SmallBizLink

Best Airlines for Business Travel

Nealeigh Mitchell | SmallBizLink — Wed, 12 May 2010 10:04:00 -0700

The recession turned practically every carrier into a low fare airline; fancy flying was one of the first items chopped from businesses budgets.

But the economy is finally turning around. And in an effort to bounce back from billion dollar losses, airlines are offering all kinds of extras to woo corporate fliers.

So which perks would persuade you to pick one carrier over another? See how the most popular international fleets stack up.

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United Airlines

Cabin comfort: United’s business class passengers settle into a long-haul flight on fully adjustable ergonomic seats with lumbar support and leg rests. The airline is currently rolling out seats in international and business class cabins that lie completely flat when fully reclined. Travelers also receive a complimentary amenity kit featuring Murad products to help protect skin from travel stress.

Meals: Leave the $5 airport peanuts in the terminal. Passengers enjoy premium wines, ports desserts, fruit, cheeses, and a three-course meal. Some international travelers are lucky enough to be served local cuisines, including Japanese cuisine for travelers to Tokyo.

Entertainment: Premium cabin customers can catch up on films on a personal 15” widescreen video monitors with access to 150 hours of on-demand movies and TV shows. Some flights offer iPod and iPhone connectivity to play iTunes video. Plus, noise-reducing headsets drown out the snorers.

Work: Most aircraft come with in-seat power outlets for your tech gadgets. Satellite phone service is available for a charge and customers traveling between New York and both Los Angeles and San Francisco (premium service flights) can surf the Web, and access corporate VPNs on their Wi-Fi enabled laptop or mobile device.

Frequent Flyer: United’s Mileage Plus program offers a decent list of partner airlines and partner hotels to its loyal customers. Plus, several car rental companies and credit cards are affiliated with the airline. You can earn miles with the United credit card, T-Mobile Wi-Fi service, or even by subscribing to a newspaper. The one catch is there’s an expiration date on accrued miles. Use them or lose them!

Next Page: Continental Airlines →

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Continental Airlines

Cabin comfort: Continental’s BusinessFirst travelers flying overseas to certain destinations can stretch out on a flat-seat bed, a roomier design that allows you to lie completely flat to sleep. An amenity kit filled with aromatherapy products helps you arrive fresh and revived after a lengthy flight.

Meals: Continental offers carefully select menus and wines for each country they serve, many times highlighting local specialties. BusinessFirst meal service includes a wide variety of delicious menu selections as well as premium wines and champagne. And don’t worry if your sleep schedule is off. The “Executive Meal Option" allows you to dine at anytime during the flight.

Entertainment: That eight-hour flight will fly by with Direct TV, feature films and audio/video On Demand at your fingertips.

Work: Keep your laptop juiced up with a power port at your seat. Joining the Wi-Fi frenzy, the airline will be adding GoGo Inflight Internet to a handful if its Boeing aircrafts this Spring. The new wireless service will provide access on Wi Fi-enabled laptops and smartphones, and will offer similar speeds to wireless mobile broadband.

Frequent Flyer: Continental’s OnePass program partners with dozens of airlines and hotels, rental companies and mileage credit cards. You can even earn miles on France’s Amtrak rail travel. OnePass members earn a minimum of 500 miles per flight. Plus, reward tickets start at 20,000 miles instead of the usual 25,000.

Next Page: Delta Airlines →

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Delta Airlines

Cabin comfort: Business passengers rest easy on flat bed seats on certain aircraft in Delta’s fleet. Plus, you won’t miss a wink with premium pillows, duvets, and headrest to snuggle in. Extended bins allow rollerboard stowage for added legroom.

Meals: International five-course dining menus feature entrees from celebrity chef Michelle Bernstein. Wash one down with signature cocktails or a select choice of wines.

Entertainment: Stave off boredom with complimentary movies, live TV, and video games. Passengers also have access to over 18 satellite networks and more than 3,700 MP3s. Don’t want to miss the best part of the movie with a trip to the restroom? Delta On Demand lets you pause and start your movie at your leisure.

Work: On Delta, you can tweet from your seat and get work done! In-flight Internet access is available on thousands of flights a day. In addition to laptops, Wi-Fi works with smartphones and other wireless handheld devices offered by all major U.S. providers. Keep your gadgets running strong with in-flight power adapters at your seat.

Frequent Flyer: Delta’s Sky Miles program offers 90 ways to earn miles. Delta also offers SkyMiles dining and hotels with even better rewards rates if you book ahead. The airline is a member of the Sky Team Global Alliance along with Continental and Northwest, with whom you can rack up miles as well.

Next Page: American Airlines →

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American Airlines

Cabin comfort: Can’t postpone a meeting until you land? Seats swivel so you can conduct business face-to-face. Electronically-controlled recline and lumbar support features in each chair makes for a comfortable ride. Plus, individual satellite phone at each seat keeps you connected. Sleep in peace in a fully flat bed and wrapped “Premium Cabin Duvet.” Plus, passengers are provided with an SpAA In Flight amenity kit, which includes two aromatherapy packets, comfort socks, eyeshades, tissues, earplugs, and a pen.

Meals: Menu designed by three world-class chefs on staff at American Airlines. Food and wine selection tailored to the route you’re flying. The airline’s “Dine Upon Request” option let’s you eat when you please.

Entertainment: Each seat has personal video system with on-demand library of 45 movies, 80 hours of TV shows, and 15 video games. An On-Demand library boasts 30 CDs & 14 channels of audio programming. Drown out the crying babies with noise-cancelling headphones.

Work:Wireless Internet access on American's flights is available in the continental U.S. and to customers traveling to Mexico and southern Canada; however, coverage currently doesn’t extend 100 miles beyond the U.S. border.

Frequent Flyer: Like most airlines, reward tickets begin at 25, 000 with American’s AAdvantage program. The one catch is that there is no minimum number of miles earned on a given flight. They make up for it by providing dozens of ways to earn points, including opening up a line of credit at certain banks, donating to charities, and even activating a smartphone.

Next Page: Virgin Atlantic →

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Virgin Atlantic

Cabin comfort: Virgin Atlantic’s award-winning Upper Class Suite and Premium Economy cabin is as posh as it gets. Upper Class offers first class style at a business class price with amenities such as a reclining leather seat that folds into a fully flat bed with a real mattress! Pampered passengers can indulge in a massage or a manicure in a private treatment area. A novel lighting system that can go from dawn to dusk over the course of a flight reduces the effects of jet lag.

Meals: Want your three course meal right after take off? No problem! Meals are designed so travelers can eat what they want, when they want. Everything on the Freedom Menu is individually and freshly prepared to your order and served up in style on fine china.

Entertainment: Get comfy in reclining seats with adjustable headrests, lumbar supports, and moveable armrests. Escape in your own private cinema with a seatback TV and a choice of with a huge choice of films, TV programs, and games. Some flights offer seats decked out with their own video games console with up to 35 games.

Work: Hop on your company’s VPN and check your email in flight on Virgin’s Wi-Fi system.

Frequent Flyer: Elevate members enjoy a pretty cush reward program. Fliers earn points for every dollar you spend on your base fare, can redeem reward flight for as low as 2,500 points. Plus, they’ve got neat website where you can manage your miles with ease.

Make that monthly trip to Shanghai a lot more bearable by finding the best airline that fits your needs. Carriers are constantly rolling out promotions and slashing fares to compete for your business. With a little research, you're bound to get the best bang for your buck when flying the much-friendlier skies.

Strategic and Tactical Planning: Understanding the Difference

David Brydson | SmallBizLink — Tue, 09 Feb 2010 10:42:00 -0800

Many small business owners and operators do not spend much time planning for their business success. The biggest reason, in my opinion, is that they are not aware how easy it can be. Most owners, when they hear the words Strategic Planning or Tactical Planning, get a glazed-eyed look on their faces. Actually, these can be rather simple tasks to manage if you understand a few things about them. Instead most business operators are in a state of confusion about what each of these terms mean.

The reason for this confusion stems from the fact that both words are closely connected and, unfortunately, used interchangeably. Yet, in business terminology, the words strategy and tactics refer to separate business functions and practices.

Strategy Sets the Stage
In real world business usage, the term Strategy actually is the thinking process required to plan a change, course of action, or organization. Strategy defines, or outlines, the desired goals and why you should go about achieving them. The strategic planning phase involves business thinkers (namely you - the small business owner) determining why, and in a global sense what, you will achieve in your stated goals. Owners or upper management decide what the guiding philosophy and values will be, and how people involved in the businesses operations should act, in attaining their objectives. It can be a compilation of many complex multi-faceted plans created for achieving your pre-established objectives.

But Tactics Is the Play
Tactics are the specific actions you take in implementing your strategy. These actions comprise what is to be done, in what order, using which tools and personnel. You may employ a number of tactics and involve many different departments and people in this effort to reach a common goal. You may even recruit suppliers to accomplish your objectives. Tactics typically requires the involvement of the organization as a whole.

Strategic Planning Process
To understand the differences better, here are some notable points to consider, with respect to strategic planning. When doing strategic planning, you need to determine, specifically, what outcome you want to achieve (These are your Objectives) and how you will measure the results.

In addition, you need to establish a realistic baseline or starting point. (Where are you now?) Include in your planning a picture of internal and external realities that will impact your plan. This dictates that you do relevant research (competitive, market, etc). You will then need to craft an aggressive action plan to take advantage of opportunities discovered during your research. This will include a listing of your defined strategic objectives, with the tactics you expect to use to achieve them. The plan should reflect both perceived challenges and the expected end results in order to be complete.

To ensure support for the strategy, it is advisable to conduct consensus-building exercises for the company. You might include Marketing, Sales, Customer Service, and other personnel inside and outside your organization. Any uncertainties and risks will be sure to surface at this point in the strategic planning process.

Tactical Planning Process
In tactical planning, you need to understand and decipher the strategic goals; then identify the courses of action you will need to achieve those strategic objectives. Tactical planning is developed by those who deal with getting the work done, day by day. They draw up a tactical plan so they know what to do, when they need to do it, and this will help them deal with the “how” part of the plan. The main question for them is: “How can the strategic goals be accomplished within the designated limits of resources and authority?” The only way that can happen is to insure that the tactics create results which lead to the strategic benefits you desire.[widget:operationsinarticlemax]

As a small business owner, you need to make plans that include specific activities that are arranged on specified time frames and have specific outcomes. Ensure the performance of all tactical planning activities and calculate their effects; then help connect the tactical moves to the strategic plan.

In Summary
To sum up, strategic planning relates to issues pertinent to the mission of your small business—the purpose of its existence. The responsibility for strategic planning rests with you (and your partners and investors, if any). No one else is ever going to do that work for you, or without your involvement!

Tactical planning relates to actions taken day-to-day, and whose results will move the company forward to achieve the objectives outlined in the strategic plan. The responsibility to plan this belongs to those who perform the work. They are truly the only ones qualified to plan it. Strategic is the what and why. Tactical is the how.

The terms tactical and strategic are fundamental to an understanding of the different responsibilities attached to management and governance of any small business. If you fail to do this for your company, then you are driving a 1000 mile race without a roadmap. If you don't know where you are going, or how you are going to get there, then where you end up will most likely not be where you hope.

No destination is the destination of the un-destinated!

If you would like help with any part of the planning process or implementation of your plan, please contact BestFit Solutions. As frequent travelers of this road, we can provide a map to make sure you end the race, exactly where you want to be.

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The Value of Design to Startups

Dave McClure | BusinessWeek — Tue, 02 Feb 2010 10:55:00 -0800

Over the past five years I've consulted with and/or invested in about 50 startups. I've gotten to know a lot of entrepreneurs and a fair number of the venture capital and angel investors who are backing these companies, most of which are in the consumer Internet field. And guess what? Probably more than half of the startups, and more than 90% of the investors, have no clue what they are doing when it comes to user experience and online marketing.

So what, right? Surely design and marketing aren't that important? Investors don't have to be experts in every field. After all, you don't expect every football coach to be an ex-football player.

Well, actually, yes I do.

Symphonies of Code

Design and marketing aren't just as important as engineering: They are way more important. Here are the two main reasons why:
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1. Addictive User Experience (Design) and Scalable Distribution Methods (Marketing) are the most critical components of success in consumer Internet startups, not Pure Engineering Talent.

We have this image of space-age whiz kids such as The Woz [Steve Wozniak], Bill Gates, and Bill Joy, who could disassemble and reassemble a transistor radio, a toaster oven, or a mainframe computer, and who grew up writing symphonies of code and wondrous applications before they even lost their virginity.

Those guys were studs. They were god-like, and for their businesses—building computers or advanced software or operating systems—that kind of horsepower matters. It's the same, perhaps, for companies such as Google (GOOG), PayPal, Facebook, or Mozilla. You need a lot of geek to build search engines, or Web browsers, or fraud systems, or serious CAD software, or the movies that Pixar puts together.

But how much tech does it take to create most basic input-output forms for consumer Internet software, when so much of the underlying infrastructure has been built into the operating system and browser platform?

Visual Imagery and Copywriting

It's actually pretty easy to write a Web-friendly app or Web site these days. But it's still incredibly difficult to create visually appealing interfaces and, beyond that, to design them in ways that are compelling and engaging, drive calls to action, and are measurably adept at getting more customers to use your products. Figuring out game mechanics and activation, designing reinforcement schedules, visual imagery, landing page tests, and copywriting—all this is not trivial.

And if you have some success with your design, you still have to chase the scalable, predictable, profitable channels of customer acquisition … otherwise known as marketing. These days, most marketing isn't traditional PR and product placement. It's a very technically intensive discipline filled with SEO, SEM, social platforms, e-mail, widgets, social media, viral marketing, blogging, video, user-generated content, etc., etc. It's a traditional marketing person's worst nightmare—tens if not hundreds of potential marketing channels and campaigns with unknown costs, techniques, and payoff.

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Yet folks who know what they are doing can build amazing services with awesome native product marketing features that cost little or nothing to drive massive adoption.

It certainly doesn't hurt to have code jedis at the helm of your starship, but engineering for consumer Internet startups need only be competent. The real challenge is finding designers and product managers who can build an awesome product experience, and marketers who can figure out effective, scalable, integrated distribution strategies (whether organic or paid, whether technical or creative).

Investors With Expertise

2. If investors don't have operational backgrounds in design, development, or marketing from proven consumer Internet companies, you probably don't want their money (or it better be the best damn term sheet on the table).

Honestly, if you're taking money from investors, why not try to get the best experience you can along with the 20%-40% equity you're giving up? Why not find people who actually have a shred of intelligence about consumer products and relevant skills, when you're going to be sitting in board meetings with them every month for the next three to five years of your godforsaken, sleepless, work-like-a-dog excuse for a life?

Do you really want to be taking product and marketing advice from someone who has spent most of his or her life without ever having designed a Web page, coded a simple program, written a blog post or e-mail, or even have a Facebook or Twitter account they know how to use with any amount of intelligence whatsoever?[widget:resourcesinarticlewidget]

When you do background research on your investors, see if you can find them online. Do they have a recognizable Web presence? Do they blog, do they twitter? Do they have a profile on LinkedIn, Facebook, Flickr, or YouTube? Do they appear to have experience in the Internet industry, or do they just have an MBA from some big-name school and no relevant operating roles?

Seriously, life is too short. Your startup is too important. And your chances at being the next Google, PayPal, or Mint are already tough enough.

So here's the deal. Hire people smarter than you. Find a decent designer who understands human psychology and sexuality, game mechanics, SEO, and conversion analytics. Find someone in marketing who understands how to send an e-mail, write a blog post, use search engines, social platforms, and social media, and has done landing page A/B tests. Find investors who have a clue about the products and services they invest in, who use the products, and maybe even write or speak about them frequently. Find people as advisers, mentors, and investors who have the same operational experience you'd hope to hire for your startup.

If we all take this to heart, we might just build a few more useful consumer Internet products.

Dave McClure is a software developer, entrepreneur, startup advisor, angel investor, blogger, and internet marketer. He oversees the Founders Fund seed-stage investment program.

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SCORE: 10 Tips To Grow Your Business

Ramon Ray | SmallBizLink — Mon, 01 Feb 2010 09:55:00 -0800

SCORE, America's premier organization providing FREE counselors to growing businesses offered 10 practical tips to help you grow your business. All 10 points can get a boost by using technology. I've added the technology dimension, resource to each tech tip.

1. Grow your customer base. Understand your customer demographics and why they buy your products and services. Win clients over with new and diversified products. Offer multiple price points and create packages or customizable plans, which give your customers greater freedom and flexibility.

One of the best things you can do to really KNOW your customers is to profile them in a database or customer relationship management (CRM) tool. Profiling your customers and analyzing their purchasing history will help you uncover what products are more profitable and why and help you market to them what they want and that will sell.

Databases: Microsoft Access, File Maker Pro, Intuit Quick Base, Alpha Software

CRM: BatchBlue, Zoho CRM, Sage CRM, Working Point, Intuit Customer Manager, Microsoft CRM, Infusion Software

2. Expand low budget marketing. Promote your business for free on Twitter, and set up a Facebook fan page. Start a blog and comment on other blogs. Take this opportunity to communicate with customers about your business. Go viral.

Other low budget marketing inclucdes:

Email marketing (Campaigner, Constant Contact, Vertical Response, iContact)
Cost Per Click Marketing on Google, Bing, Ask
Search Engine Optimization (ptimize your web site for more search engine traffic)

3. Surround yourself with experts. Get feedback from advisors you trust. Entrepreneurs count on SCORE for free and confidential business mentoring. Use a mentor to test ideas, map a sales plan and focus on success. Ask SCORE for advice and meet with a SCORE mentor.

SCORE advisers are great for advice on just about everything. If you want to find more mentors check out your local Chamber of Commerce or professional organization (NAWBO, BDPA, YO, Vistage International, and others are great resources)[widget:resourcesinarticlewidget]

4. Add ecommerce through a web site. Your business needs a web site to stay competitive. Secure all variations on your company’s domain name. Use online forms to encourage interaction. Add a shopping cart to sell your products, not just promote the brand.

Your web host can help you develop a shopping cart for your web site. If you want to start selling online, on the cheap, consider using PayPal.

5. Free up time to sharpen your focus. Organize for success. Set a time each week to handle routine tasks. Use a PDA to keep track of phone numbers, dates, appointments and meetings. Take short breaks to refresh and recharge.

There are so many tools you can use to manage your daily schedule. Microsoft Outlook's calendar is used by many professionals, but there are so many others.

6. Create experience events to draw in customers. Host special events like demonstrations, trunk shows and classes. Offer rebate programs to encourage repeat purchases. Rearrange merchandise to make it appear fresh and provide a fresh customer experience.

Events are a VERY powerful tool to encourage loyal customers, showcase new products and services, and even as a new revenue stream. Eventbrite is a great event management tool. Constant Contact Event Marketing has recently launched their own as well.

7. Network to build buzz and referrals. Join groups that represent your clients. If you don’t have the money to join an association, offer to donate your services. Take advantage of social gatherings, committee appointments, membership meetings and networking events. Each meeting is an opportunity for referrals.

This goes back to the suggestions in point three.

8. Track your cash flow. The one thing all businesses need is cash. Ensure that you collect receivables within 30 days. Monitor invoices. Pay early when you get a discount. Always keep an eye on your cash. Prepare cash flow reports so you understand your cash needs.

QuickBooks, Freshbooks and Sage Peachtree are a few tools to consider.

9. Plan for financing success. Even if you’re in business, you should have a business plan ready to submit to potential lenders. Know how additional funding will help you grow your business, and demonstrate your ability to re-pay the loan.

Check out Palo Alto Software's Business Plan Pro

10. Consider an LLC. As a sole proprietor, you are personally liable for the debts and liabilities of your business. A corporation or limited liability corporation (LLC) protects your personal assets and property. You can register your business as a separate legal entity.

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Family Business: Managing Family Members

Tue, 26 Jan 2010 11:27:00 -0800

One of my passions in life is working with family owned businesses. Family businesses enjoy a success rate far greater than other kinds of businesses. In the US, family businesses provide 65% of all wages. This group is the backbone of our country and will likely be the group that pulls us out of our current recession. This group is not without challenges, as I often hear the following:

- "We can’t talk about the real issues"

- "We seem to have differing expectations about how to handle the business"

- "As the family and business grow, we’re facing more confusion and conflict"

Every family business member feels differently toward the business: some hate it, some love it, to some it is a dream come true, to others it is a nightmare.

A couple of key points on managing family in a family business:

1. Keep an Open and Clear Line of Communication

When it comes to any business, communication is important. In a family business it is crucial to success. Make sure before you start a business with a family member or hire a family member, discuss individual roles and responsibilities, clearly define expectations, and make sure everyone is in agreement, before you proceed. If you take the time to do this, you will avoid potential threats down the road.

2. Be Logical, Not Emotional

It is often difficult to be objective when you are dealing with family. Feelings are hurt easily, and it is a common reaction to get defensive instead of taking the time to look at the issue from a logical perspective. Before you make a decision or comment, try asking yourself, “How would I handle this situation if I were dealing with a non-family member?” Ask yourself that same question every time you need to make a decision regarding a family member. The goal is to train your mind to be more logical when dealing with emotional situations. Be sure to clearly explain your decision to your family member as you would to a non-family member.

3. Reward Competence, Not Genetics

A good business owner or manager will reward their employees based on performance, family members should be held to the same standard. If a family member is not qualified to be the VP of your company, hire someone who is. You may think you are doing a good thing by providing a family member with a job, but if they are not qualified, they can do more damage than good when it comes to the success of your business. Not to mention that nepotism is a fast way to alienate the non-family members that work for you.

4. Be Fair, Not Biased

Family feuds are better left at home. If you have conflict between family members at work, encourage them to work it out, outside of the office. If they are unable to do that, treat the situation as you would if it were between non-family members. In some cases you may need to discipline them or ask them to go home for the day. Under no circumstances should you engage in the conflict. If you take sides, you are now part of the conflict. The same rule applies if you are dealing with a situation involving a family member and a non-family member. To be an effective manager you need to have the ability to be fair and rational when running your business.

5. Take Time for Each Other Outside of the Office

Believe it or not, all work and no play will drive your business and relationships into the red. Make sure you not only nurture your business, but take time to nurture your family relationships as well. Try going out to dinner together once or twice a month, taking a weekend trip away from your home and office, or trying to plan at least one longer vacation each year to get away from it all. Be sure that no matter what you do, have fun, and do not discuss the business. Take the time for yourself and your family, and as a result it will be better for your business

Family Business Advisory Boards

Scott Heintzelman | The Exuberant Accountant — Tue, 26 Jan 2010 11:13:00 -0800

Statistics tell us only 33% of family businesses transfer to the second generation and only 15% make it to third. Why is it so difficult for a family to pass on the business to the next generation? What causes them to fail? What steps can be taken in order to increase the likelihood of the business succession? I am convinced one of the most important factors in the success of family businesses is the assistance of an advisory board.

Most business owners have more than one advisor which may include a trusted accountant, an attorney, a financial advisor, and possibly other business owner colleagues. Each has specific knowledge and experience to contribute, but no single individual can possess the professional designations, practical knowledge, or industry related experience to serve as the sole advisor.

There are many symptoms and problems that your family business could be facing. An experienced advisory board can help relieve tensions and resolve problems like these:

1. Continuing disagreements between family members

2. Broken communication between generations

3. Lack of family meetings

4. Narrow way of viewing things

5. Emotionally charged decision making

6. Problems attacked without objective perspectives

7. Distorted assessments of each other’s talents

8. Loss of commitment to the family and/or business

9. Questioned motives

How would an advisory board aid in resolving these problems? Watch for Part 2 of the Family Business – The Advisory Board Post, when I answer questions like: Who should sit on my board? Should I pay them? If so how much? How often should we meet?

5 Recession-Proof Industries

Hamsa Ramesha | SmallBizLink — Mon, 25 Jan 2010 11:35:00 -0800

Recession-Proof Industries

The rate of job openings and new hires has steadily decreased since 2007, according to data from the U.S. Bureau of Labor Statistics. And unemployment rates are holding fast at 10 percent, which also doesn't bode well. According to the December employment report, 6.1 million people face long-term unemployment.

Even though experts are hollering about the impending end of the recession, it would be wise to keep these industries in mind for the next time the economy goes down the drain. These fields aren’t going to let a simple economic crisis knock them down. They know who's really in charge — they are.

Luckily, if you're in one of these five recession-proof industries, you've got nothing to worry about. And if you're not, it's not too late to jump on the bandwagon.

Check out these five hardcore industries that you want to be a part of when the next recession strikes:

Number 1 >>

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1. Health Care

Swine flu anyone? Germs don't care about the economy. You don't stop getting sick just because you're out of a job – in fact, the stress may make you feel even worse. So it's no wonder fields like pharmaceuticals and biotechnologies are particularly resilient.

We’re an older population with more health problems (see: obesity) than we were during the last recession. According to the December employment report by the BLS, health care jobs continued to rise, adding 22,000 jobs last month alone. Specific jobs such as physicians (9,000 new jobs) and home health care services also (8,000) did very well. According to the BLS, the health care industry has added 631,000 jobs since the beginning of the recession. Employment has increased in ambulatory care, nursing, and residential care facilities, according to the BLS.

Exception: Health-care providers who offer proper health care to individuals were hard hit this recession, not to mention the fact that an estimated 50 million Americans are without health insurance. Hospitals and other medical institutions get left with the debt if health bills go unpaid.

Keep Going:

Number 2 >>

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2. Federal Government

The government always needs help, and that doesn't change in a down economy. A job with the federal government is seen as a reliable paycheck, no matter what state the nation as a whole may be in. In fact, many leave these jobs only for retirement. Government jobs are rarely cut back, and this is especially true in a recession where expanding these positions can stimulate the economy.

Rather than laying off workers, companies go into a hiring freeze. Plus, as baby boomers retire, more positions open up, meaning more room for new talent.

Keep Going:

Number 3 >>

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3. Skilled Services

Hair stylists, plumbers, electricians – they offer services that are always in demand, all the time. Seriously.

It just makes sense: These industries offer products and skills that people will always want. Demand stays consistent because the services are not only affordable, but considered necessary to the success of a business, or running a household. Services that trend to a down market will do exceptionally well. It is the type of industry to remain steady no matter what the economic climate may be. For example, nail salons saw a 9 percent growth in 2007, according to the BLS.

Keep Going:

Number 4 >>

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4. Food Manufacturing

A bad economy doesn't mean we cut back on food — especially comfort food. The food manufacturing industry includes meat preparation, dairy products, farming, bakeries, confectionary products, food delivery, etc. Because demand for food is relatively stable no matter what state the economy is in, food manufacturing remains secure, though it can be impacted by short term conditions including animal diseases, weather conditions, and trade agreements, according to the BLS.

In addition, it can be easy to get a job as a food production worker (did you know they make up 54 percent of all jobs?), as you need little formal education or training.

States like Michigan, where the recession has left deep marks, managed to see a 12 percent growth in the agricultural food industry. Food manufacturing employment grew 2.6 percent in September for Oregon as well, when compared with September 2008.

People are also indulging in inexpensive sugary treats, which is why confectionery companies like Hershey's are doing well. It makes sense; candy and chocolate are relatively cheap, but oh-so-yummy and comforting. Breakfast foods, like eggs and cereal that you can actually eat at any time of day, saw a rise in popularity — General Mills Inc. saw their second-quarter profit jump 50 percent in 2009 alone.

You may have heard of the spectacular growth by the nation's biggest fast-food chain: McDonald's. The Golden Arches definitely wins best-in-show for all-around growth, both in the U.S. and abroad, with their successful launch of McCafe coffee and new store openings (almost 600 in 2008!). Even though it's well accepted that people eat out less and at home more in a recession, it worked in McDonald's favor: when people do eat out, they eat cheap. I'm Lovin' It.

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Number 5 >>

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5. Lights, Camera, Action!

History tells us Hollywood and recessions are like a PB&J sandwich — the perfect combination. The Arab oil embargo of the 1970s and other past economic woes have always come out in favor of Hollywood, and it seems this time around is no exception (hello, Avatar!).

What is surprising are the record sales. More people stayed at home this recession, choosing an inexpensive night in with a movie, versus splashing out more by going out on the town. That adds up to box office gold.

Even though ticket prices have increased, overall U.S. box office ticket revenue hit a record high at $4.2 billion this summer. This is significant since no single blockbuster movie did as well as 2008's The Dark Knight. International box office sales broke records too, up 7 percent from 2007 at $5.8 billion.

Online movie rentals aren't doing too bad either: Redbox, the company behind automated $1 DVD rental kiosks in grocery stores, plans to expand in over 2,000 Kroger stores next year, as well as Walgreens, 7-Eleven, and other retailers.
However, the real superstar is Netflix. The recession was a blessing from the heavens for this Internet movie mogul; over 10 million paid subscribers – and counting – and a market value of nearly $3 billion. (That's doubled since 2008!)

It doesn't stop there. Netflix earned $432 million in third quarter revenue, a 4 percent increase from the previous quarter. Analysts expect the online giant will meet its goal of adding 300,000 to 500,000 new customers in the three months ending September … which would mean about 2.5 million more customers than the same period in 2008. Yowza! That would be a record growth in the company's 10-year history.

On the flipside, competitor Blockbuster Inc. plans to close over 900 stores by the end of 2010 and denies rumors of bankruptcy.

Your E-Options for Tax Returns Are Plentiful, Helpful, and Mostly Easy

Mark A. Kellner/The Washington Times — Thu, 21 Jan 2010 12:04:00 -0800

Jan. 20--Less than three months remain until April 15, and last Friday, the Internal Revenue Service declared its electronic filing system "open for business," allowing taxpayers the chance to get their refunds quicker. If you're receiving W-2 forms and other statements in your mailbox, you might be itching to begin.

It's been a few years since I've examined the options for preparing tax returns, and electronic filing has grown up quite a bit. According to the IRS, "approximately 70 percent of the nation's taxpayers, some 98 million people who meet the $57,000 income limit, are eligible for the user-friendly Traditional Free File [service]," which the agency says "provides step-by-step software help that asks simple questions and puts the answers on the correct tax forms."

For the rest of us, services such as Intuit's TurboTax (www.turbotax.com) and CompleteTax (www.completetax.com) from CCH (formerly known as Commerce Clearing House), as well as H&R Block's "At Home" online service, are among the top options. I've tested the Intuit and CompleteTax online services so far; H&R Block's products, which include software as well as online services, will get a separate workout shortly.

While it may seem a bit daunting to enter all your data online and hope for the best, it appears that the online services are quite good. If you don't qualify for the "free" online prep, you can pay for various services, from "basic" to "professional" with prices ranging from $15 to $50. State returns are extra, usually about $25.

[widget:moneyinarticelcurrin] One advantage of the online services is that they should work with all computing platforms, Windows, Mac or Linux. Another is that you could start things on your lunch hour at work and finish up at home, or vice versa. A third is handy electronic filing, although the software-based programs should offer that as well.

Of the two systems tested so far, TurboTax Online offers the more sophisticated online interface. It includes lots of graphics, animation-style features, and a friendly mien that is very inviting. The tax "interview" is relaxed, and while taxes aren't always the most pleasant thing in the world, this is a nice way to prepare it.

One of the things I enjoyed most about the TurboTax Online experience is that the physical layout of the screen was a bit easier on the eyes than the CCH/Complete Tax screen. Numbers were easier to read on TurboTax, and instructions were very clear.

On the other hand, Complete Tax was, well, more complete than TurboTax. It guided me to the forms for Schedule C deductions more easily than TurboTax did; with the latter, even after an "upgrade" to the "Home & Business" version, I had to manually dig through the Web site to get all the deductions in.

There was another key difference, although I did not go through each return line-by-line to see why: the Complete Tax returns gave me about $1,000 more in refunds than did the TurboTax-prepared returns. I can't swear which system is more correct, and there's a chance I made a mistake with one or the other program that swayed the total, but that's a lot of money, either way.

For me, at least, this will require more investigation and examination. I might well end up going to a tax preparer this year and letting them sign on to the process. But I could end up going with an online system, especially if H&R Block's program comes down closer to one of the other results.

My advice would be to try both systems: You can create an account and enter data for free; payment is required to e-file and/or print your return -- and see which you enjoy better. TurboTax is certainly a well-regarded name, but Complete Tax is quite good as well, and it gave me a higher refund calculation.

Five ways to make 2010 a banner business year

Linda Griffin | SmallBizLink — Thu, 14 Jan 2010 11:09:00 -0800

Ahh, yes, it’s January again. I always feel that December flies by in a mad dash. It seems that as soon as I sit down to Thanksgiving dinner, I get up and it’s New Year’s Eve!
After the rush and excitement of the holidays, I like to take time in the first few weeks of January to re-group. I plan where and how I want to spend my energy and time in the new year. Here are five business areas and suggested activities that will have a major impact on achieving your business goals in 2010.

1). Expand your network of prospects and clients

Review your networking activities from 2009. Did they give you an appropriate payback for the time you invested? Before you eliminate them, determine why they weren’t successful and take corrective action.

Create a marketing plan to attract new prospects and clients. It should cover the entire year and include social media, print and direct mail advertising, holiday campaigns, article marketing, contests, etc.

Get recognized as the expert. Offer to share your knowledge by speaking at local events, clubs and networking groups.

2). Increase your Profitability

Look for lower cost or no cost options for any of the products and services you use. Free and low cost applications have many of the same features as higher priced name brands.

Track everything from the cost of maintaining your web site to the return on investment of your latest marketing program. Create a budget and cash flow analysis so that you know what revenue is coming in each month and what expenses are flowing out.

Take advantage of free listings in online directories such as Google and Yahoo marketplace. Many local newspapers maintain an online business directory.[widget:resourcesinarticlewidget]

Be frugal with your time. Don’t waste the day away on email, internet surfing and facebook. Limit the amount of time you spend on non-revenue producing activities.

3). Turn customers into raving fans

Thank your best customers with special deals and exclusive services and ask them for referrals.

Figure out what your customers want. Develop a customer feedback system and really use it to make your products better

Add at least one new product or service this year. Study your competition and find one thing that you can do better or one problem that they aren’t addressing and solve it.

4). Embrace life-long learning

Read at least four business books this year and subscribe to at least 2 monthly business magazines. Read them for ideas and inspiration.

Pick one new skill that you want to get better at this year and invest in a personal development class or conference.

Join a mastermind group or hire a coach. They will provide support, someone to bounce ideas off of, and someone to encourage you and hold you accountable.

And finally,

5). Have fun.

Enjoy the work itself. I hope that’s one of the reasons you started your own business.

Take an annual vacation or multiple shorter ones. The mental and physical break will re-energize you.

Take a lunch break every day. Use the time to get away from your office to meet friends, to read for pleasure, to enjoy the weather or take a nap. You will be more productive when you get back to your desk.

Looking to Start a Business? Now is a Good Time

Entrepreneur Column — Tue, 12 Jan 2010 11:25:00 -0800

As we move into the winter months, and the economy is slowing coming out of its "economic winter," one only need look around to see that one person's recession is another's great buying opportunity.

That is especially true if you are in planning and buying mode for your start-up.

Few times in recent memory have been as kind to buyers of all kinds of goods and services as right now -- especially if you are starting a new business.

So what can you get at a great price?

A lot actually. Especially when it comes to office space, marketing and -- in certain some industries -- entire infrastructures (particularly in the restaurant business).

That said here are some things to look for on the cheap to make your initial business investment lower than you may anticipate.

Office space. This depends on where you live, but right now, it's generally a buyer's market for commercial space; that includes everything from retail to warehousing, and restaurants to real estate.

Deals abound. Some brokers are even offering lease to own options and other interesting incentives to fill empty space. Make sure you understand any lease agreement and make sure you have a good attorney to review it with and for you. And remember that if you're in retail, part of your lease is your marketing cost, because your location is imperative for your success.

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Furniture and filing systems. Search Craigslist, keep an eye out at auctions or troll local garage sales for office furniture or filing cabinets.

Whenever you pay retail for these items, you are definitely overpaying because furniture quickly goes in and out of style and filing systems literally sit and take up floor space, which -- like it or not -- you pay for as part of your overhead.

Phones. Phone systems are another expense you should look to cut as much as you can, because the mark-up on new retail phone system is high.

There's nothing wrong with a good, gently-used phone system. You can find the hardware fairly easily, and you can always find a good, independent contractor to set up the system for you and your specific needs. The result is you being able to bypass becoming a high-profit center for your phone company, at a cost too hard to for you to recoup in a short period of time.

Inventory. Want to "test market" seasonal fashion or clothing? Interested in overstocked inventory from another part of the world?

A little bit of leg work and research can uncover incredible deals in a variety of niches and categories. Do your research up front, go in low to a large number of vendors and you will eventually find a great deal.

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Shop fittings or office accessories. Much like furniture and filing systems, any of your internal shop fittings and accessories can be found at or below cost via the internet, at auctions, business sales and the like.

Again, gently used fittings -- especially in retail -- can add that special touch to the look and feel of your space but should never be purchased at a retail price. Same for the accessories and knick-knacks you think you may need when you go to the office supply store. Don't be tempted. You can find for a fraction of the cost elsewhere.

Capital equipment. Whether its backhoes, large trucks or heavy equipment, all are for sale nowadays, at prices almost too good to be true.

For decades business people have been looking for bargain prices on these types of assets; and many new and long-time restaurateurs have outfitted and renovated new, existing and expanded operations with equipment they have picked up online, at auctions, at sales and competitors who fell victim to the downturn.

If you are in a capital intensive industry, you will find great prices on buildings and real estate, and on equipment. Be sure the market you are going into has a demand for your product or service because turning around and unloading those assets at a higher price than you paid for them will be difficult for the foreseeable future.

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Advertising. We've touched on this before but there have been few periods in the past two or three decades where advertising and media coverage can be obtained at rock bottom prices; with loads of incentives and added-value.

Again, there's no need to pay market rate for any sort of ad space, and limit your yellow page spend to no more than 5 percent of any budget. Long a price insensitive medium, phone book publishers are, in most cases, willing to offer very good deal for your marketing investment dollar.

Now that we looked at some things you should never pay full price for, is there anything you should ever buy new?

Actually, yes, and that would be your computer and network equipment. It's rare to find a great "gently used" system to meet your needs, and prices are more than comparable for remarkably fast and versatile new systems with everything you need.

You needn't worry about the integrity of the hardware or any of the software, and you can customize a new system or network specifically for the demands and capacity of your business.

Regardless of what is on your new business wish list, don't go overboard on purchases -- retail, wholesale or otherwise.

Remember, every dollar out needs to be brought back in at some point to start generating good returns. So be mindful, extremely cost-conscious and even frugal in your startup mode. Doing so will pay valuable and more profitable dividends for you at a quicker rate than those competitors who go overboard at the start.

Brad Sugars is Entrepreneur.com's Startup Basics columnist and the writer of 14 business books including The Business Coach, Instant Cashflow, Successful Franchising and Billionaire in Training. He is the founder of ActionCOACH, a business coaching franchise.

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Mint Makes a Quick Mark on Intuit

Aaron Ricadela | Businessweek — Mon, 11 Jan 2010 10:00:00 -0800

Four months after Intuit (INTU) bought personal finance Web site Mint.com, the company is preparing to phase out its Quicken Online software, moving Intuit's Web users to Mint. The software company plans to combine its technology with Mint's, making it easier for users to toggle between the Web and their home computers while managing money.

Intuit plans to discontinue Quicken Online, its Web-based money management product, sometime between April and June, and move those users to Mint.com, Intuit Vice-President and Mint founder Aaron Patzer says in an e-mail. Patzer was expanding on comments he had made in an interview for the NBC Bay Area program Press: Here.

"Quicken Online will be end-of-lifed in the next few months," Patzer said on the program. "We'll transition those users over to Mint.com," while preserving their historical financial data, Patzer's remarks indicate that Intuit is moving swiftly to reshape its software to more closely resemble the Web-based service that gained users at such a brisk clip that it started threatening Intuit's dominance of the personal finance software market. Patzer had hinted at the plans in an early December blog entry.

In the on-air discussion, Patzer said Intuit plans to keep selling desktop versions of Quicken for Windows PCs and Apple (AAPL) Macs for perhaps five years further. That's mainly to appeal to "older" users who "feel more comfortable" with their finances on a personal computer, he said. Within about two years, the company plans to combine the software code of Mint.com and Quicken into a product that would let users readily switch between desktop and online modes.

Will older Quicken users adapt?

Patzer said he and his team from Mint have been given lots of leeway to shape Intuit's personal finance products. "They want to learn more from us than us from them," he said.

The Mint team possesses the necessary "intellectual capital" to sell customers on third-party financial products that can lower their interest rates or fees, says Cathy Graeber, an analyst at Forrester Research (FORR). Yet it's not clear that long-time Quicken users will warm to new features on the Web. "It will be really hard for older Boomers and seniors to feel comfortable with something that's a hybrid of desktop and online [software]," she says.

Intuit's $170 million acquisition of Mint, announced on Sept. 14, propelled the $3 billion software maker's personal finance software into the Web 2.0 era. Mint has proven especially popular among Web users in their twenties and thirties because it avoids a lot of the data entry that characterizes much financial software and that many users find off-putting. Mint uses software algorithms to automatically categorize expenses and help users create budgets.

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Quicken boasts 10 million to 12 million customers and brings in about $200 million a year in revenue, according to Patzer. But Intuit hasn't managed to attract younger users to the brand while Mint has garnered more than 1.5 million users since its 2007 debut. Intuit also sells QuickBooks accounting software and a tax preparation package called TurboTax.

Quicken Online failed to thwart Mint

During the TV interview, Patzer got in a dig at Quicken, whose cumbersome operation he has said helped inspire him to create Mint. Quicken appealed to an "anal-retentive-type personality who wanted to make sure everything was penny perfect," he said. Patzer, who took charge of Intuit's personal finance business after the acquisition closed last November, said the company plans to combine Intuit and Mint software code into a single "code base" that could run on a PC or in the cloud, letting users switch between the two modes. Future desktop versions could use Adobe Systems' (ADBE) Air, Microsoft's (MSFT) Silverlight, or open-source HTML 5 technologies to pull information from the Web while running on a user's desktop, he said.

Meanwhile, Quicken Online will be dropped. Intuit introduced the Web site at the beginning of 2008 in order to compete with Mint. Quicken Online never took off and Intuit said after acquiring Mint that it would stop promoting the site and instead steer new Web users to Mint. At the time, the company said it planned to keep the Quicken Online brand alive as a service for desktop Quicken users to get alerts and updates about their investments. Now Mint will be the primary source of that information while connections between the desktop and Web products are developed.

Mint is expanding its purview as well. Patzer said Intuit plans to launch a Mint feature later in 2010 to help users manage their mortgages and determine the best time to refinance.

Down the road, there's scope for Intuit to create a "Mint for health care" product that lets consumers track their medical spending, Patzer said. Health-care software is a new area of investment for Intuit. In 2009, the company began offering customers of UnitedHealth Group (UNH), Cigna (CI), and Medical Mutual of Ohio software called Quicken Health Expense Tracker that lets consumers decipher insurers' "explanation of benefits" documents and see how much they owe vs. their deductibles. Insurers pay Intuit for the software, which is free to members of those plans and which has reduced the number of customer service calls the plans receive, Intuit President Peter Karpas says in an interview. Intuit also sells Quicken-branded accounting software for doctors.

More Articles from BusinessWeek available here

Keys to a Successful Business Valuation

Lie Dharma | SmallBizLink — Fri, 08 Jan 2010 15:36:00 -0800

The hard thing about valuing a business lies in the great unknown of future cash flows and the risks associated with being able to generate future cash flows. While historical operations can provide a sound starting point to determine future cash flows, it can also be very misleading. For example: a biotechnology company in an early stage of clinical trials has no historical positive earnings or cash flows, but may hold an extremely high market valuation based on the promise of future cash flows from the eventual production and sales of a new drug. Or conversely, a cemetery operation may have a one-time event due to a liquidation of real estate holdings (held for a long time), which will be nonrecurring. Hence, future cash flows can be distorted by historical events that are nonrecurring (positive or negative). The key lies in the ability to calculate a core or operating cash flow figure on which to base the valuation.

Through this post I share some little tips and trick to uncover lies behind the shady—unknown of future cash flow I mentioned on the preface which is the key basis in determining the most appropriate business value. Read on…

Adjusting Cash Flows To Be Used As A Business Valuation Basis

The following points, by no means all inclusive, provide a flavor for how cash flows can be adjusted to be used as a basis when determining the most appropriate business value.

Expense savings - One company may be interested in acquiring a business that offers tremendous expense savings opportunities via implementing the concept of economies of scale. By combining the two entities, an unprofitable business now may actually produce a positive cash flow (which has value). The elimination of duplicate accounting functions, human resource tasks, distribution facilities, and so on are often cited in business acquisitions and can assist in supporting the valuation calculated for the business being acquired. Easy targets include duplicate business overhead functions, such as accounting and finance, because, generally speaking, two CFOs or even two accounting departments aren’t needed in the combined entity moving forward.

Added expense removal - Pushing through other or personal expenses in closely held businesses has been around as long as the IRS (actually longer). Generally, these expenses aren’t necessary for the ongoing business to operate, but the owners take advantage of the tax break. Removing these expenses to increase cash flows can lead to higher business valuations. Examples of these types of items include retaining family members in various administrative or clerical positions that are more of a luxury, inflating owner salaries, or passing through various personal expenses associated with travel, autos, and so on. Of course, nobody is questioning the legitimacy of these expenses for tax purposes, but I have yet to find a company that does not test these waters somewhat.

Potential cost increases - Certain companies may be at a stage where a significant reinvestment in capital equipment, assets, and so on is required to continue to support and generate cash flows. You need to factor in these one-time expenditures into a business valuation model to reflect the impact on future cash flows. While depreciation expense is added back to determine the proper EBITDA, this figure can also be reduced in the scenario where significant reinvestments in fixed assets are required to keep a company competitive, such as upgrading its facilities to meet new environmental regulations.

Hidden assets - Certain assets may have a significant value present external to the core business. For example, a company may have purchased real estate years ago for future business expansion, but the property is no longer needed internally. To an outside party, the value may be substantial, and, as such, this hidden value needs to be reflected in the complete business valuation. Or conversely, this asset may be excluded from the business valuation and carved out from any potential analysis to capture the core value of the business.

Intangible assets and/or intellectual property - Brand names, research in process, patents, trademarks, contracts for retail shelf space, and similar types of assets have the ability to generate significant cash flows if managed properly. While one company may struggle with generating adequate cash flows, another may prosper by applying its marketing or financial muscle to an intangible asset.

Lost future business - In service organizations, a business valuation may decrease as a result of a key principal leaving or retiring. Anyone who has evaluated an acquisition within the service industry knows how critical this issue can be in terms of negatively impacting future cash flows. If a partner of 30 years leaves, chances are a portion of his accounts will also leave, which in turn produces reduced future cash flow.

This list could go on and on. When a business is valued, all elements and facts of importance must be evaluated in terms of determining what is the most reasonable future cash flow stream that can be expected. From a logic standpoint, it’s relatively easy to understand why a seller of a business would want to maximize the cash flow stream, or EBITDA, because a higher valuation would be received. Conversely, it’s also just as easy to understand why a buyer of a business would want to minimize the cash flow stream or EBITDA because a lower valuation would be provided to the seller.

Factors Influence The Multiple-applied to The Cash Flow Stream

To increase the value of a business, a higher multiple applied to the cash flow or earnings stream is desired. Conversely, in order to decrease the value of a business, a lower multiple is used.

The following list, which isn’t meant to be all inclusive, covers factors that influence the multiple applied to the cash flow stream:

Interest rates - Interest rates, simply stated, represent the cost of capital. For our purposes, the most common reference point for interest rates is the prime rate as established by the country’s largest banks. In today’s relatively stable interest rate environment, you can expect reasonable cash flow multiples. However, when the Federal Reserve Board even mentions that rates may rise, it should come as no surprise that valuations may be pressured lower rates rise, business valuations decrease. This concept is based on the premise that the opportunity cost for the funds used to buy a business will be higher, and, with all things being equal (including the EBITDA of a business), the valuation must be lower to produce the desired return.

Growth potential - Higher growth opportunities translate into stronger future cash flow potential and demand higher multiples. Just ask the dotcoms of the late 1990s and early 2000s about how they received astronomical valuations based on the premise of extremely high future growth rates. From a business perspective, the more information, support, and data that you can provide a potential buyer about the growth prospects of your business, the higher business valuation you will receive.

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Length of cash flow stream - Cash flow streams that are longer and more secure or reliable produce higher valuation multiples than shorter, uncertain cash flow streams. If a company has patent production in place for the next ten years (supporting the cash flow stream) versus three years, it’s safe to say the valuation multiple will be favorable. This concept is commonly referred to as an Evergreen income stream. Just as it sounds, if you can produce cash flow streams that are forever green, cash flow multiples will increase.

Liquidity of investment - If an investment is readily liquid with multiple buyers available, a higher multiple is generally provided. Non-liquid investments with limited market appeal increase risks and drive down valuation multiples. This concept is especially true on Wall Street, where the most widely held and largest publicly traded corporations may receive a higher valuation given the ability to readily sell investments on the open market.

Management continuity - Management resources, experience, talent, and continuity represent critical elements of the business valuation process. In the infamous words of Gordon Gecko played by Michael Douglas in the movie Wall Street, nobody wants to buy or invest in a company that represents a dog with a different set of fleas. If the management team isn’t qualified to operate the business and produce continued cash flow, the multiple applied to the cash flow stream will suffer.

Concentration or diversification risks - The higher the concentration or diversification risk, the lower the multiple. Two like companies with the same cash flow stream operating in the same industry may receive different valuations because one company may generate its revenue equally from 100 accounts and the other from just 10 accounts equally. The impact of losing one account in 10 is far greater than 1 in 100 and increases the concentration risk. While it may be nice to generate 35 percent of your revenue and earnings from the Home Depots of the world, increased operating risks are present that may actually deflate the value of your business.

Timing is everything - Just about everyone has heard this phrase at one time or another. For business valuations, timing really is everything in terms of driving higher multiples and increased liquidity. You need look no further than the robust valuation period experienced in the late 1990s that crashed within a period of roughly 12 months with the start of the new decade. Capitalizing on or missing the window of opportunity can significantly influence the multiple received.

The determination of the multiple to be applied to the cash flow stream really boils down the risks present, actual and perceived:

* Actual risks are relatively easy to understand and quantify and, as such, can be applied to the determination of the cash flow multiple in a relatively logical fashion.

* Of greater uncertainty are the debates that inevitability occur about perceived risks. These risks are much more subjective in nature and, if not properly managed and presented, can significantly impact the value of a business. Needless to say, the higher the risks, the lower the valuation multiple received, which in turn drives a lower overall business value.

There are no set rules in the business valuation game. While a seller may want to maximize cash flows and lower the risks (thus increasing the value), the acquirer may want to deflate potential future cash flows and increase the perceived risks (thus producing a lower value). Or, conversely, an estate may want to justify a lower valuation to reduce potential estate taxes, whereas the IRS may be more aggressive and increase the valuation for obvious reasons.

While the basic principals used in the business valuation process are relatively constant, cash flow and how the EBITDA and multiples are managed or manipulated represent the real basis of valuing a business.

To realize the maximum valuation for a business, you must properly package, prepare, and present the business. This preparation goes well beyond getting your financial and accounting house in order because the business valuation and sales process involves a significant amount of subjective elements beyond just the numbers. You wouldn’t expect to realize the highest value when you’re selling a home that has a leaky roof, weeds growing in the yard, and clutter thrown about. Nor would you expect to receive a reasonable offer for your business with personnel or management shortcomings, excessive expenses, or improperly prepared and presented financial information.

Timing, as they say, is everything, and, while important when valuing and selling a business, preparation and presentation are just as critical! To this point, external professionals are often used to assist with this function. Top realtors often generate higher values (even with their commissions) for real estate properties if they know how to market and sell the properties. The same logic holds true for selling a business as the top business brokers, investment bankers, and/or mergers and acquisition specialists can enhance the value of a business and produce greater returns for the seller.

Final Thoughts On Successful Business Valuations

Somebody once came up to us and raised the question as to why the equity or net book value of a business isn’t equivalent to its fair market value. Valuing a business based on its net book value sounds simple enough and would seem to make sense because, if the assets and liabilities on the balance sheet are fairly stated, the business should be able to liquidate with the remaining cash equal to the net equity of the business. But rather than look at it in this fashion, I suggest an alternative view:

If you could receive a cash flow stream of $100,000 per year from assets that have a stated value of $50,000, not only would you be willing to purchase the assets for $50,000, you’d most likely be willing to pay ten times this amount. OR, if an investment generated $50,000 in annual earnings but was going to cost $2 million, would you (or any other entity) actually pay $2 million, or would an attempt be made to drive the price down to, say, $500,000 to better equate the return with the investment?

Valuing a business isn’t based on supply side economics (if it costs X, it will return Y in cash flow). Rather, the cash flows and earnings of Y determine the value of X.

Online Banking Has Killed Personal Checks for Good

Anick Jesdanun — Tue, 05 Jan 2010 12:08:00 -0800

NEW YORK - It's been nine months since I've written a check.

That's not to say I'm on some 12-step program to resist shopping. My credit card bills would suggest otherwise. Rather, when I opened a new bank account in March, I challenged myself to see to how much I could use my bank's online bill-payment service to stretch the 10 starter checks I got for free.

Ordering a box of checks can cost $20 to $30, and in these tough times, every penny counts. I also save 44 cents in postage for most checks that go unwritten.

To my surprise, I haven't needed to use any of the 10 free checks all year.

I knew I wouldn't have trouble paying electricity, cable TV, phone or credit card bills. And for merchants, friends and others without prior electronic arrangements with my bank, Citibank, its bill-payment service simply prints out a check and mails it directly. I've done that with rent for my apartment, and so far I haven't been evicted.

Trouble could lie with bills that have payment slips to return.

Because Citibank's service - like those offered by other banks - sends checks or makes electronic transfers to merchants directly, there's no way to attach that slip.

I thought I'd encountered such a roadblock just a month into my experiment, as I needed to submit a form with some state tax payments. I prepared to pull out one of those precious starter checks. But then I noticed that New York state has a Web site for making electronic payments directly, without forms. Problem solved.

The solutions aren't always elegant, though.

Instead of handing my building's super a holiday tip, I had Citibank mail a check with "Merry Xmas" and my apartment number printed on the memo line. There wasn't enough space to use the nonreligious "Happy Holidays," and the bill-pay approach seems so impersonal. We'll see how quickly I get repairs done in the coming year.

Perhaps the most nonsensical check-free experience involved my registration for a marathon in Charlotte, N.C. I could have mailed in a form with my check for 44 cents postage. Instead, to conserve my 10 starter checks, I paid a $7 processing fee to submit it online.

I know, it might sound silly. But I've gotten so used to a check-free lifestyle over these past nine months that I couldn't bear the thought of writing one and mailing it in - and getting closer to having to pay for a box of checks.

I do miss getting canceled checks back, but banks have generally moved away from that anyhow, with or without electronic payments. Instead, many banks now let you view electronic images of canceled checks online.

For electronic payments and transfers, Citibank lets you view records online for about four months. After that, you'd have to rely on the brief listings in the monthly statements or contact customer service for more detailed records. But I was glad to learn that option would remain available even after I closed my account.

My one disappointment with online bill payment is over what's known as the float.

Normally, I would get to keep my money for several days while a check got mailed and cashed. If a friend procrastinated, the money could remain mine for weeks or months.

With Citibank's service, the money is taken out of my account as soon as the bank sends the payment. Citibank uses the interest earned during that period to cover costs of running the service.

Not all banks do this, though - some will deduct the funds from your account when the recipient gets the payment. And we're really just talking about a few pennies here, not enough to offset the convenience of online bill payment.

It's become such a lifestyle change that I have now gone paperless with many other accounts as well. Credit card and cable TV statements are now delivered electronically, after years of my resisting nagging by those companies.

It got me wondering: What's the point of checks in this era of credit cards, PayPal and electronic transfers? Many merchants don't even accept personal checks anymore.

The biggest test of my check-free devotion came when I called Citibank to find out just how much a box of checks would cost - only to learn they come for free at my account level.

As much as I love free, my reply was still: No, thanks.

How Two Colorado Software Startups Are Boosting Their Local Economies

Wayne Heilman/The Gazette, Colorado Springs — Tue, 22 Dec 2009 11:17:00 -0800

Two small Colorado Springs-area online software start-up companies are trying to carve profitable niches in specialized markets that they hope will help them grow into key players in their industries and play a significant role in the local economy.

Colorado Springs-based Four Roads LLC helps its customers build an online presence using social media and electronic commerce tools based on the Telligent Community software suite, which includes tools for organizations to build blogs, wikis, discussion forums, media galleries, RSS feeds and other applications.

After some early successes, such as winning a contract with New Zealand consulting firm Aliveware Ltd. that has since ended, the 2-year-old company is trying to broaden its customer base of 100. [widget:resourcesinarticlewidget]

Monument-based ProVault LLC earlier this month moved from the testing phase with its online software that helps clients of family law practices and support professionals produce the financial affidavit used in divorce proceedings.

The 9-month-old company bought the rights and customer list for desktop software used by three-fourths of Colorado's family law practices and developed the online software that can be accessed from the client's home.

The two companies are "exactly the kind of employers we are looking at for the continued growth of the Colorado Springs economy," said Mike Kazmierski, president of the Colorado Springs Regional Economic Development Corp.

"These kind of technology companies can meet the needs of their customers globally, while finding the talent they need in Colorado Springs. We have found these companies find our area appealing and are less interested in incentives."

Six of the 13 companies or organizations that EDC helped to expand or relocate operations in the Colorado Springs area this year employ fewer than 10 people and moved their headquarters to the area with plans to hire dozens of additional workers.

EDC also is targeting technology start-up companies as one of its primary focuses of its economic development efforts under a new plan developed earlier this year with the help of an Austin, Texas-based consultant.

Four Roads

Sean Winstead started Four Roads in 2007 with three other entrepreneurs from Florida and England after Telligent's product evangelist, Dave Burke, realized the four were working on similar projects individually and should start talking with each other.

Winstead joined Gary McPherson, Michael Trefry and Rob Nash to form Four Roads a few months later after Burke sent them their first two potential customers, Aliveware and SchoolDude.com, which offers online tools for managing schools.

All four founders and nine others work for the company as contractors.

"Telligent makes one of the leading platforms for building social media Web sites for companies who need to hear from their customers, and each of us on our own came up with the idea of adding an e-commerce add-on so companies and organizations could collect payments for subscriptions, memberships or merchandise," Winstead said. "The revenue from those first two customers provided the funding for our product development."

A veteran software developer, Winstead moved to the Springs in 2000 to work for TurboPower Software Co., which developed software for computer programmers before it was acquired by a casino software company and shut down. After TurboPower shut down, he and four others started Component Science, which also produced software for computer programmers, but the company lacked the marketing and sales support to be successful, he said.

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The highway to success has been bumpy for Four Roads, Winstead said. The company became overly dependent on a major customer and suffered a sales decline after that project ended in late 2008, and made a bad salesperson hire that compounded that drop, he said.

The company also is trying to raise about $400,000 to hire a team to complete projects for clients rather than divert members of its product development team into client services, he added.

The primary products Four Roads sells include software that manages content, allows electronic commerce transactions, creates and manages calendars and manages user accounts using Facebook and Twitter account information, all on Telligent Community Web sites. Winstead said the company wants to boost sales from $1 million this year, which was down from $1.5 million last year, to $3 million next year and $5 million in 2012 by expanding its customer base.

ProVault

Faced with a dramatic drop in income a year ago when her ex-husband lost his job and her child support payments dropped, Debbie Saunders Mignola turned to her software development background to help support her four children.

A consulting business that helped divorced spouses document their financial needs wasn't generating enough revenue and she couldn't find a technology job after being a stay-a-home mother for four-and-a-half years, so she started ProVault.

"I went through a divorce four years ago, and my attorney told me that the financial reports I submitted were the best he had ever seen. He and two other accountants who specialized in divorce that I had worked with encouraged me to start my own company," Saunders Mignola said. After looking for ways to expand her consulting business, she ended up buying the rights to software used to produce the complex financial affidavit used in divorce cases.

She had originally wanted to work with William Redak, the Louisville developer of that software, but found he wanted to sell the business after 20 years of developing and selling his software. She agreed to buy him out and found that 38 percent of his customers that she surveyed would switch to an online version she wanted to develop, so she learned how to use the MySQL database software to create the online version using entirely new coding.

Saunders Mignola had 20 family law firms and related professionals testing her software and 44 registered subscribers by the time she launched the online version earlier this month. In the first few days, she sold discounted bundles of 50 uses and 10 uses to those firms. She markets the software as a way for family law firms to offer clients a less expensive way to get financial data for the affidavit than filling out a questionnaire and having a clerk enter it into the affidavit.

ProVault, which has two employees and about 10 contractors on staff, plans to expand its sales by June to California, Massachusetts and Texas and then hire a sales force to offer its online software nationwide in a year, Saunders Mignola said.

The software is now marketed to family law firms by e-mail and at industry conferences, but she eventually plans to market it to divorcing spouses who don't use a lawyer and add other software for divorce-related paperwork.

Are you playing Whack-A-Mole?

David Brydson | SmallBizLink — Thu, 17 Dec 2009 10:36:00 -0800

Almost everybody is familiar with the video game Whack-A-Mole or some variation of it. For those few that are not, it is a game where you have a large hammer, like a old fashioned carnival strongman, and you run around a playing field trying to hit "moles" that pop their heads up from holes in the ground within a specific amount of time. When you hit the mole, you get points and your score goes up.

As you progress through the game and get better at hitting the mole, they pop up faster and faster. The biggest challenge is, having to guess where they will pop up next. Because if you knew where they will pop up next, you could position yourself there beforehand. At some stage in the game they start popping up two or three at a time. They get very good at knowing where you are and pop up at the farthest hole from your current position.t

Now let's use to use the same analogy related to your business or work life. If you are like most small business owners, you spend most of your day running from one fire to the next. These are your moles. You get to "Whack" a particular mole and then hurry to the next hole and whack that one. What you will quickly notice is, the more running you do, the faster the "moles" pop up. Just like the game.

You get to a point where you can no longer keep up with all the fires (moles) and your day runs out. You get to the end and you are exhausted and look up at the score for your day. Did you notice that in the beginning of the game, you scored much a higher hit rate and were more productive? Your sense of accomplishment dwindles and satisfaction drops. There is no longer a feeling of success.

Let us begin by thinking about your tasks in a different way. How would the game be different, if you could stop the moles from popping up as fast, or popping up at all? If you had a way to make that happen, wouldn't you feel better about your success rate? At a minimum, you would not be as tired when the time ran out. The answer is to get below the surface and either block the holes or eliminate the moles BEFORE they pop up.

As moles are very creative in tunneling and popping up to the surface (just ask any farmer or gardener); you need a way to know either where they are going to pop up or how to eliminate them. The same is true for the daily fires that show up in your business. What you need is a system to eliminate or reduce them to a manageable number.

By having a system in place, you can predict, with reasonable accuracy, what is going to happen and when. You will have the answers (your hammer) readily available to whack them with, because you have removed the guesswork. You know what is going to happen, what the response needs to be, and who is going to handle it.

A system is nothing more than a series of processes, procedures, and tasks that are executed in a systematic way. By having one in place, you are less likely to hop from one fire to the next and will become more productive. If you find yourself putting the same fires out more than once or twice, then you have a good candidate for a systemized way of handling it.

The repeated fires are the result of something. Is that "something" you can control? If you were able to provide that "something"; would they stop occurring? If the cause is not anything you have control over, then you will have to systematize the response - or how the response is handled. Could someone else handle it, if they knew how or had the right tools? This is where your system becomes useful.

By reducing things to a system, you can have more time, effort, and energy to handle the most important parts of your company; the vision, strategies, and growth. And, that is what will keep you in business.

History has shown that organizations cannot afford to neglect systematization and strategic processes, especially in challenging economic times. The biggest risk of all is to do nothing. With every passing week that an organization does not have a well-considered strategy, solid systems and processes, and the enabling tools to execute them, it is missing opportunities to better position the company for sustainable growth.

By investing in operational efficiencies, your company can save money over time and be better positioned to take the lead when economic times improve. These systems free you to focus on your customers, so you can continue to nurture the business, strengthen critical relationships, and better capitalize on revenue opportunities. Systematic processes provide you with an opportunity to improve your business by providing the right mix of systematic transactions, automated responses and personal attention, to ensure long-term success.

SmallBizLink Holiday Gift Guide

SmallBizLInk — Mon, 14 Dec 2009 15:27:00 -0800

Gift Guide Categories

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Holiday Gift Guide for Your Accountant

Steve Berman | LedgerLink — Mon, 14 Dec 2009 14:31:00 -0800

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During the holiday season, buying gifts for accountants could be trickier than shopping for someone in any other occupation. Why? Because accountants, by nature, know what everything costs.

Still, that doesn’t mean there aren’t plenty of options, and that’s where we come in. We’ve combed the giftosphere for the best (affordable) selections for the number cruncher in your life. Check out the list and spend, spend, spend away (but not too much, of course)!

Gifts for their Desk! >>

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Gifts for their Desk!

Everyone knows accountants love to start their mornings (and propel themselves through the workday) with coffee. However, most offices don’t supply the best tasting joe and those daily runs to the coffee shop can really add up after a while. To help save your accountant buddy money while helping him or her save money at the same time, get this personal coffee maker. Its small size makes it great for keeping on top of one’s desk, and this writer knows from experience that Cuisinart makes great coffee makers.

Cuisinart Personal 4-Cup Coffee Maker ($30-$45) chefscatalog.com

Pushing buttons all day on the calculator. Filling out spreadsheets. Taking breaks to play Farmville on Facebook (just kidding, we all know how hard accountants work!). No matter what they’re doing during the workday, accountants are at severe risk for carpal tunnel syndrome. To prevent this workday malady, check out this Palm Support With Mouse Pad from Fellowes. The Gel provides support and glides easily across the optical mouse pad, reducing wrist pressure. Not only that, its antimicrobial protection means fewer sick days for your hard-working friend.

Fellowes Gel Gliding Palm Support With Mouse Pad ($15-$25) bettymills.com

**Gifts to enjoy after work! >>**

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**Gifts to enjoy after work!**

Accountants and auditors, like most people who spend 40-100 hours per week inside an office, like to imbibe from time to time. The only problem with drinking wine at home arises when it’s time to call it a night and there’s still some vino left in the bottle. You see, accountants hate to waste anything, be it money or Pinot Noir. With this themed bottle stopper, he or she will be able to save wine while reminding everyone they know WAY more about GAAP than anyone else at the party.

Accountant’s Bottle Stopper ($20-$25) giftsforprofessionals.com

Shawshank was perhaps the most beloved movie of the 1990’s, and the film’s hero, Andy Dufresne (played by Tim Robbins), is an accountant. In fact, Andy’s accounting skills played a big part in helping him survive prison and snag a few simple perks for himself and his cellmates. Even though most accountants probably shy away from purchasing movies when there are so many cheaper rental options these days, the rewatchability factor of this classic film is high enough to make Shawshank an exception to the rule and a fantastic gift.

The Shawshank Redemption, Blu-Ray/DVD ($20-25) Amazon.com

The Gift of knowledge! >>

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The Gift of knowledge!

Nobody knows how better to spend allocate financial resources than accountants. Just ask them. And since CPAs are often required to bone up on new rules and regulations with 20-50 hours of continuing professional education per year, the need to purchase books never really goes away. And for someone studying for the CPA Exam, the cost of books and other study materials can easily climb into the thousands. With a giftcard to a bookstore, be it in the mall or online, accountants and auditors can really help themselves and their wallets – or they can splurge and use the cards to buy one of those Twilight books everyone keeps talking about at the office.

Giftcard to the Bookstore of Your Choice ($1-???)

If you feel like gift cards are too impersonal, the perfect gift for an accountant may be the newest release from John Grisham. Since the majority of his books' protagonists are in the legal profession, many don't know Grisham actually used to be a CPA. Just another reason to pick up his latest, Ford County, a collection of short stories which take the reader back to the Mississippi county that served as the setting for his first book, A Time to Kill. Then when Ford County is made into a movie in a few years, the accountant in your life will be able to say, "The movie was OK, but the book was sooooo much better."

Ford County, by John Grisham ($24.00) RandomHouse.com

And if you feel like splurging a little... >>

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And if you feel like splurging a little...

If an accountant-themed bottle stopper just isn't enough present for the wine-loving accountant or auditor in your life, check out this special edition accountant wine bottle holder. Not only is this fella a great conversation starter, he's also a CPA so you know he's paid his dues. This intricate sculpture is made of recycled steel and copper, so it'll last longer than any bottle of wine in your friend's collection.

Accountant Wine Bottle Holder ($24.00) occupationgifts.com

(Disclaimer: While it's a great idea to buy gifts for accountants, we wouldn’t recommend trying to deduct these purchases if you’re buying them for your tax preparer. He or she will definitely notice and think less of you!)

12 Ways To Expand Your Marketplace

David Brydson — Mon, 14 Dec 2009 10:10:00 -0800

When expanding your business, you should explore all the strategic alternatives available to you. Select the one that makes the most sense and then prepare a plan on how to implement that strategy. There are at least a dozen common strategies and a variety of strategic combinations or special situations to choose from. We present some of those alternatives below.

Expansion of Present Location

Learn to spot telltale signs of saturation in your present facilities. Grocery stores, for example, keep track of abandoned carts. When a shopper fills a cart and then leaves because the checkout line is too long, the grocer should realize that there is a serious problem. If you are experiencing bottlenecks, think about adding to your facilities. Determine how many additional customers you could service by building up or out and compare the additional sales to the cost of construction and temporary inconvenience.

Relocation

If it appears unlikely that you can draw more customers to your present location (at a reasonable cost), consider moving closer to your customers. A location on Main Street, in a shopping mall or an industrial park may cost you more in rent, but if you gain exposure to new customers it may be a sound investment.

Additional Outlets

Reaching the most customers may require opening several outlets at convenient locations throughout your market area. In addition to the added costs of real estate and multiple inventories, carefully analyze the cost and availability of labor and training, and the cost of hiring a manager for each location and installing an efficient monitoring system. Your advertising dollars may become more efficient since your radio, TV and newspaper ads cover your entire market. The multiple locations will make it more convenient for customers to find you.

Downward Vertical Integration

If your profits depend on the prices you pay for raw materials, your most profitable growth strategy may be to buy a farm, mine or processing plant to produce your own materials. This
strategy also may make sense if your product quality is based on a consistent supply of goods
at an acceptable quality level.

Upward Vertical Integration

Most small manufacturing businesses that start are forced to conform to the existing marketing
channels and sell through established manufacturers' representatives, jobbers or dealers who have access to the market.

As you grow, however, it makes sense to analyze your distribution system to see when you can improve your situation by hiring your own sales team, contracting with distributors, buying a truck fleet, opening retail stores or factory outlet stores or doing anything else you need to do to get closer to your market.

Remember, every time someone gets between you and your customer, it either reduces your revenue or increases your operating costs. Also, it impedes the provider- consumer communication that is essential to a good marketing program.

[page]Exporting Goods or Services

Literally, there is a world of markets available to you if you are willing to learn how to get started. The U.S. Department of Commerce's U.S. and Foreign Commercial Service and the U.S. Small Business Administration can help you explore potential foreign markets for your product or service.

Tourists' Business

When you are looking for new customers, don't ignore tourists who could be attracted to your
area. Work with your local convention and visitors' bureau to determine the impact if you cooperate with local tourist attractions or hotels and restaurants to get more people to visit and
spend money in your community.

Franchises

Franchising as a growth strategy offers advantages if you are short of expansion capital, yet have a concept that can be packaged and taught to people who wish to invest in a business. The legal problems can seem overwhelming, but with a good plan and competent advice, you can develop a franchise system that could prove extremely profitable.

License Agreements

If you have a technical process or service, you may be able to find people in other markets who
would be willing to pay you a royalty for the rights to use your process. Perhaps you could You might also be able to sell raw materials, secret ingredients, special tooling or promotional materials to your license holders.

Direct Marketing

Selling directly to your customers is one of the oldest and most effective methods of marketing.
Today, there are few door-to-door salespeople; most direct marketing is seen via direct sales companies, in party plan selling and through email, ‘snail’ mail, TV and magazines. Direct selling requires good selection and training techniques and a commission plan plus liberal incentives.

Telemarketing

If you have a good list of prospective customers, telemarketing may be an effective method of informing them about your business, qualifying them for sales follow-up or selling your product or service to them. Professional firms can be used, or you can set up your own telephone room. Here again, recruiting and training are critical because only a few people can do telemarketing well.

Private Label

One method of reaching out to new markets is to sell your product under the name of your distributor or retailer. One drawback is: However, you cannot build customer or brand loyalty because the consumer does not know you are the producer. Another potential problem is that, should the owner of the label find a cheaper producer, you may be out of the business.

For more help implementing these ideas in your company, please contact David Brydson of BestFit Solutions at 503-206-0333.

Coming Up With A Killer Business Idea

Max Klausner | SmallBizLink — Tue, 08 Dec 2009 10:49:00 -0800

Do What You Love

Starting a business is a blood, sweat and tears endeavor that will consume the majority of your time. If you do not pursue what you love you will not be happy and your business will most likely fail.

The key questions to ask when coming up with an idea are:

What am I passionate about?

- Love dogs? Start a business that involves dogs.

What am I good at?

- Love dogs and you are a talented artist? Start a dog portraiture business.

What industry am I knowledgeable about?

- Work in hospitality and love dogs? Start a boutique dog kennel.

Innovation

Once you identify what market or service industry you would like to go into you must figure out what you bring to the table. The answer to this question will determine the success of your business.

Solve a Problem: Ben Franklin vs. Larry David

You don’t have to be a great inventor to come up with a product idea. Think about things that annoy & frustrate you. What do you whine about on a day-to-day basis? What do you wish you could have?

Once you identify this problem, offer a solution. It is important to note that you do not need to invent anything new or have an original idea.

Innovate an Old Market:

Is your industry of interest behind the times? Can you apply a new technology or process that has existed for years within another industry that will ease the pain of customers? The Internet is a paradigm for how new technology can turn established models on their head -- think media and retailing.

Personal Goals

Last but not least, you must make sure your ideas are consistent with your personal goals. Why are you starting a business? Do you seek greater flexibility over your hours? Do you want to get rich? Does your idea allow you to accomplish these goals?

Coming up with a great idea is easier than you may think; you just need to know where to look. The tricky part is finding an idea that you want to pour your heart and soul into that will be successful and align with your goals of starting a business in the first place.

Coming Up with a Killer Business Idea is Part 1 of 10 of the SmallBizLink Entrepreneurship Series: How to Start a Successful Business.

Business Management Basics: Seven Factors for Success

LaShon Anthony — Wed, 02 Dec 2009 15:54:00 -0800

All business owners want to be successful. This article outlines seven aspects of a company that require effective management. You can always find ways to create a "well-oiled machine." Improvements typically translate into returns on your investment.

1. Marketing - Product, price, and positioning.

Timing is everything. Snickers, Tootsie Pops, Mars bars, and Three Musketeers were all created during the Great Depression of the early 1930s. During stressful times, people turn to comfort foods. Chocolate candy is an inexpensive choice that also relieves cravings & releases endorphins. At this time, perhaps the best item to market is digital information. People surf for information everyday on a variety of electronics. How-to videos, webinars, articles, and ebooks & audiobooks have all seen an amazing increase in demand. The out-of-pocket costs are very low and you can create these materials at home on the computer in your pajamas.

2. Finance - Earning money and accounting for your receipts.

If you're not earning money, it's time to close shop. Be creative. Get paid for freelancing. Develop a good checklist for minimizing losses. Increase profits by upselling & outsourcing. Keep your receipts and organize them by month so you won't scramble for information at tax time. Many small business owners fail to itemize expenses for this very reason. Make sure you don't miss the major deductions.

3. Production - Creating with consistency and high quality over the long term.

Customers don't want to spend their hard-earned money on products that stop working or break shortly after purchase. They also don't want to pay for shabby services. Dependability will add a premium value to your business. Your customers will notice and start talking about your merchandise (or service) to their family & friends. The word of mouth factor (viral marketing) cannot be denied. Every company of every size strives to achieve this on some level.

4. Distribution - Getting your products or services to market timely and economically.

The channel you select will be determined by the type of merchandise you sell or service you offer. Research the distribution system of your competitors and copy what works for them. Some products are appropriate for convenience stores, others fit best in wholesale, direct sales or larger retail establishments. Protect yourself with an agreement with the manufacturers. In regard to marketing, you'll need to implement offline and online strategies. Here are a few examples:

Offline:

- Print advertising in newspapers and magazines

- Radio/TV ads

- Flyers, postcards, brochures, and door hangers

- Cold calling

- Event sponsorships

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Online:

- Pay Per Click (PPC) ads, such as Google AdWords

- E-mail marketing

- Blogging

- Videos

- Widgets

- RSS feeds

- Affiliate programs

- Social media networking

5. Research & Development - Innovation, reinvention, and responding to the competition.

This process can consist of several steps before the prototype is finished, beginning with developing ideas. Next, you'll have to work through the product's design, engineering, market research & analysis, and price. Not all of the steps are always necessary. Also keep in mind if the item is very technical, development research can be very expensive. One way to spread this cost is through business partnerships. IBM used this strategy in 2001 (not the first company or instance) and they're still collaborating today.

6. Government Regulations - Complying with all federal, state, and city laws.

Every state has rules regarding the issuance of a business license. Check the website of the Department of Revenue in your area. For a quick search, check Business Licenses and Permits. The restrictions, approval process, and fees will differ from state to state. The procedure could include some or all of the following:

a. Legalizing the structure of the business

b. Registering the business name with the Secretary of State

c. Registering for a Federal Employer Identification Number (EIN)

d. Registering with the Dept. of Revenue for a Business Tax Number

e. Initial consultation with a city representative

f. Completion of an application

g. Review of the physical location, if any, by a Zoning representative for a permit(s)

h. Review by an inspector, if necessary

i. Issuance of a certificate

7. Labor - Finding the people you need and training & developing your staff.

Personnel are extremely important. It's the highest expense of any company when you consider recruiting, payroll, insurance, and retirement costs. The collective ideas of staff can propel businesses into the billions. Uncontrolled behaviors and poor management can propel companies into failure. (Look at the Bernie Madoff fiasco). Office policies are crucial to every business. A non-hostile, supportive workplace environment ensures optimal employee performance. Other factors are important, such as mentoring and continuing education on office technology, safety, and diversity.

Control these issues and enjoy the results of planning your destiny!