Think about the short term but focus on the long term

I have always been annoyed by something in the world of business. It's not a new problem. In fact, I'm not even sure how many people even realize it is a problem. However, it is something that should be looked at more and something should be done about it.

There is just way too much focus on company quarterly earnings reports.

I suspect that a lot of this is being driven by the 24/7 media cycle we find ourselves in these days. The media talking heads that are on all of the tv networks, business websites or bloggers such as myself need stuff to write and talk about. It is easy to talk about companies quarterly earnings because it gives great talking points about where the business currently stands, and provides contrast against prior quarters.

Add all of this to 'meeting analysis' expectations' and it becomes easy to see how companies can shift focus to maintaining the good news every quarter - and maintaining a good stock price. When those expectations become too much, companies can turn to various shady practices to keep the good times rolling, but they will inevitably get caught.

That is why I believe companies should continually maintain focus on their long term plans, strategies and growth. Yes, short term thinking is obviously needed, but don't let it overtake focusing on the long term.

However, companies must maintain their focus on the long term. By doing so, short term plans will take care of themselves. Yes, there will be quarters of disappointing news, but it happens to all companies. Don't lose sleep over that and keep looking forward!

Oh Groupon

It was announced earlier this afternoon that Groupon had lost $42.7 million dollars in their first quarter as a public company.

Among many reasons, it didn't help that they had an effective tax rate of nearly 1600 percent. Sure that is due to various rates due to expansion expenses in various locations across the globe. But they will need to bring that down significantly in the near future.

However, I foresee a lot of problems going forward for Groupon.

For those that do not know, Groupon and a whole host of other companies (Living Social is most prominent), customers sign up to receive emails regarding specials for various businesses in their area. In most cases, it is for at least 50 percent off of products and services.

It is great for the customer, especially if there are offers that appeal to them on a regular basis. It can be good for a business to increase foot traffic or move product.

But many businesses just lose out when it comes to these types of products. Here is one story and there are hundreds more just like this.

When I had my business, representatives from Living Social dropped by on a regular basis wanting me to run deals, especially towards the end. I was already getting my ass kicked. I didn't need to take a greater beating.

I tried to get the reps to give me solid scenarios where I would actually be able to break even. They couldn't do it. The closest was for them where the customer would pay $10 for $20 worth of product, excluding liquor.

From there, Living Social would take 50 percent, or $5. Then they had all of these other ancillary and processing fees, that would end up yielding me around $2.70. I would take a loss no matter how much alcohol I could move. My costs were not around 15 percent. I never had a chance of breaking even, let alone making a profit. Groupon is very similar in nature.

If they are to ever achieve long term success, they will have to change their business model to attract and retain more businesses. Far too many have been chased off after losing too much money, time and reputation from experiences gone bad. If there are no businesses using Groupon and the like, there will be no customers.

Groupon needs to listen to more to their former customers like what I linked to above. If not, this type of business will go the way of pets.com.