SBA Small Business Week

This article was written by Ben McCulloch, SCORE Orange County 1^st Vice Chairman

During April 21-25, the SBA celebrated 'Small Business Week', and placed the spotlight on the significant impact and critical importance of small business on the Nation's economy.   The SBA recognizes the entrepreneurs and organizations that have truly stood out over the last year.

Choosing those stand-outs is daunting task. Nationally, there are over 25 million small businesses (500 or fewer employees). 60% to 80% of new jobs are created by small businesses.

Here in Orange County, small business is a particularly big deal.  Nearly 100 thousand small businesses – from agriculture, to finance, to utilities – employ roughly 1.4 million people. And that’s from a population of just over 3 million!

So, this week the SBA’s Santa Ana District office recognized several of these businesses successes and contributions to the small business community. All told, local businesses were awarded a national award, a state award, three regional awards and ten District Awards. Included were:

Small Business Person of the Year
Dr. Than Nguyen, Knowlwood Restaurants, based in Santa Ana.

Family-Owned Small Business
Garrett Pack, Santa Ana Creek Development Company, based in Orange.

Young Entrepreneur
Tim Gormick, Discount Water Sports of San Clemente.

Financial Services Champion
Nancy Russell of Comerica Bank

Home-Based Business Champion
Kimberly Davidson, MBD Marketing, based in Murrieta.

Veteran Small Business Champion
Robert Yap, Great Pacific Securities in Costa Mesa.

Minority Small Business Advocate
Kim Nguyen Zastro, VITEESE Recruiting and Staffing of Tustin.

Small Business Journalist
Lillian del la Torres-Jimenez, Jimenez Communications of Rancho Cucamonga.

Women in Business Champion
Camille Jayne, Matters at Hand, based in Irvine.

District Director’s Award
Dr. Fred Zandpour, Associate Dean in the College of Communications at CSU Fullerton.

Each of the winners announced this week will be presented the ‘Atlas Award’ at a gala banquet on September 27. Mark your calendars and look forward to more information from the SBA in the coming weeks.

One Person LLC, the Pluses and Minuses

This article was written by Dick Ginnaty, CPA

California has recently allowed one person LLCs, and it has potential to save some costs over incorporating. A one person LLC is a “disregarded entity” for federal income tax purposes and therefore, a separate tax return for the LLC is not required unlike a corporation (saving professional tax preparation fees). Instead the results of the operation of the LLC are filed on Schedule C of the return of the owner. The LLC still owes California the minimum $800 fee however just as it would if filing as a multi-member LLC.

The negative of an LLC operationally is the “fee” goes up if the revenue of the LLC exceeds $250,000. This fee is not based on net income but instead on gross revenue. To avoid this fee, a growing LLC can elect to be taxed as a corporation by filing federal Form 8832 Entity Classification Election. By doing so, an LLC can elect to be taxed as a corporation (and then elect Subchapter S status) and avoid the fee when revenues exceed $250,000.

If the prior seems confusing, it is and before forming an LLC check with your accountant to make sure the choice makes sense for your situation.

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)

How to Perform a Preliminary Patent Search

This article was contributed by James T. Fulton, SCORE Orange County Management Counselor

Before spending any money on a Patent Lawyer, it is useful to see if your idea has been patented by someone else within the last 20 years (which would prevent you from selling products based on the idea in the commercial marketplace), or has been patented earlier (which would put the idea into the public domain and allow anyone to sell products based on the idea).

The US Patent and Trademark Office (USPTO) sub-divide patents into classes and subclasses. There are about 1000 separate classes and at least 30,000 subclasses. Your initial challenge is to find the appropriate class and subclass for your idea. The complete index of classes and subclasses is available on the Internet, as are printable copies of all issued patents. Beginning recently, copies of all submitted but not yet accepted and issued applications are also available so people can avoid reinventing something already in the works.

Your major problems are two: finding the index and finding the appropriate class. You should know that the title of a patent has nothing to do with either the index or the class. Thus, to search the USPTO files based on words in the title is a waste of time. You must search the appropriate class and subclass for patents with similar ideas in their abstract. Then, you must read the entire patent of those that appear to describe an idea similar to your idea. To find the appropriate class, go to www.uspto.gov/web/patents/classification/selectnumwithtitle.htm . This will take you to the Index of Classes by name. You must either scan down through this list to find the appropriate class and subclass or hire a patent attorney to do it for about $1000. It is your choice. To see how the system works, click on GO next to Class 007, Compound Tools. This will take you to a list of all of the Subclasses in 007. Note the variety of title for the 70 or so subclasses. If your idea acts like a wrench, note the indented types under subclass 138. Does your idea include an adjustable feature? If so, it is probably under subclass 139, the one with one dot in front of it. However, note the two dots in front of subclasses 140 and 142. These are subordinate to 139. Does your adjustable wrench include a cutting feature? If it does, your idea belongs in Class 007 and Subclass 142, usually described as 007/142.

Click on the red P to the left of Subclass 142 and your screen will fill with the last 50 patents issued in this subclass. Only patents back to number 4,500,000 are active and protected by the government (issued after 1987). The older patents contain ideas already in the public domain. Ideas equivalent to these cannot be patented again.

Ref: Pressman, David “Patent it Yourself” Nolo Press, Berkeley California (available at most main city libraries)

Next Women’s Breakfast is July 11th at the Center Club

Join us for an exciting, informative breakfast with Sabrina Gibson, inventor of “Smart and Sticky” websites and a master at membership websites who has proven her strategies by taking startup companies from Zero to Million dollar sales in record time. She will share with you how you can leverage the Internet to Grow your business even if you don’t have a website right now. She will teach you about podcasting, submitting articles and building massive prospect lists using the Internet. You will walk away with ideas you can implement right now.

She is a highly acclaimed speaker and author of “From Zero to Million Dollar Sales”

For all details and registration go to www.score114.org/women_in_business.html

Weak Dollar, Not Always A Bad Thing

This article was written by Bob Bradley, SCORE Orange County Management Counselor

In our international counseling and workshops, we emphasis the importance of currencies when planning or doing business with other countries. It is an important part of any business with international reaches. It is also important to understand the implications of currency relationship changes. A change in relationships over time can certainly impact a business.

Let's take a step back and examine the impact of currency relationships and what they can mean. In our media driven world of portraying "winners" or "losers", the terms weak and strong, when applied to the dollar, have been used almost interchangeably with good and bad. Given the truth of the assumption, the good and bad concept is particularly interesting when we find someone or something to blame for this terrible thing. Controversy and  debate can abound. Good or bad, weak or strong, it depends entirely on what side of the road you are on. Most agree that we have had a "weak" dollar for awhile. But try to tell the hotels and shops in New York that this is a bad thing because significant numbers of Europeans are coming to New York to buy things because they think New York is "on sale". Tell the Companies, who are now reporting first quarter profits, that did extremely well selling to European countries, that "weak" is synonymous with bad. Or conversely, tell those that work in the European tourist industry and depend on American tourists dollars for their incomes, that a weak dollar is good. Again it depends on what side of the road you are on. Those that assign blame for the weak (bad) dollar may only tell a partial story.

Furthermore, for those that think a balance of trade with a country should be just that; a balance, the weakening dollar, with respect to that currency, certainly facilitates that goal by driving down the payment balance because it takes fewer dollars to reduce the debt (or imbalance of trade). For those that think we should buy less from other countries the weaker dollar also serves this end by making products from other countries more expensive thereby curtailing imports. The weaker dollar may also motivate foreign manufacturers to locate in the USA and hire US workers. Due to their ability to get their hands on "cheap" or "weak" dollars they might find it cost effective. It has long been argued that the Chinese currency should be free floating which would theoretically result in a more balanced world economy. In 2005 the Chinese currency was allowed to partially float. Since that time the relationship to the dollar has changed by a little over 15%, resulting in Chinese products becoming more expensive in the US. However, the counter to that is an increase in costs to US companies that operate manufacturing facilities in China which might result in higher prices (or inflation) in the USA or even a slow down in business which could result in employment reductions in the US.

Finally, the price of oil provides many lessons. Given that most oil is traded in US dollars and that the dollar has significantly "weakened" against the Euro, What is the impact? There is evidence indicating that the price of oil has not increased in European countries nearly as significantly as it has in the USA, and those countries using non dollar pegged currencies are also getting cheaper oil. Now think of this: If an oil producing country accumulates dollars as a result of their oil sales AND they import goods and services primarily from countries where the weak dollar has prevailed (Europe and Japan), what happens to them? In all probability they will experience inflationary pressures and loss of purchasing power while countries that import their goods and services from the USA may find themselves in a more favorable position. Is this good or bad? Depends on what side of the road you are on.

All of this is like keeping several ping pong balls under water at the same time. For our SCORE clients it is important to know that the international machinations of economics and politics exists and that changes may positively or negatively affect their business, either directly or indirectly. It is diligent to evaluate your business under various currency scenarios, even if you think the scenario seems impossible. For a small business to ignore something that may have an adverse affect on their business may be regrettable. Five years ago, $120 dollar a barrel oil or a 160 Euro would have been a part of few business plans.

Stay on the right side of the road!

SCORE Adds New Online Resources for Young Entrepreneurs

SCORE "Counselors to America's Small Business" announces a new section specifically for young entrepreneurs at the SCORE Web site, www.score.org. The new content area offers valuable mentoring and resources to help high school, college-age and 20-something small business owners succeed.

Visitors to www.score.org/young.html will find the following resources:

• "Insights for Young Entrepreneurs" feature key articles on: entrepreneurship as a career choice; web site design; university assistance; and how to start smart.
• "Resources for Young Entrepreneurs" list more than 35 organizations, groups and Web sites that offer news, strategies and assistance.
• "Competitions for Young Entrepreneurs" features eight awards that help encourage and recognize business success.
• "Stats on Young Entrepreneurs" provide the latest research and facts on Generation X and Generation Y entrepreneurship. 
• "How SCORE Can Help You" highlights SCORE's free online and face-to-face counseling with low-cost workshops and free eNewsletters.

Introducing the SCORE O.C. Internet Marketing Blog

SCORE Orange County has just launched a blog focused on how small businesses can best utilize the internet to gain customers and increase customer satisfaction. New posts will be added approximately 6-10 times per month on topics such as search engine optimization, email marketing, ecommerce, social networking, blogs, analyzing your site’s performance, etc. During the first month, new blog posts will mostly address the subject of planning your website but, we will mix things up to keep it interesting. Please be assured that our blog posts will be targeted at the small business entrepreneur - not to the technical professional audience. Please visit the blog at http://blog.score114.org or just go to our website at www.score114.org and select “internet marketing blog” from the navigation links on the left side of our website pages.

Our new blog is a result of the significant interest we have received by our clients for more help with how they can best leverage the potential of the internet to improve their business performance. This demand is coming from both owners of existing businesses as well as those entrepreneurs that are in the process of launching their business venture. This blog will not be an online course nor will it substitute for our internet marketing workshop. Rather it is intended to be an easy to read format for receiving “bit sized” pieces of information on this subject that will augment what you learn in our seminars or via counseling.

If you want to be notified automatically when we add a new post to our blog, on the right side of the blog you will see where you can subscribe via email or “in an RSS reader” (for those of you that are not yet familiar with “RSS readers”, that will be covered in an upcoming blog article). If you subscribe via the email box, you will receive one email on any day that we post a new article(s) with a subject line of “Internet Marketing by SCORE O.C.”

Coming Soon.

The small group of SCORE O.C. counselors that have been assisting our clients with their internet marketing are receiving more requests for help than we are currently able to meet in a timely matter so we will be adding some new services in the “not too distant future.” In the coming months look for announcements of a “hands-on” sessions that we will hold for small groups of business owners that currently have website which could benefit from a “tune-up.” And, we will be creating a new directory of helpful information and tools that are available on the internet. Stay tuned…