Category Archives: Business

So Kid, You Don’t Think Education Is Important?

There’s a &%!$ing Study for Everything

Should leaders cuss? Believe it or not, someone's done a management study on that question and as you can imagine it sounds like it was one of the more entertaining academic exercises you'll ever find:

In the most memorable scene of any academic paper I've read lately, Jenkins, after working in the packing department for a couple of months, uses nuclear-grade profanities to challenge an alpha-male co-worker, a guy named Ernest: "Well f—–g get on with it then, you lazy —-." Other workers gasped, but in fact, the incident led Jenkins to be invited to join group activities from which he'd previously been excluded. "[Jenkins] had identified the profane linguistic 'initiation rite' for inclusion in the packers' social group, and used it successfully," the authors concluded.

Winston-Salem City Council Needs to Be Aware of the Law of Unintended Consequences

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According to this story on WXII's site the Winston-Salem city council is considering a new set of fees for Internet cafes. From the story:

The city of Winston-Salem could stand to generate more than a $500,000 if City Council members approve new taxes on Internet cafes.

The City Council has proposed a $2,500 license fee and a fee of $500 per machine for the nearly 50 new locations operating inside the city. Currently, the businesses pay no taxes to the city or state.

"We're getting no revenues from these very rapidly growing businesses that are in our communities," Winston-Salem Mayor Allen Joines said. "Our budget is very difficult right now, so any revenue enhancement we can come up with that will not really impact a business, we're trying to look at. We believe these are very lucrative businesses and could easily afford this fee we are proposing."

I haven't seen the actual proposal so I can't speak to the specifics, but what worries me about this is the definition of "Internet cafe". If the definition is too loose then here are some of the businesses that could get sucked into this:

Any business that charges for wi-fi access – for instance Starbucks – could conceivably be charged for each person that pays to access the network.
Hotels that charge for internet access in rooms, or that provide internet access on computers in their business centers and lobbies.
Even coffee shops that provide free wi-fi could get hit for $3,000 – $2,500 for the fee and $500 for the computer/router. They aren't making a dime off the wi-fi, but if the proposal isn't worded correctly they could get hit with the fee regardless.

It sounds to me like the City Council is trying to target a specific type of business (essentially legal gambling parlors), but sometimes when fees or ordinances are adopted to target specific types of businesses then other "innocent" businesses get caught in the crossfire.

I can guarantee you this: if every company that offers free wi-fi learns that it's going to be hit with a $2,500 fee then you can bet your bottom dollar that free wi-fi will disappear in Winston-Salem. Paid wi-fi might survive, but you'd have to sell a LOT of daily access passes to justify it. As for hotels that charge $15.95 a night for internet access in your room? I'd like nothing better than to say "Hit 'em with your best shot!" since that's one of the most annoying business practices in the hospitality sector, but if you do they'll just pass it along as a higher daily rate.

That Winston-Salem is looking for additional sources of revenue is not surprising, and neither is the fact that the targeted industry is a "sin" business, but let's hope the City Council is smart enough not to tax itself. After all, this is the city that just a few years proudly unveiled its own free wi-fi on Fourth Street. The description of the free wi-fi service from the city's own website sounds to me suspiciously like what the rest of the world considers an Internet cafe:

Fourth Street Wireless Internet access is a free service provided by the City of Winston-Salem. Citizens in restaurants and businesses along Fourth Street can access the Internet through high-speed connections and enjoy browsing the Web, checking and sending e-mail, or chatting through instant messaging services.

Like I said, I just hope the City Council is very careful with this thing.

One last thought: Can anyone think of other fees that are targeted at specific industries? I'm sure there are some out there, but my fatigue-fogged mind isn't hitting on any right now.

ExtenZe at Hanes Mall? Really?

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I know I've been distracted lately, what with three teenagers needing feeding and watering, the day job going on all cylinders and me being preternaturally distracted and all, but how in the heck did I miss this? ExtenZe opened its one and only store in Hanes Mall over the weekend! From the article:

ExtenZe has predominantly marketed to the male demographic in the past. Not only with a NASCAR Sprint Cup sponsorship of the No. 37 ExtenZe Racing Ford, but also through spokesman such as Jimmy Johnson, championship winning football coach, and porn star Ron Jeremy. Also with late night infomercials, featuring Bridgetta Tomarchio – actress, model, talking to people about their personal sexual performance levels.

But now one of the hottest products is ExtenZe Women, an all-natural blend to create a female libido booster. In addition to these enhance products, the store plans to capitalize on traditional mall products with the ExtenZe logo on and engaging slogans such as “Yeah, We’re Cocky” and
“Growing Our Fan Base One Member at a Time”.

I never thought I'd live to see the day that Hanes Mall was mentioned in the same article with Ron Jeremy. Seriously, is this a hoax or can someone confirm that there is indeed an ExtenZe store at Hanes Mall? I go to the mall once a year (Christmas Eve, 3:00 p.m. in a panic) so I have no way of knowing for sure.

A Little Tarnish for BB&T

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Winston-Salem based BB&T has enjoyed a very strong, positive public image especially during the last few years as other "local" banks like Wachovia painted themselves as evil-banker-villain people. Well, it looks like the sterling image is in danger of being tarnished. To wit, two stories in the last week (h/t to Ed Cone for lead to first story):

Visions of Profits Gone, Lot Buyers Sue (News & Observer)

Attorney Wes Hodges, whose firm filed the suits against Saunders, said that buyers were subjected to high-pressure sales tactics. He said they were told it was certain that they would reap big profits by the time the two-year loans came due and that the subdivisions would be finished by then.

He said prices of the lots were artificially increased via fraudulent appraisals and that the lender – BB&T in most cases – signed off on the loans knowing the prices had beenhyped. The frontline bankers approving the loans were paid bonuses of up to 100 percent of their annual salary for hitting targets for the number of loans written, he said.

BB&T is a defendant.A spokeswoman for the bank said it doesn't comment on ongoing litigation but that it will vigorously contest the allegations.

Whistle-Blower Ordered Re-Hired in a Ponzi Scheme (Associated Press)

The BB&T Corporation must rehire a former company investigator who said she was fired after exposing a $100 million North Carolina development scam, an administrative law judge said in a ruling released Friday. The decision, made by Judge Jeffrey Tureck, said the investigator, Amy Stroupe, should be reinstated to her position with back pay because of protection afforded by whistle-blower laws…

Investigators say the development, known as the Village of Penland, was a Ponzi scheme, and Judge Tureck said in his ruling that the bank was assisting the fraud by making loans to investors in the community.

Less than Zero

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Before I start let me please ask one thing: family and friends who know me well, please try to keep the snickering to a minimum as you read this. Here goes.

One of the requirements of my day job is working with our finance committee to figure out how to manage the association's money. Cash management is a given for any company, but like many non-profits we have emergency reserves that we have to manage and make sure they will indeed be there for a rainy day. (The thought of me managing emergency reserves is what probably has my family and friends snickering since I'm the same guy who in college, and the ensuing years until marriage, managed his checking account via ATM. If there was money there I took it and if there wasn't I just shrugged, wondered where the hell it had all gone and resigned myself to eating peanut butter until the next payday arrived). The association's bylaws limit what we can do with the reserves so there's really not a lot of thinking to do. We just have to find the best possible return in money market funds or CDs and we have to make sure they are structured so that they're fully insured. Here's the rub: CDs and money market funds currently have rates that range from zero (that's right, nada) to one or two percent. Unless inflation stays that low then our money is effectively losing value as it sits in the bank.

All that's to say that if you have financial reserves with which you need to play it safe then you're going to have to accept break even as a good deal for the time being. Along those lines Fred Wilson has a very pertinent and must-ready post here.

Cuban: Corporate America Has Been Neutered

Used Car Dealer Meets Social Media