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