Russ: Good morning. This is the BusinessMakers Show, heard here and seen online at thebusinessmakers.com. This is episode number 267 of that show that champions innovation and entrepreneurship.

John: That's right. Two-hundred and sixty-seven times over all these years we've been championing these guys and gals.

Russ: You bet. You bet.

John: That's probably a world record. I don't know of any show that has done that.

Russ: All right. You bet. All right. And here's our lineup for this morning. For our featured guest today, I am going to visit with a man who used what he learned as a kid when he worked for his Dad in his Dad's home moving business and then he combined that with what he learned from his own home building business, as a young adult to launch what he does today. I am going to sit down and talk with Kenneth Neatherlin, founder and CEO of Ground Force Building Systems. A cool company that builds concret home building foundations and then delivers them to the building site. But first... That's right. It's time for the BusinessMakers School of Business, and this is not your business as usual school by any means.

John: That's right, and we are living proof of that because of the tireless effort we put into this thing.

Russ: There you go.

John: But it's fun.

Russ: That's right.

John: And if you - I'll tell you, if you don't like what you're doing, you shouldn't do it.

Russ: There you go.

John: Yeah.

Russ: All right, and we kick off the School of Business each Saturday morning with a quote of the day.

John: Quote of the day.

Russ: And today's quote comes to us from Zig Ziglar.

John: Aah.

Russ: And it goes like this: "You don't have to be great to start, but you do have to start to be great."

John: That's right. Yeah, that's-

Russ: Pretty straightforward.

John: And pretty straight - you know, there's a lot of sayings like that, where they transpose the words, and that's one of them; it's a device, you know, you use to get peoples' attention.

Russ: You bet.

John: Jesse Jackson is famous for that, you know.

Russ: Yes. Yes.

John: Yeah. Okay.

Russ: My favorite Jesse Jackson one is when he said, "I not only deny the allegations, but I deny the allegator."

[Laughter]

Russ: All right, and that brings us to This Week in Business History. What happened during this July week in business history, John?

John: Well we're going to start in 1802. DuPont - we know that you've heard of that company, right?

Russ: Absolutely.

John: And it was founded by a French immigrant, I can't pronounce the first name, but the last name is DuPont.

Russ: Okay. There you go. Makes sense.

John: And, you know, his grandsons eventually took over the business, they established research facilities, transformed the company. It started out as an explosives manufacturer.

Russ: Right. Gunpowder, right?

John: Gunpowder. And it became involved in much more than that; in Kevlar, Lycra, Lucite, Teflon, Freon. I mean-

Russ: You bet.

John: You know, these chemical companies get a lot of flack because they're not "green," but if it weren't for some of these things they developed, it's-

Russ: Oh yeah. We would've never gotten to where we are today without it. That's right.

John: Absolutely.

Russ: So DuPont's-

John: We'd be sitting here, sweating through our suits-

Russ: That's right. That's right. That's right.

John: Without air conditioning. You know, Freon is the big thing.

Russ: That's right. So DuPont is 208 years old this week.

John: This week in business history, 1872, a guy named Mahlon Loomis patents wireless radio. Can you believe that, wireless radio-

Russ: Wireless radio. Yeah. Yeah.

John: -back in 1870. And that was just the patent.

Russ: That's right.

John: It was kind of a vague patent as you read into this thing, because the patent had no schematic drawing of how to build a wireless, you know, radio platform.

Russ: Right. Right. So sort of a concept patent.

John: It was a concept patent, yeah.

Russ: Okay.

John: Which is, you know, interesting.

Russ: Yes it is.

John: What do you think? I have a concept here. Okay.

Russ: Right. [Laughs]

John: This week in business history, in 1894 is the birthday of Percy L. Spencer of Howland, Maine, who is the patent holder for the microwave oven.

Russ: And what an invention that has been, turned out to be.

John: Oh man. Yeah, he joined the Navy like in the 1912 and learned wireless telegraphy.

Russ: Okay.

John: And joined the Raytheon Company in 1902. He worked with these things called magnetrons, which were used to generate microwave radio, and he was standing near one of these gizmos one day in 1945 and a chocolate bar melted in his pocket.

Russ: And he went, "Hmmm."

John: Well, he was standing in front of a magnetron. That eventually led to the big deal of everybody's got one.

Russ: And how could we do without 'em, man?

John: I know. I resisted getting one, I've got to tell you.

Russ: Did you?

John: I thought, 'You know, I'm not going to spend all this money just to heat up a couple of hot dogs everyday.'

Russ: Yeah? And then last week you broke down and bought one, eh? All right.

John: Yeah, I had a chocolate bar I wanted to soften up

Russ: Right?

John: You know the older you get the harder it is to chew things.

Russ: That's right.

John: Okay. All right. This week in business history, 1921, John Herschel Glenn was born in Ohio.

Russ: Oh my goodness.

John: Famous astronaut, The Right Stuff, he was a Marine. Now he eventually got into politics and he had a stain, a couple stains on his political career. He's part of this group of senators that tried to pressure government agency to relax oversight of an S&L in Phoenix.

Russ: Oh wow. Really?

John: And they were unsuccessful, but he was tainted by that. He was one of the seven or eight senators - John McCain was involved in that.

Russ: Right. Yes, he was.

John: And then later on he was able to quash a senate investigation of the Clinton administration through a rather underhanded manner.

Russ: John Glenn did?

John: John Glenn did, yeah.

Russ: Wow. Wow.

John: And they think the reason why he did that was the Clinton administration told him if he would do he could to derail this investigation then they knew Glenn wanted to go up in one of these spaceships again, and-

Russ: Right. That was the ticket to ride.

John: That was the ticket to ride, yeah. That's just a rumor/innuendo, but it's amazing how that all happened.

Russ: Yeah. And he did get to go, in his 80s, right?

John: He did. And the senate investigation was quashed on the Clinton administration.

Russ: Wow. There you go.

John: Okay. This week in business history, in 1925 Hitler publishes Mein Kampf. But that wasn't the original title of the book. The original title of the book was Four-and-a-Half Years Fighting Against Lies, Stupidity, and Cowardice.

Russ: What?

John: That was the original name of Mein Kampf.

Russ: Really? Really? Wow.

John: Yeah. And his publisher, a guy named Max Amann, was said to have suggested a much shorter title, Mein Kampf.

Russ: There you go.

John: This week in business history in 1935 an airplane crashes, actually it's a military airplane, crashed into the Empire State Building by mistake.

Russ: My goodness. Seventy-five years ago.

John: It was a foggy day. Yeah. Right. This week in business history in 1940 is the first successful helicopter flight, Stratford, Connecticut. Where would we be without the helicopter?

Russ: Boy, and I bet that was exciting. I mean, helicopters are pretty noisy, a lot of moving parts and everything.

John: I know, right, 'cause of those rotors. Man, the rotors.

Russ: Yeah, you bet.

John: This week in business history in 1941, Martha Reeves was born. She's famous for the group Martha and the Vandellas, "Dancing in the Street".

Russ: Oh yes. Oh yes.

John: But my favorite song was "Heat Wave". That was one of her best songs.

Russ: Oh yes. So she would be 69 years old this week.

John: That's right. Your math is impeccable.

Russ: Happy birthday, Martha. Well, thank you. I was always good at adding and subtracting.

John: I know, right. Yeah.

Russ: It's my specialty.

John: I know, right. This week in business history in 1955 the first electric power generated from atomic energy sold commercially. I think that happened around Pittsburgh. The Westinghouse Company was big on nuclear energy. It's too bad it was not developed even more. There were a lot of plants that were built and everything.

Russ: I think it's getting ready to be, hopefully, to meet solutions-

John: That's right.

Russ: For our challenges.

John: This week in business history in 1960 Cuba nationalizes all U.S.-owned sugar factories in Cuba.

Russ: Yeah.

John: Right. Not in other places.

Russ: Not in the United States.

John: Castro would if he wanted - if he could.

Russ: If he could, right.

John: Yeah. Right. Okay, 1965 this week in business history, Bob Dylan releases "Like a Rolling Stone".

Russ: What an incredible - I think recently Rolling Stone magazine said that that's the number one rock and roll hit of all time.

John: Right. This week in business history in 1968 the Intel Corporation was founded in Santa Clara, California. There's a company that did pretty well for itself.

Russ: Yeah. I think they had more to do with the information technology innovation and boom than anybody did. I mean, just, sheesh, yeah.

John: Well, it's a chip. That's the brain. That's kind of like the brain of the computer.

Russ: And everybody used it, yeah. It moved everything forward significantly.

John: But where would we be without the computer chip? We'd have all these boxes that wouldn't do anything.

Russ: That's right.

John: This week in business history in 1969 Mary Jo Kopechne in Ted Kennedy's car drowns. She's 28 years old and she was attending a "party" at Martha's Vineyard, Massachusetts. She's part of this group called the Boiler Room Girls that worked for Robert Kennedy. He gave Ted Kennedy the keys to the car to drive her back to - there's a ferry that took her to another little town, I guess, and he drove off the bridge and he lived and she died.

Russ: Yeah. Kind of mysterious and probably affected him in his political career the whole way.

John: Oh, it did. It did. You know-

Russ: As I guess it should if you think about all the details.

John: Okay. This week in business history, same week, this is unbelievable, first man ever that landed on the moon, Neil Armstrong, Edwin Aldrin.

Russ: Yeah, Buzz Aldrin, yeah.

John: And poor Michael Collins that was up in the command module. He never - you know, you'd think they'd say, "Hey, Michael, come on down and set foot on the" - he was-

Russ: "Stay up there."

John: -the whole time they were there he's, you know-

Russ: Just circling the moon up there.

John: I know. Right?

Russ: Yeah, and in quite a bit of danger himself.

John: Yeah. Right.

Russ: I mean you look at all the things they were doing, but what an event that was.

John: They could say, "Hey, come on down with us."

Russ: Yeah. "Come on, take a walk with us."

John: "Take a walk." Yeah. Good. This week in business history in 1996 the first commercial high-definition television signal was broadcast. Boy, that was a controversial thing, 'cause the Japanese were developing high-def and, you know, we were lagging behind.

Russ: But now it's common. It's everywhere. It's unbelievable.

John: I mean, you know, I don't watch a show unless it's in high-def.

Russ: Right. Right. I can't see it.

John: It has to be a really good show. A really good show.

Russ: Yeah, it does. It does.

John: This week in business history in the year 2000 the leaders of Salt Lake City bid to win the 2002 Winter Olympics were indicted by a federal grand jury for bribery, fraud, and racketeering.

Russ: Oh man, that's right.

John: They were all giving bribes to the Olympic committee to, you know-

Russ: Because they had decided and concluded, probably with evidence, that that's what it takes to win.

John: I guess so. Speaking of nefarious things that went on, this week in business history the telecom giant WorldCom filed for Chapter 11 bankruptcy protection. Something they did on their bookkeeping, they took expense items, things that you normally just expense, like a chair, a desk; instead of taking the full expense in the year or the month it was spent, they would depreciate it over many years, so it would make the financials look better.

Russ: Yeah, I always got a kick out of the explanation that in the same era when Enron went dead, they would say that Enron and their abuse of Generally Accepted Accounting Principles could be called calculus, it was so complex. On the other hand, what WorldCom did was just math. You know, they just did, it was like adding and subtracting. It was simple math.

John: Then I read in the Wall Street Journal the other day that Bank of America has been hiding some debt. Did you see that?

Russ: Wow. No.

John: The idea, right? I mean where's it all headed?

Russ: Yeah, we don't like the rules abusers. I mean they're just bad, you know, as the other end of the spectrum, the socialism aspect. These are both enemies of entrepreneurship, innovation, and capitalism.

John: As I've always said, and I live by this, is that without the rule of law you cannot have capitalism or entrepreneurship.

Russ: That's right.

John: You have chaos.

Russ: That's right.

John: You have anarchy. Civilization can't survive.

Russ: There you go. And that wraps up this morning's history lesson?

John: Hey, I can't think of anything else.

Russ: Good history lesson.

John: Thank you.

Russ: So I thank you. It's an award-winning history lesson.

John: Award winning. Award winning, yes.

Russ: That's right. And that brings us to the Jargon Challenge Round.

John: The Jargon Challenge Round, all right. Hey, I've been doing pretty good on this this year.

Russ: Yes, you have.

John: I bet - I think I've got a winning percentage.

Russ: You might be over the 50-percent mark, which is good.

John: Yeah, considering I don't know what the word is until the minute - the second I hear it.

Russ: That's exactly true.

John: I think it's pretty darn good.

Russ: That's exactly true. I go out and find a new word.

John: Or make one up.

Russ: Or make a new word.

John: Yeah. Yeah.

Russ: And I say the word - and then John guesses the meaning.

John: Without having heard the word before.

Russ: You ready?

John: Yeah.

Russ: It's a noun.

John: A person, place, or thing.

Russ: Gurgitator.

John: Gurgitate. Well, regurgitate is when you throw you up.

Russ: Yes, it is.

John: All right. Gurgitate is when you intake.

Russ: That's accurate.

John: So a gurgitator is someone who takes everything in and then regurgitates the stuff that's harmful.

Russ: [Laughs] No. No. You were doing well.

John: I was doing well.

Russ: A gurgitator is a person who competes in eating contests.

John: Oh.

Russ: So, you know, and there's probably some people that actually-

John: See, I was looking for a technology side thing.

Russ: I know you were. You went too far.

John: I should've just stuck with the-

Russ: That's right. You know, there are probably people who don't compete yet, but eat like gurgitators.

John: Yeah, and they weigh 600 pounds. They have to be taken out of their house with a crane.

Russ: That's right. That's right. All right, and that brings us to Dumb Moments in Business History. Do you have a new dumb moment for us?

John: Yeah. Well this is not a new one. I don't think we've talked about this in the 260-odd shows that we've done, but it just happened to catch my eye. Quaker Oats Company, I always thought that was a pretty smart company; this just goes to show that no matter how well-run or smart or whatever, someone's going to screw up.

Russ: Yeah. Right.

John: This is a big one. They branched out in the '90s and acquired Gatorade sports drink from Stokely. And they were real successful and thought, "Well man, we can't fail," so they later acquired a bottled tea maker called Snapple.

Russ: Oh yeah, I remember that, yeah.

John: And they spent like $1.7 billion, and it was a leveraged buyout, so they had to borrow all kinds of money for this thing. And they found out that, unlike their Gatorade products, Snapple required refrigeration.

Russ: They found out after they bought it?

John: Yeah. Right. And they did-

Russ: They didn't have that capability.

John: -shock, horror, dismay, they had no refrigerated - they did not own any refrigerated trucks. Distribution companies learned this and priced accordingly, so they had to outsource.

Russ: Right, the distribution.

John: Outsource the distribution. So they robbed Snapple of the money they needed for marketing, PR, and all that. And they eventually had to sell to a company called Triarc. They bought Snapple for $1.7 billion and then they sold it for $300 million.

Russ: [Laughs] I knew that it was a huge loss. I never knew this chapter on truck refrigeration.

John: I know.

Russ: It sounds like the due diligence team didn't do all the due diligence, man.

John: Yeah, I know, they should've.

Russ: What a mess.

John: Yeah, they should've - all they had to say was, "Well how do you get this stuff from point A to point B?"

Russ: Right. Absolutely.

John: "Oh, we need refrigerated trucks. Well we don't have any refrigerated trucks."

Russ: All right. Lesson learned. And before we wrap up this morning's School of Business, it's time for the very popular PKF Texas Entrepreneur's Playbook. So let's welcome Mr. Greg Price.

John: Here he is, you know.

Russ: On the piano.

John: Hey, Greg, how you doing? Here we go.

Russ and John: A one, and a two, and a-

Greg: This is Greg Price with PKF Texas' Entrepreneur's Playbook.

According to the U.S. Census Bureau, there are approximately 29 million privately held companies in the United States. Many of these small- and medium-sized (SME) entities report to a limited range of financial statement users, including venture capitalists, insurers and lenders.

In December 2009, the American Institute of CPAs (AICPA) and the Financial Accounting Foundation (FAF) formed a Blue-Ribbon Panel to address how U.S. accounting standards can best meet the needs of users of private company financial statements. The Panel is expected to provide recommendations on the future of standard setting for private companies. The analysis will include whether standalone accounting standards are needed.

Once set of standards that will be reviewed is the International Financial Reporting Standards (IFRS) for SMEs. Released during July 2009, the Standards are a slimmed-down version of the full IFRS. Along with the SMEs standards, the International Accounting Standards Board (IASB) released implementation guidance, including example financial statements and disclosure checklists.

These standards may have a widespread effect. According to the IASB, more than 95 percent of the companies around the world are classified as SMEs. Although there is not a size test to determine whether a company is an SME, classification is more readily determined by whether the company has "public accountability." As a result, this standard is not available to companies that are publicly traded or who hold assets in a fiduciary role, such as banks or insurance companies.

Because there is not a definitive timeline for adoption of IFRS by the SEC, there will continue be a period of substantial change. Since private companies will also be affected by the switch we will continue to monitor the process at the SEC, as well as with existing convergence projects by the FASB and IASB.

PKF Texas has written a white paper detailing the impact of the impending conversion which can be found on our website at pkftexas.com/IFRS.

To read and comment on the PKF Texas' Entrepreneur's Playbook, visit my blog, fromgregshead.com. And be sure to check out the new mobile ready website at PKF Texas.com - PKF Texas, The Fit That's Right!

Russ: And that wraps up this mornings School of Business. Be sure to stay tuned in to hear the story of the entrepreneur who used what he learned as a kid working for his Dad in his Dad's home moving business and then he combined that with what he learned from his own home building business, as a young adult to launch what he does today. That's Kenneth Neatherlin, founder and CEO of Ground Force Building Systems. The company that is changing the residential and small business building business. You're listening to the BusinessMakers Show heard here and seen online at theBusinessMakers.com.