December 2007 - MAAA__

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December 2007 - MAAA__ Powered By Docstoc
					                      MidAtlantic Automotive Aftermarket Association
                                     4601 Gettysburg Road
                                   Mechanicsburg, PA 17055
                               (717) 761-6117 or (800) 382-1239
                     Fax: (717) 761-3771 Email:

                                                          battle resulting in the design patent protection.
      November/December 2007                              The non-OE collision parts marketplace is the
                                                          current battlefield but the opportunity for Ford
                                                          and other OEMs to propagate their control of
                    What’s Inside                         replacement parts beyond bumper covers and
                                                          fenders into mechanical and electronic parts is
Patent Issue Update                            1          not a far fetch.
Endorsement for Right to Repair                2
NJ – New Truck Idling Regulations              2          In response to this latest challenge to the
NJ – Paid Family Leave                         3          viability of an independent aftermarket, the
NJ – Crackdown                                 4          Quality Parts Coalition (QPC) was formed to
PA – Small Business Dodges Tax Increase        4          mobilize opposition. On Monday, September 17,
PA – Health Care Mandates & New Payroll Tax    4          2007 the Quality Parts Coalition hosted a parts
PA – Lower Unemployment Compensation Tax       5          display near the north wing of the U.S. Capital.
Credit Card Fraud                              6          On display were examples of both aftermarket
Fund Your Retirement                           6          and OEM parts intended to demonstrate their
Plastic Bags                                   6          comparable quality and the lower price
Five Major Changes to Aftermarket              6          competition of the aftermarket products.
Don’t Risk A Lot to Save A Little              7
Boost Your Sales                               8          “When the aftermarket is allowed to compete
Improve Chances with Right Hire                9          with the OEM car companies, the consumer
Younger Workers – Time Off                    10          wins”, says Eileen Sottile, spokesperson for the
When Clients Won’t Pay                        11          QPC. “ With competition, the consumer saves
Motorwatch                                    13-14       money on repairs using quality alternative parts
                                                          from the aftermarket. In fact, that competition
                                                          works to keep prices down on OEM parts too.”

                                                          In the last 20 years, OEMs have pushed hard
           Patent Issue Update                            against the aftermarket with proprietary
                                                          language in the 1990 Clean Air Act and
The car companies have been wielding their                subsequent aftermarket restrictions written into
power around the Federal and State                        policies enforced by the EPA and the California
governments for decades and they remain                   Air Resources Board. At the state level, OEMs
persistent in their efforts to gain a legislative         attempted unsuccessfully in the 90s to pass
advantage over the independent aftermarket.               design copyright protection for many parts and
When Ford won a design patent on a handful of             for most of the last 10 years have vehemently
F-150 collision parts last year, they laid down yet       opposed the aftermarket’s attempt to establish
another challenge to the aftermarket that, if             the Consumer’s Right to Repair Act.
allowed to survive, could make the parts and
service aftermarket regulated servants of the             “For now, this is a consumer issue”, contends
OEM (Original Equipment Manufacturers).                   Skip Potter, Executive Director of the
                                                          Chesapeake Automotive Business Association
Keystone Automotive, a collision parts importer,          (a Maryland-based small business aftermarket
was the chosen Ford target for the 2006 court             trade association). “If OEMs are allowed design
                                                          patents on their parts its like being forced to buy
thread from the dress designer or a replacement          letter goes on to state that “consumer and
refrigerator from your original home builder             independent service sector access to vehicle
when things need repair. The consumer pays               maintenance will in turn, greatly enhance overall
more when supply is monopolized.”                        public safety and the environmental efforts to
                                                         clean up our air.”
“Today the fight is about fenders and hoods as
OEMs claim them to be their protected work of            For a copy of the letter, visit the Right to Repair
art,” Potter continues. “With the under hood             website at
space getting smaller all the time, what’s to
prevent a creative OEM from redesigning the
shape of a battery or radiator, making those
designs protectable, as well. In addition, what if       New Jersey DEP Issues New Truck
their tire tread designs are allowed to be
patented works-of-art? If the do-it-yourselfer and              Idling Regulations
the professional aftermarket service centers are
limited to using car dealers only for supply, this       The amount of time trucks are permitted to run
becomes a critical small business issue for the          idle has been steeply reduced under New
American economy.”                                       Jersey Department of Environmental Protection
                                                         regulations that took effect this summer. Diesel-
Aaron Lowe, Government Affairs Vice President            vehicle drivers can no longer idle for 30 minutes
for the Automotive Aftermarket Industry                  at their place of business at the beginning of the
Association points out that this issue does not          day or for 15 minutes following a three-hour
call into question the rights of ownership of a          engine shutdown (except in very cold
functional patent granted to an inventor of a            temperatures). Violators are subject to a penalty
unique new product.                                      of $250-$1,000 per day for each vehicle.

For more information on this issue, visit                After April 30, 2010, truck operators will be                            prohibited from idling their vehicles overnight.
                                                         They will have to use new technologies such as
                                                         truck-stop electrification and alternative power
                                                         units to provide heating, cooling and other
 Consumer Groups Endorse Right                           amenities without a running engine.
           to Repair
                                                         DEP provides grants to truck owners to install
Five consumer groups wrote a letter in late              technologies to reduce idling and save fuel.
October to Rep. Edolphus Towns, D-NY,                    These technologies include alternate power
endorsing The Motor Vehicle Owners’ Right to             units, bunk heaters and tailpipe retrofits.
Repair Act (H.R. 2694). Signed by the                    Interested truck owners can contact the New
Advocates for Highway and Auto Safety, Center            Jersey Motor Truck Association at 732-254-5000
for Auto Safety, Consumers for Auto Reliability          for more information on these grants. Get more
and Safety, Consumer Federation of America               information about the DEP’s diesel program by
and Public Citizen, the letter states that               visiting
“guaranteeing access to vehicle repair
information would empower consumers by
enabling their local mechanic to properly
diagnose service & repair their vehicles at a
reasonable cost.”                                           Our eyes are placed in front
                                                         because it is more important to look
“The Right to Repair Act asserts a vehicle
owner’s right to choose a trusted local repair                ahead than to look back.
shop and protects the right of independent repair         Can You Afford 10 Weeks of Paid
facilities to compete fairly for customers.” The
                                                                  Family Leave?
                                                          personal comments and tell your legislators and
   Tell Gov. Corzine, the Assembly Labor                  the governor why this Bill A-3812 is harmful to
 Committee and Assembly Speaker Roberts to                your business.
           VOTE NO on A-3812.

The Assembly Labor Committee is scheduled to                              Talking Points:
consider A-3812 which has been amended to
allow every employee in New Jersey to take 10                 This legislation is in direct conflict with
weeks of paid leave off every year. The bill                   the federal Family and Medical Leave
would be funded through an increase in the                     Act (FMLA) and the New Jersey Family
employee’s share of Temporary Disability                       Leave Act.
Insurance payroll tax.
                                                              The strain will be hardest on small
Current unpaid family leave law does not apply                 businesses which are exempt from State
to employers with less than 50 employees. This                 or federal leave policies that would be
proposal will impose a one-size-fits-all mandate               covered under this legislation.
on every business and has no exemption for
small businesses with 1-49 workers. Small                     A mandate requiring paid leave
businesses that have never had to cope with                    incorrectly presumes that small-business
unpaid leave mandates will suddenly face the                   owners do not currently offer flexible
prospect of having key employees out for up to                 leave policies.
10 weeks at a time.
                                                              Small businesses already have programs
This legislation would make New Jersey only the                in place that allow employees to balance
third state in the nation to offer such a program              the responsibilities of work and family.
and would apply to businesses of all sizes!
MAAA is calling on all of it’s members to                     This mandate has the potential to hurt
help to defeat paid family leave. Businesses in                conscientious employees. Over 90
New Jersey are already struggling to find and                  percent of businesses cope with
retain skilled workers. A paid family leave law                employee absences by reassigning work
would force employers to find replacement                      to other employees.
workers who won’t be as productive or to pay
overtime and put more burdens on other                        Cost of such a generous leave proposal,
employees.                                                     such as increased overtime, hiring
                                                               temporary works or loss in productivity
NFIB believes that our businesses should be                    will fall on the employer.
permitted to tailor a benefit package to their
employee base and not have a benefit package                  Business owners will incur additional
mandated by the legislature. Passage of this                   training and search costs.
legislation will certainly add to the current anti-
business climate of New Jersey.                               Employers will lose flexibility as they are
                                                               forced to either comply with the new
Our members are strongly urged to contact                      legislation or provide a plan with benefits
Gov. Jon Corzine, Assembly Speaker Joseph                      at least as generous. This will prevent
Roberts and members of the Assembly                            businesses from offering benefit plans
Labor Committee. Tell them that it is time to                  that are suited to their particular
take a stand for New Jersey’s struggling                       employees’ needs.
small businesses and to vote “no” on this
anti-small-business legislation.                              Small-business owners already work with
NFIB/New Jersey has provided some sample                       their employees to grant sick or family
talking points to help you craft your                          leave when it is needed.
communication. Take a moment to share your
    Temporary disability funds should be                  Lawmakers supported many of the governor’s
     reserved for those who are disabled. An               priorities,   including  substantial  spending
     expansion of the TDI fund has the                     increases for pre-kindergarten programs, laptop
     potential to have a negative impact on                computers for high-school students, child care
     the financial viability of the fund and               for low-income families, and services for the
     could result in an increased tax burden               elderly and persons with mental and physical
     on employers.                                         disabilities.

    A paid leave mandate would have a                     NFIB members across the state were
     profoundly negative impact on New                     instrumental in helping to block proposed
     Jersey’s business climate.                            increases, including an increase in the state
                                                           sales tax to 7 percent, a new tax on electricity

                 Act Now!
                                                           usage, a new payroll tax to pay for health care
                                                           for the uninsured, a new gross-receipts tax on
                                                           home heating oil and wholesale oil distributors,
                                                           higher trash taxes, and new and higher taxes on
       ** Crackdown by State of                            tobacco, cigars and cigarettes. A special thanks
             New Jersey **                                 to Senate Appropriations Chairman Gib
                                                           Armstrong (Lancaster) for leading the opposition
                                                           in the Legislature to the new tax-increase
MAAA has been informed of a crack down by                  proposals.
the State of NJ on the display of 2 sections of
the NJ state poster. The State is now requiring            The plan will increase spending by about $750
the public display of the following 2 laws, The
                                                           million next year for highways and mass transit,
Public Accommodations, and Family Leave                    with automatic increases occurring each year
Act in a location viewable by the general public.          after that. The Pennsylvania Turnpike will raise
State inspectors have been active in searching             tolls on the Turnpike and impose new tolls on
out and fining business who do not have these 2            motorists using I-80.
laws displayed in a public venue. You may want
to consider copying these 2 sections from your             The plan also diverts state slot-machine gaming
Labor Law poster and displaying them in a                  revenues originally earmarked for property-tax
section of your business that is open to the               relief to fund construction of a new arena for the
public. We do not know the total scope of the              Pittsburgh Penguins and the Convention Center
crack down, but we have been told by several of            expansion in Philadelphia.
our larger NJ customers that they have been
fined for not having the notices in full view of the
                                                            Health Care Mandates and New
                                                           Payroll Tax Bad Medicine for Small
     PA Small Businesses Dodge
                                                               Business in Pennsylvania
        Tax-Increase Bullet in
          New State Budget                                 Kevin Shivers, state director of Pennsylvania’s
                                                           leading    small-business    organization,  the
State lawmakers and the governor came to                   National Federation of Independent Business,
terms on a $27.5 billion state budget, which               and NFIB Research Foundation Fellow Bruce
raises state spending almost 5 percent but                 Phillips today unveiled a detailed nonpartisan
included none of the tax increases proposed by             study     of    the   proposed     “Cover    All
Gov. Ed Rendell in February. The agreement                 Pennsylvanians” health-care plan. Phillips
was reached one day after the governor                     summarized the report for legislative and
furloughed thousands of state workers because              executive staffers this morning before publicly
of the budget impasse.                                     unveiling the study.

“Health-care costs and the ability to afford           Shivers also was concerned the proposal would
quality health insurance continues to be the           do little to address the fundamental problem of
most important issue for small business,”              affordability, but could exacerbate the problem
Shivers     said.   “Small-business     owners         by expanding the size and scope of state
throughout Pennsylvania are looking for                government with a payroll tax on those who can
solutions that make health care both accessible        least afford it.
and affordable.”
                                                       Cumberland County small-business owner
But details of the study conducted by Phillips         Donna Parting said components of the plan
suggest that the mandates and payroll taxes            would make running her small business more
contained in the Cover All Pennsylvanians plan         difficult, with new costs eating away at her ability
would hit small-business owners hard.                  to maintain her present workforce.

“The 3 percent payroll tax on employers who            “As it stands today, this proposal is unfortunately
presently cannot afford to provide health              all stick with very little carrot for struggling small-
insurance to their employees would hit roughly         business owners like me,” Partin said. “The
50 percent of all small employers in                   troika of new mandates, taxes and government
Pennsylvania,” Phillips said. “That tax, along         bureaucracy will be a job-killer.”
with insurance premiums and accounting costs,
will cost small-business owners in Pennsylvania        Shivers suggested that rather then focusing on
an estimated $1.9 billion annually.”                   building a larger role for state government in
                                                       health care, legislators should focus on
The study also projected the impact those costs        measures to expand consumer choices and
would have on the ability of employers                 improve quality of services at a lower cost.
throughout Pennsylvania to maintain payroll and
grow their businesses. Phillips projected the          “Many in Harrisburg have properly diagnosed
plan would cost Pennsylvania Businesses                the ailment, but are offering the wrong treatment
167,000 jobs during the first five years of the        for what’s ailing Pennsylvania’s health-care
program – with a whopping 103,000 of those             system,” Shivers said. “Providing more options
jobs lost coming from small employers.                 and greater flexibility for employers to provide
                                                       health care to their employees ought to be our
“This proposal may be well-intentioned, but its        goal – not creating a vast and costly
effect on small business in Pennsylvania could         bureaucracy that in many cases will do more
be disastrous,” Phillips said. “The loss of more       harm than good for struggling small-business
than 100,000 jobs in the small-business sector         owners.”
of the economy could have devastating effect on
Pennsylvania’s ability in the future to attract
entrepreneurs and develop new industries.”                PA – Lower Unemployment
Shivers was not surprised to learn the added            Compensation Tax Rates for 2008
costs could cripple many Pennsylvania
employers, as many small job providers are             The state Labor Department reports the average
already struggling.                                    unemployment-compensation tax rate beginning
                                                       Jan. 1 will be 4.7 percent – down from 5 percent
“Small-business owners are already struggling          in 2007 and 5.4 percent in 2006. The change
with an increasingly competitive global economy        could save employers about $141 million.
and rising energy bills and other costs – a
whopping new payroll tax could put many of             An automatic mechanism to maintain the
them out of business permanently,” Shivers             solvency of the fund, from which unemployment-
said.                                                  compensation benefits are paid, was enacted as
                                                       part of a series of reforms to the state
                                                       unemployment compensation law in 1998. This

mechanism triggered a combination of tax               New Law Allows Taxpayers To Deposit Refunds
increases and benefit reductions following the                  Into Retirement Accounts
2001 recession.
                                                       New this tax-filing season is a change in the law
Based on the level of the trust fund on June 30,       that allows taxpayers to deposit their tax refunds
the average annual benefit payments for the            into an IRA. The new provision is part of the
past three fiscal years and economic forecasts         Pension Protection Act of 2006 enacted last
for the coming year, the average tax rate for          August. Under the law you can split your refund
employers for 2008 is projected to be 4.7              among three checking or savings accounts and
percent on the first $8,000 of wages. The              three different US financial institutions by using
average employer cost for unemployment per             Form 8888, Direct Deposit of Refund. The IRA
employee is projected to drop by $28.                  must be established prior to requesting a direct
                                                       deposit. It’s also necessary to notify your
                                                       account trustee of the year the deposit is to be
   MAAA now accepts credit                             applied.
    cards for your payment of                          Keep in mind that if you and your spouse are
          dues or services.                            filing jointly, each of you may be able to
                                                       contribute $4000 ($5000 if 50 or older) to your
                                                       IRA for the tax year 2006.

           Credit Card Fraud
                                                         Plastic Bags – The Clear Choice
If you accept credit card then at sometime or
another you’ve been presented with a card that         More & more jobbers are switching from paper
won’t swipe in your machine. Is that card              bags to plastic bags. Plastic bags are not only
counterfeit or just a demagnetized card? What          stronger but they are also recyclable. MAAA has
you do next can be critical. See the enclosed          available to their members 3 different sizes of
flyer for the steps you need to take to protect        plastic bags and a convenient starter case with
yourself and pass this information along to your       all 3 sizes included. We also have engine and
counter people.                                        crankshaft bags, bags with handles and custom
                                                       bags with your company logo, name & address.
                                                       Support your association and order your bags
             LAST CHANCE                               today.

                                                             Five Major Changes to the
MAAA still has calendars available for                              Aftermarket
2008. Use them as handouts to your
customers for Christmas or the New                     Five major changes are underway in the 2007
Year. Great Selection, Great Advertising               aftermarket, which will have profound influence
                                                       on aftermarket development during the next 10
& Great Prices! Call 800-382-1239 to
                                                       to 15 years.
order TODAY!

         Fund Your Retirement                             1. Changes in Annual Vehicle Mileage

   Through June this year, mileage by all
   types of vehicles was down .04%                          The September and October issues of
   compared to 2006.                                        the monthly Lang Report present 2007
   Unless there is a significant reduction in               market share analysis of leading outlets
   gasoline pump prices, it is likely 2007                  in the Service and Do-It-Yourself markets
   annual mileage will decline versus last                  as well as changes in the strength of
   year.                                                    major    outlets   within   these     two
   This would be the first time in more than                aftermarket sectors over the past five
   a quarter century (since 1981) that                      years.
   annual mileage receded, and the first                    These changes in outlet share will
   time since World Was II (over 60 years                   continue, with significant aftermarket
   ago) that annual mileage declined                        consequences.
   without gasoline shortages or rationing.
                                                     Source: Aftermarket Insight by Jim Lang
2. Increasing Vehicle Age

   The age of light vehicles on U.S. roads                     Check out our website,
   continues to climb. While this has been
   underway for a number of years,                      
   differences between the average age of                         for our current
   passenger cars versus light trucks and                            SALES!!
   foreign versus domestic models is
   increasing dramatically.

3. Vehicle Mix                                         Don’t Risk A Lot To Save A Little

   While vehicles in operation continue to             This article provided courtesy of Federated
   increase, there is substantial variation in        Mutual Insurance Company, your association’s
   the growth of passenger cars versus light                      recommended insurer.
   trucks as well as domestic versus foreign
   models. The changing mix of vehicles in           Over the past year, most business owners have
   operation is being driven by shifts in the        been cutting expenses where possible, usually
   types of new light vehicles Americans             by eliminating “extras.” Your insurance program
   are purchasing.                                   may be and should be one area you can
                                                     examine to find cost-saving advantages.
4. Service    Market    and    DYI    Market         Perhaps you’ve sold or depreciated some
   Growth                                            equipment or vehicles that can be deleted from
                                                     your insurance policy. You may have changed
   Over the past five years, the DIFM                certain operations to eliminate exposures that no
   (Service) market has increased at an              longer need to be insured. That’s why it’s
   average annual pace more than three               important to review your insurance program with
   times faster then Do-It-Yourself product          your Federated marketing representative
   purchases.                                        annually and inform us about any changes.
   This shift in how aftermarket products            As you contemplate any reductions in your
   are installed (by mechanics or Do-It-             coverage, however, be wary of reducing your
   Yourselfers) has profound implications            limits of insurance to save premium dollars. In
   for the usage rate of specific aftermarket        the event of a devastating loss such as
   products as well as where products are            destruction from a tornado or a fire, you could be
   purchased and how they are distributed.           disappointed if the insurance settlement falls
                                                     below your expectations. Inadequate limits of
5. Changing Outlet Mix in the Do-It-                 insurance could prevent you from reopening
   Yourself and Service Markets                      your doors.

                                                                          Boost Your Sales By Accepting
It’s important to keep accurate records of your
business property values, including current                                       Credit Cards
appraisals of your buildings and receipts for
equipment and other purchases. A machine                                Accepting credit cards is becoming a must for
purchased 15 years ago could cost two or three                          entrepreneurs and small business in today’s
times as much to replace at today’s prices. Your                        business environment. There are numerous
limits of insurance should reflect the                                  social, demographic, and technological factors
replacement cost of your property, not                                  combining to make plastic the payment form of
necessarily the purchase price.                                         choice for increasing numbers of people.

Coinsurance provision                                                   By the Numbers
Business owners sometimes overlook the                                  The average American cardholder has roughly
coinsurance provision included in most property                         four bank credit cards. Credit card purchase
insurance policies. “Coinsurance” means that                            volume has been expanding about 15% per year
you agree to keep you limits of insurance at or                         for the last five years or three times faster then
above certain percentage of the full replacement                        the increase in overall U.S. purchases. As of
cost of the property or you will have coinsurance                       2005 credit cards accounted for 19% of all
penalties applied at the time of a loss.                                purchases, debit cards for 33% and checks for
                                                                        only 11%. According to one estimate,
For example:                                                            businesses forfeit up to 80% of consumer
Suppose you purchased your building for                                 impulse buys if they don’t accept credit cards.
$300,000 a few years ago and it is valued at
$500,000 today. You insured the building for                            Why People use Credit Cards
$250,000, which met your policy’s 80 percent                            To understand the growth in credit card use, it’s
coinsurance provision at the time. If your current                      important to grasp the reasons for their
policy’s coinsurance also is 80 percent, your                           popularity. Consumers typically use cards
limit should be $400,000 ($500,000 x 80%) or                            because:
higher to avoid penalties at the time of a loss. If                            They don’t want to carry cash
you had not increased your limit and a fire                                    They want to save cash in hand
caused $300,000 damage to part of the building                                 They want to gain loyalty points (such
today, with a $5,000 deductible, your claims                                      as airline miles)
settlement would be $182,500. You would need                                   They are making a large purchase
to come up with $117,500 to rebuild the                                        They are looking to float money in a
damaged part of the building!                                                     back account
                                                                               They are making a reimbursable
$250,000 divided by 400,000 (required limit) =               .625                 purchase for a company
  $300,000 (amount of loss) times .625       =           $187,500
                   Minus deductible                     - $5,000        Plastic on the Internet
                   Claims settlement        =            $182,500
Your Cost: $300,000 (amount of loss) minus $182,500 = $117,500
                                                                        Even as credit card use grows in the real world,
(Note: This example is for illustration purposes only. Other            plastic already dominates the world of Web
factors and policy provisions may also affect claims payments.)         shopping. This breakdown of how people pay for
                                                                        online purchases demonstrates that credit cards
There are many practical ways to reduce                                 are the key to e-commerce:
insurance costs and keep your property
adequately insured. You don’t need to cut                                      Credit card online –   85%
insurance expense at the expense of your                                       Check mailed –         10%
business.                                                                      Credit card via phone – 2%
                                                                               Credit card via mail –  1%
                                                                               Other method –          2%
The Business-to-Business Opportunity                        outside the company might wonder how you
                                                            ever got into management. This can adversely
It’s becoming increasingly clear that credit cards          affect their regard for your judgment and
are also playing a greater and greater role in              capability as well as your own employees’ view
business-to-business transactions. For example,             of you as a manager. Some people will see the
Visa is bundling credit and cash management                 employees you hire as an extension of yourself
products for small businesses under the                     – and their regard for you can rise or fall,
umbrella of the Visa Business Card.                         according to the way they perceive your hires.

Larger companies are also streamlining their                Managers hiring for entry-level positions often
buying processes using so-called business                   commit one of the biggest recruiting mistakes:
cards for indirect purchasing. Each business                hiring hastily with an attitude that says, “if this
card transaction shaves a reported $50 to $100              one doesn’t work out I can always get another.”
in purchasing costs. That’s something to keep in            This reasoning is wrong on two counts. First,
mind if your company works with large                       regard for the manager who goes rapidly
companies.                                                  thought multiple hires ignores the real – and
                                                            often substantial – direct and indirect costs of
The Future of Plastic                                       hiring and placing employees.

Market research indicates that consumers view               Hiring is an imperfect process at best. There is
credit cards as lifestyle enhancers that                    no foolproof formula for finding and screening
contribute to other areas of interest in their lives.       job applicants and no way to guarantee that any
And credit card products now in development,                given hire won’t be a dud. No one has yet
such as the “electronic purse” and online debit             devised a reliable means of separating those
cards, promise to further extend the use of credit          who simply talk a good job from those who can
cards.                                                      do a good job. However, you can take some
                                                            simple precautions to improve the chances that
It all adds up to bad news for checks. Paying               each hire you make will be the right one.
with plastic is becoming increasingly popular for
even routine bills such as gas and electricity.             First, remain aware that hiring costs money.
And younger customers’ preference for plastic               Including direct and indirect expenses, it can
cards is even more pronounced. Check and                    cost anywhere from one-half annual salary to
paper credit use has continued to fall as                   twice annual salary to replace an employee.
consumers become more comfortable with the                  Every poor hire who has to be replaced
security of online credit card submissions and              represents     a    significant  amount     of
the rise of operations like PayPal.                         unrecoverable cost.

For more information on the Association Credit              Improving your chances of making the right hire
Card Program through NOVA Information, Inc.,                begins with careful screening of applicants. Your
call your MAAA office @ (800) 382-1239.                     human resources department may do this, but
                                                            you should involve your self in the process so
                                                            you know the range of applicants available. You
  Improve Your Chances With the                             should first examine applications to weed out
                                                            people who don’t meet the minimum
            Right Hire                                      qualifications outlined in the job description. For
                                                            those who meet the minimum qualifications and
What your employees do reflects on you. The                 might be interviewed, you should note any
hires you make, especially in your early days as            apparent gaps in employment or educational
a manager, will have a great deal to do with the            histories for interview questioning. You should
impression you make on your customers, clients              examine all applications of those you may
and others. Let’s say the first person you hire             interview     for    apparent      inconsistencies,
turns out to be a colossal dud; others inside and           especially in education and experience.
Most working managers don’t conduct interviews             suggestions, it’s possible to improve your
regularly. If you have an open position only               chances of making the right hire.
every few months, you won’t be intimately
familiar with interviewing. Recognize this reality
and get some sound advice on how to interview.              For Younger Workers, Time Off Is
Much of an applicant’s first impression of the                      The Best Bonus
company is formed in early personal interviews
– perhaps a screening interview by human                   It didn’t take accounting firm owner, Richard
resources and a placement interview by the                 Berkowitz, long to figure out he had a problem
department manager responsible for the open                during tax season relating to his younger
position. Rarely does a central hiring authority           workers. “When I told them it was mandatory
who brings all employees on board and gives                they come in on the weekend, they looked at me
them to the department managers ever find the              like I was out of my mind.” Berkowitz has
right hire.                                                discovered what many boomers who lead their
In seeking the right hire, never assume that               companies now face. For most workers in their
everyone your interview is desperately seeking             20’s and 30’s, time is currency. And, like most
this particular job. People with certain                   currency, few are willing to give it away.
qualifications might be scarce, and if so, they
can’t be treated as sellers who have entered a             It’s a complex dynamic playing out in workplaces
buyer’s market. Remember that many of the                  across the country. A significant number of
better candidates know they have other options.            boomers can’t figure out why younger workers
                                                           don’t’ have the “pay your dues attitude” they do.
Be especially sensitive to the information                 For boomers, success means unrelenting toil
presented on a job candidate’s application or              and sacrificing family time in order to secure a
resume. The majority of resumes contain some               corner office filled with Lucite plaques. For
degree of exaggeration and a great many of                 generation Xers, success means balance.
them – as many as half, by some estimates –
contain outright falsehoods. Secure written                “There’s a lot of frustration in the workplace,”
permission to verify employment experience and             says Cam Marston, a consultant and speaker on
educational credentials, and make sure that key            multi-generational issues. “Boomers are having
qualifications do get verified.                            a hard time finding their replica in the work force
Give every applicant the opportunity to ask
questions. The potentially best hires usually ask          To motivate younger workers and curb turnover,
the best questions. The better applicants will ask         some managers are rethinking how they
about the job and its challenges before probing            communicate with employees. Harmony can be
into the personal side of possible employment.             as simple as understanding the generational
Think twice about any applicant whose                      differences and talking the right language or
questions are all about pay and benefits.                  using the right rewards.

Finally, in addition to discussing capabilities and        Marston says older managers – boomers ages
experience, spend more time probing the                    42 to 60 – must use language with younger
applicant’s reasons for seeking employment with            staffers that acknowledges the value of their
you. Be especially sensitive to whether this               time: “I know work isn’t your life but while you’re
applicant seems to be trying to better himself in          here, let’s agree on what you’ll be accountable
some way (good) or simply trying to escape                 for.”
something (perhaps not so good).
                                                           To motivate Xers (ages 27-41), think short-term.
No particular hire ever brings with it a guarantee         Most are not interested in long term solutions or
of success, but with a little thought to these             putting in overtime and waiting for rewards later.
                                                           Instead of giving them a bonus at the end of the

year, Marston says an Xer would prefer this:              Most small business owners don’t enjoy account
“You’ve really worked hard this past week. Why            receivable duties. Unanswered phone calls,
don’t you take off half a day on Friday.”                 awkward conversations or rude comments are
                                                          sometimes part of the process. But since getting
Berkowitz, enlightened by Marston at a                    paid is a crucial part of business, having a debt-
company-wide        meeting,     says   he    now         collection strategy pays when clients won’t.
understands       the     different   generational
perspectives and will change his approach                 Fortunately for Honning, only 2% of his clients
during tax season. He no longer will refer to             have payment problems. When he notices
overtime as “mandatory”. Instead he will inform           delinquent accounts, Honning writes letters,
staff that there is a certain amount of work that         calls or even mentions the unpaid bill when he
needs to get done and let them create their own           visits the customer’s house for monthly pest
schedules. Even more, Berkowitz says, the firm            control service. Stopping service for chronic late-
may changes it’s bones and compensation plan              payers is a risky move for his business because
to reward productivity rather than hours.                 of New Jersey state laws. “We write a contract
                                                          to do a monthly service,” he says “If they don’t
A few companies already have overhauled their             pay and we cut them off, we’re still obligated if
employee reward programs to acknowledge                   they get infested with something.”
younger workers’ value on time. Wachovia
started a “manager-awarded time away”                     If you face a stack of unpaid invoices, consider
program about a year ago that allows bosses to            these tips for collecting what you’re owed:
hand out as many as three extra paid days off
as a performance bonus, in addition to the cash              1. Screen potential customers. Avoid the
performance rewards they already receive. And                   problem up front by performing credit
some retailers are rewarding employees with                     checks on your clients. The three
time-off gift certificates for good customer                    nationwide credit reporting companies
service.                                                        provide business as well as personal
                                                                credit reports. Some business owners
                                                                worry that checking credit history will turn
              PA State Change                                   off a new customer, but it’s an essential
                                                                part of business that can save you a lot
                                                                of trouble in the long run.
The 60-day youth training wage increased
to $5.85 per hour on July 24, 2007. This is                  2. Write it down. Especially important for
 a substantive change and requires a new                        service-based businesses, be sure you
               state poster.                                    provide your customers with a written
                                                                explanation of the scope of services, how
  Call (800) 382-1239 to place your order.                      extra costs are incurred, how often you
                                                                bill and when payment if due. Don’t get
                                                                caught in a your-word-against-theirs
                                                                disagree-ment if a client claims he didn’t
                                                                approve your work and therefore, won’t
When Clients Won’t Pay…Tips For                                 pay.
       Collecting Money
                                                             3. Be consistent. Send bills regularly and
          You’re Owed                                           monitor money coming in. When clients
                                                                won’t play promptly – usually within 10-
Ken Honning doesn’t like to be a pest – he’d                    30 days or whatever you agreed to –
rather exterminate them. But when clients won’t                 immediately follow up. Don’t let unpaid
pay their bills, Honning, the owner of Burlington,              bills linger and then demand payment
N.J. – based Expert Pest Control, has to bug                    months later.

  4. Keep your cool. Though it is frustrating
     when clients won’t pay, control your
     temper. It’s important for business                            2007-2008
     owners to understand there are many                              MAAA
     laws that restrict or prohibit aggressive                   Board of Directors
     collection tactics. Laws vary by state so
     contact your attorney, your state’s
     attorney general or your state’s
     consumer       protection     agency      to              President – Harris Steinberg
     determine if your state has enacted a fair
     debt collection law. If you violate the law,
     you could end up paying the debtor in                1st Vice President – H.M. ‘Willie’ Bixler
     the form of attorneys’ fees, costs and
     other penalties.                                        2nd Vice President – Tom Kelso
  5. Calm, Cool, and Collected … to avoid
     legal trouble the NFIB Legal Foundation               Secretary/Treasurer – George Lyter
     cautions against any of these actions
     when collecting unpaid bills:                       Immediate Past President – Mike Demers
           Calling or communicating with the
            debtor so frequently that it could                     **********
            be considered harassment.
                                                             Northern N.J. – Don Rosenberg
           Threatening to use physical force                 Central N.J. – John Conover
            to collect a debt.                               Southern N.J. – Ted DeGaetano
           Using obscene          or   abusive

           Communicating with the debtor’s                     Western PA – Tom Kelso
            employer or family members.                          Central PA – Bill Keiter
                                                              Eastern PA – Bob Wesolowski
Source: Shannon McRae, NFIB MyBusiness
Mag                                                                **********

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