Economy and Capitalism

"Liberty is a necessary ingredient of prosperity." these words from Walter Williams in a recent editorial ring true as we watch many of the Middle Eastern countries unravel. Having a large market sector and private property rights are what allow people (entrepreneurs) to translate their skills into money. Without private property rights they have no way to leverage their property as collateral, to obtain investment capital or secure long term contractual deals. Thus any business without these rights remains small. Contrast that with the US and our free society, private property rights and free markets. Many of the more Socialistic Middle Eastern countries with state intervention, planning and weak or no private property rights wonder why their citizens aren't more entrepreneurial and why they can't build a more robust economy. The answer is freedom and liberty. People will generally pursue a better life, produce something of value or work for someone who does and lift themselves out of poverty if they are allowed to. Many citizens from these countries have come to the US with little or nothing and have been very successful. Something to think about.

The Good Idea and Good Resources Business Plan Workbook

I just saw this book by Richard E Hall "The Good Idea and Good Resources Business Plan Workbook". In a weak economy many unemployed decide to tackle their own business and the tools and skills needed are laid out in this book. Simply stated, a good business consists of a good idea and good resources. There are six elements of the Good Idea 1) Products or Services 2) Customer Profiles 3) Competition 4) Differentiation 5) Advertising and 6) Sales. There are 6 elements of Good Resources 1) Ownership 2) Financial Model 3) Staffing 4) Funding 5) Facilities and 6) Balance Sheet. Together these 12 elements create the business model and by thinking through each of them you can develop a comprehensive business plan.
The author does this with worksheets for each of the twelve steps and as you follow each you develop a business model and each worksheet can be transferred directly to the Business Plan as appropriate. This is a "Learn and Apply" book. As you learn each step you apply the information to your specific business in the worksheet and untimately produce the desired end product, the business concept and the business plan.
The author is an entrepreneur, has written books and given seminars on business planning as well as how to write a business plan. This process is simple but comprehensive and is a great exercise for the budding entrepreneur as well as the small businessman who wants to look at his business objectively with the purpose of growing and expanding.
BTW the local Score Chapter in conjuction with the WVSBDC will be doing a seminar on this book in Parkersburg, WV in May and in Glenville, WV in June.

Gas Drilling and Jobs

Marcellus Shale Gas Drilling is in the news every day. The Marcellus Shale runs through West Virginia, Pennsylvania, New York and parts of Ohio and Maryland. The latest rants in the press have been about out of towners taking "our" jobs since many of the oil field workers come from TX and OK. Should we fault an out of work oil worker for coming to where the jobs are? Should we expect the drilling rig owners to turn over a $3M piece of equipment to someone who doesn't have the training or skill to operate it. On any given drill site there are about 150 different people who have been involved. From the gas company geologist, to the landman and attorney who negotiated the lease to the site preparation crews cutting trees and laying in roads and the truckers who haul in the heavy equipment, the stone for the road, the office trailers, port-a-potties, drill pipe, lights and generators and finally the drilling rig. Then there are the roustabouts, the laborers that set it all up. Once they are ready to drill there is a steady stream of people coming and going. There are the crews that build the water pit for the eventual fracking. There is the mud guy who delivers and mixes the drilling mud. Crews line the site with 24 mil plastic sheeting so any spill does not leak into the environment. There are bolting crews who build and test the BOP stack (Blow Out Preventer), valves delivered and set up to contain the drilling and eventually the gas. Finally the drillers start drilling.
About half of the jobs require little training or experience. Many of the downstream contractors hire and train their own people for the specialized work that they do. There are companies that build and repair valves and other pressure control equipment. Companies that specialize in hauling all manner of equipment and supplies, fuel companies who fuel all these trucks. Even bulldozer driver who pull many of these trucks onto the site. Then there are the cement crews who cement in the casing before fracking and all the fracking crews.
All in all there are hundreds of jobs and most of the people I talk to want people who will show up on time, work hard and learn and get dirty. After that the gas companies, the drilling companies, the fracking companies will train you. Yeh, there are some specialized skills needed like welding or heavy equipment operator but by and large anyone with a high school diploma and the ability to work hard can get a job that pays $50k per year easily.
Let's stop with the noise about out of state workers and concentrate on how we can find these companies the employees they need.

Marcellus Shale and NIMBY

Since much of my income last year was derived from the Marcellus Shale and the companies who are working it I have found some interesting commentary and would like to share. First, to understand the issues I educated myself on the drilling and the follow up procedures to actually producing the gas. Second, as a vendor I talk with many of the players and visit the drill sites and third I read the news reports and commentary.
Many of the news articles are reiterations of other articles and talking points from the people who are against drilling of any kind and they use the same terms and the same disputed information and the same scare tactics about contaminated water wells, inflammable water, damaged roads etc. To be clear, there is some potential for water contamination in the water table during drilling. However, drillers are very aware of that and as soon as they drill below the water table, they stop, case the well in steel pipe and cement this pipe to the formation previously drilled through. This is done so that subsequent drilling CANNOT expose the groundwater to drilling chemicals or fracking fluids. Watch the video here http://www.api.org/policy/exploration/hydraulicfracturing/hydraulicfracturing.cfm
Since many of the news articles give the same information, it is apparent to me that they haven't taken the time to understand the process and the people who are the most vocal are NOT the people who own the mineral rights to the gas. As for the road damage these guys don't want to pay for a $150,000 truck over the hill or the wrecker to pull it out. Most of the roads they travel on end up being better when they are done because they up grade the road as the go. Nothing is without risk and if we ever want to see independence from foreign oil we have to exploit this resource. We can and will do it safely and provide energy to many future generations.

Winter Storm

As I sit here watching the weather channel and the big winter storm coming across the midwest I am reminded that Spring is coming and my bike tires are probably flat. In addition, my knee still hurts from a twist I got at the beach and I am really in sad shape. However, my biking goal this year is 1000 miles give or take. My legs need it, my heart needs it, my peace of mind needs it. Riding a bicycle gives me a chance to slow down even while my heart speeds up. I can see the birds and appreciate the quiet and simplicity of nature. I tend to ride alone and out in the country so I can hear the quiet and not the 18 wheelers trying to blow me off the road and see the birds and not the glass and trash I have to watch out for on the highway. Last year's road rash scars have faded, I have a new riding shirt I need to get into. I guess the exercise bike will have to do for now so I can do the long ride when the sun comes out. Until Spring...