Settlement Negotiations 3

I got an email from The Wicked Stepmother last night seems like she hadn’t received anything back from me or the go-between. Turns out the go-between hadn’t been to his office for the last few days and hadn’t got my email. Oh well.

So I replied to her email and spoke to the go-between. (Aside: aren’t all these codenames tricky?). Then I called my lawyers and got some general tactical advice. The summary of which was offer what you can.

So I offered them what I could. All the non-monetary things they wanted, 1/3 of their cash settlement offer now and another 1/3 in 12 months. I told them I would enter a multi-year deal and I was offering all I could over 12 months (2/3 of their claim). They said they wouldn’t wait for 5 years either.

They wanted 100% of the cash. I was afraid they’d take that position. I said “I’ll give you the other 1/3 after another 12 months but that was all I had and wouldn’t threaten the company by committing to a outlay that wasn’t viable”. They’d get back to me.

A while later I got a call, they wanted 100% paid 1/3 now and 2/3 in equal weekly installments over 40 weeks. They tried to play the emotional line about building a company from nothing over 20years to get nothing. I thought the $1Million they’d got so far wasn’t really nothing, but didn’t mention it. Instead I told her I’d call her back once I looked at the cashflow implications of their demands.

I called the lawyer, who said to stick to the message. I called the go-between who said stick to the message.

Then I got angry. No way the company can pay that sort of weekly drain. That’s what got us into this mess in the first place. Aside from the cash I am giving up a few valuable assets including a 50% shareholding in their childcare centre and current business. So I called them back and told her that. She said 50% of nothing is nothing. I stuck to my message about responsible spending and that is all I have.

She didn’t believe me, and we’d probably end up in court.

I repeated the message I don’t want to spend a fortune in court, I do want to settle this and am offering them 100% of what they want. I am giving them 100% of what I can conceivably give. If they don’t want it then at least I tried. She said they’d let me know.

Settlement Negotiations 2

Got the Heads of Agreement for the settlement today. It is a one-sided document prepared by the other side’s lawyers. In it I promise to do six things and they promise nothing – including no mention of ceasing all actions.

Oh well that’s what happens when the other side prepares the documents. Obviously I wont sign it. At this stage I’m not sure I can pay them all the money they want anyway. So I’m trying to figure out how much they will take and what’s the most I can afford to give them.

Strategic Planning

I’ve been planning the next steps for my company.

We’ve run ads for new distributors, I’ll be interviewing some applicants tomorrow. Hopefully I’ll hand that over to one of the staff as well. Actually that’s interesting because distributors mainly deal with my staff member who does stock allocations. Her role in a retail company may be that of merchandise planner, she determines what products each distributor carries this week.

Because she handles day-to-day communication with distributors I thought she should have a go at hiring a couple. Should be interesting.

I’ve been looking for a warehouse for short term rental to take the warehouse clearance sale on the road. I need 100 to 400 square metres and I don’t want to pay more than $500 per week for more than a couple of months.

I think I’ve found one.

So now let’s see if I can negotiate the lease and get the sale moving.

Feeling good about bad things?

I missed an opportunity to chat on ABC Radio Statewide Drive with Brad Storey who asked:

I’m working at the ABC radio and looking for someone to comment on the ‘psychology’ of finance. Why the dollar at .80 cents makes us feel good but may not be good for us.

Sadly I didn’t check the blog in the 1 hour 5 minutes and 17 seconds before the deadline. Hey I understand journalists’ time pressures. But it is a great question.

Why do we feel good about a dollar over 80 cents?

One answer is semantics. The media reports the dollar is up or down. Some tell us against the US dollar. None mention that you can’t actually get that rate anywhere. It is an indicative spot rate, but it is useful to know the general direction of the foreign currency market. So we generally feel good when things are up and bad when things are down. Of course that is when we are selling something.

Secondly there is nationalism. Australians are enormously competitive. We like having the best in the world – cricketers, swimmers, actors and currency. That’s okay, again when we are selling something.

Thirdly there is ego. Many Australians remember a Aussie dollar that bought $1.30 US or so. Some even remember when an Aussie Dollar bought nearly two greenbacks. Like fading aristocrats, we fondly recall the good-old-days and resent the conspicuous affluence of new money.

Lastly there is tangible versus intangible effects of our currency’s strength. We have interest rates higher than our trading partners. Hot money is chasing those higher returns, creating demand for our currency. Imports are cheaper because our dollar is stronger. Consumers notice they can buy DVD players for $89. That seems like a good thing to them.

Consumers don’t notice when exporters get less for their sales overseas. Most exports are denominated in US dollars. All that happens is fewer profits to those farmers, miners and bio-techs. The impact that has on the balance of payments is longer-term and disconnected.

Also we are no longer selling something, we are trying to buy Australian dollars with the Greenbacks we got for our wool, nickel and bionic ears. It’s a bit too abstract for our average consumer.

It’s like the February credit card bill – that’s when we truly pay for Christmas. We didn’t forecast that pain on Christmas eve. It seemed great to buy toys and gifts on plastic. We feel affluent and generous.

So there you are. Paulzag’s take on feeling good about bad behaviour. Cognitive dissonance in action. Of course the usual disclaimer applies Nobody knows anything – William Goldman

Office Suites

I’ve moved the company desktop to Mandrake Linux 9.2. There are some teething problems. The most surprising is the timing of double clicks is sufficiently different to our Windows NT boxes that we’ve all noticed it.

I don’t run a corporate democracy. I wanted Microsoft products out of my business, so I picked a Linux distro that seemed worth a try.

It comes bundled with OpenOffice.Org. I’ve been using OpenOffice for about 6 months and really like it. It isn’t a keystroke compatible clone of M$-Office, but it’s functionally almost identical.

So I’m with Sim’ that IBM should ignore M$-Office and get behind OpenOffice.

There are cosmetic differences and in many ways it is more powerful. But in ither ways it shows it’s geek roots. I use M$-Word to transform data from legacy databases. Word has a great feature to search and replace non-printing characters like Hard Line Breaks (^p) and Tabs(^t). In OpenOffice I think I need to use regular expressions. That may be wrong I haven’t needed it enough to learn.

That leads to the main point. For 99% of our requirments for Text and Spreadsheets OpenOffice is perfect. I have even used it to read documents from lawyers – most of whom use M$-Offices automation features extensively. I’ve been able to read and print everything. The margins and page breaks might have needed some fine tuning.

Now it’s a matter of removing the old PC’s from our desks. I know my PA uses Outlook when I’m not looking. She claims she can’t wait for Ximian-Evolution to implement Task Alarms. As long as staff can keep doing things the old way they won’t change. Plus it will take longer for them to learn the new tools as they rely on old familiar tools.

New staff mantra: Remove the ability to do things the old way.

Customer Abuse

I had one of those unpleasant customer experiences. One of our GSM sim cards has failed. So I walked into the Telstra dealer who does all out business. I explained that the card failed, want a replacement and hope we don’t have to pay for it. Not a chance said he, $33.00 would appear on our next bill. Without choices, we go through the motions of identifying myself and calling Telstra Mobile to activate the new sim. The sales guy butchers my surname in the process.

As I’m giving my account password to Telstra I gave it one more chance. Why do I have to pay $33 if the sim failed? “If it’s failed and not lost, you don’t have to pay” said the Telstra operator. Smiling I turn to my dealer, who says “No way – who’ll pay the $25 for the new sim?”

What?!?! I’ve bought 5 services and three handsets from these guys. Instead of working it out with Telstra, they grind me – the customer – in the middle. So I tell the Telstra operator I don’t want to do business with this dealer. Telstra agree and tell me to get a new sim anywhere – they’ll refund the charge in my next bill.

Dumb and dumber. That dealership had inside running on our new PABX for two companies, until then.

Make it easy to do business.

Customer Care

We sent out a letter (or email) to customers who signed up for our mailing list in last year’s warehouse sale. The only way onto the list was to be a customer last year. There were about 70 names on it as we didn’t start collecting addresses until late in the sale.

The letter offered a $10 voucher to give it wow! factor. Some staff freaked – what if the customer only bought $10 worth of products? Worse still what if they wanted change from the voucher? But I wanted wow!, so the only conditions were a two week window and no change.

We haven’t worked out the specific results of the promotion but the early results are pleasing and profitable. Remember we are focusing on clearance lines here.

The smallest purchase using a voucher was $12.00, and the customer offered to pay half. I thanked him for his offer and his support last year; asked for $2.00 and told him to tell his friends. The friends subsequently spent over $40.00. Other voucher users have spent hundreds of dollars. So our mailing list customers responded well.

We’ve also sent a mailing to regional primary school Parents and Friends groups and child-care centres. While only about 600 letters, these represent new customer categories for us. Basically they buy out of the box in our warehouse. Very dusty but fun, and the prices are peanuts. I have trouble with “prices slashed” – do customers really believe it? The cynic in me struggles to find authentic ways to express a genuine clearance sale.

Staffing is also challenging. Some customers want department store service, but at these prices it’s a place where you dig through and find your own bargain. Once a week I remind some staff member that we can’t help a customer for an hour to choose a $12 tablecloth. At the same time we smile, are friendly and help when we can – you never know when the $12 tablecloth will lead to a $1500 Mothers Day stall order. Plus we have an easy refund policy.

When customers are walking around with bundles of products in their hands we walk up and offer to put is behnd teh counter for them. That way they are free to shop some more.

Make it easy for customers to buy from us – that’s the mantra.

Systems at work

Good to see Bruce Whiting get good coverage in today’s Enterprise section of the Sydney Morning Herald . It’s a pity I can’t find a link to that section on the SMH site.

Bruce is MD of The Mint Group; and co-author with John Burley of Money Secrets of the Rich among other talents. I’ve met and like Bruce and referred friends to him.

The article was basically about getting balance and profits in the life of a business-owner. Bruce told me years ago that a shareholder should review their return from any investment regularly. A business-owner should first look at the manager’s salary they draw for their effort, and then benchmark their dividends/profits as well.

One way of achieving more freedom and profitability in a business is to systemise as much as possible. That’s what I’ve been trying to do at my company (in between legal battles). I get to work from home today as I lost my glasses on the weekend. But two years ago the company didn’t operate if the General Manager was absent. Everything was a crisis, emergencies determined priorities. What a stupid way to run a business.

Worse what an awful place to work. I live by the slogan Failure to plan on your part does not make your problem an emergency on my part. Why would I attract and keep good people who can make the same money elsewhere without the hassle?

So there has been a cultural change at the company, with staff able work without micro-management.

Bruce makes an interesting point that not all businesses can be systemised, e.g. if the business is locked up in the principal’s head or contact list. One solution is to move the business to a related industry and untangle it from the principal that way.

Get a copy of the SMH for the details – worth a read.

Design Changes

I’m gradually restoring the design elements of WealthEsteem. Those of you who remember it should be happy.

Given the improvements to WordPress I’m going to redo the design from the ground up so in the meantime I’ve used the simple_sky style by Chris M of http://aphotolog.com. Thanks Chris it looks great.

Let me know if something isn’t working. For now there is not calender. Hopefully it will be back soon.

Update I’m just finished the design at 1:43am Tuesday 17 February 2004. Let me know if anything broke.

Settlement Negotiations

The AVO hearing in the Succession Wars was this morning. Last week I sent an emissary to try yet another settlement – I asked to find out what they want.. This time we got results.

The Geezer and The Wicked Step-Mother told us what they want to go away. Now I need to decide if giving them what they want hurts less than continuing the fight. Basically I give them a wad of cash and some non-monetary things (like control of some companies and products).

There is nothing absolutely objectionable about the non-monetary side of the offer. So now it’s a matter of working out how to give them that stuff without incurring large expense or liabilities. The monetary settlement is trickier. Obviously I can’t go into the level of detail I’d like. It is really tempting to do an exact breakdown.

The way the deal was put to me was “here is an offer, pay them $X and give them this stuff, in return all actions cease”. I took all actions to include the AVO complaint as well as their actions against me. If we settle the dispute I don’t need to fear the Geezer attacking me out of frustration with legal battles. In the spirit of give and take I withdrew the AVO application.

Credit where it’s due, the Geezer checked with me if I would be upset if he pursued a costs claim against the Police. While it is unlikely the Police would make me pay a costs order against them, they would not be well-disposed to me if they lost a costs order. I reminded the other side that we are trying to harmoniously resolve the dispute and upsetting my reputation with the Police was not good. I told them I’d appreciate it if they didn’t pursue costs. They didn’t pursue costs and the Magistrate congratulated us on being able to resolve some of our disputes.

Anyway I thought some of you would like to know there is light at the end of the tunnel. At least it seems like it.