Laurie Wartik Joins Berkshire Hathaway California Home Services

By Gary Wartik
January 5, 2017

Berkshire Hathaway California Home Services (“BH”) recently announced that Realtor ® Laurie Wartik of Camarillo joined its Ventura, CA office in November, 2016 after having an association with another broker since 2014. The BH Ventura office, a corporate office rather than a franchisee, serves a wide area that includes Ventura and Santa Barbara counties, Malibu, the Conejo Valley and the San Fernando Valley. Operating from a corporate office, Laurie said, “….offers my clients a higher and more complete line of realty services. During 2016, the Ventura BH office matched more buyers and sellers of residential properties in Ventura County and the Conejo Valley than any other area brokerage.

Laurie and her husband are long-time residents of Ventura County, and also reside part-time in Palm Desert. Laurie is also a member of the Desert Cities Association of Realtors. “Having the opportunity to join Berkshire Hathaway Ventura is a special opportunity, especially at a time when the local housing market, while in short supply compared to needs, remains strong,” she added.

“This is a great time to become a first time home buyer, as well as for current homeowners to move up to a larger home to meet growing family needs,” Laurie pointed out. “I look forward to continuing to help families and individuals in the Central Coast area and Coachella Valley areas find that special property that will fit both their budget and their lifestyle,” she concluded.

Laurie Wartik may be contacted directly by calling 805-437-9521, emailing her at ; or by visiting her website at

Lower Fuel Costs – What’s Good and What’s in Doubt?

By Gary Wartik
January 29, 2015

Since November 2014 there has been significant discussion about the short and long-term effects of dramatically lower vehicle fuel prices on the American economy, and even on the world economy. From this vantage point, it looks positive in the shorter term, but with some caveats.

Under current pricing, a hypothetical California family that drive vehicles that get 25 miles per gallon, and purchase an average of 75 gallons monthly at $2.35 per gallon, will save about $100 a month, when compared with the average price of $3.70 per gallon in place just last fall in Southern California. That annualized savings of $1200 is important to many families and certainly to the local economy. Some families will have the discipline to put the funds into savings, or into reducing debt, while others will intentionally or otherwise spend the savings in the local economy. Those actions are all a good thing.

From the standpoint of businesses, a reduction in fuel costs will have many levels of benefits, most apparent of which is the reduction in all costs associated with the delivery and shipping of everything from raw materials to finished products. With fuel costs held in check for the time being, companies may find greater profits for shareholders, and even spread some of the savings in the form of improved employee wages and benefits. United Parcel Service, FedEx and moving companies, for example will save thousands of dollars daily that can either be passed along to customers, or that will serve to hold delivery rates in check. Major companies such as commercial airlines will benefit from the savings that will flow right down to the bottom line. In effect, lower fuel costs will help hold future inflation in check. These are good things too.

In another other realm of good news, the 50 percent drop in international oil prices during the last few months has begun to hurt some neighborhoods that are less than friendly to America. Think Russia, Iran and Venezuela. These three states mainly fund their national budgets with oil money. There are likely few tears being shed around the Western world for the economic challenges now faced by these autocratic regimes.

What is helpful to understand, however is that there is no “free ride” for many. Lower oil prices also affect our own economy, as well as some of our important allies. Canada, Mexico, the United Kingdom, Norway and some West African oil exporters are also going to suffer budget impacts. Fortunately for most of them, these countries have more diverse economies that are less dependent on oil exports.

Here in the United States, we have a number of states that are major oil producers. Texas, North Dakota, California, Alaska and Oklahoma are the top producers, in that order. Each looks to strong oil revenues to maintain a healthy economy. In the area of “be careful what you wish for,” there are already news reports of thousands of job layoffs in the American oil industry itself, along with those that service that industry. We are already seeing layoffs in Texas, North Dakota and in the Bakersfield, CA area. There are more to come. The job layoffs are not good news, although if one compares the value of wages lost versus the overall gains of fuel savings in the economy, lower oil prices clearly win out. The challenge is that if you are one of those losing a job, that puts one in a crisis mode. That is not good.

Recent press reports reflect that even with low fuel prices only in place for a few months, some Americans are already thinking that fuel efficiency and conservation are now less important. The increase in the purchase of larger, less fuel efficient vehicles in the US has already been reported, as has a decrease in consumer interest in fuel efficient vehicles. This sends the wrong message to our fellow citizens and to the world. This is not a good thing.

There is one more aspect to the oil price issue that warrants addressing. That relates to OPEC, Saudi Arabia in particular. The press has been replete with reports that the Saudis are looking to maintain market share at almost any price. Their $750 billion in dollar reserves confirm that they can afford it. Some Saudi officials have been candid enough to admit that they oppose America’s move towards energy self-sufficiency. This is not good for OPEC, and if the Saudis drive the oil price down further, it may be a challenge for America as well.

It is no secret that the advent of American shale oil extraction, where previously uneconomical to recover, is now a significant threat to OPEC. If the goal of the Saudis in particular is to drive oil prices down low enough to make the more expensive process of fracking for shale oil uneconomical, then over a period of time, less oil will be available on the world market. Oil prices will then begin to rise again. As well, the faster the economies of Germany, India, Japan, and China recover from their respective reduced economic growth, the faster additional consumption may drive up international oil prices.

From the macro point of view, $46 oil is likely not sustainable long term. Prices may dip some more, but the sense here is that prices will begin to firm as the economies of the industrialized nations begin to recover from their present malaise, perhaps later in 2015. That too would be a good thing, even if that drives oil prices somewhat higher.

We won’t know for awhile how much the oil markets have changed. Markets will remain subject to political shocks, especially in the Middle East, but new American oil coming on line, whatever the international shocks may be, should lessen the impact on world oil prices than they have previously. That should be a good thing too.

Are Banks Lending? Well, That Depends

By Gary Wartik
May 15, 2014

In November 2013, “Raymond,” a future client of Vision Economics, met with a Los Angeles area banker on his own in search of a $175,000 working capital loan. Without being adequately prepared, he was turned down for the loan designed to help in expanding the business.  While Raymond had operated for eight years, he did not assemble sufficient documentation in support of his application. The banker told him that “….we are lenders, we expect to be repaid timely.” “You have not shown an ability to service a new loan.”  Translated, Arthur may have had the ability to service the loan, but he had not demonstrated that ability.  Raymond understandably felt just a little wounded by that meeting, but nonetheless a bit wiser.

This office was subsequently retained to assist with the loan process.  The banker’s response conveyed an important message that the era of more free-wheeling bank lending that preceded the 2008 Great Recession is long over.  Further, every small business applicant needs to understand what it takes to obtain a loan in today’s challenging lending environment.  We met with Raymond over the next six weeks and put together a business plan for the bank’s consideration.  Interestingly, it was his company’s first fully written business plan.

A business plan is one’s roadmap to success, setting out in writing company goals and how those goals will be achieved.  The business plan offers the banker a sense of who the applicant is and what the business is all about.  Any banker is going to be concerned about the stability of the applicant’s business, since instability often leads to loan defaults.  Even in the instance where no loan is being sought, having a current and tested business plan is just plain good business.

A well written business plan allows any lender to see how the sales projections were developed and what profit level can be anticipated.  After all, a banker will reason, profits are what generates the cash to service the loan.  Clear goals and measurable standards of financial performance need to be provided in a good plan, and the strategies to achieving the goals need to be explained in some detail.  As well, knowing who the competition is and how to distinguish one’s business from that of competitors is important.  That is why a good marketing and advertising component is an important part of a successful business plan.

Explainable and defendable long term goals also are central to a strong business plan.  Noting the goals and the approach as to how they will be achieved is important to helping a lender understand the direction in which the business is headed.

Strong financial information is another essential part of any plan.  A projection that suggests that a company’s growth rate will, for example, regularly double, just because the business owner is optimistic, is usually unrealistic on its face.  Realistic projections, supported in the business plan as to how they will be achieved, are of primary importance.

As part of the financial review, it is important that the business plan indicate what the business owner(s) has already invested in the company.  In other words, the bank or any other lender wants to be assured that the loan applicant has some “skin” in the game.  In Raymond’s case, he had already invested a good amount of his own funds in the company, so that was not an issue.

Vision Economics is very experienced in writing business plans that are designed to work.  Especially for a new business, we will tell you if we think that your business vision is not realistic, and what alternatives may be available.  We work with the client, discussing and testing every component of the business plan to ensure that it is realistic and defendable. We know the layout of a good business plan.  We know the essential elements of a plan that bankers want to see, especially the financial ones.

In Raymond’s case the story ended much better than it started.  Ultimately this office and Raymond were able to justify a need and the ability to service a $220,000 loan.  The additional funding allowed for some needed inventory growth.  As well, the extra funding allowed for upgrading of a computer monitoring system, something that this office highly recommended as an important control component of the business.  The bank involved liked what business plans call the “planned use of funds.”

If you are a start-up or relatively new business seeking new or additional non-equity funding for your business, there are a number of options.  Our article by Michael Levy in this month’s newsletter reflects on alternatives to traditional bank lending.  In each case, however, a compelling story in the form of a strong business plan, and/or historical financial data are central to being considered for most loans.

If you have the need for a business plan, and borrowing needs as well, please call the business plan experts at Vision Economics at 805-987-7322.

So the Bank Won’t Lend to You? Now What? Some Alternatives are Offered

By Michael Levy
Edited by Gary Wartik
May 5, 2014

Vision Economics has worked for nearly thirty years with start-ups and young companies in need of operating capital beyond that which is considered “start-up capital.”  Most lenders require a strong business plan, especially when any type of SBA-approved loan is involved.  One of the specialties of Vision Economics is the preparation of business plans to meet the company’s needs and to “speak” to the issues about which the lender has the greatest concerns.

One thing that we can say, to put it directly, is that traditional banks generally do not loan to start-ups without a very strong plan and financial backing and/or available assets that may be pledged as collateral.  As a result, one of the valuable resources that this office can bring to the table is the introduction to companies such as Templar Business Credit in Encino, CA to assist in meeting company finance needs.

There are a lot of questions that get asked about “asset based” lending and how such lenders are different from banks. In today’s lending environment, banks are restricted by regulators and sometime they lack the ability to monitor and track asset based loans. That does not mean that banks will not make loans, but they need to have a stronger credit and cash flow history than previously.

There are a number of reasons why banks are hesitant to loan to small business, not the least of which are state and federal regulatory restrictions. Banks are looking for collateral and a history of profitability. If you have a small business that has had some ups and downs, or your business is growing and you don’t have the working capital to keep up with demand, you are not bank eligible.

A bank looks at your debt-to-worth ratios, your financial statements, your tangible net worth and your secondary source of repayment …..We at Templar look at your collateral and ability to service the debt. We know some of our clients are just getting off the ground or on the rebound from a difficult situation.  We analyze not only the current financials and collateral but your projections as well.
I have listed some of the questions that are most common.

How to know if you’re Accounts Receivable are eligible? 
An account receivable evidences a debt owed to an enterprise and arises in the normal course of business. To be an eligible account receivable there must be a “purchase order” for goods or services, shipment or delivery of the goods and unequivocal acceptance of the goods or services, at that point “title transfers” and the receivable becomes a debt owed by the buyer and an eligible account.
Several issues can arise in any commercial lending relationship. It could be a “legal” issue regarding the validity of the receivable or a “credit” issue.
In the norm, if you sell goods or services to a customer you have created an eligible account that can be used as collateral.  But what about selling on consignment or progress payments, foreign customers, dating’s or special terms? That is where a creative lender can be responsive to a borrower’s needs.  We at Templar Business Credit can tailor a financing solution to meet the needs of our clients.

When can Inventory be financed?
Inventory financing can offer unique and special problems for a lender or borrower. What kind of inventory? Normally finished goods, purchased parts or raw materials offer no problems. Challenges arise when unique inventory is part of the mix. It is difficult to advance against anything that grows, eats or spoils. Having said that, Templar has experience in lending in the wine industry, grass seed and fish food production. We don’t say no without listening to the prospective borrower.

How much is your equipment worth to a Lender?
In general an asset based lender will advance up to 75 percent of the forced liquidation value of a client’s machinery and equipment.  Nationally recognized appraisers and auctioneers are usually added to the mix to get the best value possible for your production equipment

How does Purchase Order financing work?
Templar Business Credit offers a very unique purchase order financing product. Purchase order financing can be used to acquire inventory and raw materials to satisfy a confirmed purchase order. When the client ships goods, the accounts receivable are then financed. We don’t only finance finished goods from a foreign source, we help you manufacture locally.

For additional information, please give us a call at Vision Economics at 805-987-7322, or call Michael Levy, president of Templar Business Credit, at 818-702-9692.

Why Companies Live and Die

Why Companies Live and Die

All things in this world have a lifetime, and businesses are no exception. Some businesses grow and prosper for many decades and some never flourish, fading very quickly. What’s the difference between them? Why do some make it and others fail?

The lack of a business plan is a primary reason for most business failures.  But business failure, as opposed to success, is just the other side of the same coin. The question is whether you will be content to simply flip that coin and take your chances, or plan ahead, effectively weighting that coin so it comes up heads.

According to Small Business Administration statistics noted in Scott Shane’s book, Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By,  twenty-five percent of all small business start-ups fail in their first year, and more than 70% fail within ten years. So business success is clearly based on more than just a coin toss.

Business plans do not stop functioning after a business launch.  They must be referred to and updated as circumstances warrant.  There will always be factors beyond management’s control. The economic recession of 2008-11 killed off a number of businesses, but effective planning can head off many other reasons that are frequently blamed for failure. Impacts such as taxation and tough regulations can be planned for as business challenges rather than allow them to be terminal for the business.

A 2013 article in Forbes gives five reasons why businesses fail. But let’s look at the other side of that coin. Businesses succeed by doing these things well. We’ll turn it into six points:

  • Have sufficient start-up capital. There is no solid formula for this. If you plan to support your business for two years until it can support you, you are building in a two-year failure component.  Profit stems from successful planning, not from how long you can survive without profit;
  • To avoid being compared to your competition you will need a unique product or approach. You don’t need to look just like your competition;
  • You need promotion. Word of mouth is great, but you will have to have enough of those mouths out there speaking words for it to work. The key is an ongoing dialog with your customers, which takes us to the next point;
  • You need to be crystal clear in your communication of your company’s value to the customer.  Don’t be muddled and don’t be verbose. Be clear, succinct, and compelling. After all, there is something you want your customers to do, right?
  • Provide effective, professional leadership from the top. Master your weaknesses and perfect your skills. Don’t be the reason for your own company’s failure;
  • Make sure your start-up idea is a good one. Do you have a profitable business model and are the revenue streams proven? Test marketing can make the difference for you in these areas.

Located in Camarillo, California, Vision Economics serves all of California, Arizona and Nevada with both large and small business services. We will gladly answer your questions about the essentials of business success and proper business planning.   Please give us a call.