prose. But you can’t castigate anyone (including me) by being mean-spirited and obnoxious.

So, enjoy the new PURE JAKE and keep in mind that you might not agree with everything that I have to say but it will be PURE JAKE to the core!

Jake Jakubuwski