My business plan: I will kill you with my smug

Just a brief note in passing to discuss two things that on the surface might seem unrelated. That is because under the surface they are unrelated. They are smugness, and business plans.

First, business plans. If you were to go to a bank seeking financing for your business, be it nail grooming or dog bathing or plumbing and heating, the bank will ask to see a written business plan. Stripped of its jargon – things like market dimensions and depth, rate of return, maximized cash flow … all real to a degree but also inside baseball talk, the simplest way to understand a business plan is to answer the question: “What’s your gimmick?”

Here’s an example. Though the business has mushroomed, years ago McDonald’s sold hamburgers. Their gimmick was simple: break even on the sandwiches, and score big on soft drinks. Every-time we purchased a soda there, if we paid a buck, they made ninety cents. That was enough to sustain them all by itself, and a good business plan.

I ran into this yesterday with radon mitigation equipment. It is nothing but a gimmick. For it to work, three things are necessary: bad science, a frightened consumer, and a house that is changing hands.

This model worked on me even as I knew they were scamming me back when I sold that house in Livingston, Montana. The fact that the Realtor@ went behind my back and frightened the tenant was cynical and greedy. This is why I closed out my discussion at Nextdoor this morning by answering a Realtor@ who was feigning a lawsuit with the words from a very old and delightful movie. “I fart in your general direction,” I told him.

You might think that smug on my part, but it is not. It is just a show of heartfelt contempt.

Smug is something else again. One of my favorite South Park episodes, aside from the Tom Cruise working in a fudge factory as a packer one, was the Prius episode. People in South Park were buying that car in droves, and were very haughty and condescending to others about it. As a result, a cloud of “smug” was forming over the village. At the same time, George Clooney gave an acceptance speech at the Academy Awards that was haughty and holier than thou, and as a result, a cloud of smug formed over LA. It was making its way towards South park. In the end, the town was destroyed as the two clouds of smug collided and created a massive wind storm.

Smugness is a mask for deep insecurity. It is also passive aggressive. It is the P/A tactic that is so off-putting.

As defined, passive aggressiveness is …

“A tendency to engage in indirect expression of hostility through acts such as subtle insults, sullen behavior, stubbornness, or a deliberate failure to accomplish required tasks.”

Passive aggressive people communicate in such a way that we cannot win. The classic question asked in a P/A tone is “Do you still beat your wife?” Either yes or no is an admission of guilt. The “question” is really an accusation.

Another example: Suppose I have entered into a deal to sell a house, and have been told that I need to install $1,400 in radon equipment in the basement. I refuse. The Reator@, knowing I am going to stand my ground, elects to go behind my back and scare my tenant into leaving if I do not install the equipment. Vacancies are expensive, and one occurring right before closing might kill the deal. I am forced to choose the lesser of two evils.

With P/A people there is no good outcome. They run circles around honest and authentic people. While we are thinking, they are scheming.

The passive aggressive mindset is learned in the home, and normally straight communicators and P/A’s don’t get along. In the mating game, two P/A’s will often find each other and slowly drive each other into a state of constant anger and tension.

In the Nextdoor thread I mentioned below I encountered a dishonest business plan, smugness, and passive aggressiveness. The threat to sue me was just icing on the cake – I had exposed the man and his scheme, and he went on the attack to scare me away.

I farted in his general direction. But in the end, life is too short, people are gullible, and passive aggressive people are all around. He will carry on with his radon scheme.

I am thankful for this blog and its writers and commenters. And I appreciate it when someone tells me point-blank that I am wrong about something. Mistakes, after all, are the best teachers around, and direct communication, as opposed to sidewinders, is refreshing.

9 thoughts on “My business plan: I will kill you with my smug

  1. a serious business plan contains a realistic estimate of possible production costs and selling amounts. Based on that the bank can decide if you know what you’re talking about. Buying or selling real estate may look similar but it is not. Money invested in a business can get completely wasted fast and easy. You rent an office, spend money on renewing the interior, buy some equipment, buy materials, etc. All that loses its value after you pay for it. If you’re not making enough to pay back the loan, you may have not enough valuables to be taken from you if you’ll default. Not so real estate. If you cannot pay back the mortgage, the bank will simply take your house and sell it. The market can be bad but that is a risk both sides have to take. That’s why they invented things like “limited liability” for financing businesses. Theoretically you can get broke time after time always starting new business after the last one failed. Practically it won’t work because no bank will lend you any money. If you fail to pay back a mortgage once you’ll usually never ever buy a house again. If you sell (or buy) a house, there may be inconvenient restrictions, like this radon thing in the USA. That’s to scary people of buying and selling to easy. That’s also why vacancy ads are so expensive. We also have to pay real estate taxes and notary costs in Germany which makes about 5-10% of the price and which you’ll never see again. I’m wondering if Realtor can legally access your tenant in the first place. It’s none of their business who’s renting your house, no? The business goes only between the seller and the buyer. Or was your tenant the buyer? In that case, the Realtor maybe obliged to inform the buyer of all the risks. That’s what in Germany the notary is obliged to do. Just imagine yourself on the buyer side. Won’t you wish to be informed that you can blackmail the seller with radon to maybe lower the price a little? I think the system simply wishes people to buy houses but not to sell them.

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    1. I think what the Realtor@ did there was a breach of ethics. (“Realtor@”, by the way, is how they brand their profession, lipstick on the pig.) The profession is, like banking itself, loaded with ethical clowns. They want us to think they make money only on the closing commission, usually 6-7% (on homes) split among they buying and selling agent and the agencies that employ them. That slices it thinly. The possibility for hidden side deals is obvious, radon equipment and title insurance just two. Seriously, if radon accumulating in a crawl space is a real problem, what is the answer? Ventilation. How much “scientific knowledge do I have to possess to understand that?

      But like most people, when I sold that house back in 2014, I stumbled into the scam. When I was told I needed to spend $1,400 on what is basically just a fan and a vent, I remembered hearing that radon standards in Canada were much, much higher than in the U.S. I did some quick research and realized that if radon was dangerous, the same levels would apply everywhere, and yet Canada was several times that of the U.S. I then discovered that there was no legal requirement to mitigate radon, and so I told the Realtor@ I was not going to spend the money. If someone else thought there was a problem, someone else could pay.

      That is when it got strange. Word got back to me that the renter found out about the radon problem, and having young children, freaked. This is the nut of the radon scam, fear. Who would have told her? The bank? Me? A little birdie? No. Only the Realtor@. I was now faced with the possibility the tenant was going to vamoose, and would be faced with finding a new one, doing all of the cleaning and painting and other stuff, having to find someone suitable, and closing was just around the corner. My choice was obvious … install the f****** equipment, take the money and leave.

      There is one other possibility … the Realtor@ simply lied about the tenant. That too is a breach of ethics. In that case, if I asked the tenant about the radon problem, same result … she freaks.

      From all of this I now conclude that the Realtor@ was invested in the radon scam, and therefore was given a cut of the proceeds. For that to be the case, there has to be a considerable markup on the equipment, as with title insurance, for there to be enough to grease all the palms involved.

      I don’t know about Germany. In the U.S., this is all normal. This place is incredibly corrupt. Everything is a minefield. You’re right about business plans, that it takes good research and planning to run a successful business, and that means a written plan. I get all of that. But most often that plan involves something, some way, to guarantee some means of leveraging cash into the business with very little underlying cost … a gimmick. Banking itself has this gimmick … “points.” They simply take a percentage of the loan up front as their cut. I don’t know the going rate, but if it is 2 points on, say, a $500,000 loan, the bank gets $10,000 AND the annuity AND the security of real property as collateral [and a 1% “origination fee”]. They also force the borrower to insure the loan for them. That is a gimmick. You’ll find a gimmick behind every successful business.

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  2. “Westerners” have a quite funny view of “corruption”, “cronyism” and “nepotism”. Where in other cultures those things are common across society, and for the right reasons, in the so-called “developed” West people have been indoctrinated into believing those things are bad and don’t happen there.

    The difference is of course that in “the developed West” corruption (using ones means to achieve political or other goals), cronyism (relying on friends to gain influence or jobs) and nepotism (as cronyism but then family) also has been dominant for ages, but mostly restricted now to the elite classes. Who successfully manipulated the masses into believing such things are wrong.

    Imagine your son or daughter having to go to prison and you can avoid that from happening by using your financial or other means. A sane parent of course cares more for their children and make sure to save the kid. The same with cronyism and nepotism, which here in Latin America are common ways to do business. And rightly so; you can trust friends and family usually more than strangers and the idea of “I do something for you and you do something in return” is a good concept rooted in our social structure as human beings.

    In discussions with people back in Holland, one of the most indoctrinated countries in the world, I always had to laugh about their ignorance and belief in “this doesn’t happen here and it is bad”. It is not bad and it happens way bigger there than people imagine.

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  3. Those are good points, and I don’t object to either cronyism or nepotism. I also don’t object to companies engaging in price-fixing. That too is common in Europe. It’s the only way business is going to really survive. Here in the US, we just don’t talk about it. [On an unspoken level, it is easily understood by everyone in business that price competition is self-destructive. It is not done. Rather, businesses agree not to compete, slice up markets, or if they do actually compete do so only on peripheral things like market share. Airlines might try to lure customers from one another by such devices as a little more legroom or better snacks, but in the end all will charge the same price to fly to the same destination.]

    What is going on with radon, title insurance, points and origination fees, mortgage insurance, and stuff like that is quite different. That is deliberate deception of the public. It is dishonest business practices. I do object to that. It was the CPA for over 30 years, And I never had to resort to such tactics. If I had to hire a friend or a kid, which I never did, I would gladly do so. And being a CPA is itself a form of restraint of trade, as it is a club and you have to work hard to get into the club. So I am not a virgin in these matters.

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    1. No, sure, I didn’t mention it in the context of “this scam is good”, obviously it isn’t, it is lying and extorting money relying on fear pr0n.

      It used to be a scare too in Holland, so in Europe, contrary to what Müller claimed, and was a big issue as many houses do have basements there. The first 9 years of my life I slept in one, as did my parents too. And I remember from your story about your daughter you did too?

      If the radon scare would be real, that is very dangerous, because it is such a heavy gas, so stays close to the ground. “Ventilation” wouldn’t do much in such a case, more active air circulation (pumps, fans?) should be done. But these “135 packs of cigarettes per day” radon scare stories I don’t buy, not even for 1400 USD…

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        1. I will object cronyism, nepotism, and price-fixing as I have been a victim of all three. I enjoy when this stuff gets pointed out, much how I enjoy how POM points out how we have been bamboozled on certain issues. That new shirt for $39.99 cost pennies to make so when you see it on the clearance rack for $10.99 you aren’t getting a deal. And don’t get me started on car sales. That used car on the lot for $5,999 was bought at an auction for $850.

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  4. Cronyism is simply hiring of friends or friends of friends. That’s how the world revolves. The biggest problem with nepotism is regression to the mean, copies of copies, each generation less talented than the one before, and yet assuming they have what it takes. George W. Bush comes to mind, along with Steve Forbes.

    And I would love for you to ‘get started’ on car sales, other forms of hucksterism.

    I just asked my grandson, a very bright and ambitious kid, if in high school he ever studied compound interest. It is the guts of everything in business, creation of annuities. 18% on a credit card is robbery, but kids don’t understand that. Anyway, he said no, never for even a day.

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    1. The plan of business here in “Boston”is to wrap up the “WORLD SERIES” and put this “Baby to bed tonight”. The score is 2-1 Boston in the 5th, and I’m predicting a 5-2 ending to lay it to rest in “LA, LA LAND”. and “if”by chance it comes back here to Boston I’ll be waiting here to say Good-Night to the Dodgers.

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