Entrepreneurial News®

Really Big Oil Profit Opportunity

We got to thinking over the weekend, after hearing that John Cassimatis of Red Apple Group owns an oil company, that the US could export its surplus oil to Europe and displace a lot of Russian oil.

As we unfold the oil opportunity below, it appears that any oil company, or a consortium of oil companies, could take advantage of this opportunity.

Oil is not export controlled, because the oil is owned by the privately held oil companies. However, some is produced on federal lands, which probably can’t be used for our little scheme. Oil companies could export any oil that they’re not now selling, which is about 2 million barrels a day as this is being written. One would probably have to subtract out any oil produced on federal lands.

Any oil company willing the challenge the Biden administration’s probably unconstitutional ban on oil production could participate.

To really put a dent in Russian oil exports to Europe, let’s say that we sell our crude, landed in Brussels, for $60 per barrel. We could go as low as $40, but $60 will put a serious crimp in Putin’s oil revenues, which is the idea behind the whole scheme.

If Putin has a crimp in his cash flows, he lightens up on the Ukranians. Or goes further in hock to the Chinese.

At $60 per barrel, the daily total revenues to the US oil consortium would be $120 million which probably isn’t enough to ruffle the feathers of the EPA.

A large tanker olds about 400,000 tons of something, which is 400 million pounds. A barrel of oil weighs around 300 pounds, so we’re exporting 1.3 million tons of oil, or about 3 or 4 very large tankers full per day. In a month, allowing for transit times, about 10 tankers at least could be utilized. Worldwide, there are over 8800 tankers of various sizes, so we’d be optimistic than tankers can be found.

It seems possible that enough tankers could be lined up in Houston ship channel where a majority of our oil pipelines terminate. Maybe send a few to New Orleans.

Get busy, boys and girls.

The DEI Myth

As we’re sure you know, DEI stands for Diversity, Equity and Inclusion.

And you might be wondering how a small business like yours is going to afford in time and money the staff to develop such programs.

As a small business, we are of the opinion that DEI programs aren’t something you need to worry about because the Feds aren’t going to get around to enforcing them on small business.

So, continue to work with a meritocracy on your promotions, which is the spirit of DEI without all the commotion. If you have someone in your company who’s especially keen on DEI, you might take them aside and find out why that person thinks your company needs such a program.

There might be internal changes in promotion, hiring and other policies and procedures that will get rid of the problem.

If you’re a larger company, say over 500 employees, then you probably need to develop DEI programs, or at least be seen to be developing them. Personally, we think they’re a flash in the pan, not to be seen much after 2024.

We are sure that you can find consultants to design such DEI programs if you really want to do them. Our guess is that they’ll cost upwards of $100,000.

So, as we often say, review what’s going on and even discuss it with your employees. Point out to them the other ways you have to spend money.

Chat/GPT Is Here

The next programming language revolution might be here.

Chat/GPT was launched in November 2022, and it looks promising because it has the potential to really simplify web programming but anticipating what you’re going to say.

Their website is www.chat/gpt.com

To some extent, we don’t know what we don’t know.

What we do know is that it will make content much easier to do.

What we don’t know is what it will do to search oriented content, where Seach Engine Optimization (SEO) words are put into the lading pages and elsewhere to improve search results.

We are also devoting one of our Solutions Forum groups next week to discussing the topic with a couple of members who also know their way around software programming, and we’ll keep you informed.

The Wile E. Coyote Economy?

Just saw a comment from Larry Summers, the noted economist, who opined recently that the economy is about ready to go through a Wile E. Coyote moment and fall off a cliff.

And a few more large companies laid off some more workers. And Biden thinks the sky is falling.

On the other hand, Beth Van Dyne, the Texas congresswoman, just reported that the Dallas-Fort Worth area added more jobs than some blue states.

And Florida continues to truck along well, because of low taxes. Their unemployment rate is actually below the 3% what we used to think of as full employment.

And two of my clients sales are actually running ahead of last year, although both say that they’re hustling more to get the sales. I have a Solutions Forum group meeting with some more clients this coming week, and we’ll find out how they’re doing.

So, we don’t think there’s a Wile E. Coyote moment in the offing for small businesses but be careful out there and continue to hustle.

Profit Opportunity in Gluten Free Bread

I recently did the bread and milk run for my wife, and I was shocked at how expensive gluten free bread is compared to normal bread.

I got to thinking, did a quick Google search of gluten free breads and discovered that there isn’t a mainline bakery making gluten free bread.

All of the bakeries are small, artisan shops, and the prices of gluten free bread reflect that: about twice the price of regular bread.

Several years ago, after Bimbo Bakeries which is owned in Mexico bought Oroweat, our favorite bread company and then took it off the market, since it was a slow month in consulting, I called and asked them why. I got a rather nonresponsive answer (the customer service person didn’t know and wouldn’t look into it) and Bimbo eventually reestablished distriubtion, so all is well.

Bimbo, here’s another opportunity: introduce a gluten free bread in larger sizes. I don’t know how big the gluten free market is, but my hunch is that it’s 10-15% of the total bread market. Other gluten free products are selling well, IMHO, so why not introduce a gluten free bread?

We’ll do the focus group for Bimbo for a great rate: not free, but certainly reasonable. In fact, I’ll call a couple of research houses I know (having done focus group work for them) and ask them. One never knows.

In the meantime, I might talk to my alma mater, the Wharton School of the University of Pennsylvania, and see if they want to look into gluten free bread. Back in the day, it wasn’t uncommon to have Wharton rented out to consumer marketeers doing studies; I participated in a few myself.


What’s Behind the 517K Jobs Increase in January

Seems like the media is missing a trend that we spotted last month: the hiring is going to come from smaller firms, as the larger firms lay off people, they overhired during COVID.

Smaller companies largely kept their powder dry during this period and rode out the pandemic. Sure, in some big Dem-run cities and states, there were closures, but it seems that most of those have all gone.  California and New York seem to have patches of masks and interference, but it’s minor nationally.

But the bulk of the hiring increase in January, in our opinion, came from smaller firms deciding to hire that extra person in January, because they’re relatively optimistic about 2023. Hiring was spread all over the categories, with hospitality leading the way.

Our guess is that, if these firms continue to think the economy is at least ok, they’ll keep the hires and consider more in the June/July timeframe.

There are some early signs that the Biden Bunch might free up some energy, as they realize for 2024 what a miscalculation they’ve made. The baloon incident, being and incompetent negative, might push the energy drilling.

We’ll see.

The Big Company Recession

All the media mavens seem to be trying to talk us into believing there’s going to be a recession.

From where I sit, in Arizona, it doesn’t really look like it among my clientele.

Of course, they have me advising them on boosting marketing expenses and improving sales execution, but even so, business conditions don’t look that bad here. They look worse in Democratic-led states. Yeah, we’ve got a Dem governor here in Arizona, but maybe only temporarily.

All of the companies doing the layoffs are large, publicly held companies, many in the tech field. In many cases, it seems they overhired after the COVID pandemic, and growth hasn’t lived up to their expectations at the time. So their stock price goes down, reflecting reduced growth.

Reduced growth doesn’t mean recession. It means reduced growth.

And the Biden crew hasn’t done anything to improve economic conditions, since the House won’t let them spend money, and they’re a one trick pony.  But they haven’t been able to raise taxes, either, because the House is sitting on their tax increases.

And I expect McCarthy to negotiate spending reductions, since he’s got all the cards in the negotiation. Joe hasn’t figured out that yet, but he’s well, slow.

So, dear readers, hang in there.



Customer Service 134

It seems like I’ve written 134 posts about customer service, or lack of it, since this blog launched 10 years ago.

Clearly, some companies just don’t get the message.

One of our neighbors is having Anderson windows installed, to reduce heating and cooling bills.

Fair enough.

My wife decided to call Anderson, to get an idea of what it might cost to install their windows in our house.

But Anderson pretty much mishandled the call.

Rather than asking some probing questions about the nature of our installation, the Anderson inside salesperson started spouting all sorts of numbers about costs, without really knowing much about our installation.

And then offered to send a salesperson out to look at our planned installation. It would be a waste of time, because they didn’t establish a need on our part. We look at ROI, Anderson.

So, they succeeded in turning off my wife. And on house matters, she’s the decision maker.

Poorly played, Anderson.

And There’s NPR

When I did the last post, it occurred to me that I’d overlooked any new product or service revenue (NPR) that you might get in 2023.

The reason is simple: there are lots of steps to take to get to market, and at any point you might have to abandon the project, make product or service changes, find more financing, develop a new set of customers, etc. All of these take time, with an uncertain outcome.

You might also have to add personnel.

NRR and ENCR: Good Ways to Plan Sales

In the recent issue of CEO Magazine, there was an important article in the back or the magazine that has a useful tool in forecasting revenues for 2023.

So, if you’re still pondering your sales forecast for the rest of this year, read on. Otherwise, read on for next year, or midyear adjustments.

NRR is Net Revenue Retention, or the sales coming from customers that you had at the beginning of 2022.

ENCR is Earned New Customer Revenue, the revenue that you’d like to get from new customers in 2023.

Figuring these two out might give your bookeeper a headache, but it seems doable. We’re going to talk to our Solutions Forum members and see what they think about how easy it is split their revenues into the two buckets.

Other things, such as your promotion budget, flow from this revenue breakdown.

If you’re leaning on existing customers for the bulk of your 2023 revenues, you’re going to use ‘reminder’ promotions that you’re still here and you’d like their business.

On the other hand, if you’re tilting towards new customers that you don’t have yet, you may have to find out what media and people influence them to buy from you, tune up your Unique Selling Proposition and use promotional vehicles designed to attract new customers. Maybe add some sales reps, inside and out.

The two sets of promotional vehicles might not be the same, and the messages surely won’t be the same.

So, it’s one more thing to ponder, folks.