Should You Install Microsoft Vista or Stick With XP

Now that Microsoft Vista has been around for a couple of years, is it time to switch from XP? The answer is a resounding NO! Here’s why.

For most small business users, the operating system of a computer is all but invisible. We use applications and share files. The technical stuff in the background might as well be operating in ancient Aramaic. We want it to run our word processing, spreadsheet, database, accounting and point of sale programs reliably, securely and economically.

Reliability

The latest versions of XP are quite reliable. Even though Apple wants you to believe you are dealing with mass occurrences of the blue screen of death (BSOD), you aren’t. You and your employees turn on your computers in the morning and they work. Vista doesn’t have any advantage here. Verdict: It’s a tie.

Security

Neither Vista nor XP are devoid of security issues. You need a good Internet firewall and good, up-to-date virus protection. It helps to train your employees not to click on everything that appears on their Internet browser screen as well. While you can’t be 100% safe from employee stupidity, you can follow a reasonable regimen of backups, adware and spyware removal. Neither operating system has an advantage here. Verdict: It’s a tie.

Economic Costs

Here is where Windows XP beats Vista by a mile. I’ll divide this category into three sub-categories: Software, hardware and training costs.

Software

All of the current software for Windows PCs runs on XP. Some of the current software doesn’t run on Vista. That’s right. You may have to upgrade your software to run on Vista. There is no advantage to changing to Vista and there may be significant costs to do so.

Hardware

Windows XP runs well on computers with any of the Intel or AMD processors made in the last five years. It will run with 512 megabytes of random access memory (RAM), although I prefer at least one gigabyte. Vista is a slow, bloated memory hog by comparison. Microsoft say is will run on less than one gigabyte of RAM, but I wouldn’t consider running it with less than three. Even then Vista is much slower than XP. The level of equipment needed to run Vista means that you will probably have to replace computers over two years old.

Next, you have to consider the hardware you have plugged into your computers. Printers, scanners, cash drawers and even some of the plug-in cards inside your computers may not work with Vista. For many of your hardware devices, you will need to install new drivers (programs that tell Vista how to run them). For some, there are no drivers available. In some cases, you will have to replace the hardware. Vista will surprise you with many hidden costs in this category.

Training

Vista doesn’t look like Windows XP. Your employees will not be able to find some of the functions they are accustomed to using on a daily basis. This means training costs and time wasted searching for OS functions. This may be the most expensive part of the whole changeover.

Summary

Microsoft is claiming that they will stop supporting XP at the end of June. I don’t believe it. Recently, Microsoft announced that a copy of XP will come with every new copy of Vista. All you will have to do is push the “go back to XP” button to uninstall Vista and install XP in its place. They have admitted defeat. XP is good for at least two more years.

The next version of Windows, Windows 7 is expected to ship at the end of 2009 and is expected to address many of the negatives of Vista.

My evaluation: Skip Vista and wait for Windows 7. There is no good reason to change from XP to Vista and there are lots of reasons to keep XP. If you have already bought some Vista machines, keep an eye out for a Microsoft offer to revert to XP. Your Vista machines may function without problems, but if they do wreak havoc with your office, go back to XP.

Written by Steven Tuttle - sdt@unh.edu

Editor's Note: This month we present the first in a series of management articles for the restaurant owner. Charlie Caramihalis is putting his decades of restaurant management experience into print. Each article will present a technique that can be used to increase profits for your business.

Calculating Actual Cost of Beef Entrees

By Charles Caramihalis, Associate Professor
Thompson School of Applied Science, University of New Hampshire

Food cost continues to remain one of the highest variable costs faced by any restaurateur. This fact coupled with continued price increases of commodities such as meat and increased competition among restaurants for their share of the customer base in this economy make it even more difficult to turn a profit in our business.

Many owners or even worse the chefs they hire improperly establish selling prices for the steaks they sell because they confuse price per pound of beef purchased with actual yield of beef following fabrication in the restaurant kitchen.

Establishing the actual raw cost per portion of beef entrees is simpler than one might think. To illustrate this point, consider the following scenario. A restaurant purchases a tenderloin strip which it cuts into 8 ounce filet mignons. The purchase weight of the strip is 8 pounds at a cost of $8.10 per pound for a total cost of $64.80. Correct? “Yes and no,” the smart restaurateur would respond. While the amount paid to the purveyor for the beef is $64.80, this amount is not reflective of the actual cost to the operation of each steak hitting the plate when ordered by the guest.  Many owners/chefs mistakenly divide the cost per pound shown on the invoice by the individual serving size without taking into account the actual yield after trim. Assuming this is done given the scenario above, the cost of each steak would be incorrectly computed to be $4.05.

 Although initially time consuming, the correct method requires the chef to take into account average trim loss when breaking down the whole tenderloin. If the average waste is deemed to be 20%, then the actual per pound cost would compute to be higher than $8.10. To correctly figure raw portion cost, simply multiply the invoice cost per pound ($8.10) by the additional percent lost in trim (20%) to get the true cost per pound:
                $8.10 x 1.2 = $9.72.
Therefore, the true raw cost per portion of each steak sold is determined to be $4.80, not $4.05.

As one can easily determine from the example above, incrementally this cost discrepancy represents huge potential losses in revenue for the operation. The same analysis must be completed for every center of the plate item fabricated in the restaurant kitchen to avoid these hidden losses.

Creating an Excel Loan Payoff Sheet

In previous articles we explored the Excel payment function (pmt) and the use of absolute references in formulas. Here is a useful spreadsheet that uses both. Let's assume that you purchased a new house in January of 1998 with the first payment on February 1. You borrowed $250,000 at 5.9% for 30 years and have been making payments on the first of the month for the last 10 years. How much do you owe the bank on February 1 of this year? This spreadsheet will give you the loan payoff balance for any month, for any loan of any amount and any interest rate. It assumes monthly payments but you can adjust for different periods.

First, here is the basic setup of the spreadsheet:

The payment function is =pmt(c2/12,d2*12,-b2). Note that the interest rate had to be divided by 12 to calculate monthly interest and that the term of the loan had to be multiplied by 12 to correctly calculate the total number of payments. The minus sign in front of the loan amount (principal) makes Excel return a positive result rather than the negative liability figure that is the default.

Our task is to write the formulas necessary to initialize the first payment and then to complete the necessary formulas for each successive row.

The First Row

The first row is different from all the others because it gets the initial balance from cell B2. After this row, every successive row will get its starting balance from the ending balance on the previous row. The formula for cell B5 is simply =B2. That puts the beginning loan balance into cell B5. By doing it this way, when we change the loan amount in cell B5, the entire spreadsheet will recalculate with the new amount.

Now it gets just a bit more complex. To calculate the interest paid for the first month, we need to multiply the starting balance by the monthly interest rate. Here's the formula: =b5*c2/12. Note that we had to divide the interest rate by 12. The rate is written as the annual interest rate. We needed the interest rate for one month. Here is a picture of what we have so far:

To calculate the principal paid, we can simply subtract the interest paid from the payment. That formula will be: =E2-C5. The Ending balance then can be calculated by subtracting the principal paid from the starting balance for this payment: =B5-D5. Here is the complete row of formulas and the results.

It appears that we have finished the first row, but we have not. Only the starting balance formula is different from the formulas on successive rows. Using absolute references, we can adjust the interest paid and principal paid formulas to work on all rows. The ending balance formula is ready for the rest of the spreadsheet.

Notice that we need the interest rate for every item in the interest paid column. Since the interest rate is always at cell C2, we can adjust the row 5 interest paid formula to read =B5*$C$2/12. Note that when we copy this formula down the column that the B5 will become B6, B7, B8, etc. It will refer to the starting balance for each payment. The C2 will continue to be C2 because it is locked by the dollar signs. By doing that, the formula will always refer to the interest rate at cell C2. That allows us to change C2 and automatically adjust the entire sheet to a new interest rate.

Now, we will do the same thing with the principal paid formula. The payment is always at cell E2. By putting dollar signs before the E and the 2, the formula will always refer to that cell to find the payment amount. Here's what we have so far and the results.

Note that the amounts didn't change when we used the absolute references.

Subsequent Rows

All that remains is to complete row 6 and copy it down as far as we want. The starting balance for the second payment is the ending balance for the first payment. The formua is simply: =E5. When we copy that down, the row number will adjust appropriately for each successive row. Since we adjusted the other three formulas, you may copy them down to row 6 now. Here are the resulting formulas and numbers:

You may now copy the row 6 formulas down the spreadsheet using the fill handle. Our original quest was to find the balance on February 1 of 2008. Let's see what we find.

Our balance before the February 1 payment is $208,652.81. After the payment it is $208,195.85.

One more note. To create the dates in column A you can use the autofill function. All you have to do is type the first two dates in A5 and A6. Then select both dates and use the fill handle to increment down the column for as many rows as you like. But... Autofill is a different topic for a different time.

Written by Steven Tuttle - sdt@unh.edu

Help Your Employees Manage Their Careers

Creating a Career Ladder

By William H. Scott
Professor of Applied Business Management
University of New Hampshire

Motivated employees require a vision of how efficient performance in their present position relates to their long range career goals.

The first step in visualizing your path is to know what your goal is.  According to the Cheshire Cat in Alice in Wonderland, "If You Don't Know Where You're Going, Any Road Will Get You There." To get there you have to know where there is.

I like to use a magic wand to help employees visualize a career objective.  If I had a magic wand and could grant you any job in the world, what would you choose?  The answer to that question is the top rung on your employee’s career ladder.  Now all we have to do is determine the steps to reach that goal.  Obviously the path will be different for each career.

Since I work with students, it is relatively easy to give them an assignment to contact 10 people in their chosen career and to interview them with the primary question being:  How did you get your present position?  Other questions would be:  Is college necessary?  What courses will help the most?  What jobs did you have that gave you the experience to be prepared for your position?  What do you like/dislike about your present position?

This procedure can easily be accomplished by a non-student.  It is very flattering to be asked to help a younger person to reach your position in life. Nine out of ten people will answer your questions if asked.

As a result of questioning 10 role models they will learn the most probable path to take.  A second result is they may find a mentor who will advise them on an on-going basis. Once the goal and steps to reach the goal are determined, the employer should provide encouragement to attend the correct seminars or colleges to gain the necessary experience.

A career ladder with dates should be developed.  For a Human Resource Manager that ladder would look something like this:

For a Restaurant Manager/Owner the ladder may look like this:

Throughout the rungs it is expected that workshops/seminars/courses will be taken as suggested by mentors or advisors. By helping your employees create their career ladders, you provide them with the growth opportunities they need to manage their careers.