Risk Services of Arkansas - August 2020
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My Time in Corn Country
T here was a point in time when I knew almost every truck stop in Iowa. I knew which ones were good, which ones to avoid, and which diners had the best breakfast. This is the kind of highway knowledge only truck drivers tend to have, and that’s because, for several summers, I worked as an assistant truck driver. My little town in Iowa had a seed corn manufacturing plant. It was the biggest employer in town. There’s a reason Iowa is corn country. Each spring, prior to planting, the plant sold thousands of bags of seed corn to farmers all over the state. The thing is that most farms didn’t use all those bags. Every summer from the time I graduated from high school to the time I finished college, I would come home and take a job with the plant. We went all over Iowa in an 18-wheeler to collect the unused bags of seed corn so the farmers could get a credit on their account with the plant. In a single day, we would fill up the trailer with bags of corn. Mind you, it was just the driver and me doing all the loading ourselves, by hand with a conveyor. We’d back up to a barn and there’d be between 75–100 bags. The driver and I would load up all the bags, give the farmer his receipt, and
drive straight to the next farm. Our first appointment of the day was always scheduled at 7 a.m., so we had to be on the road very early, sometimes by 3 a.m., to make it on time. We’d go to the farthest farm first, then spend the day working the route back to our little town in the heart of Iowa. Then we’d drop the trailer off at the plant, go home, and do it all again the next morning. These were long, hard days. I’m talking 12–15 hours driving around the state and loading bags of seed corn. We were loading hundreds of 50-pound bags, all day long, five days a week. At the end of every day, I was exhausted. But I also got in really good shape, and the job paid really well. I was making more money than anyone else I knew my age. This was in the late 1970s, so the money I earned loading corn all over the state was my spending money at college over the next year. There was no GPS back then, so we had to really get to know the roads. I learned quite a bit about navigation and reading a map. I also learned that I did not want to be a truck driver all my life. I was glad for the work but did not want to be sweating in the back of a truck trailer every summer. I have immense respect for truckers and the job they do. Those were the most exhausting summers of my life. I don’t subscribe to the idea that one job is better than another because it pays more. Every job should be respected for the fact that it is a job and you are doing something to benefit humankind. There is honor and value in hard work, and truck drivers are definitely some of the hardest working people out there.
“These were long, hard days. I’m talking 12–15 hours driving around the state and loading bags of seed corn.”
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This spring, scientists and local governments asked citizens to “flatten the curve” by staying home and limiting the spread of COVID-19. While the economic shutdown had many businesses scrambling to make up for lost profits, it could also provide more pivotal information for making wiser data- driven decisions, according to Columbia School of Business professor Oded Netzer. The pandemic skewed data that many business leaders rely on to make decisions about future marketing practices. How can you make valuable marketing moves when your data is undercut by a crisis and marred by unprecedented closures and business decisions? For Netzer, the answer lies in the past. In an article published by Columbia Business School, Netzer explains using data, which cannot provide the full story of the circumstances to make a marketing plan, requires human foresight and conceptualization. It’s our job to pick up on the patterns data from the past has given us. He explains, “Humans are good at pattern recognition; computers are good at data processing. At times like these, when data is limited, we need to combine both.” Netzer recommends analyzing the market crash of 2008, previous fallouts from past pandemics — such as MERS or even the Spanish flu more than 100 years ago — and changes or data pulled from countries further along in the COVID-19 fight. Because of the limited information experts have on COVID-19 and the lasting implications of the pandemic, Netzer believes those who look to the past to conceptualize current data will have the best idea of how to move forward. With this thinking in mind, Netzer recommends businesses run simulations and test marketing strategies now before fully deploying them in 2021. This can provide real-time data and identify pain points. In addition, Netzer advises businesses to establish multiple variations of their marketing plans so businesses can easily adapt as the times do. Now is the time to examine your skewed data, compare it to the past, test your 2021 marketing strategies, and create simple, effective hypothetical scenarios so you can be better prepared for marketing your business in the new year. This year’s data may be incomplete, but it can still be a powerful tool in building your future. FINDING THE TRUTH IN THE PAST HowHistory Can Help You Analyze COVID-19 Data and Plan for a Better 2021
Futures Are Made at Recovery Centers of Arkansas
Some years ago, a young woman was dropped off at Recovery Centers of Arkansas (RCA) by her parents. She was very young but already had a history of sadness, having lost custody of her only child. Recovery did not come easy for her. She challenged and manipulated her way through most of it. Then finally, her lightbulb moment came. It was her decision to make and her life to live. A few years after this woman finished treatment with RCA, the organization got a call from her mother, who was in tears of joy. The mother wanted to report that her daughter had just completed her bachelor’s degree in addiction study and had started a job at a treatment facility in the next town over. She was so grateful that her daughter was alive and sober. This story is one of many wonderful stories from RCA. An outgrowth of the first Alcoholics Anonymous chapter west of the Mississippi River, RCA came into being when two separate addiction treatment centers joined together in 1999. Since then, the organization has helped countless individuals on their journey to recovery and has become the largest substance abuse treatment provider in the state. This journey wasn’t easy, as RCA’s Executive Director, Carole Baxter, explains. “For a long time, people viewed substance abuse as a personal failing,” Baxter says. “So no one really tried to help with addiction. Through the years, the concept of being able to treat someone with a substance use disorder became a reality. People stopped viewing substance abuse as a personal failure, so treatment came into existence. A great deal of changes have occurred over the years because of the concept of being able to treat people.” With the shift in the way we view substance abuse came a wealth of possibilities. Research into the nature of substance abuse began, and with it came effective treatments. University of Arkansas for Medical Sciences (UAMS) is recognized as a leader in substance abuse research. RCA works closely with UAMS to stay on top of the latest research and best treatments, so they can continue to offer the best possible outcomes for the people who come through their doors. Helping people take back their lives and see a better future is the mission of RCA as a whole and every member of the staff. Baxter is not in recovery herself, but when she got out of college in 1974, she was offered a job in the field of recovery. “It’s been a very rewarding career,” Baxter says. “I’ve seen a lot of changes. When I first started out, there wasn’t a whole lot we knew how to do. Now, there’s so much more we know about what works and what to do … When people come for treatment, there will be bumps in the road, but they can be overcome. Everything can be okay, and you have the rest of your life ahead of you.”
To learn more about how the Recovery Centers of Arkansas helps people fight for a better future, visit their website at RCofA.org .
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A HEFTY PRICE TAG COVID-19 COULD COST INSURERS $100 BILLION
I n one way or another, the COVID-19 pandemic has thrown every industry into chaos. Service industries, such as bars and restaurants, have been hit especially hard. As time goes on, we are getting a clearer picture of how the pandemic has impacted other markets. The insurance industry in particular is reporting major losses. Lloyd’s of London, an international insurance and reinsurance market, has reported that it is expecting to pay as much as $4.3 billion in claims resulting from COVID-19. This is more than it paid in claims from the impact of hurricanes Harvey, Irma, and Maria combined. Keep in mind that this is just one market. Projections from across the insurance industry estimate that companies could end up paying out $40 billion to $100 billion before everything is said and done. Exact estimates vary greatly because the overall costs associated with COVID-19 are still uncertain. Health experts warn of a potential “second wave” of infections that could come about in the coming fall and winter. There is also the impending threat of hurricane season. Due to the pandemic, there is less time to adequately prepare for the storms. Factor in the predictions of an above-average hurricane season and the resulting damage could be far more severe than usual.
When examining the long-term impact of the pandemic, insurance carriers could also find themselves required to pay out additional claims they had not initially accounted for due to lawsuits and legislative measures across the country aiming to broaden protections for businesses and workers. Some of these measures focus on examining worker’s compensation for front-line health care workers and other “essential” employees. Other measures aim to provide coverage to every business that has purchased business income insurance, regardless of whether or not communicable disease exclusions were included in their policy. There is also the matter of whether or not insurance carriers will have to cover COVID-19 testing or immunization. Whether or not insurance companies will pay for these costs remains to be seen. Many businesses are wondering how the costs of COVID-19 will ultimately impact insurance policies. The State of the Market report published by AmWins Group, which addresses overall market trends of the insurance industry, states that across segments, expect to see a continuation of less capacity, higher rates, and more insurers having trouble filling out placements. As our nation struggles to reopen, it is clear that we must be prepared for the long-term impact of COVID-19, which as it stands right now, looks like higher insurance pricing in the future.
Have a Laugh!
Easy way out on Pg. 4
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INSIDE This Issue The Most Exhausting Summers of My Life page 1
How History Can Help You Understand COVID-19 Data
The GoodWork of the Recovery Centers of Arkansas page 2
The Rising Cost of COVID-19 Take a Break page 3
What Small-Business Owners Can Learn From ‘Profit First’ page 4
MANAGE CASH FLOW WITH ‘PROFIT FIRST’
R unning the day-to-day operations of a business while also managing the money can be difficult to juggle for many small-business owners. Even if they have systems and processes in place, these methods don’t always work as well as they should and can easily become difficult to navigate. When you hit this kind of wall, it can be hard to keep your focus on growing a profitable business. Enter Mike Michalowicz and his book “Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine.” The book was published in 2014 but was updated in 2017. It’s been a huge hit, garnering rave reviews from the business world due to its simple yet innovative profit-first formula. The book has been so successful because Michalowicz has faced these types of challenges before, and he used these experiences to develop principles that make life (and business) that much easier for small-business owners. You’ll get the scoop on Michalowicz’s profit-centered approach and how his innovative system flips traditional accounting on its head, making money management more streamlined. If you find yourself struggling to manage the Mike Michalowicz Shares What You Need to Know
financial side of your business, then he has you covered. His tips are especially useful for businesses that have cash flow that varies from month to month or that have a peak season. Michalowicz’s insight is even more valuable in the wake of the COVID-19 pandemic, as business owners and entrepreneurs everywhere look to get back on track in the second half of 2020, boost their businesses, and recover lost profits.
If you’re a seasoned business owner and are already money-minded and exceptionally organized, this book will likely serve as a quick refresher, but if you’re a startup business owner and want to improve your accounting systems and catapult your profits, then “Profit First” is just what you need.
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