First, this message is different as it shares two open positions from a coaching client. Also, I’m providing financial news.

Good News, Good Opportunities. One of my business coaching clients plans further growth in 2011 and has two positions open. The company is a well established leader in its industry segment as a regional distributor of wholesale and retail construction related products locating in Reading, Ohio. The first position, Office Administrator, is part-time, prefer five days a week, could work around children school schedule; but, mostly will be an important foundation person to let the others do the sales and operations of the business. The second position, Sales Rep, allows them to grow, reach more customers, increase depth in company, and free up the President/Owner.

Business Coaching – Requesting Referrals! Together with the owner we identify the needs, then I work with small and medium sized businesses on business and bottom line improvement. Specialization examples include producing Annual Business Plans, financial analysis, cash flow, marketing plans, and combined operations-financial Dashboard Reports. May I help a business owner-leader that you know?

Financial News
Some of what I thought were the best articles this month from CFO.com.

• Boardroom Focus in 2011: Growth – Many leaders and CFO’s can expect more positive board meetings in 2011, with an emphasis on strategy and growth. The past few years, anxious directors have asked finance chief how they intend to raise or preserve cash. This year the focus will be more on best ways to spend cash, growth, and corporate strategy. See full article at (http://www.cfo.com/article.cfm/14549573).
• CFO Outlook: Onward and Upward -  Finance Chiefs are more optimistic than they were last quarter and plan to increase spending in 2011 per Duke University/CFO Magazine survey released in a December 14 article, CFO magazine (http://www.cfo.com/article.cfm/14544581). The survey finds more optimism about the economy in general, their companies, and that the tone should translate into some hiring. Finance chiefs have been aggressively accumulating cash, half say they will spend some cash, others will continue with a liquidity buffer and watch the lingering economic uncertainty.
• Late to the Party: Small Biz – This January 11 article in CFO magazine (http://www.cfo.com/article.cfm/14549163) notes that weak sales continue to keep small businesses cautious. A survey of business owners done in December, released by the National Federation of Independent Business (NFIB) shows that the moderate recovery being felt at large corporations is largely out of reach for the smaller firms. Lower sales are cutting into business plans for hiring new employees and making capital expenditures, causing them to make do with smaller staffs and aging equipment.
• People Are Different – But Shouldn’t Be – Very different article on human capital decisions, measuring human capital and running a business. See CFO magazine (http://www.cfo.com/article.cfm/14548918). “Our people are our most important asset.”
  It’s common today for business leaders to at least pay lip service to that sentiment. Yet, many if not most leaders have only a vague notion of what that assets is worth, or how it can be deployed for optimal returns. True, many human resources departments have scorecards and databases that generate lots of reports on things like turnover, performance distributions, and engagement. But, what’s usually missing is the application of metrics that finance executives (and some CEO/COO’s) hold dear. Detailed comments follow in the article.
• Treasury Tackles Small-Business Lending – Will community bankers tap a $30 billion fund intended to get capital flowing to small businesses? One-third of small businesses say it is harder to get credit today than a year ago–about 70% are worried about their ability to access financing to run the business in 2011. The article (http://www.cfo.com/article.cfm/14549598) provides some survey results and analysis.

Blessings & Best Regards
Paul J. Gillman
pgillman@cinci.rr.com

Happy Holidays, Merry Christmas, and a successful New Year! This message is to share some financial news (detail notes below) and to provide holiday networking.

I work with small and medium sized businesses on business and bottom line improvement. Specialization examples include producing Annual Business Plans, cash flow, and combined operations-financial dashboard reports. Let’s contact a business owner-leader that you know.

Financial News
A number of the notes and links are from CFO.com.

• Lessons of the Fall – It may be hard to believe, but there was at least one positive outcome to the financial hardship that befell companies in the wake of the economic crisis that struck in September 2008: a heightened sense among finance chiefs of how to assess and manage unexpected risks. See full article at http://www.cfo.com/article.cfm/14535443.
• Repeal or Repair -  Health reform is more likely to get a nip and a tuck rather than a toe tag – according to a December 1 article, CFO magazine (http://www.cfo.com/article.cfm/14540265). In the wake of midterm victories, triumphant Republicans have repeatedly vowed to repeal health-care reform. Yet political reality suggests that GOP leaders only real option will be to fix and polish the very law they would prefer to consign to the dust heap.
• Surprising Rise in Health Costs – This December 6 article in CFO magazine (http://www.cfo.com/article.cfm/14542731) notes that U.S. companies should hope their collective forecast for healthcare costs in 2011 is more accurate than the one they made for this year. A spike in per-employee costs — the biggest since 2004 –caught many by surprise.
• Bank Loans Crucial to Start-ups – Where do small businesses get their capital? Not from the sources you might think, CFO magazine (http://www.cfo.com/article.cfm/14520386). Small businesses are more sensitive to the contraction of bank lending than previously thought, and the conventional wisdom about how small businesses finance themselves may be hogwash, according to a new paper from the National Bureau of Economic Research.
• Commercial Banks in Limbo – Although their balance sheets are recovering, banks are still hesitant to lend. When it came to handing out business loans, commercial banks and savings institutions continued to be ultraconservative in the third quarter of 2010. The article (http://www.cfo.com/article.cfm/14542011) provides some figures and analysis.

Have a Blessed Holiday Season
Paul J. Gillman
CFO & Financial Business Coach
513-317-7039
pgillman@cinci.rr.com

Dear Friends

Financial News A number of the notes and links are from CFO.com.

• 401(k) News – according to recent articles in CFO magazine, there has been change in participant behavior, investing, and employers response. 401(k)’s have rebounded from the scary periods in 2008, with contributions coming back, improved performance, and more companies reinstating suspended 401(k) matches. In addition to the April article, the link includes five articles from April 2009 thru December 2009 in part showing the historic progression over the past year. The link also references access to 401(k) Buyer’s Guide 2010. This is a large repository of information on the subject which can offer you a lot of depth.

   

• Audit Fees – according to an April 8 article in CFO magazine the average company each year spends .061% of revenue on audit fees. I believe this applies to companies who receive a full audit, have an audit committee, and get a signed opinion. Many of you may have smaller costs with your local or regional CPA firm. If you are interested in the “CFO Audit Fee Report” I could forward you the information and you can order a full report.

   

• Intel on Financial Incentives – per article titled “Intel CFO Sees U.S. Losing Battle for High-Tech Jobs” in CFO magazine, the federal government needs to add financial incentives and improve education and infrastructure to attract high-tech manufactures. Other countries have very explicit national agendas to improve their infrastructure. “China is doing an awe-inspiring amount of investment, ranging from improving the electrical grid and broadband (networks) to building roads and airports”. Intel’s recent experience in China has been very favorable.

   

Economic Notes

• C&I Lending to Stay in Doldrums – according to a May 5 article in CFO magazine, structural and regulatory pressures will continue to dampen commercial credit. Lenders are traditionally slow to bankroll companies in the early stages of an economic recovery. But some recent studies say the drop in commercial and industrial (C&I) lending brought on by the credit crisis will persist – and that loan origination volumes will stagnate even as US economic growth picks up.

   

• Business Conditions in Ohio – A year ago per PNC Economic Outlook, pessimism among small and mid-sized owners rose to an all-time high per their surveys. The new findings one year later, reveal Ohio owners are more cautiously optimistic; but, still waiting for more customers and higher sales. In addition to a marked shift in pessimism in the past year, other key findings included:
  • The hiring outlook improved as one out of five expect to hire full-time employees during the next six months.
  • Regarding business recovery timing, the owners report more evidence of noticeable improvement in their own businesses.
  • However, expectations for the a U.S. recovery are fading as owners have grown more cautious about the U.S. economy in the last six months, despite recent signs of improvement. The overwhelming majority (93%) say the U.S. economy has not begun to improve. About one quarter expect the economy to noticeably improve within the next 12 months. Meanwhile, 66% feel the economic recovery is between 13 and 24 months away. (Survey conducted February 2010.)
  • Fiscal Stimulus Impact: One year after the passage of the $787 billion American Recovery and Reinvestment Act (ARRA) of 2009, 75% of owners feel they have yet to benefit. Only 1% report their business has received a significant benefit.

   

• Current Status and Outlook for the United Stated Economy – In a May 4 report from the Federal Reserve Bank of Cleveland, the following were key comments:
  • Production is Improving. Real GDP growth has turned positive with inventories and consumption showing the greatest strengths; but, Real GDP growth remains below historical levels despite significant improvements in industrial production.
  • The Labor Market is Weak. Unemployment rates remain high due to significant declines in payroll employment while unemployment duration stands at record levels; but, the 2010 outlook for college graduates is improving with projected demand highest in health care services and business administration.
  • Housing Segment is Improving. House price appreciation is recovering; but has further to go with projected recovery varying greatly across the country. Foreclosures appear to have peaked; but, remain extremely high adding to the ‘Months Supply of Homes’ currently on the market. But, the outlook for recovery remains positive as excess supply falls, demand grows, and prices increase.
  • Consumers are Cautious. The expected change in Median Family Income remains at very low levels while personal savings rates improve; but, consumers remain cautious about their current situation, although slightly optimistic about the future with total retail sales beginning to show strength.
  • Financial Sector is Improving. Monetary policy remains accommodating with perceptions of risk continuing to decline while the Federal Funds Rate remains low and excess reserves of depository institutions remain high with the survey of Senior Loan Officers indicating that banks view underwriting standards as tight enough.
  • Finally, Consumer Inflation Remains Under Control.

   

Best Regards,
Paul J. Gillman
CFO & Financial Business Coach
Cell: 513-317-7039
pgillman@cinci.rr.com

Some of these comments are compliments of a FENG (Financial Executives Networking Group) newsletter.

For those of you looking for something cheery to read with your coffee, you may want to skip to the latter parts of this newsletter as the observations below about the state of the economy could depress you; but, they also offer some guidance on interest rates, business conditions, and jobs.

• Interest Rates & the Economy — according to a recent article in CFO magazine, don’t worry about higher interest rates or inflation any time soon.  One should expect slow growth and low interest rates for the immediate future, as the Federal Reserve won’t be able to tighten rates.

• Business Conditions — Ordinarily low interest rates are good for business except where there is little. According to a recent Duke University / CFO Magazine poll of over 1,400 CFOs, consumer demand is the top concern for the economy while maintaining profit margins was the top concern for their company.

• State of the Credit Markets — There is good news and bad news. The good news is that the banks had a better year in 2009 according to the FDIC. The bad news is that they continue to be saddled with extraordinarily high non-current loans and losses making for tight credit standards in the foreseeable future.

• Extend And Pretend — For those companies looking to refinance all of their bank credits maturing in 2010 – 2014, good luck. Banks today are either unable or unwilling to refinance all of these facilities unless companies are willing to pay more.  Also, look for tighter covenants. Oh, and the bond markets are also experiencing the same problem; lots of re-financings coming up in 2010 – 2012 according to Moody’s.

  On the brighter side of life (see Monty Python’s “Life of Brian” for the song) companies are worried about and focused on maintaining their employee’s morale and productivity. Also, the US economy remains the strongest and largest in the world and there is no longer panic in the (Wall) streets.

• Job Bill Becomes Law — Another CFO magazine article recaps legislation signed by President Obama on March 18 provides employers with new incentives for hiring and retaining workers.

• For business owners and financial leaders, re-examine your ability to contribute to acquire / maintain a company’s liquidity as well as its profitability. Companies able to acquire / build out new products because of their access to credit or high cash on hand will get the jump on their competitors and grow more quickly, increasing their demand for people.

• Spend time understanding the “new” banking / credit markets.  For owners and financial leaders, there are or will be many new regulations (US Senate’s new financial bill, IFRS accounting rules, SEC rules, etc).

Best Regards,
Paul J. Gillman
Business Performance Coach
Cell:  513-317-7039
pgillman@cinci.rr.com