By Stephen Troy

In the late 20th century the name Charles R. Schwab, became synonymous with discount Stock trading. However, some 70 years before young Charles (Chuck)Schwab hit Wall Street, it was another Schwab, Charles M. who was making headlines. Charles M. Schwab (no relation) started his career at the Carnegie Steel Mills in the 1880’s. By 1897 Schwab had caught the eye of Andrew Carnegie and worked his way up the ladder becoming, at 35, the president of the largest steel company in America. It was he, as president of Carnegie Steel, that he arranged the secret sale of Carnegie steel to the famous banker, J.P. Morgan. The sale made Schwab one of the richest men in America.

Morgan was so impressed with young Schwab that he made him the president of the world’s first billion dollar corporation, U.S. Steel. The partnership between Morgan and Carnegie didn’t last long. Two years into running Morgan’s U.S. Steel Company, Schwab quit to create a rival company, Bethlehem Steel. It was here Schwab out-foxed America’s premier banker. It was Schwab’s little Bethlehem Steel that managed to get the patent rights to the “H”” Beam. This single invention ushered in the age of the skyscraper, making Bethlehem Steel one of America’s most successful companies, towering over the most revered banker of all times, J.P. Morgan.

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Stephen Troy

Author Business Biographies

By Stephen Troy

EXTRA, EXTRA read all about it. Henry Heinz bankrupt and arrested for fraud!  This sounds preposterous today, doesn’t it?  It’s not the type of headline you would expect to see about the owner of one of the most famous food brands in the world. After all, today in 2012, Heinz is an international brand known around the world for its great food products and dazzling success. Although H.J Heinz Company has been around for over 135 years, it was not Henry’s first company. Henry started out in the business world in 1869 opening another company, Heinz and Nobel, teaming up with a friend L. Clarence Nobel to make horseradish. Horseradish was a popular, but labor intensive product of the day. The young U.S. economy was expanding so quickly that Heinz and Nobel  found themselves riding the economic wave to riches, producing several other  time saving prepared foods for the over worked wary housewife.  Heinz and his partner’s early success helped them expand rapidly; opening warehouses in multiple cities to insure their products were close enough to their customers to insure freshness. Heinz and Noble took a novel approach in that day by even storing grocer’s own products in one of the nearby Heinz and Nobel warehouses so they could deliver at a moment’s notice. This practice ensured that stores shelves were stocked with only the finest and freshest of Heinz foods for the appreciative customer.

It was an amazing growth story for such a young company. Unfortunately it wasn’t to last. Just four short years after its founding Heinz and Nobel, with so much promise, Heinz and Nobel found itself smack in the middle of the panic of 1873. The bank panic of 1873 was a catastrophic event that ravaged the U.S. economy. Banks collapsed and closed, credit dried up, citizens lost their farms, houses and businesses.  The United States was brought to its knees. Eighteen thousand businesses failed and unemployment hit 15%. Families lost their farms, houses and jobs. Heinz and Nobel was no exception. With bank lending all dried up, and all their capital tied up in warehouses and merchandise, holding out as long as they could Heinz and Nobel found itself on the doorstep of bankruptcy as well.  By 1875 it was all over for Heinz and Nobel. The partners individually were both also headed towards personal bankruptcy. While Henry’s partners panicked and abandoned the company, Henry stayed to protect the merchandise of his customers from looting and foreclosure. Heinz didn’t want customer’s merchandise which they owned and he was only storing to get tied up with creditors looking for their money. Henry quickly went into action moving customer’s goods out of his warehouses to locations safely away from the hands of his creditors. Unfortunately for Henry, his customers didn’t see his true intentions. Panicking and convinced that Henry was running off with their product they called the police. Convinced Heinz was running, the merchants had Henry arrested for fraud. It took some fast talking, but Henry was eventually  released and was able to convince his customers that he was only trying to protect their goods, not abscond with them. Out of jail, but not out of debt, poor Henry was still forced into bankruptcy. He did however keep a detailed log of everyone he owed money to.  He wanted to make sure he could pay them back with interest when he was back on his feet. This was something he was able to do when he found lasting success with H.J. Heinz and Company in 1888.

The panic of 1873 finally came to an end in 1879.  Henry with his talents and his reputation for honesty and fairness in tack was ready to try again. This time it was going to be a family business with him having supreme control. With the help of his father, who had also gone bankrupt because of the panic, his brothers and other relatives, Henry started the now famous H.J. Heinz Company. Henry’s Company brought many improvements to the food industry.  H.J. Heinz was the first to automate with an assembly line years before another Henry, Henry Ford. Heinz was also the first to move factory production next to farms to insure his product was at the peak of freshness before going into jars and bottles;  and of course there was the clear glass jar. While others manufacturers used dark glass to hide their inferior goods, Henry insisted on clear jars for his products so the consumer could see its purity

There were to be more economic panics in Henry’s future, but this time he was prepared and in control. Oh, and if you are wondering what that famous 57 stands for, it’s his wife’s lucky number 5 and his lucky number 7.  The numbers had nothing to do with the actual number of varieties he had at the time. He copied the idea from a clever billboard he saw advertising 29 varieties of shoes. 

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Stephen Troy

Author Business Biographies

By Stephen Troy

Most of you probably know Aaron Burr. Statesman, Vice President, and Continental Soldier. He is most famous for killing Alexander Hamilton in a duel in 1804.  You might remember he was immortalized in a “Got Milk” commercial a few years ago.

Most people forget that our founding fathers were also great business man. Aaron Burr was no exception. His genius and rivalry with Alexander Hamilton gave us a very large and enduring financial institution.

Back in 1790’s Aaron Burr wanted to open a bank and compete with Mr. Hamilton’s Bank of New York. The problem Burr faced was Hamilton held a legal monopoly on banking in New York. Burr was not deterred. Through a loop hole that allowed utilities to take deposits and deploy capital Burr seized this opportunity to start the Manhattan Water Company to supply water to New York residence. The Manhattan Water Company quickly grew and after some time and lobbying by Burr, was allowed to convert to a bank.

Over the years the Manhattan water company became the Manhattan National Bank. Eventually it merged with the Chase National Bank to become the Chase Manhattan bank. You know it today under its new merged name JP Morgan Chase. This old old bank has never forgotten its roots.

If you look at your Chase credit card, your Chase checks or the front of a JP Morgan Chase Bank you will see an octagonal shape. That shape happens to be a drawing of a wooden water pipe. The kind they used in the 1790’s to transport water for Aaron Burrs Manhattan Water Company. 

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Stephen Troy

Author Business Biographies

By Stephen Troy

The name Woolworths is a corporate name that most likely is forgotten in history. That is unless you are over 40. Even then it’s a faint image of a simple dime store that seemed to lose its way. F.W. Woolworth Co. with its distinctive, red and gold store front closed its last store in the US in 1997. For over 100 years Woolworths and Franks retailing empire was a fixture in most every U.S. city in the nation. Their name recognition was as high if not higher then; Coke, Nike, McDonalds and Starbucks.

The story of Frank Woolworth and the Woolworth Empire began in a small hardware store in Watertown, NY. Frank was an eager stock clerk that had a talent for creating merchandise displays. It didn’t hurt that he was willing to work for free just to learn the business. Today its very common to display merchandise in an attractive manner before the customer. In Woolworths day it was unheard of. When customers wanted something it was the store clerk who would go behind the counter and get it. That method meant some merchandise didn’t move very quickly. To get rid of excess stock the store owner filled a table with interesting items and priced them for 5 cents. Within a day the table was empty to the delight of the store owner. This went on for weeks until the fad wore off. Never the less Frank was hooked on retailing. In particular 5 cent retailing.

Eventually Frank convinced his boss to sell him $300 of merchandise on credit. All of which could be sold for 5 cents and still make a handsome profit. With a full suitcase of wares he boarded a train to Utica NY to open his first store. With limited funds he rented a vacant shop on a side street  where he papered the windows while he set up inside. On opening day he did well. It was the subsequent days that sales continued to fall off until sales were barely a trickle. Utica wasn’t very impressed with young Franks method of selling. After little more than a year Frank had to admit his first store was a miserable  failure.

Frank boarded a train back to Watertown with the goods he had left and took his job back at the old hardware store. Like every other entrepreneur before and after he had the bug. It was only a few months  before he wanted to try again. Again with  a suitcase full of wares he boarded the train for the second time. This time he was headed to Lancaster Pennsylvania. This time he rented his shop on the main street in town. Frank was busy setting up and printing flyers and ad’s announcing a special kind of store. Even signs on the windows announced something exciting was to come. Frank spent days arranging the tables and decorating the windows. He was sure the idea of having the customer touch and select the merchandise for just 5 cents was going to be a hit this time. When opening day came there was a line at the door waiting to enter. By the day’s end young frank sold $121 worth of 5 cent items. This store was surly going to be a success. Frank found a successful formula. Good product at a value prices located on the main street of town. Where did you think WalMart got the idea?

It wasn’t long before frank opened more stores by recruiting his relatives and a few well picked partners. Everyone seemed to be clamoring for Franks wares. There was such demand that try as he might he just couldn’t hold prices at a nickel. To keep sales rising and offer a larger selection of items to his patrons, Frank added a 10 cent table to the stores. It wasn’t long before F.W Woolworths, also known as the five and dime, were everywhere.

When the store count reached 586 Frank felt the time was right to go public and sell stock. He liked to boast later in life that he created over 100 millionaires that day. In 1911 with his success secure and an enterprise spanning the globe he decided to build a world headquarters. Not just any building but the tallest building in the world. At a cost of 13.5 million dollars all paid in cash he completed the Woolworth building in Manhattan. It remained the tallest building in the world until the opening of the Chrysler building over 20 years later.

Not everything was rosy for Frank’s. His daughter who married Frank Hutton, the brother of EF Hutton, the senior partner in the famous stock brokerage company of the same name, was what we might call today BiPolar. Pushed over the edge by her husband overt affairs, she took her life. It was only a year later that Frank himself died of a tooth infection that could have been prevented had he not had a fear of dentist.

Franks estate went to his family. The large share that was to go to his daughter Edna was passed instead to her daughter Barbara..  They say money doesn’t buy happiness. Barbara was a poster child for that saying. After being ignored by her father she was bounced around to relatives , governess and boarding school. On her 18^th birthday while the rest of the world was standing in bread lines, Barbara held a million dollar coming out ball. The guests included, Vanderbilt’s, Rockefellers and Astor’s. On Barbara’s 21^st birthday  the “little miss rich girl’ as the tabloids named her, inherited at the height of the depression 50 million dollars. The equivalent of 1 billion today.

Barbra’s spent her money wildly living the life of a socialite jet setter. After a life filled with every luxury and buying herself out of 7 failed and somewhat abusive marriages she died with a little more then four thousand dollars in the bank. She was famously quoted as saying, “ I’ve never seen a Brinks Truck follow a hearse”.

And what’s left of Frank’s legacy. Over more than a hundred years of operating the Woolworth the company expanded into other businesses. One of their many acquisitions was a shoe store chain called Kinney shoes. You might still shop there. No longer will you find a Woolworth five and dime in every town across the country, you will find Kinney shoes under their new name Foot Locker in every mall in the America.  Now you know.

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Stephen Troy

Author Business Biographies

Herbert’s start in business was anything but smooth. The son of a prominent inventor and engineer Herbert was followed in his father’s footsteps as a young inventor himself. After graduating from Case University with a degree in Chemical engineering, Herbert set up his first company to experiment in finding new and better ways of extracting bromide from the brine water found underground in Canton Ohio and Midland Michigan. Unfortunately for Dow and his investors, his first try at running his own chemical company didn’t fare well. Slightly more than a year after opening Dow was forced to go bankrupt. Though all was not lost. His associates who work with him were so impressed with his work that they provided capital and help him start a new company, Midland Chemical, in Midland Michigan. Alias, even his new partners grew wiry of all of his research which produces only a thimble full of revenue. Failing to turn out salable products and create meaningful revenue his partners decided to change course and fired Dow. Dow wasn’t discouraged. He knew his research would one day pay big dividends.  

Returning to Ohio, It was his third try with the backing of family and old college friends that Herbert found success with The Dow Process Company. This time his process for extracting chemicals from brine water was getting results. Within three years Dow returned to Midland Michigan after renaming his company Dow Chemical and The Midland Chemical Company to get access to the rich brine deposits under his old plant.

Dow’s research and patents were paying off. The Dow Process for removing multiple chemicals from brine was allowing Dow the ability to manufacture bromide and important cheaper then imports.  Up to that time the Germans controlled a cartel and had a near monopoly on the sale and production of bromide. Dow’s new method was now threatening the German stranglehold on the worldwide market. Dow s process was now underselling the cartel in Europe and the United States.  Not able to convince Dow to raise prices, the Germans were determined to force Herbert out of the business.

Their plan was simple. Lower the price of bromide shipped to the United States until it was unprofitable for Dow to compete. Unfortunately for the cartel, Dow was quick on his feet. As the price of Bromide shipped into the United States slipped below Dows manufacturing costs he ordered his agents to quietly buy up all of the German bromide they could get their hands on. The lower the price dropped the more Dow was buying. Dow didn’t hold on to the Bromide for very long. As fast as the imports came in, Dow Chemical would repackaged it and ship it back to the European market.  Dow was now competing with the Germans in Europe by selling their own product back to them at a substantial profit to Dow. At first the Germans couldn’t understand what was driving the huge demand bromide in the states. They also couldn’t find out who was selling cheap bromide in Europe. They incorrectly accused members of their own cartel of violating the set fixed price of bromide.

 It was some time before the cartel realized that the cheap bromide flooding Germany was their very own product which they shipped to the United States. Dow had single handedly broken the cartel and made a handsome profit doing so. 

By Stephen Troy

Herbert’s start in business was anything but smooth. The son of a prominent inventor and engineer Herbert followed in his father’s footsteps as a young inventor himself. After graduating fromCaseUniversitywith a degree in Chemical Engineering, Herbert set up his first company to experiment in finding new and better ways of extracting Bromide from the brine water found underground in Canton Ohio and Midland Michigan. Unfortunately for Herbert and his investors, his first try at running his own chemical company didn’t fare well. Slightly more than a year after opening, Herbert was forced to go bankrupt. All was not lost. His associates who worked with him were so impressed with his work that they provided capital and help him start a new company, Midland Chemical, in Midland Michigan. Alas, even his new partners grew wiry of all of his research which produced only a thimble full of revenue. Failing to turn out saleable products and create meaningful revenue, his partners decided to change course and fired him. Herbert wasn’t discouraged. He knew his research would one day pay big dividends. 

Returning to Ohio, he gave building a chemical company another try. With the backing of family and old college friends, Herbert Henry Dow found success with his third company, The Dow Process Company. This time his process for extracting chemicals from brine water was getting results. Within three years of founding his third company they were profitable. Dow returned to Midland Michigan with the renamed Dow Chemical Company and bought his old business, Midland Chemical. Midland’s factory was sitting on top of vast rich deposits of brine, giving Dow access to the valuable highly concentrated brine.

Dow’s research and patents were paying off. The Dow Process for removing multiple chemicals from brine was allowing Dow the ability to manufacture and sell bromide cheaper than the cartel controlled supplies.  Up to that time the Germans controlled a cartel and had a government supported monopoly on the sale and production of Bromide. Dow’s new method was now threatening the German stranglehold on the worldwide market.  Dow’s process was underselling the cartel in Europe and the United States.  Not able to convince Dow to raise prices, the Germans were determined to force Herbert out of the business all together.

Their plan was simple. Lower the price of Bromide shipped to the United States until it was unprofitable for Dow to compete. Unfortunately for the cartel, Dow was quick on his feet. As the price of Bromide shipped into the United States slipped below Dow’s manufacturing costs he ordered his agents to quietly buy up all of the German Bromide they could get their hands on. The lower the price dropped the more Dow was buying. Dow didn’t hold on to the Bromide for very long. As fast as the imports came in, Dow Chemical would repackaged it and ship it back to the German market.  Dow was now competing with the Germans in Europe by selling their own product back to them at a substantial profit to Dow. At first the Germans couldn’t understand what was driving the huge demand of Bromide in the states. They also couldn’t find out who was selling cheap Bromide in Europe. They incorrectly accused members of their own cartel of violating the set fixed price of Bromide.

It was some time before the cartel realized that the cheap Bromide flooding Germany was their very own product which they had shipped to the United States. Dow had single handedly broken the cartel and made a handsome profit in doing so. 

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Stephen K. Troy 

Author – Business Biographies

By Stephen Troy

When gold was discovered at Sutter’s Mill in the winter of 1848, John Sutter the proprietor and founder of Sutter’s fort did everything in his power to keep the news quiet. Gold was discovered at Sutter’s Mill by John Marshall. Sutter had partnered with Marshall to build a saw mill on the south side of the American River. While excavating Marshall turned up large flakes of gold and quickly ran back to the fort to inform Sutter. Both agreed that if word got out about the discovery before they could secure title to the rest of the land miners would flood the area and disrupt Sutter’s plans for construction and farming.  

Those plans were dashed when a Mormon newspaperman and dry goods merchant named Samuel Brannan got wind of the discovery. Brannon was an early convert of Mormonism and a protégé of Joseph Smith and leader of the Mormon Church in New York before traveling to San Francisco in 1846.

Brannan had apprenticed as a printer and by some accounts, became a Mormon for the sole purpose of becoming the publisher of The Prophet, the Mormon newsletter. After the death of Joseph Smith in 1844 leaders of the church directed Brannan to lead 240 people west, travelling by sea. At the same time, Brigham Young lead the remaining followers west to California by land.  Brannan and pilgrims boarded the ship Brooklyn leaving New York in February 1846 for a six month journey which would take them around Cape Horn. The first stop was in Honolulu. It took a while longer before Brannan and the others would finally disembark at the Mexican Port town of Buena Vista, known today as San Francisco.

The arrival of Brannan and the 240 Mormon settlers tripled the population of this small Mexican city on the bay. Brannan was charged with setting up the first Mormon outpost in this new city. He eventually established a religious settlement to the east along the American River on what they would call Mormon Island.  An ambitious Brannan lost no time building a flour mill on the island, along with the first English speaking newspaper in San Francisco.  The California Star utilized a Franklyn printing press and the flour mill he had brought from New York. He then, along with the others, waited for the arrival of Brigham Young to California by land.

As Brigham Young and his 15,000 followers got ever closer to California in early 1847, Brannan rode out to meet him at Green River, Wyoming, with the idea of convincing Young to settle in San Francisco. Young however dismissed the idea of going to California, deciding instead to turn south to a desolate area of Utah where he would establish a settlement near the Great Salt Lake. Young feared that the abundant fertile land of California would eventually attract too many settlers to the area, again disrupting his followers, forcing them to move once again.

Brannan returned to San Francisco and opened what would be his first dry goods store. A year later in 1848 Brannan noticed that employees, many who were Mormon were coming into his store paying for supplies with gold. Curious and representing the church Brannan traveled out to Sutter’s Mill to see firsthand where the gold was coming from.

After seeing firsthand his Mormon followers finding as much as $250 in gold a day, Brannan ordered his Mormon followers to pay him, as head of the Mormon Church, a ten percent tithing on all of the gold they found in the ground. The extra gold Brannan received was spent buying up every shovel, pick, pan, horse, mule and other mining supplies he could find in California. He also opened additional stores in Sacramento and at Sutter’s Fort. When he was convinced he had secured every available item he filled a quinine bottle with gold dust extracted from the American River and traveled back to San Francisco. As Brannan stepped off the Ferry he waived the bottle in the air and run through the streets yelling “Gold, Gold, Gold from the American River”. Brannan himself had to print the news of the gold find in his own paper, since even his employees had abandoned their jobs heading to the mountains with gold fever.

The price of mining supplies increased a hundred fold or more. By 1849 most of his dry goods stores were doing well over $5,000 each a day, (equivalent to $125,000 in today’s dollars). Brannan was on his way to becoming the richest man in California. Brannan used his new found wealth to buy large tracks of land throughout California and Hawaii. At one point becoming San Francisco’s largest land owner, owning twenty percent of all available land in the city. He owned a like amount in Sacramento.

It wasn’t long before Brannan received a message from Brigham Young asking for the churches money. As Brigham Young saw it, Brannan had use Church money to enrich himself and the money rightfully belonged to the Lord. Brannan is reported to have responded back to Young saying, “I’ll give up the lord’s money, as soon as he sends me a signed receipt by the lord.” Brannan was shortly thereafter excommunicated from the church.

Brannan continued to invest and spend his vast new wealth on banks, railroads, telegraph companies and even establishing towns. When Brannan visited the hot springs in upper Napa valley he bought the 2,000 surrounding acres to build a resort. He announced that he was going to build the famous New York Saratoga Springs right here in California. In his excitement instead of saying I will make this the Saratoga of California he mistakenly utters I will make this the Calistoga Sarifornia. Thus he created the town of Calistoga.

Brannan abandoned his Mormon roots rather quickly after being thrown out of the church. Gambling, womanizing, and drinking he got into many drunken brawls. In one with his employees he was shot eight times. Although he nearly bled to death, he did manage to survive. It was the last straw for Ann Eliza Brannan, his wife of twenty five years. Filing for divorce in 1870 the court awarded her half of her husband’s fortune payable in cash. Since most of Brannan’s wealth was tied up in real estate and other property Brannan was forced to liquidate his holdings at a low point in the California economy.

Although both left the marriage millionaires Brannan keep gambling his wealth in unprofitable ventures trying to ignite is old glory days in business. By 1887 Brannan was a broken man living in Arizona and selling pencils trying to earn enough money to travel back to San Francisco. Brannan died in 1889 while living on a fruit farm just outside of San Diego, California, leaving just a few dollars to each of his children.

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Stephen K. Troy 

Author – Business Biographies

By Stephen Troy

At the turn of the 19^th century, major wealth was being accumulated by such great men as Morgan, Carnegie, Astor, Guggenheim, Vanderbilt and many others. These men controlled the financial wealth of a nation and many times did so by manipulating stocks and bonds. Or did they?

One name absent from almost everyone’s list was Hetty Green.
Hetty was well known by her male peers as “The Witch of Wall Street.” She was a miserly woman who dared to play in an all male game. In fact her large cash war chest and cunning brought many of these same men close to financial ruin. Hetty’s knack for figures and her keen eye helped her build a fortune estimated at over $100,000,000 ($2 billion in today’s dollars). Her estate was almost double that of the great financer, JP Morgan. Hetty loaned money, several times bailing out New York City with million dollar loans, controlled railroads (enabling her to rob the robber barons), invested in Real Estate as far away as Texas and of course manipulated stocks and bonds.

Hetty was different than the famous families of the gilded age. Hetty got her enjoyment from making and saving money, not spending it. She wore plain black dresses until they wore out, used carriages until they fell apart, and moved regularly to keep the local taxman at bay.  At one point she brought her only son Ned to a free clinic for treatment of a leg infection and herself suffered in pain for years due to a hernia, because she refused to spend the $150 for an operation.

As frugal and conservative as Hetty was, her son was not. Shortly before Hetty’s death in 1916, Ned moved to Texas to manage the family properties. To Hetty’s disapproval Ned returned with an ex-prostitute who he employed as his housekeeper, before eventually marrying her.  Ned’s inheritance after his mother’s death would eventually allow him and his new bride to live the lifestyle of the rich. Even Ned’s spendthrift ways couldn’t deplete Hettys legacy. Upon his death Ned’s $100,000,000 inheritance passed to his sister Sylvia. Sylvia died in 1951, still with the original $100,000,000 Hetty had left behind. This time the taxman would be the big beneficiary of Hetty’s money, taking over half. The balance was left to 64 different charities, thus closing the last chapter in the life of the richest woman in the world.

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Stephen Troy

Author Business Biographies

At the turn of the 19^th century, major wealth was being accumulated by such great men as Morgan, Carnegie, Astor, Guggenheim, Vanderbilt and many others. These men controlled the financial wealth of a nation and many times did so by manipulating stocks and bonds. Or did they?

One name absent from almost everyone’s list was Hetty Green.
Hetty was well known by her male peers as “The Witch of Wall Street.” She was a miserly woman who dared to play in an all male game. In fact her large cash war chest and cunning brought many of these same men close to financial ruin. Hetty’s knack for figures and her keen eye helped her build a fortune estimated at over $100,000,000 ($2 billion in today’s dollars). Her estate was almost double that of the great financer, JP Morgan. Hetty loaned money, several times bailing out New York City with million dollar loans, controlled railroads (enabling her to rob the robber barons), invested in Real Estate as far away as Texas and of course manipulated stocks and bonds.

Hetty was different than the famous families of the gilded age. Hetty got her enjoyment from making and saving money, not spending it. She wore plain black dresses until they wore out, used carriages until they fell apart, and moved regularly to keep the local taxman at bay.  At one point she brought her only son Ned to a free clinic for treatment of a leg infection and herself suffered in pain for years due to a hernia, because she refused to spend the $150 for an operation.

As frugal and conservative as Hetty was, her son was not. Shortly before Hetty’s death in 1916, Ned moved to Texas to manage the family properties. To Hetty’s disapproval Ned returned with an ex-prostitute who he employed as his housekeeper, before eventually marrying her.  Ned’s inheritance after his mother’s death would eventually allow him and his new bride to live the lifestyle of the rich. Even Ned’s spendthrift ways couldn’t deplete Hettys legacy. Upon his death Ned’s $100,000,000 inheritance passed to his sister Sylvia. Sylvia died in 1951, still with the original $100,000,000 Hetty had left behind. This time the taxman would be the big beneficiary of Hetty’s money, taking over half. The balance was left to 64 different charities, thus closing the last chapter in the life of the richest woman in the world.

—

Stephen Troy

Author Business Biographies

The most common cash flow problem occurs because customers exceed their credit terms and take longer to pay. Companies routinely give customers 30 days to pay their bills, but due to economic conditions, some clients may stretch their payment terms to 60 days. If a company has to wait almost two months to receive payment for invoices, it needs to find funds to meet current expenses. Usually, these payments are generated from reserves which are replenished by paid invoices. Problems start when reserves dwindle as expenses mount.

Two ways exist to protect reserves. One approach is to delay the company’s expenses until they match the payment cycle of the business’s customers. The other is to attempt to accelerate customer payments. Ideally, both approaches should be taken to achieve the most optimal solution.

The most common way to delay expenses is to contact vendors and ask for extended terms. If your company has been a loyal and timely payer, your request should be granted. However, if you do renegotiate payment terms, assure that all future payments are made on time. Do not risk your vendor relationship or you may be forced to pay COD for your goods or look elsewhere for new vendors. Avoid missing payroll and payroll taxes. If these situations are imminent, seek the help of a qualified advisor.

There are two easy ways to accelerate the payment of invoices. Offer customers a discount to pay quickly. The “2%/10″ is an industry standard that allows customers to take a 2% discount if they pay an invoice within 10 days. If this approach is not sufficient to solve a cash flow shortage, consider the process of factoring. Invoice factoring accelerates your revenues by using a financial intermediary to advance funds against outstanding invoices. The factoring company quickly sends you a large percentage of an outstanding invoice and settles the transaction with your company once the customer has paid in full. The factoring fee is based on volume, credit quality, and invoice age among other variables.

Factoring is easier to obtain than conventional business receivable financing, but it is more costly. It is important that your company has quality receivables from credit worthy customers. Factoring can work well if a company has small cash reserves but large receivables, again from high quality customers.

Most cash flow shortages require a comprehensive strategy to manage both income and expenses to ensure liquidity. Factoring is a good tool which can help accomplish this goal.

Article source: http://www.aerofund.com/blog/index.php/2011/05/alleviate-cash-flow-shortage-invoice-factoring/