Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Archive for December, 2008

Podcast Available:President of $300 Million Firm Discusses Growing Your Business on Dec. 29 Economic Perspectives

Posted by Hopeton on December 26, 2008

On the December 29 edition of Economic Perspectives John Allen, President and chief operating officer of G&A Partners,  discussed how he and Chairman Tony Grijalva grew the firm into a $300 million human resource and administrative outsourcing firm in 13 years.  G&A Partners was ranked as one of the fastest growing private companies in America by Inc. Magazine this year.  Between 2004 and 2007 the sales of G&A Partners grew 121.5 percent, more than doubling in size.  Headquartered in Houston, Texas, G&A Partners is one of the largest Hispanic owned firms in the nation.  Click here to listen to John Allen interview.

Allen is a licensed CPA with over 25 years experience in management consulting.  He has been an entrepreneur since 1992 when he left Grant Thornton CPA firm to team up with Tony Grijalva to form Grijalva & Allen, PC, a CPA firm specializing in serving new and emerging growth companies.

Through a contract with the U.S. Minority Business Development Agency, Grijalva & Allen manages the Houston Minority Business Enterprise Center and the Dallas/Fort Worth Minority Business Enterprise Center which provide technical assistance to minority businesses.

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Obama Announces Choice to Lead SBA

Posted by Hopeton on December 24, 2008

With the swiftness of his announcement of Karen Wells as his choice to be the next Administrator of the U.S. Small Business Administration on December 19, President-elect Barack Obama has clearly indicated the importance of that position to his administration.  He has named his nominee to be the SBA Administrator much earlier than the Clinton and Bush Administrations did when first elected, who made their choices known in March 1993 and February 2001 respectively.

President-Elect Obama and Karen Mills

Preident-Elect Obama and Karen Mills

More important than the early selection of his nominee for SBA Administrator is who recommended Mills, Maine Senator Olympia Snowe, the former Chairman and current Ranking Member of the Senate Committee on Small Business and Entrepreneurship.  Snowe had sent a letter to Obama on December 8 asking that the Adminstrator position be re-elevated to Cabinet-level status.

In her press statement congratulating Mills for being nominated for the SBA position Snowe said, “…I hope President-elect Obama will carefully consider my proposal to re-elevate the SBA Administrator to Cabinet-level status — as under the Clinton administration — so that Karen can have the maximum impact on America’s 26 million small businesses, which create three quarters of net new jobs annually.”

So what experience will Wells bring to the table?   Equipped with an MBA from Harvard University, Wells has 25 years experience as a principal in the private equity and venture capital industry and has taken a leadership role in the growth of more than 20 companies in the consumer products, food, distribution, textile and industrial component sectors according to the press statement released by President Elect Obama.  A resident of Maine, she chairs the Governors Council on Competitiveness and the Economy.

Mills appointment was praised by Massachusetts Senator John  Kerry, Chairman of the Senate Committee on Small Business and Entrepreneurship.

“The President-elect’s selection to lead the SBA demonstrates his commitment to bring Washington in touch with the real needs of Main Street.  Karen has been a champion of small business,” said Kerry in a press statement.

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Tips for Small Business Survival During the Recession

Posted by Hopeton on December 23, 2008

By Jaime Noyola, Director of Lending, PeopleFund

Undoubtedly the National Bureau of Economic Research’s announcement that the U.S. is and has been in a recession since December 2007

Jaime Noyola

Jaime Noyola

comes as no surprise to most American’s. As Washington and Wall Street attempt to sort out a solution, there are many ways individual business can protect themselves from the effects of the down economy. Successful businesses will be those who can most quickly adapt to changes in the market and take advantage of the opportunities presented while minimizing operational risk. The following are some recommendations we are making to our clients.

1. Watch your accounts receivable. As credit tightens, many businesses are finding they no longer have access to the funding necessary. This can quickly lead to slow payment. Remember the squeaky wheel gets the grease. Stay vigilant with your clients and monitor your agings daily.

2. Evaluate your clients. It is more important now that ever before to evaluate each of your clients, existing and prospective. Many historically strong companies are now unable to pay their bills. Do not be one of the vendors left holding the bag. Just because a prospect has a good reputation or a client has an excellent repayment history, don’t assume that this will continue. Often times despite their best efforts, they maybe unable to make good on their commitments. Remember that when extending terms to clients you are not only following an industry practice, but you are extending credit. Evaluate it as such. Sales income does not pay expenses, cash received does.

3. Cash is king. During economic downturns, cash is the most important asset on your balance sheet. It allows companies to weather the storm. While companies need not hoard cash, this is a good time to evaluate expenses and purchases. It maybe prudent to delay large ticket items in order to maintain a larger reserve.

4. Don’t let assets become liabilities. In banking there is a phrase used often, “asset rich but cash poor”. While assets are better than liabilities, unutilized assets (those not making money) requiring significant supportive cash flow can quickly hinder more than help. Businesses must be cognizant of the true cost of holding an asset (maintenance, insurance, taxes, etc.) and determine if it is outweighed by the future benefits. Assets sold can always be repurchased when business increases, cash used to support unproductive assets are gone forever.

5. Keep creditors informed. If you should begin to see a negative impact on your finances, keep your creditors in the loop. DO NOT DISSAPPEAR. Unreturned calls are a red flag for creditors. All creditors are aware of the situation and most are willing to work with you. This is one area where it costs nothing to gain large dividends.

6. Indecision becomes decision. Indecision quickly leads to paralysis which can leave a company ill prepared to deal with the changing market. Rarely is staying the course the best plan of action in this type of economy. While making changes can be scary, idly awaiting the economy to get better is effectively a decision to do nothing. Agility is key. Obtain the best information available and continue to make decisions. Be ready to change directions at a moment’s notice.

The unknown is often scary. For many, this is the first dealing with a prolonged recession. It is important to remain positive and know that this period is just a part of a cycle. Inevitably the economy will expand again. Successful businesses will be those that change with the tide and survive until the next period of prosperity.

PeopleFund is a community development financial institution that specializes in lending to small, minority, and women-owned businesses in Austin and central Texas, especially those located in low to moderate income communities or  that will create jobs.  For more information on PeopleFund go to www.peoplefund.org.

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Author of Book on Career Success for Professional Women on Economic Perspectives December 22

Posted by Hopeton on December 18, 2008

Marshawn Evans, author of SKIRTS in the Boardroom, will be the featured guest on Economic Perspectives on skirtsDecember 22.  Dinita Caldwell, a member of the Delta Sigma Theta Sorority’s Economic Development Committee, will be a guest co-host for the Evans interview.

According to Evans, women make up one-third of Fortune 500 managers, but make up less five percent of the top executive earners in the country. Through SKIRTS, which stands for Sisterhood, Knowledge, Integrity, Respect, Tenacity, and Substance, she provides inspiring business advice to professional women looking to take their careers and lives to the next level.

Marshawn Evans

Marshawn Evans

In the introduction to SKIRTS, Evans ,who appeared on Season 4 of Donald Trump’s television show, The Apprentice, writes that SKIRTS  “is a book about success, success on your own terms in a world where being on a show like The Apprentice is not the summit of your achievements, but merely one more piece of the puzzle that makes you CEO of you, of your career, and your destiny.”

Besides her appearance on The Apprentice, Evans is an entertainment attorney and founder of ME Unlimited, a corporate consulting firm specializing in peak performance, diversity and in developing life-dynamic leadership strategies for women.  She graduated with honors from Texas Christian University with a bachelors degree, and earned a law degree from Georgetown University.

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Podcast Available: Predatory Lending Focus of December 15 Economic Perspectives

Posted by Hopeton on December 11, 2008

Leslie Parrish, Senior Researcher for the Center for Responsible Lending discussed trends in predatory lending on the December 15 edition of Economic Perspectives, 5:30 p.m. – 6 p.m. on KAZI 88.7 FM. Parrish recently spoke in Austin on payday lending trends at a forum sponsored by PeopleFund. The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated

Leslie Parrish

Leslie Parrish

to protecting homeownership and family wealth by working to eliminate abusive financial practices.

To listen to the interview click here.

Predatory lending is a major problem in Texas, especially payday lending. According to an article published by Don Baylor in the April 2008 edition of the Texas Business Review, The Hidden Costs of Payday Lending , Texans borrow $2.5 billion a year from payday lenders with interest and fees of $500 million to $600 million.

As a Senior Researcher, Parrish analyzes a variety of consumer finance issues, such as payday lending, car title lending, and bank overdraft fees. Previously Parrish was a Senior Policy Analyst in the New America Foundation’s Asset Building program where she worked policies related to savings, asset limits, and financial education.

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Recession Basics: Who Decides When A Recession Began & How It’s Defined

Posted by Hopeton on December 9, 2008

By Hopeton Hay

The National Bureau of Economic Research (NBER) announced that the U.S. has been in a recession since December of 2007. According to the NBER the last recession lasted from March 2001 to November 2001. With this recession 11 months old and counting, its the longest one we’ve had since the 16 month recession during the Reagan Administration which lasted from July 1981 – November of 1982.

Now that the official “spokesman” for recession has made this announcement some background information on NBER and how they define a recession is in order.

What is the National Bureau of Economic Research

NBER is a private, non-profit research organization founded in 1920 to promote a greater understanding of how the economy works. The Bureau’s associates focus on empirical research in the areas of statistical measurement, models of economic behavior, the effects of public policy on the U.S. economy, and the effects of alternative policy proposals. Sixteen of the 31 American Nobel prize winners in Economics have been researchers at NBER. It’s governed by a board of directors with representatives from major research universities such as Harvard and Stanford, and a representatives from major national economic organizations such as the American Economic Association and the AFL-CIO.

How Does NBER Define a Recession?

NBER defines a recession as a significant decline in economic activity spread across the economy lasting more than a few months, normally visible in production, employment, real income, and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches a trough.

The Bureau first began publishing the dates of business cycles in 1929. The NBER’s Business Cycle Dating Committee, formed in 1978, is responsible for declaring the beginning and end of recessions. The committee relies on a number of monthly economic indicators published by government agencies to maintain a monthly chronology of the business cycle.

Some of you may be wondering why it took so long for this announcement to be made. Yes there has been much speculation in the press that the U.S. is in a recession, but the Business Cycle Committee typically waits 6 to 18 months before declaring when a recession began so that the existence of a recession is not in doubt.

For more information on the NBER and the recession go to www.nber.org/cycles/recession.html

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Podcast: Author Discussed How to Elevate Your Game at Work Through the Hidden Power of Play

Posted by Hopeton on December 5, 2008

Kevin Carroll, author of The Red Rubber Ball at Work: Elevate Your RRB@Work_CoverGame Through the Hidden Power of Play, discussed how to apply the same skills we used as kids when we played to promote innovation, results, teamwork, leadership, and curiosity in the workplace on the December 8 edition of Economic Perspectives.  To listen to the interview click here.

According to Carroll, activities we played in our childhood were far from frivolous time, but rather were productive (even if as kids we did not realize it). Activities we called soccer, marbles, doubledutch, and tag were also excersizes in resourcesfullness, planning, strategy, design, decision making, creativity, and risk taking.

Kevin Carroll

Kevin Carroll

Carroll is founder of Katalyst Consultancy where he has helped turn creative ideas into reality for organizations such as The National Hockey League, Nike, ESPN, Starbucks, The Walt Disney Company, Mattel, and more. He was formerly a Creative Katalyst for Nike and also was Head Athletic Trainer for the Philadelphia 76ers.

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