Why the Super Bowl proves that FAILURE is a KEY to SUCCESS. (Part 2)

In Part 1 of this series, I wrote about how failure, as a result of trying new things and experimenting, is a key to ultimate success.  I pointed out how Pete Carrol’s and Bill Belichick’s past failures, including while coaching with the New York Jets, were part of the reason they were facing off in this year’s Super Bowl.  Ultimately, a failure is not really a failure but a learning experience.  And successful coaches and small business owners take the knowledge learned from a set back and treat it as a case study to take them a step closer to success.

In Part 2 of this series, I will address how failure provides another key building block for success by providing motivation and how the New York Jets again contributed to football perfection.

I know you are thinking that it is odd to see the words “Jets” and “perfection” in the same sentence.  However, Super Bowl III is the basis for the Jets contribution to football perfection.  The Jets were not perfect that January day in Miami over 40 years ago when “Broadway” Joe Willie Namath rocked the football world and put the American Football League on the map when the Jets defeated the mighty Baltimore Colts in Super Bowl III.  The Jets were 17.5 point underdogs (the largest in Super Bowl history) and going up against one of the traditional powerhouses of the NFL, led by their Hall of Fame Quarterback Johnny Unitas.  (Unitas was Joe Namath’s idol growing up and Joe wore Unitas’ number 19 in high school.)  Despite the overwhelming odds against the Jets which was helped fueled by Joe Namath’s guaranty of a win before the game, Joe and the Jets pulled off one of the greatest upset victories in the history of sports, defeating the Baltimore Colts 16-7.  (Since the Jets have not made it to the Super Bowl since then, I often wonder if Namath made a Faustian deal to get the Jets the win like Joe Boyd in “Damn Yankees”.)

The story of perfection began with the loss of Super Bowl III by the Colts, but not for the Jets or even the Colts.  However, it did start in the Colts locker room and the feeling of embarrassment and failure that the Colts head coach felt by losing to the upstart league . . . namely Don Shula.

While many a man would have viewed the defeat as crushing and something that was impossible to overcome, the loss to the Jets created a new fire in the gut for Don Shula.  Years later he would say:  “What I learned from that loss . . . was that when you are there, it’ not good enough to be there, when you are there, you better walk away with that ring.” Another interesting note is that Don Shula lost the Super Bowl to his former coach when he played for the Colts, Weeb Ewbank.  Coach Ewbank had been fired by the Colts and replaced with Shula who was only 33 years old, just like Pete Carrol was fired by the Patriots and replaced by Bill Belichick.

Shula began to work harder than ever to coach his teams.  He started to gain redemption when he joined the Miami Dolphins and brought them to the Super Bowl in 1971 but lost.  Then in 1972, Shula and his Dolphins capped off the one and only undefeated season in the history of the Super Bowl era by going a perfect 17-0 and defeating the Washington Redskins in Super Bowl VII, 14 to 7.  In four short years, Shula went from football hell to the top of Mount Everest and he and his team have accomplished something no other team has been able to match since.  Shula ended his NFL career with 347 wins and a .678 winning percentage and was inducted into the NFL Hall of Fame in 1997.

I will leave you with this quote from Coach Shula which applies to all entrepreneurs: “Success is not forever and failure isn’t fatal.”  Again, when you have a setback in your business, and you will, remember it is part of the learning experience and should fuel your motivational fire.  Learn from that experience and use it knowing that it will bring you a step closure to your ultimate success!

Why the Super Bowl proves that FAILURE is a KEY to Success. (Part 1)

                The Super Bowl will pit two championship coaches against each other:  Pete Carrol of the Seahawks who has won championships on the college and NFL levels and, Bill Belichick  a multi-Super Bowl winner.  By all accounts, they are successful in their chosen careers and are possibly hall of famers.  However, they have a common denominator between them that involves failure . . . the New York Jets.

                Both are former head coaches of the Jets.  As a long suffering Jets fan, I remember them well.  Although Belichick was head coach for only one day before bolting to the Patriots (no I am not bitter), he was on the sideline for heartbreaking losses including the Jets loss in the AFC championship game to the Broncos when the Jets were leading at halftime.  Bill also was head coach of the Browns before they moved to Baltimore.  That history speaks for itself.   Pete failed to bring championships not only to the Jets, but also, as head coach of the Patriots.

                I am sure on Sunday, my fellow Jets fans (and even some Browns fans) may be thinking: “What if they stayed to coach our team?”

                Well, the truth of the matter is that all Patriot Fans and Seahawk fans owe a debt of gratitude to the Jets for allowing both Pete and Bill to make their mistakes and learn from them to go on to build championship teams.  Had Bill and Pete not “bled Jet green” at one time, they would not be facing each other on the biggest stage in sports.

                If you are a small business owner, you must keep this lesson in mind.  You are going to face struggles and challenges in your business.  Sometimes it’s hard to get through the day.  It’s all part of being a small business owner.  You must expect to make mistakes, take on challenges and keep pushing to learn what will work.  There is no one way to do things and you must keep trying different ways until it all comes together.

I leave you with one of my favorite quotes from Thomas Edison on how long it took him to figure out how to make a light bulb.  He said:  “I have not failed.  I’ve just found 10,000 ways that won’t work.”  (Part 2- The Jets creation of perfection).

The Ten Questions You MUST ASK BEFORE You Hire a Debt Consolidation Company.

More often than not, when I meet with a client coming to see me for a complimentary bankruptcy consultation, they advise me that they first attempted to use a debt consolidation company they saw advertised on TV.  Unfortunately, if they are coming to see me, it means the company did not help them.  Sometimes there were misrepresentations made to my clients.  Other times, the clients simply did not understand the terms of the agreement. 

Therefore, I have come up with the following questions you MUST ASK if you are considering hiring such a company:

1.  How much is your fee and how is it determined?

2.  When will you start settling my accounts?

3.  Are you entitled to your fee even if you don't settle any of my accounts?

4.  What happens if I am sued before you settle an account?

5.  Do you pay for an attorney for me if I am sued?

6.  How long will it take for you to settle my accounts?

7.  What will you do for me if a creditors seeks to garnish my wages?

8.  What will you do for me if a creditor levies on my bank accounts?

9.  What will you do for me if a creditor seeks to repossess my car?

10. Will I get a refund of my payments if I change my mind and you haven't paid any of my creditors?

If you are not satisfied with the answers to these questions from the agency and are interested in exploring other alternatives, give my office a call at 941-206-3700 for a confidential, complimentary consultation to go over all of your options to get out of debt and have the opportunity for a fresh start.

BIG Tax Problems Loom for Underwater Homeowners!

As the end of the year is coming fast upon us, Congress has failed to extend the benefits of the Mortgage Debt Forgiveness Relief Act, which expires on December 31, 2013.  Under the provisions of the Act, if you sell your primary residence as a short sale, [that is for less than what you owe on the mortgage], the debt forgiven is not treated as taxable income under the Act.  For example, if you sell your home that is $100,000 upside down and $100,000 of debt is forgiven by your lender, and you are in the 15% tax bracket, you could be hit with a $15,000 tax bill if you don't close on your home before the end of this year.

Unfortunately, if Congress does not extend the Act, many will have to file for bankruptcy to avoid the extreme tax consequences related to a short sale since any debt forgiven in Bankruptcy is NOT a taxable event.  Also, keep in mind that if the Act is not extended and you close on your home in 2014 and then file bankruptcy, the taxes incurred as a result of the short sale are not dischargeable in your bankruptcy and you would still be on the hook to pay the taxes.  Therefore, you must file BEFORE you close on your short sale if the Act has not been extended.

As you can see, failure of Congress to extend the Act could have a significant impact on real estate sales here in Southwest Florida.  Hopefully, there will be enough citizens and interested parties contacting their Representatives to take action.  For more information on short sales, foreclosures, and your credit score, CLICK HERE. 

WHAT HAPPENS TO ME WHEN MY FRIEND FILES BANKRUPTCY?

            You may be asking yourself: “Why should I care when my friend files for bankruptcy?”  Well, if you are like many of my clients, friends and associates, you have a big heart.  At some time in the past, especially in some of the difficult financial times your friends may have gone through recently, they may have come to you for some assistance in co-signing for a car loan or on a credit card.  You agreed to it because you knew the person for a long time and that they are a good person and would pay their debts.   Unfortunately, as much as your friend fully intended for you not to have any responsibility for the loan and it was only a technicality, the reality is, if they have no job and cannot make the payments, when the choice is between paying for a credit card or buying medicine for their children, the credit card does not get paid.  Now, this favor that you provided to your friend or, more commonly a family member such as a parent co-signing for a child, turns into a nightmare.  We often see the situation of a parent co-signing on anything from a credit card to a mortgage loan for their children and then being faced with a huge liability.

            One of the most powerful tools in the Bankruptcy Code is the Automatic Stay.  The Automatic Stay means that upon the filing of a bankruptcy petition by an individual, any parties attempting to collect a debt such as a credit card company or a mortgage company must stop.  If they fail to stop their collection efforts they can be held in contempt of court and sanctioned.  However, certain secured creditors such as a mortgage company or a vehicle lender, can proceed with their collection efforts against the collateral if they file a motion with the court requesting that the Stay be lifted for the limited purpose of pursuing the collateral, but not a deficiency from the debtor.  However, from your prospective, if your good buddy stopped making payments on the credit card, you may have already received phone calls and letters prior to his filing for bankruptcy.  The question then becomes: “Are you protected by your friend’s bankruptcy filing and the protection afforded by the Automatic Stay?”  As with most cases in the law, the answer is: “it depends”. 

            If your friend or family member has filed for a Chapter 7 bankruptcy, the Automatic Stay does not apply to you as a co-debtor.  Therefore, a credit card company can continue to pursue you for collection of that debt.  However, if your friend filed a Chapter 13 Bankruptcy, which provides for repayment to creditors, then you may be protected by the Automatic Stay provision.

            Specifically, pursuant to Section 1301(a) of the Bankruptcy Code, if you are liable on a debt with your friend and it is a consumer debt, the Automatic Stay applies to you as well and the creditor may not pursue you for collection of that debt.  However, your friend must also agree in his Chapter 13 Plan to pay the claim in full.  If he does not agree to pay the claim in full, then the creditor could pursue you for the amount that your friend is not agreeing to pay.  Also, it must be a consumer related debt.  Therefore, if you co-signed for a lease on a commercial property for your friend’s new tattoo parlor in Sarasota or Port Charlotte, you may be subject to the rent for the balance of the ten year lease. 

            Hopefully, you will never have to face this issue.  However, the lesson to be learned from this is that if you want to help out a friend or family member, it is important to get a full financial disclosure just as if you were a bank lending to this person.  As hard as it may be to say “no” to a lifelong friend or your son or daughter, in the end, you may learn the meaning of the phrase: “no good deed goes unpunished”,  and be stuck holding the bag, while they are discharged from any further liability.

            If you have co-signed for a loan as we described in this article and have questions or concerns, please do not hesitate to call on us to answer your questions.

How NOT to Succeed in Business without Really Trying - Part II

[This article first appeared in the July 2012 Charlotte County Chamber of Commerce Newsletter]. 

Last month, I wrote about the first five reasons of my top ten reasons why businesses fail.  I based my selection from the 30 reasons listed in Napoleon Hill’s  book “Think and Grow Rich”.  Here are the second five in no particular order of importance. 

6.  Lack of a well-defined power of decision. Making decisions is one of the key skills necessary to be a successful entrepreneur. If you're unable to make quick decisive plans with regard to your company, indecision results in no decision.  In the new economy, businesses that fail to react in a timely manner will be left behind and not in business for much longer. Your business’ success depends upon you making prompt decisions and providing the required leadership for your employees. As the owner of the company, your goal is not to be friends with your employees, but rather, a leader of them, for not only your benefit, but for the benefit of your employees and their families.

7.  Over caution. Part of being an entrepreneur requires the ability to take risk.  Any time someone opens their new business, there is that fear that no one will come through the door. However, if you have spent the time, putting together a proper business plan and required systems in place for not only your services but you're marketing as well, the risks are diminished.  Being too conservative, over cautious and not willing to take any chances will lead to failure.  One philosophy followed by some entrepreneurs is “ready, fire, aim”, meaning that if you just keep “aiming” until you get the product, service or advertisement “perfect”, you may never make the decision to “fire” and take the required action to move your business into profitability.

8.  The habit of indiscriminate spending. Obviously a clearly defined budget that your business sticks to is crucial to a business' success. Spending more than budgeted because you have a good month is a big mistake, and not planning for possible downturns and bumps in the road with regard to your business is fatal.  Saving for a rainy day is an important part of your business plan.  Budgets must be monitored carefully and adhered to religiously.

9.  Guessing instead of thinking. Too often assumptions are made by business owners without a factual basis. In my line of work, I often have clients come to see me after making bad decisions when we could have directed them towards a proper path. Consultation with professionals such as attorneys, accountants, architects, engineers and other advisors, is invaluable and ultimately will save you more money than trying to fix mistakes down the road.

10.  Lack of capital. Again, if I were ranking these, this would be number two. Often I see owners starting to launch a business which, if given time, would be successful. However, they are undercapitalized, expect to reap great revenues in a short period of time, and by month six, they can't even pay their rent.  I generally tell clients when starting a new business that they should have at least 6 to 12 months of their personal living expenses put away in order to survive in case there is no money coming in from their business, and that they should have access to lines of credit (not credit cards or a second mortgage on their home) or other funding sources that will carry the business through the first 12 months based on conservative projections of income.

I hope the foregoing will give you something to think about with your business. Please send me your questions or comments at mark@martellalaw.com, and I'll be happy to discuss these with you further.

How NOT to Succeed in Business without Really Trying - Part I

[This article first appeared in the June issue of the Charlotte County Chamber of Commerce's June 2012 Newsletter.  Part 2 will be published in the July Newsletter.

Also, if you receive the Chamber Newsletter, keep your eye out for an insert with a very special and tasty offer coming in your July Newsletter!!!]

One of the best business books ever written is the classic "Think and Grow Rich" by Napoleon Hill.  If you have not read the book, I highly recommend it.  A note of caution.  The title is misleading.  It should really be called “Think, Take Action and Grow Rich”.  In one Chapter of his book, Hill offers  the 30 reasons why most businesses fail.  In my experience as an attorney practicing law for over 24 years, I have come across many of the same common downfalls I see in small businesses which lead to ultimate failure.  While I don't agree with all 30 of Mr. Hill's reasons why businesses fail, I did pick my top 10 reasons from his list.  Since space does not allow me to cover all 10, this will be a two part series with the first five presented below.

While the following list is not all-inclusive of the reasons businesses fail, these are my top 10 reasons listed in no particular order:

 1. Lack of ambition to aim above mediocrity. Too often, especially in this new economy, good enough is no longer good enough. Businesses that do not seek to go the extra mile in the new economy will ultimately be left behind when competing against companies that go above and beyond their customers’ expectations.  Think Disney!

2.  Lack of self-discipline. All entrepreneurs are excited about starting a new business. However, if they fail to implement systems and impose standards upon themselves personally, and their employees, that will allow them to provide a consistent, high value (not to be confused with cost), product or service to their customers, they are doomed for failure.

3.  Procrastination. We all suffer from this at times. However, as a small business owner, procrastination can be the death of your business, especially when it comes to marketing. For example, with regard to the Chamber, many businesses do not take advantage of the marketing opportunities provided by the Chamber in a systematic fashion, such as providing information in our weekly e-newsletter, Business Online, or regularly attending events such as our breakfasts, lunches and after hour business card exchanges.   Putting this type of marketing off by saying: "I'll do it next week”, may lead to “next week” being the last week that you're open.

4.  Negative personality. Think about it.   Do you like dealing with someone who's always down and is always negative in their thoughts and the prospects of the future. It is very easy to join in with the naysayers about how difficult it is in this new economy.  However, if you wish to succeed, your mindset must change and you must take control of your future and not be controlled by the negative thoughts of others.  As the leader of your business, you must convey a positive attitude to your employees if you want them to convey it to your customers.

5.  Wrong selection of associates in business. If I were putting these in order of importance, this would be number one. Too often I have clients come to my office who want to form a business venture and they tell me, literally, that they only know each other for a couple of weeks.  Those of you who may have been in business partnerships for a long time know that it is just like a marriage which requires give and take and excellent communication skills.  Good communication between partners is essential, and a common belief in the mission of the business and how it will proceed is vital.  While different personalities and different skill sets can enhance the business, the differences must complement each other and not result in constant agitation and conflict.

            This is the first five of ten reasons.  Look for the next five in the July Newsletter. I hope the foregoing will give you something to think about with your business. If you have any questions or comments please feel free to contact me at mark@martellalaw.com, and I'll be happy to discuss these with you further.