Feb/Mar-'01 ISSUE highlights Big Tax Deductions Page 1 Including Many that Business Owners may not be Aware of Collecting Payments Due Page 2 Ways to Reduce Late Payments Jest for the Fun of It Page 4 TPI’s “Funny Business”Department Marketing Tip Don't Forget the Basics Page 3 Mixed Economic Signs Page 1 Indicate Caution in 2001 Shrewder Computing Page 3 Internet Privacy—What to Look For Taking Care of Business Page 2 Safety Suggestions to Help Reduce the Rate of Lift Truck Accidents TPI Action Page 4 — Worker's Comp. Insurance Avail able from “Preferred Provider” — Clovis & Roche' Collections Firm no Longer Serving the Industry — Albuquerque Committee Meetings open to All BUSINESS MANAGEMENT Turfgrass Producers International Mixed Economic Signs Indicate Caution in 2001 While not yet predicting a recession, commercial construction—a positive the economy will experience something impact for turf producers, landscapers rougher than the “soft landing” that is and a wide range of businesses. generally expected. • Continuing improvements in productiv­ Anticipated is a period of sharply slower growth in 2001. Reasons: 1) Despite the U.S. Federal Reserve Board’s recent interest rate cut, previous hikes have reduced demand for mortgages and commercial loans. ity fueled by advances in business technology. Bottom line: 200l’s growth rate will be less than 3.2 percent, compared with about five percent in 2000. That’s quite a slowdown but still enough for a strong economy. 2) The surge in energy prices has increased turf producers’ costs of fuel (production, harvesting, delivery) and even petroleum-based fertilizers. 3) A drop in investor confidence, due to the declining stock market is dampen­ ing consumer spending. Interest rates are expected to fall only slowly, due to the Federal Reserve’s reluctance to reduce short-term rates. Inflation will remain low as growth eases and productivity gains allow compa­ nies to absorb higher energy and labor costs. Despite these growth-stifling forces, there are still powerful factors supporting the global economy’s overall health: • Low unemployment (even though this increases turf producers’ concern for hiring and retaining sufficient workers). • Irwin L. Kellner, Ph.D., chief econo­ mist for CBS MarketWatch forecasts continued strength in residential and Advice to businesses: • Check the credit ratios of all new customers. • Be aware of any slowing retail figures (consumer purchase) and your growing inventory. • Build your cash reserves. • Reduce debt. • List ways to cut costs if business slows more than you expect it to. Big Tax Deductions Business Owners Too Often Miss Because tax laws keep changing, very few business owners take full advantage of the many tax breaks available. Fortu­ nately, most tax errors and oversights can be easily corrected in a session with your tax adviser early enough in the tax year to permit strategic planning. Here are some areas for potential tax savings: Automobile write-offs. Maximizing the tax deduction for a car used in business can sometimes include more than just the standard mileage rate (34.5 cents per mile, beginning 2001 in the U.S.). High repair costs and/or increased insurance costs could factor in. Keep good records all year in order to assist your accountant in deciding whether to take standard mileage deductions or base your write-off on the actual cost method. Expensing vs. Depreciation. Buying new equipment raises the question of whether the new item should be expensed- -written off at once—or depreciated over a period of years. Expensing only pays if you have enough income to offset the expense. If your business is new, or if it is having a bad year with little hope for immediate improvement, you probably would benefit more from depreciating. Overlooked deductions. Don’t forget tax deductions of: business entertainment in your home, charitable contributions, training and education. Check with you tax advisor for specifics. Taking Care of Business George C. Jehlen Jr., ARM, CAP Don’t Let Your Lift Truck Bring You Down! W.S. Pharr & Co. Atlanta, GA be present, in good condition and func­ tioning properly. If not, take the lift out of service until repaired. • Establish a written training program which exceeds the guidelines and is presented by a qualified trainer. Re­ member formal instruction and practi­ cal training are required. For many of us, we need to use bilingual materials and trainers. Make sure that your operator’s manual provided by the manufacturer is part of your training. The final step in the training process is when the operator demonstrates their ability to inspect and operate each lift that you will authorize them on. Con­ sider establishing a written lift truck layout and exercise. You must main­ tain these documents of this evaluation process. We all can benefit from each other’s experience and practices. If you would like to comment, share your experience or your program, please do so through TPI. Let’s all work hard and together to avoid these senseless accidents. Over the past few years, the fre­ quency and severity of employee inju­ ries from lift truck accidents have in­ creased at an alarming rate. Here is an example of just a few: • At a job site, a piggyback lift driver drove his empty lift across an embank­ ment. When it started to roll, the op­ erator tried to jump from the lift un­ successfully, resulting in his death. • In a turf field, a field lift driver was loading a delivery truck when another employee walked behind the lift. When reversing the lift, the second employee was struck, which resulted in a severely broken leg. All of us can relate to these accidents and probably have experienced “near miss” incidents in our operations. Too many times the labor crunch has forced us to put inexperienced or untrained employees, or worse that old timer that has seen it all, on our lift trucks. Since December 1999, OSHA has enforced a new forklift operator training regulation. While we can argue all day whether or not OSHA has any authority over a turf farm, does it really matter? This regula­ tion provides an excellent guideline for the development of your own operator training program. Besides, OSHA, EPA, WPS, etc., these standards and regula­ tions are all minimum guidelines. There is nothing in these documents prohibiting us from doing more. The OSHA standards, guidelines, ex­ amples and compliance directives are available at OSHA’s website (www. OSHA-SLC.gov\training\pit). Addition­ ally, there are numerous other resources such as J J Keller, Gempier’s, your lift manufacturer, local technical schools and your insurance company’s loss control department. Here are a few key points to consider in developing your program: • Document your daily inspection of the lift. Backup alarms, lights, horns, seat belts, rear view mirrors, SMV Triangle or reflective tape, all should Collecting Payments Due... Regardless According to Anita Drummond of the U.S. Small Business Administration’s Office of Advocacy, 25 percent of businesses that don’t survive their first two years is often due to uncollected receivables. Here are some tips to help reduce the number of overdue accounts. Agreements in Writing Janet Attard, author of the Home Office and Small Business Answer Book and manager of the Business Know- How forum on America On-line, advises creating a letter of agreement and asking each customer to sign it, before further business. The letter should stipulate what you will do, when you will do it, how much and when you will be paid. A lot of small business owners are so eager for a sale they agree to a job without talking about payment. If it feels awkward putting your working relationship in writing, just remember you’re in business to make money. “Bringing that issue up in the beginning helps weed out those who are serious from those who are not,” said Attard. for earlier payment is more effective than charging late fees. If late fees are necessary, be willing to waive that charge for customers’ good-faith efforts to pay. She advises getting at least a partial payment in advance when the customer’s enthusiasm is high. You have a tangible product that obviously costs money to produce, so some pre-payment is more understandable. Plus it helps meet payrolls and other expenses. Make sure your invoices are num­ bered, sent promptly and delivered to the right person in order to eliminate future frustration and delay in collecting. Credit cards are a convenient option but remember a percentage from each sale goes to the credit card company. Incentives and Reminders Offering a small percentage discount One business attorney advises creating a series of increasingly urgent reminder letters to past due customers. Another advises sending one friendly reminder letter before making a phone call to the person with authority to respond. Final Steps After all efforts have failed, it’s time to consider a collection agency. Small claims court is another final option but, before you sue, call the customer to find out if he or she would prefer to settle without court. If the response is negative, be sure to follow up with a letter stating your claim. If that effort is unsuccessful, the demand letter will provide evidence to the court that you made every sincere effort possible to collect the amount due. Marketing Tip Bob Hummer Don’t Forget the Basics! Sporting Valley Turf Farms Manheim, PA Too often we think of marketing in refer­ ence to salespeople, advertising or budget­ ing promotional dollars. I do all of the above, as most sod producers do. How­ ever, don’t forget that marketing also in­ cludes prompt service, product quality control and neatness. Prompt service obviously relates to de­ livery trucks being on time. Our trucks now have cellular phones and our shipping orders include both the cell and office phone numbers of customers. This allows our drivers to directly communicate traffic delays, directions and related details of each shipment. Prompt service also relates to customer pickups or FOB shipments. We do every­ thing possible to get our customers’ trucks in and out of our yard very quickly. We do this in a number of steps. First, we employ a designated “yard person,” a flatbed truck and warehouse-type lift truck. Secondly, all FOB orders are picked up at our dis­ patch yard. The flatbed truck shuttles the pallets from the field in advance of the customer’s projected arrival time. Twice a day, depending upon tempera­ tures and the season, we do a float count. The float count is for walk-in customers who did not call in their orders and/or cus­ tomers who have called in the amount and time, but increase the quantity after their drivers arrive for the pickup. The yard person stores the freshly har­ vested sod in a shaded area near a water source. Thirdly, the dispatch office win­ dow faces our yard entrance. Both the dispatcher and the yard person keep a third eye on the yard entrance. They both also have hand-held portable communication systems. One or both read the name on the Watch for Sur-Charges on Rental Car Bills Many rental car companies are tacking on surcharges (shuttle buses and such) that can add 10 to 40 percent to a published rate. Before reserving a rental car, contact prospective companies and ask: “What are the total charges.” incoming vehicle and the yard person jumps on the lift truck and brings the pal­ let or pallets to the already parked vehicle. The customer walks 10-12 paces into the dispatch office. I request we have the dispatcher or an assistant standing at the counter with the shipping order in hand to greet the customer. Depending on the size of the order, the customer’s vehicle is loaded by the time the driver leaves the office. The yard person then helps the driver to “tie down” and thanks him or her for the business. Of course, there are times when two customers show up simul­ taneously and one will have to wait a short time before the yard person can load that customer’s order of sod. Our promptness and courtesy as a sod vendor supports the important significance for the customer to get to the job site and have enough time to install the sod the same day it is picked up. This system also permits our harvesting crew to be more efficient in the field and it allows our own delivery trucks to get in and out of the field as quickly as possible. It also elimi­ nates the paper shuffle between the field and office, assuring pallet return accuracy. Quality control is an easy one, although sometimes employees tend to fall asleep when there are no complaints. Each piece of sod must be free of weeds and insects. Physically, the edges must be clean cut and of uniform soil thickness. The equip­ ment on our harvesting crew includes a portable gang mower set a tad bit shorter than the general mowers. The crew double-cuts the harvest area daily before harvest. Management challenges the har­ vesting crew to keep the pallets squarely stacked and rolls tightly spooled. Our trucks are watered down and tarped during very hot weather. Trucks and forklifts are washed and polished on a regular basis. Drivers are uniformed and aware of the meaning of customer oriented. None of the above items cost a lot of marketing money; rather, it places the emphasis on management. This is simply marketing by serving and managing. Shrewder Computing Internet Privacy Many internet sites— including the U.S. Chamber of Comimerce—post privacy policies alerting consumers as to how personal information may be used. Sites differ in their use of this information. Most use non-identifi- able information just to track fre­ quently visited pages and find out which pages consumers prefer, what information is requested and to find out how the site can be improved. Other sites may collect personally identifiable information, such as e- mail and snail mail addresses, for marketing or research purposes. These sites should have this fact included in their privacy statement. Many e-commerce sites post seals from trusted sources, such as the Better Business Bureau, to signify that credit card information and similar data will be encrypted and the process secure. If you are uncertain, call or e- mail the organization for verification. One problem many businesses don’t realize is that privacy companies might completely block the server on which the business’s domain name resides. The web software used by these filtering companies doesn’t discriminate. Instead of blocking the relevant addresses that correspond to unwanted sites, many privacy compa­ nies block access to everything on the web host’s server. That could very well translate into lost dollars for businesses that might not even know they’re being blocked. TPI Action WORKERS' COMP. INSURANCE is now available to turfgrass sod farms in the U.S. from W.S. Pharr & Co., a newly designated “preferred provider.” As an­ nounced to the membership in a recent mailing, the TPI Board authorized this designation to the company after receiving a unanimous recommendation from the Farm Management Committee. A specific proposal can be initiated by contacting the Atlanta, GA based firm at 770/434-8440 or 800/817-2244. CLOVIS & ROCHE COLLECTIONS FIRM previously a “preferred provider” to TPI members, has recently chosen to no longer pursue the industry’s bad debt accounts. According to the firm’s spokesman, “The monetary value of the accounts, and in particular, the extreme age of the debts, have made it impossible for Clovis & Roche to produce any worthwhile return for either the members or ourselves.” Not to be overlooked in this decision is the implicit fact that TPI members do not pursue collections action until the accounts are quite old. History has demonstrated that the older a past-due account becomes, the less likely it will ever be collected. (See article on page 2) ALBUQUERQUE COMMITTEE MEETINGS OPEN TO ALL The following TPI committee meetings will be held in Albuquerque during the Midwinter Conference. All are open to the general membership. Marketing — 10:15 - Noon, Tuesday, Feb 6. Farm Management — 2:45 - 5:30 pm, Tuesday, Feb. 6 Conference/Convention — 4:45 - 6:45 pm, Tuesday, Feb. 6 Study Tour— 7 - 8:45 am, Wednesday, Feb. 7 Technology Resources — 3 - 5 pm, Wednesday, Feb. 7 Manufacturers/Exhibitors — 7:30 - 9 am, Thursday, Feb. 8 Magazine - 7:30 - 9:30 am, Friday, Feb. 9 To Receive Additional Information On Any of These Items, Contact the TPI Office Phone: 800/405-8873 or 847/705-9898 Fax: 847/705-8347 or e-mail: Turf-Grass@msn.com Website: http://www.TurfGrassSod.org BUSINESS MANAGEMENT Turfgrass Producers International 1855 Hicks Road, Suite C, Rolling Meadows, IL 60008 James Beard International Sports Turf Institute 1812 Shadowwood Dr. College Station, TX 77840 Jest For The Fun Of It Kids Say the Darndest Things Some grade school teachers must agree with the title of this section because they keep journals of amusing things their students have written in papers. Here are a few examples: “A census taker is a man who goes from house to house increasing the popula­ tion” “Water is composed of two gins; Oxygin and hydrogin.” “Most of the houses in France are made of plaster of Paris.” “The spinal column is a long bunch of bones; the head sits on the top and you sit on the bottom.” “The four seasons are salt, pepper, mustard and vinegar.” “Syntax is all the money collected at the church from sinners.” “In spring, the salmon swim upstream to spoon.” “The word trousers is an uncommon noun becuse it is singular at the top and plural at the bottom.” FIRST CLASS MAIL U.S. POSTAGE PAID Rolling Meadows, IL 60008 Permit No. 662