Marklin Financial Services LLC

Lots of company claim they are good at customer service. And many say they listen to their customers.

But just listening is not good enough. I feel you have to listen, show concern and do something about it.

A day does not go by at our Bridgewater Foods Supermarket that we do not get a customer comment. Some are critical, yet many are positive.

When a customer makes a comment, we try to stop what we are doing and engage with that customer in a sincere conversation. We look them straight in the eye. We listen to what they are asking. We then respond to their comment in an honest way. And finally we take their name and number to call them back when the situation has been fixed.

As a result, our customers believe we take their comments seriously. And when we act upon them, and they see that they have sparked a change, well then it becomes fulfilling and contagious. They will bring up more suggestions and the cycle begins again.

Many retailers want to stick their heads in the sand and not know what is going on. After all it is much easier to ignore their comments and stick to the status quo. But these retailers will be left behind in the long run. Most of the changes we make today are spurred by customer thoughts, not the owners.

Those who really listen and do something will be rewarded with loyal customers and walking billboards of your store.

John Marklin

www.marklinfinancial.com

Quite often I will get a phone call from an aspiring entrepreneur who needs help launching his new idea into the market place. This usually is a result of an entrepreneurial seizure; some spark within their field of expertise that they naturally want to capitalize on.

In the past, I would spend countless hours with new entrepreneurs honing their mission, their vision and their strategic plan. Then we would spend time working on a SWOT analysis and a cash flow forecast.

This information is still critical to a successful launch of a business idea. However, I now drill into one more area at the beginning of the process. How is the project going to be funded?

Recently, some of my clients have run into brick walls when it comes to funding. The banking situation in this country has totally taken its eye off of new business development. They look at new entrepreneurs as it they have a disease; they want nothing of them. Unless you are bringing hard unencumbered assets to the table for the bank to use as collateral, forget about even going to a bank. It is a waste of time.

Once aspiring business owners realize that the banking venue is shut off, they usually resort to bootstrapping the project. Doing it in their free-time and keeping their full-time job going to pay the bills. The problem here is that a project that gets less than 100% of your effort usually results in less than 100% success.

The last option is the private funding venue; something like what goes on in the show Shark Tank. The entrepreneur seeks funding from private individuals in exchange for a stake in his new company. This can be tricky as the “angel financier” will want most of the profits leaving you with a small slice of the pie.

I try to encourage entrepreneurs (who seem to be very young these days), to find funding from family members or friends. At least they will know the integrity of the owner and the owner will less likely bail if they know family or friends’ money is at stake.

Of course, the best choice is to fund it yourself providing you have a pile of cash available for the project. This usually eliminates the younger owners. But if you can pull this off, it will provide you with the most flexibility and freedom to achieve your goal.

John Marklin

www.marklinfinacial.com

After graduating from Mizzou in accounting in 1974, I landed a job with the prestigious CPA firm of Peat Marwick and Mitchell in St. Louis. I was thrilled with the opportunity to work at one of the “Big Eight” firms and wanted to start my career off on the right foot.

I reported to my first client, Emerson Electric, with much anticipation and anxiety. I didn’t know what to expect. So I put on my best 3-piece suit and got to work thirty minutes ahead of time to impress my supervisors.

I was the first to arrive, so I settled in and laid out my pens and pencils and sat waiting for my boss. He arrived a few minutes later and we chatted for a couple of minutes. I then asked him what he wanted me to do.

“Go make a pot of coffee!”

My jaw dropped. My eyes had a deer-in-headlight look. I said to myself, “Make coffee? You’ve got to be kidding? I didn’t come to work here to make coffee!”

A split second later I snapped back to reality and attempted to make my first pot of coffee. It was a disaster. I didn’t clean the pot well and had no idea of the number of scoops to use. Plus the filter wasn’t properly laid so it doubled over and coffee grounds floated in the pot.

Somehow I survived that harrowing experience. I eventually became a pretty good accountant and also learned how to make a pretty good cup of coffee.

So, in order to prevent this from happening to anyone else, I will let you in on my secret formula for a great tasting cup of coffee. It is in the number of scoops to use. That’s right. You have to use the perfect number.

Here is my formula that has been tested, by me, for 35 years.

# 0f Cups divided by 2 minus 1 = # of Scoops.

For example, if you want a 12-cup pot of coffee, take 12, divide by 2 or 6, minus 1 = 5 scoops. Perfecto! That is it! For a fine cup of coffee!

Trust me on this one.

John Marklin

www.marklinfinancial.com

Much discussion is taking place these days in the halls of congress about student loans and the impending doubling of interest rates on Stafford loans in July. Both political parties agree that the rate for new Stafford loans should not double and now are entrenched in another bitter fight about how to pay for it.

Times have changed in this arena dramatically since I went to college in the 70’s. Back then I could work really hard in the summer cutting grass and make enough money to pay for 75% of my entire tuition and living expenses at Mizzou. The remaining 25% was paid by me through work study programs at the college and other odd jobs throughout the school year. My parents couldn’t afford to pay for my college and I really don’t remember student loans existing.

Today, it is much harder to make enough money in a year while paying for a college education. Education costs have increased dramatically over the years, well above pay raises for workers. In stepped the federal government with low interest college loans to pay for out-of-control tuition hikes. All this was to delay the inevitable; paying for these loans after graduation when you have your lowest paycheck.

We now have student loan debt over a TRILLION dollars. More than all credit card debt and more than all auto loan debt. It is hard to imagine being surprised at our predicament.

Over the past twenty or so years baby boomer parents did what their parents didn’t do, pay for their kid’s college tuition. And when there wasn’t enough money in the bank, they had a plethora of low interest loan choices. They wanted their kids to pursue their dreams, letting them choose the college of their choice, often not worrying about the higher cost of tuition some of the schools charged. After all, we should never discourage our kids from seeking the best path in life at any cost, right?

Those days are gone. Regardless of what the government decides to do with Stafford loans, there will eventually be LESS government subsidies and loans available to fund high tuition at prestigious schools. This will force a major decision: kids choosing more affordable schools or the more expensive schools dipping into their endowments to make the decision more palatable.

Regardless of when this happens, frank discussions with your kids about the real cost of tuition needs to be done early in their teen years. Kids have to understand that all decisions come with a financial cost and realize that dreams can be achieved through a less expensive route.

John Marklin

www.marklinfinancial.com

Our Bridgewater Foods Supermarket has a really nice tradition for Earth Day. The children in K-5th grade at the local elementary school decorate our paper shopping bags with an Earth Day theme. They return the bags and we put them on display at our checkout stands. Customers are free to use any bag for their groceries.

This tradition has gone on for many years and some of the customers come in specifically to use the colorful bags. Some parents and grandparents look for their child or grandchild’s bag to use. It is a fun activity and one that really promotes recycling and the spirit of Earth Day.

The bags are going fast, so stop on by if you are in the neighborhood. See below for a sampling of this year’s bags.

John Marklin

www.marklinfinancial.com

“John, check the security cameras. I think a shoplifter just left the store.”

That was the message my front end manager gave me on the phone about a very suspicious looking customer.

So I checked the monitors in our back office and sure enough found a young man take a bottle of beer, hide it in his gray hoodie pocket and walk right out the door. I made note of the customer and told the cashiers to alert me if he returned.

A couple hours later the same person came in and I was immediately alerted. We watched him on the cameras and found him take a deli sandwich and put it in his pocket. I left the back office and hung around the front door until he tried to leave the store.

I stopped him before leaving and asked him to take out what was in his pocket. His face sighed at being caught and he showed me the sandwich. I took his name and address and told him never to come into my store again.

Dealing with shoplifters is part of being in the grocery business, or any retail business. Owners and managers know that it goes on, and some have elaborate camera and security systems to catch thieves. But following through on prosecution is not always done. Why? Because the time and effort required to prosecute can be many hours, or even days. So an owner has to decide if it worth it.

My business partner and I believe very strongly in having a zero tolerance policy regarding shoplifting. It is not so much due to recovering a $2.59 deli sandwich, but the message that it sends to the community. Shoplifters talk and when they hear of someone getting busted, the word spreads. If a store is not tough on crime, we are sending a message to all to come and steal from us; we won’t take the time to prosecute.

My front end manager and I had to spend three hours in a courtroom waiting to hear the outcome of the shoplifter. The judge finally ruled and gave the culprit a conviction and a fine, and explained that three shoplifting convictions equal time in prison.

As I left the courtroom I had mixed emotions about the whole process. It shouldn’t require six man hours of the victim’s time in a courtroom to prosecute a shoplifter. But if I don’t spend the time, I may have a bigger problem and more theft in the future.

I guess I will have to get used to sitting in this courtroom.

John Marklin

www.marklinfinancial.com

A friend told me last week of the sudden closing of a popular hotel, The Atlantic House and its destination restaurant, Blue Sky, on York Beach in Maine.

My friend’s daughter had plans to be married at the hotel in Oct. Plans had been set and a sizeable deposit was made to Atlantic House last month.

Now they are scrambling to decide what to do. Friends were coming in from as far away as Alaska. Invitations have been made. And the deposit…..

And they found out about the closure, not from the hotel, but from an acquaintance who read about it in a newspaper.

The hotel did send out an email to customers with reservations after the article hit the newspaper and the ensuing angry phone calls to the Atlantic House. The email talked of trying to renegotiate its lease and the process taking longer than expected. They apologized for the inconvenience to the wedding couples.

This leads one to think, “Just how much research is needed on the financial viability of a hotel when booking an event like a wedding?” When we booked our daughter’s wedding three years ago at the Marriott, it wasn’t an issue. Marriott was a world-wide chain. But booking events at a sole proprietorship, like the Atlantic House, does bring along risks.

It is interesting to note that the Atlantic House still has its website up today, and there is no mention about being closed.

One piece of advice to anyone booking events like this is to pay with a credit card. You do have more protection paying with a credit card and a good chance of getting your deposit back.

But that certainly doesn’t relieve the stress and anxiety of finding a new location.

John Marklin

www.marklinfinancial.com

Last week I was a last minute addition to the Richmond Monument 10K run. This 6.2 mile run is gaining in popularity with over 40,000 participants this year.

I opted to start out running and then planned finishing with a brisk walk. Of course I did not prepare at all for this. So at about mile marker three I pinched a nerve in my right hip and had to slowly walk the remaining three miles.

As I walked in pain down the last stretch of Monument Ave I had some time to observe the beautiful landscape, the stately mansions and Civil War hero statues that adorn the famous street. This street truly is a gem for the city.

I also watched many people much older than me pass me by. To these serious runners, focus was in, and running as a hobby was out. The determination matched the perspiration on their faces as they seemed only intent on beating their personal best time.

Later that week, Debbie and I traveled to DC to see the legendary Moody Blues once again in concert. Since the 70’s I have followed the Moodies as my favorite band; I have most of their albums and used to be able to recite most of the words.

The Moodies now consist of only three of the original members. The lead singer Justin Hayword is the youngest at 65, the drummer Graeme Edge just celebrated his 71^st birthday and bassist John Lodge is somewhere in between. Age has not deterred these talented musicians as they performed their favorite songs on this, their 45 year anniversary tour since the release of the iconic “Nights in White Satin”.

From Justin’s strong voice to John’s harmonic tones to Graeme’s Higher and Higher dance, these Moodies have not slowed down in the least as they head into their diamond years. Their stamina playing for over two hours in a very hot hall was evidence that these musicians are in great shape and feed off the energy of their loyal and enthusiastic fans.

As spring always seems to bring a new energy to me, it was good to see firsthand how some middle age people are coping with and seem to be prolonging the aging process.

John Marklin

www.marklinfinancial.com

When I started my consulting career in 1997, I did what other consultants did; bill by the hour. I would try to find out what others billed so I could be competitive and not under-bill for my services. I set up a simple time-keeping system and tracked my hours every day. Then on Sunday nights, I would recap the week and send out bills to clients.

Over the years, I changed the way I bill. Sometimes clients would ask for a set price for the project or a monthly retainer. Or they would want a not-to-exceed amount. A couple clients asked me to be paid only if they were paid, a contingency-type arrangement. Still others wanted to put me on some type of commission.

I dabbled in all the above types of compensation methods. While doing so, I started to think about what the client was really saying.

“I really am uncomfortable with paying you by the hour. I don’t know how much time you will eventually spend and the bill may be more than I can afford, or what I believe the work is worth.”

Consumers have developed a bottom-line mindset. They wants a simple price for the product. Transparency is in. Vagueness and uncertainty are out. Billing other than by-the-hour seemed to satisfy this thirst for simplicity in pricing.

As I changed away from hourly billing I also saw an unexpected side-effect; I started to make more money.

When I billed by the hour, there was only so much to be made. There are only so many hours in the week that can possibly be billed.

But when I gave a flat quote to a client for the entire project, the number of hours available started to increase. If the flat quote was designed for a total of 20 hours of work, and I got it done in 15, I just saved 5 hours that could be applied to another flat rate job.

I found that when I multiplied this exercise 5 times, I could practically add 25-50% more available time to use at my disposal.

Consider moving away from an hourly mindset. The client wants it. And so will you.

John Marklin

www.marklinfinancial.com

It used to be very easy getting credit, especially for personal residences and home equity loans. Five years ago, mortgage loan officers wouldn’t even verify your income for underwriting. And they waived the 20% down payment using a secondary loan vehicle. I remember thinking to myself back then that we were in for a real shake up when these loans had to be serviced in a tough economy. And it did happen with the real estate collapse and the bank bailouts of a few years ago.

The pendulum has now swung as far as possible to the other side. For anyone who has attempted to get a mortgage or a loan today, they will find an incredible due diligence process. Where the underwriting used to rely on collateral as its main form of approval, the process has shifted to substantiation of cash flow, and being assured of making the payment.

I don’t disagree with this logic at all. It seemed reasonable that if you are going to borrow money, you need to assure the lender he will be repaid. The best way to do that is to substantiate cash flow.

But the way cash flow is substantiated, is flawed, in my opinion.

Banks look at your income as the first source of cash flow. And income usually is W2 income. Therefore, if you have a job, one that pays you a salary, and it meets the debt service formula requirement of the proposed financing, you are well on your way to loan approval.

But if you don’t have a “real” job, well then good luck.

Banks do not view free lancers, independent contractors and new business owners as having a real job. Even though you may be able to substantiate historical cash flows from business ventures, these funds are considered secondary to someone who gets a fixed paycheck.

This thinking is archaic. Especially now.

The US needs to improve its economy. Building homes, refinancing, and starting new businesses are all good for the economy. They add jobs.

Banks are is the business of lending money. Along with this comes an underwriting process that should look at all sources of income and collateral in order to substantiate the risk.

Sometimes this requires doing things a little differently. Sometimes a little outside of the box. And something not copied out of a FHA or Fannie Mae playbook.

John Marklin

www.marklinfinancial.com