Saturday, December 15, 2007

Is Your Business Ready for the New Year?

This article was written by Carl Woodard, SCORE Orange County Second Vice Chairman

With the new year just around the corner, does your list of resolutions sound like this? 1. Clean out the garage 2. Get more exercise …etc., Setting goals is a great idea, but when was the last time you applied the same process beyond your personal life?

Here’s an idea. Consider preparing a list of resolutions for your business! I’ll bet that there are some areas that need cleaning out, dusting off and getting a bit more exercise in 2008. And, you probably know what they are.

Pull out your Business Plan. Did you reach those sales goals that you worked for this year? How is your Cash Flow? Has a new competitor arrived that you did not anticipate? Has that affected your profit margin because you stepped up your advertising and ran two more promotions? By the way, what is your margin? And, have costs caused your breakeven point to move higher than it should? It’s probably time to grab a pen and get your ideas on paper!

While it is always a good idea to revise your Business and Marketing Plans regularly, don’t let that major effort delay putting a few simple, but often overlooked, ideas to work as soon as the clock strikes midnight and the football games are over….well, perhaps you shouldn’t wait that long!

Let’s pick just a few simple ones for starters:

  1. First, find a meaningful way to make your product or service stand out from the competition. You want to be top-of-mind when your customer needs what you offer.
  2. Second, make a detailed list of potential customers to contact as early in the year as possible. Contact them by telephone, an introductory letter or, perhaps, in person.
  3. Next, remember to thank your current customers, regularly. That doesn’t require an expensive gift. Try a phone call or a personal hand-written note to deliver a sincere “Thank you”.
  4. Can you expand your services, or product line, to serve your current customers better? And, since they buy from you now, why not ask them for a referral?
  5. Review recent promotion methods to see if they need improvement. After a while, some methods become stale.

That should start the year rolling with a positive approach. And when you make your list of things to do, remember to contact any of us at SCORE Orange County to help you with your Business Plan, Marketing, Finance or Sales questions or to just discuss general business management with you. Plan to attend our workshops, which are conveniently offered throughout the area, and come to our Women in Business breakfast meetings.

We can be reached at 714-550-7369 to set a convenient appointment or we can be contacted at www.score114.org. We have approximately 100 experienced counselors waiting to help you.

Have a successful New Year

Up to $5,000 of Start Up Costs Can Now be Deducted

This article was written by Dick Ginnaty, CPA

Start up costs are costs incurred prior to actively operating a business and include such activities as analysis of potential markets or products, travel or other costs to secure prospective distributors, suppliers or customers, and includes professional fees incurred to form a corporation, partnership or limited liability company.

Historically these costs were capitalized and either not deductible until the business ended or were written off over a 60 month period, 1/60 of the cost per month. Under current law if the starts up costs are less than $50,000 then $5,000 can be written off immediately. Any remaining costs are written off under the old rules, 1/60th of the costs each month for 60 months.

Start up costs for purchasing an existing business are also subject to the fast write off rules but they include only the investigative costs incurred in the course of the search.

Costs of issuing and selling stock or costs of transferring assets to a corporation are not included in start up costs for this purpose. Nor are syndication fees, or costs of making a contract between a partnership (or LLC) and the partners regarding operation of the business.

Good luck and here’s hoping it “all adds up” for you.

(If there is any area in accounting or tax that you think needs to be addressed in this newsletter please e-mail Dick at Ginnatycpa@aol.com and if it is of general interest, he will address it in future articles).

To Achieve Greater Business Success, Unlock Your Employees

This article was written by Hillel Pitlik, SCORE Orange County Management Counselor

Traditionally, business organizations establish a hierarchical structure of supervision. Unfortunately, this method can cause the organization to act in a fragmented manner where ideas are suppressed and cooperation is thwarted.

In many cases, problems which arise in everyday activities are left unsolved because the responsibility chain is not clearly defined. I’m reminded of a visit to China when a faucet in our hotel bathroom was not functioning. We called the desk and they sent a plumber to fix it. We asked him, “Why the cleaning personnel had not found the problem and reported it?” He replied, “That isn’t their job.” Unfortunately, this happens in our organizations much too often.

While your organization has specific goals – never underestimate how much your employees can contribute to greater success. It is the objective of good management to harness the power and ingenuity of the people.

The basic question to be addressed is. “How do you get all the employees pushing in the same direction while keeping their eyes out for problems?” Today’s mantra for such an organizational fabric is “Teaming”.

It’s important and vital to any business because it is your people who best understand the nature of the problems they face in their every day activities, and they are almost always the one’s best able to devise workable solutions. A methodology that encourages these ideas is the one that will best serve the total enterprise.

Teaming is based on the premise that the whole is stronger than the sum of its parts. Each individual has something to contribute and taken together success is more frequently assured. A simple example that comes to mind is a small manufacturing business that has lost a key manager. The documentation for the products of the company was largely in the head of this key manager. The workers in the shop had been there as long as the manager. There was a critical need to recapture the lost information. By empowering the working team that had the equivalent knowledge, the business was able to survive this information loss. In fact, the resulting documentation incorporated many improvements that the individual employees had introduced on their own. By engaging the team, the efficiency and productivity of the organization improved substantially, because the workers were not just automatons but part of the entire process.

In addition to solving problems, the team can establish goals for productivity that become a commitment and thus the team’s success is a group objective that has a higher probability of being achieved. The best team structure demands that the team supervisor is part of the team. The supervisor is there to make sure that the resources the team needs for success are provided in a timely manner as well as working in the team to assure success.

Think TEAM and your business will flourish beyond your expectations. Your employees will be happier and you will realize the business success that a good enterprise deserves.

Help Needed

This article was written by Bern Lefson, SCORE Orange County Management Counselor

It’s that time of year when owners gear up for extra temporary help. Finding good help is always challenging. Here are some tried and true tips to make finding good help.

  • Hire only those people you would want all year round. If you wouldn't hire them for full time positions, don't consider them for temporary holiday help. Remember poor or incompetent service will not ring the cash register.
  • Use the message that gets you the help you need. Use words or terms that attract the serious applicant. Using words that attract those just looking for an extra buck is a mistake. Use your imagination to post eye-catching posters or fliers in places where your type of applicant will see them.
  • Recruit wherever you are. Put creative messages on back of business cards and give them out to everyone who provides you with good service. Don't forget to include your employees. When you hire someone referred by your employee, give a cash referral bonus or paid time off after the holiday rush has ended.
  • Hire with the longer view in mind. Good seasonal employees when treated well will be available when full time openings arise or for the next holiday season

Following these concepts will take the hassle out hiring employees.