Business Finance, Identity Theft and More Sad US Housing Info

How ready is your business for an emergency?

We’ve talked in the past about the fact that almost two-thirds of people couldn’t afford to miss one weeks’ worth of pay. But there are also businesses who rely on customers and cash flow in the same way.

In the event of a disaster, 40% of businesses don’t re-open their doors. That’s a staggering failure rate for a small business. And disasters do happen – and come in very different forms. While you and I have an emergency fund, for a business, it’s called retained earnings. This is the profit of a company which STAY in the business, and lots of companies have very little of that.

Knowing this is a huge problem for small businesses, the Red Cross has teamed up with the U.S. Government and set up a great site. This web site has an easy check list to think through, and enact, some easy steps to prevent your business from being one of the 40% who fail. That check list is a lot more than having money in the bank, or the right type of insurance. It’s at http://www.ready.gov/business/

Going from bad to worse:

If you’re wondering about the US economic situation, houses and their values are one of the major factors, along with their stalled unemployment rate around nine percent.

On one of my flights this week I read a story in the Orlando Sentinel about the Florida housing market. They did a study in their four biggest counties in Orlando that turned out to be pretty depressing.

Right now there are 150,000 vacant homes in those four counties. That’s not including second homes or any vacation homes, those are just normally owner-occupied homes.
That means, with an average of 2.2 people in a family, over 330,000 people would need to move into the area to absorb those homes which are sitting empty right now. And that’s assuming they don’t build a single new residence. THAT is an over-supply. And when there are too many of anything, how do you sell it? Economics 101 says the price will need to drop. Orlando is nice, but they aren’t going to have 330,000 people move there over our lifetime…

Moody’s Analytics estimates that in some areas such as Naples, Florida, home prices won’t fully recover until 2038.

One of the nastiest identity theft problems

I’m not sure to what extent this is a problem in Canada, but you have to know it’s here, or coming: The US tax department, the IRA, has a big identity theft problem. Crooks who have stolen someone’s identity are using it to file fraudulent tax returns on-line. They change the address, put in a bunch of phony deductions, and then claim and get a big tax refund.

When the real person files his or her return, it bounces, of course, because their return is already shown as processed and refunded in the system. To fix that, and to challenge this fraud takes a huge effort, a lot of time, and is really tough to fix. With crooks selling someone’s full identity for less than $20, look for some tougher steps to file your return on-line next year. You have to know the Canada Revenue Agency is aware of it and taking similar steps before it becomes an epidemic.

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