I was playing golf yesterday with my new business partner in my latest venture in the field of medical recruiting.  He is a young, very successful doctor, who is totally driven to succeed and we were talking about the qualities needed for success.

'Drive' and 'hunger' are qualities that will go a long way in the path to success - give me an uneducated person with these qualities and the rest can be taught.  Education for me, was a tiresome process of reading books and attending lessons that I was rarely interested in and then regurgitating the facts and during the process, scoring and A, B C or the dreaded D and E, depending on how many facts I could remember.

This is not to say that education is unimportant, it has to be education from the motivation to learn and not the forcing of learning and this is why I probably learned so much after school and college, as my motivation to learn was much higher.

When I am training any sales people and particularly recruiters, I insist that they must have a passion for their industry. This passion will form the basis of their industry learning - what are the 'drivers' of the industry, who are the main players and what are their qualities over their competition.  this 'learning' enables the sales person to form opinions and then to have meaningful discussions with their clients.

Add to the mix with huge levels of drive, hunger and the sales techniques to bring immediate value and you have the formula for success!

~Neil

Back from a series of trips including a visit back 'home' to the good old UK.  I must say I was really surprised how cold it was compared to Dallas, which reached 80 degrees just before my departure and looking at the snow covered UK today, its only got worse.

Crazy Jack and I are working on an exciting new series of online products ranging from martial arts to a complete online recruiters training program.  Having trained literally hundreds of recruiters over the years, many who have gone on to great success with their own companies and others who have taken senior management positions with large global firms, I thought it was about time that I shared my secrets and this online program will cover everything, but most importantly, how to ensure that as a recruiter, you are immediately seen to add value to your clients and candidates.

I am working 'live' with people and explaining how a downturn in the economy can be a huge opportunity and of course, how to handle each and every objection that is thrown at you, before it even occurs.   this is probably my most exciting project yet!!

~Neil 

I have just put the phone down to a friend of mine, who has a business back in the UK.  Like most in his sector, he is suffering due to the economy and also, like most he is heavily dependent on bank finance.

We were talking and he was telling me how revenues have nearly halved over the last 12 months or so and that trading is extremely difficult and he can't see himself lasting another 6 months!

I asked him if he had tried negotiating with the bank and he said that he had, some months ago, but not now as he feared he may push them too hard and they will foreclose.

I told him first, that a hell of a lot has happened over the last few months and second, that he is probably in better financial shape than the bank!  I also told him that he absolutely MUST start negotiating, asking for his payments to be suspended for a period, to get the business back to a positive cash flow and ultimately to profit.

In my business career, I have faced recessions and serious cash flow problems, even in 'boom' periods.  What I have learned most as a entrepreneur, is how to survive.  My idea of survival is to make sure that every creditor is aware of the problem up front and then to devise a plan to pay them back, but the plan must be realistic and achievable for all.

I have been 'bust' in my career before and at that time, my creditors would not negotiate with me and I told them that I was sorry, but I could not meet my payment obligations, their attitude was simple - pay or we bust you, which they did.  This was during the recession of the late 80's/early90's and I think one of the reasons why it occurred, was because I told them of my problems too late and they had effectively lost trust in me.  the next time I had a problem, I addressed it immediately and I worked out a deal with my creditors to pay them back.  At that time, I could have easily 'busted' the business myself and started a new one the next day, but I wanted to honor my obligations to the creditors and not lose the business.

There is always a deal to be worked out to solve any problem in business, but you have to be open and honest with everybody and the plan must work for all the parties involved.  Trust is the most important part of the relationship with financial institutions and trust can and is built and maintained in both good and bad times!

~Neil

In part two I talked about derivatives being at the heart of the problem and to explain the concept of derivatives fully, would occupy this blog for a year, so you can conduct your own research to understand further.

The real issue with derivatives is that you can literally create money out of thin air and it is lending without 'lending'! Banks are governed by strict rules that dictate to them how much reserves they must hold in relation to the amounts they can lend.  So if the capital ratio is 10, then the bank can lend monies equivalent to 10 times the amount of reserves - if the bank has $100M in reserves, then it can lend up to $1billion.

But, the banks are lending without really lending and this creates the term 'notional lending', which using the analogy of a poker game, the notional sum is the chips and you can keep playing with the chips until of course, it is time to cash in and you have to come up with the 'real money'.

Over the last years, nobody has had to come out with any 'real money' to pay off losses as counter parties have allowed them to roll over debt, but in doing so, charging an interest penalty for compensation. 

So why have things now come to a head?

In simple terms, because a package of loans, including the sub-prime loans of the housing industry defaulted into billions, which could not be rolled over, because the counter party was insolvent!

If you look at a traditional mortgage portfolio, you would see lending restricted to a maximum percentage of the asset (house) value, say 80%.  This afforded some protection to the lender, but we are now in an economy of hyper competition - some lenders will go to 90 or even 100% and also greed.

Greed is the whole game and over the last fifty years our society has promoted a lifestyle that is based on consumption - mankind has been indoctrinated to work harder and consume more and when do not physically have the cash to spend, there is always a bank willing to extend a loan and that of course created a credit based society.

Now putting this altogether, we have the creation of a credit based economy, which of course leads to huge amounts of consumer and corporate debt, we have a banking system that has changed into something akin to gambling and finally, the 'straw breaking the camels back' - the recent sub prime crisis!

So what about the future?

Well we could look at the fact that it is the central banks, working with the consumer banks that have created the boom and bust cycles of capitalism and the answer may well be in abolishing the central banking system.  Whatever it is, one thing is for certain, the financial architecture of the world will definitely change.

~Neil

I have talked about the fact that the modern banking system has collapsed and has triggered a financial tsunami, but now I will talk about the 'weapons of mass destruction', not those  - purported to be found in the Middle East, but the financial weapons of mass destruction - derivatives.

I will quote Warren Buffet, the world's greatest stock market investor, in his Chairman's Letter in the Berkshire Hathaway 2002 Annual Report:

"We view them (derivatives) as time bombs both for the parties that deal in them and the economic system.  In our view derivatives are financial weapons of mass destruction, carrying dangers that, while now latent are potentially lethal."

Further:

In 1990, Sir Julian Hodge in a memo dated November of that year to senior executives of the Julian Hodge Bank said:

"In no circumstances enter the derivatives trading market without first agreeing to it in writing with me…At some time in the future, it could bring the world's financial system to its knee."

So what exactly are derivatives?

First, let's establish that there is an organization that started all of this - the International Swap and Derivatives Association (I.S.D.A).  This is the organization that spawned the US$500 trillion global derivatives market - the organization that manufactured most of the derivative products, the financial WMD's. 

Derivative trading could, at the extreme, be described as 'loan sharking' and 'gambling'.  In reality, it is the ability to trade with money you don't have to 'put up' or even money that you don't own, the ability to trade on 'margin'.  Say you want to trade an amount of US$ 1000, you need only to actually part with 10% of that amount and despite the fact that you are 'truly' working with 1000, your actual physical cash exposure is only 100.  Now multiply this into the millions.  There is a downside however…losses can be unlimited!

The problem is that the officers of the ISDA are from the worlds leading banking institutions! 

I talked earlier about the fact that banks are now lending to almost anyone and this has spawned from the lack of money making opportunities from 'traditional' banking.  

The banks have been forced into forming their own 'elite' money making club in an effort to protect their industry, the industry that is worth literally billions.

Many mathematical geniuses are employed to create elaborate mathematical models to eventually come up with the 'sucker deals' - the endless list of investment products that are inveitably sold to the public.

If you are from the UK, you will probably be aware of how, in the early to mid 1980's, the building, banking and insurance industries collaborated to sell more homes and the creation of a set of 'products', that lined the pockets of the same industries, but only served to potentially bankrupt the individuals in the process.  I am talking about the 'endowment' mortgages that promised to pay off a 25 year mortgage in 15 years, through the 'prolific' investment capabilities of the fund managers…and we were sold!

I am not against the sales people who sold them for they were totally indoctrinated by the belief, nor the people that bought them, for they knew no better, but I am against the acceptance of blame when it all went wrong and disaster struck in 1989/90.

…continued

~Neil

We must not disillusion ourselves that the current financial crisis is just another 'crash' and all will be well after the 'correction'.

It is true that the capitalist society works on a boom and bust principle but when I talk about 'correction' in the current crisis, I am not talking about simply letting the system 'work itself out', I am talking about the end of the present global financial system as we know it  We have an opportunity to re-build a better and fairer system of wealth distribution - the world has paid a heavy price, especially the millions of wage earners who have lost their homes and savings. 

Before I delve into the 'real story', I want to take you back to the times when owning a home was reserved for the privileged few, when even getting a Bank account was a privilege and more importantly, when lending was subject to strict criteria.  Banking in those days was the 'professionals profession'.

Banking and Stockbroking were the professions of the privileged few and it was a 'club'.

Now let's take a look at the last thirty years - we have seen a drastic change in the sheer amount of lending, to the point where the lending criteria is simply, 'do you have a pulse?'You see, it is not easy for Banks to make money any more - not in the traditional fashion anyway!  Also, think of the amount of 'day trading' that occurs today in the markets.  Now before you all go crazy and tell me that this is the removal of the 'club' system and that it is opening up opportunities for all - think of the motives behind the system that actually created these so called 'wonder' opportunities! 

In the good old days, customers were recommended, mortgages were recommended as of course were all loans and importantly, the people were far more more creditworthy.  My Grandfather said to me one day ( I was nine and raised by my Grandparents and  my Mother), "son,if all of us stopped paying our mortgages, what would the Banks do)?  He was not far from the truth, but of course, because lending was far more restricted, there would have been a far greater chance that they would have got their money back and of course, the stigma of bankruptcy was huge in those days.  But a very good question all of you should ask your Bank today is that if each depositor walked into the Bank at the same time and asked for their money, would the Bank be able to cover it? Think about that question when you next negotiate an interest rate for a loan!

Simply put, we are in an era of hyper competition and the Banking system is far from immune - just look at the deals that have been thrown your way, just to get you to borrow money.  think of the automotive industry, it is no longer about buying cars, but getting the right type of credit.  think of huge global corporations - General Electric for example - where does most of it's revenue come from?  Not from manufacturing, but from the GE Capital arm of it's business - finance.  the same can be said of General Motors and it's GMAC finance arm.

..continued

~Neil

I am again writing about events in the UK and from the news last week, we can see that the election battles have commenced.

A few days ago, a Member of Parliament for the Opposition Party was arrested by the counter terrorism unit of the police for allegedly leaking immigration information that was 'embarrassing' to the Home Office. Information leaked included details of illegal immigrants who had been cleared to work in security! I cannot believe that the Metropolitan Police Force now extends its duties to saving the Government from embarrassment - outside of the fact that the counter terrorist unit was selected for the job! As a staunch supporter of the Conservative Party, I never thought I would see the day when I would agree with one of the UK's most prolific communists, sorry socialists - veteran Labour MP Tony Benn, who said "once the police can interfere with parliament, we are into the police state".  I could not agree more.

~Neil

After my attack on the UK Banking executives who receive payouts for failure and hold expensive parties, I must comment on the 'big three' automotive CEO's that went to Washington to ask for bail out money, a mere 25 billion dollars collectively! 

But did they have to fly to Washington on their private jets???????

Perception is of course reality and whilst as another businessman, I can see that the cost of such an excursion is negligible, in relation to the financial state of their companies… they really should have given it a little more thought as public opinion has sharply turned against them.

It reminds me of an old friend of mine, starting his marketing business with absolutely no cash - something I can identify with, only his problems extended to having no car and no suit for that matter. I called him on the eve of him pitching to his first and extremely high-profile client, just to ask him if he solved his problems.  "The cash, no", came the reply, "but the suit and car, sorted", he said, in his finest London accent.  "go on, please explain", I asked him, "simple, one of my mates is a car dealer and the other is a tailor, I've got hold of a morning suit and a Rolls Royce". I was absolutely stunned and silent and then came the follow up - "you always told me to be the director of first impressions Neil, well I've just become the CEO, still need a chauffeur though - you up for it"? Got to laugh, but he landed the account though!

~Neil 

We are all hearing about the Government cash, or should I say the taxpayers cash, that is being handed out to the failing financial institutions, the latest being Citi Group.

You cannot solve, in the long term, a debt problem by creating more debt.  These institutions have enjoyed huge times of insane money making and through greed and loose credit policies, they are now facing their reality.  More importantly, where is the incentive to succeed, when failure is simply countered with a lifeline?

I wonder what would happen if I wrote to the Prime Minister in the UK, asking him for a loan - I can tell you that I would be referred to a local government office and told about the various 'schemes' that are in place to help business people like me.  After a few months of due diligence and a few meetings, not to mention cutting through the 'red tape' my case would be either approved or not and maybe I could get some cash.  Alternatively, I could be the CEO of a Global financial corporation, that you would expect to know a thing or two about money, especially how I judge others on how they use it and advise them where to invest it and steer myself into a financial tsunami and guess what, the 'red tape' and due diligence doesn't exist anymore and I get my cash and rescue my Company and probably walk away with a few million as well!

Capitalism is founded on the 'boom and bust' cycle and it is the very nature of capitalism and 'corrective' periods have occurred throughout history and they must be allowed to 'correct'.

~ Neil

I was reading Mark Cuban's blog where he is talking about the advisers that President Obama has assembled around him and the fact that he has not one single entrepreneur on his team.  Mark further talks about the need for the Government to get in touch with the people who form companies and literally live from job to job, hoping to get paid on time. He says that entrepreneurs who start and run small companies will be the propellant of the economy. I could not agree more.

These are the people who take the real risks, putting their money on the line each and every time and who have to constantly fight Governmental 'red tape'.  Yet many of these companies develop into hugely wealthy enterprises, creating jobs and paying serious amounts of taxes.  We need to locate and nurture this talent.

It seems the fat cat Bankers are at it again, this time back in the UK, the Royal Bank of Scotland saw fit to hold a SECRET 300:000 pounds party for its executives - fair enough you might say, when times are good, but not after receiving 20 billion pounds of bailout money from UK taxpayers!

Still on the Banking scene, it seems that the UK Banks have told the Chancellor that they will not pass on any interest rate cuts to customers as their profit margins are already too tight and they are not 'charities'.  They are absolutely correct - the charity is the UK taxpayer who has had no option but to bail them out with billions of pounds of their own money - the same money the Banks expect the taxpayers to then put back in their pockets so they can make even more!

~Neil 

So Joe Calzaghe did it! Beating Roy Jones Jr last night was an amazing victory for Joe - coming off the floor in the first round to produce a totally convincing points win, having cut Roy badly during the latter part of the fight.

I was at the famous South Fork Ranch, here in Dallas last night for a Dallas cast reunion.  Seeing the cast was amazing , as I was glued to each episode when living in the UK and still watch the DVD series today. Great entrepreneurial and business education!

Funnily enough, I got talking to some people about the boxing and the usual negative Calzaghe comments come out about how he only fights washed up fighters etc - I asked them if they boxed themselves and was not surprised to hear the answer 'no' and then tried to explain to them that any fighter has the capability to inflict serious damage to another with just one punch.  Roy Jones Jr was and still is, in my opinion and incredible fighter and although he is not going to be as fast as he was in his prime, nobody would want to be on the business end of any of his punches.  You have to respect anybody who steps into the ring and I don't care who it is, there is always a chance for either fighter to win.  Watching Roy last night showed me he was far from 'washed up' and gave a strong performance right to the end, but it was Joe who won through and it was totally deserved. Whether Joe will retire is now the question - certainly, he has nothing more to prove…but…like every fighter, it's in his blood!

So another good night for Wales and all that needs to be done now is to get the Rugby team ready for the Grand Slam and do it all again!!

~Neil

History has been made here in the USA today with the appointment of Barack Obama, the first  ever African-American President and proves that the USA is truly a Country where everyone has equal opportunity to succeed, even becoming President.  Good news for the Franklin family as my son, who was born here on 4 July, is being groomed to be the 52nd American President - he was glued to the television and embraced election fever like a true Presidential entrepreneur.  Look out for Samuel John!

Like in all election campaigns, promises are made and when the battle is won, it's delivery time.  As one of the most influential Countries in the world, the spotlight is always on the USA at election time, and given the global financial crisis that in my opinion, has not even commenced, it is firmly shining on Mr Obama today as it is of course, on all Global leaders.

Turning the attention back to the UK, we have to wait another two years until we can rid ourselves of our current Government, who has managed to fall short on virtually every promise, yet still clings to power.  I think even Mr Blair new when to jump ship!    

The Government nationalized television corporation, known as the British Broadcasting Corporation, the one that manages to successfully show and repeat the same show for twenty years and charge every person who has a television, a fee for owning one, whether they watch the channel or not, may have redeemed it self a little.  They conducted research at the famous Louis Pasteur Institute in France, into a chemical compound found in red wine that can actually trick the body into losing weight!  Fantastic news, but being someone who has total faith in natural products, I am sticking to the natural products found in the Burgundy region of the same Country!  Good news for Mum as well!

~Neil

I have just read an article in a British newspaper about the Chief Executive of failed banking organization Halifax Bank of Scotland (HBOS) being paid a ‘consulting’ fee to help Lloyds TSB, the bank that is taking them over to identify the weaknesses of the company. The fee for this consulting arrangement is a staggering 60:000 pounds per month!

Under his leadership, bad debts have doubled to 5.2 billion over the last five months and although he has forgone a golden goodbye of nearly one million pounds, he has the small consolation of a 2.4 million pension pot and of course the ‘consulting’ relationship, not to mention the potential loss of 20:000 jobs as a result of the Government backed nationalization of high street banks.

There is an argument that it doesn’t really matter if the executive leadership of large, public companies fail, they will probably leave with far more money than most people will see in a lifetime, when of course, the shareholders that back the companies end up losing.

But what about the humble entrepreneurs out there who have huge amounts of desire, ambition and of course, the winning ideas that will ultimately create wealth and jobs? If an entrepreneur fails, he or she will just become another one of many in the statistics of business failures and as most successful entrepreneurs will testify, they are certain to face failure at least once during their journey.

Three good examples of hugely successful entrepreneurs in Britain are Sir Philip Green, Sir Alan Sugar and of course, Sir Richard Branson - did they experience failure? Definitely. What I am saying is that out there is a huge pool of potential and existing entrepreneurial talent and that is the talent that needs nurturing and most of all, Government help.

It is of course election day here in the US and my money is on…

~Neil

I'm back again after the long absence and I'm writing this with two of the most important events in our current economic climate - the USA election and the looming fight with Welsh boxer Joe Calzaghe and Roy Jones JR.

I'll deal with the boxing first as it is the easiest and although I have the greatest respect for Roy, I simply have to root for Welsh superstar Calzaghe, who I tip to win this fight on Saturday and then perhaps Joe can retire as an undefeated legend of the ring.

Now to more concerning events, I believe we are about to embark on one of the worlds most serious financial crisis in history - one that will dwarf the great depression of 1929 and although we have seen the signs over recent weeks, I believe the imminent USA election is placing events on hold, after which we will see an out of control downward spiral, that no President is going to be able to pull out of easily.

The reason for this is the loose money policy of extending huge amounts of credit, hyper competition and the change from a deflationary to an inflationary environment.   A good example is the UK housing market, which following a deep recession in 1991, was rebuilt by the willingness of Banks to lend to almost anyone, who followed the dream of becoming a property millionaire.  Now many did of course and those were the ones with the foresight to anticipate the right time to sell out, in a growing market and with the aim of leaving something for the next person.  When you look at this period, you must realize that the economic conditions were looking good, with a rising stock market and a euphoric view overall.

Wise investors and certainly the people over at Full Circle Asset Management (my own advisers), were predicting the economic conditions that we are witnessing today and they were so far ahead of their time, that nobody listened!  They were actually seeing a Bear Market in the mid to late 1990's and the emergence of a Bull Commodities market and how right they were!  Today, people are queuing up for their advice!

Anyway we all need to prepare and to prepare, we must be aware and that means opening our minds and taking tough action when needed.

~Neil 

Have been traveling again, so the blog suffers - still finishing the new site and hope to get this up very soon!

~Neil 

The success bug continues….I must welcome Brad Hermetet to the Franklin-Spirko sales team.  Brad started one week ago and after his first week of training from Crazy, he secured three appointments and closed his first deal today!  Amazing!

Now we should not really be surprised as Brad turned up to the interview with a presentation and a quota!  Put that together with Crazy's unique style of interviewing finishing with the words:

"It's real simple, you can either sell and hit your quota here, or not sell somewhere else"

…and you have a formula for success…or… 

Vintage words from a hugely successful sales guy turned even more successful Internet Marketing specialist!

I have today had what you could call a truly international lunch - yours truly from London England, with a Vietnamese lunch guest, in a Afghanistan restaurant, being served by a Turkish waitress and in Frisco, Texas!

~Neil 

Its been a record breaking week for staffing companies C-People, Dataworkforce and for Franklin-Spirko  I also want to acknowledge the successes of the people who make it happen! 

I partnered with Cary Tobolka to form C-People here in Dallas and Cary quickly added Scott Higby to the leadership team and this team has led to an almost vertical growth line.  James Clarence Grimes aka the 'Alabama assassin', has produced another record month and he is certain to smash his target this year, that is if Cary and he can stop talking long enough to make it happen!  Cary is famous for his stories, which he could turn into an award winning book or six and a movie - the famous 'Tales of Tobolka' cover every subject known to mankind and a few that are not!

The Dataworkforce team have produced exceptional results this week and I must firstly credit long serving (or suffering as she would say) VP and GM, Nadene Chaplin, who almost single handedly implemented a new CRM platform.  Van Phan aka 'The Black Widow', along with Ale Sanchez have completed what must be the fastest placement I have ever witnessed - taking a fresh requirement and moving through pre-screening, phone and face-to-face interviews and a start in record time - all done while traveling and solid support coming from David Solkhon and his team.

At Franklin-Spirko, we have sold a record number of DVDs featuring Val Riazanov, this time selling the first in the Russian health and fitness series, full credit to the marketing expertise of the team!

As an entrepreneur, you are always involved with everything in your business, but you must learn to hire the best people you can afford and energize them and I must say that the energy has been huge this week and now we have raised the standards even higher!

 ~Neil 

All is looking good for the book I co-wrote with Crazy Jack, The Inner Salesman .  This is the book that explains that each of us is already born with the natural ability to sell and that the art of selling can't and does not need to be taught, rather 'coaxed' out of the individual by showing the individual how to 'unlearn'!  We are busy working on the next book, on a similar line titled "The Inner Millionaire".  In this book we are talking along the same lines as the Inner Salesman, but expanding the theme to illustrate how what you already know, combines with the laws of the Universe!

One of our newer co-entrepreneurs (we don't have employees at Franklin-Spirko), the Viking, has a book in progress and this is around the theme of how there is an exact science to getting rich.  Now the Viking is a very wise old soul and has researched this concept thoroughly and is about to reveal to us how quantum physics and the laws of the Universe again, combine to show us exactly how we can all get rich!  Very interesting from the Viking, who has a series of other interesting ideas, one of which includes the use of 'harassing helicopters'.  I think the Viking has been spending too much time with Jack!

~Neil 

The new site will feature all of the websites I am associated with as well of course, as the businesses.  We have a lot going on at Franklin-Spirko and have just expanded the team with developers and sales staff, targeting local and national business as well as our own ideas and initiatives.  Our Martial Arts DVD, featuring Val Riazanov and yours truly as the victim, is still selling well and we are about to release two more, this time covering Russian health and fitness.  

I got in trouble from my Mother yesterday, for not commenting on the Calzaghe-Hopkins fight, which of course Joe won on a split decision - a great year for Wales with this and the Rugby Grand Slam.  I would rather face Joe Calzaghe and Hopkins in the same ring, than the wrath of my Mother any day!

On a more serious note, we are about to face very tough economic times around the globe, as the credit contraction finally takes it's toll.  We've been living on borrowed time as far as this is concerned, for a long time now and the real story is about to unfold.  For business people out there, this is where your real skills are created and tested, as surviving in a rough sea is one of the hallmarks of any successful entrepreneur.  For me, it will be the third recession I have experienced, so it is not uncharted territory, but without doubt, it is going to claim many business casualties.  Remember though, you learn very little when times are good!

~Neil 

Haven't posted for a while as I have been mega crazy busy ( the usual entrepreneur excuse)! 

I am in the process of completely revamping the website, so stay tuned - there are a lot of exciting developments in the Franklin world.

~Neil