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designed web site, while others continue buying large mailing lists, only to find that a portion of the costly list is outdated and the residents have moved.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 www.score114.org. 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 Ginnatycpa@aol.com and if it is of general interest, he will address it in future articles)

SCORE 114 Awards Scholarship at Cal State Fullerton

Thuy (Angela) Nguyen was awarded a $1000 scholarship at an awards ceremony. She is a member of the Business and Honors program with a 3.7GPA. She tutors students in grades K-12 on a variety of subjects.

SCORE members who volunteer and mentor business students during 2007-08 received a plaque for their service. They are Howard Hawkins, Jack James, Alan Mannason, Bryon Romig, and Fritz Von Coelln.

Successful Interviewing

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

There are three steps to successful interviewing. All of these steps are built upon the competencies and accountabilities of the results of the position you require. Write out what these are for the position you are intending to fill.

Step 1 The Screening Interview.

This is usually done by phone. Good screening focuses on four questions tightly focused on the job. Ask questions about these four areas:

  • The candidates career goals
  • What the candidate is really good at professionally
  • What the candidate is not interested in doing or not good at
  • Who the last five bosses were, what each boss would list as the candidate’s strengths and weaknesses, and what rating on a scale of 1 to 10 they would give

Step 2 The In-depth Interview

This is done face-to-face and usually takes one hour. What you are doing in this interview is searching for strengths and weaknesses and behaviors. Again, all questions are focused on what the candidate has done (past performance) and behaviors that are required for successful performance of the job duties and accountabilities.

Your questions delve into the person’s background in school, work history, career goals and competencies. Your questions are designed to find out what were the high and low points during the formative years in school. Then you should ask about each job the person has held. Questions to consider are:

  • What were you hired to do?
  • What were your accomplishments?
  • What failures or mistakes were made in this job, and what did you learn from them?
  • What talent did you inherit, what changes did you make to this talent mix, and what talent did you end up with?
  • What were the people like that you worked for, and how would they rate you?
  • Why did you leave?

Then delve into the career aspirations of the candidate and how this position would enhance these aspirations.

Finally, ask relevant questions about the required competencies you require for the position.

Don’t spend time “selling” the job at this stage. Once you have determined the candidate that best fits the position you “sell” the job based on the good fit for the position.

Step 3 Reference Checking

Reference checking is a short but professional conversation. What you wish to know can be found by these questions:

  • The situation or context they worked in with the candidate
  • The candidate’s strengths and weaknesses with examples
  • How they would rate the person’s overall performance in that job
  • Ask about a key specific that came out in the interview with the candidate that shows strengths or weaknesses

Another Big Hit for the Women in Business Breakfast Series

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

score_tjpg_wib8 The Orange County SCORE Women in Business Breakfast series had another big hit on May 7, 2008. The breakfast was held at the Center Club in Costa Mesa and featured Mary Scarborough, an award winning speaker, writer, and certified marketing coach who weaves humor throughout her practical, plain-speaking advice. Mary provided a wealth of information in her handout, which focused on marketing by the numbers – building your business by design, not default. She shared her experience of working with two SCORE clients as she took them through the process of identifying their ideal clients and developing a strategy to gain new clients. She spoke from her heart and was an inspiration to all who attended. Mary’s book “The Procrastinator’s Guide to Marketing” was a sell out. There were more then 100 in attendance and provided great opportunities for networking with other women business owners.

score_tjpg_wib9 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!

Don’t Miss the Women’s Breakfast –Friday, July 11, 2008

new-wib-logo The next Women in Business breakfast will be held on Friday, July 11, 2008, from 7:30 to 9:30 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 speaker will be Sabrina Gibson, inventor of “smart and sticky” websites. Sabrina is a master at membership websites who has proven her strategies by taking start up 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.

Sabrina is a partner in 5 online companies and a management company. She is a highly acclaimed speaker and author of the book “From Zero to Million Dollar Sales”. You can read more at her website www.ProfitPartnersUnlimited.com.

The cost for the breakfast is $30.00 pre registration, $35.00 at the door. Add an additional $35.00 to reserve an exhibit table. Sign up on the SCORE website http://www.score114.org/women_in_business.html to reserve your space as seating is limited.

SCORE Volunteers Wanted in Riverside Area

Have you often thought that you would like to bring your business experience to the local community?   Why not think about volunteering as a SCORE Counselor.  Presently working or retired, we help you put your skills to good use.  The rewards are great!  We have over 10,500 SCORE volunteers around the country who will be your colleagues.  For more information email Mike Munz at:   Michael.Munz@score114.org. phone 949-723-4576. Tell us about yourself.  You will be glad you did.