In this segment we’re going to explore two more profit drains – quality and payment terms.  Sound a little mundane?  You’ll be surprised at the savings you can generate.

Quality

I’m sure that most of you are expecting me to talk about lack of quality.  After all, it’s poor quality that costs you money in rework, callbacks or fixes.  All of these terms describe the effort associated with redoing the original work so that it satisfies the customer.  There’s no question that this is a profit drain, but it’s not our focus today.  We’re going to explore the cost of providing quality.

I know that it seems strange to think of quality as a potential profit drain, but here’s an insight I got from a printer.  He asked “Dale, when a customer walks through my door which do you think he’s more likely to buy, a good print job or a great print job?”  “A great print job!” I replied.  He smiled one of those Gotcha! smiles and said “Most people can’t tell the difference between a good print job and great print job, yet the cost is dramatically higher for a great print job.”

His message was clear; he didn’t sell many great print jobs because his customers couldn’t see the difference between good and great.  How often do we increase the quality of our offerings without checking to see whether the customer values the additional quality?  How often do we look at quality as a way to differentiate ourselves from our competitors, all the while assuming that the customers will pay more for the additional quality?  As our printer so astutely noted, customers aren’t always willing to pay for higher quality.  The solution seems simple, don’t add quality unless the customer is willing to pay for it, but what happens when your employees provide quality greater than the contract requires?

A concrete contractor client experienced that problem.  One of his finishers was a perfectionist.  He did beautiful work, but he wanted to apply the same level of quality to a cul de sac street that he would to a patio, sidewalk or driveway in a custom home.  Custom homeowners are willing to pay for higher quality (aesthetic appeal), land developers aren’t.  My client experienced lower profit margins on street paving jobs involving this finisher.  How do you deal with this problem?

The first thought that comes to mind is simply to let the guy go.  Certainly that’s an option and it may be the best option if all of your work is street work.  He simply isn’t suited to the type of work you do.

If you do both street work and custom work as my client does, a better alternative is to limit his involvement to those jobs requiring the level of quality he likes to provide.  In other words, use him only on custom work jobs where the customer is willing to pay for higher quality.  If you can’t keep him busy full time, direct some of your marketing efforts to acquiring more custom business.  The profit margins are typically very good on custom work.  Match your employee’s penchant for quality with the customer’s desire for quality and you’ll profit handsomely.

If you want to avoid having quality become a profit drain, use this two-prong approach:

Make sure your customer is willing to pay for more quality before you begin a quality improvement initiative. Monitor your employees performance to assure they aren’t providing more quality than the contract requires.

Now, let’s turn our attention to payment terms – not yours, your vendors.

Payment Terms

What’s your attitude toward your vendors’/subcontractors’ payment terms?  Do you abide by them religiously?  Do you allow yourself a little extra time, possibly a week or two?  Or do you take as much time as you like?  The choice you make can have a dramatic impact on your bottom line.  How much?  To answer that question I’m going to ask you to switch roles and become the vendor/subcontractor so that you can use your cost structure to quantify these costs for your firm.

Let’s assume that you have three customers.  They’re all paying the same price and they all have agreed to the same 30-day payment terms.  One pays on time, the second pays about two weeks late, the third pays at about 75 days.  Obviously, the one that pays on time is your most profitable customer.  The other two are successively less profitable.

Let’s further assume that all three call with an urgent request, but you can only accommodate one of them.  Who’s going to get their request granted?  The one that pays on time, right?  The others will either wait for your availability or devote time and energy to trying to find another source to satisfy their needs.  What are these options going to cost them?  If they decide to wait for you here are some of the costs might they incur:

Down time Productivity losses associated with shifting personnel from one job to another (and back again when you become available) Penalties for late delivery

This brief list will help you quantify some of the costs you incur when you have to wait on your vendor/subcontractor.  Costs that you are more likely to incur if you consistently ignore their payment terms.

If your vendors/subcontractors choose to find another source rather than waiting for you, the costs they’ll incur include:

Purchasing’s time spent trying to find another source that’s available Risk of callbacks (rework) caused by inexperience with your production standards/processes Higher prices (you’ll charge extra to accommodate the quick turnaround they request)

Again, these are the same costs you’d incur if your vendor/subcontractor put your request off because you’re not paying on time.

There is one more cost you are likely to face as a result of your penchant for paying late – higher prices.  If you have a customer who typically pays around 75 days when your terms are 30 days, aren’t you going to build an interest factor into your future pricing?  You bet you will.  How expensive can that be?  Here’s an example that will help answer this question.

Again, I’m going to ask you to change roles and become the vendor/subcontractor.  A customer who does $300,000 worth of business with you each year typically pays you at 75 days rather than the 30 days you require.  The current interest rate is 9% on a line of credit loan (I know that rates are much lower now, abnormally so, that’s why I’ve chosen a more traditional rate).  How are you going to adjust your pricing to this customer to compensate you for his late payments?  Here’s the method I’ve seen used most often in my 13 years of consulting work.

Take the 9% interest rate and divide by 12 months to arrive at a monthly interest rate of .75%.  Next you multiply that rate times the number of months he’s late.  In this case the customer is 45 days, a month and a half, late.  At this point many people round up to two months.  Why?  The math is easier and you cushion yourself against even slower payments in the future.

Continuing with the math, you’re going to raise his prices 1.5%, .75% times two months, right?  Not likely!  There’s something about quoting price increases with fractions in them that sounds a little weak.  Do you really believe you’re only worth 1.5% more?  Why not 2% more?  Of course you’re worth 2%.  2% it is!  You can see how this whole methodology lends itself to rounding up.  You rounded from 45 days to 2 months.  Now, you’ve rounded the price from 1.5% to 2%.

Most customers won’t change vendors/subcontractors for a 2% increase.  Why?  They’re afraid of the learning curve and its attendant mistakes as well as the uncertainty regarding the new vendor’s/subcontractor’s dependability.  Voila!  You have your price increase. Now, let’s compare the cost to your customer of borrowing the money to pay you on time vs. the 2% price increase he’s accepted.

Borrowing vs. Price increase

Original sales volume – $300,000

9% interest for 45 days (75 –30) –  $3,329

2% price increase – $6,000

The price increase costs 80% more than the interest.  That’s without considering the waiting costs mentioned above (down time, productivity losses, penalties) or the costs of acquiring a new vendor/subcontractor (purchasing’s time, more callbacks/rework, higher pricing for a quick turnaround time.  As you can see, ignoring your vendors’/subcontractors’ payments terms can be a serious drain on your profits.

Now, I’m not saying that your payment must be there on the exact day it’s due to avoid these costs.  Most vendors/subcontractors consider a payment within 5 days of their terms (35 days on a 30-day term) to be timely.  If you consistently pay within 5 days of the terms, you’ll be a valued customer.  One whose requests are given high priority and whose price increases do not include interest factors.

If you want to increase profits without adding resources – make sure you get paid for the quality you provide and pay your vendors/subcontractors within 5 days of their terms.

Copyright © 2002, Dale Furtwengler, all rights reserved

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Curb appeal is one of the number one factors that people look at when they begin to look for homes on the market. You only get one chance to make a first impression and the curb appeal is what buyers can see first and foremost. The sidewalks should be as clean as possible in front of your home, the driveway might need to be re-sealed or paved, and the paint on your home shouldn’t be incredibly chipped that it would cause the overall look to be sacrificed. The hedges and grass should be trimmed.

The kitchen is the most important room in the home according to statistics and home buyers so you need to make sure that yours is appealing. Your counter tops are often the first things that get looked at. Granite counter tops are the most desirable but not always so cost effective so you might try to do something like tiles or laminate. Your bathroom fixtures might want to be replaced as well since that is the second most important room in the entire house.

The front door is something that, obviously, is seen right away. Since natural light is so desirable, people want the front door to let light in by some matter. Your door shouldn’t be squeaky so oil the hinges up and make sure that it matches the hardware of the home as well. If you’re looking to really make the home appealing you could also replace the front doors with French doors but they are quite expensive and not always in the budget.

The next thing that needs to be in top shape is the floor. Each person is going to have their own preferences for what they like but hardwood is a huge seller for people. If you do have wood make sure it is in good condition and possibly re-stained to appear new. The carpet should definitely not have stains and if it’s old you might want to replace it completely to match the feel of the room and the paint.

These are only a few tips about how to get your home to sell quickly. A faster sale saves you money and valuable time as well. Make the experience as pleasant as possible but take advice from a variety of sources.

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Trees are also symbols of immortality, being able to live to considerable age. Pando, a Trembling Aspen located in Utah, USA is considered the world’s oldest living tree. Pando is estimated to be over 800,000 years old. Pando is a clonal colony of a single male Quaking Aspen. This massive trees root system covers 107 acres and is estimated to weigh in excess of 6,000 tons which makes it the heaviest known living organism in the world.

Throughout the world many different species of trees live amazingly long lives. The verified oldest measured ages are:
Norway Spruce (Picea abies) 9,550 years
Baobab (Digitata Adansonia) 6,600 years
Great Basin Bristlecone Pine (Pinus longaeva) 4,844 years
Alerce (Fitzroya cupressoides) 3,622 years
Giant Sequoia (Sequoiadendron giganteum) 3,266 years
Huon-Pine (Largarostrobos franklinii) 2,500 years
Rocky Mountain Bristlecone Pine (Pinus aristata) 2,435 years
Because of their potential for longevity, trees are frequently planted as living memorials. We become attached to trees that we or those we love have planted and tended.

Trees add beauty and grace to any locale. Blossoms in the spring, verdant summer foliage and breathing taking colors in the fall; trees mark the seasons as they enhance the beauty of world. They make life more pleasurable, peaceful and relaxing. The majesty, endurance and strength of trees imparts a cathedral like quality as they help us to experience a primal connection with the earth and our most deeply held cultural and spiritual values.
The tree has always been a cultural symbol. The tree is often used to represent nature or the environment itself. In South America a tribe of Indians hold the belief that the trees of the forest hold up the sky. According to ancient tribal legends, the downfall of the trees will precipitate the destruction of Mother Earth.

Since ancient times, cultures around the world have honored trees with reverence and respect. Cultures in Australia and Asia regard the trees as mythical ancestors. Trees were often worshipped as the living embodiment of their gods and were believed to have holy medicinal applications and miraculous healing qualities for the body, mind and spirit.
The Druids of Europe were particularly influenced by trees and believed that trees possessed great mysterious powers. The Ancient Greeks are also known to have had a highly developed respect for the nobility and power of trees. Painting and pottery from the period display images of gratification and reverence. The Greek culture held the Bay Tree in especially high esteem as the tree was dedicated to their God Apollo and his young son Aesculapius and was held in sacred honor. Aesculapius was the God of Medicine and thus the Bay Tree was believed to have healing power and was used in many medical potions.

Built in the mid-12th century as a tribute to the Mother of the King, Ta Prohm Temple in southern Cambodia is the undisputed capital of the Kingdom of the Trees. The mystical and enchanting jungle temples beauty is explored with delight and left with deep regret. It remains virtually untouched by archaeologists except for the clearing of a narrow pathway for visitors. Because of its natural and pristine state, one can experience the wonder and joy of the early explorers when they discovered these amazing ancient monuments in the middle of the nineteenth century.

Wreathed in silvery mist and shrouded by dense jungle, the temple of Ta Prohm is ethereal in every aspect and conjures up a romantic mysterious aura. Banyan, kapok and fig trees spread their gigantic sprawling roots over giant stones, probing walls and tearing terraces apart as their branches and leaves intertwine to form a lush sheltering canopy over the structures. Trunks of these noble trees twist amongst stone pillars and over cobbled walls. The strange, haunting charm of the temple trees entwines itself about you as you go, as inescapably as the roots have wound themselves about the walls and towers. When visiting the awe inspiring Kingdom of the Trees one quickly becomes aware of how powerfully present and fully alive trees are and one can not escape the all-encompassing connection trees provide in the intricate and fragile web of existence.

More than 8000 tree species, 10 percent of the world’s total, are threatened with extinction. Destruction of forests and woodlands and unsustainable logging of valuable timbers stands are causing the devastation of many important species. Clearing and burning of our forests leads to increased levels of atmospheric carbon dioxide, a significant contributor to global warming.

It saddens the soul to realize that the majority of the citizens of the Earth are so accustomed to seeing trees that they take them for granted; forgetting that these noble entities are fundamental to our very existence. Trees act as the living lungs of the planet, sequestering carbon dioxide and returning to us precious, life giving oxygen.

Trees have numerous aesthetic and economic benefits beyond their important role in carbon sequestration and oxygen production. Trees offer shelter, filter water, cleanse the air of pollution, moderate the climate, help prevent soil erosion as well as providing wildlife habitat, scenic beauty and a plethora of items we use daily. We rely on trees for paper products, building materials, fuel, food, medicine and more.

Benefits of Tree Planting
We all desire abundant forests for our children and grandchildren. Trees maintain sustainable soils and control erosion. Retaining soil in place by their root mass, deflecting wind driven rain with their canopies and contributing nutrients with their leaves, trees are crucial to sustaining and improving the earth’s ecosystem.

Trees cleanse our air and water. From auto and factory emissions and ozone in industrialized areas to fertilizer and pesticide runoff from rural farms, trees absorb toxic pollutants as they recharge ground water and sustain streamflow. Trees also combat global warming. As trees grow they remove carbon dioxide from the atmosphere, the major contributor to global warming.

We depend on trees for their nutritional bounty. Fruit and nutmeats are a staple of diets around the world. A fruit tree can live for more than forty years and produce more than 10,000 pounds of fruit. A tree truly gives life. Apples are one of the most popular fruit tree choices and a mature apple tree can produce up to 500 apples in a season. Consider planting pear, plum, cherry, apricot, orange, lime, lemon or banana trees. Research what will grow well in your local area. Plant and enjoy an organic harvest grown in harmony with nature. Nothing tastes sweeter!

Trees are used world wide as landscape amenities to soften the harsh outline of buildings, to create green spaces in communities, provide privacy, to screen unsightly views and to dampen noise pollution as well as beautify the property. Shrubs and trees, properly planted and tended on a residential or commercial lot can significantly increase real estate value. Mature, healthy trees add an average of 20 per cent to a property’s value.

Planting trees saves energy. Trees planted strategically around our homes will decrease cooling costs in summer and provide a windbreak against the cold winds of winter thus saving on heating expenses. Depending on species and maturity, the cooling shade of trees can reduce home energy consumption by up to 20 percent. Air temperature in the vicinity of trees is cooler than that away from trees. The larger the tree, the greater the cooling effect. Tree planting in urban areas moderates the heat-island effect caused by concrete paving and heat absorbing buildings.

Planting trees feels good! It is immensely satisfying to plant a tree, happy in the knowledge that this gift to the earth will bring joy, shelter and sustenance to our children, grandchildren and countless future generations.

Environmental Stewardship
Problems caused by massive and increasing levels of deforestation worldwide has raised awareness of environmental issues and the crucial role forests play. Climate change is the largest environmental issue the world faces this century. People of all ages throughout the world agree that we must act. However sometimes the task seems overwhelming, the challenge too global for any one person to make a difference. Wrong! Every individual act has rewards and consequences.

Celebrate Life! Plant A Tree!
Plant trees in your yard, volunteer with civic and community tree restoration efforts and contribute to non-profit organizations implementing reforestation.

Consider green gifting. Are you looking for the perfect gift for a birthday, wedding, anniversary celebrations or any milestone occasion? Are you looking for a meaningful way to mark the birth of your child or grandchild?  Would you like a special way to memorialize a loved one who has passed away, a unique way to honor a veteran? Giving the gift of a celebration or memorial tree is a unique gift that will last a lifetime.

There is strength in numbers. Together we can make a difference. Take action by living a green lifestyle to reduce your carbon output, educate children about protecting the planet we all share and be part of the solution simply by planting more trees.

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The lawn is always a good place to start in any yard. As the largest single entity aside from the home itself, the lawn has a lot of say in the overall appearance of the home and property. Make sure that the lawn is cut cleanly and trimmed to perfection, if the grass has gotten a bit yellow then spend some time watering an fertilizing to bring out the green. The driveway is another good area to focus on. As the entranceway to the property the driveway will form part of the overall first impression of the home. Cracked and weedy driveways never look appealing and should be taken care of before the home gets listed. If the drive is cracked then simply resurfacing will not straighten these problems out. Re-paving a driveway can be quite costly so make sure you assess the the cost against the projected asking price before moving ahead with such a major fix.

Gardens also play an important role in the creation of proper curb appeal. A freshly tended and organized arrangement of flowers and bushes add an artistic note and color to a home. Gardens with weeds and untamed bushes again speak of a level of disinterest in the condition of the property so thorough maintenance on a regular basis is always a good idea. Finally we come to the home itself. New paint is always a big bonus for buyers but be careful in your color selection. You may want to simply offer buyers a paint credit or concession so they can select their own colors but that does not do too much for your curb appeal. Try to pick colors that accentuate the home and also blend well with the other homes in the neighborhood, Remember, the first impression that buyers have of your home is extremely important so don’t skimp on upgrading the visual impact of your home.

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The major problem with the beaches in the area of the canal and just past the canal area is the debris that washes up on the beaches. Part of the debris is from the city itself and another contributing factor are the ships waiting to transit the canal. Recently Panama City began a clean up project for Panama Bay which will include a new water treatment plant and sewage system for the city. Of course, the problem wasn’t recreated overnight and it won’t be fixed overnight, but at least we begin. This should cut down on some of the debris that washes ashore. However, unless stricter ordinances are put in place and imposed with consistency on the residents and the vessel in the bay the beaches will continue to be trashy.

Panama’s FarFan Beach

Across the bridge of the Americas in first position is Panama’s Farfan Beach. The roads are a little rough, similar to a forgotten county road in the US, rough road patches and peppered with a some potholes. Even with the road conditions, once you’ve crossed the bridge it is only a two minute drive to the entrance of Farfan Beach. The first thing you will notice is the barricade that blocks the paved road’s approach to the abandoned beach area. The second thing of notice is Panama’s Balboa Gun Club positioned directly next to the barricade. The third thing you should notice is the alternate off road paths that have been created to access the beach.

Panama’s now forgotten Farfan Beach was once a hot spot as is evidenced by the abandon concrete concession stand that was once complete with toilets facilities. Farfan is a canal beach, from the concession area you can look out to the left and see Panama’s Amador Causeway with a clear view of Naos Island and the Smithsonian Institute’s Culebra Island. Looking straight ahead you can view large and small vessels anchored just outside the Panama Canal waiting for permission to begin their transit and since the canal is operational twenty four hours day, seven days a week, you are sure to see a vessels at the beginning of its transit.

Since Farfan is no longer managed, tall grass now covers some areas of the once popular beach, from the well worn grooves made by vehicles that drive out to the beach area it is evident that Panama’s Farfan Beach still receives it’s share of visitors. Even if you choose not to drive off road, it only a short blocks walk past the barricade on the paved road to the beach area.

It’s important to note, being a Florida transplant; the beach here is not sandy but mostly volcanic rock. However, it is well worth the time to drive out and see the canal area from this prospective; spend a little time imagining this area in its glory day. I hope there are better days to come for this forgotten recreational area.

Panama’s Playa Bonita/Playa Kobbe

Panama’s Playa Bonita is also a beach on the canal, it is a little rustic in location. It sits beside the road with just a little pull off spot along an old bridge. The area never had a concession or toilet facilities and the beach area is a steep drop from the road. From under the old bridge a river empties into the canal.

Many of the beach areas in Panama are fed sand and water from Panama’s rivers. This is note worthy to swimmers who might encounter the whirlpools they create as the rivers empty their content into the larger body of water.

From Playa Bonita you can see the bridge of the America’s and the hill the old Howard Air Force Base is on. The beach was a mix of sand and volcanic rock and was from a Florida transplant perspective, a bit trashy.

A four star resort area has been built on the road to Playa Bonita, InterContinental Playa Bonita Resort & Spa. About ten minutes from the actual area of Majagual, fourty Minutes from Panama City’s International Airport Tocumen. www.playabonitapanama.com

Panama’s Playa Veracruz – the local beach

Panama’s Play Veracruz is still a busy local beach. There are roughly twelve rancho style concessions along the beach where you can enjoy entire fried sea bass for three to five dollars and beers for sixty cents. Playa Veracruz flows all the way into the beach town of Veracruz.

Veracruz, Panama is located approximately twenty five minutes from Panama City and known for its various fish markets, it is a small fishing village that is made up mostly of lower socioeconomic class level.

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Veracruz, once was an attractive area in front of US Howard Airforce base. It’s city park once had a concrete concession stand complete with toilets facilities, swimming pools, and sheltered picnic tables. The abandoned structures are still standing in the park area. A small fee was paid to gain entrance to the park. But based upon recent reported incidents by local police Veracruz now rates as a high-crime area.

Veracruz, is nestled between the beautiful Pacific Ocean and the base of lush green mountains. The drive is about thirty minutes to downtown Panama, and only fifteen to twenty minutes to get to Balboa, Panama which has just about everything one could need or want for everyday living.

The former US Howard Airforce Base which is located just in front of the area of Veracruz, and former Rodman Naval Station recently received approved legislation to become a free trade zone for the Pacific making this another area to watch for growth explosion.

Playa Chumical

Veracruz, flows into Veracruz de Chumical. Chumical, has a sand and volcanic rock beach that is cleaner than Veracruz, the homes are larger and better maintained. In this town are fishermen and residents that work in the city. Chumical is the cleanest of the public access beaches since leaving Panama City.

Entrance to the beach can be gained by the various paths the allow access between the houses. There is nothing but open water and islands to be viewed from the coast in Chumical. There are no concessions or commerce on this stretch of beach.

The day I visited I found a delightful sight. Three children playing in a tide pool whiling away the hours in the Panama sun. They stopped long enough to allow me to take their pictures. Their presence definitely added to the beauty of the scenery.

Playita Vacamonte and Vacamonte Port (Vaco Monte)

Playita Vacamonte, Panama sits just outside the official entrance to the Vacamonte Port. It is the smallest of the public access beaches since leaving Panama City. Like Panama’s Playa Bonita, this area is a little rustic since it set road side and you have to descend a steep hill to reach the beach area. Parking is minimal but the view is breath taking. The waters here are clean and the Vacamonte Port area is well maintained free from the normal roadside debris.

The Vacamonte Port of Panama is an international port. You will need to show your passport to the guard and enter the area.

Vacamonte Port consists of a few small building and a port of industrial fishing. The port has two wharves and a pier. In the port are all manner of fishing boats whose main commodities are shrimp, shark, tuna, and various local fish. The fish are sold to the general public from 8:00 until 2:00. There’s a bank and a restaurant in the port. Shop early if you want small fish for your home, the small fish sell out early.

From Vacamonte International Port seafood is shipped all over the world.

Peurto Caimito

Peurto Caimito, Panama is home to Mariano Rivera, relief pitcher for the New York Yankees. Mariano has a large home just outside of Peurto Camito, and with residents like this it is hard to list Peurto Caimito among the forgotten beaches of Panama, but we can definitely call it off the beaten path. Puerto Caimito is situated at the mouth of the Caimito River, and is a commercial fishing town with a fish meal processing plant and is an old pirate village

Of all the places previously listed Peurto Caimito caught my attention and begged me to stay a while. It’s hard to say if it was the signs that hang from the homes along the beach front road that entice you with promises of fresh fish for sale. Or maybe it’s the thought of the fishing boat moored behind the house that go out on the rising tide, when the water has sufficiently covered the vast expanse of beach and brings the day’s catch to vendors living in the houses. I was also struck by it was the fishermen tending to net repairs and daily maintenance of their outboard fishing boat on the beach. And rusty vessels in the port and as well as the few rusted past use on the far end of town where the road ended at the ship yard. The child in me came out saw I watched a town’s child climbing in and out of the rushed out boat hull on the beach. I could have spent the day climbing, exploring, poking, and turning things over.

Peurto Caimito, residents are mostly descendants of the island peoples and a lower socioeconomic class level that live off the sea. They catch sardines or anchovies, they have no refrigeration, so the boats all smell and are sealed with a slime of fish oil.

There is a couple of large ranchitos on the beach with patios facing the beach, music blaring loudly. The beach was easily accessible and was mostly sand. We didn’t see anyone swimming or lounging, but was week day and from the positions of the ranchitos I would wager to say to some extent the weekends bring pleasure seekers to the area. The smell of wood cook stoves and signs selling carbon add to experience that was hard to leave behind as my day ended.

If leaving with locals and cheap land with ocean front property appeals to you, it will probably also appeal to you to know that El Chorrera is only fifteen minutes back up the road and has practically everything necessary for living a comfortable life in Puerto Caimita.

For more information, please visit:

http://www.panamaexpertos.com

http://www.panamaexpertos.com/forum/panama-s-pacific-coast-beach-guide-part-1-ct45.html

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