Saturday, December 13, 2008

Don’t miss Michael Gerber Presentation on Tuesday Jan 6, at Chapman University

Awakening the Entrepreneur Within -- How Ordinary People Can Create Extraordinary Companies - Michael Gerber

Tuesday, January 6, 2009 from 10:00-noon at Chapman University

Here’s an incredible opportunity to hear from a world-renowned speaker, Michael Gerber. If any individual can rightfully be called “The World’s Number One Small Business Guru,” it is Michael Gerber. His E-Myth books have touched the lives of millions of business readers, in every industry, throughout the world.

e_myth The E-Myth Revisited, Michael Gerber’s opus on why most small businesses don’t work and what to do about it, was first published in 1986. With over 2 million copies sold, it continues to make the Top 10 list of the hottest business books in the U.S. More than just an author, Michael Gerber writes about what he has done himself, not only on his own behalf as Founder and CEO of E-Myth Worldwide, but on behalf of the millions of business owners for whom Michael Gerber’s E-Myth principles and systems have been successfully put to work. Michael’s latest focus is the entrepreneur as dreamer with his latest book – Awakening the Entrepreneur Within; How Ordinary People Can Create Extraordinary Companies, and his 3-day intensives: In the Dreaming Room.

To register or for more details, click here or visit the workshop page at

This event is brought to you by:


Celebrating Another Year Coming to an End

score_tjpg_mcculloch This article was written by Ben McCulloch, Chairman, SCORE Orange County

Here in mid-December perhaps you, too, have the surprise feeling of ‘where did that year go?! … Offset (more than a little bit) by a twinge of ‘I thought it would never end!’ As the last two months have repeatedly reminded us, business cycles don’t pay much attention to the calendar. But, the end of one year signals the beginning of another, and the time in-between provides a short pause to take stock.

What have we learned this year?

For many, the year has presented numerous, unforeseen challenges. For some, it’s also presented a few unexpected opportunities. Our shared experience is a reminder that there are many factors over which we have no control, nor can we anticipate with confidence. You may have begun the year with well-constructed business plans, but they may not have prepared you for the surprises and uncertainties since September.

How to prepare for next year?

Keep planning! Uncertainty doesn’t mean you can’t plan. Instead, build on your current business plans with a different approach, mindful that risk increases the further out you try to project, and that the consequence of being wrong may have increased substantially. Focus you’re planning on the fundamentals of your business: costs and cash flow, of course. But also key on your core customers, your products and services, and how you market to bring those two together. And, if you need assistance, or just need a sounding board, give us a call.

As we continue into the Holidays, and on behalf of the women and men of your SCORE chapter, I wish you a happy, restful, and safe season. Congratulations on dealing with a historic set of challenges, and best wishes for success in the coming year. We look forward to seeing you again soon, and working together to make an impact in the Orange County business community.

QuickBooks 2009; Some Interesting Additions, and Improvements

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA

QuickBooks 2009 is out and in the stores, and contains some clear enhancements from 2008. Most of the improvements/additions have to do with the Web, such as accessing “Live Community” (effectively, an on-line chat room for QuickBook users), creating a professional website, and communicating to others (your accountant, vendors, customers) through what they are calling “QB Messenger”.

Other operational enhancements include tracking international sales and expenses in multiple currencies (a big enhancement in this ever shrinking world), and the ability to download invoices and estimates created through Adobe’s software PDF form templates (just Google: Adobe Inc.)

The enhancements in QuickBooks 2009 version brings up the question of how often should you update your QuickBooks. The answer is every two years at least. The reason for the two year maximum between updates is simply that Intuit, the company that produces QuickBooks, does not support versions older than two years. Obviously, you should check out the changes in each version and make the economic decision if the enhancements are worth the update cost.

Well that’s it for 2008, I hope you and yours the very best for this holiday season, and prosperity and health for the new year.

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 and if it is of general interest, he will address it in future articles)

Next Women’s Breakfast January 16, 2009

Ring In The New Year With 10 Resolutions

score_tjpg_ryan This article was written by Martha Ryan, SCORE Orange County Management Counselor

The Orange County SCORE Women in Business Breakfast series has planned another great event to help you ring in the New Year. Join us on January 16, 2009 at the Center Club in Costa Mesa, to hear Dr. Deborah Gaut share ten New Years’ resolutions that you can easily make (and keep!) to enhance your company’s image, build loyal relationships with customers, and create word-of-mouth buzz for your company.

If you want to NETWORK and share ideas, experiences and advice with other women in a variety of service and product businesses, DISCOVER the variety of available of services and resources provided by SCORE and their partners to enhance or help you start your business and SHARE your knowledge and experience through the opportunity of exhibiting at the breakfast…join us!

wib-logo Deborah is the author of three best-selling communication textbooks and has 20 year of training and consulting experience in business and industry. She is the President of OnYourMark! Communications, Inc., and co-founder of the California Institute for Veterans Studies.

The Women in Business breakfast will be held on Friday, January 16, 2009, from 7:30AM to 10:00AM (registration starts at 7:00AM) at the Center Club, 650 Town Center Drive, Costa Mesa (free valet parking located just past the ticket office for the OC Performing Arts). The cost for the breakfast is $30.00 advanced registration, $35.00 at the door. Add an additional $35.00 to reserve an exhibit table. Sign up on the SCORE website to reserve your space as seating is limited.

Business Practice Patents Take Major Hit!

score_tjpg_Fulton This article was written by Jim Fulton, SCORE Orange County Management Counselor

On 30 October, 2008, the U. S. Court of Appeals for the Washington Circuit (which handles all Patent appeals) substantially reversed the position it had adopted in 1998 with regard to Business Practice Patents.  As a result, Business Practice Patents will be harder to acquire.  The Court upheld the position taken recently by the U. S. Patent and Trademark Office in the matter of Bilski & Warsaw vs. the USPTO.

The Court essentially returned to the pre-1998 position by reversing its “State Street decision.”  The “State Street decision” had caused great controversy due to its vague wording.    It said in that case “business practices were patentable so long as they’re useful, concrete and tangible.” This language is no longer effective.  The Court, in a 9-3 decision, wrote that in order for a process to receive patent protection, it has to either “transform an article to a different state or thing” or be “tied to a particular machine.”  This places the Business Process Patent in parallel with previous process patents found most often in chemistry.

It is clear that it will be more difficult to obtain business practice patents in the fields of accounting, banking, insurance and software in general.  It also opens the way to litigation related to patents issued during the interim period.

The decision is subject to appeal to the U. S. Supreme Court.  However, that Court is notoriously reluctant to become involved in the technical details of patent matters.  It specifically formed the above named Court to handle such matters for it.

Opportunities for the Future

score_tjpg_bour This article was written by Norm Bour, SCORE Orange County Management Counselor

As this economy remains in a state of chaos, let’s try to look at the bright side. This crisis shall pass in time and no matter what is thrown at us, we, as Americans, will endure and survive. That is well and good for the “Big Picture”, but what about you, the reader, the one who is trying to keep their current business going or possibly looking to start a new one? Where shall you look? What businesses look like better gambles (?) in the next few years?

The Ageing Population

I’m a Baby Boomer and most of the people I know are too, if not beyond that. Health care is better than it’s ever been and the average life expectancy in this country is now over 78 years of age. That means a support system will be needed for tens of millions of people ranging from health care, care giving, even mundane tasks like help with shopping or chauffeuring from place to place. This new Baby Boomer generation will be the largest and wealthiest mass ever to enter retirement age. And they fight and kick the whole way! For the most part this generational group of ex-hippies, ex-executives and every other career that they engaged in likes to be active and they truly do think young. What businesses can enhance that and support that attitude?

For the most part this generation is more active than most before them. Exercise, athletics, entertainment, personal training, beauty treatments, cosmetic surgery; these will all be in high demand in the decades to come. Golf, hiking, fishing, you name the sport and there will be more people engaged in solitary (not team) sports than ever before. Though youth may be gone, the ILLUSION of youth remains strong. How can you profit from that?

In addition, the majority of these Boomers do not like cold climates, so keep that in mind when you think about starting or maintaining a business where there are more people leaving than arriving. In California we’re probably fine, but the Northeast and Middle America will not be the destinations of choice.

The New, more Complex World

Another area of profit is the ever growing and ever more complicated world of computerization. A novelty 20 years ago, computers are a necessary part of life and their complexity grows each year. Wi-fi, networking, new operating systems, and even the “dark side”, viruses and other Trojans and malware will create opportunities for those that wish to service the less sophisticated. And the computer opens up opportunities for growing on-line businesses, networking with vast amounts of like-minded people, and working in areas that you may not have had access to in the past. Location restrictions are less important than ever before and doing business cross country and even worldwide is not out of reach.

Keep an open mind

These are just two of the many ideas that will have a greater chance of success in the years to come. Other areas:

· How about the “Green Movement”, which is here to stay? Energy savings will remain a mandate from all levels and there will be opportunities. Energy auditing, support of hybrids and a host of businesses we cannot even imagine will open up in the next decade.

· Career counseling. Even though the population is aging, many are not financially able to retire. These people need direction, counseling and guidance in their next steps.

· And along those lines they also need financial help and counseling. Financial advisors and planners will remain busy in the years to come.

So as we approach 2009 try not to think of the past for it will never be the same again. All the old rules are gone and the stability we’ve nurtured our entire lives may also be gone. If your business is not doing what it used to, or what it should, remember it’s smarter to cut your losses if you need to change direction and if you start fresh do your homework first.

Happy holidays and a Make a toast to a successful 2009

Score Counselors Select Winners in Aerospace Competition

Six Score 114 counselors each reviewed 120 applications for the Supplier Excellence Alliance. SEA is an industry alliance which promotes supply chain improvements and supplier collaboration. Winners were presented awards at their Gala on November 12 in Indian Wells, Ca.


Judges in the picture are from left to right, Bob Lichtsinn, Jim Fulton, Angelo Farro, Bern Lefson, and Jerry Margolin. Jack James was not present.

Saturday, November 15, 2008

Chairman’s Message

score_tjpg_mcculloch This article was written by Ben McCulloch, Chairman, SCORE Orange County.

Thank you for checking in on our newsletter.  We strive to be relevant to your need for business information.  If you’re here for the first time, welcome.  If you’re returning, we’re glad you did.  Either way, before you leave please tell us what more you are looking for.

As our October edition ‘went to press’, the Congress was about to vote on the ‘financial bailout’ package which, you’ll recall, failed to pass the first time.  What a month it has been since:  the $700 billion financial stimulus package finally passed, the Fed decreased the Fed Funds rate and infused cash into the commercial paper markets, and the FDIC increased the maximum insurable amount for deposits.  The securities markets responded with wild fluctuations, for no apparent reason.  And, we’ve just elected a new President.  That’s just in one month!

At our October SCORE chapter meeting we devoted the bulk of our attention to the economic situation.  We compared notes on what our clients – i.e. you – are experiencing, and discussed ways that we can be even more responsive to your urgent needs.  We also compared notes on what we’ve each learned from running businesses during past severe economic downturns. 

I just want to highlight one theme that emerged from our discussion:  that the uncertainty we are feeling right now may not go away in the foreseeable future.  Let me try that another way:  your approach to the near-future should assume that uncertainty will prevail.  As we’ve seen now that the election is behind us, some uncertainties will be clarified as we move forward; but, you can assume others will emerge to make your planning treacherous, and your risks high.

But plan you must.  Dealing with such pervasive economic uncertainty may not be something you’ve had to contend since 9/11, and before that, all the way back to 1990-91.  Though each downturn is different, dealing with them is helped by proven techniques learned by experience.  If you haven’t ‘been here before’, or if you want someone to help you navigate the path ahead, I encourage you to contact us (714.550.7369) for an appointment with one of our counselors.  Also, be sure to check our workshop calendar from time to time, as we may be tailoring selected topics and content to be more relevant to your current needs.

What do you think?  If you have a lesson or technique that helped you through a similar downturn, please share it with us here.

Buying a New Truck/SUV before Year End Could be a Steal…

...both from a cost standpoint and tax write off standpoint.

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA.

The tax act passed in February of this year contained some provisions which could make buying a larger SUV a tax favored purchase. The first requirement though, is the SUV must weigh in excess of 6,000 GWT. It doesn’t have to be new, so used is fine. The write offs would be as follows on a $35,000 vehicle; first, the vehicle qualifies for the instant $25,000 write off under sect. 179, then 50% of the remaining $10,000 of cost can be written off under the new act, and the remaining $5,000 would be eligible for standard depreciation on a 5 year asset (20% for the first year or $1,000). That’s a total first year write-off of $31,000 on a $35,000 purchase. Not bad, considering  the recent run up in gas (although abating lately) has slashed prices of used large SUVs. Remember, the vehicle has to be purchased and put in service before December 31, and the business usage must be 100% to qualify for the total write off indicated above. You will get a pro-rata write off for vehicles with a business usage between 50-99%. For vehicles used in business with usage rates below 50%, the write offs are reduced dramatically. Call your accountant for these calculations.

Second Topic: The Bailout Tax Provisions

The bailout bill (passed in Sept., 2008) as finally enacted contained over 80 pages of extended or new tax provisions. In this brief space, we cannot adequately summarize all the provisions that may apply to you. My best suggestion is to call or visit with your accountant between now and Dec. 15th to see if there are provisions you should act on prior to year end.

In addition, the newly elected national administration has been verbal in announcing its intentions to change the tax code in an unfavorable way for certain high earning tax payers. Therefore, I encourage those who may be affected to visit with your accountant. There may be ways to accelerate income into 2008 instead of waiting to 2009 when higher income and capital gains rates may apply.

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 and if it is of general interest, he will address it in future articles)

Teleworking Saves Overhead and Improves Retention

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

In this time of high gasoline costs and increases in office rent, teleworking or telecommuting can be a godsend for small firms that wish to retain key talent or high performers.  There are now 35 million teleworkers with 12% of employees at companies with 21 to 100 people sometimes working remotely.

A study by Robert Half International found that teleworking and flexible schedules were the third most important incentive for attracting new employees.  Teleworking cuts overhead because less space is needed and cuts commuting costs for employees.  In fact, teleworking has been found to offer a slight increase in productivity.

To make teleworking be viable for your business, it is important to write a policy that spells out what is expected, who is eligible, which jobs can be done remotely and how often and how productivity will be measured.  For example, jobs that don’t require much face time, or those that require longer periods of concentration are excellent candidates.  Many firms permit teleworking by customer service employees. 

A good practice is to write a contract for the employee working remotely that spells out which hours are required, which days will be remote based, what sort of home office is required, who pays for and owns the equipment needed, and how productivity will be measured.  Customer services jobs can be measured by the number of complaints are resolved per day.  Others may send an email each day specifying what is to be accomplished that day. 

Many firms will provide a laptop computer pay for the internet connection and for a router.  Some also require that a video camera be installed on the computer for teleconferences.  Other firms simply ask that the employee be responsible for providing the equipment in order to be able to work remotely. 

As those with experience in teleworking state, good employees will perform under any conditions – whether at home or at the office.  But do remember that some employees need the environment of an office or do not want to work at home.  If starting this strategy, do it first on a trial or pilot basis.  In this way any problems can be addressed without wrecking the concept.  If it fails to work for your situation, a pilot approach does not bind you and cause issues with expectations being denied.  One key to success with teleworking is excellent communication between everyone.

How Long Can I Hang in There?

score_tjpg_bour This article was written by Norm Bour, SCORE Orange County Management Counselor.

During the past 10 years (actually for much longer) money has been easy to get. Lenders were everywhere, home equity was abundant and increasing at unseen rates and money literally was flowing in the streets. With this perception of easy capital came opportunities not seen for many years and many took this new horizon to start a new business. Some of them had a good solid foundation, but many did not.

So what do we do now?

If you look at all the businesses out there, you cannot deny that the odds of success are sometimes overwhelming. Certain businesses are far more prone to failure than others, but statistics show that over 60% of new businesses will not last beyond their fifth year. Restaurants, transportation and clothing boutiques generally have a higher failure rate than the norm, but these are just averages. Many factors can contribute to your success or failure, including experience, financial backing, and location. With all that being said, now that the economy is in a downturn (aka Recession) with the third quarter of 2008 having negative GNP of .03%, the first time since 2001, you cannot escape the concern and fear in the public’s mind.

How do I survive?

If you are one of those businesses that are barely hanging on, you must make an honest assessment of your situation, especially your cash flow and debt structure. SCORE counselors  can help you with that. If you already have a business line of credit, now is the time to “test it out” which means, try to tap into it to make sure it’s still available. You should also have a sincere conversation with your banker or lender to get their take on how they view you. If you do not have a business line of credit and you have no credit available through other sources including equity (or lack of equity) in your house you have to ask yourself, “how do I survive if things go wrong?”

When do I cry “UNCLE?”

As much as we strive to be optimistic and as much as we have faith in our abilities to survive any downturn, sometimes valor is best achieved by crying Uncle and cutting your loses. In military terms you cannot always win the war, but sometimes you can get more done by winning the battles. If you see that you have no fallback position and your business is losing more money every month it may be time to throw in the towel.

Recovering and moving forward

Worse case, it’s time to call it quits, so you must try to salvage what you can. In order that would be; your sanity, your family unity, your money, and your credit. Again, this may not always be possible so you must think not just of your current situation, but down the road and to your next venture. Is it time to get a job? Is it time to redirect into a new career? Only time will tell, but make every effort to not let this failure determine your life or your future. Most every successful businessperson has had their share of failures and that typically is the price of future success.

Man It Is Tough!! The Thrift Store Operation.

score_tjpg_reich This article was written by Chuck Reich, SCORE Orange County Management Counselor.

As far back as 1964 there were thrift shops in Orange County. Today just about every community has a thrift shop business. Operating a thrift shop whether for profit or non profit is similar to running a retail business. The poor can not help the poor; they too have to pay and need to make money to promote their organizations mission.

That brings us to the place where everyone seems to think that operating a Thrift Store Operation should be a piece of cake. I mean donations are free, aren’t they? You have volunteers that take the place of paid workers, don’t you?

At first blush you would think that in tough times the thrift stores would much better, I mean people are watching their dollars. They want to get the best buys for their money.

The truth is the Thrift Store Operation is just like any retail business. The merchandise is not free! Even dropped off donations can be expensive to handle. A good portion of the donation is junk, of no value to anyone. This costs to trash this stuff. Next a portion of the donation will be fair, you still have to process and that cost labor. Then what’s left should be very good merchandise (unless the donor held their own sale and the very good stuff is gone).

Some volunteers have their own addenda. The only reason they volunteer is to get the first look at the real goodies first. Don’t get me wrong there are some volunteers that are worth their weight in gold, you got to love them.

My suggestion for anyone thinking about getting into the Thrift Store business really think it through, and get some good advice from the counselors at SCORE114 Orange County.

Saturday, October 18, 2008

You are ‘America’s Economic Solution’, But What to Do in the Meantime?

score_tjpg_mcculloch This article was written by Ben McCulloch, Chairman, SCORE Orange County.

As I write this, the House is considering the Senate’s version of the financial ‘rescue’ package. Maybe by the time I finish – and hopefully by the time you read this – we’ll know whether the bill passes. If so, some of the historic uncertainty in the marketplace should be lessened. ‘Should be lessened’: the problem is complex and one bill won’t remove the uncertainty plaguing the markets.

Of course you’re following these events closely, too. As citizens, business owners, and entrepreneurs, you are the ‘Main Street’ that so much of the deliberation has focused on helping. On that, there is no dispute: small business is the core driver of our economy. A report released just yesterday by the Kaufman Foundation underscores the public’s view notion that you are ‘the answer to the current financial crisis’ (

That may be gratifying, and it’s definitely the philosophy that underpins our mission at SCORE. But, until we get beyond the crisis, you have some realities: how do you make the lease payment, make payroll, and keep the shelves stocked? You’re not alone. Take a look at this California business owner (found at Donny Deutch’s ‘The Big Idea Blog’) as she puts a face on the problems being experienced by so many of you.*blog*&par=RSS

Though we don’t have money to lend, your SCORE counselors are here to ‘lend’ you something else of value: experience running businesses during previous, difficult economic times. We do not claim to have your solution, but we can give you ideas on managing AP and AR, preparing for meetings with your bankers, other options (and risks) for accessing temporary cash, and – as with the business owner in the video – preparing for your expansion when the cash and credit markets begin to recover. And they will!

In the meantime … what are your concerns and the problems you’re facing? Please comment below and share with us any solutions that have worked for you. We look forward to helping you until we – together – get past this crisis.

Employing Your Children is a Potential Tax Savings.

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA.

Employing children can save taxes. The key notion here is that the first $5,000 of earned income by any aged person is tax free because anyone who earns money gets the a standard deduction up to $5,000 regardless of whether they are claimed as a dependent on another (i.e. parent’s) tax return or not. For example, if a 16 year old earns $5,000 wages from his/her sole proprietor parent, then they will be no income tax paid on the $5,000 by the child, and the parent will get the $5,000 deduction against the sole proprietorship income. This is also true for partnerships or LLC’s or any unincorporated entity.

To go even further, the child could earn $9,000, put $4,000 into an IRA and again, no income tax will be paid by the child. As an additional bonus, for an employed child of a sole proprietor or partnership, under the age of 18, the wages are NOT subject to social security taxes either.

One can get fancier (i.e. higher non taxable income to the child) if a “simple” pension plan is invoked by the business. Up to $15,500 can be earned (and deducted) and the child will not pay ANY income tax.

Warning: In incorporated entities, the wages ARE subject to social security taxes (totaling 15.3%) so the advantages have to be weighed more carefully, but for corporations (like a Sub S) enjoying significant earnings, it can still be worthwhile.

Last caution: the wages have to be for actual work performed and have to reasonable for the nature of the work.

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 and if it is of general interest, he will address it in future articles)

Women in Business Breakfast Series on Friday, November 7, 2008, Learn About Customer Feedback

This article was written by Martha Ryan, SCORE Orange County Management Counselor.

score_tjpg_hanson The Orange County SCORE Women in Business Breakfast series has planned another great event for November 7, 2008 at the Center Club in Costa Mesa, featuring Felena Hanson, Principal, Perspective Marketing (

If you want to NETWORK and share ideas, experiences and advice with other women in a variety of service and product businesses, DISCOVER the variety of available of services and resources provided by SCORE and their partners to enhance or help you start your business and SHARE your knowledge and experience through the opportunity of exhibiting at the breakfast…join us!

Felena Hanson is not only a marketing expert but also a marketing professor at CSU Dominquez Hills and the Fashion Institute of Design & Merchandising San Diego, author and international speaker. She will share “The 10 Rules of Customer Feedback” in an interactive seminar that will provide concrete steps to implement and use customer feedback to improve your bottom line. You will learn:

  • Which forms of communication are most effective
  • How to develop a customer feedback survey
  • Which online sources are best for collecting information
  • How to inexpensively solicit feedback
  • What to do with the information once it’s collected

The Women in Business breakfast will be held on Friday, November 7, 2008, from 7:30AM to 10:00AM (registration starts at 7:00AM) at the Center Club, 650 Town Center Drive, Costa Mesa (free valet parking located just past the ticket office for the OC Performing Arts). The cost for the breakfast is $30.00 advanced registration, $35.00 at the door. Add an additional $35.00 to reserve an exhibit table. Sign up on the SCORE website to reserve your space as seating is limited.

It’s the End of the World as We Know It! Or is It?

score_tjpg_bour This article was written by Norm Bour, SCORE Orange County Management Counselor.

There is no question that the world we live in, including the business world, is changing before our very eyes. Everything we have been experiencing in our entire lives, “business as usual,” is no more, and the old rule book has been discarded. So what does this mean for current business owners? What does it mean for those who wish to become new business owners? It just means you need to read out of the new plan manual and there are some strategic areas that require new methodology.

How you borrow money and from where

Borrowing money has been a way of life for generations and during the past 30 years it has never been easier. There were a few years that were difficult, but for the most part, everyone wanted to lend you money. That is no longer the case. As of this writing, the $700B Bailout Plan is being finalized with one of the specific agendas as being the easing of the credit markets. Banks are reluctant to lend to each other and are hoarding cash. Why would they want to loan money to you? Those Signature Loans and Personal Lines of Credit will never be as easy to obtain as what they have been. The wild card is SBA and government loans. They will be more difficult to get than before, but easier than institutional financing.

Short, medium and long term planning

If you fail to plan you will be planning to fail. That old bromide still remains true, but the Looking Glass will be much more difficult to read. During the prior 18 months we have gone from the failure of the sub-prime market, to the crisis of the mortgage banking industry, which created the banking fiasco, which shut down one of our most consistent partners in the mortgage market: Fannie Mae and Freddie Mac. Shortly thereafter, AIG got an $85B safety net, and just recently Washington Mutual triggered the biggest bank failure in history followed by Wachovia which just over one year ago bought World Savings. What is particularly scary is the speed with which all these events occurred.

The moral to the story is that the future will be harder to predict than ever before. Your short term goals will probably be more accurate than not, but any long term plans beyond a 5 year window is a total guessing game.

Growth and expansion

In the past few years many companies expanded since the economy was booming, money was abundant, and the consumer was willing to spend. Those rules are also gone. How many companies have closed or significant downsized during 2008? In 2007 there were 32,000 business failures, but we doubled that number in just the first quarter of 2008. Starbucks closing 600 stores, Mervyns department stores, plus many others and a list too long to print, make these times some of the most fragile we have seen in decades.

Remember the tortoise and the hare fable and who won at the end.


As these situations change with breakneck speed, the key to your financial future is education. The days of coasting along and having faith in old conventional establishment is over. YOU are in control. Continue your involvement with SCORE, whether as a volunteer or a client. Find financial counselors who can take you into this new quickly changing future. And find like minded support groups and mentors you can all learn from.

So is it “the end of the world as we know it?” The lyrics of that popular song follow with “it’s the end of the world as we know it, and I feel fine.” And you will. This too shall pass and life will go on, just with a different set of rules.

Don’t Waste Time Writing Press Releases

This article was written by Nick Leighton, SCORE Client.

Seem a little strange for a PR professional to be telling you not to write a press release? Well, that’s not how a small business is going to get outstanding publicity. There is a better way and it’s not high cost. Follow the steps below and you will have the best ROI of all your marketing.


You need to find the right media to attract. The more precise and accurate your understanding of the media - the better.

Thanks to the Internet you can find these media simply. Next you need to:

1 – Find the right person at that media outlet that you should be talking to.

2 – Understand the media. If it is a magazine, then get a copy and read it; if it is a radio show, then tune in.

Try with a small list of 5 media to start with. You can always broaden your list later on. With only 5 media on your key target list you don’t need press releases.


Next we need to build what we are going to say to them. The rule is simple – it is not your product or service that is going to sell you but the benefits that you offer your customers.

Fill in the blanks:

I work for ………. (define client base) who struggle with ……… (client problem) and would like to ……… (our benefit). What separates us from ………. (the competition) is that we ……….. (offer/USP) and as a result our clients get …………. (benefit of our services).


Now to produce the tools needed – which are not press releases. You need three things:

1 – A professional photograph of yourself and your product or service in digital format. Note ‘professional’. Spend $400 on a professional and I guarantee it will have a multiple return on investment.

2 – Paragraphs – who you are and what you do, what you used to do and something outside of work that adds interest.

3 – An overview of your business – in simple English. No jargon, no acronyms – just a half page on your company and what you offer your customers.

About the author:

Nick Leighton is the founder and CEO of NettResults Public Relations -

Thursday, September 18, 2008

Chairman’s Fiscal Year in Review

score_tjpg_Revelle This article was written by Jack Revelle, SCORE Orange County Chairman

Another fiscal year is just about over and with it comes the end of my term of office as the chapter chair for Orange County SCORE-114. During these past 12 months our chapter has continued to grow, both in numbers of volunteer management counselors (we are now approaching 110 members and remain the largest, most productive chapter in all of SCORE) and in the number of the various types of services we offer the Orange County small business community (including no-cost, one-on-one counseling at 18 sites across the county and over 150 no-cost or low-cost workshops at libraries, chambers of commerce, and universities).

Even some of our regular SCORE clients are not fully aware of the many other challenges our counselors accept, e.g., we provide advisory board services to existing businesses that need a continuing relationship with one or more of our volunteers. Our speakers bureau continues to make our management counselors available to many service, civic, and professional organizations as well as to local conferences to speak about SCORE and what we do as offer as on a variety of business-oriented topics.

Already in its third year, our Women’s Breakfast of Champion series continues to grow in popularity as measured by the number of repeat attendees we see. We continue to mentor both undergraduate and graduate university students in entrepreneurial programs at UC-Irvine, Cal State-Fullerton, and Chapman University. For example, we annually participate in the Stradling Yocca Carlson & Rauth Business Plan Competition as both student team coaches and this year, for the first time, as judges.

For many years Orange County SCORE-114 has maintained a library of no-cost, hard copy documents that are distributed by our counselors to our one-on-one clients during their appointments at our Santa Ana office. This collection has been expanded to include additional materials not previously available through SCORE. Naturally, our free CD is offered to those clients who indicate a need for the business plan, marketing plan and cash flow templates contained on the CD.

We have considerably expanded our outreach to assist our military men and women with small businesses who are just deploying to or returning from the Middle East as well as their spouses who need the advice and assistance that Score’s volunteer management counselors provide.

Just recently, we have established an electronic link and a continuing relationship with the Norm and Mike Radio Show, a daily (2:00 to 3:00PM) broadcast on KLAA (AM830) that features current business news as well as discussions about various aspects of the economy, plus the importance of mortgage acceleration and debt elimination.

Another recent development, we are, for the first time, the “official” judges for the Supplier Excellence Alliance (SEA) Awards. See article below.

And for those organizations that already exist as or want to become non-profits, some of our SCORE volunteer management counselors are also associated with Coaches of Orange County (ECOC). This group specializes in providing advice and the Executive assistance to non-profit organizations.

When you visit our local website,, or the SCORE Association national website,, there is virtually nothing a small business wants or needs (short of a loan) that you can’t find. And when you’re ready to give back to the small business community, you’re encouraged to contact us on our local website to investigate the process for becoming a SCORE volunteer management counselor in the largest, most productive SCORE chapter in the country.

And this is just the beginning of what Orange County SCORE-114 has done, is doing, and will be doing. We are the resource of choice for all of the small business community and if you, as an owner or manager, haven’t yet made use of our no-cost products and services, don’t you think the time has come when you should?

Thank you, one and all, clients, sponsors, and volunteers for all you do to make America great. Without the entrepreneurial spirit, dedication and energy of the small business community, our vitality and growth would not be what it is.

Members of Chapter 114 thank Jack ReVelle for his dedication and leading the chapter to another outstanding year of providing quality client services. Job well done.

Two Websites You Need To Know About

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA

Put and in your favorite places.

Calgold is a site maintained by the California Environmental Protection Agency which lists all the requirements to operate a business in the various cities of California. So, for example, if you thinking about operating a business in Brea, visit the website ( and follow the instructions, and the requirements of doing business in Brea are presented. How cool is that? Timely, definitive, and free.

Nolo, formerly known as Nolo Press, has for the past 30 years been a publisher and distributor of books and pamphlets that explain in plain English, legal processes. Titles such as, “How to form a LLC”, and, “How to form a Corporation,” have been published and are updated on a regular basis. Most of the books are written by attorneys. Many include a CD including all the forms needed to create the legal document required to accomplish the stated task, and the price is right. Almost all of the titles cost less than $100.

Even if you are not inclined to try to “do it yourself” filing important legal documents that you want done correctly (like incorporating), I encourage you to visit the site and purchase any title that is related to the topic you are interested in. By knowing about the legal process you want accomplished, you will understand the information required by the lawyer to perform the task, and can get started gathering it. It will also help you understand the time (and dollars) required to complete the task.

Remember, a prepared and informed buyer usually get the best deal, either in terms of cost, or more importantly, quality. This general advice applies to professional services also.

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 and if it is of general interest, he will address it in future articles)

Chapter 114 to Judge Aerospace Supplier Competition

score_tjpg_farro This article was written by Angelo Farro, SCORE Orange County Management Counselor

SEA (Supplier Excellence Association) has selected SCORE114 as the exclusive panel of judges to evaluate applications for the annual awards to outstanding Aerospace companies. 

The awards recognize the best suppliers and highlight the best practices leading to outstanding business performance.
SEA is a non-profit alliance of industry prime and tier-one contractors and leading sub-tier production suppliers.

Award categories include:

  • SEA Leadership & Culture Award
  • SEA Workforce Development Award
  • SEA Operational Excellence Award
  • SEA Performance Award: Most Improved
  • SEA Supply Chain Innovation Award
  • SEA Customer of the Year Award
  • SEA Richard Hall Award for Leadership Excellence

The SCORE judges are Angelo Farro, Jim Fulton, Jack James, Bern Lefson, Bob Lichtsinn, Jerry Margolin and Jack ReVelle.

Awards will be announced at the Awards Gala to be held November 12, 2008 in Palm Springs.

Are You Hiring Someone With Analytical Skills For The Position?

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

Many positions in small businesses require a person to think beyond the routine.  Analyzing the meaning of a situation or set of data means better service to the customer or more efficiency or profit for the firm.  To test a candidate's ability to think in this way means a very detailed interview.  One must ask questions that truly reveal whether an applicant has the analytical skills you are looking for.

Interview questions to assist in identifying analytical skills include:

  • Describe a situation when you anticipated a problem. What, if anything, did you do about it?
  • Give an example of when your diagnosis of a problem proved to be correct. What approach did you take to diagnose the problem? What was the outcome?
  • Describe the most difficult work problem you've ever encountered. What made it difficult? What solution was implemented and how successful was it in solving the problem?
  • What steps do you take toward developing a solution?
  • What factors did you consider in evaluating solutions?

It is critical to your success to think through the potential challenges of the position you are seeking to fill.  Then measure the candidate with questions such as outlined above.  You will be rewarded with a much better hire and fit.

Let’s Discuss Various Types of Business Debt

score_tjpg_bour This article was written by Norm Bour, SCORE Orange County Management Counselor

Cash flow is the lifeblood of any business, no different than the blood that keeps us alive. Without positive cash flow your business dies. It is one of those things that most business owners take for granted, grumble about and try to control. Yet they rarely sit down and analyze it and develop an orchestrated plan to eliminate it.

We’ve categorized debts into four major groups: mortgage debt, equipment debt, inventory and revolving or personal debt.

Mortgage debt is usually, but not always, the largest debt for a business. If you own a building it is typically the “best” type of debt since it is long term and more stable than others. Our goal is to eliminate all the other debts that impede cash flow so we can focus everything towards that mortgage debt.

Equipment debt is one that some businesses do not have, but if you are involved in manufacturing or any type of production these costs can be high. Doctors, dentists and medical related fields typically have significant equipment debt. Many times these loans are in the forms of leases, which make a lot of sense for many reasons. Lower payments and the ability to phase out obsolete equipment or technology are just a few.

Inventory debt can be considerable in many cases. We did a case study of a motorcycle dealership with $400,000 in parts inventory, some of which had not turned over in more than one year. In addition they also paid “flooring” on $600,000 worth of motorcycle inventory which ran another $20,000 per month. When we were done with the analysis we recommended almost 20% less inventory of new stock and liquidating tens of thousands of dollars in parts that were not moving. After paring both these items down we were able to increase the cash flow by $5,000 per month.

Revolving debt is probably one of the necessary evils of most businesses, and allows money available as a reserve or for emergencies. As is obvious you want to pay these types of debts off quickly since they are usually expensive with a variable rate. They can be secured or unsecured lines and are fairly easy to get as long as you have credit.

Taking a good look at all these expenses and calculating the damage from all and the collective positive cash flow is the first step in analyzing your business. We have been teaching mortgage acceleration strategies since 2002 and when those same techniques are applied towards business debt the pay off period can be incredibly fast.

If any one of areas is out of line and if the cash flow is negative it is critical that you repair that as soon as possible or you will hemorrhage yourself out of business. If you are fortunate enough to have positive cash flow, then it’s smart business to work on acceleration of all those debts and get rid of them as quickly as you can.

Editor’s note- Norm has a radio show dedicated to business, real estate and finance. It is on AM830 daily between 2 and 3 in the afternoon.

TriTech Funding Conference, October 16th, Riverside

If you know an entrepreneur that is looking for money to grow their business, TriTech is hosting a Funding Conference October 16th in Riverside.

The program will cover all forms of raising debt financing and equity capital. There will be a number of Angel investors available to answers questions on how to get the start-up funds needed to launch or move a business forward.

See website for details

Sunday, August 10, 2008


score_tjpg_mcculloch This article was written by Ben McCulloch, SCORE Orange County Vice Chairman

Interest rates, credit crunch, employment, stock market, real estate, retail sales, gas prices, inflation …

environ Your business environment sends you many signals. Some may be noise; interesting perhaps, but affecting ‘the other guy’. Other signals may be loud and clear, and worth paying attention to. Sense-making is difficult, and responding even more so. Yet, to succeed – and even survive – you must navigate your business environment. So, where do you get your environmentals?

Locally, we have several excellent authorities for regional business and economic activity, trends, observations, and even an occasional ‘outlook’. Follow the links below to see some examples. As you do, you may notice two things: that business news – about specific companies, industries, and events – is reported more frequently than economic news and, as you might expect, economic news and analysis can require a more careful reading:

  • The OC Register Small Business section is now found in their ‘Money’ section. Last year Jan Norman’s small business column moved to her very active blog, giving her opportunity to report on a greater range of business and economic topics. Be sure to bookmark her site.
  • Orange County Business Journal (OCBJ). Published weekly, the Journal provides a comprehensive report on business news and events around the county.
  • The LA Times Business section features small business news every Monday.
  • Cal State Fullerton Economic Forecasts. Every six months, the Mihaylo College of Business and Economics issues a ‘Midyear Economic Forecast’. Here is their spring 2008 update.
  • Orange County Public Library and city libraries. The reference section of your library is an excellent source of authoritative business information. At the Fullerton City Library and Yorba Linda Public Library in particular, their business librarian can help you find – and interpret – the information you need.

In the current economy, a deeper awareness and understanding of what might be going on can be helpful. Jan Norman points us to The National Federation of Independent Businesses’ (NFIB) recent (July) report of small business economic trends. Their analysis – reported monthly since 1986 – provides an index of small business optimism, as measured across a variety of such operational factors as sales, prices, wages, inventories, and credit. Although their analysis is not specific to any region of the country, it may help you understand the relationships of the factors that drive your business. You won’t be surprised to learn that the optimism of small business owners is waning, but you may find what they’re experiencing may sound familiar.

Business planning is an on-going process, especially since your business environment changes around you. As you navigate your business through this slowing cycle, remember that a SCORE counselor is standing by to help you steer toward opportunities – and around the hazards – in your environment. We look forward to working with you.

Cash vs. Accrual: Which is Best!

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA

Many service businesses use “cash basis” financial statements to file their income tax returns and in general, defer income tax in doing so. However, when it comes to managing their business, every business should look at BOTH cash based, and accrual based income statements because they both tell an important but different story.

Cash basis income statements are what I refer to as the “check book” income statements because with few exceptions it represents actual cash inflows and outflows during the period. That is, it represents the deposits to the bank, and the checks written during the period. This statement represents a “checkbook reality” statement which all business managers have to deal with (i.e. the actual cash in the bank).

Accrual basis income statements are what I call the “legal basis” income statements because they represent the actual completed sales during the period and the actual incurred expenses during the period. Not all of the completed sales (i.e. invoiced sales) will be collected during the period, and not all the incurred expenses (i.e. invoices received) will have been paid during the period, but the business manager will want to understand if the income generated exceeded the expenses incurred (i.e. Are you winning or losing the game).

For those who account for their business on QuickBooks, they can look at either statements on a cash basis or statements on an accrual basis by merely toggling a software switch. To do that in QuickBooks; bring up a profit and loss statement screen, select the “Modify Report” tab (left most tab), and then select “accrual” or “cash” on the report basis section of the screen that appears.

By using both statements (cash and accrual) you will be getting critical information about your business from two different by equally important perspectives.

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 and if it is of general interest, he will address it in future articles)

Next Women’s Breakfast is September 5, 2008

score_tjpg_ryan This article was written by Martha Ryan, SCORE Orange County Management Counselor

If you are a woman that owns a small to medium sized business, you need this networking breakfast. You have the opportunity to:

  • learn from other successful businesswomen
  • network with other small business owners
  • share ideas, experience and advice
  • learn about the services of SCORE and the U.S. Small Business Administration

The location is The Center Club , 650 Town Center Dr., Costa Mesa, CA 92626 (Note: The Center Club free valet is located just past the ticket office for the OC Performing Arts)

The date is Friday, September 5th - 7:30 a.m. to 10:00 a.m. (registration begins at 7:30 a.m.)

The fee is $30 advanced reservation online; $35 at the door

Join us for an exciting breakfast with Rhonda Sher, creator of the Two Minute Networker program and nationally-recognized expert in person-to-person business networking. Rhonda's topic "How to Keep Your Pipeline Filled Up in a Down Economy" will cover how to be visible in an invisible world, how to identify the ideal client and know where to find them, how to make the connection with strategic partners and create a win/win situation and how to create a simple system for keeping your funnel full.

As an attendee, you will walk away with techniques and strategies that you can quickly put into action to find new prospects and referral partners. You will learn the system to keep marketing costs down while driving profits up and how to quickly and easily develop rapport with others to create relationships that open the door to new business. Rhonda will share her "Two Minute Networker" secrets to success to show you how to fill your pipeline up in a down economy.

Retaining Your Best People In Uncertain Times

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

Nothing creates turnover among your best people like uncertainty.  During tough economic times it is important to address this issue by directly telling your best employees what the future holds and their role in it.  Putting to rest their insecurity is a must.

For the smaller employer it is an excellent thing to create a "Personal Engagement Plan" for each key employee.  The PEP can be created by having a third party ask the key employee(s) what learning do they need, their preferred way to be managed, the changes they would like to see made to improve their performance, and, ways to retain their knowledge at low-cost or no-cost ways.  The third party then uses the input to create the PEP.

This type of demonstration that you have your key performers’ best interest in mind goes a long ways toward retention in uncertain times.

Re-Invent Your Business

score_tjpg_lewczyk This article was written by Stan Lewczyk, SCORE Orange County Management Counselor

The market keeps changing, the competition keeps changing—are you keeping up? If you have been in business for several years, you need to re-invent your business at least every five years or less to make sure you are prepared for the future.

Is your business growing? Is it profitable? If you are not satisfied with your answers, these are additional reasons to review your current strategy and business model.

How do you do this? Here are some broad steps to take:

  • Review the market-what business needs are you filling today, how are market changes impacting your “reason for being”, what additional future changes do you expect, how can you respond to these
  • Do a SWOT (strengths, weaknesses, opportunities, threats) analysis for your business and the key competitor(s)
  • Re-affirm where you want to be in 3-5 years, what are your new goals
  • Review steps 1-2 if you need to expand into new business opportunities
  • Determine what changes will be needed to get there--business scope, personnel, operations, investment, sales and marketing, etc
  • Develop a step by step plan to get there—including a new, updated business plan
  • Get help from SCORE

This approach doesn’t mean that you will need to make major changes in your business model. Perhaps all you need to do is to focus on your key strengths and determine how you can improve on them to solidify current business and to gain new business. The key here is to set aside time to re-think and re-invent your business model.

Another suggestion, read a good book on business strategy for new ideas. An example is “Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne.

Score’s Advisory Board program is available to help established businesses address issues such as this.

SBA Launches Tax Savings Resource Center

The U.S. Small Business Administration has created an online new resource center, which connects America’s entrepreneurs with tax management tools and strategies to maximize savings from the 2008 Economic Stimulus Package. It is located at
This web page contains three resources. 

  • A fact sheet,
    Highlights of the tax benefits from the 2008 Economic Stimulus Package.
  • A depreciation calculator
    Provides an estimate of the first year depreciation available under the provisions of the Stimulus Package.
  • On-line seminar
    Summarizes the tax benefits from the 2008 Economic Stimulus Package.  The seminar concludes with the depreciation calculator.

New SCORE Women's Web Site

The new SCORE Women's Web Site and SCORE Women's Success Blog are live at:

SCORE Women's Business Site:
SCORE Women's Success Blog:

The new women's business site will help you track your business progress, initiate a sales forecast tool, develop a monthly business checklist and provide articles specific to the current stage of your business as well as other related features .

Be sure to check out the women's blog which was featured in Jan Norman of the Orange County Register's blog as well as in the Wall Street Journal and the New York Times online. The blog features specialists in several aspects of business such as marketing, finance, management and internet marketing. Betty Otte of the Orange County SCORE Chapter is featured as one of the bloggers.

These two women's resources join the Women in Business Breakfast series to provide in depth information for the woman business owner. Don't miss the next breakfast on September 5th at the Center Club in Costa Mesa featuring nationally recognized network expert, Rhonda Sher.

And DON'T miss checking out our new women's websites. You will be amazed at how much you can learn.

SCORE Chapter 114 Elects New Officers for 2009

The following new board has been elected by the Chapter members.

  • Chairman: Ben McCulloch
  • Vice-Chairman: Carl Woodard
  • 2nd Vice-Chairman: Angelo Farro
  • Treasurer: Joel Mascitelli
  • Assistant Treasurer: John Seelinger
  • Secretary: Terri Carr
  • Assistant Secretary: Laurie McCulloch

Current Chairman, Jack ReVelle congratulated the incoming board and wished them good luck.
Their term begins on October 1, 2008.

Our Sponsors

SCORE Orange County is most grateful to its sponsors for their commitment to help small businesses in our area. Our sponsors are...

Chairman's Council

CDC Small Business Finance

College Works Painting

Kring & Chung Attorneys LLP

National Merchant Center

National Vendor Insurance

NPI Services, Inc.

Omaha Steaks

Premier Business Centers

Sam's Club

Southern California Edison
For Business Development Workshop Information go to

Union Bank of California

Washington Mutual

Wildflower Linen

Web Advanced



Farmers & Merchants Bank

For more information about becoming a sponsor, please send us an email at

Sunday, July 13, 2008

A Small Business Case Study in Six Sigma

score_tjpg_Revelle This article was written by Jack Revelle, SCORE Orange County Chairman

Six Sigma is a problem-solving methodology and management philosophy that was born at Motorola in the early 1980s. In recent years it has “caught fire” and is currently in use at a broad variety of both product- and service-oriented businesses. However, some ill-advised people falsely believe that Six Sigma is just for large companies. Frankly, this is just not true! The following example of applying Six Sigma supports the truth that it has universal application.

A small company assembled orders within its warehouse for delivery to its customers. Orders were written and phoned in by its customers one to two days in advance of requested delivery dates. More often than the company was willing to admit (actually about 15% of the time), the delivered orders did not match up with the orders that had been placed. 

Enter the tools of Six Sigma. Using process flow charts and process maps to graphically define the assembly and delivery processes, tally sheets for data collection, Pareto diagrams for data analysis, cause and effect analysis plus multi-voting to determine root causes, brainstorming to identify potential corrective actions, and force field analysis to analyze the various corrective actions and determine which action was the best choice, the company, led by an external Six Sigma facilitator, was able to significantly reduce its "go-backs." 

As a direct result of the foregoing, the company saved the cost of three full-time employees who previously worked exclusively on refilling and redelivery of orders.  This is commonly referred to as the “hidden factory.” This reduction in labor costs amounted to an annual savings of nearly $100,000.

I can personally attest to the authenticity of this example since I was the Six Sigma facilitator. I worked with this small business (now much larger) in Phoenix, Arizona for about two years and all this actually happened.

Those readers who think Six Sigma might be the problem-solving methodology that could help them to eliminate, or at the very least, reduce some of their business-related problems should view the website, You’ll learn about Define, Measure, Analyze, Improve, and Control, or DMAIC, the step-by-step approach to problem-solving known throughout the world as Six Sigma. Other sites that focus on Six Sigma as it relates to small business are and

For free assistance from Orange County SCORE-114 in learning more about and implementing Six Sigma in your business, call (714) 550-7369 and let our Client Services Manager (CSM) know what you need. The first step in problem identification and solution is to make the call.

Third Party Enhancements for QuickBooks – Definitely Check Them Out!

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA

QuickBooks cannot be everything for all businesses. Even they recognize this. For over ten years they have provided information on their web site ( about independent providers of add-on programs that do things QuickBooks doesn’t do. Usually, these programs fit niche markets (not necessarily small niches however) that QuickBooks doesn’t serve or doesn’t serve with the features needed by the businesses in that niche. Both new and seasoned QuickBooks users should check out the third party providers serving their business. Dealer Management, Property Maintenance, Real Estate Brokerage, Commission Calculations/Tracking, Retail Management, Child Care, Law Practice and Church Management are just examples of the types of software offered.

To find the third party software on the QuickBooks web site, click the Community tab (Home page, left column), then click Compatible Software (left column) and then click All Solutions By Industry (scroll to bottom of page).

Don’t forget to periodically re-visit this site, as new software is being added periodically. Just recently, software that facilitates paperless (less paper but not “no paper”) operations has been added as new category.

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 and if it is of general interest, he will address it in future articles)

Mentor Cal State Fullerton Business Students This Fall Semester

Consider being a mentor to senior business students on real time consulting projects for small businesses. The fall semester starts late August.

Mentors are assigned to a team of 5 students on projects that CSUF selects from the many applications they receive for consulting assistance. Mentors meet with students about 8 times a semester to discuss the ideas and recommendations that the students develop. Mentors review proposals and final written reports and critique the final PowerPoint presentation.

The students are enthusiastic and welcome your business knowledge and suggestions. Several SCORE counselors are mentors and speak highly of the experience. You can contact Dr. Michael Ames, at 949-644- 4541 or

Beat the Competition Before They Beat You

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

Being in a small business today is a constant battle.  You are always looking over your shoulder to see what your competition is doing. This reactive method suggests keeping the status quo until things get tough.  Without doubt reacting is not the most efficient way to operate.

Let’s consider a slightly different approach. If you could conceive of the idea that would put you out of business, then you could beat your competition by getting there first, and thus continue to grow and flourish.
It almost sounds too simple, because it is.

Such a process demands that you begin by thinking out of the box. Spend some time studying your business and thus grasping every facet effecting its growth or decline. Record your observations carefully. Ask yourself the critical questions that reveal what you are doing right and what you are not doing right or not doing at all.

Look around the business world for similar businesses and how they are behaving in the current business climate. What must change for you that could lead you to start such thinking process?  Start now before change is forced upon you.  So put on your thinking cap today.

What product or service don’t you deliver today that your customers could use? Do these fit within your present business model? If not, how can your model be modified? Do you have the skills and the resources to add these new elements to your business? If this new segment is a good idea should you consider evolving your business in a new direction, so when the competition wakes up, you are already successfully operating in that area and they have to play catch up to you.

Just as you should review your cash flow on a monthly basis to properly manage your business, so should you go through this out of the box evaluation on an annual basis. It allows you to keep your business fresh and on the path of success. This process should be conducted with the key people in your enterprise for greater effectiveness. More heads are better than one.

Remember that you have lived with your business since inception. Don’t get bogged down in the past, look into the future.

Marketing, What is Your Plan?

score_tjpg_noah This article was written by Robin Noah, SCORE Orange County Management Counselor

Marketing! The myth and the realities intersect.  Too often I hear “…takes too long, I can’t afford it, I am too busy, and I need a hit now…"  These are somewhat mythical statements.   The reality is that the essence of marketing has to do with understanding 2 things: 1) knowing what the end result you are looking for is and 2) focusing on your customer’s needs and wants.  For example fix into your thinking process that growth comes about by what I call the GET:

  • Get more customers
  • Get customers to repeat buying
  • Get customers to buy more products
  • Get customers to buy your upper level products

Most business persons know the GET.  Yet what I hear more of is “I can’t get ….  “Can’t get” is focusing on the loss, how about putting your energy into getting what you want?  Open your circle of attraction.  Look for what you want not what you have not gotten.

The simple answer is really a question...”How can I get more business (cash flowing in)?”  The answer is that the bigger the customer base the larger the revenue stream.  The more people know about you the more opportunity for increasing your customer base.

So what can you do?  First set aside some time to map out a plan; set a direction for increasing your business cash flow...  Consider this time an investment in managing your business.

Here are some ideas: Start by:

  • Listing what your needs are:  For example is it increasing sales - getting more leads, or to get your customers to buy more and more often because they are  greatly satisfied or is it to have a steady cash flow or is the focus on profit.
  • Making sure that your promotional message is presented as a customer solution.  Drive your customer towards success.  Your message needs to quickly answer the silent question, “What is in it for me?” 
  • Studying your pricing – can you increase the pricing on all or some of your products?
  • Venturing out to other market segments that are potential clients. No one can afford to be everywhere so be selective.
  • Introduce an incentive plan for your existing customers for referrals.  Incentives can be some special pricing for your product line.
  • Find someone to take a critical eye to your web site.  Does your web site draw visitors/customers? There needs to be a reason for the visitor/customer to return to your site.
  • Get a blog started
  • Get to know other business people in your area.  Work out a combined promotion.
  • Talk to The Business Development Manager at your city hall.  They often have programs that impact the business community. 
  • Attend local business community events and promote your business.

You may have done some of these things and found that they did not work for you.  If that is the case then get some help to analyze why your activity did not work and go forward with another activity.  Make sure you follow up your efforts to determine how they work for you.  Track the activity and responses. Ask yourself “Did the action get the result I was looking for?”    The greater challenge is knowing what you are looking for and how to get it.

Saturday, June 7, 2008

That Sounds Fair!

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

Effective marketing may take many forms as you strive to maximize your small business success. There is a constant challenge to build a solid base of potential customers and much is written about new methods to reach them. Often overlooked, however, is the methodology to keep your customer base fresh.

Many businesses thrive with a well designed web site, while others continue buying large mailing lists, only to find that a portion of the costly list is outdated and the residents have moved. Let’s focus on one simple method that has been around for decades and will guarantee that you meet your target audience and have fun while you do. This works well for service businesses, as well as for those of you who sell crafts and specialty foods…. Have you been to the fair lately?

State and local fairs are plentiful and one comes to a location near you every year, generally in the fall. Attendees live locally and are relaxed and having fun while there. Why not benefit from their casual mood and possibly gain a new long-term customer? With proper planning, you can be there this year!

Here are some things to keep in mind as you prepare:

First, contact the local group that arranges the fair each year and check prices. Costs vary by size and locale, as well as by your booth size and location within the exhibit area. Remember to divide the cost by the number of people you will meet and you will see a real value.

Be with similar companies … Home repair with other home repair. Food with food, etc. and buy a space at the intersection of aisles, if you can. That way you get attention from all directions.

Next you will need an attractive booth area. Make it easy to approach. Use giveaway items as incentives for the curious. These can vary from simple, individually wrapped candies to key chains, letter openers or pens to larger offers such as sweepstakes, games, discount opportunities (fair specials), etc. If you want people to return often, give away prizes every hour with the winner required to be present. Here is your big opportunity….have a method for each and every visitor to fill out a card with name, address, phone number and email address. Record these fresh contacts in your active data base of potential customers. After all, this is the reason you came and here is your payoff!

Have sales brochures that fully describe what you are selling and present them with a big smile. Meet and greet! Give out cards that clearly show how to contact you.

Participation in a fair has some challenges that you need to be ready for. You must realize that a two-week event requires your company to have a representative there at all times, including night security if you leave merchandise on location. Standing (never sit down) can be tiring for those on duty and the weather can be warm and humid. But, your customer must see only a big warm smile.

Make your area and sales material unique so that you and your company will be remembered long after the doors are closed and the cotton candy is eaten.

For all of your business questions, remember that your Orange County chapter of SCORE has over 100 experienced counselors ready to assist you. We can be reached for an appointment at 714-550-7369, or We can help you with marketing, sales, finance, operations or other business topics. Just give us a call. All of our counseling services are free of charge to you.

Good luck! See you at the fair!

The Taxation of “Sweat Equity”

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA

Many businesses are started with one or more persons putting up the capital, and the one or more persons putting in their efforts or experience in lieu of an actual cash investment in the start up of the business. This contribution of effort or experience is called “sweat equity” Unfortunately it gives rise to taxable compensation to the people receiving an interest in the business in exchange for their “sweat”.

Take for instance, a corporation started with Mr. Big Bucks contributing $200,000, and Mr. Just Sweat contributing his efforts, with the plan that Mr. Sweat would receive a minimal salary but with the plan that after meeting certain requirements, Mr. Sweat would by rewarded with some percentage of the business. This eventual reward (if it happens) of an ownership percentage in the business, creates a taxable event. Compensation in the form of an ownership of the business is received by Mr. Sweat and he has to pay income tax on the value of what he received (and is subject to payroll taxes). The value can be tricky to determine as it is the value of an ongoing business and may require a formal valuation of the company. In any case, Mr. Sweat will want to minimize the value and therefore the tax that results. The partial good news is that “sweat equity” compensation can be a deduction to the company.

These “sweat equity” deals are common but require some planning so the largely overlooked tax consequence doesn’t appear under an audit.

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 and if it is of general interest, he will address it in future articles)