Archive for October 2004

ACME Product of the Day IV

A regular feature, it is explained here. Many of our ACME products come courtesy of this site.

Once again, ACME is way ahead of its time. Below are the ACME rocket skates:

Rocketskates1 Rocketskates2

And here is the modern copy-cat product from motosk8 (courtesy of Gizmodo)

OMG -- Wash. State Sales Taxes

Just pulled out the new Washington State sales tax forms to do my September taxes. The form is now 8 (dense)pages long! This is really getting out of control. In contrast, the sales tax forms for Florida (which has other problems, but we will talk about those later) fit on one side of a 3x5 card.

Washington is the worst offender I have seen in at adding jillions of new small targeted sales based taxes. They have become even more complicated than California. The basic sales tax rate varies by industry and by location - and I am not talking about just by county or city but by town. Each of something like 350 towns have their own tax rate. Then there are add-on taxes that don't follow any recognized borders, such as convention taxes and transit district taxes. Then there are lodging taxes, that vary by town but also depend on the number of sites we have in a campground, but of course that threshold number of sites changes by town as well. I have spent litterally hours with maps trying to figure out what rate we collect at for each of our locations. The Washington State tax return takes longer to prepare than any 4-5 other returns we have.

Private Space Travel - Woohoo

Congratulations to Burt Rutan and Co. for winning the X-prize for private space flight. When I was growing up, we thought this kind of thing would be happening much sooner, but better late than never. Also, thanks to Paul Allen and the Ansari family for funding the effort. D. D. Harriman lives!

Welcome Carnival of the Capitalists!

Welcome to Carnival of the Capitalist readers. Its great to have you here. If you are looking for the series on buying a business, it starts here. I have started a new series on working with the Department of Labor here. Future series will include posts on managing multi-state businesses, workers comp, liability insurance, sales taxes, and government contracting.

Rethinking Football Metrics

I find that most experienced managers have become experts at identifying and gaming flaws in measurement systems. The in and outs of measurement systems have always interested me, both in business and in sports (how about that segue-way?)

Those of you who are baseball fans may be familiar with Bill James. Bill James came to the conclusion that baseball stats really didn't say very much about what went on in a game, and were misleading in evaluating individual performance. He and people like him have asked questions like "is RBI production really a fair measure of individual performance (since it depends on teammates getting on base)" and "why are walks left out of traditional hitting stats". My post is really on football, but if these baseball questions interest you, check out the book Moneyball.

Much like these baseball stat pioneers, there are a number of people trying to rethink football statistics. For example, is total yardage given up a good measure of defensive productivity? Won't a mediocre defense on a team with a great offense that grinds out 8 minute drives sometimes look better on this stat than a good defense on a team with an offense that is always 3 and out? A site called Football Outsiders is one example of the search for better football understanding. If you are numerically inclined, and are tired of the "its all about execution, about taking it one game at a time" football analysis, check these guys out.

Is the Department of Labor "Fair"? Part 1 of a series

Note that this is part 1 of a three-part series. Here are part 2 and part3.

Over the past several years, we have been audited a couple of times by the Department of Labor (DOL). One of the audits was standard procedure (as a concessionaire to the US Forest Service, audits are sometimes required on certain contracts) and one was based on employee complaints. It never ceases to amaze me that some folks never even bother to call our HQ to complain and try to get it paycheck mistakes fixed -- they go straight to the government rather than our labor department if something looks wrong on their check.

Many times I have heard other small business owners say that the DOL is not "fair". If you were to ask me if I think they are fair, I would answer "yes" and "no". If you want to know if DOL employees are generally honest, well-intentioned, and law-abiding, my experience is that they are. However, if you expect, as a business owner, that the DOL will act as some kind of neutral court of law, in which you and your workers have equal status and equal rules of evidence, then you are in for a surprise. The DOL is not on the employers side and doesn't really pretend to be.

This should not come as a surprise to you. Young lawyers out of school generally don't seek out lower government pay scales with a vision of helping businesses manage their cost structures. They join the DOL because they are interested in defending downtrodden workers against rapacious capitalists who seek to exploit them (etc. etc.) The main mission of the DOL is to enforce labor laws like the Fair Labor Standards Act (FLSA). However, overlaying this mission is a strong institutional culture that mission 1A is to defend workers against employers. This culture will have a number of implications in any dealings you, as an owner or employer, have with the DOL:

1. Workers claims will almost always be believed by the DOL, and the DOL will generally not require much documentary evidence to back up workers claims. The flip side of this is that employers claims that contradict workers will always require extensive documentary evidence. For example, we had several weeks of time sheets burn up in an office fire. In cases like this, the DOL will generally always side with the worker's recollection of time worked rather than the employers, even if the time claimed is completely inconsistent with hours worked in all other documented weeks. The burden of proof, in almost any dispute, will be on the employer.

2. The DOL's first answer to any employer's claims of an exemption under FLSA or other labor laws will be "NO". Congress has granted a number of exemptions to labor laws for certain business situations. For example, one that applies to our business in some cases is the FLSA has relaxed standards for overtime for "seasonal recreation businesses". From my experience, the DOL hates to admit that these exceptions apply to your particular situation. Back to the fairness point, they CAN be convinced, but sometimes it takes a lot of work to do so. In part 2 and part 3 of this series, I will give more specific examples of how to do this.

3. The DOL will never point out to you an exemption or saving that you are missing. I know that many people get frustrated with the IRS, but I have actually had experiences where the IRS found a mistake where I had overpaid. I have never had this experience with the DOL. The DOL does not really have very good staff or tools to help employers comply with the law in the most efficient manner. They have LOTS of tools and people dedicated to making sure workers get every bit of what the law guarantees them.

If you recognize this culture and context, and put any frustration that you might have as a tax-paying citizen and business owner aside, you can get a fair shake from the DOL. You just have to be prepared in advance to argue your case and bring lots of evidence to bear. And, if worst comes to worse, and you are willing to pay the attorney fees, you can always refuse the DOL's finding and take the case to a court of law, where there are much more neutral evidence standards.

The next part of this series will discuss further some examples and lessons learned in making your case to the DOL. Part 3 of the series will include a specific example.

Note: These are my observations as a business owner and are not specific recommendations. I am not a lawyer, and, even if I were, I am not your lawyer.

ACME Product of the Day III

A regular feature, it is explained here. Many of our ACME products come courtesy of this site.

This is an awesome product. The ACME dehydrating technology was always tops. These are perfect for pitching into an unloved neighbor's swimming pool. Not sure I would add water while holding it in my hand, though...

Boulder1 Boulder_a

Buying a Company, Part 3

This is the third (and hopefully last) installment of a series of posts on how I went about buying my current business. You should also refer to part 1 and part 2. This installment will focus on options for financing the purchase of a small company and what kinds of legal documents you will need to complete the transaction.

Continue reading ‘Buying a Company, Part 3’ »