The Small Business Authority

The results are in: The SB Authority Index for January climbed to 110.09 points, from 109.82 points in December. Increases in the ADP National Employment Report^® and Newtek’s proprietary merchant-processing volume influenced the climb.

“We see modest improvement in job creation and see sub 200k employment increases monthly for the near future,” The Small Business Authority President and CEO, Barry Sloane, said in a prepared statement.

To read more of Sloane’s analysis, click here.

The Small Business Authority

You’re a small to mid-sized business. You’ve got an IT guy or gal, employee workstations, and maybe even a few servers in a back room somewhere. On the servers you might be storing important business data, a few applications that help you run your business, and maybe even your website.

Then, disaster strikes.

Not necessarily an earthquake or tornado, but something simple: a hard drive fails. This takes down your server; your data is lost. You spend several thousand dollars in parts and labor getting your system fixed. During the downtime — which could be hours or days — you’ve lost productivity and even sales revenue. Three months later, a powerful storm cuts power to your servers and a water leak damages your network equipment. Again, you spend several thousand dollars getting your system fixed.

While this all might sound like an extreme example of bad luck, think again. If you house your IT infrastructure completely in-house, disaster will eventually strike. Whether that’s something as simple as a piece of hardware going out, or an act of mother nature, there’s no way around it. The only thing you can do is be prepared. This means having the staff on hand, having the equipment and the ability to fix that equipment. This, of course, is just the tip of it. If you’re a small to mid-sized business, are you prepared to take a hit like this?

If the answer is no, cloud hosting might be a simple solution to this very important problem.

The advantage that a reputable cloud hosting provider has over your small, in-house set up basically comes down to money and resources. If you’re a small business, you probably don’t have the tens of thousands of dollars needed to safely host your own critical data.

Let’s look at some of the investments you’ll need to make to host properly in-house.

• Hardware firewall
• Software firewall
• Network Intrusion Detection System (IDS)
• Network Intrusion Protection System (IPS)
• Servers
• Server Rack
• Server Chassis
• Server Room with adequate cooling and air conditioning
• Uninterruptible Power Supply
• Fire Suppression System
• Operating System Licensing

With a cloud provider, you won’t need to spend a dime of capital on any of the above.
* If you’re hosting in-house, ask yourself these questions, and then ask your hosting provider:

• How reliable is your server or network hardware? If you were to experience any type of hardware failure, how long can your business survive without your data or servers? Is it a day or a week? This is the question you need to ask. Have you tested your backup and restore? Feel confident all will be good in a disaster?
• What security do you have in place? Are your systems protected by a firewall? Do you have an intrusion detection or protection system? Can anyone walk into your server room? Do you monitor your server room around the clock?
• How equipped are you for growth? If needed to expand your computing infrastructure, how difficult would it be?

If any of your answers for the above questions makes you uncomfortable, consider these points:

• Not all clouds are built the same, but a reputable hosting provider will provide you with over 99.99% uptime. Cloud computing infrastructures leverage virtualization and pool resources from a large set of servers. In those cases, the inevitable failure of some hardware will not mean certain downtime of services. In fact, a solid cloud infrastructure should be built to handle just that without missing a beat.

This article originally appeared on Forbes.com.

The Small Business Authority

What were you reading about a year ago today?

Every once in a while, we like to go back in time and revisit the conversations we’ve begun. Last year at this time, we were telling readers how to upsell loyal customers.

Here’s a refresher.

Does your bottom line need a boost?

Here are the surest tactics to affect profitability. They are designed around the customers who already know you, know your products, and are poised to buy something. That’s one definition of loyalty, but there are others. In fact, there’s an interesting debate on customer loyalty and profitability that is referenced at the end of this article. Before you put into action the ideas included here, you need to think about how you would define your most loyal customers.

Let’s say you’ve already collected some data on who your customers are and what they buy. That’s a good starting point for a concept that has marketing magic: CRM. Customer relationship management is a way to leverage everything you know about your customer into the next sale. There’s a lot of software out there that “does” customer relationship management, but remember that CRM is not a technology—it’s a way to manage your business. Use the information you have to understand why your customers buy from you and not from a competitor down the street or on the web.

Good data includes what your loyal customers have bought in the past, how long it has been since their last purchases, and which offers they responded to.

Once you know your customers intimately, you can offer to provide solutions to their needs, not just a list of products or services. You can provide the solutions via targeted email newsletters or offers. If you field a sales staff, train your staff members to collect information on trends that would interest particular customers. Impress these loyal buyers by knowing why they like you (free shipping? No-hassle returns? Dog biscuits by the front door?) and you’ll make them super loyal. Don’t go for mass conversions. Go for the best few.

Regardless of whether your business is brick-and-mortar, online, or a combination of both, you can reach your customers via email. Ask if you can use those email addresses to send them useful information and special offers. A blog is a great way to establish rapport with customers. It gives your business a face and a personality, and it gives you a chance to talk about benefits on a regular basis.

Now, let’s upsell

Upselling can be a simple matter, but it takes some forethought. And it takes an attitude that could be summed up in the phrase, “Assume the sale.” Here are a few ideas to get you thinking.

If you walk into a wine store, frequently you’ll find low-key signs throughout the store that are giving you information (“Wine Spectator rated this wine 95”). You don’t find these signs on the bargain bins; just on the shelved wines. The signs offer sales information without doing a hard sell, but they are designed to upsell customers. They’re created with the assumption that the customer is a little intimidated by the selection process but will walk out of the store with at least one bottle of wine. The purpose of the signs is to gently steer customers to make choices that have good margins, will satisfy the customers, and bring them back again. Your website could similarly offer information from professionals or experts. Remember, assume the sale: If the customer is on your website, she is presumably looking to buy something. Give some thought about a way to use experts to address the specific needs of your loyal customers.

On your website, just the way you mix products can produce positive results, so experiment. Offer a mix of price points in a category and show them side by side. Face-to-face sellers do it as well. The Apple Store’s friendly, well-trained staff does it exceptionally well. If initial conversations determine that the customer has a $50 budget for an accessory, show the customer the features of the $85 model, then the $70 model, then the $49.95 model. Go best, better, good. You’re likely to sell the $85 product.

Understand that when customers are shopping with you, it’s all about the experience (lucky you if that’s the case!), so find ways to enhance the experience. An example: The fine-dining restaurant where the waiter doesn’t just ask, “Does anyone want dessert and coffee?” but instead wheels out the dessert cart and suggests a little something to finish the meal.

Extra incentives for high-spending customers are good ways to upsell if you package things strategically (e.g., 20 percent discount on merchandise if you buy a one-on-one workout package at the gym). Or set thresholds to get the incentive: If a customer is poised to buy $85 worth of pet products on your website and free shipping kicks in at $100, chances are he’ll impulsively add another squeaky toy or two if it doesn’t take time to find it. So make sure there are some eye-catching items advertised on the checkout page for $25 (or for $14 and less).

Make the experience of shopping with you a little bit special, and the customer will notice. Don’t ask, “Are you finding everything you need,” but ask, “You know what would look great with that sweater?” That’s the foundation of a good relationship with a loyal customer.

For additional viewpoints on what defines customer loyalty and how the definition relates to profitability, visit whyloyaltymatters.com.

The Small Business Authority

Micro businesses in the United States represent an important economic segment and will be an important factor in our economy. They are major contributors to job growth and form a huge block of the total outstanding business community and tax base. Today, micro businesses face five major challenges in order to flourish and survive:

• Capital or finance
• Technological advances
• Embracing ecommerce or the internet advantage
• Navigating health insurance
• Outsourcing when available

Many business owners today cannot find funding or loans for their businesses. Whether a business owner is looking to refinance existing bank debt or growth capital, money is hard to come by. Without funding, micro businesses across the U.S. will struggle. The bank-lending crisis and depressed equity values in homes have reduced the amount of available dollars to micro business. The Small Business Authority has programs suited for businesses with modest employee headcounts.

Without understanding what software, hardware, and business processes are the latest, greatest, and most cost effective, micro-business owners cannot compete. Products such as cloud computing can turn a struggling micro business into a profitable machine by reducing cost, improving security, and enhancing business functionality. The Small Business Authority has cloud solutions that can turn micro businesses into strong competitors.

The internet has been the world’s great equalizer for micro business. How in the world can a micro business compete today with capital shortages and an environment that is friendly only to big business? All we need to do is observe the success of Facebook and Mark Zuckerberg as an inspiration to what one can do with knowledge, an idea, and correct utilization of the internet’s strength. The Small Business Authority’s internet tools can take a micro business to higher highs by building web presence, web traffic, and web security, and by maximizing client experience, reach, and payment flow.

The ultimate challenge to micro businesses in 2012, 2013, and 2014 will be how the Patient Protection and Affordable Care Act will affect small business. The landscape is treacherous as many questions exist and changes in the environment are transpiring with speed and magnitude. Without a road map, a go-to source for information, and up-to-the-minute information, micro businesses will not be able to provide for the health, safety, and cost for their staff members and families. The Small Business Authority has the answers for you and your company. Come to our 50-state-licensed National Insurance Agency at The Small Business Authority for cost-free advice and service for all your rapidly changing health insurance and benefits needs—specifically designed for the micro-cap companies.

Micro-cap companies are, by definition, too small to be able to have in-house IT, payroll, or HR staff. Outsourcing these vital services and needs is important for micro-cap businesses to be able to compete, lower their business risks, and do so without the expensive non-levered internal staff. Capabilities such as human resource software modules (for as little as $30 per month) are quite attractive to a micro-business owner who may otherwise hire a PEO or internal HR person.

Outsourcing payroll and shifting tax-liability risk for payroll tax reporting is also an intelligent choice. The Small Business Authority has many ways to save micro businesses money while reducing their risk.

We at the The Small Business Authority are dedicated to making independent micro businesses owners succeed in a thought-changing and challenging environment. We recognize that small business is big business, and that you all add up to a universe of clients who are important to the American economy. We welcome your thoughts, participation, and questions as you come to our blog with your daily challenges and needs.

Most importantly, we realize that all the micro businesses have tight budgets. At The Small Business Authority, we have programs designed with free trial months (Newtek Payroll, Cloud Computing Services), programs with no setup fees (NewtPay and NewtPay Mobile), and programs that offer free website software and setup.

At The Small Business Authority, you can speak with our Business Service Specialists for information, as our time is on our dime.

This article originally appeared on Forbes.com.

More effective than a "free kittens" sign

As a small-business owner, you may be thinking about providing group employee benefits for your employees. There are many “benefits” (no pun intended) to providing this kind of service for your employees.
There are many different insurance companies with many different programs. Generally speaking, there are six types of benefits you should at least consider when selecting which to include in your package.

1. Health insurance: Health insurance protects against the risk of medical expenses. There are many health insurance companies with many different types of programs and options. It is best to do some research to see which insurance company is best for your company and employees’ needs. Two very popular insurance programs are HMOs and PPOs.

• HMOs, or health maintenance organizations, provide managed care for insurance companies. HMOs cover the services of doctors who agree to treat patients under HMO guidelines. Under HMOs, individuals usually select a primary care physician and need to obtain referrals in order to see other doctors or specialists. These referrals are only given when the HMO plan deems the services necessary.
• PPOs, or preferred provider organizations, are subscription-based, and employees can visit network doctors without going to primary care physicians for referrals. Doctors and hospitals work with insurance plans in order to provide care at reduced rates. Most PPO plans also allow employees to visit non-network doctors, but employees pay higher deductibles and/or copays.
• High-deductible HSA plans are also gaining popularity. The premiums can be significantly lower than PPO premiums. HSA plans allow employees to set up qualifying bank accounts and make contributions from which they pay the expenses that fall within the deductible. The contributions to the HSA that are not used in the calendar year roll over to the next year.

2. Vision plans: These are usually offered as an addition to general health insurance plans, but they can be purchased standalone. Vision plans provide reimbursement for vision services. This insurance would be used when visiting optometrists or ophthalmologists for services such as eye exams, as well as for getting eyeglasses or contact lenses.

3. Dental coverage: Generally offered in addition to general health insurance plans, dental plans provide individuals with insurance for dental care. Dental plans vary, but generally speaking, they cover (partially or in total): basic cleanings, fillings, X-rays, periodontics, and endodontics. Some plans may even cover parts of oral surgery, crowns, implants, or dentures. Some carriers offer HMO and PPO dental options.

4. Group life: Life insurance can be purchased on the group with a set limit for the group or set limits by job/class. The coverage is term, reasonably priced, and available while individuals are employed by the company. While a Group Life program can be purchased standalone, most employers will combine as part of the overall benefits package.

5. 401(k) plans: 401(k) plans are a great way for employers and the owners to provide a vehicle to create a retirement income pool. Individuals contribute a percentage of pretax income into a qualified plan while they are working, and they receive funds from the plan upon their retirement. The investment income accumulates tax-free and the recipients pay income taxes as the funds are distributed, usually at a lower rate. Individuals can start withdrawals without penalty upon turning 59 ½. Many employers provide matching contributions based on a formula that may include company profitability.

6. Disability (short- and long-term): This type of insurance protects those who become disabled and are unable to work. Short-term disability insurance generally pays a percentage of a disabled employee’s salary for a certain amount of time after a waiting period of 7-14 days. Each state has different guidelines and rules regarding short-term disability; some states require benefits be provided for up to 26 weeks.

Long-term disability insurance is more popular among employers. If an employee is unable to work for a long period of time due to disability, this coverage will pay a part of the employee’s salary. The amount of money that an individual will receive often depends on his position and how much coverage his company provides. Many employers will provide both STD and LTD as complementary products.

This article originally appeared on Forbes.com.

More effective than a "free kittens" sign

As a child equipped with an Easy-Bake Oven and overactive appetite, you dreamed about opening a restaurant. Now that you’re an adult, you may have found that turning your childhood dream into a profitable business venture often requires tough costs that turn your stomach.

Before you begin scrimping on items to meet your bottom line, consider the truth and consequences behind the following popular cost-cutting measures.

The True Cost of Cheaper Produce

When buying food for your restaurant, you should seek out the lowest bid, right? Not necessarily.

Constantly changing suppliers for produce just to save a few cents per product may cost your restaurant in the long run. The hours spent evaluating competing bids, coordinating among many suppliers, or handling multiple small deliveries may not result in higher returns.

In fact, the money saved in changing vendors to spend less on produce may not be worth the time you lose for more important management activities.

“Using a prime vendor frees up management time that can be better spent on high-return activities like taking better care of your customers and developing your people. In my mind, trying to save 25 cents on a case of green beans is hardly a high-return activity worthy of much owner or management time,” Bill Marvin wrote for RestaurantOwner.com.¹

If you’re still not sold, consider this: Working with a single vendor can also be used as a marketing scheme. Explain to customers that your prices are slightly higher because your food is organic or grown locally.
You’ll save time and money by sticking with one supplier, and you might attract a new audience of organic foodies.

The Hard Facts About What You’ll Lose (Besides Employees) When Your Restaurant Downsizes

Reducing staff size is a quick and effective way to cut costs at your restaurant.

However, in service industries, like the restaurant business, human capital is often your best asset. So, if you face downsizing your staff, first consider asking employees to work part-time hours or take furloughs.

When the financial situation of your restaurant improves, rehiring the same employees may no longer be an option, at which time you’d be forced to retrain new staff members.

“The National Restaurant Association estimated that for each average hourly employee you hire, you spend $1,500 training them,” according to the Aaron D. Allen Consulting blog.² “Meanwhile, many restaurants have a 100 percent or higher turnover rate of employees. If you have a staff of 100, that means $150,000 per year in training new employees!”

Additionally, keep your best talent—chefs, servers, and management included. High-quality service and an attentive wait staff are among the top reasons customers return to a restaurant.

What do successful restaurants—like any small business—have in common? A strong identity and strong customer base.

Now, this doesn’t mean a menu accompanied by a kitschy décor or cliché theme. Focus the identity of your restaurant instead on achieving superior food, service, and prices for your customers.

If you’ve established your restaurant’s reputation and your customers are loyal, consider reducing your rent before cutting any other cost. Move the location of your restaurant. Trust that frequent diners—Bill, Charlie, Deb, and all those you know by name—will follow.

With the right attitude and solid business practices, you can cut costs and keep a profit without changes you’d lose your lunch over.

For more information, visit:

1. “The Easiest Way to Cut Your Food Cost 10 Percent”
2. “Top 10 Ways to Cut Costs at Your Restaurant”

More effective than a "free kittens" sign

Is this the week you absolutely must make a sale before you can make payroll? Could your salesperson’s relationship with a big potential customer be your salvation, but only if the offer on the table is just a little bit sweeter?
Cutting prices may seem like the answer in both situations, but if you’d like a pricing expert’s advice, don’t do it. Hold your price and focus on your customer, not your own issues.

“It’s natural to be desperate when business is slow. It’s never right to show that you are desperate,” said Mark Burton in an interview. The vice president and co-founder of Holden Advisors, a consultancy that helps customers increase revenues and profits through an intelligent pricing strategy, Burton blogs about pricing, and as an owner of a small business, he is particularly sensitive to small-business owners’ worries.
If you cut prices when sales start to fall, he said, “you can actually harm the business over the long term.”

That is particularly true in a business-to-business environment. The reason: In B2B selling, you have more control over the framing of the customer’s perception of value, and you can help him or her see your prices as reasonable. Cut prices to make payroll and you’ll lose the customer’s confidence in the value story you have presented and built.

In a consumer environment, psychological factors that are “more qualitative and more attitudinal” will influence whether the customer pays a higher price for your product or spurns yours for the less expensive brand at the dollar store. In B2B, the decision-makers care about a financial or “more of an economic perspective, so it gives you the opportunity as a small-business owner to start looking at what you do … that helps your customer become more profitable,” Burton said. Emphasize ROI, how you can help streamline their processes, or testimonials that describe savings realized.

Don’t Focus on Internal Needs

The temptation to discount is great when you, as a business owner, are not confident in the price you are presenting.
“The danger that small-business owners can fall into is they start to look at things too internally—what do I need to get by, to be happy, and to turn an OK profit?” Burton said.

That’s an internal focus, and that’s a mistake. Customers care about three things: the offer, the product, and how valuable the offer and product are. Lose focus on the customer’s concerns and “you’ve already lost the pricing battle,” he said.

Don’t Cut Prices to Lure Big Customers

You might decide to lowball the price in order to get a foot in the door with a big customer. Burton argued that you should hold the line in your pricing negotiations. Do your homework and find out what is attracting that customer to your offerings, then work on a pitch that homes in on that.

“If you’re too aggressive on pricing in the first instance,” said Burton, you’ll never make it up, because “that low price becomes the starting point for all subsequent interactions.”

Burton acknowledges that this is a contrarian viewpoint.

“You’re going to have people in your organization who want to go banging on the doors of the big companies,” he said.

But you’re better off building your business with a series of smaller transactions to smaller customers, who are both more loyal and more willing to pay your prices.

“You have to be cautious of becoming captive to a large account because it can be very difficult to grow the business beyond that,” Burton said.

If a big account comes to you, “It’s better to start small with them rather than to take a big bite. … The best answer is, ‘We’re honored and humbled.’” Don’t turn the big account away, but start on something small to see how the relationship works. You’ll learn how to work together, what your value is, and who your advocate will be when you pursue a longer-term contract with the account, he said.

Remember Who You Are

That’s a rule out of “Pricing With Confidence,” the book Burton wrote with Reed Holden.
Burton elaborated: “Customers come to you because they see value in what you do. So your focus has to be on the customer’s perception of value rather than your own internal perception of it. Your job in all cases is to manage that value upward so you get fairly paid.”

If times are tough and customers are demanding a discount, he advised that you walk away and walk to your bank. Put your own money into the business rather than cut prices.

Burton said to start that precedent early. As you grow the business and new people come on board, “it’s a very powerful cultural element.” As people learn that the owners are willing to put their own skin in the game “in order to get the right prices,” it sends a message.
“As you grow and hire employees,” he said, “you want to model for them that you’re willing to put it on the line to get paid fairly” for your brand’s or product’s or service’s value.
To read Mark Burton’s blog, visit markburton.wordpress.com.

Financial Results Conference Call

What are you doing at 4:15 p.m. EDT March 14? That’s the day our President and CEO, Barry Sloane, and our Chief Accounting Officer, Jennifer Eddelson, will be hosts for a conference call regarding The Small Business Authority’s annual 2011 financial results.

You can watch a live webcast of the call here, or check out our website for a replay.

You can also access the live call by dialing 877-303-6993 or 760-666-3611.

To listen to a replay, dial 855-859-2056 or 404-537-3406 and enter code 42197402.

Higher Interest Rates

It is clear that we have two levels of interest rates in the U.S. economy: the rate of interest for the U.S. government to borrow money and the cost of capital for everybody else. We do not think we need to spend too much time explaining the current level of U.S. Treasury yields except to state:

• The U.S. Federal Reserve Bank has targeted the federal funds rate to equal approximately zero to 25 basis points.
• The U.S. Federal Reserve Bank has produced long-term interest rates for U.S. government-backed instruments by bond purchases through QE1 and QE2.
• Foreign demand for the U.S. Treasurys is high as U.S. dollars held by foreign governments are being repatriated in the form of Treasury bond purchases that conceptually are viewed as a safe haven.

The U.S. government should immediately stop interfering in the economy by forcing rates to decline, devaluing our currency, and planting seeds for hyperinflation down the road. We all believed in Nasdaq 5000 (2000 Q1), residential home prices will never go down (2005), and gold is dead money (1999). Are we ready to accept the $10 loaf of bread, the $10 gallon of gas, and the $20 T-shirt? That is where we are going as the U.S. government inflates its way out of its debt binge.

In addition, interest rates need to adjust to levels that enable business owners who deserve capital to acquire capital, instead of having investors perpetually buying U.S. Treasurys for inherent capital appreciation backed by the perpetual Bernanke bid.

The U.S. government through its perpetual bid has taken the perceived risk premium out of owning U.S. Treasurys. It is hurting savers and investors, and in an unforeseen way is crowding out an appropriate interest rate and cost of capital that should be going in to the private sector.

Higher interest rates and a stronger U.S. dollar will encourage capital flows to the private U.S. economy, which will cause Washington to pay higher levels of interest on its debt and encourage the U.S. government to stop its precipitous spending. At current low levels of interest rates, the U.S. government is not being punished enough for its excessive borrowing and spending habits.

The U.S. government and small businesses are better off paying higher interest rates and having capital available rather than the current market scenario where the U.S. government has forced rates lower and is crowding out the private sector for capital.

This article originally appeared on Forbes.com.

Ecommerce Is Essential

Do you have an ecommerce site?

We hear the following responses from business owners all the time:

1. No, I do not have a website.

2. Yes, I have a website, but it isn’t good.

3. Yes, I have a website, but it needs to be updated.

In all three cases above, immediate changes and help must be instituted for the small-business owner. A fourth answer, “Yes, we have a website, and it drives significant business to us,” is the only appropriate answer in today’s environment.

Ecommerce is growing as a percentage of sales, and it will only keep growing.

It is crucial for business owners to effectively utilize the internet and the tools it provides to help them grow their business revenues by 25 percent. The power of the internet enables a business owner to increase his business’s presence in communities and geographies that were unattainable before.

Business today is local. You cannot be in business today without an internet billboard or brochure (aka a functioning website). Website plans are available today for little to no cost. Organic search, which is a search that generates results that were not paid advertisements, is an essential for any business, whether it’s a shoe shop, dry-cleaning outfit, or law office.

The Small Business Authority insists that a functioning website that takes payments, allows for search, and tells a complete story about your business is vital and is the best ROI for a small business today.

Many will say, so what’s new about this? Please see our survey, in which more than 50 percent of our respondents said they had no website and were unhappy with their web presence. In addition, more than 75 percent said that they did not accept payments on their websites. Just view us as your trusted advisor who will continue to nag you about suiting up for business every day with the best tools.

If you don’t accept business online, it’s time to start. If you already do, it’s time to maximize your potential revenue!
This article originally appeared on Forbes.com.

Every once in a while, we like to go back in time and revisit the conversations we’ve begun. Last year at this time, we were telling readers how to create five easy steps … in five easy steps.

Here’s a refresher.

Five easy steps

You can’t swing a dead gimmick around the net without hitting a blog post featuring five easy steps, or three secrets, or 10 tips, or six ways, to do something. It’s the cyber equivalent of those inflatable dancing tubes you see in front of car dealerships.

Goofy, yes, but it works. It works because people love to quantify chaos. People want to tie the loose ends of life into neat little bows. Whether people desire increased sales or abs that make other people weep, they want “wham-bam” methods to attain their desires.

Either that, or they have nostalgia for the Count.

So, here are five … ah … ah … ah … steps.

1. Put the most important information first. Journalists call it the inverted pyramid style. Put the main point in the first sentence (lead) and follow with the next most important information, down to the least important. An article written in the inverted pyramid style gives readers the basics first, and it gives them the option to stop reading after that.

2. Be practical. The most useful home advice you’ll ever find will probably come from a “Hints from Heloise” column—for example, use a shower cap to cover a bowl of leftovers. Heloise is the MacGyver of everyday living, and she leaves her readers saying, “I wouldn’t have thought of that!”

Take it from her. Give your readers easy-to-implement, practical ideas.

3. Write something useful. Before you create your list, take into consideration whether a reasonable person would already know what you’re writing. The definition of a reasonable person is someone who hasn’t been living in a cave.

Consider the occasional neanderthal at your gym, the one who deserts his 100-lb weights on the squatting machine you were hoping to use. You may feel inspired to write a how-to list that begins with, “Use your opposable thumbs to pick up weights.”

Most people do not require such explicit, “no duh” instructions. Give them ideas that they wouldn’t already know.

4. Appeal to the reptile brain. Susan Weinschenk, Ph.D., uses psychology to explain human behavior, and she blogs about it at whatmakesthemclick.net. Weinschenk keeps readers intrigued with her growing series of articles, “100 Things You Should Know About People.”

Consider what she writes in her 11th article about a part of the human brain that resembles that of a reptile: “The job of your old brain is to constantly scan the environment and answer the questions: ‘Can I eat it? Can I have sex with it? Will it kill me?’ That’s really all the old brain cares about, is food, sex, and danger.” Think James Bond eating a steak.

Although the human brain has evolved, Weinschenk writes, it still has that primitive part.

So, try something sexy, tasty, or dangerous. It’s more effective than a kick in the shins.

5. Create your list. It’s as easy as ABCD.

A. Pick your topic. What will you advise people to do?
B. Pick the length of time it will take to complete the steps.
C. Pick the number of steps you will include.
D. Pick your buzzword—Secrets? Ideas? Hints? Suggestions? Tips? Steps? Keys?

Now, complete the sentence: “How to (insert A) in (insert B) using (insert C) easy (insert D).”

You, too, can create a list of five easy steps by following these five easy steps. Remember to keep your content useful and practical. Develop your formula. And, in the repurposed words of a great president, “Ask not what your [blog] can do for you—ask what you can do for your [blog].”

Loan Programs for Small-Business Owners

Everyone in the market today knows small-business owners are in dire need of capital and loans to finance their historic activity and their growth. It is clear that the biggest drag on the U.S. economy and the small-business segment has been the U.S. and global de-levering process. Federal, state, and local governmental bodies are shrinking in size and scope. Banks and other financial institutions due to losses during the credit crunch are reducing their balance sheets and ability to provide finance to this sector.

Despite a Federal Reserve zero-percent interest policy, equity and debt capital are hard to come by for small businesses. The Small Business Authority is an active participant in providing debt and financing to all U.S.-based businesses under certain guidelines and programs.

As a small-business owner, you may have trouble securing conventional (bank) financing. Here at The Small Business Authority, we work with small-business owners to effectively identify, evaluate, and structure financial needs unique to small businesses. The loan programs listed below can help you develop, expand, or sustain your small business.

1. Flexible Term Lending Program: These loans can range in size from $50,000 to $5 million with terms of 7 to 25 years, based on the use of proceeds. These loans are structured without balloon payments with floating interest rates (up to 2.75 percent over prime). This lending program is good for many industries, including manufacturing, wholesaling, retailing, and construction. To be eligible for this type of loan, your business must be operated for profit, located in the United States, and owned by a U.S. citizen or resident alien. As the business owner, you have to demonstrate repayment ability from earnings, and your business cannot concern religion, politics, sex, or investing in real estate.

2. Fixed/Floating Rate Program: This type of loan program is structured so that there are no balloon payments, with interest rates fixed based on current market rates. The term of the loan is based on use of proceeds. To be eligible for this type of loan, your business must be operated for profit, located in the U.S., and owned by a U.S. citizen or resident alien. As the business owner, you have to demonstrate repayment ability from earnings and your business cannot concern religion, politics, sex, or investing in real estate.

3. Conventional Real Estate Loan Program: This type of loan program is a financing tool that can help you acquire commercial real estate. You can use the money from this loan to purchase, renovate, expand, or refinance commercial real estate. With this program, you may be able to secure a loan up to $5 million with terms up to 30 years. There are fixed/variable rates and multiple prepayment options.

This article originally appeared on Forbes.com.

Hackers can be good for business.

When you ask for one.

A new trend can enhance your sense of security for your website and/or confidential business data. To ensure that your website, business server, or database is secure, hire a professional hacker and have him target you for an evaluation. Sounds crazy!

This way, you can actually see how resilient and secure your confidential data and business information truly is.

In order to complete a web security check, the professional hacker must compile a survey and full report, which exposes vulnerabilities as well as makes suggestions to fix the holes. Once completed, the assessment must be repeated and tested on a regular basis to ensure that the security fences and forces are impenetrable and remain so.

Most business owners do not realize that these openings may have been created by developers who work on websites or databases and forget to close these openings, leading to hackers entering systems or databases.

Constant monitoring and surveillance can find these vulnerabilities and should be remediated immediately to keep confidential information secure.

A survey conducted by The Small Business Authority showed that out of more than 1,200 responding small-business owners, only 27 percent have had an outside party test their computer systems to ensure they are hacker proof. Very few business owners have taken the necessary precaution of having a professional data-security firm perform an assessment. With recent breaches of security at Citibank and Sony in mind, small-business owners should step up and ensure that their confidential business information is protected.

This article originally appeared on Forbes.com.

More effective than a "free kittens" sign

Once you have made the decision to move your home business to a storefront location, you have some planning to do. After all, as Christopher Elliott wrote for Microsoft Business, “Moving your business or home is widely considered one of the single-most stressful life events for an individual.”¹ Think about ways to reduce the stress and costs associated with moving a home business to a regular office.

• Consider the location. The first decision you make should be your desired location. It’s usually a good idea to start looking at offices near your house to avoid a long commute. Of course, while this is the ideal option, it may not work out perfectly when you consider other details that greatly affect your business.
  You need to make sure the new location reaches your target audience, so do some research of the surrounding area to find out who lives near the building you are considering. Once you are satisfied with the answer, consider whether the office is easily visible from the street. Having good visibility can help you attract new customers who see your sign as they drive or walk by.
  Julie Lenzer Kirk,² CEO of Path Forward International, was mentioned in an Entrepreneur article, where she advised readers to consider whether licensing rules would be different at a new location. If the move means you are changing cities or counties, your current license may not be valid, and your tax rate and insurance requirements may even change.
• Choose the right amount of space. Make sure that all your office furniture, including desks, filing cabinets, and bookshelves, will fit into the new office space. Make sure you leave room for expansion, especially if you plan to hire a few employees soon. Also, consider where customers will sit when they come into the office.
  Although it is important to ensure you have enough space for your business, don’t go overboard on the size of the building. Otherwise, you may end up paying more than necessary for rent and utilities. Make sure you can both justify and afford the office you choose.
• Plan ahead for moving day. Relocating will likely interrupt your business for at least a few days, but you can mitigate the impact on your company by planning ahead. This can be done by simply considering the ways you would plan for a residential move. For example, even if the move-in date is weeks away, you can start packing up the items you will not use until then.
• Update your address. If you regularly get inventory shipments, you need to let the distributor know your company’s new address ahead of time. This can prevent you from having to move merchandise shortly after it is dropped off at your house, so be sure to update your business address. You will have to do the same for your mail and any marketing materials that feature your current address.
• Get help moving. Consider whether you will hire movers for the relocation. This is often the simplest and fastest way to move a business, but it is usually not the cheapest option. If you need to save money, tell employees, friends, and family members ahead of time when you will need their help so you are not left moving your business alone.

For more information, visit:
1. “Moving Your Office? 5 Tips for Staying Productive”
2. “Moving Your Business out of the House”

You’re an IT manager who is seriously considering a move to the cloud. How would you go about your cost benefits analysis?

What you might do is compare the capital expenses associated with your on-premise IT needs against the monthly operational expense of hosting your data and applications in the cloud over a period of, say, three years.

To do this, you would simply add up the price tags for servers, network hardware, server racks, and so on. If you were more comprehensive, you’d factor in replacement hardware, the cost of your floor space, the power bill, and the staff needed to manage everything.

If you were a big enough business (read: big IT budget), you’d also factor in your server room features, such as special cooling units, redundant power sources, power backups, onsite generators, around-the-clock armed security, and an overnight admin to monitor the servers.

What you would see, in just about every case, is that the cloud offers up substantial cost savings and frees up your capital for core areas of your enterprise. But sometimes, those cost savings might not be enough to motivate you to deal with the ‘hassle’ of migrating your services. The problem with that, however, is that the true cost savings of the cloud goes well beyond price tags for equipment.

Perhaps the biggest benefit of hosted IT, specifically with cloud computing models, is that it offers true cost transparency. You’re provided, in most cases, with a monthly bill, and that includes the whole shebang – servers, network, monitoring, racks, power, OS licensing, support, multiple connectivity providers, diesel generators, etc.

With on-premise IT, it’s not nearly as transparent, which is why you also need to consider the not-so-obvious costs associated with owning your own infrastructure. Here’s a checklist of considerations:

• Specialized IT staff (network pros, system admins)
• Time and other resources from management away from the core business.
• IT resources spent focusing on infrastructure versus the business applications hosted on them.
• Never-ending procurement of infrastructure, replacement hardware, and new technologies.
• On-going maintenance of servers from a hardware and software perspective.
• Around-the-clock monitoring.
• Disaster recovery plan.
• 24/7 armed security, surveillance
• Software licensing.

You’ll also need to ask yourself these questions:

• Can you support your solution around the clock with your current staff?
• Do you have expertise in all areas including software, databases, load balancing, caching, security, and so on?
• Is your IT budget adequate to keep staff current?
• How strong is your physical and data security?
• Who is trained to configure and maintain your firewall?
• Can you afford to carry multiple connectivity providers?
• What system is in place to ensure uptime during general power loss?
• Do you perform daily backups and store securely in an offsite location?

When looking at the bigger picture, the cost benefits of moving your IT needs to the cloud begins to swing overwhelmingly in one direction.

What’s your big picture IT costs? Need help figuring it out? Give us a call.

What to Look for in a Mentor

Even teenage elephants need mentors or they’ll join gangs and kill rhinos, as reported by CBS News.¹ What makes you think that you as a small-business owner aren’t susceptible to making bad choices if you’re left to your own devices?

You need a mentor. Not only to inspire you, but also to model a practical skill set for success in business. You may think you have all the knowledge you need, but sometimes you don’t know what you need to learn until you’re in the middle of the lesson.

What to Look for

The Human Resources Working Group of the Federal Library and Information Center Committee compiled a list of 27 traits of a good mentor, such as leadership by example, integrity, and good contacts.² We have some ideas as well:

Do as I Do

A good mentor will model for you methods and behaviors that you perhaps were unaware existed. He could show you ways of handling situations you hadn’t previously considered. A good mentoring relationship helps you escape the “This is what I was taught, so I’ll go with it” excuse. If you’ve only seen examples of bad mentors or if you’ve seen no examples at all, you’re not destined to use those role models or wander aimlessly through business. But you must be aware and open to learning.

A Wise Advisor

Advice is best given when it stems from hard-won experience. Has your prospective mentor taken the steps he’s suggesting, or is he just giving you pie in the sky that he hasn’t tasted for himself?

You’ve probably heard the fable of the man, the boy, and the donkey.³ As they go through town, they encounter a variety of people, each with his own opinion of how the three should carry on. But how many of those people ever walked a donkey? The man and boy try to appease all the advice givers and in the end, the donkey drowns.

Beware, and remember that you alone will live with the consequences of any advice you implement.

Good Fruit

Look at your prospective mentor’s life. Would you want to be him? Why or why not?

While your prospective mentor is hashing out advice about how you should do such-and-such, take a look at the “fruit” in his life. Is he well-respected in his field? Is his business success consistent? Or does he have a reputation for making late payments and implementing worst practices?

Nobody is perfect, but if your prospective mentor has rotten “fruit” in his life, you can bet he has some rotten “roots.”

Additionally, figure out how he has handled any failures in his life. Everybody has them. What did he do with his? Did he make lemonade, or does he have moldy lemons all over his house?

Where Do I Find a Mentor?

Life is funny in that your mentors often appear at just the right time.

If you’re still waiting for your mentor to show up and you want to be proactive, begin your search with SCORE, a nonprofit organization dedicated to helping businesses. SCORE has upwards of 13,000 volunteers, many of whom can serve as business mentors.⁴

How about you? Have you had a mentor, whether business or personal? What did you learn? Or have you served as a mentor? Reply in the comments below.

For more information, visit:
1. “The Delinquents”
2. FLICC: “Characteristics of a Good Mentor/Coach”
3. “The Man, the Boy, and the Donkey”
4. SCORE
5. U.S. Small Business Administration: “Mentor-Protégé Program”

How to Stay Afloat When Times Are Tough

An economic downturn, an insipid recovery, and continued uncertainty are the triple-headed monster dogging small businesses. In reaction, most business owners have already made substantial cuts in their spending and boosted efforts to sell more.

Now what?

Here are ideas that focus on using resources more wisely.

Assess Customer Profitability

If you need to squeeze more out of a lean, hardworking staff, it’s time to examine your customer list. Nancy Butler, who built and sold a small business in financial planning and assets management, advises companies to look at the level of service they are providing customers. Is every customer getting the same level of service? If you said yes, that’s what you strive for, you are missing the point. Ask yourself: Does every customer provide the same amount of income to my company?

A national speaker, business coach, and writer on the topic of success in business, Butler advises business owners to group customers according to their profitability to your business. Then keep your cost to service each group in line with its profitability.

Butler grouped her own customers in three groups: A, B, and C. Her advice is particularly applicable to companies in the service industry.

“To provide the same level of service to all clients … It reached a point where I realized I had to either spend more time at work and less with my family, or hire more staff, which meant less income for my family,” she wrote in an email.

The customers who are providing the most income to your business (A customers) deserve the best service, she said: “Going above and beyond for them will also help to better assure they stay with you.”

She is not suggesting that C customers be treated badly when they call, but for the outreach your company does to existing customers, the tips and ideas and information you send out can be done in a more cost-effective way for the C customers (a quarterly newsletter, for example) and in a more personal way for the A customers. The A customers would get a “quarterly phone call to check in and see if they have any questions,” and to get the opportunity to ask how you “can be of further assistance.”

In different industries or in a B2B versus a consumer business, a company will “need to set a plan that is appropriate,” wrote Butler.

“The correct level of customer service for every client can be one key to the success of your business and provide the balance you need to more efficiently manage your time and resources while maximizing your bottom line.”

Manage Time

If this economic situation has you feeling out of control, try to gain mastery of your time so you can run your company. Start by streamlining tasks that require your attention—that is, they cannot be delegated—but could be done more efficiently if you had the time to think them through. Ask a friend or colleague to help you assess the task with a gimlet eye, or hire a time-management expert to help.

Also, look at the tasks you do that could just as well be done by someone else. Assigning them elsewhere will result in a more profitable company because spending your time on basic operations is not the best use of resources.

Accounting, billing, and payroll are all jobs that practically beg to be taken out of the owner’s hands. A provider of payroll solutions, like The Small Business Authority, powered by Newtek, can get you out of the rut of doing this job every two weeks.

Social media can consume huge amounts of time, and the temptation is to let it because your company should be visible on Twitter, Facebook, and Google+, among others, and you should monitor responses and tweak offers and on and on. All of that may be true, but you are only one person, so don’t try to do it all. Come up with a plan whereby you divide responsibility for monitoring, planning, and posting.

In the phrase popularized by Ben Franklin, time is money. In the current economy, small-business owners can start their own turnaround by getting a better handle on their time.

More effective than a "free kittens" sign

1. Credit Cards
The use of credit cards is a great way to increase your customer base. Credit cards are easily one of the most common forms of payment methods today. Not accepting credit cards may be detrimental to your business and sales. All you need to start accepting credit cards is a point-of-sale terminal. You can learn more about these terminals and accepting credit card payments here.

2. PIN/Signature Debit Card Acceptance
Accepting PIN or debit cards will help to increase your sales. Like credit cards, debit cards are very popular among consumers. Debit cards allow sales proceeds to be deposited directly into your account, and transactions are reported with your credit card transactions on your monthly statements. Debit cards offer a quick, easy-to-use payment solution for your customers.

3. Ecommerce
Ecommerce, short for electronic commerce, refers to buying and selling products or services on the internet. Adding ecommerce to your website will allow you to increase you sales, as your customers will have more ways to purchase your products. Ecommerce allows you to accept payments online, add a shopping cart to your website, and have funds deposited directly into your bank account.

4. Gift/Loyalty Cards
Gift cards are huge in the current market. Gift cards and loyalty cards have a dual function: They increase the amount of money your business takes in, and they act as a marketing tool that promotes your business. Gift cards can increase recognition of your business, are easy to use, and drive users to your company. Loyalty cards allow you to personally design a rewards program for frequent customers. Common loyalty programs assign points per dollar spent or tally customer transactions, which can later be redeemed for coupons, discounts, or prizes.

5. Mobile Processing
The ability to process payments through a mobile device will put you one step ahead of your competitors. Mobile processing allows you to use your phone to swipe credit cards and process payments over your wireless data service. The ability to process payments anytime, anywhere is a great resource.

This article originally appeared on Forbes.com.

Deficit reduction and higher taxes

Nothing!

The U.S. economy and its citizens have one major problem: it’s called their “elected officials in federal government.” These “elected officials” operating in a capacity as a fiduciary spend more money than the U.S. taxpayers (tax revenue base) bring in. Any smart consumer or small-business owner, when faced with this reality, would immediately and dramatically reduce his expenses to match his cash intake. Government officials refuse to accept the realities of the world and continue to spend taxpayer money and are afraid to make cuts, but more importantly, they cannot stop the concept of trying to buy special interests’ favor or votes. In order to avoid creating any discomfort for voters or special interest groups, they are turning to alternative methods.

Method 1: Raise taxes in an attempt to increase revenues, which produces an uncertain outcome.

Method 2: Borrow more money to avoid cutting expenses and unsustainable government programs.

The federal government, based upon factual data supplied by the Congressional Budget Office, Congress, and the president, is fully aware that the on balance sheet expenses are grossly outstripping the current tax receipts and projections for the U.S. economy.

The president and some senators and congressmen are suggesting raising taxes to reduce a portion of the deficit. There is no guarantee that raising tax rates will actually increase revenues. Increasing tax rates and reducing tax credits have at times in this country’s history proven to not increase total tax receipts. If the problem is an excessive expenditure issue, deal with it: Cut the expenses and balance the budget.

Method 2, which is borrowing more money, works up to a certain point where the market no longer believes that you are on a sustainable path to be able to repay the principal and interest. This country currently borrows at historically low levels of interest rates and currently has historically high levels of leverage on a percentage comparison to GDP. This amount of leverage does not even include the off balance sheet higher levels of expenditure, which would be caused by increasing rates of interest for U.S. debt to clear the markets, and the forever increasing costs of Medicare and Medicaid in an aging population. Small-business owners across the U.S. are not hiring, making capital expenditures, or growing their businesses in any other way because of the fear that the government will confiscate their wealth through taxation. Small-business owners recognize that someone will have to foot this bill and class-warfare suggestions from politicians target them.

Stop increasing tax rates on employers, savers, innovators, and entrepreneurs so that these successful U.S. wealth providers, who carry the burden of paying for the U.S. government, can continue to do so at a reasonable rate instead of being placed in a state of bankruptcy and discouraged from growing the pie for the benefit of all.

This article originally appeared on Forbes.com.

13 Types of Insurance

1. General Liability Insurance: Every business, even if home-based, needs to have liability insurance. The policy provides both defense and damages if you, your employees, or your products or services cause or are alleged to have caused bodily injury or property damage to a third party.

2. Property Insurance: If you own your building or have business property, such as office equipment, computers, inventory, or tools, you should consider purchasing a policy that would protect you if you had a fire, vandalism, theft, smoke damage, etc. You may also want to consider business interruption/loss of earning insurance as part of the policy to protect your earnings if the business is unable to operate.

3. Business Owner’s Policy (BOP): A business owner’s policy package contains all required coverage a business owner would need. Often, a BOP includes business interruption insurance, property insurance, vehicle coverage, liability insurance, and crime insurance. Based on your company’s specific needs, you can alter what is included in a BOP. Typically, a business owner will save money by choosing a BOP because the bundle of services often costs less than the total cost of all the individual coverages.

4. Commercial Auto Insurance: Commercial auto insurance protects a company’s vehicles. You can protect vehicles that transport employees, products, or equipment. With commercial auto insurance, you can insure your work cars, SUVs, vans, and trucks from damage and collisions. If you do not have company vehicles but your employees drive their own cars on company business, you should have non-owned auto liability to protect the company in case the employees don’t have insurance or have inadequate coverage. Many times, the non-owned vehicles can be added to the BOP policy.

5. Workers’ Compensation: Workers’ compensation provides wage replacement and medical benefits to those who are injured while working. In exchange for these benefits, an employee gives up the right to sue his employer for the incident. As a business owner, it is very important to have workers’ compensation insurance, because it protects you and your company from legal complications. State laws will vary, but all require you to have workers’ compensation if you have W-2 employees. Penalties for noncompliance can be very stiff.

6. Professional Liability Insurance: This type is also known as Errors and Omissions Insurance. The policy provides defense and damages for failure to render, or improperly rendering, professional services. Your general liability policy does not provide this protection, so it is important to understand the difference. Professional liability insurance is applicable for lawyers, accountants, consultants, notaries, real estate agents, insurance agents, hair-salon operators, and technology providers to name a few.

7. Directors and Officers Insurance: This type of insurance protects the directors and officers of a company against their actions that affect the profitability or operations of the company. If a director or officer of your company, as a direct result of her actions on the job, finds herself in a legal situation, this type of insurance can cover costs or damages lost as a result of a lawsuit.

8. Data Breach: If a business owner stores sensitive or nonpublic information about employees or clients on his business computers, servers, or in paper files, he is responsible for protecting that information. If a breach occurs either electronically or from a paper file, a Data Breach policy will provide protection against the loss.

9. Homeowner’s Insurance: Homeowner’s insurance is one of the most important kinds of insurance you need. This type of insurance can protect against damage to the home and against damage to items inside the home. Additionally, this type of insurance may protect you from accidents that happen at home or may have occurred due to actions of your own.

10. Renter’s Insurance: Renter’s insurance is a subset of homeowner’s insurance that applies only to those whose who rent their homes. The coverage protects against damage to the physical property, contents of the property, and personal injury within the home.

11. Life Insurance: Life insurance provides for an individual’s loved ones in the event of the individual’s death. If you have life insurance, the insurer pays a certain amount of money to a beneficiary upon your death. You pay a premium in exchange for the payment of benefits to the beneficiary. This type of insurance is very important, because it allows for peace of mind. Having life insurance allows you to know that your loved ones will not be burdened financially upon your death.

12. Personal Automobile Insurance: Another very important type of insurance is auto insurance. Auto insurance covers all road vehicles (trucks, cars, motorcycles, etc.). Auto insurance has a dual function, protecting against both physical damage and bodily injury resulting from a crash, and also any liability that might arise from the collision.

13. Personal Umbrella Insurance: You may want some additional coverage, on top of insurance policies you already have. This is where personal umbrella insurance comes into play. This type of insurance is an extension to an already existing insurance policy and covers beyond the regular policy. This insurance can cover different kinds of claims, including homeowner’s or auto insurance. Generally, it is sold in increments of $1 million and is used only when liability on other policies has been exhausted.

This article originally appeared on Forbes.com.

Watch it now:

WWW Beats Bricks and Mortar

We are witnessing a major change in buying behavior and how consumers are spending their time shopping. Based upon our own portfolio of 15,000 merchants who take Visa, MasterCard, Discover, and American Express, we saw that our internet-based payments business increased 20 to 25 percent compared with last year, and our bricks-and-mortar payments business is flat year over year. This data is from the Black Friday weekend, including Cyber Monday.

Cyber Monday is a well-known term for the Monday following Black Friday, which is the Friday following Thanksgiving in the United States. This marketing tactic is used by many business owners to drive online discounts and promotions. According to comScore Inc., online spending increased by 5 percent in 2009, and by 16 percent in 2010. Cyber Monday 2011 hit a record high, with U.S. online sales amounting to $1.25 billion.

What does this mean for us? Internet shopping is growing. It is obvious that consumers are especially addicted to shopping during the holiday season, and they have not closed their wallets—especially with deals like free shipping.

However, it is bad for the employment base of retail employees as well as real estate that is retail-oriented. Business owners need to address their ecommerce assets to make sure that they are maximizing their potential.

According to Reuters, department stores saw their online sales grow 60 percent this Cyber Monday compared with last year, due to their efforts on improving their websites, online advertising, and emails to customers. This has allowed department stores to collect more data on shopper trends, which has led to increases in web traffic for stores like J.C. Penney and Macy’s.

Make sure you are maximizing your web presence with the following:

• Custom web design
• SEO
• Internet Marketing
• Ecommerce
• Custom Applications

To learn more, click here.

This article originally appeared on Forbes.com.

Inventory Software

Many small-business owners adjust their inventories by the quick eyeballing of warehouse goods. Although such a method may suffice in a state-fair jelly-bean guessing game, it doesn’t meet official approval by the Internal Revenue Service.

Inventory inaccuracy can add to a company’s operational costs, as well as introduce accounting errors at the end of the year.

Underpay your taxes and your business can face hefty penalties, but overestimate your inventory and your business may lose revenue from overpaying the government, warns Strategos Inc.¹ Insufficient stock leads to delays and unhappy customers. Over-ordering stock leads to a costly surplus.

To create a comprehensive record of inventory, consider using software and take the following characteristics into account.

1. Cost. The cost of inventory software ranges from free to somewhere in the thousands, depending on the features. Are you ready to invest some serious cash in this area?
If your company is short on funds, you may prefer to put your money into raw materials and settle for a free version of inventory software to start.

2. Key inventory needs of your company. Start by asking your chief executives exactly why the company needs inventory software.

• Financial reasons? Perhaps your startup is beginning to grow, so you’re on the hunt for new investors or lenders. If you’re courting equity investors, you must present an accurate description of your business’s value.
  In the case of debt financing, lenders need to know your inventory count to determine exactly how much in tangible assets and collateral you can provide.
  In either case, your inventory software will most likely be used to calculate number, cost, and price of merchandise. Check to see whether these features are easy to use on any software you consider. Also, check to see whether there is a reporting function that allows you to calculate merchandise totals and cost-profit reports.
• Operational reasons? Perhaps your online store is constantly selling nonexistent stock. Your business will need inventory software to sync with the online shopping-cart platform of your website. However, not all systems work together. Call the software support team and inquire about the software’s digital coordination capabilities. And, make sure there are no additional or hidden costs for doing so.
• Sales point? If you operate a wholesale business with a retail aspect to it, you may need a sales-point feature to accompany your inventory software—i.e., a way to create barcodes, scan SKU numbers, print invoices, and charge credit cards. Some inventory software is geared more toward commercial use than others.
  When it comes to inter-technology communication, it’s important to note that not all inventory software will sync with QuickBooks or other accounting software. If auditing concerns are crucial in your decision-making process for purchasing an inventory program, consider this feature first to narrow your search.

3. Customer service and help-desk resources. If this is your company’s first time using inventory software, you may need extra help. Some software companies provide in-person support for a fee. Others have free online-chat support.

4. Ease of use. Finally, technology is only as good as its user. So measure your employees’ comfort levels when using inventory software. Sign up for 30-day trials to test the interface and ease of use for varying software products.

Don’t let salesmen talk you into purchasing inventory software that is too expensive, too confusing, or too limited for your small-business needs.

With the extent of competition among inventory software providers, the vendor should be offering you a steal of a deal. Be sure to negotiate. And, leave happy.

For more information, visit:
1. “Inventory Record Accuracy and Cycle Counting: The Lean Side of Cycle Counting”

More effective than a "free kittens" sign

2011 was the year in which mobile marketing became an essential tool for small-business owners who are customer-focused. It was also the year mobile malware became a big worry. A study by Lookout Mobile Security that was released in August 2011 stated that attackers are deploying techniques as insidious as taking control of people’s smartphones, racking up SMS (short message service) charges, and stealing people’s identities and making off with their data, including financial data.¹

The worry for small-business owners is that their good names and brands can be damaged if a malicious app that masquerades as theirs targets mobile users. The Lookout study gives examples of gaming apps like Bubble Buster by developer SkitApps, which cyber-thieves revised and republished on a download site where unsuspecting gamers loaded a “repackaged doppelganger” on their Android phones.

Partly because of the screening process to sell apps in the Android marketplace versus Apple’s app store, Androids are more susceptible to malware attacks. Another difference is in the architecture of the operating systems, with Apple’s keeping downloaded apps in a “closed” system where they can’t access private data. Also, there are a lot more Android phones out there in the marketplace, giving the bad guys another incentive to go after them.

Lookout’s study says that upwards of 500,000 mobile users were affected by malware in the first half of 2011.
It’s not only gaming developers who need to worry that their apps will be hijacked. A battery-saver app and a scientific-calculator app were also repackaged by malevolent developers last year.

“Repackaged apps containing malware create a crisis of trust,” the study points out.

As Laurie Sullivan wrote for MediaPost about the malware threat, “One bad incident can damage a brand’s reputation, forcing marketers to design a search engine marketing (SEO) campaign to combat the bad press.”

Learn the Threats

Malicious QR codes—The black-and-white scannable squares that embed a link to your advertising or website have the potential to be hijacked by cybercriminals. This new threat was uncovered by Kaspersky Labs, an internet security firm, in September. In a report on the development, Mobile Marketer’s Chantal Tode quoted Kaspersky Lab malware researcher Tim Armstrong saying he expects to see more malicious QR code campaigns because “it is a very easy campaign to set up. … QR codes are a pretty low-level scam in regards to how technical the malicious author needs to be.”²

Malvertising—Another way business owners can lose customers is when malicious programmers create what look like innocent ads that, when clicked, send customers to a bogus website to download malware. The Lookout study cited a case where a website imitated the Android Market site and the customer’s mobile device got a “drive-by download” (an automatic download of a malware app, in this case GGTracker, whose aim is to sign users up for premium messaging, running up high charges). Lookout calls GGTracker “the first mobile malware that steals money from users in the U.S.” (many malware products originate in Russia and Eastern Europe before moving, in more sophisticated form, to North America).

Mobile payments using SMS are on an upward trend because they facilitate all sorts of transactions. Juniper Research reported that $170 billion worth of SMS charges in 2010 will likely grow to nearly $630 billion by 2014.³ That makes SMS a tempting pot of gold for criminals.

The electronic device security industry is aware of sophisticated work on the part of malware creators, whereby customers actually authorize premium SMS charges, because the requests are hidden deep in the “Terms of Service” or other fine print that almost no one reads before completing a download.

Watch out and Be Watched

Security providers (like Symantec and McAfee) that have fought viruses and phishing scams on PCs suggest that the same sort of vigilance from users that is now fairly routine on desktops and laptops will keep users’ data safe on mobile devices. Tony Bradley, chief marketing officer at Zecurion, a data protection company, wrote in a PCWorld article, “Mobile operating systems have enough security in place that apps generally have to request permission to access core functions and services of the device. Think about the permissions you are granting before you just tap and blindly accept them. Does that Sudoku app really need access to your contacts, camera function, and location information?”⁴

Meanwhile, the big search engines are watching for malware and will flag your advertising if it is associated with a site where users’ devices can become infected. In a post on the Webmaster Center blog at Bing, users can get some insight into what it means to be flagged as malware and what you can do about it.⁵

For more information, visit:
1. “Mobile Threat Report”
2. “Malicious QR Code Campaigns Threaten Legitimate Marketers”
3. “Press Release: Mobile Payments Market to Quadruple by 2014, Reaching $630 Billion in Value, Although Still Only Accounting for Around 5 Percent of Ecommerce Retail Sales”
4. “Five Tips to Avoid Malware in Mobile Apps”
5. “Getting Flagged as Malware? Some Insights”

Outside Sales Classification

On Oct. 28, 2011, The Hartford Courant¹ reported that AT&T won an overtime lawsuit brought by 200 managers who alleged they were entitled to overtime pay. Although wage and hour laws ensure that employees who work in excess of 40 hours per week receive time-and-a-half for extra hours worked, there are certain exemptions to this rule. In the AT&T case, the managers were found to fall within these exemptions because they were managers who held supervisory positions and who made salaries of upwards of $80,000 per year.

Exemptions to Overtime

The Fair Labor Standards Act² gives workers both the right to overtime as well as other wage and hour protections. The AT&T employees who filed suit were alleging that they had a right to overtime under the Fair Labor Standards Act.³ The court disagreed, however, saying they were “executive, administrative, and professional employees” and thus exempt under FLSA rules.

There are two tests generally used to determine whether an employee falls within the executive/professional exemption: The first looks at what the employees’ duties are,⁴ and the second looks at whether the employees are paid on a salary basis.⁵ Certain examples of exempt duties include hiring, firing, and scheduling employees, formulating personnel policies, and determining staffing levels. Nonexempt duties include food preparation, telemarketing, and bookkeeping, among others.

In the case of AT&T, the employees suing were clearly salaried workers and had responsibility for supervising other employees below them, and for making scheduling and staffing decisions. For this reason, the victory for AT&T was relatively straightforward.

Exemptions for Outside Sales Workers

Although the “manager” exemption to overtime rules is clearly defined and established, another exemption also exists for those considered “outside sales” workers. This exemption can be more difficult to apply.

Defining who is considered an “outside sales” worker can be a complicated task, but many states have carved out specific rules used to guide the courts and employers. For instance, in a 1999 California case called Ramirez v. Yosemite Water Co.,⁶ the California court ruled that an employee must spend at least half of his time away from his office in order to be considered an outside salesperson exempt from overtime.

In September, a Kern County, California, judge shed more light on this issue when he ruled that the “office” did not have to be a main office or branch of a company in order for an employee to be considered “at the office,” according to an article on HG.org.⁷ For instance, the time an employee spent working from his own home office could be considered to be “at the office.” In fact, any fixed site where the employee made phone calls or performed required office work could fall within the definition.

To make a determination of how much time an employee is actually spending “at the office” versus in the field, courts will look at the testimony of employees and employers. They will also look at phone records, computer and email records, and other evidence of work performed in the event that there is a dispute.

Company policy mandating that employees spend a certain amount of time in the field is not, however, determinative in whether an employee will be classified as an outside sales person, unless those policies are enforced. For instance, even if employees are told they must spend a certain amount of time doing work in the field, if they are given more in-office work and/or the reality of their job assignments doesn’t match up to that required time out, then they will not fall within the definition of exempt workers.

The Importance of Classifying Employees Correctly

As an employer, it is essential that you classify all employees correctly. Applying either a manager exception or an outside sales exception inappropriately can result in significant legal liability, including action on the part of your state’s department of labor or a wage-and-hour lawsuit brought by the individuals who lost out on required payment.

For more information, visit:
1. “AT&T Wins Overtime Lawsuit”
2. “Federal Employees and the Fair Labor Standards Act”
3. “Wages and Hours Worked: Minimum Wage and Overtime Pay”
4. “Connecticut Department of Labor: Exempt/Nonexempt Employees for the Purposes of Wage and Hour Laws”
5. “Connecticut Department of Labor: Salary Test for Determining Exempt/Nonexempt Status of Employees”
6. “Ramirez v. Yosemite Water Co.”
7. “Has an Increase in the Incidence of Labor Abuses Accompanied the Recession?”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Dispassionate primer on E-Verify

One of the biggest conversational landmines these days is the topic of undocumented employment. But regardless of your stance on the issue, you as a small-business owner are most likely concerned with doing the right thing ethically and legally.

Stephanie Rabiner of FindLaw.com wrote that the Immigration Reform and Control Act allows for criminal and civil penalties at the federal level for employers who “knowingly hire undocumented workers.”¹ The U.S. Supreme Court also this year affirmed by a 5-3 vote an Arizona state law that revokes or suspends business licenses of those who hire undocumented workers, according to The Wall Street Journal’s “Law Blog.”²

Here is a defused, dispassionate primer on E-Verify and a new bill on the Congressional to-do list, the Legal Workforce Act.

What is E-Verify?

Employers have long used Form I-9 to verify eligibility for employment. Employees are required to fill out Form I-9 prior to beginning employment. Employees also have to present documentation of their identities and lawful immigration status, such as driver’s licenses, Social Security cards, U.S. passports, and permanent-resident cards. Employers are responsible for keeping copies of these forms on file and are permitted, but not required, to also photocopy the accompanying documentation.

E-Verify is a modernized system used by employers to determine the validity of applicants’ eligibility by comparing their information with Social Security Administration records and Department of Homeland Security data. E-Verify is voluntary for most employers except for those who do business in states that mandate it, and for those who have “federal contracts or subcontracts that contain the Federal Acquisition Regulation (FAR) E-Verify clause,” according to the DHS website.³

As a tool for determining employment eligibility, E-Verify is clearly not new to human-resources professionals. Many employers have been relying on this virtual quick-check system for years.

Enter the Legal Workforce Act

In September, Rep. Lamar Smith, R-Texas, introduced the Legal Workforce Act (H.R. 2885, previously known as H.R. 2164), which would, among other things, require all employers nationwide to use an “employment eligibility verification system (EEVS) patterned after the E-Verify system.”⁴ The bill would also get rid of the current I-9 system.

The Legal Workforce Act would not only eliminate conflicts that exist in employment-verification laws from state to state by setting a single standard to be complied with, but it would also prevent employers from being liable if they’d used the E-Verify system to determine that the workers in question were eligible for employment.

According to a summary of the bill by the National Immigration Law Center, agricultural employers could “count seasonal workers hired in previous seasons as current employees who need not be verified.”⁵

Has the bill generated any volatility? You bet. Keith Johnson went into more detail in his “Washington Wire” blog for The Wall Street Journal.⁶

At this point, as Johnson wrote, the Legal Workforce Act “is still just a bill, a poor lonely bill, and any similar proposal faces a real uphill battle in the Senate.”

How about you? As a business owner, what do you think about the idea of a mandatory E-verification system? Share your thoughts in the comments below.

For more information, visit:
1. “Punishment for Hiring Undocumented Workers OK”
2. “Supreme Court Upholds Arizona Immigration Law”
3. “E-Verify”
4. “H.R. 2885: Legal Workforce Act”
5. National Immigration Law Center: “Legal Workforce Act (H.R. 2885), Summary of Its Main Provisions”
6. “Illegal Immigration, Jobs Back in Spotlight at E-Verify Hearing”

More effective than a "free kittens" sign

Another security breach has hit a major retailer—this time, hackers targeted Amazon-owned Zappos. Mathew J. Schwartz reported in InformationWeek that Zappos’ more than 20 million customers were receiving emails from the company, with notifications that personal data was stolen. Credit and debit card information was not hacked, according to the article.

So, how hacker-proof is your ecommerce site? Out of the approximately 1,200 respondents to The Small Business Authority’s September Market Sentiment Survey, a whopping 73 percent said they hadn’t tested their computer systems and data for susceptibility to hackers.

That’s a lot of potential vulnerability.

Internet-security breaches are not going away anytime soon. You probably read about the security breach at Sony, or the one that hit Citigroup.

How do you know that your site won’t be next?

You might want to begin by reading our “Business Owner’s Guide to Good Cyber Security Habits.”

If you have any questions, let us know in the comments below.

To read the InformationWeek article, click here.

More effective than a "free kittens" sign

What were you reading about a year ago today?

Every once in a while, we like to go back in time and revisit the conversations we’ve begun. Last year at this time, we were telling readers what two ecommerce giants could teach small businesses.

Here’s a refresher.

Amazon.com Inc. and Apple Inc. are in the news. Amazon is newsworthy for its initiative to eliminate the “wrap rage” affecting its customers. Amazon is an ecommerce phenomenon, selling directly and offering a platform for other merchants to sell more than a million different products—books, music, toys, consumer electronics, household products, and more.

Have you seen us on Forbes.com lately?

We know you’re barraged with online reading choices and you have to be selective about what you read, if only for time’s sake.

Well, we would like to invite you to take the time to read our blog on Forbes.com.

Most recently, we posted some tax tips. We’ve also made mention of the employment situation in North Dakota vs. California, the payroll tax holiday, and why “www” beats bricks and mortar.

To read the latest post, click here.

Tax-planning tips

1. Do your research or hire an outside consultant. Taxes are not something to be taken lightly. There are penalties, fines, and punitive interest costs for inappropriate filings. Sales tax, payroll tax, and income tax must be calculated correctly. If you don’t have in-house help, you may want to use an advisor like J.H. Cohn or Janover Rubinroit if you run a larger business, or the Corporate Tax Network if you have up to 20 employees.

2. Take advantage of deductions. There are many deductions you may not have known were available. Taking advantage of deductions allows you to subtract business costs from gross income. Some deductions that small-business owners should research and take advantage of are automobile deductions, home-office deductions, travel expense deductions, and entertainment expense deductions.

3. Know how to classify your business. Correctly classifying your business can help you reduce your tax rate. Different business structures face different tax liabilities and rates, so it’s best to research and decide which type of business is best for you. Some options are sole proprietorship, partnership, limited liability corporation, S corporation, and C corporation. You can learn more about these different types of businesses by clicking here.

4. Control your tax due date. As a small-business owner, you may want to ask for an extension on your taxes; however, extension requests are not always approved. There are other options for delaying your due date, including delaying certain actions and accelerating others. Some actions you may want to delay would be the collection of payments and the sale of assets. These are two actions best left until the new year. Some actions you may want to accelerate are purchasing real estate and equipment. These will all help to delay the process.

5. Negotiate a monthly payment. If you’re having trouble making your tax payment, it may be beneficial to negotiate a monthly payment with the Internal Revenue Service. A monthly payment will allow you to pay off the IRS in smaller increments. There are different payment plans based on need and eligibility. Sometimes these payment plans can be beneficial to small-business owners; however, be wary of interest payments that may end up being more harmful than helpful.

This article originally appeared on Forbes.com.

You may also be interested in:

1. “7 Top Tax Deductions for Small Businesses”
2. “Six Smart Tax Tips for New Business Owners”
3. “Do You Have Employees With Disabilities? You May Qualify for Tax Benefits”
4. “Taxes and Your Home-Based Business: Consider These Tips”

tax tips

1. Auto Expenses

As a small-business owner, you can deduct some of your automobile expenses. You may be able to expense the cost of a vehicle if you use it for your business. You should always keep track of all your business-related automobile use. You also may be able to deduct a certain amount for mileage. You may also deduct for tolls and parking costs.

2. Entertainment Expenses

You may deduct for entertaining clients and prospective business contacts. You may do so as long as business is discussed during the event. The most common entertainment expense occurs when taking business contacts out for meals.

3. Travel Expenses

If you travel a lot for work, you’re in luck! You can deduct some of your travel expenses. These expenses include: airfare, car or taxi usage, lodging, meals, calls, and faxes.

4. Charitable Donations

In some instances, depending on the type of company, you may be able to deduct for charitable donations. If your company is a partnership, S corporation, or limited liability company, you can deduct for cash donations.

5. Advertising and Marketing Expenses

Advertising and marketing costs directly related to your business may be deductible. Some of these may include business cards, promotional activities, and radio, television, or print ads.

6. Software Deductions

You can deduct software purchases for your small business if you purchase and use the new software within the same year.

7. Equipment Expenses

Small-business owners often have a good amount of equipment, so deducting equipment expenses is key. Some equipment that you may be able to deduct includes: personal computers, laptops, and office furniture.

As a small-business owner, you should consult in-house or outside consultants as well as the tax code to get more information on what is or isn’t tax deductible.

This article originally appeared on Forbes.com.

You may also be interested in:

1. “Taxes and Your Home-Based Business: Consider These Tips”

2. “Six Smart Tax Tips for New Business Owners”

3. “Do You Have Employees With Disabilities? You May Qualify for Tax Benefits”

shopping cart

2012 started with a bang for several social-network giants—especially those of the 140-character variety, which recently had their feathers ruffled by a certain search giant. Social positioning in 2012 has begun among the big three—Facebook, Twitter, and now Google+—with the latter two squaring up for the first of what is sure to be numerous public showdowns.

On Tuesday, Google announced the latest changes to its super-secret-ghost-like search algorithm. Riding the momentum of its social-media network, Google+, Google released the “Google Plus Your World” update. Basically, the update personalizes your Google search results based on its (Google) social network. If you have a Google profile and you’ve searched on Google recently, then you may have noticed a more personalized result based on your profile.

Google continues to attempt to personalize the search process by incorporating its own social network into search results, thus shunning the other two prominent social-media giants when it comes to search results.

Some see this as another attempt by the search giant to strong-arm its users into what it deems necessary and right for search on the web.

Insert Western showdown music here.

The “Google Plus Your World” update has really ticked off the folks over at Twitter. Twitter, as you’re probably aware, has become the outlet for breaking news, making everyone with a computer or smartphone a “pop journalist.” Twitter has become the source for real-time information.

“As we’ve seen time and time again, news breaks first on Twitter; as a result, Twitter accounts and Tweets are often the most relevant results.” (Read Twitter’s full statement here. Courtesy of TechCrunch.)¹

After reading that statement, you can see why this latest update has ruffled a few feathers over at Twitter. Prior to the update,

Twitter accounts and tweets about specific events would show up as real-time search results on Google. After the “Google Plus Your World” update, search results will be personalized based on people’s Google profiles, ultimately ranking those same events posted by Google+ users instead of the 140-character updates.

Now you can sympathize with our blue-feathered friends at Twitter.

But before jumping on the Twitter bandwagon and joining the thousands bashing Google, you might want to know that Twitter’s relationship with Google used to be pretty rosy. And profitable. Google and Twitter had a partnership (which ended in July 2011 and was not renewed by Twitter) that helped Twitter show up prominently in real-time Google search results, thus guiding Twitter to become the established news source it is and prominently claims to be.

As Twitter publically calls foul, Google has responded by stating that it is simply following the “rel=nofollow” rules set forth by Twitter.² Basically, Google is stating that Twitter “removed itself from search” by not renewing the agreement.

You can find Google’s Official Statement on Google+.³

It seems the fun has just begun as news spreads through the Twitterverse and across the web of the possibility of an antitrust case gaining steam, and has turned this seemingly harmless “update” into an all-out social-media showdown.

You may be asking yourself where Facebook stands amidst this dustup. They’ve stayed quiet, for now. But with the quiet release of Facebook news-feed ads, ultimately stepping on Google’s advertising toes, that story is surely only beginning.

In the meantime, enjoy Twitter for its breaking news and 140-character blurbs, enjoy Facebook for its updates, and continue to search on Google. In the end, there’s room for everyone—unless, of course, you’re Google, Twitter, or Facebook.

Stay tuned as we monitor these developments.

1. Read Twitter’s full statement here
2. It’s On! Twitter vs. Google in battle over search results
3. Google Fires Back at Twitter: You Took Yourself Out of Search

shopping cart

This week on Help Desk, we are going to discuss shopping cart software, an essential tool for your online business. Nearly $31 billion was spent online by Americans during the holiday-shopping season, and online sales surpassed $1 billion on four separate days alone.¹ Who wouldn’t want to have a cut of that ever-growing pie?

If you already have a website for your business, the next step necessary to compete in today’s market is adding a shopping cart and ecommerce store. If you’re not selling your product or service online, your competitor probably is!

Shopping cart software allows your customer to shop at your website by placing items in a virtual shopping cart (much like the process at Amazon.com and other ecommerce sites you probably have used). Once your customer decides to checkout, the software will calculate a total for the order, including shipping and handling and associated taxes (if applicable).

Features you should look for in an online shopping cart:

• Easy Installation: While there may be a slight learning curve associated with getting your store online, a quality shopping program will walk you through the process of creating your store front and product database step-by-step.

• Complete Administration: Simple management of your store is essential, so you should find a cart that provides straightforward administration of your products, prices, sales, coupons, promotions, discounts, etc.

• Integration: One of the most crucial factors of choosing the right cart is that it should easily integrate with your existing website and your payment gateway so you can accept credit cards with ease.

There are multiple shopping cart programs available online for your ecommerce needs. Our affordable option, Newtek Cart,² requires no software license to purchase and is just $20 per month. Newtek Cart offers one-click installation and is compatible with all major payment methods. It also includes a Newtek Gateway module pre-installed if you already utilize us to process your credit card payments or plan to in the future.³

Further Reading:

1. “Online holiday spending sees busiest week ever”

2. Learn more about Newtek Cart and try our live demo.

3. Our Knowledge Base offers multiple help articles for Newtek Cart, including a step-by-step guide on how to install the software, add products, configure your payment methods, and more.

• Keep the lines of communication open with the customer. “A lot of people are getting into debt who have never been in debt before,” said Dunn. “They don’t know what to say, so they just ignore you…. As the business owner, it’s really important for you to take the initiative and to understand that and reach out to them.”
• Have a customer-service mentality. When you call a past-due customer, offer a solution or two. For instance, you could set up a payment plan. Or, “if they want to continue to buy but are past-due, get the order COD with maybe $100 added to the COD tag to be put toward the balance.” That way, their balance isn’t getting higher, you’re helping them to be able to stay in business by making sure they have inventory, and you are not cutting off your nose to spite your face and forcing them into the competitor’s arms because you won’t sell to them. It’s a win-win solution.
• Call or visit a customer when you first see the signs. Maybe the last couple of invoices were paid a little late. Don’t wait until the 31^st day to call, call on the 25^th day, said Dunn. Ask if they received the product and if there are any problems with the invoice. They might say they need proof of delivery or there was a shortage. You can start to work on these problems before the invoice is due if you make this proactive call. Besides, she pointed out, “That’s a good way to get your invoice on the top of the pile to be the next invoice they pay.”
• Always do what you say you’ll do. “It’s like raising kids,” she said. If you make a threat and don’t carry it out, they won’t believe you next time. And word gets around.
• Follow up.

5 Elements of a Credit Policy

Mission – This is your fundamental statement about your money. For instance, said Dunn, “we will offer credit to all customers that file a credit application and are found creditworthy.”

Goals – This clarifies what your company plans to do if accounts are in arrears, or how tough it intends to be with new customers and with existing customers. Also, it sets goals for the credit department itself, for instance, that you’ll have one person in accounts receivable making phone calls to 50 past-due customers per day. In her book, Dunn suggests that another goal might be to keep tight control so that accounts in arrears are never more than 2 percent of sales. Goals can and perhaps should be revised annually, depending on the economy, competition and other factors, she wrote.

Responsibility – Who is going to make the calls to collect? Also, who will be in charge of the credit department, if you have one. Often small businesses assign this job to a part-time accountant who works outside the company. Outsourcing makes it easier for you to maintain friendly relations with past-due accounts. (Say, “It’s just policy, it’s not personal.” But don’t back down. “It’s just throwing money away,” said Dunn.)

Policies and Procedures – What are your payment terms (usually, net 30)? Will a new customer be automatically extended credit, or do they start out as a COD account for a certain period? The policies will spell out how much credit you will give a new customer, what to do when a customer is 60 days past-due, and so on. Maybe you send a friendly reminder first and then call five days later. “It’s whatever works for your business, and also that you have the manpower to do.”

If one of your policies is to use a collection agency at a certain point, this section will specify who that collection agency is. “You want to have this already researched and in place” before you run into a situation where you need to use a collection agency, Dunn stated.

And your number-one policy—even if you do nothing else—should be to require a credit application from every customer that is not paying on the spot. “If you do place someone with a collection agency, you have that paperwork and the agency can try to collect for you, but without that paperwork, the agency legally has no verification to send the debtor and can’t pursue the debt for you.”

Terms of Sale – In addition to your standard payment terms (net 30, for instance), specify here if you will offer an early-payment discount (2% if customers pay in 10 days, for instance), if there will be a fee charged for a returned check, and if collection fees and court fees will be passed along to the customer. Dunn says that you need to research state-by-state what fees you are legally entitled to pass along.

While the rest of your credit policy is for internal use only, information in this last section should be printed in three other places: on the credit application that the customers sign, on your invoices, and on your statements.

Hiring a CFO

One of the key elements of any business is its finances. Without the money, there is no business. This means someone needs to keep careful track of all the financial dealings to make sure things are on track.

When a business first launches, it is typically the CEO who is responsible for keeping an eye on the company’s financial picture. This is true because most small companies are too small to warrant the employment of a chief financial officer, or CFO.

New businesses that rely on a CEO to keep tabs on finances often simply contract an accountancy firm to crunch numbers, handle taxes, and keep account of their assets. As the business grows, however, this becomes inefficient and bringing in a full-time person becomes necessary. For example, this was true of Alamn Marsarek, the CEO of Quickoffice, a company that specializes in software that allows other people to edit phone applications.

According to The New York Times¹, Marsarek had a background in finance and so took on the role of both CEO and CFO. Together with a team of just a few accountants to run the day-to-day things, Marsarek acted in both positions. By 2010, however, his company had grown so much that he found it was becoming difficult to focus on all aspects of the business on his own. To manage the workflow, the company hired a full-time CFO to handle the finances.

What Will a CFO Do For Your Company?

While a CFO will take over the general accounting and management of the business finances, they also play a bigger role in the company they work for. A CFO is more like a partner in a business, helping build and make major corporate decisions.

The key duties of a CFO include, but are not necessarily limited to, accounting and finance, insurance, banking, and handling legal issues. They can provide competitive market analyses and help a company avoid growth problems so that they may stay in the black.

When Should You Hire a CFO?

As the position of CFO typically pays a six-figure salary, it is important to wait until you can afford to cover the cost of hiring one. Typically, a company should be making $10 to $20 million in revenue before they would have to consider hiring a permanent CFO.

According to Entrepreneur², other factors that can indicate you are ready for a CFO include:

• The complexity of your operations. The more products you make and the more widespread your customer base is, the more complex your financial picture will be and the more likely it is that hiring a CFO is a good idea.
• When your company has grown too large for you to handle payroll and taxes without the help of a CFO.
• When the financial landscape of your business is changing rapidly. This is true whether you are experiencing wild upswings or wild downward trends in profits. Any type of financial instability makes it hard to plan and budget without the help of a CFO.

What If You Aren’t Ready Yet?

If your company is not large enough to warrant a full-time CFO, you may also choose to do what Bibby Gignilliat did and hire one to work for you part-time. Gignilliat is the founder and CEO of her company, Parties That Cook. When her company hit the two million mark in revenue, she was advised to hire part-time CFO, Jeff Gustafson. For a fee of $150 an hour and 8 days a month, Gignilliat would get Gustafson to not only look at the business’ finances, but also to build a financial model that showed how expansion to different cities might affect the business both in the short and long-term.

A CFO can be an asset to any business they go into. They act as accountant, advisor, partner, and even as an investor in some cases. If your business is not ready, however, a CFO can be an expense you don’t need.

This means it is important to take the time to understand your current and future revenue and to weigh the expense of a CFO against the current costs of monitoring your company’s finances in order to determine if hiring a CFO is right for you.

For more information, visit:

1. “When Should a Small Business Hire a Finance Chief?”

2. “How To Know When to Hire a CFO”

Additional Source

http://www.openforum.com/idea-hub/topics/money/article/when-to-hire-a-cfo-1

Security

Often, it can be overwhelming to get your business online, as the amount of choices at your disposal are numerous… hosting, website design, SEO… to name just a few. Not only do you need a functioning website that can be found by your customers, but you have to consider your ecommerce requirements if you are going to sell your products and services to those customers online.

We at The Small Business Authority understand that and want to help educate you on all the online options available to you here that can help your business increase revenue, reduce expenses, and minimize risk. This blog will explore a different subject each week and also point to helpful articles in our comprehensive Knowledge Base that can help further enhance your online comprehension.

This week, our topic is Secure Socket Layer (SSL) certificates, which protects your customers’ data and ensures that online transactions on your website are secure. Netscape, who at one time offered one of the most popular browsers in the world, actually developed SSL, a security protocol that allows Internet users to communicate online in a secure fashion. SSL allows the transfer of sensitive information online by encrypting and decrypting the data that transfers between web servers and Internet browsers as it travels across the Internet.

You’ll know that you are using a website with SSL certification if you see a ‘s’ after the ‘http’ in the URL address of your browser (https://www.YourDomain.com). A green address bar and a small padlock icon can also appear in the address field of your browser that you can click on to find out detailed information (encryption rate, issuing company, expiration date, etc.) about the site’s SSL certificate.

A quick technical overview of how SSL works: a visitor types in your URL or clicks on a link to a page on your website or online store that utilizes SSL protection. Their web browser requests a secure session from the server where your website data is stored, and the server responds by sending a digital copy of your SSL certificate.

The browser then verifies that your certificate is valid, was issued for your website, and was provided by a Certificate Authority that the browser trusts. A Certificate Authority is a third-party company (i.e. (Trustwave, GeoTrust, Verisign ) that verifies your site ownership and issues your SSL certificate. Then, a session key is created, encrypted, and decrypted (a back and forth between the web server and the end-user’s browser), and a secure connection is established between the user and your website.

Phew! This process actually occurs in just milliseconds for a seamless, safe, and secure experience for visitors at your website. Thus, a SSL certificate is a must-have if you are going to sell anything online or collect customer information at your website. Without SSL, data transferred to and from your site can be compromised and available to hijacking and theft. With it, your customers will know that you’ve ensured that their personal information, credit card numbers, account numbers, and passwords are safe from interception.

The process of ordering a SSL certificate for your website can be complicated. However, we have automated the process in our Secure Socket Layer so you can quickly and easily have SSL certification that protects valuable sales transactions and customer data on your website.

So what can you do to give yourself the best chances at success this year? We’ve come up with our own list of important tools for entrepreneurship in 2012. Hint, it’s heavy on tech.

1. Technology Fluency (learn to speak geek)

In today’s economy, you need more than just great business sense. You need some tech chops, too.

It’s not just that many of today’s big-named entrepreneurs hail from Silicon Valley—high technology is now a critical component in just about every industry, and at every size and level.

And when we say technology, we don’t just mean gadgetry and social media. You’ll need some fundamental understanding in areas such as web and application development, networking, servers, and more. This will enable you to communicate your vision with not only any internal technology staff that you bring on, but also freelancers and/or third-party firms that you contract out to.

An understanding of IT, and knowing what it is (and isn’t) capable of doing, will also help make your operations run more efficiently.

Where to start?

One of the best ways to learn about web development, servers, databases, basic programming (and so on), is to get your hands dirty. Consider building a WordPress site on your personal computer and then deploying it to a live server. There is a ton of help documentation and books out there that can walk you through the steps. WordPress, conveniently, is a great application to work with for both newbies and hardcore web developers.

2. Google+ (and newer new media)

With a fraction of the user base that Facebook possesses, you might be wondering why we’d be giving Google+ the time of day on this list.

The simple fact is Google, for better or worse, dominates search. And for that reason alone, Google+ demands that we pay attention. Case in point: when a Google user adds your Business’s Google+ profile to one of their ‘circles’, any relevant keywords related to your website will rank significantly higher for that user from that point on. In other words, Google’s algorithm puts a ton of weight on Google+. This is something Facebook can’t do.

Where to start?

Set up a Google+ page for your business or brand and create incentives for clients/contacts to start engaging with you on the social-media site.

3. Klout (which is to say influence)

Klout has become, despite some industry criticism, one of the most important tools out there for businesses and marketers to measure how influential they are on the social web. In a nutshell, Klout’s algorithm factors in how active you are (and how active people are in engaging with you), and then assigns you a score. This score, then, can be compared to other influencers out there, and can be an indicator of how well you’re leveraging social media channels for your brand identity (or self).

If you’re wondering why this might matter, the truth is it might not matter at all. But it can be a great tool to let you know how effective your social-media skills are when you’re out there spending huge amounts of time networking and evangelizing your brand. A low score might save you the time to realize you’re not doing things right.

Where to start?

If you’re already a Twitter, Facebook, and Google+ user, visit Klout.com and sign up to see where you stand.

4. Cloud Computing (compute without capital investment)

Last year, it could be said, was the year of cloud computing. The technology, of course, has been around for several years, but 2011 marked the coming out party for ‘the cloud’ outside of the IT world. Amazon, Google, and Apple all released new consumer-centric cloud services (i.e. iCloud, Amazon Cloud Drive, etc.), and hosting providers, like The Small Business Authority and Microsoft, further drove hosted IT services to the small-business community.

Why does this matter to entrepreneurs? Now, more than ever, computing is both mind-blowingly powerful and cheap. Instead of dropping 100K on server and networking hardware, software licenses, and IT staff, you can now outsource it to a premium provider for a little as your home electric bill. Not only that, business-class tools like file storage and other business applications are now available in the cloud for little, if any, cost.

Where to start?

Business computing needs are as diverse as the businesses they serve. First, assess your needs, speak to an expert, determine your goals. You can even call us just to talk about your business (we’re actually staffed for just that).

______

There’s our tools of the trade for entrepreneurship in 2012. What are yours? Let us know in the comments section below.

The Survey, with polls over 1,000 small business owners, showed a majority of are optimistic about the future of business in 2012.

READ MORE.

If you’re a little behind the curb, be sure to check out our top social-media articles of the year.

1. Running a Company Blog: What are the Returns?
>>Read It Now.

2. Facebook Fails: Social Media No-No’s and Pitfalls to Avoid
>>Read It Now.

3. Should You Start a Tumblr Blog for your Business?
>>Read It Now.

4. Leveraging Google+ in Your Social-Media Strategy
>>Read It Now.

5. How to Be a Great Community Manager
>>Read It Now.

6. Measure Your Social-Media Activity
>>Read It Now.

7. #Winning at Social Media
>>Read It Now.

It was tough, but here’s our top 5 according to the editors. Let us know if we missed your favorite.

1. How to Reach Mobile Users With Your Marketing
>>Read It Now.

2. Three Ways to Build Web Traffic
>>Read It Now.

3. What Are the Tax Structures for Corporations and LLCs?
>>Read It Now.

4. Seven Traits of Successful Entrepreneurs
>>Read It Now.

5. Six Ways to Improve Profitability
>>Read It Now.

Demystifying the Cloud: An Explanation of Cloud Computing for the Nontechnical Business Leader
>>Read It Now.

The Developer/Reseller/Technologist’s Guide to Selling Cloud Computing to Small-Business Clients
>>Read It Now.

The Cloud at Newtek: Past, Present, and Future
>>Read It Now.

What Business Owners Need to Know About Web Hosting
>>Read It Now.

3 Real-World Problems Solved Using Cloud Computing
>>Read It Now.

Nov 2011 SB Authority Index

Today we released our much anticipated SB Authority Index.

The November Index, which grew .31% from October, shows continued slow growth for the U.S. small business economy. The slight increase was due to ADP’s employment report and retail sales.

Read our full press release.

cloud computing

From a restaurant owner who keeps tabs on employee theft to a new venture that dodged $20,000 in startup costs, here are real-world examples of how small businesses are storing, accessing, and exchanging computerized information in the cloud.

1. Watching Transactions for Theft – Restaurants and bars with multiple locations are sending their POS (point of sales) information to the cloud where it is not only stored, but also analyzed by an application that employs artificial intelligence to search for unusual patterns that could indicate theft. The product is called Aloha Restaurant Guard. It’s installed in 65,000 restaurants nationwide, said Jessica Lundberg, senior marketing manager of Radiant Systems, the manufacturer of the Aloha suite of products, and because Restaurant Guard is cloud-based, it stores enormous amounts of historical data, analyzing it using algorithms created to spot scams.

For instance, if a server has 10 or 15 voids in one day, that might indicate a scam. Or if a particular bartender is frequently getting 70 percent tips, that might indicate that he or she is pouring free drinks and being rewarded for it. Each server has a unique login, so a pattern of unusual transactions easily fingers a thief. Additionally, if a certain type of scam is caught running in Chicago, said Lundberg, an algorithm will begin to search for it, and can spot it as soon as it appears in Los Angeles, Miami, or Detroit.

One Restaurant Guard customer is Jeffrey Bank, CEO of the Alicart Restaurant Group, which owns Virgil’s Real BBQ and Carmine’s, operating in New York, Atlantic City, the Bahamas, and Washington, DC. Through an Aloha POS system, installed in 1999, Alicart managers, servers, and bartenders print out customer checks and process credit cards. Bank added a more sophisticated application, Aloha Enterprise, when it rolled out a few years later. Enterprise polls Alicart’s data every 15 minutes and stores it in the cloud.

Aloha’s Restaurant Guard came along early in 2010 and Bank signed on to keep tabs on employees’ transactions. “The old-school product would have been cameras you could put above your bar,” he said in a phone interview. “But no one’s watching 12 to 14 hours of video,” and the bartender knows it, so “that’s not the best deterrent. Restaurant Guard is doing the same thing. It’s going through hundreds of thousands of transactions and looking for anomalies you would never see on your own.”

Alerts come to Bank on a store-by-store basis. He gets a report laying out the peculiar behavior and can decide whether to talk to the employee and find out if there’s another explanation or a mistake—or if retraining or termination is the appropriate remedy.

“You might have someone pulling a fast one and ringing up a check for a dollar, and then putting in a $90 tip, and they’re actually taking a cash advance on their own credit card. Now that’s not stealing from you, but they’re doing something that’s improper,” said Bank. “It’s something you might not be able to recognize on your own.”

The fact that all his data is stored in the cloud means high reliability, said Bank. The folks at Aloha have “99 percent time up.” More than that, “I don’t really need to know. I don’t need to pull the curtain back.”

2. Two Partners, One Customer List – “We launched our collection of eyewear just over a year ago and originally tried to maintain our customer list inside of an Excel spreadsheet—which worked for the first few dozen people we met. But it very quickly became a nightmare to manage,” commented Anthony Codispoti, co-founder of Activist Eyewear,¹ a Brooklyn, NY, company that designs and manufactures eyeglasses in limited editions for discerning customers.

He works from Columbus, OH, and his co-founder, Mark Craig, works from Brooklyn, so when they found themselves emailing the spreadsheet containing CRM (customer relationship management) details back and forth continually, they realized there had to be a better way. They found an SaaS (software as a service) provider called Batchbook² that maintains a database of their sales leads and tracks both partners’ communications history with the clients, storing it all remotely, where either partner can access it anytime.

“The really nice feature for us is that it automatically tracks our email conversations and attaches them to relevant customer files,” wrote Codispoti in an email message. “So when I go to call on a client, I cannot only see notes that I’ve previously entered about them, but I can scan email communications we’ve had so that I’m up to date on the latest. And I can access everything when I’m traveling. It’s a gift from above—it really is.”

3. Starting a Business with Little Capital – For Michael Kaiser-Nyman,
CEO and founder of Impact Dialing,³ an automated dialing application for political campaigns and polls, among other uses, cloud computing solved what could have been a huge problem for his company: How to launch it on a shoestring. He wrote in an email that, “we would have faced at minimum $20,000 of physical infrastructure costs. Thanks to the cloud, we spun up with a couple hundred dollars. And we don’t 
have to worry about capacity planning: We just spin up more resources when we need them.”

The company, inaugurated in September 2010, has two products, both of them built on cloud technologies. Not only that, the company’s email, CRM, and tools for productivity, development and collaboration are all cloud-based. “We actually have no physical assets,” he wrote.

Impact Dialing never really considered investing in infrastructure. From conception, the intention was to use remote servers and purchase computing on demand, i.e. cloud computing. “In less than five weeks of writing our first line of code we launched Impact Dialing and started selling it to political campaigns,” Kaiser-Nyman wrote in a blog post⁴ that later won him funding. “We released new features and bug fixes on an almost daily basis. A couple times, someone was interested in using our product but really needed a feature we didn’t have, so we built the feature and released it within a day or two. And by the time the November [2010] elections were finished, we were already profitable!”

For more information, visit:

1. Activist Eyewear

2. Batchbook

3. Impact Dialing

4. “Impact Dialing’s Lean Startup Model”

business owner

A small business that is solely owned by a woman or majority owned by a woman can be in an advantageous position for getting contracts from U.S. government agencies. The fact is that women tend to run smaller, less profitable companies than men do, earning 78 cents to the dollar men’s businesses generate¹, and women’s small businesses are therefore provided a helping hand.

Agencies of the U.S. government have targets to meet in awarding contracts to small, disadvantaged businesses, women-owned businesses, service-disabled veteran-owned businesses, and businesses in historically underutilized business zones (HUBs). For women-owned small businesses (WOSBs) the goal is 5 percent of total awarded contracts. In fiscal year 2010, the federal government awarded $17.46 billion of business to this category, amounting to only about 4 percent of the more than $400 billion awarded in contracts.² So, women’s advocacy groups and the U.S. Small Business Administration are taking steps to educate women owners of the opportunities.

• The biggest opportunities are in set-asides, contracts specifically reserved for WOSBs in about 300 industries. Such set-aside programs occur where women owners are underrepresented. Go to fbo.gov, and on the first line in the pull-down box, Set-Aside Code, set your search for Woman Owned Small Business or Economically Disadvantaged Woman Owned Small Business.

To determine your eligibility by SBA standards for your industry, go to this page on the U.S. Small Business Administration website. Your company must be at least 51 percent woman-owned. Management and daily business operations must be by a U.S. citizen who is a woman. If your company is at least 51 percent owned by one or more women who meet the following criteria, you can qualify in the economically disadvantaged woman-owned small business (EDWOSB) segment: a) a personal net worth of less than $750,000; b) average annual income of less than $350,000 for the past three years; c) total assets value of less than $6 million. This document spells out all the requirements. See page 30-31 of the document for exclusions when calculating net worth and income. Even if you are not eligible, you can team up with another small business that is eligible.

• Companies determine their eligibility and then self-certify or obtain third-party certification. The federal government is even providing training in how to register and go after government contracts in the WOSB program. Local SBA offices can provide details. Also, an organization called Women Impacting Public Policy (WIPP) provides free training through its Give Me 5 program, the “5” referring to the 5 percent that the government says should go to woman-owned businesses.³

• Another opportunity to get in on the $400 billion that the government is spending on business services and products, and open to all types of small businesses, even those run by men, is the Simplified Acquisitions Process (SAP), which makes the application and payment faster than for standard government contracts, according to Guy Timberlake, co-founder and chief visionary officer of The American Small Business Coalition. You can learn more about SAPs in an article on the GovWin site, where companies, including small businesses, can find information on getting federal contracts.⁴

After decades of struggling for a piece of the economic pie, women who own small businesses are in the pleasant position of having Uncle Sam watching over their ventures, or at least steering them to new business opportunities within the federal government. If you are a WOSB, take notice.

For more information, visit:

1. Are Male and Female Entrepreneurs Really That Different?

2. “Leveling the Federal Contracting Playing Field — The New SBA Woman-Owned Small Business Program Explained”

3. The Give Me 5 Program

4. “Expert: There’s Under-the-Radar Money in Simplified Acquisitions”

interview

It’s widely stated that the best job performance starts with a good job description, but the fact is you don’t need one. Of course, if you’ve created a company where the titles are creative—chief architect of change, chief fun arranger, meter/greeter/popcorn eater—you need to set down a few things on paper to make sure you and your new hire understand one another. But generally, job descriptions are dreary to read and to write and don’t do much to elucidate anyone. There’s no law saying you must write them.

Okay, but the most visited article in the Starting a Business section of the U.S. Small Business Administration’s website is “Writing Effective Job Descriptions¹.” We wondered why. The answer is elusive, but a human resource management professor, Ken Pinnock, associate director of employee relations and employee services at the University of Denver, gave us several reasons that small businesses might think writing job descriptions should precede any hiring decision. Not that he believes they are in every case necessary.

• Employees often feel more comfortable when they have a job description. “It seems to clarify expectations. There seems to be a comfort level in terms of, ‘Here’s what I need to know,’” he said in a phone interview.

• Job postings are easier to create if you already have job descriptions in your back pocket. You can pull information from them and be reasonably sure you haven’t left out any important duties or competencies.

• When an employee is injured, Pinnock said, it’s helpful to have a formal description of the essential duties of the job because you might have to “assess…can this person perform these duties or might they need leave? or might this move into a more formal issue with respect to the Americans with Disabilities Act?” Perhaps you will have to send an essential duties list to a health care provider or to a state workers’ compensation board, in which case, it’s good to have it written up in advance.

• In a job interview, the list of duties can actually be used to structure the conversation. If you do that, said Pinnock, “pulling interview questions right from the job description, which by definition makes the questions job-related,” you can avoid legal pitfalls that can occur when you ask personal questions with no relevance to the candidate’s abilities.

• Job descriptions can be helpful in compensation decisions. A title and a list of duties give you a basis for doing comparisons. If you have a job description, it’s easy to compare pay levels in survey data. Filling a newly created position becomes less of a mystery once you set down the essential duties and do an online search to see what other companies are paying for this job.

So there you have five good uses for job descriptions. However, said Pinnock, “With respect to small businesses, the question I would raise is do they really need job descriptions.” For companies that have fewer than 25 employees, Pinnock said job descriptions are not at all necessary. Even at the 50-employee point, many times “it’s really clear what are the expectations of each person’s role [and] what are the key skills that are needed for somebody to come in and take that role and do the work.”

Problems Can Occur

Job descriptions go out of date, and that’s their biggest drawback. You have to keep them current or that can cause problems with interviews, compensation decisions, and especially injury and workers’ compensation decisions. So when jobs morph and grow and technology changes so the basic details of the job are different than when the description was written, someone on your staff has to update the job description, and that’s an administrative chore that can eat up precious hours in a growing company. For more on this point, just cruise around online reading HR horror stories.²

“The other issue,” said Pinnock, “kind of goes back to a union mindset in the 20^th century where, you know: ‘This is my job and I’m not going to deviate from it.’” He said that in a union or non-union environment, employees can argue, “‘That’s not what my job description says.’ And that’s a challenge.” Such an attitude can be given legs by the simple act of having employees sign to acknowledge they have received a copy of their job description. He strongly recommends against requiring sign-offs that implicitly convey the message, “These are my duties, plain and clear,” or that seem to make the job description “a contractual type document.” A job description is not meant to fully describe everything a job might entail. “I tell people to think of it as a snapshot. To give [the employee] an idea of what’s required.”

If you do write one, keep it short, one page or maybe two at most. Identify and label the essential duties. List additional duties that you will hold the employee responsible for. Spell out the knowledge, skills, and abilities required to perform the job. And add the disclaimer, “Other duties as assigned.”

Pinnock said that he also adds a statement noting that “this job description is not all-inclusive or in no way is meant to spell out all the duties, assignments, or tasks that may be required in the course of the work.”

As to why the U.S. Small Business Administration is attracting so many new small business owners to read up on writing job descriptions, Pinnock acknowledged that “they are difficult to write because you have to try to cram a lot of information into one or two pages [that will] capture and encapsulate the position.”

Other resources he suggested are the Society for Human Resource Management (where a local chapter member might provide some good, practical advice) or a local employer association³ such as MRA–The Management Association.⁴ It offers templates and sample job descriptions plus survey data to determine if you are paying a competitive wage in, say, Milwaukee. Every state has its own labor laws, so you need local advice, and this is where to get it if you’re in Wisconsin, northern Illinois, or Iowa. There’s also a 24-hour hotline where you can call and speak to an HR professional.

For more information, visit:

1. “Writing Effective Job Descriptions”

2. “How a Bad Job Description Lost an Airtight Case, and Other Horror Stories”

3. Employer Associations of America

4. MRA–The Management Association

coffee

From childhood you’ve used these skills to get what you want, but negotiation know-how can fizzle when you start to think more about your relative inexperience than about what you want and why. In business, you may feel out of your league negotiating with someone who horse-trades every day. It’s easy to feel intimidated when it’s time to talk compensation with a salesperson, or hire a sales director, or convince a banker of your loan worthiness, or hammer out a contract with a major vendor. If your negotiation skills need sharpening, read on for some tips from the pros.

Sharpen Your Mind. Practiced negotiators say that mental attitude is all-important. You need to be positive and pay attention. This may require some silent preparation or self-discipline. Margaret Neale, director of two Stanford Business School courses on negotiation, identifies two more elements related to minding your mind-set: Don’t cave too quickly (even if you think the price is fair, “always offer less—if only to make your opponent feel good about the deal”) and don’t gloat. “Gloating will only drive your opponent to extract the difference from you sometime in the future.” The tips are from an article on the Stanford Graduate School of Business site.¹

Define Your Interests. David A. Wachtel, president of Hautacam Consulting Inc., also teaches negotiation techniques. He states in an article in The Negotiator Magazine² that “the purpose of negotiating is seeing if you can get your interests met through an agreement. An interest is why you want something, not what you want [emphasis is in the original]. When negotiators begin working from the standpoint of interests, they can begin to work with the other party to explore alternative solutions.”

Rank Your Priorities. When you are selecting a vendor and negotiating a contract, both sides must feel that they are winning, because you are in fact entering into a partnership. Start by ranking your own priorities. Spend some time studying your list. What would you be comfortable giving up? Then imagine your vendor’s priorities. This will give you a sense of what areas will be most important in your negotiations before you even sit down to work out the actual contract.

Listen With All You’ve Got. Communication is 93 percent nonverbal, Wachtel reminds us. A good listener asks a lot of questions and pays attention to body language and tone of voice, as well as words.

Look for Silver Linings. Examining every offer for positives and then coming back with something you will trade for a concession on the other side is what negotiating is all about, said Neale in the Stanford Graduate School of Business article. “If I can trade off issues that I care about more and you care about less, then we’ve been able to create value in a transaction,” said Neale. “That’s the silver lining.”

Use Silence. Don’t race to fill every pause with talk. In fact, if you are involved in a negotiation that may be stressful to the other party, create pauses that may heighten anxiety. In so doing, the other party will likely give you something. The strategic pause can be a powerful tool in collection calls, for instance. “If we make a clear and uncompromising statement in response to something the debtor proposes, we need not elaborate just to relieve the conversational tension,” wrote D. Park Smith, who represents a collection agency, in an online article.³ “Literally a simple ‘no’ may be the best negotiating response, without a single additional word from you.”

Keep Your Focus. Roger Fisher and William L. Ury, who wrote the best-selling book Getting to Yes, laid out a method based on four principles:

• Separate people from the problem,
• Focus on interests, not positions,
• Invent options for mutual gain,
• Insist on using objective criteria.

Their book, published 30 years ago (and reissued in 1991), is still available in hardcover, paperback, and as an e-book. After all, the principles of successful negotiation are timeless.

For more information, visit:

1. “Negotiation Strategy: Six Common Pitfalls to Avoid”

2. “Improving Your Negotiating Skills: Tips Learned in the Trenches”

3. “Collections and Negotiating Skills”

coffee

Imagine this, even if you’re not a morning person:

You’re the first to arrive at the office. You turn on the light in the break room and start brewing a pot of coffee. You take out a paper filter and load the industrial-sized coffee machine. You go back to your office and wait a few minutes. Once the coffee has brewed, you grab a Styrofoam cup and pour yourself some Joe. As you exit the break room, you leave the light and hot plate on to keep the coffee warm and note to the latecomers that the day has begun.

In offices around the nation, employees arrive early, start consuming energy immediately, and keep consuming until late in the evening.

Small-business owners want to care about the environment as much as they do about their bottom lines. Sometimes it’s difficult to justify going green when faced with the added expenses.

With rising energy prices, however, it’s beginning to look like the two are no longer mutually exclusive.

Climbing energy costs are burdening small businesses—as much as 87 percent of business owners are reporting negative impacts, according to the National Small Business Association 2011 Energy Survey.¹

You can start going green with a few small changes to the daily grind.

It all starts with your morning cup of coffee.

Replace the coffee maker. Most business owners consider coffee an indispensible professional tool. Late nights and early mornings are jump-started with a highly caffeinated dark roast that drives productivity and innovation from dawn to dusk.

At the same time, a coffee maker draws as much as 900 to 1,200 watts.² A coffee pot doesn’t have to be brewing to drip dimes at a time. The hot plate alone is enough to fry your electric bill.

So, replace the electric coffee maker with a French press. Because French presses have come down in price, you could even purchase one for each employee and still come out ahead.

At 1,200 watts, a coffee maker that runs four hours a day, 260 workdays per year, at 8 cents per kilowatt-hour, will cost your company $99.84 per year. In contrast, a French press requires hot water via a microwave or kettle, both of which use less energy by operating in short bursts of time.

A French press also ensures that your employees don’t have to sacrifice quality of brew in the trade-off.

Use fewer disposable accouterments. A standard coffee maker requires paper filters. And they’re not recyclable once you use them for brewing. A French press does away with all the paper accouterments.

While you’re at it, lose the straw stirrers and individually prepackaged creamers. Save the cost of plastic waste by using metal spoons and purchasing bulk-sized, nondairy creamer.

For a healthful alternative, switch your transfatty nondairy creamer to coconut-milk powder.

Ditch the Styrofoam. Three to four Styrofoam cups per employee per day can add up. Use ceramic mugs as an environmentally friendly alternative to disposable dishware.

Ask your employees to bring in mugs from home as a donation to the cause. Or, institute a “silly mug” day on which employees compete to have the most outrageous or comical ceramic sidekick.

Finally, have mugs monogrammed with your business logo and offer them to employees as holiday gifts or to prospective clients as a marketing tool. Diminishing your company’s carbon footprint can go hand-in-hand with boosting brand awareness.

Install automatic lighting. Staff members don’t necessarily use conference rooms or break lounges at all hours of the day. To reduce energy consumption and electricity costs, install lighting with motion sensors.

Not only will you save on electricity; you’ll also no longer have to make “checking that the lights are off” a hazing technique for new employees.

Keep up the good work! At least 82 percent of small-business owners have already taken one or more measures in the past three years to reduce their energy consumption, according to the NSBA Survey.¹ Most of them cited saving money as their main motivation.

Join the ranks, and ask one of your employees to become the energy manager of the office.

So, starting tomorrow morning, go green—it just makes dollars and sense.

For more information, visit:

1. National Small Business Association 2011 Energy Survey

2. U.S. Department of Energy: “Estimating Appliance and Home Electronic Energy Use”

Importing

After vacationing in Thailand, you’ve decided to add beautiful button-up shirts made in Bangkok to the shelves of your U.S.-based clothing store.

But the customs process is complicated and convoluted. Where do you begin? Ask questions.

Ask your attorney.

First, make sure you understand the law regarding importers.

Because of the hefty penalties involved with improperly importing goods, consider hiring a lawyer who is well-versed in the import process.

“Under the Customs Modernization Act (‘Mod Act’), importers are legally responsible for determining the correct classification and value of the imported merchandise,” according to Lawyers.com¹. Duty calculation and recordkeeping are included in their responsibilities.

Lawyers.com went into detail about the five responsibilities that small-business owners must assume to import goods into the U.S.: “admissibility” of the merchandise, proper entry procedures, payment of all fees, marking, and recordkeeping¹.

Once you have worked out all “informed compliance” details with your lawyer, you’re ready to negotiate contractual terms with your supplier or manufacturer.

Ask your manufacturer for samples.

If you’re importing manufactured goods, be sure to obtain samples.
“Ask for samples or a catalog, the facts and figures of current foreign distribution, and the product demand in their own country,” advised Foreign Trade On-Line².

There’s always a risk that the products you’ve designed and requested will not come back to you quite as expected. Exchanging free samples will help build trust between you and your manufacturer.

Nevertheless, you should still conduct a comprehensive background check on your manufacturer or supplier.
As soon as the manufacturing process has been instituted, you should investigate the rest of the importing process requirements.

Ask your customs broker about restrictions.

The next step is to create an import plan with a licensed customs broker. The U.S. Small Business Administration defines customs brokers as “private individuals, partnerships, associations, or corporations licensed, regulated, and empowered by U.S. Customs and Border Protection to assist importers and exporters in meeting federal imports requirements³.”
Customs brokers are important mediators between you, the small-business importer, and the CBP. They prepare appropriate documentation and ensure that your shipments meet federal import requirements, according to the U.S. Small Business Administration³.

As such, a customs broker’s expertise is costly. So, shop around until you find a reasonable rate with an honest, licensed broker.

If you’re new to the process of importing, find a broker who can clearly and succinctly explain the regulations and fee requirements to you, because there can be several confusing customs complications when it comes to massive overseas shipments.

Ask your CFO if you can afford it.

Many of the costs associated with importing—taxes, duties, excises, commission to your broker, payment to your supplier—are payable in advance and in cash. Thus, your small business must be adequately liquid to pay these fees up front.
In addition, when dealing with foreign currencies, be sure you’re accommodating exchange-rate fluctuation in your estimates. Just a few days can make a big difference.

Ask yourself if it’s worth it.

The importing process is long, expensive, and often difficult. Therefore, before you embark on this journey for the first time, ask yourself: “Can I handle the headache and still turn a profit?”

Some creations make for great business. Others are best left as seaside souvenirs.

1. “Importing and Your Small Business”
2. “How to Start and Operate Your Own Profitable Import/Export Business at Home”
3. U.S. Small Business Administration: “Importing Goods”
4. “Opening a Small Import Business”

email

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Remember the Enron email scandal? As part of a federal investigation into the fraudulent activities going on at Enron in the early part of this century, hundreds of emails were released to the court and eventually to the public. ABC News¹ reported that many of these emails “could prove to be embarrassing,” not only for Enron but also for employees whose names were attached to the personal emails they’d sent that were now being revealed to the world. The gathering of these emails was an example of e-discovery, a trend that companies and individuals will continue to face as part of the digital era.

What is E-Discovery?

E-discovery is a broad term used to describe any situation in which electronic data, such as email or internet postings, are sought in a criminal or civil case. The discovery process allows plaintiffs and defendants to exchange information during pretrial preparation, and the court will actually compel information to be turned over if it’s relevant or “probative” to the case.

In days past, discovery was limited to phone records, paper documents, and the like, since those were all that existed. Records were available only of the things people had chosen to write down, and the extensive amounts of paperwork turned over in cases were cumbersome to go through.

Today, however, e-discovery is changing the game. According to figures compiled in a recent Law.com² article, Twitter users send more than 200 million status updates every day, and people on the internet send 13,800,000 messages every single hour. All these tweets and emails and instant messages and Facebook posts and chats that are flying around cyberspace create a written record of things that might otherwise have been discussed over the phone or in person. Because the records are digital, all of the data and information are stored somewhere and rarely eliminated, no matter how hard you try to get rid of the data. Further, the digital format makes it easy to sort through data quickly to find relevant information.

These online communications are generally not privileged except in certain unusual and limited circumstances. This means that all of these records can be accessed as part of e-discovery, and they can have a significant impact on litigation by providing evidence of things that otherwise might have been unprovable. For example, according to USA Today,³ the twins who sued Facebook CEO Mark Zuckerberg argued that evidence existed in instant messages that would prove that Zuckerberg had stolen the idea for Facebook from their own website plan. Although a judge dismissed the twins’ suits, it’s easy to imagine a case in which a message sent and forgotten many years ago could be uncovered and used in litigation.

The Risks of E-Discovery for Employers

The biggest risk for employers is employees sharing information either about their employers or about their own activities that could get their employers in trouble.

Even for honest business owners who aren’t knowingly doing anything wrong, they could be held responsible for actions committed by employees who are acting on behalf of the company. This means the actions of their employees can land them in legal trouble if those employees share details about potential legal violations at work. There is also a risk of employees revealing trade secrets or posting criticisms about their employers, both of which can do serious business damage.

Handling the Issue

Law.com has suggestions for business owners wanting to protect themselves from e-discovery risks. The suggestions include establishing a reasonable social-media policy with clear boundaries, as well as providing training to make clear to employees what is and is not permissible use of social media. Law.com also recommends doing some monitoring of social-media posts to determine what is being said about the company.

For more information, visit:

1. “Embarrassing Enron Email Exposed Online”

2. “From the Experts: Read the Fine Print Before You Tweet”

3. “Winkelvoss Twins, Narenda Claim Hidden IMs in Facebook Lawsuit”

Law

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Lawyers come in all shapes and sizes. Some work at large firms or as in-house corporate counsel, others at boutique firms, and a minority are self-employed.

You might meet an attorney and his high-priced, power-suited colleagues for a client lunch at a hotel restaurant. Or, you might meet a lawyer at his desk behind bars under a fluorescent sign reading, “Bail Bonds.”

Lawyers also come with years-level of experience, the legal world’s version of karate belts. They’re awarded first-years or second-years or fifth-years, for example.

Among the suits, you’ll also find degrees of specialization—from transactional and contract work to high-pressure litigation and trial law.

With such a variety to choose from, how do you decide who makes the best lawyer for your small business?

Begin online. There are a variety of online resources that can help you refine your research to the appropriate fields of law, location, and peer rating, including Super Lawyers,¹ Justia Legal Services & Lawyers,² and Lawfirmdirectory.org.³ The American Bar Association also maintains a list of bar associations by state and locality on its website.⁴

Narrow the field. The attorney chosen for a patent filing will differ from the attorney chosen to represent your business in small-claims court. So, first restrict your search by specialty.

Specialties of law can include family, criminal, injury or disability, bankruptcy, immigration, trusts and estates, intellectual property, or job and employment.

Attorneys are not only specialized in areas of practice, but they are also localized. Lawyers are only licensed to practice in certain states.

As a small-business owner, you may want to narrow this search even more by searching for attorneys practicing in your neighborhood. Thus, you limit your search to lawyers already familiar with your market area, business needs, local competition, and pertinent state, city, and county laws.

Once you have narrowed the field to a small list of firms and individuals, try a quick Google search for news items that mention the attorneys. You’ll get an idea of the types of cases (and successes) the firms or individuals have tried.

In addition, news articles give insight into the reputations of the firms or individuals.

Get a referral. As a small-business owner, you may not have an exorbitant budget to hire a lawyer. Therefore, you might want to look for lawyers who offer negotiable rates or contingency-fee arrangements.

To do this, find other small-business owners with similar legal issues and budgets as your own, then ask them about their legal representation. Find out if the business owners have been satisfied with the legal work provided and at what cost.

Still, don’t be swayed by one person’s referral. What works for one person may not work for you.

Conduct interviews.

Invite a few of the legal frontrunners to your office. In a short but meaningful question-and-answer session, find out which firm or individual has the right character for your small business.

When it comes to legal expertise, no doubt there will be numerous qualified candidates. However, it’s important to hire a lawyer who will make the time to speak with you (off the clock), cut through convoluted legalese, generally practice patience, and possess the skill to discuss your company’s legal options simply and succinctly.

When tenuous business situations arise, you should feel comfortable calling your lawyer for help. Preventative measures and early action can save you valuable time and prevent costly liability risk.

Start (literally) on a case-by-case basis. You have total freedom to negotiate contract terms. So, start by hiring a lawyer to consult on a singular case. From there, evaluate the lawyer’s performance, provide feedback, and decide whether to transform your relationship from provisional to permanent.

Your interaction on the first case will also determine the attitude and expectations for all other cases—something that both attorney and client can appreciate.

For more information, visit:

1. Super Laywers

2. Justia Legal Services & Lawyers

3. LawFirmDirectory.org

4. State and Local Bar Associations

car pool

Small-business owners should take advantage of the intrinsic and monetary benefits of encouraging employees to make a “green” commute. Giving employees incentives to walk, bike, bus, or carpool to the office can save business owners time and money, as well as boost morale.

A green commute will create happier employees, a better business, and a healthier bottom line.

Here’s how.

Reduced Parking Costs

If your employees pay for their own parking, green commuting will save them money. To encourage green commuting, calculate how much your employees would save by leaving their cars at home—lower gas expenses, reduced car maintenance, and fewer parking fees.

Next, help your employees identify the most convenient bus routes from their homes to the office by downloading maps and schedules. Or, have human resources suggest carpool groups to employees with nearby home addresses.

To add incentives to employees’ participation in these calmer, cleaner commutes, offer to pay for all or part of their bus fares, or pay for a single parking space for carpoolers, for example.

If the managers of your office building automatically assign parking spaces to your company, negotiate a discount on rent for giving up the parking spaces. If you use few or none of your parking spaces, chances are the building managers will be able to sell the spaces to other renters.

Regardless of your parking situation, discuss the perks of green commuting with future employment candidates. Advertising a “green” office will increase your appeal to prospective workers—especially among the younger generations—and it will add value in terms of the environment.

Improved Morale and Teamwork

Soon, you’ll find that people who bike to work have formed cycling teams. Employees who walk to work can organize charity walks together.

Carpoolers, for their turn, will likely discuss work on the commute, which means more off-the-clock productivity and brainstorming. Carpoolers will also likely discuss family and personal matters, and such discussions tend to bring individuals closer as a team.

Either way, encouraging a green commute indirectly promotes teamwork inside and outside the office—definitely cheaper than a retreat with ropes courses and trust falls.

Healthier, Happier Workers

How many work mornings are ruined by a stressful rush-our commute? By taking the bus or the train, employees can read books, listen to music, and generally relax before Monday-morning meetings.

In addition, biking and walking make for healthier individuals. Not only that, but exercise has also been shown to relieve office-related stress, improve mental calm, and increase workplace productivity.

Researchers from England’s University of Bristol, as reported by the Daily Mail, found that employees who exercised before going to work or during lunch breaks were calmer and less stressed on those days than on days they didn’t exercise.2
For more information, visit:

1. “Get a Tax Break for Going Green in 2011”

2. “People Who Exercise on Work Days Are Happier, Suffer Less Stress, and Are More Productive”

Winning

Although equity financing and small-business lending remain the best options for long-term funding, small-business owners interested in an infusion of cash should consider entering competitions.

Somebody has to win them, so why not you?

A Variety of Opportunities

In a January 2010 Forbes.com article¹, Maureen Farrell highlighted some of the competitions that are available. It’s not too late to find out which one you’d like to enter in 2012.

To see a bigger list of business competitions, check out the slide show on Forbes.com².

Go Local

Just as small businesses help their local economies, the impact of small-business competitions may be equally localized. So, search your district, county, or city websites and resources for contests.

As an added advantage, small-business owners will typically find less competition and greater rewards among their neighborhood contests.

Best of

Finally, if you’re looking for instant funding and gratification, submit your small business to one of the many “Business of the Year” awards.

Search for awards in your industry area—“Best of” apparel, internet technology, or advertising, for example—and take a chance at gaining increased publicity for your growing company.

Embrace the competitive spirit that makes you a successful entrepreneur, and supplement your small-business sales with contest prizes and awards.

A little competition never hurt anybody, right?

For more information, visit:

1. “The Biggest Small-Business Competitions”

2. “In Depth: 15 Small-Business Contests”

Business Real Estate

Five years ago, a small-business owner could buy a building to use as a production facility and count on it paying for part of the business’s other costs. At that time, almost any real estate investment would have increased in value, and an owner could have tapped that inflation in the property’s worth to propel her company’s growth. That world is at least two years gone, but business owners are still adjusting to the new reality.

In the past two years, the U.S. Small Business Administration has made several changes to its lending programs to offer relief to stretched business owners. On Oct. 12, 2011, the government issued new provisions that ease the requirements substantially for small-business owners looking to refinance properties using SBA 504 loans. Business owners with more than 10 percent equity can refinance and use the proceeds to fund certain business expenses, including salary, utilities, insurance, and inventory. The program will end in September 2012.

Like the sea change that business owners are still adjusting to, a short-term program or temporary fix might make owners’ footing feel insecure. But there is one reality they can hold on to.
“Small-business owners are going to have to get a little more creative in terms of how they approach finance,” said Charles H. Green, a specialist in financing for small businesses.
Green is the author of the forthcoming “Get Financing Now” (McGraw-Hill, January 2012) and conducts seminars for small-business owners who need a compass to navigate this new world. Green said in an interview that the business owners he speaks with are “somewhere between floundering and stunned” by the changes in the financial world they operate in every day.

He sees small-business owners struggling, particularly when they have balloon payments on conventional real estate loans approaching. Their refinancing options are not what they expected when they first took out the loans. Lenders, he said, are “looking at real estate with much greater suspicion and more hesitation.”

The changes to the SBA 504 loan program, Green said, are intended to help such business owners.
“This short window can enable them to get into this guaranteed product without consideration of their real estate devaluation,” he said.
Of course the business owners who apply for this program have to pass scrutiny, and they have to have been making their loan payments without default for the past 12 months.

Check out Your Bank

Green said so much has changed from five years ago that you can’t assume your bank is making loans or that your bank is on sound footing. You might go through all the paperwork of applying for a loan, “and the bank at the end of the day says, ‘We can’t do it,’” Green said. “What they’re not saying to the borrower is, ‘We can’t do it because we can’t do any loans right now.’”

His advice is to go to the Federal Deposit Insurance Corp. website and check which banks in your state have had legal actions against them. A search using this database will indicate whether your bank in question is under scrutiny.

Good Time to Buy?

With property values having fallen almost everywhere in the past three to four years, the building you’re leasing may look like an attractive purchase right now. But, Green said, “it’s going to be a steeper road to get financing for it.” You may have to come up with a larger equity contribution, perhaps as much as 25 percent or even 30 percent.

If you don’t have that kind of capital, get creative. Green said that negotiating with the seller for the seller to carry part of the financing might be a solution. Also, you might take on a partner. It might be worth doing if it helps propel your business forward in other ways. Think longer-term.

“People are going to have to start taking more personal responsibility for their financial condition and be more proactive in getting their business in good shape, knowing their own metrics, and even understanding which banks in the marketplace can and will be good candidates to finance them,” Green said. “It was always convenient to go to one bank and look at one loan to handle all of your situations and opportunities.” But in this new world, you might have to put together a patchwork of financing to get to the same end.

Did you know that The Small Business authority is a top nonbank lender for SBA 504 and SBA 7(a) loans? Call us at 855-2thesba to learn more.

Innovation

In a lean economy, it can be a challenge to grow your company. Innovation and a strong business strategy become more important than ever to identify new ways to reach consumers as well as encourage employee productivity. Often, this means conventional or traditional strategies and wisdom must be tweaked.

Building a Qualified, Successful Team of Employees

In a time of slow economic growth, you may not have the desire or the funds to hire many employees. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, recently told Bloomberg Businessweek¹ that the high unemployment rate may be more affected by the reluctance of employers to bring in new workers than by payroll reductions.

In most cases, the traditional considerations when evaluating a potential candidate include qualifications and the ability of the candidate to “work well” with the current team of employees. But Stephen Shapiro, author of “Best Practices Are Stupid: 40 Ways to Out-Innovate the Competition,” told CNNMoney² that hiring people who “don’t fit the existing mold”—or even people you don’t like—can result in a better team with fresher ideas.

Shapiro believes that teams of individuals who have varying backgrounds, personalities, standards, and goals are teams that are more likely to engage in healthy conversations and debates. This can foster new ideas on everything from saving money to streamlining processes in the company to generating marketing ideas.

Shapiro’s belief in the importance of diversity is corroborated by a 2011 Forbes Insights study,³ which found that “a majority of respondents agreed that diversity is crucial to encouraging different perspectives and ideas that foster innovation.”

Motivating Employees

Once you have a strong team of employees in place, it’s crucial to properly motivate them.

According to an excerpt from the book, “How Full Is Your Bucket,”⁴ The concepts of ‘recognition’ and ‘praise’ … are two critical components for creating positive emotions in organizations.”

Also, ask your employees to submit ideas for improving your business. This practice can pay off big time, especially when you make it easy for all employees to contribute innovative suggestions. An October 2011 article in The Wall Street Journal⁴ showcased some examples of companies that effectively generated employee input.

For more information, visit:

1. “Fed’s Lockhart Says Slow Hiring May Be at Root of Unemployment”

2. “Why Your Company (Probably) Can’t Innovate”

3. “Global Diversity and Inclusion: Fostering Innovation Through a Diverse Workforce”

4. “The Power of Praise and Recognition”

5. “For Bright Ideas, Ask the Staff”

6. “How to Create a Culture of Innovation”

Well, dear readers, we are proud to announce that we now have a small-business blog on Forbes.com. We know, right? Exciting!

We are happy to share the news with you, and we hope you are happy for us.

We’ll still have our blog here, and we plan to continue reporting on the issues that really matter to small-business owners.

You are why we’re here, after all.

Yeah, we feel like a big deal. But we’ll never forget that you, dear readers, are truly the big deal.

Check out our Forbes blog here.

Open for Business

A business license gives you legal authority to operate a business in a particular city, county, or state. Licensing rules vary by state, so the process to get a business license in one state is different from the process in another state. The U.S. Small Business Administration offers a tool that, when you plug in your zip code, takes you to the licensing authority in your region and gives you some helpful hints about getting your business licensed.¹

Some people are so eager to get their businesses started that they skip getting a business license altogether. Bad idea. First, operating many types of businesses without a license is against the law. There are specific licensing requirements for salons, child care, food services, real estate, home health care, and other industries that affect public safety. Check with your local business-licensing authority for specific rules in your area. Starting your business on the wrong side of the law is a terrible way to build for a successful future.

You also need a business license in order to open bank accounts, sign leases, and perform many of the transactions necessary for day-to-day operation. Finally, operating without a business license opens you up personally for liability issues. You could get wiped out. And in today’s litigious society, it’s important to protect yourself.

Here’s what you need to know about getting a business license. The process may differ according to your state.

Taxes

If you’re planning to form a business partnership or corporation, or if you’re planning to hire employees, you will need to apply for an Employer Identification Number (EIN), also known as a Tax ID number, from the Internal Revenue Service.

You can apply for an EIN in a variety of ways, such as by applying online or filling out and mailing a Form SS-4.

You will also need to register with the tax authority in your state. Each state has different requirements and tax rates.

Permits

Your city or county might also have permit requirements for your business. Each area has different rules. Building permits, zoning permits, and health permits are just a few of the requirements out there for local business, according to The Wall Street Journal.²

Incorporation

Corporations, nonprofits, LLCs, and partnerships are required to register with the appropriate state agency. Sole proprietorships usually don’t have to register.

‘Doing Business As’ (DBA) Filing

This one’s a bit tricky. If you plan to do business under a name other than your own, you need to file a DBA or “Doing Business As.” At that point, there are different requirements by state, but you might then need to register your new DBA business name as a trade. Even if it’s not required, filing your trade—usually with the Secretary of State’s office in your state—will keep others from doing business in your area under the same name.

Employer Requirements

The U.S. Small Business Administration has a list of all the steps required to hire your first employee.³

1. U.S. Small Business Administration

2. “Do I Need a Business License or Permit?”

3. “10 Steps to Hiring Your First Employee”

4. IRS Publication 15 (Circular E), Employer’s Tax Guide

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Save big on workers' compensation

By Adam Friedlander

Like the St. Louis Cardinals, your business can only win its World Series and optimize performance by keeping your No. 1 asset, your employees, working and safe.

Here are four ways to do that.

1. Maintain safety in the workplace by establishing a Culture of Caring™. From the president on down, the message must be made clear that the management team cares about the well-being of company employees.

Employees must feel that their managers want them to go home from work in the same health in which they arrived. If one of your employees is injured, make sure you communicate with him that you want him to return to work quickly and that you’re there for him. Creating a culture of caring is the single-most important step to saving money on your workers’ compensation.

2. Eliminate unsafe acts and conditions that increase opportunities for claims. Establish a “safety committee” that analyzes past claims, isolates patterns, and then eliminates the causes.

3. Your claims experience directly affects your premium (up or down) annually through the experience modification. Safety can capture up to 45 percent savings through experience modification credits on your premium. Capturing savings from safety through your experience modification is a strategic and “bottom-line” imperative.

4. Organizations with low claims are eligible to participate in “loss sensitive” workers’ compensation programs that reward businesses for their safety. As an example, some safety groups fully insured by the New York State Insurance Fund have saved safety-conscious members up to 50 percent on their premiums for decades. Many insurance carriers offer dividend plans that reward safety. It all starts with a Culture of Caring™.

Adam Friedlander is president of Friedlander Group Inc., the workers’ compensation leader in New York for retailers, wholesalers, restaurants, hotels, oil dealers, and social services. Since 1992, Friedlander Group has saved more than 3,000 clients a quarter of a billion dollars in discounts and dividends on their workers’ compensation.

His new book, “How to $ave Big on Workers’ Compensation | With Insights From Leading Industry Experts,” is the No. 1 best-selling Business Insurance and Risk Management book on Amazon. Learn more at www.howtosavebigonworkerscompensation.com.

How health-care reform can help small businesses

During World War II, the U.S. government put wage controls on businesses so workers on the home front wouldn’t earn more than their military counterparts on tightly controlled salaries. But with so much of the workforce overseas, the competition for talent became fierce. So companies beefed up their compensation packages with benefits like health insurance, which weren’t subject to wage controls. And the rest, as they say, is history.

There are many who argue that we should do away with the practice of employers providing health care. In 2009, Princeton economics professor Uwe E. Reinhardt wrote in The New York Times that the practice poses two problems.¹ First, the perception that fringe benefits are “given” to the employee are false. The cost of providing company benefits is subtracted from employees’ salaries, which ultimately disconnects workers from the impact of health care on their families’ finances. Second, employer-provided coverage is temporary and doesn’t follow employees after they leave the company.

Nevertheless, the pressure of providing competitive benefits packages has overwhelmingly disadvantaged small-business owners.
According to a report from the White House Council of Economic Advisers, small businesses “pay up to 18 percent more per worker than large firms for the same health insurance policy.”² This, in what is effectively is a tax on small companies, discourages these firms from offering health coverage and recruiting the best talent.

The Affordable Care Act seeks to help small businesses in six ways, according to the White House.

1. Offers small-business owners a health-care tax credit to lower the cost of covering their workers. To mitigate the higher cost for small-business owners to cover their employees, the Affordable Health Care Act established the Small Business Health Care Tax Credit, which gives small-business owners a credit of up to 35 percent of their premium costs.⁴ In 2014, the rate will go up to 50 percent.

2. Creates health-insurance exchanges to increase bargaining power and drive down costs. By 2014, firms with fewer than 100 employees will be able to pool their buying power by buying insurance through exchanges. The Congressional Budget Office estimated that exchanges will drive down the cost of health-care premiums by 7 to 10 percent.³

3. Ends price discrimination against small businesses with sick workers. A small business with just one sick worker can be subject to raised premiums—just when insurance is most critical. Starting in 2014, insurers will be prohibited from raising premiums when someone gets sick.

4. Increases health-care security to unlock entrepreneurship. Workers who would otherwise change jobs or start their own businesses regularly lock themselves into their jobs because of a need for insurance, or because they have pre-existing conditions. Health-care reform eliminates exclusions for pre-existing conditions.

5. Reduces the hidden costs on small-business employees who have health insurance. By extending coverage to an additional 32 million Americans by 2019, the Affordable Care Act seeks to eliminate the hidden costs to policy premiums that treating the uninsured adds.

Kyle Sloane, Vice President of Insurance Services at The Small Business Authority, will be a guest on this Saturday’s “The Small Business Authority Hour,” 4 p.m. – 5 p.m. EST on 77WABC. The topic? Health care.

“Although the objectives of the legislation are intended to benefit small businesses, until the Supreme Court decided as to whether or not the health-care bill is constitutional (case being heard in February and ruling expected in June), the main focus of small businesses, as well as Americans as a whole, should focus on living healthier lifestyles,” Sloane said. “By actively managing your own health, practicing preventive care, and making a conscious effort to live healthier, individuals will naturally incur lower health-care costs.”

“I think that whichever side of the political spectrum you fall on, addressing core issues like obesity and healthy living will out the small-business owner in the best possible stance regardless of the direction of health-care legislation,” he said.

For more information, visit:
1. “Is Employer-Based Health Insurance Worth Saving?”
2. “The Economic Effects of Health Care Reform on Small Businesses and Their Employees”
3. “Protecting Families and Putting More Money in Your Pocket: How Health Insurance Reform Will Lower Costs and Increase Choices”
4. “Small Business Health Care Tax Credit for Small Employers”

Taxes and your home-based business

Running a home-based business has all sorts of benefits. Aside from the flexibility and being home for your kids after school, there are many tax benefits. Patricia Lotich wrote on her Thriving Small Business website¹ that tax deductions for a home-based business include the business’s portion of the real estate taxes, mortgage interest, insurance, and more.

As with any tax dealings related to your business, keeping good records is vital. It’s also a good idea to consult a reputable tax adviser, preferably one who is familiar with your particular type of business.

There are several criteria your business must meet in order to qualify for the tax breaks. The Internal Revenue Service says you must use part of your home “exclusively and regularly” as your main place of business or as a place to meet with patients or clients regularly, or you must have a separate, detached structure in which you handle business dealings.²

Here are some tax tips to maximize your deduction opportunities:

1. Don’t get greedy. It might seem tempting, but pretending like entertainment expenses are actually for business can be really dangerous—and dishonest.

2. Employee retirement-plan contributions are deductible. Don’t forget to pay yourself and put something away for retirement. As an added bonus, those savings are deductible.

3. Are your kids at least 6 years old? Put them to work tax-free!

4. Keep track of your mileage for business. This deduction can be easily overlooked. The current standard mileage rate is 51 cents per mile.⁴ If you drive quite a bit for business, you could really rack up the costs.

5. Deduct the cost of your health insurance. Premiums are skyrocketing and the cost of buying one’s own health insurance keeps many entrepreneurs in miserable jobs. But health insurance premiums for you and your family, as the operator of your own business, are deductible.

If you have employees, make sure to educate yourself on the tax advantages for small businesses as a result of the Affordable Care Act,⁵ including tax deductions for each insured worker for businesses with fewer than 100 employees.

6. Don’t forget startup expenses. Bloomberg Businessweek reported⁶ that as of 2010, you can deduct up to $10,000 in startup expenses for your business.

7. Keep a daily appointment calendar. A basic daily appointment book can provide additional documentation about business dealings and deductibles, such as mileage and entertainment expenses. It can prove where you were, who you were with, and what you were doing. Many times, the IRS will accept a daily appointment calendar as legitimate business documentation.

8. Don’t think it’s too late. If you discover deductions you failed to claim, you can go back up to three years and amend your tax returns.⁵ This doesn’t apply to math errors, as those are traditionally automatically corrected by the IRS.

For more information, visit:

1. “IRS Tax Tips for Home Based Businesses”
2. “Work From Home? Consider the Home Office Deduction”
3. “Tax Tips for Home Based Businesses”
4. “IRS Announces 2011 Standard Mileage Rates”
5. “6 Ways Health Reform Will Help Small Businesses”
6. “New Tax Deductions for Small Business”
7. “7 Tax-Saving Tips for Home-Based Businesses”
8. “9 Facts on Filing an Amended Return”

Considering pets in the workplace?

Anyone who loves a dog or other animal knows the good feelings having a pet around can create. The American Pet Products Association in 2008 released the results of a poll of American workers, showing that “75 million Americans believe having pets in the workplace makes people happier” and “70 million Americans believe having pets in the workplace reduces stress.”¹

We found it stunning that the number of respondents to the poll appeared to exceed the population estimate for Thailand. So we got in touch with the association and learned that the poll results were based on a sample of 1,000 Americans 18 or older.

Still, whether you ask 1,000 respondents or 75 million, you’ll probably find that people like pets.

Do you think you might want to allow pets in your workplace? Here are some considerations:

1. Pets improve employee health. According to the Centers for Disease Control and Prevention, having pets can facilitate health benefits, such as decreased blood pressure and cholesterol.² Pets also decrease people’s feelings of depression and isolation. Healthy, happy employees can increase your bottom line and are less prone to be sick and miss work.

2. Pets at work increase collaboration and creativity. When pets are around, people tend to feel more collaborative. One study mentioned in The Economist³ compared how different groups of coworkers collaborating on an advertisement felt about each other. Some groups had a dog present and others didn’t. Members of the groups with a dog reported feeling greater trust and intimacy with their teammates than did their dog-less counterparts.

If your business relies on creative, collaborative thinking, you might improve productivity by allowing dogs into the office environment.

3. Make sure every employee can weigh in. The Occupational Safety and Health Administration has no standards prohibiting pets in the workplace, other than to call for a “safe working environment.” But if pets cause other workers distress, it might be an issue. Before you allow pets in the workplace, ask all your employees about their feelings. Some employees may be allergic to certain animals. Others might just be afraid of dogs. Improving the work environment for pet-loving workers at the expense of others isn’t a fair policy.

4. Is your environment pet-friendly? Ensure that a pet’s experience at work is as positive as your own. Pets can be a fun way to relax employees and greet customers at the door and give everyone a warm and fuzzy feeling. But is your business a safe place for a pet?

Nail and hair salons with harsh smells and chemicals can be toxic for pets. Chocolate, avocados, grapes, and all sorts of other foods are potentially lethal for dogs. And even the most urban of pets need a little piece of grass on which to run around.

5. Think it through. Although there are many benefits to allowing dogs and other pets in the workplace, it’s important to consider all the potential drawbacks before enacting a new policy. Everyone in the organization might agree that having pets in the workplace would improve performance and productivity, but remember that having pets involves responsibilities that could potentially detract from work. Dogs might need walking a few times per day. Chewing, fighting, messes, and other mishaps are likely to come along with pets in the workplace, so make sure you’re prepared.

With a little planning and care, your business could be the next pet-friendly place to work. It’s a great way to foster your employees’ loyalty and creativity and to keep things light and happy.

1. “U.S. Companies Continue Trend of Allowing Pets in the Workplace”
2. Centers for Disease Control and Prevention: “Health Benefits of Pets”
3. “Manager’s Best Friend: Dogs Improve Office Productivity”
4. “Dogs Allowed: Creature Comforts at the Workplace”

Pregnancy Rights

Although a new baby is an occasion for great joy, an employee’s announcement of a pregnancy can be a minefield for an employer. Pregnancy brings with it a number of potential complications in the workforce, from finding a replacement staff member during an employee’s maternity leave to handling an employee’s unexpected missed work due to potential medical complications during the pregnancy.

Employers need to tread carefully on all of these issues to make sure that pregnant women are given the full benefits of their legal rights and that no inadvertent discrimination occurs.

Pregnancy Rights and the Pregnancy Discrimination Act

The most basic and important rule for employers is that pregnant women, whether employees or potential candidates for a job, must be treated in the exact same way as anyone who is not pregnant. While pregnancy is not a disability under the Americans with Disabilities Act (though some pregnancy complications may be), the Equal Employment Opportunity Commission¹ makes clear that pregnancy discrimination can be a form of gender discrimination.

The Pregnancy Discrimination Act of 1978² expressly amended Title VII of the Civil Rights Act to ensure that pregnant women were protected against any type of discrimination on the basis of their condition. Under the terms of this act, any business with 15 or more employees is prohibited from discriminating against pregnant women in hiring, firing, and terms and conditions of employment.

The Act also made clear that health insurance coverage has to cover pregnancy under the same cost structure/basis as other medical conditions, and that pregnancy cannot be singled out as a factor in determining whether an employee can work. An employer can, however, require medical documentation before an employee takes pregnancy-related leave, but only if the employer requires such documentation for other conditions as well.

Finally, among its other protections, the Act also establishes that pregnancy-related benefits cannot be limited only to married women.

FMLA Benefits

While Title VII and the Pregnancy Discrimination Act prohibit discrimination against pregnant women, the Family and Medical Leave Act³ gives new parents the right to take up to 12 weeks of unpaid leave due to pregnancy complications and care for newborns. The FMLA also allows parents—both mothers and fathers—to take leave based on the adoption of children, in addition to other family and medical issues.

The leave can be consecutive or in certain cases intermittent, which means employees can take time off in smaller chunks rather than in blocks of days, weeks, or months. The Department of Labor explains the criteria for intermittent or reduced-schedule leave on its website.⁴

Your company may be covered by FMLA and required to grant leave if:

• You employ 50 or more workers within 75 miles of the employee’s workplace.
• The employee wishing to take leave has worked for at least 12 months at your company.
• The employee wishing to take leave has worked at least 1,250 hours in the previous year.

There are some exceptions to FMLA rules, such as if you employ a couple who both wish to take leave as a result of a birth or adoption. In such cases, the two employees are entitled to a total of 12 weeks off, not 12 weeks each. If you offer paid maternity leave, you may also be able to count this time as part of the 12 FMLA weeks off.

Outside of these and other limited exceptions, you must give employees this time off without any adverse consequences to them. You cannot discriminate against them during their leave or upon their return. They must also be reinstated to their previous positions or equivalent positions when they come back to work.

State Rules

In addition to complying with FMLA and Pregnancy Discrimination Act rules, both of which are federal rules that apply throughout the United States, you may also have to comply with state-specific rules. For instance, California affords to pregnant women significant benefits that go beyond what FMLA requires.

Under California’s Pregnancy Disability Leave Law,⁵ women may take up to 16 weeks off due to pregnancy-related disabilities, such as severe morning sickness. California’s law also applies to employers with as few as five employees, instead of FMLA’s 50.

The Associated Press⁶ reported that California Gov. Jerry Brown recently signed two bills that will extend protections to women on maternity leave.

For more information, visit:
1. “Facts About Pregnancy Discrimination”
2. “The Pregnancy Discrimination Act of 1978”
3. “Family and Medical Leave Act” (Overview)
4. “The Family and Medical Leave Act” (Compliance Guide)
5. “California Leave Laws”
6. “Gov. Brown Signs Bills Ensuring Maternity Coverage”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Essentials for an Employee Handbook

If you’re going to expand your business and hire additional employees, consider creating an employee handbook. It’s a good way to establish the expectations and rules of your company in a clear and formal way.

Fundamentally, your employee handbook should establish the legal responsibilities of the employer and the rights of the employee. The more time and energy you put into creating a thorough and thoughtful employee handbook for your staff members, the happier you are likely to be with their performance.

The U.S. Small Business Administration recommends a list of topics¹ to include in an employee handbook. Here are some highlights:

Work Schedules

Your employee handbook should clearly establish employees’ working and lunch hours. Also, is telecommuting an option? How do you handle absences?

General Employment Policies

Whether you conduct background checks or drug screenings, detail your general policies from hiring and firing to promotions, transfers, and resignation procedures. This should also include general information about labor laws, union eligibility for your employees, and rules regarding hiring foreign workers.

Anti-Discrimination Policies

You’re legally obligated to comply with laws prohibiting discrimination and harassment.²

Safety and Security

This handy Workplace Safety and Health³ guide can help you establish sound safety and security policies for your business. In your handbook, outline such items as OSHA’s rules regarding reporting any workplace accidents as well as your own policies regarding natural disasters, weather, and hazardous chemicals.

To see the complete list of handbook criteria, click here. For more information, visit these U.S. Small Business Administration pages:

1. “Employee Handbooks”
2. “Employment Discrimination and Harassment”
3. “Workplace Safety and Health”

Our very own Barry Sloane, president and CEO of Newtek Business Services, The Small Business Authority, will make a live in-studio appearance on the Fox Business Network’s “Cavuto,” hosted by Neil Cavuto, 6 p.m. – 7 p.m. EST tonight. Check your local listings.

Don’t miss it! If you catch it, let us know your thoughts in the comments section below.

Running a company blog: What are the returns?

According to Bloomberg Businessweek,¹ the days surrounding Halloween were full of scary costumes and even scarier business prospects, or so reflected the downturn results of a quarterly poll taken by Wells Fargo and Gallup in October that measured small-business confidence.

When concerned about the economy, small-business owners should look toward increasing communication with their customers. Direct contact with target clients boosts business and assuages customers’ fears of trouble.

For best results, create a company blog.

Company blogs and social-media sites draw in new customers and new ideas, increasing business one hashtag at a time.
Almost 25 percent of Americans’ time online is spent browsing blogs and social media, according to Nielsen’s Social Media Report for Q3 2011.² And, according to the same report, 70 percent of online social networkers also shop online.

That means: To reach current and prospective customers, small-business owners must log in online. Borrowing from a traditional sonnet, the modern entrepreneur should ask of blogs, “How do I love thee? Let me count the ways.”

1. Attract new customers, appeal to the old. Blogs communicate public-relations news and updates to current customers, and they serve to attract future customers.

Across a selection of 10 major global markets, social networks and blogs reached more than 75 percent of active internet users, the report cited.² You can no longer rely only on paper fliers, coffeehouse posters, and pamphlet handouts.

Not only does increased internet traffic boost sales; it also provides free marketing. Lower your advertising budget by investing more time in building your blog. You’ll see returns in online sales: increased new customer orders and increased customer reorders.

With so many internet users today, blogging has become the improved method for advertising new products, attracting prospective clients, learning from constructive criticism, explaining away price increases, and dispelling—for example—rumors of closure. Good riddance, recession!

2. Attract new investors, grow the company. Looking to grow? A blog is not simply a different medium for selling the same product. Blogs can communicate to consumers and investors alike. In addition to talking about recent in-store arrivals, blogs can also discuss above-average company returns.

Separate your blog into sections—one that appeals specifically to customers and another that delves into finances. These days, transparency is not only expected; it’s rewarded.

3. Ameliorate customer service, humanize your business. If you ask people about overseas call centers, the majority will complain about the impersonalization of business today. Small-business owners have long benefited from boasting a mom-and-pop shop ethic. But that image can get lost in a fast-paced digital world.

With a company blog, small-business owners can personalize their services and company. Customers enjoy seeing photos of the office, staff members, and the owner and her family. Additionally, clients appreciate reading about daily activities written in the first-person voice.

Blog posts and websites also enable customers to ask questions and seek answers online without coming into the store or wasting time on the phone. Not only does this reduce stress for the customer-service representatives of a small business, but it also it saves valuable employee time when there are fewer phone calls and inquiries to address.

Although starting a company blog may seem daunting, the returns are immeasurable. Joining social-networking and blogging sites is free, so there’s no harm in trying.

Small-business owners may even find that a blog was just what they needed to rejuvenate their enthusiasm and confidence, which can often fall pace with the stock market.

So, join online networking groups, like small-business entrepreneurs before you, and create a digital voice for your company.

1. “Small Business Confidence Remains Low”
2. Nielsen: “State of the Media: The Social Media Report Q3 2011”

The fine art of subtle self-promotion

You’ve been there. Stuck at another rubber-chicken networking lunch, shoulder to shoulder with one of those self-promoting machines. You haven’t even gotten passed the gravy boat before you know that the guy has an MBA, took pets.com public, and has 5,000 followers breathlessly awaiting his next 140 characters of Twi-sdom. He hates it when people describe him as a marketing “guru” but if that’s what people want to say, then who is he to stop them? And by the look of his so-white-they’re-almost-blue bleached teeth, he’s also got a thing for Crest Whitestrips.

Tacky. Boring and tacky.

Any business owner knows self-promotion is totally necessary if you expect to be successful. So what’s the difference between self-promotion with a scalpel and Crest Whitestrips Guy?

Frankly, it’s knowing your audience.

If It Isn’t Relevant, You’re Bragging

Here’s the best marketing and promotions advice you’ll ever get: People only care about themselves. It’s one of those things like gravity and the sun rising in the east. It’s just the way it is. So what does that mean to your self-promotion ninja strategy? If the accomplishment, accolade, or thing you think makes you sound cool and competitive isn’t relevant to the person you’re talking to, you’ve officially become the bragging one-upper. It really turns people off.

Did you just land a big account? No one cares. They only care about the account they just lost.
On the other hand, if you’re talking about sales strategies and you happen to mention what helped you land a huge account, that’s totally impressive and fair game. It actually might help the person you’re talking to close more business of his own. Well played.

The difference? The second approach has something to offer your audience beyond hearing about how awesome you are.

More Listening, Less Yapping

Think about it: The people you respect and listen to the most in your professional life probably have a tendency to say very little. But when they talk, everyone listens.

It’s especially easy in socially awkward situations to babble endlessly to avoid uncomfortable gaps in conversation. Instead, focus on asking the person you’re talking to open-ended questions that give him room to talk and maybe do a little of his own self-promotion. Again, people are most engaged and interested in conversations about themselves. Once you’ve given that person ample time and space to talk, pick up on something he said and use it as a segue to throw a little something complimentary about yourself in the mix. You should find a very receptive audience.

Master the Elevator Pitch

Successful business people, especially in sales and marketing, can tell you in two minutes or less—about the same amount of time as an elevator ride—what they do and why it matters to you. Come up with your own self-promotion elevator pitch that lets people know who you are and why you’re cool. You’ll find that, just like in politics, if you have a disciplined message, you’ll be far less likely to stray too far off topic, even under the most strenuous of circumstances.

Practice your elevator pitch in the mirror, in the shower, at the breakfast table, and on your family until you have it down cold. Once you do, you’ll never sweat another interview or networking event again.

Be Honest, for Pete’s Sake

One little white lie under pressure can irreparably damage your reputation forever. Sure, it goes without saying, but it’s still worth mentioning: Never ever lie, embellish, inflate, strategically omit, misrepresent, or bed the truth or give anyone the slightest inclination that you’re not being completely forthcoming about yourself. Sometimes you may feel pressure to act a little more athletic, seem a little more sophisticated, or appear to be more successful, but it’s too hard to pretend to be someone you’re not.

Besides, honesty and self-deprecation are the hallmarks of someone who is secure in who she is and what she has to offer.

Sometimes no amount of self-promotion can beat that.

So nice to meet you

Next time you see a presidential candidate—any presidential candidate—in the midst of a campaign, watch him work a room. Master politicians, it’s said by more than a few political pundits and strategists, know the art of “retail politics.”

Getting out and meeting with voters, making a connection with them, and leaving them with the sense that they’re the most important people in the world—that’s the stuff of both retail politics and networking for business. And if you’re good at it, there’s no telling how far you’ll go.

Here are a few tips for working a room, some more obvious than others, to help you quickly make a connection, develop rapport, and leave your audience feeling great about the encounter.

1. Check yourself before you wreck yourself. It’s as true a sentiment now as it was when Ice Cube first rapped those lyrics. Before you walk into a room, take a few breaths and make sure you’re bringing the right, positive energy into the situation, suggests an article on the University of California at Berkeley’s Career Center website.¹ If you walk in with a bad attitude, chances are everyone else will pick up on it. That’s no way to make a good first impression.

2. Arrive early. This idea from a Forbes.com² article is great. When you arrive early at a party, meeting, or event, the article says, you adopt a “host mentality” that is more nurturing and open. It’s also a good way to get more relaxed about interacting with others.²

3. Have a game plan. Most networking functions only last about an hour or so, and you want to make sure you’re covering as much ground as possible in the time available. Familiarize yourself with the list of attendees beforehand and even select a few and do quick Google searches on their names. The idea isn’t to stalk anyone or gain “intel” but if a few seconds of research shows you share a former employer or similar hobby, you’ve got an easy conversation starter. You also might not know what a person looks like, so finding a picture on a company website can be helpful for a quick ID.

4. Act natural, but not too natural. It doesn’t matter how good the egg rolls are—you’re not going to make a good impression with sweet-and-sour sauce on your chin. While you’re working a room, you need to be focused and comfortable. The best bet is to have a drink or cocktail in your left hand, keeping your right hand free and dry for shaking. You also want handy access to your business cards. If you’ve got a bunch of stuff in your hands or your cards are buried at the bottom of your bag, you’re going to flub around and either look like you’re disheveled or like you’re a total mess. Have everything ready to go so you can relax and focus on the conversation during the event.

5. What’s your conversation starter? Not so much a pickup line as a way to get a dialogue going is how you should think about your conversation starter. Some people like to wear their conversation starters. A large piece of jewelry can be a great way for people to notice and connect. Others like to stick with current events or even the weather. Often, a simple “What kind of work do you do?” will suffice. A networking event isn’t the time to draw a blank, so make sure you’ve got your best openers, one-liners, and interesting tidbits ready to go.

For more information, visit:
1. “Networking Tips: How to Work a Room”
2. “How to Work a Room”

Maintain a healthy work-life balance

Balancing work life and home life has become a Cirque du Soleil-type adventure for many of today’s small-business owners. For many, the lines between work and home life have become so blurred that it’s hard to know where one ends and the other begins. And for small-business owners who are responsible for everything from facility maintenance to payroll, the 24-hour demands can be overwhelming. Worse yet, technology allows you to be connected wherever you are. No hiding!

Work-life balance doesn’t mean each is getting an equal amount of attention. Achieving a work-life balance means that you’re giving the right amount of attention to each aspect of your life, and you’re achieving professionally while enjoying family, friends, and home life.

How do you know if your work-life balance is out of whack? Here are some signs:

• You’re exhausted. Not exhausted like you could use a nap after a long night, but total exhaustion. With its arsenal of energy drinks, gallon-sized Starbucks cups, and break-of-dawn bikini boot camps, society constantly sends messages that fatigue is something to be dealt with and fought through. But fatigue is your body telling you it needs to rest.
  The Mayo Clinic¹ explained that chronic or extended periods of fatigue can damage your emotional health as well as drain your energy. For the health of both your business and personal life, getting enough rest is essential. Otherwise, both aspects of your life will suffer.
• You’re missing important stuff. School Christmas pageants, the latest Cher farewell tour, a night out with your main squeeze—are you missing out on big, important events in your personal life?
  Same goes for work. Did you show up late to your big presentation with oatmeal on your jacket? Are you letting your team at work down by not pulling your fair share? It’s important to take stock every now and again about which parts of your life are getting short shrift, and adjust accordingly.
  Your priorities, demands, and interests are constantly shifting, and so will the way you manage and spend your time.
• You’re constantly in a fire drill. You know that feeling that you’re constantly running 15 minutes behind? It happens to everyone from time to time, but if you find days stretching into weeks of harried lateness and surprise deadlines, dates, and appointments around every corner, it’s probably a sign that your work-life balance needs tweaking. When you’re not in control of your time and you’re constantly reacting, it means you’re not showing up to any part of your life prepared and present. Ratchet up your time-management skills, asses where the problems are occurring, and most importantly, start cutting unnecessary stuff.

So, what can you do to help maintain your optimum work-life balance? Here are some tips.

• Get out of your seat. In today’s world, commuting, computing, and communicating are all done in front of a screen while sitting on one’s tuchus, often stuffing one’s face with baked goods. Exercise is the ultimate stress reliever and a critical part of any healthy body and mind. Exercise helps you sleep, puts you in touch with your body, and gives you time to breathe. Whether it’s a walk around the block or a morning jog with your dog, you’ve absolutely got to incorporate at least 30 minutes of regular activity into your schedule every day. No exceptions.
  Dr. Andrew Weil thinks modern society suffers from “nature-deficit disorder” from a lack of interaction with the natural world, according to an excerpt from his book, “Spontaneous Happiness,” which appeared in Newsweek Magazine.² Sunlight, moonlight, bird song, and other sights, sounds, and experiences are fundamental to health and well-being. Get outside and move around. You may be surprised by how much better you feel.
• Eat healthful foods. A lot of stress and fatigue can be linked directly to an unhealthful diet. When was the last time you drank a glass of water? When was the last time you got your full five servings of fruits and veggies in a day? Eat right, drink plenty of water, and take a multivitamin to boost health and well-being.
• Cross stuff off your list. Here’s a secret: You don’t have to do it all. Do you enable a slacker on your payroll at work? Stop it. You don’t have time. Can you outsource any of your daily tasks at work or home? How about getting a housekeeper? Maybe you can take the laundry to get done once a month. Whatever it is that’s sucking up your time and energy, figure out a way to cross it off your list. Making time for yourself and the things you love, even just a couple of extra hours a week, will make you a better business owner, family member, friend, and anything else you want to be, in life or at work.

For more information, visit:
1. Fatigue: Definition
2. “Andrew Weil’s Spontaneous Happiness: Our Nature-Deficit Disorder”

Facebook Fails

Tweeps, friends, followers—no matter how you’re connected, it’s likely that you’re using social media to drive some of your business. Increasingly, business is done, not with the traditional handshake, but with the click of the ol’ “thumbs up.” Sure, most of the old rules of business communication still apply, but there are some common pitfalls people make that can spike even the best social-media manager’s intentions.

The biggest problem is that people become so comfortable interacting in real time through social media that they can say things that would be unimaginable in, for example, more formal business letters or communications.

There are rules. There’s even etiquette. Just the smallest tweaks in your social-media strategy can make a big difference in your bottom line. And missteps can go viral.

Fail: Sporadic Updates

There’s nothing sadder than a neglected social-media account. That’s not to say you need to be glued to your social-media account like a high-school freshman waiting to get asked to the homecoming dance. If you launch a social-media initiative for your business, make a commitment to update and engage your followers and connections at least on a daily basis.

There are plenty of time-saving tools, like HootSuite, that will let you schedule your tweets and posts in advance, across multiple networks. You should also be generous in retweeting and sharing other people’s information. It builds goodwill among your followers, encourages others to share your information to their followers, and saves you time by leveraging the work of others. It’s a winner for everyone.

One more thing: Sending out tons of posts in a flurry is no good, either. People get annoyed when you clog up their feeds with a blast of social-media updates. Like most everything in life, slow and steady wins the race.

Fail: Hashtag Overuse

Hashtags are a great way for people to search by keyword on Twitter, but messages riddled with those pesky little buggers tend to look more like spam than actual messages. Unified social-media platforms like HootSuite make it easy to send a single message across Twitter, Facebook, LinkedIn, and other social networks, so it’s extra important to make sure that too many hashtags—which really are only pertinent for Twitter—don’t show up in your LinkedIn, Facebook, or other social-media feeds.

Fail: Getting Mad

For good or bad, the anonymity and casual nature of social media make people really comfortable expressing themselves. Your customers, clients, and colleagues are more likely to deliver brutal criticism of your service or product on social media than through other means of communication.

Be prepared. It might be tempting to respond in kind with a snarky or defensive comment. Resist the urge. Be professional and courteous, and go over and above to address any complaints. It stings to receive criticism in such a public way. But if you can embrace it as an opportunity to address the issue and show that you are willing to accept the critique and correct it, your followers and potential customers will take notice.

At the same time, use any kudos you get on social media as an opportunity to reward loyalty. If one of your customers takes the time to give your business a good review, take the time to thank him or even offer him a little something in return. Restaurants will often offer freebies to customers who rave about their services. Look for opportunities to do the same with your business.

Fail: Oversharing

Really, no one cares whether you’re having a good hair day, coming down with a cold, or coming off a breakup. Save that stuff for your personal accounts. Because of the nature of social media and the conversations that happen, it’s easy to develop a false sense of intimacy with your followers and connections. Just because your customers and colleagues “friend” you on Facebook, it doesn’t really mean you’re actually friends. It means you have a shared interest in the same topic. And that topic isn’t you.

People who are connected to your business on social networks only care about one thing: what the information they receive means to them. If your communications aren’t focused on delivering information your audience can use, they’ve officially crossed over into spam. Don’t bother your customers with expositions of your desire for a venti Starbucks pumpkin spice latte.

Managing staff members you rarely see

According to the U.S. Census Bureau’s 2009 American Community Survey, 5.9 million people work from home.¹

Michael Amigoni runs a company that was virtual from the day it was born more than 20 years ago, with employees distributed around the U.S. and Canada. ARO Inc., of which he is chief operating officer, employs 150 home-based workers to provide business processes, primarily for insurance carriers.

When only phone calls and keystrokes transmit staff members’ willingness to do their jobs well, managers need a different set of skills to supervise workers and make sure they’re providing value to the company. Intuitive judgments are not possible. The key to running such an organization is putting systems in place.

Amigoni, co-author of “Managing the Telecommuting Employee: Set Goals, Monitor Progress, and Maximize Profits and Productivity” (Adams Media, 2009), said in an interview that contrary to what many people might think, it’s relatively easy for an employer to determine that a virtual employee is not performing up to expectations and needs to be let go. The supervisor in a virtual company can and should be aware of an individual’s production level at all times, he said.

“It’s all numbers,” he said, unlike in a regular work environment where a supervisor can easily let unsatisfactory performance slide while giving the employee she enjoys talking baseball with or the young woman who’s always so dependably upbeat another chance.

Here are four ways to stay abreast of telecommuting employees’ performance:

1. Supervise by the numbers. “We look at the numbers [of calls completed, problems resolved, etc.] on a constant basis,” Amigoni said. Supervisors also rely on scorecards from trainers, who, when they are not training, are in the role of quality assurance. Finally, the company uses automated surveys that customers fill in. Only about 1 percent of customers, however, opt in to take the surveys.

2. Be there via technology. “You manage someone in a virtual environment about the same as you manage someone in a larger brick-and-mortar culture,” Amigoni said. He and other virtual employers use tech tools to do what their eyes and ears would do in a face-to-face relationship. For instance, Skype helps a supervisor give an employee quick advice when a problem arises. With Skype and instant messaging, supervisors are literally on their employees’ desktops, much closer than they would be in a typical large call center with workers in cubicles. So when a staffer is on a call with a customer and gets a question that he hasn’t encountered before, he can “tap into the supervisor really quick” and get an immediate answer, Amigoni said.

3. Use the web for training. Each new hire needs training in the company’s systems and procedures.
A webinar or a web-based training system that facilitates a virtual classroom can help a business owner provide lessons about his company’s mission, brand, and market, as well as provide step-by-step instructions—essentially, anything he wants to train his people to do or know.

A resource like Citrix Online’s GoToMeeting features a virtual whiteboard that the trainer annotates in real time while conducting the training on a conference call. Adobe Connect is another training resource used by business owners.
Amigoni cautions that trainers must use different techniques to deliver web-based lessons. They have to ask questions frequently to ensure that students are following the concepts—and give pop quizzes to gauge students’ progress.

4. Be aware of legal and security issues. The primary legal issue you must be aware of when you hire your first virtual worker is the difference between an employee and an independent contractor. You withhold taxes from the pay of employees—workers who follow your dictates as to which hours they must be clocked in. For them, you fill out W-2 forms. For independent contractors, you are responsible for filing Form 1099 for anyone to whom you pay $600 or more in a year.

Any business that relies on third-party technology to transmit sensitive information, even company training, has to be aware of the potential for hackers to gain access to files. You might think you’re too small to attract the attention of hackers, but a small business using a technology like Skype might be vulnerable, according to Karen Frenkel’s Fast Company article.²

Telecommuting has advantages for the environment, for business owners who prefer to avoid major investments in overhead, and for workers who want more flexibility in their days. Even the traditional, old, hidebound federal government is designing work-at-home procedures, the National Safety Council reported.³ Before long, physically commuting to work might be considered as 20th century as, say, dialing a telephone.

For more information, visit:
1. “Profile America: Facts for Features”
2. “Skype’s Huge, New Security Headaches”
3. “Safe on the Home Front: Protecting the Health and Safety of Teleworkers”

Where are business owners spending/not spending?

All over the country, business owners in every income bracket appear to be asking themselves the same question: How do I reduce my spending? For small-business owners in particular, finding the answer has never been more important. The financial struggles of recent years have many small-business owners scrambling to budget themselves more efficiently.

Restructuring business spending can bring about major changes in a company, such as salary reductions, inventory increases, and the elimination of benefits, depending on an analysis of where funds could be better spent.

Here’s a look at where business owners are spending—and where they’re not.

Where Small Businesses Are Likely to Spend

According to Reuters,¹ the adage of “spend money to make money” appears to be making a comeback. Investment spending is on the rise, with more business owners willing to funnel their funds into projects that might offer a return in the long term, such as development and factory construction.

On the small-business front, however, numbers are a little less ambitious, and funds for investments aren’t as high. Small-business owners are aiming a bit more conservatively, investing instead in the expansion of very particular avenues of advertising (such as email and internet promotions).

The Daily Herald² reported that small-business owners will also be spending on advanced technologies in the coming year, taking advantage of cloud computing. Cloud computing refers to the usage of infrastructure as a service. So instead of business owners having to make a significant capital investment in expensive server and networking equipment, they’ll be able to turn their computing needs into a much lower-dollar operating expense, thanks to cloud-service providers.

Where Small Businesses Are Likely to Reduce Spending

One area where business owners are cutting back hasn’t surprised economists much: payroll expansion and employment recruiting, according to The New York Times.³

Across the board, hesitation still exists when it comes to adding employees or offering pay-based promotions to existing employees. Many business owners are still holding back on spending significant amounts of money on staff needs.

For more information, visit:
1. “Businesses Beat Market Blues, Boost Spending”
2. “Small Businesses Are Spending on Technology”
3. “Who Says Companies Aren’t Spending?”

Get government funding

The job of a small-business owner is multifaceted and ever-evolving. To be successful, you need to know everything from supply-chain management and HR laws to accounting. That can be a daunting proposition.

The good news is that resources are available through both federal and local government channels that can help you get the additional training you need.

How do you tap the government for the extra cash you need for training? There are several options. Here’s where you can start looking for government funding for small-business training.

Start at the Federal Level

The U.S. Department of Labor oversees the Public Workforce System,¹ which was established under the Workforce Investment Act of 1998 to invest in economic development across the country. At the center of the Public Workforce System are the roughly 3,000 One Stop Career Centers that have been established across the country. These centers place all of the federal government’s career and business development resources in one place. This is a great place to start looking for funding for additional training.

The U.S. Department of Labor website provides a link to a database of One Stop Career Centers across the country as well as contact information.¹

State Economic Development Agencies

Although the funding for additional training comes from the federal government, the majority of the funds are filtered down to the local level so business leaders and local leaders can decide how best to spend the money to encourage economic development.

To make sure this happens, each state is broken down into individual local investment areas, which are controlled by local investment boards. These boards, which are composed largely of local business leaders, identify particular sectors for investment to boost economic development.

Research the people who sit on your local investment board and contact them for more information about their investment strategies and how your business might fit in. They can also detail the existing resources available in your area. Visit the Career One Stop site for a list of local boards and contact information.²

Community Colleges and Public Universities

Government grants are regularly passed along to local community colleges and public universities, which in turn administer the training programs. The great part about working with colleges or universities is that resources are available at the schools to help you navigate the opportunities and submit a proposal. So if you’ve never written a grant or submitted a proposal before, they can help. Just call your local college or university and ask for the department that handles grants. That department is there to assist you through the process.

Learn How to Write an Effective Grant Proposal

Making a case for why you should receive funding is your primary goal when writing a grant proposal. Your job is to convince the grant issuer that investment in your training will benefit the overall economic environment of your community, so keep that in mind when writing your grant. Don’t just talk about how additional training would improve your bottom line. Think bigger about your local business environment.

Your grant proposal must also include specific, measurable goals, a budget for the entire proposal, and a detailed explanation of the outcomes you hope to achieve. Most importantly, follow every detailed direction given about how to submit your proposal. A sloppy or incomplete proposal not only makes you and your business look unprofessional, but you’re also likely to be denied without full consideration.³

When submitting your grant proposal, you might also consider including any pertinent supplemental materials including financial statements, awards, or even letters on your behalf from community and business leaders.

For more information, visit:
1. “The Public Workforce System”
2. “State and Local Workforce Investment Board Contacts”
3. “Writing a Successful Grant Proposal”

Veteran small-business owners

More than a million servicemen and servicewomen will return from duty in the next five years, according to a report to President Obama by the Interagency Task Force on Veterans Small Business Development.

“At this critical time, we have both the responsibility and the economic imperative to help veterans as they build businesses and create jobs,” wrote Karen G. Mills and Marie C. Johns in a letter included in the report. “Thousands of troops are coming home and America’s small businesses are working harder than ever to get our economy going again.”

Mills and Johns are the administrator and deputy administrator, respectively, of the U.S. Small Business Administration.

The Task Force released the report this month. The report contained 18 recommendations that would help increase small-business ownership among veterans.

The Task Force’s recommendations fell within three categories: Increasing opportunities for growth, improving and expanding counseling and training services, and reducing barriers to growth and improving coordination and efficiencies.

In April 2010, Obama charged the U.S. Small Business Administration with leading the Task Force, which is composed of seven federal agencies and four representatives from service organizations for veterans.

To read the report, click here.

To read more about programs for veterans who are small-business owners or who want to become small-business owners, check out this blog article from February.

They also recommended that Congress keep in mind three main points for future job creation. All had to do with boosting the U.S. Small Business Administration’s 7(a) and 504 lending power.

We couldn’t agree more.

Of course, we do happen to be the No. 1 nonbank lender for SBA 7(a) loans for fiscal year 2011.

That’s not just horn-tooting. We really do love helping small-business owners.

To see for yourself, click here.

Hiring for a Home Office

There are numerous reasons why it’s profitable and pragmatic to run your small business from a home office, according to the U.S. Small Business Administration.¹ Fewer expenses, flexible hours, and proximity to family are among the many reasons it’s convenient to combine business with pleasure.

You may be one of the millions who have successfully launched a startup from home, and you may have seen your business grow. You may have decided it’s time to hire additional employees and transform your cozy team of one into a dynamic duo (or trio, or quartet …).

But, as candidates interview on your back porch after driving through your residential neighborhood, their eyes show uncertainty. For you, the combination of professional and domestic lives is a no-brainer. For others, it’s cause for hesitation.

So, how do you hire for a home-based office?

Make it clear that your office is in your home.

Provide full disclosure in your advertisement prior to the interview about the size of the office space in your home, any untraditional hours, and your house’s typical state of chaos.

You’ll be more likely to find a candidate with the necessary credentials and character for your home-based business if you inform prospects ahead of time.

Realize that some candidates may prefer a more formal office environment—with a mailroom not a mailbox, a coffee shop instead of a coffee pot, or meetings in a conference room instead of in your dining room.

Try not to take rejection personally. The right fit for your workplace is a person whom you trust in your home—and who enjoys being there.

Don’t hide the realities that come with your home office.

Does your 6-year-old get home from school at noon on Wednesdays? Does your dog have unfettered access to the office area of the house?

When advertising for a position in your home-based office, be direct about what candidates should expect. Don’t organize a formal interview if you typically spend half your workday in socks.

It’s especially important that job candidates understand the idiosyncrasies of your work setting. It’s possible that quirks will turn into perks, because your future employee may have children, pets, or peculiar obligations of her own.

Establish a separate office space.

Be wary of the “reverse interview.” While you’re examining the qualifications of a job candidate, she’s assessing the work environment of your home.
Legally, there are three requirements² for home-office tax deductions, according to The Entrepreneurs’ Help Page:

• The home office must be the primary place of business for your business,
• Your home must have a separately identifiable place for the business, and
• The space set aside for work must be regularly and exclusively used for business.

Potential employees may be more interested in the practical reasons for having a separate office space. For example, to perform her job effectively, your new employee will want adequate elbow room and equipment.

In addition, the office space in your home should be noticeably free of distractions and personal items such as children’s toys.

In addition to establishing a separate office space, don’t give your family members access to the office during business hours. Communicate to your children and spouse that the office space is off limits on weekdays. Future employees will be more impressed to see the office computer being used for work-related activities instead of watching iCarly videos.

Have fun.

Lighten up when interviewing candidates. Ask questions to reveal the working styles of your potential employees.
“The close quarters of a home office can be stifling, and there are no other employees around that your worker can vent to. So figure out how to keep the mood light and learn to laugh about life’s daily little annoyances,” Tom Candee wrote for Entrepreneur.³
Take advantage of the many fun, freeing reasons you started a home-based business in the first place. And, don’t forget to demonstrate these founding principles to potential future employees.

For more information, visit:

1. U.S. Small Business Administration: “Home Based Business”
2. The Entrepreneurs’ Help Page: “Home Business”
3. “Hiring Employees for Your Homebased Biz”

Steve Jobs

It’s no big surprise that Walter Isaacson’s biography of Steve Jobs is already one of the biggest sellers of the year, moving nearly 400,000 copies in its first week. The man was as important to his industry, to business, and to popular culture as you can get. And both his biography and his death have sparked many reactions.

Jay Yarow of Business Insider gave his take on both. He commented yesterday on one particular anecdote in the book, which depicts one meeting Jobs had with Microsoft founder Bill Gates:

Speaking of Bill Gates, Jobs said, “He was happier than I’ve ever seen him, and I kept thinking how healthy he looked.”

It might not seem all that sad to most people, but reading that, I can only imagine Jobs looking at Gates, who is eight months younger than him, thinking about how close he is to death and how far from death Gates is.

READ MORE

Have you read the Jobs biography? Let us know your thoughts in the comments section below.

Business Owners Say

During challenging economic times, small-business owners face a host of problems. Although the biggest issue might appear to be a lack of consumer demand for products or a lack of consumer confidence, business owners who responded to a recent Gallup poll¹ said their biggest issue was complying with government regulations.

Gallup conducted phone interviews with 604 small-business owners Oct. 3-6. Small-business owners were defined as those running operations that had sales revenue of no more than $20 million.

Although business owners cited government regulation as a major problem, some evidence suggests that the actual fear of over-regulation is overstated. Bloomberg News,³ for instance, reported on statistics from the Department of Labor that showed that for businesses with 50 or more workers, only 18 of the 7,247 mass layoffs in 2010 happened because of government regulations. In the first half of 2011, only 11 of the 3,114 mass layoffs that occurred had to do with government action.

For more information, visit:
1. “Government Regulations at Top of Small-Business Owners’ Problem List”
2. “Republicans, Democrats Disagree on Government Role in Creating Jobs”
3. “Obama Wrote 5 Percent Fewer Rules Than Bush While Costing Business”

To put it in simple terms, a developer platform is an environment in which software can be developed and deployed. Platform examples include:

• Microsoft Windows
• Microsoft Web Platform
• Google Android
• iOS
• Mac OS X
• LAMP
• Facebook

While the above list is not exactly comprehensive, it contains some of the big ones developers around the globe are building applications for right now. And if you’re reading this blog post, you’re almost certainly viewing it on an application that lives on one of these platforms.

Here’s the same list of platforms, but with examples of applications that were developed for it.

• Microsoft Windows (Outlook, Microsoft Word, or any Windows program)
• Microsoft Web Platform (web applications like our very own webcontrolcenter.com, or popular dynamic websites like stackoverflow.com)
• Google Android (any Android phone app)
• iOS (any iPhone app)
• Mac OS X (Safari, GarageBand, or any Mac app)
• LAMP (popular web applications like WordPress and Joomla!)
• Facebook (apps, website integration)

What’s Facebook doing on there?

Unless you’re a developer or perhaps a follower of the tech world, you may not have realized that Facebook is anything other than a social-media website. While it is still that, it’s actually much more, and it’s something all business owners should start paying attention to. You could even stop thinking of Facebook as a website altogether and start thinking of it as a platform, with facebook.com simply being the marquee application that lives on it.

A Brief History

Should you

Five years ago, as the boom days of the mid-2000s began to wind down, Facebook reached a modest achievement. The budding social-media website attracted more than 12 million users as of December 2006. In contrast, the undisputed champion of new media at the time, MySpace, acquired 100 million users earlier that year.

Boy, how things have changed. Fast forward to today and we all know how that story played out. MySpace is now effectively dead, and Facebook has more than 750 million active users worldwide.

So what happened?

Well, a lot did, but let’s focus on one of the factors specifically—the one glaring difference that did more to separate the two brands than any other: the Facebook platform.

In 2007, Facebook did something significant. The company opened up its platform to third-party software developers and supplied them with a set of tools that would allow anyone to build applications for the platform. In the years to follow, the platform expanded to support integration across the web and personal computing devices. MySpace, on the other hand, was late to the platform party, and lacked the vision, technology chops, and talent to compete with Facebook.

How the Facebook Platform Is Changing the Social Web and the Fundamental Way Business Owners Engage With Their Customers

To understate it, the Facebook footprint is immense. Been on the CNN website lately? Now you can see which of your Facebook friends shared any articles. Listen to music on Spotify? The only way to sign up for an account is with your Facebook credentials. More and more services are leveraging the Facebook platform every day. With a user base nearing a billion people, it’s no wonder why business owners want to leverage it.

Here’s what your business can do to leverage it, too:

Website Integration

Can people “like” any of your products, services, or pieces of content on your site? Can people log into your blog with their Facebook credentials and leave comments? Facebook provides the tools that enable developers to easily integrate these experiences into existing websites.

Apps

Facebook can be more than just catching up with your friends, and business owners are starting to realize this. Bigger brands like JetBlue Airways and Starbucks already have custom applications on Facebook so they can engage more deeply with their customers.

But you don’t need to be a Fortune 500 company to get your own app. Small-business owners can find free or low-cost apps to incorporate into their pages. If a you run a blog for your business, why not use a Facebook app to stream your RSS feed? If you sell merchandise, how about using an app that lets you manage a viral deal (like Groupon)?

Advertising

Privacy issues aside, Facebook has become the king of collecting personal data from its users. Every time you “like” something or update your profile, you’re giving Facebook extremely valuable data that it can use to better advertise to you. In a sense, the entire Facebook platform exists so that Facebook can become a better advertiser. The more Facebook knows about its users, the better it can target ads. Such precision marketing could bring you more bang for your buck, which is especially good if you don’t have a monster ad budget.

What’s next?

If you’re a small-business owner, step No. 1 is to think out of the box, and think about how you can use the Facebook platform to help your business grow. Step No. 2 is to call your developer and discuss the ways you can leverage the platform.

So, how are you using Facebook to help your business grow? Let us know in your comments below.

How Can Tumblr Help You?

The main point of Tumblr is to share content with your audience, and unlike some forms of social media, you have lots of freedom to do so. Instead of being limited to short blurbs or being expected to post long articles, you can share pictures, links, quotes, videos, and audio content, Jessica McLaughlin wrote for Sprout Social Insights.¹
Common examples of posts include photos of products, quick mentions of current sales, or intriguing questions for readers to answer.

Jim Lodico wrote for Social Media Examiner that “Tumblr is not for everyone.”

“The audience tends to be younger, so short, highly visual blog posts tend to do much better than text-intensive posts,”² he wrote.

Perhaps the most appealing aspect of Tumblr is that it’s free, so you don’t have much to lose by at least giving Tumblr a chance. It’s also known for being simple to use.

The bottom line is that if you want a Tumblr page to work well for your business, do your research first to ensure that the audience you want to reach is even aware of the site. If your typical customer is older or doesn’t have access to a computer, you may be better off using other marketing tools.

For more information, visit:

1. “How to Set up a Tumblr Blog for Business or Brands”
2. “Should You Be on Tumblr? Seven Business Case Examples”

health care

Online marketing regularly gets a lot of attention because it’s a great way for small-business owners to expand their audience. However, don’t assume that you can stop your print-marketing efforts just because the digital pathway is so appealing. Instead, use a mix of the two, because print marketing is still beneficial to small-business owners.

Print Marketing Hasn’t Lost Its Magic

BusinessNewsDaily¹ reported about an Infogroup survey that had 44 percent of respondents saying Facebook was either very important or somewhat important. Print marketing was not too far behind in the survey.

“Traditional print marketing and search advertising were rated as somewhat important by most of the businesses surveyed,” according to the article.

John Zhang, professor of marketing at the Wharton School of the University of Pennsylvania, told readers of Knowledge@Wharton that a slower economy could be a time to use a combination of print and digital marketing tactics. The print tools don’t have to be expensive and might include banners and direct mail, he said.³

Ways to Save on Printing Costs

If the cost of stamps has you reconsidering your direct-mail campaign, check out all your options before choosing a mailing service. Joyce M. Rosenberg wrote in an Associated Press article, “The good news is that the mailing and shipping business is very competitive. A small-business owner can take advantage of the rivalry.”⁴

Also, don’t forget that your print-marketing costs are usually tax-deductible, so keep your receipts for paper, ink, and postage, as well as receipts from professional printing services, for tax time.

For more information on using print marketing for your small business, visit:
1. “Small Businesses Predict Growth Despite Economy, Survey Says”
2. “New Survey Finds Small Businesses Are Down but Not out: Concerned about Business Climate; Optimistic About Their Own Growth”
3. “When the Going Gets Tough, the Tough Don’t Skimp on Their Ad Budgets”
4. “Higher Postage Doesn’t Have to Hurt Small Business”

On Brainstorming Well

Brainstorming is about providing structure to nebulous thoughts. Through group contribution and discussion, employees of a small business can create a meaty strategy for business growth from the simplest of ideas.

Where do you begin?

Which brainstorming techniques work best will depend on the members of your team. Where does your team feel most comfortable—a meeting room, outdoors, the neighborhood coffee shop?

Maybe humor breaks the ice. If so, begin the session with your most off-the-wall, fun ideas. Does the boss intimidate your team? In that case, he can organize a brainstorming meeting, but he should leave the room once the session starts.

How do you keep it going?

Although brainstorming tends to be a group process, its effectiveness depends greatly on a good facilitator.

The leader of a brainstorming session should arrive prepared with a set of guidelines, a specific topic area for discussion, and a time frame.

First, the facilitator should clearly outline rules for contributing to the brainstorming session.

Second, the discussion should remain on the topic at hand. A strong facilitator can steer a conversation toward pertinent ideas and away from irrelevant ones.

Third, the time frame should be adhered to. If meetings usually last one hour, take 45 minutes for brainstorming then use the final 15 minutes to wrap up the conversation with a summary.

Is group brainstorming the best way to innovate?

It has been shown that brainstorming as a technique for developing new ideas is not suited for everyone or every business. A 2006 study by Aaron Bolin and George Neuman, published in the Journal of Business and Psychology,² found that some people are predisposed to view group processes negatively.

So, if you run a software startup and you employ a lot of introverted computer technicians, it’s possible that the best ideas might not emerge from group collaboration.

Instead, try incentive-based innovation. Each month, circulate the details of an administrative or technical problem your business is facing. Ask your employees to email you ideas to solve the problem. This way, your employees can brainstorm ideas and resolutions for boosting company growth in the comfort of their own offices or homes. Then, reward the best idea with an extra day off or bonus, for example, to encourage participation.

Finally, consider this advice from the late Stanford University professor Bill Lazier:

“Don’t try to come up with the proper answers; target coming up with good questions.”³

For more information, visit:

1. “What’s the Secret to Better Brainstorming?”
2. “Personality, Process, and Performance in Interactive Brainstorming Groups”
3. “Innovation Quotes: Brainstorming”

Tax Benefits for Employees With Disabilities

Did you know that the Internal Revenue Service has tax benefits available for employers who have employees with disabilities? Here’s a summary:

Renovation Tax Credits

For qualifying small businesses (those with 30 or fewer full-time employees and $1 million or less in earnings in the previous tax year), the Disabled Access Credit may be claimed if business owners spend money on “eligible access expenditures.” Check out the Equal Employment Opportunity Commission¹ website for details.

Work Opportunity Credit

According to the IRS, employers may also find their businesses eligible for tax benefits for hiring disabled employees through the Work Opportunity Credit.² The Work Opportunity Credit allows a business owner who employs a worker who falls under a specific category (such as having a disability) to benefit from a tax credit of up to 40 percent on the worker’s qualified wages from the first year.

Deduction for Architectural Barrier Removal

One more tax benefit for employers of disabled workers can be found in the Architectural Barrier Removal Tax Deduction found in the U.S. tax code.³ This deduction is available for employers who can prove that they have actively removed barriers in their workplaces that once restricted full access for disabled employees.

Other Opportunities

The IRS also offers disability-related documents and services.⁴ Braille tax forms and large-print tax forms are all available though the IRS; talking tax forms are also available for the hearing impaired. While each of these forms is available in a slightly different way, voice-recognition software, refreshable Braille displays, and screen-reading software all combine to make these services accessible to disabled workers. Not every tax document is available in each of these formats; however, the most popularly used forms are all accessible, provided users have the proper software.

For more information, visit:
1. “Facts About Disability-Related Tax Provisions”
2. IRS: “Work Opportunity Credit”
3. “Expenditures to Remove Architectural and Transportation Barriers to the Handicapped and Elderly”
4. IRS: “Accessible IRS Tax Products”
5. IRS: “Tax Benefits for Businesses Who Have Employees With Disabilities”
6. Realeconomicimpact.org

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Run your business from home, or from a storefront?

In the past, starting a business automatically meant getting a big loan and finding office space. Now you have the option of running your business from home, using the internet instead of the traditional hulking desks or rows of cubicles in a spacious building—as long as you can operate your business effectively without a physical storefront. Sometimes it’s hard to tell whether you should keep your business at home or go for a brick-and-mortar office.

Consider these questions:

• How much money do you have for your startup? “Increasingly, a physical location, unless absolutely needed to carry out your day-to-day operations, is just more overhead your business can do without,” according to Small Business Trends.¹
• Are you ready to drop the cash needed for a brick-and-mortar location? In general, it’s cheaper to start your business at home, then either stick with that model or eventually get a storefront office.
• Do you have employees? If you have independent contractors who are OK with working from home, you should be fine keeping your business at home, too. However, full- and part-time employees may feel more comfortable going to an office, not your house. Unless your house is spacious enough to fit all your employees, you should likely rent an office.
• Do you have a product, or a service? Most business owners selling services can do so from their own homes because the final result of hours of hard work can be emailed to clients. However, if you have enough income and prefer face-to-face contact, you may choose to rent a storefront anyway.
  If you sell products, it’s more common for you to have a brick-and-mortar store. This is because your home is unlikely to have the space you need for inventory, and you probably don’t want customers constantly visiting your house to pick up items. If you do decide to keep your product-based business at home, be prepared to ship packages to customers.
• Do you want set hours? According to freelance writer Laura Spencer, “Most traditional businesses have traditional, or at least set, hours. Usually, they are posted on the door or on the office wall.”² If you want to pack up and go home at the end of the business day, then you may prefer a brick-and-mortar shop. It may be necessary to get some organizing, stocking, or accounting done after hours, but you won’t be dealing with customers when your company is closed for the day.
  By contrast, a home business allows you to work whenever you want. In fact, clients may expect you to constantly be available. Entrepreneur Derek Bayer told readers of his website that this may be a good thing for many business owners:
  “Although you still have to plan and set goals, you have the convenience of setting your schedule as you wish instead of running your hours around a scheduled workweek.”³

For more information, visit:
1. “Small Business News: Who Needs Bricks and Mortar”
2. “10 Differences Between Freelancing and Running a Brick-and-Mortar Business”
3. “A Comparison of a Brick-and-Mortar Business Versus Virtual Business“

Interview and get the best candidate

Because people are at the center of any successful business, hiring employees can be one of the biggest decisions small-business owners make. No matter what the position, you want to find the best candidate possible. But remember: You’re being interviewed, too. It’s just as important for you to make a good impression on a potential candidate as it is for her to make a good impression on you.

So here are some guidelines on how to give a great interview and hire the best candidate.

Do You Understand the Job’s Real Needs?

Start by writing a detailed job description. This will help you define exactly the kinds of skills and background you’re looking for in an employee. This is also a good time to make any adjustments to the scope or nature of the position, if you’re filling an existing job opening.

After you’ve written a job description, write the advertisement for the job. Give a brief overview of the company and the job, describe the ideal candidate for the position, and detail which communication method you prefer. The job title should match the job opening. This is also a good time to explain why your company is a great place to work, Mesia Quartano wrote for LatPro.com.¹

Do You Have a Game Plan?

Next, sit down and decide what the interview and screening process will be for the position. It’s the fairest to candidates to be consistent and ask the same questions in each interview. When you schedule an interview, be clear about the process and let the candidate know who will be sitting in on the interview. The blog HR Lowdown² suggested that if a candidate was was scheduled for a panel interview, for instance, she would want to know that so she could bring enough copies of her résumé.

Before you begin the process of hiring a new employee, understand how you want the interview process to work and make sure everyone on your team is on the same page.

Be Prepared

Thoroughly read the résumé and cover letter and get to know the background of the candidate prior to the interview. You might even do a quick Google search on the candidate for any obvious red flags or points of interest. Just as you would expect any decent candidate to have done his homework on you and your business, return the courtesy.

In addition to being polite, really get to know the candidate’s background so you can ask the most probing and revealing questions during the interview. The goal of the interview, broadly, should be to find out about the candidate’s background, why the candidate is interested in working for you, and what the candidate thinks he will bring to the position. Take notes during the interview so you can refer back to them later.

Consider Body Language

Body language will tell you more about a candidate than almost anything she says. And although you want to take notes about what the person is saying, you don’t want to overlook what she’s doing while she’s answering your questions.³

A clammy handshake, arms folded across the chest, slouchy posture, and weird foot tapping can all be clues that this is not a person you’d want to work with every day.

Illegal Interview Questions

Of course you want to ask the most probing questions you can in an interview to help you get the best sense of the candidate, but there are some questions you’re absolutely not allowed to ask. Generally speaking, these questions are those that are so personal in nature, they’re not really pertinent to the job. It’s a fine line between getting to know the real person and overstepping your bounds as a potential employer.

USA Today⁴ touched on the questions that are illegal to ask in an interview. If a candidate volunteers his age, religion, family status, or other such information, fine. Just quickly move on to another, appropriate, topic.

For more information, visit:
1. “The 5 Characteristics of Highly Successful Job Postings—Tips for Effective Online Recruiting”
2. “How to: Interview a Job Candidate”
3. “The Interview: Body Language Do’s and Don’ts”
4. “Illegal Interview Questions”

Never forget the power of the consumer

UPDATE: The New York Times reported that Bank of America no longer plans to implement its debit-card fee.

On a recent segment of “ABC World News With Diane Sawyer,”¹ Sawyer reported that many bank customers are closing their accounts due to the new debit-card fees. Since Bank of America announced its new $5 monthly charge for debit-card usage, these Americans have been withdrawing their money and closing their bank accounts.

Other people are taking further action. Credit Unions Online² reported about Kristen Christian, a small-business owner who started “Bank Transfer Day.” The Nov. 5 event encourages bank customers to move their money to credit unions.

Customers have already been doing so, according to another “ABC World News With Diane Sawyer” report.³

ABC News also reported⁴ that JPMorgan Chase, PNC Financial, Key Bank, and Citigroup will not implement fees as Bank of America has. Chase tested fees in parts of the country but won’t expand them, according to the article.

While Bank of America may never see a blip in its profits from this transfer movement, small-business owners should take heed and remember the power of the consumer. The customer may not always be right, but he can take his business elsewhere in an instant.

Most small-business owners do not have the luxury of treating the loss of customers as an afterthought. They need to realize the risks involved when increasing their prices and fees, which could alienate their customer base. Maintaining good customer service, providing quality products and services, and actually listening to what customers want before they go across the street to a rival are even more important than ever!

It’s crucial now to be aware of the buying power of your customers and what you can do to offer them the utmost in customer service. A small business should be easily accessible to its customers. While your brick-and-mortar store may only be open during certain hours, a website is available 24/7/365. You should maintain communication with your customers through all channels and always answer emails and return phone calls in a timely manner. You may even consider making yourself available on Twitter or adding a Facebook account for your business.

No matter what methods you utilize, treating every customer like he’s your only customer will go a long way toward keeping him happy and keeping him coming back!

For more information, visit:
1: “Bank Customers Close Accounts”
2: “Bank Transfer Day Is November 5th — Are You Going to Move Your Money?”
3. “Bye-Bye, Banks: 9 Tips Before You Switch to a Credit Union”
4. “Big Banks Say No to Debit Fees, Won’t Follow Bank of America’s Lead“

Dirty PlayPlaces

An Arizona woman who videotaped dirty conditions at PlayPlaces in East Valley McDonald’s restaurants has been banned from a franchisee’s locations, azfamily.com reported.¹

A spokesperson for McDonald’s USA said in a statement that the chain “takes feedback about our restaurants extremely seriously” and “we remain committed to working with an internal team on ensuring that our PlayPlaces are clean and safe for all customers,” according to the article.

But the mom’s actions became “disruptive,” thus the franchisee’s ban.

Really, McDonald’s?

We have some ideas about handling public relations in a crisis. Here’s what we recommended² in a recent post:

“Know when and how to say sorry. Even the most valid of excuses for any accident or mishap is generally not well-received by the public. If your company is at fault, just admit it and say you’re sorry. You might find it helpful to read Richard S. Levick’s article on ‘The Art of the Mea Culpa.’³

“Consult with your attorney about any liability issues and as soon as possible apologize, do everything you can to set things right, and move on. Whether you have to refund customers’ money, recall a product, or make a public statement, it’s far better to ask for forgiveness than give the impression that you either don’t care about the issue or don’t want to admit when you’re wrong. Be generous with your customers and the public, and they’ll be generous in return.”

How about you? Have you experienced a public-relations crisis? How did you handle it? Let us know in the comments below.
For more information, visit:

1. “Exposé Gets Valley Mom Banned From McDonald’s”
2. “Public Relations in a Crisis: What You Need to Know”
3. “The Art of the Mea Culpa“

America Invents Act

In September, President Obama signed the America Invents Act, the first major change to the U.S. Patent and Trademark Office in decades, The Huffington Post reported.¹ And as anyone who has dealt with the Patent and Trademark Office knows, the outdated system became woefully unprepared to deal with modern business, and more specifically, the explosion in the volume of patent applications related to software and technology. Dealing with the Patent and Trademark Office became a barrier to entry for entrepreneurs.

Exacerbating the problem of endless litigation was that patents were being granted for relatively common business practices, with language that was so vague it practically invited lawyers to hash it out in court.

Patent Trolls

Worse yet, patent litigation has flowered into a bona fide business model that crushes innovation. In July, This American Life and NPR’s Planet Money teamed up to present a story, “When Patents Attack,”² which introduced listeners to the term “patent troll.”

“Patent trolls” buy up patents and tie up companies in years of litigation as a means to crush businesses, or maybe just make a buck, or billion. CNNMoney reported that the new law doesn’t block “patent-troll lawsuits.”⁹

First to File

The Brookings Institution released a brief³ that touched on the major changes that the America Invents Act creates.
One major change is the switch to a “first to file” system. Prior to this legislation, patents in the U.S. were granted on a “first to invent” basis, which invited litigation to determine who truly was the first to invent. In the rest of the world, patents are issued to the first inventor to file.

Fees, Please

Another major part of the America Invents Act allows the Patent and Trademark Office to set and keep the fees it generates, CNN reported.⁴ In the past, any money the Patent and Trademark Office received was sent to Congress. Now, any excess fees will go into escrow and the Patent and Trademark Office will be able to petition Congress for those fees, according to the article.

Post-Grant Review Process

The America Invents Act also creates a post-grant review process, Washington Post reporter Brad Plumer wrote.⁵ This allows bad patents to be challenged and supporting evidence to be reviewed in the Patent and Trademark Office rather than in the courts.

Proponents and Critics

The law has its supporters and detractors.

Leo Gerard, United Steelworkers international president, said in a prepared statement⁶ that the bill’s signing “represents an important step” though there’s more to do.

“The U.S. manufacturing sector files the vast majority of the world’s patent applications, but our success is under attack by other nations as well as by global companies who want to profit at our expense,” Gerard said in the statement. “Enforceable patent protection is an important policy tool necessary to ensure manufacturing success.”

In contrast, James Besson of Boston University said the law “really doesn’t create jobs for anybody except maybe patent lawyers,” according to The Huffington Post.¹

Billionaire entrepreneur and Dallas Mavericks owner Mark Cuban offered on his blog⁷ suggestions for patent reform—such as doing away with software patents altogether.

For more information, visit:
1. “Patent Reform Bill Signed Into Law After Years of Debate”
2. “When Patents Attack”
3. “The Comprehensive Patent Reform of 2011: Navigating the Leahy-Smith America Invents Act”
4. “Obama Signs Patent Reform Bill”
5. “Everything You Need to Know About Patent Reform in One Post”
6. “USW: America Invents Act Advocates Good Jobs, Patent Reform”
7. Blog Maverick: “My Suggestion on Patent Law”
8. “New Patent Law and Its Impact on Small Businesses”
9. “Patent Trolls Cost Inventors Half a Trillion Dollars“

How to save on employee health insurance

Sure, you’d like to give all of your employees the best health insurance benefits money can buy, but skyrocketing costs and the economic downturn have made that just about impossible. Many employers have eliminated benefits altogether because the expense is just too much. But benefits are a key component to recruiting and retaining the best employees.

The good news is that rather than eliminating employee benefits, you can provide health-care coverage on a budget with a few adjustments. Healthy, happy employees make the difference between success and failure in business. So here are four easy and low-cost ways you can provide health-care benefits for your employees at a fraction of the cost of traditional insurance plans.

High-Deductible Plans and Health Savings Accounts

High-deductible plans shift more of the health-care costs to employees, but critics say they may not be beneficial for every employee, The New York Times reported.⁶ High-deductible plans allow employees to fund their health care through pretax dollars put into health savings accounts that can be rolled over to the next year. Employers can also contribute to health savings accounts to cover the cost of the deductible. The Wall Street Journal¹ reported that employers could even require employees to contribute.

When health savings accounts were established in 2003, the idea was that employers would make initial contributions and that the balances in the accounts would build. This hasn’t proven to be the case. Most employees are using all of their health savings account balances on care, so if you plan to make a contribution as an employer, keep that in mind.² But rather than doing away with health benefits altogether, you can share the costs with your employees by using HSA plans.

Flexible Spending Debit Cards

Flexible spending allows employees to pay for medical services not covered by insurance with pretax income deducted from their paychecks. Flexible spending money doesn’t typically roll over into the next year, so it requires a little planning for medical care on the part of the employee. You can use flexible spending money for everything from copays to contacts. And the benefit for the employer is a low cost—about $1 to $2 per card per month.

Insurance Cooperatives

Health-care cooperatives allow business owners to band together to buy health care at a volume discount. The idea isn’t new: The Farm Security Administration insured more than half a million people through a cooperative in the 1930s and 1940s, according to The New York Times.³

Cooperatives keep premiums low, keep the cost of prescription drugs in check, and help local, independent hospitals, pharmacies, and providers stay in business, the National Cooperative Business Association wrote.⁴

Many opponents of the new federal health-care laws see insurance cooperatives as a viable alternative to government involvement.

States are just now establishing rules about how insurance cooperatives can negotiate with providers, so rules can vary. Check the rules that govern insurance cooperatives in your state.

Employee Wellness

Healthy-living programs, online wellness resources, nurse hotlines, and incentives for healthy living all cut down on the cost of employee health care by helping to keep employees from getting sick in the first place, The Wall Street Journal reported.⁵ A catastrophic illness and hospital care can deplete, even bankrupt, an employee or small-business owner. More healthful lunchroom snacks, work-sponsored fitness activities, and nurse-supervised disease-management services are low-cost ways to avoid the crushing expenses associated with long-term illness.

Online wellness programs cost as little as $3 per employee and encourage weight loss, exercise, and other healthy lifestyle choices. Make a nurse hotline available for employees, and you may decrease unnecessary visits to the emergency room. The cost can be as low as $1 per employee per month.

Disease-management services are third-party vendors that use claims to identify those at risk for chronic illnesses like hypertension and diabetes. Nurses will reach out to those patients to make sure they are seeing doctors, taking their medication, and that their symptoms are being managed.

All of these initiatives can help protect the health of your employees and the financial health of your business.

For more information, visit:

1. “How to Save on Health Insurance”
2. “Small-Business Benefits of Health Savings Accounts”
3. “So What’s a Health Insurance Co-op, Anyway?”
4. “National Cooperative Business Association: Health Care”
5. “Providing Health Benefits on a Budget”
6. “High-Deductible Plans Grow, But Not Everyone Should Get on Board”

Embrace Your Gen X Employees

Looking at unemployment numbers in the United States, it’s tempting to believe that business owners have their pick of talent and have no trouble filling positions. The reality, however, is a different story. According to a September 2011 article in The Economist titled “Got Talent,”¹ there are many employers who are already struggling to find qualified workers and who expect things to get worse as baby boomers retire.

One option for employers is to embrace Gen X workers (about 46 million people born between 1965 and 1978, according to the Center for Work-Life Policy).⁴

Understanding Gen X Employees

Despite what you may have heard, Gen X-ers aren’t a bunch of slackers clinging to their childhood Cabbage Patch dolls, sitting in cafes, listening to “Smells Like Teen Spirit.” They’re actually quite motivated.

But Gen X workers, more so than previous generations, may be motivated not simply by paychecks, but also by a desire to find meaningful and engaging work. Members of this generation, unlike the ones before, don’t expect to stay at one company for the entirety of their careers. The Manufacturer³ indicates that many members of this generation are interested in entrepreneurship, or they’re leaving large corporations in favor of smaller companies, in part because of dissatisfaction with corporate politics and mismanagement.

This means that to keep the workers your business will need to grow and thrive, you may need to overhaul—or at least make changes to—your company’s culture and environment.

The Center for Work-Life Policy recently released a study titled, “The X Factor: Tapping Into the Strengths of the 33- to 46-Year-Old Generation.”⁴ The press release for the study revealed a number of facts about Gen X workers, such as:

• 75 percent of Gen X women and 72 percent of men are self-described as “ambitious”—and they work the hours to prove it.
• 60 percent of female Gen X workers who don’t have children and 36 percent of male workers who don’t have children said that they feel their employers take their personal commitments less seriously than the commitments of people with kids.

A New York Times discussion of Gen X workers⁵ also indicated that many of them may be less focused on teamwork and more interested in their individual roles at work and in their own professional advancement.

Attracting Gen X-ers

By understanding the causes of dissatisfaction for Gen X workers as well as the things that motivate them, you can take steps to make your company culture more Gen X-friendly:

• Recognize the needs of workers who don’t have children and give them the same consideration as workers with children in terms of flex-time opportunities or time off to attend to personal needs.
• Understand and address the top reasons for employee dissatisfaction. Hay Group⁶ identified some of the top reasons employees leave their jobs as insufficient advancement opportunities, unpleasant working conditions, lack of meaningful work, dissatisfaction with company direction, or a feeling of not being recognized for the work performed.
• Drive home the point that employees receive benefits for their hard work. This doesn’t necessarily have to cost you more money in terms of salary or additional benefits, either. According to an Unum press release on MarketWatch,⁷ simply educating employees about benefits through brochures or other channels can make a significant difference in employee satisfaction.
• Offer employees as much autonomy and decision-making authority as you are comfortable with. According to a study from the Economist Intelligence Unit,⁸ around 78 percent of workers surveyed indicated that having decision-making authority was a major factor in their desire to work for a company.

For more information, visit:
1. “Got Talent?”
2. Lockheed Martin: “About Us”
3. “HR: The Gen X Friendly Workplace”
4. “Generation X: Overlooked and Hugely Important, Finds New Study From the Center for Work-Life Policy”
5. “Working Relationships Across Generations”
6. “Engage Employees and Boost Performance”
7. “Employee Benefits Season Gives Employers Chance to Boost Employee Morale”
8. “Global Firms in 2020: The Next Decade of Change for Organizations and Workers”

Read More at the Credit Union Times.

Make your employees happier.

With all the pressures you face as a small-business owner, it’s really easy to overlook your No. 1 asset: your employees. Happy employees work harder, are healthier and more creative, and will bring you more success than any 25 spreadsheets you’ve been hunched over your desk studying. Happy employees will project a better image of your company, treat your customers better, and spread good word of mouth.

A September 2010 study of more than 900 companies found that those with the happiest employees actually performed better in the stock market and had 19 percent higher returns than in 2009, according to the Inc. article, “Why Happy Employees Are Good for Business.”¹

In the interest of clarification, happy employees aren’t necessarily walking around with barely stifled giggles all day long. Happiness at work could also be characterized as general satisfaction and engagement in the business.

But times are tough and money is scarce. Employees who have been under stress because you are understaffed, or those who are worried what the economy will mean for their jobs, need to know they are valued members of your team. And while it would be great to give everyone on your payroll a big, fat raise, that isn’t generally a realistic option. So here are some cheap, easy ways to make your employees happier and help everyone achieve success.

Recognition

It sounds deceptively simple. Lavish praise and recognition on employees when they deserve it, according to an article in The Christian Science Monitor.²

And don’t limit recognition just to business-related stuff. Did Lindsay in legal just have a baby? Did Jack in accounting just finish a marathon? Celebrate all of life’s accomplishments with your employees and they’ll feel more appreciated, and happier, at work.

Loyalty Counts

Loyalty is an incredibly powerful business commodity. If someone hits a rough patch in his personal life, it rarely comes at a convenient time for an employer. A sick parent, illness, divorce, and so many more of life’s road bumps can happen to anyone, and as a boss it might seem easier to let the employee go and find someone who will be more engaged at work.

Don’t do it.

First, if you stick by your employee when he needs you most, he’ll remember the kindness. Second, if you don’t stick by an employee when he’s at his lowest, your other employees will take note and know the same could happen to them. Bite the bullet and take the hit. Not only will your employees be happier, but you’ll feel better about it, too. Help the employee get his work covered and come up with an arrangement that works for everyone.

Make Work a Healthy Place to Be

So many office kitchens are jammed with chips, candy, cans of soda, and all sorts of other unhealthful choices. Plus, sitting at a desk all day—or standing on one’s feet—can leave even the fittest employee feeling drained. Healthy employees are happy employees. Healthy employees are sick less often and have more focus and energy.

And while it might not be feasible to subsidize everyone’s gym membership, there are cheap things you can do to encourage employee health. For instance, encourage employees to schedule regular medical and dental checkups. Suggest that they organize walking groups and other group-fitness activities. After hours, turn the conference room into a yoga studio, complete with instructional DVD. And offer healthy food and drink options in the kitchen rather than Pop-Tarts and potato chips.

Sense of Purpose

Nothing will crush morale quicker than a lack of communication with company leadership. In order to feel invested and fulfilled at work, an employee needs to know what his purpose is and how he fits into the larger structure. If he feel likes he’s directly responsible for your business success, he’ll care more about it. No one wants to feel like he’s wasting his time. Remind the people who work for you why they’re there and why you need them. Donna LaMar and Betsy Laney elaborated on that and other points in their article, “How to Keep Your Employees Happy and Productive in the Midst of a Recession.”⁴

For more information, visit:

1. “Why Happy Employees Are Good for Business”
2. “Seven Things Employees Want Most to Be Happy at Work”
3. “Happy Employees Make Thriving Companies”
4. “How to Keep Your Employees Happy and Productive in the Midst of a Recession”

What the best managers know for sure

Great management is a skill that isn’t easily defined, but you know a great manager when you see one. They’re leaders, they’re mentors, they’re coaches, and they inspire people to do their best.

At its essence, being a great manager is all about leadership. John Wright, in his article, “The Best Managers Are Leaders Too,”¹ cited a survey by marketing company TSN that showed that fewer than one-third of all managers are perceived as strong leaders.

So what’s the secret? Here are five things great managers know for sure.

1. It’s good to be human, according to Jan Gordon in her article, “Top 10 Qualities of an Excellent Manager.”² Management is not a science; it’s an art. And dealing with people and finding out what motivates them is never a clear-cut endeavor. Great managers must connect on a human level with their employees and develop a sense of trust. Managers who hide behind their authority, never admit mistakes, and don’t recognize how important it is to be recognized for one’s work aren’t able to lead effectively. Be comfortable being yourself, and people will respond.

2. Structure matters. It’s a delicate balance to maintain a steady, comfortable structure for employees that doesn’t stifle creativity and make people feel boxed in. Great managers are well-versed in the structure of the company and should be able to help employees navigate that structure. It’s part of the job.

For instance, if one of your employees has a good idea about how to streamline productivity, she should be able to count on you as her manager to get it into the right hands and move it through the proper channels. Part cheerleaders, part fixers, managers who understand leadership know it’s important to set the stage for their employees’ success.

3. Set the example. Probably the most important aspect of successful management and leadership is setting the example you want your employees to emulate. All the time. If you are lax about getting to work on time, you send a message to your employees that being on time isn’t that important. If you gossip about people at work, you can be sure you’ve set the tone for your employees to do the same.

And doing the right thing most of the time doesn’t count. Consistency is the only thing that counts. Your employees need to be able to count on you for steady leadership over the long haul. It requires discipline and commitment to set the example every day, but no one ever said leadership is easy.

4. Have clear expectations, Julie Fuimano wrote in her article, “The Elements of a Great Manager.”³ Your staff members should know exactly what is expected of them at all times. It’s a manager’s responsibility to make sure each and every member of the team understands his role and how success is defined. Otherwise, people will make assumptions about what they should be doing and will be likely to waste valuable time and resources on the wrong things. Provide employees with a detailed and comprehensive look at how their jobs affect the success of the group, and set clear standards of excellence. If you show your team members what you want and how to get there, they’ll bend over backward to do a great job for you.

5. Be open. Open office doors, open to new ideas, open posture—all are the hallmarks of a great manager. When you’re open and available, you set the tone for everyone else.

The people who work for you should know where they stand at all times. Give feedback openly, both positive and negative. It’s important for people to trust that you’re not holding back or being less than truthful.

Being open also means being available for all the daily stuff that pops up. Your employees need to know and trust that you will be there for them.

Being open with staff members requires continuous and thoughtful communication. When you have news to share from management meetings, let your team members in on the details. As a manager, it’s your responsibility to make sure your staff members have all the information they need to perform. And all of that starts with the manager.⁴

For more information, visit:

1. “The Best Managers Are Leaders Too”
2. “Top 10 Qualities of an Excellent Manager”
3. “The Elements of a Great Manager”
4. “Ten Ways to Be a Great Manager”

More effective than a "free kittens" sign

When you have a boxful of kittens to give away, what do you do? You nail a cardboard sign to a telephone pole.

But when you have products or services to sell, do you still rely on the el cheapo method of bringing customers in?

You need to join the cyber-revolution.

“Business today is local,” we wrote on our Forbes.com blog. “You cannot be in business today without an internet billboard or brochure (aka a functioning website).”

Having a physical location lets customers come to you, but having a website brings your business into people’s homes and smartphones.

Ecommerce sales are expected to grow through the next two years. But our April 2011 Market Sentiment Survey showed that business owners are not tapping into their ecommerce potential as they could.

Check out our Forbes.com blog to learn more about the importance of having a business website.

How about you? Do you have an ecommerce site? If you do, how is it working for you? If you don’t, why not? Let us know in the comments below.

Sloane based his comments on the latest SB Authority Index results.

LaRocco also asked Sloane about the obstacles to growth, what’s happening with lending, and the state of business hiring.

To read the full article, click here.

Save money on your energy bill

There are some business expenses that cannot be reduced without sacrificing both the quality of your work and the comfort of your employees, but electricity is not one of them. There are plenty of ways for any business owner to save money on energy bills, and they don’t have to involve turning off the air conditioner and lights to make employees sweat it out and work in the dark. Consider some painless changes that can add up to impressive savings.

Revisit Your Office Equipment

No matter your industry, you probably use lots of technology in the office. The U.S. Small Business Administration lists some common-sense tips¹ for saving energy when using office equipment. Here are two:

• Turn off computers when you’re not using them. That’s a no-brainer, you may say. But according to the administration’s website, “There is a common misconception that screen savers reduce energy use by monitors; they do not.”
• Unplug battery chargers after you’ve charged your batteries.

Such practices don’t require spending any money, so you have nothing to lose.

If you’re thinking of upgrading your technology soon, you can implement other methods of saving money, according to the U.S. Small Business Administration:

• Buy equipment marked with the ENERGY STAR² label.
• Buy a laptop instead of a desktop—laptops run on less energy.

Moderate Heating and Cooling

You probably don’t want to simply stop using the air conditioner or heater unless the weather is mild. Keeping employees uncomfortably hot or cold can actually reduce productivity and possibly even cause illness. Instead, save electricity the smart way with a few changes that only your business checking account will notice:

• Make sure you don’t have any appliances or furniture blocking your vents; otherwise, your HVAC system will have to work harder to cool or heat the air.
• Cover windows with sunscreens, or at least blinds or shades, to block the sunlight.

You can save money on your energy bill when you raise the temperature setting on your air conditioner. You could probably get away with increasing it by a degree or two without anyone being uncomfortably hot, but remember that sacrificing your employees’ comfort is not worth saving a few bucks. Be sure to listen to any feedback from them.

Upgrade Your Lights

You might be aware that traditional incandescent bulbs are becoming a thing of the past. This is because there are several alternatives that work just as well while saving energy and lasting longer. The following ideas can help you save some energy:

• Use compact fluorescent lamps (CFLs) when possible, because they use about 75 percent less electricity than the incandescent kind, according to SRP, an energy provider to the Phoenix area.³
• Consider using light-emitting diode (LED) bulbs instead of standard bulbs. LED bulbs not only use less energy, but also last about 25 times as long, The New York Times reported. ⁴
  Either way, you should save money on your energy bill every month when you switch, and you will end up replacing the bulbs less frequently. In many cases, both types of bulbs can last several years. Though energy-efficient bulbs used to be known for costing more up-front, they are now typically on par with traditional bulbs pricewise. They may even be cheaper when you buy them in bulk.

These tips should be easy for any business owner to implement, and most of them cost no extra money to try. Even if each idea saves you only 2 to 3 percent on your bill, the savings can add up. So give these ideas a shot.

For more information, visit:

1. “Tips for Energy Efficiency”
2. ENERGY STAR
3. “Install CFLs to Light Up Your Home”
4. “Do Energy-Saving LED Lamps Save Energy?”
5. “How to Use Less Energy to Run Your Computer”

Declutter your desk

Whether you have limited space on your desk or you just like a clean working surface, you can help keep your desk free of clutter with a little extra effort. Here are some suggestions for a more streamlined workspace.

Use Functional Décor

You want your desk to look nice, but not at the expense of productivity. When you’re trying to pick between filling your desk’s surface with attractive items that are technically useless and tools that you actually use everyday, ask yourself if you really have to choose. There are items available that are attractive and functional.

For example, you can buy a vase full of pens that look like flowers, as each writing utensil features a fake flower on top. Not only will you always remember where to find a pen, but you’ll also brighten up your desk.

Customize Your Office

Many people place photographs on their desks of family members, pets, or fond memories. Pictures can help you feel relaxed, and they remind you of the people and animals you love to be around. In addition, pictures reveal pieces of your personal life, which can make you easier to relate to and work with. However, not everyone has enough space on his desk to add lots of photos.

Consider getting a mouse pad with a picture of your dog on it to add a personal touch to your desk without taking up valuable space. You can also get a personalized calendar for your desk or wall.

Light Up Your Desk

Every desk needs a source of light nearby for those occasional late nights. Think beyond a simple desktop lamp and consider some smaller options that still give enough light.

If your desk comes with a hutch, you can attach an overhead light to it. If you prefer to stick with a desktop lamp, choose one with lots of storage space in the base to store pens, paper clips, staples, and other small necessities. Another option is a small LED lamp that can be clipped to your computer. According to Coolest Gadgets, such a lamp is great for lighting up your keyboard as you type.

For more information, visit:
1. “Ten Ways to Relaxify Your Workspace“

Flash mob robbery

One of the attributes of social-networking platforms is the ability to call together groups of people who would otherwise be strangers, and convince those strangers to do strange things together in public. Not everyone, however, has used the flash-mob strategy for pure fun.

Flash Mobs Versus Criminal Flash Mobs

A flash mob is the sudden, premeditated gathering of people in a public place to perform a synchronized act, usually to the surprise of those around them. According to a BBC news article, Bill Wasik is credited with starting the movement in 2003, when he sent emails and subsequently created a show.¹

At first, these demonstrations of strength in numbers were harmless. They involved random participants gathering, then chanting a phrase in unison, dancing a choreographed routine, or some such activity, then dispersing back into the crowd.

More recently, a number of flash mobs have involved some form of criminal activity, such as destruction of property or physical violence.

The International Business Times² reported about a mob of teenagers who robbed a Dallas convenience store in September 2011. The Toronto Sun³ reported about a flash robbery at a Quickie store in Ottawa, Ontario, and an article in The Washington Times mentioned a number of criminal acts perpetrated by flash mobs in Chicago, Milwaukee, and the District of Columbia.⁴

Loss of merchandise can happen quickly as a result of these mob events, and the number of people involved can make it difficult or impossible to identify those responsible. In Philadelphia in 2009, for example, more than 30 people who were alleged to have joined together through Twitter assaulted a man, and in 2010, a flash-mob robbery resulted in the theft of hundreds of dollars’ worth of merchandise from Sears within five minutes, according to The Huffington Post.⁵

Managing the Situation as a Retailer

In response to the increasing number of criminal flash mobs, the National Retail Federation⁶ has released a set of guidelines for business owners to follow if they were to receive such a visit. Here are the highlights:

• Whatever the situation, put customer and employee safety first.
• Monitor social-networking sites for mentions of the business.
• Take note of any large gatherings of people around the store.
• Gather evidence—pay attention to the characteristics of the robbers, and pay attention to what they are taking.
• Share information with local law-enforcement agencies.

For more information, visit:

1. “Flash Mobbing and Its Unstoppable Rise”
2. “Flash-Mob Robbery, Violence Hits Dallas”
3. “Store Hit by Flash Mob Robbed Again”
4. “Harsher Flash-Mob Penalties Weighed in Maryland”
5. “Flash Mobs, No Longer Just Dance Parties and Pillow Fights, Pose Growing Criminal Threat: Cops”
6. “National Retail Federation: Multiple Offender Crimes”

Like an animal courtship ritual.

You have merchandise to sell and you want to lure customers into your showroom. How do you draw them in, get them to stay awhile, and get them to buy your merchandise?

Consider how members of the animal kingdom lure potential mates, and incorporate those tactics into your next sales event.
Here are some tips.

Target Your Bugle Call

An elk’s bugle call can signify whether it’s courting, herding, or ready to fight.¹ Sometimes, it’s a bull telling the ladies he’s available. Other times, it’s a cow who doesn’t plan to share her dinner. Whatever the situation, elks have an idea of whom they’re bugling to.
Before you bugle, figure out who your target audience is. Inc. ran an article with advice on how to do just that.²

“Target marketing allows you to focus your marketing dollars and brand message on a specific market that is more likely to buy from you than other markets,” according to the article.

Next, figure out the best way to holler at your target audience. What will you say and how will you deliver it? Your bugle call could come through in mailers, TV commercials, internet promotions, radio spots, and other forms.

Understand that your bugle call may lure unintended recipients. But a customer who responds to your call probably understands that even if he doesn’t plan to buy anything, he’s agreeing to hear a sales pitch in exchange for whatever prize you’re offering. Plus, he (or someone he knows) may be in the market for your product in the future.

So make sure you …

Offer Great Prizes at Your Event

According to brisbaneinsects.com,³ the Australian hanging fly catches prey and offers it as a gift to its potential mate. The receiving fly judges the gift by its quality, and the better the gift, the greater the likelihood of the gift bearer’s success.

How about you? What “prey” are you dangling in front of potential customers to warm them up to your product?
Say you sent out a sales slick telling people they’ve already won prizes and all they have to do to claim them is to come to your store.
So a customer arrives with his winning sales slick, and you tell him, “I’m sorry; you didn’t win the Ferrari, but you do get this lovely pen.”

At this point, the customer will buck your pitch and buzz off into the night, peeved that he wasted $5 in gas and 20 minutes to visit your establishment.

But you may still be able to win him over if you …

Offer Free Food

The Owl Pages⁴ reports that a male owl uses food as one way to lure a female to his nest. If it works for an owl, it can work for you.
Your culinary spread could feature anything from doughnuts to pizza to foie gras with truffles. A heavy belly slows a customer’s exit from your establishment, and a mouthful of grub keeps him from objecting to your sales pitch.

Once you’ve gifted and fed your potential customers and you’re ready to close the deal …

Don’t Be a Snake

With the male-to-female ratio against them, some male red-sided garter snakes will release female-scented pheromones to confuse their competitors, according to NOVA.⁵

The hypothesis is that the female-scented snakes can then slither up to the real female, according to the article. But then there’s the likelihood that the male snakes will gang up on the female-smelling snakes when there’s no bona fide female snake around.

Don’t let that be you. When you finally give your pitch, be straightforward about your product. Selling a clothes washer? Don’t tell the customer that he can bake cookies in it. And don’t make him wait until he hauls it away to learn about any loopholes in the warranty.
Stay honest and don’t try to fool your customers. If you pretend your product is more than what it is, your customers may hiss.

For more information, visit:

1. “Bugle Call (of the Wild): Elk Mating Season Arrives Along With Prime Viewing”
2. “How to Define Your Target Market”
3. “Scorpion Flies, Hanging Flies—Order Mecoptera”
4. “Owl Breeding and Reproduction”
5. “Mating Trickery”

Workers' Compensation

In every state in the United States, workers’ compensation requirements are in place to ensure that employees are provided for if they suffer injuries at work. If you’re an employer, you must comply with the statutory requirements for workers’ compensation within your state. By doing so, you’ll avoid potential liability that could stem from one of your employees suffering a work-related injury, because workers’ compensation is an exclusive remedy system.

Buying Workers’ Compensation Insurance

Your first and most important obligation as an employer is to purchase workers’ compensation insurance for your employees. State laws vary on exactly when workers’ compensation must be purchased, but generally if you employ more than a few people (including executives or yourself), you need to purchase workers’ compensation for all employees.

There are some limited exceptions for farm or agriculture workers, but for the most part, all employees must be covered.

Classifying employees as independent contractors to avoid having to buy workers’ compensation can get you into legal trouble, so make sure you correctly classify all workers and buy insurance for each worker you employ.

Your Obligations for Work Injuries

As part of your obligation under the workers’ compensation legislation in most states, you generally must provide information to employees on their rights under the workers’ compensation system. This typically includes making employees aware of how to report workplace injuries and of how to make workers’ compensation claims.

When an employee is injured at work, the employee has the obligation of notifying you of the injury. Typically, this must be done within a reasonable amount of time, which can be as short as 30 days in some states. After you have been informed of the injury, you will need to file reports with your workers’ compensation insurer. Although this process varies slightly, the report is usually called “First Report of Injury” or something similar. The workers’ compensation board in your state and the Occupational Safety and Health Administration usually must be notified of work-related injuries as well.

Once your employee has begun the claims process, your workers’ compensation insurer will take over a lot of the obligations of processing and managing the claim. You may need to provide your employee with a list of doctors he can visit in order for treatment to be covered, and you’ll need to provide information to the workers’ compensation insurer about the work-related injury and other details that the insurer must know in order to process the claim.

An employee may be compensated under the workers’ compensation system for any injury that arose as a direct result of his work duties, regardless of whether you as an employer were negligent.

If the employee’s claim for workers’ compensation benefits is approved, the insurer will pay damages, including the costs of medical care and any disability payments. If the claim is denied, there is a chance the employee will appeal.

Workers’ compensation insurance is just one of the products The Small Business Authority offers. See the details on our “Commercial Insurance” page.

For more information, visit:
1. California Department of Industrial Relations, Division of Workers’ Compensation—Employer Information
2. Cornell University Law School, Legal Information Institute: “Workers’ Compensation: An Overview”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Interchange Fee Cap

The Federal Reserve’s debit-card interchange fee rule, born out of the Durbin Amendment of the Dodd-Frank Reform Act, took effect Oct. 1. Now, certain debit-card issuers can no longer charge merchants as much as they once did for customers’ debit-card transactions.

While many merchants may be dancing in the streets over the new savings, big banks are howling and finding ways to pass the pain onto customers through debit-card fees and slashed rewards programs.

The New York Times¹ reported that Bank of America, for example, plans to charge a $5 monthly fee to its debit-card customers as a way to recoup its share of the $6.6 billion expected loss in banks’ annual revenue.

The Retail Industry Leaders Association thinks that’s “great news” for other banks, according to a press release.²

But who will really benefit from the lower rates in the short-term? Will merchants pocket the savings right away? A certain percentage of merchants will see the benefits, but the majority of merchants will not. The swipe-fee cap is designed to protect merchants, but the real winners, at least until market competition catches up, will be the acquirers, according to an overview of the Durbin Amendment rules by The Strawhecker Group.³

Durbin Amendment 101

The Durbin Amendment⁴ springs from a section of the Dodd-Frank Act that added a provision to the Electronic Fund Transfer Act that addresses interchange fees—the fees that debit-card issuers (like banks) charge businesses every time customers swipe debit cards at points of sale.

The amendment allowed the Federal Reserve Board to create a rule regulating debit interchange fees—which it did. Under the rule, banks with assets totaling $10 billion or more are limited in how much they can charge merchants per debit-card transaction—now they can only demand about .05 percent plus a 21 cent base fee per transaction.⁵ That’s down from the approximate 1 percent plus 15 cents-per-transaction fee that merchants were used to. The fee cap does not apply to credit cards.

Where do acquirers fit in?

The Fed defined “acquirer” as “a person that contracts directly or indirectly with a merchant to provide settlement for the merchant’s electronic debit transactions over a payment card network.”⁵ The Small Business Authority, for example, is an “acquirer” under this definition.

The interchange rates are what acquirers have to pay the banks. The business owners pay the acquirers the interchange rates, and the acquirers pass that money on to the banks. The new rule takes the old debit-card interchange rate of approximately 1 percent plus about 15 cents per swipe and cuts it to .05 percent plus about 21 cents—that’s the rate per swipe the acquirers have to pay to the banks.

Now, that doesn’t mean that acquirers have to pass the savings on to merchants. The acquirers now pay less to the banks, but they can still charge the original rates to the merchants.

In time, market competition will drive down the rates that acquirers charge merchants. But that could be a good three to five years, according to The Strawhecker Group’s overview.³

So, business owner, will you see short-term savings from the swipe-fee cap? It depends on who your acquirer is.

Don’t wait three to five years for the market to catch up. Make sure you’re working with a reputable acquirer who is committed to getting you a competitive rate on your processing costs right away.

For more information, visit:
1. “Banks to Make Customers Pay Fee for Using Debit Cards”
2. “RILA Comments on Bank of America Debit Fee Announcement”
3. “Overview: Durbin Amendment Rules”
4. “Final Text of Durbin Amendment as Contained in the Dodd-Frank Act”
5. Federal Register: “Debit Card Interchange Fees and Routing”
6. “The Dick Durbin Bank Fees”
7. “Bank of America to Charge $5/Month for Debit Cards“

Reduce small-business risk.

Reducing small-business risk is important—especially in today’s tough economy—but small-business owners don’t always have the funding necessary for comprehensive internal audits and insurance.

So, whether you own a startup or a more seasoned business, try these six cost-free tips to lower your level of risk without lowering your bottom line.

1. Keep detailed documentation. Adequate documentation of transactions guarantees that you’ll be aware of how much you owe vendors and how much customers owe you. Contracts and detailed paperwork provide evidence for all agreements, and they help protect your small business against possible future problems.

Proper documentation is the foundation for all audits. So, due diligence will come in handy in the event that your small business comes under the Internal Revenue Service’s investigative eye.

2. Know the regulations. These days, with so much free access to information on the internet, it doesn’t take much to become an expert. So, educate yourself on the regulations for your industry.

What are the unique tax requirements for your state or county? For your corporation, partnership, sole proprietorship, or franchise? Are you required to buy special licenses or permits?

You can reduce your small-business risk by simply knowing what risks you face in the first place. Sign up for Google alerts, for example, to maintain your working knowledge of developments in your field.

3. Minimize cash handling. A study by the Association of Certified Fraud Examiners¹ showed that businesses lose, on average, 6 percent of revenue to employee fraud and abuse, Joseph T. Wells reported. Retailers dealing with excessive amounts of cash are particularly vulnerable.

To mitigate this risk, minimize the number of employees who handle cash and the number of cash transactions your business conducts.

Count receipts for cash handling after every business dealing, and make certain your employees know they’re accountable for any discrepancies.

4. Diversify your business through alternative income streams. Entrepreneurs are known for their ability to develop seemingly limitless ideas. So harness two or three of your good ideas. Don’t rely on one single business venture to keep your company afloat.

“It is absolutely a good strategy to have as many sources of revenue that aren’t linked together. The only time that it ceases to be a good strategy is if they get outside of their core competencies,” Frank Manfredi, of Manfredi & Associates, said to Joanne Costin in the article, “Business Diversification: Spreading Risk, Increasing Your Odds.”

Try to tap into an alternative income stream. That way, if one section is in a slump, your entire career won’t be. But be careful to only diversify your operations to the extent you feel comfortable financially.

5. Act fast. When accidents or errors happen, act fast to seek medical attention, handle legal documentation, or do bureaucratic reporting. Delays are often the biggest source of cost increases.

6. Lower costs by negotiating. “One way to minimize risk is to negotiate everything,” Robert Pagliarini wrote for CBS MoneyWatch.com.² “Don’t accept anything as is. Negotiate discounts, concessions, bonuses, terms, etc. It will feel awkward at first, but keep practicing.”

The best part? It doesn’t cost you anything to try.

W.A. Swan concludes his Bright Hub³ article with the following piece of advice: “If you maintain an active role in your business, you will constantly be aware of potential problems. This will allow you to take a proactive approach and avoid unforeseen risks or potential liabilities.”

In the end, simple, meticulous attention to detail to the varied aspects of your business is your best defense.
For more information, visit:
1. “Collaring Crime at Work”
2. “Five Rules to Reduce Risk When Starting a Business in the Other 8 Hours”
3. “Eight Steps Every Entrepreneur Can Take to Reduce Risks”

Anti-Harassment Policy

Smart employers know that having a written anti-harassment policy in place is important to help protect against discrimination lawsuits. According to two U.S. Supreme Court cases,¹ Burlington Industries Inc. v. Ellerth and Faragher v. City of Boca Raton, employers may be liable in the event that other employees or supervisors create an environment of harassment or discrimination.

The Supreme Court made clear in these landmark cases that the only way employers can avoid liability for a harassing environment is to raise an affirmative defense against the claims. Having an anti-harassment policy is one requirement of the affirmative defense.

Defending Your Business Against Hostile Work Environment Claims

In hostile work environment employment-discrimination cases, the burden is first on the employee to prove that the work environment was made unpleasant because of his race, gender, sex, religion, or other protected status. Once an employee is able to prove he suffered adverse consequences at his workplace in violation of civil-rights laws, the employer faces vicarious liability for the harassing actions of his employees.

When hostile work environment discrimination exists, the employer must raise an affirmative defense to avoid this liability, which means the burden of proof shifts to the employer. The employer must prove two things in order to avoid discrimination, and he must prove them by a preponderance of the evidence, which means that more likely than not, what the employer is alleging is true.

According to guidelines from the U.S. Equal Employment Opportunity Commission,¹ an employer must prove two things:

1. “The employer exercised reasonable care to prevent and correct promptly any harassing behavior,” and
2. The harassed employee “unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.”

The EEOC guidelines show that having an anti-discrimination policy in place is a vital part of being able to prove that you took reasonable care to prevent harassment.

Drafting an Anti-Harassment Policy

When drafting an anti-harassment policy, make sure that you make it sufficient to be considered “reasonable care” to prevent harassing behavior. Typically, this means that the policy must:

1. Provide a definition of unacceptable behavior and take a clear stance that such behavior will be addressed promptly.
2. Provide reporting opportunities for employees who are being harassed. There should be multiple avenues through which an employee can report harassment, including a contact outside of his immediate supervisor or department, so an employee would never be in a position of only being able to report harassment to the harasser, if his harasser were a supervisor.

Simply having a policy is not enough to establish the first prong of the affirmative defense. A company’s history of enforcing the policy, its willingness to protect employees and keep claims confidential, and its promptness in investigating any complaints will also be considered when determining whether an employer acted reasonably.

Will a Policy Be Enough?

Unfortunately for an employer, he may have a policy in place and do everything right and it still may not be enough. The problem stems from the second prong of the affirmative defense: The employer must prove that the employee unreasonably failed to take advantage of protections that were in place. Meeting this burden of proof can be difficult and requires that the employer be able to show that he truly was able and willing to help the employee and that the employee simply failed to act.

The more protections afforded by the anti-discrimination or anti-harassment policy and the easier it is for an employee to make a report of harassment, the better the chance an employer has of being able to prove that the employee’s behavior in not using the system was unreasonable. On the other hand, any past history of not protecting and promptly responding to complaining employees can be deadly to an employer’s defense.

For more information, visit:

1. “Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

What's on Facebook?

According to the American Management Association’s “2007 Electronic Monitoring and Surveillance Survey,”¹ as many as 12 percent of employers reported monitoring blogs to see what information was being disseminated about their companies. Another 10 percent indicated that they monitor social networks for the same purpose. With the meteoric rise of Facebook, Twitter, and other social networks, and with the increasing importance of social networks in the corporate and consumer worlds, it’s likely today that those numbers are even higher.

Although it’s smart business practice to keep a handle on your company’s online reputation, it’s not always advisable to take action based on what you find on employees’ Facebook pages. In fact, according to a recent opinion by an administrative law judge for the National Labor Relations Board, “Facebook firings” may be illegal business practices.

Facebook Firing Cases and the National Labor Relations Act

Since the mid-2000s when Facebook first came onto the scene, employees have been fired for their Facebook conduct. Fox News² in 2008 reported about one of the first casualties: an 18-year-old New England Patriots cheerleader who was removed from the squad after posting pictures of herself on Facebook. The pictures featured the cheerleader holding a Sharpie next to a passed-out man covered in offensive drawings.

The more notable Facebook firing cases, however, came later when fired employees began to make allegations that their employers’ actions were in violation of the National Labor Relations Act.

The suggestion that Facebook firings might involve the NLRA was important because the Constitution does not protect against employers interfering with free speech. Although governments are precluded by the First Amendment from blocking people’s right to exercise their freedom of speech, private employers are not precluded by the First Amendment from firing employees for negative comments made on Facebook. Since the majority of the United States operates under employment-at-will rules, employers were thus free to fire employees for bad Facebook feedback. When the workers suggested that the NLRA applied, they were trying to find protection for that speech in the NLRA.

Protected Activities Under the National Labor Relations Act

The NLRA was passed in 1935 to protect the rights of workers to unionize, strike, and take part in other concerted activity. The NLRA states:

“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”³

The NLRA prohibited private-sector employers from interfering with these rights regardless of whether employees were in unions.

The National Labor Relations Board was created in order to enforce the NLRA and protect employee rights.

The question that arose, then, and that the NLRB began to try to answer, was whether employees’ actions in Facebook firing cases could be considered “other concerted activities.”

The Cases

A series of cases occurred since 2008 that helped shape the rules for when the NLRA could provide worker protection—and when it couldn’t.

• The Chicago Tribune reported about a car salesman⁴ who complained on Facebook that the dealership he worked for served cheap food at a promotional event. The NLRB enforcement office determined the salesman’s words were protected “concerted activity” because they dealt with the “terms and conditions” of his employment.
  However, the salesman also posted photographs to Facebook of a car accident, according to an NLRB press release.⁵ That car, which was driven into a pond, was from a nearby dealership that happened to be owned by the group that also owned the car salesman’s employer. The NLRB ruled that the salesman’s posting of the car-accident photographs was not protected speech, and therefore the salesman was not wrongfully terminated for those Facebook posts.
• A Chicago bartender seeking relief after complaining to his sister and calling customers “rednecks” wasn’t protected, because his complaint was made to his sister, not to fellow employees, according to memo from the NLRB. ⁷
• Another NLRB memo noted that a worker at a nonprofit residential facility⁸ wasn’t protected when she posted inappropriate comments about residents, because she wasn’t making the comments to any co-workers.
• One of the most significant cases, however, was NLRB v. American Medical Response.⁹ Labor Relations Today wrote about the settlement of the case, in which the NLRB filed a complaint against AMR, alleging that the company’s overly broad internet policies violated the NLRA. The company had a policy prohibiting employees from making “disparaging, discriminatory, or defamatory comments when discussing the company” on the internet. The NLRB felt this policy could potentially interfere with an employee’s right to engage in protected activities. The case settled before the NLRB could make a final ruling, but this rule shed significant light on the position the NLRB would take.
• In September 2011, the NLRB finally conducted a full hearing on a Facebook firing in a case called Hispanics United of Buffalo Inc. In this case, an employee posted a complaint about a co-worker on Facebook, according to the LexisNexis Litigation Blog.¹⁰ Four other employees commented with their own complaints. The complaints contained profane language, and the company fired the complaining employees for their comments. The NLRB determined the firing was a violation of the NLRA because the employees were exercising their rights to discuss matters related to working conditions.
 In Hispanics United, the NLRB made clear that employees don’t need to be trying to change their working conditions, nor do they have to actually share their concerns with their employer. Simply talking about working conditions to fellow employees is enough for the speech to be protected.

The Comments

The Hispanics United decision doesn’t come as a surprise, considering the NLRB Acting General Counsel’s Aug. 18, 2011, memorandum.¹¹ The memo made clear that an employee’s Facebook posts would first be judged using a longstanding Meyers Industries test.¹² This test looks at whether the employee’s Facebook post is a single complaint by that sole employee about management or working conditions, or whether the posted complaint is made with or on behalf of other employees.
If the speech is found to affect other employees, as indicated by the comments or approvals of other employees, then the NLRB will determine whether the speech is protected. For this, the Atlantic Steel¹³ test is used. Under this test, posts are protected as long as they do not publicly disgrace employers. Public disgrace is interpreted narrowly, and even calling employers names may not be seen as public disgrace. Speech, therefore, whether found on Facebook or elsewhere, is broadly protected.

The Takeaway

These cases make clear that the NLRB is taking a protective stance and offering employees leeway when it comes to protections for their Facebook posts. It’s wise for employers to be cautious about terminating employees for making disparaging work-related comments on Facebook, especially if those comments are made to other employees.
Employers should also be cautious about their Facebook policies after the American Medical Response case, because that and the NLRB opinions seem to suggest that blanket policies governing internet postings infringe on concerted protected activity.

For more information, visit:
1. American Management Association: “2007 Electronic Monitoring and Surveillance Survey”
2. “Patriots Cheerleader Fired After Facebook Swastika Photo”
3. National Labor Relations Act
4. “NLRB Juggling More Facebook, Social Media Cases”
5. “Administrative Law Judge Rules Chicago Car Dealership Had Overly Broad Employee Policy, But Discharged Employee’s Activity Not Protected”

6. NLRB Office of the General Counsel—Advice Memorandum (Wal-Mart)
7. NLRB Office of the General Counsel—Advice Memorandum (JT’s Porch Saloon & Eatery Ltd.)
8. NLRB Office of the General Counsel—Advice Memorandum (Martin House)
9. “NLRB, Parties Settle ‘Facebook Firing’ Case”
10. “Hispanics United: NLRB Gives First Written Decision Involving Social Media”
11. “Acting General Counsel Releases Report on Social Media Cases”
12. “Unfair Labor Practice Law and Procedure”
13. “Decisions and Orders of the National Labor Relations Board, Vol. 351”
The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Shopping-cart abandonment

In the ecommerce world, when a customer puts an item (or several) into an online shopping cart but clicks away before concluding the transaction, it’s called shopping cart abandonment.

That’s an apt name because to the e-retailer, it feels like being jilted. When a personal disaster of that type hit—way back when you felt love like a firecracker and its loss like a stab—you were unable to see why your squeeze left you because you were blinded by emotion. In the ecommerce world, your blindness is an actual fact. E-retailers don’t have a chance to see what their customers are reacting to. They’re just guessing unless they follow up and ask.

The customer who abandoned the cart might be a parent shopping from home, perhaps called away to deal with a crying child. That shopper might have every intention of returning and finishing the checkout later. Or the customer might be shopping by phone and could simply have lost the connection. Will she return another day? Maybe. Maybe not.

There are myriad reasons for abandonment that have nothing to do with your site, your prices, or your shopping cart. Just make sure that you provide no reasons on your website to frustrate or scare away customers.

1. Does your cart remember the shopper? The parent of the crying child might not get back to your website for a day. When he finally comes back and logs in, he’ll be pleased to find a well-designed shopping cart that still has the goods in it, ready to pick up the transaction where the shopper left off. This is called a persistent cart. It’s like the dog greeting him at the door. Gives the shopper a little zing of positivity: “Yeah, they want me as a customer.”

If you don’t have a persistent cart, you’re requiring your customer to retread the same ground he covered yesterday. He’ll have to find the items again, and he’ll have to input the shipping and billing information again. The hassle quotient is huge. How, then, are you going to keep that customer?

2. Are there photos to help the shopper? As an e-retailer, you know you need to have the right traffic and the right product at the right price. There’s trial and error involved in tweaking those elements. But when it comes to decreasing instances of shopping cart abandonment, you’re on firmer ground. You’ve got one goal: Make shopping easy for the user.

Maybe your customer clicked away and took a look at a similar item on a competitive site, then got interrupted and now, several days later when she returns to your site, she can’t remember exactly what’s in the shopping cart. The description might list a SKU number or it might have a generic description (“men’s crewneck sweater”), but that’s not going to be as helpful as a thumbnail image of the product.

Related to that tip is this one: Provide links back to the product so if the customer has questions about the size or material or whatever, it’s an easy click to go check.

3. At what point are your customers deserting you? If most shopping cart abandonment occurs during the final step when the customer learns what the shipping costs will be, you need to tinker with your shipping costs. There are several things you can do, including offering free shipping if the customer reaches a minimum expenditure threshold with the order.

With a sophisticated cart, you can pull up all the abandoned orders and see, for instance, if multiple people put a specific product in their carts before abandoning them. Maybe the shipping is being calculated incorrectly, or maybe an inexpensive product becomes a silly item to buy when shipping costs more than the product’s sale price. The point is, you have more information to get to the bottom of the mystery.

Customers may abandon their purchases on your ecommerce site because your shipping costs are higher than expected. If a customer sees your shipping costs only after he has filled in all the forms to place an order, he might just abandon not only the cart, but also any idea of ever returning to your site. Ideally, your cart should show shipping costs early in the ordering process.

4. Is everything working properly? If you’ve got lots of tire-kickers and few buyers, or if you’re seeing a dropoff in the number of orders your site is processing, something might be wrong in the checkout process. Most e-retailers are not software experts, and that’s OK. Your software partner can handle the technical part.

The Small Business Authority, powered by Newtek, offers web services for ecommerce, including the Newtek Cart. When you use the Newtek Cart, you can actually see all the abandoned orders and reach out to those shoppers as individuals to learn why they didn’t complete their transactions.

Make sure your customers don’t lose confidence in your site, which can happen if something doesn’t work properly. Sometimes the customer gets an error message and it’s unclear to the customer which box he didn’t check or what information he neglected to input. Do your own tests and get your site developer to provide pop-up directions such as, “Select shirt size.”

Maybe your customers are getting pop-up messages that the SSL certificate has expired, suggesting that your site is not secure and their payment details will not be guaranteed private. That is likely to send them fleeing from your site, many ecommerce experts warn. So if you’re losing customers who have already begun the checkout process, you’ll want to look at that SSL certificate.

We found this video of Jobs delivering a commencement speech to Stanford University in 2005, titled, “How to Live Before You Die.”

“Sometimes life’s going to hit you in the head with a brick,” Jobs said in the speech. “Don’t lose faith.”

Legality and morality of monitoring employees at work

Employee monitoring, a hot topic these days, can serve many purposes. It can help protect employers from hostile-work-environment claims stemming from the circulation of inappropriate emails. It can help to ensure that employees are not sending incriminating emails about illegal activity that can come back to be used against the employer in civil or criminal litigation. It can help employers ensure that employees are being productive and behaving appropriately when talking to clients, and it can help prevent employee theft and fraud.

Employee monitoring can also break down employer-employee relations and earn the company negative press, such as the 2007 example¹ of Wal-Mart Stores Inc. coming under fire. Wal-Mart took heat in the press after its extensive monitoring program was revealed. The outing of Wal-Mart’s surveillance began with the termination of a company employee for recording a conversation with a reporter from The New York Times. Once he had been fired, the employee reported details to the public about the behind-the-scenes surveillance that was going on, according to CNNMoney.

If you’re contemplating whether to monitor employees, consider your choice from legal and moral standpoints. This will help you protect your company’s interests while decreasing harm to your reputation or your relationship with your employees.

The Legality of Employee Monitoring

Few state or federal laws exist that prohibit general employee monitoring. There’s also no guarantee to privacy in the U.S. Constitution (though some have read one into the due-process clause). Although there are some federal laws that do exist, including the Electronic Communications Privacy Act of 1986,² the scope of these laws is limited and there are many exceptions.

Under the Electronic Communications Privacy Act of 1986, surveillance—including video surveillance—is permitted as long as it doesn’t capture “communication.” This means that an employer can monitor the actions of employees in order to avoid fraud or theft by using a video camera as long as the camera doesn’t record conversations.

The Electronic Communications Privacy Act also provides some exceptions that allow employers to monitor various types of communication, including telephone calls and emails. In order for an employer to be permitted to monitor communication, the employer must fall within one of three criteria.

1. The employer must be the provider. If the employer is providing employee computers or employee email service, the employer can generally monitor what employees do with those computers or the types of emails they send.

2. There is a legitimate business purpose for the monitoring. An example of a legitimate business purpose is when an employer can prove that he needs to monitor emails to protect himself from liability or to make sure employees are productive.

3. The employee consents to the monitoring. The employee may give express consent, for example, when he’s told his emails will be monitored or his work will be videotaped, and he agrees to the surveillance. The consent may also be implied, which occurs when an employee knows he’s being monitored and he doesn’t object to the monitoring.

Monitoring of employees and customers may take place in any area where there is no reasonable expectation of privacy. For instance, an employer can monitor the public area of a store but not dressing rooms, and he can monitor a reception area but not bathrooms.

It’s also important to note that additional state or federal laws may restrict an employer’s ability to monitor employees in certain limited instances.

Morality of Monitoring Employees

Although there are generally no legal problems with monitoring employees, many employers have a moral problem with monitoring—especially when it goes too far, such as in the example of the Wal-Mart case. To avoid potential questions about the morality of monitoring employees, it’s good to clarify your company’s position on surveillance and to obtain employee consent. When employees know both that monitoring will occur and why the monitoring will occur, such as to protect the company from legal trouble, they will generally accept reasonable monitoring without complaint.

For more information, visit:

1. “Ex Wal-Mart Worker Admits to Spy Campaign”
2. Electronic Communications Privacy Act of 1986
3. “Should You Monitor Your Employees’ Emails?”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

INSERT CAPTION HERE.

As a small-business owner, it’s hard not to take business failure personally. But don’t let plummeting financials do the same to your mindset. Contrary to how you may feel right now, it’s not too late.

There’s a reason the acronym for America’s Best Companies¹ is ABC. The key to recovery rests in the alphabet’s first three letters.

Attitude

Success is not just about being in the black; it’s about thinking in the bright. Big ideas and a positive attitude are vital to help your business survive impending closure.
Neil Anderson, president of The Courage Group, told Jessica Dickler of CNNMoney² that business owners need to commit to a “failure is not an option” way of thinking.

Obtaining money for your small business may begin with a sound business plan, but it ends with investors’ confidence in your energy and motivation for owning and operating a company.

Embracing risk is one of the hard realities that come with owning a small business. Seven out of 10 new firms survive the first two years, but only half of them survive for five years and just one-third survive for 10 years or more, according to the U.S. Small Business Administration.³

Confidence and the willingness to risk it all are crucial to successful crisis management.

The same do-or-die drive that motivated your startup is what will ensure that your company staves off a total shutdown.

Back to the Basics

It’s easy to get bogged down in the complexities of daily operations, accounting, and the prospect (horror!) of bankruptcy. It helps to go back to the basics. A small business in trouble must decrease its expenses and increase its revenues.

Start with revising or rewriting your business plan. A business plan helps an entrepreneur map out her company’s strengths, weaknesses, plans for the future, and timetable for getting there.

Also, a revised business plan will give you an idea of your company’s financial standing, and it will help you refocus on the basics of running a small firm.

For example, identify your fixed costs. Can you let any of them go? Next, identify the variable costs. For service-oriented or labor-intensive products, make a plan to improve the efficiency of your company’s operations and employees.

Overwhelmed? Take a break and head to the library. Spend an hour rereading your old business textbooks. Sometimes the best solution is the simplest one. It may even be right in front of you.

Ultimately, in addition to the right attitude, a strong balance sheet is the solution to your struggling finances.

Competition

Everybody’s heard the adage, “It isn’t personal; it’s business.” This isn’t your failure; this is a failure of your company to compete. So, take an objective eye to study the competition.

Research should begin with data collection.

“Join professional groups, attend trade shows, and subscribe to industry publications. Such organizations often publish surveys and trend reports that will give you insights on what others in your field are doing,” Karen E. Klein wrote in the Los Angeles Times article, “Small-Business Advice: How to Study Competitors.”⁴

Klein also wrote that national lobbying organizations give members a heads-up about pending or passing legislation that would affect business owners.

After you obtain the data, analyze the numbers. In which areas are your competitors spending money? Where are their highest margins? Never underestimate the power of basic, unbiased information.

Feedback from your customers may also help identify deficiencies in your small business. In the end, satisfying your customers is a fundamental part of business ownership.

If you’ve done your best to satisfy customers and implement the ABCs but you haven’t seen a positive change in company performance, consider seeking third-party professional assistance. Even the most accomplished entrepreneurs can’t do everything perfectly, all the time.

For more information, visit:
1. “America’s Best Companies”
2. “Six Ways to Keep Your Business Alive”
3. “U.S. Small Business Administration: Frequently Asked Questions”
4. “Small-Business Advice: How to Study Competitors”

Should you monitor your employees?

According to the “2007 Electronic Monitoring and Surveillance Survey,”¹ as many as 66 percent of employers monitor their employees’ use of the internet at work, while another 43 percent of employers monitor employees’ emails. Although some advocates for employee rights argue that monitoring infringes on employee privacy, the law says otherwise in most cases.

Employers are permitted under the Electronic Communications Privacy Act of 1986² to monitor employees’ emails if the employers provide the network on which the emails are sent or if the employers have a legitimate business purpose for the monitoring. Because most employers provide their employees with company email and because there are many legitimate business purposes for email monitoring, including ensuring productivity and making sure that no prohibited behaviors are occurring, monitoring of employees’ emails is generally accepted as a legal choice for employers to make.

The question for many employers, though, is not whether monitoring is legal but is instead whether they should monitor employees. Some employers may be concerned about monitoring interfering with employee-employer relations. Others may be hesitant to incur the cost of monitoring.

Why monitor employee emails?

One of the most important reasons why employers may consider monitoring employees’ emails is that a failure to monitor could, in some situations, lead to legal liability. Employers are held responsible for something called “hostile work environment” discrimination under the U.S. Supreme Court’s interpretation of Title VII and other civil rights legislation.³ This means that if employees are making the workplace uncomfortable or unpleasant on the basis of a worker’s race, gender, religion, or protected status, employers can be held responsible.

Outside of potential liability for discrimination cases, employers may also monitor employees’ emails to identify:

• Time theft in the form of employees spending large amounts of time sending personal emails at work
• Employees revealing company or trade secrets in emails in violation of non-compete agreements
• Employees making inappropriate comments to clients or customers or soliciting customers away from the firm in the event that the employees are planning to leave the company
• Employees discussing prohibited or illegal behavior via email that employers could be held responsible for. With e-discovery becoming a major force in litigation and with the difficulty of ever permanently getting rid of electronically sent information, this reason for monitoring is equally as important as avoiding liability for harassment.

How about you? Have you considered monitoring your employees’ emails, or do you already monitor them? How has it worked for you? Let us know in the comments below.

For more information, visit:

1. American Management Association: “2007 Electronic Monitoring and Surveillance Survey”
2. Electronic Communications Privacy Act of 1986
3. “Enforcement Guidance on Vicarious Employer Liability for Unlawful Harassment by Supervisors”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Do you need a non-compete agreement?

When bringing new employees aboard, it’s important that a business owner take steps to protect her business from any potential damage that the employees could do. There are a number of ways she can do this, such as publishing a handbook of prohibited and permitted behavior. Another way that a business owner can protect herself from potential risk is by making employees sign non-compete agreements.

When You Need a Non-Compete Agreement

There are several specific industries in which non-compete agreements are common. Examples of situations in which non-compete agreements are important include:

• Fields where employees have regular contact with clients. There are many different industries that depend on employees’ interactions with customers and clients. Examples include design, sales, tutoring, and professional services (e.g., legal and medical). In these fields, it’s common for individual employees to develop relationships with their businesses’ clients. 
When an employee leaves the company, then, there’s a danger that he could take clients with him. Having a non-compete agreement that restricts an employee from soliciting former clients or from opening a competing business within a certain geographic location can help a business owner minimize the risk of losing a valuable part of her customer base.
• Fields where there’s a large amount of research and development. Research and development of new technology is common across multiple industries, but often the IT and medical/science fields are the ones in which the most significant research is being done. When an employer has an employee developing a new drug or a new technology, there is generally an agreement in place that any work done is “work for hire.” This means that when the employee makes a breakthrough or comes up with an innovative design, the employer retains the rights to that design, including the right to get a patent. 
Research and development is expensive, and a business owner probably doesn’t want an employee working for years on a project simply to take his knowledge and experience to a competitor. In such industries, therefore, non-compete agreements are essential.

Do You Need a Non-Compete?

You’re more likely to consider using a non-compete agreement if you run a technology, science, or service-providing business.

Ask these questions to determine whether you need a non-compete agreement:

• Do your employees have ongoing customer contact or access to client lists that would allow them to take business from you if they left your company?
• Do your employees have access to trade secrets or to privileged information that could be of use to your competitors or that could damage your company if the information went public?

If the answer to either of these questions is “yes,” then you might consider drafting an enforceable non-compete agreement to protect your business interests.

For more information, visit:
1. “Sign This Agreement Not to Compete or You’re Fired! Non-Compete Agreements and the Public Policy Exception to Employment at Will”

2. “Non-Compete Agreement”

3. “The Power of the Non-Compete Clause”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Cyber Security

For those of you who do your banking online (or anything else important on the web), you probably know the importance of cyber security—if you don’t, you could be looking at a big mess.

Online threats could lead to any of the following:

• Identity theft
• Illegal transactions with your credit card or checking account
• Theft of your customers’ payment methods
• Theft of private customer information
• Theft of your business’s private or proprietary information
• And more …

The simple truth is, the internet can be a dangerous place without the right precautions in place.

So, what can you do about it?

If you’re an IT pro or web professional, we’re probably not going to tell you anything that you don’t already know. But to help the business owners out there who are general web users (like most folks), here’s our guide to Good Cyber Security Habits.

Part I: Wrong Ideas That Sound Right

1. Antivirus fully protects your computer—WRONG.
Although having quality antivirus and firewall software installed on your servers and workstations can help protect your systems, it’s not always 100 percent effective. Don’t let this or any other single security measure give you a false sense of security. You still need to combine this tactic with other good security habits, which we’ll get into below.

2. Hackers are only interested in computers with important data on them—WRONG.
Just because you or your business may have a computer that you only “surf the net” with, and you don’t think you do anything important on it, it doesn’t mean it’s OK if you’re not on top of keeping it secure. The fact is, if that computer is using your network, you could potentially be giving a hacker better access to your other systems.

3. Your computer automatically updates all your software—WRONG.
Your Windows or Mac computer might prompt you to perform regular software updates, but these updates don’t include all the applications you have installed on your computer. One of the biggest entryways for hackers is through security vulnerabilities found in outdated software. To prevent this, check each of your applications and programs regularly, and be sure your versions are all up to date.

PART II: Password Protection and Surfing Safety

If you were to only take away one thing from this article, it should be to take your passwords seriously.

Here are some rules that can help keep you secure:

1. Don’t use the same password on more than one account. Your online banking password SHOULD NOT be the same as your email password.

2. Make each password as difficult as possible. The drawback here, of course, is the inconvenience to you, the user. But simple passwords, such as words you could find in the dictionary, are too easy to hack. You need a minimum of eight characters, with at least one letter, one number, and one special character if allowed (i.e., #, $, %, ^, &).

3. Change your passwords ALL THE TIME. Send yourself a reminder once a month to change all of your passwords. Again, it’s inconvenient, but it’s a solid habit to have to keep your systems secure.

4. Be careful what you click on. You’ve probably caught on that these days, you can’t blindly click on any link in your email—especially if it’s from someone you don’t know. The same thinking should apply anywhere you visit on the web, especially if you’re visiting a website that you’re not familiar with. This also includes search-engine searches, particularly image searches, which have been targets for all types of malware.

PART III: Antivirus and Firewalls

1. Part I addressed the importance of updating your program software—your antivirus software needs to be updated regularly as well. New cyber threats surface every hour, which means your antivirus software is almost always a little out of date. So keep it as little out of date as possible.

2. The point of a firewall is to protect your computer, server, and/or network from unnecessary and sometimes dangerous online traffic. For example, if you have a server that is only being used as a website server, you would use a firewall to lock down all entry points that aren’t used by normal web traffic (you wouldn’t keep the email port open if your server wasn’t being used by email). Note that firewalls come in two flavors—hardware and software. Both offer their own advantages and disadvantages.

PART IV: Website and Online App Care

1. You need to think of a website or online application as you do any other computer program. Your website or application (and the server it sits on) needs to be regularly updated, just like your software does. If your website is powered by a popular open-source application, it almost certainly has regular software updates, which include security patches.

2. Make sure transactions and important data are encrypted. This should go without saying, but all transactions on your website should be protected by an SSL certificate (which also gives web users peace of mind). Additionally, you shouldn’t be storing any unnecessary information on your servers or business computers—if you do, all of that information should be encrypted.

3. Hire an “ethical hacker” to find vulnerabilities in your website. Listen to The Small Business Authority Hour this Saturday as our CEO, Barry Sloane, discusses cyber security with Bo Dietl, an expert on this very subject. The show begins at 4 p.m. EDT, Oct. 1 on 77WABC.

PART V: Employees

1. If you staff more than a couple of people at your business, you’ll need to control which employees have access to which systems and applications. You wouldn’t blindly give every employee a key to your safe, would you? If you limit access and an employee resigns, you’ll know exactly which systems he had access to. Then you can change those passwords.

2. Lock your computer when you’re away from it. If you have access on your computer to critical banking information, you’re leaving that access open to anyone who might be near your computer when you step away. All personal computers come with a locking feature that requires a password to log back in.

3. Train all your employees on good cyber security habits. An employee who likes to click links inside every email he receives could undermine all the good habits you follow each day.

How about you? What are the cyber security habits you implement? Let us know in the comments below.

Why micromanaging is bad

Few people want to be known as a micromanagers and for good reason. Micromanagement is a leadership and supervisory style in which the manager or supervisor closely observes and controls some or all aspects of employees’ jobs. A micromanager might allow employees little or no autonomy in decision-making and will typically want to have insight and input into even small decisions. Micromanagers may also supervise beyond a point that is reasonable. Needless to say, this can have a detrimental effect on employee morale. Studies also indicate that micromanagement can actually make employees less productive and can make it harder for managers to do their own jobs well.

Why avoid micromanagement?

There are several reasons to avoid micromanagement as a leadership style. One of the main reasons is that it can actually backfire and cause employees to perform worse. According to an August 2011 study in the Journal of Experimental Psychology,¹ being continuously watched can both distract workers and can hinder working memory. This makes it more difficult for those under surveillance to learn new skills or to pay attention to the tasks they should be doing. Other theories also indicate that micromanaging can cause workers to divert attention from relevant tasks into worrying about the supervision. Workers can become so paralyzed by the pressure of a watchful eye that they are unable to complete the tasks at hand.

Aside from reducing productivity, micromanagement can also be detrimental to employee motivation and can cause talented employees to go elsewhere. A USA Today article titled “Micromanaging Makes You Frantic and Less Productive”² confirms the dangers of losing good employees due to micromanagement by quoting John Beeson, author of “The Unwritten Rules: The Six Skills You Need to Get Promoted to the Executive Level.” According to Beeson, micromanagement can prevent good workers from developing to their full potential and can eventually drive them to leave a company.

Losing good employees or coping with unmotivated ones is never a good thing, but it may become a big problem, especially because, as The Economist³ indicates, the competition for talented workers is likely to increase as talent gaps widen due to retiring baby boomers. Today, the numbers show that many employees may already be finding reasons for dissatisfaction at work. Only 63 percent of respondents to a Harris Interactive survey said they believed their employers valued their contributions at work, according to a press release posted on MarketWatch.³ Dissatisfaction with micromanagement may be one reason so many of the remaining employees are unhappy. USA Today’s micromanagement article² indicates that micromanagement may be increasing due to economic uncertainty and increased pressure on managers during tough economic times.

While new studies shed light on the dangers of micromanagement, classic theories of motivation can also suggest clear problems with overly controlling bosses. For instance, Maslow’s hierarchy of needs indicates that employees, once their other needs are met, seek self-actualization and, to achieve it and be fully motivated and happy in their jobs, they must be able to feel they are reaching their full potential and making a valuable contribution. Herzberg’s two-factor theory also posits that although basic hygiene factors like a safe work environment can help decrease dissatisfaction, they don’t create satisfaction per se. Satisfaction at work requires a different set of variables, including a feeling that work is valued or meaningful. Micromanaging is at odds with these classic motivational theories.

Are you a micromanager?

Although it’s easy to understand why micromanaging is a bad thing, it may be harder to identify and stop the behavior. USA Today’s micromanagement article² gives several tips for recognizing whether you’re a micromanager, such as whether the amount of follow-up time you spend inhibits your ability to do your own job well.

The article also recommends ways you can overcome your micromanaging tendencies, such as delegating more effectively.

By consciously recognizing that micromanagement is a bad thing and reminding yourself to take a step back, you can create a more pleasant work environment. You can also make it easier for employees to do their jobs well, and you can concentrate on doing your own job to the best of your ability.

For more information, visit:

1. “Choking Under Pressure: Multiple Routes to Skill Failure.” DeCaro, Marci S.; Thomas, Robin D.; Albert, Neil B.; Beilock, Sian L. Journal of Experimental Psychology: General, Vol. 140(3), Aug. 2011, 390-406.
2. “Micromanaging Makes You Frantic and Less Productive”
3. “Employee Benefits Season Gives Employers Chance to Boost Employee Morale”
4. “Got Talent? Competing to Hire the Best and Motivate the Rest”

How to use Google AdWords

If you were to google “trip to San Diego,” you would undoubtedly receive a whole host of results, ranging from trip-advisor websites to food reviews to hotel and flight aggregators. You’ve probably noticed that the first few results of any Google search are highlighted advertisements, taking precedence over other search results. You may also be familiar with the column of results on the right-hand side that displays the same types of results but catches your eye in a different way. What gives these search results this kind of priority? Google AdWords.¹

When you google “trip to San Diego,” you see a “Tour to San Diego” ad from San Diego Tours, a “Trip to San Diego” ad from Cheapflights, and a “San Diego Attractions” ad from the Julian Chamber of Commerce, to name a few. These businesses created Google Ads via AdWords.

AdWords’ biggest focus is relevance—how can your ad reach the highest level of quality by using keywords that describe your business? AdWords can develop a payment plan that fits your budget, craft an ad campaign with easy-to-follow steps, and ensure that you target the correct audiences.

Steps to Successfully Using Google AdWords

Google’s “AdWords Beginner’s Guide”² takes you through a step-by-step process to create your ad campaign.
Provence Wellness Center³ in New York City chose to embrace AdWords and is more than satisfied with the results thus far. Beginning in 2009, the center relied mainly on traditional Google search results to spread the word about its services. About a month ago, manager Mireille MacCarthy upgraded to AdWords.

“Google Ads has been very good for us,” MacCarthy said in a phone interview. She talked about the benefits of keyword targeting: “That’s where our clients come from. They just go on Google and type ‘detoxifying holistic center’ [or] ‘facials and massages’ or ‘honey wax hair removal.’” She said that thanks to AdWords, clients can stumble on her ad faster and locate her business immediately.

A note to local business owners—like Provence Wellness Center, you may arrange to have your ad appear to people searching within a certain-mile radius of your business location.

“It makes sense, because most people [rely on] search engines. We ask every client how he or she found us, and they say, ‘Google.’ And with Google, you have a choice of seeing a review,” MacCarthy said. Google allows you to create a setting that allows others to post reviews about your business.

Finally, MacCarthy talked about the ad reports she receives from AdWords.

“Every month, they send me how many people clicked, how many people viewed our website … we pay per click … you tell [Google] your budget and then you know how many clicks you can receive per month for your ad.”

To begin your journey, visit the AdWords Small Business Center⁴ for beginner’s guides, instructions, tips on creating your most effective ad, and more.

Once you’ve gotten settled in the AdWords world, refer to the AdWords Checklist⁵ to check whether you’re 100 percent on track to seeing results.

For more information, visit:
1. “Advertise Your Business on Google”
2. “AdWords Beginner’s Guide”
3. Provence Wellness Center
4. AdWords Small Business Center
5. “AdWords Checklist”
6. “Where Will My Ads Appear?”

Rules to Live by in a Home Office

Working from home can be tricky, and hiring for a home office can be even more so. But now that you’ve successfully established a routine, it’s time to assess your home-office environment’s capacity for fostering productivity.

Obey these five “rules to live by” in your home office to ensure that your small business continues to thrive.

Rule No. 1: Make your space work-friendly.

If your small business includes multiple employees, it’s important that they feel comfortable working from your home. This includes separate bathroom facilities, if possible. Your employees don’t want to know which brand of anti-lice shampoo your 6-year old uses.

If you’re self-employed, this rule is the most important, yet hardest to follow. Although proximity to family is one of the many advantages of having a home office, a small business won’t succeed amid constant distractions such as crying babies, questioning spouses, or barking dogs.

“The distractions of home provide the biggest downside [to working at home]. There are dishes to be done, dinner to prepare, homework to help with—and children who just want to play,” Jenni Hunt, a stay-at-home mom who sells items on eBay and advises others, said to CNN.¹

So, inform the members of your household which hours of the day you can’t be disturbed. But, still take advantage of the convenience with which you can walk to an adjacent room for family lunch.

Rule No. 2: Keep it clean.

Now that you’ve finally removed all the children’s games and dog toys from your home-office space and you’ve created boundaries, increase your home-hygiene standards from “tidy” to “clean.”

Keep your home office spotless by hiring a professional cleaning service. Not only will this create a welcoming, productive environment for your employees, but it will also lower your small-business insurance risk.

Take a page from Bloomberg Businessweek’s² book of advice, and write off cleaning services as a tax-deductible office expense. When it comes to cleanliness, there is no downside.

Rule No. 3: Be flexible.

Large corporations usually have more cash on hand to offer their employees. As a small-business owner, you may find it difficult to compete in terms of benefits or bonuses.

At the same time, small-business owners can offer incentives that large companies often can’t, like flexibility. Instead of rigid vacation days or sick time, offer flexible schedules to your employees. That way, work gets done, but so do errands. Your employees will appreciate the flexibility more than, say, gift cards.

Rule No. 4: Include creature comforts.

“It’s well-established that the home office is no cube in the corporate hive. Its feel, funk, and accoutrements are distinctively not Facilities Management-Approved,” according to ChiefHomeOfficer.com.³

So whether it’s the indirect lighting, cushy furniture, or the ability to listen to Pandora internet radio through headphones, a sense of comfort is beneficial to a creative environment.

Rule No. 5: Throw out all the rules.

The benefits of working from home are immeasurable. Don’t get bogged down with formalities and rules—they represent the exact opposite of your original intentions in operating a business from home.

Don’t try to simulate the environment of a sterile, 60-story corporate building. Instead, embrace a nontraditional atmosphere to put your employees at ease. Conduct business meetings outside during sunny days, dare to own a hot plate, or go barefoot, for example.

The best part about a home office? The rules to live by are your own.

For more information, visit:
1. “Internet Moms: Getting the Best of Both Worlds”
2. “Twenty-Five Unsung Tax Deductions”
3. “Home Office Creature Comforts”

Google+

Your mom taught you that it was important to share. Now it seems like Google has taken her advice. Google+, which recently opened its e-doors to the public,¹ is the newest player in the growing social-media world and, just like with mom, it’s all about the sharing.

As a part of the Google suite of free productivity applications (including email, document creation and sharing, and everyone’s eponymous search engine of choice), Google+ seeks to cut into Facebook’s dominant market share. Much like Facebook in its early days, the Google+ project has launched the personal side of the application first, with the more business-appropriate features being rolled out slowly. Google told Ad Age² that the business profiles and related applications will be launched later in 2011, but small-business owners don’t have to wait to start incorporating Google+ into their social-media marketing strategies.

Ford Motor Co. is one of the organizations that Google has chosen to test-drive Google+ for business.³

Watching Ford play in the Google+ environment can help business owners develop strategies for their companies’ Google+ profile rollouts, learning along the way to avoid the pitfalls that Ford and other test companies may encounter. If you ask nicely, Google does appear to be allowing some companies to test the Google+ business app environment, so that could be an option.

So, how could you, the small-business owner, benefit from using Google+? Well, the Circles feature allows you to set up well-differentiated groups with whom to interact and share your content. You can stay in contact with your suppliers and vendors in one circle, your existing customers in another circle, and your potential clients in yet another circle. Your messages can be distinctly different for each group, and Google+ allows that to happen simply and organically. In this area, Google+ has it all over the current Facebook business page functionality. Google+ also has “Hangouts” (think modern video chat rooms on steroids) that will ultimately allow you to conduct training sessions, give webinars, or even have meetings with attendees from all over the world, all very simply and for free.⁴

Another benefit that Google+ provides is that it can boost your website’s SEO rankings. Because Google holds all the cards in determining which sites come up best in its search engine, the fact that Google is giving a lot of weight to Google+ presence may ultimately be the best thing of all about this new social-media tool. (Although, we think the Google+ version of Angry Birds is pretty cool, too.)⁵

Before you share anything on Google+, be sure to check out the “Google Terms of Service,”⁶ because any content posted on Google+ is subject to aggregation by Google. The very act of posting your content, including photographs and artwork, gives Google the license to transmit or distribute it at will. It’s always a good idea to protect your company’s intellectual property online, but Google+ makes that even more important now.

Want to learn more about Google+ right now? Check out PCWorld’s “Ten Tips for Google+ Beginners.”⁷

For more information, visit:
1. “Google+ Social Network Opened to Public”
2. “Google+ Brand Pages Coming in 2 Weeks”
3. “Welcome to the Google+ Project”
4. “Google Plus for Business: Pages to Launch Later This Year”
5. “Google Wastes No Time Putting Games on Google+: Angry Birds, Bejeweled, Zynga on Board”
6. “Google Terms of Service” (See “Content License From You”)
7. “Ten Google+ Tips for Beginners”

Use these presentation tips.

Whether you’re addressing your employees or trying to close a huge new deal, you won’t wield a tool from your arsenal that’s more important than killer presentation skills. Here are a few tips to help you nail your next presentation or public-speaking engagement.

1. Use PowerPoint judiciously. There’s truly nothing more boring than sitting in a dark room listening to someone drone on while he mindlessly clicks through a PowerPoint. The PowerPoint shouldn’t just be the closed-captioned version of your prepared remarks. An effective PowerPoint slide simply underscores a particular point you’re trying to make.

If, for instance, you want to illustrate the revenue growth in your company, show a graph with a nice, visible upward trend. Nothing too detailed, no words required. Remember, most of the people in the audience won’t be able to see any sort of detail on your PowerPoint slides, so skip anything tedious, like spreadsheets or anything with small type.¹ The same applies to sound and video clips. If members of your audience can’t make out what they’re supposed to be seeing or hearing, you’ll lose them entirely.

Better yet, break out of the mold and skip the PowerPoint altogether. It’s been done to death. Try to think of a more compelling and creative way to communicate with your audience. Often, just a handout with pertinent details will suffice.

2. Enough about you—what’s in it for us? Please, don’t bore the audience with meaningless details about yourself. Many people think it’s a way to built rapport, but really it alienates audience members who will determine in the first 30 seconds of your presentation whether you have anything to say that might be useful or interesting to them. Reciting your résumé or life story is not the way to connect. Nancy Darling’s blog post on Psychology Today offers more tips about creating an audience-focused presentation.²

Give the audience a couple of pertinent details about who you are and move on to why you are taking the audience’s time. Better yet, have a colleague, event emcee, or host give you an introduction that gets all of the formalities about your credentials out of the way so you can get on with the presentation.

3. Use the right body language. In and of itself, the art of using body language to communicate in business is incredibly important. The Total Communicator agrees.³ Remember, when you’re giving a speech or presentation you’re an actor, an entertainer. Even if you’re reviewing tax figures, walk into the room ready to give an Oscar-worthy performance. And as any stage actor would tell you, how you carry yourself on stage is everything.

Posture is the single most important element as you walk in front of your audience. Stand up straight, shoulders back, with your arms relaxed at your sides. Crossing your arms or excessively touching your mouth or face is a common sign that you’re lying, so steer clear of those sorts of ticks and fidgets.

Eye contact is a delicate dance. You want to make eye contact with as many people in the audience as possible. Try not to focus too much on any one person, even if she’s the primary audience member or decision maker. Spend too much time focused on one individual and you’ll lose the rest of the room. But you also don’t want your eyes to dart around the room and glaze over. Then you might lose your connection with your audience. A good rule of thumb is to maintain eye contact with various individuals and hold their gaze for two to three seconds, then move on.

A smile is the easiest way to put people at ease and draw them into what you have to say. But not just any smile. A forced, mouth-only smile is a subconscious turnoff for people. Genuine smiles use the eyes and the mouth to communicate. So before you put on a happy face, make sure it’s convincing or people will assume you’re a big phony.

4. Know your audience. Not only will knowing your audience help you avoid putting your foot in your mouth; knowing the nuances of your audience members’ characteristics and motivations will also help you get their attention. It’s a common icebreaker to open with a joke. But let’s face it: Not that many people are funny, and a comment in the name of being funny can easily come off as inappropriate or unprofessional.

Instead, try engaging the audience by illustrating that you understand their challenges and are there to make their lives easier. Whether you’re selling advertising to a local restaurant owner or holding a symposium on nuclear physics, showing your audience members respect and concern is the best way to win them over. Paul Brown elaborated on this point in his 2006 New York Times article.⁴

5. Know when to shut up already. Regardless of the setting or the nature of your presentation, go in with a point and a plan, and once you’re done, stop. Sure, this sounds simple enough, but countless strong presentations have been ruined with meandering, pointless, redundant closing statements.

Remember the “Seinfeld” episode where George Costanza started using the old Vegas showmanship trick of walking off “on a high note?”⁵ Structure your presentation according to this rule and you’ll never go wrong. Make your presentation clear and concise, and close on your own version of a “high note.” There’s a reason why it works in Vegas.

For more information, visit:

1. “Tips for Effective PowerPoint Presentations”
2. “How to Give a Presentation Part I: It’s Not About You”
3. “The Eyes Have it, and They’re All on You … and Your Gestures”
4. “Listen Up. Know Your Audience.”
5. “The Burning” (“Seinfeld”)

How to handle a public-relations crisis

Public relations gurus have made fortunes guiding companies through crises. From a product recall to a public-safety concern, there will never be a more important time for you and your business than in the midst of an emergency. A well-managed crisis can mitigate or eliminate the amount of damage done to a business. A poorly handled crisis can doom a company forever.

Here are five tips for small-business owners for handling a crisis successfully.

1. Get prepared before a crisis happens. Get a plan together before there’s ever a need for a crisis public relations plan. Gather phone numbers, designate a company spokesperson, and decide who would be responsible for various aspects of any emergency, recommends Marc Davis in the article, “Crisis Management Strategies for Business Owners.”¹ There should only be one person designated to speak to the media to avoid confusion and to avoid misinformation getting out there.

Who is the attorney for your business? Who would have access to legal documents and other critical information if an emergency arose in the middle of the night or while you were on vacation?

Whatever arrangements you make, be sure your entire organization is clear on what needs to happen if a crisis—such as a crime, natural disaster, or technological failure—arises.

2. Honesty and transparency count. No matter the nature of the crisis, get all the facts and make them available to any interested parties. The longer you or anyone from your company sit on pertinent information and the longer you hide that a problem exists, the worse you and your company will look. And, it should go without saying, but honesty isn’t just the best policy—it’s the only policy. Any suggestion of dishonesty could doom the entire company. No one can stand a liar.

Crisis PR consultant Jonathan Bernstein wrote that it’s important to remember the “Three C’s of Credibility: Compassion, Competence, and Confidence.”²

3. Anticipate questions. After a crisis, you’re likely to get flooded with questions from everywhere including the media, your customers, and possibly even police or other authorities. Get those answers together and draft a press release explaining exactly what you know and even what you don’t know yet, according to the article, “Five Tips to Help Small Business Handle Crisis PR.”³

It’s also critical to release information as soon as it’s available to avoid giving the impression that you’re hiding anything. Meet any challenges head on and be proactive about providing information. Being proactive doesn’t mean engaging in guesses and gossip, however. Make sure you get the facts and only provide confirmed information to the public.

4. Keep employees informed. In the midst of a crisis, it can be easy to forget to communicate with your employees. Reassure them that the problem is being handled and that someone is taking charge of the situation. It’s also critical to impress upon each and every employee that she is not to talk to any member of the media, according to the UnderstandingMarketing.com article.³ Even the most off-the-cuff and innocent comments can create big problems in the midst of a crisis.

5. Know when and how to say sorry. Even the most valid of excuses for any accident or mishap is generally not well-received by the public. If your company is at fault, just admit it and say you’re sorry. You might find it helpful to read Richard S. Levick’s article on ”The Art of the Mea Culpa.”⁴

Consult with your attorney about any liability issues and as soon as possible apologize, do everything you can to set things right, and move on. Whether you have to refund customers’ money, recall a product, or make a public statement, it’s far better to ask for forgiveness than give the impression that you either don’t care about the issue or don’t want to admit when you’re wrong. Be generous with your customers and the public, and they’ll be generous in return.

For more information, visit:

1. “Crisis Management Strategies for Business Owners”
2. “The Three C’s of Credibility in Crises”
3. “Five Tips to Help Small Business Handle Crisis PR”
4. “The Art of the Mea Culpa”

Do's and don'ts of mobile marketing

A smartphone user searches for “tires.” A moment later, your automated service sends his cell phone a discount offer, enticing him to come visit your tire store now.

Or another example: A brick-and-mortar fashion retailer texts a flash sale alert to loyal customers in its Insiders Club: “Five hours only. Come in before 5 p.m. today.”

Small-business owners are just as capable of leveraging the power of mobile marketing as the Coca-Colas of the world.

Although in the second example, the alert was readable even on older cell phones, smartphones are changing the game. Most new cell phones going forward will be capable of accessing the web, according to research by Gartner Inc.¹ When your customers use their mobile phones more often than they use laptops or PCs to find businesses and products like yours, that’s a watershed moment in marketing.

Interactivity will be assumed and required. Are you up on the do’s and don’ts of mobile marketing? Here are four things to think about if you are new to the mobile marketing arena.

1. Set a clear purpose. Mobile marketing has two primary objectives: Engage customers and build relationships. That’s what it’s all about. If your customer is using a smartphone, you can reach her when she is most likely to be responsive. She’s out and about and types in a search looking for your service. So engage her. But even if she is using a traditional cell phone, you can remind her you have unique products that she likes. Make the reminder friendly, not intrusive. Maybe she’s sitting in Starbucks, having a break. Turn her passive behavior into interactive behavior. Think of your advertising as an ongoing conversation.

2. Strategize. Your mobile marketing is part of your overall marketing strategy, but you’ll need different thinking on it. Every marketing discussion and decision affects those customers who are primarily reachable by mobile promotions. So make your assigned staff member who “understands” Twitter part of your marketing team. Don’t exclude him from the big meetings because he’s young and in your opinion doesn’t need to get the whole picture.

Pitch your campaign to the widest possible array of devices: Androids and iPhones and RIM’s BlackBerrys, plus what are called feature phones (the standard mobile phones). That’s the advice of the Mobile Marketing Association.²

The world of mobile advertising is growing most dramatically outside of the United States. If you have dreams of expanding beyond the 50 states, mobile marketing may well be the way to go. According to the Mobile Marketing Association, advertising costs are often much lower in relatively undeveloped markets.

For statistics on the types of devices that are most prominent in various world markets, visit mobiThinking.³

3. Keep messages short. The Mobile Marketing Association’s first rule for making your message effective is to remember that mobile phone screens are much smaller than computer screens, so whatever you say and whatever banner you use must be short, small, concise. If you want the customer to fill out a form, make it short. If you want the customer to send contact information, limit it to a phone number.

4. Jump-start interaction. You want interactivity, but how are you going to get it? Two ways (a don’t and a do): Don’t send your customers the same generic messages that you use in email marketing, and do always include a call to action. That’s the advice of Alex Speirs of TXT2GET, a mobile marketing company that helps companies with SMS (short message service) marketing.

“Effective advertising is advertising that not only engages consumers initially but then allows them to interact with your advertising in order to move them on to becoming actual consumers,” he wrote in the article, “Common SMS Marketing Mistakes.”⁴

About that call to action: That means asking users to text a certain phrase and number (“Text the word PETS to 54321”) or show their phones at the register for savings. Realize, though, that your customers may be just as new to this as you are, and they may be concerned that they’ll run up high message charges on their phones if they respond to—or even read—your offer. They may also be concerned about privacy. Moto Message, a company that specializes in mobile marketing, suggests using a disclaimer and offers two examples in an article on its website.⁵

Want to know more?

For some mobile marketing case studies, visit the Mobile Marketer website,⁶ or check out a flashier presentation by Google.⁷
If you are serious about becoming a mobile marketer, check out the Mobile Marketing Association’s website for the association’s “U.S. Consumer Best Practices”⁸ guidelines.

For more information, visit:
1. “Gartner Outlines 10 Mobile Technologies to Watch in 2010 and 2011”
2. Mobile Marketing Association
3. mobiThinking
4. “Common SMS Marketing Mistakes”
5. “What Details to Include in a Mobile Marketing Call to Action”
6. Mobile Marketer: Case Studies
7. “Mobile Right Now”
8. “U.S. Consumer Best Practices” guidelines

What's in it for me?

The Obama administration wants to create incentives to get small-business owners hiring again. From payroll tax cuts and holidays to 100 percent deductions on investment, there are some real opportunities on the horizon for small-business owners to leverage new government programs and get ahead while growing their bottom lines. Here’s what you need to know about the American Jobs Act and how it might affect your business.^1,2

Payroll Tax Cuts

Every small-business owner knows all too well the expense the payroll tax adds to any employee: approximately 15 percent of the employee’s salary. So the Obama administration has proposed lowering employers’ share of the payroll tax rate to 3.1 percent for the first $5 million of wages that employers pay, according to the American Jobs Act website.¹

The package amounts to tax cuts on workers and small businesses to the tune of about $175 billion. Payroll taxes generally bring in about $900 billion to the U.S. Treasury Department each year, only second to individual income tax returns.

Casey B. Mulligan, an economics professor at the University of Chicago, wrote an article for the “Economix” blog in The New York Times.³ He said the payroll tax cut is the part of the American Jobs Act most likely to actually create jobs. He added in his article that workers “might not realize it,” but often they pay more in payroll taxes than in federal income taxes.

The second part of the plan would reduce employer payroll obligations by more than 6 percent, Mulligan said.

Tax Breaks for New Plants and Equipment

If you’ve been looking to expand, there may never be a better time to make those dreams a reality. The American Jobs Act proposes extending small-business owners’ ability to take deductions on investments on new plants and equipment, according to the American Jobs Act fact sheet.⁴

Improving Government-Business Cooperation

Finally, the American Jobs Act wants to make it easier for government contractors to get paid faster. Further, the federal government will create an online portal that allows business owners to interact with the federal government in real time, to try to keep capital moving in the economy.

“If you’re a small-business owner who has a contract with the federal government,” Obama said in his Sept. 8 address to the joint session of Congress, “we’re going to make sure you get paid a lot faster than you do now.”

The proposal also calls for a complete review of regulations that affect small-business owners’ ability to hire and to access capital.

The Republican-led House has expressed interest in pushing through many of the small-business aspects of the American Jobs Act, including payroll tax cuts, while holding its collective nose at increased infrastructure and government spending.

“Even in the Democratic-led Senate, Majority Leader Harry Reid has suggested that Obama is unlikely to get his way in his call for immediate action by Congress,” The Associated Press reported.⁵ “Reid has said there are some other issues that need to be dealt with first, including transportation funding.”

The Associated Press also reported that Obama would sign whichever parts of the bill that Congress agreed on, but he said he’d push for passage of the entire bill.

To read two perspectives on the American Jobs Act, check out the editorials from The New York Times⁶ and The Wall Street Journal.⁷

For more information, visit:
1. “Tax Cuts to Help America’s Small Businesses Hire and Grow”
2. “Help Get America Working Again”
3. “How Payroll Tax Cuts Can Create Jobs”
4. “Fact Sheet: The American Jobs Act”
5. “Obama Touts Jobs Bill Benefits for Small Business”
6. “A Good Jobs Program” (Opinion)
7. “The 2013 Tax Cliff” (Opinion)

Make sure your business is safe at the federal level.

Incorporating your business and maintaining compliance at the state level are important steps to take to protect your personal assets, as well as to remain in good standing with the Secretary of State’s office. Another step to take to keep your business above the rest is to understand federal regulations pertaining to your business.

Although the federal government doesn’t regulate all business activities, it does set requirements that some companies must satisfy. To ensure that your business is in compliance with government rules, familiarize yourself with requirements for your industry.

The most common federal requirements for businesses include:

• Employer Identification Number (EIN). The Internal Revenue Service requires every corporation, limited-liability company operating as partnership, and employer to obtain an EIN. We can help you apply for an EIN, also called a Federal Tax Identification Number.
• Tax Obligations for Businesses. Small-business owners need to understand their federal tax responsibilities. The IRS publishes a “Tax Information for Businesses” page on its website that provides general information to business owners.
• Business Licenses and Permits. Some agencies require owners of certain businesses to obtain business licenses at the federal level. For example, companies in the transportation industry may need to register with the Federal Motor Carrier Safety Administration.
• Labor Laws. Business owners who hire employees must comply with numerous labor laws regarding wages, benefits, working conditions, and more. The Labor Department publishes an “Employment Law Guide” to help employers meet these requirements.
• Posting Requirements. Depending on whom they hire, business owners must display certain posters from the Occupational Safety and Health Administration, the Employment Standards Administration, and other departments. The Labor Department has outlined posting requirements on its website.
• Industry Regulations. Specific industries have special requirements for conducting business. For example, owners of farming companies must comply with environmental regulations. Owners of construction businesses should identify and understand hazardous-materials laws.

If a federal agency governs your business activities, check with that agency for more information about its requirements. For an alphabetical listing of federal agencies, visit USA.gov.

If you need help incorporating your business or determining which business licenses and permits are applicable to your business, or you need to obtain an EIN, The Company Corporation^® can help you. Visit The Small Business Authority’s “Incorporate Your Business” page for more information.

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

How to give stellar customer service

Do you pay fanatical attention to what your customers want? At the companies known for the very best customer service, getting the best is not about training. It’s about living a story of delivering consistently and well what the customer is paying for.

If you want your company to deliver stellar customer service, it starts with the people you hire. The companies that are really devoted to great customer service, the ones you read about and hear about, like Zappos¹ and The Ritz-Carlton,² are in a position to look for everything they want in the people they hire.

Bruce Temkin, managing partner of the Temkin Group and author of the “Customer Experience Matters”³ blog, said that a “combination of the raw skills and the innate interaction skills” are important if you’re going to please customers, no matter how difficult the issue or the personality. But owners of smaller businesses generally want to have people who can handle six things at once, requiring different skill sets, he said in an interview.

That doesn’t mean you have to compromise.

“It’s always a balance between hiring for raw skills and hiring for expertise in the area you want to get,” Temkin said. “The good companies look for both.”

Then it’s up to you, the business owner, to “consistently communicate what the vision and brand stand for.” Start that on day one for each new hire, and your company will be in good position to be a customer-service exemplar.

The Time for Rethinking

The owner’s imprint is what Temkin calls that consistent communication from the owner of a small company to his employees. Temkin warns that as the company starts to grow, the owner needs to be aware that customer service may suffer unless he rethinks his role.

“When businesses are relatively small and the owners can oversee everything, then they can put their imprint on the entire service experience for customers,” he said. Once a company grows too big for the owner to handle everything, or even to be aware of all the issues and problems, “it requires some processes, it requires some rules, and it can’t just rely on the vision … and intuition of the owner.”

There may come a time when a business owner needs to stop doing everything and instead needs to just guide the company.

“As part of their stepping back, [owners need to] really rethink their role,” Temkin said. “[They need to] think about how they can influence the beliefs that their leadership group has, how they can communicate what’s important to the broader audience of employees as they grow.”

That is the foundation of a strong culture, and if you want stellar customer service, you must actively foster service-mindedness as an aspect of your culture in a growing company.

“You want to have the passion and clarity of a founder, but you also need to build processes and infrastructure that can support growth. You’ve got to figure out how to do both, but sometimes executives can’t do both,” Temkin said.

Storytelling Plays a Role

One way to transmit the passion and vision you feel for the company is through storytelling. Some larger companies, such as Costco Wholesale, use stories as a way to let new hires know about the values and best practices of more experienced team members. They actively look for stories about hero employees who solved customers’ problems by going above and beyond; then, they use those stories to inspire and teach others. Jim Sinegal, Costco’s co-founder and outgoing CEO, was quoted in an article in The Costco Connection⁴ magazine, saying, “What else have we got besides stories? That’s what really hits home with people; it’s what brings meaning to the work we do.”

Small-business owners can use stories as well, but in a different way, Temkin said. He said owners could tell stories about why they founded their companies, stories about interactions with customers, and stories about how they want to build their companies.

“These stories can certainly frame a lot of the elements of the culture,” Temkin said. But try to remember that your stories are not about holding onto the past. They’re about carrying the company forward.

Returning to the theme of the small company reaching a point where the owner can no longer be hands-on, Temkin said, “Part of the reason why the small-business owner needs to step aside is that things do need to change.”

“That’s why there’s always this balance between trying to maintain the essence of who you are and evolving into who you’re going to be.”

Ideally, when the company is still small enough that the owner knows every employee, she can communicate the vision informally with individuals and small groups. But when the company grows beyond that point, that’s when storytelling becomes more important.

As a company grows, its owner can use meaningful stories to convey the company’s values.

“Storytelling is something you can pass along,” Temkin said. “It’s not just the stories that I tell but the stories I tell that other people repeat.”

For more information, visit:
1. “Zappos Lessons: Building a Customer-Focused Culture”
2. The Ritz-Carlton: “Gold Standards”
3. “Customer Experience Matters” blog
4. “Costco: A Fish Story”

(Illustration by Josue Evilla; reprinted with permission.)

How did The Small Business Authority manage to be a top nonbank lender in these tight financial times? By top nonbank lender, we’re talking $65.5 million in U.S. Small Business Administration loans given in fiscal year 2010.

The Small Business Authority President and CEO Barry Sloane touched on the components of the company’s success in the “David vs. Goliath” column in October’s issue of Fortune magazine.

Sloane was one of three business leaders featured in the column. To read the story, click here.

Illustration by Josue Evilla; reprinted with permission.

How to pick the best office desk

Your office desk is a major part of your business, as you probably spend most of your time behind it. It’s the place where most business owners keep their computers, phones, and important documents, so selecting a new desk should be a big deal. Consider these tips as you’re searching for the right desk for you.

Select the best material. The traditional office desk is made of wood—but wood can be heavy, expensive, and easy to nick. If you want the look of wood with a lower price tag, consider wood veneer. According to Lloyd Burrell’s article for Small Biz Bee,¹ “Typically a traditional desk in cherry veneer, mahogany, or walnut veneer will do wonders for your credibility.”

Burrell also said that metal and glass desks tend to be inexpensive and quite functional, so these options may work for you, too. Just consider the rest of your surroundings before you choose, because you want the desk’s surface to match the décor in your office.

Pick the right size. You need a desk that fits all the necessities you use to run your business, which means the surface should be big enough for your monitor, paperwork, and any organizational materials, such as a desk calendar or day planner. You will also need space underneath for the CPU, if you are using a desktop, and places to keep your writing utensils and other items.

Consider the location. Your new desk should fit in your office without looking crammed into place. Measure the area you have available before buying a desk, taking into account the space you will need to fit your chair and any nearby furnishings, such as filing cabinets.

Another reason to choose the spot before selecting the desk is to help you decide whether a hutch is a good idea. If you want to place your desk in the middle of the room and you want to be able to look at clients or employees from behind it, you probably won’t want a hutch. However, if you plan to place your desk against a wall and you want extra storage, you may want a hutch.

Pick your features. Most business owners need more than just empty surfaces for their monitors. Try to find a desk with a drawer for the keyboard so you can put it neatly out of sight when not in use. Patricia Schaefer told the readers of Business Know-How² what to look for in a keyboard tray. Burrell also talked about other common desk features in his article.¹

Prepare the location. Whether you’re having your new office furniture delivered or you’re moving it in yourself, get the appointed space ready. Clear a path from the door to the area where you plan to put the desk, and vacuum or sweep the floor. If the desk will be placed against a wall, blocking the outlets you’ll need for work, consider plugging in the necessary cords before the furniture arrives. This way, you can just put them through the proper holes in the back of the desk as you move it into place, then plug them into your office equipment when you get everything put together. The better you prepare for the new desk, the sooner you’ll be able to start enjoying its functionality.

1. “Small Business Startup Priority No. 1: Your Office Desk”
2. “Select the Right Work Desk“

Whom should you hire?

When you find yourself overwhelmed with projects for your company, you may begin to consider hiring additional staff members. After all, making sure your team can handle the work is crucial if you are to meet deadlines and please clients with quality results. However, don’t be hasty in hiring a slew of full-time employees when the work may dry up tomorrow. Instead, consider hiring some contractors who can be kept on hand as the work ebbs and flows.

To determine whether full-time employees or temporary contractors would better suit your business needs, ask yourself these questions:

Will the work last?

If you’re working on a project that will involve an impressive workload for the next year or more, then it’s worth it to hire at least one more full-time employee. On the other hand, just because you have some more projects than usual this time of year doesn’t mean the work will last. You may end up going through the hassle of interviewing, training, and collecting paperwork for a new full-time worker, only to run out of work for him to do. To avoid wasting time and money on employees you don’t need, make sure the new work will be long-term.

Can you afford to pay for a full-time employee?

Contractors tend to have higher hourly rates than full-time workers for one reason: They don’t get the same benefits. Consider what you usually have to provide for staff members:
• Paid vacation
• Sick leave
• Health and life insurance
• 401(k) matching
• Workers’ compensation

Plus, you typically have to pay a portion of Medicare, Social Security, and unemployment taxes for each full-time staff member, Rhonda Abrams wrote in her USA Today article, “Should You Hire an Employee or Independent Contractor?”¹
Before you decide whether an employee or contractor would better fit your budget, add the benefit and tax costs to the salary you’d pay an employee, then compare the total to the simple hourly rate you’d pay a contractor.

Do you need help with a specialized project?

You may have no more work than usual, but you realize that your employees cannot handle the projects at hand. If you need some specialized skills for your current workload but do not foresee a long-term need for the specialized knowledge, you may benefit from hiring a contractor. For example, OPEN Forum writer Thursday Bram recommends hiring a contractor when you need a new website, because you’d likely only need a new site design once in the next few years. She sums up the matter by writing, “Contractors are generally one of the best options when you need a specialized skill set on a short-term basis.”²

Add the Overall Costs

Because contractors usually have higher hourly rates than full-time employees, you may benefit more from hiring a full-time employee if you need someone 40 hours per week. On the other hand, if you only need help around 20 hours per week, then a contractor is your best bet. If you end up needing more of the contractor’s time in the future, you can always find out if he is open to the idea of becoming full-time eventually. This can benefit both of you, offering some job stability and health insurance to your new employee, and saving you from paying the high hourly rates of the typical contractor.

For more information, visit:

1. “Should You Hire an Employee or Independent Contractor?”
2. “Temps, VAs, Contractors, and Employees: Who Should You Hire?”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Perform a SWOT analysis on your competition.

In an effort to gain a stronghold in the market, complete a SWOT analysis. This involves determining the strengths, weaknesses, opportunities, and threats to your company. According to Albert S. Humphrey’s contribution to businessballs.com,¹ the concept of the SWOT analysis was created in the 1960s by a research team of which he was a member. Its main point is to determine current and future advantages and disadvantages so a business owner can work on improving her management strategies.

If you’re considering performing this analysis for your business, do the same analysis on your competitors. This can give you an advantage because it offers you insight into how to set your company apart.

1. Look at your competitors from a customer’s point of view. This is often the best way to conduct research on them. Nancy A. Shenker, president of theONSwitch marketing firm, told Entrepreneur² that business owners should sign up for their competitors’ mailing lists. Signing up for mailing lists enables business owners to get a steady stream of literature about their competitors, offering constant insight into their new offerings. Shenker shared other tips in the Entrepreneur article.

2. Consider the strengths of your competitors. You need to find out what they are doing right—then do it better. This step will also satisfy your curiosity of just how much better your competitors are doing, if at all. According to Virtual Advisor Inc.,³ sources that contain this kind of information include yearly reports, press releases, and databases that specialize in offering facts about businesses.

3. Examine your competitors’ weaknesses. As you have suspected all along, your competitors have a few shortcomings, and you now have a good reason to investigate them. Check records to find out if they have lost any market share, major clients, or important vendors, because big changes can indicate instability.

4. Determine the opportunities left by your competitors. If it turns out that your competitors’ customers are unhappy or disappointed lately, consider how that could benefit you. This is how their weaknesses can become your strengths. If you think their mistakes have led to an opening for you to present a new offering for customers, start planning now. If you suspect that other companies are forgetting about a particular audience, start focusing on that market today to gain an advantage in the industry.

5. Pinpoint the threats that your competitors pose. If your competitors’ customers seem happy, you should not ignore the threat that this may pose for your own customer base. If their market shares appear to be steadily increasing, you need to find out why, especially if your share of the market has stagnated.

Conducting a SWOT analysis can offer you a few ways to refresh your marketing tactics and product development while ensuring that you rise above your competitors.

1. “SWOT Analysis History—The Origins of the SWOT Analysis Model”
2. “How to Research Your Business Idea”
3. “Analyzing Your Competition“

You may need to qualify.

Are you conducting business in more than one state? Chances are that you may need to qualify your business outside of the state where you originally formed your corporation or limited-liability company.

What does it mean to “qualify”? When you incorporate your business, the state in which you incorporate with the Secretary of State’s office is known as the domestic state. If you decide to register your business in another state besides the domestic state, this is known as “qualifying” in a foreign state. An example would be that you incorporate a business in Delaware. You then decide to register your business in Pennsylvania and New Jersey. In Pennsylvania and New Jersey, your business would be known as a foreign business, because it wasn’t incorporated in those states.

If you are deciding whether your business should register in additional states besides your domestic state, here are some items to consider:

• Corporations and LLCs usually register as foreign businesses if they have a physical presence, such as an office, warehouse, or employees, in other states.
• Consult with legal counsel before deciding to register in additional states. This can be beneficial in determining whether it’s a good idea for your business to expand to other states.
• Requirements for registration vary by state. Some incorporation or registered agent service companies can assist in determining the documents and fees required for the states in which you do business.
• Do your research on separate business licenses, permits, and tax registrations that may apply when you register in a new state. Some service companies provide compliance services to help you determine which licenses, permits, and taxes apply to your business.

The Company Corporation^® has helped thousands of business owners incorporate and keep their businesses in compliance. If you’re interested in incorporating, registering your business in another state, or learning more about compliance services, visit The Small Business Authority’s “Incorporate Your Business” page.

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

What is your action plan?

If you want scrambled eggs and coffee after a hurricane, visit a Waffle House.

The restaurant chain’s ability to be up and running after a storm is also a way to measure the severity of storm damage. The fewer menu items being served, the more severe the storm.

FEMA Administrator Craig Fugate calls it the “Waffle House Index,” according to The Wall Street Journal.

It looks like Waffle House was prepared not only for Hurricane Irene, but also for a zombie apocalypse. The chain had an action plan in place that went above and beyond the recommendations from the Centers for Disease Control and Prevention.

The takeaway is that it’s good to have a plan and to stock up on ice, generators, and—if you serve breakfast—eggs.

Ensure That You’re Insured

You also want to check your business owner’s policy to see whether you’re insured against a flood.

While you’re at it, check to see whether you’re insured against other potential liabilities.

Acts of nature aren’t the only threats to business. Business owners also have to learn to thrive despite recessions, legal issues, and, depending on their locations, corrupt governments.

Rebound From Recession

In the midst of a recession, you need to know where your business stands. Our article, “How to Assess Whether Your Business is Doing OK,” shows you how to use ratio calculators to answer the questions, “Where are you now and where were you last year (or five years ago)?” Knowing where you’ve been helps you determine where you want to go.

You may also be wondering how you could afford to bring on extra staff members if the need were to arise. You’ve seen the numbers. You understand that the unchanged unemployment rate for August may mean that economic recovery could be slower than hoped. This would be a good time to learn about just-in-time hiring.

Be Legalistic

If you think a hurricane or a recession could give your business a pummeling, try getting into legal trouble without having “Inc.” or “LLC” after your company name. Our primer on incorporating explains the benefits you could reap—among them, protection of your personal assets.

If for whatever reason you’re ever embroiled in a legal dispute, you’ll want to consider whether arbitration or litigation would better suit your needs. Don’t decide without reading this.

When in Kyrgyzstan …

In 2009, Forbes released a special report, “The Most Corrupt Countries.” If you’re thinking of going international, don’t go to these countries.

Unless you think you could handle it.

Adrian Gaskell tackled the question, “Can companies thrive in corrupt countries?” in a guest post for the International Business Leaders Forum.

Gaskell wrote about research showing that some companies could thrive despite government corruption, and some companies could do so without becoming unethical. The study, “Victim or Victimizer: Firm Responses to Government Corruption,” was published in the Journal of Management Studies.

How about you? What are some ways you’ve prepared for disasters of any kind? Please share in the comments below.

When we heard that GoDaddy recently announced that it was going to drop its support for ColdFusion hosting, we felt terrible. The ColdFusion community deserves better.

Needless to say, we love ColdFusion. We love it so much, in fact, we’ve been supporting it for more than a decade — since before ColdFusion was an Adobe product, and since before ColdFusion was a Macromedia product. That long.

On top of that, we have one of the largest ColdFusion development communities in the world, and our commitment to the platform has never let up.

So, if your ColdFusion website or app is homeless, come check us out. We have a nice home for you. If you’re a new customer to us, check out our special offer of 4 free months.

If you’re new to ColdFusion 9, Adobe’s latest iteration of the platform, check out our top-five list of features we love:

1. ColdFusion Builder – CF9’s most talked about new feature isn’t even a part of the server software; it’s the IDE—Adobe’s first ever IDE for ColdFusion.

Built on top of the open-source project Eclipse, which is widely used as a Java IDE, ColdFusion Builder is deeply integrated with ColdFusion 9 and allows developers to manage their entire development life cycles (from concept to production, as Adobe puts it) with a single tool.  Simply put, it makes the process of building CF apps easier and faster.

ColdFusion Builder is currently in Beta 3, and can be downloaded through Adobe Labs.  You can run ColdFusion Builder as a standalone installation or as a plug-in to Eclipse or Adobe Flash Builder.

2. Object Relational Mapping (ORM) – This is a big deal.  And to be honest, We’re not sure why ColdFusion ORM hasn’t garnered more attention than it has.

The reason it’s a big deal:  It shifts the way CF developers can approach application development … and it’s a HUGE time saver.

Ray Camden articulated the benefit of CF ORM best during his presentation at Adobe MAX:

For most of our lives, we’ve been a slave to the database table … we write our code based on it, we even do some of our functionality based on it; for example, we may not add the ability to sort by a last name if the database table only has one column for names … so typically, that’s the way we work.  We have our tables and then we slap the web app on top.  That’s not really the way it should work.  The way it should work is that our app should define everything … and the database should be the slave to that.

ColdFusion ORM enables us to shift the relationship we have with the database in this manner.

In a nutshell, ORM allows us to map data to and from a relational database — those darn tables — by using object models.  And what this means to CF developers is a tremendous amount of time saved from tediously writing SQL statements and the ColdFusion code that goes with them.

Imagine making complex database calls without writing any SQL queries — now you can with CF ORM.

3. Enhancements to CFScript – This one is particularly interesting to us, and one that we hope you CF developers out there will comment about below.  Enhancements to CFScript in CF9 pretty much takes the language to the next level, and you can now build an entire CF web app completely in script syntax without using any CFML.

This example shows how CFML tags and CFScript can do the same thing.

Is CFScript more elegant to use?  Is it more of a “real” programming language?  That seems to be the assessment of some, but either way, CFScript does a good job of expanding the appeal of the platform.

4. The cfspreadsheet tag – This is just a cool feature, and it’s part of the broader office file interoperability features now in CF9.  The cfspreadsheet tag lets you mange, access, create, and interact with data in an Excel spreadsheet.  It’s that simple, and CF9 makes it simple to do.  See some examples here.

5. Our Community – We boast one of the largest ColdFusion communities in the world.  Not an exaggeration.  A big reason for this is that we’ve been supporting ColdFusion for more than a decade, beginning with ColdFusion 4.0.  That’s not only before Adobe; that’s before Macromedia.  So as we mentioned earlier, we’re thrilled to be supporting this latest version and the next generation of CF apps that will call our servers home.

Upgrade your customer service.

The business world is changing so quickly—thanks in large part to the rapid advancement of technology—that business owners often don’t realize they’re falling behind the curve. Even something as straightforward as customer service must be viewed with fresh eyes to keep up with customers’ latest demands. Customers are bombarded with an overwhelming amount of information every day. How can you make sure it’s your information they’ll remember?

Make your customer service impeccable.

Here are some tools you can use to boost the quality of your customer service:

Customer Reviews

After years of trusting expert reviews, customers want to hear what others just like them have to say. Consumers are flocking to sites like Yelp¹ and Angie’s List² to tell the world about their experiences at your company. Once those reviews are in the public domain, they most likely won’t go away, so you want to make sure customers only have good things to say about you or your product. Check out reviews people have left about your competitors and see what lessons you can apply at your business.

Online Customer Service

As people spend more time online, traditional methods of customer service are often insufficient to please them. You set up your toll-free customer-service line and you have it staffed with live voices 24/7, but that’s just not enough anymore. Your customers need a way to communicate with you beyond the telephone. Options like live chat, contact forms, and quick-response email give midnight shoppers a way to communicate with you on their schedules.

Customer’s Choice

As with customer-service options, your customer wants to do business with you in a way that suits him and his lifestyle. He may not be able to visit your brick-and-mortar storefront, and he may not be in your time zone or even your hemisphere. Find a way to let him ask a question or place an order online as an alternative to visiting or calling your company. You’d be surprised by how many of your current clients would appreciate these options as well.

Self-Service

Staying with the DIY online theme, build a repository of information that your customers can search and access on their own. Provide links to warranty information and service providers, make product manuals available on your website, or offer advice about making the most of your products or services. The benefit of this strategy is two-fold: Your customers will spend more time on your site (always the goal), becoming better educated about your business and perhaps finding more of your products that will benefit them. Additionally, your customer-service associates will have more time to spend with the customers who still need to call in for assistance.

Customer-to-Customer Communication

It’s simple to add a discussion board to your ecommerce site. In addition to contributing to excellent customer service, you’re providing customers with a way to communicate with each other. Companies like Hewlett-Packard Co.³ and Apple Inc.⁴ have long recognized the benefits of consumer users’ groups and support communities, where users can share tips and support each other. Monitoring user discussions will also help you discover ways to improve your products and customer service.

Go Green

Most business owners have recognized that taking positive steps for the environment is not only socially responsible, but it’s also a consumer hot button. No, not every customer demands that your company be environmentally friendly, but many customers are adamant about it, according to Green America.⁵ Find ways to share with your customers how you’re taking environmental concerns seriously and incorporating green strategies into your business. You’ll feel better and your customers will respect you for it.

Give and Give Back

Rather than offer your customer a percentage or dollar amount off a current purchase, give him a generous reward to be used on his next visit or purchase. This is one way to get the customer to return to make additional purchases.

Want more ideas? Check out “Eleven Crucial Consumer Trends for 2011” from Trendwatching.com.⁶

For more information, visit:
1. Yelp
2. Angie’s List
3. HP Support Forum
4. Apple Support Communities
5. Green America
6. “Eleven Crucial Consumer Trends for 2011”

Learn from the phone-hacking scandal.

As you may have heard, the News of the World tabloid newspaper ceased publication in July, after 168 years in business. An internationally distributed, U.K.-based publication, News of the World was at one time the biggest-selling English-language newspaper in the world, according to the Guardian.¹

News of the World employees were caught hacking into people’s voicemail messages in pursuit of news, the BBC reported.² British royals, celebrities, and politicians were allegedly targeted. The Guardian reported that journalists also hired a private investigator to hack into a murdered teenager’s voicemail messages, and possibly those of fallen British servicemen’s families.¹

Through this chain of events, News Corporation Chairman and CEO Rupert Murdoch (News Corp’s News International branch published News of the World) encountered a series of challenges not unlike those that many small-business owners face (granted, on a much larger scale).

Here is what small-business owners can learn from the News of the World scandal:

• Know what your employees are doing. It is certainly possible that Murdoch didn’t know the details of his employees’ wrongdoing, or the lengths to which some of them went to report news.
  Before a House of Commons Committee, Murdoch, his son James, and News International CEO Rebekah Brooks denied that they knew everything that was happening at the paper, the BBC reported.
  Every business owner must know—and take responsibility for—what’s going on “under his own roof.” In the event of an absentee owner, a trusted manager should act as a proxy, providing a guiding hand and watchful eye over the employees and reporting back to the owner. For those business owners who can’t be everywhere at once, many legal, ethical, and technically simple tools exist to help monitor employees’ activities.
• Be ethical. Regardless of which tools a business owner may use, it is his responsibility to set an example for the entire company. An ethical corporate culture starts at the top and must flow down to every department, manager, and employee.
  In addition to setting a personal example, a business owner should implement formal policies and procedures to remind employees of their ethical duties. Texas Instruments has an “Ethics Quick Test” on its website with questions to determine whether an action is ethical.
  Small-business owners must scrap and claw and fight for their market share, but in doing so, they must be aware of the pressures placed on their employees to perform. Without a sound ethical base upon which to run a business, even the most successful companies stand to lose everything in the end.
• Be realistic. Unrealistic pressure to perform or meet goals can cause even the best employees to experience cognitive dissonance between what they know is “right” and what must be done to keep their jobs and feed their families. Business owners must remember that for the most part, employees really just want to do the right thing. A business owner should never ask an employee to do something he wouldn’t be willing to do himself.
• In the face of crisis, don’t go golfing. Photographs of Murdoch on the golf course during the heat of the investigation prompted great outcry in the U.K. and around the world. Mark Lewis, attorney for the family of a murdered teenager whose voice messages were allegedly hacked by the paper, told the Guardian, “It’s a bit like Nero fiddling while Rome was burning.”¹

For more information, visit:

1. “News of the World to Close as Rupert Murdoch Acts to Limit Fallout”
2. “Q&A: News of the World Phone-Hacking Scandal”

Thank you, workers

This Labor Day, we’d like to acknowledge the “hands and feet” of industry—the workers who build the bridges, pave the roads, write the computer codes, mop the floors, and keep the customers happy.

Without your contributions, all those great business ideas would remain just that—ideas.

Thank you for your hard work.

To hear what President Obama has to say about job creation, tune into his address to the House and Senate this week.

USA Today reported that Obama’s address was moved from Wednesday to Thursday, because Wednesday is the day of the GOP presidential candidates’ debate.

The address is scheduled for 7 p.m. EDT Sept. 8. For more information, check your local listings or visit Whitehouse.gov.

This Saturday on The Small Business Authority Hour, entrepreneurs Stew Leonard and Michael Dermer will join Newtek Business Services President and CEO Barry Sloane for a conversation about thriving in today’s environment.

The Small Business Authority Hour runs from 4 p.m. to 5 p.m. EDT, Sept. 3 on 77WABC and wabcradio.com.

Independent business owners are welcome to call into the show at 800-848-9222 beginning at 4:15 p.m.

To listen online, visit wabcradio.com and click, “Listen Live.” To listen to past shows, click here.

7 Traits of Successful Entrepreneurs

What makes an entrepreneur successful? Is it raw intelligence? Is it street smarts? Or is it all luck?

Although we can’t formulate the exact recipe for wild, runaway success, we can tell you about some commonalities we see every day in the customers we work with—and we work with a ton of them.

To put this statement into perspective, we not only have more than 100,000 business accounts in our portfolio—we also log nearly 180,000 one-on-one phone calls with small-business owners every month.

Here’s our list of seven traits we see firsthand in successful entrepreneurs, based on the observations we’ve made over the years.

1. An understanding of technology. This is not to say that successful entrepreneurs need to be experts in computer technology. It does mean, however, that many highly successful entrepreneurs understand the importance of technology in today’s business environment, and they aren’t afraid of using it to help their businesses.

Ask yourself these questions: Do I know how to use social media to promote my brand or product? Do I know about the many ways that software and infrastructure services can help me cut costs? Am I aware of the various ways to monetize my business website?
If technology scares the dickens out of you, it might be time to take to plunge to the 21st century.

2. An eye for talent. One of the most underappreciated abilities that a successful small-business owner has is the ability to pick the right talent—not just the obvious talent (which anyone could do with deep enough pockets), but also those diamonds in the rough who can grow into vital roles in an organization. Remarkable business owners can pick the right talent even on a tight budget.

When interviewing candidates, really get to know them. Learn what makes them tick. In addition to making sure they’re qualified for the specific position, dig around for other talents they might have. Imagine what you could do with a cook who also knew how to edit videos. Or an assistant who dabbled in graphic design. You’ll be amazed at what the right people can bring to the table in the long run.

3. An ability to get employees to buy into the dream. This goes hand-in-hand with trait No. 2. Again, with a tight budget, you may not be able to pay as well as, say, Google. But if your employees feel like they have a stake in your business and its success, they’ll put in the long hours and unwavering dedication without being asked. A successful business owner has the ability to get his employees to believe in the company dream—and make it big. If your staff members lack motivation at times, find out what fuels their passion and tap into it. And, if that doesn’t work, find passionate talent elsewhere.

4. An ability to take strategic risks while reducing risks in day-to-day operations. Few people in this world take as much personal and professional risk as small-business owners do. But that doesn’t mean small-business owners are reckless or without calculation. The most successful entrepreneurs cover their bases whenever possible. This includes everything from digital security to having the right insurance coverage. What vulnerabilities does your business have? If someone broke into your store and stole your computer, would you be out of business? A stroke of bad luck shouldn’t wipe out your potential to make it big.

5. An ability to aspire to delusional goals. When Steve Jobs returned to Apple in 1997, the company was a few months away from possible failure. More than a decade later, Apple is the most valuable company in the world.

Jobs’ business goals in ’97 may not have been lofty enough to expect that exact outcome, but he certainly sensed that wild success was within reach with the right products and marketing. The most successful entrepreneurs often have the most outrageous goals, and they do whatever they can to reach those goals.

6. A strong emphasis on customer service. Before Zappos CEO Tony Hsieh sold the online retailer he helped built to Amazon.com for $1.2 billion in 2009, he was a customer-service hawk, going to extreme levels to provide the best possible service to his customers. This same passion for customer service is one of the most consistent traits—across the board—that we see in successful small-business owners. When a small business competes with corporate giants, it can gain an advantage if it focuses on customer service.

7. An ability to adapt to change. The reality of owning a business is much more daunting today than it was even a generation ago. You can’t just have a storefront anymore; now, you need a website. Now you have digital assets, higher health-care costs, and, in some cases, more government regulation. The most successful entrepreneurs aren’t afraid to navigate change, and they can thrive on it. Many small retailers have found it difficult to compete online, but many other retailers have used the internet to expand and diversify. How equipped is your business to change?

What traits do you have in common with successful entrepreneurs? Or what traits did we forget? Let us know in the comments below.

Narrower Treasury Definition of Small Business

The Treasury Department wants to narrow the definition of small business in America. And small-business owners might wind up paying more taxes as a result.

There isn’t currently a standard definition for a small business, according to the Treasury Department. But a new report indicates that the fight to rewrite the tax code in Congress will start with defining what a small business is, precisely.

What’s believed to be behind the move is the all-too-common Washington, D.C. answer: politics. Small-business owners are commonly used as a political football when it comes to discussions of tax reform. So the Treasury Department has released a new, narrow methodology to define small business, which shrinks the number of small businesses and their assets dramatically.¹

The narrower Treasury Department methodology defines a small-business owner as someone whose active profit or loss from the business represents, at a minimum, 25 percent of her adjusted gross income.¹ The Internal Revenue Service draws the line between small and other business at $10 million in income or deductions.

So, what does this mean?

First, many S corporations and other “flow-through” entities are currently defined as small businesses when they’re really anything but small. And Uncle Sam wants a bigger cut.

“Before this, you had the largest law firms in America, with revenues over $1 billion, and they were being treated as small businesses,” said Edward Kleinbard, USC law professor and former chief of staff of the Joint Committee on Taxation,² in a Bloomberg article.³ “That’s just preposterous on its face.”

The Obama administration and Democrats in Congress have long advocated for closing tax loopholes for businesses as a means of raising revenues. Opponents say revising the tax code will hurt small businesses. So, if the Treasury Department can narrow the definition of what a small business actually is, the impact on tax reform will be minimized.

Bloomberg paraphrased Payson Peabody, former tax counsel to former Sen. Jim Bunning, R-Ky., as having said that “Democrats could use the proposed definition to argue for tax increases.”³

“In the short term, this report is aimed at Republicans in Congress who say that raising top rates would impact small business,” Peabody told Bloomberg.

According to a study for the S Corporation Association of America,⁴ more than 90 percent of corporations are structured as flow-through entities, and from 2004 to 2008, the business owners paid 44 percent of all federal business taxes when they filed their individual tax returns.

The Wall Street Journal⁵ reported that the narrower Treasury Department small-business count revises the number of small businesses in 2007 from 20 million to 12.9 million and from $376 billion in net income to $335 billion in net income.

“Although ‘small-business owners’ are often the subject of tax-policy debate, a consensus does not exist regarding the specific attributes that distinguish small businesses from other firms,” the Treasury Department report said. “Previously, the Office of Tax Analysis had counted a small-business owner as any individual who receives flow-through income from a sole proprietorship, partnership, S corporation, farming operation, or miscellaneous rental activity. This overly broad definition was used because, for the majority of flow-through business income (partnerships and S corporations), it was not possible to trace income from the business entity to the respective owner(s). Due to newly accessible tax data, this technical constraint has been overcome.”

For more information, visit:
1. “Methodology to Identify Small Businesses and Their Owners”
2. Joint Committee on Taxation
3. “Higher Business Taxes May Follow Treasury’s Definition of Small”
4. “The Flow-Through Business Sector and Tax Reform”
5. “Using New Definition, U.S. Treasury Report Finds Fewer Small Businesses”

InteCare Inc.

Rebecca Sigafus speaks with a Midwestern authenticity that makes you want to tell her your problems. She’s in the right field.

Sigafus began her behavioral-health career as a music therapist, where she spent 10 years before returning to school for her master’s degree in social work.

“I loved being a music therapist,” Sigafus said. When she was attaining her master’s degree, she was surprised by how much she enjoyed learning the management and administration side of behavioral health.

Nowadays, Sigafus no longer sees clients. She works as the chief operating officer and director of quality improvement for InteCare Inc., a nonprofit organization that provides administrative and managed-care services for behavioral-health and addiction-treatment organizations in Indiana and bordering states.

“Bottom line—we provide the network and all the administrative services that go with it,” Sigafus said.

“What we do is we provide credentialing of the providers in our network. We have psychiatrists, nurse practitioners, licensed clinical social workers … it’s a broad array of people who work for behavioral health care and addiction services. We credential those folks and we credential organizations.”

“Since 2008, which is when we started [getting involved with] managed Medicaid, when we really got going with managed Medicaid, we have credentialed approximately 630 individuals and 52 organizations,” Sigafus said.

InteCare has also credentialed more than 216 group practices.

InteCare was incorporated in 1998. It was founded by four community mental health centers in central Indiana. Its clients are mainly in the public sector, including the state of Indiana and managed Medicaid programs.

InteCare also maintains a network of care providers who are qualified and verified to provide behavioral-health services.

“That’s the database that [The Small Business Authority] hosts,” Sigafus said. “In addition to credentialing, we collect quite a bit of info for providers to provide to our clients for the managed Medicaid [program] … and that number is approximately 3,040 unduplicated providers.”

InteCare has been a hosting customer with The Small Business Authority since December 2008. When the company sought a partner that was reasonable, flexible, and fast, it found what it needed at The Small Business Authority.

“[The Small Business Authority] clearly had the experience and expertise that we were looking for,” Sigafus said in a previous interview. “We actually had previous experience with [The Small Business Authority] in setting up a system on a shared server, which was quickly and successfully implemented. When considering other options, they were the best fit for us, and the most cost-effective.”

Practice random acts of coolness.

Southwest Airlines just wrapped up a deal to buy AirTran Airways, which will bring the airline for the first time into Atlanta, a well-known Delta Airlines stronghold, according to The Atlanta Journal-Constitution.¹ The planes haven’t been painted and

Southwest Airlines isn’t even in the Atlanta market yet. But in advance of a full-scale marketing effort, Southwest has launched a “charm offensive” on Atlanta that its marketing team has smartly termed “Random Acts of Coolness.”

“We wanted to get to know the city and introduce ourselves to Atlanta, well before Southwest planes land here,” Quinnie Jenkins told the AJC. Jenkins is the community affairs and grassroots manager for Southwest in Atlanta.

Teams of Southwest and AirTran employees have been handing out treats to firefighters and police officers and donating money to local swimming pools, the AJC reported. They also set up tables and handed out tote bags, school supplies, and muffins to teachers on the first day of school.

The idea is to enter the community and seek out its heart-and-soul influencers like teachers and police officers, and simply be nice. Novel concept, right? There’s no better way to build a strong community relationship than by doing something to improve your community and connect with potential customers.

So, what “random acts of coolness” could your business pull off? When you consider the cost of marketing and advertising, it could be the smartest branding money your business ever spent. Here are a few ideas to help get you started with your own random acts of coolness “charm offensive.”

• Sponsor a local Little League or other sports league. Build loyalty by sponsoring a local Little League, Pop Warner team, or another organized activity for kids. What better brand ambassadors than a bunch of local kids getting exercise and having fun? Parents will notice, too.
  Little League Baseball has guidelines² in place for supporting teams. You can’t advertise alcohol or cigarettes or any other product that’s harmful or particularly controversial. But sponsorship allows you to place your business name and logo on the team uniforms.
  If you plan to include team sponsorship as part of your community outreach plans, make sure the effort is first and foremost focused on helping kids get out and play. The marketing and goodwill are just byproducts of being a good community partner.
• Donate your products or services for raffle and other prizes for charity events. If a school or local charity asks you for help, say yes. You don’t have to write a big check to participate. Just buy a ticket to the next rubber-chicken fundraiser or donate your products or services to be auctioned off.
  Aside from the exposure your charitable donation will provide, consider the tax benefits of charitable involvement.³
• Adopt a street. Adopting a street or highway is a great way to get your business noticed for all the right reasons. There are different ways of adopting a highway or street, including working with your local government to determine an arrangement. There are even companies that will help you identify appropriate markets and work with you on signage, like Adopt-A-Highway Litter Removal Service of America.⁴
• Sponsor school events, and support fundraisers. Teachers and schools are the heart of any community. And with state budgets being slashed across the country, there have never been more opportunities to help. Many schools are willing to sell naming rights to buildings, and schools need sponsors for everything from band uniforms to after-school programs. Reach out to your local schools and find ways you can help. Parents, teachers, and kids will return the loyalty.
  From career days to sporting events, opportunities exist for you and your business to help. Here’s a great article with even more ideas about how to get involved.⁵
• Donate to local public television and radio drives. Public television and radio stations have pledge drives several times each year. Every pledge drive requires not only donations, but also staff members to answer phones, as well as all sorts of volunteers. There are opportunities for companies to sponsor entire evenings of programming and staff phone banks. It’s wonderful exposure for any business. Who wouldn’t want to help out Big Bird? Contact your local stations for opportunities to get involved, and maybe even score a bit of free airtime to boot. Find your local public television station at pbs.org and radio stations at npr.org.

For more information, visit:

1. “Quietly, Southwest Starts Marketing Offensive”
2. “Sponsorship of a Team in a Local Little League”
3. “Small Business Cents: Charitable Giving and the Tax Benefits for Small Businesses”
4. Adopt-A-Highway Litter Removal Service of America Inc.
5. “Businesses Should Donate Time and Money to Support Local Schools”

Tax tips for small-business owners

Are you forfeiting your summer vacation to start your new business? The Internal Revenue Service wants to help you take all the right steps from the beginning.

Here are some tips to make startup-related tax issues less confusing:

1. Decide on your business entity. What type of business entity are you going to establish? Be sure to think this through and research extensively. Once you choose your business structure, you can’t change it easily. The type of business you establish, whether it’s a sole proprietorship, partnership, C corporation, S corporation, or limited-liability company (LLC), will determine which tax forms you need to file.

2. Know which taxes you need to pay. The type of business you run will determine which taxes you will pay and how you will pay them. You may need to pay income tax, self-employment taxes (Social Security and Medicare for yourself), employment taxes (withholding part of Social Security and Medicare taxes from your employees’ wages and paying a matching amount), and excise taxes (taxes paid when purchases are made on a specific good, such as gasoline).

3. Get an Employer Identification Number (EIN). If you have employees or you operate your business as a corporation or partnership, you need an EIN, also called a Federal Tax Identification Number, to identify your business. You’ll need your EIN when you invoice your vendors.

4. Keep good records. Choose your record-keeping system and make a point to keep up with documenting all your business income and expenses. Depending on what type of business you have, you may be required to keep certain kinds of records. For tax purposes, hold on to all supporting documents such as bank deposit slips, cash register receipts, and more.

5. Choose calendar year or fiscal year. Every business owner must figure taxable income on an annual period called a tax year. Once you choose to go with either a calendar tax year (12 consecutive months beginning Jan. 1 and ending Dec. 31) or a fiscal year (12 consecutive months ending on the last day of any month except December), you must continue with that choice unless you get IRS approval to change.

6. Choose your accounting method. You must also decide which accounting method you will use to report income or expenses. The most common methods are cash and accrual. Under the cash method, you report income in the tax year you receive it, and you deduct expenses in the tax year you pay them. Under the accrual method, you report income in the tax year you earn it, and you deduct expenses in the tax year you incur them.

Need help deciding on a business structure when incorporating or filing an EIN? The Company Corporation^® can help. Speak to an incorporation specialist by visiting The Small Business Authority’s “Incorporate Your Business” page.

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

Principles for Social Media and Business

Social media isn’t a silver bullet. It’s not even necessarily a smart place to put tons of your business resources. Here’s what social media is: a cheap and personal way to connect with a slice of your customer base. That’s it. Sorry to burst any social-media consultants’ bubbles out there.

When done well, social-media networking can be an innovative, low-cost way to connect with customers, engage them in a conversation, and develop their loyalty. When done poorly, social media is just another opportunity to turn people off. Before you send your next tweet, post on any wall, or StumbleUpon anything, consider these five guidelines for social media and your business.

1. Audience: If you build it, sales will come. The only goal of any social-media initiative should be to build audience. That’s the only metric worth monitoring in the beginning. The more people in your network, the more eyeballs that see your message, the better your chances of converting those eyeballs to sales. There are many ways to build an audience. Providing engaging content related to your business or even offering deals and specials only available on social media are great ways to start. Just make sure every social-media interaction has the goal of building your audience.

Socialnomics¹ has a handy updated list of social media and the number of users. Take a look and see where your customers are.
And check out the comprehensive list from Mark Hendrickson at TechCrunch² of some of the software available to help you begin amassing your following.

2. Understand SEO. SEO, or search-engine optimization, is a fancy way of saying this: Google is looking for quality, relevant content for its users, so give it to Google and everyone will do just fine. There are certainly tricks of the trade both on the technical side and the content side of your social and online media to goose your Google search ranking.

Neal Rodriguez wrote an excellent primer on SEO for the Forbes³ blog, and he included links to Google tools to help get you started.

The best thing you can do for your business is pick two or three keywords relevant to your business and use them as often as you can on your site and in your social media. For instance, if you run a dry-cleaning business, you want to add as much content to your site that allows you to use the phrase “dry cleaner.” Google will recognize your site as a highly relevant spot for information on “dry cleaner” and move you up in the rankings accordingly.

Just like with your audience, the more quality content you give Google, the more love you’ll get in return.

3. People really just want to talk about themselves. Just like in real life, people on social media are really just looking for information about themselves. Fair enough. Give it to them. If you run a produce-delivery service, look for people in your area talking about their latest diets and let them know how easy your service can make their lives. Run a bike-repair shop? Look up and strike up conversations with your local bike clubs. Seek out your potential customers and let them know how you can help. And with social media, you can save the cost of the stamp or phone call.

Here’s an anecdote about hospital social media’s relationship to user engagement and the need to shift from a “me” to a “we” perspective.

4. It’s easy and inexpensive to be successful on social media. You don’t have to turn into a 15-year-old girl tapping away the hours on her smartphone to be successful with social media. It’s far better to do less but make it great. If you bombard your followers and friends with an endless stream of junk, you’ll lose them. Plan your messaging ahead and stick to one or two interactions per day. What’s more important than the number of interactions per day is how consistent your messaging is over the long haul.

There are plenty of tools that can help you schedule and organize all your social-media interactions and automate the posting process. TweetDeck⁴ and HootSuite⁵ are two popular platforms.

Also, remember to share other friends’ and followers’ information. Make a habit of sharing and retweeting other people’s content, too. More often than not, they’ll return the favor.

5. Timing matters. Friday at 4 p.m. is when you’re most likely to be retweeted. Make sure you’re sending your messages and engaging with users during peak social-media usage times to maximize your effectiveness. Dan Zarrella’s guide published on ProBlogger⁶ gives you the details about where and when to catch your audience.

For more information, visit:
1. Socialnomics
2. “Nine Ways to Build Your Social Network”
3. “Ten Myths About Social Networking for Business”
4. TweetDeck
5. HootSuite
6. “When’s the Best Time to Publish Blog Posts?”

“Should we get married?”

INSERT CAPTION HERE.

Since June 24th’s dramatic vote in Albany, this is the question everyone is asking. What a difference a few weeks make—earlier in June, when Gov. Cuomo introduced New York’s same-sex marriage bill, there was little belief that it would even be brought to a vote, let alone have a sufficient number to become law. Many activists simply had hope and the slightest bit of faith.

Two weeks later, the dream became reality. Now, the coupled but hitherto unmarried are free to legally ask that question. If couples have not planned properly, however, they may hear some say, “Be careful what you ask for.”

Beginning July 24, same-sex couples obtained a lot of new rights, including employer health benefits, easier inheritances, and a host of state tax breaks. Federal recognition was not part of the vote, however, leaving benefits like Social Security out of reach for same-sex couples.

As tax advisors and counselors for many domestic partners in the metropolitan area, we’re hearing this question from our New York clients with more than just curiosity this week. The reality of marriage when talking taxes is a sobering discussion. It’s similar, of course, to the discussion that opposite-sex couples face when they are about to marry, with one major exception—same-sex couples will only be considered married at the state level. For federal purposes, same-sex couples are still considered unmarried and must file as single taxpayers.

What, then, is at issue? Well, there’s the graduated nature of tax rates at the state level. As you add the second partner’s income, the additional income is taxed at higher rates than it might have been if each partner were to file as a single individual. There’s the definition of marriage—when is a marriage not a marriage? In New York, same-sex marriage is now a matter of law—the Marriage Equality Act. In neighboring Connecticut, civil unions that were not dissolved or annulled by October 1, 2010 were “merged” into marriage by operation of law. Although New Jersey doesn’t recognize same-sex marriage, its civil-union laws do allow for joint tax-return filing.
The ancillary issue to consider is one’s filing status—if you are married under the law, you no longer have the choice of a “single” filing status; married individuals must file their state returns as married filing separately or jointly with their partners. Unlike Massachusetts, which pioneered gay marriage in 2004, New York has no residency requirements for obtaining a marriage license. However, if you marry in New York and you are not a resident of New York, you must still follow the tax laws of your domiciled state regarding tax-filing status.
Is this filing-status choice beneficial? Does it benefit us financially? What are the legal implications? Those are the real questions being asked. Not to be obtuse, but the answer to those questions is that it really depends. There are a number of considerations to take into account, like the family’s combined income, partners’ itemized deductions subject to limitation, partners’ itemized deductions subject to AMT adjustment, and the total principal of mortgage financing. Other considerations are dependent children, dependent-care expenses, and even educational expense deductions or credits.
As you can see, the answer to the question is anything but simple. Marriage is a wonderful and romantic step that millions of couples take each year as a natural progression in their relationships. If you are currently contemplating the “Should we get married?” question, please consult your tax advisor.
To learn more, visit the Domestic Partners Network today!

Visit www.janoverllc.com.

Make sales contests work for your company.

Nearly every small business hits a sales slump at some point, resulting in a plateau for profits. Although this may be normal, the bills still need to be paid so ignoring the issue is out of the question. One of the most tried-and-true ways to pull your company out of quicksand is by rallying the troops with a sales contest. Tempting your salespeople to get moving by waving around prizes and cash to the highest earners can be quite effective, but only if you do it right. Consider some tips on keeping your sales contest fair, fun, and successful.

1. Use contests sparingly. Although you could always use more revenue, save the contests for the times you really need to increase your sales. Otherwise, the contests may become ineffective and ignored by your employees. Sales performance professional Alan Rigg wrote the article, “Do Sales Incentives Really Motivate Sales Professionals?”¹ In it, he warned, “Rather than constantly running new sales incentives and contests, save them for special situations such as jump-starting sales of new products or services or reinforcing desired changes in how your salespeople sell.”

2. Think about your objective for the sales contest. Make it specific so your employees know what they are aiming for. Whatever your company is struggling with most at the moment should be the focus of the competition.

Also, make it a challenge. An article on Inc.com titled “Letting Employees Battle It Out”² highlighted the perks of encouraging a little competition in the workplace, regardless of the contest’s objectives. Nick Friedman, president of Florida-based College Hunks Hauling Junk, told Inc.com about the contests he holds to encourage employees to compete with each other to get the best profits, average job size, or loyalty from customers, to name a few ideas.

3. Break the contest into increments. The main point may be to increase revenue in the long run, but employees will be more motivated if they are frequently updated with their performance in the contest. You may be able to keep it running for several months, but don’t wait until then to hand out prizes if you want to keep up the spirits of the participants. Consider offering a smaller prize to the person who makes the most sales each week. Then, add each week’s results so you can hand out the big prize at the end of the contest. This way, it’s likely that more than one employee will win a prize.

4. Offer appealing prizes. Cash is always appreciated, but it’s not the only prize available, especially when it comes to the smaller sales rewards. Rather than handing out a $20 bill to the employee who wins the weekly contest, for example, consider giving out movie tickets or happy hour on you. A larger prize might be an all-expenses-paid trip. Gift cards are often gladly accepted, but keep in mind that they have to be declared to the government by employees because they count as taxable income, according to Entrepreneur.com. The article “Don’t Be a Scrooge by Giving a Gift Card”³ states that while gift cards of any amount are taxable, tickets to events or movies are not.

5. Make sure the contest benefits you. A contest is useless for your financial bottom line if you don’t make any money from it, whether immediately or eventually. You need to do more than just break even on your prize budget. Measure the results weekly or in other time increments to make sure that sales, customers, and overall profits really are increasing as a result of your employees’ recent efforts.

1. “Do Sales Incentives Really Motivate Sales Professionals?”
2. “Letting Employees Battle It Out”
3. “Don’t Be a Scrooge by Giving a Gift Card“

Consider these features when choosing a small-business credit card.

More and more small-business owners are using business credit cards to finance their startups and daily expenses. From 1998 to 2009, the percentage of small businesses using business credit cards increased from 37 percent to 64 percent, according to two surveys and a poll mentioned in the “Report to the Congress on the Use of Credit Cards by Small Businesses and the Credit Card Market for Small Businesses.”¹

Although a minority of small-business owners still makes use of a consumer credit card to fund operations, there are many advantages to using a small-business credit card instead.¹

Small-business credit cards enable you to separate your business expenses from your personal ones, which becomes an asset (though not literally) when calculating your end-of-year accounting. Additionally, small-business expenses are easier to manage once the company’s budget is centralized on a single card.

You may also issue to each employee a small-business credit card in her own name and at a customized credit limit. This way, you control who has access to company funds and exactly how much.

Finally, if you plan to expand your business, you can use a small-business credit card to help build credit in the company’s name. When you’re ready to seek a small-business loan, for example, you’ll strengthen your application if you have a solid credit history with adequate financial documentation.

“When entrepreneurs take those first trembling steps, most have to take them alone. Credit can help them do that. And it can help them bridge the gap when they know that orders or sales are coming in, or a private investor is going to come through,” George Whitehead² told Karen E. Klein³ of Bloomberg Businessweek.⁴ Whitehead is business development director for the National Endowment for Science, Technology, and the Arts.

“All kinds of unexpected things happen to small businesses. Credit can act as a cushion.”

Although the advantages of a small-business credit card are plentiful, not all cards are created equal. So, how do you decide? First, carefully read the fine print of a credit-card application. Then, investigate and prioritize for your company the following five features before you sign up:

1. Interest Rates (APR). If you are opening a small-business credit card for the temporary relief of debt, you should consider a card that offers balance-transfer benefits and a zero percent introductory APR.

Be sure the card still provides a low APR for all future purchases once any special balance-transfer offers expire.
Although most small-business owners already take advantage of business credit cards, only 18 percent of them carry balances.¹ But even if your company intends to pay off all monthly charges in full, a low APR will provide a cushion for all contingencies.

2. Rewards. If borrowing is not your ultimate goal, benefits may be. When choosing a business credit card, consider the perks that come with using it, such as free plane tickets or electronics, or cash back.

In addition to these tangible gifts, small-business credit cards offer other, intangible benefits, including fraud protection and travel insurance.

Of course, spending is required to receive a dollar-for-dollar match, so be sure your card is accepted widely in the places where you shop.

3. Credit Limit. Small-business credit cards usually have higher credit limits than consumer credit cards. If your company tends to make large monthly purchases but lacks liquidity, you will find more leniency and room to grow with a credit line from a small-business card. Don’t let your personal credit limit stymie business development.

4. Documentation and Financial Services. Many small-business credit cards offer free financial or spending reports, or both. Also, credit cards often offer payment services that sync with QuickBooks and other accounting software. These features facilitate company audits and ensure that your business taxes include all appropriate write-offs.

At the same time, not all credit-card companies offer timely documentation and financial services free of charge.

5. Annual Fees. Ask about annual fees before choosing a small-business credit card. Owners of certain businesses may be able to write off credit-card convenience fees as necessary business expenses. But check with your accountant. Hidden fees can break the bank.

There is a plethora of options available to small-business owners when it comes to opening a business credit card.

“We see a great opportunity,” Mike Nagle told Pat Curry for CreditCards.com.⁵

“It’s a large market,” said Nagle, who manages the Ink credit card from Chase. “There are 27 million small businesses with up to $5 trillion a year in spending. The majority of that spending still happens on a check. There’s a great opportunity to provide innovation.”

With so many small-business credit cards from which to choose, funding a great idea never became easier. Select the offer that works best for your company.

For more information, visit:

1. Board of Governors of the Federal Reserve System, “Report to the Congress on the Use of Credit Cards by Small Businesses and the Credit Card Market for Small Businesses,” May 2010
2. National Endowment for Science, Technology, and the Arts
3. Karen E. Klein
4. “The Credit Card Debate”
5. “Small Business Credit Cards Stage a Tentative Comeback”

Congratulations! You’ve decided to take the next step with your business by incorporating. Now you need to learn about the incorporation process and recognize the options available to you.

When going through the incorporation process, avoid these nine mistakes:

1. Thinking your business is too small to incorporate. All business owners can benefit from the opportunity to separate and protect their personal assets from business debts. No business is too small to incorporate or form a limited-liability company.

2. Waiting until the last minute to incorporate. Some state offices have longer processing times than others when it comes to the incorporation process. If you need to have your business incorporated by a certain date, find out your state’s processing time for filing an incorporation document. Call the Secretary of State’s office in the state in which you wish to incorporate, or call a service company that provides incorporation services. Most service companies work with all of the Secretary of State’s offices on a daily basis and are familiar with processing times.

3. Choosing the wrong service company. Finding the right service company may seem difficult. Conduct research on service companies that provide incorporation services. Look for companies that have a long history of providing expertise in the industry, as well as good customer service.

4. Incorporating in Delaware or Nevada just because of their popularity. Most small-business owners benefit from forming corporations or LLCs in the states in which they will conduct the majority of their business. If you expand your business to other states, then you may want to consider registering in Delaware, Nevada, or any other state.

5. Choosing the wrong business structure. Few states permit companies to change from one business structure to another. Before you incorporate, learn the structural differences among corporations, LLCs, and partnerships.

6. Thinking that filing the incorporation document is all you need to do. After you file the incorporation document, you also need to keep your business organized. Some service companies provide bundled package items like legal guides, corporate minute books, and Federal Employer Identification Number (EIN) filing information.

7. Naming yourself as your company’s registered agent. This can be a mistake if you don’t understand what a registered agent must do. For example, a registered agent must be available during all business hours to receive important legal documents. If you run your business from home and leave your house to run errands and an officer comes to your door with service of process, you may run into problems for not being available to receive those legal documents. Some service companies provide registered-agent services and can receive legal documents on your behalf, and they have offices in all 50 states.

8. Being careless when completing your incorporation document. Believe it or not, many people have misspelled their business names or business addresses when filling out incorporation documents. Review all of your information for accuracy before submitting. Some states charge fees to change information on documents after they have been filed.

9. Failing to stay in compliance. Don’t forget about business licenses, annual reports, permits, and tax registration. Many states, counties, and cities have different licensing requirements. It’s important that your business remain in compliance in the state, county, and city where you conduct business.

If you are ready to take the next step and incorporate your business, visit The Small Business Authority’s “Incorporate Your Business” page. The Company Corporation^® can answer all of your questions regarding the incorporation process and have your entity incorporated in less than 10 minutes!

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

Get office supplies on the cheap.

The cost of office supplies can add up quickly for small and large businesses alike. Bundle¹ reports that the average cost for office supplies in the United States is $19 per month, with the top 10 percent of spenders paying out as much as $39 per month to buy supplies.

If you want to trim this area of your business budget, you can incorporate some simple ways to cut costs and get office supplies on the cheap.

Shopping Around

One of the best ways to make sure you are getting office supplies on the cheap is to know what you are spending in comparison to what others charge. Although it might be too time-consuming to track the price of every item every time you need to make a purchase, it’s best, at a minimum, to identify your biggest expenses and do some comparison shopping on those items at least once a quarter. You can buy from the lowest-price provider or, if you have a supplier you like to work with and you find an item for a lower price somewhere else, you can ask your regular supplier to match the lower price.

Avoid Brand Loyalty

Being brand loyal when it comes to office supplies is sure to cost you. If you can buy generic brand items or items that are on sale at the time of purchase, you could save significantly over the cost of name-brand products.

Take Advantage of Promotions and Coupons

Most companies that sell office supplies offer periodic coupons or special deals. Some have promotions on an ongoing basis. For example, it is common to receive dollars off a purchase if you return ink cartridges when they are empty. Ask about any special offers or deals that may be available before you order. If you receive a coupon in the mail, see if you can stock up during the promotion on items you will need in the near future.

Consider Local Suppliers—Especially at Back-to-School Time

Sometimes, the best way to buy cheap office supplies is to go shopping at your local warehouse store or even your local dollar store. Although it might be less convenient to visit a retail store than to order online, it could be worthwhile if the savings are significant.

Many business owners offer back-to-school promotions designed to lure parents and returning students into their stores. There is no reason that you can’t take advantage of these deals as well—the low-price pens and paper marketed to school children will work just as well in a professional setting.

Buy in Bulk

Many suppliers will offer discounts if you buy in bulk or set up standing orders. If you have a supplier already, ask what kind of discount she is willing to offer you if you place larger orders at once. If she isn’t willing to offer any, consider shopping around for other suppliers.

Consider Unconventional Solutions

Although all of these tips can help you save money on your office-supply purchases, sometimes an out-of-the-box idea can provide the most significant savings. For example, in Augusta, Ga., some city commissioners have suggested that the city cut back on its $500,000-per-year paper and office-supply expenses by using iPads.² In an increasingly high-tech and electronic world, such an idea could be a great investment that pays for itself over time.

For more information, visit:

1. “Cost of Office Supplies in the U.S.”
2. “Augusta Floats iPads as Way to Slash $500,000 Paper Budget”

Using the Shopping Cart

If you’re looking for new ways to grow your small business, you can expand its reach by opening an online store. Selling your products and services online can add life to your business by boosting sales and increasing profits.
With that comes a responsibility to have in place not only a website, but also a user-friendly shopping cart.

What should you look for?

You have a variety of shopping-cart options from which to choose. If you’re mindful of what to look for when considering shopping-cart software, you’ll be more likely to find what you want.

Consider credit-card processing. If you want to engage in real-time credit-card processing, you need to have your shopping-cart software tie into your merchant-account software.

Consider what your hosting company offers. Some companies include shopping-cart software in their hosting packages. That’s great for you, the small-business owner, because you don’t have to look or pay for additional shopping-cart software. Everything is all in one place.

Consider what the shopping-cart page looks like. As noted above, some shopping-cart software limits what the shopping-cart page looks like, as well as what it contains. Be mindful of what your software does and doesn’t allow. You want your shopping-cart page to be as user-friendly and clean as the rest of your website.

Consider the security of your software. Being on the internet means protecting yourself from hackers. Because shopping carts contain valuable customer information, namely addresses and credit-card information, they need to be secure to keep out the bad guys. The last thing you want is for someone to hack into your site and steal customer information. Use the most recently updated software. Check out blogs, newsgroups, and consumer-review sites to see if the software you’re considering works well for others.

Why even have shopping-cart software?

If you have a small business that offers a limited number of products or services, you might conclude that you don’t even need to consider shopping-cart software because it simply isn’t worth it. Here’s the bottom line. If you want to expand your business, if ever so slightly, you can do so by having a website with a shopping cart.

Arbitration vs. Litigation

This article is based, with permission, on “The Advantages and Disadvantages of Arbitration as Compared to Litigation” by Arthur Mazirow, Esq., CRE. Mazirow holds the copyright to “The Advantages and Disadvantages of Arbitration as Compared to Litigation.”

Litigation through the courts is slow, expensive, public, and subject to all sorts of forces beyond your, and your counsel’s, control. So it’s no secret why arbitration, which is quick, private, and final, can be an attractive alternative for settling all sorts of disputes ranging from divorce and child custody to business and insurance. But before you agree to arbitration over litigation¹ in matters related to your business, there are a few things you should know.

Why arbitration?

Arbitration is fast. It could take years to bring a case to trial. If you’re looking to settle a dispute in your business, chances are you need to resolve the issue and move on as quickly as possible. Arbitration requires only that you and the other interested parties agree on a mediator and agree that the decision is final and binding.

Arbitration is cheap. Attorney’s fees for a long court battle can cripple a company and drain fortunes. By settling a dispute through private mediation, you could save on paying lawyers for months, even years. Arbitration isn’t always the least costly option, however. When you employ a panel of arbitrators or the issue involves multiple parties, the cost of arbitration can skyrocket.

Arbitration is private. Messy disputes or those involving private, proprietary business matters are often best settled quietly. Litigation in open court is public. If the nature of your conflict is sensitive, you might want to consider arbitration.

Arbitration is informal. Everyday business is fraught with disputes. No successful person ever got that way without ruffling feathers here and there. It happens. But if your goal is to maintain a business, or any other, relationship with the other party, arbitration can offer a neutral, casual, and friendlier way to come to a resolution without the typically confrontational environment of a trial.

Arbitration is personal. By coming to a mutual agreement with the other concerned parties about who will mediate your affairs, you are afforded the opportunity to select someone particularly suited to your business. You can hire a mediator with a background in a particular industry or someone who you know is familiar with your business.

Arbitration Downsides

Arbitrators aren’t necessarily neutral. When you go to court, the judge’s paycheck isn’t coming from the litigants. Not so for arbitrators. If you’re in a dispute with someone who is a better customer of the arbitrator who will be making a decision about your future, be careful. If the insurance company you’re battling gives your arbitrator millions of dollars a year in business, is your arbitrator likely to be completely neutral? You can’t know all of the interests of the arbitrator, but if you’re concerned about getting a fair, impartial decision, consider litigation.

Arbitration is final. Decisions from an arbitrator are final. Unlike a court trial, which offers an appeals process, any decision, no matter how unfair it seems, is binding.

Arbitration isn’t really about the law. Unlike court cases, which are decided based on a broad history of legal precedent, arbitrators aren’t under any obligation to consider the outcomes of past disputes. Arbitrators will often make judgments based on what is fair or just, or based on their business instincts, not on what’s legally required.

How to Select an Arbitrator

There are really no rules for the best way to choose an arbitrator to settle your conflict. There are a number of online directories and resources available, like Mediation.com² and GAMA.com,³ that can help you narrow down your search.

It’s only important that you and the other party agree on which arbitrator to use. GAMA.com⁴ suggests that you could draw straws or pull a name out of a hat to see who selects the mediator. Sometimes, parties will agree to allow their respective attorneys select an arbitrator together. Arbitrators are most often attorneys with specialties in specific areas of the law, so it might be most beneficial, and expedient, to choose one who knows and understands the nature of your business and the dispute in question.⁴

What’s most important is that you trust this person to make a decision that can determine the outcome of your dispute, or even the future of your business.

For more information, visit:
1. “Advantages and Disadvantages of Arbitration as Compared to Litigation”
2. Mediation.com
3. GAMA.com
4. “Suggested Ways to Select an Arbitrator”

The Small Business Authority cannot and does not give legal or tax advice and nothing contained in this article should be construed as such. Before taking any actions based on this or any other article published by The Small Business Authority, we strongly advise you to consult with an attorney and/or your tax professional.

Pick the right office chair.

According to the Occupational Safety and Health Administration,¹ one in every five workplace illnesses or injuries can be attributed to back injuries, and one in every four compensation indemnity claims are back-injury related. While some of those back injuries result from accidents or from actions like repetitive lifting, others are caused by poor posture when sitting, staying in one position for too long, or sitting in poorly designed workstations. An employee can go a long way toward preventing injury by sitting in an office chair that is ergonomic, comfortable, and properly designed to reduce stress on the body.

Choosing an Office Chair

The OSHA website² states that a “well-designed and appropriately adjusted” chair is essential to a safe work environment, and the website provides several guidelines for what makes a good chair. According to OSHA, a good chair:

• Supports the back, buttocks, legs, and arms
• Reduces or eliminates the need to sit awkwardly or with improper posture
• Limits contact stress
• Reduces forceful exertions

OSHA also suggests that, whenever possible, the person who will be using the chair regularly should test the chair for comfort and fit before the chair is purchased. Because this isn’t often possible in an office environment where chairs are purchased in bulk or where employees may come and go, OSHA advises that chairs be adjustable so individual users can modify the chairs to meet their needs.

Important Elements of a Chair

Aside from making sure your chair is adjustable and trying out the chair before purchase whenever possible, you should look for several characteristics in any chair you consider buying:

• The chair’s backrest should provide sufficient back support. The chair should provide this support in a variety of different sitting positions, including reclining at least 15 degrees. It is best if the lumbar support is height-adjustable and can be moved back and forth so it can be altered to fall at the small of the back, as well as accommodate both shorter and taller people. The backrest should also be lockable in place so it does not move involuntarily.
• The chair’s backrest should conform to the spine’s natural curve. When this is not possible, a lumbar-support cushion or even a rolled-up towel can be used to make the chair better support the shape of the user’s back.
• The seat of the chair should not be too high or too low. A person should be able to put his feet flat on the floor when sitting in the chair. It is best if the chair’s seat pan is adjustable so users of different heights may use the chair.
• The seat of the chair should be comfortable. OSHA recommends a padded cushion and a waterfall edge on the cushion. If the chair becomes worn and the user begins to feel the springs, the chair should be replaced.
• The cushion of the seat should be wide enough. A person’s buttocks should fit comfortably without his hips extending over the sides of the seat cushion.
• The chair should have at least five legs. Four or fewer legs can make the chair less comfortable and more likely to tip. Having casters on the legs is a good idea to avoid awkward reaches and bending, but the casters should be appropriate to the type of flooring material used.
• Armrests are optional. If they are present, they should be adjustable to avoid forcing a person into an awkward position or making it difficult for him to get into or out of the chair. The armrests should also be made from soft materials that do not irritate the skin, and they should not have sharp corners.

Choosing a Chair

Choosing the right chair is a question of balancing the needs of the users with the budget available for office furniture. Although you would facilitate maximum employee comfort by allowing each employee to pick out her own chair, you should ultimately choose a chair that meets as many of the OSHA criteria as possible and that allows a user to customize it to her own needs.

For more information, visit:

1. “Back Injuries—Nation’s No. 1 Workplace Safety Problem”
2. “Chairs”
3. “OSHA Technical Manual: Back Disorders and Injuries”

What are the business tax structures for corporations and LLCs?

When starting or incorporating a business, consider the tax structures that exist. It’s important to understand the difference between corporations and limited-liability companies (LLCs) when it comes to tax structure and tax forms to file. You will be able to determine which entity type and tax structure best suit your business. For specific guidance regarding tax forms, you should always consult your accountant or tax advisor.

Corporations and LLCs complete tax filings with the Internal Revenue Service based on their tax classifications. For example:

• C corporations file IRS Form 1120 and pay taxes on any profits at a corporate income tax rate. Shareholders also pay taxes on dividends. Quarterly estimated tax payments are due in April, June, September, and January.
• S corporations file IRS Form 1120S. Shareholders report their shares of corporate profit and loss on their personal 1040 income tax returns using Schedule E. Like a partnership or LLC, an S corporation must also file Schedule K-1.
• Single-owner LLCs report all profits or losses in the LLC on the personal income tax returns of the owners using Schedule C, similarly to sole proprietorships.
• Multi-owner LLCs taxed as partnerships file IRS Form 1065 with a Schedule K-1. Each LLC member reports her share of profits or losses in the company on Schedule E and submits it with her 1040 return.

You can also save on taxes with business-tax deductions. Tax deductions may allow small-business owners to offset the expenses of starting and running their companies. The Internal Revenue Code provides for certain business-tax deductions on equipment, vehicles, travel, and more. Some home-based business owners can also deduct portions of rent, utilities, and insurance.

Log your business expenses regularly and save your receipts to help maintain an accurate record of your expenditures. You may need these records to help calculate deductions or to provide to the IRS during an audit.

Many business owners take advantage of the following deductions:

• Startup costs. Business owners may incur startup costs for research, advertising, licensing, and other items prior to opening for business. Business owners can deduct startup expenses in equal amounts over their first five years in business, instead of deducting the costs in the year in which they were incurred.
• Operating expenses. Day-to-day operating expenses include employee salaries, rent, travel, and more. A business owner can deduct operating expenses in the year in which he incurred them. A business owner should, however, familiarize himself with IRS limits on the amounts he can deduct.
• Inventory costs. Inventory consists of items that business owners make or buy, then resell. These costs differ from startup expenses. Business owners can deduct inventory costs as they sell the inventory.
• Capital expenses. Land, equipment, machinery, or buildings may qualify as capital expenses. These expenses include long-term investments, as opposed to simple operating costs. The appropriate timing for deductions on capital expenses depends on several factors, including the size of the business.

To learn more about the different tax structures, business-tax deductions, or different entity types available when incorporating, visit The Small Business Authority’s “Incorporate Your Business” page. You can request a free consultation call with an incorporation expert!

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

Productivity decreases in second quarter

U.S. widget output in the nonfarm business sector increased 1.8 percent in the second quarter of 2011, according to a report from the Bureau of Labor Statics.

By “widget,” we mean the output of real goods and services by the domestic economy. Exports, federal government spending, private inventory investment, and nonresidential fixed investment were the widgets that pushed up the output number.

Even though widget output increased in the second quarter, people increased their hours worked by 2 percent to create those widgets.

That means productivity dropped at an annual rate of .3 percent for the second quarter, according to the BLS.¹

“If output increases but hours increase more, then you have a decline in productivity,” said BLS public affairs officer Gary Steinberg.

“If it takes you more hours to produce something, that’s lower productivity.”

The increase in output is based in part on an advanced estimate of the GDP by the Bureau of Economic Analysis.²

The productivity calculation is subject to change, because the BLS receives data from other agencies and compiles the data to get the calculation, Steinberg said. Any time new data come in, the productivity number gets revised.

The revised productivity calculation is set to come out in early September. The second estimate for the second-quarter GDP will be released Aug. 26.

For more information, visit:

1. “Productivity and Costs, Second Quarter 2011, Preliminary”

2. “Gross Domestic Product: Second Quarter 2011 [Advanced Estimate]”

Get that employee just in time

According to the latest Bureau of Labor Statistics “Employment Situation Summary,”¹ the unemployment rate for July 2011 dipped slightly to 9.1 percent from the previous month’s 9.2 percent. The BLS report showed that total nonfarm payroll employment was up by 117,000 (that includes a drop in government jobs).²

We wanted to see whether the unemployment rate for July was as bad as it was last year. The BLS figures showed that the national unemployment rate in July 2010 was 9.5 percent.³

So unemployment this July wasn’t as high as it was last July.

Nevertheless, some business owners may be incorporating a just-in-time hiring method as a way to be lean and mean in this economic climate.

Just-in-Time HR

The ease of stopping and starting recruitment, coupled with the incorporation of business practices such as just-in-time and lean manufacturing, mean that business owners can—and do—wait to hire employees until they need them, rather than hiring employees to prepare for potential economic shifts. Just-in-time operation means that manufacturers wait to buy materials so they arrive precisely when they are required for production, resulting in less waste, a decrease in costs, and increased efficiency.

Manpower Inc. CEO Jeffrey Joerres talked about just-in-time HR in a 2005 Expatica⁴ article. Joerres told Expatica that industries like IT and telecommunications are incorporating JIT HR, using sophisticated methods of analysis to determine exactly when they will need employees and to tailor their hiring accordingly.

What Does This Mean for Employees?

Employees who want to succeed in this job market need to take steps to stand out from the crowd and to make the companies that are hiring take notice. According to an article in The New York Times,⁵ “Going back to school does offer the possibility of joining the labor force when the economy is better. Unemployment rates are also generally lower for people with advanced schooling.”

A 2009 CNNMoney special report⁶ showed how networking and volunteering helped people make the contacts needed to find jobs, even during tough times.

What Does This Mean for Business Owners?

Business owners who want to succeed in a challenging economic landscape must also embrace the trend of careful management of personnel. Hiring too many employees can hinder a company’s growth, especially during slow economic times. Hiring too few can result in an inability to meet increasing demand.

Close communication among HR personnel and department heads is essential, as is keeping watch of economic trends to anticipate and prepare for growth. HR managers should also streamline the recruitment process and have a plan in place to bring on talent as needed.

For example, business owners may want to consider using temporary or flex workers to meet temporary periods of demand. Personnel training methods should be in place to ensure that new employees can quickly be brought up to speed when demand calls for hiring to occur. There should also be a procedure for anticipating layoffs, as well as a careful plan in place for handling slowdowns. In other words, business owners who want to succeed may need to embrace a seamless system that ensures that workers will be available when needed.

For more information, visit:
1. “Employment Situation Summary”
2. “July Payroll Numbers Not So Bad, Survey Shows”
3. “Unemployment in July 2010”
4. “New Frontiers in Business: Just-in-Time HR”
5. “Many With New College Degree Find the Job Market Humbling”
6. “How to Get a Job”

A Website-Accessibility Rule Would Be Good

The DOJ Civil Rights Division is currently reviewing comments about a possible rule regarding website accessibility for people with disabilities. The DOJ put an Advanced Notice of Proposed Rulemaking in the Federal Register in July 2010, and it collected comments through January 2011. This is the second part of a two-part series. To read the first part, click here.

The Equal Rights Center is a nonprofit organization in the District of Columbia that advocates for civil rights and equal opportunity. The ERC submitted a comment about the notice, stating its support of a website-accessibility rule and the use of WCAG Level AA standards to create the rule.

Donald L. Kahl, executive director of the center, said issues like the ones raised with the advanced notice of proposed rulemaking are part of the core of the organization’s mission.

“It falls into our mission in a couple of ways,” Kahl said in a phone interview. “These regulations are a layer on top of the statutory law [from ADA] that has always required equal access for people with disabilities.”

Who Should Comply?

Kahl said that the question of who should comply with the regulations—web designers, software providers, or those who put up websites—has already been addressed by the ADA. The potential regulation would clarify how owners, operators, lessors, and lessees would have to comply.

Don’t Screen Readers Solve the Accessibility Issue?

Kahl said that screen readers are not a complete solution to the issue of website accessibility (for people with visual impairments).
“The problem with screen readers is they don’t tend to work with a lot of formats we take for granted [such as] PDF. So screen readers might help with some portions of websites, but they certainly don’t allow the fair and equal access that the ADA requires.”

Pros and Cons

Along with increasing market share, business owners could reap other benefits from complying with web-accessibility guidelines, Kahl said.

“I think there is the inherent benefit of doing what’s right for fellow Americans,” he said. “Benefits for business for being a good corporate citizen. Not just to the business community, but to the community as a whole.”

“That’s why so many companies work so hard to be good corporate citizens.”

Kahl doesn’t see any drawbacks to complying with such regulations.

He said that not complying with such regulations, however, would create a large “Do Not Enter” sign on the internet for people with disabilities.

“The very fundamental concept of our country is we are all equal before the law,” he said. “Not just whether we are black or white or Caucasian or Latino or gay, but whether you’re a person who has or doesn’t have a disability.”

“We are less as a society when we don’t include everyone in the common goods and services and access to common services that we all should have.”

Alternative Methods of Communication

Kahl doesn’t think that alternative methods of communication completely solve the problem of website accessibility. He said to keep in mind the context of the modern world.

“The internet has become not just a tool to do things, but a required tool to do so much,” he said.

He cited examples of online-only businesses, educational sites, and job-training opportunities.

“And business today, in many instances, is conducted over the internet,” he said.

“For business to say, ‘I don’t want to do this, I’ll force someone to come down or do it only over the telephone,’ creates vestiges of a separate but not really equal system” that the organization tries to fight, he said.

Web Developers Want to Know, White Says

Ashley White, communications and outreach manager for the ERC, sat in on the phone interview.

She said the ERC recently redesigned its website to be accessible.

She said that web developers are interested in knowing how to make websites more accessible to people with disabilities.

“[The] need and want is there on the developer side,” she said.

When asked about the cost to redesign the website, Kahn said he didn’t have the number on hand.

“Even for us, a nonprofit organization, we did not find that cost to be prohibitive,” he said.

It’s the Right Thing to Do

Kahl said there are more than 60 million Americans with disabilities, and “that group is going to increase at a significantly much faster rate than the rest of the population.”

“It is a huge market share for Title III businesses to tap into,” he said. Increasing accessibility to people “makes business sense, in addition to being the right thing to do.”

ICUL says Credit Unions Should Be Exempt

The DOJ Civil Rights Division is currently reviewing comments about a possible rule regarding website accessibility for people with disabilities. This is the second part of a two-part series. To read the first part, click here.

After the Advanced Notice of Proposed Rulemaking appeared in the Federal Register in July 2010, the department held a public-comment period that included town halls around the country. The comment period ended Jan. 24, 2011.

Lynn Esp, Assistant General Counsel for the Illinois Credit Union League, attended a hearing in Chicago, where she said the DOJ accepted information.

Full disclosure: The Small Business Authority does not have a partnership with ICUL. However, The Small Business Authority has a partnership with the Credit Union National Association. The Small Business Authority did not consult with CUNA for this article.

Esp and the ICUL don’t want the rule to apply to credit unions, and Esp submitted a letter saying so to the DOJ during the comment period.

Credit unions should be exempt from website-accessibility standards, according to the letter, because their services are targeted toward a “limited audience,” and those who need financial information from the website could also obtain it in person or over the phone.

Esp sees the potential standards as a financial and manpower burden on credit unions.

“I believe that the burden more properly is placed upon software providers, such as Microsoft Word or Windows, to implement the guidelines,” Esp said in a phone interview. “Credit unions, I don’t believe, have the power to do that, unless they contract with a third party.”

“I think the burden is improperly placed on financial institutions when it’s actually going to be the software providers are going to benefit,” she said. “It’s a software change and who’s going to benefit but the software providers?”

WCAG or Section 508?

The department’s first questions regarding the advanced notice were whether it should use WCAG level “AA” guidelines for its rule, and whether the department should use Section 508 guidelines instead of the WCAG.

WCAG refers to Web Content Accessibility Guidelines, which were created by the World Wide Web Consortium (W3C). The WCAG contain 12 criteria to make websites accessible to people with disabilities.

The Federal Register notice makes mention of three levels of conformity to the WCAG: “A” (minimum), “AA” (intermediate), and “AAA” (maximum).

“Section 508” refers to Section 508 of the Rehabilitation Act of 1973. Section 508 outlines the standards that federal agencies have to follow to make “electronic and information technology” accessible to people with disabilities, according to Section508.gov. The 508 standards are currently being revised, according to the Federal Register notice.

Esp said she doesn’t think the DOJ would exempt smaller credit unions from the rule.

If no credit unions are exempt from the proposed rule, Esp said that using Section 508 standards would be more appropriate than using WCAG.

It wasn’t that Esp recommended the 508 standards as much as it was her lack of confidence in the WCAG, she said. She doesn’t think the WCAG are cost-effective, and she doesn’t think credit unions can achieve compliance under the guidelines.

“The problem with WCAG is [it’s] too stringent. Section 508 allows for more freedom for credit unions,” she said.

Esp said she doesn’t think the DOJ will use the 508 standards.

“I think they’re going to go with the WCAG,” she said. “I think they view 508 as more of a legal standard, whereas WCAG is more operational.”

What Would Compliance Look Like?

Esp said she thinks compliance to the rule would be burdensome to credit unions.
“Most credit unions do not have internal IT staff, nor do they have the ability to make general software changes,” she said. “They lack revenue.”
“It’s really more of a programming issue and I think it’s going to back a lot of people into corners,” Esp said.

“The thing with this proposed rule is physically, access has not been denied. They have access. It’s just a question of the quality of access.”
Esp is not aware of any website-accessibility guidelines that credit unions may be subject to at the current time. She is also unaware of the percentage of credit-union customers who have visual impairments.

What Should Credit Unions Do in the Meantime?

There are some things credit unions can do while the DOJ is hashing out the potential rule.

“If they’re going to get a software upgrade, they should ask about the ability to make things accessible,” Esp said. “[They can] determine what kind of software capabilities they’ll need.”

“If they update their material, it opens up a new community of individuals who could be involved in membership,” she said. “It’s a win-win; it’s just, at what cost are you going to comply?”

Esp said that if the rule were to be proposed and passed, credit unions would have to “examine the cost it would take to update the website and budget accordingly, contract with third-party people who are familiar with these obligations, [and] determine whether they have the resources to allocate to website accessibility.”

If credit unions did not have the resources, she said, they would have to show how implementing website accessibility would create an undue burden.

Esp said she thinks the DOJ will probably pass a rule.

Are you ready to export to foreign markets?

The rise of business technologies has broken down most barriers to entering the global marketplace for even the smallest of businesses. It’s never been easier, or more secure, to market and sell products to the most remote corners of the globe right from your home office. In fact, out of all U.S. exporters, roughly 70 percent have 20 or fewer employees, according to the U.S. Small Business Administration.¹

Emerging overseas markets represent the largest opportunity for any business. The current U.S. population, which the Census Bureau’s population clock projects to be just over 311 million, is a puny portion of the worldwide population of nearly 7 billion. India alone has a population of 1.2 billion potential new customers. The real opportunity for growth lies outside U.S. borders.
But just because the logistics are easier, it doesn’t mean taking your business outside of the U.S. is a simple decision. Any small-business owner who wants to be successful in overseas markets must do her market and regulatory research and make a thorough plan.

There are many ways to export, from selling to a buyer who then sells your product to a foreign market, to shipping and fulfilling overseas orders yourself. Because there are so many options, it’s critical that you understand all of the implications of each before you begin.

Here are some basic questions to ask yourself about your business to help you decide if you’re ready to start exporting your product, technology, or franchise.

1. Is there a viable market for your business in a foreign country?

Consumption habits are fickle. When you’re dealing with a foreign market, it’s vital to understand your customers. Do thorough market research and a market test to determine your business’s viability in a foreign market.
There are firms you can hire and free resources and access to specialists through the Trade Information Center² to help you determine if your business is export-ready.

It’s important to look at everything from the impact of currency exchange rates to cultural preferences and patterns. What are the packaging, recycling, and labeling requirements in that market? Are the barriers to entry into a foreign market too costly to make good business sense?

The U.S. has free trade agreements (FTAs), which protect and provide favorable environments for American businesses, with 17 countries, according to Export.gov.³ Everything from eliminated tariffs to intellectual-property protections have already been negotiated and approved by the U.S. government and the World Trade Organization (WTO). Those countries are good places to start identifying potential markets. More than 40 percent of U.S. exports were sold to FTA countries in 2010.³

2. Are you ready to make the commitment to international export?

Exporting to foreign markets requires a high level of commitment for success. Aside from language and regulatory barriers, there are simple logistical considerations, like time zones.

From dealing with new middlemen and partners to making sure your labels are spelled correctly and meet foreign standards, expanding into a foreign market requires a huge commitment. Are you prepared to dedicate yourself and your company’s resources to the endeavor?

3. What is your plan for distribution and promotion in foreign markets?

Freight forwarders, shipping regulations, labeling, tariffs: All of these issues need to be considered in your export plan. Do you fully understand international shipping, export documentation, and financing requirements?

Distribution can get tricky in emerging markets. You can’t just use a tracking number in developing nations. Often, business owners look for freight forwarders⁴ who handle the formalities of shipping in foreign countries. Do your research and determine which distribution path is right for your business.

Aside from getting the product to market, how will you promote your business in a foreign country? Will you employ a foreign advertising or promotional firm? How will you manage your company’s image and brand in an overseas market?

Everything from color to font choices can have a huge impact on the success of your export business. Consider partnering with an expert who is intimately familiar with your new foreign market.

All of these challenging questions will help you determine if your business is ready to export to foreign markets. Visit Export.gov⁵ to learn about U.S. licensing and regulations and to find expert advice and resources.
For more information, visit:
1. “Export Loan Programs”
2. “Export Basics”
3. “U.S. Free Trade Agreements”
4. “Finding a Local Freight Forwarder”
5. Export.gov

July Payroll Numbers Not So Bad

Private business owners boosted their payrolls by 154,000 jobs in July, according to the Bureau of Labor Statistics.¹

Today’s “Employment Situation Summary” also showed that total nonfarm employment increased by 117,000.

What’s the difference? The BLS press office said that “total private employment” is just that—the total number of jobs created by the private sector.

“Total nonfarm employment” also includes government jobs. Yup. It includes another category, but it’s lower than the total private employment number. That’s because government employment dropped by 37,000.²

The summary also showed that the numbers pushed the unemployment rate down slightly, from 9.2 percent to 9.1 percent.

The summary did not break down the results by size of business, so we don’t know how many small-business owners were adding those jobs. We do know that mining, health care, retail trade, and manufacturing saw increases.

The numbers come from a survey of payroll data that is based on approximately 140,000 businesses and government agencies that represent 410,000 work sites throughout the country, according to the BLS press office.

For more information, visit:
1. “Employment Situation Summary”
2. “Table B-1. Employees on Nonfarm Payrolls by Industry Sector and Selected Industry Detail”

You're Gonna Live Forever

Deciding to start a business is a big decision. When you finally make that decision, you want your business to be successful and to be around for a long time. You may even want to pass your business down from one generation to the next. If you form a corporation or limited-liability company (LLC), you get perpetual existence for your business and protection for your personal assets.

What exactly is perpetual existence? It means that when your business is incorporated, it has no expiration date. Your entity will exist for an unlimited period of time, unless you designate an end date for your business. With a sole proprietorship or partnership, the business ends when the owners die or leave the business. With a corporation or LLC, a business continues to exist even if ownership or management changes.

How can incorporating your business protect your personal assets? When you incorporate or form an LLC, you separate your personal assets from your business assets. Limited liability refers to the protection given to corporate shareholders, limited partners, or members of a limited-liability company if a judgment is issued against the business.

Here is an example of personal assets at risk. Let’s pretend that Joe owns an auto-body shop called Joe’s Auto Shop. Joe’s business is not incorporated. A customer who used Joe’s Auto Shop decides to sue the business. Because Joe did not separate his personal assets from his business assets, he may be in jeopardy of losing his personal assets like his car, house, and life savings. By setting up a business entity like a corporation or LLC, Joe could have separated his personal assets from his business.

To learn more about the benefits of incorporating, visit The Small Business Authority’s “Incorporate Your Business” page. You may request a free consultation call with an incorporation expert from The Company Corporation.^®

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

Mark Goodman, CPA and co-managing partner at Janover LLC, will join Newtek Business Services President and CEO, Barry Sloane, for the discussion.

The Small Business Authority Hour runs from 4 p.m. to 5 p.m. EDT, Aug. 6 on 77WABC and wabcradio.com.

Independent business owners are welcome to call into the show at 800-848-9222 beginning at 4:15 p.m.

To listen online, visit wabcradio.com and click, “Listen Live.” To listen to past shows, click here.

Why consider business structure?

Why should you consider your business structure before seeking financing?

If you are seeking financing, you are serious about running a business. If you are serious about running a business, you need to think through the various ways to structure it. Will you run it alone or with a partner? Will a partner be active or not? The type of structure you select will have an impact on the financing, said David H. Fater, a financial executive with more than 40 years’ experience working with entrepreneurs and small businesses, because it all starts with how much personal risk you’re willing to take.

Setting up your business as a sole proprietorship is the simplest structure and requires no filing of papers. But if the business goes bankrupt and a creditor puts a lien on the assets of the business, the creditor can also put a lien on the business owner’s personal assets.

“If David Fater operates something called Sam’s Sausage Shop as a proprietorship, while the business operates under a different name, it gets treated as if it’s part of David Fater, and it’s reported as part of David Fater’s individual tax return,” Fater explained. “If I borrow money in the name of Sam’s, I will have to sign for it as David Fater the individual.”
Other types of business structures—LLCs, limited partnerships, S corporations or C corporations—are designed to protect personal assets.

If you choose to operate your business as a proprietorship, you may be able to get a bank loan to finance your business, but Fater recommends against it in this business structure.

“The last thing you want to do is be on the hook for any funding,” Fater said. “In which case, you may look to family and friends and/or angel investors for capital.”

Fater’s rule of thumb is, “Anything under $3 million may be raised from family, friends and angel investors. For financing in excess of $3 million, you need to go to real capital sources for which you need a corporate structure.”

He’s not saying that this simplest way of forming a company isn’t useful.
“I think there are a number of things that can be done very appropriately in a proprietorship,” he said.
Fater cautions that you need to consider risk and anticipate tough junctures for your business. Ask yourself, “Do I anticipate that any of my customers may be dissatisfied sufficiently that they’re going to get back more than the fees they paid me?”

Partnerships, LLCs, and Corporations

A partnership is also simple to set up and—like a proprietorship—provides little protection against risk. You don’t have to sign any papers. Each partner claims a share of business income on his personal income tax return, and each is liable for the entire amount of any business debts or claims against the business.

An LLC (limited-liability company) offers less risk but is more costly to set up and run. There is a general partner as well as one or more limited partners who invest in the business. LLCs do provide limited personal liability for business debts. In most LLCs, owners pay taxes on their shares of business income in their personal tax returns, but there is an option to be taxed as a corporation. If there is a lawsuit or a collection on a debt, only the assets of the business itself are at risk. The Small Business Authority advises, however, that although an LLC or other structure may provide some more protections than a sole proprietorship or partnership would, the borrower will still be on the line personally, along with all personal assets, if the borrower took out a government-backed loan (via the U.S. Small Business Administration). Although these loans are small-business friendly, they have strict requirements. A personal guarantee and a lien on all business assets are required to secure the loan.

“If someone goes to the trouble of forming a limited-liability company and then personally guarantees debt, he or she has defeated the whole purpose of creating the structure in the first place,” Fater warned. He admits he was guilty of making such a decision at a time when cash was critical for a public company in which he was an officer.

It may be more difficult to raise money for an LLC than a corporation, simply because the corporate structure tends to make investors more comfortable.
“One possible solution may be to form a new corporation and merge into it, dissolving the LLC and converting into a corporation,” Fater wrote in his book, “Essentials of Corporate and Capital Formation.”

The best protection from risk is found under a corporate structure in which the legal entity exists separately from the persons who form it. An S corporation provides the limited-liability protection of a corporation, but its revenues are taxed the way a partnership or sole proprietorship would be: It pays no taxes as an entity, but its earnings or losses flow through to the owners’ individual tax returns. A C corporation is the best way to minimize personal risk. It is the structure under which business owners can most easily raise capital. Also, it is taxed as an entity separate from its owners.

Fater, who works with entrepreneurs regularly, said it is always his recommendation to form a C corporation to conduct meaningful business. This recommendation is especially true if you will be borrowing money or seeking investors. A C corporation is the type of business that will best protect the individual going into business, and it’s the structure lenders prefer.

“Startup business corporations generally have no real means with which to repay debt, so the initial startup capital will be some form of equity, probably common stock or a sort of preferred stock, depending on who the early investors are,” Fater said.
“Large amounts of money can be raised based on the founder’s credibility. That credibility comes from past successes [i.e., people will throw money at you if you have made money for them in the past] and evidence that you can and do accomplish what you say you can. [Achieving company milestones is how you demonstrate this kind of credibility; missing those milestones is how you destroy it.]”

Web Coupons

Chances are, you’ve heard about these new daily-deal websites popping up as fast as Whac-A-Mole moles. There are Groupon and LivingSocial, and there are BuyWithMe and Dealfind. Even mid-market newspapers like the El Paso Times are beginning to offer daily deals via their websites.

And what’s not to like about all of this? The deals are often unbelievably good. In a tough economy when household budgets are tight, you can often find restaurants willing to give you $20 worth of food for $10, or yoga establishments offering $160 worth of classes for $25. You can even find great deals on vacation packages, hot-air-balloon rides, pedicures, and, of all things, common plastic-surgery procedures. It’s no surprise, then, that the leading brand of these so-called web coupon sites, Groupon, would be hailed by our good friends at Forbes as the fastest growing web company of all time.

Although it’s obvious that these deals are great for both the consumers and the deal brokers, is it as clear as to whether they are good for your business?

The answer, of course, is … maybe.

If you’re considering using Groupon or any other deal site, you need to know five things.

1. Be prepared for a large influx of customers. Chad Nason, a B2B specialist with Groupon, posed this question in an interview conducted via email: “Is your business really ready for a Groupon deal?”

If you offer a smoking Groupon deal, expect a ton of new traffic to walk through your door. You might think of it as a good problem to have, but without being adequately prepared, you could be looking at a disaster.
“Groupon guarantees an influx of customers, and both your business and your staff need to be ready to handle the rush,” Nason said. “The most successful Groupon merchants stock up on people, product, and sleep.”

So, before going through with a Groupon, be sure you can support well-above-normal staffing levels in the days following your deal.

[Need a more affordable option for your payroll needs? Learn more.]

2. Be prepared to lose money in the short run, especially if you’re a restaurant owner. If you went to Groupon’s website right now, you’d almost certainly find an amazing deal on food or products: $40 worth of food for $10, $30 for $15, etc. On top of that, the daily-deal website, just as with any other broker, will take a cut from that coupon (that’s, of course, how they make their money). So if you’re a restaurant owner offering $40 worth of food for $20, you’re not only giving away $20 worth of product, but you’re also splitting the $20 coupon purchase with the daily-deal company. So in reality, you could potentially receive as little as $10 for $40 worth of product. The true cost to you could be even higher than that if you’re adding staff members to support the rush.

So our advice would be to think of doing a daily deal not as a profit strategy, but strictly as a marketing investment. For that reason, be sure you can take the upfront costs. One thing you could do to minimize those costs is to place a cap on the number of coupons you can sell. According to Nason, placing a cap “ensures that [your] business won’t be overwhelmed.”

[Lowering your credit-card fees might be one option to improve your margins. Learn more.]

3. Do everything you can to get those daily-deal customers back and buying at regular price. If your daily deal ends up cutting into your margins and the deal itself ends up losing you money, the only way to make it a winning proposition is to get those new customers back and buying at regular price. Even better, turn them into regular customers.

This is where you need to get creative. If you’re giving away an exorbitant amount of products or services with your daily deal, don’t be afraid to ask your customers for something in return. This could be anything from signing up for your newsletter to “liking” you on Facebook or following you on Twitter. Create a mechanism where you retain some sort of contact with your new customers after the initial sale.

4. Be sure you have a great website, and be sure that website is easy to find online. As part of your broader marketing strategy, you should use more than just extra staff members to support your daily-deal offer. Make sure you have a solid web presence that is optimized for search engines. Do you own a coffee shop in St. Louis? When someone googles “coffee shop in St. Louis,” will he be able to find you? If you sell merchandise at your store, are you set up to do the same through your website? And if you’re building customer relationships through social media, have you integrated Facebook and Twitter on your website? Can someone “like” your business from your home page? If you haven’t considered these factors before, you can incorporate them now to ensure the long-term success of your daily-deal adventure.

[Need a consultation on your website or internet-marketing strategy? Learn more.]

5. Be sure you’re completely comfortable with the terms of your daily deal. This should go without saying, but it might be the most important part of your daily deal. Do the math and figure out what your investment is. Be sure to consider placing a cap on your daily deal if the deal itself cuts into your margins. And if you know other business owners in your area who have run deals on Groupon or LivingSocial, get their insight on the matter, and learn from their mistakes or successes.

Have you ever run a daily deal before, or are you thinking about running one? Share your experience in the comments below.

Website Accessibility

The DOJ Civil Rights Division is currently reviewing comments about a possible rule regarding website accessibility for people with disabilities. What might it mean to you?

The Small Business Authority made three attempts to speak with officials at the Civil Rights Division of the Department of Justice about the rule. The public-affairs office did not respond to requests for an interview with an official. Instead, the public-affairs office said the department collected the information and is going through it.

For the first part of this two-part series, we trawled the Federal Register for information about the advanced notice and how it may affect you. In part two, we will speak with representatives from two groups (one that supports the guidelines and one that doesn’t).

History

Back in July 2010, The DOJ Civil Rights Division posted an Advanced Notice of Proposed Rulemaking regarding website accessibility for people with disabilities. The ANPR was called “Nondiscrimination on the Basis of Disability; Accessibility of Web Information and Services of State and Local Government Entities and Public Accommodations.” We could call it NBDAWISSLGEPA for short.

Now, an advanced notice of proposed rulemaking is different from a notice of proposed rulemaking. The department at that point hadn’t created a specific set of regulation revisions; it was “considering” revising regulations and wanted feedback on what those revisions should be.

With this notice, the department was looking for comments on how to revise Title III of the Americans With Disabilities Act to make the “goods, services, facilities, privileges, accommodations, or advantages offered by public accommodations via the internet, specifically at sites on the World Wide Web, accessible to individuals with disabilities,” according to the Federal Register.

The department was also seeking comments about a revision to the ADA’s Title II regulation, but that refers to state and local governments. Title III is what we’re interested in.

What Are Some Barriers to Accessibility?

Here are some of the ways that websites are not accessible to people with disabilities, as written in the Federal Register: Lack of captions, inability to change the font size, lack of support for keyboard alternatives, images without text that screen readers could “read,” lack of headings, no labels on input forms, and the presence of CAPTCHAs.

People who use assistive devices have difficulty navigating websites that have barriers like these.

The department wrote in the notice that removing certain barriers to website accessibility “is neither difficult nor especially costly.” (For example, putting alt text or tags in images so screen readers can “read” them, using form labels, incorporating voice recognition, and using headings.)

But the notice later said, “Since this is an ANPRM, the department is not required to conduct certain economic analyses or written assessments that otherwise may be required for other more formal types of agency regulatory actions.”

“If any proposed rule the department issues regarding web access is likely to have an economically significant impact on the economy, the department will prepare a formal regulatory analysis.”

Who Would Have to Comply?

Any business that is defined as a “place of public accommodation” by Title III of the ADA would be subject to website-accessibility guidelines. Here’s how “public accommodation” is defined in the Federal Register: “A facility whose operations affect commerce and that falls within at least one of … 12 categories.”

Examples of places of public accommodation are bakeries, convention centers, restaurants, bars, day-care centers, bowling alleys, and zoos. To see all of the categories, look in 28 CFR Parts 35 and 36 [CRT Docket No. 110] on this page.

After the notice appeared in the Federal Register, the department held a public-comment period that included town halls around the country. The comment period ended Jan. 24, 2011.

Click on the links to read what representatives from two groups (one in favor of the guidelines and one opposed to the guidelines) had to say.

Don't play "ATM roulette"

There was a clip years ago of one of those hidden-camera prank shows, set in Reno or some other gambling hub.

Unsuspecting patrons would insert their cards and enter their PINs into a rigged ATM, and they’d wait for their money as they would at any machine.

This ATM, however, would not give them their money. Instead, it would play a message, “Thank you for playing ATM roulette,” and it would ask them to play again.

These days, there’s a form of “ATM roulette” that is less benign. It’s called skimming.

What happens is thieves place devices on ATMs that collect users’ account information, according to the Federal Bureau of Investigation. Thieves then use the account information to make cards. Then they make their own withdrawals.

Check out the FBI website¹ to read tips on how to avoid falling victim to a skimming scam and how to spot a skimmed machine.²

You don’t want to gamble with your bank-account information.

For more information, visit:
1. “Taking a Trip to the ATM? Beware of ‘Skimmers’”
2. Graphic: ATM Skimming

Corporate Veil

What is a corporate veil? Do you even need it?
A corporate veil refers to the separation of the business from its owners. As long as a company maintains this separation by following government and general business regulations, a judgment against the business should not affect the personal assets of its owner. If you own a business and want to protect your personal assets like your car, home, and retirement savings, you might want to consider a corporate veil.

One way to access a corporate veil is to incorporate your business by forming a corporation or a limited-liability company. It is a business owner’s job to successfully separate the operations of the LLC or corporation from her nonbusiness activities. The following actions will help create a strong wall between the entity and the owner or owners as private individuals. However, it is ultimately up to the court to determine whether the veil has been pierced.

1. Accurate Record Keeping. Records must be kept for all important business matters, and they are most accurately kept when recorded in real time. The entity cannot speak, so excellent written records are the most effective form of communication. Records often include the articles of incorporation, operating agreement, listing of owners, transfers of ownership, minutes of meetings, results of decisions, banking decisions, and any other activity relevant to business operations.

2. Contracts in the Entity’s Name. All business contracts should be in the entity’s name. This is straightforward if the entity and business activity start at the same time. However, many business owners begin as sole proprietors, then elect to incorporate or form LLCs. Any contracts held by the sole proprietor should be documented and transferred into the entity’s name.

3. Compliance With State Requirements. Stay current with all requirements from the Secretary of State’s office. Most states, if not all of them, require an annual filing of officers accompanied by an annual entity fee. Do not let the entity fall into default, because some states may include the default in the permanent entity record.

4. Separate Business Finances. Maintain separate personal and business financial accounts. The entity must have its own bank accounts and arrangements to avoid comingling personal and business finances. When you sign LLC documents, sign them with your name, and further sign as a member or manager of the LLC.

5. Use of Legal Entity Name. It is common for the entity’s name to be used in many different documents. Be sure to use the entire legal name of the entity each time. Do not use partial or abbreviated entity names. They are not the legal name.

6. Business Insurance. Call your insurance carrier for a business-insurance quote and purchase coverage that meets your company’s needs, if you can afford it. Assume that a lawsuit will occur at some point, and plan accordingly.

To learn more about The Company Corporation^® and the services it has to offer, such as incorporation and the exclusive $50,000 Corporate Veil Guarantee,^® visit The Small Business Authority’s “Incorporate Your Business” page.

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

Confusing reports

This article has been updated with new developments.

According to recent studies or surveys, small-business owners don’t expect to hire more staff members in the coming months. But they added 88,000 jobs in June. But that didn’t affect the unemployment rate. But first-time jobless claims dropped significantly last week.

Confusing, isn’t it? If economists and researchers were to agree on one thing, it might be that it’s hard to get a definitive snapshot of the economy.

We turned to Karen Dynan, Robert S. Kerr Senior Fellow and vice president and co-director of the Economic Studies program at the Brookings Institution, for some insight.

“The indicators we have for the economy as a whole suggest that hiring by private firms slowed noticeably this spring,” Dynan wrote in an email. “To some extent, the weakness reflect temporary factors: the hit to real income from higher gasoline prices and reduced manufacturing production related to supply-chain disruptions stemming from the Japanese earthquake.”

Dynan wrote that those factors’ influence should decline, which could mean more growth and hiring later this year.

“The decline in initial claims is consistent with the expected pickup,” she wrote.

“It’s much harder to know what’s going on with small businesses because we don’t have great information about how employment gains break down by size of business. The indicators we have are noisy and impressionistic. Some indicators are volatile because of measurement error and technical factors. Surveys tell you about people’s intentions but intentions can be different from actions.”

Dynan wrote that overall, “there are good reasons to think that small businesses have suffered more over the past few years than larger businesses and that they are facing more challenges now.”

Some of those reasons are small businesses’ lack of collateral, difficulty obtaining credit, less financial support available from family and friends, and fewer exports, Dynan wrote.

“Finally, I think there’s a good case to be made that all the uncertainty about the U.S. economy and economic policy is having a bigger toll on small-business hiring than large-business hiring,” she wrote. “With limited administrative and legal staffing, hiring mistakes may be more costly for them.”

The Studies

Last Friday, we mentioned two articles from The Wall Street Journal. One article highlighted a report that showed that business owners polled in late June were unlikely to hire. Another article, appearing on the WSJ “In Charge” blog, highlighted a report that showed payroll numbers increasing in June.

We also asked small-business owners to weigh in on the hiring issue, among others, in our SB Authority Market Sentiment Survey for the month of July. Out of a sample size of approximately 1,100 respondents, 60.4 percent said they don’t plan to expand their businesses or hiring in the next year.

A little earlier than that, The SB Authority Index jumped 1.18 points from May to June. Credit that boost to retail sales, U.S. Small Business Administration increased loan volumes, and the Russell Microcap Index.

Plus, the ADP/Macroeconomic Advisers report showed that small-business owners added 88,000 jobs in June.

Not only that, but total nonfarm private-sector employment was up by 157,000 jobs for that month, according to the ADP report.
Nonetheless, those numbers didn’t do much for the June unemployment rate, which remained at about 9.2 percent, according to the Bureau of Labor Statistics.

Today, Reuters reported that first-time jobless claims “hit a three-month low” last week.

QR codes: Passing fad, or brilliant marketing tool?

Somehow, the best marketing tool of the online era is still flying under the radar of many small businesses. QR (Quick Response) codes are a two-dimensional type of barcode, originally designed by a Japanese automaker to revolutionize the manufacturing inventory process. These powerful little gizmos have an almost unlimited ability to assist any business in tracking and improving a variety of processes; however, they really shine when used to help with marketing efforts.

So, how do they work? Well, let’s start at the end and work our way back. For marketing purposes, QR codes are read by your prospect or customer using a smartphone application. ScanLife,¹ QuickMark,² Optiscan,³ Barcode Scanner,⁴ and the Google Goggles⁵ application are just a few of the many options available. You include a QR code in your marketing materials, on your business cards, or on promotional items, and when your prospect scans your code with her mobile device, she is directed to text, video, photos, music, or even a URL of your choosing.

The obvious advantages for customers include the instant access to your content and the convenience of not having to write down (or try to memorize) a phone number or web address for later use. Many potential customers are lost every day to the lag between exposure to your brand and the time it takes to get to a computer or phone. QR codes let you take that lag out of the equation. They are extremely cost-effective, simple to use, and almost limitless in their potential.

You can generate your own QR codes easily, quickly, and cheaply (can you say, “FREE?”) using a code generator such as Kimtag,⁶ iCandy,⁷ Kaywa,⁸ or a host of other code generators that are available for free or as part of a QR services suite. StickyBits⁹ will even produce your QR codes on stickers or temporary tattoos, for even more fun options.

Codes no longer have to be homely little squares of squiggles, either. QR codes can be crafted into your company logo and colors, or shaped to resemble almost anything, such as a dog or a house (Check out these 15 examples of QR codes on Mashable). Each code can store almost anything the creative marketer can imagine.

Although the sky’s the limit for getting creative with QRs, let’s talk about some specific examples where QR codes can help you market your small business.

• Window or trade-show displays. Picture this … it’s late at night and a happy young couple stroll home from a romantic dinner. They pass your jewelry store, long-since closed for the evening, and wish they could look at rings. But wait! There is your QR code, shining in the display window like one of your fine bridal sets. She bats her eyelashes, he whips out his smartphone, and voila! Your online catalog pops up instantly so they can browse (and even purchase) your wares as they stroll on.
• Promotional materials. Many companies like to give away swag at trade shows, seminars, or sales presentations. Imprint a QR code on your swag, and potential customers will never lose the ability to connect with you. Attach some kind of limited special offer to the code that isn’t available to the general public, and you will create instant urgency and brand loyalty.
• Ecards. Imagine your business card, supersized! On your business card, include a QR code that will allow the recipient to scan your information instantly into his smartphone contacts. Or, have the QR code direct your potential customer to your company’s website, online storefront, or Facebook page.

Right now, you may be asking, “What’s the downside?” Well, actually there is one disadvantage of note. Many people don’t know what QR codes really are or how to use them. This problem is simple to overcome, however. Place a blurb in your marketing materials explaining what the QR code does and where to find a scanning app. You will give your curious customers all the help they need to start scanning their way into your bottom line!

For more information, visit:
1. ScanLife
2. QuickMark
3. Optiscan
4. Barcode Scanner
5. Google Goggles
6. Kimtag
7. iCandy
8. Kaywa
9. StickyBits

Microsoft logo

It’s not every day that our techies down in the trenches get the attention they deserve—it’s the nature of their profession. If they do a great job and everything’s working perfectly, everybody forgets they exist.

But now they’re getting their due, and not from just anyone. Microsoft, the software and business-tools giant, recently published two beefy case studies showcasing some of the incredible things The Small Business Authority’s got running under its hood.

In case you didn’t know, The Small Business Authority provides highly reliable and hyper-secure cloud hosting services to the small-business community.

A ton of experience, research, and old-fashioned hard work went into the effort. Take a look at these case studies to get a better idea:

• Read about what went into building our cloud infrastructure.
• Read about how we achieved the incredible feat of 100 percent uptime on our cloud database infrastructure.

To learn more about our cloud offering, watch the video on our cloud page.

Let us know what you think in the comments below. We’d love to hear from you.

Three Ways to Intro a New Product

Luck plays a part in getting the marketplace to notice a new product. But so do research, persistence, and thinking outside the box. It seems there are almost as many ways to bring a product to market as there are entrepreneurs with the will to stick it out until sales revenues catch up with development costs. The ideas below do not rely heavily on the use of social networking. Videos and Facebook pages are part of the marketing programs, but the basic strategies are retailing mainstays. And there’s a reason for that: They work.

1. Find a licensee. Brian Fried, a New York inventor who hosts the “Got Invention Radio”¹ show on his website, advises other inventors to find partners or licensees. If you have just one product, you won’t make an impact on your own, even if you do manage to get some shelf space next to the five or six shelves displaying Johnson & Johnson’s brands. However, a licensing agreement with that company just might be possible, and it would give you better positioning on the shelf as well as distribution and manufacturing.

Where to start? Go to a store where you envision your product to be sold, and look around at the other brands displayed in the appropriate section of the store. “See where your product would align with another company” in your chosen line of business, then contact that company, he said. He has licensed one of his products with KitchenAid and Farberware.
Do your research and make some phone calls, he added. See if there’s an opportunity to present the product to the company you hope will license it. If all goes well, the company rep will agree to add your invention to the company’s product line.

Trade shows are another way to find potential partners. Using the Trade Show News Network,² Fried types the industry name in the search box (for example, housewares) and gets a list of major and minor shows in that industry in any city and state he chooses.

“Go [to a show] as a trade guest and go prepared,” he said. On the website of the show, you can usually search for exhibitors by product category. Before the show, call the companies you want to see and ask if you can set up a meeting. Also, “I take my products and I walk the floor,” said Fried. (It was at a trade show that he met a buyer for QVC, who ultimately offered him airtime to promote his inventions.)

So, what do you give up in a licensing deal? A large part of the profits, because the licensee takes on all the risk. A licensee will give you an advance and a guarantee—how much he expects to sell—securing an intellectual property license from you. Fried said that one of his clients was offered a 10 percent royalty by one company and a 5 percent royalty by another.

The licensee puts up money for tooling, manufacturing, distribution, perhaps even marketing, “and then they’re seeing if it’s going to be received in the market. … You’re getting a small percentage, because there’s very little risk to you,” said Fried, who invented Pull Ties³ and Eggstra Space.⁴

Don’t assume that a smaller royalty offer is not worth pursuing. Fried said that his client who chose the 5 percent deal did so because it involved distribution to Toys R Us, Target, and other large retail outlets. Not so with the guy offering 10 percent.
“I always tell people, ‘Find the right partner, the partner that has the manufacturing capability and has a good product line and has great distribution channels,’” said Fried, who has been asked for advice by so many people that he finally authored a book on the subject: “You & Your Big Ideas.”⁵

2. Grab a decision-maker. Amy Davis, an MBA graduate of Sacred Heart University in Fairfield, Conn., turned a class project into a winner by sending samples of her Kiss-u Tissue Tube that fits in the cupholder of a car to “executives and board members of the companies I wanted to work with.” In an email exchange, she emphasized the need to be original and send something clever, such as a product in special packaging, or a link to a funny YouTube commercial—something that is targeted to the individual.
“I would guess there are probably hundreds of ways to get the attention of decision-makers in big companies—the point is to think outside the box and find people within these companies who you think will get your product,” she wrote.

Davis did the work on her own. However, if you can afford to hire help, you might want to consider a small public-relations company as a creative partner to formulate original, clever ideas that align with your product’s “brand promise.”
Davis sent samples to corporate executives whom she selected using Hoover’s.⁶ She was specifically looking for profiles of women in their 40s with children (Davis has three children and targets multitasking, carpooling moms with the Kiss-u Tissue Tube and refill packets).⁷

She made a connection with Walgreens and let the company lead—company reps set pricing and signed a contract with her. Walgreens is unusual for a large retailer in that it offers a one-time-buy program for products that have not been market tested. That Walgreens trial (7,600 cases of 16 Kiss-u tubes) helped her find other retail outlets.
Davis handled her own manufacturing. She found a company in China via a web search.

3. Offer a free trial. This is a time-honored method to get buyers to bite: Try it and if you don’t like it, just send it back. But before you create such an offer, be advised that if you do not play fair with consumers, you could be labeled a deceptive marketer.
In 2009, about 100 online merchants had their payment processing terminated by Visa because of numerous complaints to Visa, the Better Business Bureau, and the Federal Trade Commission. Now there is a law prohibiting the worst of the practices. Called the Restore Online Shoppers’ Confidence Act, it was signed by President Obama on December 29, 2010.⁸ The new law targets what’s known as negative-option marketing. That’s when unless the consumer cancels or rejects the free item in the trial, he is billed for additional products. The companies that were engaged in these practices were third-party sellers, who obtained lists of customers and their billing information from internet retailers.

The Federal Trade Commission released a statement⁹ about the Restore Online Shoppers’ Confidence Act in December 2010. Here are some excerpts from the release that will could help you stay out of legal trouble:

• Disclose the terms of the offer in an understandable manner.
• You must obtain the consumer’s express informed consent to be charged before you charge his or her card or bank account.
• If the offer involves recurring charges, you must tell the customer how he or she can stop the charges.

Response Magazine¹⁰ reported that in 2009, the FTC’s Division of Enforcement released five principles regarding “negative-option” marketing. The principles came out before the Restore Online Shoppers’ Confidence Act became law.

For more information, visit:
1. Got Invention Radio
2. Trade Show News Network
3. Pull Ties
4. Eggstra Space
5. “You & Your Big Ideas”
6. Hoover’s
7. Kiss-u Tissue Tube
8. Restore Online Shoppers’ Confidence Act
9. “Statement by FTC Chairman Jon Leibowitz Regarding House and Senate Passage of Legislation to Combat Deceptive Online Sales Tactics”
10. “Legal Review: Getting Strict With Negative Option Marketing”

Assess whether your business is doing OK

When there’s doubt about whether a football play earned enough yardage for a first down, the refs take a measurement. In business, too, it’s necessary to take a measurement every now and then. Instead of a tape, the tool you use is called a ratio calculator.

Where are you now and where were you last year (or five years ago)? That’s the simple question that ratio calculators set out to answer. The comparisons help you chart your growth or see areas of slippage. They provide critical measures, like debt to assets, that you’ll need when you meet with potential funding providers.

Bankrate.com has a variety of ratio calculators, which The Small Business Authority obtained permission to post. Try one of these:
• Operating profit percentage calculator—fill in your operating income and sales.
• Gross profit margin ratio calculator—fill in your net sales and the cost of goods sold.
• Current ratio calculator—plug in your assets and liabilities.
• Quick or acid test ratio calculator—plug in three numbers for an “acid test” on your company’s liquidity. Fill in assets, inventory, and liabilities to learn if you have a ratio acceptable to creditors.
• Return on assets ratio calculator—fill in your net income and an average of your total assets from your last and current statements. This comparison will tell you how much income is generated by assets.
• Debt to assets ratio calculator—fill in your total assets and total debt (this shows you whether your business is too highly leveraged to result in a good rate from a lender).

What’s a good number?

To get a sense of how your business stacks up, go to your library’s reference section for thick volumes of financial ratios where you can look up companies like yours by industry code (SIC or NAICS). The “Almanac of Business and Industrial Financial Ratios, 2011 Edition,” by Leo Troy, Ph.D., shows financial information from 5.8 million corporate tax returns filed from July 2007 to June 2008. As an example, a manufacturer of baseball caps (code 315990) that has less than $500,000 in assets would stack up well against others of its size in its industry if it had a current ratio of 1.8 and a return on assets of 50.3, to pick just two of the ratios in that reference book. A sporting goods store would look good if it had a current ratio of 2.3 and a return on assets of 23.5.

Dun & Bradstreet also publishes key business ratios. Additionally, CPAs and accounting firms can help you not only find out if your numbers are good but also decide what to change in your operations to improve the ratios.

You may also want to look at The Risk Management Association’s “Annual Statement Studies: Financial Ratio Benchmarks, 2010–2011.”

Are you hiring or not?

Earlier this month, The Wall Street Journal wrote about a U.S. Chamber of Commerce report that showed more than half of executives at small businesses did not plan to add staff members.¹

Four days before that, The Wall Street Journal’s “In Charge” blog wrote about an ADP/Macroeconomic Advisers report that showed an increase in small-business hiring for the month of June.²

So, which is it? Are small-business owners hiring or not?

The Chamber of Commerce report was based on respondents’ attitudes, while the ADP report was based on data. Neither the media contacts for the Chamber of Commerce nor the media contacts for ADP returned The Small Business Authority’s phone calls for clarification.

We’re fans of number crunching ourselves, and we use the ADP National Employment Report as one of eight factors affecting our SB Authority Index.
We also want to know where you stand. That’s why we asked business owners to weigh in on the issue in this month’s Market Sentiment Survey.
Be sure to check back with the blog, because the results will be out soon!

For more information, visit:
1. “Little Hiring Seen by Small Business”
2. “Hiring Picks up at Small Firms”
3. Small Business Outlook Survey
4. ADP Small Business Report

Stay in compliance.

Incorporating or forming a limited-liability company has many great benefits, like personal asset protection, tax flexibility, and perpetual existence. The key to maintaining these great benefits is keeping your entity (corporation or LLC) in compliance. Keeping your entity in compliance with the Secretary of State’s office in the state where you formed is known as being in good standing.

When an entity falls out of good standing with the Secretary of State’s office, it becomes noncompliant and consequences can occur. Some significant consequences are that the Secretary of State’s office may levy penalties against an entity or even dissolve the company. Additionally, when a business owner fails to follow the steps required to maintain her limited-liability protection, her personal assets may no longer be protected from lawsuits against the company. This is known as “piercing the corporate veil.” Piercing the corporate veil applies to both corporations and LLCs.

There are some best practices that can help you stay in compliance with the Secretary of State’s office.

• Familiarize yourself with the Secretary of State’s office in the state where you incorporate. Each Secretary of State’s office has a website and usually has a dedicated section for business services. The website contains useful information regarding tax deadlines, business filings, and business licenses. It is also wise to write down the telephone number for the Secretary of State’s office. If you have a question or concern and you cannot find the answer online, call a representative at the office.
• Choose a registered agent to receive your important legal documents. State laws require all corporations and LLCs to maintain registered addresses with the Secretary of State’s office in the states where they are registered to do business. The person or company located at that address must be available during all business hours. A registered agent receives and forwards important legal documents and state correspondence on behalf of the business. As well, some third-party registered agents provide services to remind you to file important business documents, like annual reports or franchise taxes, to help keep your entity in good standing.

The Company Corporation^® provides incorporation services as well as registered agent services. To learn more about The Company Corporation^® and its services, visit The Small Business Authority’s “Incorporate Your Business” page.

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.

Retail sales, the Russell Microcap Index, and an increase in loan volumes from the U.S. Small Business Administration pushed up the Index.

Talk about wolves in sheep's clothing.

“Cash is king” is an adage used to describe business. It means that cash flow is the blood that keeps the heart of a kingdom pumping, thus illustrating the significance of cash flow to a business—especially a small one.

The Definition of Cash Flow

Cash flow is the management of bills coming in and out of a business. It is critical for a small-business owner to understand the importance of cash flow, because it is one of the most important components to the success of a small business. Without cash, profits are meaningless.

The Difference Between Cash Flow and Profitability

Cash flow is the movement of money in and out of your business through cash, checks, electronic debits, and credits.

Profitability is the ability of your business to generate more sales and dollars than the cost of your business expenses.

It is essential to understand that cash flow and profitability are two different concepts. Profit does not necessarily equal cash.

Nevertheless, it is important to understand that despite the difference between cash flow and profitability, the two go hand-in-hand.

Cash flow is calculated when a payment has been received. Profit is calculated the moment a sale is made, even if the payment hasn’t yet been received. If customers are not paying their bills on time, your company will not have money to pay its bills on time.

Therefore, profitability is only possible if a company strengthens its cash flow.

Positive Cash Flow Versus Negative Cash Flow

Positive cash flow is when the amount of cash coming into your business is more than the amount of cash leaving your business.

Negative cash flow is when the amount of cash going out is more than the amount of cash coming in.

How to Improve the Cash Flow of Your Small Business

Learn to predict tomorrow’s cash flow. To predict how much money your business will have in the future, try to predict its potential sales. Also, figure out the rate at which you will collect money that is due to your business, along with the amount of money that needs to be paid to your vendors. If you consistently analyze your company’s cash flow, you will lower the chances of suffering from cash flow crunch, which is the shortage of cash in a business.

Cash flow predictions for long periods of time are more useful, but they can be less accurate. To make more accurate projections, estimate cash flow for up to six months—then update your projections once a month.

Increase sales.

• Focus on existing customers. Analyze how much of your product customers are buying and why they are buying it. This is a cost-effective way to increase profit and generate sales.
• Set up a sales incentive program. Give your salespeople incentives to get out there and sell! Recognize and celebrate salespeople for their achievements. Recognition gives people a sense of accomplishment that motivates them to keep up the good work. This is a great and cost-effective way to inspire a salesperson to make a sale!
• Fill your customers in. Let customers know about upcoming sales when they’re in your store, or by phone or email. They will be sure to come back, and they may bring some friends along!
• Reward your customers. Provide customers with birthday discounts or point systems that allow discounts once they’ve spent a certain amount of money. These tactics will both increase sales and build customer loyalty.

Watch out! Have good money management in your small business. If your money is not managed properly, you may not be able to make investments that are necessary to compete with other small businesses. Bad money management may also lead to your business having to borrow money.

Various factors affect the cash flow of your business, including accounts receivable, inventory, accounts payable, capital expenditures, and debt service. Focus on these factors to maintain positive cash flow in your business:

• Create capital expenditures so you do not spend too much money on purchasing inventory and equipment. Capital expenditures, or CAPEX, are funds used to acquire or upgrade assets.
  If an expense qualifies as a CAPEX, your business could extend the cost of the expenditure over the amount of time the asset is functional. If an asset’s cost can be maintained in its existing state, the cost will be subtracted in the year of the expenditure.
• Make sure you are not slow in collecting accounts receivable. To make collecting receivables easier, get a lockbox service. Your bank can provide your business with a post office box. When customers send checks to the post office box, the bank will be able to process the money faster. It is also a good idea to keep your banking at one bank, and offer your customers discounts for paying their bills quickly.
• Create an accounts payable department. The AP department will make payments to vendors and providers in a specific amount of time. This will avoid default, which can happen if a business does not pay its bills on time. It may also be smart to look into receiving help from a debt service, which will help your company use cash to repay interest on a debt.
• Beware of bankruptcy! Small-business owners run the risk of losing track of the amount of money coming in and going out. Check your cash flow statement regularly. If you notice that cash flow has been negative for an extended amount of time, you may want to check your money in the bank. It may be getting low. Keeping tabs on cash flow statements will help maintain the positive cash flow of a small business.

Use Facebook Check-in Deals

You’re probably aware that Facebook provides more than just a Facebook Page or Facebook Ad to market your business. Take Facebook Places, for example. This feature is meant for friends to announce to each other their current whereabouts: “Jane Smith is at Anytime Fitness in Ft. Myers, Fla.” Places provides your business free and rapid advertising. Whenever Facebook users visit your location and “check in” on Facebook Places, their friends are automatically notified. But Places is not just a fun way for friends to spontaneously meet up or for friends to show each other where they spend their time.

Your can use Places to motivate people in to check in to your business. By using the Deals feature on Places, you can make your shop, event, or online store stand out among the hundreds of others advertising on Facebook.

The Deal on Facebook Deals

Currently, business owners are using Facebook Places for its “Check-in Deals” component. Facebook followers can check in to receive individual discounts, to be rewarded for encouraging their friends to save, and to receive savings for repeat visits. They are even using Facebook Deals to donate to charities. Deals also makes the “Like” button available, which allows your deals to appear in news feeds. That’s one way Facebook distributes your deals. Facebook’s “Deals Guide for Businesses”¹ describes eight methods of distribution:

• Facebook home page
• Deals page
• “Sponsored Deal” blurbs
• Wall posts by users
• News Feed
• Notifications to people when their friends “Like” or buy the same deals
• Deals tab
• Emails

How to Claim a Place for Your Business

Remember, to use Check-in Deals, you must first claim a place for your business on Facebook. Eric Brantner explained the process in his seohosting.com article, “Are You Using Facebook Places to Promote Your Business?”²

How it Works for Your Followers

A CNN article³ explained how Facebook users use the GPS on their phones to notify friends of their geographical locations. Facebook Deals takes this a step further by not only announcing your existence but also enticing people to visit your store, for example, to save on quality products.

Why Should You Use Deals?

By not taking advantage of this free feature, you will miss out on building clientele, strengthening loyalty, and increasing sales. Most business owners are establishing Facebook Pages and Ads for their businesses. Facebook Deals offers more than just information on your business—it also entices smartphone users to make purchases, builds customer loyalty, and strengthens your business’s reputation as a place that wants customers to save money and feel appreciated for making purchases.

Still have questions about Check-in Deals on Places? Visit the Facebook Help Center.⁶

For more information, visit:

1. Facebook’s “Deals Guide for Businesses“ (see “Download Business Guide” at bottom right)

2. “Are You Using Facebook Places to Promote Your Business?”

3. “Facebook Introduces Check-in Feature”

4. “Introducing Deals”

5. “What Facebook Places Means for Small Businesses”

6. Facebook Help Center: Check-in Deals

Going Green Is Good for Business

Have you thought about going green?

The green trend is one that big businesses have begun to tackle and smaller businesses are starting to follow. Not only can this approach of ecological conscientiousness aid in saving the planet; it can also save small businesses some big bucks.

Going green isn’t just for eco-focused businesses, either. The trend has reached a variety of businesses.¹

By making minor adjustments in the workplace, a small-business owner can reap major long-term benefits, and actually increase his revenue and use his business’s green image as a marketing tool.

Sounds intriguing, right? But what does it actually mean to be a green business?

All businesses must follow the environmental standards set by law for their given industries.² How can you make the extra effort and make your business green?

To get started, you’ll need to develop specific practices that are unique to your line of work. For instance, if your business is in the auto industry, your green practices are going to be significantly different compared with those of a pizza place.

It would also be beneficial for you to keep yourself up to date on the latest environmental issues and consumer trends, and create a plan of action that your employees and you can realistically follow.

All members of your staff should meet to discuss the plan and how they’ll execute it. Doing so will make your green efforts structured and enforceable. It may also be possible to receive a seal or logo from a certifying association for your efforts, but you can still use green practices without an official stamp.

In case you’re thinking it’s going to be too expensive to pull off, keep this in mind: It is a misconception that all green practices come with huge costs. The truth is that you do not need a million bucks to invest in green projects.

You don’t need to devote entire departments to environmental improvement, as giant corporations can afford to do. You can take a series of seemingly inconsequential steps that go a long way:

• Buy green office products, like energy-saving light bulbs and environmentally friendly cleaning products.
• Use less paper by forwarding emails and only printing emails that need to be kept as records.
• Recycle old paper products, computers, and peripherals.
• Turn lights and computers off, and unplug charger adapters anytime they’re not in use.
• When it’s time to purchase new company-owned vehicles, go hybrid.

All of these minor changes will save your business money, and that money will add up. Some of the cost savings may include reduced utility and waste-disposal costs, more efficient operations and processes, and even tax credits.

Going green is a hot trend and not just in the business world. It’s on the minds of consumers as well.

Saving money, making money, and saving the planet—it’s a no-brainer. Ditch the red and go green!

For more information, visit:

1. “It’s Becoming Much Easier to Go Green”
2. “Becoming a Green Business”

Build web traffic.

You run a small business, so you have a website. But a website is like an Italian sports car. No matter how much money you spend on it, you know it doesn’t work as efficiently as it could. The reality is that websites are mysterious to most of us in the business world.

You might have revamped your site in the past 12 months to improve its organization or functionality, but because the point of your website is to attract customers (“eyeballs,” as they’re called in the world of internet marketing), your No. 1 goal should be to improve your site’s traffic. Here are three ways that even the most tech-averse small-business owner can generate more web traffic, and three ways that a partner like The Small Business Authority can help.

1. Get on the map. It’s not only easy but also free to have those colorful pushpin graphics identify your business locations on a map that displays with search results. First, check the accuracy of the search listing that comes up for your business. Then, get a free map that displays when your company comes up in a Google search. Google Places¹ is the name of this feature.

Next, put a map from Google on your site’s “Contact Us” page.²

2. Have a thing with Bing. Bing allows business owners to add coupons, special deals, restaurant menus, and product photos to Bing search results for free. Ironically, it’s hard to find out about this with a search. What used to be called Bing Local Listings is now called Bing Business Portal.³ Once there, click on “Learn more” to get all your questions answered.

It’s worth noting that for both Bing and Google, you are asked to “claim” your listing. Some have said that to set your business apart from others, you must take the time to fill out all the fields in the forms. Granted, you hate having to register and give passwords, and you believe Google and Microsoft (Bing’s parent) already know too much about you. Get over it. You are here to optimize search results. Even uploading photos will help you climb in the rankings, so do the work. No one else is going to offer to get you high rankings for free.

3. Put the “e” in ecommerce. Make your ecommerce site easy for customers in every possible way. That means easy to find, easy to use, easy checkout, and easy returns. You’ll increase your revenue as well as your traffic.

• SEO is the way to ensure that you are easy to find. A campaign to improve SEO looks for long-term gains, not a quick win. It needs at least six months. SEO campaigns can focus on improving your website’s ranking in search results on a local, regional, national, or international stage, and prices vary according to the size of the selected universe.
• These days, most searches for local information are performed on mobile devices, so an easy-to-use website is one that’s optimized for mobile searches. The Small Business Authority’s new MAXlocal product is an example. Imagine someone in a taxi, trying to find this year’s equivalent of Tickle Me Elmo before he catches a plane home. That’s your mobile customer. Time and location are critical details for his web experience. He won’t click on your listing unless you make it easy for him to get exactly the information he wants. MAXlocal includes a marketing plan that creates a unique profile to ensure that your listing is the first one that comes up when someone runs a search for a company or product like yours, using either a mobile phone or computer.
• Look at your site’s ecommerce functionality closely. To sell products and accept credit-card payments, you need four basic components: a shopping cart, payment gateway, processing plan, and SSL certificate. The Small Business Authority can provide all of these tools for easy checkout. If your website has products displayed on basic catalog pages, it is not a true ecommerce site. Just adding a shopping cart will not make it one. Your web team will need to rethink the whole design so it is efficient to navigate.
• Why do we mention easy returns in an article about building web traffic? Because it’s just good customer service to help online buyers find the merchandise they really want. Remember: Happy customers tell other customers. Add a “Comments” form so your customers can share their experiences. Ask to use good comments as testimonials. The testimonials will show up in search results and help build traffic.

Back in the early days of the internet, we didn’t have maps or starred reviews or product photos in search results. In those days, we didn’t have a need for any of the techniques described in this article. But now we do. These techniques can help your business grow, and they could help you find new customers by the thousands.

For more information, visit:

1. Google Places
2. “Add Google Maps to your website”
3. Bing Business Portal

Talk about wolves in sheep's clothing.

Talk about wolves in sheep’s clothing.

Some scammers posing as tax-service providers are putting fliers in churches, advertising their ability to help taxpayers claim “found money.”

The “found money” flier distributors are one of the types of scammers the IRS is warning against. The IRS this week reminded taxpayers to be leery of people who try to get them to make tax-credit, refund, or rebate claims.¹

Other examples include offering to help people apply for Social Security-based rebates or “free money with no documentation required,” according to the IRS press release.

Scammers are targeting low-income individuals, and they’re especially targeting the South and Midwest.

“This isn’t brand new,” said Anthony Burke, spokesman for the IRS, in a phone interview. “This kind of thing has been around for a long time. But we have been hearing that there may have been a slight uptick in this in certain locations.”

“Most taxpayers file a correct return timely and voluntarily, and most taxpayers know what they’re entitled to,” he said.

Additionally, the IRS prepares returns for free for taxpayers who earn less than a certain amount. Currently, that annual income cap is set at $49,000.

How do you know whether a tax service is reputable?

“Don’t go to a fly-by-night operation,” Burke said. “Go to someone who’s well known in the community.”

Burke said that anyone who is approached by one of these tax services should go to her local IRS office and talk to an employee.²

Burke also recommended that a person verify the service with her local Chamber of Commerce or Better Business Bureau.

Also, ask whether the preparer is an “authorized electronic return originator,” Burke said. If the preparer says “yes,” ask him to show you his documentation. The IRS sends the documentation to tax preparers.

Burke said the axiom still applies: “If it sounds too good to be true, it probably is.”

If you have any questions about these scams or about taxes in general, you may be able to visit a Taxpayer Assistance Center this Saturday, July 16. The IRS is holding a “fresh start” open house, and several centers will be open. To find a location near you, click here.

For more information, visit:
1. “IRS Urges Taxpayers to Avoid Becoming Victims of Tax Scams”

2. “Contact My Local Office”

Add credibility to your business

With a growing competitive market, business owners do whatever they can to stand out from the rest. One of the best attributes a business owner can have is credibility. Customers, vendors, and even potential partners may choose to work with a company if they believe it is credible and trustworthy.

One of the ways to build instant credibility is by incorporating or forming a limited-liability company. Adding “Inc.” or “LLC” to the end of your business name implies a legitimacy that will impress your potential customers, vendors, and partners. It essentially says you’re real, you’re committed, and that you’re here for the long run.

Another way that incorporating or forming an LLC builds your credibility is that it gives your company a perpetual existence. Perpetual existence means that your entity will continue to exist even if management or ownership changes. People investing time or money in your company—especially customers—can be assured that your business is here to stay.

The Company Corporation^® has more than a century of experience helping business owners incorporate their businesses. To learn more about incorporating or forming an LLC, visit The Small Business Authority’s “Incorporate Your Business” page. With The Company Corporation,^® you can form your entity in less than 10 minutes or speak to an Incorporation Expert to answer any of your questions regarding forming your business.

The Company Corporation^® furnished this article as part of a series that appears every Friday on Thesba.com. The Company Corporation^® is a service company and does not provide legal or financial advice. For more information, visit Incorporate.com.