7 Tools to Streamline Your Business Operations

When you’re running your own business, every minute is valuable. You can’t afford to waste any time. But with so much on your plate and limited hours in the day, how do you make sure everything gets done – and done right?

The success of your business depends on your business operations. In his autobiography, “Iacocca,” business leader Lee Iacocca writes, “In the end, all business operations can be reduced to three words: people, product, and profits.” You need to keep all three organized and running smoothly for your business to operate effectively.

With the help of a few tools and technologies, it’s easier than ever to run your business with efficiency. And with operations under control and moving things along, you’ll be able to spend more time focusing on running your business – and boosting your bottom line.

Here are the seven tools you need to improve your business operations.

1. Trello

In her book, “The Outstanding Organization,” business consultant Karen Martin writes, “Chaos is the enemy of any organization that strives to be outstanding.” To combat that chaos, a project management tool such as Trello is necessary.

Trello allows you to organize and manage an entire project from start to finish. You create cards for each task needed and assign those cards to the task owner. You can assign deadlines, add comments and track progress as each card moves through to completion.

2. Slack

You could have a million business operations tools, but without open communication among your team, you’re going to have problems. Slack offers a user-friendly online chat that helps teams stay in contact all day – no matter where they are.

In Slack, you can create conversation threads on a specific topic, so when you’re working on a project, all the communication about that project will be in one place. This way, it’s easy to collaborate and make decisions quickly.

3. PandaDoc

Paperwork is a tedious part of business, and with so much going digital, it’s a hassle to still rely on paper for things like contracts, proposals and quotes. By using a document management software like PandaDoc, you won’t need to print and scan in documents. Instead, everything is handled digitally.

The tool allows you to create, send and track documents – all in one place. It also has the option of e-signatures. With everything streamlined in one tool, the time you spend on documents is greatly reduced, freeing you up for other important business tasks.

4. Freshbooks

According to a survey by the National Association of Small Businesses, the number one challenge of running a business is economic uncertainty. Managing finances can be stressful, especially if you’re doing it all on your own.

Freshbooks offers an easy and simplified system for managing your finances. You can track your expenses, send invoices and manage your books with minimal effort. Accounting is fast and secure, giving you more time to devote to other areas of your business.

5. ZenDesk

Customer service is a hot topic for businesses lately, and those that do it well are seeing abundant benefits. On Twitter, customer service expert Shep Hyken writes, “Make every interaction count, even the small ones. They are all relevant.”

ZenDesk is a help desk solution that will ensure your customers are satisfied with each interaction with your business. The tool allows you to connect with customers from anywhere – email, social, chat and phone – all from one dashboard.

6. Calendly

As the head of your business, your schedule is probably pretty packed. So scheduling any new meetings or phone calls in your already-busy schedule can be a pain. On his blog, Seth Godin writes, “You don’t need more time. You just need to decide.”

Calendly makes scheduling meetings and appointments easy by allowing you to coordinate schedules and avoid going back and forth over email trying to find a time that works.

7. MailChimp

When you’re looking to send a mass email, your typical email service provider, such as Gmail or Outlook, can only do so much. You need a marketing automation tool like MailChimp to better connect with your email list.

MailChimp allows you to create professional-looking emails, send them to your contacts and track your campaigns. You can also set up automated emails, which will save you the hassle of remembering to send. You just create and organize the campaign once, and MailChimp does the rest. Then, you can come back and gather data on how successful the campaign was.

What tools do you use to keep your business running smoothly? Let me know in the comments below:

Here Are 3 Things That Perpetuate Dishonesty, and 3 Ways to Thwart It

It’s a dog-eat-dog world out there. In the race to make it to the top, some values often get dropped along the way. Among these stands out one; namely, honesty.

Car salesmen. Stock investors. Overzealous entrepreneurs. We all know the cliches, and we’ve all heard the stories of scams and cover-ups.

But what is it that drives people to cross boundaries to the point of deceiving customers, employees, and the world at large? Additionally, knowing all the risks associated, why would anyone resort to fraud or cheating to succeed in business?

The answer is that people don’t think too much. We’d prefer to remain blind and be able to follow temptations. But do a bit of investigation, and you’ll quickly learn how to re-frame your mind to stay on the straight path of honesty. Below are a few points to get your gears turning.

1. We think honesty slows us down.

Come on, when was the last time anyone actually read all the terms and conditions? This world runs on a fast pace, and people simply don’t have patience to go through the motions of every task. When we can cut corners, we will.

But when you’re running a company, your decisions have a ripple effect on the market you’re serving. According to an October 2014 study by Cohn & Wolfe, a global communications and public relations firm, honesty is the number one thing consumers want from brands.

So if you don’t want your startup to become a statistic of the 90 percent that fail, on average, make sure to stick to the truth when it comes to your brand. It’ll set you up for success in the long run!

2.  We think we won’t get caught.

It’s midnight on a desolate rural road — who will see you run through a red light? Similarly, who would notice if you slipped an extra unlisted ingredient into a product, or told a customer half the truth, being that they wouldn’t be shrewd enough to pick up on it anyway?

These moral quandaries can be paralleled to the famous riddle: “If a tree falls in a forest where no one is around, does it make a sound?” Perhaps it makes a sound, perhaps it doesn’t, depending on who you ask.

But the tree fell, that’s for sure.

We’re beyond kindergarten. We shouldn’t be living our lives in fear of punishment from legal authorities; and conversely, in celebration of victories acquired through dishonest means. That’s a pretty juvenile mindset, and no corporation can stand on the feet of those tenets for long.

Maybe you won’t get caught at first. But repeat dishonest practices will ultimately stain your reputation, because people aren’t stupid and eventually things come to light. All it takes is one small suspicion and you’re doomed. At best, you lose a customer; at worst, you’ll wind up in jail, like Martha Stewart did in 2004.

3.  It’s the norm.

It’s the sad truth, According to a University of Massachusetts study led by psychologist Robert S. Feldman, 60% of people lied at least once during a 10-minute conversation and told an average of two to three lies.

However, just because everyone else is doing it doesn’t mean it’s right. Everyone can hold themselves up to higher standards — it just takes a conscious awareness, and a lot of effort to train oneself to be honest.

Honesty is (indeed) the best policy.

But refreshingly, it’s also quite common to find businesses that run according to the principle of honesty as the best policy.

Companies all over the world are starting to not just recognize the values of honesty, but live by them. “In our business, honesty and transparency is the oxygen of our existence,” states Mati Cohen of Pesach in Vallarta, a holiday hotel program.

This echoes of the founding principles of Buffer, a social media company that embraces the coined term ‘radical transparency’; all its salaries are public and there are no secrets amongst employees, which eliminates much of the animosity that is ever-present in many workplaces.

Tirath Kamdar, co-founder and CEO of jewelry and watch company TrueFacet, says that his company runs by these standards. “The alarmingly opaque nature of the luxury watch and jewelry market motivated us to create TrueFacet. Our goal is to bring transparency back to consumers. We set the standard for jewelry and watches at market value, allowing customers to obtain these products for the most fair price. This is why our customers return time and again.”

Developing Honesty.

Nurturing this character trait requires hard work and patience. Make it a point to recognize how often you utter even little white lies, and correct yourself when you slip.

Because, after all, honesty is the best policy.

***Liba Rimler contributed to this article

These are Google Android 8.1's five best features

I’ve been using Android 8.1 for several weeks now on my Pixel 2 smartphone, and I’m impressed.

It’s not so much that Android 8.1 is a big jump forward for most end-users. It’s not. Google’s major 2017 Android improvements came with Android 8.0. With a smartphone containing a Pixel Visual Core chip, it’s a dramatically different story.

1) Visual Core

The Visual Core is Google’s first custom-designed consumer processor. It’s a dedicated image processing chip. Today, it’s only in the new Pixel 2 and Pixel 2 XL. Tomorrow, it may be appearing in other smartphones.

CNET: Google Pixel 2 XL review: Promising phone with new caveats

With Android 8.1, the Visual Core chip has been activated and the results are dramatically better photos. First, it takes much faster High Dynamic Range (HDR) photos. By taking a series of photographs in micro-seconds, HDR-enhanced cameras do a much better job of capturing the full range of darkest blacks and lightest whites than older digital cameras.

With Google’s HDR+, your smartphone camera takes a rapid burst of pictures. The Visual Core chip then combines them five times faster than previous generation of processors into one superior picture. You may not notice the speed, but what you will notice is how much more detail you’ll get from low-light photographs.

You used to only be able to take HDR+ photos using the Google photo app. Now, third-party camera apps, which use the Android Camera application programming interface (API), such as Instagram and Snapchat, can also take advantage of HDR+’s superior processing for better photos.

2) Neural Network API

Any device which can upgrade to Android 8.1, which for now are the Pixel 2 and 2 XL, the Pixel 1 and 1 XL, the Pixel C tablet, and the Nexus 6P and 5X, can make use of Google’s Neural Networks API (NNAPI). While as a user you won’t notice anything immediately from this improvement, Android developers will. NNAPI is designed to make it possible to run machine-learning (ML) on mobile devices. This API provides a base layer, higher-level, ML framework. This, in turn, can be used by Google’s TensorFlow Lite.

What this means for you as a user is you can expect to see some very interesting smart applications coming your way soon. For example, by this time next year, you can expect speech recognition and language translation apps, which will approach Star Trek-levels of coolness.

3) Bluetooth battery levels measurements

Do you get sick and tired of not knowing if your Bluetooth earphones or headset are about to die on you? I know I do. With Android 8.1, you’ll find a Bluetooth battery display in the Bluetooth settings. I’d still rather have it on the top status bar, but this is a lot better than fumbling with my Bluetooth gadgets.

4) Better screen management

On some smartphones, notably the Pixel 2 XL, some people were seeing screen burn-in. If you don’t recall this ugly blast from old style CRT display’s past, screen burn happens when the same screen elements — such as the navigation icons or the clock — are always on. After time, these elements are “burned” into the display so their ghostly presence remains even when they should be gone.

With Android 8.1, smartphones now vary how these are displayed. The result? The end of screen burn.

5) New look

There aren’t any major changes to the interface, but there are some useful ones. These include the Pixel Launcher. This makes it easier than ever to access Google search functions and installed apps. Android’s quick settings are transparent now so you can still see a hint of the main screen beneath it. There are also new launcher themes.

All-in-all, Android 8.1 is a good step forward. What I’m really looking forward to though is seeing more smartphone vendors bringing it to their flagship phones. Thanks to Google’s Project Treble.

TechRepublic: Android Oreo rollback protection prevents hackers from exploiting past vulnerabilities

Before Treble, which first appears in Android 8.0, when Google launched a new Android version, the chip OEMs, such as Mediatek and Qualcomm, had to add drivers so their silicon could run it. Then the device vendors added their customizations. Finally, the carriers had to bless the update. Then, and only then, could you get a new version of Android on your old phone. What a mess!

Project Treble has redesigned Android to make it easier, faster, and cheaper for manufacturers to update devices to a new version of Android. It does this by separating the device-specific, lower-level software — written mostly by the silicon manufacturers — from the Android OS Framework.

By working with the chipset OEMs, the vendor interface is validated by a Vendor Test Suite (VTS). In short, Google is cutting out some of the fat, which makes Android updates so slow.

If the phone vendors cooperate by not adding too much of their own spice to the stew, many of you may finally see Android 8 and 8.1 on your phones before I’m writing about the release of Android 9.

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Apple's $213 Billion Problem

Source: imgflip

Few stocks have been as hot in the past year as Apple (AAPL), whose shareholders’ have long been waiting for a repatriation holiday. With the passage of tax reform, those dreams are now finally going to be realized, potentially allowing Apple to repatriate hundreds of billions of dollars in foreign held cash.

AAPL Total Return Price data by YCharts

Of course, as Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (BRK.B), which is sitting on $90 billion in investable cash, has shown, having a mountain a money can both be a blessing and a curse. That’s because it increases the risk that management may feel pressured to do something that ultimately squanders shareholder money.

In the coming months we’re sure to see a bevy of pundits crawling out of the woodwork to pontificate on just how Tim Cook and company should spend the largest cash horde in corporate American history.

So let’s take a closer look at the best, and worst, ways that Apple could, and will likely, spend this windfall. More importantly, find out whether or not today is still a good time to buy the stock of this future dividend growth legend, or if the train has already left the station.

The World’s Largest Free Cash Flow Minting Machine

Apple’s ability to continue growing its mountain of cash is nothing short of amazing. This is due to the world’s strongest brand, which gives it industry leading profitability.

Source: Forbes

Most notably, Apple’s free cash flow margin and returns on capital are testaments to management’s long-term ability to allocate capital very efficiently, resulting in excellent long-term shareholder wealth compounding.

Apple Trailing 12 Month Profitability

Company Operating Margin Net Margin FCF Margin Return On Assets Return On Equity Return On Invested Capital
Apple 26.8% 21.1% 22.2% 13.9% 36.9% 28.5%
Industry Average 21.9% 15.6% NA 9.4% 28.4% 24.7%

Sources: Morningstar, Gurufocus, CSImarketing

The end result of Apple’s highly popular and sticky ecosystem is that its cash pile has continued to grow despite the largest capital return program in history.

Source: Apple

In fact, Apple’s free cash flow generating power is so great ($50.8 billion in the past 12 months) that even with $234 billion returned over the past five years, the company’s cash position has grown by $148 billion.

Better yet? Despite returning an epic $45.7 billion in buybacks and dividends in the past year, those returns result in a total FCF payout ratio of just 89.9%, which is why the cash pile continues to steadily grow.

Of course, with 93.6% of the cash held overseas, Apple was unable to repatriate this money without paying a hefty 35% repatriation tax. However, with tax reform now offering a 15.5% repatriation rate, and a shift to a territorial corporate tax system, this means that Apple’s days of hoarding cash overseas are likely at an end.

In fact, if the company were to repatriate all its overseas money (not likely), that would be $213 billion that would suddenly open up, and bring the company’s total domestic cash position to $230 billion.

Source: Apple

And given that Apple continues to see strong growth in all its businesses and geographical areas (other than Japan), this mountain of money isn’t likely to start shrinking anytime soon.

Which brings us to the potential problems that so much money can create. Because while the largest cash position in the world is certainly a great problem to have, it also could put increasing pressure on management (from activist investors), to “do something.”

AAPL Return on Assets (TTM) data by YCharts

That’s simply because so much cash sitting on the balance sheet earning almost nothing will over time cause the company’s returns on capital to decrease.

So what exactly is Apple likely to do with its cash? More importantly, what should it do And avoid doing at all costs? Let’s take a closer look at the five options Apple has, in order of most to least beneficial to long-term shareholders.

#1: Buying Back Even More Stock

Historically, Apple has overwhelmingly favored buybacks, with 71% of its total capital return spending taking this form since 2012. Of course, for most of that time Apple’s shares have been highly undervalued, thanks to Wall Street’s pessimism about its future growth prospects.

However, in the past year, Apple stock has crushed the S&P 500, the Dow Jones Industrial Average, and even the tech heavy Nasdaq. So does that mean that shares are now overvalued and that investors (and the company) should avoid buying Apple stock today?

AAPL Total Return Price data by YCharts

Not necessarily. Because if we take a big picture view of the company’s valuation, we find that Apple may indeed still be a good buy today.

Company Forward PE Historical PE Yield Historical Yield Percentage Of Time Yield Has Been Higher
Apple 15.4 15.3 1.4% 1.8% 85.4%
Industry Median 20.9 NA 2.0% NA NA
S&P 500 18.8 14.7 1.8% 4.3% NA

Sources: Gurufocus, Multpl.com, Yieldchart

That’s because the company’s forward PE ratio is actually around its historical average, much lower than either the industry median, or the S&P 500’s forward PE ratio.

However, it is true that as a dividend stock Apple’s yield is rather paltry. That’s both compared to the industry median, the S&P 500, and the stock’s own historical yield.

AAPL Dividend Yield (TTM) data by YCharts

In fact, Apple’s yield is currently near a three-year low, and since it restarted the dividend in 2012, Apple’s yield has been higher about 85% of the time. So we have some contradictory signals. Apple either appears attractively valued, or way overpriced, depending on which backwards looking metric you use.

Of course, all profits and dividends are ultimately derived from the future, which is why I also like to take a long-term (20-year) view, by using a discounted free cash flow model.

TTM FCF/Share 10 Year Projected FCF/Share Growth FCF/Share Growth Year 11-20 Fair Value Estimate Growth Baked Into Current Share Price Discount To Fair Value
$9.67 5% (conservative case) 4% $155.42 6.8% -9%
7% (likely case) 4% $174.47 3%
9% (bullish case, analyst consensus) 5% $200.26 18%

Sources: FastGraphs, Morningstar, Gurufocus

While true that such projections are not without their issues (they require educated guesstimates about the smoothed out future growth rate), such an analysis can also give us an approximate estimate of a company’s fair value based on a company’s likely future cash flow.

I use a 9.0% discount rate because historically (since 1871), this is the net total return (after expenses) that a S&P 500 ETF would have generated. Thus I consider 9.0% to be the long-term opportunity cost of money.

Because of the uncertainty surrounding long-term growth rates in a highly competitive industry such as this, I use a variety of growth scenarios. Underpinning these are Apple’s strong penchant for buying back shares, (4.1% annually over the past five years).

This strong pace of buybacks, which repatriated cash is likely to keep at similar levels, means that even with relatively modest sales growth Apple’s EPS and FCF/share can continue growing far more strongly.

Based on what I consider the most likely growth scenarios, I estimate that Apple shares are actually trading close to fair value. And based on the Buffett principle that “it’s better to buy a wonderful company at a fair price than a fair company at a wonderful price,” that means that, at least in a vacuum, Apple remains a justifiable buy today.

Of course, if analysts are right that Apple’s growth will be far more impressive, than shares are actually substantially undervalued. Which is why I expect Apple’s largest use of repatriated cash to continue to mostly focused on share buybacks.

The good news is that Apple hasn’t been a blind buyer of its shares, but rather has acted responsibly and opportunistically purchased more shares when its price was lower.

AAPL data by YCharts

For example, in 2014 when shares where particularly suffering, the company greatly accelerated its buyback program. This means that, while Apple is likely to massively increase its buyback authorization in 2018, it might not actually put this “dry powder” to use should shares rise too high.

#2: Faster Dividend Growth

Company Yield TTM FCF Payout Ratio 10 Year Projected Dividend Growth 10 Year Potential Annual Total Return 10 Year Potential Yield On Cost
Apple 1.4% 25.1% 9% to 15% 10.4% to 16.4% 3.4% to 5.8%
S&P 500 1.8% 50.0% 6.1% 7.9% 3.3%

Sources: Gurufocus, FastGraphs, CSImarketing

As a dividend growth investor obviously I love it when companies raise their payouts at a brisk pace. And given that Tim Cook has said that the company will raise its dividend every year, this means that Apple represents a potentially wonderful long-term income growth investment.

That’s because the company’s extremely low FCF payout ratio means that it can effectively continue raising its dividend at its recent double-digit pace for the foreseeable future. Of course that pace was set back before tax reform changed the game when it came to how much potential domestic cash Apple will have to work with going forward.

In fact, Apple Analyst Gene Munster predicts that Apple will ultimately repatriate $214 billion over the coming years broken down like this:

  • Buyback reauthorization increase: $69 billion (spread out over next three years)
  • Dividend growth rate through 2022: 15%

A potential 50% increase in its dividend growth rate would certainly be a huge win for dividend-loving Apple shareholders as it potentially means that the 10-year yield on cost would end up 5.8%. In other words, while Apple’s yield today is not impressive, patient long-term investors can potentially expect shares bought today to prove to be strong income generators in the future.

Of course that assumes that Apple does accelerate its dividend growth rate, and keeps it higher for the next decade. However, that’s actually a highly realistic scenario. That’s because, assuming a conservative $30 billion a year in annual operating cash flows, this means that even with accelerated buybacks and dividend growth, Apple’s ending cash balance at the end of 2022 would be about $270 billion.

That means that even if Apple were to boost its buyback authorization to $235 billion (including the remaining $166 billion it has now), and massively increases its dividend growth rate, the company’s immense rivers of free cash flow would mean that it still wouldn’t make a substantial dent in its money pile.

However, a 15% dividend growth rate should be more than sufficient to ensure that Apple continues to deliver market beating total returns.

#3: Paying Back Debt

Over the past five years Apple has become one of the biggest corporate bond issuers in the world, taking on $116 billion in debt to fund its capital returns.

So naturally many assume that the company’s enormous coming repatriation will be used to pay back much of and perhaps all of this debt. And given that almost all of Apple’s debt is callable, this is certainly a possibility. However, I don’t actually think this is likely, or in fact, necessary.

That’s owing to Apple’s still rock solid balance sheet, which gives it one of the top investment grade credit ratings in America.

Company Debt/EBITDA EBITDA/Interest Debt/Capital Current Ratio S&P Credit Rating
Apple 1.51 33.0 38% 1.28 AA+
Industry Average 1.47 27.1 24% 0.53 NA

Sources: Morningstar, FastGraphs, SimplySafeDividends, CSImarketing

That means that Apple’s average effective interest rate of 2.0% hardly makes it a priority to pay down its debt. That’s especially true given that under tax reform companies can still write off 30% worth of EBITDA of interest. Starting in 2022 that changes to 30% of EBIT. However, as you can see, Apple’s $2.3 billion a year in interest expense is a tiny fraction of its enormous cash flows.

Interest/EBITDA Interest/EBIT
3.0% 2.9%

Sources: Morningstar, SimplySafeDividends

That means that it just doesn’t make much financial sense for Apple to pay off its debt at an accelerated pace.

#4: Major Acquisitions

More buybacks, accelerated dividend growth, and paying off debt have generally been the top methods that investors have expected Apple to use its tax windfall. However, there are more speculative ways that the company could put that cash to work.

One such method would be through massive acquisitions. Over the years analysts have speculated that Apple can or even should buy the following companies:

  • PayPal (PYPL): $88.8 billion market cap
  • Netflix (NFLX): $82.2 billion
  • Tesla (TSLA): $54.7 billion
  • Activision Blizzard (ATVI) $48.8 billion
  • Pandora (P): $1.2 billion

While a superficial argument about why such acquisitions make sense can be made, in reality big, splashy purchases are just not Apple’s style.

For example, while Apple has done a total of 92 acquisitions over the decades, none have been larger than its 2014 $3 billion purchase of Beats Electronics. This is actually great news since, according to the National Bureau of Economic Research, 87% of large scale acquisitions end up destroying shareholder value.

This is why I expect Apple to continue to make relatively small bolt-on acquisitions, such as the $400 million purchase of Shazam. This purchase may not be a “game changer” but that’s not what Apple needs.

Rather Shazam adds 120 million customers to Apple’s music database and will hopefully be incorporated into Apple Music, which has just over 30 million monthly subscribers. It’s also what Apple needs to stay competitive with industry leader Spotify (Private:MUSIC), which has 65 million monthly subscribers and is growing twice as fast.

And keep in mind that even Apple Music’s large recurring subscription base is essentially a drop in the bucket for Apple. That’s because even assuming that all those users are on the standard $9.99/month plan (student plan is $4.99 and family plan $14.99), Apple Music only represents about 10% of Apple’s total service revenue, or about 1.3% of total company sales.

However, Apple’s focus isn’t necessarily on moving the needle with any acquisition. Rather it wants to continue improving its ecosystem and locking in customers into its iPhone walled garden.

Source: Motley Fool

This is because, for the foreseeable future, the iPhone will remain the company’s cash cow. Thus maintaining or growing the loyalty of its installed base is the key to the company’s growth plans.

That’s especially true given the rapid growth of its services business, (34% YOY). If Apple can continue improving its ecosystem and maintain approximately the same global market share it has now, then a steadily growing user base will mean much greater service revenues in the future. In fact, over the past year Apple’s service sales have been about $25 billion, and are well on their way to hitting $50 billion in 2020.

That includes a lot of recurring, subscription-based sales and cash flow, just what Apple needs to keep its epic cash return program humming along for years to come.

#5: Special Dividend

The biggest worry I have about Apple’s repatriation isn’t some ill conceived and massively overpriced acquisition. Rather my concern is that management will feel pressure to pay a large special dividend.

After all, the company is such a FCF machine that even if it greatly accelerates the pace of buybacks and dividend growth, its cash position isn’t likely to shrink much, if at all, in the coming years. That’s especially true given that the iPhone X is expected to create another record-smashing holiday quarter for the company, which will likely result in another strong full year of top and bottom line growth.

Source: KGI Securities

Meanwhile according to well respected (and historically accurate) analysts at KGI securities, in 2018 Apple is expected to roll out an even better lineup of phones. That includes upgraded and enlarged screen versions of the iPhone and iPhone Plus, as well as an even larger version of the new current flagship, which analysts are dubbing “the iPhone X Plus.”

In other words, Apple’s next few years are potentially set to see stronger than average top line growth. And with ever rising average selling prices on its phones (iPhone X Plus likely to cost $1,100 to $1,150 to start) its earnings and free cash flow is likely to continue rising to ever more stratospheric levels.

This means that even if Apple were to increase its capital return program by over 50% in April or May of 2018, as analysts currently anticipate, the company’s cash pile could continue to grow.

So why is this my biggest fear? Why shouldn’t dividend investors cheer at the prospects of a potential $15 to $20 per share special dividend? After all, if you have owned Apple a long time, and have accumulated a substantial share count (say 1,000 to 10,000 shares), then this could potentially represent a $20,000 to $200,000 windfall.

However, unlike regular dividends that grow steadily over time and represent recurring income that investors can count on (and which generally cause share price appreciation in line with dividend growth), special dividends are far less advantageous.

This is for two reasons. First, unlike regular dividends which are qualified, special dividends are generally treated as returns of capital by the IRS. While this can be a great benefit to those who plan to own Apple for decades (ROC lowers your cost basis and so represents deferred taxes), it’s a benefit that’s generally lost on shares held in a tax-deferred account.

More importantly, the share price will be adjusted down by the exact amount of the special dividend on the ex-dividend date, meaning that special dividends don’t represent any benefit to long-term shareholders.

Rather it would be a large permanent reduction ($79 to $105 billion assuming a $15 to $20 special dividend) in the company’s cash. That means that any amount paid out as a special dividend can’t go to share repurchases, which permanently increase FCF/share and thus allows longer, stronger regular dividend growth.

And since studies show that total returns for dividend growth stocks generally follow the rule: yield plus long-term dividend growth, a special dividend would be a permanent reduction in the company’s long-term total return potential.

Bottom Line: Apple Has The Best Problem In The World Right Now

Don’t get me wrong, I’m in no way arguing that Apple is likely to squander its repatriation windfall. After all, management has shown itself to be incredibly disciplined with its capital allocation, and has thus far avoided making huge mistakes.

This is why I think it’s likely that in the Q2 annual capital return update we’re likely to see a major doubling down on buy back authorizations. That’s especially true given that Apple shares, despite the epic rally of the past year, are trading at fair value or slightly below.

In addition, I expect that we could get a substantial increase in the rate of future dividend growth, simply because Apple’s cash hoard is too large for the company to reinvest and generate anywhere near the returns on capital it has achieved in the past.

This means that Apple’s status as a great dividend growth stock is likely to increase substantially in the years ahead. However, while shares are still potentially a good buy, personally I plan to wait for a market downturn before adding this Grade A income growth blue chip to my own high-yield retirement portfolio.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

UPS Office Staff Called Up to Deliver Packages In Last-Minute Christmas Rush

Faced with unexpected holiday volume in some areas, UPS this year had to draft hundreds of office workers to deliver packages at the last minute.

According to the Wall Street Journal, the staffers included accountants and marketers, who suddenly found themselves hefting boxes. Such switches aren’t uncommon during the company’s hectic holiday season, but they’re usually voluntary and coordinated well in advance.

A UPS spokesman confirmed to the Journal that several hundred office employees have been called on to deliver packages. Some of them reportedly used personal vehicles. Most of the reassignments, according to the spokesman, are now wrapped up.

At least part of the problem was the tight labor market across the U.S., which made it harder for UPS to hire its usual bevy of seasonal workers. Another factor is online shopping, which has grown every year for more than a decade, and peaks sharply in the days before Christmas. This year, in certain locations, the number of packages exceeded even UPS’s projections.

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The unpredictability of that volume has been a challenge for UPS and other delivery services for years, and they’ve experimented with various solutions. Temporary staffing can increase throughout, but expensive overexpansion during the 2014 holiday season highlighted its downside risk.

On the other side of the equation, UPS has floated various approaches to raising prices during the holidays, in part to encourage customers to send packages earlier and spread out demand. This year, the shipper added peak surcharges, mostly under a dollar per package.

Those modest surcharges don’t appear to have done much to encourage customers to plan ahead this year. UPS could make them higher, but then the problem becomes competition — FedEx didn’t implement a holiday surcharge for most packages this year.

That leaves a nearly insoluble problem, as the delivery industry searches for ways to scale massively for a short period every year. Calling up the accountants doesn’t seem like a very sustainable solution.

Amazon Acquires Security Camera and Video Doorbell Maker Blink

Highlighting its growing ambitions in Internet-connected home devices, Amazon has acquired wireless security camera startup Blink.

The deal, announced on Friday, gives Amazon a rising star in the emerging and highly competitive field of connected home devices that includes Alphabet’s Nest. In addition to a wireless security camera, Blink makes a video doorbell that lets homeowners glance at their smartphones to see a live feed of who is at their door.

Financial terms of the acquisition were not disclosed.

Blink’s security cameras, first introduced in 2016, are known for their ease of setup and for not needing a plug because they can operate on batteries. The video doorbell, which costs $99, is also battery powered

Amazon push into connected home devices started in 2014 with the Echo, the smart speaker that relies on voice recognition to answer questions and do things like order Uber rides. The company expanded its connected home lineup earlier this year with the Cloud Cam, a security camera that has since become an integral part of Amazon Key, a connected lock that lets Amazon’s delivery workers enter homes to drop off packages when homeowner are away.

Blink said Thursday it would continue to operate as part of Amazon and sell the same products it already does. The companies provided no other information about their plans.

This Company Published All Its Employees Salaries 4 Years Ago. Here's What They Learned.

“Robbie, how much do you make?”

Someone asked me this question at a recent job, and I admit, I was thrown off. The reason they asked wasn’t to be nosy, but to find out if they were getting underpaid or not.

Most salaries are private, so my coworker couldn’t find out without asking. It’s a constant issue.

Well, Buffer, a social media management platform company took salary transparency to another level four years ago.

Their salaries are transparent, both internally and publicly. You heard that right. You can go to this Google doc to find out exactly how much everyone in the company makes, including the CEO. They’ve really embraced salary transparency head on.

I was intrigued by this and reached out to Buffer with a few questions about what they’ve learned so far.

The biggest challenges

Buffer’s biggest challenge was its own insecurity, according to Hailley Griffis, PR manager at Buffer. “The team was on board because of our value of defaulting to transparency,” she says. “We already had salaries live internally, so it was just switching it to a larger audience. There were a lot of what-ifs floating around at Buffer.”

What if the made it easy for anyone to poach Buffer employees because they knew exactly how much more they had to pay them? Or what if new people refused to join because they didn’t want their salaries online? None of those what-ifs came to fruition, Griffis says.

I find this really interesting. They were already sharing salaries internally, which is a massive first step for any organization. I’d honestly be happy with just internal sharing.

Taking it public is another story.

The positives and negatives

I can’t imagine that full salary transparency would be be entirely positive. Still, I was curious to see what the impact has been.

Griffis mentioned three positives:

  1. A jump in applications as soon as they went transparent.

  2. The accountability of being held to a higher standard, and the ability to pay people fairly and without bias.

  3. Increased trust among their team.

And negatives?

“We do get negative feedback, comments and such, from the public when we share updates to our salary formula or our pay,” Griffis says. “Pay is something that everyone will always have strong opinions about and we can’t please everyone.”

Based on comments from several social media sites, Buffer receives negative feedback that the salary formula doesn’t account for the individuals who operate at a higher level than their peers in the same category.

Additionally, job searchers are used to negotiating, so when they can’t negotiate, they don’t feel like they’re getting a good deal. This is a common issue for high performers.

Salary transparency isn’t for everyone. My stance is that people should be paid unfairly. If you’re are performing ten times better than your colleagues, then a formula to calculate your salary will leave you disappointed.

What I do admire about Buffer embracing salary transparency is that they really own it. It’s not like the salary spreadsheet is hard to find. They actively market it.

I also appreciate that they created a salary formula–so you can understand what your true worth should be. It’s not foolproof, of course, but I think it’s a start in the right direction.

How would you feel if your salary was not only available to your colleagues but to anyone with an internet connection?

U.S. lawmakers seek temporary extension to internet spying program

WASHINGTON (Reuters) – Republican leaders in the U.S. House of Representatives are working to build support to temporarily extend the National Security Agency’s expiring internet surveillance program by tucking it into a stop-gap funding measure, lawmakers said.

The month-long extension of the surveillance law, known as Section 702 of the Foreign Intelligence Surveillance Act, would punt a contentious national security issue into the new year in an attempt to buy lawmakers more time to hash out differences over various proposed privacy reforms.

Lawmakers leaving a Republican conference meeting on Wednesday evening said it was not clear whether the stop-gap bill had enough support to avert a partial government shutdown on Saturday, or whether the possible addition of the Section 702 extension would impact its chances for passage. It remained possible lawmakers would vote on the short-term extension separate from the spending bill.

Absent congressional action the law, which allows the NSA to collect vast amounts of digital communications from foreign suspects living outside the United States, will expire on Dec. 31.

Earlier in the day, House Republicans retreated from a plan to vote on a stand-alone measure to renew Section 702 until 2021 amid sizable opposition from both parties that stemmed from concerns the bill would violate U.S. privacy rights.

Some U.S. officials have recently said that deadline may not ultimately matter and that the program can lawfully continue through April due to the way it is annually certified.

But lawmakers and the White House still view the law’s end-year expiration as significant.

Rep. Kevin Brady (R-TX), Chairman of the House Ways and Means Committee, arrives for a Republican conference meeting at the U.S. Capitol in Washington, U.S., December 20, 2017. REUTERS/Aaron P. Bernstein

“I think clearly we need the reauthorization for FISA, and that is expected we’ll get that done” before the end of the year, Marc Short, the White House’s legislative director, said Wednesday on MSNBC.

U.S. intelligence officials consider Section 702 among the most vital of tools at their disposal to thwart threats to national security and American allies.

The law allows the NSA to collect vast amounts of digital communications from foreign suspects living outside the United States.

But the program incidentally gathers communications of Americans for a variety of technical reasons, including if they communicate with a foreign target living overseas.

Those communications can then be subject to searches without a warrant, including by the Federal Bureau of Investigation.

The House Judiciary Committee advanced a bill in November that would partially restrict the U.S. government’s ability to review American data by requiring a warrant in some cases.

(This story has been refiled to correct typographical error in headline)

Reporting by Dustin Volz and Richard Cowan, additional reporting by Timothy Ahmann; Editing by Chris Reese and Lisa Shumaker

5 Finance Resolutions Your Business Should Make to Help You Save Money 2018

New year’s resolutions are popular this time of year, but the harsh reality is that most of the resolutions you and I make won’t fully happen. When it comes to your business, however, the payoff of sticking to, or not sticking to, your resolutions can have a much bigger impact than just a wasted gym membership. You want your business to grow and be successful in 2018, and you will do whatever it takes to make that happen.

So why not take some steps right now, and make some resolutions for your business to keep growing and developing into 2018?

This may sound easier said than done, especially when you are trying to juggle customer expectations, developing and reaching new customers, making sure you take care of taxes correctly, and fending off the competition. There is a lot you are already thinking about, but I’m going to focus on finance related resolutions for 2018.

At the end of the day, finance and financial fundamentals are what drive the majority of decisions, so why not focus on getting — you need to know your cash numbers to pay your bills.

Let’s take a look at some finance resolutions that will help your business next year:

1. Document and organize your cash flows.

This may seem like an obvious thing to do, but don’t forget the majority of small businesses fail due to a lack of capital and financing. Tracking the cash coming in, and out of, your business is, I would argue, the single most important you can do to improve the financial health of your business.

Two things you can start doing right now to improve your cash flows are 1) collect and clean up your receivables, and 2) maybe consider discount to encourage customers to pay sooner.

2. Make a debt repayment plan.

Debt payments, and the interest payments that are associated with them, can drain the agility and flexibility from your business. Debt, in and of itself, is not a bad thing — it can help you expand, grow, and develop your business, but you need to have a plan to pay it back.

Some things to consider when making this plan are 1) which debt has the highest associated interest, 2) what is your largest debt, and 3) is there any debt that is especially restrictive on your business via loan terms?

3. Formalize your pricing model.

You are surely aware that, in order to generate profits for your business, that your revenues have to exceed your costs, but how standardized are your prices? I know that, especially for a service business, that every client and project is different, but there are always some items that are the same.

The amount you charge per labor hour, any prices you pass along to customers, cost increases you assume, the rate of inflation, and how much your competition charges should be numbers you know off the top of your head.

4. Determine how you want to get paid.

Getting paid is always a great thing, but how you bill your customers, and how your customers pay you can make a big difference come tax time. As an entrepreneur, and especially if you are starting a new side hustle while holding down a fulltime job, you have several options for how you want to get paid.

Work with your CPA or tax professional to figure out if being paid as a 1099 employee, being classified as a freelancer, or doing work on a contract by contract basis will work best for you.

5. Do your taxes throughout the year.

As a CPA one of the top issues I see every year is when entrepreneurs get tripped up different kinds of taxes. Although taxes get a lot of coverage between March and April, if you run your own business you may very owe estimated taxes throughout the year. Adding on to this, your business might be impacted by the coming changes to the tax code depending on how your business is structured, where you do business, and what deductions you are currently taking.

Work with your CPA or tax professional to get a handle on what you may owe in 2018, what change might be coming, and what you can do to ease this transition — your bottom line will thank you.

Making resolutions for the new year is something you and I both do for ourselves, but it’s also something you should consider making for your business. Focusing on your finances, doing some research now, and drilling down to action items can make 2018 a financially fit year.  

Chromebooks and Office 365 together will challenge Windows laptops

Video: Samsung’s new Chromebook Pro hybrid can run Android apps

It’s no secret that I’m not a Windows fan. I’m beginning to wonder if Microsoft isn’t either.

Hear me out. On Nov. 27, Chromebook users discovered that Office 365 would run on some of their laptops. To be exact, we now know you can download and run Office 365 on Samsung Chromebook Pro, Pixelbook, Acer Chromebook 15, and the Acer C771.

Now, you’ve been able to run the lightweight web versions of Office programs — Word, Excel, PowerPoint, and OneNote — on Chromebooks. But they were never that good. Then, Microsoft made Office Mobile for Android available, and that also worked on Chrome OS. But, now, Office 365 is up and running — and it’s the real-deal MS Office.

There are now more than 120 million Office 365 users. That’s about 10 percent of all Office users. Those aren’t just home users on a tight budget. According to a 2016 study by Skyhigh, 91.4 percent of businesses with at least 100 users were running Office 365. Usage within enterprises grew over 320 percent as the percentage of employees using at least one Office 365 application more than tripled from 6.8 percent to 22.3 percent.

In the past, the automatic answer at most companies to any attempt to switch to another operating system was: “But it can’t run Microsoft Office.” Well, now Chromebooks can.

True, Office 365 is not the full all bells and whistles Microsoft Office, but numbers don’t lie. For most businesses, Office 365 is more than enough Office for day-to-day work.

And running Office 365 on a Chromebook doesn’t require any special software, such as CodeWeavers’ CrossOver. You just download Office 365 from the Play Store on any Chromebook, which supports Android apps on Chrome OS, then pay Microsoft’s Office 365 subscription fee of $70 a year, and get to work.

Besides just getting Office, you also get all the other advantages that come with a Chromebook. Chrome OS is more secure than Windows. It’s updated with the latest patches and features about every six weeks. Chromebooks are mindlessly simple to use. If you can use a web browser, you can use a Chromebook.

In addition, one feature I’ve grown to love recently is that, if you lose your Chromebook or dump it in a bathtub, to get all your apps, documents, and settings back, all you need to do is get a new one, then sign in with your Google ID, and in minutes, your desktop is back just as you like it and ready to rock.

Finally, you can get a great Chromebook for only a few hundred dollars. Sure, Microsoft promises that its new Windows 10 S will be great. What I see though is the next incarnation of arguably Microsoft’s greatest OS failure to date: Windows RT.

Sure, there’s some software that only runs on Windows. But, unless you’re running one of those programs, most Windows users no longer need Windows. Heck, Microsoft itself has been moving to a service — rather than a product — business plan for years now. And the company has just moved Office, once and for all, into a multi-operating system service model.

The bottom line is that Microsoft has got rid of the single biggest reason why people are still with Windows: MS Office. If you can run Office on a Chromebook, which is safer, more reliable, and cheaper, why wouldn’t you? I’ll be darned if I can think of a reason for most users.

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