November, 2009

November 04, 2009

Hi [First Name],

Finally, some good news on the economy. It's mixed of course, but why not take 3.5% growth in GDP as a reason for "cautious optimism" with respect to digging ourselves out of a hole?

In the last "special edition" of the newsletter, I gave another summary from the ITR presentation, and it too indicates we should be looking to expand our businesses - within reason. The theme, then, is the glass is neither half-empty nor half-full, the glass is too small. Let's work towards expanding market share and building infrastructure in our businesses.

You will also find a very useful article from our experts at Rutan & Tucker about the "Art of Successful Termination" and another from a new expert joining our ranks, Dean Zerbe from alliant Group.

I hope you enjoy this issue of the ELC Newsletter.

Dave Kinnear

CEO, dbkAssociates, Inc.

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Healthcare is BIG business.

Here's my view, Dean Zerbe makes his points later

Healthcare is big business and getting even bigger. I'm interested, since as a "boomer," I will likely be up for lots of healthcare costs in the future. Luckily, I'm healthy at the moment and dealing with only minor health issues (knees hurt, cholesterol is problematic and such). Yet, despite reasonable planning, I know that a catastrophic medical problem for either me or my spouse could easily prove financially disastrous.

Medical facilities are the 34th most profitable industry in the country and health insurance companies are the 35th most profitable. I'm not sure where YOUR business is in that profitability measure, and you may be wildly profitable. Yet I'm not sure I can justify the cost of providing healthcare for employees in most small businesses. Healthcare premiums are up 130% since the year 2000. Many of the companies with which I work are severely challenged by the increase in the cost of healthcare and their employees keep looking at a reduction in spendable income since their portion of the healthcare for their families keeps increasing. So what are we going to do to solve this problem?

Well, I'm not sure I trust the federal government to get this right. When you look at the amount of lobbying money that is being spent by the healthcare industry to put politicians in their pocket, I'm not sure we citizens and small business owners will ever get any relief. Two things are becoming clear, we need to change the system and the industry is fighting the proposed changes - and that can't be good for us.

Insurance and healthcare is largely invisible to us. If you get a statement from your insurance company and/or the hospital, it is very likely you will not be able to understand the documents. They are filled with codes and what I believe is language that can only be described as "purposeful obfuscation." Possibly the only thing that is more obfuscating than those documents, or at least as difficult for lay persons to understand, is the "America's Affordable Healthcare Act of 2009." Have you read it? - - - Me either!

So what choice do we have? It seems to me we have to either go with the devil we know - Insurance Companies that are and will always want to be highly profitable, or the devil we also know - the government which has never really been in touch with small business, and I mean either party, it doesn't matter, the Republicans are every bit as bad as the Democrats when it comes to business. In fact, the case can be made that based on GDP, business actually does better under Democratic administrations - look at the data before you jump in my in-basket.

I want to just throw up my hands and give up on this - it seems too complicated and too much work to really find out what's for real. Instead, I will make the effort to find out as much as I reasonably can and still run my business. This much I know - we can't let healthcare continue on the present path. Healthcare costs are rising so fast that they are threatening our economy. Fully one third of the costs are "waste." Waste being defined as unnecessary tests, unnecessarily paying for patented drugs, etc. So I'm for change, I guess. It just remains to be determined how that change will manifest in our businesses and our economy.

What's your thought? Do you really trust the healthcare industry? Do you trust the government more? Do you not trust them both, and if so, which is the lesser evil in your mind? Post your comments on my Blog.

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From the Expert . . .

This month, Jeff Wertheimer and Brandon Sylvia, our resident experts from Rutan and Tucker, discuss the often misunderstood "Art of Successful Termination." Few activities have the potential for unpleasantness as the termination of an employee. Particularly in economic downtimes, the termination of a worker who has done nothing “wrong,” but whose employment the business can no longer sustain, can be a tortuous and stressful decision. The employer may have established a personal relationship with the soon-to-be-unemployed worker, which only makes delivering the bad news more difficult.

In this insightful article, Jeff and Brandon explore how to organize our companies from the start so that we do not fall into the usual traps, but rather develop the "Art of Successful Termination." Read more . . .

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Introducing alliant Group

I spend a great deal of time trying to help business folks "find" cash. One of the ways I have been doing that is by introducing them to our colleagues at alliant Group. Tax Credits are a complicated and "tricky" subject for many folks, and alliant Group can help make things a bit more straight forward to understand.

In getting to know the folks there, I ran into the rather colorful and outspoken Dean Zerbe - to be more accurate, I ran into his articles on the alliant Group website. And with permission from alliant Group, I'm connecting you with Dean. I don't always agree with the way he puts it, but there's no doubt that Dean has done his homework and knows his stuff when it comes to taxes. So here's his thoughts on the healthcare plan as it stood at the beginning of October 2009.

"This deal is getting worse all the time." That's the way Lando Calrissian put it in The Empire Strikes Back, and it will likely be the reaction of many small-business owners as they watch the health reform bill move through Congress.

Read more . . .

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