SALES AND USE TAX—Energy Star sales tax holiday

The Texas Comptroller has issued a publication explaining the Energy Star sales tax holiday that will take place on Memorial Day weekend, from 12:01 a.m. on Saturday, May 24, through 11:59 p.m. on Monday, May 26 (Memorial Day). The products qualifying for the exemption are air conditioners priced under $6,000 (room and central units), clothes washers (but not clothes dryers), ceiling fans, dehumidifiers, dishwashers, light bulbs (incandescent and fluorescent), programmable thermostats, and refrigerators priced under $2,000.

Qualifying products will display the Energy Star logo, which may appear on the appliance, the packaging or the Energy Guide label. There is no limit on the number of qualifying items one can purchase during this sales tax holiday, and an exemption certificate is not required.

The tax-free holiday also applies to the following: specified catalog and Internet sales; layaways; delivery, shipping, handling or transportation charges connected to the sale of a qualifying item purchased tax-free during the sales tax holiday; and, installation charges for a free-standing or mobile qualifying item purchased during the sales tax holiday that retains its identity as tangible personal property after installation.

Texas Tax Publication 98–836, Energy Star Sales Tax Holiday, 01/01/2008

The Caveman Returns

Sorry that I have sort-of abandoned this blog...going to make this a priority in 2008.

Startup Houston

I am now going to be a regular contributor to the blog Startup Houston along with Kurt Stoll. Kurt and I share a vision of creating a forum for local entrepreneurs to discuss issues and thoughts that come up as they look to start new ventures. Take a look and let me know what topics we should be covering.

The Funded

Check out the new site. It is attempting to be a giant repository for feedback on all types of business funding for entrepreneurs.

The Importance of Planning

I still am amazed at the amount of companies that I encounter that operate without any sort of business planning whatsoever. There are many types of business planning activities that a company should spend time on:

1. Marketing plan: what do you sell and to whom do you market toward? This is rudimentary analysis and modeling that is a must...how can you expect long term value creation of you do not even know your market? I recommend the work of Geraldine Fennell as a primer for creating a good marketing plan (Fennell, Geraldine, and Greg M. Allenby (2003) "Market Definition: A Strategic Task,"Marketing Research, 15,2, 32-37.)
2. Pricing analysis: what type of pricing strategy should you employ that addresses both tactical and strategic objectives? What are the economics of your product or service. There is a great article from back in the day entitled "Beyond the Many Faces of Price: An Integration of Pricing Strategies" by Gerard J. Tellis, Journal of Marketing, Vol. 50, No. 4 (Oct., 1986), pp. 146-160 (here is a link to the article on JSTOR.) Remember, pricing is both a financial and marketing function that is both tactical and strategic.
   
3. Financial modeling: given a set of assumptions, how much capital will the business consume or create over an extended period of time? Every decision we make in life is based on risk and return...yet many in business do not take this process to a more structured level. I have seen more business models fail because they outgrow their capital base as opposed to bankruptcy or lack of sales.

Whenever the question of planning comes up, I almost always hear that it is postponed because of a lack of time to spend on it or inexperience in going through the process. Sometimes business leaders will point to a budget that they are held accountable to but rarely understand how it was prepared. I am personally not a fan of budgets as they are limiting and tend to be a waste of time. My position is to focus on rolling forecasts that are driven from the bottom up and sail accordingly (here is a link to a webcast from last year that talks more about implementing rolling forecasts.)

I will try and spend more time on future posts on planning and the issues and opportunities that can be created from them.

Is this it for Vonage?

Judge blocks Vonage from adding new customers

Vonage Holdings Corp. cannot add new customers while it appeals a finding that it infringed Verizon Communications Inc. patents for making phone calls over the Internet, a federal judge ruled on Friday.

I wouldn't worry if you use this service for your business just yet, but you may want to consider an alternative in the long run. It would not surprise me if they are not also dancing in the halls of AT&T right now as well.

Who thinks we need an overhaul of our intellectual property and antitrust laws?

Loans-a-Plenty

Referring back to a recent post, here are some talking points about the market frenzy in how aggressive lenders have been recently:

• Corporate liquidity is at record levels;
• Interest rates continue to remain low; and
  
• Default rates are at record lows.

In reading several articles (none of which I will quote since they require me to pay for licensing and I am a cheap bastard), the following observations have been made:

• leverage multiples are up tremendously;
• covenant-less loans are appearing more often; and
• risk premiums have all but disappeared.

If this doesn't indicate a pullback soon, I don't know what will. It's incredible how quickly we forget the past cycles and claim that "the world is different." My advice, get the deals while these lenders have appetites bigger than their stomachs but make sure you have alternatives to support you if things go south.