Have We Dodged The Bullet?

It was not long ago that some experts were predicting a $200 price for oil but with it down far below predictions, Dr. Warren Jestin of ScotiaCapital warned, speaking at a conference on fuel price held by DTA, “Don’t get fooled by the drop in fuel prices. It will go back up.” Have we dodged the bullet here in Canada? Although Canada is night and day to the USA with our banking system, we are still impacted. USA’s “borrow to buy” model is not in Canada and that sub prime idea proves that not all innovation is good.
“Step back and understand the fundamentals,” advised Dr. Warren Jestin, ScotiaCapital.
Warren Justin, Chief Economist of ScotiaCapital. Warren joined Scotiabank some 25 years ago and is a popular public speaker and media commentator on economic issues in Canada and abroad. His expertise both about Canadian and global economic issues is extensive and his team's research work is leading edge.
Dr Jestin believes Canadian Banks are in good shape
For the last fifteen years the USA has used the “borrow to buy” model which was most prevalent in housing. There was a record number of Americans owning their own home but the model could not be sustained. Consequently, the USA is deleveraging and with eighteen months of housing inventory to clear, this will take years.
The core message is that the growth rate of China is above 10% and even if it slows with the global problems, it will drop to 8% which is still a very attractive opportunity for investment money, compared to the USA growth rate of 1% to 3%. Inevitably, there will be a shift in where foreign investment flows and this will affect our economy.
Fuel Prices Will Return to Highs
As for fuel prices, Dr. Warren Jestin advises to treating the Canadian dollar as if it were on par with the US dollar even if it drops below, since commodity prices will rise up again. By the end of next year, expect fuel prices to also move back up as commodity prices increase again. Supply conditions for oil could be affected by OPEC and whether it decides to cut back production. Oil is being used less as companies become more productive. "Ultimately," John Loewen , CEO of Loewen & Partners, says, "China will determine the price of oil and it is on a growth trajectory."

Design Your Freight Program

It goes without saying that the manufacturing and retail industries are slowing and this is a challenge to the status quo. A well designed freight program can add good value.

“Many companies are asking ‘What can we do well here in North America? Credit is tight and how can we make better use of the dollars we do have?’” said Dan Goodwill, a specialist in Logistics at an event with DTA and Jacoline Loewen, author of Money Magnet and a partner in raising capital. Don Goodwill advises, “A good place to start where there are opportunities for cost savings and logistics offers many hidden opportunities.”
Have a Score Card
§ On time service
§ Billing accuracy
§ Refusal rates – is your order profitable to them?
§ Claims and exceptions
Goodwill suggests that the key is to actively look for paradigm shifts. In other words - change from one way of thinking to another.

Places to Start to Look for Change

1. Examine your inland freight costs – it’s a missed opportunity. Look at alternative logistic venders and change your requirements. Could you live with longer lead time of five days instead of two and go for a lower price? Revisit your economies of serving your own market and see where you can be flexible.
2. Check your assumptions about the cheapest and best ways. There was a time when if comparing box cars and trucks and you were doing a bid - the truck rates were better than the car load. This has shifted.
3. How can you leverage your freight smarter? For example, are there ways you can make life easier for your carrier? Are you asking them to arrive at four in the afternoon and then sit there waiting, charging up your fee?
4. Look to your customers’ needs. For example, Shoppers Drug Mart has inbound freight from many vendors and wants to leverage that freight cost as it is a good opportunity to save money. Instead of 3,000 incoming vendors, it wants to go down to 1,000. How can you help your customers simplify, streamline and save money?
5. Understand your true costs. You can benchmark fuel surcharges and figure out the rate between Calgary and Montreal.

Dan Goodwill, President Dan Goodwill & Associates. Dan was the previous President of Yellow Canada, President of Clarke Logistics, General Manager of TNT Railfast and Vice President Sales & Marketing TNT Overland Express. His broad experience makes him a knowledgeable public speaker on cost savings programs and profit generation.

Private Equity Key to Strategic Expansion

Having recently partnered with Bermingham Construction, a Hamilton-based manufacturing company and winner of the 2008 E&Y Manufacturing Entrepreneur of the Year award, C.A. Bancorp was a key component in its successful transition to global markets. Mark MacDonald, Managing Director, Private Investments, will discuss the process of working with a private equity firm for the first time. C.A. Bancorp is an alternative asset manager that specializes in small and mid-cap opportunities. C.A. Bancorp seeks to help private companies innovate by investing expertise and intensive analysis of macroeconomic themes, industry trends, and market dynamics.

Having a partner like C.A. Bancorp helped the family owned business move from stagnation to dynamic growth to markets far more dynamic than the mature North American marketplace. It takes guts to allow in partners but do you want to be rich or be in control?" asks Jacoline Loewen, author of Money Magnet and partner with Loewen & Partners.

Join the Discussion with Mark:

Thursday, November 20th, 2008

10:30 am – 3:00 pm

The National Club

303 Bay Street, Toronto

Bay Street & Adelaide, Downtown Toronto

Map Location & Parking
Cost
$148.00 + GST
To Register (Please note, business owners and CEOs only):
Please email: akobeleva@loewenpartners.com or call 416 961 0740 and ask for Anastassia

How to Take Money From a Dragon

Guest Post on Dragon’s Den by J. B. Loewen

Imagine, if you would, that you are about to pitch your business to the Dragons and are being shown toward the Den. (I presume the CBC producers use long, pointy sticks to prod entrepreneurs forward). Ahead of you lie the huge vault doors which remind you no one escapes the lair of the Dragons. There they wait in the gloom, seated up high (increasing the drama) and TV cameras glint menacingly, waiting to capture the moment you are flayed to the bones. You are tethered to a pole and the Dragons rise up shrieking and set upon you.
Well…not quite.
But reading through the blogs and Fan Forums, there are many comments from viewers who find the rough & tumble of the Dragon discussions distasteful – as if CBC has brought back Elizabethan Bear Baiting for our viewing pleasure.
Yet, gentle viewer, I believe this week’s session of Dragons’ Den awarded more to the entrepreneurs than the Dragons. First to enter the Dragons’ lair was Larry Destiny, his stage name from days as a fearsome pro-wrestler. Still carrying a glimmer of his wrestling ring stage presence, Larry rolled out his product called Attitubes – water filled weights.
As Arlene Dickinson said, “If someone had come to me with the idea of a ball in every gym, I would not have believed it.”
Larry quickly lured all the Dragons down to his pit and had them doing deep knee bends and even got Big Jim Treliving hoisting his watery weights above his head.
Now who’s being tortured here, folks?
With the Dragons suitably subdued and keen to learn more, Mr. Destiny let loose his own bit of torture, “I do not have a single sale.” Attitubes is still just an idea – patented – but a concept only. The Dragons fell into a heated discussion over whether it could be licensed or sold. Robert Herjovac informed Larry he had been drinking some wicked Kool-Aid to offer 20% of his company for $200,000 (making it an $800,000 valuation). If Larry had some sales to prove the concept, it would have been different. One by one, the Dragons backed away and Big Jim suggested Larry take charge of his own destiny. Last to speak was Arlene. She said, “$200,000 cash but for 60% of the company.”
With Larry off to call a partner, I waited for one of Kevin O’Leary’s intemperate jokes but this time it was Robert hurling words like ‘ludicrous’ and accusing Arlene of sitting too close to Kevin, picking up his evil aura, and stealing a naïve entrepreneur’s business – yet again!
Kevin, normally the hot head, calmly agreed with Robert, telling Arlene she was taking over his role of Chief Incubus of Venture Capital. She just gave them her Mona Lisa smile but W. Brett Wilson stepped into the frey and told the others to back off, “Arlene’s in and you’re not – so stop badgering her.”
I was hoping for a fight, swords drawn, maybe a fatal blow struck but no such luck because of Destiny. That’s right, Larry returned. Guess I’ll stick to Hockey Night in Canada for the gloves-off fights.
Here’s where the cruelty to Dragons begins. Larry negotiated the same cash deal but lowered the offer to 50% ownership. People, please, this is a lot of cash for just an idea. Yet when Brett stepped back into the deal, bringing his sports teams and gym to use the product, Larry was soooooo mean. No way was he changing his power play – boom, boom, boom. His brutality shocked me. Even Brett said, “When we shake, don’t crush my hand.”
Note to Larry: May I suggest a brand name switch? What about Aquatubes? It gives the water concept and Attitubes is little too close to ‘tubby’ for my liking. Oh, if you do go with my idea – how about $200,000?
This deal of Brett and Arlene’s was a bone crunching triumph for Larry Destiny. Here we get a glimpse of Venture Capital at its best. Research out of Harvard Business School says that money from outsiders is more likely to spur on success than cash from your favourite auntie or your mum. There you go – Larry Destiny and all you entrepreneurs out there, Dragons’ Den offers you a great chance to get the wealth you deserve. For all those who withstand the Dragons’ fire, enduring their scorn, you will be stronger. Otherwise, there is the long standing tradition where outside the CBC building, the heads of entrepreneurs are displayed on spikes as grisly reminders of those who spurned the advice of the Dragons.

J.B. Loewen raises capital for growth companies and is the author of Money Magnet: Attract Investors to Your Business.

Private Equity Investors are Ready to Spend

David Simpson recognized the important role that family controlled businesses play in the Canadian economy, and became founding Director of Ivey’s Business Families Centre. As an operator in a family business himself, he supports learning in this vital sector of the Canadian economy and maintains a passion to promote this lifestyle choice.

Join David as he leads the discussion. Please note that space is limited to maximize the value to attending CEOs by ensuring a highly interactive environment.
Thursday, November 20th, 2008

10:30 am – 3:00 pm

The National Club

303 Bay Street,

Toronto

Bay Street & Adelaide, Downtown Toronto

Map Location & Parking
Cost
$148.00 + GST
To Register (Please note, business owners and CEOs only):
Please email: akobeleva@loewenpartners.com or call 416 961 0740 and ask for Anastassia

Agenda
10.30 am – 12:00 pm
David Simpson, The Richard Ivey School of Business, Business Families Centre - Welcome
Charles Loewen, C.P. Loewen Enterprises Ltd.
12:00 pm - 1:30 pm Networking and hot lunch
1:30 pm – 2:30 pm
Mark MacDonald, C.A. Bancorp
2:30 pm – 3:00 pm Networking

Gold Sponsor: Loewen & Partners works with private companies to raise growth capital. Our goal is to match owners of companies with suitable investors who understand the business and can add significant value. Over the past decade there has been a significant shift in the sources of financing available to small and medium-sized companies. This is primarily a result of the rise of private equity as the best place to access capital.