Bits of wisdom

Two little gems for your consideration:

"Don't spend 90% of your time on things that produce 10% of your income."

"Never tell a client you can't do something for him, otherwise next time he'll try to do it himself and won't call you."

Small Businesses Brace for Tax Battle

For your information from the Washington Post:

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/26/AR2009042602838.html?hpid=topnews

Appropriate Compensation

The following article appeared in Winter 2003 edition of The Consultant

Appropriate Compensation for the Consultant

By Harry V. Wiant, Jr. and Dr. John R. Brooks

The appropriate compensation for consulting is a delicate subject, but one of utmost interest to both the consultant and the client. Poor decisions made on this issue can easily lead to serious consequences for the consultant, including loss of business and eventual failure of the consulting enterprise, if not worse.

There are obviously two extremes, charging too little or charging too much. Surprisingly, foresters have a built-in tendency to error at the first extreme. Historically, foresters have not earned high salaries, and as a result they do not appreciate the uniqueness and value of their knowledge. To illustrate this, give the average non-forester a d-tape and a map and ask him to inventory a 100-acre tract of timber! Yet, this is not a great challenge for the average forester.

Compensation Considerations

The consulting forester has at least 4 years of college education and is expected to continue that education through short-courses and professional meetings. Business-related taxes must be paid, there are professional dues, office expenses, even if it is a home office, and other business-related expenses (health insurance and vehicle use, for example) that must be included in a reasonable fee schedule. One contentious aspect involves professionals who provide consulting services on a part-time basis. In many cases, the office and vehicle expenses are not included as overhead costs and thus provide an avenue for underbidding the competition. This poses some ethical issues concerning just compensation and is a topic normally addressed by professional organizations such as the Association of Consulting Foresters.

A logical step-by-step approach is:

Ascertain the yearly salary that seems appropriate in view of your education, experience, and expertise. We will use $50,000 as an example. Any business should show some profit, which may be reinvested, above expenses and salaries. Assume yours is a one-person operation, and a 10% return is acceptable. The figure is now 50,000 + 0.1 x 50,000 = 55,000
You have health insurance, retirement investment, and office expenses. This could easily be $25,000 per year. (55,000+25,000 = 80,000)

The number of billable days per year will probably be between 100 to 200, closer to the lower figure when beginning your business. Assume 150 days. A reasonable daily rate in this example is 80,000/150 = $533.

Some consulting will be billed on an hourly rate; simply use the usual daily rate divided by 8. Keeping a fair account of the number of hours spent on a project can be somewhat perplexing, as there will be interruptions in your work. Some attorneys keep hours to the nearest quarter-hour, which is workable if not considered a bit excessive.

Charging a percentage of the amount a timber sale brings (often 10%) when working for a client is common and, frankly, the most lucrative for many consultants. This approach is often criticized as leading consultants to recommend cutting stands too heavily in order to increase their "take". The argument can be made that the timber sale provides a period of cash flow for smaller clients who normally could not or would not invest in timber management services. Frequently, this income is used to offset the cost of previous or future management activities. Also, this approach encourages the consultant to obtain the best price possible for the client. In the final analysis, this is an ethical decision which will affect the long-term reputation and income of the consultant.

It is generally recommended that compensation rates be fixed and not adjusting depending on the client. However, when a consultant must put their reputation and expertise on the line in legal cases, a higher than usual rate is not unreasonable. One consultant charges twice the daily rate for any day or part of a day spent in court and has not had difficulty with this policy.

Invoicing

Undoubtedly, most consultants would prefer to have some portion of the amount they expect to receive for a job paid up front. This, however, makes many clients uneasy. A more palatable approach is to bill at intervals as the work progresses. Before work begins, a one-page document describing the work you plan to do for the client and signed by both parties is usually sufficient to guarantee payment. An invoice should include the addresses of both parties, a description of the work completed with dates, days or hours being billed other expenses billed and the total to be paid with, perhaps, a penalty for payment late by 30 days.

Problems

Problems will arise, and the best one can hope is that they can be minimized. A business-like approach, honest dealing on the part of the consultant, and a clear written understanding of the services the consultant will provide will preclude most problems. If a client refuses to pay, legal steps may be required, but those cases are rare. Invoicing at intervals for long-term jobs will help minimize loss from the rare dishonest client.


This article is one of a series we plan to include in a book we are writing, The Consulting Forester. Readers are encouraged to send us comments and suggestions for improvements.

HARRY V. WIANT, JR.
lbberson Chair Forest Resources Mgt.
PSU School of Forest Resources
212 Ferguson Building
University Park PA 16802
email: hvw3@psu.edu and

DR. JOHN R. BROOKS
Associate Professor Forest Biometrics
West Virginia University
Division of Forestry
P.O. Box 6125
Morgantown. WV 26506-6125
jrbrooks@mail. wvu.edu

Steps to a better chapter (and a better life)

Ten Commandments of Human Relations

1. Speak to people. There is nothing so nice as a cheerful word of greeting.
2. Smile at people. It takes 72 muscles to frown, only 14 to smile.
3. Call people by name. The sweetest music to anyone’s ears is the sound of his own name.
4. Be friendly and helpful. If you want friends, you must be one.
5. Be cordial. Speak and act as if everything you do is a joy to you.
6. Be genuinely interested in people. You can like almost everybody if you try.
7. Be generous with praise and cautious with criticism.
8. Be considerate with the feelings of others. There are usually three sides to a controversy—yours, the other fellow's and the right side.
9. Be eager to lend a helping hand. Often it is appreciated more than you know. What counts most in life is what we do for others.
10. Add to this a good sense of humor, a huge dose of patience and a dash of humility. This combination will open many doors and the rewards will be enormous.

Get in the Game with ACF

From the National Wild Turkey Federation's
Get In The Game
Spring & Summer 2009
Tree TALK

ENHANCE TIMBER AND WILDLIFE WITH ACF!

By Lynn Wilson, ACF Executive Director

If you own timberland and like to hunt, chances are you want to maximize your timber growth while enhancing wildlife habitat. Whether your goal is managing for timber sale income, hunting, underlying land value, recreational use, aesthetics, or all of the above, the best way to achieve success is to employ a qualified consulting forester.

What is a Consulting Forester?

Consulting foresters are educated, independent professionals who represent the best interests of their clients. They do not buy timber or have any other conflict of interest. The typical consulting practice offers comprehensive forest management services and charges a fee based on time and expenses for services rendered. A consulting forester is your “expert-for-hire” for forestry advice, just like your doctor provides you medical advice, your lawyer, legal advice and a CPA advises you on taxes.

Why Hire a Consulting Forester?

Because professional consulting foresters owe allegiance to their clients and not a timber buyer nor anyone else, they are able to assist landowners in achieving their objectives, especially when selling timber for a fair market price. This is particularly important because, according to Dr. Carlyle Franklin of the Association of Conservation Foresters (ACF), “more potential income to forest landowners is lost through poor marketing of stumpage than through fire, diseases, insects and storms combined.” In addition to helping you get the best value for your timber, a consulting forester can help you plan for a sustainable timber harvest that will protect your family’s forest legacy. In fact, university research has shown that landowners using professional forestry advice receive on average 28 percent higher income from timber sales and, following a final harvest, have future timber stands that are 120 percent more productive!

Selecting a Consulting Forester

Working in the woods doesn’t necessarily mean that someone is a forester. When hiring any consultant—forester, doctor, lawyer or CPA—the first two questions you need to ask them are “What’s your educational background?” and “How long have you been practicing?” Other important questions are “Do you have professional liability insurance?” and “Do you have a conflict of interest?”

When you employ foresters with the initials ACF after their name, you know that you are hiring individuals who can give you satisfactory answers to your questions. Founded in 1948, the Association of Consulting Foresters was chartered by five individuals who believed that “it was in the public interest to establish minimum professional and ethical standards.” After more than 60 years, the rules formulated in 1948 have been strengthened but have remained essentially the same. In addition to a forestry degree from an approved university curriculum, members must have at least five years practical forestry experience and no economic interest in a timber purchasing or procurement entity. All ACF members are professional foresters who are governed by a strict code of ethics and whose principal activity is providing consulting services to the general public on a fee or contract basis.

Now, back to managing forestland for wildlife. There are simple things that a consulting forester can recommend that will make a big difference. In fact, a well-managed forest is a virtual wildlife sanctuary.

Stephen Whitfield of the ACF recommends, “If wildlife is important to you, consider leaving a wider-than required stream buffer when planning a harvest. Also, think about opening up the forest canopy along the edge of roads, called daylighting, to encourage growth of seeding grasses and legumes.”

In addition, your consulting forester can help you enhance habitat for wildlife with a forest management plan that includes practices like controlled burning, appropriate thinning, brush control and protecting mast-producing trees like oaks and hickories. Since wildlife is sensitive to disturbance, your consultant can also see to it that management activities are properly and carefully executed. Moreover, when specialized wildlife habitat management advice is needed that is beyond your ACF consulting forester’s expertise (from a wildlife biologist, for example), they are ethically obligated to, “engage, or advise their clients or employers to engage, other experts and specialists in forestry and related fields whenever the clients’ or employers’ interest would be best served.” These are just a few things your ACF consultant can do to help you enhance your turkey habitat. And remember, wildlife not only benefits from good forest management . . . landowners do too!

For more information on how the services of an ACF consulting forester can help enhance your total forest resource, call (888) 540-8733 or use the “Find an ACF Forester” feature at www.acf-foresters.org.

Torre- what?

Ever heard of torrefaction? Check this link:

http://www.forest2market.com/opencms/opencms/f2m/newsletters/story/2009_Apr_Torrefaction

Components of an Active, Respected, Beneficial ACF Chapter

For your consideration, here are a few suggestions for building your Chapter with better meetings...

- Have a minimum of 2 regularly scheduled meetings per year.

- Each meeting should be one full day or more and should not be held in conjunction with other meetings.

- Have the meetings at a location selected, arranged, and paid for by ACF and not at a facility belonging to the state or federal government, a university, or private industry.

- Have a segment at each meeting devoted to continuing education, tailored for consulting foresters. Arrange for the appropriate continuing education credits.

- State, federal, university, and industry officials should be invited guests, as needed, and should not become regular fixtures.

- Invite in writing, to each meeting, non-ACF consulting foresters who would make desirable ACF members.

- Meetings should deal head-on with current problems, but should keep a balance between positive and constructive topics, education, and problem solving.