THIS IS MY 160TH BLOG ON UNDERSTANDING MONEY
TOOLS
March, 2019
In this blog we will recap a bit from a previous blog on
retail stores, and cover a couple more things that I think you might find of
interest. My intent for blogs is to cover many financial topics that may help
you, and offer some advice in each from my past experiences. I started writing these about 5 years
ago. To seek out a particular
topic or industry scroll back through my blogs, and I bet you find one that
will benefit you to some degree.
Each blog has a heading.
A friend suggested I include a bit of my life story with
each blog. I have recently been
delinquent in this to keep the blogs somewhat concise, but will continue at
some point.
Before we start, a worthwhile email came to me from a lawyer
and I thought I would share. It
may save you money and hassles. As
more people travel, theft has become more prevalent in the “real world”. It doesn’t matter where you are, it
happens. I remember once I was in
front of the Louvre in Paris; rainy day, wearing a yellow slicker. A young gypsy girl was begging and
poking me with a cardboard tray with change on it…distraction. As I declined to give her money and
turned away, she caught her hand in my front blue jeans’ pocket, where my
passport was. So subtle that I
could not feel the intended theft; I was lucky. In a way I admired that ability and talent, albeit illegal,
and a skill she most likely learned from her parents. On the other hand in Paris, and not so lucky, I have had 3
friends and my brother who lost money or passports. It could happen anywhere in the world but the tourist spots,
and crowded subways, busses, etc. seem to be the hotspots.
The lawyer’s good advice is:
- Make
a copy of all your credit cards, both sides and passport, if you have one. Keep these photocopies in a separate
location.
- Call
your credit card companies immediately, report the theft and stop credit on those cards.
- Call
your banks immediately.
- Periodically,
in your home take a video of every item and all personal belongings. In case of theft or damage due to fire
or water, you need a record to report to authorities and insurance companies,
or you may not be compensated.
This goes for cabinets, appliances and everything. In travel, list your personal items so
if stolen reimbursement can be justified.
- If
your passport is stolen you need to report it to the police and your
embassy. If you are in a foreign
country, the embassy can issue a temporary passport.
- Report
the theft to the large credit rating companies.
I used to travel quite a bit. I bought a soft, cotton money belt where I kept a few large
denomination bills along with a credit card and passport. It was about 5 inches wide with a fine
zipper. No one would guess I
was wearing it, even under a T-shirt.
If you are out in public keep your wallet and passport in your front
pant’s pockets, preferably a pair of pants with a closure to the pockets.
Let’s talk briefly about retail again. You may also want to revisit my prior
blogs on the subject. Retail
business in stores is getting more difficult, with on-line buying increasing
each year. Think things through as
an inevitable world recession will occur at some point in the not so distant
future. Don’t just jump in without
thorough analysis. We covered the need for market study, and how to figure out
your intended circumference/perimeter and area.
To repeat the formulas:
- Circumference/perimeter
of a circle is: C=3.1416 Times radius squared (or radius TIMES radius).
- Area
of this circle is: A=3.1416 times the diameter (or radius PLUS radius).
I would keep leased square footage to a minimum, and utilize
the footage as best as possible.
Try to minimize the length of the lease, however with renewable options
to your advantage. If you need to
close your establishment you don’t want to have the landlord come after you for
years of lease payments. Even
though you most likely sign as an officer of your corporation, a big company or
bank may come after you personally.
Everything in retail is done analytically and
mathematically! The numbers need
to work. I have seen so many small
stores open and fail because the owners wanted to do it their way, versus doing
what the market wants and will bear.
Two of the most common mistakes are the wrong location, or paying too
much for rent as a percentage to gross income. Today’s world is tough. 50 years ago you might have gotten away with things, today
you can’t. If you have an item
that can be purchased on-line, I probably wouldn’t start a retail store. People
will shop you, then buy on-line.
The one business that on-line doesn’t afford is the restaurant/bar
business. Many of the people start
these because of egos…let’s hang out at my bar! It is a tough business with
long hours and hard work. I have
started two restaurants, both successful.
I put up the money and wrote the business plans, took a one-third
ownership in both. My good friend,
Brian Ahern, was manager. One
started in February, 1971 in Denver, and was Denver’s first health food
restaurant next to the University of Denver where I went to college. The second restaurant was a fine
continental food restaurant in Durango, Colorado, opened in November, 1983. The
latter restaurant fulfilled a lesson to be learned. I spelled out what could
happen to my two partners as we held less than 50% interest, and that was that
the majority of ownership lay with a lawyer/accountant and he could abrogate
our management contract, take over the successful restaurant; we would lose
time...and my money. That is what
happened. Be careful accepting an investor who wants controlling interest! The best advice I can give you on the
bar/restaurant business in an urban environment is build the business, market
and promote the business, make it successful and “sell out” within 2-3
years. It is a trendy industry.
I have shared many of the pros and cons of retail and other
businesses in previous blogs.
Because of my business background, especially owning a well-respected
Denver private equity firm, L. R. Nicholson & Co., it brought contact with many “deals”. This history included
mergers/acquisitions, initial public offerings as well as utilizing “clean”
shell corporations, turn-arounds, private enterprises and more. Here is a list of a few:
- Started
and operated Shell’s Auto-Care and Amoco’s Certi-Care.
- Started
Auto-Source Ltd., auto-leasing company.
- Helped
start Video Concepts. One of the
first home video/home
entertainment retail stores in enclosed
shopping malls.
- One
of first employees to build a US oil company to 300 people (Energetics, Inc.),
and managed the initial public stock offering through Rothschild, Inc. to the
public. Our “team” consistently
raised $200 million per year in the late 1970s until 1983. That was when a million dollars meant
something!
- Data
National Co., one of the first companies to computer integrate a retail gas
stations’ customer base, with accounting and car servicing history. Took company public via a clean shell
corporation.
- Bought
Game-A-Tron Corporation, a computer hardware company to serve Data National Co.
with computer hardware/monitors.
- Warranty
Service Systems, Inc., mailing of monthly promotions and “reminder cards” to
customers of retail gas stations/convenience stores. Became large and respected
as a data company; American Express outsourced work to us. It was in association with Data
National Co.
- Started
and President and CEO of National Pure Water Corp., serving poor water areas,
towns and cities, mainly in rural Texas and New Mexico with fast-fill, 5 gallon
water stations. Stations
manufactured by a Tucson, AZ, company.
- Started
two successful retail stores in Phoenix, Arizona, area.
- Raised
capital for and became a managing partner in real estate projects.
- Raised
capital for and became partner in several oil and gas projects.
Enough of that, the above list is intended to illustrate
what you might learn from my past experiences, both pros and cons. Just remember you don’t win at all.
It’s easier to make money, than to keep it! Go back through my 160 blogs.
Extra: Love
trivia and facts. Someone mentioned presidential executive orders to me
recently because of the border wall between the US and Mexico. I looked it up, and found executive
orders quite common. Here is a
list of recent president executive privileges.
- Bill
Clinton: 364
- George
W. Bush: 291
- Barack
Obama: 276, including closing off his personal records to the public two days
after taking office.
- Donald
Trump: 96, and counting.
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