Questions Financial Advisors Hear the Most

Preface: There are some questions that are asked frequently by clients. If our clients are asking them, it means that others are likely wondering the same thing. Here are the three most common questions asked on a daily basis.

Questions Financial Advisors Hear the Most

How much should I be saving?

This is the number one universal question. No matter age, income, or financial stability, everyone who steps into the office asks this question. To answer this, we like to suggest the 50/30/20 budgeting rule. What this means is to simply divide your take-home pay into three categories to provide a framework for how that money should be allocated. With this model, half of your money goes toward “needs,” for example rent, utilities or insurance. Thirty percent is allocated toward discretionary spending such as vacation or going out to eat. The final 20 percent is what you should be saving.

Read entire article here

Jordan Sowhangar | CFP®, wealth advisor, Univest Investments, Inc. 

Recordkeeping for Donations to Charity

Preface: The rules governing the substantiation requirements for claiming a charitable deduction are complicated and require patience to analyze exactly which rule applies for the type and value of property contributed.

Recordkeeping for Donations to Charity

One of the requirements for claiming a tax deduction for a contribution to a charitable organization is that you have to be able to prove it.  The rationale is clear, but the rules for compliance are very detailed and the cost of running afoul of them can be substantial.  For example, in a case from 2017, the Tax Court disallowed a $33 million deduction when the donor neglected to include the necessary records with the donor’s tax return.  In a case from 2016, the Tax Court disallowed a $65 million deduction because the donor failed to obtain an acknowledgment of the gift from the charity.

To a large degree, the burden of complying with the rules lies with the donor, and it is certainly the donor who bears the most risk if the substantiation requirements are not met. However, an organization that receives charitable contributions has its own set of requirements and can be subject to significant penalties if those requirements are not met.

As a starting point, a donor who intends to claim a tax deduction for a charitable contribution must first make sure that the organization is eligible to receive charitable contributions. Most eligible organizations are listed in the Tax Exempt Organization Search, available at www.irs.gov…….

Read Entire Article Here: Record Keeping for Donations to Charity

 

Credit: Douglas A. Smith | Tax Attorney. 

Doug is a tax attorney who represents individuals and small business owners in the Lancaster area in IRS audits, appeals, and deficiency proceedings.  He frequently secures favorable collection alternatives for clients that involve installment agreements or offers in compromise.  He has experience dealing with liens and levies, penalty abatement, innocent spouse relief, substantiating business expenses, foreign bank account reporting, trust fund recovery penalty, identity theft, and many other tax matters.

Know Your Sales Tax Risks

Preface: Sales tax compliance is advised for every business. While sales tax laws are unique from state-to-state and item-to-item, analysis of sales tax risks on business products or services is advised. Here’s why.

Know Your Sales Tax Risks

By Jacob M. Dietz, CPA

Should you get a sales tax analysis?

Imagine an entrepreneur sitting at their desk opening mail. Suddenly they come to an official-looking letter from the government of another state. Hesitatingly, they open the letter. It states that their business owes tens of thousands in sales tax and penalties and interest.

How did the business get into this predicament? The business tried to render unto Caesar what was Caesar’s. None of us are old enough to have paid taxes to Caesar in the first century, but in the 21st century taxes are complex. An honest businessperson could find themselves with sales or use tax liabilities that they didn’t know they owed. Consider conducting a sales tax analysis to review if your business may have some sales and use tax liabilities.

Small Equipment Dealer

How could a business unknowingly rack up a sales tax liability? Assume Reuben is an equipment dealer who sells small wagons to farmers and gardeners. Most of his sales are to other dealers or to farmers, so most of his sales are exempt. Every month or two, however, he will do an online out-of-state sale to a customer who is not a farmer.

Does Reuben need to file sales tax for his out-of-state sales?

Reuben may want to ask a CPA to do a sales tax analysis for his company. Some questions they may examine are:

  1. In which states is Reuben selling?
  2. To what kind of customer is he selling?
  3. What type of product is he selling?
  4. How many sales dollars and transactions are there?

Reuben asks his accountant “suppose I sell $250,000 of nontaxable sales to XYZ state, and then I sell $20,000 of taxable sales. Must I file sales tax in that state?”

Taxability Varies by Jurisdiction

Assume Justin owns a clothing company in Pennsylvania. Based on the type of clothing he sells and Pennsylvania’s sales tax rules, he files no sales tax returns in PA. Justin is a very talented entrepreneur, and his clothing business continues to grow from small to large. Justin soon starts selling hundreds of thousands of dollars in clothing to other states. Since PA generally does not tax clothing, although there are exceptions, Justin assumed other states would not tax clothing.

To be on the cautious side, however, Justin decided to have his accountant evaluate his sales tax practices. The accountant realized that Justin did have nexus (substantial connection) with other states that do tax clothing. Based on the thresholds in the other states Justin should be filing. Fortunately, Justin had only recently reached the thresholds, so he was able to get his taxes in order quickly.

What would have happened if Justin had not asked his accountant to analyze his tax situation? Perhaps eventually another state would have audited Justin. It could have forced him to pay the sales tax with penalties. That would have been a blow to Justin’s bottom line. Since he was not collecting the sales tax to pay from customers, he may have been forced to pay it with the company’s money instead of the customer’s money.

Labor

Assume Brendan operates a handyman business. He fixes a variety of items, depending on the customers’ needs. One day, Brendan was called out to the home of a sweet elderly couple that needed some items fixed. First, Brendan fixed their chair. Next Brendan fixed their roof.

Is his labor taxable? The labor for the chair repair was taxable, since a chair is a taxable item. The labor for the house roof repair was not taxable, since the item was real property not subject to tax.

How can Brendan keep the taxability straight? He can withstand scorching heat while fixing a roof, but sales tax rules give him a headache.

Construction

Is sales and use tax compliance complex for construction companies? Generally, in PA construction contractors pay sales tax on materials that they buy, and then they generally do not charge sales tax on the finished building. Some other sales tax jurisdictions, however, treat it differently. If a construction contractor is working outside PA in one of those other jurisdictions, then they may want to know what those rules are.

What happens if a construction contractor buys materials in one taxing jurisdiction, but builds the project in another jurisdiction?

Outsource your Research

You do not want to be the honest entrepreneur opening the mail and finding that your business has not rendered unto Caesar what is owed. But what can you do? If you are like many business owners, you would rather fix a roof or prepare an estimate than figure out sales tax. Consider outsourcing your sales and use tax research to a trusted CPA.

This article is general in nature, and it does not contain legal advice. Please contact your accountant to see what applies in your specific situation.

Jake Dietz is a CPA, Business Consultant, with Sauder & Stoltzfus, LLC, a certified public accounting firm, in Ephrata, PA, specializing in entrepreneurial business accounting and tax services, bookkeeping, business valuation, and peripheral CPA services. Jake can be contacted at 717-961-9811, or jdietz@saudercpa.com

Achieving Elite Entrepreneurial Business Meeting Traction (Segment III)

Preface: Same person with a different question; same person with a different mindset; same person with a different and [now achieved] effective business meeting(s).

Achieving Elite Entrepreneurial Business Meeting Traction (Segment III) 

“Elite” entrepreneurial business meetings are achievable not on the premise of the business worlds definition of a [business] groups superior [meeting] successes or abilities, but on the timeless principle that [you and] your business is “elite” compared to one key standard — what your business meeting was yesterday.

Yes, there is only one business you should want to superior meetings to, and that is your own. Every minute you spend wishing you had someone else’s business meetings, is a minute spent entirely wasted towards developing and improving your own. Secondly, if you had that “other” [business] meeting, it would likely be like your own, because you’d be there.

So, does the mindset of business meeting participants determine the keystone effectiveness of the meeting? Maybe? If coffee and donuts influence and green-visor the characteristics of a business meeting mindsets, then the answer could be a resounding Yes.

A large-scale study was conducted to investigate the mindsets of business leaders when they were at their most effective and delivering their best results. In-depth structured interviews were conducted with 667 executives over a ten-year period. Eight distinct mindset themes were identified, one of the most common being a “Purposeful” theme, exhibited by 82% of the leaders. A closer examination revealed two major subcategories of the Purposeful theme

  • Impact on the World
  • God/Spirituality

 

The Purposeful mindset theme points to a contextual frame that is important to leaders, and seems to imbue them with a level of personal power and sense of mission that translates into high levels of accomplishment.

The link on leveraginggenius.com to the research report unfortunately says ……. The resource you are looking for might have been removed, had its name changed, or is temporarily unavailable.

Continuing further now with the keystone question of does the mindset of business meeting participants determine the business meetings effectiveness, continues to highlight this fact with the following excerpt as an interesting research from https://gelinasjames.com/mindsets-shape-meetings/

“Thanks to the groundbreaking work of Carol Dweck we now understand a simple idea: having a fixed mindset or a growth mindset shapes how we interact with others.

Individuals with a growth mindset believe their talents can be developed with dedication and hard work. Their focus is on learning. Those with a fixed mindset believe their talents are carved in stone and cannot change. Because of this, meetings called to solve problems or make decisions with others can be a trial for folks with fixed mindsets and a learning-fest for those with growth mindsets.

The mindsets are easy to spot. Those with a fixed mindset focus on being smart and right. If they are extraverts, they tend to talk with great confidence about THE right answer. They avoid taking risks or engaging in exploratory conversations without preconceived right answers because they fear their perceived inadequacies might get exposed. However, if those with a fixed mindset are introverts, they might stonewall, stay silent, and wait until the end to step in with their version of “This is the way it is.”

Those with growth mindsets focus on learning and finding effective solutions. They listen more, ask questions of genuine curiosity, and are open to the possibility that their perspective might be ill-informed or just wrong. And, according to Carol Dweck, people with a growth mindset achieve more because they focus on learning and less on looking smart.

As the calendar pages turn, the right mindset for business meetings(s) that too often is fabricated with a proverbial coffee and donuts is most effectively achieved with simply more effective and inquisitive questions per research.

We’ll wrap-up with some advice from https://executiveeducation.wharton.upenn.edu/thought-leadership/wharton-at-work/2012/08/shifting-mindsets/

When you’re heading to a business meeting, participating in a business meeting, or departing a business meeting — are you asking questions like this?

  • Who is to blame?
  • Why can’t they perform?
  • How can I [or the business] prove I’m right?
  • Why aren’t we winning?
  • What could we lose?
  • Why bother?

 

Sipping coffee and holding a donut will improve the above mindset created from those questions, yet there exist a different [and more effective] approach to the business meeting with the right questions; and that will lead to a more effective [an elite] business meeting.

  • What are my [or the businesses] goals?
  • What am I responsible for [in this business]?
  • What are the facts and what am I assuming wrong?
  • How can I help?
  • What do our customers want?
  • What steps can we take to improve the situation?
  • What’s possible [for this business]?

 

That friends, is an accountants perspective on the difference between the superior business meeting(s) you wish for, and business meeting(s) you have, both for you and the participants.

Same person with a different question; same person with a different mindset; same person with a different and [now achieved] effective business meeting(s).

Elite (Entrepreneurial) Business Meeting Traction (Segment II)

Preface: Every business meeting planned, should advisedly begin with these two questions. First, what does this group have to meet about? And, secondly, who are the right people for this meeting?

Elite (Entrepreneurial) Business Meeting Traction (Segment II)

Credit: Donald J. Sauder, CPA, CVA

Patrick Lencioni, president of the Table Group has this to say about the great meetings. “Meetings are the “linchpin” of everything,” “If someone says you have an hour to investigate [research] a company, I wouldn’t look at the balance sheet. [or cash flow statements] I’d watch their executive team in a meeting for an hour. If they are clear and focused and have the board on the edge of their seats, I’d say this is a good company worth investing in.” Article: Meetings: The Good, the Bad and the Ugly from Knowledge @ Wharton.

Interesting perspective, yes? Yet, very effective entrepreneur. If you want to hear the iTunes your business meetings broadcast, this is likely how you can determine quickly if your business meetings is achieving the ultimate purpose, with the listeners hearing and departing the meeting acting with increased strategic objectives, i.e. gaining traction.

There are numerous types of business meetings: “retreat meetings,” “executive level meetings,” or say “operational or company meetings.” Lencioni provides some key questions with regards to preparation for a [entrepreneurial] business meeting. First, what does this group have to meet about? And, secondly, who are the right people for this meeting?

It helps to start with the Why? The objective of the meeting is a good starting point for who should be in the room. Why is this meeting necessary? Why does the group need to meet? Say, is the meeting to build teamwork cohesiveness, communicate information, develop strategic goals for the enterprise, train the team on new business processes or field processes, develop specific skills of the group, i.e. customer relations, new software, or field technologies, or is the meeting to simply gather information from field members and office staff?

Once you have the right people in the room, the next question is: What is the purpose of the meeting? “That may sound pretty obvious,” notes Lencioni, “but it’s amazing how many times people come together and are not really clear about the purpose. One is to make a decision or have a discussion that will lead to a decision. Or is the purpose to give updates and share information? A lot of times people find themselves in a meeting where the primary purpose is to receive information, and that’s a poor use of people’s time. Those meetings can be easily dispensed with and can be an email instead that people read in their own time. The majority of meetings should be discussions that lead to decisions.” Article Meetings: The Good, the Bad and the Ugly from Knowledge @ Wharton.

“Recent research finds that the act of walking leads to increases in creative thinking. ….Plenty of anecdotal evidence also suggests that walking meetings lead to more honest exchanges…”

In the framework of the right people, can we challenge the continual table or desk and chair discussion, and consider in some instances HBR article: How to Do Walking Meetings Right from: Russel Clayton Christoper Thomas and Jack Smother.

Fran is part of a growing trend known as walking meetings or “walk and talk…..”

A walking meeting is simply that: a meeting that takes place during a walk instead of in an office, boardroom, or coffee shop where meetings are commonly held……. Likewise, Melmed finds that merely holding some of her meetings while walking has given her the necessary “unplugging” time she needs in order to be an effective writer.

Recent research finds that the act of walking leads to increases in creative thinking. ….Plenty of anecdotal evidence also suggests that walking meetings lead to more honest exchanges with employees and are more productive than traditional sit-down meetings.

Furthermore, Dr. Eytan believes walking meetings lead to better employee engagement by breaking down barriers between supervisor and subordinate or between coworkers. He sees the bonding achieved through walking meetings as a micro version of the bonding that can be experienced when coworkers travel together on business trips.

 “……if your [business] team is clear and focused on how to proceed effectively after the (discussion) meeting, the time was invested well.”

To be sure, not all meetings are suitable for walking meetings (and not everyone is physically able to participate in walking meetings). Sometimes it is valuable to have materials or a whiteboard close at hand….The best candidates for walking meetings are ones where colleagues are conferring on decisions or exploring possible solutions. Indeed, in our survey, participants holding managerial and professional positions experienced more of a creativity boost from walking meetings than those in technical or administrative type jobs (though all categories realized some benefits).

Reading a quote from Edmond Mbiaka “The habit of talking the talk has distracted many people from walking the walk” is too relevant to business meetings, because the appraisal value of the meetings, i.e. the discussion, will only be realized with the speed and achievement of the destination from walking the talk on implementation, e.g. if your business team is clear and focused on how to proceed effectively after the (discussion) meeting,  the time was invested well. You’ll walk out of that meeting and be an “elite” business, as a result of the effective traction from the business meeting.

Achieving Elite Business Meeting Traction

Preface: If you had to identify, in one word, the reason why the human race has not achieved, and never will achieve, its full potential, that word would be ‘meetings’ Quote: Dave Barry

Achieving Elite Business Meeting Traction

Credit: Donald J. Sauder, CPA, CVA

A great business meeting for countless entrepreneurs is too often considered worse than say a bad day hiking. Why? In this blog series, we’ll discuss the problems of business meetings, and provide tools to solve effectively that problem with an understanding of the key objectives and purposes of business meetings.

Many entrepreneurs are rarely overly experienced in business operations and therefore do not thoroughly understanding the purpose and effective structure of business meetings. This results in a typical unappreciated and misunderstood hour or two of the day that detracts from other business tasks they (or team members) excel in, e.g. fieldwork or sales.

“Effective business meetings have 1) an objective; 2) they are an efficient and a wisely invested use of participant’s time; and 3) the participants agree that the meeting was sensible, and worthwhile.”

“I just wasted an hour!” “What progress was gained?” We have entirely too many (meetings)!” “We always talk about the same problems!” “(s)he always dominates the conversation!” “Did you see him/her on his laptop answering emails?” Once the participant complaints start about business meetings, what is the (re)solution?

Effective business meetings have 1) an objective; 2) they are an efficient and a wisely invested use of participant’s time; and 3) the participants agree that the meeting was sensible, and worthwhile. If the meeting objective is met with proper preparation and an efficient process, then the participants agree that it was worthwhile, e.g. your meeting was a success. They (meetings) should all be like that — right?

A non-business example of a successful meeting: attending church every Sunday. It is for a 1) specific objective, 2) time wisely invested, and 3) participants for the most part agree it was sensible and worthwhile. The board was successful!

“If you suggest great coffee and donuts will make up for uncomfortable chairs, and a boring or lengthy meeting discussion, you’re probably right.”

START ON TIME. END ON TIME.

Nothing can drain the energy from a room quite like waiting for the person in charge to show up. Why do so many in positions of power fall into the bad habit of being late for meetings? Is it just that they’re so busy? Or is there a small thrill in keeping everyone waiting for them, a reminder that their time is somehow more valuable than everyone else’s?

Time is money, of course, and all that sitting around and trying to guess when the boss may arrive is a waste of a precious resource. When establishing the informal rules of an organization, employees take their cues from the person in the corner office. If that person wants meetings to start on time, meetings will start on time.

Terry Lundgren, the chairman of Macy’s, has never hesitated to enforce a strict policy of on-time meetings. “If the meeting is at 8, you’re not here at 8:01, you’re here at 8, because the meeting’s going to start at 8,” he said. “Busy people that can’t get off the last phone call to get there, [need to] discipline themselves to be there on time.”

Just as important as starting on time is ending on time. A definitive end time will help ensure that you accomplish what’s on your agenda and get people back to their work promptly. “I like to have an agenda that we think through,” Adam Bryant has conducted hundreds of interviews with C.E.O.s about leadership for the Corner Office series for the NY Times.

If you suggest great coffee and donuts will make up for uncomfortable chairs, and a boring or lengthy meeting discussion, you’re probably right. But was the objective of the meeting effectively achieved? Will (your) business develop and flourish further because of the business meeting(s)?

One thing’s for sure. “If we keep doing what we’re doing, we’re going to keep getting what we’re getting”. Quote from Steve Covey. First, you need to realign the meeting roster; this is the approach to plans and duties for meetings.

Start your business meetings with Good News! Talk about what’s great; e.g. new customers, YoY sales volume increases, new employee(s), plans for future, promotions, employee anniversaries since hiring, the holiday banquet or summer picnic, goals successfully completed since prior meetings, etc.

But before you start the meeting, you need an agenda. If your business meeting leader doesn’t prepare an agenda, offer to prepare or help them with that. Step up to plate and take the initiative to work towards elite business meetings. If you are the meeting leader, make sure your agenda is prepared, and distributed at least 30 minutes before the meeting.

If your business meetings are 50%+ communication and passing along information about departments, projects, or business plans and goals, do you really need the meeting?

Five minutes of an hour business meeting communicating information to the group isn’t a real problem. But 30 minutes of an hour-long business meeting, would more effectively be managed with many teams from say an email to the entire group sharing the necessary information and communications on the business. Then a follow-up meeting that involves successful collaboration and insightful Q&A on the information from the email.

To be continued….

The “Michael Process” – Leading your Team to Greatness (Segment X)

Preface: If the quote is true, “Behind every successful man is a women.”  Then behind every successful business venture, is a champion team.”

The “Michael Process” – Leading your Team to Greatness (Segment X)

Winning business teams are akin to any winning sports team, you can’t win the championships playing all the positions solo. You need expert, experienced, capable, and diligent team work. Your team’s implementation of the ideas, strategies, plans, and vision from your business connections drive your business to greatness. Your businesses connection are the networks from your community, experiences, employees, partners, consultants, advisors your business harnesses for the necessary resources to articulate and implement an effective “Michael Process.”

As you and or your team, concisely define, analyze and understand the problem(s), and then (re)solve those problem(s) effectively for thee marketplace, your business will gain the horsepower that creates, develops, and perpetuates an encouraging entrepreneurial endeavors vibrancy and success. Plainly, that is the simple, effective, and powerful “Michael Process” at work. The more vibrant a business successes, the more vibrant the businesses teamwork. Building the team, is building the business. Great businesses, always have room for more great people.

“You team will need to work well together; they will need to keep their commitments to adhere to the business vision and values, and understand the exact role they play towards building the businesses success.”

Exuberant business successes can be simplified to adherence with the three step “Michael Process.” A) passion for a marketplace, B) a concisely defined problem(s) the marketplace needs (re)solved, and C) providing an effective solution to the marketplace problem(s) defined in step B.

Once your “Michael Process” is developed, an important secondary characteristic is your team’s developments that will implement the process. You team will need to work well together; they will need to keep their commitments to adhere to the business vision and values, and understand the exact role they play towards building the businesses success. Your team will need a good attitude. They will also need to encourage each other to persevere, be accountable on deadlines and business goals, and communicate with a winning perspective. And your businesses leadership will need to earn and keep your teams respect and trust. Your team will help  write your business story(s).

Entrepreneurs who adhere to the “Michael Process” are more likely to have an entrepreneurial venture that is less susceptible to market and economic pressures, more respected in the community, and can sell products or services at premium prices in the marketplace. Why? Because their passionate vision for the marketplace and the opportunity creates an edge – from the passionate drive to continuously improve skills, keep focused, and gain and develop resources that other competing businesses lack or are lethargically skipping.

“Sure, any gold medal winning team is impressive. If you’re unfamiliar with the story, the big reveal is that the U.S. Team was comprised only of college and amateur hockey players—who were competing against professional teams.”

Larry Page, co-founder of Google, is quoted as saying…..”Always deliver more than expected.” There is only one way to consistently adhere to that advice, and that is to enjoy what you do every day delivering your services or products to the marketplace, just like the “Michael Process” articulates. You can be brilliant, capable, and an field expert, but if you think you will achieve business greatness yourself, you always be surpassed by the great team. And a great team has a great story(s).

“And now it’s your turn. If you don’t yet have great business stories from your “Michael Process” as an entrepreneur (most successful entrepreneurs do) you have the opportunity today to think about what you want those stories to be.”

In 1980, Herb Brooks organized a group of young men to form what is arguably the most impressive teamwork story in history. Known today as the Miracle on Ice, the 1980 U.S. Hockey Team skated away from those Olympic Games with the gold medal. Sure, any gold medal winning team is impressive. If you’re unfamiliar with the story, the big reveal is that the U.S. Team was comprised only of college and amateur hockey players—who were competing against professional teams. Teamwork stories detail the late nights, the contrasting talents, and the breakthrough moments when a group of people challenged a status quo, realized the missing piece of the puzzle, and changed one small aspect that changed everything. David Sturt and Todd Nordstrom 4 Stories Great Leaders Tell to Engage Their People.

And now it’s your turn. If you don’t yet have great business stories from your “Michael Process” as an entrepreneur (most successful entrepreneurs not only have good stories, but they have great stories) you have the opportunity today to think about what you want those stories to be. Then be more than a hearer of the entrepreneurial story(s); be a doer!

P.S. This is the conclusion of the “Michael Process” segments.

“Walking to the Fields” on The “Michael Process” (Segment IX)

Preface: “It has been my observation that the happiest of people, the vibrant doers of the world, are almost always those who are putting into play, calling upon, depending upon the greatest number of their God-given talents and capabilities.” See quotes from John Glenn.

“Walking to the Fields” on The “Michael Process” (Segment IX)

Credit: Donald J. Sauder, CPA, CVA

“You can learn wisdom (e.g. in this context the business tool of the Michael Process and its relevancy) by three methods. First, by reflection, which is noblest. Second, by imitation, which is the easiest; and third by being a doer; and in that school, it is either if-only or next time.” That is a paraphrase of sage words from Confucius.

For those who choose to be a doer, it pays to prepare appropriately. Even though business problems don’t compare to a figurative “Biblical Moment”, more than one entrepreneur with lofty ambitions would have had a less costly education with a $250,000 MBA and five years of preparation. But quote “we don’t know what we don’t know.” And between what there is to know, and what we know, is a big gap, for the majority of individual entrepreneurs. That’s why partnerships, collaboration, alliances, advisors, coaches, and mentors, are vital for successful and developing businesses.

“He continues on to say, “If you’re not guided by a clear sense of purpose, you’re likely to fritter away your time and energy on obtaining the most tangible, short-term signs of achievement, not what’s really important to you.

And just as a focus on marginal costs can cause bad corporate decisions, it can lead people astray. The marginal cost of doing something wrong “just this once” always seems alluringly low. You don’t see the end result to which that path leads”.

Clayton Christensen says God hires people who help others become better people. As a Harvard Business School professor, Christensen teaches aspiring MBAs how to apply management and innovation theories to build stronger companies. But he also believes that these models can help people lead better lives. Here are some of his questions. How can I be happy in my career? How can I be sure that my relationship with my family is an enduring source of happiness? And how can I live my life with integrity? It also helps to ask these questions early in life, i.e. during preparation.

He continues on to say, “If you’re not guided by a clear sense of purpose, you’re likely to fritter away your time and energy on obtaining the most tangible, short-term signs of achievement, not what’s really important to you. And just as a focus on marginal costs can cause bad corporate decisions, it can lead people astray. The marginal cost of doing something wrong “just this once” always seems alluringly low. You don’t see the end result to which that path leads”. The point is, the Life of Purpose, that Clayton encourages for his students, is noble and effective. It also aligns with the Michael Process. To quote from Segment I, That is your [business] purpose – provide an effective solution to a marketplace problem that you’ve concisely defined, with a passion for the marketplace, i.e. customers or clients.”

“The largest gaps in entrepreneurship are between the dreaming doers and the dreaming talkers. You will observe that real doers rarely criticize other doers. They realize how much work is really required.”

Well said Michael. “Real entrepreneurs have a passion for what they’re doing, a problem to be solved, and a purpose that drives them forward” – quote from Michael Dell. Exuberant business successes can be simplified to adherence with the three step “Michael Process.” A) passion for a marketplace, B) a concisely defined problem(s) the marketplace needs (re)solved, and C) providing an effective solution to the marketplace problem(s) defined in step B.

 The “Michael Process” is designed to firstly, provide dreaming talkers an understandable and implementable process towards be entrepreneurial doers, and secondly, help the entrepreneurial doers be more effective.

“It has been my observation that the happiest of people, the vibrant doers of the world, are almost always those who are putting into play, calling upon, depending upon the greatest number of their God-given talents and capabilities.” This quote from John Glenn, is perfectly aligned with the “Michael Process” entrepreneurs.

The largest gaps in entrepreneurship are between the dreaming doers and the dreaming talkers. You will observe that real doers rarely criticize other doers. They realize how much work is really required. The “Michael Process” is designed to firstly, provide dreaming talkers an understandable and implementable process towards be entrepreneurial doers, and secondly, help the entrepreneurial doers be more effective.

The “Michael Process” with Fisher-Price (Segment VIII)

Preface: Mattel is a leading global children’s entertainment company that specializes in design and production of quality toys and consumer products. The company creates innovative products and experiences that inspire, entertain and develop children through play…..

………..Ruth loved work over playing from day one; and while in high school she worked two jobs. First as a part-time secretary for her brother Joe a lawyer in Denver, and then double shift at the Greenwald Soda Fountain in the big indoor market in downtown.

The “Michael Process” with Fisher-Price (Segment VIII)

Credit: Donald J. Sauder, CPA, CVA

The American toy company Mattel, officially began in 1945. Headquartered today in El Segundo, California, Mattel has been a leader in American toys for decades. Mattel brands and products include Fisher-Price, Monster High, Barbie, Ever After High, Winx Club, Hot Wheels, Matchbox, Masters of the Universe, and American Girl. Today the company is international with a presence in 40 countries and selling products in 150 countries. Here’s what co-founder Ruth Handler says about the company’s beginning. “We didn’t know how to run a business, but we had dreams and talent.”

Ruth loved work over playing from day one, and while in high school she worked two jobs. First as part-time secretary for her brother Joe a lawyer in Denver; and then double shift at the Greenwald Soda Fountain in the big indoor market in downtown. Cruising through downtown in her 1932 Ford coupe, 16 year old Ruth Mosko had to have a second look at her future husband, Elliot Handler. It took her two weeks to locate “Izzy”.

Ruth was from the prosperous east side of town, and attended a top tier high school in the nation. Izzy was a member of the friendly gang called the Gigolos. They were Jewish and Italian kids from the more dangerous west side. Soon the two began to date. Three years later during college break, Ruth went on vacation to Los Angeles. While dining with a friend from Paramount, she applied for a job at the company and was hired. Quickly enamored with the big city, “Izzy” Elliot had almost disappeared from her mind. One month late Elliot transferred his college studies to of all places the prestigious Art Center School of Design in Los Angeles too.

Then it the big moment, Ruth envisioned a sales calls to the exclusive Wilshire Boulevard shop called Zacho Imports.

Where’s the “Michael Process?” Let’s continue. As an artist by trade, Elliot became fascinated with designing Lucite lamps, picture frames, hand mirrors, and candelabra to decorate the couple’s apartment. Ruth was impressed, and certain that with the quality and passion in the design features she could sell the products as a business. With a credit card and $200 purchase of supplies at Sears, the couple became entrepreneurs in 1938.

Elliot was so surprised he had a most challenging time finding scrap paper and a pencil to write the order on. Elliot’s hands were shaking, and then Zacho was out the door.

Matt Matson and Elliot met in 1938 too, when Elliot designed and built an oven for Matt’s rental apartment. At that time, Elliot and Ruth called their business Elliot Handler Plastics. Then it the big moment, Ruth envisioned a sales calls to the exclusive Wilshire Boulevard shop called Zacho Imports.

When Ruth arrived for the sales call, Axel Zacho really liked what Elliot had designed, but he wanted to see the couples shop before ordering. Preparing for the worst, Ruth and Elliot met Mr. Zacho in their pitiful little workshop. When Axel agreed to a $500 order, Elliot was so surprised he had a most challenging time finding scrap paper and a pencil to write the order on. Elliot’s hands were shaking, and then Zacho was out the door.

Soon Ruth had the courage to made a sales call to Douglas Aircraft. The Douglas executive loved the Plexiglass clock Elliot had designed. His order was so large, Elliot’s brother Al had to fly out to help produce the gifts for Christmas, and Ruth had to borrow $1,500 for working capital to fill the order.

Then constant bickering in the business lead Matt to leave in 1944. Within one month, a new company developed Matt + El, or Mattel.

With a taste of success, Elliot continued enthusiastically with his designs and Ruth excelled with a love and thrill on the challenge of selling what Elliot crafted. Six years after the Sear purchase, annual sales of the Elliot’s products designs exceed $2m. Matt Matson’s business expertise had made a big contribution. Then constant bickering in the business lead Matt to leave in 1944. Within one month, a new company developed Matt + El, or Mattel.

Starting with picture frame sales, Mattel soon expanded to dollhouse furniture. In 1947 the company launched its first toy sensation, a ukulele called Uke-A-Doodle. Fifteen years after launching, the company went public on the NYSE.

With continued success, Mattel purchased Ringling Bros. and Barnum & Bailey Circus in 1971 for $40m from the Feld family. Two years later, despite the success of the circus division, Mattel sold the circus to support company vibrancy. After an investigation, Elliot and Ruth Handler were round guilty of issuing false financial reports on the company, and the company banned them from the board. It was Arthur S. Spear who turned the business around, and back to profitability in three years.

Is this “Michael Process” really the Chicken Dance Elmo heritage of the famous Fisher- Price? The answer is “yea”.

The “Michael Process” – Yesterday, Today and Tomorrow (Segment VII)

Preface:  If you can improve [customers] peoples lives, you have a business. People think, ‘well everything’s been thought of,’ but actually, all of the time, there are gaps in the market here and gaps in the market there.”  Richard Branson 30 Days of Genius.

The “Michael Process” – Yesterday, Today and Tomorrow (Segment VII)

Credit: Donald J. Sauder, CPA, CVA

Perusing back through the business landscape to the early 1900s, major business trends or industries applicable to “Michael Process” entrepreneurs included the development of the engine, the tractor, the automobile, oil production, and generation of electricity. Along with these business development enterprising entrepreneurs started car dealerships, farm machinery dealerships, and gas stations. Corresponding new occupations developed e.g. mechanics and electricians.

Organized in 1976 with a single mission to be the best electrical contractor in the Midwest, ProElectric in Kansas City, KS, has developed into a respected electrical contractor with annual sales volume surpassing $20 million. Employing up to 150 employees, the business provides outstanding electrical services to customers. Blossoming with an application of the “Michael Process” to a century stable industry, there’re an entrepreneurial business that is solving problems with a business purpose successfully for their community.

 “Interestingly, the 110 story Sears Tower completed in 1974 is monument of the era. This landscape led to new occupational titles including machinist, truck driver, computer programmer, and shop foreman.”

During the 1960s the players on the business landscape comprised manufacturing, computers, telecommunications, automation and production customization, and more stores (and restaurants) to present all the products saturating the marketplace. Interestingly, the 110 story Sears Tower completed in 1974 is monument of the era. This landscape led to new occupational titles including machinist, truck driver, computer programmer, and shop foreman.

What about tomorrow’s “Michael Process” opportunities?

If you have faith like Peter in the Book of Matthew, do you need a “Michael Process?” Here’s how it worked. After they had returned home, Jesus went up to Peter and asked him, “Simon, what do you think? Do the kings of this earth collect taxes and fees from their own people or from foreigners?”

Peter answered, “From foreigners.” Jesus replied, “Then their own people don’t have to pay. But we don’t want to cause trouble. So go cast a line into the lake and pull out the first fish you hook. Open its mouth, and you will find a coin. Use it to pay your taxes and mine.”

“The not only do they [fruitful entrepreneurs] set realistic goals, and take accountability seriously; but they know they create their own success, i.e. they have faith they will achieve their business vision.”

Then there is the story of the daughter of a wealthy businessman who took her boyfriend who was studying to be a small-town pastor to meet her parents. After dinner, the father sat in his mahogany study with the young man, and started asking questions. “So how to do you plan to earn a living to support my daughter and a family if you’re interested in marriage?” The young man responded “God will provide.” The father followed up with “And as a pastor, how will you buy a nice house for my daughter and grandchildren to enjoy?” Again, the young man replied “God will provide.” Following up on the conversation later, the mother ask her husband how the conversation went with the young man. He replied, “….another Liberal and he thinks I’m God”.

Granted, we are not saying the “Michael Process” is an unfailing principle. It helps facilitate the faith necessary to succeed in business and research supports this. Dan Schawbel writes in his article 14 Things Every Successful Person Has In Common, not only do they [fruitful entrepreneurs] set realistic goals, and take accountability seriously; but they know they create their own success, i.e. they have faith they will achieve their business vision.

“Ponder that one moment. If you’re an entrepreneur, those gaps are your business opportunities and or threats. Successful businesses have satisfied customers, no exceptions.”

If you do not have faith like Peters yet, here is a timeless quote. “The best businesses come from [customers] bad personal experiences. If you just keep your eyes open, you’re going to find something that frustrates you, and then you think, well I could maybe do it better than it’s being done, and there you have a business. If you can improve [customers] peoples lives, you have a business. People think, ‘well everything’s been thought of,’ but actually, all of the time, there are gaps in the market here and gaps in the market there.”  Richard Branson 30 Days of Genius.

Ponder that one moment. If you’re an entrepreneur, those gaps are your business opportunities and or threats. Successful businesses have satisfied customers, no exceptions. In addition, entrepreneurship doesn’t require a great idea; you don’t need a genius invention for the “Michael Process” to work for you. You simply need the expertise to improve the lives of your future customers. That’s the pillar characteristic of the “Michael Process” case studies. Ray Kroc’s name is not McDonald; Alex Fourie did not invent the iPhone; Anna Phosa wasn’t the first farmer; And Michael Dell did not invent the PC. Yet they’re entrepreneurs who have solved problems [closed gaps] effectively with a passionate business purpose.

What if the business landscape of the future includes remote healthcare, autonomous vehicles, a sharing economy, artificial intelligence, renewable energy, smart cities, 3D printing, domestic robots, and commercial drones? The “Michael Process” will continue to be applicable in business as long as seed time and harvest remain.