Everyone's Blog Posts - SBDC National Network

Entrepreneurs-Time to Be Thankful

2010-12-23T17:15:38.000Z

Whether you’ve had a difficult year in this current environment or have been one of the fortunate ones and prospered, it would serve you well to pause and take stock of all the things you should be thankful for.

Be thankful you are in your own business and your own boss. Millions of people aspire for the same.

Be thankful for all your customers without whom you would have no business.

Be thankful you live in the United States, which affords you the opportunity to pursue your passion and to succeed with no limitations– and yes to fail, which
is one of life’s great teachers.

Be thankful you can choose which 80 hours each week that you can work.

Be thankful for your family and friends who are your support team–an essential element for Small Business owners.

Be thankful for your loyal employees who are helping you fulfill your dreams.

Be thankful you are rewarded for your company’s successes while knowing you can pay for its risks.

Be thankful that you can make sure everything is done the right way.

Be thankful you can try to implement any ideas you have and bring them to fruition. The corporate people can’t say that.

Be thankful you are in a position to positively impact other people’s lives.

Bob Reiss is the author of Bootstrapping 101: Tips to Build Your Business with Limited Cash and Free Outside Help . He has been involved in 16 start-ups, is a three time INC 500 winner, a graduate of Columbia University and Harvard Business School and the
subject of two Harvard case studies. He’s a frequent speaker at
university entrepreneurial classes.

The Hurricane Pipeline Is Loaded- Tips to Protect and Save Important Documents, Collectibles

2010-09-03T10:00:00.000Z

The Hurricane Pipeline Is Loaded

Both CNN and The Weather Channel are reporting a line of hurricanes and tropical storms that extend over the entire Atlantic to Africa. Everyone’s still guessing how powerful they’ll be and where they’ll make landfall but the one thing they all agree on is that the next couple of months are going to be dicey.

The most active date of hurricane season is marked as September 10th but the season continues through the beginning of Nov.

Prognosticators have been predicting an active destructive 2010 season right from the beginning. In fact, at the National Hurricane Conference in Orlando, I heard some of these experts first hand and discussed the season and precautions we should take with Hurricane Bob, the well known Internet Radio Expert. (http://freehurricaneinfo.org/hurricane/water-damage-mold/hurricane-crystal-ball-gazers-see-trouble/) But up till now there has been no activity beyond the tropical storms that have been dealt with in stride. Yet, interestingly enough, none of the experts have been willing to recant their predictions even though half the season is past.

Well, don’t sit back and breath easy yet… I just left Virginia Beach, VA where I was visiting Tom Antion, the legendary Internet Marketer… just in time to avoid the packing and evacuation warning for the arrival of Hurricane Earl, with Fiona on it’s heels. And, as you may know, there are two more lined up behind Fiona: Gustav and another not yet named.

I called Tom this morning and they are packed, evacuated and 3 hours inland. I asked what he packed up: family history, dogs and electronic copies of business and important info. He didn’t have a Grab n’ Go kit… but fortunately, this time, had time to pack and get out of town.

Packing and evacuating is a harrowing unsettling experience that belies the innate wiring we have to protect our stuff. Of course you can’t take it all with you. So some priorities must be understood ahead of time. Preparation ahead of time means all the difference in the world. Interesting enough, preparing ahead of time for a disaster like a hurricane also prepares you for home fires, flooding etc.

Treasured Photos and Documents: Storms, Water Damage, Mold and Copy work

At the National Genealogical Society’s annual meeting in Salt Lake City, UT, I terrorized the expo of aged family curators and archivists when I flashed in front of visitors to my booth a scrapbook/photo album that had been badly ruined by water and had grown an ugly crop of mold. The morning before the conference started, a distraught lady had given me two of these books, unwilling to deal with the mess. Inside are treasured family photos including those of grandparents now gone, documents and certificates of graduation and church ceremonies, letters from young children and lots of cute children growing up. Can you image just throwing out something like this!?

There is help available to salvage these situations and this type of damage is totally avoidable! This disaster occurred in a cardboard box, on the front driveway of their house while they were moving between houses in the same town. You don’t necessarily need a hurricane or flood to have disaster. It can be a situation all of your own making.

So, here are some helpful, useful, cheap-to-do tips that will make get you prepared:

Ahead of the Storm

Make Copies
• Make copies of important documents and irreplaceable photos and send them to someone out of the area.
• The ink on good laser copies won’t run with water. Photocopy, photocopy, photocopy… but remember, your ink jet on your desk is NOT archival and the inks will run!
• Many photos kept on hard drives can be copied to another location. Scan docs.

For items at home or in the office:
• Find a place to store items on high ground (top shelf of a closet)
• Put memories in clean plastic tubs. Get your photos, books, letters out of cardboard boxes. If cardboard boxes get wet, they stain everything.
• If you stash boxes of stuff in the attic in an emergency situation, don’t leave them there long term.. . The heat of attics won’t be good for original old photos and papers.
• An inventory and appraisals will be very important to have. Go to www.personalpropertyappraisal.com
• Shake proof your house and office to minimize the flying around of objects and breakage. Museum Wax is an excellent product. See http://freehurricaneinfo.org/productssupplies/

Keep this in mind after a storm hits

Knowing what to do after a disaster has struck may allow you to save your most personal and valued possessions. If it’s valuable in any way, don’t throw it out just because it’s stained, moldy, wet or torn. There may be a way to get help.”

Talk to Someone Before You Throw Your Damaged Stuff Away

Have you had books ruined by mold or photos that have stuck together in a pile? Perhaps you have had frames bashed, a painting that was torn or items that were smoke damaged? I visited recently with a woman who suffered a total loss because of the toxic smoke from a fire over six months ago. She was still an emotional basket case because of the unsettled situation with possessions she loved. With some proper instruction and help, it doesn’t have to be like that.

Stay hopeful and find help. Much can be done to recoup lost items of value, even if it’s a long time after the fact.” If you need help interacting with your insurance company, go to http://insurancepersonalpropertyassessments.com/ for more information, examples and referrals for help.

The cost? Yes, that’s a major factor. That’s why I try to empower the homeowner and small business owner to do as much as possible. Most of the items to be retrieved have no monetary value. Every dollar has to stretch a long way, especially in times of crisis.

For a copy of “How To Save Your Stuff From A Disaster” click now, on http://www.freehurricaneinfo.org/productssupplies/
Here are some sources for more information:
http://www.saveyourstuff.com/cmd.php?af=1192684
www.faclappraisals.com
www.fineartconservationlab.com

Facebook pages with info: “SaveYourStuff”, “Preserving Family History”, “Fine Art Conservation”, “Fine Art Insurance Help”, “Free Hurricane Info”

Asking For A Raise

2010-08-26T16:14:07.000Z

A great number of people would rather visit their dentist than ask their boss for a raise that they believe they deserve and is overdue. I believe that everyone in this situation should summon up their courage and ask for it. You have nothing to lose and everything to gain. Here are some thoughts that may help you do so successfully.

First, this need not be confrontational. You should be asking, not demanding. Do not exhibit anger or yell. Many times it’s not what you say but how you say it that determines the outcome. No threats.

Like most things in life, your success or failure can be determined by your preparation. Here are some things to think about in this vane:

Know and be ready to articulate your contribution to the company. It’s never about your needs but what you offer your company and your boss.
Know your job description, who you report to, and who reports to you. Often, your boss is not aware of your responsibilities and contribution.
Try to know what your fellow employees with similar responsibilities earn. This should not be public knowledge, but somehow it is.
Research what competitors pay for your type of job.
Be ready if asked, “How much of a raise are you looking for?”
Think about what additional responsibilities you can assume, you want, and what the company needs, and what you’re ready for. This can be the tipping argument in your getting the raise.
Know the company’s current financial situation and prospects. This can affect some of your approach.
Be relaxed and remember humor is a very effective, persuasive trait in your favor. This does not mean memorized rehearsed jokes. Stay within yourself.
If turned down, do not exhibit anger even if you feel it. Instead think of asking what you can do to earn more.
If the company is in a current bad economic situation and your boss says you are deserving of a raise but can’t afford it, then you might suggest alternate non-cash rewards, like stock options and perks.

There are a number of benefits for you even if your raise request is rejected, such as:

If your request is articulated in a convincing and calm manner, you will be respected for your attempt and put on your boss’s radar for increased responsibilities because of the way you handled a difficult situation.
You are planting seeds for a future raise.
In a prosperous company year when bonuses/raises are given out, you may be higher on the list and given more because of your request.

The lesson here for Small business owners is when you discover you have talented and productive employees, don’t wait for them to ask for a raise. Go to them first and offer them one, even if you can’t afford it at the moment. Explain to them that you appreciate their work, offer them a perk or token raise, and tell them you will give them the raise when the company can afford it. If you do
this, your employees will be even more productive and won’t be putting their resumes out there.

Bob Reiss is the author of Bootstrapping 101: Tips to Build Your Business with Limited Cash and Free Outside Help. He has been involved in 16 start-ups, is a three time INC 500 winner, a graduate of Columbia University and Harvard Business School and the subject of two Harvard case studies. He’s a frequent speaker at university entrepreneurial classes.

Intuition-Use in Decision Making

2010-08-26T16:09:07.000Z

One of the big questions about decision making is the intuition versus science balance: how much should you go with your gut and how much should you depend on information that has been
gathered systematically? My answer is that intuition should be used as often as possible. I’m well aware that there are many people who feel that “your gut” is the same thing as “your emotions” and therefore should not to be trusted. But it seems to me that if you’re working in a realm you’ve very familiar with, your gut is based on the sum total of your past experiences. If you’re driving down a road in a city where you’ve never been before, you haven’t looked at the map in the glove compartment, and there are no landmarks with which to orient yourself, then your intuition about which direction to head in is probably worth very little.

By contrast, if you’re on your own turf, your intuition is worth a lot. It may not be something you can articulate as a rational process, but it’s definitely a tool you should use. So, if you’ve got a lot of
experience, trust your gut more. And if you’ve got a lot of time—and some resources—try to adopt a systematic approach to the decision at hand.

The decision deadline is a factor in the intuition versus science approach. With lots of time, the balance shifts towards a more systematic, thorough study approach. With less time, I would rather rely
on intuition rather than lose an opportunity. Of course, if the opportunity fails and can put your company out of business, I would want more than intuition at play. . .but don’t downplay the value of
intuition, particularly in an experienced person.

TROUBLE GETTING AN APPOINTMENT ?

2010-07-11T18:36:52.000Z

I loved reading the below Media Life Magazine article on a smart way to find a job. I have reproduced it in its entirety as I believe it applies equally to securing a hard to get appointment in your sales effort.

Happy Selling!
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Now here's a smart way to find a job - Target a Google ad at the person you want to hire you

By Diego Vasquez
Jun 15, 2010

It’s the time of year when thousands of recent college graduates are searching for their first job in media, hoping to find some way to stand out in a crowded field. They could learn a lesson from Alec Brownstein. The 29-year-old from New York City was looking for a way to get his resume in front of some top agency creative directors when he flashed on an idea: Why not buy a Google ad targeting them by name? Whether we like to admit it or not, everyone Googles themselves. The next time they did so, they found an ad addressing them by name and stating why Brownstein would be the perfect hire. He bought the ad last summer and by January had a new job as a senior copywriter at Young & Rubicam, the agency he targeted in his search. Though recent graduates are often warned not to use gimmicks in their job search, this particular gimmick worked because Brownstein was also showing his future bosses his smarts: He knows how good media works. Brownstein talks to Media Life about how inspiration struck, why it cost so little to execute, and why the scheme worked.

How did you come up with this idea? How long did you kick it around before deciding to go ahead with it, and where were you employed before?

I decided that I wanted to work at Young & Rubicam in New York, for some of the most creative creative directors in the business. I was doing a bit of research about them, on Google of course, and I noticed that no sponsored links appeared when you Googled their names.

As someone who Googles myself, shall we say, frequently, I realized that if someone were to take out an ad above my results, I would notice it. So that’s what I did.

I didn’t kick around the idea for long before implementing it. I think I executed the idea the same day that I thought it up. I was employed at the time, but at a much less creative agency.

How did you decide who to target with the ad?

I identified the creative directors whose work I most admired and respected. These were the guys who I thought I could learn the most from, so I targeted them.

Take us through the process — how much did the ad cost, what did it say, how long did it run, etc.

Since nobody else was bidding on these names as search terms, I was able to get the top spot for a bid of 15 cents per click. I only paid per click, but I put a cap of $1 per day, per ad, just in case.

The ad said, “Hey, _____________. Googling yourself is a lot of fun. Hiring me is fun, too.” The ad then linked to my online portfolio. I believe that the ads ran for about six weeks before I started getting responses. The total cost for the entire campaign was less than $6.

Did you hear from all the people you targeted? How many interviews did you get?

I heard from four of the five creative directors that I targeted. I interviewed with all four of them and received a job offer from two of them.

Was anyone embarrassed to be discovered Googling themselves?

Interestingly enough, they all said that someone else had Googled them and told them about it.

People are sometimes advised not to do gimmicky things, like sending resumes on pink paper or sending HR people gifts to stand out.

Why do you think this gimmick worked? How much of it has to do with the fact that advertising is an industry based on creativity?

I believe that the Google Job Experiment worked because the entire idea was predicated upon the thing which I was asking them to hire me to do. That is, to create a successful ad. It was certainly a stunt, but different in its thinking than, say, sending a resume on pink paper. My exact execution was probably best for the advertising industry, but I believe that there is room for creativity in any job search. The key is to come up with that creative idea that says more than just, “Look at me!”
but says, “Look at me, I’m quite good at __________.”

How much media attention have you gotten for all of this? Have you enjoyed it, or is it getting to be a distraction?

The media attention has been amazing. I’ve been on/in news shows, magazines, blogs, trade publications, radio, etc. It’s died down quite a bit, so it’s not really a distraction for me. I have enjoyed it, though.

Now that you’ve used this method to get a job, how will you go about getting a raise?

Good question. Perhaps I’ll figure out a dollar value for all the free press that I’ve gotten for the agency and then ask for that. Or I could do it the old fashioned way: hard work. Maybe I’ll try both.

Making the Most of SBDC Resources

2010-07-02T15:00:00.000Z

Not familiar with the amazing work that SBDC Counselors do? When I speak with entrepreneurs, I'm often surprised that they are not aware of the many excellent resources that are available to them through their local SBDC.

"Business owners can tap into comprehensive, confidential business counseling services at no cost," I explain to them. A typical response is "What's the catch?" and then I give them a history of the SBDC dating back to 1979 and explain the economic impact of the SBDC on the small business economy. There's no catch, I explain, and you should absolutely pay a visit to the SBDC near you.

I've had a few business owners come back to me and thank me profusely for introducing them to the SBDC and its vast resources for entrepreneurs. My only regrets are that the SBDC resources are limited and that awareness of the SBDC is not as high as it should be. It's my own opinion that small business growth is essential not just to cure the ills of an atrophied economy but also to cure a number of societal ills -- crime problems, domestic abuse, insufficient education levels, trade deficits, etc.

All of these challenges can be solved by a booming small business environment that churns out jobs and training while speeding the flow of money through the economy. Keep your fingers crossed that more resources are allocated to good entrepreneur-friendly programs like the SBDC in the years to come.

For additional thoughts on entrepreneurship, please visit my Resources for Entrepreneurs website.

Managing Your Numbers Is Essential for Growth

2010-06-30T13:20:01.000Z

This is my June column in Entrepreneur.

It takes more than quarterly meetings with your accountant to know what is going on.

Do you want to do everything you possibly can to ensure the survival and growth of your company? Of course you do. Well, one of the most essential skills that you can bring to your company is understanding, tracking, and using certain numbers.

This numeracy–thinking in numbers–is a vital, vital skill.

Let me explain. In my experience, far too many people feel that they aren’t good at math, or didn’t take accounting, or whatever. Using this as an excuse, they hire someone else to watch the numbers for them. This is two mistakes in one. First, they’re selling themselves short. Anybody can work with numbers, and the kind of number-tracking I’m talking about requires no advanced mathematical training or professional degree. Second, there’s no substitute for you in this process. Nobody else out there is as motivated as you are to get the numbers working on behalf of your business.

Yes, your accountant can prepare your P&L statements, tax returns, and balance sheet and offer certain kinds of advice based on rules-of-thumb and industry norms. (By the way, an accountant with lots of experience working with companies like yours can be a gold mine of comparative information.) But you simply can’t count on quarterly meetings with your accountant. In order to run your company properly, and dramatically reduce your risk of failure, you need to get access to certain numbers quickly, and use those numbers effectively.

Here are the numbers you should have at your fingertips:

a snapshot of the company,
cash flow statements that are regularly updated,
cost analysis of your product(s),
break-even analyses, both for the company overall and for each new product.

Here I will only discuss the snapshot of the company. My goal is to get you comfortable with these numbers–by which I don’t simply mean that you’ll be able to generate them, but that you’ll understand them and be able to adapt and use them effectively. In general, my prescription is, know and love these numbers! Note, I am not saying you have to prepare the snapshot yourself. When you’re small, you can have your accountant or bookkeeper prepare them for you; and if your company grows to the point that you can afford a chief financial officer, then he/she will take responsibility for preparing the numbers.

I call the following chart the Company Snapshot because I want to convey the idea that it’s quick to read and absorb. I’ve done it weekly because that’s been the interval that’s proven most helpful to me in my businesses. One manufacturing company I’ve worked with does a similar report daily. Depending on the nature of your business, you might find a bi-weekly report adequate, particularly during slow seasons. In certain situations–for example, where your company is temporarily flush with cash–you may decide that a monthly snapshot is adequate. But you can’t make that decision until you understand the snapshot, and how your company performs against that snapshot. So my advice is start weekly, and adjust as necessary. The snapshot is meant to be simple. It’s meant to be easy to prepare–your secretary or bookkeeper should be able to do it–and able to be digested by you in no more than five minutes. Depending on the specifics of your business, you may want to add or subtract categories from the following exhibit. You might also want to use comparatives from a prior period.

Just remember: Keep it simple.

Company Snapshot

Current assets: _________________
Cash, reg: _________________
Liquid assets: _________________
Receivables: _________________
Other: _________________

Total: _________________

Inventory (if a product company): ______________________
Finished: ___________________
Component: ___________________

Total: ___________________

Current liabilities: ______________________
Payables: ______________________
Misc: ______________________
Accrued commissions: __________________
Accrued royalties: __________________

Total: ______________________

Fixed monthly expenses: ______________________

Loans outstanding: ______________________
Monthly sales to date: ______________________
Yearly sales to date: ______________________
Future orders to ship: ______________________
Open purchase orders: ______________________

The point of this report is to get the quickest possible handle on key
aspects of your company’s operation, such as:

Do I have enough cash to pay my bills? (You may notice that you’re cash challenged because your fixed monthly expenses seem to be too high. This should trigger you to start thinking about cutting some expenses or converting some to variable expenses.)
Are my receivables running too high? (If so, is it because payments are running late? Or is it because my credit-checking system has fallen apart, and we’re selling more non-credit-worthy
customers?)
Do I have enough inventory to handle future demand? (A caveat: This report can’t tell you if you have the inventory in the right categories; only a detailed inventory report can tell you that.)
Have we over-committed ourselves in terms of inventory? (Most companies hit this stumbling block sooner or later. If your inventory figure is too high, it’s a signal that you need to get the kind of detailed report that would let you take the right immediate action–such as canceling existing product orders, heading off the placement of future orders, putting certain items on sale, or closing out certain items.)
Are my sales on target as to projections? If not, why and what corrective actions need to be initiated?

Starting and growing a business can have you in chasing-your-tail mode with not enough time in the day to do everything. While you deal with this syndrome, you must always keep an eye on your numbers. This snapshot is meant to help you do so in a minimum amount of time. It will help you prevent crises by spotting them before they materialize. Most business failures are attributed to running out of cash. Let’s avoid that.

Are You Financially and Emotionally Ready To Sell Your Business?

2010-06-16T21:54:46.000Z

Walking away from your life’s work is a big step that doesn’t come without its obstacles. Determining your readiness to sell your business largely comes down to two main factors. Are you financially ready to sell your company? And are you emotionally ready to sell your company?

Assessing Your Financial Readiness to Sell a Company

Your financial situation may be the easier of the two factors to consider but surprisingly, it is oftentimes the one most overlooked by sellers. The key question is whether the proceeds you receive from selling your business will give you the financial means to actually leave the business. For most people, the value of their business makes up a large chunk of their net worth. That means getting the right price is critical to reaching their post-sale goals. You’d be one of the lucky few if the proceeds from your sale are not essential for your retirement or future plans.

But selling also means cutting off the revenue source you’ve been drawing out of every year. So how much do you need to go forward? What sale price will allow you to meet that need? And can your business currently command that price on the open market? If the answer is no, now may not be the right time to sell.

The best way to assess your financial readiness to sell a company is to find a wealth manger, an individual who can analyze your entire portfolio and calculate your post-sale needs. But the first step is finding an experienced, knowledgeable third party to put a value on your business. Once the valuation is completed, your wealth manager will be able to determine if a sale will yield enough money to fund your future plans. If the proceeds won’t be enough, you may have to spend the next few years working to build up the businesses’ value before you sell. Otherwise you must consider lowering your expected spending after the sale or finding a way to supplement your income and bridge the gap.

Assessing Your Emotional Readiness to Sell a Company

The more elusive part of evaluating your readiness to sell is your emotional readiness. Can you really walk away from the business you built for so many years?

While there will be a transition period where you stay in touch for some period of time, there will still be that moment when your services are no longer needed. What are your plans when that day arrives? It’s best if you can detail exactly how you are going to spend our time. More time with the kids/grandkids? More time for a hobby? Even starting another business? If you cannot describe post-sale life, you should question your sale decision.

The example of a niche manufacture illustrates the importance of emotional readiness. The seller’s business attracted multiple buyers with significant offers but a deal was never made. Why? It really came down to the fact that the owner was not emotionally ready to walk away unless he received an unrealistically high offer. When the moment arrived to sell, he simply couldn’t disengage from the business. The net result was time, energy and capital wasted.

So truly ask yourself the tough questions before pursuing the difficult and long task of marketing your business for sale. Will you have the necessary funds for your desired post-sale life and are you emotionally ready to pursue a life after business ownership? If the answer is no, keep the business running – assuming you have the will and drive to remain competitive and relevant.

Learn more at www.bizbrokerjournal.com

Energy – An Important Entrepreneurial Attribute

2010-06-15T13:00:00.000Z

One thing I’ve noticed, in my conversations with entrepreneurs over the years, is the incredibly high energy levels most of them possess. It would be interesting to find out whether they’ve always been
that way, or whether they started working at higher energy levels as the amount of fun and reward in their lives began to increase after they started their own business.

I’m convinced that, within reason, physical activity generates more energy than it consumes. All the years when I was on the road, I made a point of working out almost every day. (This was back in the days before running became popular, and I used to attract some interesting looks from hotel guests as they encountered this character running around the periphery of the parking lot in the dark.) Physical exertion makes you sleep better and think better, and may permit you to sleep fewer hours with no ill effects. And the more stress you’re under, the more you will benefit from exercise.

I remember when a Goldman Sachs partner, Connie Duckworth, gave an informal talk at my kids’ school a number of years ago. (The talk was sponsored by Dare to Dream, a foundation headed by my wife, Grace, that tries to inspire girls and young women to aspire to high professional achievement.) Duckworth was telling her young audience about her schedule, which might best be described as murderous. At the time she had three children (ages one, two, and five), worked a million hours a
week, and had no free time. But she treasured her exercise. Her solution? To work out at 4:00 a.m. three or four times a week. Duckworth was performing at a high energy level!

You will have to do the same. Think about it: The engine that makes your small business go is you. So take care of your engine. Give it a proper physical regimen and diet, which is very important and usually overlooked. Read a book, get a video, put an exercise machine in your home or office, go to classes, hire a trainer—whatever it takes to get into the habit. But above all, use common sense. And don’t let yourself say that you don’t have enough time. Make exercise a priority, and
you’ll be paid back with increased efficiency, and a good shot at a longer and more satisfying life.

ACCEPT CRITICISM GRACIOUSLY

2010-06-14T18:00:00.000Z

I believe that a strong attribute of a successful entrepreneur is to accept criticism and to do it graciously so that the person offering it will give it again.

Sounds simple enough, but a great number of people just can’t do it. They get angry, petulant, standoffish, etc., and resent the person offering it. The opposite should happen as most people offering it like you and are doing it to help you. In fact, it may be uncomfortable for them to do it. Those receiving the criticism should thank them.

To grow your business and yourself, you should seek out criticism. We all like to say we welcome feedback. However, you must remember feedback goes two ways. We love good feedback because if affirms our beliefs or actions. Often it is negative, and you should welcome it and delve into the reason behind the negativity as it could be very beneficial to you.

Most people offer criticism on a positive note. They don’t call you stupid. It’s hard to be gracious to someone who offers criticism in an insulting manner. However, your company may have treated them
egregiously. Think about your experiences with large companies who have treated you poorly re: your purchase of their product or service. The airline has lost your baggage on your long awaited vacation; they don’t even call you with an update on your status; and if you call them, the phone is busy. You want to scream and will do so if you ever had a human to talk to. Your bank makes a mistake and bounces your check; when you call, they immediately suggest you made an error. If these companies would listen to their customers’ complaints/criticism, they would learn how to correct their problems, which would improve their bottom line and create long-term loyal customers.

This acceptance of criticism extends to all your human activities. Certainly, your employees will be more motivated and productive if the boss really listened and sometimes acted on their criticism. Once you understand the benefits to you of accepting criticism, work hard at taking it graciously. This will ensure that the process will continue. . .all to your benefit. Criticism can be a source of continuous learning.

Hurricane Season Starts. But Who Cares If You Don’t Live In Hurricane Country?

2010-06-10T18:18:24.000Z

Hurricanes are a big deal… the most violent of weather related natural disasters. The Director of Human Resources at Amgen told me that if a hurricane made a direct hit on their production facility in the Caribbean and shut them down, they would be in a world of hurt. The domino effect would impact businesses all over the world.

So, the question to you is, “Are any of your suppliers or major clients in hurricane country?” What will happen to your company if:

… you stop getting supplies?

… your supply routes are blocked or closed?

… your customer’s businesses are closed?

What are the chances this will happen?

The predictions from the experts over the last few months and from the National Hurricane Conference that I reported to you on previously… will all be updated in June 1^st. The updates will reflect a worsening of the predictions and more pessimistic prognosticators. The experts warn a 'Hell of a year' for hurricanes.

Weather Services International said the coastal region from the Outer Banks of North Carolina northward to Maine was twice as likely as normal to experience a hurricane this year.

STORY LINK: http://www.msnbc.msn.com/id/37360717/ns/weather/

And here’s something most people haven’t been talking about: What will a hurricane do with all the oil floating on the oceans? The picture isn’t pretty. This week the BP CEO announced the oil disaster was caused by “an unprecedented combination of failures.” We are about to see “an unprecedented combination of failures” regarding this hurricane season. Both were predictable. The second will impact your business even if you are not located on the coast.

President Obama declared this week, “Hurricane Preparation Week” and Hurricane Season officially starts next week. The past seasons have lulled us into a false sense of security and disaster denial. All forecasts point to an elevated number and severity of hurricanes this year. Probability and risk statistics should not be your key driver. But, “What if?” is the key question to ask this year. Will you be impacted or not, directly or indirectly? If you do not understand all the impacts and don’t have monitoring plans, triggers, and predetermined action plans in place, your business is at risk. Failure to plan places you at personal risk.

For example, supply chains will be the single greatest point of failure for businesses across the U.S. during hurricane season. Do you know who your key suppliers are? Have you reviewed their business continuity plans? What metrics did you use? Do you know the shipping routes used? You are betting your company on them. Hurricanes will occur. There will be a disruption. Are you ready?

Your greatest tool in helping your contacts, suppliers and customers be better prepared so that your business is protected (against the impact of their losses), is to keep a “Be Prepared” conversation going with those with whom you have personal contact and relationships. Here are five tips to stay present with:

1. Copy important documents, contracts, legal papers and keep the extra copy in another location (another state or on-line)
2. Update appraisals, ownership certificates and insurance policies (and the documentation for those policies) and keep a duplicate copy somewhere else (another state or on-line storage).
3. Can an alternative communication system be implemented (short wave) to stay in contact?
4. A walk through the business with a video camera looking at details and making comments that will be of interest in settling an insurance claim make be invaluable.
5. Consider the value to a company that photos, art, collectibles, awards, antiques etc may have. They make up a corporate culture and some items can heavily influence the asset sheet balance.

Paying attention to these potential needs of your business' associates and support system... and taking action to anticipate their needs may keep you in business and functioning.

For a copy of “How To Save Your Stuff From A Disaster” click now, on

http://www.saveyourstuff.com/cmd.php?af=1192684

More tips are available at

www.saveyourstufffromadisaster.com

and from

www.freehurricaneinfo.org

What was the biggest earthquake in recorded history? Some tips for you!

2010-06-10T18:00:00.000Z

Earthquakes, Risk Management,

Disaster Preparedness

Damaged property in the Marina.

A recent news video on earthquakes stated that seismologist experts record over 27,000 earthquakes in the US each year! (most barely detectable but an indication of potential).

This week marks the 104^th anniversary of the San Francisco Earthquake in 1906. The largest US relief effort ever was mobilized for that, even more than Katrina. But, it didn’t even make the list of the top biggest 15 earthquakes ever recorded.

In 1964, Prince William’s Sound, Alaska had a 9.2 which was the biggest ever in US recorded history. But, get this! On the top 15 list of the most powerful quakes of all time, ever recorder anywhere, 12 occurred along Alaska’s coast!

The biggest earthquake of all time happened in 1960 in Valdivia, Chile: the 9.4 triggered floods and a volcanic eruption.

The U.S Geological Survey estimates a 50 percent or higher chance of an earthquake measuring 7 or greater on the Richter scale hitting San Francisco in the next 75 years. That seems like a very safe “guess” to me! That earthquake is likely to exceed $390 billion in damage.

What about the seismic zone that runs the whole length of California? If The Big One doesn’t hit The City within the next 75 years, whose to say some other area along the fault line won’t be devastated beforehand? Does it seem, to anybody else, that seismic and volcanic activity has increased in the last few years?

What about the likelihood of a life altering natural disaster in your area? Is that occurrence a real possibility? Would you bet on it? Well, you are…

Computer models show that an earthquake similar to the massive quake in 1906 would do substantial damage to The City’s four main bridges as well as endanger the fresh water supply and utility network, including the power grid and telephone lines. Much of the coastal area would sink into the ground or collapse into the bay. What would happen in your area?

STORY LINK: http://247wallst.com/2010/04/19/the-390-billion-san-francisco-earthquake/

What kind of danger/exposure is your area afflicted with? Hurricanes, tornados, floods, heavy storms, infestations? We have all seen stock offerings where the company disclaimer states past performance is no indication of future performance. However, with disasters past performance is always an indicator.

Unbelievably, most San Francisco residents are not concerned about their exposure to damage and risk. Does your company have locations there? Do your customers have locations there? Do your vendors have locations there? The disruption to the U.S. economy, insurance industry, and financial services will be staggering when the next San Francisco quake hits. It may seriously affect you even though you may not be there. How can you prepare?

An assessment of your exposure to risk is essential. Not only should you have a plan to confront how it will affect you, your company and your employees but consider the following: Irreplaceable documents, historical matter, intellectual and creative property, insurance claim documents etc may be what allows your company to reopen if you are ground zero. Its not an earthquake story but, consider this story about losses…

A Sad Insurance Story

Making Copies and Keeping Them in Other Locations

In 2009 there were two devastating fires in Santa Barbara, California. One took out the home of a very successful businessman, politician and passionate collector whose base of operations was his office at home. In the fire he lost bronze sculptures of all sizes (the fire go so hot that a couple of life sized statures were melted into a puddle of molten metal!), numerous works of art on paper and paintings and everything else that goes along with a well furnished home. This man was well insured, on paper, with AIG (now Chartis).

The problem was that in the fire, all the files, receipts, photos and records of the art collection went up in smoke. That meant that the owners were unable to readily produce for their insurance company

document how much they had paid,
document and qualify the condition
prove the level of quality
document the provenance (history of the artwork)

These four missing “details” for each work of art meant the owner had nothing to go on for the insurance claim except an inventory sheet with minimal descriptions that was filed with the insurance company. And the fight began…

After a year, three insurance agents, a couple of lawyers, a couple of independent adjusters and a lot of frustration later, the matter is still not settled and the total amount of the settlement is bound to be significantly less than what the owners feel is appropriate or justified.

Devastation is at the heart of any natural disaster. But the idea of “total loss” by everyone is an uncommon occurrence. Usually, there is an “epicenter” of devastation but there is also a wide path of people affected around the impact area that are only marginally affected. So, its always worth being prepared.

Even in the event of total loss, you can do some very important things to protect yourself and reduce risk. Being better prepared in this particular sad situation could not have saved the contents. However, copies of photos, receipts, appraisals etc stored in a remote location would have empowered this businessman to get response quickly after the disaster. “Redundancy” is a term used in business when multiple copies are kept in different locations for just this reason.

For a copy of “How To Save Your Stuff From A Disaster” click, now, on http://www.saveyourstuff.com/cmd.php?af=1192684

For coaching on business assessments and answers to preservation questions, Scott M. Haskins is your preservation coach (www.preservationcoach.com) and provides free content for redistribution through organizations from www.saveyourstuff.com. You may contact Mr. Haskins for workshops and for featured speaking engagements at 805 564 3438.

For more information on Mr. Haskins’ background, go to www.saveyourstuff.com

Thinking About Buying a Business? - Answer These Questions

2010-06-01T16:43:50.000Z

At face value, the life of an entrepreneur may seem glamorous. You run the show, make your own hours and don’t have to answer to anyone but yourself.

Unfortunately, it does not always work in your favor. It often takes hard work and determination to create a thriving business poised to become the next big success story. Before rushing out to buy a business, new entrepreneurs would be well-advised to take a step back and consider five important questions prior to jumping into business ownership.

What are my strengths and weaknesses as an entrepreneur?

The skill of successful entrepreneurs, which has been studies and modeled for many years, requires more than just a well-rounded background consisting of functional and strategic experience. Knowing your strengths and weaknesses will guide to towards acquiring a business that showcases your assets and downplays your limitations. It’s tough to be objective when assessing your strengths and weakness so it might be worth investing in a third-party entrepreneurial assessment. As an unbiased review of your skills and background, he or she can give you a snapshot of how you might succeed as an entrepreneur, as well as what type of business would best suit you.

What is my tolerance for risk?

Owning a small business is not for the faint of heart. Unlike what many new entrepreneurs anticipate, there is no such thing as a day off. All business decisions require your complete involvement, as any capital investment is either coming out of your pocket, or you are guaranteeing the loan. If you are easily troubled and the worry paralyzes you, it may be wise to think twice before buying or starting a business of your own.

What is my financial profile?

It is absolutely critical to fully understand your ability to financially leverage the purchase of a business. Your comprehensive financial profile should take into account not only your personal net work, but also the other factors banks are now considering when processing loans. A lending profile will be a helpful guide, giving you information on the size and type of business you can afford, the cash flow requirements, working capital needs, appropriate investment vehicles and a pre-approval for lending you may need.

What type of business is best suited to my talents?

Buying a business is your opportunity to do what you love, so your passion for the specific industry should be one of your primary concerns. It’s usually a good idea for new buyers to engage in a brief educational session where they can learn the steps involved in buying a business and the first rule of focus: concentrate on your career goals first, and worry about the financial benefits second. If you cannot say you would love running a particular business, skip it and keep looking.

Who are my advisors?

From day one, assemble a competent team of advisors who are skilled and committed to the business-buying process. Your team should include an attorney, accountant, banker, insurance advisor and business broker. While many professionals will tell you they understand the work of business acquisitions, there are few who make it their living to focus solely on this type of work.

When Is It Time To Sell?

2010-05-24T15:30:00.000Z

As a business broker who’s been involved in hundreds of deals, I can tell you with certainty that the best time to sell your business is when it’s doing well. I can also tell you that this is exactly when most business owners have the hardest time pulling the trigger on a sale. If things are going so well, they ask, why sell and potentially leave money on the table?

I can illustrate to you exactly why using one recent example. A client hired our firm to determine the value of his business and market it to potential buyers. The business was just wrapping up a record year and had all the attributes buyers are seeking. As expected, our firm generated multiple offers, several of them well above the value placed on the business. That’s when the mistake was made. Because of the offers, the owner began to second-guess the value of his business. We could never get a deal done and just four months later, business slowed. Today, the business value is far lower than when great offers were on the table.

So how do you know when it’s the right time to sell?

The fact is you should be planning for that time as soon as you get the business started. Thinking ahead and laying out a timeline toward your exit will help you put the pieces in place to prepare your business for sale.

What follows is a 10-year timeline that can help you plan for the eventual sale of your business. It can also help you calibrate the best time to sell so you can get top dollar and achieve your personal goals.

7 to 10 Years Before Selling

This is merely the education and reading stage. Learn about past successful transitions, attend seminars on how to sell a business and talk to those who have already sold one. Get familiar with the process but take your time; this phase can last several years.

3 to 5 Years Before Selling

Start to assemble a team of advisors to design a plan. This can include an accountant, attorney, wealth manager, insurance agent, business broker and exit planner. An experienced exit planner can quarterback the process and ensure everyone is working toward a common goal. The result of this planning can range from minor tweaks to larger changes to ensure that you maximize the business’ value.

2 Years Before Selling

At this stage you should be revisiting the plan every six months to make sure you’re on pace. If things are on track, this is the time to firm up your vendor and client agreements and ensure key employees are in place.

1 Year Before Selling

Make sure you can answer this question with clarity: Why are you selling? That will be the first question every potential buyer will ask. Work with your broker to develop a strong marketing strategy to attract the largest number of buyers.

Finally, when everything is ready, take a step back. Focus on maintaining the business so it’s running smoothly and let your brokerage firm manage the transaction. That will lead to a graceful and profitable exit.

PLAIN TALK: So, you want to start your own business

2010-05-20T14:05:40.000Z

The first question is do you really have the patience, temperment and common knowledge to go into business for yourself? Make no mistake this is a life altering and life changing decision. Truly.

Carefully consider, calculate and comprehend your response.

"Carpe Diem"

Violent Storms and Flooding in Tenn., and Miss. Are Giving YOU A “Heads Up.” 3 Important Tips

2010-05-18T17:00:00.000Z

Horrible floods in Tennessee and Mississippi have been in the news for several weeks now. Water levels crested 10 feet over what is considered flood level! Thousands were evacuated and hundreds of others were rescued from their homes — some plucked from rooftops. The area that seems to have gotten the most press has been Nashville.

This last week, while I was in Milwaukee speaking at a national meeting for art conservation I got a phone call from a Nashville frame and photo shop. While they had taken positive action to deal with the overwhelming mess, we had a very productive discussion about mold and reprocessing photos at a local professional photo lab

What you may not have heard about is that not only was flooding a problem but several areas also had to deal with tornadoes. I can’t imagine the added mess of a tornado in the middle of a flood. It must have seemed like the end of the world for some.

Tennessee state's Army National Guard was called in to help and dozens of vehicles and personnel were put to work rescuing stranded residents. Nashville Mayor Karl Dean reported more than 600 water rescues in the city alone. One building in east Nashville was caught on video floating down Interstate 24 and passing stranded vehicles. The video was quickly uploaded to YouTube.

Now that the water is subsiding, the clean up is at hand. It will be at least several days until the most evident damage can be assessed and many weeks or even months will be required to know the real depth of the problems created.

What do the woes of these folks suggest to you? Can the message, “Be Prepared” be said any clearer? So, what can you do?

1. This photo shows a man evacuating but able to save his stuff. If his papers, books, scrapbooks, photo albums etc had been in cardboard boxes, they would have been ruined and gone. Put your important stuff in plastic bins.
2. Keep your storage boxes of important items off the floor.
3. Keep a copy of important papers in another location (city) or consider online storage services. If everything is lost in a flood, fire or wind, you will have back up. This could be super valuable to a small business.

For more tips, free downloads and a copy of How To Save Your Stuff From A Disaster, go to http://www.saveyourstuff.com/cmd.php?af=1192684

Write Your Business Plan in Pencil

2010-05-18T15:05:37.000Z

This is my May column in Entrepreneur.

The smartest entrepreneurs plan on growing and are prepared for change.

I have a few words of advice for first-time entrepreneurs, as well as seasoned business owners looking to hit a new stage of growth. My advice is this; write your business plan in pencil. I realize this may be
difficult for all you non-golfers, but doing so will illustrate two important principles.

1. Change is inevitable.

I have little doubt that you (the small-business owner) will shortly have to change, amend, modify, scrap or abandon your original business plan altogether. One of the attributes of successful entrepreneurs is flexibility. By writing your business plan in pencil it forces you to look at change as the only constant. Make change your friend, embrace it and work it to your benefit. The reasons why your original plan will need to be changed after your company is operational are myriad. It’s likely you under or over-estimated your competition, margins, cash needs, competencies and suppliers. Or you misjudged market need and size. Every entrepreneur discovers new opportunities that didn’t appear until there was actually a business up and running.

2. We must avoid business plan worship.

When we see documents neatly typed (and maybe even received praise for them), we are reluctant to change. Especially for those who attended business schools where the plan took on a larger than life
importance. People whose plans got high marks, or even worse, won a business plan contest, tend to feel their plan is inviolate. They also tend to believe that if they rigorously adhere to the plan it will yield the riches of their dreams. It’s my hope that the mental image of a pencil will remind you that change is good and will help you reach your goals.

Most small-business owners that I know never wrote a business plan. In 16 start-ups, I’ve never written one. And John Altman, a very successful entrepreneur, founder of six companies and former professor of entrepreneurism, never wrote a business plan for his start-ups, either. Most people who write a business plan do it to raise money or because someone told them that’s what they’re supposed to do. The fact is that a detailed plan is only required if you want to raise money from a bank or venture capitalist. And both hardly ever offer a loan or invest in early stage companies. So your energies are wasted writing those long and thick plans.

Now don’t get me wrong. I strongly believe in planning, just not in long, voluminous tomes that will probably go unread. For most sole proprietors, that business plan can reside in your head, or–if you must commit it to paper–on a napkin.

If you really want to write a plan, try this. At the start of each year write what your goals are and specifically target new areas of distribution and the names of new accounts that you want to clinch.
Also, put on paper the names of current customers with whom you want a deeper relationship and the strategies you’ll employ to do so. This plan should only run one or two pages. I also recommend you write down your accomplishments and shortcomings from the previous year. While you can do this exercise primarily for yourself, I would also share it with members of my team.

As your company gets bigger, that’s when those written planning documents become paramount. As your company grows you want to be sure all your employees are on the same page and equipped with the knowledge of how they can contribute to the company goals.

It is a reversal of commonly accepted logic to suggest you postpone the business plan until you’ve reached a growth spurt. But, as John Altman said on this point, “If you’re going to empower the other people in your company, guess what; you’d better give them a map to the highway you’re on! Otherwise, they can’t share that vision in your brain.”

Opportunity for New Businesses

2010-05-18T14:30:00.000Z

Many Large Companies’ Horrendous Customer Service Invite the Creation of New Businesses

I am giving you a play-by-play of an experience I had with Sears to illustrate my point. They are not unique in their interaction with their customers that I classify as arrogance.

When I bought a treadmill from Sears a number of years ago, I bought a maintenance protection agreement as a treadmill is an important element of my regimen. The purchaser of this agreement is entitled to one free maintenance checkup every 12 months. The purchaser must call for this as Sears does not remind you.

So I called for an appointment and was given one for next Monday between 1:00 p.m. and 5:00 p.m. and rearranged my schedule to be home. At 3 p.m. that afternoon, a Sears representative called to say that they wouldn’t be able to make it that day and when would I like to reschedule. . .no big apologies.

I told the operator with respect (I never want to kill the messenger although it is sometimes tempting) that I would reschedule only if they gave me a specific time as I would not give up a half day again for their error. I also suggested that they give me the first appointment of the maintenance person’s schedule that day. I was told that is impossible to do. . .a word that is not in the vocabulary of most entrepreneurs. When I saw that my request was not going to be fulfilled, I asked to speak to a manager.

Reluctantly, she told me she would transfer me. Her transfer rang and rang for 7 minutes when I gave up and hung up.

Two days later, I calmed down and called again to speak to a manager. After an interminable delay and talking to recorded messages, an operator came on who proceeded to tell me she could not give me a supervisor until I explained why I needed to talk to one. So, Ifoolishly gave her the story of the broken appointment and my desire to set up a time-specific new one. She proceeded to tell me that I already had a new one, three weeks in the future with a 4-hour window. I told her that I did not make it, and it appeared that the first operator made it on her own to clear the matter out of her basket. The second operator suggested that my wife might have made the appointment for me. (You don’t want to hear the retort I had but held back on that crack.) She also told me of the impossibility of getting a time-specific appointment.

However, I had better luck this time as I did get to speak to a supervisor. After explaining the situation to him, he did not use the impossible word, but told me he could not honor my request as they must
treat all customers the same. My retort was “Do they break appointments with all customers”...another argument ignored. No matter what I said, he repeated the mantra: “All customers must be treated the same” as if it was the Bill of Rights he was reciting. He, however, made what he considered a great counter offer. . .A new appointment in two weeks instead of three with, of course, no time specificity. This ended our conversation and began my inspiration to write this blog to dramatize the opportunities that incidents like this one with Sears and thousands of similar ones with other companies every day, create for new fledgling ventures if they concentrate their efforts on maintaining customer satisfaction. Consumers, in my opinion, will pay a premium for some courtesy and satisfaction.

I do not blame the individuals I talked to in my odyssey, but I do hold Sears totally responsible. I believe their training, monitoring, and policies are at fault. Guess where I will never shop again.

Deficit in coffee supply promises dealers windfall

2010-05-11T21:54:40.000Z

A deficit in coffee supplies to the global market promises firm earnings for dealers in coming months, a new outlook report has revealed citing rapid depletion of existing stocks amid improving consumption of the beverage.

The International Coffee Organisation (ICO) said declining production in most exporting countries had exerted pressure on stocks with certified stocks in leading outlets such as the New York and London futures markets falling since September 2009.

Prices at the weekly Nairobi Coffee Exchange (NCE) largely take after proceedings at these international markets.

“Stocks are at low levels both in exporting and importing countries since they are being drawn down to offset the reduction in supply. Bearing in mind the outlook for production, it is likely that demand will continue to outstrip supply in coming months,” ICO executive director Nestor Osorio said in a market report for March.

The ICO said the estimated world production for crop year 2009/10 had been revised downward to between 120 to 122 million bags.

And in what could be partly blamed for the supply deficit, statistics showed that one of the world’s largest producers, Colombia, had suffered a huge hit in production.

The country’s production in the first five months of crop year 2009/10 was well below the level recorded for the same period in 2008/09, indicating the likelihood of a second consecutive year of reduced production.

“This is attributable mainly to renewed outbreaks of coffee berry borer following heavy rainfall in the previous crop year, as well as the implementation of the coffee regeneration programme,” the ICO said.

Climatic difficulties

Another top coffee producer, Vietnam, has also been experiencing climatic difficulties as a result of the drought caused by the El Niño phenomenon.

A large number of aging coffee trees has added to these difficulties, with authorities indicating that the country’s production may be reduced to about 17 million bags during the current crop year.

Due to such knocks, total global exports during February 2010 was 7.1 million bags compared to 8.7 million bags in February 2009, while the cumulative total for the first five months of 2009/10 was 35.6 million bags compared to 40 million bags for the same period in 2008/09, a fall of almost 11 per cent.

“Declining production in many countries has led to a drawing down of remaining stocks to very low levels, especially in exporting countries, while certified stocks of the New York and London futures markets have been falling continuously since September 2009,” the ICO said.

But in what could uplift the spirit of producers and dealers in Kenya, Mr Osorio said the prevailing market situation would keep prices of the commodity firm over coming months.

“I would like to indicate that the dynamic performance of world consumption and lower production in some important producing countries have helped to support a firm market, particularly in the case of Arabica,” the official said.

During last week’s auction at the NCE, the top price for benchmark grade AA coffee fell by more than $100 per 50-kg bag with analysts attributing the development to lower quality crop offers.

“We have a lot of pressure in terms of quality as we come to the end of the crop season,” Daniel Mbithi, an official at the NCE, told Business Daily.

An auction report by the NCE said that grade AA sold between $437-$150 per bag compared with last week’s price of $555-$250.

How Buyers Decide Who to Buy From

2010-05-10T03:42:45.000Z

After decades of personal selling and observing others sell, I am convinced most buying decisions are based on emotions rather than on a rational basis. The ratio of the two motivators varies with the
individual buyer and the circumstances at the time, but clearly the seller must always be aware of the emotional component of the decision process. Having the best product, service, price, warranty, etc. does not ensure a sale.

Here’s a sampling of some of the non-rational reasons I have observed buyers employ in their buying decisions.

They like salesperson personally.
They have something in common with salesperson, like attending the same school.
Seller is friendly with their boss, or boss told them to buy.
The previous buyer bought from current vendor.
They perceive seller is friendly with someone in top management.
Something in your offer positively impacts their bonus. (This may be rational from their personal viewpoint, but their job is to find the best deal for their employer.)
They receive some personal gain from the seller.
The seller is great looking.
The seller is a stylish dresser.

There are an infinite number of emotional decisions involved in buying decisions. The buyer may be unaware of them.

So, if you are a seller and you know that your product or service is clearly superior to the one being currently bought by the buyer, do not assume he will switch to you. Do your homework and try to determine everything you can about your buyer to understand his/her emotional buttons so you can put them in play in addition to your rational approach. Your persistency can eventually overcome a buyer’s emotional bias.

If your many attempts fail, you might approach the buyer’s boss with your strong rational arguments that can trump the buyer’s emotional decision-making.

Bob Reiss is the author of Bootstrapping 101--Tips to Build Your Business with Limited Cash and Free Outside Help. He has been involved in 16 start-ups, is a three time INC 500 winner, a graduate of Columbia University and Harvard Business School and the subject of two Harvard case studies. He is a frequent speaker at University Entrepreneurial classes."

THE MISSION STATEMENT–Good For Small Businesses Too

2010-05-03T19:58:10.000Z

The mission statement is something very different from the business plan. Mission statements set the moral and human goals to which your company is supposed to aspire. In many cases, they also state higher order business goals, such as a corporate commitment to maintaining an annual compounded rate of growth of a certain percentage.

Mission statements are most often associated with large corporations—an effort to get thousands of people to pull in the same direction across a far-flung corporate empire. But I think a mission
statement is a good thing for a small business as well, and it’s something that should be developed at the outset.

The mission statement clearly tells employees what behaviors are expected of them and describes the kind of treatment they can expect from their employer. Most people have a strong desire to know the rules of the game. In addition, they want to be proud of the company for which they work. The mission statement gives them at least one piece of the puzzle.

This is also the best reason not to have a mission statement if you don’t intend to follow it. There’s nothing more poisonous than to have the management thumping away on some ethical tub, and at the same time acting in ways that directly contradict the espoused values. If you can’t walk it, don’t talk it!

The mission statement, like the business plan, is a useful tool for triangulation and mid-course correction. Take it off the shelf every once in a while, and see if you’re living by it. (Better yet: look at
the framed version on your office wall.) And when you face a tough choice, look at that statement again for guidance. To the extent that your mission statement contains concrete business goals, make sure that you either (1) achieve those goals, or (2) acknowledge that you aren’t achieving them and take steps to bring the company’s performance into line with its aspirations.

You may not spend a lot of time on your mission statement, but you should clearly set the tone for the kind of company you’re trying to create and sustain. Culture comes from the top—that is, from you. How accessible will you be to your employees? Will you truly listen to their input, or will you just pay lip service to their ideas? What are your expectations from everyone, especially in the realm of building trust? How will your company treat its customers? What are its attitudes toward quality? Part of the point of the mission statement is the process as well as the product. If you involve other people in the development of the mission statement, you’re already sending a signal about your culture.

If disputes arise, how are those disputes resolved? Do people walk away feeling that the resolution was fair, smart, and efficient? Again, your personal example is extremely important here. One of the best ways that you can inculcate values into the fabric of your company is to embody those values.

Don't Overlook Your Suppliers

2010-04-23T00:43:16.000Z

Don’t overlook your suppliers–they are hidden assets and can help your business grow.

Your approach to suppliers needs to be part of your strategic plan since almost every company, whether product- or service-oriented, is dependent on suppliers. Many business owners seem to get this supplier issue backwards. They think that because they write the order, they’re in the dominant position and can exploit it with unreasonable demands, including personal perks.

Let’s get this right–you need good and reliable suppliers. When you find them, treat them like gold. Work as hard on building a good supplier relationship as you do building a relationship with your
customers. And be loyal to your good suppliers. They are essential to your business’s good health and growth. They are a nuanced bootstrapping
strategy.

Let’s briefly look at all the ways suppliers can impact your company.

Quality: Supplier components can positively or negatively affect the quality of your product. Higher quality increases customer satisfaction and decreases returns, which adds cash to your
bottom line.

MORE

This article was written for entrepreneur.com April 6, 2010

Bob Reiss is the author of Bootstrapping 101--Tips to Build Your Business with Limited Cash and Free Outside Help. He has been involved in 16 start-ups, is a three time INC 500 winner, a graduate of Columbia University and Harvard Business School and the subject of two Harvard case studies. He is a frequent speaker at University Entrepreneurial classes."

Fighting Back Against Credit Card Fees

2010-04-19T02:44:07.000Z

I recently attended an SBDC Small Business seminar and was surprised to discover how many small businesses were financing their businesses via credit cards. I understand the difficulty of securing money for start-ups and the passion of pursuing one’s dream to have their own business move them to the desperate act of securing high multiple credit cards to get started. I don’t understand this tactic unless you have cash flow to pay off the card balances. If you don’t, you will severely damage your credit ratings. Be that as it may, if you are going this route, be aware of the high charges awaiting you
if you are late in paying your bills.

Here is an example I recently experienced with a major credit card company with actual numbers.

I was looking over an $881 monthly charge of my wife’s card before paying it and noticed an interest charge of $59.39 and a late fee of $39.00. (The card companies will argue that the late fee is not related to the interest charge, and I will advocate they are kissing cousins as both are triggered by the one act of receiving the payment late. It seems obvious that the card company uses this tactic to show a lower interest rate.)

Moving on to the math using their interest charge of $59.39, this is an interest of 6.73%. This doesn’t sound too bad until you realize (which they hope you don’t) this is for one day only. Amortized it comes out to 2,456%, an astounding number. I thought this was against the usury laws, but I was to learn it is not. In fact, new credit card laws that go into effect this August change some credit card practices, but they do not limit how high interest rates can go. I asked my wife to call the card company and ask how late the payment was. She was told one day, which in effect, was the full 2,456% rate. If we add the $39.00 late fee, the annualized charge is 4,072%. After I did this math, I
asked her to call again and tell them this charge for one day late was unfair, and they did not hesitate to immediately tell her they would void both charges. I have always found if you phone and politely voice your unhappiness over their outrageous charges, they will yield and adjust or eliminate them. Of course, if you are very late on a consistent basis, the outcome may be different.

Knowing that card companies generated $20.5 billion in fees in 2009 and that few people challenge them, they would rather void some charges so as not to shine the spotlight on this lucrative source of income.

There are some other variables in this transaction in that you are at the mercy of the card company in knowing about how long did it take for the mail to get to them. One day, seven days? Also, how long did it take for them to process and enter the payment on their books?

A small piece of good news is that the new law states credit card companies must give consumers at least 21 days instead of the current 14 to pay their monthly credit card bills.

So, make the call, endure the phone wait, and challenge the charge. Every bit helps when you are fighting for survival and profits.

Business Plans vs. feasibility analysis and loan proposals

2010-04-16T12:55:54.000Z

I am increasingly convinced that there is an over-emphasis on the "business plan" as the universal tool used to answer all small business financing questions.

In my opinion, my start up clients really need a feasibility study first. And most of my existing business clients need a well drafted loan proposal.

The "full blown" business plan falls somewhere in between.

Thoughts?

By the way are you familiar with Tim Berry's "new" software Plan as you go ?

Mike Byrnes
http://fintelligence.org/

Business Incubators Can Be a Start-Up's Best Friend

2010-04-09T00:25:00.000Z

tag-financing tag-technology tag-management-guidance"">If you are a start-up company and you qualify, incubators can be a fantastic resource for you in your pursuit of success.

Here is the NBIA (National Business Incubation Association)’s description of Incubators. “Business incubation is a business support process that accelerates the successful development of start-up and
fledgling companies by providing entrepreneurs with an array of targeted resources and services. A business incubator’s main goal is to produce successful firms that will leave the program financially viable and freestanding.”

Critical to the definition of an Incubator is the provision of management guidance, technical assistance, and consulting tailored to young growing companies. Incubators usually also provide clients access to appropriate rental space and flexible leases, shared basic business services and equipment, and assistance in obtaining the financing necessary for company growth.

Incubators are physical plants that primarily house the offices of start-up companies. They will rent you flexible leases, which can allow you to expand or shrink your space quickly. Rents vary by Incubator, but most often are lower than the market rates at the outset. As you grow, you can upgrade to more space. Fees are charged for some Incubator services and can vary by Incubator. Some have no fees but want equity in your company.

Incubators come in many flavors. Some are only for technology companies. Some are for a specialty technology. Some are mixed use while others are service or manufacturing oriented.

Here are some Incubator facts as supplied by Corinne Colbert, Director of Publishing at NBIA.

There are 1100 to 1200 Incubators in the United States.
27% of Incubators have investment funds.
70% have links to angel investors.
The average stay in an Incubator is 33 months.
About 6% of North American Incubators are for-profit programs.

Most Incubator tenants accept start-ups, as well as existing companies. Besides the above described advantages afforded to Incubator tenants,
some other positives are:

Networking with other entrepreneurs.
Getting business from other tenants.
Getting assistance from specialists in the community to supplement on-site mentors.

Be forewarned: it is not easy to get accepted into an Incubator. You need to meet the criteria of the one to which you are applying. For sure, you need to prepare for your interview with a sound, well thought out business plan. These plans do not have to be lengthy dissertations. Succinct and short are good.

No matter the tediousness of the application process, an Incubator acceptance can be a defining moment in your future success.

To find the Incubators near you, go to the NBIA website: www.nbia.org. Their phone number is 750-593-4331.

(This blog is excerpted from Bootstrapping 101.)

Bob Reiss is the author of Bootstrapping 101--Tips to Build Your Business with Limited Cash and Free Outside Help. He has been involved in 16 start-ups, is a three time INC 500 winner, a graduate of Columbia University and Harvard Business School and the subject of two Harvard case studies.He is a frequent speaker at University Entrepreneurial classes."

Don’t Be Bullied By Your Lawyer

2010-03-31T01:30:00.000Z

8 THOUGHTS IN DEALING WITH A LAWYER

There are many occasions in the life of a Small Business where a lawyer is needed—a rental lease, a royalty contract, an employment contract, a business partnership, an investor, a lawsuit,etc. Small Businesses rarely have a full-time lawyer and staff, so theCEO hires one for the specific task needed. Here are some things to think about when hiring a lawyer.

The lawyer works for you because you pay them. Some attorneys can be very intimidating and want to make your business decisions for you. Don’t let them. You set out what you want them to do for you and if they cross the line, call them on it.
If any negotiating is required, decide early who will do the negotiating. I always preferred to do my own negotiating and then have the lawyer make sure the legalese represents the agreement
accurately with no loopholes. If you feel that your lawyer is a better negotiator than you, then by all means, let him/her do it, but with you setting the parameters.
Always set a timeline for the lawyer. Often they take too long, particularly if they are on an hourly fee compensation.
Never let a lawyer ask for more in negotiations with 3^rd parties, without your permission. This will only delay the agreement and the other party will then take off the table, some of their concessions given to you.
Keep in mind the mindset of many lawyers (not all) some tend to think there is only winning or losing. You should only focus on the key things you want from this agreement. You also need to
understand your leverage position. Even if you can dictate the points in an agreement, let the other party have their way on some of their key desires that are not particularly important to you. You want the other party to feel they’ve been treated fairly. You may be dealing with them in the future.
Stay involved with your lawyer on the whole process. Don’t be afraid to ask questions.
Do not hesitate to negotiate fees with your attorney. They are negotiable. Also try to establish a maximum fee, which can be difficult. Try to set out stages of your lawyers work and cost of each. They should lay out their strategy and tell you the odds of your success. Going to trial can be very expensive, and you may feel it is cost prohibitive for you to proceed to that stage.
Check out the credentials and specialty of your lawyer before engaging them and be sure to know and meet the lawyer who will be handling your case. Many times you meet a partner who will then assign a fresh hire, just out of law school, which may or may not be okay.

Remember, don’t be intimidated.

"Bob Reiss is the author of Bootstrapping 101--Tips to Build Your Business with Limited Cash and Free Outside Help. He has been involved in 16 start-ups, is a three time INC 500 winner,a graduate of Columbia University and Harvard Business School and the subject of two Harvard case studies.He is a frequent speaker at University Entrepreneurial classes."

FACTORS: How They Can Help Your Cash Flow and More

2010-03-28T22:42:33.000Z

Factors finance $120 billion in receivables, yet most small and start-up businesses are not aware of them. Business schools rarely acknowledge them. However, they can alleviate your cash flow problems. They can loan you or advance you money against your receivables and in some cases against your inventory. In other words, your receivables are an asset that the lender (Factor) purchases.

The Advantages of Using Factors:

You get payment for your invoices within days. This allows you to pay your suppliers on time, to build trust with them, and to take advantage of their cash discounts. It is a financial tool that speeds your business’ cash flow. Factors do not lend money on purchase orders.
All your costs are variable.
Factors check the credit of all your customers and would-be ones. Thus, you get more accurate and current information than if you performed this function on your own. More money is saved by eliminating the need to hire a credit checker.
Factors collect all your receivables. In today’s world, the majority of customers like to stall the payment of their bills. Some will not pay until someone calls them for payment. The Factors have more leverage than you as an individual have. They may represent 50 suppliers of one customer.
Factors act as insurers of the receivable. If after you ship a customer and the customer goes bankrupt, the Factor may be stuck, depending on your contract, not you. This feature can help you sleep better as well as eliminate your bad debts.
The Factor can take over some of your administrative functions and save you the resultant labor costs. On one of our game companies that was created around a licensed product, the Factor supplied us with data on monthly shipments which acted as our Royalty statement. They also provided us with total shipments by territory or account which we used as our Sales Rep commission statements.
You can get money even though you don’t have a good credit rating. The Factor is only interested in your customers’ credit ratings.

The disadvantages of using Factors are the costs, which can be high in some cases, and they may alienate some of your customers with their collection techniques. You need to read and understand their contract carefully.

You can locate an appropriate factor by going to the website of the International Factoring Association office. or ask your local banker, SCORE, or SBDC.

(This post is excerpted from Chapter 11 of Bootstrapping 101.)

Bob Reiss is the author of Bootstrapping 101--Tips to Build Your Business with Limited Cash and Free Outside Help. He has been involved in 16 start-ups, is a three time INC 500 winner,a graduate of Columbia University and Harvard Business School and the subject of two Harvard case studies.He is a frequent speaker at University Entrepreneurial classes."

Blockbuster Ideas Not Required

2010-03-15T18:12:31.000Z

The starting point for any new venture or product is the idea. What product or service will our business offer that will be a winner?

A great many people can’t get past this idea phase. It seems to me that many of them stall out because they are waiting to hit upon some kind of revolutionary new idea--a concept of such power that it will appeal to everyone. They want bells to go off in their heads. They want brilliance. They want a blockbuster idea.

The fact is, there’s not a lot that’s new under the sun. Most businesses, even highly successful businesses, are founded on a very ordinary, very mundane idea, pretty far removed from brilliance. It’s
luck, timing, and execution that transforms a ho-hum idea into a good business.

All of us would like to come up with a show-stopper of an idea that will cause customers to flock to us when they recognize the brilliance of our creation. This scenario is rare. You can take comfort in the factthat most new businesses and products are based on an existing, well known, and possibly boring entity. Their success is founded on new and better executions. Higher quality, value added features, new areas of distribution, outworking competition, better timing, superior service, license added, etc.

Think of Scrabble where you add one letter to an existing word, and you get full credit for the other person’s word. You don’t have to reinvent the wheel.

Over Investment In Fixed Assets and Small Business Failure

2010-03-10T23:42:07.000Z

In his book Small Business Management, Michael Ames gives the following reasons for small business failure: Lack of experience, Insufficient capital (money) , Poor location, Poor inventory management, Over-investment in fixed assets, Poor credit arrangements, Personal use of business funds, and Unexpected growth .

This is the fourth in a series of eight posts concerning the top causes of small business failure. We will work our way up to the number one cause; however each one is an important issue for any small business to consider. This post is on over investment in fixed assets being a cause of failure.

Fixed asset turnover is the ratio of sales (on the Profit and loss account) to the value of fixed assets (on the balance sheet). It indicates how well the business is using its fixed assets to generate sales. A higher ratio is better because a high ratio indicates the business has less money tied up in fixed assets for each dollar of sales revenue. A lower or declining ratio may indicate that the business is over-invested in plant, equipment, or other fixed assets.

While some financial analysts claim that such a ratio is inconclusive and companies do not generally cite these figures, there has been an unfortunate trend in accounting curriculum across the nation to start to refrain from teaching the fixed asset turnover ratio. This ratio is especially important for startups and small businesses where access to capital is tighter than ever.

In today’s competitive business environment, the best place to start is with your performance relative to your peers. There is very little benchmarking data directly available like there is for inventory turnover however there is information that can be used to indirectly calculate benchmarking performance. For example, Return on Assets and Profitability data is directly available at: http://www.retailowner.com .

The following is a demonstration of how the benchmark yourself against your peers in the industry. In this case, we will use a Gift Store.

1. Selecting Other Specialty Retail Stores from the dropdown menu of the Store Benchmarks tab and of RetailOwner.com then selecting Gift, Novelty, & Souvenir Stores shows a Return on Assets of 4.4% in 2009 and a Profit of 1.3% in 2009.

2. The Profit divided by the Return on Assets provides the ratio of Total Assets to Sales or 29.5% in this case.

3. With data for the percent of assets that are fixed, this benchmark can be converted to the Fixed Asset Turnover. This data can be found at http://www.bizstats.com/ Clicking on the “Balance Sheet” tab brings up key ratios for Corporations and S-Corporations by industry. For example, clicking on S Corps and selecting Retail and then Miscellaneous Retail Stores for more detail information shows a percent of Fixed Assets of 16.78%.

4. Multipying step 2 and 3 brings the example’s Fixed Asset Turnover benchmark to 5.0%.

As a startup, it is likely you will have lower than average turnover (worse than average) because you are just beginning. The challenge is to look at your performance over time and determine how quickly you can be on par with your peers. If you are significantly different with no clear advantage, you may be over investing in fixed assets.

This is an opportunity to boot strap and locate deals or bargains – can you purchase used equipment, lease, or subcontract out work to minimize your exposure. Furthermore, considering building less capacity as businesses rarely fail because they are bursting at the seams – this is a nice problem to have and much easier to solve than the other way around.

The Golf Balls and the Mayonnaise Jar - Small Business Life Perspective

2010-03-09T01:13:23.000Z

I have received this email story a number of times over the years with no idea who created it. I think it’s a good one to share to remind Entrepreneurs of perspective in their lives.

When things in your life seem almost too much

When 24 hours in a day is not enough

Remember the mayonnaise jar.

A professor stood before his philosophy class with some items in front of him. When the class began, wordlessly, he picked up a very large, empty mayonnaise jar and proceeded to fill it with golf balls.
He asked the students if the jar was full. They agreed it was.

The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the
jar was full. They agreed it was.

Then the professor next picked up a box of sand and poured it into the jar. Of course the sand filled up everything else. He asked once more if the jar was full. The students responded with a unanimous yes.

The professor then produced two cups of coffee from under the table and poured the entire contents into the jar, effectively filling the empty space between the sand. The students laughed.

“Now,” said the professor, as the laughter subsided. “I want you to recognize that this jar represents your life. The golf balls are the important things—family, children, health, friends, and favorite
passions. Things that if everything else was lost and only they remained, your life would still be full.”

“The pebbles are the other things that matter like your job, house, and car. The sand is everything else—the small stuff.”

If you put the sand into the jar first, he continued, there is no room for the pebbles or the golf balls. The same goes for life.

“If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you.”

“So. . .pay attention to the things that are critical to your happiness. Play with your children. Take time to get medical checkups. Take your partner out to dinner.”

“There will always be time to clean the house and fix the disposal. Take care of the golf balls first—the things that really matter. Set your priorities. The rest is just sand.”

One of the students raised her hand and inquired what the coffee represented. The professor smiled. “I’m glad you asked. It just goes to show you that no matter how full your life may seem, there’s always room for a couple of cups of coffee with a friend.”