Building Wealth within New Social Policy Regulations – 2009 to 2012

Too small to be saved is in a perverse way is a building block for future personal wealth. To achieve prosperity, now more than ever and in the New Jersey more than other places, taxes and political considerations are more significant in the business decision mix than it has been since the 1950’s.

We do not know specifically where Congress is going, but it is generally moving into more regulations and penalties for company owners that violate these regs.. An essential exercise for all business owners is to pay more in depth attention than ever before to political developments.


On the other hand, government is creating new markets through massive spending increases. Taking advantage of opportunities opened by current (June 2009) political decisions is imperative. Owners must be sensitive to political – market risks of emerging regulation and oversight. These factors significantly rebalance weighing competitive market variables versus political ones in decision making.

From an operations standpoint, product and innovation remain key to customer satisfaction and top line revenue growth as before. However, legal tax - minimization efforts weigh more heavily in the decision process that a year ago in terms of long term wealth creation. We will explain later.

Pricing is always both a strategic and practical issue, of course. We ask clients not to change price structures that reflect their brand value proposition. Rather, we recommend adjusting to near term economic turmoil by structuring trade, distribution channel and end user pricing with short term promotions. Longer term value perception will be based on how company sets its product line valuations now. Seek and get professional counsel on these strategies.

We also characterize all customers in categories such as triers, loyal buyers and heavy users. As budgets allow, we recommend rotating promotional activity through each customer cohort or category based on an understanding of the business cycle. What this means is grasping customer behavior and develop programs specific to their needs.

In terms of debt, my bias is to use short term working capital loans to help liquidity and long term debt only for well positioned asset purchases that have demonstrable payout. Revenue volatility and inflation will be issues forefront on our radars; negative leverage can be catastrophic.

Back to the wealth creation strategy –we suggest investment spending in relationship building, even in terms of lost revenue now which means both trade and end user brand equity. Spend to achieve deep employee relationships and strong teams. Taxes on profits do not increase brand value.  Investment spending on brand, inside and out, does. In future years capitalism will return, as will a premium value on strongly branded companies based on a committed team, strong trade and end user brand.


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