Monthly Archives: May 2016

THE BEST BOOKKEEPER

In some 25 years running my own business, the best bookkeeper I ever had was fast, accurate and thorough.  She seemed right on top of everything all the time.  She never made waves of any kind.  She was terrific.

The only problem was that at one point we discovered she embezzled a lot of money.  She was so good, she devised a clever scheme to cover her embezzling, at least for a while.

When I hired her, she told me she previously worked for a real estate firm and for UCLA.  Tried getting references from both places, but neither would say much.  We later learned why.

One weekend I was out of town working at one of our Woodworking Shows and got a call from Randy, the publisher of our Association News, Trade Magazine.

He told me something very peculiar seemed to be going on.  In looking to see if one of the magazine’s advertisers had paid for their last ad, he discovered a bunch of checks setting in the bookkeeper’s desk drawer.  A lot of them were dated more than a month ago.  Appeared very unusual since we deposited checks at least once a week.

Monday morning we got to the office very early and found dozens of checks just lying openly in her drawers.  That was her only mistake.  If she had put them in an envelope and buried them somewhere, we would have had a lot of difficulty uncovering the problem.

After a lot of checking of bank deposits, show cashier reports, and advertiser invoices, we finally figured out what was going on.  We would come back from a weekend show with say $10,000 to $20,000 in cash.  The bookkeeper would match up enough checks she was holding to fill up what we expected to see deposited from the show.  She then took the cash.  Maybe a total of $20,000 or $30,000.  It was hard to tell exactly how much.

Not satisfied with the cash, she borrowed the numbers from one or two of the company’s credit cards and treated herself to some shopping at Lane Bryant.

Later that morning when we confronted her with the problem, she didn’t deny it.  She was calm and collected and said, “I’ll give you the pink slip to my car.”  At that point, the car was worth maybe $500.  Not even close to what we estimated she stole.

Our lawyer said, “Don’t take the car.  You may not legally be entitled to it.”  When we contacted the Police and the City Attorney’s office, they both said they had bigger fish to fry.

So we licked out wounds and tried to put in some new procedures to avoid further problems.  On advice of our accountant, we set up the following procedure:

  1. Who ever brought the cash back from a weekend show gave it to the overall show manager with a cc of the ticket sales recap.
  2. The show manager gave the cash to the bookkeeper and got a receipt, which was stapled to the ticket recap report.
  3. All checks received in the mail were first given to the show manager or publication publisher, who checked off the receivables in the monthly computer printout
  4. A copy of all deposit slips was given to the show manager and publisher.

Almost three years went by and we got a call from our ex-bookkeeper.  Seems she pulled the same stunt with her next employer, got caught, and had to serve a little time.  She was now on probation and ordered to try and make restitution.

She came by to deliver the car we had the pink slip on.  It was now a total wreck and we got $200 for it.

She drove off in what looked like a brand new car.

An exhibitor friend regularly teased me about having all that unreported cash from our woodworking shows.  I could never convince him that we had to take some strong steps to make sure no one (including me) took the cash.

ArtSchwartzSig

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WHAT INFLUENCES ENTREPRENEURS TO BECOME ENTREPRENEURS

America is the world leader by number of entrants, as well as size of entrepreneurial businesses.  What motivated all these people to start their own business?  What were the influences in their life that had an impact?  Where did the drive and work ethic come from to create and build a start-up business?

To address these questions, I asked a few of my small business entrepreneurial friends to join me in sharing their answers and thoughts.

Here are a few of their stories.

Gary Wechter, Summation – IBM reseller of mid-range computers and software developer, 20 employees.

“I think there were two periods in my life that stoked my entrepreneurial drive.  First, was growing up in Bayside, NYC and then later coming to Los Angeles.

“I always liked having my own money.  Around age 12, I was a paper boy and in my mid-teens I was a bowling hustler where I made lots of money when the minimum wage was only $1.15/hour.

“This allowed me to have a lot of independence and more money in my pocket than my neighborhood friends; almost all of whom later went the civil service route, becoming policemen, firemen, postal workers and the like.

“Disillusioned with college, I dropped out after the first year and by accident got a job with National Cash Register Co.  In 1974, after seven years, they relocated me to Los Angeles, where I was fortunate enough to start my career as a computer programmer.

“The move to California forced my wife and me to make new friends, almost all with college degrees and several in their own business.  As I learned more about small businesses from my programming job and these new friends, I came to feel that starting my own business might in fact be a real possibility.

“Around 1977, an opportunity to start a software business presented itself.  I took a deep breath and decided to give up a paycheck after 13 years and go for it.  I never looked back.”

Milt Thaler, City Foods (grocery stores), 250 employees.

“Growing up in L.A., there was always talk about the market my father and uncle ran on North Broadway.  My interests developed into wanting to be a chemist.

“After service in the Navy during World War II, I came home hoping to pursue my goal in chemistry.  The unexpected death of my father created a family dilemma.  To help support my mother, I volunteered to assume my father’s partnership in the market.

“My uncle wasn’t too happy about having a new 20-something as a partner, but that’s how my career in the grocery market began.  It was a somewhat uncomfortable start at being a reluctant entrepreneur, giving up my desire to be a chemist, and with a partner who wasn’t overjoyed having a new, young associate.

“Over the years, we built and operated six grocery stores around L.A. catering to the Latino community.

“It was a good life and a rewarding career for me and my two sons.  Obligation and opportunity launched my life work and it became a challenging and fulfilling journey.”

Clifton Chang, Altair Investments – industrial real estate, manufacturing co-investor, and angel investor in tech start-ups, 10 employees.

“I think the entrepreneurial drive was set by the time I was nine and encouraged by a family culture of entrepreneurship.  It’s a combination of DNA, environment and encouragement from early small successes.

“At age nine, mom got me to sell Reader’s Digests door-to-door in our Houston neighborhood.  That taught me that hard work and persistence counts and that “no” is just a step on the path to “yes.”

“A year later, a high school senior gave me two boxes of comic books.  I set up shop in the neighborhood selling comic books at one-half of the new issue price or trading one comic book for two returned from a customer.

“My family culture was imbued with entrepreneurship.  My mother was an entrepreneur, securing the Fidelity Funds Franchise for Asia in 1960 and launched her own mutual fund.  From ages five to 25, I would talk to my Uncle John, an entrepreneur in Asia, who would have two or three ventures at any time.  I would hear about my maternal grandfather’s successful business launches.

“In college at MIT, entrepreneurial juices reasserted.  Had a side business for three years running speed reading courses at several Boston college campuses.  The culture of MIT was to encourage experimentation, independent thought and take risks.  The speed reading courses helped pay for college expenses.  Social outings were financed by organizing parties and outings and my fee was a free spot.

“By the time I applied to MBA programs right after college, my goal was to be a serial technology entrepreneur.

“A chance phone call to Trammel Crow landed me a job in Dallas with the Crow organization.  One of the country’s leading industrial real estate firms.  They nurtured me and then sent me to Orange County as a partner to start a new division.  After a few years, I felt ready to go off on my own, and ended up being a real estate entrepreneur and investing in other technology entrepreneurs.

“The marketplace can be a far tougher taskmaster than any boss.  As an entrepreneur, however, the personal freedom to make decisions, and mistakes, as well as the opportunity to make a difference, for better or worse, is unequaled.”

Next month we’ll hear from three more entrepreneurs.

ArtSchwartzSig

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REACHING FOR A HANDLE ON LIFE

Two years ago I was invited (by me) to make the commencement address at Blog University (6-4-14).  It was so well received (by me) that I have been asked again to address the graduates of 2016.

“To all of you who have survived the rigors and parties of college life, let me help you reach for a handle on life.  There are six areas I would like to outline which took me many years to understand and appreciate.

“These six plus six more will be discussed in some greater detail in an expanded version available by request (see note at the end).

“First, the three-question interview.  Whether you’re actually asked these questions or not on a job interview, you will be better for knowing the answers.

“No. 1:  Where are you going?  What do you want to do and/or accomplish in life?  Not just want kind of job or career you want but what will be your priorities; family, church, accomplishments; the things that will give you satisfaction and fulfillment.

“No. 2:  What are your strengths?  This question is only important because it leads to the third question, so don’t get too carried away with this one.

“No. 3:  What are your weaknesses?  Be concise and truthful; ‘I’m not as good a writer as I’d like to be.’  ‘I’m not always as detail-oriented as I should be.’  ‘I’m not always sure of the direction (or goal) of a given project.’  ‘Impatient,’ etc.

“Second, when to make a decision.  When a decision is needed, we tend to think about analyzing the problem, getting all the background and/or considering all the alternatives.

“These are all necessary in the decision-making process, but the most important and first consideration is—when does the decision have to be made?

“When you jump at trying to make a decision fast, you short-change your ability to make the best decision.  If you understand how much time you have to make the decision, you create a more relaxed, less frantic environment and provide a path to a better decision that almost seems as if you arrived at that decision seamlessly without strain or anxiety.

“Third, look for options or stepping stones.  Try to avoid all or nothing, charge ahead or abandon totally some project or idea.  Try to find some steps that can lead in the same direction without jumping the whole distance forward or back.

“Fourth, asking for a raise.  Most people ask for a raise and attempt to justify the asking based on their assessment of their worth and comparison to other people and jobs they see.  Not a good approach.  Just asking for a raise because you need it or you think you deserve it is a bit threatening.

“The best way to do it is to seek out your employer’s counsel at some appropriate intervals and propose these kinds of questions:

  • How can I make myself more valuable to this firm?
  • How can I approve my ability to do a better job?
  • How can I improve my work here?
  • How can I assume more responsibility?
  • How can I help the firm’s objectives and goals?

“These questions say you are eager; you are anxious; you are willing, loyal and dedicated.

“Fifth, there’s plenty of time.  There are 168 hours in a week.  They are generally used:

  • 56 hours sleeping
  • 14 hours preparing, eating and cleaning up
  • 7 hours showering, dressing, cleaning
  • 5 to 10 hours traveling/commuting
  • 38 hours working

“And there’s laundry, errands, etc., but that leaves 20 to 30 hours each week you can decide what to do with.  Set your priorities and make time work for you.

“And, sixth, the prizes are given for staying power.

“You may have the promise; you may have the potential; you may only need the chance to exercise your creative juices and aggressive ability.  Your chances of really being rewarded properly for all this, however, will only come when you have demonstrated the staying power; the consistency to hang in over some period of time.  How long?  Certainly, it will vary.  It’s at least a year or more; it’s not months; it’s not days.

“You can get what you want out of life—if you know what it is you want and follow some of these guidelines.  There is, of course, much more, but these have been some of the more important things I have learned in reaching for my handle on life.  I hope if you can understand some of what I’m saying, it will help you and make it easier for you.  But it is your handle, and your life, and you must reach for it in your way.”

Note:  An expanded version of this blog called “A 12-Part, Post-Graduate Seminar on Climbing the Ladder of Success” is available (12 pages or so) if you email me your request at artschwartz1@verizon.net.

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MY MOTHER WAS THE CEO

As we celebrate Mother’s Day this Sunday, it seems like a good time to reflect on the many contributions all our mothers made to our lives.

We didn’t have a large family.  It was my sister and me, as well as my father.  No mistake though, my mother was the CEO of our family.

She was the direct negotiator with my sister and me about anything either of us wanted to do or not do.  My father was a kind of a go-along guy.

My mother was very active in the elementary school PTA and then around 1940 she took a job as a bookkeeper with Cejwin Camps, a large series of five camps built around a pretty lake in Port Jervis, New York.  Each summer, they hosted about 1,000 kids.

She worked in the NYC office in the winter and summers up at the camp.  My father commuted to spend weekends at camp.  I was a camper for a number of years and then worked as a waiter and kitchen worker.

Her memory was amazing.  My sister and I would mention a camper’s name during dinner and she would recite the family history, and, when pressed, how much they still owed for tuition.

She went to work when she was about 14, commuting from Harlem to midtown Manhattan on the subway.  It was a clerical job of some sort on the 12th floor of a high-rise building.  Afraid of the elevator, she walked up and down the 12 flights of stairs until she found a new job in a lower elevation.

One of her greatest thrills from these early jobs was delivering a package to another office.  While waiting to see the package’s recipient, she noticed the other person in the waiting room.  It was Irving Berlin, the famous song writer.

She was working at the Softlite Lens Co. where she met my father, who was a printing broker looking for business.  They married and lived in Rockaway Beach, NY.

After a year or two, they moved to Jackson Heights and stayed 25 years or so.

Later on they lived in Florida, and after some mishaps my father had to go into a nursing home.  Although he had increasing dementia, he prospered somewhat in that environment although he was not a happy camper and didn’t treat the nurses well.

To keep the peace, my mother would take two buses, rain or shine, to spend the day with him—and you know what it’s like when it rains in Florida?  It pours!  I arranged a charge account with a taxi company.  She took a taxi twice.  When I asked why she wouldn’t keep using the taxis, she said, “I don’t like the way they go.”

The only time she wouldn’t go to the nursing home was when either my sister or I were in town.

My father passed away at 91.  And, finally, after much persuasion from my sister and me, she moved to a Hyatt Senior Residence.  It was really quite nice, but she didn’t like it at all.

At 97, she broke a hip and was hospitalized.  When they asked her what she wanted for lunch tomorrow, she got quite annoyed and announced that she’d had enough.  With her steely determination, she passed away two days later.

And now, a few words from her grandchildren.

From her grandson Phillip:

A remarkable thing about the apartment that my grandparents lived in Jackson Heights—apart from the glass-fronted tchochke cabinet and the inexhaustible supply of chewy raspberry candies that lived in bowls in the living room—was that one of the closets had a shelf high up, and that shelf was capable of producing gifts, one for cousin Ellen and one for me, whenever we visited.  It seemed remarkable to me, at age three.  I wondered why our apartments in Sunnyside didn’t come equipped with such remarkable closets.

Grandma didn’t understand normal tastes in food.  She didn’t stock Cocoa Marsh or Quik, the standard chocolatizing agents of the day, so one had to drink one’s milk straight up.  The cookie situation was wanting in all sorts of ways that I couldn’t make clear to her.  There was a great deal of cottage cheese and sour cream, but no hot dogs that I could discern.  It made me wonder if she had raised her own children on such harsh fare.

Something I did appreciate about grandma:  she never, to my recollection, tried to serve children ice cream of any flavor other than chocolate or vanilla.  And certainly not peach.

And from her granddaughter Lisa:

When I think of grandma, I think of an apartment in Jackson Heights with a small basket of wooden blocks and grandpa’s classical music playing on the radio.  I think of grandma arriving in New York for summer visits from Florida, armed with chocolate-covered potato chips.  I think of her on Normandy Isle with a wind tunnel outside the door, and in Miami Beach chatting with friends by the pool at the Byron.  I think of grandma as strong and tough and sharp-witted, close to her relatives and friendly to her neighbors.  I think of her climbing on buses to go everywhere and writing thank you notes in beautiful handwriting.  And, I think of grandma with my mother and you, her devoted and dutiful daughter and son.

HAPPY MOTHER’S DAY – Aren’t you glad we all had mothers?

ArtSchwartzSig

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