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Archive for the ‘Business’ Category

Krispy Kreme – A Case Study For What Not To Do

Wednesday, April 20th, 2011

I love Krispy Kreme. It’s nice to watch the doughnuts coming out of the machine. It’s so good to taste Krispy Kreme doughnuts. I thought about buying Krispy Kreme franchise many years ago. I gave up on that idea because the initial investment was beyond my reach. Few years later, in 2004, the company went down because of mismanagement.

Mismanagement — this is the essence of what went wrong in Krispy Kreme. Greed played a big role. Fraud is another. CFO.com has detailed article on what went wrong with Krispy Kreme. If you are thinking about running some franchise or if you are a MBA student, check out the article here. It’s very informative and educational.

Top four common work at home scams to avoid

Friday, September 18th, 2009

So many people have been looking for ways to make some extra income, ways to help pay the bills because of the difficult economy. This has led to more people than ever looking for work at home jobs for an extra income, or even for their entire income. While there are legitimate work at home jobs, did you know that 99% of the work at home advertisements you see on the Internet are scams? Before you go investing your time or money into a work at home job, make sure you avoid these four common scams.

Four Common Work at Home Scams

  1. Envelope stuffing- This is probably the oldest one in the book, but it continues on even to this day. Trust me when I tell you, you won’t be stuffing envelopes for a living. The people placing these kinds of ads aren’t looking for envelope stuffers, but rather people who will pay a registration fee and then place the advertisement somewhere else. Stay away from these scams!
  2. Processing medical insurance claims- If you think about it there is no way any legitimate doctor is going to contract out their insurance claims to an unproven person or firm. Don’t pay for medical insurance claim “training” that is supposedly so easy you can learn it in no time.
  3. Multi-level marketing schemes- There are legitimate multi-level marketing companies, but the truth is most of the multi-level marketing advertising you’ll see are nothing but a pure pyramid scheme. How can you tell the difference? Typically in a MLM scam they will be more concerned with you getting other people to join under you than selling any product.
  4. Craft or assembly work- Many scam artists like to use people’s talents against them, and that is exactly what happens in these types of scams. You’ll hear that you can earn money by assembling products or crafts for this company, but once you start crafting and assembling (after you have paid them money for instructions), you won’t hear back from the company.

What businesses will thrive when the economy rebounds?

Tuesday, March 17th, 2009

While any kind of economic rebound appears to be at least several months away there is never any harm at looking into the future. In fact, if you can predict what areas will do the best when the economy does rebound, you can do yourself a lot of good both from an investing standpoint as well a career standpoint.  During an economic recovery there are always sectors that lead the move, and it is a great idea to try to do your due diligence and decide which you believe may fit that criteria, even though it may take time to come to fruition.

The typical businesses that thrive as the economy rebounds are manufacturing and construction companies that begin to bounce back nicely because economic activity is picking up once again. In addition to those, retail names generally do well when the economy recovers because of the increase in consumer confidence and spending. Cyclical names that are out of favor generally come back into favor quite quickly during an economic rebound.

Will the economic rebound that comes after this major recession look like a normal rebound? That really is the million dollar question. There are some factors which may delay the recovery in some groups that typically recover quickly. For example, the banking industry is generally one of the first to move higher, but it may be hard pressed to bounce back right away after the debacle of the credit crisis. On the other side of this there may be areas that are bigger winners than normal. One possible area that could do very well in the recover is alternative energy companies. Even manufacturing and industrial companies that are in front of their peers in “going green” are liable to bounce quicker. I truly believe that the move toward a greener world is not a short-term blip this time, but rather a real and serious effort that can be profitable for companies.

GM says Bankruptcy is Possible

Thursday, March 5th, 2009

One more unimaginable thing is happening. GM may file for bankruptcy if the bailout fails. GM’s auditors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan. GM revealed the concerns in a filing to SEC.

“The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern,” auditors for the accounting firm Deloitte & Touche LLP wrote in the report.

More details are here. I hope that union workers understand the severity of the issue and work with the management to save the company.

BofA CEO Ken Lewis Doesn’t Want to Talk about Merill Bonuses

Thursday, February 26th, 2009

I think Ken Lewis is arrogant and overconfident. Hours ago, he refused to reveal the names of Merill employees, that received multi-million dollars bonuses in 2008, to New York Attorney General. Those guys received the hefty bonuses few weeks after Bank of America received $20 billion bailout from Government.

The New York attorney general’s office has subpoenaed Bank of America Corp. seeking the names of Merrill Lynch executives who received $3.6 billion in year-end bonuses, after Chief Executive Ken Lewis didn’t want to give out the names. If this guy is genuine, as he claims, why is he hiding the names? Whom he is trying to protect? Himself?

Related Link: Ken Lewis Keeps Lips Sealed

$80,000 Collectible Teddy Bear

Thursday, February 26th, 2009

We all heard about $6,000 spent by Dennis Kozlowski, former CEO of Tyco, for bathroom curtain. Now, there is another guy that allegedly spent $80,000 for collectible teddy bear — using the money looted from investors.

Federal prosecutors allege that since 1996, Paul Greenwood and Stephen Walsh ran a fraudulent investment-advisory scheme, involving several companies, in which they promised to invest funds in a program called “enhanced stock indexing.” It was represented as a conservative trading strategy that had outperformed the Standard & Poor’s 500 Index for more than 10 years. Prosecutors allege the men raised more than $668 million from institutional clients, and misappropriated most of the money.

Recently we heard about Bernard Madoff. Then, there was news about Allen Stanford. Now, this news is coming out. I wonder how many more crooks are going to be discovered.

Alleged victims (of Greenwood’s fraud) include Carnegie Mellon University, which had invested more than $49 million, and the University of Pittsburgh, which put in more than $65 million, court records show. These universities charge exorbitant fees from students and then they lose all the money to some crooks. What a world!

Related Link: Pair Lived Large on Fraud

Four ideas for starting a home business during a recession

Wednesday, February 4th, 2009

The simple fact that the economy is performingly terribly and consumers have very little money to be spending is a big drawback from starting a home business right now, but there still are some opportunities that could prove very profitable. In fact, starting a home based small business has some very nice benefits including very low overhead in most cases as well as reasonable operating expenses. The key is during a recession you must find an area that is going to do well despite the economy, not an area that will do well when the economy does well. I put together a few ideas to help out those who are looking to start a home business during this recession.

  1. Medical Home Business- The medical and healthcare area is still booming and will continue to in the future as baby boomers continue to age. A medical billing business is one idea, or a medical transcription business is another.
  2. Pet Care Business- The pet care home based businesses have been growing by leaps and bounds (no pun intended) in the last year or two. I don’t think they are anywhere near done in their growth cycle. Pet sitters is an area of amazing growth that should continue. Other ideas in the pet care home business area include: clothing and accesories, toys, or a doggy day-care.
  3. Freelance writing/photography- The freelance world typically booms during a recession because a company can save money by hiring a freelance contractor rather than paying a full-time salaried worker with benefits. Flexibility and the ability to be your own boss are big perks of this type of business.
  4. Green or environmentally friendly businesses- The world is making a strong push to become more environmentally friendly and green businesses can capitalize in a big way. This is another area that has already shown gains, but in my opinion there is tons of room for growth still to come.

All four of these areas are growing despite the struggles of the overall economy. If you are without work or want to take the reigns yourself consider starting a home based business in one of these growing areas.

Wells Fargo’s Vegas Extravaganza

Wednesday, February 4th, 2009

Wells Fargo Bank had booked 12 nights, beginning Friday, at the Wynn Las Vegas and the Encore Las Vegas, to celebrate and motivate its employees. What are they going to celebrate at this point of time in the economy, that too when they just received bailout money from taxpayers?

After the outrage from lawmakers and media, Wells Fargo canceled its plans. Kevin Waetke, spokesman for Wells Fargo, said the Las Vegas trip provided a unique opportunity for employees of Wells Fargo and newly acquired bank Wachovia Corp. “to focus on continuing to do all we can for U.S. homeowners.”

Ok. Don’t you guys have already done enough to U.S. homeowners???

Source: Wells Fargo defends the trip, then cancels Vegas Junket

Buy one car, Get one car free!

Sunday, January 11th, 2009

Taking a page from grocery shop’s playbook, a car dealer in Belgium tried the “buy one, get one free” tactic. It actually worked out very well for them last month. The promotion allowed the customers to pick from a full range of new vehicles starting around $30,000, and then choose a second free vehicle carrying a price tag up to $18,000. Belgium’s Cardoen auto dealer’s commercial director said he had witnessed a tenfold increase in visitors since the promotion kicked off in late November.

May be GM or Ford should try the similar tactic in U.S. to move the cars out of dealers’ lot.

Strategy for 2009

Friday, January 2nd, 2009

2009 is going to be a difficult year. It may not be as bad as 2008, but still it’s going to be a challenging year. We witnessed sub-prime crisis, financial meltdown, Lehman brothers’ failure, Freddie and Fannie scandals, $700 billion bailout and Bear Stearns scandal – all in one year.

This year may bring more bad news for economy. One more bank may fail. There may be one more stimulus package. On the bright side, Obama administration may take bold steps to regulate the financial sector. Obama’s plans to create more jobs for Americans would work out well.

Individual investors like us should re-evaluate our goals. If retirement is your goal, you may have to work longer before retiring. If your 401k is just 40.1k, you have to re-think about your risk tolerance and portfolio allocation. We may not get much from fixed income portfolio this year because of near-zero interest rates.

If you are a short-term trader, keep your stop losses tighter. If you are a long-term investor, this may be the ideal time to invest in good stocks. Volatility will continue in 2009 also, so short-term traders should be aware of exit point before they enter any trade.

If you are a business owner, re-connect with your customers to make sure that their needs are fulfilled. You should also re-connect with your employees so that their goals are aligned with your goals.

Good Luck in making some money this year. Whether you are going to make money or not, try not losing your hard-earned money. Because money saved is money earned!

Related Link: Turn the page into 2009

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