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Teri Bernstein, MBA, CPA has been teaching full time in the Business Department of Santa Monica College since 1985.  Prior to that, she worked in Internal Audit and Special Financial Projects for the 1984 Los Angeles Olympics, CBS, Inc., and Coopers & Lybrand (which is now part of PricewaterhouseCoopers).  She attended the University of Michigan and Wayne State University.


  • Spanx Billionaire signs onto the Giving Pledge

    Sara Blakely, the 42-year-old billionaire-entrepreneur behind the shapewear company Spanx , signed the Bill Gates/Warren Buffett " Giving Pledge " this month. She was one of eight new signatories to the visionary agreement, but made headlines because of her status as a young, female, self-made billionaire (she owns 100% of her company). The Giving Pledge is "is a commitment by the world's wealthiest individuals and families to dedicate the majority of their wealth to philanthropy." Its current page of "Pledger Profiles" includes 114 signers, among them: Richard Branson (Virgin Atlantic) Elon Musk (Space-X, Tesla Motors) Paul G. Allen Michael R. Bloomberg Eli and Edythe Broad Larry Ellison Reed Hastings and Patty Quillen ( Netflix ) George Lucas Mark Zuckerberg Ronald O. Perlman There has been some criticism that the Giving Pledge does not have a plan mapped out to achieve certain goals, and that it allows mega-foundations to influence public policy by influencing social services. Nevertheless, the commitment to spend wealth on philanthropic pursuits does keep the money in circulation--benefiting the economy--and it allows the wealthy individuals the right to direct their funds as they see fit. And, of course, philanthropic giving creates a tax deduction. Sources: " Spanx mogul Sara Blakely Becomes First Female Billionaire To Join Gates-Buffett Giving Pledge ," by Clare O'Connor, Forbes Magazine, May 7, 2013 " Philanthropic campaign by Gates and Buffett gets more pledges ," by Tom Brown, Reuters , May 7, 2013. Follow up: Read up on one of causes that Sara Blakely funds: The Empowerment Plan . What would you invest in if you were a wealthy individual who had signed this pledge? Do you think that the Giving Pledge is controversial? Why or why not?

  • The Entrepreneur Quiz

    image from www.entrepreneur.com Entrepreneur-aptitude quizzes cannot really predict who will be the next great success as an entrepreneur. But they can help identify personality traits that might hinder entrepreneurship. So take this quiz (developed by Andy Yates of Huddlebuy , a website devoted to small business): Question 1: Why do you want to start up your own business? a. To make a difference. b. To make a lifestyle choice. c. To make a bundle of cash. Question 2: How committed are you? a. I will do whatever it takes. b. I will commit whatever time I can manage. c. I will do whatever makes sense - I have a lot of things on the go. Question 3: Are you a team player? a. I know I can’t do this alone - I do, or will, work with experienced people with complementary skills. b. I know I can work on my own or with other people. c. I know what I am doing and I can take this on myself - after all, the reason I am in this business is that I can do it better than other people. Question 4: Where do you want to be in five years' time? a. I want to see my product or service used by thousands of people. b. I want to be happy. c. I want to be sitting on a beach. Question 5: How are you going to make money? a. I have spoken to customers, I know what they want and what they would pay and I have worked out my supply and distribution costs. b. I have spoken to suppliers, worked out the costs and I reckon I can make a margin. c. I will provide it, customers will come. Question 6: How are you going to grow sales? a. I am going to lead initial sales and then hire more experienced people. b. I am not a sales person, so I will focus on getting the product right and sort out the rest later. c. I will provide it, customers will come. Question 7: Have you got any competitors? a. Yes, but I have identified the gap in the market, understand the market size and opportunity and outlined clear reasons why people would buy from me. b. Yes, there are some big competitors but I know who they are and I will watch them closely. c. No, I haven’t got any competitors - my business is unique. Question 8: How much profit is the business going to make in five years' time? a. I am ambitious and forecast strong growth based on reasonable assumptions from what I already know of the market and the opportunity. b. As long as I pay the bills and do my best to grow, the business should make profits. c. The business is going to be massive. Revenues are going to go through the roof, while costs will stay really low. Question 9: How much do you know about your industry or sector? a. I and/or my team have experience and contacts in this sector. b. I have done a bit of work in this area and reckon I should be OK. c. I know what I am doing. How hard can it be? Question 10: What have you achieved so far? a. I have sorted out my initial product/service and got some initial sales/traction/data/PR/social media followers/marketing exposure. b. I have done a lot of research. c. I have a brilliant idea. According to Yates, those who answered mostly "a" stand a decent chance at being able to succeed. Those who answered mostly "b" might be aiming for the lifestyle associated with being one's own boss, but may not have the temperment for assuming the risk of managing a capital investment. Those who answered mostly "c" might be better off "sticking to their day job." Sources: " The Great Entrepreneur Quiz: Have You Got What It Takes To Make It Big? " by Andy Yates and Huddlebuy, ThisIsMoney.uk.co , April 30, 2013. Follow: @MailOnline on Twitter | DailyMail on Facebook http://www.huddlebuy.co.uk -- "Europe's largest daily money-saving site for small business" Follow up: If you took the quiz, what were the results? Are they what you predicted? If you have an entrepreneurial idea, what is it and how will you make it happen? Why do you think that Yates judged the following as "c" items?: "N o, I haven't got any competitors. My business is unique." "I have a brilliant idea."

  • What do entrepreneurs REALLY think about the minimum wage?

    image from www.staffinglink.com Recent research has produced two opposite outcomes regarding entrepreneurs' attitudes toward raising the minimum wage: Result #1: two-thirds of entrepreneurs support raising the minimum wage ( Small Business Majority -SBM) Result #2: 93% of entrepreneur oppose raising the minimum wage ( National Federation of Independent Businesses -NFIB) One might conclude that there is a lot of variation in entrepreneurial ranks (they are a diverse lot), but as it turns out, the language used in the questions may have skewed the outcomes of each of the surveys. " When the Small Business Majority asked its minimum-wage question, it stated the amount of the current minimum wage -- $7.25 an hour -- but did not mention how much the minimum might rise. You can understand how a business owner would listen to this question and think, 'Well, $7.25 sounds awfully low. My people get more than $7.25 anyways, and keeping up with inflation sounds fair. Sure, let’s raise the minimum.' " On the other hand: The NFIB survey " asked if respondents were in favor of amending the state constitution to include a 14% increase in the minimum wage. It didn’t state the current minimum. This sounds like a bigger deal...Most entrepreneurs didn’t get 14% raises last year, and they don’t want their payroll costs to go up by that much, either ." Plus, mentioning that the state constitution would have to be amended made it sound serious. So--which survey was more fair? Or, were both flawed? Source: " Who Speaks for Entrepreneurs? ," by Kimberly Weisul, Inc.com , April 25, 2013. Follow up: What do you think is the "real" result? Which question was phrased in the more objective and fair way? How would you word a survey on this topic to produce the most objective results? How do you feel about the minimum wage, for yourself and for others?

  • Literally, it's "Power clothing"--and it may soon be everywhere

    photo by Ken Bennett, Wake Forest University, shows a piece of material that is hooked up to meter David Carroll, of Wake Forest University, has developed a kind of cloth that can charge your cellphone . He calls it "power felt." The material works by using body heat and movement to create electricity. The science behind this is thermoelectrics . We experience a cruder form of thermoelectrics when we hold onto a piece of cold metal and it warms up. What causes the warmth is the movement of electrons. With nanotechnology, Mr. Carroll has made a fabric that can manufacture electricity by converting the movement of bouncing on a carseat or flapping in the wind. The fabric is flexible and relatively cheap. According to Business Insider , " this fabric soon may be stitched into every shirt, lying under every car hood and wrapped around every house ." Where do I invest? Source: " How 'High-Performance Clothing' Will Power Your Phone And Monitor Your Health ," by Robert Ferris, Business Insider, April 16, 2013. Follow up: What other uses have been suggested for this "power felt" other than charging your cell phone?

  • Method makes a Clean Merger

    image from methodlust.com When Eric Ryan and his childhood friend, Adam Lowry, started Method --a maker of ecologically-minded soap products--they had no idea they were starting a movement as well as a company. Their products' success caused industry leaders in cleaning products ( e.g . Proctor & Gamble) to develop their own lines of "green" products. Last year, Method was acquired by Ecover , a company based in Belgium that shares the sustainability values of the Method founders.They had been approached by the "usual suspects"--Big Soap--but they chose to go with a company that had a good chance of supporting the "methods" they'd set up. They hope to thrive and grow with the new partnership. Says Eric Ryan: "Everybody needs soap. It's a dirty world out there." Source: " A Soap Maker Sought Compatibility In A Merger Partner " by Rod Kurtz, New York Times , January 16, 2013. Follow up: Do ecological or sustainability factors have any impact on your decisions regarding cleaning products? Why or why not? What were Method's two choices as a growing entrepreneurial soap maker? What other entrepreneurial companies have taken Method's route? What companies have taken the other path? Can you assess which decision is better from a financial standpoint?

  • An argument AGAINST out-sourcing

    image from chicagocreativedesign.com Double Encore is a company that is betting everything on home-grown apps. They develop for Apple (not for the android market), and they employ all their own developers. They are a Colorado-based technology company with a special relationship with Apple...and--THEY DON'T OUTSOURCE. Their policy is contrary to the industry trend. The Computer Economics Annual Outsourcing Study recently reported that information technology outsourcing was up by 23% in 2012. But Double Encore is bucking the trend. Here are some of the reasons: quality control can only be monitored in a controlled environment their office is an environment of "experience, creativity, and unwavering ambition" their commitment to their clients is based on originality--not on "knock offs" outsourcing contributes to lower salaries for engineers...which then contributes to a smaller pool of talent willing to work for sub-par salaries they've seen the poor results from their clients failed outsourced products, which have to be cleaned up Double Encore is marketing itself from this quality niche. Its policies also set the standard for its human resource management. Does it sound like a good place to work? Sources: " Why We Don't Outsource [Seriously, Stop Calling Us] ," by Emily Grossman, Double Encore Blog, March 24, 2013. Follow up: What do you think of the Double Encore idea that "Genius doesn't go on sale. It just leaves the market"? What does it mean, with respect to outsourcing policies?

  • "New Jersey in a Bottle": marketing problems for a fine wine

    image from eastcoastwineries.blogspot.com If you are selling a high-end, classy product, it appears that an association with "New Jersey" does not have the same marketing appeal as, say, "France," "Italy," or even "California." The fine-wine industry in New Jersey has learned this lesson, and has taken to marketing its products truthfully--if not transparently--as being from the "Outer Coastal Plain." Amalthea Cellars is a New Jersey winery owned for the last 30 years by Lou Caracciolo. He makes a $33/bottle cabernet sauvignon blend. But he's had a hard time selling it--both because of New Jersey's reputation (I'm thinking " Snooki ") and the reputation of the all-too-syrupy cheaper wines usually produced by vintners from The Garden State. The above map is provided just in case you have a hankering to go on a wine-tasting expedition and your don't happen to be near more traditionally famous vineyard areas... At any rate, Lou Caracciolo and other New Jersey fine-wine makers have "branded" their wineries' location as " The Outer Coastal Plain " (think "Napa Valley") rather than "New Jersey." Their Outer Coastal Plain Vineyard Association is "dedicated to the establishment and promotion of sustainable and economically viable viticulture in the Outer Coastal Plain AVA of New Jersey." In addition, Caracciolo has convinced one of the major low-end sweet wine makers, Tomasello Winery ,(see the map), to make a $48 bottle of fine, dry cabernet. Worth a try, if you are a wine drinker? The Outer Coastal Plain Vineyard Association hopes so. Sources: " The Trick to Selling Fancy Wine From New Jersey: Don't Say It's From New Jersey, " audio feed and article by Robert Smith, NPR, Morning Edition, March 29, 2013. Follow up: Check out the Outer Coastal Plain Vineyard Association website. What is an " AVA "? What is " branding "? Why is it important to a business, especially a business like Amalthea Cellars?

  • Kristen Bell and Amanda Palmer on Kickstarter

    [View:http://community.cengage.com/GECResource/themes/gew/utility/ :550:0] Amanda Palmer and her Kickstarter campaign, from YouTube, linked in Sources, below. Kickstarter , a crowdfunding site, is populated with creative types trying to raise sufficient funds for a school film project, or to finish research on a novel. But sometimes Kickstarter is the indie path to millions...as was the case with Amanda Palmer last summer, and, more recently, the Veronica Mars movie. promotional image from the Veronica Mars television show Amanda Palmer ran into some criticism from outside observers, since she raised more money than was needed to lmake her album: she needed $100,000, but she raised $1.2 million! She was the first Kickstarter Millionaire. Ms. Palmer claimed that she would funnel the money back into the business to create more product for her fan base. " This is the future of music ," she said. The Veronica Mars campaign, managed by star Kristin Bell and creator Rob Thomas, raised all $2 million of the money they needed within 24 hours...and then some, for a total of $2.7 million. I wish I'd known about it. I am a serious fan of the former television show, and am pretty curious about the movie. But I wonder...is this the type of venture that Kickstarter was really set up to promote? Sources: " Veronica Mars movie is a go after successful Kickstarter campaign " , by Alex Cohen and A Martinez, Take Two , KPCC, Southern California Public Radio, March 14, 2013. [ Kickstarter campaign video is at this link ] " Amanda Palmer tells us about becoming 'a Kickstarter millionaire' ," by Jen Carlson, the gothamist , June 4, 2012. Amanda Palmer on YouTube. Follow up: Have you ever contributed to a Kickstarter campaign? If so, how much did you give, and what did you get? Would you have contributed to the campaigns mentioned above? How does crowdfunding through Kickstarter compare and contrast with stock issuance in a corporation? How would you improve upon the Kickstarter model?

  • Girl Scout Cookies: $785 million in business lessons

    photo by Sean Patrick Farrell, New York Times : Mary Ruiz sells Girl Scout Cookies It's Girl Scout Cookie season again. In this video , Ron Lieber interviews Mary Ruiz the "Cookie Titan of Tuscon," and her mother, Pilar. Mary enjoys selling--and the rewards it brings--and her mother is impressed by the organizational, financial literacy, time-management, and business communication skills that Mary has developed through this activity. Experts such as Daniel Pink (author of To Sell is Human ) would agree that a successful sales program, with a product that the salesperson believes in, can produce positive and life-affirming outcomes. Others judge the sales activity of the top school-age salespersons as exploitative or unhealthy, according to Lieber's article. But for Mary, selling Girl Scout cookies allows her to set idealistic goals, and feel satisfaction and happiness in the process. Her mother is impressed by Mary's interest in other financial matters, such as the family's mortgage and insurance needs. Of course, those of us who eat cookies are also happy to have the product. My personal favorite are Samoas... Image from cocktailsandcookies.org Sources: " More Than Pushing Cookies ," by Ron Lieber, New York Times , February 8, 2013. Video Link: Ron Lieber and Mary Ruiz To Sell is Human: the Surprising Truth about Moving Others , by Daniel Pink, Penguin Group, 2012. Follow up: Selling Girl Scout Cookies has taught what business skills to Mary Ruiz, according to her mother? What personal problem has Mary overcome in the process? Do you have any reservations, such as the ones mentioned in the article, about direct sales done by children? What are the appropriate limits (if any), in your opinion? Have you ever participated in a direct sales campaign, or worked on commission? What was your experience?

  • EatWhatever: the high cost of investment capital

    photo of entrepreneur Jacqui Rosshandler from article linked below Does the possibility of having bad breath make you feel self-conscious in business or social situations? This is just the kind of insecurity that creates demand for a new product. The primary product of the 4-year old company EAT WHATEVER is a two-step process that works both in the mouth and in the stomach. Jacqui Rosshandler is an entrepreneur that had seen a similar product in her native Australia, but saw the unmet need in America. She subcontracted out the development of a different, two-step solution. Then she ran her business out of her NYC apartment with an initial investment of $60,000. But soon she ran out of cash to increase her production, and was unable to secure a loan from a bank loan. Networking connections led her to Alfred Shorin, an investor, who offered an immediate cash infusion of $250,000 in exchange for a 75% stake in her company, with an opportunity to increase her share to 40% if certain goals were met. This was a lot of her company to sacrifice for the needed dollars! For this article, several financial advisors were contacted to give their opinions of Shorin's offer, and offer advice to Rosshandler. The question, in a nutshell, was: Is 25% of something better than 100% of nothing? What would you decide? Source: " Help for a start-up, but at a high price ," by John Grossman, NYT , January 2, 2013. Follow up: What factors contributed to Rosshandler's inability to get a bank loan? What events contributed to the product's successful introduction? What are the various suggestions made by the financial advisors interviewed for the article? What decision would you make if you were in Rosshandler's position?

  • Informational interviews: a tool for success

    image from comerecommended.com "What is your dream job? If you could have the career of any person, who’s would it be? Wouldn’t it be nice to talk to that person, and ask them how they got where they are?... Well, why don’t you?" This is what my 24-year old daughter, Hannah Bernstein, asked a friend of hers, based on her own experience doing interviews for the Facebook site, " Blue Sky Black Sheep ." Hannah was talking about a personal interview, done by you to get exactly the information that you need to make a career, educational, or investment move. Hannah's advice: "If what you really want to do is own your own business, or run a restaurant--it’s likely that those entrepreneurs haven’t been professionally interviewed. But you can still ask these people questions about their career. It’s called an ' informational interview '. It’s like a magic word. Pick out exactly who you’d like to talk to. If you’re looking to open up a restaurant in Los Angeles that serves meals at a $20-35 price point, that seats around 50 people, find a restaurant like that and find out who runs it. Then look up their email address (likely available on the company website) and get in touch. Explain that you have aspirations in that field, open with an expression of admiration of that person’s knowledge, and then ask if you can talk to them, either by phone or in person, about how they’ve achieved what they have in their profession." "I find that there are different conventions around informational interviews in different fields. When talking to someone in the business world, politics, or an administrative position, 'informational interview' is a thing that they’ll know about. You can directly ask for an informational interview, and they’ll say yes if they can. In less formal fields, like tech or entertainment, the convention is often to offer to buy someone coffee or a meal, so you can 'pick their brain' while you’re doing it." "People like to talk about themselves. When you tell someone that they’ve achieved something in their field-- enough so that you look up to them as an inspiration--they’re flattered. The worst that can happen is that they say 'no'." The possible positive outcomes are: a larger network for additional connections in a field that you like; the beginning of a mentor relationship that might lead to an internship or more; inside information about the downsides of a business that you hadn't considered; a better understanding about what is involved in a successful career path; a body of information that will help you to interview for jobs in that field, if experience is necessary first improving your business communication skills. If you have no experience as the "interviewer," check out the list of possible informational interview questions on About.com. Sources: " Informational Interview Questions ," About.com. " Blue Sky Black Sheep ," Facebook.com Follow up: Just do it. Interview someone who has a career you want. Take a digital recorder and a notebook, prepare some questions, and have some fun.

  • DuckDuckGo ??: The growing art of data dodging

    image from onqny.com I can remember the first time " data mining " really freaked me out. I was writing an email in Gmail, and I excerpted a children's story I had written about two sisters who were stowaways on a boat of female pirates going to Catalina, an island off the coast of Los Angeles. Before I had finished the email, ads popped up in the right column of my mail account, advertising hotels and bed-and-breakfasts in the main city on Catalina. Plus a coupon for the ferry. "Creepy!" I thought. But "creepy" is the new "normal." It turns out that others are also disturbed by search engines and other cyber outposts mining your online clicks to develop specialized marketing tools to direct at you. "Need is the mother of invention"...and this need for privacy is the inspiration for new businesses that cater to those who do not want to be data-mined. One such business is the search engine, DuckDuckGo . image from the search engine's website DuckDuckGo still connects you to businesses when you search for products...but they do not provide advertisers with your personal data, so that ads are not targeted to your address, or your friends. Another website, DeleteMe , actually promises to separate you from your data trail...for a small fee. It searches the web to remove photos and personal information. Talk about job creation! Businesses are forming, and apps are being developed, to DO more data mining...and, on the other side, there are businesses forming to THWART data mining. Perfect. Source: " The growing art of data dodging " by Stacey Vanek Smith. Marketplace, American Public Media , November 29, 2012. Follow up: Try some searches on Google (or your usual search engine), and with DuckDuckGo. How do they compare? Investigate some of the links before you answer. According to a Pew study cited in the article, what proportion of Internet users object to data mining? Are you among them? How do you protect your personal information? If you don't have any self-protective habits, check out this site .

  • From Bullfighting to Finance!

    image from 48women.org Carmen Bermudez is now CEO of Mission Management and Trust in Tuscon, Arizona. But the road to that position was very interesting, indeed. She was born in Costa Rica, and was raised by a mother who'd been abandoned by her husband. She was poor , and she didn't like it. Early on, she imagined herself as a bullfighter as an antidote to her life's reality. Her mother emigrated to the USA when Ms. Bermudez was 15. She went to Santa Monica High School and Santa Monica College, but returned to Costa Rica to pursue bullfighting after being trained by Hollywood stunt-people about how to manage the cape and the bull. Her success as a bullfighter caused her to become addicted to the "high life" but injuries forced her to stop. She then became a TWA flight attendant and race car aficionado. While a flight attendant, she met her husband, a principal of Marathon Asset Management (an investment company), and relocated to La Jolla, California to work with him. She started a trust company spin-off a few years later. "We're a boutique company that caters to people who are conservative about their investments," says Bermudez. Wow. She can really feel the success... Source: " From Bullfighting to Finance " by Carmen Bermudez, NYT , November 25, 2012. Follow up: What do you think was the turning point in Ms. Bermuda's success? Is that the kind of opportunity that could be made available to others, or was it just "luck"? Did she create her own luck? Imagine your own tale of amazing success. Where does it begin? Where does it end up? What are the adventures you have along the way. What lessons do you learn and how do you learn them? Write your own fantasy WSJ "personal journal" piece or NYT "The Boss" piece.

  • Berkshire Hathaway buys party-favors

    image from orientaltradingcompany.tumblr.com The go-to party favor company when my kids were growing up was Oriental Trading Company . They had cheap items for party-favor bags that were sure to provide instant fun for the kids. The timing of this purchase seems ideal for Berkshire Hathaway , as the holiday season is not only party-filled...there are stockings to stuff as well. Oriental Trading Company is an 80-year old catalog and online-based retailer. Warren Buffett's Berkshire Hathaway purchased Oriental Trading from Kohlberg Kravis Roberts (KKR) for an estimated $500 million. KKR was the most recent owner; Oriental Trading company has had a series of owners over the last several years. It was originally started by a Japanese immigrant, whose son, Terry Watanabe, expanded the business dramatically through increased catalog sales and creating relationships with churches and schools. KKR bought the company when it was having financial difficulties, so KKR's profit on this sale to Berkshire Hathaway is considerable. Source: " Berkshire to Buy Oriental Trading Company ," by Michael J. De La Merced, NYT Dealbook , November 3, 2012. Follow up: Under what circumstances did KKR purchase Oriental Trading Company? How much profit did KKR make in this sale? What is the current market price of Berkshire Hathaway? What are some of its other holdings? What is the basic business philosophy that Warren Buffett uses in making investment decisions?

  • Entrepreneur wins by using managerial accounting skills

    image by Peter Wynn Thompson of the New York Times Nick Sarillo is a pizza shop owner, who has built his business by developing and adhering to a "trust-and-track management style." He developed his principles the hard way--first by being overly optimistic and over-expanding...and then by saving his business. To do this he appealed to his customers with transparency. Then, because he was dealing with a young employee population, he adopted a "coaching" attitude, by making goals clear, allowing workers to meet those goals in their own way, and by tracking successes and giving real bottom-line feedback. Sarillo's marketing plan was also unique. He tracked and gave back 5% of profits to the community by allowing groups to use his building to fund-raise. This increased his visibility and made his business an integral part of community activities. Sarillo has written a book about his management style: " A Slice of the Pie: How to Build a Big Little Business ." He has also been on the cover of Inc. magazine . Source: " A Pizzeria Owner Learns the Value of Watching the Books ," by Ian Mount, NYT , Small Business, October 24, 2012. Follow up: Read the article. Describe what problems occurred at Sarillo's Elgin restaurant. How did he solve them? How did Sarillo finance his business? What went right and what went wrong with his financing model? What external factors contributed to Sarillo's business challenges?
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