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In this week's Omni Talk Retail Fast Five news roundup, sponsored by the A&M Consumer and Retail Group, Simbe, Mirakl, Ocampo Capital, Infios, and ClearDemand, Shoptalk's Ben Miller joined Chris and Anne to discuss: - Saks Fifth Avenue's new Amazon storefront - Walmart's new “Store of the Future” down in Texas - Morrisons introducing Simbe's Tally robots - Pinterest becoming a visual search engine - And closed with a look at Lowe's new MyLow AI app for store associates There's all that, plus Omar Akilah of Infios stops by for 5 Insightful Minutes on how AI will impact order management system design, this month's OmniStar, and we ask Ben about everything from which snack food he would least like to live without to the all important question of, “Who won the Met Gala?” Music by hooksounds.com #retailnews #AIretail #ecommerce #Walmart #Amazon #Pinterest #RetailTech
In this week's Omni Talk Retail Fast Five news roundup, sponsored by the A&M Consumer and Retail Group, Ownit AI, Avalara, Mirakl, and Ocampo Capital, A&M's David Schneidman and Brooks Levering, joined Chris and Anne to discuss: - If Target wasted its 2024 tech budget on its new CarPlay integration - The likelihood that Dick's Sporting Goods keeps up its phenomenal Q2 sales growth - Just how special Walmart's new partnership with StockX is or is not - Simon's introduction of ShopSimon and whether it heralds a new way to shop your local mall - And closed with a look at the many use cases of Walmart's new invisible barcodes There's all that, plus this month's OmniStar (congrats Michael Diedrich of Tractor Supply), the return of Barney the Dinosaur, and our votes for the best television episode of all-time! Music by hooksounds.com
In this week's Omni Talk Retail Fast Five news roundup, sponsored by the A&M Consumer and Retail Group, Ownit AI, Avalara, Mirakl, and Ocampo Capital, A&M's Chad Lusk and Adam Thompson, joined Chris and Anne to discuss: - The “tall” order that awaits Starbucks' new CEO - Victoria's Secret's new CEO Hillary Super and what her first-year priorities should be - Whether we should all buy or sell Best Buy's new up-to-the-minute delivery monitoring as a point of differentiation - If forced to pick just one, would they rather have the DashPass or Amazon Prime - And closed with a look at Walmart's decision to pull drones out of three states and if it signals the end of all the drone delivery hype And, the Global Head of Digital Commerce at AWS even stopped by for 5 Insightful Minutes on how and where retailers should make investments in AI! There's all that, plus this month's OmniStar (congrats Tony Costanzo of Torrid), dating deal breakers, Greek delicacies, and whether Adam is Team Alfie or Team Gabriel. Music by hooksounds.com
In this week's Omni Talk Retail Fast Five news roundup, sponsored by the A&M Consumer and Retail Group, Ownit AI, Avalara, Mirakl, and Sezzle, Chris and Anne discussed: - Amazon's plans to copycat Shein and Temu (Source: CNBC) - Target lowering its in-store theft threshold from $100 to $50 (Source: Bloomberg) - Tesco piloting on-pack, scannable QR codes (Source: Grocery Gazette) - Tiptop adding the new wrinkle of trade-ins to its BNPL offering (Source: Digital Transaction) - And we closed with yet another look at the future of smart carts through the lens of Shoprite's further expansion of its Instacart Caper Cart pilot to more stores (Source: Retail Dive) There's all that, plus this month's OmniStar (congrats Diana Marshall of Sam's Club), how Chris would improve the Delta Sky Club, dating app wingmen, and who Anne would most want to call the play-by-play of a 10-minute recap video of her life. Music by hooksounds.com
In this week's Omni Talk Retail Fast Five news roundup, sponsored by the A&M Consumer and Retail Group, Wiliot, Avalara, TGW, and Sezzle, Chris and Anne discussed: - Walmart's out-of-nowhere decision to shut down all 51 of its health centers (Source: Bloomberg) - Best Buy's “groundbreaking” new partnership with CNET (Source: Best Buy Press Release) - Tesco bringing EagleAI's gamification to its loyalty program (Source: Tesco Press Release) - Walmart launching its first new private label food line in two decades, aka bettergoods (Source: Bloomberg) - And closed with a look at why Nordstrom launching a new digital marketplace may just be the Mirakl it needs (Source: Retail Dive) There's all that, plus this month's OmniStar (congrats Ryan Nalette of Bob's Discount Furniture), Chris V4.7, the vagaries of selling live chickens, and why jalapeños should be branded like Dole Pineapples or Chiquita Bananas. P.S. We are also gearing up for CommerceNext out in NYC in June. Scaled retailers and brands can register for FREE with code “FASTFIVE” in the referral field. Secure your spot now — head to commercenext.com/conference/ and don't forget to use “FASTFIVE” P.P.S. Be sure to check out all our other podcasts from the past week here, too: https://omnitalk.blog/category/podcast/ P.P.P.S. Also be sure to check out our #1 podcast ranking in all of retail on Feedspot Music by hooksounds.com
In this week's Omni Talk Retail Fast Five news roundup, sponsored by the A&M Consumer and Retail Group, Wiliot, Avalara, TGW, and Sezzle, Chris and Anne discussed: - The real reasons why Amazon would pull its Just Walk Out Technology out of its Fresh grocery stores and Whole Foods store (Source: Payments Dive) - Target installing cameras above its self-checkout machines (Source: Bloomberg) - Kroger closing its three e-commerce facilities (Source: Grocery Dive) - Costco offering Ozempic to some of its members (Source: CNN) - And closed with a look at Home Depot's recent acquisition of SRS (Source: Reuters) There's all that, plus this month's OmniStar, gig driver nightmares, and all the new ways to screw up a burrito. P.S. We are also gearing up for CommerceNext out in NYC in June. Scaled retailers and brands can register for FREE with code “FASTFIVE” in the referral field. Secure your spot now — head to https://commercenext.com/conference?utm_source=OMNITALK&utm_medium=social and don't forget to use code “FASTFIVE” P.P.S. Be sure to check out all our other podcasts from the past week here, too: https://omnitalk.blog/category/podcast/ P.P.P.S. Also be sure to check out our #1 podcast ranking in all of retail on Feedspot Music by hooksounds.com
In this week's Omni Talk Fast Five retail news roundup, sponsored by the A&M Consumer and Retail Group, Wiliot, Avalara, TGW, and Sezzle, Chris and Anne discussed: - Wendy's about face on surge pricing (Source: KTLA-5) - Target's new paid membership program, Circle 360 (Source: CNBC) - The RealReal's store expansion plans (Source: WSJ) - Sam's Club's new design thinking studio (Source: Chain Store Age) -And closed with an examination of whether Whole Foods' plan to open s smaller stores is, first, a good idea, and, second, if it is an idea that will actually work (Source: Grocery Dive) There's all that, plus cereal for breakfast, our newest OmniStar, and a tip of our cap to all our loyal fans for helping to make this our 1,000 podcast episode! Music by hooksounds.com
Amazon VP AWS Applications, Dilip Kumar, is back for his regular annual appearance to discuss how Amazon continues to think about the evolution of checkout and personal identification. In this podcast, Chris and Anne go deep with Dilip on: - The latest Amazon Just Walk Out innovations, including the two new recently opened Seattle Seahawks and Texas Rangers Fan Shops. - The evolution of Amazon One palm payment - And, finally, where Just Walk Out and Amazon One could be headed next! Dilip is a past OmniStar for a reason -- because whenever we have him on the program, you undoubtedly learn something new! Music by hooksounds.com
In this week's episode of the eCom Ops Podcast, Norbert Strappler is joined by Arlen Robinson, Chief Operating Officer and Co-Founder of Omnistar Interactive. They discuss affiliate marketing programs, referral programs, and digital marketing practices for best eCom results.
You can see a shortened version of this content in video form on our YouTube page, OmniStar Financial Group.This podcast is a publication of Omnistar Financial Group. The content is developed from sources believed to be accurate and reliable with all information. The information in this material is not intended as tax or legal advice and may not be used for the purpose of avoiding any federal tax penalties. Please consult with a tax or legal professional for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for purchase or sale of any security or service provided by Omnistar. Any opinions expressed in this podcast reflect those of the authors and are subject to change. Any distribution, use or copying of this video other than the intended recipients is prohibited.Omnistar has been serving clients since 1992 through deep relationships, actionable strategies, and advanced technology. Our goal is to empower those we serve to reach their goals and live their best life.Give us a call at (910) 319-7834Or visit our website at www.omnistarfinancial.cominfo@omnistarfinancial.com
You can see a shortened version of this content in video form on our YouTube page, OmniStar Financial Group. This podcast is a publication of Omnistar Financial Group. The content is developed from sources believed to be accurate and reliable with all information. The information in this material is not intended as tax or legal advice and may not be used for the purpose of avoiding any federal tax penalties. Please consult with a tax or legal professional for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for purchase or sale of any security or service provided by Omnistar. Any opinions expressed in this podcast reflect those of the authors and are subject to change. Any distribution, use or copying of this video other than the intended recipients is prohibited. Omnistar has been serving clients since 1992 through deep relationships, actionable strategies, and advanced technology. Our goal is to empower those we serve to reach their goals and live their best life. Give us a call at (910) 319-7834 Or visit our website at www.omnistarfinancial.com; info@omnistarfinancial.com
You can see a shortened version of this content in video form on our YouTube page, OmniStar Financial Group.This podcast is a publication of Omnistar Financial Group. The content is developed from sources believed to be accurate and reliable with all information. The information in this material is not intended as tax or legal advice and may not be used for the purpose of avoiding any federal tax penalties. Please consult with a tax or legal professional for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for purchase or sale of any security or service provided by Omnistar. Any opinions expressed in this podcast reflect those of the authors and are subject to change. Any distribution, use or copying of this video other than the intended recipients is prohibited.Omnistar has been serving clients since 1992 through deep relationships, actionable strategies, and advanced technology. Our goal is to empower those we serve to reach their goals and live their best life.Give us a call at (910) 319-7834Or visit our website at www.omnistarfinancial.cominfo@omnistarfinancial.com
No matter where you are in your financial journey, its never too early or too late to start planning for retirement. Dustin and Phil from Omnistar share 5 game changing strategies that will maximize your money for the future! You can see a shortened version of this content in video form on our YouTube page, OmniStar Financial Group. This podcast is a publication of Omnistar Financial Group. The content is developed from sources believed to be accurate and reliable with all information. The information in this material is not intended as tax or legal advice and may not be used for the purpose of avoiding any federal tax penalties. Please consult with a tax or legal professional for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for purchase or sale of any security or service provided by Omnistar. Any opinions expressed in this podcast reflect those of the authors and are subject to change. Any distribution, use or copying of this video other than the intended recipients is prohibited. Omnistar has been serving clients since 1992 through deep relationships, actionable strategies, and advanced technology. Our goal is to empower those we serve to reach their goals and live their best life. Give us a call at (910) 319-7834 Or visit our website at www.omnistarfinancial.com info@omnistarfinancial.com
In this episode of the eCom Ops Podcast, Norbert Strappler is joined by Arlen Robinson, Chief Operating Officer and Co-Founder of Omnistar Interactive (OSI) Affiliate Software. They discuss the differences between affiliate and referral programs, what it takes to build a successful affiliate program, how to manage influencers for your eCom efficiently.
Welcome, You are here at the Beacon! I am your host David Darab…prepare to have your Blind Spots Illuminated!So…It’s very appropriate, since our Team here at OmniStar Financial and Dental Systems Optimization are Experts in Blind Spots, that we devote this episode to Cognitive Biases which create Blind Spots.Let’s kick off our discussion with a quote from one of my favorite thinkers, Professor Richard Feynman, A theoretical Physicist, Exceptional Teacher, and Contributor to the Manhattan Project.> “The first principle is that you must not fool yourself and you are the easiest person to fool.”> Richard P. FeynmanIt is possible for people to be confused or unaware about something rather important. The fact that most people don’t know they are missing it doesn’t make it any less of a problem for them or their practices.This is the best definition of a Blind Spot!For those of us that remember the movie City Slickers, you may recall the main character played by Billy Crystal, went out West with his friends to find themselves during a midlife crisis. There he meets his guide, Curly, played by Jack Palance, a rough and leathery cattle rancher that will show them all a thing or two. Curly teaches them about the “one thing”, the secret of life that everyone must figure out for him or herself!Well, we all have “one thing” that we carry around that is unique to us, and it too is so very important to figure out. This one thing is with us at all times, at every twist and turn life throws at us. Every time we are facing a challenge or problem that requires us to make a decision this one thing is there, hiding silently, but contributing loudly to our choices, direction, and decisions…that one thing is our Cognitive Bias. It is unique to each one of us. If we are not aware of its presence or its powerful influence it creates Blind spots. A blind spot is something that is critically important even though we are unaware of it. The fact that you don’t know you are missing it doesn’t make it any less important. In fact, because you are unaware it becomes even more important.Here at OmniStar, it’s our Tag Line “Illuminating Blind Spots”. We consider it Job #1 to help you find, Illuminate and see your Blind Spots! It’s what we do because you can’t see your blind spots alone.“We see what you are incapable of… that's what we do.” David Darab, DDS, MBACognitive Biases affect how we make everyday decisions, big and small as well as how we think about and invest our money and create our wealth.A cognitive bias is an error in cognition that arises in a person’s line of reasoning when decision-making is flawed by personal beliefs.When the Bias is unseen by the individual but seen by others, it is a Blind Spot.The Cure here is recognizing and acknowledging that they exist. Once you become aware of these Cognitive Biases they are no longer Blind Spots.I am subject to this, as I bet you are too, in the areas of clinical practice, business decisions as well as finances and investing.I tend to “cubbyhole” things, giving a lot of weight to my time in the business. I think to myself…I have done this for 30 years, I have seen everything, I should be good to go! But that is not always the case. Just because it looks the same doesn’t make it the same. I can still find myself in “the ditch” when I overlooked a small feature or minor detail that has snuck up and “bit” me. So let’s dig deeper here.Let’s Illuminate for you what Cognitive Biases Exist so they will be less likely to create Blind Spots!Understanding Cognitive Biases first starts with understanding Heuristics.So what are Heuristics??Heuristics are mental shortcuts that ease the cognitive load of making a decision, we use them all time. … Examples of heuristics include rules of thumb, an educated guess, or been there and done that!When considering the term “Cognitive Biases”, it’s important to know that there is an overlap between cognitive biases and heuristics. At times these two terms are used interchangeably but they are not exactly the same.In his book, *Thinking, Fast and Slow*, Professor Daniel Kahneman defines heuristics as“a simple procedure that helps find adequate, though often imperfect, answers to difficult questions.”He also defines the relationship between Cognitive Biases and Heuristics as follows:“… cognitive biases stem from the reliance on judgmental heuristics.”Putting this together we see that…Heuristics are the “shortcuts” we use to reduce complexity in judgment and choice, Cognitive Biases result from the gaps between what “should be” and the Heuristically determined behavior.According to the Cognitive Bias Codex, there are an estimated 180 cognitive biases. This codex is a useful tool for visually representing all of the known biases that exist to date.The biases are arranged in a circle and can be divided into four quadrants. Each quadrant is dedicated to a specific group of cognitive biases:1. What should we remember?Biases that affect our memory for people, events, and information2. Too much informationBiases that affect how we perceive certain events and people3. Not enough meaningBiases that we use when we have too little information and need to fill in the gaps4. Need to act fastBiases that affect how we make decisionsCognitive biases can have a devastating effect on our business decisions as well as decisions relating to personal finance and wealth. At OmniStar we are experts at Illuminating Blind spots, so let’s take a look at what these Cognitive Biases are. Because…as it is said…What has been seen cannot be unseen, what has been learned cannot be unknown.There are over 40 cognitive biases that negatively impact our ability to make sound financial decisions. I won’t bore you with an exhaustive list, but let’s hit some of the most common ones and see if any of these might ring a bell, and possibly be hindering your decision making ability.Some of these biases include:Overconfidence BiasIs when confidence in our own judgment is greater than the objective accuracy of those judgments. It results from someone’s false sense of their skill, talent, or self-belief. It can be a dangerous bias and is very prolific in finance and business. The most common signs of overconfidence include the illusion of control, timing optimism, and the desirability effect, the belief that something will happen because you want it to.Self Serving BiasSelf-serving cognitive bias is the propensity to attribute positive outcomes to skill and negative outcomes to luck. In other words, we attribute the cause of something to whatever is in our own best interest. Many of us can recall times that we’ve done something and decided that if everything is going to plan, it’s due to skill, and if things go the other way, then it’s just bad luck.Herd MentalityHerd mentality is when you blindly copy and follow what your friends, colleagues, and peers are doing. When you do this, you are being influenced by emotion, rather than by independent analysis.Loss AversionLoss aversion is a tendency for investors to fear losses and avoid them more than they focus on trying to make profits. Many investors would rather not lose $2,000 than earn $3,000. The more losses one experiences, the more loss averse one likely becomes. It is common for both professional and amateur investors to hold on to losing investment positions for too long, whilst selling winners too soon.> “In human decision-making, losses loom larger than gains.”> Kahneman and TverskyFraming BiasFraming is when someone makes a decision because of the way information is presented to them, rather than based just on the facts. In other words, if someone sees the same facts presented in a different way, they are likely to come to a different conclusion about the information.You may choose to purchase capital equipment, buy a car, or purchase an investment depending on how the opportunity is presented to you.Anchoring BiasAnchoring is the idea that we use pre-existing data as a reference point for all subsequent data, which can skew our decision-making processes. If you see a car that costs $75,000 and then another car that costs $30,000, you could be influenced to think the second car is very cheap. Whereas, if you saw a $5,000 car first and the $30,000 one second, you might think it’s very expensive.Confirmation BiasConfirmation bias is the idea that people seek out information and data that confirms their pre-existing ideas. They tend to ignore contrary or conflicting information. This can be a very dangerous cognitive bias in business and investing. Using confirmatory bias, we tend to search for, interpret, and remember information in a way that confirms our existing preconceptions. This unconscious bias makes it possible to miss findings or ignore evidence that could otherwise change our view.Hindsight BiasHindsight bias is the theory that when people predict a correct outcome, they wrongly believe that they “knew it all along”, which falsely inflates their confidence for future decisions.The Curse of Knowledge BiasWhen knowledge of a topic diminishes our ability to think about it from a less-informed, but more neutral, perspective. I call this…“You don’t know what you don’t know paradox!”or, “a little knowledge can be dangerous” bias.Blind Spot BiasDemonstrated when we think we’re less prone to cognitive bias than those around us. People see themselves differently from how they see others. They are immersed in their own sensations, emotions, and thoughts while at the same time their experience of others is dominated by what can be observed externally.Information BiasSometimes we tend to seek information even when it does not affect action. Better decisions can often be made with less information – more is not always better.When we constantly seek more information we are falsely concluding a better decision will result.More information is not always better.Better information is better.Optimism BiasThis is seen when we tend to overestimate the probability of positive outcomes but underestimate the potential for negative ones. 80% of us are prone to this cognitive illusion.This is the power of positive thinking, but not the best heuristic for the best outcomes.Mental Accounting BiasMental accounting explains how we tend to assign subjective value to our money, usually in ways that violate basic economic principles.Although money has consistent, objective value, the way we go about spending it is often subject to different rules, depending on how we earned the money, how we intend to use it, and how it makes us feel. In reality, money is fungible and one dollar is worth as much as the next, whatever its source or purpose. This bias affects how we rationalize our spending and investment decisions.Here is an example…Imagine you’re walking down the street, and you happen to find a $100 bill lying on the sidewalk. Ordinarily, you’re a pretty frugal person, and you’ve been trying to save some money to put towards buying a car in the future. Today, however, you take your newfound $100 and put it towards an expensive dinner. You tell yourself that this money isn’t “car money” — this is a one-off, special occasion, so why not treat yourself to a nice evening out?You have just fallen victim to Mental Accounting Bias.Outcome BiasThe tendency to judge a decision by its eventual outcome, rather than the quality of the decision when it was made. This behavioral tendency leads us to de-emphasize the events preceding an investment outcome, whilst overemphasizing the outcome.> “The fact that something worked doesn’t mean it was the result of a correct decision, and the fact that something failed doesn’t mean the decision was wrong. This is at least as true in investing as it is in sports.”> Howard Marks – Inspiration from the World of Sports Memo (2015)In business, making a good and sound decision does not guarantee a good outcome. Recency BiasWhen people weigh recent events and observations more heavily than those in the past.With this bias, we tend to base our thinking disproportionately on whatever comes most easily to mind. In an investment context, this can be dangerous because we are likely to lean more heavily on our experience of recent investment performance when considering future returns.Older people can display marked recency bias, with a focus on positive memories. This has potentially significant implications for the important investment decisions they make as they approach retirement.> “We look at the most recent evidence, take it too seriously, and expect that things will continue in that way.”> Dan Ariely – Predictably Irrational (2010)Regret AversionThe tendency to avoid making decisions that we fear we could later regret.Risk CompensationThis suggests that we adjust our behavior according to our perception of the risk level, becoming less careful when we feel safer and more cautious when the perceived risk level increases.Status Quo BiasEvident when people resist change and prefer things to stay the same or stick with previous decisions.Sunk Cost EffectThe tendency to throw good money after bad. Can lead us to continue investing into a project based on our earlier decisions, rather than on its current objective merits or despite new evidence suggesting that the decision was probably wrong.I think of this as, “What’s past is past!”The IKEA EffectThis bias explains the tendency for people to place a disproportionately high value on objects that they partially created themselves, regardless of the quality of the end result.This is especially prevalent in clinical dentistry.and finally…Dunning–Kruger effectIs a cognitive bias in which people with low ability at a task overestimate their ability. It is related to the cognitive bias of illusory superiority and comes from the inability of people to recognize their lack of ability.[image:3C24884B-4665-43AB-A892-1FAD5A5B4821-9378-000098BBC7F6B8B6/Dunning-Kruger.jpg]Even with this partial list, you can get a feel for how many Cognitive Biases there are and how influenced by them we can be, distorting our ability to make sound and accurate decisions.Have you encountered any of these yourself?? I know I have and learn volumes about myself researching for this podcast.Now that we have some awareness of our Cognitive Biases let’s look at some strategies to overcome them. I’ll outline 5 actions for you to consider…#1 Separate the Problem from the DecisionMake sure you thoroughly understand the Problem first which requires you to make a decision. Separate the problem from your decision-making, rarely does a decision have to be made immediately or simultaneously.#2 Reflect on past decisionsIf you’ve been in a similar situation before, you can reflect on the outcomes of those previous decisions to learn how to overcome your biases. Learn from your previous decisions, both good and bad. What went well…if so why? What went poorly…if so what would you avoid or do differently?#3 Include external viewpointsThere is some evidence that we make better decisions when we consult with other people who are more objective, such as advisors, coaches, mentors, and trusted friends and colleagues. Therefore, before making a decision, talk to other people to consider different viewpoints and have your own views challenged. Importantly, other people might spot your own cognitive Biases, Blind Spots, as we say here at OmniStar!#4. Challenge your viewpointsWhen making a decision, try to see the weaknesses and “poke holes” in your thinking regardless of how small, unlikely, or inconsequential these weaknesses might seem. You can be more confident in your decision if it withstands serious, critical scrutiny. This “Devil’s Advocate” role and voice are crucial to point out flaws in your thinking. If this alternative view proves stronger, time to rethink your decision.#5 Delay decisions, do not act when under pressureA final way to protect yourself from relying on your cognitive biases is to avoid making any decisions under time pressure. Rarely does a significant decision have to be made immediately. If decisions can be delayed, many times the problem that initiated the need for action may resolve, better alternatives may present themself, or additional information can be obtained which aids in the decision process.A Take-Home MessageWe often rely on cognitive heuristics and biases when making decisions.Heuristics can be useful in certain circumstances; however, heuristics and biases can result in poor decision-making and reinforce unhealthy behavior.When we are not aware of them, they create Blind Spots which can lead to unpredictable and adverse outcomes. There are many different types of cognitive biases, and all of us are victims of one or more.However, being aware of our biases and how they affect our behavior is the first step toward resisting them.So that wraps things up for this Podcast. We hope this information has created a few "Ah-Ha" moments to help you better understand some of your biases. Once you are aware you can take corrective action and achieve better outcomes. Please share this Podcast if you found it helpful, and leave a review on iTunes too. We welcome your feedback and suggestions for future podcast sessions. You can always find me, your host, David Darab, at my Twitter handle, @ddarab.Remember our Team here at OmniStar DSO stands ready to help you and your practice with any Blind Spots and questions.We see what you are incapable of… that's what we do.Thank you so very much for tuning in and listening. We are very grateful for your time and attention and so delighted to have you in our audience.https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555
General segments with time stamps you can quick link to: 00:02:43 Panel Introductions 00:10:07 Holloween talk 00:39:04 CoCo Thoughts 00:42:03 GameON! challenge results 00:44:25 GameON! Discussion - Phantom Slayer 01:09:50 Next week's game announcement - Pipes 01:43:40 GameON! news 02:26:12 News from around the world 03:41:46 Project updates and acquisitions 04:01:17 CoCo Caboose - after show & wrap-up discussion 1) Robert Sieg has uploaded a disk image with 3 sample 160x192x16 color pictures https://tinyurl.com/y33edhca https://tinyurl.com/y4r4bhre https://tinyurl.com/yynf4pqa 2) Simon Jonassen released some details and sample song using a 4 voice music player https://tinyurl.com/y595r2pv 3) Neil Blanchard has a last call for his special run of 40th anniversary Coco masks on Facebook: https://tinyurl.com/y4cu9h4s 4) Sheldon MacDonald posted a video on the Coco group on Facebook showing what his upcoming RSDOS tool program https://tinyurl.com/y6a4wx8c 5) Philippe Trottier posted on Facebook about replacing a 6551 chip with another chip. https://tinyurl.com/yyrdzzz9 6) Laurence Byers posted some scans of a review of BASIC-09 from the April 1984 issue of BYTE magazine https://tinyurl.com/y3rl9x66 7) Ciaran Anscomb (Sixxie) has posted a link to a work in progress on his gitlab account - indexing Dragon User magazine articles https://tinyurl.com/yylhycxk 8) Keith (ChibiAkumas) on YouTube has his first assembly language tutorial specifically for the Coco 3 up, concentrating on 16 color bitmap drawing in this episode: https://tinyurl.com/y5b4c3x5 9) Paul Shoemaker put up a cool video demo on Facebook showing his "Pixels" program, which shows randomly moving pixels https://tinyurl.com/y5chbboo https://tinyurl.com/y6fop83n 10) Carlos Camacho is reminding people on Facebook that he has ROM chip upgrades for Coco https://tinyurl.com/y5562hne 11) Steve Norton has released a utility on Facebook (for Windows) that will help automate renaming long DSK filenames to the 8.3 format required for the CocoSDC. https://tinyurl.com/y4phoeg4 12) Peter Cetinski uploaded to github an archive of the Tandy Coco Tech bulletins: https://tinyurl.com/y2gkz8rd 13) Darren Ottery put up a video demo on Facebook of his simple Drum machine program called 'Beatbox'. https://tinyurl.com/y5rqls8l 14) Bill Pierce has put up a list of known bugs, and of feature requests, for VCC on Facebook and is asking for people to update the lists for future updates. https://tinyurl.com/y5o5dkkh 15) Episode 65 of the Coco Crew podcast is out http://cococrew.org 16) Robert Gault has uploaded a utility called MLFINDER to the Facebook Coco group https://tinyurl.com/y5y4xd2f 17) Curtis Boyle released the first public release of the new Technical Reference manual for NitrOS-9 https://tinyurl.com/y643o9ga 18) AC's 8-Bit Zone has posted a video where a channel viewer has a Coco 2 that won't start up properly - and AC sees if he can fix it (part 1): https://tinyurl.com/yyx5m9w3 19) John Whitworth announced that a 2nd order for the MSX 2+ boards has been ordered https://tinyurl.com/yxmpk5lb Game On news: ============= 1) Avram Berman put up an interesting question: What Coco game would you most like to have a sequel of? https://tinyurl.com/yxdzetxu 2) Neil Blanchard he has a last call going out for 3D Monster Maze and Bomb Threat cartridges https://tinyurl.com/y64fs5rj 3) Chet Simpson has released the first info files for eventual disassembled source code for 4 programs on his GitHub. https://tinyurl.com/y6lo8uc3 4) Paul Thayer has a video update on his progress with his Coco 3 game, Sokoban https://tinyurl.com/y5k5m2zx 5) Nick Marentes did a tongue in cheek "teaser" image for his upcoming dual game pack (Rally-SG, now with a track editor, and his new Pipes game), which has stirred some controversy. Nick has a comment on this. 6) Rick Adams put some scans up on Discord and Facebook showing some of his original notes and sketches for his original, more complicated design for the OmniStar https://tinyurl.com/y3d2kxnb 7) Henry Reitveld did a quick video showing him using the CocoSDC with Brett Gordon's YA DOS that can have up to 3500 floppy disk images: https://tinyurl.com/yyzvg6lb 8) Vintage is the New Old did a review of Digger III: The Saint's Ascension, including a gameplay video: https://tinyurl.com/yxf9uf6t https://tinyurl.com/y23pu93x
General segments with time stamps you can quick link to: 00:02:43 Panel Introductions 00:10:07 Holloween talk 00:39:04 CoCo Thoughts 00:42:03 GameON! challenge results 00:44:25 GameON! Discussion - Phantom Slayer 01:09:50 Next week's game announcement - Pipes 01:43:40 GameON! news 02:26:12 News from around the world 03:41:46 Project updates and acquisitions 04:01:17 CoCo Caboose - after show & wrap-up discussion 1) Robert Sieg has uploaded a disk image with 3 sample 160x192x16 color pictures https://tinyurl.com/y33edhca https://tinyurl.com/y4r4bhre https://tinyurl.com/yynf4pqa 2) Simon Jonassen released some details and sample song using a 4 voice music player https://tinyurl.com/y595r2pv 3) Neil Blanchard has a last call for his special run of 40th anniversary Coco masks on Facebook: https://tinyurl.com/y4cu9h4s 4) Sheldon MacDonald posted a video on the Coco group on Facebook showing what his upcoming RSDOS tool program https://tinyurl.com/y6a4wx8c 5) Philippe Trottier posted on Facebook about replacing a 6551 chip with another chip. https://tinyurl.com/yyrdzzz9 6) Laurence Byers posted some scans of a review of BASIC-09 from the April 1984 issue of BYTE magazine https://tinyurl.com/y3rl9x66 7) Ciaran Anscomb (Sixxie) has posted a link to a work in progress on his gitlab account - indexing Dragon User magazine articles https://tinyurl.com/yylhycxk 8) Keith (ChibiAkumas) on YouTube has his first assembly language tutorial specifically for the Coco 3 up, concentrating on 16 color bitmap drawing in this episode: https://tinyurl.com/y5b4c3x5 9) Paul Shoemaker put up a cool video demo on Facebook showing his "Pixels" program, which shows randomly moving pixels https://tinyurl.com/y5chbboo https://tinyurl.com/y6fop83n 10) Carlos Camacho is reminding people on Facebook that he has ROM chip upgrades for Coco https://tinyurl.com/y5562hne 11) Steve Norton has released a utility on Facebook (for Windows) that will help automate renaming long DSK filenames to the 8.3 format required for the CocoSDC. https://tinyurl.com/y4phoeg4 12) Peter Cetinski uploaded to github an archive of the Tandy Coco Tech bulletins: https://tinyurl.com/y2gkz8rd 13) Darren Ottery put up a video demo on Facebook of his simple Drum machine program called 'Beatbox'. https://tinyurl.com/y5rqls8l 14) Bill Pierce has put up a list of known bugs, and of feature requests, for VCC on Facebook and is asking for people to update the lists for future updates. https://tinyurl.com/y5o5dkkh 15) Episode 65 of the Coco Crew podcast is out http://cococrew.org 16) Robert Gault has uploaded a utility called MLFINDER to the Facebook Coco group https://tinyurl.com/y5y4xd2f 17) Curtis Boyle released the first public release of the new Technical Reference manual for NitrOS-9 https://tinyurl.com/y643o9ga 18) AC's 8-Bit Zone has posted a video where a channel viewer has a Coco 2 that won't start up properly - and AC sees if he can fix it (part 1): https://tinyurl.com/yyx5m9w3 19) John Whitworth announced that a 2nd order for the MSX 2+ boards has been ordered https://tinyurl.com/yxmpk5lb Game On news: ============= 1) Avram Berman put up an interesting question: What Coco game would you most like to have a sequel of? https://tinyurl.com/yxdzetxu 2) Neil Blanchard he has a last call going out for 3D Monster Maze and Bomb Threat cartridges https://tinyurl.com/y64fs5rj 3) Chet Simpson has released the first info files for eventual disassembled source code for 4 programs on his GitHub. https://tinyurl.com/y6lo8uc3 4) Paul Thayer has a video update on his progress with his Coco 3 game, Sokoban https://tinyurl.com/y5k5m2zx 5) Nick Marentes did a tongue in cheek "teaser" image for his upcoming dual game pack (Rally-SG, now with a track editor, and his new Pipes game), which has stirred some controversy. Nick has a comment on this. 6) Rick Adams put some scans up on Discord and Facebook showing some of his original notes and sketches for his original, more complicated design for the OmniStar https://tinyurl.com/y3d2kxnb 7) Henry Reitveld did a quick video showing him using the CocoSDC with Brett Gordon's YA DOS that can have up to 3500 floppy disk images: https://tinyurl.com/yyzvg6lb 8) Vintage is the New Old did a review of Digger III: The Saint's Ascension, including a gameplay video: https://tinyurl.com/yxf9uf6t https://tinyurl.com/y23pu93x
Episode 64 Show Notes -- http://cococrew.org/cococrew-podcast-64.html
This episode of CoCoTALK! features: Ken from Canadian Retro Things https://www.youtube.com/channel/UCRkegwvhByytikbnnLMVMpA Footage from the Adalaide Retro Meetup in Australia https://www.youtube.com/watch?v=aPvyyXXwgeM&ab_channel=DavesTimeMachine See a new pickup, the Motorla XOR develpment system Hear about Chet Simpson's new Digger III game for the CoCo 3 release https://www.facebook.com/groups/2359462640/permalink/10158595404992641 Possible visits from Rick Adams and an update on his latest release OmniStar https://www.facebook.com/groups/2359462640/permalink/10158587884482641/ https://rickadams.itch.io/omnistar General segments with time stamps you can quick link to: 00:02:46 Panel Introductions 00:08:17 Ken with Canadian Retro Things 00:36:31 GameON! challenge results 00:38:41 GameON! Discussion - Rally-SG 01:11:44 Next week's game announcment - Digger III 01:17:31 Rick Adams release of OmniStar 01:36:34 Ken Waters - Basic game he is creating 01:47:08 GameON! news 02:16:47 News from around the world 03:02:32 Project updates and acquisitions 03:30:21 CoCo Caboose - after show & wrap-up discussion News stories for Episode #177, September 12, 2020 show: ====================================================== 1) Pere Serrat has released a demo set of 10 WAV files https://tinyurl.com/y4orzmnz Refresher on the MSX2+: https://tinyurl.com/y6zok2oa 2) Robert Sieg has both a video demonstrating his new MC-10 Solo Full screen emulator Video: https://tinyurl.com/yyqfe6se Online emulator: http://mc-10.com 3) Noel's Retro Lab on YouTube put up a video about his latest batch of hardware & software https://tinyurl.com/y5cx4zdk 4) AC's 8-Bit Zone, as part of SepTandy 2020, shows off his giant Coco collection https://tinyurl.com/y2v58jta A cable to hook his Coco 3 up to his Magnavox 85CM15 monitor: https://tinyurl.com/yyt9uqct 5) Murilo Queiroz posted a link to Usborne books https://tinyurl.com/y2zx43ve 6) Fred Rique posted a video showing some experiments he has been doing with mixed text and graphics scanline characters using Semi-graphics https://tinyurl.com/y4k9y3el 7) John Linville posted a link to the "Virtual VCF Midwest 15" schedule https://tinyurl.com/y5ugm2sy 8) Xeox Gomazoa put up a small BASIC program that he wanted some contributions from other people to speed it up by repogramming it in ML https://tinyurl.com/yyayl9ak 9) Raymond Jett posted how he patched his Sound/Speech pack to have a switch https://tinyurl.com/y67nhwxj 10) Tony Jewell shared an ad from back in the day in the Dragon Facebook group - a "Turbo Datacorder" https://tinyurl.com/y2es7mjc 11) LGR Blerbs put up a video this morning of him unboxing his "new stock" Tano Dragon: https://tinyurl.com/yxz7x3rh Game On news: ============= 1) The Amigos have released their ARG Presents Coco episode https://tinyurl.com/yynu3b6u John Shawler's (BoatofCar) 1.5 hour Coco livestream https://tinyurl.com/y473pw4t 2) Jim Gerrie release an MC-10 conversion of LEM from Creative Computing https://tinyurl.com/y3vg2jt4 3) Simon Jonassen has put up a quick video of what looks to be a new game/game engine https://tinyurl.com/yymzte7d 4) Rick Adams has released his game Omnistar, https://tinyurl.com/yyu53s5w You can order it here: https://rickadams.itch.io/omnistar 5) Ken over at Canadian Retro Things put up a gameplay video https://tinyurl.com/yy27q6hd 6) Ken also put up a video of a video game in BASIC that is he is picking up again after 35 years https://tinyurl.com/y32678ug 7) GigerPunk (Rob's Retro Rambles) has a video up of Cuthbert and the Golden Chalice on the Dragon 32: https://tinyurl.com/yxgmgaau Custom artwork designed by Instagram artist Joel M. Adams: https://www.instagram.com/artistjoelmadams/ Custom CoCoTALK! and retro merchandise is available at: http://8bit256.com Consider becoming a patron of the show: https://patreon.com/ogsteviestrow Live interactive video streams: https://www.youtube.com/steviestrow https://www.facebook.com/cocotalklive https://www.periscope.tv/CoCoTALKlive/ https://twitter.com/CoCoTALKlive Email any suggestions you have for the show to cocotalk@cocotalk.live Visit us on the web at http://cocotalk.live Join us for daily conversations on Discord: http://discord.cocotalk.live To find out more about the Color Computer visit http://imacoconut.com
This episode of CoCoTALK! features: Ken from Canadian Retro Things https://www.youtube.com/channel/UCRkegwvhByytikbnnLMVMpA Footage from the Adalaide Retro Meetup in Australia https://www.youtube.com/watch?v=aPvyyXXwgeM&ab_channel=DavesTimeMachine See a new pickup, the Motorla XOR develpment system Hear about Chet Simpson's new Digger III game for the CoCo 3 release https://www.facebook.com/groups/2359462640/permalink/10158595404992641 Possible visits from Rick Adams and an update on his latest release OmniStar https://www.facebook.com/groups/2359462640/permalink/10158587884482641/ https://rickadams.itch.io/omnistar General segments with time stamps you can quick link to: 00:02:46 Panel Introductions 00:08:17 Ken with Canadian Retro Things 00:36:31 GameON! challenge results 00:38:41 GameON! Discussion - Rally-SG 01:11:44 Next week's game announcment - Digger III 01:17:31 Rick Adams release of OmniStar 01:36:34 Ken Waters - Basic game he is creating 01:47:08 GameON! news 02:16:47 News from around the world 03:02:32 Project updates and acquisitions 03:30:21 CoCo Caboose - after show & wrap-up discussion News stories for Episode #177, September 12, 2020 show: ====================================================== 1) Pere Serrat has released a demo set of 10 WAV files https://tinyurl.com/y4orzmnz Refresher on the MSX2+: https://tinyurl.com/y6zok2oa 2) Robert Sieg has both a video demonstrating his new MC-10 Solo Full screen emulator Video: https://tinyurl.com/yyqfe6se Online emulator: http://mc-10.com 3) Noel's Retro Lab on YouTube put up a video about his latest batch of hardware & software https://tinyurl.com/y5cx4zdk 4) AC's 8-Bit Zone, as part of SepTandy 2020, shows off his giant Coco collection https://tinyurl.com/y2v58jta A cable to hook his Coco 3 up to his Magnavox 85CM15 monitor: https://tinyurl.com/yyt9uqct 5) Murilo Queiroz posted a link to Usborne books https://tinyurl.com/y2zx43ve 6) Fred Rique posted a video showing some experiments he has been doing with mixed text and graphics scanline characters using Semi-graphics https://tinyurl.com/y4k9y3el 7) John Linville posted a link to the "Virtual VCF Midwest 15" schedule https://tinyurl.com/y5ugm2sy 8) Xeox Gomazoa put up a small BASIC program that he wanted some contributions from other people to speed it up by repogramming it in ML https://tinyurl.com/yyayl9ak 9) Raymond Jett posted how he patched his Sound/Speech pack to have a switch https://tinyurl.com/y67nhwxj 10) Tony Jewell shared an ad from back in the day in the Dragon Facebook group - a "Turbo Datacorder" https://tinyurl.com/y2es7mjc 11) LGR Blerbs put up a video this morning of him unboxing his "new stock" Tano Dragon: https://tinyurl.com/yxz7x3rh Game On news: ============= 1) The Amigos have released their ARG Presents Coco episode https://tinyurl.com/yynu3b6u John Shawler's (BoatofCar) 1.5 hour Coco livestream https://tinyurl.com/y473pw4t 2) Jim Gerrie release an MC-10 conversion of LEM from Creative Computing https://tinyurl.com/y3vg2jt4 3) Simon Jonassen has put up a quick video of what looks to be a new game/game engine https://tinyurl.com/yymzte7d 4) Rick Adams has released his game Omnistar, https://tinyurl.com/yyu53s5w You can order it here: https://rickadams.itch.io/omnistar 5) Ken over at Canadian Retro Things put up a gameplay video https://tinyurl.com/yy27q6hd 6) Ken also put up a video of a video game in BASIC that is he is picking up again after 35 years https://tinyurl.com/y32678ug 7) GigerPunk (Rob's Retro Rambles) has a video up of Cuthbert and the Golden Chalice on the Dragon 32: https://tinyurl.com/yxgmgaau Custom artwork designed by Instagram artist Joel M. Adams: https://www.instagram.com/artistjoelmadams/ Custom CoCoTALK! and retro merchandise is available at: http://8bit256.com Consider becoming a patron of the show: https://patreon.com/ogsteviestrow Live interactive video streams: https://www.youtube.com/steviestrow https://www.facebook.com/cocotalklive https://www.periscope.tv/CoCoTALKlive/ https://twitter.com/CoCoTALKlive Email any suggestions you have for the show to cocotalk@cocotalk.live Visit us on the web at http://cocotalk.live Join us for daily conversations on Discord: http://discord.cocotalk.live To find out more about the Color Computer visit http://imacoconut.com
Market pullbacks, indeed, are opportunities. But things are not as simple as saying, buy when the markets are down. The coronavirus-induced market turbulence is affecting everyone – but how it affects you depends upon your goals and objectives. That is, if you can control your fear. After all, that is mostly what is happening at the moment, reactions based on fear. Don’t get me wrong, we recognize that these are scary times, particularly for those in or near retirement. Nevertheless, regardless of your age, or place in life, we consider market dips as opportunities, not threats. And speaking of fear, remember that what you hear on the news is not likely what you are experiencing in your portfolio. That’s because OmniStar investment strategies are designed to have lower beta and standard deviation than general indexes, such as the S&P 500. Risk-adjusted return defines an investment's return by measuring how much risk is involved in producing that return, which is generally expressed as a number or rating. We apply this to every client portfolio to ensure risk is reduced as much as possible without sacrificing total performance. For example, many of our clients in recent weeks have experienced losses of approximately 10% while the S&P 500 is down nearly 30%.Let’s cover a few points before we move ahead. The impact of the coronavirus on the economy continues to escalate which calls for adjusting GDP estimates. Oil prices have fallen to $30 per barrel, which warrants a lowering estimates of capital investment into equipment. President Trump has banned travel to Europe and sports leagues have cancelled games, tournaments and seasons, leading us to rein in expectations for personal consumption expenditures on services such as flights, hotels and restaurants. Recessionary conditions in Europe and Japan will slow export growth. As well, the end of the bull market is likely to short-circuit consumer confidence, with a potential negative impact on auto and home sales. With those points, let’s go ahead and answer what has become the most repeated question from our clients.Should we move to cash? The short answer is no. Moving to cash has many negative implications.• You no longer receive dividends• Covered call premiums are not possible• Trying to time re-entry is a long shot• You lock in current lossesI want to share salient points from a client call this week. Our discussion focused on their decision to move into cash. During our conversation, they shared a story of a friend who served on the executive team at Delta Airlines. Their friend advised them to purchase shares last year at a time when the stock was trading near $67 per share. They went on to say how Delta was well-positioned and “when we get through all of this, Delta will benefit”. Indeed, we agreed. However, they didn’t realize shares of Delta were trading down nearly 50% from just a year ago, yet their confidence in Delta was not compromised. All of sudden the realization struck that Delta is not the only company that will benefit when we get past the current pullback. Moreover, they realized staying invested makes sense if we believe companies will survive and do well as COVID-19 moves to the rearview mirror.Again, we recognize these are scary times. But hang on and you will see where I am headed. I don’t want to state the obvious, but we expect the economy to contract during the second and third quarters, of 2020 and likely begin to experience some recovery in 4Q with more appreciable improvement through 2021. We might as well use the R word. They are part of our economy and they cannot be escaped.However, the last 11 recessions have averaged 11 months in duration. A potential silver lining this time around, we think the recessionary environment will be shorter, given the strength of the economy prior the current conditions. It appears likely that the virus will be contained in a relatively brief period. For the last part of February and at least through the first third of March, the stock market could be described as tumultuous, to say the least. The S&P 500 Index, the Dow and Nasdaq have fallen precipitously. In some cases, indexes are down by nearly 30%. While the Coronavirus is somewhat to blame, we view it as more of a catalyst that caused a fear-trade. Prior to the Coronavirus outbreak, the following criteria set the stage for a market correction in 2020. • Markets priced to perfection• Corporate earnings were peakingStocks trading above fair value• PE ratios high suggesting overvalueWith the Coronavirus tipping the markets into a sell off, the Fed has implemented the following to reduce financial impacts.• The Federal Reserve cut rates by 25 basis points in an emergency meeting• The Fed has now taken rates to near zero.Going to cash and sitting on the sidelines means you miss some of the best up-days, which are needed to offset the down-days. Consider these history-making days and you I think you will appreciate why staying invested is usually the best course. This covers trading days from February 24th through March 18th:• Those trading days saw 7 of the 9 largest one-day-point-losses for the Dow in history• Those days also saw the two best-one- day-point-gains for the Dow in historyIs opportunity knocking? :If you are retired or some other life event has forced you to live off of your savings, naturally, you are nervous, the headlines and histrionics of media commentators are enough to scare the bravest of souls. They can quickly take away confidence.But consider heeding the words of the legendary investment manager John Templeton, who famously counseled, “Buy when there is blood in the streets.”I want to share some important numbers from One of our strategic resources, ARGUS Research. They have adjusted their outlook and expect approximately 10% annual decline in continuing operations earnings for 2020, bringing the earnings per shar on the S&P 500 to approximately $146. On that basis, they lowered their 2021 forecast to $162, from a prior $180. On the lower EPS numbers -- and in the wake of Monday's sharp stock sell-off – their market valuation model is indicating stocks are about 16% below fair value. Certainly, an argument for buying. So, where will the market be at the end of 2020? We think it is highly probable to be in a range of 2800-3300. Global GDP growth rates are also expected to be revised downward by economists. The International Monetary Fund initially set its forecast for global growth in 2020 at 3.2%, up from 2.9% last year. We estimate that the cutbacks in China alone — where growth had been forecast at 6% for the year, but may come in closer to 2% — could reduce that 3.2% rate down toward 2.5%. Adding the fact that Japan’s economy contracted 6% in the latest quarter and that Germany has been flirting with recession for the past year, 2020 is likely to be the slowest year for growth since the financial crisis years of 2007-2009. Central banks around the globe are moving quickly to provide aggressive measures - fiscal stimulus programs are definitely part of their conversations. We note that budget deficits are already high, as a percentage of GDP, for the U.S. so our central bank is dealing with an already difficult scenario – COVID-19 has added yet another layer of complexity. TechnicalsThe S&P 500 plunged 12% on March 16, its worst one-day decline since the crash of October 19, 1987. From its all-time high on February 19, the index, as of that date, has plunged 29.5% in just 18 days, also the worst decline since 1987. The index closed at 2,386 and is rapidly approaching key chart support near 2,350 from the lows in December 2018. Interestingly, that area also represents a key retracement of 38.2% of the entire bull market since 2009. We view this as a very important area and will closely watch how well the market manages to hold this level. Maybe we hit a panic low on 3/16, but we really don’t know yet. Let’s agree, the market has a long way to go to dig itself out of this mess. Also making a case for the bottoming process, we are back below the 200-week moving average, as well as what we consider to be the bull market trendline. Both of these longer-term supports are near 2,650. The risk/reward seems very favorable based on market sentiment and market breadth. Moreover, bear markets never end on good news and market bottoms tend to occur before the economy turns positive. Other indicators of a returning bull are stocks trading at a discount, unusually high dividends, and heavy trading volume. All of these elements are in place. The 14-week Relative Strength Index (RSI) is extremely oversold, in fact, this is the most oversold the “500” has been since October 2008.In our opinion, we have seen the worst of this capitulation and now it is only a matter of time before stocks begin to move higher. The key is a sound investment policy that allows a cushion – money market funds, dividend paying stocks, selling covered calls, and other safe and low-volatility repositories that allow you to avoid selling stocks at low levels. If you are a client of OmniStar, you can better appreciate our focus on value stocks with good dividends and reasonable P/E ratios. Such holdings are less aggressive and have a history of lower volatility. Your investment team is working diligently to rebalance portfolios that have been thrown askew over the recent volatility. Your portfolios are being brought back to their intended balance of equities and fixed income. This is a necessary step in staying the course during volatile markets, and an opportunity to score equities trading lower.Keeping the Big Picture in PerspectiveNo one likes to see markets continuing to set one-day point-drop records. And while the media continues to scream that the sky is falling, let’s think for a moment- it’s not.Remember through the first few months of 2020, we see:• Low and declining energy costs • Low interest rates• Low inflation• Easy monetary policy and more aggressive measures being implemented• Low unemployment (50-year low)• Stable housing market• Banks in solid financial condition with strong balance sheetsGiven the pre-coronavirus strength in our economy, now is not a time to abandon long-term investment plans. We maintain that shifts in the economy can, and often do, present buying opportunities. The world is witnessing widespread shutdowns and quarantines, measures that have never been seen outside of wartime. These conditions will reduce economic growth and increase the odds of a recession. In fact, we surmise a recession is already in play. However, the aforementioned points suggest we will see a much quicker return to normalcy as compared to other recessionary times. At this point, we are planning for a sharp economic slowdown, but we are confident it will be short-lived.Bottom Line: The sky is not falling as winter 2020 comes to a close. But metaphorically, we are not immune to stormy conditions from time to time. These periods serve to remind us why the proper gear is necessary. In this case, the proper gear is a comprehensive wealth management strategy and a team of professionals to help you stay on course. Having a plan provides peace of mind because the planning includes conditions just like those we are experiencing today. Market vicissitudes are not new and they will always be part of investing. In closing, stay calm and avoid emotional impulses that may not be justified. Remember, impetuous decisions based on the medias passion for selling fear is not a strategy. Try to avoid obsessing over things that are unlikely to derail a well-designed strategy. Thanks for joining us and we will see you soon on We are talking money.
This is our second podcast dedicated to COVID-19 (coronavirus) as renewed fears dragged stock prices down last Friday and again on Monday, February 24th. The dow jones industrial average closed down more than 1000 points. The rising coronavirus fears are likely resulting from significant new outbreaks in Italy, South Korea, and Iran. Political rhetoric from Bernie Sanders over the weekend likely added fuel to the sell-off in health insurance stocks – Senator Sanders won the democratic primary in Nevada on Saturday where he described his Medicare for All – calling for the elimination of private insurance.Stocks staged an impressive rebound from initial coronavirus fears, but concerns about the global economy are compounding as the virus spreads to many continents and countries. Companies ranging from Apple to Ralph Lauren to Procter & Gamble have cautioned that upcoming earnings will be impacted by slowed retail sales and supply chain disruptions. These companies are proof that effects of coronavirus are moving beyond the more obvious travel-related industries like airlines and cruise ships. The classic risk-off response several weeks ago was quite modest but we said in our first podcast that “no one has a crystal ball when comes to pandemics or epidemics”. Just like then, we have a world filled with emotion, and emotion is driving much of what we see at the moment. I think it is important to consider two behavioral emotions – first is confirmation bias and the second is known as a herding bias.Confirmation bias is simple, we make decisions based on information that reinforces what we believe. Herding bias is just like it sounds. We tend to follow the herd, regardless of where and why it is moving.Over the last several weeks, the leading question is whether the economic and profit impact of coronavirus will be more than a one-quarter event. What we know so far is emerging market equities, airlines and oil prices have continued to cool since the day Chinese officials confirmed the virus can spread from person to person. Now, the not so obvious companies are beginning to feel the effects of supply chain disruptions and slowing retail sales. Even with this recent bout of selling, stocks remain near record highs. On the other hand, gold, bonds and commodities are suggesting increased fear and a more-sluggish period of economic activity over the next few months.Ultimately, we expect the virus impact to take the path of other major outbreaks, that is, a short-duration impact). Lest we forget, the Fed’s low interest-rate policy and rebounding corporate profits, in our opinion, continue to offer a sound long-term backdrop for stocks. Also, 437 S&P 500 companies having announced fourth-quarter earnings, it is our understanding that 71% of those companies have exceeded the consensus, above the long-term average of 65%. Basically, if the current trajectory holds, the final result versus expectations will be among the strongest of 2019.Giving a little more confirmation to stable economic conditions, the Empire State manufacturing index rose sharply to 12.9 in February, up from 4.8 the prior month, with strong gains for both new orders and shipments -- although the component for future business conditions was essentially unchanged. Housing starts remain strong and new home permits were up a strong 9% in January. Consider rising home permits, higher consumer confidence, reduced unemployment applications and high stock prices, it is unlikely that we are headed for an extended sell-off. However, I should mention that the producers manufacturing index feel to 49.4 in February. Anything below 50 is said to indicate contraction in the economy.This is the first time we have seen this number below 50 in four years. There is no question that coronavirus is starting to impact several industries.On the whole, we expect the economic damage from coronavirus to be moderate and mostly contained. In our opinion this means the economic rebound is not being derailed, rather it is more akin to a delay. From our view, additional disruptions to global economic growth will occur in the next few months, especially as it relates to manufacturing and trade. But, keeping this in perspective, we are talking about a change in global GDP or .2 - .3%. You should also be aware that the most severe damage is occurring in the Chinese economy - according to Reuters, analysts expect the outbreak to cause significant damage to China’s growth in the first quarter and hinder their global trade for months to come.Europe is also feeling significant effects due to their export-oriented economy. Finding a silver lining in all this chaos and distress seems improbable. But consider this, all these economic worries have driven bond yields to near record lows. In fact, 10-year yields have landed at 1.38%. If nothing else, yields at these levels most likely delay any possible shifts to tighter monetary conditions. As we see it, Central banks around the globe remain extremely accommodative despite resilience in the service and consumer sectors.In our first coronavirus podcast we shared a number of things gleaned from other global disease epidemics. You may recall what we found was encouraging - economic growth and markets have historically responded with a V-shaped pattern. Our research showed that initial reactions tend to include a slowing of consumer spending with a rebound that happens almost as rapidly as the downturn. Pent-up demand eventually helps fuel the rebound. History tells us that recoveries are typically led by retail and manufacturing sectors. It is safe to say that reduced flow of people and goods due to travel restrictions and quarantine measures are already affecting demand in the short term and that trend will likely continue for a few months. Similar to the 2002/2003 SARS epidemic, the fear of slower global growth is plausible but we firmly believe this is transitory.Coronavirus is a serious threat with the potential to create catastrophic results. As with any outbreak, gauging the impact will take time. The severity of this outbreak will bring significant consequences but according to the Johns Hopkins research, we are beginning to see what appears to be a slowing of new cases and recoveries are rapidly increasing. That’s not to say we are out of the woods, but the virus is being hit with vigilance from all corners and the results are positive.From our perspective, we remain more optimistic about longer-term growth prospects and most investors and consumers seem to believe that central banks will remain accommodative, helping avoid recession, despite coronavirus-related risks. Of course, there is always the chance that we are overly complacent and confident. At this stage, the sell-off is not overly concerning and, in fact, we will not be surprised to see additional volatility and more corrective selling. Still, we don’t see any near-term catalysts that would cause a recession or end the equity bull market.Bottom line: We still see global growth edging higher this year, given easier financial conditions, a break in global trade tensions, and generally positive economic data. 2020 kicked off with an encouraging start but predicting a virus would be impossible and the markets were priced to perfection. So, why is everyone so edgy and disappointed – corrective selling is a natural part of investing. Nevertheless, emotions get the best of most people and we quickly forget about long-term strategies and focus on every minute. The corona virus outbreak has reached more than 80,000 confirmed cases and some 2,700 deaths. Conversely, total recoveries have risen to nearly 28,000 as of this podcast. Though transitory, outbreaks such as this creates downside risks to our optimistic outlook for continued growth. For the near term, we believe U.S. Treasuries are severely overvalued, thus keeping interest rates lower. For longer-term investors, we feel that opportunities are presented when stock prices decline. Nevertheless, market declines should not be considered a universal endorsement to buy. Rather, it is an opportunity to looks for companies with strong balance sheets, those capable of sustaining during recessionary periods. What does it mean for OmniStar strategies? Basically, when anxiety increases, implied volatility also increases. This provides an opportunity to deploy sidelined assets, adjust strike prices in our option strategies, and monitor our strategic allocations. What it doesn’t mean is knee jerk reactions. Volatility can be our friend, as long as emotional behaviors are kept at bay. One thing we do know from recent trading history: every time the VIX has doubled, since 2012, buy opportunities were created.
You have been thinking, it might be time. You have enjoyed a wonderful career in dentistry, have grown and nurtured an exceptional practice with wonderful patients. You have invested heavily in CE, for your clinical and business skills along with staff development and training. You would like to share what you have learned with a young doctor and begin to consider transitioning your practice, but you still love what you do.You are not sure though. Should you consider an associate so you can work a few days less every week? The associate can work your old schedule, you say. But wait, do you have enough room in your office for two doctors to be treating patients at the same time, you have never done that. You think I can expand and add an operatory, maybe…possibly? Or, expand our hours, with a staggered schedule? What is the staff going to say?! How about another hygiene room too, our patients are waiting way too long to get into hygiene!Whoa, not so fast partner…Can I afford all of this?How much is my practice worth?Should I consider selling my building too, or lease it back to the new dentist?When will I be ready to completely retire?Will my staff be ready to accept a new doctor and all of these changes?I have so many questions I don’t know even know where to begin.Do any of these thoughts, questions or ideas sound familiar? If they do then you are in the right place. Our Team here at OmniStar Financial are experts in all of these areas and can find the answers you need to feel confident with your decision so you can take action. In this podcast, we will review some of these topics to get you thinking and planning for your future.We like to say…> “If you are starting to think about a practice transition, then you are already three years behind. Today’s not to early to start planning!”> OmniStar Financial GroupI am nearly 35 years into my career and am now receiving more calls and having more conversations with my classmates who are beginning to think about or have already begun the process of transitioning their practice. I thought this podcast would be a great asset to have so I can share some talking points and get everyone thinking about what their transition might look like or could involve.To begin with, there are as many ways to transition a practice as there are dentists and practices to transition. There is no one way, no “cookie-cutter” way, no best or ideal way to accomplish such a monumental task. There is, however, one way that works best for you and your practice. Our challenge is to find that path with you.Our process here at OmniStar is very personal, methodical and hands-on for every dentist. We first start by identifying the wishes, goals, and desires of the dentist we are consulting with. These are all very different and unique for each doctor and their practice. Some may want to sell their practice and turn over their keys immediately, others may think of slowing down gradually over the next 3- 5 years with an associate taking a greater and greater role in the practice.We spend time educating the doctor about the process, steps and timing of key events necessary to prepare a practice for a successful transition. It can be a daunting and stressful time for the dentist as the practice he or she grew and nurtured for decades now comes under close scrutiny by others, especially the potential buyer's adviser(s) who will undertake a detailed examination of all financial aspects of the practice. We believe providing facts and filling in all the details and steps necessary can take away a lot of the worry and anxiety.Preparing the doctor and practice is critical here. This begins by examining the accounting systems, services, and reports that are being generated on a monthly basis. Many practices which have been operating successfully for decades can become complacent with record-keeping along with their bookkeeping. When these systems and records are closely examined by independent consultants they can be found inadequate, falling short of industry best practices. Deficiencies, inadequacies along with inconsistencies are never a good thing for a potential buyer’s advisors to find.In many closely held dental practices, quasi-business expenses sneak into the practice financials over time. A quasi-business expense would be something that benefits the doctor and other family members that are employees too. These additions or omissions can distort the financial picture of the practice and are sure to be pointed out and questioned by the purchaser’s consultants. Things like expensive CE, automobiles, rent payments (charging too much, or not enough), retirement plan contributions to name just a few are some of the more common areas we see.Other areas in practices that get overlooked, or undermanaged, include the Accounts Receivables as well as the depreciation schedule and assets. We observe that accounts receivable can accumulate in a practice with the good intention of eventually collecting the monies owed. Excessive and very old receivables adversely distort the financial health of the practice. Exceeding old accounts should be examined and a determination made as to the likely collectability of the monies owed. Non-productive accounts should be written off, or turned over to a collection agency. This write-off should be documented in the patient's ledger and used in future financial decision making should the patient ever return for treatment.> “There is no better predictor of future patient behavior as past behavior.”> Dr. David DarabDepreciation schedules and old “mothballed" equipment can also accumulate over years and years. This distorts the Balance Sheet, especially the Asset section, and ultimately the calculations used to determine practice value. Almost as exciting as watching paint dry, perusing and updating the depreciation schedule should be undertaken to “clean up” your financials. Equipment that is no longer in service, or has already been disposed of should be removed from the schedule and the asset adjustment made.Quasi-business items like automobiles, photography equipment and artwork that are used exclusively by or for the benefit of the doctor owner should also be identified and accounted for.Remember, your associate or purchaser is buying a business, your business. You and your advisors should do everything possible to present an accurate picture of your financials, assets as well as cash flows. Regardless of what you think, have heard, or read in throw away journals, your cash flow is King, and represents a critical asset in practice valuation.Practices with well established and written business systems and protocols along with consistent and strong cash flows and profitability have greater value to a purchaser and bring premium sales price compared to one where systems, cash, and profits are lacking.Other assets that need evaluation and possible updating include the practice equipment, technology, software, and web presence.Consider the following questions…how would you answer them?Is the practice completely digital?What kinds of imaging systems are used?Is there a digital workflow?What about the Practice Management Software? Is it current?Are the billing systems efficient?Is it a Fee for service practice? Is the fee schedule used by the practice current?Has the fee schedule been analyzed and benchmarked?What is the insurance profile or mix?Does the practice have a website that is current?Is it SEO Optimized? Does it rank at the top of a web search? Does it have over 60 5-Star patient reviews?Yes, lots of questions, and at times more questions than we have answers, at least initially.How about a few more questions…What does your workweek look like? What days and hours do you work?Have you been slowing your schedule down a bit? Or Driving Strong until the end?Are you accepting new patients? Do you see children?What is the demographic profile of your patient population? Do you have a wide range of ages? Or has your practice matured with you and now it mostly mature adults?What is your wait time for a new patient visit?Is it possible you have become highly selective with your new patients because you are so busy and can?Well, if you are considering an associate you will soon have several more “mouths to feed”, literally; an associate dentist along with his assistant(s) and hygienist. These additional employees will place immediate strain on your cash flow and profitability, do you have sufficient new patients entering your practice to maintain this new higher cash flow?Maybe you need to change some of your processes and systems in order to attract more new patients.Developing some basic social media marketing on Facebook, Instagram and Twitter might be in order to help jump-start and leverage the energy around a new associate.Maybe you haven’t thought about all these details before and that’s ok! That’s why we are here, to illuminate these potential blind spots for you!We take a “deep dive” into all of these areas looking for deficiencies and make recommendations to bring them up to current standards of accounting and reporting as well as best practices. Although we are not accountants or CPA’s, OmniStar has excellent Accounting Firms in its stable of Consultants and Strategic Partners. This also includes attorneys, bankers, practice appraisers, web designer and any other specialist needed in the process of Practice Preparation, Valuation and Transition.Once the doctor's succession plan is sketched out the question next turns to the practice building and real estate. Should one sell the practice and building at the same time, or continue leasing the building to the new dentist. These are great questions requiring a detailed and systematic approach to Wealth Management. Our Team at OmniStar uses a multistep process beginning with an evaluation of the dentist’s assets including Investments, Real Estate, and Practice. This is followed by a detailed analysis of cash flow, insurance, Asset allocation, savings plan, tax strategies, pension plans, and risk tolerance. Following this evaluation and analysis, actionable strategies are detailed and then implemented. Monitoring and optimization of the strategies follow as results are tracked and progress towards one's goals are achieved.As this analysis is completed new goals are identified and the process repeats itself in a constant cycle. With each iteration of this cycle, practice efficiency is improved, results are obtained and new goals identified which allow for continuous improvement.In almost every practice we consult with, blindspots are encountered and processes identified that can be improved through face-to-face team training and coaching which OmniStar provides to the doctor and staff. Remember it is never too soon to start “getting your house in order” when considering a practice transition. It is much better to be prepared early, than risk not being prepared when an unexpected opportunity knocks at your door. You want to be prepared to accurately answer the multitude of questions that will be forthcoming from both the acquiring or associate dentist as well as their advisor. (s)This brings up a very important point to remember; you do not always have precise control of the timing of your transition. Opportunities may appear earlier or later than planned or anticipated. Remembering this and being flexible can still enable the transition and transaction to work for the benefit of all parties. OmniStar can use its financial modeling to examine multiple “what if” scenarios to help you decide what path to follow.And finally…With all sales, especially that of practice, the Tax Man Cometh. Structuring the transaction so the tax consequences are minimized for both the buyer and seller is paramount for all!Remember too, throughout this process...> “It’s not the deal, but the people in the deal that makes a difference.”> Dr. David DarabWe are approaching the end of this Podcast now, hopefully, I have been able to shine some light on a few blindspots in your practice and outline an action plan to get you and your practice in top shape and ready for any opportunity that presents.From my perspective your practice is supported by 3 Foundational Systems that must always be monitored, analyzed and optimized to maintain a successful and growing practice:1. Finance- all things relating to and dealing with money; financial statements, accounting, banking, fee schedules, financial policy for patients along with insurance plans and networks.2. Property, Building, and Equipment- all physical assets you can put your hands on; building, location, dental equipment and supplies, computer workstations and servers, technology and imaging systems.3. Business, Software, and Human Capital- all things personnel and patients interact with; practice management software, EMR, insurance billing and collections, web site and patient portal, online reviews, practice systems, policies and Standard Operating Procedures.Keeping all three of these areas optimized is necessary to achieve operational efficiency and the highest level of profitability. Remember, If you need help here, or in any other way with your practice please reach-out to us here at OmniStar.There you have it! I hope that this information has created a few “Ah-Ha” moments, or stimulated some additional questions you can direct to your advisers. Hopefully, you now have a better understanding of the many puzzle pieces that must come together for a successful practice transition. We welcome your questions here at OmniStar Financial. Our Team is highly experienced and will help find answers to your questions. We welcome the chance to help you optimize and grow your practice and your profitability. Our contact information can be found on our website [OmniStarfinancial.com](http://omnistarfinancial.com). You will also find a link there to sign up for our newsletter.Be sure to check our show notes too.Please share this podcast if you found it helpful, and leave a review on iTunes too. We welcome your feedback and suggestions for future podcast episodes. You can always find me, your host, David Darab, at my twitter handle, @ddarab.Thank you so very much for tuning in and listening. We are very grateful for your time and attention and so very pleased to have you in our audience.
A recap of 2019 and outlook for 2020 - Where we've been, where we are, and where we may be headed.
“Fake News” for Dentists: Section 179With the year-end approaching we will soon be turning our attention to holiday celebrations and festivities; Thanksgiving, Christmas, New Years and Section 179 Deductions!If you are a small business owner, especially a dentist, you will be visited by equipment sales professionals, especially at year-end, who tout the incredible tax savings one can accrue by using Section 179. With those two words, “tax deduction”, dentists become easy prey for the dental equipment sales rep, and many times make large capital purchases for their tax benefits alone.In this podcast, we are going to spend some time learning more about Section 179, and illuminate several Blindspots the sales rep is sure to leave out.Section 179 is a part of the Internal Revenue Tax Code which allows small businesses to take an accelerated tax write-off in the year of purchase for equipment which would otherwise be depreciated, or expensed over time. Most of the equipment in a dental practice qualifies, and under the right conditions, it can be a great tool to reduce your tax liability while improving and upgrading the technology in your practice. There are many pundits out there preaching the benefits of Section 179 as an incentive for Doctors to save on their taxes. Admittedly, there is a time and a place where we would agree; however, there are some Section 179 pitfalls practice owners need to be aware of and consider when making that determination.Let’s take some time to go down the “rabbit hole” and learn some rules to be aware of when considering Section 179.Rule 1: Only your Tax Professional knows best.There are so many nuances and details of Section 179 that it is essential for you to consult with your Tax Professional prior to pulling the trigger on this. Projections and planning for your current year as well as future years is critical. Many times it is in the future years where the potential problems with Section 179 become apparent. Only your Accountant knows for sure if electing the Section 179 Deduction is beneficial to you.Rule 2: Your equipment sales rep is NOT your Tax Professional.In all the excitement of the year-end sales frenzy, your equipment sales rep will most likely illustrate the maximum one-year “tax savings” for you with a quick spreadsheet calculation. I wish this were that easy, but it’s not. As my accountant likes to tell me repeatedly…”It depends, David!”“It depends, David”Maurice, my AccountantBuyer beware here…this calculation is an estimate only and should have the disclaimer, “for illustrative purposes only!”Without a comprehensive understanding of the doctor’s financial situation and tax bracket, an equipment sales rep does not have sufficient information to determine the amount of money a doctor will save. You as the doctor must consult with your tax advisor before making a large purchase.Remember Rule 1: Only your Tax Professional Knows Best!“Knowing the name of something doesn’t mean you understand it.”Richard FeynmanRule 3: Knowing the name of something doesn’t mean you understand it.It seems at year-end everyone is talking about “Section 179 Write-Off”, or “Section 179 Deduction”. At this time of year, this is the most common question our consulting firm is asked, “Can I use the 179 Write Off?”, or “How much more equipment can I buy to save taxes?” So, just because someone espouses this term does not mean they know or understand it! You can hear it called a “write-off”, a “deduction”, an “accelerated expensing”, or even an “accelerated depreciation”. So many terms, but so little time!So which is it? An expense? A deduction? A Write-off? A depreciation?How exactly does Section 179 reduce your taxes?If you don’t know, listen here.To understand how Section 179 reduces your taxes we must appreciate, in basic terms, how your financial statements work and how they are interrelated; the Balance Sheet, the Income Statement or P&L, and the Statement of Cash Flows.First, Capital Equipment purchases are classified as Assets and appear on your Balance Sheet, completely avoiding your Income Statement. The Income Statement shows your Revenue and all the expenses incurred to generate that revenue, not your assets.Capital Equipment is Expensed in the Income Statement through the process of Depreciation. Depreciation is a complex accounting topic best delegated to your Accountant. As the business owner, you should understand that the Depreciation expense accounts for the loss in economic value, over time, of an asset. This loss is the result of wear and tear, consumption, the effects of time, as well as obsolescence. This Depreciation expense is a NON-Cash expense, as no cash is exchanged here, i.e. no check is written. Think of it as an accounting entry or “adjustment”. Be aware there are several methods Accountants can use to depreciate assets. As a result, it is acceptable to calculate depreciation for taxes differently from how depreciation is recorded for accounting purposes.So, say you purchased that new Cone Beam Scanner for $100,000 and your accountant recommended a 5-year depreciation schedule to match your 5-year bank loan. Assuming the equipment will be fully depreciated to a book value of zero, your depreciation would be $20,000 per year.This $20,000 shows up on your Income Statement as a Depreciation Expense, thus reducing your Net Income by $20,000.Remember, your Net Income is linked to your Balance Sheet through the Retained Earnings section. This $20,000 depreciation expense effectively lowers your Retained Earnings by the same $20,000. Since most dental Corporations are Pass-Through Entities and not subject to taxation, your $100,000 Cone Beam Scanner, depreciated at $20,000 per year has effectively reduced your Taxable Income by $20,000 and at a 35% tax rate saves you $7000 in taxes each year.So what does Section 179 do? It allows you to take an accelerated depreciation and fully deduct the entire expense of the equipment in the year of purchase. Please note there are restrictions and limitations to all tax codes, consult your Tax Professional for all those details.In our Cone Beam example, depreciating the entire $100,000 purchase reduces your Net Income and effectively your Taxable Income by $100,000, saving up to $35,000 in taxes.Remember, and the key point here, your mileage may vary, as may your tax savings. Only your accountant knows for sure if Section 179 is beneficial to you. Remember Rule 1: Only your Tax Professional Knows Best.To further complicate Section 179 there is also something called Bonus Depreciation; kinda like a “cousin” to Section 179. Bonus Depreciation also allows for a 100% depreciation of qualified assets. Simply stated, Section 179 provides greater flexibility than just bonus depreciation alone. With Bonus Depreciation, you can create a tax loss, but with Section 179, you can only bring the taxable income down to $0. As you can quickly appreciate, the entire discussion of depreciation, Section 179 and Bonus Depreciation, along with the many other depreciation methods can get very technical and complex, well beyond my expertise. Certainly, well beyond the expertise of a Dental Equipment Sales Professional. While it is important for you to understand depreciation and how it affects your financial statements, I recommend that you save yourself some time and leave depreciation calculations to the accounting experts.“Depreciation Selections, Schedules and Calculations are NOT for do-it-yourselfer’s!”Dr. David DarabAt this juncture, I can’t resist reviewing for you, the effect a Capital Expenditure has on your financial statements…Let’s take a look!When you purchase a $100,000 ConeBeam machine with the financing you add $100,000 to your Cash Asset on your Balance sheet and create a $100,000 Loan Liability. Remember, your Balance Sheet must Balance; Assets must equal Liabilities plus Owner’s EquityWhen purchased, the $100,000 cash from the loan is converted into a $100,000 equipment asset on the balance sheet.Your monthly loan payment of about $1800 (4.5% over 5 years) breaks down into principal payment of approximately $1700 and an interest payment of about $100. The principle payment appears on your Statement of Cash Flow while your interest payment appears on your Income or Profit and Loss Statement as an Interest expense. We already mentioned the depreciation expense will appear on the Income Statement too.There you have it. If you need a refresher on the key financial statements please go back and listen to my podcast series on each one! It will get you up to speed on how to talk finance, the language of business. After listening to my series, rest assured, you will know more about business and financial statements than 98% of your colleagues, guaranteed!Rule 4: You should never be in a hurry to buy equipment!Section 179 is available to you year-round, not just in the closing days of the year. It is not a time-limited offer valid in December only!There is no special Tax Magic for Section 179 at year-end. Ideally, you should be carefully planning your major capital expenditures throughout the year, not rushing at the last closing moments of the year to get the equipment installed. The rush and panic are created because, in order to qualify for the Section 179 Deduction, the equipment must be purchased and put into service by December 31!So, please feel free to purchase your needed equipment throughout the year, not just in December, and still take advantage of Section 179 Depreciation while enjoying using your new technology.Rule 5: You get the maximum deduction with or without Section 179.It is important to realize that all Capital Equipment will be fully depreciated per the depreciation schedule chosen by your accountant. Section 179 does not allow for any additional depreciation. Section 179 just takes all the depreciation in one year, no more, no less. No special magic or secret sauce.Listen on for potential traps and blindspots though, it is never as simple as the salesperson makes it out to be.Rule 6: You Still Have to Pay for the Equipment!Write off, deduction, expensing all sound wonderful, but none of these verbs reduce the cost of your equipment. You must still pay for it.After all the high fives and celebrating over your massive Section 179 year-end deduction that just saved you lots of money on your taxes, you are left with the reality of paying on your banknote for the next 5 years or so.In future years, you have now completely lost the depreciation expense and deduction on your income statement, since you took all of your depreciation in the year of purchase by electing Section 179. Many call this the Section 179 “tax trap” that “catches” you in future years. You are now left with the reality of higher net income, higher personal taxes along with loan repayments for your equipment purchase. This potential “double whammy” repeats during the period of your loan repayments.This is a huge blind spot and potential pitfall when Section 179 is elected.Follow me here…You load up on equipment, pay with debt and expense it all through Section 179. You are happy to owe so little in taxes, the equipment rep is happy, and your CPA looks like a genius.But…, and there is always a “but”…In future years you now have less cash because you are now paying on your debt service, and without any deductions, remember you elected Section179, you now have a higher taxable income and the corresponding tax bill that further reduces your cash!Rule 7: If you fail to plan, you plan to fail.With all the year-end excitement and frenzy is sounds like a great idea to be able to write everything off, but doing so may not result in all the tax savings claimed. In deciding whether to elect Section 179 or Bonus Depreciation, doctors need to think about what future earnings are expected. One might want to save some deductions to offset future income when earnings and taxes could be higher.As with any tax decision, you cannot look at the current year with blinders on. Before making a decision to take the Section179 deduction, it’s important that you and your accountant discuss not only this year’s tax implications but also the impact it will have on future years as well. Ask your accountant if the refund I get this year is at the expense of next year. Don’t fall for the Section 179 Tax Trap! You have just been warned.Rule 8: Never buy a tax deductionYour goal to pay as much tax as you can! Yes, let me repeat that paying taxes is ok, in fact paying more taxes is even better. Paying more taxes means you must have more income as well. We here at OmniStar believe that maximizing and growing your income is the key to growing your wealth and becoming financially independent. Minimizing taxes is not a strategy that will grow your wealth or help you become financially independent.Spending your cash to buy a tax deduction never creates wealth. Your deduction reduces your taxable income by the amount of your expense. This is identical to buying something on sale. If your marginal tax rate is 35%, then you get everything the practice buys at 35% off. The kicker is, any many forget, you still have to pay for the 65%. Said another way, would you spend $1000 to save $350? Understand that simple question along with the answer and you are well on your way to creating wealth.So, time to sum things up here.We have learned that Section 179 has no special powers or magic, it simply allows you to fully depreciate your capital equipment in the year of purchase. As with all Internal Revenue Tax Code, there are rules, limitations, and restrictions that apply. Listeners are urged to consult a qualified Tax Professional for guidance here. Your sales rep is not equipped to provide you such guidance. Planning for future years is critical so the timing of your depreciation expense aligns with your future income growth. Such planning can help you avoid the Section 179 tax trap where Fantom Income, and its associated tax bill, is created when your depreciation expense was used up in the prior year by electing Section 179. This is a double whammy with higher taxes along with debt service on your equipment loans, creating negative cash flow.Also, avoid the year-end rush and frenzy, budget and buy your capital equipment and start using it anytime during the year; Section 179 is available to you year-round.Remember, Section 179 only accelerates depreciation, it does not allow any additional write-offs, deductions or depreciation.And finally, never buy a tax deduction. If you need the equipment to better your patient care, then, by all means, purchase it, but buying it solely for its tax deduction is a wealth destroying strategy.We hope that this information has created a few “Ah-Ha” moments, or stimulated some additional questions you can direct to your advisers. Hopefully, you now have a better understanding of what Section 179 is, and more importantly, what it is not!We welcome your questions here at OmniStar Financial. Our Team is experienced and will help find answers to your questions regarding Capital Equipment Budgeting. We welcome the chance to help you grow your practice and improve your profitability. Our contact information can be found on our website [OmniStarfinancial.com]. You will also find a link there to sign up for our newsletter.Be sure to check our show notes too.Please share this podcast if you found it helpful, and leave a review on iTunes too. We welcome your feedback and suggestions for future podcast episodes. You can always find me, your host, David Darab, at my twitter handle, @ddarab.Thank you so very much for tuning in and listening. We are very grateful for your time and attention and so very pleased to have you in our audience.And now for the required Legal Disclaimer:David Darab, DDS, MS, MBA REFERENCES:Section 179 Information for Businesses | Section179.Orghttps://www.section179.org 2019 Section 179 Tax Deduction Calculator | Section179.Orghttps://www.section179.org/section_179_calculator/
PODCAST EPISODE (EP10) Analyzing Your Financial Statements Welcome, you’re here at The Beacon, so glad you found us! Prepare to have your Blind Spots Illuminated! Over the last 3 episodes we studied and examined the key financial statements you should be receiving monthly; 1. the balance sheet 2. the income statement or P&L 3. and the Statement of Cash Flows Now, what the heck are you supposed to do with all that information! In this episode we will examine some basic financial statement analysis. Much of this analysis involves calculating ratios from the data contained in the financial reports. As I promised at the very beginning, the math here is very simple…Division, nothing more complex than that! The listener may find it easier to follow this analysis and ratios by printing out the show notes and using them as a reference. Ratios offer points of comparison , which can reveal more than the raw numbers alone. Ratios can help you determine if the numbers are favorable or unfavorable. Ratios themselves can be compared: 1. Over time 2. With projections, and 3. With Industry averages and benchmarks The Questions we are looking to answer are: 1. Can the business pay all of its bills? 2. Did the business make any money? and how much? 3. Can financial performance be improved? Remember our financial analysis provides a good picture of current financial health along with past performance. These numbers are more historical in nature rather than predictive. Although financials can help with planing and tactics, future performance of your practice depends on other critical factors beyond finance including: 1. The ability of Management to react to local economic conditions, market competition and changes. 2. The Experience and Capabilities of the doctors in the practice. 3. The practice’s current financial position. Recall the limitations of financial reports too; 1. Many of the dollar values are estimates at best. 2. The Balance Sheet does not show actual Net Worth. 3. Assets are valued at their Historical cost. Book values contained in these reports represent Original cost less accumulated depreciation. 4. Depreciation expense shown on the Income Statement is only an estimate of the amount of asset used, not the Value of the Asset. To begin our study, we will break down the Financial Ratios into 4 broad categories which can be used to analyze a companies performance; 1. profitability 2. leverage 3. liquidity 4. efficiency PROFITABILITY: a measure of a companies ability to generate sales and control expenses. This answers the question, Did the Practice make Money, and how much? GROSS PROFIT MARGIN PERCENTAGE: GROSS MARGIN = GROSS PROFIT / REVENUE (from the P&L) Recall, Gross Profit = Revenue - COGS or COS Gross Margin Shows the basic profitability of the product or service before expenses are considered. Or, how much the company must pay out in Direct Costs to make the product, or deliver the service. Trends are important here because they can indicate potential problems. Gross Profit trending down could mean that Market pressures and Competition are reducing Pricing Power, or the cost of material and labor are rising. Gross Margin can be an early indicator of favorable or unfavorable trends in the marketplace. OPERATING PROFIT MARGIN PERCENTAGE: OPERATING MARGIN = OPERATING PROFIT (EBIT) / REVENUE (P&L) Recall, Operating Profit = Gross Profit - Operating Expenses Operating Margin indicates how well a company is running its business from an operational standpoint. Or how well the managers are doing their job controlling expenses. Trends are important here too! Downward trend is a warning that COSTS and EXPENSES are rising faster than SALES. NET PROFIT MARGIN PERCENTAGE - the proverbial BOTTOM LINE (P&L) NET MARGIN = NET PROFIT / REVENUE Tells a company how much out of every sales dollar it gets to keep after EVERYTHING else has been paid for - payroll, vendors, lenders, and taxes. RETURN ON ASSETS: Tells you what percentage of every dollar invested in the business is returned to you as profit. ROA = NET PROFIT / TOTAL ASSETS (balance sheet) Remember, these ratios are more powerful when they are tracked over time to establish trend lines. LEVERAGE RATIOS: DEBT VS EQUITY FINANCING Let’s us quantify how a business is financed, or how a business uses debt. The Financial Analyst’s word for debt is LEVERAGE. One can compare this to a Mortgage. A mortgage allows you to purchase and live in a bigger home than you might otherwise be able to afford with your Cash savings alone. Also, the Interest payments on your mortgage debt is deductible from your taxable income making your home even more affordable. When you first take out a Mortgage, and say put down 20%, you are Highly Leveraged! You have more debt than equity. A business is similar in that it can invest in profit generating assets without drawing down its cash reserves and simultaneously deduct the interest payments on this debt from its taxable income. That’s a double win! You should note that BANKERS LOVE to look at your leverage when you apply for a loan, either business or personal. DEBT-to-EQUITY RATIO: DEBT-to-EQUITY RATIO = TOTAL LIABILITIES / SHAREHOLDER’s EQUITY Or, How much debt the company has for every dollar of shareholders equity. INTEREST COVERAGE: INTEREST COVERAGE = OPERATING PROFIT / ANNUAL INTEREST CHARGES Which is a measure of the company’s “interest exposure”, or how much interest it is paying relative to how much it’s making. Shows how easy it will be for a company to pay its interest. A high ratio means the company can take on more debt. LIQUIDITY RATIOS: Can we pay our bills? Can the company meet all its financial obligations, not just debt, but payroll, bank loans, payment to vendors, taxes, etc. Tracking this is critical for small businesses as they are the ones most in danger of running out of cash! This is an easy Ratio to Calculate and Track, it’s called the CURRENT RATIO CURRENT RATIO: measures Current Assets against Current Liabilities CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES We are looking for a Ratio greater than one (1), but a Current Ratio too high means the business is sitting on its CASH rather than investing it or distributing it to shareholders. Finally are the … EFFICIENCY RATIOS: Managing the Balance Sheet Here we will Learn to Manage your Assets and Liabilities; consisting of: Inventory Receivables Payables Property, Plant and Equipment INVENTORY We have 2 metrics here, INVENTORY DAYS and INVENTORY TURNS, both measure how efficiently a company uses its inventory, both are difficult to calculate in a dental office that uses a Modified Cash Basis of Accounting. The concepts are still very important. INVENTORY DAYS - Measures the number of days inventory stays in the system or on the shelfs. While, INVENTORY TURNS- Tells us how many times inventory is turned over and replaced in a year. Or the number of times inventory sold out , or could have sold out, and had to be reordered in a year. The take home point here is… THE LOWER THE INVENTORY DAYS and the HIGHER THE INVENTORY TURNS the BETTER YOUR CASH POSITION. again… Translated, we don’t want Inventory just sitting on shelves. We want it quickly being transformed into product and services and ultimately REVENUE! DENTISTS should take note here! Less inventory, not more is key. This flies in the face of quantity discounts that your vendors offer which works in the opposite direction; INCREASING INVENTORY DAYS and REDUCING INVENTORY TURNS, effectively REDUCING YOUR CASH POSITION! I like to remind dentists that they should image dollar bills, rather than supplies, sitting on their stockroom shelves. A practice should keep just enough inventory on hand for the treatment scheduled. Yes, that is easier said than done, but at least resist, just a little bit, the temptation to buy supplies in large quantities thinking you are saving a lot of money. Instead, you are spending your cash that could be sitting in your bank account, not on the shelfs of your office! This practice becomes even more costly if supplies expire or become outdated. Make sure your vendors will work with you to exchange outdated or soon to expire supplies. That discussion is best had prior to placing an order. RECEIVABLES DAYS SALES OUTSTANDING How fast customers pay their bills. DSO = (ENDING A/R) / (REVENUE/DAY) This metric can be, and should be calculated and tracked monthly! It is very important to monitor how efficiently your office systems can collect outstanding balances. Improving DAYS SALES OUTSTANDING is a FAST TRACT to IMPROVING YOUR CASH POSITION with NO CHANGE IN REVENUE OR COSTS. Again, Dentist’s should take note here and monitor and manage this metric very closely. PAYABLES How long it takes you to pay your invoices or bills. DAYS PAYABLE OUTSTANDING is the cousin to Days Sales Outstanding Days payable outstanding = Ending Accountants Payable / (COGS/day) This is not a metric we will calculate, and track, but important to understand that paying your bills promptly will help to maintain excellent credit. Here, the higher your Days Payable Outstanding the longer you get to keep your money and the better your cash position, but the less happy your vendors are likely to be. This again flies in the face of what many advisors recommend at year end, which is prepaying several months of expenses; ie, credit cards and rent. Accelerating these PAYMENTS REDUCES your CASH POSITION. this is worth repeating again….. If you are prepaying, or paying your invoices early, by all means ask for a prepayment discount from your vendor. PROPERTY, PLANT and EQUIPMENT TURNOVER PPE Turnover = revenue / PPE (balance Sheet) How many dollars of Revenue does each dollar of PPE (hard assets) generate. What is important here is the concept. One wants an increasing PPE Turnover. Translated, that means one wants higher revenue generated for the Hard Assets of the Practice. With this metric in mind consider your practice. Can you answer these questions favorably? * Will that new or bigger office enable you to generate more revenue? * Will that in office milling machine, or intra oral scanner generate greater revenue? greater efficiency? greater productivity? * Will that Cone Beam CT scanner generate more revenue? These are questions a financially knowledgable business owner would have the answers too, or at least consider prior to making a significant capital investment! Consider this the next time you are preparing to make a capital purchase. Please note, Tax Savings are not considered here! One can also calculate TOTAL ASSET TURNOVER Total Asset Turnover = Revenue / Total Assets Here again we want a high Total Asset Turnover Ratio. We can achieve this through a combination of the following: * efficiently using fixed assets * reducing inventory (inventory days and inventory turns) * reducing receivables (DSO) * increasing sales (through volume or pricing) That list is critical and worth repeating. The astute financial manager would concentrate efforts on using fixed assets efficiently, reducing inventory and reducing receivables as well as increasing sales. WHAT RATIOS ARE MOST IMPORTANT TO YOU! Built into your income statement are ratios for each line item by percent of revenue as well as dollars. These percent of revenue are easier to track over time to establish trend lines. This internal standard is the best way to monitor your progress and management of expenses. Making sense of your expenses begins with accurate accounting which requires an organized chart of accounts. This does not always exist, as many dental offices just use the standard chart of accounts that comes with quickbooks. One of the very first tasks we at OmniStar do when consulting with an office is to better organize and categorize the chart of accounts so financial reports will be easier to understand , more meaningful and more insightful to you, the user. One final Ratio to Consider is Return on Assets, which can be broken down into two ratios we have already examined: * Net Profit Margin and Asset Turnover. (Net Income/Revenue) X (Revenue/Assets) = Net Income/ Assets = ROA Simply stated ROA equals Net Profit Margin X Asset Turnover! This is Key Point because it contains the secret formula to driving greater Return on Assets, a Pivotal Business Metric. One can increase your ROA with 2 tactics: Increase Net Profit Margin by: Raising fees or Delivering services more efficiently, and/or Increasing asset turnover by: reducing average inventory (inventory days and inventory turns) reducing receivables (DSO) reducing the purchase of additional assets Market forces and competition may prevent you from improving Net Profit Margin. Working on your Balance Sheet Levers of Inventory, Receivables, and Assets could be your best move to improving your financial results. SUMMARY In summary we have examined some basic metrics used to analyze your Financial Statements. These metrics are almost all ratios which allow comparisons and benchmarking to other businesses and practices as well as establishing trends within your own practice. Time spent in the Analysis of your financial reports should answers the questions; 1. can we pay our bills 2. are we making money 3. how can we improve performance. One should note that there is NO metric for OVERHEAD, a KPI (Key Performance Indicator) that dentists like to track, compare and brag about with their colleagues. OVERHEAD is an imprecise term, whose definition changes depending on who is doing the analysis. Questions like, are doctors salaries included? what about doctor perks? CE? Automobiles? Retirement Plan Contributions for Staff? and Doctors? This is a perfect example of how financial metrics can be distorted. Eliminating many of these may give the false impression that your overhead is low, which may not, in fact be true. Operating Margin may be the best estimate of overhead, as it includes Indirect Costs as well as General, Office and Administrative Expenses. Also note that TAXES are not emphasized in this analysis. Taxes are not a key lever for improved business performance. Most dental practices are pass through entities, whereby the partners or owners pay all the taxes, not the business. Tracking and analyzing this financial data requires some work, time and effort. This is the work a business owner must commit to in order to achieve a successful and growing practice. If you are not interested, or do not have the time or knowledge to monitor these critical financial metrics, then by all means please enlist the help of a consultant or accountant who can and will. Remember, what Warren Buffett said: “The more you learn, the more you earn!” Please do not just ignore these reports, because poor financial and cash management will always become apparent at some point in time. We would call this a BLINDSPOT. The Fact that Financial Reports are not understood by many doesn’t make it any less of a problem for them or their practice. I will share how I review my financial reports next…. Be reassured that after just a few months experience this process can proceed rather quickly. Any large changes noticed may require a deeper dive by me or with the help of our accountant. First, I Check the date on the reports. They are typically a month or two behind due to the time it takes the accountant and book keeper to reconcile our statements. Next, I will check our bank account balance, I know this is current. I then start with the Statement of Cash Flows. What is my Operating Cash flow? Investing Cash flow? and Financing Cash Flow? How does this month and YTD Compare? Does the Ending Cash approximate my Bank Balance? Next I look at the Income Statement I examine Total Income percentages and compare the current month to last year, and the current YTD with the last YTD. I then look at each line item focusing on supply costs, employee wages, and other operating expenses. I note any significant percent changes, up or down, and then try to explain them. If I can’t I will call my accountant for a deeper dive. I expect some fluctuations with time, which are normal and could be due to a large order or a large infrequent expense. I then look at Gross Margin and Operating Margin comparing the current month to last year, and current YTD with last YTD. Finally I hit the Balance Sheet and again compare the current YTD with the last YTD. You can begin to see a pattern here; tracking and comparing current financials with last years financials. With this technique you begin to establish your own internal standards. This is an excellent way to monitor your practice financials and make any necessary adjustments to improve your financial performance. I am especially interested in the Equity Section of the Balance Sheet, as this is where all of our YTD profit accumulates! My partner and I take a modest salary draw monthly, and then as Equity Accumulates we will distribute some of the Profits as a bonus to ourselves throughout the year. I like to keep at least 2 months of payroll in the bank as cash. I sleep much better at night knowing our cash reserves are good. and Finally, we are done for now! Until next month! So that wraps things up for this Podcast. Hopefully you have a better understanding of some basic Financial Statement Analysis and Metrics. You don’t have to know how to build a car in order to drive it, but you do need to know how to operate it, read the dashboard, adjust the knobs and dials, watch for the indicator lights, and keep the car on the road and out of the ditch. The same is true for the Financial Reports of your practice, one of your most valuable, cash generating and wealth creating assets. Don’t ignore what’s it’s telling you! Your practice talks to you in numbers, those numbers are on your financial reports. We hope that this information has created a few “Ah Ha” moments, or stimulated some additional questions you can direct to your advisers or accountants. Hopefully, you feel less intimidated with Financial Reports now so that you can spend time familiarizing yourself with this information. You can always replay our Podcasts for review. Check our show notes for some excellent references. We welcome your inquiry here too at OmniStar Financial. We are experts in Dental Practice Financial Analysis and Insight. Our contact information can be found at our website OmniStarfinancial.com . You will also find a link to sign up for our newsletter. Please share this podcast if you found it helpful, and leave a review on iTunes too. We welcome your feed back and suggestions for future podcast sessions. You can always find me, your host, david darab, at my twitter handle, @ddarab. Thank you so very much for tuning in and listening. We are very grateful for your time and attention and so very pleased to have you in our audience. David Darab, DDS, MS, MBA REFERENCES: Financial Intelligence by Karen Berman and Joe Knight Stark Naked Numbers by Jason Andrew
“If you don’t know your numbers you don’t know your business !!” Marcus Lemonis, from the popular TV series The Profit. Welcome, you’re here at The Beacon, so glad you found us! Prepare to have your Blind Spots Illuminated! Hello and welcome to our series on “Cracking the Code”, or alternatively, “Deciphering Your Practice’s Financial Statements”. We will spend the next 3 Podcasts reviewing, deconstructing and dissecting the 3 financial statements you should be reviewing at least monthly; the balance sheet, the income statement (P&L) and the statement of cash flows. If you are like most doctors, financial statements are that “Stack of Stuff” your accountant sends you every month, but you tend to ignore! You may take a peek at a few areas you understand, Income, revenue, expenses, and of course profit, it all looks ok so not wanting to throw it out you add it to the constantly growing stack of stuff you know is important and will get to one day, but that one day never seems to come!! You secretly may be intimidated by these reports, but are too busy, proud or embarrassed to ask for help understanding them. I believe this is why so many dentists simply delegate this task to their accountant/CPA. That’s a dangerous handoff. You, as the business owner, should have a basic understanding of these reports, expert knowledge is not required. Just enough knowledge so you can speak the language of business and ask questions to your accountant, CPA or financial advisors regarding what’s in these reports. In this manner, you and your team together can improve your business and financial results. No matter where you work in your organization, you’ll do your job better if you understand basic financial concepts. You’ll be a more effective contributor to your company’s efforts to make money and grow the business. You, as the doctor, are in the very best position to understand what resources and assets must be acquired to deliver exceptional care. Ensuring an excellent financial return on those assets just makes good business sense. If you are not receiving an above market return on your business investments then it is a better idea to take that cash out as a salary and invest it differently. I have a promise for you before we start… I PROMISE, I will never mention debits and/or credits, no general ledger or trial balances. Those terms may conjure up fear and dread from your undergrad accounting class! The math is here is easy too; addition, subtraction and if we get fancy we might use division to calculate a ratio. But Why again is this important? “Accounting, accounting, accounting. Know your numbers.” -Tilman J. Fertitta, CEO of Landry’s Inc. and host of The Billion Dollar Buyer. Warren Buffett says, “Accounting is the language of Business.” If you can’t speak the language how do you know how your business is doing? It appears that “knowing your numbers” is a recurring theme! Consider the following questions… Do you know the difference between profit and cash? Do you have enough cash to make payroll? How profitable are the services you provide? I will address all of these. In addition, I’ll help you… Make sense of the three key financial statements. Gauge your company’s financial health. Weigh costs and benefits before committing resources. Understand why the Profit shown on your P&L never equals the cash in your bank account? The Secret Stash is that cash is hiding in your Balance Sheet. You won’t become an expert, but you will have a better understanding of the language and financial reporting framework. Remember, your banker and lending institutions are very interested in these financial reports along with the financial strength of your practice. If they are interested, you should be too! Consider this also important if you are preparing for a practice transition; adding an associate or selling your practice. Strengthening your financial position can result in the best valuation for your practice, and who doesn’t want that!! The fact is that Finance and Accounting, like other business disciplines, are as much of an art as they are a science. There are many estimates and assumptions contained within your financial statements. Accounting and finance are not reality, they are a reflection of reality. One does not always know how precisely to allocate costs, nor does one know exactly how long a piece of equipment will last, hence how rapidly to depreciate it. Is a Cost considered a Capital Expenditure, or an operating expense? This choice has an immediate effect on the bottom line and your profitability. Before we dive in a little background is important You should appreciate how these reports are generated by your accountant. Every financial transaction in your practice, ie; purchase invoice, canceled check and bank statement is analyzed, categorized and entered into your ledger. In most practices, the common point of data entry is your PMS along with Quickbooks. Inside of Quickbooks are numerous categories termed a “Chart of Accounts”. It is from your chart of accounts that your financial reports will be generated. It is critical that your Chart of Accounts are properly organized and categorized! The default mode in Quickbooks is rarely adequate. The old saying..Garbage in Garbage out, holds very true here! In most practices, our very first step is to reorganize and recategorize the Chart of Accounts so we can get the financial data we are looking for. Without this, your financial statements will be utterly useless to you other than for tax purposes. Please call us here at OmniStar if you have questions about this. It is important to recognize your accountant’s perspective and responsibilities when financial statements are prepared. The financial crisis combined with the Enron and WorldCom accounting scandals ushered in a new era of rules to ensure the accuracy of financial reports, these standards are called GAAP, for Generally Accepted Accounting Principles. GAAP was designed to stop billion-dollar corporations from deceiving and defrauding investors and shareholders. Prior to GAAP, “Creative accounting” and “cooking the books” was not uncommon. The fall of Enron, WorldCom resulted from “cooked books” and caused the complete and immediate demise of one of the worlds largest accounting firms, Author Anderson, who was the auditor of these firms. GAAP sets the accounting standards and rules for reporting financial results, very similar to our standard of care in clinical practice. GAAP has 2 benefits; GAAP ensures consistency over time. GAAP enables comparison between practices and firms. GAAP has rules your accountants must follow, some of these rules are: -assets are priced at their historical cost, ie what you paid for it, not what it MAYBE worth today. -Conservatism, accountants will only record a number they know is accurate, accountants do not estimate nor guess at costs nor values. -Consistency. once a company has established an accounting method it must continue with that each year. Publicly traded firms along with larger organizations are required to have their Financial Statements Audited by an independent accountant called an auditor. For our practices, that degree of scrutiny is not required. Our accountants prepare a “Compilation of Financial Statements," the report clearly states the statements were not audited if you read the cover letter carefully. You should also be aware of what accounting system your practice is using to assemble your financial reports. The two different accounting systems are; Accrual and Cash. Accrual Accounting is required by GAAP thus required in publicly traded firms as well as larger firms and practices with more complex economic transactions. The object of accrual-basis accounting is to match revenue and expenses in the period that they are earned and incurred. The cash flow from these transactions occurs at a different time. This system provides more accuracy when reporting the financial position and performance of a firm. In the Cash Basis of Accounting revenues and expenses are recognized only when “cash” is received by or paid out by the practice. Most small to medium practices, like the ones listening here, are well served with a Modified Cash-Basis Accounting system. In this system, the only non-cash economic events recorded on the books is the purchase of equipment and the depreciation expense of that equipment. Patient receivables would not be reported on the financial statements, since they are not cash, but would be recorded internally for collection purposes within your PMS. A Modified Cash-Basis Accounting systems provide the necessary information to comply with the IRS and file taxes. In addition, bankers and lenders will accept these reports for loan applications. Remember we talked about Accounting having estimates and approximations. Some of these biggest distortions can occur on the balance sheet. So let’s dig in. A balance sheet, also called a “statement of financial position”, represents a Scorecard of the financial health of your business at a single point in time. The BALANCE SHEET starts with the FUNDAMENTAL ACCOUNTING EQUATION; ASSETS = LIABILITIES + OWNER’S EQUITY OR WHAT YOU OWN = WHAT YOU OWE + OWNER’S EQUITY Consider the BALANCE SHEET like a sheet of paper divided in the middle. On the left side are Assets and on the right side are Liabilities at the top and Owner’s Equity at the bottom. The summation of the left side (Assets) must equal the summation of the right side (Liabilities + Owner’s Equity). Thus, the Balance Sheet Balances. Lets start with Assets ASSETS are WHAT YOU OWN; cash, receivables, inventory, prepaid expenses, Property, Plant and Equipment, Land, and Goodwill. ASSETS are considered CURRENT or NON-CURRENT - These are listed in decreasing order of liquidity with the most liquid “cash like” assets at the top and the least liquid like land and Goodwill at the bottom. CURRENT ASSETS are those that will be utilized within a year. cash Accounts receivables remember, in a Modified Cash Basis of Accounting Receivables are not cash, so not reported on the Balance Sheet. The PMS will have these amounts and aging. prepaid expenses inventory SIDE NOTE HERE: all of your inventory costs money and is created at the expense of CASH. One quick Pearl is to decrease your inventory to increase your CASH! When you look in your supply area, instead of seeing box and boxes of stuff, imaging dollar bills…it’s the same thing!!! Would you rather have your dollars, or would you prefer to give them to your suppliers? The buy 10 and get one free is a tactic used by suppliers to get you to buy more, which uses your cash. I propose you have much better uses for your cash then it sitting on your shelves! The worlds largest firms use “just in time” inventory control, so should you! NON-CURRENT or LONG TERM ASSETS are those that will NOT be turned into cash within the next year. Property, Plant and Equipment is listed at historical COST, NOT MARKET VALUE Less ACCUMULATE DEPRECIATION This is one section where the Art of Finance appears. For example- Increase the depreciation of an asset from 3 to 6 years results in a 50% smaller charge on the Income Statement, Less Accumulated Depreciation on the Balance Sheet, a higher figure for PPE, and thus more Assets. By the Fundamental Equation of Accounting, more assets translate into more Retained Earnings! ANOTHER ACCOUNTING RULE: * DEPRECIATION IS ALWAYS A NON-CASH EXPENSE! Goodwill Now to the Top Right side of the Balance Sheet, LIABILITIES LIABILITIES are WHAT YOU OWE; accounts payable, accrued expenses, payroll, bank loans, notes and lines of credit. These are also considered CURRENT, or NON-CURRENT CURRENT: those payable within the next year accounts payable - what you owe your vendors. current portion of LT debt accrued expenses- payroll and taxes - your employees don’t send you an invoice, they just expect to be paid, as does Uncle Sam with taxes. deferred revenue NON-CURRENT or LONG TERM Assets are those due in over a year. loans, debt, lines of credit And finally, the bottom right side of the Balance Sheet, OWNER’s EQUITY OWNER’s EQUITY: STOCK- monies contributed by investors or owners. RETAINED EARNINGS or ACCUMULATED EARNINGS are the accumulation of PROFIT or LOSSES left in the business. for our world of dental practices this is where bonuses and dividends accumulate. the practice entity would not retain these profits but rather pass them onto the owners as either salary or dividends depending on the legal structure of the practice thus avoiding double taxation at both the corporate and personal levels. SIDE NOTE HERE: Consider profitability like your “Grade” in a course, you work hard in a class over a time period, a semester, and at the end of the semester you get a grade. Equity is more like your “GPA”, it reflects your cumulative performance, but only at one point in time. So, that’s the Anatomy of a Balance Sheet dissected section by section. How does it work?? Why is it important?? Well as the name implies: THE BALANCE SHEET MUST BALANCE FIRST…..A BALANCE SHEET RULE: AT LEAST 2 THINGS MUST CHANGE ON A BALANCE SHEET…This is called Double Entry Accounting! Let’s try some transactions and see how this works and how easy it is! By doing these exercises you will begin to think and talk the language of business and finance and understand the “double edge” sword to each and every financial transaction! Our goal in any business is to GROW your EQUITY or RETAINED EARNINGS We purchase a new Digital Pano at $30,000 with bank financing. So, we add an asset on the left side of +$30,000, so something must change on the right side, either a liability or Owner’s Equity. In this case, we add +30,000 of liability, the bank loan, and the Balance Sheet Balances. Say we paid $5000 of cash and financed $25,000. The asset still goes up to $30,000, asset cash goes down $5000 and the liability is now only $25,000 Tada…the balance sheet balances yet again. You all Getting it??!! Let’s Buy $4000 supplies with cash. An asset, Supplies goes up by $4000 and another asset, Cash goes down by $4000…the Balance Sheet Balances. No change in Liability or Equity How about Buy $4000 supplies with credit. An asset, supplies, goes up by $4000 and a liability, accounts payable, goes up by $4000…the Balance Sheet Balances. You will learn when we review the Income Statement, or P&L, that your profitability or “Bottom Line” is connected to the Balance sheet through the Owner’s Equity Section. All profitability increases owners equity. That’s really important so let’s say it again… ALL PROFITABILITY INCREASES the OWNERS EQUITY portion of the balance sheet!!! This concept is critical and links your Income Statement / P&L to your Balance Sheet! So as we just learned 2 things, at least, must change on a balance sheet if Owner’s Equity Increases. Either an asset increases or a liability decreases, or a combination of those. Herein lies the answer to the nagging issue of why my practice is profitable but lacks cash! Look closely at all of your asset categories, your cash may have disappeared there; buying supplies, equipment or technology, or paying down liabilities, bank loans, and debt. This works in reverse too…accelerate the depreciation of your equipment (ie section 179) which reduces the VALUE of that ASSET, and correspondingly reduces your Owners Equity side of the balance sheet too. Finally, the “profit” you have achieved is equity and not cash, remember that…Profit does not equal cash! We will talk about that when we dissect the Income Statement. SUMMARY: reviewed basic accounting principles GAAP Accrual vs Cash Basis of Accounting Fundamental Accounting Equation, ASSETS = LIABILITIES + OWNER’s EQUITY 2 Things on the Balance Sheet must change with every transaction Income Statement and Balance Sheet are connected through the OWNERs EQUITY Portion. So that wraps things up for this Podcast. Hopefully, you have a better understanding of the mechanics of the balance sheet. We hope that this information has created a few “Ah Ha” moments, or stimulated some additional questions you can direct to your advisers. We welcome your inquiry here too at OmniStar Financial. Our contact information can be found on our website OmniStarfinancial.com. You will also find a link to sign up for our newsletter. Please share this podcast if you found it helpful, and leave a review on iTunes too. We welcome your feedback and suggestions for future podcast sessions. You can always find me, your host, David Darab, at my twitter handle, @ddarab. Thank you so very much for tuning in and listening. We are very grateful for your time and attention and so very pleased to have you in our audience. REFERENCES: https://www.amazon.com/Financial-Intelligence-Revised-Managers-Knowing/dp/1422144119/ref=sr_1_4?keywords=financial+statements&qid=1553527149&s=gateway&sr=8-4 https://www.amazon.com/gp/product/0648424006/ref=ppx_yo_dt_b_asin_title_o03_s00?ie=UTF8&psc=1
How does your brand identify influencers and brand advocates? How do you set up programs to work with these valuabe resources? Arlen Robinson of Omnistar discusses affiliate marketing, referall programs, and influencers. He gives us tips on getting programs in place and share trends on where he sees this area growing in 2019. Thanks to Social Joey and Franchise Dictionary Magazine for supporting Social Geek Radio.
We’ve talked about influencer marketing and referral marketing. Now, it’s time to talk about affiliate marketing. With all these types of marketing, where does one end and the other begin? They’re all related, but each is a little different. Today, we’re talking to Arlen Robinson, chief operating officer and co-founder of OmniStar Interactive. Arlen describes the differences between types of marketing, how to set up a structured program for affiliate marketing, and how to recruit and create incentives to bring affiliates on board. Some of the highlights of the show include: Affiliate Marketing: People who are outside affiliates, not customers, promote your business, products, and services Referral Marketing: Your customers who refer your business to people they know Influencer Marketing: Someone who has their own audience and following Every business should implement an affiliate or referral program because of stats Due to abundant shopping options being available, consumers get overwhelmed Create an affiliate program by defining reasonable goals and promotional strategies, as well as ways to measure success Find and recruit affiliates via online directories and social media; be competitive and get their attention by offering sizeable incentives - cash is king Other incentives could include offering products, merchandise, and gift cards Affordable solutions are available to internally track and manage sales, payment process, and content influenced by individual affiliates Use a viral loop to create a constant flow into your affiliate and referral programs Links: Omnistar Interactive How To Avoid The Most Costly Mistake In Influencer Marketing With Shane Barker [AMP 115] PayPal Openinfluence Izea What topics and guests should be on AMP? Send your suggestions!
What's the best way to drive leads for your business via word-of-mouth marketing? This week on The Inbound Success Podcast, Arlen Robinson of Omnistar Interactive talks about referral and affiliate marketing programs and how to leverage them to drive qualified leads to your business. Some highlights from our discussion include: The main difference between referral and affiliate marketing programs is that a referral program is a program where you're structuring it for your customers to refer people they know and an affiliate program is structured for people that have not used your product or service themselves to promote it to people they don't know in exchange for a commission. The key to a successful referral program is that it is clear and straight forward as far as the offering for customers. It is also important to have a smooth onboarding process for the people participating in your program. Program participants need to be motivated to participate, so it's important to think carefully about the offering. Arlen recommends a 20% commission. The best referral programs make it easy for members to promote the product or service by providing them with canned emails and social media messages. Referral and affiliate marketing programs are most common in the ecommerce industry, but new software platforms are making it easier for B2B businesses to put these types of programs in place. 92 percent of all consumers trust recommendations from their friends or family members - people that they know - as opposed to all other forms of advertising. 64 percent of marketers agree that word-of-mouth marketing is the most effective. Arlen shared that most customers cover the cost of affiliate marketing software within two to three months of implementing a program, making the ROI quite high. Listen to the podcast to learn more about the differences between referral and affiliate marketing, what types of businesses they're right for, and how to use them to drive leads. Transcript Kathleen Booth (Host):Welcome back to the Inbound Success Podcast. I'm Kathleen Booth, and I'm your host. Today, my guest is Arlen Robinson, who is the Chief Operating Officer and co-founder of Omnistar Interactive. Welcome, Arlen. Arlen Robinson (Arlen): Thank you for having me, Kathleen. It's a pleasure. Arlen and Kathleen recording this episode Kathleen: Yeah. I always like when I have guests that are from my hometown area, even though you don't live in the Annapolis, Maryland, area, I know you lived in the Maryland area for a while. You went to school in D.C., so I feel like I'm with my hometown guy. Arlen: Right, definitely. I know the Maryland/D.C. area well. Those were my stomping grounds for quite a long time, for at least 20 years or so. So I know the ins and outs of DC, the DC Metro area, DC, Maryland, Virginia for those of the listeners that ... I'm familiar with that. Most people in the area refer it as a DMV. Kathleen: Yep. And now you've fled to warmer climates in Florida. I'm super jealous because as we're recording this it's just after Thanksgiving and it's cold up here. So it's a good time to be a Florida guy. Arlen: Definitely, yeah. That was one of the main motivating factors for myself and my business partner relocating here to the Orlando area. It's really the weather. I grew up in the Chicago area. Between that and coming to DC, Maryland, enough is enough. Kathleen: Yeah, I grew up in New Hampshire, so I can relate. I was like, "I need to move south because this is too much for me" when I was up there. Weather aside, I've got so much I want to chat with you about. About Omnistar Interactive Kathleen: Before we get into it, can you tell my listeners a little bit more about Omnistar Interactive and what you guys do? Arlen: Sure. Not a problem, Kathleen. I'll give you the quick and dirty of my background and Omnistar. First of all, Omnistar Interactive is our company. We have, right now, two software solutions. Software as a service solutions. Our main solution is our Omnistar affiliate software. But before I get into that, we started off almost 20 years ago now, actually, as a full service web development firm, providing custom web based applications, custom web sites for a variety of different firms and different industries, different niches. That time, early 2000 and right at 2000, was really the boom where there was so many internet start ups left and right looking to get a website out, looking to get a web application out, so we really took advantage of that for several years developing a number of niche websites and custom web based applications. Several years into starting the company, we decided to take a step back, because, I'm not sure if you're familiar with the whole life cycle development projects of when you're developing a website and then a web based application, it's a lot of work and it's a lot of interaction, a lot of back and forth that you have to have with the customers, and at that time it was really early in the days of the internet and a lot of businesses didn't really understand what it took to put these types of web applications together and were trying to nickel and dime us around every corner. So we took a step back and said, "okay there is some core functionality that it seems like a lot of businesses could use", so we decided to just create our own suite of solutions. The Omnistar Affiliate software was one of them. We actually had about eight different web based applications during the early 2000's and as time went on, we really just looked at the data and we just said, "the Omnistar Affiliate software's the one that really took off" and with having all those other solutions, we were really almost running ourselves a little thin trying to maintain all of those products, so we decided to phase out the other solutions and really go full force with the Omnistar Affiliate software. Which is - Kathleen: Yeah, I was gonna say, can you talk a little bit more about exactly what that software does and who it's for? Arlen: Sure. The Omnistar Affiliate software is an affiliate referral platform that allows any business to really leverage word of mouth marketing. Typically, the way that the software works is businesses would use our technology, or our software to provide their customers with a unique link that the customer or an affiliate can use to promote the business across various channels, whether it's email, whether it's social media, and then when that customer or the affiliate sends a successful sale or conversion, our technology tracks and rewards that particular customer or affiliate. That's pretty much what it does in a nutshell. Our client customer base is primarily e-commerce businesses, businesses selling a product or service online, however, we also have some brick and mortar shops. We've recently integrated and developed some features to the software that are clickable for service based businesses, such as plumbers, roofers and that type of thing. Kathleen: Oh, that's neat. Yeah, one of the reasons I was really interested to talk with you, is that I haven't really spoken with anyone in depth about affiliate or referral marketing in this podcast. Which, when I started thinking about it, it was kind of surprising to me because what I'm focused on is inbound marketing, which is naturally attracting the right customers as opposed to going out and spamming them and trying to get in front of them. One of the best ways to naturally attract the right customers is word of mouth. It's obviously one of the most powerful. So it was interesting to me that, really nobody I've spoken to, to date, has incorporated any kind of formal affiliate or referral program into their marketing strategy. So, that's what really made me interested in chatting with you. I know that you use your platform for your own marketing. Obviously, you've got lots of customers that use it. I'd love to just start by asking you to tell me a little bit more about what makes a successful affiliate or referral program? What are some of the foundational building blocks that need to be in place for this to work for somebody? Referral v. Affiliate Programs: What Is The Difference? Arlen: Okay, gotcha. That's a very question. There are some key things that do need to be in place for a business to have a successful referral or affiliate program. But before I get into that, a common question that many businesses ask, or so many people ask us is, what's the difference between and affiliate program versus a referral program. Kathleen: I didn't even think to ask you that and that's a good point, because I keep saying referral or affiliate, as though they're synonyms. Arlen: Right, many people use them interchangeably but they're really two different things. But it's quite simple. The main difference is a referral program is a program where you're structuring it for your customers, people that have purchased your product or services, to refer typically people they know, friends of family or colleagues. An affiliate program is where you've got it structured where you're reaching out to affiliates who are people that have not used your product or service themselves and are gonna be promoting it to people they don't know for commission. In both cases, of course, there's gonna be a commission involved and they are incentivized for doing that. That's really the main difference. That's probably the easiest, I guess you'd say, definition between the two of them. Kathleen: And does your platform support both or is it one particular? Arlen: It does. It does support both and the majority of our customers that use our technology, they use it for typically both reasons. Usually, the customers are really the starting point, but we do have customers that immediately approach us and they already have affiliate relationships in place and they're just looking for a more efficient way to track referrals. How To Build An Effective Referral Marketing Program Kathleen: Well, let's start with referral programs then, because I feel like, from an inbound marketing stand point, referrals are so inboundy. What I mean by that is, you're taking somebody who's already said yes to you for their own reasons, and if they're happy, asking them to spread the word and making it easier for them to do so. Which is really at the heart of what inbound marketing is all about. So, let's talk about that first. What are the building blocks to making a successful referral program? Arlen: Well, first of all, the main building blocks to making a successful referral program, number one, is your program has to be clear and really straight forward as far as your offering for your customers. And the process for them to get on board to become a referral partner has got to be smooth. There's so many times where I've seen examples of other programs where, and I'm an affiliate or referral partner for other companies, and I've gone through a lot of hoops just to be able to refer a company's products or services. So number one, you want to make sure the onboarding process is streamlined. So no matter what technology you decide to use, or if you decide to create your own in house referral program, you want in house referral technology with your own developers, that's the first thing you need to keep in mind is that, make sure it's streamlined. And there's a number of ways to do that. Many technologies or many referral programs, they'll offer a sign up component to it where you can engage your customers at some point, either from your website directly, or even some point in the actual order fulfillment process. So even maybe sometime down the line when they've gotten their product, they've gotten their service, they're satisfied and you think they would be primed to be referral partners. You want to make it very clear, or easy for them to do that, whether it's an email exchange or whether somewhere in the interface that you provide them access to just easily signing up, or if it's just opting in. So that's number one, making it easy to onboard. Secondly, you want to also have an attractive offering. You know, for number two, people aren't going to get excited about your products and services unless it's going to be worth their while. Because these days, I think more than ever, people's attention is scattered. People are ... there's so many things coming at people, no matter what career you're in, no matter what you're doing, just living life in general these days, we've got a million and one distractions coming at us. So unless you've gotten an offering that is going to be worth somebody's while as far as the commission is concerned, they're not even going to think about it, so you want to make sure you spend the time and figure out what really can I afford to give away to these referral partners? These customers that are going to refer their friends and family. Whether it's a percentage of an order total, whether it's a gift item, whether it's a fixed amount, you really have to spend a lot of time figuring out what you can do. A lot of businesses that we work with to set up referral programs, do something where they would maybe start off at a certain point, where they would start off all their customers earning a certain percentage. Maybe 10, 20 percent, and then over time analyze the data and as they are more successful, put somebody to a different tier, so to speak, where they can maybe earn 30 percent and onward. Kathleen: I was going to ask you, what is meaningful? Is there a dollar amount threshold, or is there a thing? In your experience, can you give me some examples of what a meaningful reward is that would get somebody to take action in this regard? Arlen: Yeah, standard, what I usually see is businesses start at 10 or 15%. And that's kind of basic. I would say to really excite someone, 20 and up is really going to be something that's going to stand out from some of the other competitors. Because like I said, between 10 and 15 is kind of the default, what people start with. So when an affiliate or your customer sees that, they could just glaze over that, but if you're talking 20, 25% initially, or even greater than that, I think that is a good starting point that's going to catch people's eye. Kathleen: And does that pre-suppose a certain transaction value? Because obviously if you're selling a, I don't know, a 10 dollar thing, 20% of 10 dollars is a whole different ball game than 20% of 500 dollars. So is there a certain transaction value threshold? Arlen: That's a good question because there's businesses out there, of course, that are selling low value products, low dollar amount products, and then the high dollar amount products. So it's really going to be up to the individual business owner. Then that is a consideration if your maximum price for product is, like you said, 10 dollars, then you got to think about, "Okay, 10% commission of that may not be worth someone's while." So you got to really look really hard at what you can afford to give away. Then of course if you're talking the higher dollar amount products, maybe 100 dollars and up, then 10% commission may not be too bad. So that definitely is a consideration. And there's things in place that you can put in place as far as the technologies that you're using that can set up so that it's kind of a sliding scale based on the products that are purchased - Kathleen: Now what about if you're incentivizing something that doesn't have a dollar value? So for example, I'm thinking about, I subscribe to newsletters, for example, The Skimm, which is very popular with women. And they have an ambassador program where you get a referral link and for every X number of people that sign up using your link, you might get something. And in their case, it might be swag. Are there other models like that where you're giving away things and maybe not money? Arlen: Yeah, there definitely are models like that. And I've dealt with a lot of different customers of our that are in the organic food space actually. And this is something, I don't know if it's something that's customary in that space that are selling organic super foods and a variety of different, kind of niche products that they have a distinctive presence online. What I've seen with those type of companies is, I believe their affiliates, a lot of their affiliates or referral partners are customers of theirs. And what incentivizes them is free product, and that's something that I definitely see. So it's going to be kind of on a case-by-case basis. You kind of have to understand the people that you're getting into "refer you" business, and what's going to excite them, and what do they want. The only way to do that is really to just ask questions. So you want to really establish a solid relationship with people that are going to referring you business because you could just be guessing. You could be pulling incentives out of a hat and just kind of guessing as to what's going to excite someone, but 30%, even though that may sound good on a commission, that may not excite one of your affiliates. Maybe they do want products, or maybe they would rather have a gift item, or something else. So you want to ask questions, you want to really kind of form a relationship with them and just create a dialogue and figure out what do they want. Kathleen: Makes sense. Now, you mentioned, first thing was, make it easy to sign up. Second thing was, make it worth their while. Any other key elements required? Arlen: Definitely. You want to also make it easy for these referral partners or these affiliates to promote across a variety of different channels. The thing you want to keep in mind is, you don't want to have, to have them thinking about what they have to do. So whether you're going to give them the ability to promote across via email, you don't want them to have to type up email messages. Go ahead and just create the copy for them, and there's solutions that will allow you to store canned messages for these affiliates so they can either cut and paste, or they can even send through the interface. So you want to go ahead and create canned messages for email. And you also want to, of course, think about the social media promotions. Referral tools these days have a lot of integrations with the Facebooks, the Twitters, and the LinkedIn. So, you can even create custom posts for your affiliates to be able to easily do, or easily post across their timeline. So they don't have to think about, "Okay, what graphic am I going to share? What promotion am I going to do?" You just want them to be able to get in there, get out, promote to their audience and to their network, and then just kind of sit back and earn commissions. So you really want to take the pain away from them. So I would say that's the third most important thing is, make sure you have as many promotional options as possible. And then again, it also goes back to understanding who these affiliates and referral partners are, because you could have some that are, maybe they're bloggers, and maybe they do a ton of blogging, and they want maybe a graphic or some type of banner for their blog or their site. So those are things that you can provide to them and keep that in mind. Boosting Member Engagement in Referral Marketing Programs Kathleen: Now, let's assume you've got all these things. You've got the easy method of signing up, you've got good incentives, and you've got almost like you're doing the work for them in terms of spoon feeding them what they need in order to be successful as a partner. I imagine anything else, there's still that element of you need to keep yourself top of mind and remind them that you're there, and remind them to go in and do what's needed in order for them to take full advantage of the program. Can you talk a little bit more about that? Arlen: Yes, yeah what you're talking about there is really just your engagement and the relationship that you're going to be creating with these, the affiliates and referral partners. And that can be done ... These days, there's a ton of tools out there that would allow you to create a relationship with them. So what you want to do is make sure that on an ongoing basis, you let them know. Maybe you've got some discounts that you have going on in your company and you want to blast that out. Maybe, we just passed Black Friday, maybe you had a super Black Friday special. You want to let these affiliates know right away. Any time you've got a promotion or something that could excite customers, let them know right away so that they can pass on that information, pass on those discounts. So that can be done, of course, through an email list. These days, like I said, there's tons of email solutions that you can use that you can send out auto response emails where you can touch base with these affiliates on a frequent basis. Not only can you tell them and let them know about the discount and promotions that you have, but you can also let them know about anything new that you've got as far as promotional tools and promotional technology. So let's say you come up with a special graphic or something new for Facebook or Twitter. You want to let them know that any reason to reach out to them and let them know that you've got something new, you definitely want to do that because you want them to stay engaged. And you don't want them to forget about you. That's the main thing. As I mentioned earlier, everybody is split doing a million things. So you've got to remind them, because maybe they just forgot they're an affiliate. Maybe they're saying, "Okay, that's right, I forgot. I can get on the ball. I've got some friends that could utilize this product or service." What Types of Businesses Is Referral Marketing Right For? Kathleen: Now, when we first started talking, you mentioned that this is a great solution for, in particular, e-commerce companies, as well as some home service companies. Arlen: Yes. Kathleen: Have you seen any really great use cases with more traditional B2B firms, especially like service, regular B2B services? I'm curious. Obviously that's sort of what we are as a company, so I speak from a standpoint of selfishness and wanting to know, but yeah. Anything in that area? Arlen: Unfortunately, there's not a whole lot out there, which is actually what spawned our company to create features for service-based businesses, because you mentioned e-commerce. Tracking an e-commerce transaction is pretty straightforward in the world of affiliate marketing. In most cases, most affiliate marketing solutions just require a snippet of code that you would just need to add on an order confirmation page. And that's usually it, and that's pretty much standard across the board. A snippet of code on the confirmation page. There's some solutions that also have API's that'll be a little bit more advanced that you can use to kind of tie things together and track preferred sales from the affiliates. So, that's really what's standard. So with e-commerce shopping carts, that's easy to do, but for service-based businesses, like I said like your company or a regular service company, let's say like a roofing company or a plumbing company. They truly do thrive on referrals, and word of mouth, because let's say you get your roof done and the roofer does a great job, your friends, your neighbors are obviously going to see that you just a new roof. So of course they're going to ask you, "Okay, who did your roof? How much did you pay?" So those types of service-based businesses lend well to referral marketing, but the problem is, the transaction isn't online. You don't go to a roofing company's website and put in an entire 20,000 dollar roof into a shopping car and checkout. It just doesn't work like that. They typically work on, and as your business does as well with your marketing service, is you typically work on a lead basis where you get leads. And you got to try to convert those leads. Those leads would typically come through to the business either via phone or via some type of online form. So the referral system has to have some way of either tracking maybe a unique promotional code, or via somebody filling out the form. Those are actually features that we just integrated probably about three months ago into our software where we've got the ability and we give businesses the ability to have a customized form that has a unique referral code on it so that when somebody calls in, they just refer to that code and you'll be able to know who referred them, as well as an online info form. But unfortunately from just kind of what I've heard from talking to other businesses that were looking for this, there's not a lot of solutions out there like that specifically for service-based businesses because of the ways that you have to track that. That's really one of the main reasons there's not a lot out there like that. Kathleen: Yeah, it's all about being trackable isn't it? Arlen: Yup, exactly, exactly. What Kind of Results Can You Expect From Referral Marketing? Kathleen: Now, speaking of tracking, I'm really curious to hear what kinds of results can come from strategies like this. So you've obviously done this for yourself, you've got lots of companies on your platform that are doing it. What are typical results, or what sort of ROI could a company expect to see from something like this? Arlen: Well, yeah. That's a really good question, and it's hard to give a specific answer 'cause it really is gonna vary on the type of business. It's gonna vary on the cost of their product or services, and also a lot goes into it as far as the cost that they typically incur to acquire a customer. So you gotta factor all of that in. But as far as statistics are concerned, I think really the numbers do speak for themselves. And so if there's somebody that's really kind of on the fence that's listening, that's not quite sure about referral marketing, the stats really speak for themselves, and really what ... These days the stats say that 92 percent of all consumers trust recommendations from their friends or family members, people that they know, opposed to all other forms of advertising. So, it's really not going anywhere. There's also some other stats that marketers will vouch for, word-of-mouth marketing. 64 percent of most marketers really agree that word-of-mouth marketing is the most effective. And I think the reason for that is because, in this kind of scattered space that we're in right now with all of these options that are available for people online and in retail, people don't really know where to go if they're trying to purchase something. People don't want to make a wrong decision. They don't want to waste money. So if they've got a referral from a friend that really has done the due diligence, it really speaks volumes. But to go back and answer your question as far as typical ROI, I would just say roughly if a business implements a referral program, you've got to keep in mind that typically you're not paying these affiliates any upfront fee. You just paying a percentage commission for a referred transaction, whether it's a dollar amount, whether it's a percentage of their order total. So I would just say roughly if a company is aggressive enough, the ROI is really ... I could say, based on what they're spending on whatever referral solution that they are getting, and we've had some stats from some past customers actually, we've done some different case studies. But a typical ROI depending on the price point, the price point let's just say for an affiliate software solution, you're going to pay anywhere from $50 to $100, $200 a month on a low end. It can of course go higher that that. Depending on the price point of your products, you can safely say that once you're launching it, if you expose it to your customers and affiliates at the same time, you can expect to cover the cost of the software, I would say on average, within two to three months. Cover the annual fee of whatever software that you're paying if you stick by the initial strategies that I mentioned, and you're aggressive enough to get enough exposure to it. Kathleen: Great. And what impact has your own referral or affiliate marketing had on your business? Arlen: Well, it's definitely had a tremendous impact 'cause we definitely eat our own dog food, we use the software, and we've been using it internally for quite a long time. One of the things that it's helped us do is isolate and form a longer-term relationships with companies such as web developers and other agencies that actually have a pool of customers. And so, it's really helped us in that respect because prior to us utilizing our own affiliate program and prior to us launching an affiliate program for our services, it's a little bit harder to engage these types of agencies because the main thing that they're looking for is they're looking for some type of return. If you've got value that you're providing them, they see that, but they're going to need some incentive to be able to promote it across the board, or kind of package it, if you will, to their customers. So in that respect, it's really helped us form relationships more than anything because we've got the affiliate program, and that's one of the peak things that these sellers and these agencies are looking for, to get some type of return. Kathleen: Got it. Well, so interesting and I think it sounds like, based on the entry price point for platforms like yours, that it's definitely something worth experimenting with if you're in a certain industry. Kathleen's Two Questions Kathleen: Now shifting gears for a second, there's always two questions that I ask all of my guests, and I'm curious to hear your answers. You talked earlier about what the spirit is of inbound marketing and how word of mouth fits so much into it. Company or individual, who do you think is doing inbound marketing really well right now? Arlen: Yeah. Inbound marketing is ... That term was actually coined by HubSpot a while ago, and it's something that really makes sense, especially in these days, but I would say a company that has done really well in inbound marketing would be Airbnb. That would be one of the top ones in my opinion, and I'll give you the reason why I would say Airbnb. First of all, they do an excellent job any time you, let's say create a profile on their site, you may be, let's say, I'm here in Orlando. I create a profile and I'm looking for some resort locations in the Orlando area. I start looking, and like anything, it's a process. I may not find anything immediately. So I start looking for resorts in Orlando. And what they've done is, within their site and technology, and many companies do that, is they drop I guess you could say a cookie or a bot on your browser that is going to be able to analyze your search history. So even though, let's say, I was at their site, I was looking at Orlando, maybe next week I'm like, yeah, I'm thinking this summer I want to go to Jamaica. So I might start looking for Airbnbs in Jamaica. They are very good at actually analyzing the search history, and then following up on the search history via email. So a day later, I may receive an email with a list of the top Airbnb spots in my price range for Jamaica. And so that's some powerful stuff. That's not a hard sell that they're doing, but they're providing me with that information based on my search history, and that's, I think, an excellent example of inbound marketing, you know, providing that value. Kathleen: Yeah. It's funny. You're the second person I've interviewed who's mentioned Airbnb for that exact reason- Arlen: Wow. Kathleen: ... because they almost like do your work for you as a customer. Arlen: Definitely. Kathleen: So fascinating. Well, the second question is the world of digital marketing is changing so quickly and staying on top of all of the changes can be tough. How do you personally stay educated and up-to-date on everything happening? Arlen: Okay. Got it. Good question, and I'll give you three things. One thing that I'm pretty religious about listening to is another podcast, actually. It is called Marketing School. It is a podcast from Neil Patel and Eric Siu. For those people that aren't familiar with them, they are some top SEO experts. Neil Patel has been around for a while. He started his own agency. He worked for different companies for a while. But they put out a short daily podcast that's five minutes where they give some really solid bite-size information, all things marketing. And I listen to that religiously when I take walks, and when I'm stepping away from my desk I turn that on, and I get a lot of good things. And they really keep me up to date. Kathleen: And Eric Siu was actually a guest on this podcast. Arlen: Oh was he? Okay. Kathleen: He was my first guest of 2018. Arlen: Oh wow. Kathleen: So if you go back to the first episode of this year, you'll find Eric Siu making his predictions for marketing in 2018. If you want to see if they came true. Arlen: Gotcha. I'm definitely check that out. Yeah, he's a great guy. He knows a lot, him and Neil Patel. So they have a great podcast, and then I'll also take a look at Neil Patel's blog. His blog, very thoughtful blog. He puts a lot into his posts. He used to post a lot more but he's kind of pulled back and focused more on the quality of the content, and yeah. I take a look at that. So those are two things. And then finally, guests that I have on my own podcast which is the eCommerce Marketing Podcast, which is my weekly podcast. I learn a lot from all my guests, and so that is another way that I stay up to date on all things marketing, specifically eCommerce marketing. Kathleen: That's great. Well I am with you 100 percent on the podcast guests thing because that is how I stay up to date. I just book people that I think I can learn from, and soak it all in, so it's a brilliant strategy if I do say so myself. Arlen: For sure. Get In Touch With Arlen Kathleen: Great. Well, if somebody wants to learn more about referral or affiliate marketing, or they want to get in touch with you, what's the best way for them to find you online? Arlen: Sure. Yeah. They can actually reach me online at a number of different ways. For number one, to get more information about our solution that I mentioned throughout this recording, the easiest link to go to our main site is just getosi.com. That's G-E-T-O-S-I.com and that'll take them, listeners, to our site. And if they want to engage with me, they can just find me on pretty much all the social networks, Arlen Robinson. I'm on Twitter, LinkedIn, and Facebook. I'd be glad to help anybody listening on their journey to referral marketing. You Know What's Next... Kathleen: Great. Well, thank you so much, Arlen. It's been interesting. I've learned a lot. I'm sure my listeners have learned a lot, and I would love to ... If anyone is listening and has an affiliate or referral program that is doing well for them, I'd love to hear about it, so you can Tweet me at WorkMommyWork. That's also where you can tell me if there's somebody else I should be interviewing who is doing kick-ass in non-marketing work. And if you've listened to this and you found it valuable, you know what to do. Leave us a review on Apple Podcasts or the platform of your choice. It helps a lot, and we appreciate it. Kathleen: Thank you. Thanks, Arlen. Arlen: Thank you, Kathleen.
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Another great episode packed with news from around the retrosphere, a Why did Tandy do that question, a Core Dump! with Nick Marentes, and, an on going discussion about, Abe Vigoda? You'll have to watch to see! 00:28:54 - Why Did Tandy Do that? Floppy discussions01:02:37 - Bruce Moore shows off his development environment01:25:13 - Omnistar has been beaten for the 2nd time!01:33:00 - CoreDump! with Nick Marentes - Window Master program Bill Vagona - not Abe Vigoda01:58:31 - Ron's Garage - lots of things from the Facebook group02:09:15 - News segments (links below)02:39:25 - Events - Tandy Assembly key note revealed! News: Hi-RES-Lo: http://www.trs-80.org.uk/competition.html CoCo in space? https://www.facebook.com/groups/2359462640/permalink/10156512087917641/?comment_id=10156516869337641¬if_id=1534293421667885¬if_t=group_comment_follow Micro processors used in space: http://atariage.com/forums/topic/276820-microprocessors-used-in-spacecrafts-page/?hl=%2Bnasa+%2Bcomputer#entry3991404 Diego's website updated: https://www.facebook.com/groups/2359462640/permalink/10156521494472641/ http://www.yaccs.info/ Paul Thayer's HPUT demo: https://www.facebook.com/groups/2359462640/permalink/10156523515892641/ Antonio got a bommerang: https://www.facebook.com/groups/2359462640/permalink/10156522445687641/ CoCoTALK!Email any suggestions you have for the show to cocotalk@cocotalk.live Join us for daily conversations on Discord: https://discord.gg/9NCAvA7 Help support the show by becoming a patron https://www.patreon.com/ogsteviestrow Retro SWAG sales help support operating costs and make you look cool http://8bit256.com Custom artwork designed by Instagram artist Joel M. Adams:https://www.instagram.com/artistjoelmadams/
Another great episode packed with news from around the retrosphere, a Why did Tandy do that question, a Core Dump! with Nick Marentes, and, an on going discussion about, Abe Vigoda? You'll have to watch to see! 00:28:54 - Why Did Tandy Do that? Floppy discussions01:02:37 - Bruce Moore shows off his development environment01:25:13 - Omnistar has been beaten for the 2nd time!01:33:00 - CoreDump! with Nick Marentes - Window Master program Bill Vagona - not Abe Vigoda01:58:31 - Ron's Garage - lots of things from the Facebook group02:09:15 - News segments (links below)02:39:25 - Events - Tandy Assembly key note revealed! News: Hi-RES-Lo: http://www.trs-80.org.uk/competition.html CoCo in space? https://www.facebook.com/groups/2359462640/permalink/10156512087917641/?comment_id=10156516869337641¬if_id=1534293421667885¬if_t=group_comment_follow Micro processors used in space: http://atariage.com/forums/topic/276820-microprocessors-used-in-spacecrafts-page/?hl=%2Bnasa+%2Bcomputer#entry3991404 Diego's website updated: https://www.facebook.com/groups/2359462640/permalink/10156521494472641/ http://www.yaccs.info/ Paul Thayer's HPUT demo: https://www.facebook.com/groups/2359462640/permalink/10156523515892641/ Antonio got a bommerang: https://www.facebook.com/groups/2359462640/permalink/10156522445687641/ CoCoTALK!Email any suggestions you have for the show to cocotalk@cocotalk.live Join us for daily conversations on Discord: https://discord.gg/9NCAvA7 Help support the show by becoming a patron https://www.patreon.com/ogsteviestrow Retro SWAG sales help support operating costs and make you look cool http://8bit256.com Custom artwork designed by Instagram artist Joel M. Adams:https://www.instagram.com/artistjoelmadams/
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