Written by:  Jennifer Smith & Nathan Smith of Austin Tenant Advisors

The Office Moving Guide is an easy to follow informational guide that provides businesses with a list of Dos and Don’ts for your office move that ensures you don’t miss any of the many steps you need to follow to have a smooth moving process.  It also provides a comprehensive Moving Checklist that gives you a timeline to follow during the lease negotiation period, after your lease has been signed, how to ultimately prepare for the move, and what steps to take after the move is finalized.

The Office Moving Guide is a tool that all businesses can use to ensure that their office move is smooth sailing and the ebook can be found on the Austin Tenant Advisors website in a downloadable pdf format.

There are 4 basic types of legal protection you can acquire to protect your business’s IP:

1. Patent:  A patent holder has the right to exclude others from making, using, or selling an invention.
2. Trademark:  The owner of a trademark has the right to prevent others from using a word, symbol, or some device which is used to distinguish the business owner’s goods and services from another business’s goods and services.  These forms of identity include words, slogans, symbols, and a product’s packaging and appearance.
3. Copyright:  The owner of a copyright has the exclusive right to reproduce copyrighted work.  These works include original literary works, computer programs, musical works and audiovisual works.
4. Trade Secret:  Trade secrets law protects a business’s secrets.  Under state and federal law, the owner of a trade secret can prevent the unauthorized use of confidential information, such as a formula, process, device or compilation of information used in the owner’s business.

Here are a few scenarios illustrating why your company should be concerned about its IP.

• You receive a cease-and-desist letter informing you that you cannot continue to use your business name.
• A competitor starts producing products in the same type of packaging as your products.
• The web address with your business name is not available.
• You invent a product and suddenly several companies spring up selling similar products.
• Another company distributes manuals substantially similar to those developed by your business.
• You learn another company is using your logo.
• One of the founders of your business leaves and demands payment for the sale of products he helped develop.
• A disgruntled employee leaves your business and starts soliciting your customers and undercutting your prices.

For more information, please contact Kathy Tremmel at Tremmel Law, PLLC at (512) 539-0317 or kathy@tremmellaw.com.

The first weekend in May was spent in Omaha with my Texas Lutheran University students. We made the trek to listen to Warren Buffett and partner Charlie Munger at the Berkshire Hathaway annual meeting.

The trip allowed us to rub elbows with well known value investors Whitney Tilson, Mohnish Pabrai and Mario Gabelli. Berkshire director Bill Gates was there and for some unknown reason, Bono, from the rock band U2 was sitting on the front row.  Maybe Bono was looking for a discount on his car insurance from Berkshire subsidiary GEICO.

As is always the case, the six hour Q & A session spans a very broad range. However, the topic of risk was repeatedly discussed.

Buffett at age 81 and Munger at 88, have been around the block a time or two. Buffett is famous for saying that Rule #1 in investing is “Don’t Lose Money” and Rule #2 is “Don’t Forget Rule #1”.  With this background, Buffett said that whether at Berkshire, or any other company, the CEO must be the Chief Risk Officer and the responsibilities that accompany this position cannot be outsourced.

Buffett has been, and continues to be, critical of many academic methods for assessing types of risk. Although he acknowledges that schools are slowly improving, the silliest things they continue to teach are investment related. Throughout the years, different fads run through the biggest and most well known of the B-Schools. Once they become popular it is very hard for faculty to challenge irrational practices for fear of offending tenured professors and therefore derailing their careers.

Buffett and Munger encouraged the business programs to teach one course in their curriculums—not stock trading, efficient market hypothesis or modern portfolio theory—but rather the boring, but critically important, discipline of business valuation. Business valuation is the heart of investing and risk management–and without it you are blind.

Buffett explained that in valuing any business you must be honest with yourself about which businesses you truly understand and those you don’t. As Buffett has done many times before, he stated it is impossible to value a business that you don’t truly understand.

Munger added that the accounting profession has made matters worse. In an effort to quantify corporate risks, accountants have developed standardized models because they ‘’don’t require much thought.” The pair agreed that when assessing the complexities of risk, there is no such thing as “standard.”

The partners agree that when it comes to assessing risk and opportunity, what matters most is your facts and your reasoning. They elaborated that a variety of risks will always be present in the world at any given time. Despite this, it is ultimately the investor’s job to understand the value of a business and to act when opportunities present themselves—regardless of worldwide drama.

As Buffett and Munger look at risk, they always think in worst case scenario terms and then add a significant “margin of safety.” The conservative approach generally finds them with a slug of cash on hand for emergencies. This allows Berkshire to avoid “fat tail risk”—the risk of something small, but significant, from completely wiping them out over a long period of time. With 98% of his net worth held in Berkshire Hathaway stock, Buffett said the goal for them and their shareholders is to sleep well at night by managing these risks.

This approach has allowed them to double the returns of the market, on average, every year for the past 45 years.

The super octogenarians then added that complicated math models created by Wall Street do not ensure a fair understanding of risk or history of financial disasters. As they made this comment, I thought to myself about all of the smart people at Enron, Worldcom, Bear Stearns, AIG and Lehman Brothers who completely failed in this task.

Buffett and Munger also offered a few tips on “what not to do.”

Pictured: Left to Right is Warren Udd, Jon Zahradka, Ken Haugen, Philip Bauch and Dave Sather

First, if you don’t understand it—avoid it. Second, know how to value a business and avoid paying high prices.  They also said that in the last thirty years they have never bought a new issue (sorry Facebook).  Then they cautioned about industries that have a great future—but in which you cannot clearly identify the winners. Finally, they reiterated that you must avoid the disasters—the things that can completely wipe you out.

Although it was a quick trip, it was very worthwhile. After twenty years of following Berkshire Hathaway I learn something new every time. I think my students learned something too.

John P. Ducrest, the Commissioner of the Louisiana Office of Financial Institutions and Chairman of the Conference of State Bank Supervisors, lays out a great argument in favor of extending the program for at least two more years. His article detailing his reasons is reprinted here, with his permission:

Economic Recovery Still Needs TAG

American Banker, March 19, 2012

By John P. Ducrest

To date, the public dialogue about the Transaction Account Guarantee program has been divided between the political and reputational risks of continuing this extraordinary federal insurance and the potential liquidity crisis that could ensue if the program ends prematurely and abruptly.

As a state regulator who witnessed firsthand the role the TAG program has played in ensuring financial stability, I encourage Congress to continue TAG for at least two years and mandate a study to examine the costs and benefits of creating a permanent insurance program to provide full coverage of transaction accounts.

The U.S. economy and the banking industry have recently showed promising signs of improvement. For instance, the FDIC’s Quarterly Banking Profile shows insured depository institutions reported a profit of $26.3 billion in the fourth quarter of 2011, marking nearly a $5 billion increase in profits from fourth quarter 2010. Further, asset quality indicators show signs of continued improvement, and loan portfolios are growing.

Overall, the banking industry is better off than it was a few short years ago. However, the dust from the recession has yet to fully settle and the industry is still in recovery. Specifically, many of the banks my fellow state regulators and I supervise continue to face a challenging economic environment with low loan demand and painfully low interest rates.

To fully appreciate the need to continue this program, we must recall its genesis. The program was crafted at the height of the financial crisis as nervous depositors began to move to institutions which they believed the U.S. government would not allow to fail. This implicit 100% federal guaranty of deposits for a handful of institutions was actually creating instability in the market. Many of the provisions of the Dodd-Frank Act seek to address this inequity by increasing the prudential standards and creating a resolution regime for the nation’s largest, most complex, and systemically significant financial institutions.

The federal regulators are doing a commendable job of writing and implementing these regulations, but much work remains. Until the mandates of the Dodd-Frank Act are fully implemented and a comprehensive resolution process exists for the biggest banks, we will have failed to restore equality to the financial system. As long as there is a widespread perception that “too big to fail” still exists, programs like TAG that provide some equity in the bank industry must remain in place.

After all, the TAG program remains a useful tool to stabilize and strengthen community and regional banks across the nation. In turn, these banks fuel small business lending, which spurs economic growth and job creation. In fact, according to the FDIC, it is estimated that community banks account for 40 percent of all small business lending which could be jeopardized if TAG is prematurely ended. For that purpose, the Conference of State Bank Supervisors, of which I am chairman, has strongly endorsed the continued need of the TAG program.

Extending TAG two years beyond the set expiration date of December 31, 2012 would help maintain public confidence and industry stability during this time of recovery. Further, a study performed by the FDIC to investigate the costs and benefits of making the TAG program permanent would provide useful information about the types of accounts that could be reasonably covered on a permanent basis, as well as how the FDIC would assess for the program. With such valuable information, the industry itself could then determine if a permanent TAG program is desirable.

John P. Ducrest is the Commissioner of the Louisiana Office of Financial Institutions and Chairman of the Conference of State Bank Supervisors.

And let’s not lose sight of one of your most important priorities in business – to be profitable and generate positive cash flow. That’s what pricing is all about.

Setting the price of each product or service you sell requires careful thought, analysis, and testing. It also must be constantly re-evaluated and adjusted to make sure you are achieving your overall pricing and profitability objectives.

Here are six steps that will help you implement a smart approach to pricing.

1. It’s All About Making Money

The first step is to get real clear about what you want to achieve with your pricing. You want to make money. That’s why you own the business.

Success in business means making money – and making money means creating revenues (sales) at a level that allows you to cover all your costs plus a healthy profit.

2. Consider Variable Pricing

One size does not fit all. Let’s say you sell a number of different products. Some of those are the type of consumable, fast moving products that are very sensitive to price. Maybe it’s a product Wal-Mart might promote as an example of their low prices.

You should seriously consider setting the price for that product at or near the competition (and being content with a lower margin). The key though is to make up the gross profit on your other products that are not so heavily shopped or where you provide particular value or quality.

3. Discover What’s Working and Not Working

Analyze the profitability of your existing products or services so you can do more of what works and stop doing what doesn’t work. You want to find out which of your existing products are making money and which are losing money. You can then fix the problem for those products losing money (and there are almost always some products losing money in every company).

When you evaluate the net contribution for each product you sell you will likely be shocked. You’ll probably find a lot more of your products have a negative net contribution than you would have thought.

A big mistake business owners often make is not constantly and relentlessly monitoring the actual profitability (or lack of profitability) by product every month.

4. Align Your Marketing and Advertising with Your Positioning

It’s very important that your marketing and advertising support the positioning of your company or product in the market. If your pricing is geared toward the higher end based on superior quality or above-and-beyond service, you don’t want your marketing efforts portraying you as cheap or lowest price.

Everything about how you position your company and product to customers and potential customers should be orchestrated to reinforce in their minds the benefits they will receive and enjoy by doing business with you.

5. Constantly Evaluate Your Costs.

To sell it right, you have to buy it right. If you are having a hard time selling a product at an acceptable profit, your problem may be that you are not buying the product right. Your problem may be your cost is too high rather than your price is too low.

You have to constantly look at every component of your product or service costs to find ways to reduce or eliminate those costs. It’s easy for costs to creep up over time. Before you know it, the costs have gone up 10 – 20% and your profitability has taken a big hit.

6. Test, Test, Test

You should always be testing new prices, new offers, new combinations of benefits and premiums to help you sell more of your product or service at a better and better price.

Take a product every month and test some new offers. Raise the price and offer a new and unique bonus or special service for the customer. Measure the increase or decrease in the volume of the product you sell and the total gross profit dollars you generate.

Many times raising the price will lower the volumes somewhat but you end up with more gross profit dollars as a result. You can then make an informed decision as to which approach makes the most sense for your business (and your bank account).

Your Next Step

Get your pricing right and you will dramatically increase the likelihood of creating a business that takes care of you financially.

Everything else you do in your business will be so much easier (and more profitable) once you have a smart approach to pricing in place.

Philip Campbell’s Blog is dedicated to helping you get the accounting and financial side of your business under control.

For quite some time now, the calls have come in from people asking us if we’re going to buy shares of Facebook at their initial public offering next month.  Whether a fan of the social networking site or not, this is an investment decision that should be fully evaluated from a business perspective. For us, there are two issues that quickly come to mind.

The first is that in buying shares of Facebook you are allocating money hoping for a good rate of return. In the most basic of terms, you are buying a business and trying to determine what a fair price should be. To begin this assessment, some simple Aggie math is helpful.

By all accounts, it appears that the initial public offering for Facebook will assess a value on the entire company of more than $100 billion. That is a very stout number and great if you are currently a Facebook insider looking for a monster payday. However, if you are just a normal investor, what exactly are you getting? Remember, the long term value of any business is the compilation of its earnings. As such, you don’t want to overpay for earnings.

Based upon last year’s figures, Facebook produced revenues of $3.7 billion. At a $100 billion value, Facebook would trade for twenty seven times revenues. Ouch! In comparison, you can buy either Wal-Mart or Exxon for less than one times revenues. Obviously, neither Wal-Mart nor Exxon are expected to grow as fast as Facebook, but is the social networker really twenty seven times better than the world’s largest energy company or largest retailer?

Out of the $3.7 billion in revenues, Facebook reported net earnings of $1.1 billion. Again, a $100 billion value would put Facebook at ninety one times earnings. We haven’t seen numbers like that since the dot com craze—and we all remember how that ended.

Wal-Mart, Walgreens, Exxon and Microsoft all trade for eleven times earnings or less. As such, an investor has to ask themselves whether or not Facebook is really nine times as good as any of these highly predictable companies with tremendous staying power.

Setting valuations aside for a second, an investor should also consider the corporate structure of Facebook.  Mark Zuckerberg, Facebook’s founder, made news this week when he made a $1 billion acquisition of a privately held company called Instagram.

What made this acquisition unusual is that Instagram has thirteen employees and zero revenues. Let me reiterate that—zero revenues. As such, Zuckerberg paid $1 billion for a concept! At those prices, I have a few concepts I’d like to sell too.

More oddly though was the fact that there was no bidding war for Instagram—just Zuckerberg and Facebook’s corporate checkbook. There was no consultation with Facebook’s board of directors, attorneys or other advisors. They didn’t even know Zuckerberg bought the company until they heard about it on the news.

How can this be? Although Zuckerberg only owns 28% of the common stock, he owns 57% of the voting shares. As such, he controls 100% of the company. Given this, an investor in Facebook should expect no oversight from a board of directors, no compensation committee and no independent directors. All you get is Mark Zuckerberg.

None of this means Facebook will flop as an investment. It just means that any potential investor must be aware of the risks that are plainly evident.

“We are proud to be associated with the SAMA organization”, says Ed Lette, CEO Business Bank of Texas. “SAMA provides important advocacy for the manufacturing business community and we support organizations that help grow and sustain our local economy.”

Business Bank of Texas provides superior banking services for commercial banking and will demonstrate the Virtual Teller Remote Deposit product at the show. Please make plans to visit representatives at Booth #712.

About Business Bank of Texas, N.A.

Established in 2007, Business Bank of Texas, N.A., is dedicated to meeting the needs of businesses and entrepreneurs across the state. Founder, President and Chief Executive Officer, Ed Lette, has become founding president of four national bank charters, including Business Bank of Texas, and has served as Chief Financial Officer for five national banks over the course of his 45-year career. The bank’s co-founder, Executive Vice President and Chief Financial Officer is Mary Ann Hebel. Prior to Business Bank of Texas, Hebel, a 37-year veteran of the financial services industry, held posts as CFO and COO while contributing the success of two other national banks. Business Bank of Texas maintains a five-star rating from Bauer Financial, Inc.

Information is stored in a concept similar to the three-ring binders. Within each notebook, you have sections (like tabs in a notebook) with pages within each section where your information is stored. You can have many notebooks, such as those for internal projects, clients, meetings, event planning, travel, etc. Users can keep notes, create tables, and insert pictures. Each note can also have almost anything attached, such as Outlook emails, Word docs, Excel spreadsheets, PowerPoint files, videos and web links.

Do you get lots of emails and find yourself wading through them all to find the ones you need for your presentation? Create a notebook or section for that presentation, then send those emails and attachments there and collect additional ideas as you get inspired. Now all your brilliant ideas are there in one place and available for when you prepare your presentation. Should you forget which folder you stored your information in, the simple search feature in One Note finds it for you. You can even search for text in pictures or spoken words in audio and video recordings. Say ‘goodbye’ to your sticky notes with OneNote.

Here are a few additional ways you can use One Note:

• Take staff meeting minutes to capture and recall important work items.
• Integrate your notes to your Outlook calendar, contacts and tasks. Find the notes later by either clicking on the item in Outlook calendar. Additionally, you can click on the OneNote item to go to the calendar entry. This is especially useful when you can’t remember the meeting date.
• Use the share feature to brainstorm ideas with others, even from different locations.
• Keep all files for projects together in the same place.
• Password protect sensitive data in different sections of your notebooks.
• Planning a trip?  Store ideas, pictures, flights, car rentals and other information all in one section with different pages for each trip. This is simple to do by selecting the “Send to OneNote” feature found in Outlook to send your confirmation emails over from Outlook into One Note.
• Securely store your personal information such as passwords, bank accounts, credit cards and frequent flyer numbers in a section, then lock them down using One Note’s password protection. This will prevent other people from seeing these pages and the file will be encrypted.

You can have lots of notebooks at your fingertips and work with others on them as necessary. It’s convenient that when you’re out of the office you can still edit and add to the notebooks, then sync when you return.

OneNote helps you keep everything in one place, and then reorganize and share as needed. Plus, you don’t have to worry about saving your work as it automatically does that when you exit the software. It also backs up automatically.

OneNote is available for Windows PCs, iOS devices, Android devices, Windows Phone 7 devices, and has a web interface as well.

Still not convinced?  Contact me at Business Accounting Software and I’ll gladly discuss with you the wonders of this underutilized gem.

●  Gross
●  Modified Gross
●  Triple Net (NNN)
●  Absolute Net

Each of these different types correspond to different landlord-tenant liability allocations for commercial lease pass through expenses.

There is no “standard” commercial lease, although some real estate industry associations have drafted their own standardized forms (which are often favorable to the landlord).  Most real estate agents will advise you to consult a Texas real estate lawyer who can optimize the lease to protect and serve your business operations, and to create a secure and valuable asset for your company.

An experienced real estate attorney can help you identify hidden risks that are specific to your small business and your commercial lease.  For example, the replacement insurance terms of a commercial real estate insurance policy may exempt coverage that could expose your leased business premises and your financial health to additional risks.  Other more practical considerations, such as construction and build-out of the leased premises, signage, terms and enforcement of parking policies, lease assignment and transfer rights, and other issues should also be optimized for your specific operations, financing, and risk management structure.

Often, there are many players involved in negotiating a commercial lease.  Typically, the landlord and tenant will each have their own real estate agents and attorneys.  To negotiate a lease on the best terms possible, it’s important for everyone to work together, and for your commercial lease attorney to be involved early in the process – ideally before you sign a letter of intent (LOI).  Prospective tenants often suffer the burden of additional expense, time, and effort when they sign a non-binding LOI that lacks “teeth” and provides no incentive structure to drive the commercial lease negotiation process.

Your commercial lease is a long-term investment with long-term obligations.  Proactive effort to effectively secure your leased commercial property and to negotiate landlord-tenant liability will provide exponential benefits to the long-term success of your small business.  The Blake Law Firm frequently provides Texas commercial real estate attorney services to business owners and advises purchase, sale, and commercial lease negotiation matters in Austin and throughout the state of Texas.

Disclaimer: This article is not legal advice and does not create an attorney client relationship.  To reach the attorney responsible for this article please contact James Blake, The Blake Law Firm PLLC, 9442 N. Capital of Texas Hwy, Arboretum Plaza One Ste 500-181, Austin, Texas 78759. (512) 651-3930.

It’s a kid’s dream come true—having Blue Bell ice cream for breakfast every day. And that’s just what Bill Rankin does. However, for Rankin it is much more than a childhood treat and he’s no kid. Bill is a former Air Force pilot as well as a CPA and the Chief Financial Officer for the iconic Texas company–and he literally “eats the companies cooking.”

Bill was kind enough to make the journey from Brenham to Seguin to meet with the students of Bulldog Investment Company at Texas Lutheran University. For three hours he gave a command performance my students won’t forget.

In his capacity, Rankin has called Blue Bell home for more than thirty years. As such, he can quote any ratio, percentage or other metric associated with Blue Bell–or the ice cream industry for that matter.

During Bill’s tenure, the company has transformed from a quaint little operation selling frozen treats only in Texas to one that now sells in twenty one states. And although Blue Bell sells in less than half the country, it commands the third best market share in the nation. It simply dominates the markets they are in. They’ve done so knowing that if they treat their customers well, word of mouth spreads which delivers even more customers. Furthermore, they recognize it is far easier to take good care of your existing customers than it is to market for new ones.

For all their success though, some of the most valuable advice Rankin shared had little to do with numbers. Instead, it dealt more with issues of fairness, integrity and passion when dealing with employees, customers and business partners.

When asked why Blue Bell is so successful Rankin immediately answered, “because of our people.” He explained that you must have the right people and they must have passion for the job. And, of course, the company must treat its people well too.

Obviously, Blue Bell has succeeded in this category. It is one of very few companies that offer not only a 401(k) retirement plan, but also a defined benefit pension and an employee stock ownership plan. That type of loyalty has average employee tenure at more than thirty years.

Despite the cyclical nature of the food business, Blue Bell has never laid off one employee. Furthermore, they’ve not forgotten their humble roots as they often operate like the little creamery that began operations in 1907. To this day, their expansion is slow and methodical; accomplished without the use of complicated budgets or debt financing.

When quizzed about the most difficult aspect of his job, Rankin again referenced the company’s people. He said they agonize over the best way to be fair to their employees making sure that everyone is given the opportunity to succeed.

For all of their success though, Blue Bell does not worry about making money. Instead, they love the job and the money is just a byproduct. On a daily basis they focus on “doing common things uncommonly well” and believe that “success is when preparation meets opportunity.” Additionally, Rankin believes that it is hard work that allows someone to succeed and rarely do you see people fail who are willing to work hard. Doing so with integrity and high ethical standards seems to supercharge their success that much more.

It is reassuring to see that Blue Bell knows that capitalism, hard work and ethical behavior are not mutually exclusive ideas. In fact, Blue Bell has a firm understanding that those are the key ingredients to truly long term success.