Toyota on a Roll

This article is courtesy of Bloomberg News.  As known in recent events Toyota is the number 2 automaker poised to take the top spot from General Motors. Due to there recent success they are trying to stay as low key as possible. They realize that they have gone from the number 4 to the number 2 automaker within the last 4 years. Ford and Chrysler have fallen on very hard times and GM is doing their best to hold on to shrinking market share.

This fast-paced growth is attributed to sales in the US that have been estimated to have grown 5 times faster than what Toyota had estimated. The great thing for Toyota is that North America accounts for about 60 percent of their operating profit as reported in an article taken from Bloomberg. However, with a slowing economy, they cannot count on out-selling the big 3. Toyota’s impact is targeted at increasing market share. It has been long known that the US vehicle sales would lower. What the Big 3 did not realize is that Americans would be buying less of their cars in exchange for Toyota’s

While in office President Bill Clinton had threatened to slap 100 percent tariffs on Japanese luxury cars as the U.S. and Japan compete over auto exports according to the report. In the past UAW laborers would vandalize Japanese cars with sledgehammers. These actions were cause by the belief that US jobs were being lost to imports. This is an event that would not surprise happening again in the near future.

Ironically since then Toyota has built U.S. plants and caused a huge positive economic impact in southern states. Americans work in the manufacturing facilities. Plus the surrounding suppliers that are mandated to operate out of local supplier parks to lower logistics costs and keep the management close as well. Although Toyota has spent millions lobbying politicians they will likely push for new trade barriers due to their voters concerns.

I guess the question will be when will Toyota take over the world…

 www.bloomberg.com

Entrepreneurs need Rainy-day Fund too

If we are serious as entrepreneurs about wealth-building, one of your most important priorities must be to establish an emergency fund for according to an article in Black Enterprises. There are a multitude of businesses go under within a two year timeframe of opening. I often wonder what percent of these businesses go under because the owners could not continue to survive. If ownership can’t make it with daily living and expenses I would imagine that the business is not to far behind.

To calculate how much you should save the best thing to do is add up your bills. Account for what you would spend in a month’s time. Items like food, utilities, rent or mortgage, transportation, clothing, health insurance, etc. Be sure to include extra for what you might save per month too. Take the monthly total and multiply it by six. For example, if monthly living expenses add up to $2,300 a month, your 6-month emergency fund would be $13,800. An even simpler goal would be to save half of what you make in a year. You would need $16,000 if you make $32,000 a year.

Although a half a year worth of savings may be adequate to help survive one should really aim at 12 months worth. The article called this their “F You.” The “F You” (of course, the F stands for “Forgive and Forget”) is what you can say to your boss when you are tired of your job. This is important especially for those who are trying to pursue their own venture. It may take 6 months to a year before your business is profitable.

The fund is by no means the answer to making the business a success in case of hard times. What it does do is give one the room to continue on when business isn’t profitable. Also if an owner comes to the reality that it is not a good venture he may have to step away. As part of an exit strategy an owner can rest assured that they can survive while they pursue another venture or most importantly a job. Remember this even though business may cut the flow of money doesn’t stop the bills from coming.

www.blackenterprise.com

Take No Prisoners

In the realm of business there are 2 skill sets that are a must.  They also go hand in hand although most at first thought might not think so.  The ability to sale and the ability to negotiate.  Both skill are honed by ones shrewdness and on-going experience.

To some arenas negotiating is just as important as conflict-resolution.  Conflict-resolution and negotiation skills have become a lost art. To a degree in life everything can be negotiated or bartered. These are a few points in the article that show one how to “get what you want.” As Sun Tsu would says know your enemy, a thousand battles a thousand victories.

• Never think like a hostage. Bolster your confidence and do away with feelings of powerlessness and anxiety. You must identify the choices you have and the potency you bring to bear on the negotiations. If you don’t think you can win who will.
• Bond with your enemy.  Establish a connection with all parties involved in negotiations, even when you may find them despicable. Refrain from demonizing others by remembering that the people are never the problem. The problem is the problem.
• Talk your way to success. Discuss solutions that will satisfy negotiating parties. Explain how all parties can achieve their goals without undermining those of others. Don’t stop talking until you’ve reached an amicable agreement. Win-win is always the best thing to focus on.

www.blackenterprise.com

Attention on Mortgage Abuse

According to a report by the Associated Press Federal Reserve Chairman Ben Bernanke may create tougher rules to enforce on mortgage lenders. Bernanke is the latest chairman of the ‘Fed’ since Alan Greenspan stepped down due to retirement. Needless to saw since taking over he has faced many problems. The nation has an ever-slowing economy. Among these many problems is the U.S. has been a glaring problem in the lending industry.

Bernanke feels that even with the new policies in place the sub-prime market should not be affected. The new changes are well received from those in Congress which been critical about his policies in the past. Some options have led to disclosure requirements that have lenders informing borrowers.

The sub-prime market has taken heavy hits within the past few years. Fraudulent appraisals and lending practices have helped pave the way to the collapse of the market. The former Bush chief economic advisor clearly has his work cut out. Only time will tell if these new policies will affect the market.

This news I found interesting because I think it will help stand-up organizations like Quicken Loans and Rock Financial. It will decrease the competition because it will shutdown those firms that do fraudulent activities. This would create a more level playing field within the residential mortgage industry. I am not sure what implications it will have on the commercial sector, probably not much.

www.bostonherald.com

Meeting the Mayor:

Mayor Kwame M. Kilpatrick’s came to speak with our class last week. We had prepared questions to ask him. Our conversation centered on the NEXT Detroit Neighborhood Initiative is a 5-year plan designed to improve issues such as cleanliness, safety and beautification. It will be achieved by utilizing growth and development strategies in six city neighborhoods. He discussed the details of the city’s plans to transform Detroit neighborhoods during community rallies in each of the six neighborhoods being targeted for the first phase of the initiative.

In addition to the housing development and new recreation strategy, there are plans to jump start economic development in the Grand River-Greenfield area, a new beautification strategy for the Northend community; plans to make the 7 Mile Livernois community a “neighborhood of choice”; and a new crime reduction strategy for East English Village.

This initiative has been made possible through generous commitments made by corporate, non-profit, and foundation partners, there would not be a NEXT Detroit Neighborhood Initiative. The long-term goal is to preserve and enhance every Detroit neighborhood, but the Kilpatrick administration has determined the most effective way to make significant change is one neighborhood at a time. The cost of implementing the initiative will be $225 million over the next five-years. The city will spend $125 million of its own money and seek another $100 million from corporate, non-profit and foundation partners.