One of the major selling points of this design for a 3D printer is that not only do you end up with a usable machine at the end of the process, but that the process of building and programming the thing yourself also provides you with a solid tech-ed mini-course (or maxi-course for the completely uninitiated). What you need to get started are two standard CD/DVD drives from a used PC, a floppy disc drive from which you extract stepper rather than DC motors (you’ll need three stepper motors in all), a PC power supply, cables, female connectors, a heat-shrink tube, and some CNC electronics. There are some components — like a NEMA 17 stepper motor — that you’ll need to purchase new, but for the most part you’ll be going with used and recycled parts.
Go here for the Instructables for this 3D printer –
How long will it take to build your own 3D printer? Typical assembly times vary from kit to kit. Much also depends on the quality of the instructions provided. Usually these are available online, and you can freely review them before you make a purchase.
The article below is a step by step instruction specific to building this 3D printer kit – very cool. Took that author about 4 and a half hours to build it. (my note)
Build a Cheap DIY 3D Printer Kit for $99: The iMakr STARTT
Jul 18, 2017
A DIY 3D printer kit for beginners, the STARTT stands apart for good reason: it costs just $99. Read on for our guide on how to build this cheap DIY 3D printer kit.
A word of caution though. Even with a set of clear instructions and the parts for a no-frills machine strewn before you, building a 3D printer from scratch is a pretty involved process, and the end results may frustrate you. Start with an open mind and the expectation that something will be wrong by the time you’re setting up your first print.
This article has specifics to make any of these DIY and Build a Kit 3D printers work as you would want them to do. It covers the things that need to be beefed up or considered and explains why for each thing. Amazing! (my note)
BUILD A 3D PRINTER WORKHORSE, NOT AN AMAZING DISAPPOINTMENT MACHINE
The answer is simple: DIY 3D printers done right are rugged workhorses. They work every single time, they never break, and even if: they are an inexhaustible source of spare parts for themselves. They have exactly the quality and functionality you build them to have. No clutter and nothing’s missing. However, the term DIY 3D printer, in its current commonly accepted use, actually means: the first and the last 3D printer someone ever built, which often ends in the amazing disappointment machine.
This post is dedicated to unlocking the full potential in all of these builds, and to turning almost any combination of threaded rods and plywood into a workshop-grade piece of equipment.
OpenSCAD is a free software application for creating solid 3D CAD (computer-aided design) objects. It is a script-only based modeller that uses its own description language; parts can be previewed, but it cannot be interactively selected or modified by mouse in the 3D view. An OpenSCAD script specifies geometric primitives (such as spheres, boxes, cylinders, etc.) and defines how they are modified and combined (for instance by intersection, difference, envelope combination and Minkowski sums) to render a 3D model. As such, the program does constructive solid geometry (CSG). OpenSCAD is available for Windows, Linux and OS X.
Blender is the free and open source 3D creation suite. It supports the entirety of the 3D pipeline—modeling, rigging, animation, simulation, rendering, compositing and motion tracking, even video editing and game creation.
Blender is a public project, made by hundreds of people from around the world; by studios and individual artists, professionals and hobbyists, scientists, students, VFX experts, animators, game artists, modders, and the list goes on.
According to the publisher, over two million engineers and designers at more than 165,000 companies were using SolidWorks as of 2013. Also according to the company, fiscal year 2011–12 revenue for SolidWorks totalled $483 million.
Parameters refer to constraints whose values determine the shape or geometry of the model or assembly. Parameters can be either numeric parameters, such as line lengths or circle diameters, or geometric parameters, such as tangent, parallel, concentric, horizontal or vertical, etc. Numeric parameters can be associated with each other through the use of relations, which allows them to capture design intent.
Design intent is how the creator of the part wants it to respond to changes and updates. For example, you would want the hole at the top of a beverage can to stay at the top surface, regardless of the height or size of the can. SolidWorks allows the user to specify that the hole is a feature on the top surface, and will then honor their design intent no matter what height they later assign to the can.
Features refer to the building blocks of the part. They are the shapes and operations that construct the part. Shape-based features typically begin with a 2D or 3D sketch of shapes such as bosses, holes, slots, etc. This shape is then extruded or cut to add or remove material from the part. Operation-based features are not sketch-based, and include features such as fillets, chamfers, shells, applying draft to the faces of a part, etc.
Building a model in SolidWorks usually starts with a 2D sketch (although 3D sketches are available for power users). The sketch consists of geometry such as points, lines, arcs, conics (except the hyperbola), and splines. Dimensions are added to the sketch to define the size and location of the geometry. Relations are used to define attributes such as tangency, parallelism, perpendicularity, and concentricity. The parametric nature of SolidWorks means that the dimensions and relations drive the geometry, not the other way around. The dimensions in the sketch can be controlled independently, or by relationships to other parameters inside or outside of the sketch.
In an assembly, the analog to sketch relations are mates. Just as sketch relations define conditions such as tangency, parallelism, and concentricity with respect to sketch geometry, assembly mates define equivalent relations with respect to the individual parts or components, allowing the easy construction of assemblies. SolidWorks also includes additional advanced mating features such as gear and cam follower mates, which allow modeled gear assemblies to accurately reproduce the rotational movement of an actual gear train.
Finally, drawings can be created either from parts or assemblies. Views are automatically generated from the solid model, and notes, dimensions and tolerances can then be easily added to the drawing as needed. The drawing module includes most paper sizes and standards (ANSI, ISO, DIN, GOST, JIS, BSI and SAC).
HERE ARE ALL THE MAIN COMPONENTS OF DESKTOP 3D PRINTERS WORTH CONSIDERING BEFORE PURCHASING ONE!
With a multiple extruders you can print in multiple colors or materials simultaneously by assigning each extruder specific color or material. Some printers can be upgraded from single to multiple extruders, some can’t. The biggest benefit of multiple extruders is when you print you can set your support structures with a different material that can be dissolved in water or some other type of solvent, depending on the materials used!
Anatomy of a 3D Printer: How Does a 3D Printer Work?
Between the names of the parts and their functions, it can be hard to keep it all straight. Here is a quick guide of the anatomy of a 3D printer. We will focus on mechanical and electrical components of the most common desktop 3D printer type: fused filament fabrication (FFF) or fused deposition modeling (FDM).
A place online to buy parts for 3D printers or to build your own from parts –
3D printing is different to any other hobby, half the fun is experimenting with different set-ups and to alter the way things work. Our 3D printer components give those who can’t leave things alone the opportunity to tinker and fine tune a big range of 3D printers. You could even build a DIY printer if you are up to the challenge, it’s actually not as hard as it would seem.
We offer components to suit most hobby type printers that use protocols such as Rep-Rap and Marlin, and the range is constantly growing.
Before starting the build we’ll look at the key components. These are parts that you can upgrade during the build, or in the future, to improve print quality or reliability, so it’s worth knowing a little more about them and the different options as quite often they are interlinked. A fact that some of the cheaper kits on the market fail to take into account.
Full details can be found here for the PRUSA i3. Once done you then need to download and install Pronterface. Once installed this software can be used to connect and commission the printer before the first print. Finally, once commissioned you’ll need some slicing software to convert a 3D model into layers ready to print.
The most popular is Slicer, which lets you load a 3D file in STL format, select your printer and print.
3D Slicer is a free open source software (BSD-style license) that is a flexible, modular platform for image analysis and visualization. 3D Slicer are extended to enable development of both interactive and batch processing tools for a variety of applications.
3D Slicer provides image registration, processing of DTI (diffusion tractography), an interface to external devices for image guidance support, and GPU-enabled volume rendering, among other capabilities. 3D Slicer has a modular organization that allows the addition of new functionality and provides a number of generic features not available in competing tools.
The interactive visualization capabilities of 3D Slicer include the ability to display arbitrarily oriented image slices, build surface models from image labels, and hardware accelerated volume rendering. 3D Slicer also supports a rich set of annotation features (fiducials and measurement widgets, customized colormaps)
Slicer is distributed under a BSD style, free, open source license. The license has no restrictions on use of the software in academic or commercial projects. However, no claims are made on the software being useful for any particular task. It is entirely the responsibility of the user to ensure compliance with local rules and regulations.The slicer has not been formally approved for clinical use by the FDA in the US or by any other regulatory body elsewhere.
3D Slicer is an open source software platform for medical image informatics, image processing, and three-dimensional visualization. Built over two decades through support from the National Institutes of Health and a worldwide developer community, Slicer brings free, powerful cross-platform processing tools to physicians, researchers, and the general public.
Slic3r is the tool you need to convert a 3D model into printing instructions for your 3D printer. It cuts the model into horizontal slices (layers), generates toolpaths to fill them and calculates the amount of material to be extruded.
Slic3r, being a true non-profit community project, allowed the people to experiment with several original new features that have become common thereafter such as multiple extruders, brim, microlayering, bridge detection, command line slicing, variable layer heights, sequential printing (one object at time), honeycomb infill, mesh cutting, object splitting into parts, AMF support, avoid crossing perimeters, distinct extrusion widths, modifiers, and much more. All of these features were first introduced in Slic3r and are now part of the commercial software out there.
Found one more I wanted to add here – it has a lot of very handy info too –
It’s a big misconception that it is expensive to start with 3D printing. When you have a tight budget, cheap DIY 3D printer kits can be a great starting point. Why DIY kits still exist mainly has to do with saving costs, because the components can be packed and shipped more efficiently.
Below we’ll first describe what to look for when buying your first kit and at the bottom of this page you’ll find a list of the best cheap 3D printer kits.
NOTE – make sure and check the great chart and list at the bottom of the post about the best 3D printer kits with their costs and how long it takes to construct them – they start at $150 and go up, with build time from 4 – 8 hours, although one of them takes 16 hours to build and is high end on price too. It is probably wonderful. Great article!
How would it EVER make sense for me as a company to be required to pay the price I’m charging you for buying me? And, pay the interest on that debt you used to buy me as a company – AND pay you management fees for destroying the company I’ve built that you’re charging me the price of buying – from me – so you can own it?
Why wouldn’t the borrowing that was done to buy Toys R Us belong to the private equity firms who bought it?
What happened to Toys R Us?
Apparently, the company was loaded with debt that came from three private equity firms forcing the company to pay for its own purchase by them back in 2005. Bain Capital, KKR and Vornado Trust Realty bought Toys R Us with the promise they would pay off the $2.3 billion in debt that Toys R Us already had at the time. Then, rather than doing that, these private equity firms added the debt they acquired buying the company and added it to what was already owed by the Toys R Us company.
That meant a debt of $7.2 billion has been owed by the company since that time and each year having to pay to roll it over by servicing the debt and never having paid it off.
Toys R Us was paying $400 million a year to simply service the debt plus paying management fees and making payouts to the private equity firms.
So, despite the toy industry seeing increases across the world in sales and the Babies R Us stores of the chain being profitable AND the 15% share of the entire toy market being enjoyed by Toys R Us which is phenomenal across its 1600 stores in 38 countries – it was forced into complete bankruptcy (Chapter 7 Bankruptcy now).
When Toys R Us sold to Bain, KKR and Vornado, 80 percent of its asking price of the $6.6 billion price tag was paid by Toys R Us and not those acquiring the company – which would be illegal in any other context of finance, loans and buying something.
Then, by putting this debt load on the company, it assured that money coming into the company could not be used in a vast array of other ways to upgrade and maintain their stores, increase their online presence, hire more sales people, or even to keep the sales staff they had that were already familiar with their stores and products, among other things.
Effectively, after buying KB toys which had been the second biggest toy retailer in the US, the same private equity group robbed that company of its cash resources to operate as well, even before the Toys R Us brand was bled dry of cash by the same pattern of destructive acquisition.
After buying KB Toys in 2000, Bain and its co-investors had the retailer borrow $85 million to pay the firm and its co-investors a dividend — a move that left the chain, which had been generating steady earnings, strapped for cash as deepening price cuts at Walmart lured more shoppers away from malls.
In that case, Bain’s cash grab left it with a profit on its investment, despite the fact that 86-year-old KB Toys got liquidated in 2008.
It looks like Toys R Us, that was built from 1948 into a mammoth successful and very profitable toy stores, wasn’t bought for $6.6 billion. It was bought for $1.3 billion in equity by the three firms, Bain Capital, Vornado Realty Trust and KKR.
This article said that the fees and interest on the debt from that buyout was costing Toys R Us $470 million a year in service. It also says that the price for the company during the buyout was $7.3 billion. Of which, the private equity firms put up what? Obviously, not cash. I’m going to look that up.
Bain, KKR, Vornado Suffer Wipeout in Toys ‘R’ Us Bankruptcy
The three firms and their co-investors sank $1.3 billion of equity into the takeover of the Wayne, New Jersey-based toy company, financing the rest with debt, according to company filings. The debt included senior loans in which they held a stake.
Partly offsetting the loss is more than $470 million in fees and interest payments that Toys “R” Us awarded the firms over time.
And from this article, it describes briefly, the typical method involved in these types of buyouts which follow a pattern of destroying the assets of the company’s operations while stealing resources (legally) at every point along the way.
It would be as if I gave someone $3 to own something that cost $2,000 and had someone else responsible for paying the entire amount, and giving me back several thousand dollars for having put up $3 in the first place.
I’d almost bet the $3 they used in the form of $1.3 billion wasn’t even cash or real assets.
Toys R Us and why the retail downturn is all about debt
“Leverage just means you’re using lots of debt,” said Eileen Appelbaum, co-director of the Center for Economic and Policy Research.
If a private equity firm wants to buy a company, it’ll put up a small portion of the money. Then it’ll go to the bank and borrow the rest.
The key? “They put the debt on the company they buy,” Appelbaum said.
In other words, the firms take out these loans, buy a company and then make that company pay the loans back.
Despite having 15% of toys sales in the marketplace and a heavier shopping season last Christmas with shoppers spending $800 billion during the holiday season, according to FT (see below for article), Toys R Us was facing massive loan payment costs that put it into liquidation status.
Toys ‘R’ Us Has 15% of the Toy Market And It’s Still Going Under. Here’s Why.
Fifteen percent of U.S. toy revenue. With that kind of market share, Toys ‘R’ Us should be in a comfortable position, not on the ropes.
The pattern followed by Toys “R” Us is typical in private equity takeovers. Management is bought off: John Eyler, CEO of Toys “R” Us, was compensated $65.3 million upon the buyout’s completion. Employees have no say in the matter. Then come the layoffs, debt transfers and shortsighted asset sales. Funds are earmarked to pay down debts—Toys “R” Us was spending more annually on debt payments than it was on its website and stores—even as cash reserves are depleted.
US retail’s turbulent relationship with private equity
DECEMBER 29, 2017
FT research shows many of the largest leveraged buyouts in the sector over the past decade have either defaulted, gone bankrupt or are in distress
At least 50 US retailers — including Toys R Us, children’s retailer Gymboree, shoe store Payless and jean maker True Religion — have filed for bankruptcy this year, the most in six years, with analysts describing it as a “day of reckoning”, for companies that rolled over their debt refinancing for years.
Observers warn that the distress is likely to accelerate in 2018 with nearly $6bn in high-yield retail debt set to mature.
The swift unraveling of the toy seller, at $6.9bn the third-largest retail bankruptcy in history, jolted vendors, who are critical to a retailer’s health.
There was some respite for bricks-and-mortar retailers this week with US shoppers spending more than $800bn in the holiday season, a 3.8 per cent rise from last year,
Looking at the article below, it occurred to me that possibly, the private equity firms own some of the debt made to the companies required to pay for their own buyouts by someone else.
Then the fees for those loans are also being paid to the private equity or investment firms holding them, on top of the management fees and other dividend payments, plus other payouts they’re are finagling from the company.
And, all of it providing a stream of resources to the investment funds that should legally belong to the company for its operation, sustenance, growth and as a prudent cash reserve against changes in the market.
The retail apocalypse is being fueled by private equity firms adding to debt loads
Nearly every retail chain caught up in the brick & mortar meltdown is an LBO queen – acquired in a leveraged buyout by a private equity firm either during the LBO boom before the Financial Crisis or in the years of ultra-cheap money following it. During a leveraged buyout, the PE firm uses little of its own capital. Much of the money needed to buy the retailer comes from debt the retailer itself has to issue to fund the buyout, which leaves the retailer highly leveraged.
The PE firm then makes the retailer issue even more junk bonds or leveraged loans to fund a special dividend back to the PE firm. Come hell or high water, the PE firm has extracted its money.
Then the PE firm charges the retailer hefty management fees on an ongoing basis.
A lot of times, these PE firms acquire part of the bonds before bankruptcy of their portfolio company for cents on the dollar. For example, Bain Capital bought significant amounts of Gymboree bonds. This gives PE firms more control during the bankruptcy proceedings, and they win again.
Why do institutional investors fund asset-stripping associated with LBOs and special dividends? Some of the answers are in Wall Street’s culture where fee extraction is everything, and one firm helps another. And too, they’re chasing yield in a world where central banks have repressed yield. Which turns out to be a costly chase.
Sports Authority is Another Loss to Our Country Caused By Leveraged Buyout Nightmare
A number of retailers have suffered this buyout process whereby the company being acquired is forced to pay for itself to be bought out by loading the profit making retailer (or other types of companies) with massive debt and extra costs to pay off cash to those who “bought” it.
But, since when do you or I get to buy something for nothing but a promise of 10% on the cost of it and then enslave the operation to pay off the rest for that purchase while streaming most of its available cash to us in fees and dividends?
From this article describing the process that took apart Sports Authority –
Leveraged buyouts saddle retailers with debts they can’t repay
April 29, 2016
But Englewood-based Sports Authority was loaded with at least $643 million in debt, a hangover from the $1.4 billion leveraged buyout in 2006 by investors led by Leonard Green & Partners.
Sports Authority’s bankruptcy plan initially included closing 140 of its 463 stores. But lawyers for the chain said in court last week that the company now is pursuing liquidation, leaving workers jobless and shopping centers across America anchorless.
In the fast-evolving world of retail, where the one constant is the need for investment, retailers laboring under heavy debt are at a disadvantage.
“Doing it right is very expensive,” said Raya Sokolyanska, an analyst with Moody’s Investor Service in New York. “Limited financial flexibility has been a reason why a lot of these retailers haven’t been able to fight back and position themselves correctly for growth.”
Private equity firms have been connected to a rash of retail bankruptcies in recent years, including Gymboree, Payless ShoeSource, The Limited Stores, True Religion Apparel, and most recently, Toys “R” Us.
(. . . )
But Toys “R” Us wasn’t pushed into court because of terrible sales — it recorded nearly $1 billion in online sales in 2016, according to a spokesperson, and had earnings before interest, taxes, depreciation, and amortization of $792 million. Rather, the company was struggling to pay down its staggering debt load — for which it could thank its 2005 leveraged buyout. Bain Capital Private Equity and KKR & Co. teamed up with real estate investment trust Vornado Realty Trust to acquire the company for approximately $6.6 billion, including $5.3 billion of debt secured by the company’s assets.
Why Private Equity Firms Like Bain Really Are the Worst of Capitalism
Here’s what private equity is really about: A firm like Bain obtains cheap credit and uses it to acquire a company in a “leveraged buyout.” “Leverage” refers to the fact that the company being purchased is forced to pay for about 70 percent of its own acquisition, by taking out loans. If this sounds like an odd arrangement, that’s because it is. Imagine a homebuyer purchasing a house and making the bank responsible for repaying its own loan, and you start to get the picture.
O.K., but what about this much more virtuous business of swooping in and restoring struggling companies to financial health? Well, that’s not a large part of what private equity firms do, either. In fact, they more typically target profitable, slow-growth market leaders. (Private equity firms presently own companies employing one of every 10 U.S. workers, or 10 million people.)
And that’s when the fun starts. Once the buyout is completed, the private equity guys start swinging the meat axe, aggressively cutting costs wherever they can – so that the company can start paying off its new debt – by laying off workers and cutting capital costs.
This process often boosts operating profit without a significant hit to the business, but only in the short term; in the long run, the austerity approach makes it difficult for companies to stay competitive, not least because money that would otherwise have been invested in expansion or product development – which might increase revenue down the line – is used to pay off the company’s debt.
It takes several years before the impacts of this predatory activity – reduced customer service, inferior products – become fully apparent, but by that time the private equity firm has generally resold the business at a profit and moved on.
The next article reminded me of how much is at stake for vendors, toy manufacturers, shippers, shopping malls and strip mall groups that have used Toys R Us to stock their shelves with products, rent large anchor properties and draw traffic to other stores nearby. All of these will be suffering hits, possibly causing layoffs beyond those being caused directly by the bankruptcy of Toys R Us as it closes 2600 stores.
How $5 billion of debt caught up with Toys ‘R’ Us
SEPTEMBER 20, 2017
But the company’s ability to kick the can down the road had been exhausted. The bankruptcy filing was the culmination of an unsuccessful seven-month effort by Toys “R” Us to find relief from its $5.2 billion debt pile, according to bankruptcy court filings and people familiar with the deliberations.
The advisers that Toys “R” Us hired to fix its capital structure explored at least two deals with some of its creditors to raise money that would have helped the company stave off bankruptcy before the key holiday shopping season, avoiding a supply chain disruption stemming from vendor fears about repayment, a bankruptcy filing shows.
Once the company realized that it could not secure financing to get through the holiday season, the objective became “let’s get it done as quick as possible so it does not interrupt the holidays,” Toys “R” Us Chief Executive Officer David Brandon told Reuters in an interview. Filing for bankruptcy allowed the company to secure financing to continue to operate its stores.
Given that “we successfully obtained our debtor-in-possession financing today, we can assure our lenders that we are in a good position to accept shipments on a normal basis and they have great assurance they will be paid,” Brandon said.
Like other retailers that own their stores, Toys “R” Us tried last month to tap its vast real estate portfolio to raise money in a sale-leaseback transaction, according to court filings. Sale-leaseback deals allow retailers to raise cash by selling real estate they own and then renting it back from the new owner. (which didn’t work, my note.)
More Layoffs for Retailers Already Having Massive Store Closings and Layoffs
Jobs everywhere! Except at stores
January 5, 2018
Record numbers of store closings and a surge in retail bankruptcies, as well as the shift to online shopping, have forced retailers to slash jobs even as other employers scramble to find qualified workers.
The sector lost a total of 66,500 jobs in 2017.
General merchandise stores, the segment that includes department stores, were hit the hardest, losing 90,300 jobs, according to the Friday’s December jobs report from the Labor Department. Clothing stores cut another 28,600 jobs. Drug stores lost 18,400.
So the job losses in the sector are likely to continue said Nicholas. In 2017, 7,000 store closings were announced, a record that was more than triple 2016’s number. And the trend will undoubtedly continue in 2018. Sears Holdings (SHLD), owner of both Sears and Kmart, said Thursday it plans to close more than 100 additional stores.
According to BLS data, the number of retail openings in February slumped to 541,000, down by 40,000, its worst performance since 2015. (U.S. News)
BLS data also showed retail layoffs and discharges climbed 37% in February and reached a total of 212,000 – its highest level in nearly two years. (U.S. News)
Unlike in 2008, Americans today are shopping more than ever.
While the last spike in retail bankruptcies during the Great Recession was clearly a byproduct of consumer stress, this time around consumers are actually spending more than ever. According to Gallup, February 2017 marked the highest average in consumer spending since 2008, with no signs of slowing.
The US retail industry is hemorrhaging jobs – and it’s hitting women hardest
January 13, 2018
As the retail landscape undergoes a dramatic transformation, analysis finds 129,000 women lost jobs last year while men actually gained positions.
Between November 2016 and November 2017, the sector fired 129,000 women (the largest loss for any industrial sector for either sex) while men gained 109,000 positions, according to an analysis by the Institute for Women’s Policy Research (IWPR). In the whole labour force women gained 985,000 jobs over the year, while men gained 1.08m jobs.
(also from this article – )
Major retailers shut shops across the US last year. A record 6,700 stores shut in 2017, according to Fung Global Retail & Technology, a retail thinktank. Macy’s alone closed 68 stores and shed 10,000 jobs. Drugstore chain Walgreens closed 600 locations.
A comment in this article says a lot of what I’ve been thinking. And, why is it that Bain, KKR and Vornado didn’t have to pay the loan payments they took out to buy Toys R Us? Shouldn’t that debt belong to the buyers, not the company they’ve bought? (This article also lists a number of the retail bankruptcies from 2017, including Radio Shack.)
Big Wall Street banks are not likely to blow the whistle on asset-stripping scams in the private equity world. They are frequently involved in collecting fees for advising on the LBOs. Then they reap more huge windfalls in fees when they underwrite the bond offerings that load up the company with debt it can’t service on a long term basis.
So the overarching question in all of this is: where is the Securities and Exchange Commission, the so-called cop on the beat that is supposed to be policing the publicly traded corporate bonds involved in these deals?
In April, Aisha Al-Muslim, a reporter for Newsday, the Long Island, New York newspaper, found the following after an in-depth review of court documents and data from top research firms like S&P Global Market Intelligence:
“…43 large retail or supermarket companies, which owned chains with 10 or more locations, have filed for bankruptcy in the United States since January 2015. The 43 companies controlled 52 brick-and-mortar chains.
“Of those 43 companies, 18 — more than 40 percent — were owned by private equity firms. The remainder were public or private companies or owned by a hedge fund.”
When 40 percent of insolvent large retail companies got this way at the hands of the so-called turnaround experts at private-equity firms while huge amounts of money moved from the coffers of the company to the pockets of the “experts,” it’s time for Federal regulators to get involved.
Private equity firms bled the company dry to turn a profit, and now mass layoffs are imminent.
Upon closer examination, however, this analysis doesn’t hold up. First, the global toy industry isn’t in decline. In fact, it’s been growing consistently over the past five years. Physical toys may be less popular in the United States than they once were, but internationally—particularly in Asian and Latin American countries—the play business is booming. And most of Toys “R” Us’s profits actually come from its Babies “R” Us affiliate which sells not just toys but also health, safety and educational tools for infant care.
Yet most importantly, this analysis fails to account for how Toys “R” Us wound up so deeply in debt in the first place. In 2005, as the company’s stock was regularly losing value due to mediocre sales, management decided to sell the company in a leveraged buyout to a trio of buyers, real-estate-investment trust Vornado Realty Trust and private equity firms KKR and Bain Capital.
This trio played a critical role in the downfall of Toys “R” Us, through imposing massive debt obligations on the company and requiring it to pay back its debts so that its buyers could turn a profit. Meanwhile, the finances of the company were thrown into disarray and employees were hit with wave after wave of layoffs.
Vornado Realty Trust, KKR and Bain Capital financed 80 percent of the purchase of Toys “R” Us, so while the company sold for $6.6 billion, the trio only contributed $1.3 billion. As part of the purchase agreement, the companies also agreed to take responsibility for all of Toys “R” Us’s long-term debt obligations, which at the time totaled $2.3 billion. Once Toys R Us was taken over, however, the debt Vornado Realty, KKR and Bain used to acquire it was pushed back onto the company, skyrocketing its debt obligations to $7.6 billion.
Toys “R” Us has been paying $400 million a year to service these debts. This money could have been used to lower prices or improve the company’s website—not to mention raising pay to its employees—but instead went to paying off creditors. Last year, the company reported a loss of $29 million. If it weren’t for these debt payments, Toys “R” Us would have run a substantial profit.
In both instances, critics say Bain and its private-equity partners left the chains vulnerable by saddling them with heavy debt loads as they took them private, crippling their capacity to compete in brutal price wars that have dogged the industry.
A leveraged buyout (LBO) is a financial transaction in which a company is purchased with a combination of equity and debt, such that the company’s cash flow is the collateral used to secure and repay the borrowed money.
(also – KKR appears in the history of corporate raiding during the 80’s and beyond – plus this, of interest)
The inability to repay debt in an LBO can be caused by initial overpricing of the target firm and/or its assets. Over-optimistic forecasts of the revenues of the target company may also lead to financial distress after acquisition. Some courts have found that in certain situations, LBO debt constitutes a fraudulent transfer under U.S. insolvency law if it is determined to be the cause of the acquired firm’s failure.
The outcome of litigation attacking a leveraged buyout as a fraudulent transfer will generally turn on the financial condition of the target at the time of the transaction – that is, whether the risk of failure was substantial and known at the time of the LBO, or whether subsequent unforeseeable events led to the failure. The analysis historically depended on “dueling” expert witnesses and was notoriously subjective, expensive, and unpredictable. However, courts are increasingly turning toward more objective, market-based measures.
Private equity typically refers to investment funds organized as limited partnerships that are not publicly traded and whose investors are typically large institutional investors, university endowments, or wealthy individuals. Private equity firms are known for their extensive use of debt financing to purchase companies, which they restructure and attempt to resell for a higher value. Debt financing reduces corporate taxation burdens and is one of the principal ways in which private equity firms make business more profitable for investors.
Leveraged buyout, LBO or Buyout refers to a strategy of making equity investments as part of a transaction in which a company, business unit or business assets is acquired from the current shareholders typically with the use of financial leverage. The companies involved in these transactions are typically mature and generate operating cash flows.
Private equity firms view target companies as either Platform companies which have sufficient scale and a successful business model to act as a stand-alone entity, or as add-on or tuck-in acquisitions, which would include companies with insufficient scale or other deficits.
Leveraged buyouts involve a financial sponsor agreeing to an acquisition without itself committing all the capital required for the acquisition. To do this, the financial sponsor will raise acquisition debt which ultimately looks to the cash flows of the acquisition target to make interest and principal payments.Acquisition debt in an LBO is often non-recourse to the financial sponsor and has no claim on other investments managed by the financial sponsor. Therefore, an LBO transaction’s financial structure is particularly attractive to a fund’s limited partners, allowing them the benefits of leverage but greatly limiting the degree of recourse of that leverage. This kind of financing structure leverage benefits an LBO’s financial sponsor in two ways: (1) the investor itself only needs to provide a fraction of the capital for the acquisition, and (2) the returns to the investor will be enhanced (as long as the return on assets exceeds the cost of the debt).
As a percentage of the purchase price for a leverage buyout target, the amount of debt used to finance a transaction varies according to the financial condition and history of the acquisition target, market conditions, the willingness of lenders to extend credit (both to the LBO’s financial sponsors and the company to be acquired) as well as the interest costs and the ability of the company to cover those costs. Historically the debt portion of a LBO will range from 60%–90% of the purchase price, although during certain periods the debt ratio can be higher or lower than the historical averages. Between 2000–2005 debt averaged between 59.4% and 67.9% of total purchase price for LBOs in the United States.
Simple example of leveraged buyout
A private equity fund say for example, ABC Capital II, borrows $9bn from a bank (or other lender). To this it adds $2bn of equity – money from its own partners and from limited partners (pension funds, rich individuals, etc.). With this $11bn it buys all the shares of an underperforming company, XYZ Industrial (after due diligence, i.e. checking the books). It replaces the senior management in XYZ Industrial, and they set out to streamline it. The workforce is reduced, some assets are sold off, etc. The objective is to increase the value of the company for an early sale.
The stock market is experiencing a bull market, and XYZ Industrial is sold two years after the buy-out for $13bn, yielding a profit of $2bn. The original loan can now be paid off with interest of, say, $0.5bn. The remaining profit of $1.5bn is shared among the partners. Taxation of such gains is at capital gains rates.
Note that part of that profit results from turning the company around, and part results from the general increase in share prices in a buoyant stock market, the latter often being the greater component.
Often the loan/equity ($11bn above) is not paid off after sale but left on the books of the company (XYZ Industrial) for it to pay off over time. This can be advantageous since the interest is typically offsettable against the profits of the company, thus reducing, or even eliminating, tax.
Most buyout deals are much smaller; the global average purchase in 2013 was $89m, for example.
The target company (XYZ Industrials here) does not have to be floated on the stockmarket; indeed most buyout exits are not IPOs.
Buy-out operations can go wrong and in such cases the loss is increased by leverage, just as the profit is if all goes well.
The application of the Freedom of Information Act (FOIA) in certain states in the United States has made certain performance data more readily available. Specifically, FOIA has required certain public agencies to disclose private equity performance data directly on their websites.
In the United Kingdom, the second largest market for private equity, more data has become available since the 2007 publication of the David Walker Guidelines for Disclosure and Transparency in Private Equity.
How would it EVER make sense for me as a company to be required to pay the price I’m charging you for buying me?
And, pay the interest on that debt you used to buy me as a company – AND pay you management fees for destroying the company I’ve built that you’re charging me the price of buying – from me – so you can own it?
In what world does any of that make sense as anything but theft and embezzlement whether legal or not?
Can you imagine what it would take to start a company today and garner 15% of the toy market? And yet, here is a company that already has that which is being decimated by a very corrupt business practice of Wall Street investment firms – to the detriment of America.
includes closing around 180 stores. That’s about one in five stores.
The large debts, including roughly $400 million that came due by the end of the year, mostly stem from “a $7.5 billion leveraged buyout in 2005 in which Bain Capital, KKR & Co. and Vornado Realty Trust loaded the company with debt to take it private,” according to Bloomberg.
Now in bankruptcy proceedings after paying massive bonuses of millions of dollars to top execs – didn’t include numbers of employees being laid off, but noted that massive layoffs had occurred early in 2017 as well.
This article listed the bonuses paid out to executives allowed by the bankruptcy court and those made before entering bankruptcy proceedings – despite huge layoffs, store closings and defaulting on some percentage of every debt.
Macy’s alone is responsible for more than 10,000 job cuts as the company finds itself displaced by online shopping. The Macy’s layoffs are coupled with massive Macy’s store closures, with 68 shuttering in 2017.
J C Penney has also become the victim of poor sales and has therefore added to the growing number of retail layoffs.
The company cut about 5,000 jobs and shuttered 138 stores across the U.S
HHGREGG FILES FOR BANKRUPTCY, CUTS 5,000 WORKERS NATIONWIDE AND CLOSES ALL STORES
STATE FARM TO CLOSE 11 OFFICES, MORE THAN 4,000 FACE JOB LOSS, DISPLACEMENT
L Brands Inc (NYSE:LB), owner of women’s apparel chain The Limited, shut down all of its 250 stores across the U.S. and slashing 4,000 jobs.
The Wet Seal closing will encompass the remaining 171 stores after it a had closed two-thirds of its locations and laid off 3,700 workers two years ago as it filed for Chapter 11 bankruptcy protection. The company is now defunct, with 3,000 workers without jobs.
Lowe’s Companies, Inc. (NYSE:LOW) found itself having to cut 2,400 workers as it struggles to keep up with the leader in the market,
HERSHEY LAYS OFF 2,700 AS A PART OF 2017 RESTRUCTURING PROGRAM
One of the largest mass U.S. IT layoffs in 2017, the 5,000 cuts coming out of HP amount to about 10% of the company’s total staff.
Eli Lilly and Co (NYSE:LLY) will be shedding 2,000 jobs in the U.S. as it seeks to save about $500.0 million annually.
Lots more great information in this article – worth reading. Explains why they had to layoff in these companies. Looking for numbers right now.
Kimberly-Clark plans to cut up to 5,500 jobs — about 13 percent of its workforce — and get rid of 10 manufacturing plants, releasing a restructuring plan along with its year-end results that showed net sales rose to $18.3 billion, up slightly from 2016.
The maker of popular brands such as Kleenex, Huggies and Kotex, Kimberly-Clark says its operating profit for the fourth quarter of 2017 was $812 million — a drop from $839 million in 2016. For all of 2017, the company is reporting nearly $3.3 billion in operating profit, down slightly from 2016.
As it announced financial results and layoff plans, Kimberly-Clark’s board of directors also approved a 3.1 percent increase in the company’s quarterly dividend for 2018, which it says is the 46th consecutive annual dividend increase for shareholders.
Falk noted that in 2017, Kimberly-Clark “returned $2.3 billion to shareholders through dividends and share repurchases.”
In the wake of Republican-backed changes to the U.S. tax code, several large corporations have given employees raises and increased benefits. But there has also been bad news. For instance, Walmart announced better pay for new employees on the same day that it said it would close 63 stores.
Providing some details about its taxes, Kimberly-Clark says, “The fourth quarter effective tax rate was 19.2 percent in 2017 and 35.7 percent in 2016. The rate in 2017 included a net benefit as a result of U.S. tax reform and related activities.”
Trump Promised to Protect Steel. Layoffs Are Coming Instead.
In September, ArcelorMittal, which owns the mill, announced that it would lay off 150 of the plant’s 207 workers next year.
Foreign steel makers have rushed to get their product into the United States before tariffs start. According to the American Iron and Steel Institute, which tracks shipments, steel imports were 19.4 percent higher in the first 10 months of 2017 than in the same period last year.
In 2008, before the financial crisis struck, the plant ran around the clock. Now, the mill coughs to life just five days a week, for eight hours at a time.
Toys ‘R’ Us Has Laid Off Up To 15% Of HQ Employees
This Friday, the company announced they had laid off between 10-15% of their home office employees out of Wayne, New Jersey — approximately 250 jobs were eliminated.
Toys “R” Us has been struggling financially for some time. In 2005, investors led by KKR & Co., Bain Capital and Vornado Realty Trust bought out the company for $6.6 billion. In 2016, the business refinanced its remaining $850 million debt load, allowing investors holding bonds maturing in 2017 and 2018 to swap their holdings for those maturing in 2021.
Harley-Davidson closing Kansas City plant as motorcycle sales fall
The Milwaukee-based company said its net income fell 82% in its fiscal fourth quarter to $8.3 million, compared with a year earlier. Earnings per share were 5 cents, down from 27 cents a year earlier. Revenue was $1.23 billion, up from $1.11 billion.
The earnings drop came in part because of a charge associated with President Trump’s tax cut and a $29.4 million charge for a voluntary product recall.
Harley-Davidson worldwide retail motorcycle sales fell 6.7% in 2017 compared to 2016. The company’s U.S. sales fell 8.5% and international sales were down 3.9%.
The company’s manufacturing consolidation includes plans to shift production from Kansas City, Mo. into its plant in York, Pa. About 800 jobs in Kansas City will be cut.
Harley’s foreign competitors have benefited from a strong U.S. dollar, as their overseas operations have made it more profitable to sell bikes in the U.S. at lower prices.
In some cases, Diedrich said, prices of Japanese motorcycles have come down 25% and discounts ranged up to $3,000 per bike.
Lots more in this article including what is expected to happen with other plants.
What’s Happening to U.S. Companies? A Look at 2017’s Mass Layoffs
Mass Layoffs in 2017 No. 2, Sears Holdings Corp. (Nasdaq: SHLD): After reporting dismal sales earnings, Sears announced on Jan. 6 it expects to shutter 180 stores by April – 108 Kmart locations and 42 Sears stores.
Mass Layoffs in 2017 No. 3, Wal-Mart Stores Inc. (NYSE: WMT): The “everyday low-price” store will be slashing over 1,000 jobs in January, as reported by USA Today on Jan. 11.
Mass Layoffs in 2017 No. 5, General Motors Co. (NYSE: GM): The car manufacturer told Fortune that it would be shutting down five of its plants in 2017 – eliminating some 1,300 jobs – primarily to cut oversupply of sedans, which have fallen out of favor among U.S. consumers.
These cuts are in addition to the 2,000 workers GM announced would be let go in November 2016, also to take place in January.
Mass Layoffs in 2017 No. 6, Pandora Media Inc. (NYSE: P): Today (Jan. 13) Pandora announced that it would be eliminating 7% of its workforce in a move to save nearly $40 million in operating costs. The music-streaming company had 2,219 employees as of Dec. 31, according to Benchmark Monitor.
Mass Layoffs in 2017 No. 7, Fitbit Inc. (NYSE: FIT): The wearable fitness tracker company announced in a press release on Jan. 30 it would be slashing 6% of its workforce, or 110 employees,
(and Hershey’s, Lowe’s, etc. mentioned elsewhere in this blog post.)
General Electric to cut 12,000 jobs in power business revamp
General Electric announced on Thursday it was axing 12,000 jobs at its global power business as the struggling industrial conglomerate responds to dwindling demand for fossil fuel power plants.
Demand for new thermal power plants dramatically dropped in all rich countries, GE said, while traditional utility customers have reduced their investments due to market deterioration and uncertainty about future climate policy measures.
Hardly any new power station projects had been commissioned in Germany in recent years, GE said. Heightened Asian competition had also increased price pressures.
GE rival Siemens is cutting about 6,900 jobs, or close to 2 percent of its global workforce, mainly at its power and gas division, which has been hit by the rapid growth of renewables.
(Reuters) – Union Pacific Corp (UNP.N) said on Wednesday it will cut roughly 500 management jobs and 250 railroad workers by mid-September as the No. 1 U.S. railroad continues broader cost-cutting.
The layoffs come as Union Pacific, like other major U.S. railroads, saw a resurgence in coal volumes this year but has been hit over the past two years by precipitous declines as utilities switched to burning cheaper natural gas and the strong U.S. dollar hurt coal exports.
SEOUL (Reuters) – When South Korea’s Samsung Electronics and LG Electronics last year announced plans to build home appliance factories in the United States, they hoped to sidestep any fallout from President Donald Trump’s “America First” manufacturing and jobs mantra.
Last week’s decision by the U.S. government to impose tariffs of up to 50 percent on imports of washing machines and key components showed that wasn’t to be.
The inclusion of hefty tariffs on components in particular had moved the goal posts in a long-running trade dispute, upending supply chains and threatening investment across other industries, officials from the companies and the South Korean government said.
Carrier plans final layoffs at plant Trump vowed to protect: report
BAKERSFIELD, Calif. – On Wednesday, Chevron announced to employees with the San Joaquin Valley Business Unit that it will implement a 26% reduction in the unit, applying across all field and office locations.
The layoffs, expected to take place in 2018, will affect locations in Kern, Fresno and Monterey Counties.
(Didn’t give numbers)
More Layoffs Hit National Geographic
Another wave of reductions since Fox bought the media properties.
WASHINGTON — Citing a long-term drought in satellite orders, Space Systems Loral has laid off a number of employees at its California satellite manufacturing facility, the company confirmed June 22.
In a statement to SpaceNews, SSL President John Celli said an “extended slowdown” in orders for geostationary orbit communications satellites led the company to this round of layoffs.
Company spokesperson Wendy Lewis said SSL was not disclosing the number of people laid off. A source familiar with the layoffs said about eight percent of the company’s workforce was affected, which would be on the order of 200 employees.
Other satellite manufacturers have also reported weak demand for commercial GEO satellites. “Last year, there were 14 new geosynchronous satellites purchased,” Dave Thompson, president and chief executive of Orbital ATK, said in a May 11 earnings call about the company’s quarterly financial results. “And at this point, my crystal ball for 2017 is somewhere in the 12 to 14 satellites, so not better than last year.” He added he hoped for a rebound in orders in 2018 or 2019.
As U.S. military budget soars, Boeing workers face layoffs
Even with an extra $52 billion for the world’s largest military in President Trump’s new budget — or the $60 billion Sen. John McCain, R-Ariz., is lobbying for — workers at Boeing Corp.’s war helicopter factory and division headquarters in Ridley Park, Delaware County aren’t sure they’ll all still be on the job next year.
“We’re hoping we get some money for the V-22 (Osprey) and the Chinook, our products here. But right now we’re in a little bit of a downturn,” said Mike Tolassi, president of United Aerospace Workers Local 1069, which represents around 1,370 of Boeing’s 4,500 workers at the complex, the largest industrial plant in the Philadelphia area.
“This past year we’ve been experiencing layoffs. I believe we’re gonna have another in April,” Tolassi added.
Teva Pharmaceutical set for major layoffs in Israel, U.S.: report
TEL AVIV (Reuters) – Teva Pharmaceutical Industries is expected to cut 20-25 percent of its workforce in Israel, where it employs 6,860 people, and a few thousand more jobs are to go in the United States, financial news website Calcalist said on Thursday.
The world’s largest generic drugmaker will send termination letters to “tens of percents” of its 10,000 employees in the United States in coming weeks, Calcalist said, citing people familiar with the matter.
Teva’s new Chief Executive Kare Schultz is working out the details with regional management in Israel and the United States, Calcalist said, adding that those set to be ousted include its chief scientific officer and president of research and development, Michael Hayden.
2017 was a record year for both store closings and retail bankruptcies. Dozens of retailers including Macy’s, Sears, and J.C. Penney shuttered an estimated 9,000 stores — far exceeding recessionary levels — and 50 chains filed for bankruptcy.
But there’s still a glut of retail space in the US, and the fallout is far from over.
The number of store closings in the US is expected to jump at least 33% to more than 12,000 in 2018, and another 25 major retailers could file for bankruptcy, according to estimates by the commercial real estate firm Cushman & Wakefield.
Nearly two dozen major chains including Walgreens, Gap, and Gymboree have already announced plans to close more than 3,600 stores this year.
When combined with last year’s record-high store closings, an even higher rate of closings in 2018 would push hundreds of low-performing shopping malls to the brink of death.
The commercial real estate firm CoStar has estimated that nearly a quarter of malls in the US, or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor tenant.
That’s because the malls don’t only lose the income and shopper traffic from that store’s business; such closings often trigger clauses that allow the remaining mall tenants to exercise their right to terminate their leases or renegotiate the terms, typically with a period of lower rents, until another retailer moves into the vacant anchor space.
The reduction applies across all SJVBU field and office locations, including the field and office locations in Kern County, Fresno County and Monterey County, the company said. The position reductions will occur in a phased approach between now and the end of 2018.
It is estimated that approximately 300 employee positions across the three counties in which SJVBU operates will be eliminated over the course of 2018 as part of this reorganization.
On Thursday, 100 employees of Chevron will be notified of their termination. However, these positions will not be eliminated until January 2018, the company said.
The next round of cutbacks could come down in late November or early December, with 40-60 positions potentially being impacted, according to sources. The layoffs could hit both on-air TV/radio talent and behind-the-scenes production staffers.
Another source expects the flagship “SportsCenter” franchise to lose people in front of and behind the camera. “I see (ESPN) going down a path where they have less staff — and hire more production companies to provide programs and fill air time.”
Through Week 7 of the 2017 season, ESPN’s “Monday Night Football” was the lone NFL TV package up in ratings, according to Austin Karp of SportsBusiness Daily. In September, ESPN’s “First Take” with Stephen A. Smith, Max Kellerman and Molly Qerim tripled the TV audience of FS1’s rival “Undisputed” with Skip Bayless, Shannon Sharpe and Joy Taylor (461,000 vs. 150,000 average viewers). With 96.9 million digital users, ESPN had five times as many unique viewers in September as Fox Sports.
But ESPN is struggling from the triple-whammy of a shrinking subscriber base, expensive billion-dollar TV rights for the NFL, NBA and other sports, and bloated talent costs. The network pays $1.9 billion annually for “Monday Night Football” and another $1.4 billion for the NBA. Don’t forget ESPN is still paying millions of dollars in severance costs to many of the 100 anchors/reporters laid off in late April.
Despite promising Madison Avenue at its upfront presentation that Mike Greenberg’s new solo morning show would debut Jan. 1, ESPN has pushed back the start date to the spring because of construction delays at its expensive new studios at South Street Seaport in Manhattan.
The ESPN workforce in Bristol, Conn., and around the country is still recovering from the layoff of 100 colleagues in late April. Unlike the previous downsizing of 300 behind-the-scenes producers, directors and staffers in October 2015, this year’s layoffs took out high-salaried TV talent and reporters, many with multi-year contracts. Many are still looking for their next gig.
Already this year, 14 retailers have declared bankruptcy, including the companies behind Payless, The Limited, and BCBG. That’s not far from 18, the total number of retailers that declared bankruptcy in 2016, according to insights from S&P Global Market Intelligence released last week.
Just days after S&P’s report was released, Bebe, which sells women’s clothing, announced plans to close all 168 of its stores. It is unclear if the company will sell clothes online despite the store closures, but S&P predicts the company has a high chance of filing for bankruptcy.
Here’s S&P’s full list, including the likelihood the companies will default in the next year:
A number of J Crew stores closing by the end of January 2018 won’t make for happy holidays with those employees.
The J Crew stores closing news comes along with a poor third quarter for the retail company. This includes revenue for the period dropping 5% to $566.70 million. Comparable store sales for the quarter were also down 9%, which follows an 8% decline from the same time last year.
The company notes that the third quarter was particularly bad at its J Crew locations. This division saw sales in the quarter drop by 12% to $430.40 million. Comparable store sales were also down 12% after a 9% decrease in the third quarter of 2016.
J Crew also operates the Madewell brand of women’s clothing stores. This segment of its business actually performed well in the third quarter with revenue increasing 22% to $107.50 million. Its comparable stores sales for the third quarter of the year were also up 13% following a 4% increase during the same time last year.
Regardless of the industry, the two main reasons businesses laid off large numbers of employees were companies shutting down or making cost cuts.
Among the companies paring workforces last year were some of the great names in American business — Westinghouse, General Electric, Macy’s, and Hershey.
The public sector also implemented cost cuts that resulted in layoffs in education and government. Private defense contractors such as Boeing trimmed jobs in 2017.
24/7 Wall St. used data provided by Challenger, Gray & Christmas to compile a list of the 25 biggest layoff announcements in 2017. Challenger, Gray & Christmas’ sources for layoff announcements included filings with the Securities and Exchange Commission, WARN notices (Worker Adjustment and Retraining Notification Act), company press releases, and media reports.
These are the 25 employers who trimmed payrolls the most in 2017.
CHESAPEAKE ENERGY LAYOFFS: 400 JOB CUTS, 330 IN OKLAHOMA CITY, DUE TO $9.9-BILLION DEBT
The Chesapeake Energy job cuts are going to affect workers primarily in Oklahoma City. Of the 400 Chesapeake Energy layoffs, 330 of those cuts will come out of the Oklahoma City workforce.
“Over the last couple years, we have divested approximately 25% of our wells, primarily from non-core areas, as a key part of our strategy to reduce debt, enhance margins, and work within our cash flow.
Chesapeake Energy Stock Fell Nearly 44%, Debt Rises to $9.9 Billion in 3Q17
The recent quarterly result for the third quarter of 2017 showed a company that is taking on an increasing amount of debt, with the total amount having jumped to $9.9 billion in the quarter, compared to $9.7 billion the year before.
Updated: Banks Closed Record Amount of Branches in 2017
Increased Technology Spending Accelerating Pace of Closures
U.S. banks accelerated their pace of branch consolidation last year, closing a net 2,069 locations, an 18% increase over the net number closed in 2016.
That pace of closures could speed up even more in 2018 as a number of bank holding companies reported plans to deploy a significant portion of expected savings from tax reform legislation enacted last month into increased spending on technology, expected to support increasing reliance on digital and mobile technology by bank customers to conduct more of their banking activity.
Wells Fargo & Co. (NYSE:WFC) is the poster child of the movement. It closed a net of 194 branches last year – the highest among all U.S. banks — and it expects to close 250 branches or more in 2018, plus as many as 500 in each 2019 and 2020.
Banks closing the most branch locations (net) in 2017
Wells Fargo Bank, 194 (net closures)
JPMorgan Chase Bank, 137
The Huntington National Bank, 134
First-Citizens Bank & Trust Co., 127
Bank of America, 119
SunTrust Bank, 119
PNC Bank, 109
Branch Banking and Trust Co. (BB&T), 92
Capital One, 73
JPMorgan Chase this week announced that it intends to expand its branch network into new U.S. markets, opening up to 400 new branches over the next five years. These new branches will directly employ about 3,000 people.
Still, JPMorgan Chase like other major national and regional banking companies, has been consolidating branches. Last year they closed 137 more branches than they opened. And since 2008, they’ve closed 1,467 branches and opened 1,251.
In 2017, CSX railroad cuts amount to over 4,000 jobs and idled hundreds of locomotives, and now, CSX layoffs for 2018 are expected to involve an additional 2,000 employees.
Jacksonville, Florida-based CSX Corporation is one of the county’s leading transportation suppliers. The rail company operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces.
CSX’s layoffs for 2017 began in February, when it announced it was cutting 1,000 management positions, most of which were in Jacksonville. Later, CSX announced it was continuing its streamlining efforts by laying off another 1,300 employees across all 23 states where it operates.
Despite laying off 2,300 people and taking nearly 900 locomotives and 60,000 freight cars out of service, it wasn’t enough.
In July, CEO Hunter Harrison announced even more layoffs were on the horizon. According to company spokesperson Rob Doolittle, as many as 700 were expected to be out of work. This raised the number of layoffs in 2017 to around 3,000.
CSX is eliminating the infrastructure it doesn’t need and consolidating operations. That includes shutting down most of the railroad’s 12 railyards.
In fiscal 2017, CSX reported revenue of $11.4 billion, a three percent increase over the $11.0 billion recorded in fiscal 2016. Full-year 2017 net income was $5.4 billion, or $5.99 per share. In 2016, CSX reported net income of $1.7 billion, or $1.81 per share. Adjusted for the impacts of the new tax law and the company’s restructuring charge, adjusted earnings per share were $2.30.
Being an entrepreneur does not have “regular” hours – unless you count all 24 hours as regular, 7 days a week or as most entrepreneurs would say – 30 hours a day, 8 days a week, which isn’t a joke – but a sad reality about how much there is to do in the time available – ALL the time.
When business books say that most businesses do not “break-even” for the first three years, that means for three years or more, over 80 hours a week, you will not only be working for free, but will probably be taking from your pocket and paying into the bills of the business – for you to keep doing that work.
The vast majority of business ventures fail rather than succeed and that is a lot more than half in this case – go look up the exact numbers, it will astound you. That means, despite having everything going for them, many of those businesses fail anyway. There may be reasons, and none may be valid for why it failed. Sometimes, businesses have everything right – timing, pricing, effort, marketing, product, process, people and sales – but fail anyway.
There is more paperwork being broke and poor than to run a business – but not by much. And, there are deadlines for poor people to put in paperwork, keep up with papers, produce them at a minute’s notice too – with fines and jail if you don’t, just like there are for small businesses and in both cases, there isn’t an army of people on staff to help with it like big corporations have.
There is rarely a faster way to go broke than to be in any business – even a business enterprise that has at some point, done well. When it turns bad, being an entrepreneur offers no skill sets to deal with the speed at which things can go to hell in a short period of time. Only the survival skills can help at that point and unfortunately, they are needed right when the mind is least capable of making any good decisions at all because of extreme stress and inordinate complexity of the information at hand which must be dealt with all at once.
In the US, entrepreneurs were at one time heralded and small businesses supported especially, as the backbone of the economy. That hasn’t been really supported for many years although the words are still used and it is talked about being that way despite the fact that it isn’t. And nobody you know wants to know you when the boat starts sinking, let alone throw you a paddle or a bucket to help you out.
Selfishness, greed and penny pinching are not the character traits that most people would brag about, nor wish to consider as their only real personality, but to be an entrepreneur those are the critical personality traits if it is going to work at all. If you don’t mind being that kind of person, and other people knowing you’re that kind of person – entrepreneurship is for you because 99% of the time, day in and day out – over a period of years, those are the traits you will be using if you want it to succeed. And, it still might not succeed regardless.
Last, but not least – no matter what you think about being an entrepreneur, why you’re doing it, what your product or service is and no matter what you think the experience will be like for you – being an entrepreneur will change you. It will change your relationships that you’ve always held dear and not always in positive ways. It will steal from what you already have and what you could’ve had if you’d done something else. It will take from your family and from their time, goodwill and caring. It just does. Whether you want it to or not – being an entrepreneur does that no matter how you go about it.
I’ll save you the bother. I don’t want to particularly, but I will. We could wait to have this discussion until you’ve experienced it too and then have a good laugh about it when it’s all over and we’ve gotten past it. But why not tell you now so you can develop ways to deal with it. So, I will.
When you start a business, believe this – it is harder to get sales than you would begin to guess. And there are some significant reasons for this.
First, your family isn’t going to buy whatever it is because, well, they’re your family. They should get whatever you may be offering at the cut rate family discount of nothing because well – yeah, they’re family. So they aren’t going to buy from you. You can choose not to give it to them for free and they’ll simply resent it and you and your stupid business that is taking up all your time and still won’t buy from you or your business.
Second, your friends are nearly the same category as your family and for about the same reasons, they won’t buy from you either. You damn sure aren’t going to sell anything to them and if they like or need what you are selling, they still aren’t going to buy from you because, well, they’re your friends. And, they want the same deal your family thinks they should get – free services or products that your business is providing to everyone else for some price.
Third, your neighbors aren’t going to buy from you because they have better things to do than to be bothered with whatever it is you are selling and really don’t want to know about it either. They could not possibly care less and besides, they are getting whatever they need from retailers that they know or the online stores for those retailers – whom they don’t know and have never met, but trust more than they ever will trust you.
Fourth, don’t think that it stops there, because the people from your church, school and if you have one, workplace don’t want to be bothered with whatever you are selling either. They don’t even want to know about it because that takes up their time and they don’t want to be share with, told about, know about, see any of it, learn anything about it or basically, have anything to do with any of it. You’re only friends by virtue of going to the same place some of the time and otherwise, have no real relationship of any measure with you. And, in a way – you’d think that would favor selling something to them because at the very least, maybe they wouldn’t want it for free since they aren’t really your friends. But, no.
Fifth, that leaves everybody else – and those people don’t know you, don’t know about you, don’t want to know about you and essentially are already buying from somebody somewhere offering something that works good enough, thank you very much. And, they are too busy and don’t want to bothered finding about any of what you are about, what your business is about or what you are offering either – no matter how damn good it might be. And that is a fact.
Sixth, among the rest of the world who may have some individuals who either need or want what you are offering and my really like to have it and be willing to spend money to get it, there is absolutely little if no access to them or for them to find you and what your business offers. These include people on twitter and pinterest and other social media which I’ll tell you about next.
Seventh, the people on twitter, pinterest and other social media sights are there, for the most part, because they want to sell you something. They are not there to retweet your marvels because they believe in them or like them, nor to repin your wonders because they think that is the best thing they’ve ever seen. They are there because your business might be a candidate for buying their marketing services, SEO services, online marketing services, and other business skills services like training you in how to be in business. All these are great and much needed but you are likely to need them when you don’t have any money from your business and by the time you do have business sales with the money to get their services, you probably have passed the point of giving a damn about whether you are getting that part right or not. And, likely don’t need them, either.
Eighth, you’d think that stores, manufacturers and other commercial businesses could use whatever your business is offering and it is probably true. They could fall into the category with family for the extent to which they act like whatever you are offering is useless or of a value that you should give it to them for free and be grateful they were willing to take it from you at all. But, they are in a category by themselves because all these businesses are overwhelmed with their own competitive streak in the marketplace and to them, no matter what you are offering – you are a competitor or worse, trying to waste their time selling them something. They are more likely to steal it when you’ve walked out the door after saying they aren’t interested and that is true regardless of how you approach them, unless you bring an army of agents and attorneys with you that you can’t afford.
Ninth, not to be outdone, local businesses want to believe their time is even more valuable than big companies and since each owner has 100,000 times more things to do in any given moment than anyone working in a large corporation, they may be accurate in believing that. They nearly all share the idea that whatever you offer, it has to be overpriced, untrustworthy, untried, unreliable, unbelievable, unlikely and unsatisfactory or you wouldn’t be coming to them to try and sell it. That is especially true if you aren’t already the place they are used to buying from – no matter what it is or how much they need it. And, obviously if you are starting your business, they couldn’t be buying anything from you yet, so there you go.
Tenth, just in case you thought that actually leaves anybody that you could sell your products or services to, you would be right. There are three people in the world besides you that would love your product or service, would believe it is wonderful and be willing to spend their money to get it and be grateful to have it. Those three people do not include you and I’m not being a smartass about it. This is simple statistics – out of 7 billion people more or less, there must be three that would like it and want to buy it and be willing to pay for it. That is good to know, but you can’t build a business or profits from three people, let alone find them among that many people. Even narrowing it down by country, market, strata of buyers for certain things, season or proximity, is still beyond daunting and you would need to get your products and services in front of them at the point when they want to buy for it to matter.
Now, I know that whether it is home parties that sell certain products, or life insurance and car sales people, or any other type of business, the first thing they want to do is list all the people they know or that the person they are selling to also knows to use as referrals. And, if you make that list and have someone else approach those people you know or that are your family members – AND – if they didn’t know it was actually your company, they would probably buy some of the products or services your business is offering. Possible.
Getting written up in a nice newspaper or magazine article might help get your products, services and business in front of the three people in the world that are sure to want and need what you are offering and let them know it is available to them. It could. And a few other people might see the article and accidentally tell somebody about what they read, who will possibly buy from your business – eventually. Don’t hold your breath.
And, not to be despondent about it nor malevolent either, none of the facts above mean anything about the value of your business or you or your product or your service or your credibility or your value or your business’ value or your products’ value or damn well anything. But it is really hard not to take it that way. The fact is, all of those truths above say more about the people and groups of people doing things that way than it does about you or your business or anything your business is offering. There is a reason that advertising costs so much – it not only provides access to a certain demographic and number of audience members but it also provides the opportunity to get in front of them in a way for you to choose what to say, how to show your product fitting into their lifestyle and identity, how to provide your products’ benefits and solutions to their problems.
Unless you have taken out a business loan or taken on investors where some real advertising budget is available, that option is probably not accessible for your startup. Some startups use a guerrilla marketing style plan with enough ingenuity to get their products in front of people who want to buy it, but their plans fail with as much regularity as they succeed – so keep that in mind. And, with enough efforts being made to run around doing guerrilla marketing as time consuming as that and social media are, you won’t have to worry about doing your primary business or providing your product or service to the public because you won’t have the time or energy to do so.
Lastly, no matter where you put your product, your service, your business, your story about it in front of people online or in the real world, it won’t be what they are looking for when they find it which amounts to no more than a bother as far as they are concerned. By the time they decide that they want or need it or both and want to buy it, they won’t even remember where to find it, what your name is, what your business is called, where they saw it or where they might find it now that they want to buy from you. And, every time you hear that a small business or a startup can take anywhere from three to seven years to break even and be in the black, remember – that really means you taking money from your own pocket or from potential future sales by taking out loans to pay for working overtime every day of the week to have a business that isn’t earning any money until it does. And since nearly every business relies on sales to earn money and make a profit, refer back to the list above.
Find a problem that needs solving or a match between skills and talents with a need in the marketplace.
Brainstorm possibilities for meeting that need or solving that problem with designs, innovations, existing products as they are or changed a bit, inventions, processes or other means.
Research the efforts already made by others and / or already in existence in the marketplace today or ever before now to solve the same thing or meet that need.
Analyze how the marketplace could support a business offering some solution to that need to solve that problem and the access points for delivering it to the marketplace.
Find out how many customers might be there who would want that service or product to meet the need or solve that problem. And, find out what they currently do about it.
Build a marketing approach, business plan and a business model particularly that will serve this market well, take advantage of new ways to reach the market as well as traditional distribution channels and look for paths to show them the solution.
Create the prototype of the product or service, write down the design or invention’s plans in a more concrete and precise way, create the drawings and accompanying texts about the business, the design or invention or innovation and the marketing.
Define the business process more concretely in terms that describe the process and method for building the business and how the product or service will be offered to the public along with a brief about the business model and marketing chosen for it.
Make the necessary calls to get materials estimates, the cost of creating a more professional level prototype, attorneys available for patent application and search, and create a network of manufacturing and marketing resources to use later.
Look for funding opportunities. If social media and crowdfunding are to be used, begin constructing those accounts and their overall structure and look, as well as creating the campaign materials for either or both crowdfunding and investor / banker / SBA funding, including video, written materials that will be put online and those to put in their hands in person, websites, campaign focus and the statement or idea that offers what distinction this product or service has going for it.
Get appointments for funding sources, investors, bankers, SBA, manufacturers, retailers and other distributors. Bring as professional a pitch as possible along with video, laptop or tablet, written materials, non-disclosure forms, attorneys or at least their phone number after prior arrangement with them, projected costs and potential sales / profits / earnings spreadsheets, and prototypes along with all web addresses to online materials about it. Remember to be brief and focused as well as intent on listening to answer their concerns as honestly and as precisely as possible.
Before signing any agreement have it reviewed by attorneys who will require a retainer or fees to do so. Return the agreement with any changes advised by the lawyers, and make an appointment to return for a signing meeting after those changes have been accepted or to renegotiate the terms with them and repeat the entire process (do not sign until attorneys have advised on the renegotiated terms.)
Then, make calls to manufacturers if it is to be produced in that way and determine the next stage of involvement from the level of prototype in hand to choice of materials to be used and level of finalized product details (drawings, scale and sizes of it, online or software 3D modeling and file types, interaction contact points to manufacturers’ design team or engineers or rep and when to expect proof of quality piece back from them.)
After all that, go to manufacturers for cost per unit to produce, negotiate the costs, delivery times, insurance and make preliminary contracts with cost estimates that will go to the lawyers before being finalized. And, get orders from retailers, deals with distribution channels that will offer the products or services and make those agreements, get invoices of specific amounts, schedule a delivery date and payment schedule. All of that information will do for the set of materials that go to the bank, investors who showed an interest, family members willing to invest or loan, other loan and funding sources, etc. where those deals will be made and contracts for their return on investment , loan repayments or participation as a partner will be defined which also must go to attorneys before signing and possibly renegotiated.
Now, if everything gets agreed to properly, signed and money for funding is provided to make up the difference in time between having something manufactured and getting paid for its delivery to contracted distributors – the marketplace will have the solution, but still not know about it to any great extent. It will not be anywhere that a purchasing decision is made at the time it is made. It will not be automatically desirable regardless of the solutions adeptness at solving the existing problem. The costs of producing it and delivering to the marketplace will not be as efficient as anything required to cover its own costs or offer any substantial profits. And, the tracking process to account for quantities being made, delivered and payments received, numbers of sales, royalties, license fees, franchise fees, patents filing and a host of other elements will still need doing immediately.
Once these steps are all accomplished, the loan holders must get paid, investors will want a continuing return of their investment with substantial returns within a short time frame of three years or less – and will likely pull out their money at that point requiring a round of new funding efforts to continue establishing the business and its offerings in the marketplace at just the time it needs it most, as well as competition will have been created to steal whatever market share that has been acquired once it is shown as a viable product or service.
Details that aren’t mentioned above can be found in most SBA and other StartUp materials, including permits, incorporation, patent and intellectual property submissions, business licenses, dba registrations, other required Secretary of State filings, IRS required filings including tax id number and employer id number, Dept. of Labor requirements for employee wages and withholding, among others. These details must be done among these steps above and simultaneously with them at a point somewhere after approaching manufacturers and before delivery of orders, but not necessarily before receiving payment for them although it is better to do so ahead of those moments. And, certain detail steps must be done within the steps above to protect the intellectual property of the design such as creating and using non-disclusure forms before showing it, filing for a provisional patent before showing it to even possible family and friends investors, bankers, potential angel investors or the manufacturers and distributors sought.
And, last of all – certainly not least, after doing all of that and putting the collateral of your house, property, and whatever else to get started in this – the public at large, individuals in specific and the marketplace in general will never be at ease in adopting the solution or solutions being offered that are different than what they are doing now, even if it solves a major problem in a marvelous way. That is just a fact. Doing nothing and putting up with something that needs to have a solution will always be more likely a choice than changing to something new, novel, unknown, not long tried in this different way, not absolutely guaranteed to solve the problem completely and effectively this time and every time. They just won’t want it – and too, the public is not going to waste time finding out about it, if at all possible because they don’t want to be sold anything else by anyone for any reason – ever.
Aeropostale files for bankruptcy, plans to close 154 stores
Sports Authority filed for bankruptcy in March and could end up closing all or some of its stores. Women’s evening wear retailer Cache filed for bankruptcy last year and closed all of its more than 200 locations.
Aeropostale on Wednesday filed for Chapter 11 bankruptcy, saying in the filing that it was seeking approval to immediately close 154 of its more than 800 stores. Just two weeks ago, its stock was delisted from the New York Stock Exchange because it was trading for just pennies a share.
Looking at the things on twitter about SxSW that are happening over the next few days, it reminds me that today, many young adults think of our world in terms of minutes, not hours or days. And, in terms of hours not days, weeks, months or years to get somewhere, anywhere in the world.
There is a disconnect between online reality where business can be created in an instant and access to entire worlds compared to what people think can be done by one person sitting in their own home, creating, sending out to the world.
My neighbors, family members, friends that are sitting right beside me in the same room say, if I want to make a business of designing pillows then I must – and they have a whole list that starts with getting the fabric from wholesalers. The list goes on to hiring people to sew the pillows, packaging them properly, marketing to buyers at stores and paying marketing and pr or ad firms to promote them to the public.
But, they don’t see that I’m doing that, sitting right here in the same room with them. it is bizarre. That is the strangeness of this new world of the internet and the strange reality it makes.
I watched my children in their teens and as young adults buying computers with their money before even the thought of buying a car entered their budgets – or even, rather than having a car at all – and smartphones, internet service, apps and software, and gadgets and now, a 3d printer instead.
In a few short years, it has become commonplace to be less than 3 minutes to the whole world knowing about who, what business, what it offers, how to get it, and be telling others about it. That is – minutes, not hours or days. How is it possible that every day people all around me that are older than 17 don’t know that – and some of the teens don’t even seem to know it either. That is a strange reality.
The experiment was a failure and yet it hasn’t “failed” yet. But, from it and its failures, I can tell you what I know about business, small business, diy business, crafting and art and design businesses, home based and online based businesses, and any kind of authentic, unusual, new, innovative, invention based, creative, crafty or art business.
As long as that last sentence was, this one is simple – things said in business guides are different and mean something different in application.
You will work 18 hours a day, 7 days a week AND spend $300 – $400 dollars in cash each month for years BEFORE it starts making any money –
When a business book or sba guide says, most businesses are in the red for the first 3 – 5 years, it means you will be paying out of your pocket, household budget, savings or financial sacrifices to work and work and work to make money with it. That can be a few hundred dollars a month or a few thousand, but as the business doesn’t cover it’s own costs, let alone pay you, that extra money it absorbs like a bottomless pit comes from you just to keep doing business at all.
97 People Playing Bingo Lose out a Hundred – Same is true in business endeavors, including yours –
Second, when a business book, investor guide for institutions and investors, or anything else says that most businesses fail – that does include yours no matter what you do right or how much money you have going towards it’s success. It is kind of like playing bingo at a bingo hall. Yes people win and take cash home, but 97 people out of that 100 lost each night and went home with less than the money they had when they went there. Those statistics about starting a business are the same way, it means that for every success, thousands – literally thousands of people and businesses were on the losing side of the equation and walked away with less than what they had in the first place. And, it isn’t any fun.
If you don’t know who will buy it – you don’t have a business that will work – even if there are those who need or would buy your product or service –
Third, when a business book or sba manual says “who will buy your product or service?” as part of the directions in the business plan planner or other guideline to help your business, it means in an implied manner that if you don’t know, you don’t have a business – no matter how great the idea, invention, plan, concept, campaign or business. It could very well be that your business serves a need or is very desirable from potential customer’s standpoint, but if you can’t define who they are, where they are or how to get them to see what you are offering and don’t know who they would be, you don’t have a business at all. And you won’t have one that has any chance of succeeding at all without that one element, though it doesn’t tell you that in their text.
There are literally three sides of a coin and it takes using all three for it to work –
Fourth, for artistic and creative endeavors at some core level of the product or service being offered to the consumer, whether it is actual art or crafts, music, dance, writing, performance art, creative consulting, public relations or any invention, novelty, innovation, inventive approach or creative application of anything – doing it as a business is a three-sided coin. The face of it is studio time which includes creating and creative work on it plus learning, continuing to expand skills and knowledge, etc. The back of the coin is the business activities it requires which include marketing, promotions, accounting and learning to apply those online and in-person skill sets, etc. And the sides or crowned edge of the coin is the creativity and creative drive which supports the other two and is used interchangeably as applied to those completely opposite types of thinking and activities.
For every dollar you borrow, investors want 3x that dollar back in a very short period of time (2 – 3 years) –
And the fifth point is this – when a business article in a magazine or investor insight article in a book or online publication talks about what they want as a return on their investment if they even consider putting money into something and they admit a desire to really have 10x their original investment come back to them, but typically expect to get at least 3x their money back – it means that is what you are going to give them for using their money. It also means that in 2 – 3 years, when they want to receive the return on their investment given back to them, they will pull all of their money plus their 2x – 3x return on their dollars – out of your business all about the same time you need that money the most for the business to survive past the founding stage.
Track record isn’t about sales figures – it is about you getting a return on the investment you have made into the business plus some –
Sixth, when a business book talks about investors and bankers in the business community looking at track record and valuations for risk before putting their support behind a business, it means several unsaid things including that you must show a return on your own investment over and above what money and time you’ve put into it. If you put in time over the course of months and years into your business, it is represented as a dollar value, even if it’s comparable value per hour is based on the minimum wage of the moment. That is part of your investment in a monetary sum plus an additional “lost opportunity cost” of having done something else, or nearly anything else and made some money. That may seem intangible, but it really is not and it does represent a dollar or monetary value which you were investing along with your efforts and cash to do the business as you went along. That means, if you could’ve been sitting in another job making $40,000 a year and did this instead – then along with showing at least a minimum wage pay for the time you did invest in it, there is another cost actually represented of $40,000 for each year you didn’t go to that job and make that instead.
A profit cannot be derived in a vacuum – it must include a return on the dollar value of your time plus your money, plus it’s sustained operating costs AND something beyond that coming from the business to be considered “profitable” –
Seventh, when business books explain how a profit is derived on paper to show what your business is capable of doing financially, it means that the costs described above including a wage for your time put into the business plus the lost opportunity cost of spending each year doing this before it showed a profit, plus the actual costs of overhead and marketing, supplies and professional fees, postage and internet service, etc. combined in a dollar amount must be realized and exceeded – then there is an actual profitability.
To say it another way, if you can’t get the original investment you’ve made (which includes all of those costs mentioned above across the time you’ve been doing it) plus its current operating costs plus something beyond that amount – it isn’t profitable, isn’t returning your own investment and consequently, won’t be expected to return the investment money someone else may put into it – so they won’t.
Telling a story about your business, yourself in context of the business, your products, or your services does not mean where were you born? –
Eighth, when a business article or guide explains how products, services, marketing materials and online profiles about the owner/s must “tell a story”, it does not mean your life story, nor does it mean to tell the story about the product and what all that product is. It means something else more closely aligned to a “hook” sort of like the last few scenes in television dramas and sitcoms that happen just before the commercial break.
It is a brief and interesting reason to come back and look, to see more, to want to know more, and to have something to talk about that is interesting to others. It is not necessarily the benefits of owning the product or having the service, but it can include those and yet, doesn’t have to convey them at all.
It is likely why Lady Gaga wore a “meat dress”, and everyone talks about it repeating her name in the story and reminds people of her music and what she does and what outrageous style and fashion her brand uses on stage and in personal appearances and in the media. All that from simply showing up in a dress made of meat. That is telling a story and guerrilla marketing at the same time.
A small business according to the SBA and bankers means a business of $3 – $5 million in sales, not smaller than that – even a startup –
Ninth, when the sba or a banker or investment group talks about a small business, they mean a business earning $5 million a year more or less, not $30 or $300 or $3,000 or $30,000 or $130,000 a year in sales. That is the truth. When small business loans and mentoring programs are offered, even those described as being available to poor credit candidates with low credit scores, or to small business enterprises and minorities, startups, or cottage businesses – they do not mean you, or me or anybody you know.
The business loan packages intended for underserved or low credit score applicants trying to start a small business actually require nearly the same level of credit score and credit worthiness as any standard business loan – nearly the same score within a few tens of points plus thousands or home equity as collateral. And, for a business to qualify for a “small business loan”, it must be able to generate, or reasonably accurately be expected to generate sales in the $3 – $5 million range, not less. And, that is what they mean by small business.
If you can’t show that your friends and family threw thousands of dollars into your business, the business community won’t want to either –
Tenth, when business and sba guides, business funding articles and business classes talk about seeking money for funding from friends and family first, it actually means that they look at that as important to convey whether people you know trust you enough to get it done – and gave you their money. It is used as an indicator of your trustworthiness, your ability to persuade or convince or “sell” the value of your business to those people you know AND it shows that if you can’t get that money, banks and investors would be wise to stay away too.
It doesn’t tell you that when you read it and if like me, your friends and family members are about sick of hearing how your business is doing while telling you for the umpteenth time why it won’t work, can’t work, isn’t going to work, isn’t Degas or Picasso or Michelangelo or the Beatles or Sting or Frank Sinatra or who the hell ever, or isn’t comparable with the written works of James Michener or Tolstoy or Tolkien or the filmwork of James Cameron, or the merchandising quality of Macy’s and Saks Fifth Avenue, etc., ad infinitum – then the last place you would want to try and get money to support your business would be those people among your family and friends.
But, it won’t read like that to business community resources from the sba to bankers to investors and investment gurus. It will read that you couldn’t get their trust and belief, that they know you and don’t consider you trustworthy to get the job done or that they are willing to risk their money betting on you to win. That is how it will read – like a big “steer clear” sign.
Even if you do everything right whatever that may be, it still might not work just because reality is like that –
And, last but not least – it is a certain kind of Cinderella thinking that causes blogs, business books, sales books, marketing tools books, business magazine articles and authors in general about business things to offer you or me with the idea that if we will do all the right things and just believe, that it will work. It means that if it isn’t working, then it must be because we didn’t do something right or we didn’t believe enough or we didn’t think positively enough or we weren’t diligent enough or we weren’t worthy of the task somehow. But, that is not possible nor likely.
First of all, none of us have that much control over anything and secondly, that belies the central fault in the thinking that if we do it good, then good things will come from it. Well, it can but it might not – that is reality. And, of which it is a part of why there are human beings engaged in this endeavor of business and art, creativity and inventing, innovating and marketing – rather than machines. It is because the flexibility of human thought and drive is necessary for it to work and without it – no man-made machine or software program can match it and get that job done.
None of those business books tell you that very effectively but it is what it means when they say in those books to be flexible, think on your feet, look for the opportunities and grab them as they present themselves, tailor the product and service to the marketplace / to the customer / etc. It is what it means when those books say, “carve out a niche”, “tell a story with your product”, “grab onto a trend” or “customize your products and services to an existing trend>”.
I found out there have been some sales of products I created on zazzle that I didn’t know happened and had an absolute panix attack when I discovered there were none of my images on the site. After waiting awhile on the phone, it turns out they are already working to fix that. And I emailed the folks over at Pokono 3D about missing their webinar on Wednesday after crashing my laptop several times trying to attend it – and, that after waiting nearly all day for it.
Very annoying. Looks like I’m going to have to find some money to get a new laptop – mine is apparently buggared with some stupid something despite McAfee, and my best efforts. Maybe there is just too much in it to do anything or my computer skills need upgrading – or possibly both.
Aside from working with making some new zazzle products, I have the other half of the business plan to write and format for The Mad Scientist Group. Finally gave up running around trying to find support for it through the small business startup services and economic development groups here. It is a waste of time. If I hear one more thing about a required boot camp for starting a business that I would have to attend in order to learn how to do a business plan, do cost and sales projections, etc. – I’ll just scream although – I’m not turning down any help. Besides which – around New York City’s five boroughs, including this one – those classes don’t start again until April. So as far as they are concerned, everything I’m doing or might do – must come to a complete halt until APRIL plus however many weeks the course runs – or maybe its a one night thing, that wasn’t clear about it. Regardless, how could a city of 12 million people have so few of these resources available and in such spotty measure? Why is that?
And, on top of that – they are nothing but clearinghouses for loans AT 12% INTEREST. That is so disgusting I can’t even imagine that they are intended for small businesses and startups in particular – especially those run by women, minorities and those economically disadvantaged in the first place that are trying to start a business in order to help themselves up the economic ladder. What kind of damn nonsense is that?
It is absolutely without merit. While the banks are borrowing at 0% interest – they are charging everyone else through the economic development (CDFIs) groups at an interest rate which is nothing but highway robbery and sure to eat any and all profits that might ever be available from any business they are “helping”. Anyway – its a waste of time going that direction. It will either have to be bootstrapped, crowdsourced or sold out in some measure to some partners or investors or something. Or maybe, forget it and not bother with any of it at all. Building a business based on innovation and invention, inventiveness and creating new products and new sustainable businesses seems like a far-fetched idea to any of the people I’ve spoken to so far in the business startup groups. They must have been sticking people in businesses around here in hair salons ad nauseum for a long, long time as THE answer because there are nearly enough to have one for every two people living in Staten Island. Maybe that is their idea of starting a business rather than something technology oriented or innovation oriented. I don’t know. But I do know this – how many hair salons, barber shops, nail fixing places and pizza places does a small community really need? I mean, honestly.
I will say one more thing, until Americans locally everywhere realize that it is going to be required of each of us individually and collectively to help resolve this economic mess through innovation, invention, inventiveness, resourcefulness, building new products and building new businesses for the short and long term that expand beyond the local community – there is nothing great that is going to happen. And that is a real shame.
Well, somebody should’ve told me that when offering a business card to someone they would give it back – over twenty people have done that already. Now, either it is the worst business card design in the world – which is possible, or people want nothing to do with it and don’t even want to go look at The America the Beautiful Show websites it describes (or my blog.) Maybe it is too much trouble to take a business card and look up what is on it. Maybe people just don’t want anything to do with anything I have built regardless of what it is and are trying to tell me that. Even their curiosity isn’t awakened to go see what it might be – very bizarre.
But, at the very least – books about business should say, “oh and by the way, most people will either give back your business card after a half-assed look at it or throw it in the trash on their way out the door with it. That is to be expected.” It could say that. I would’ve read it and expected that to happen. Or, if it means something specifically – like, “this indicates you have managed to create the crappiest business card of all time,” that would be helpful. But, no.
Maybe it is too much to read – with website addresses, email address, phone number and blog address. Maybe that makes it too hard to figure out and the person handing it back is literally saying to me by that action, “look, I’m really not going to try and look this up – so give it to somebody else.” Well, isn’t that special. I’m so glad to know that my project isn’t worth the ten minutes it would take to look it up and see it right quick. Surely that isn’t right.
And, I don’t really know what business cards any of them do take and look up the info on them. Is it the one for a locksmith? For a vacation condo? For the plumber nearby? What do they think is valuable enough to keep and want to have handy? Well, okay – the truth is that more than twenty cards were given out and handed back to me with only about five of those cards given to family members – which were handed back or a few taken to give out which they then set in a cup on a desk at home or in a desk drawer with junk on top of them. Little help that was. None of them were given to anyone and strangely enough, most of my family members didn’t want to tell anybody about it either. Where they would forward emails about some of the most trivial, stupid, obnoxious or simply untrue crap to everyone they know, none of them wanted anyone to hear about The America the Beautiful Show project or other things I’ve created online. Well, there you go. Maybe it is a bad project without any real chance of doing anything significant or an embarrassment of some kind and I don’t realize it. That could be it.
My parents have told me often enough, “don’t tell anybody you know us.” And, it wasn’t because I was falling down drunk or something – they didn’t want their friends to know we are related or even that we know one another. There is something significantly wrong about that. And, business books ought to warn that family and family friends won’t want to know you when you start a business venture of any kind – and that they won’t want to be associated with it, nor put any money in it, nor hear about it, nor tell anyone else about it, nor have anything to do with it – no matter what it is.
Thank God I didn’t open a restaurant.
You can start your own business but don’t expect us to buy from you or anybody we know to buy from you –
How could a restaurant or any other business get off the ground with the people in the community, in the family, in the neighborhood, neighbors, family and friends acting that way about it? Are they kidding?
They don’t act that way at Wal-Mart or when offering $450 to buy two tickets for a single event one time that they could care less about seeing . . .
What is up with that?
Or when their kids are paying $1300 for a cabana at poolside to blow through a couple thousand dollars at the Hard Rock Cafe drinking and gambling and buying other “stuff”.