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Making and saving money on the Internet

December 17th, 2007 by monies

NATIONAL REPORT — The moment when the Internet became important to home improvement retailing arrived with a jolt, right around last Christmas. While dozens of the traditional, brick-and-mortar retailers reported almost flat or declining holiday sales compared with the previous year, the season was merry for companies like Austin, Texas-based Garden Escape. The electronic purveyor of garden products at garden.com saw its December sales jump 300 percent compared with the previous year.

Some shoppers clearly stayed home. But they didn’t necessarily holster their wallets.

While stores struggled, Internet sales during the holidays tripled from a year ago, according to a study conducted by Boston Consulting Group and shop.org, an association of online merchants. Overall, Internet retail sales were approximately $13 billion for 1998, according to the study.

Home improvement is a segment of retail with great promise for Internet sales, according to a study conducted by Forrester Research of Cambridge, Mass. James McQuivey, a senior analyst at the company, forecasts that online sales of housewares, including appliances and other home improvement goods, will surge from the $100 million they brought in last year to $5.7 billion in 2003.

In the past few months, the Internet has gone from theoretical gold mine of the future to a powerful sales and customer service tool in the here and now. And a few home improvement companies have already jumped into the online fray, hoping to capitalize on the explosive growth of online shopping.

Home Depot, Lowe’s and Sears are all gearing up for online sales. In December, Home Depot began selling commercial/industrial products online through its Maintenance Warehouse division rnwh.com). The company plans to begin testing sales of a broader product array this year.

For its part, Lowe’s plans to offer online selling of a large assortment by the middle of this year. It already operates sites where customers can order its private label Kobalt tools and Harbor Breeze ceiling fans.

Sears is also preparing for online activity. Last October, the company created a new post, naming company vp and treasurer Alice Peterson as vp and general manager of Sears Online. She reports to Jane Thompson, who left Sears home services division to head Sears Direct.

Wickes Lumber has been one of the first traditional retailers to get into the Internet big, debuting its toolsonline.com site last July. The site has since been renamed buildscape.com, and offers 8,500 skus of tools for sale.

The beauty of the Internet is that it’s not just for big players. Site-creation and maintenance costs fell dramatically as thousands of companies poured onto the Web. For around $1,500, even a small retailer can have an attractive, functional site. And while the home improvement giants plan their Internet future, some companies around the industry — in retail, wholesale and manufacturing — already use the Internet to improve business. They save operational costs, improve customer service, and increasingly, make additional sales. Here are the ways they do it:

* Save printing and mailing costs. The Internet is a powerful communication medium, and using it can save money. Eagle Hardware & Garden, for example, sent out notices in its second-quarter 1998 report that it would no longer print and mail out its quarterly and annual reports, but would post them on its Web site instead. The result? A savings of roughly $100,000 a year, said company president Richard Takata.

By making its industrial/commercial catalog available online, Hatt’s Industrial of Thorndale, Pa., has been able to cut its catalog print run from 500 copies a year to 200, saving nearly $4,000. The company also saves money by sending out bills online to some of its biggest clients.

“They do as much as 200 transactions a month with us,” said company president Jeffrey Hatt, “and now we send them one electronic, monthly bill.”

* Save time. In the old days, members of hardware co-ops would mail their drafts of proposed ad circulars back and forth to co-op headquarters. Circulars had to be prepared far in advance because of these delays. But those days are over for tech-savvy members of Do it Best, who now proof their Build-Your-Own flyers over the Internet on the co-op’s Web page, instantly communicating their desired product and price changes to the co-op’s headquarters in Fort Wayne, Ind.

The co-op’s retail marketing manager, Larry Pensinger, said testing of the system began in January, and the first flyers created over the Internet will be out this month. The time saved from using the Web to communicate with members will allow price changes to be made roughly a month closer to deadline.

Author: Carol Tice

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REAL money makes debut

December 16th, 2007 by monies

— Greg Lahann/The Capital-Journal

By ANDREA ALBRIGHT

The Capital-Journal

LAWRENCE — A local organization is hoping its new currency will be a real boost to the Lawrence economy.

The Lawrence Trade Organization recently began distributing $3 bills called REAL money, which stands for Realizing Economic Alternatives in Lawrence.

Dennis “Boog” Highberger, the LTO’s attorney and spokesman, said he was conservatively confident that money issued and valid only in Lawrence could help the town’s economy by keeping locally earned dollars in town. However, he said it might take a little time for the idea to catch on.

“I’m certain that it’s going to work; I just don’t know to what extent,” Highberger said. “It’s a conservative program that we’ve designed so that no one can get burned.”

Highberger said the LTO would be printing about $100,000 worth of REAL money initially. So far the group has created a $3 bill featuring the likeness of the late, local poet William S. Burroughs, but Highberger said plans were in the works to print $1 and $5 bills featuring other local heros and legends.

Although new to Lawrence, local currency has succeed in communities from coast to coast. In Ithaca, N.Y., local trade can be transacted in HOURS — local currency with value based on the labor and time invested in a product or service.

Since 1991, thousands of Ithaca residents and more than 450 businesses have accepted HOURS in exchange for goods and services. In May this year, the HOURS system made a $30,000 loan to the Alternatives Federal Credit Union to pay for 5 percent of the contract work to construct its new branch, according to the Ithaca Money home page.

“I’m impressed with the Ithaca system, but I have some philosophical differences,” Highberger said. “We’ve tried to design a system that will serve people’s self interest.”

Norman Clifford, interim director of The Center for Economic and Business Analysis at The University of Kansas, said although local currency is good in theory and usually is based on the best intentions, it could be difficult to talk people into trading their money in for currency that will only be good at certain locations.

“What’s the incentive?” Clifford asked. “For me, as the consumer, to buy into this, I’d have to take dollars I can spend anywhere for dollars I can only spend in some locations. I would have to give something up and I don’t see what I would be getting for that.”

Clifford said his fear was that the extra hassle created by local currency limitations might outweigh a consumer’s desire to help the local economy.

So far, Liberty Hall movies and video rental, Amazing Grains Bakery and lawyer Bruce Plenk all have agreed to accept local currency starting next month, but Highberger said there had been interest expressed by other local retailers.

Highberger said an informational meeting has been scheduled for 1 p.m. Sept. 9 at the Lawrence Public Library for those who would like more information about REAL dollars.

“The motivation is to keep the dollars in town,” Plenk said. “One of the great things about Lawrence is the locally owned businesses that make it unique. Those stores provide jobs and make Lawrence a fun place to be. This is a great community project.”

Andrea Albright can be reached at

(785) 295-1208 or aalbright@cjonline.com.

Author: Andrea Albright Capital-Journal

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Spending money to make money

December 16th, 2007 by monies

The Federal Reserve chairman told Congress last month that growth would pick up later this year in part because companies will increase spending on computers and other equipment that helps improve worker productivity.

Count Caterpillar Inc. and Intel Corp. among those doing their part. Peoria-based Caterpillar, the world’s largest maker of construction and mining equipment, and Intel, the world’s biggest computer chip maker, are betting a wired world will help increase sales while lowering costs.

“The Internet will continue to drive increased productivity, new forms of communication and entirely new product categories well into the future,” said Craig Barrett, Intel’s chief executive. “Now is the time to invest for that future.”

Intel will spend $7.5 billion on new manufacturing equipment this year, Barrett said. “What we really need to do is prepare for the next up cycle,” he said. “You never save your way out of a recession. We’re going to grow our way out with great new products.”

On Friday, Intel Corp. said first-quarter sales will fall more than expected. Its stock closed at $29.44, down $3.81, and well off its March 10, 2000, closing price of $120.19.

Economic growth in the United States slowed to a 1.1 percent annual rate in the fourth quarter, the worst in five years. Still, productivity grew faster than expected in that quarter and put in the best performance last year since 1983, a Labor Department report showed last week. That has helped companies protect profit margins during the slowdown.

Productivity rose at a 2.2 percent annual rate in the fourth quarter, faster than the 2 percent rate of growth expected by economists. For all of last year, productivity rose 4.3 percent, the best since a 4.5 percent jump in 1983.

The economy’s slowdown has been concentrated in manufacturing. New orders at U.S. factories fell 3.8 percent in January, led by a drop in aircraft bookings, a Commerce Department report showed Tuesday. Excluding aircraft and autos, orders declined for the third time in four months.

The slump in manufacturing is a particular challenge for Caterpillar. To maintain profits, the company plans to spend $350 million to upgrade computer systems and quality control, said Chief Financial Officer Lynn McPheeters.

Caterpillar is using the Internet to link customers with the company’s 207 dealers. It also has developed an Internet-based joint purchasing system that it estimates will save $100 million this year.

Caterpillar last Tuesday announced a big payoff from its investment in research and development. A new emissions control system the company developed for truck engines will cut pollution while lowering operating costs for truck operators.

That’s just what Greenspan wants to hear. Living standards rise along with productivity, because workers can produce more for less.

Author: MICHAEL MCKEE

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Hospital groups cut losses, some make money, MGMA says

December 14th, 2007 by monies

The per-physician loss without counting financial support from the parent organization in the IDS survey dropped from $89,500 in 2000 to $70,900 in 2001. In the MSO survey, the analogous figures for all practices, whether single- or multispecialty, were $65,800 in 2000 and $43,400 in 2001. As recently as 1999, the median losses for hospital-owned practices were in the $100,000 range, and many such practices had even higher losses.

Some groups in both surveys are in the black (see article, p. 11). In the MSO survey, the 75th percentile net income for full-time-equivalent (FTE) physician excluding financial support in 2001 was $400, and the 90th percentile was $7,900. Net income per FTE physician without financial support in the IDS survey at the 90th percentile was $15,400 in 2001.

Both reports follow a format similar to that in the MGMA Cost Survey: 2002 Report Based on 2001 Data. All the practices in the IDS survey, and most of those in the MSO survey, are hospital-owned. All the practices in the MSO survey are led by separate management organizations, while many groups in the IDS survey have in-house or hospital staff managers

This is the second year for the IDS survey and the fourth for the MSO survey. The sample size of the IDS survey is 244 practices, 154 of which have 10 or fewer FTE physicians. Thus, the survey draws heavily from rural and small-city health systems. Seventy-three MSOs reported results to the MSO survey. Their median FTE physician count is 40, and their mean is 68. The majority of respondent MSOs serve from 26 to 50 physicians.

Pay System, Revenue Are Keys to Success

The two reports benchmark the performance of their respondents by many classifications, among them:

* For MSOs–by hospital vs. physician model; size (50 or fewer FTE providers vs. more than 50); primary vs. specialty care; percentage of employed providers (80% or more vs. 79% or less); and revenue performance (upper half of group vs. lower half).

* For IDS Practices–by hospital-owned vs. not hospital-owned multispecialty (the latter taken from Cost survey data; primary care only; family practice; not-for-profit vs. for-profit; aggregate size of IDS by hospital beds (200 beds or less, 201 to 500 beds, 501 to 1,000 beds, 1,001 or more beds); physician compensation system (production-based or salary); ancillary services status of multispecialty practice (hospital has ancillaries, practice has ancillaries, both have ancillaries); and physician compensation by ownership (hospital-owned vs. not hospital-owned). The latter data come from MGMA’s Physician Compensation and Production Survey: 2002 Report Based on 2001 Data).

Like the year-earlier editions, the reports with 2001 data show two points decisively:

* The practices with stronger revenue production have better performance in many other respects as well. In the MSO survey, the top half of revenue raisers had a median net loss per FTE physician about 40% lower than those in the bottom half of revenue raisers ($32,400 vs. $57,000). At the 75th percentile, the top-half revenue raisers earned $6,700 vs. a loss of $2,200 for bottom-half groups. Other areas where top-half groups had higher performance, sometimes by twofold or more, were: electronic submission of claims to payors; speed of collections; numbers of procedures–professional and surgical, lab and imaging–per physician; and compensation of senior managers.

* Groups with productivity-based physician pay systems perform somewhat better than do groups with salary-based systems, the IDS survey indicates. However, the differences connected to compensation systems are smaller than those that separate top-half and bottom-half revenue-raising groups in the MSO survey. Net practice income per FTE physician is approximately the same for the two types of pay systems. Physician compensation is $180,600 in the productivity-based practices, compared with $167,100 in the salary-based practices. Medical revenue is $415,700 in the productivity-based practices, 13% above the level in salary-based groups.

Perhaps most striking are the sample sizes: About three times as many groups report using productivity-based systems as salary-based. That is a far cry from three or four years ago, when the large majority of hospital-owned practices were paying employed physicians by salary. While the number of groups involved is small, the preponderance of productivity-based pay plans in the IDS survey suggests that most hospital managements endorse the philosophy of such plans for physicians.

Author: Unknown

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REVIEW: Airlines: Managing to Make Money

December 14th, 2007 by monies

Many airlines try to make money – or should that be aspire to make money – and market downturns due to world events don’t help their often fragile economies prosper. Many airlines are finding that the key to financial success is a two-pronged approach. It is not enough to have the right route network but a firm service-led approach to business is often the key differentiator to help grow business, integrate business and – perhaps more importantly – keep a tight handle on the finances to turn losses into profits.

This is where this book sets out to help by providing an overview of these processes and detailing many of the developments in the aviation industry. I found the book to be confusing as I had many positive thoughts towards it but a few things managed to take the shine off it.

There is no faulting the information in itself. It is all fairly good stuff that links practical knowledge with business management skills whilst retaining the necessary bias and relevancy to the aviation industry. However to me, personally, it just failed to click with the reader, leading to the book being a little hard-going and less inspirational than it perhaps was intended to be. The problem is partly how the book drones on – like one of those tiresome economists that invariably is to be found at the start of a conference: the room is hot, you’ve just had breakfast and his droning and droning makes your eyes get very heavy…. Yet, if you had been engaged and managed to stay fully alert you would have picked up a great deal of information.

Sadly the book is a little like this. It starts well on a track and then slowly gets bogged down, and there is a tendency to “flip ahead” and miss the odd gem. The wealth of further reading suggestions, references and a good index can allow you to ‘catch up’ a little but is that the point?

I did enjoy reading much of the information distilled in the book but it was hard-going at times. There was no problem with the level or detail of information (I can appreciate that the non-industry participant may flounder) but a little more editing to remove the boring lecture language and approach would benefit everyone I think.

CONCLUSION: A great information-packed book that has an unfortunate tendency to go on a bit to throw the reader off the scent.

Title: Airlines: Managing to Make Money Author: Stephen HollowayPublished by: Ashgate Publishing LtdISBN: 0-7546-1558-8Price: GBP31Reviewer: Darren Ingram

Author: Unknown

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Talking to your kids about money: make saving and investing for kids fun, not work! Here’s how to help them set short- and long-term goals to become financially self-sufficient

December 14th, 2007 by monies

–Susan Keating, Parent, Banking on Our Future Participant

Some parents say it’s easier to talk about drugs or sex with their kids than to talk about money. In this [article], we’ll explore how to open up a dialogue with our kids about personal finances.

“The only lecture we listen to is the lecture we give ourselves.” So says my mentor and spiritual advisor, the Rev. Dr. Cecil Murray of the First A.M.E. Church of Los Angeles, and I agree.

Nobody likes lectures. Your kids don’t like you admonishing them about their grades, their rooms, or their questionable “taste” in clothing. But if you look back far enough, you’ll recall that you didn’t enjoy being lectured either. The way to inspire your kids is with the inspiration of enlightened self-interest.

Instead of lecturing, bring them into the discussion and allow their suggestions to be heard. Give them a voice in the family’s finances. By making family finances a group effort, you will be giving your kids a hands-on opportunity to learn from experience–both theirs and yours.

BE OPEN ABOUT FAMILY FINANCES

Most children, rich or poor, have absolutely no concept of what it costs to live. They don’t know how large a rent or mortgage payment is, or even the cost of putting groceries on the table. They can’t yet comprehend the effort you put into bringing home the bacon, or even what a pound of bacon might cost. Their knowledge of the cost of clothing consists mainly of that “phat” $100 pair of shoes they covet at the mall.

I advocate financial transparency. This means that your kids should be able to look in and see exactly where your money goes. OK, maybe you don’t want to let them know absolutely everything. But by and large, why shouldn’t your kids know what life costs? It can be quite a sobering realization for kids to see just how expensive life is. If anything, your kids will respect you even more when they see how hard you work and how quickly money disappears on basic necessities–food, clothing, and shelter. They’ll also see that because you are spending wisely, you are able to pay off any credit card debt you may have incurred.

No parental lecture has the power inherent in parental example. If your kids regularly see bounced checks coming back from the bank, they’ll have a hard time taking anything you say seriously. If you are financially responsible, your kids will look to you as a role model. And if you are less than financially responsible, they will only be too delighted to follow your example! Let’s provide great examples for our kids, because one great example is worth a thousand nagging words.

NOW IT’S THEIR TURN

My [next] suggestion is to give each of your kids, elementary age and up, accountant ledgers and have them come up with their own categories and items. These might include clothing, entertainment, music, and whatever else your kids [enjoy]. Ask them to keep track of their own spending, and maybe give them some kind of reward, financial or otherwise, for every week when they have kept track of their numbers. Give them something that will motivate them to keep on track, even [something] as simple as a day off from chores. Make it into a game or competition if you have more than one child, especially when they’re young. Give them the idea that keeping track of their money can be fun.

My friend Jennie introduced me to the Star Chart. Her Aunt Marilyn drew up a list of chores that Jennie and her cousin Brietta routinely neglected to perform around the house. Next to each chore, she put a value–one star, two stars, three stars–with the most despised chores (vacuuming, cleaning the litter box, and so on) receiving the highest star value. After completing a task. Jennie and Brietta would receive the appropriate amount of stars. They would then anxiously look at the bottom of the Star Chart–which acted as a scoreboard of the cousins’ participation–to the “star exchange rate,” the amount of actual money each earned star was worth. Let’s say that five stars equaled one dollar. Once a month, the cousins were allowed to cash in their “stars,” so if they had earned 20 up to that point, they had $4 to spend.

Author: John Bryant

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How to make taxes less taxing: with a little knowledge, some advanced planning and a good filing system, you can save a lot of time and money when the tax man cometh

December 12th, 2007 by monies

Even if you outsource your tax preparation, you’ll save time and money if you run your business with an eye for taxes. But where to begin? If it were printed in its entirety, the Internal Revenue Code would take up more than 10,000 pages.

From that haystack, it is possible to pluck a number of needles that will help you deflate your tax bill and simplify your life.

First Things First

You must maintain accurate records. Keep receipts, canceled checks and credit card statements detailing business expenses, such as advertising, automobile, entertainment, materials, professional fees, rent, tools, travel and utilities. A file for these and other items specific to your business will encourage you to save them, and it will simplify your life when you need to find them.

The IRS is most suspicious of auto, entertainment and travel expenses, and with good reason. Deductions claimed on these items are frequently unjustified. So make sure you can justify your deductions, and you’ll be fine. Keeping a log of these and other expenses might seem like a burden now, but it will be indispensable if you are audited months or years from now when they are a distant memory.

Fran Gray, CPF, owner of Roney’s Creative Picture Framing in Florence, S.C., swears by her practice of “keeping all receipts and notes.” In 2002, Gray attended a trade show in Atlanta. With $3,000 to $4,000 in business travel expenses in an average year, her travel expense deductions alone are substantial.

Do It Yourself?

The next question is whether to prepare your own tax returns or outsource them.

For do-it-yourselfers, one of the QuickBooks software packages (Basic, Pro or Premier) should be able to handle your day-to-day bookkeeping. Then, to complete your tax return, QuickBooks sister software, TurboTax Premier Home and Business, allows you to import data from QuickBooks, further simplifying tax preparation.

Even though the QuickBooks set-up feature will tailor itself to the intricacies of your business, consulting a small business accountant is recommended to help you avoid common mistakes and show you how to integrate your bookkeeping system with tax filing requirements. This shouldn’t cost more than a few hours with the accountant, and it could save countless hours and money in the long run.

Gray uses a software package–similar to QuickBooks and TurboTax–developed by her husband who is in the computer industry. She said, “With a push of a button, I can print out everything I need for payroll and year-end taxes.”

Eventually, you might want to hire a bookkeeper and/or a professional tax preparer. After all, your time is probably better spent framing art, not making ledger entries and doing taxes. In addition to the time you’ll save by outsourcing this work, a good accountant might even pay for him or herself by finding tax deductions of which you weren’t aware.

Get What’s Coming to You

So what exactly is a tax deduction? Basically, a deduction reduces your taxable income. In other words, if your taxable income puts you in the 30-percent bracket, then a deduction of one dollar saves you 30 cents.

The IRS tax code says you can deduct an expense as long as it is “ordinary and necessary.” According to the IRS, an ordinary expense is one that is “common and accepted in your trade or business.” A necessary expense is one that is “helpful and appropriate for your trade or business.”

One of the biggest potential deductions is your car. If you use your car for business, or if your business owns the car, you can deduct some of its costs. These costs include gas, oil, repairs, insurance and depreciation. You can either deduct the actual business-related expenses or just 36.5 cents for each business mile driven in 2002. (The 2003 deduction has been reduced to an even 36 cents per mile.)

It’s important to keep business vehicle records for at least three years after filing a return. Auditors will scrutinize vehicle deductions, so you have to be able to justify the expenses. To do this, keep a log of your mileage and/or expenses with receipts. It can be helpful to write on the receipt itself the reason for the expense if it’s not readily apparent. For more information about vehicle deductions, see IRS Publication 463: Travel, Entertainment, Gift and Car Expenses.

Current vs. Capital Expenses

To further complicate matters, the IRS says some expenses can be deducted in the year they were incurred. These are called current expenses. However, other expenses–called capital expenses–usually must be deducted over a number of years.

Author: David Ressner

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Making and saving money on the Internet

REAL money makes debut

Spending money to make money

Hospital groups cut losses, some make money, MGMA says

REVIEW: Airlines: Managing to Make Money

Talking to your kids about money: make saving and investing for kids fun, not work! Here’s how to help them set short- and long-term goals to become financially self-sufficient

How to make taxes less taxing: with a little knowledge, some advanced planning and a good filing system, you can save a lot of time and money when the tax man cometh