Anne's Land

6 C's of Successful Small Business Owners

This article written by JoAnne Berg of Wise Bread is spot on and worth reading.

Oct 20, 2010

How do you define success?

 

Money? Time with family? Personal satisfaction? The creation of long-term business value? Job creation? A change for the better in the world around us?

 

Most small business owners use one or more of these definitions. Some aspire to all of them!

 

Your definition may be similar, or it may be different. The important thing is to know what success means to you. How do you make sure that you have what it takes?

 

To achieve success, I believe that there are six characteristics that all small business owners need. Fortunately, these traits can be developed by anyone who chooses to do so. 

 

Here is my list:

 

Character

Successful business owners have excellent character. They are ethical and trustworthy; they make decisions based on what is right rather than what is expedient. Whether you are their employee, partner, investor, customer, client, friend, colleague or family member, you know that you can trust them to do the right thing, and they do what they say they will do.

 

Trust pays huge dividends in business. When your customers trust you to treat them fairly, give them good value for their money, and provide excellent service — your retention and repeat business goes up, marketing costs go down, and your profitability is enhanced. When your employees trust you, productivity improves and turnover is reduced. It's not hard to imagine the cost savings and increased profitability that results!

 

Commitment

Successful business owners make a commitment to a goal, and they see it through. They are tenacious. They don't give up. When they hit a bump in the road, they find another path, and they keep going.

 

As Knute Rockne said: "When the going gets tough, the tough get going."

 

Without that commitment on the part of the owner, no business will reach its highest level of success.

 

Compassion

Compassion is good for business. In the book Values-Driven Business: How to Change the World, Make Money, and Have Fun (Berrett-Koehler Publishers, San Francisco, 2006) by Ben Cohen and Mal Warwick, the authors show how even small businesses with limited resources can benefit from caring policies towards their customers, employees, suppliers, community and the planet.

 

Many business professionals understand this intuitively. Even if all you can do as a small business is become involved in making your community a better place (for example, through membership in a local service club or service on a non-profit board), your business eventually benefits in ways that you may not have foreseen when you joined.

 

Conviction

Conviction is the absolute belief that the products or services that you are offering, and the business that you are creating, is valuable and serves a need that has never been filled in exactly that way before.

 

If you're not completely convinced of this, your customers won't be, either. Think about that for a minute — your passion for what you're doing is critical to your success. I can't think of a better reason to choose a business that you love.

 

Courage

Starting and running a business is definitely an act of courage. It entails risk, uncertainty and a great deal of effort and hard work. Courageous business owners take the risk, accept the uncertainty, and do the heavy lifting needed to make their business succeed.

 

As Sir Winston Churchill said: "Success is not final, failure is not fatal: it is the courage to continue that counts."

 

With courage, success is not guaranteed — but without it, failure is certain.

 

Creativity

People who start and grow businesses are literally creating something out of nothing. The creativity that people apply to their businesses is awe-inspiring.

 

Sometimes we limit our definition of creativity. While some people are more inventive than others, or more artistically or musically talented than others, we all have areas in which we excel creatively. These talents can be nurtured and grown once you become aware of them.

 

The process of running a business can also be very creative. Apply your creativity to your business, and watch it grow!

"Price per Square Foot" is often misleading

Recently our team has had many discussions with home sellers and home buyers on this topic.  We have  cautioned all in how it should and should not be used when assessing value.   This qualitative metric is a fanastic tool to compare like products over similar timeframes.  The reality of our local market is that no two homes are the same.  Square footage varies (inside and outside),  layouts vary and condition varies widely among our 80+ year old properties.

Most people are cautious today before parting with larger chunks of money and will often pay a premium to purchase a “done” house.  Why?  They can finance the bulk of the expense (75%-80%) and move right in!  Remodeling requires time, the inclination, creativity and large chunks of money.

A few key characteristics that influence perception of value in of Hancock Park, Windsor Square, Fremont Place, Larchmont Village, Brookside and many other neighborhoods in Los Angeles are:

• Location within a neighborhood
• Location on street itself
• Street traffic and congestion – wide vs. narrow, traffic lights vs. none, etc
• Lot size
• Interior square feet
• Interior layout and flow
• Interior storage space
• Light in house
• Bedroom count
• Bathroom count
• Condition
• System quality & age (foundation, drainage, roof, chimney, sewer, heat & air, etc)
• Architectural style of property – type, consistency
• Quality of craftsmanship – moldings, ceiling height, floors, windows, etc
• Landscaping – front and back, lighting, hard scape and grass, etc
• Upgrades – pool, guest houses, gourmet kitchen, or other special features
• Presentation – style of home & garden (i.e. furniture, art, landscaping, clutter, etc)
• List price relative to recent sales and like homes currently on the market

It is not uncommon to see 2 properties selling in the same neighborhood over the same period of time ranging from $400 a square foot to $1000 a square foot.  Hands on market knowledge, seeing properties day in and day out over years, is essential in understanding value in a market with many variables.  An excel spreadsheet will not get you there.  Some of this knowledge is tacit but the learning curve can be shortened with the help of an experienced professional that you feel comfortable trusting.

10 Reasons To Buy a Home

A thought provoking piece published last week...

• SEPTEMBER 16, 2010, 4:33 P.M. ET

Enough with the doom and gloom about homeownership. Brett Arends explains why owning a home is a good thing.

• By BRETT ARENDS

Enough with the doom and gloom about homeownership.

Sure, maybe there's more pain to come in the housing market. But when Time magazine starts running covers that declare "Owning a home may no longer make economic sense," it's time to say: Enough is enough. This is what "capitulation" looks like. Everyone has given up.

The Sept. 6 cover of Time magazine: This is what capitulation looks like.

After all, at the peak of the bubble five years ago, Time had a different take. "Home Sweet Home," declared its cover then, as it celebrated the boom and asked: "Will your house make you rich?"

But it's not enough just to be contrarian. So here are 10 reasons why it's good to buy a home.

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired. We're four to five years into the biggest housing bust in modern history. And prices have come down a long way– about 30% from their peak, according to Standard & Poor's Case-Shiller Index, which tracks home prices in 20 big cities. Yes, it's mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You'll never catch the bottom. It doesn't really matter so much in the long haul.

Where is fair value? Fund manager Jeremy Grantham at GMO, who predicted the bust with remarkable accuracy, said two years ago that home prices needed to fall another 17% to reach fair value in relation to household incomes. Case-Shiller since then: Down 18%.

Brett Arends discusses why he thinks now is a particularly good time to buy a home.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won't see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains–if any–when you sell. Sure, you'll need to do your math. You'll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

The June 13, 2005 cover of Time.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You'll feel better about your own place if you own it than if you rent. Many years ago, when I was working for a political campaign in England, I toured a working-class northern town. Mrs. Thatcher had just begun selling off public housing to the tenants. "You can tell the ones that have been bought," said my local guide. "They've painted the front door. It's the first thing people do when they buy." It was a small sign that said something big.

5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos. Money talks. Once again, this is a case by case issue: In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction of the cost of owning. But few places are so favored. Generally speaking, if you want the best home in the best neighborhood, you're better off buying.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That's valuable inflation insurance, especially if you're young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late. That also makes homeownership look a little better by contrast.

Associated Press

A house for sale in Shelby, Ohio

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the long-term growth of the economy–if it happens–and still managing to sleep at night.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn't a cost. You're just paying yourself by building equity. As a forced monthly saving, it's a good discipline.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That's below last year's peak, but well above typical levels, and enough for about a year's worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the "glut" simply won't matter: It's concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won't have any long-term impact on housing supply in your town.

So you think YOUR Mom is crazy???

I may have you beat! 

In this faced-paced, high tech world, sometimes we just have to roll up our sleeves and get our hands  dirty....literally.  Mom is leading the way today.

Here are a few shots from a day in the life here at Loveland Carr. 

Tomorrow we're throwing a party as we always do for a new property.  We're serving poached salmon, quinoa salad and french green beans. But first, the property needs it's finishing touches to complete the presentation.

Way to dig in Janet!

Taste of Larchmont tonight!

Tonight is the 18th Annual "Taste of Larchmont" from 6 - 9pm on Larchmont Blvd between Beverly Blvd and 2st streets.  Second only to the "Larchmont Family Fair" in October, this is one of my favorite neighborhood events.  It's one of those nights when you are transported to a different place and time and forget that we live in a city of 12 million+ people.  Neighbors walk over in their flips flops, push strollers, chat with their neighbors and make new friends.  It's always warm given the time of year but there are plenty of beverages to be found!

Local restaurant owners open their doors, locals volunteer and we all enjoy the essence of what it means to live in a walking community where people will likely know your name.

Tickets are $40 (www.hopenetla.org), $25 of which is tax deductible. 

All proceeds go to Hope Net Los Angeles which is an interfaith effort to eliminate hunger and homelessness in LA.  Hope Net has seen a 50% rise in the number of people using their services in the last 2 years.  It's a great cause and a fantastic way to enjoy the community!  I'll be at Chan Dara from 6:00-7:30pm tonight then cruising the Boulevard thereafter!  Hope to see you.

 

1st half 2010 local market summary - Hancock Park

It has been an active year thus far with much longer market times vs. last year, especially at the high end.

Below are the statistics:

A leader remembered...

Just a few months shy of his 100th birthday, John Wooden's physical body left this world Friday.  He remains alive in the people he coached and the words he wrote.  John was a winner.  Yes, he won countless basketball titles and is a UCLA legend but the way he won and the way he affected the lives of those he coached is TIMELESS and an inspiration.

Whether you are a coach, a player, a teacher, a spouse, a parent, a business person or simply a conscious human being his key contributions are worth remembering.

"Success is peace of mind which is a direct result of self-satisfaction in knowing you made the effort to become the best of which you are capable"

John Wooden’s Pyramid of Success

• Industriousness
• Friendship
• Loyalty
• Cooperation
• Enthusiasm
• Self Control
• Alertness
• Initiative
• Intentness
• Condition
• Skill
• Team Spirit
• Poise
• Confidence
• Competitive Greatness

Download Pyramid of Success

John Wooden’s 12 Lessons In Leadership

1. Good values attract good people.
2. Love is the most powerful four letter word.
3. Call yourself a teacher.
4. Emotion is your enemy.
5. It takes 10 hands to make a basket.
6. Little things make big things happen.
7. Make each day your masterpiece.
8. The carrot is mightier than a stick.
9. Make greatness attainable by all.
10. Seek significant change.
11. Don’t look at the scoreboard.
12. Adversity is your asset.

Get Smart

Like you I try to stay on top of current events in an effort to make sense of the world and the context in which we all operate.   Hopefully, this exercise leads to better decision making and more thoughtful conversations with others.  One of my favorite thinkers and storytellers in the world of investing is Bill Gross of PIMCO in Newport Beach.  Now we can subscribe to his podcasts!  This is so cool....especially if you find yourself in the car or on the trendmill with a curious mind.

Download Bill Gross May 2010

Like a fine wine, we do get better with age!

This is article is intriguing and worth reading.  As we age and collect more experience our reasoning, judgment, discernment are better.  I'd love to hear what you think!

Brain Functions That Improve with Age

12:47 PM Wednesday February 3, 2010
by Barbara Strauch  

 

"Can I still compete?"

It's a question many of us increasingly ask as we reach middle age. We watch younger colleagues master new computer systems with ease or pull all-nighters with nary a hair out of place and — quite naturally — we're concerned. Luckily, recent research in brain science suggests that perhaps we should fret less.

Over the past few years, neuroscientists have begun to zero in on the brain's changes in middle age, and what they've found is encouraging. Results of long-term studies show that — contrary to stereotypes — we actually grow smarter in key areas in middle age which, with longer life spans, now stretches from our mid 40s to our mid to late 60s.

In areas as diverse as vocabulary and inductive reasoning, our brains function better than they did in our 20s. As we age, we more easily get the "gist" of arguments. Even our judgment of others improves. Often, we simply "know'' if someone — or some idea — is to be trusted. We also get better at knowing what to ignore and when to hold our tongues.

Not long ago, a mid-level executive told me how he'd recently changed the way he deals with younger colleagues. When gathered to discuss a problem, he keeps his "mouth shut'' and listens. Even though — more often than not — he has a good solution, he waits. He does not speak.

"I find it works best if I let the younger workers talk first, wrestle with the problem in their own way,'' he told me. "Then after a while, I say what I think might work. I'm not sure why, but this seems to work best and to help us all learn and solve the problem better.'' In fact, though he did not realize it, the executive was using the best parts of his calmer and more experienced middle-aged brain to help him manage his situation — and get better results.

It's true that by midlife our brains can show some fraying. Brain processing speed slows down. Faced with new information, we often cannot master it as quickly as our younger peers. And there's little question that our short-term memories suffer. It's easy to panic when you find you can't remember the name of that person you know in the elevator, or even the movie you saw last week.

But it turns out that such skills don't really matter that much. By midlife our brains have developed a whole host of talents that are, in the end, just as well suited to navigating the modern, complex workplace. As we age, we get better at seeing the possible. Younger brains, predictably, are set up to focus on the negative and potential trouble. Older brains, studies show, often reach solutions faster, in part, because they focus on what can be done.

By the time we reach middle age, millions of patterns have been established in our brains, and these connected pathways provide invaluable perspective — even when it's subconscious. For instance, some middle-aged managers I've spoken with talked about how solutions seem to "pop'' into their heads "like magic.''

It doesn't come from magic, of course, but from the very real — and often unappreciated — talents of our middle-aged brains.

If You Don't Buy a House Now, You're Stupid or Broke

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth

By Marc Roth

Well, you may not be stupid or broke. Maybe you already have a house and you don't want to move. Or maybe you're a Trappist monk and have forsworn all earthly possessions. Or whatever. But if you want to buy a house, now is the time, and if you don't act soon, you will regret it. Here's why: historically low interest rates.

As of today, the average 30-year fixed-rate loan with no points or fees is around 5%. That, as the graph above—which you can find on Mortgage-X.com—shows, is the lowest the rate has been in nearly 40 years.

In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity.

And it is exactly that, based on what the graph shows us. Let's look at the point on the far left.

In 1970 the rate was approximately 7.25%. After hovering there for a couple of years, it began a trend upward, landing near 10% in late 1973. It settled at 8.5% to 9% from 1974 to the end of 1976. After the rise to 10%, that probably seemed O.K. to most home buyers.

But they weren't happy soon thereafter. From 1977 to 1981, a period of only 60 months, the 30-year fixed rate climbed to 18%. As I mentioned in one of my previous articles, my dad was one of those unluckily stuck needing a loan at that time.

Interest Rate Lessons

And when rates started to decline after that, they took a long time to recede to previous levels. They hit 9% for a brief time in 1986 and bounced around 10% to 11% until 1990. For the next 11 years through 2001, the rates slowly ebbed and flowed downward, ranging from 7% to 9%. We've since spent the last nine years, until very recently, at 6% to 7%. So you can see why 5% is so remarkable.

So, what can we learn from the historical trends and numbers?

First, rates have far further to move upward than downward; for more than 30 years, 7% was the low and 18% the high. The norm was 9% in the 1970s, 10% in the mid-1980s through the early 1990s, 7% to 8% for much of the 1990s, and 6% only over the last handful of years.

Second, the last time the long-term trends reversed from low to high, it took more than 20 years (1970 to 1992) for the rate to get back to where it was, and 30 years to actually start trending below the 1970 low.

Finally, the most important lesson is to understand the actual financial impact the rate has on the cost of purchasing and paying off a home.

Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let's assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide. Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000.

Loan Costs

Stay with me now. We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again. If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let's put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is "more stable" and it's safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.

If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you're borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

What I'm trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.

Marc Roth is the founder and president of Home Warranty of America, which touches just about every part of the real estate industry since it sells through builders, real estate agents, title companies, mortgage companies, and directly to consumers.