Saturday, February 14, 2009

To Blog or not to Blog, That is the Question

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

“Should I start a blog to find new customers?”

“Why don’t you guys have a blog?” And …

“Um … what’s a blog?”

We hear these questions in our workshops, often in the same workshop. You want to reach more potential customers, or keep in touch with your existing customers,especially now. So, is blogging the answer?

I hope you won’t be too surprised to know that we, too, have that question. Like you, we want to keep in touch and reach-out to additional businesses that might benefit from our services.

‘Blogging’ or being a blogger doesn’t mean you have to start your own blog. Besides, creating a blog is the easy part; maintaining a blog requires considerable commitment on your part. But you can still blog. Here’s how it is done.

Get started by visiting two blogs that are hosted by the SCORE national office: the Women’s Success Blog and Ask an Expert. The women’s blog launched a year ago and quickly gained readership that today numbers 9,000 visitors per month! Ask an Expert, on the other hand, just launched at the beginning of this month and is gaining traction. Take a look around. Read what’s being said. Read what others are saying. If you have something to add, leave a comment.

One visit doesn’t make you a blogger. Visit these blogs regularly to see what’s been added or, better yet, ‘subscribe’ to the blogs (click the buttons on the right-hand sidebar) so you can be notified when someone’s contributed something new to the conversation. Over time you’ll learn of other blogs that you can check out and decide if you want to follow their conversation, too.

And that’s the key: conversation. There are communities of people – millions of them – having conversations out there, likely on topics that matter to you and your business. Whether you contribute, or not, what a great way to learn what people think is important, how they’ve tackled a problem, or seized an opportunity.

We’ll be watching for you in the blogosphere.

Using a Couple of QuickBooks’s Reports to Better Manage Cash

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA

Cash is always king, but in tough times it is more so, and a couple of Quick Book’s reports can help manage it. Under “Reports” in QuickBooks, there are two reports you should monitor to help you understand and manage your cash. Specifically, the reports are the “Statement of Cash Flows”, and the “Cash Flow Forecast” listed under the “Company & Financial” section of the reports.

The Statement of Cash Flows shows where the cash has been spent and where it has been generated for the period in question (month, quarter or year). The flows are organized into three broad areas; Cash Flow from Operations, Cash Flow from Investment, and Cash Flow from Financing. The goal in general is to generate positive cash flows (increases in the Company’s cash position) from operations. Such operating sources as net cash income from the period, and the collection of accounts receivable, are listed along with the uses of cash such as pay down of accounts payable, and addition of more inventory. Over time, by reviewing this report, you will understand where the cash goes, and where, through better cash management, you might be able to generate additional cash.

The second report is the “Cash Flow Forecast” which forecasts cash flow in the future based on the expected receipt of cash from the collection of receivables, and the expected payout of cash from the payment of accounts payable. The timing of the outflows and inflows is based on the terms of payments for each customer and vendor and the current amounts due or payable for each. This report is useful to estimate the cash position of the company on a short term basis (one to two months). Longer term cash forecasting requires planning which is a topic for another column.

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)

Women in Business Breakfast Planned for March 13, 2009

carr This article was written by Terri Carr, SCORE Orange County Chapter Secretary & Management Counselor

With a focus on how to survive in the current economy, the Orange County SCORE Women in Business Breakfast series began the New Year with a terrific presentation by Dr. Deborah Gaut. She energized the audience with her suggestions on how to enhance their companies’ image, build loyal relationships with their customers and create word-of-mouth buzz about their company.

Deborah, an author of three best-selling communications textbooks, used several interesting ways to keep the audience involved in the concepts. Everyone enjoyed an opportunity to learn and take away ideas and gifts that demonstrated her suggestions.

The speaker for the Women in Business breakfast in March will be Norm Bour, a SCORE member, and one of the hosts of the former daily radio show, the Norm and Mike show. Norm’s 30 years of real estate and financial planning experience, plus his strong entrepreneurial skills, have taught him how to adapt to a changing market. Some questions that will be discussed include how does this current downturn compare to prior ones? Will your business be able to make it through to better times? You’ll find out what you can do now to increase your chances. What are the warning signs to look for? How can you reduce your overhead and control the bleeding? What about marketing? Your competition may be suffering, or gone, so learn how the strong survive. Is your business model still relevant? Find out during this entertaining and insightful breakfast meeting.

wib-logo The next Women in Business breakfast will be held on Friday, March 13, 2009, at the Center Club in Costa Mesa. The breakfast will begin at 8:00am (registration begins at 7:30am) at the Center Club, 650 Town Center Drive, Costa Mesa (free valet parking located just past the ticket office at the OC Performing Arts Center). The cost for the breakfast is $30.00 advanced registration, and $35.00 at the door. Add an additional $35.00 to reserve an exhibit table. Sign up on the SCORE website www.score114.org to reserve your space as seating is limited. This Women in Business breakfast provides a great way to network, discover the variety of services available to assist you from SCORE and others, and share your knowledge and experience by exhibiting at the breakfast. We look forward to seeing you on March 13.

Is Your Business Soft? Check Your C.A.R.T.

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

Do not panic when your business is slow. That is your opportunity for cool, strategic plans and execution. Easier said than done? Let’s see.

Much is being written about how to survive a business crisis ….reduce inventories, re-finance, cut marketing spending, reduce your labor costs, etc. Good advice for many businesses, but not applicable to all.

Look around. Your business has a CART ... A cart that’s filled with your customers. And there lies an opportunity for every business that sells a product or a service. Make the task of customer evaluation one of your top priorities.

Customers are usually defined by total sales volume, but do you really know which customers are most profitable for you? That’s right….profit, not just sales. Many times, because of the high cost to service an account (slow pay, excessive returns, special shipping), that customer actually becomes unprofitable for you. If so, why keep selling to them? Cut them off or find a way to lower your cost of supporting them until they generate profit for you. Remember, profit is your objective.

Now, let’s look at your profitable customers. First, do all you can to keep them. It is far easier, and less costly, to keep a customer than to find a new one. Keep them in your CART !

  • Cultivate them. Do your good customers buy all that they can from you? How can you sell them more? Do you offer another product or service that they currently buy from a competitor? Convert them. They already know that you are reliable. 
  • Ask for references. Ask them to recommend your company to others. Good customers usually know other businesses that you would like to have. Actively pursue them, especially if they will be profitable. 
  • Return the favor. Can your company buy more of what your customer offers? For example, if you sell cleaning supplies to company “A”, do you, in turn, use them to clean your facility? 
  • Thank them. Write a personal note telling them how important they are to you. Wish them continued success, especially in hard times, and ask how you can make their business better.

Let’s review. Use smart planning to turn soft business conditions into a success for your company. Evaluate each of your customers for profitability. Cut off those that make you lose money and keep the others in your CART. If you cultivate them, you will push that CART to the bank!

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.

Start or Buy a Business?

This article was written by Richard Eggleton, SCORE Orange County Management Counselor

As SCORE counselors a large number of our clients have contacted us to help them start a business and a very small percentage that want to buy a business. Since the SBA reports that over 75% of small business start-ups fail taking the time to look into buying an existing business may be a much better alternative.

There are many advantages to buying an existing business including but not limited to immediate cash flow, existing customers, staff in place and trained, business relationships with vendors in place, training buy the owner, opportunity to grow the business and relatively easy financing is available. It takes time and money and effort to put all the elements of a business together and the outcome is unpredictable. It maybe more cost effective to buy and existing business than start your own.

What stops people from exploring buying a business can either come from the prospective entrepreneur’s passion about their business concept. It is this passion combined with a lack of knowledge and a plan that calls for too little capital that causes many business failures.

The other major obstacle stopping people from buying a business is they don’t know where to start. Often the prospective buyer looks on the internet, finds a business listed for sale, and contacts the broker who has the listing and is either ignored or put through a process by that broker that just doesn’t seem, look or feel right. How to effectively and efficiently deal with business brokers is a topic for another article, consultation, or workshop.

Most people who look for a business on line either can’t find anything that they like because there is nothing that appeals to their own concept of the business that is right for them. Unfortunately the buyer may be too focused on what the business is rather than what the business can do for them now and in the future. Owning a business is all about the future in your dreams. What is your dream?

One place to start is to identify the characteristics of your ideal business in general terms. Yes, everyone wants a good business but what does that mean? There are some basic elements everyone should start with:

  • Stable industry not a fad
  • Room for growth in the industry
  • Documented operating procedures
  • Available in the geography you want
  • Affordable for you
  • Makes as much money as you need or want
  • Optimizes your skills, talents, and abilities in its operation

Of course there are many other considerations that comprise your personal requirements like days and hours of operation, employees and customers you feel comfortable with and far too many others to list.

Should you consider buying a business? Probably. Check for upcoming SCORE workshops on this topic.

Considerations to Follow in Planning a Layoff

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

When laid-off workers have a difficult time finding a new job, they are more inclined to sue their former employers.   Such suits may be more prevalent in the current economic downturn than in more prosperous times.  Meanwhile, according to a recent Society for Human Resource Management (SHRM) poll of public and private company human resources executives, about 60% of employers are likely to institute layoffs in the next year, and 48% have done so in the past year.

In conducting a layoff there are two important considerations: The first and easiest is where a position or product line is eliminated. The second and harder is when management decides which positions to eliminate. To do the second with the least legal liability potential requires selecting the individuals without discrimination or violating the numerous protective statutes. Here the selection criteria to follow to avoid the legal traps.

  • Base selection on quantifiable and objective factors, such as: 1) length of service or seniority (this is the safest criteria); 2) elimination of unnecessary job classifications; 3) elimination of certain categories of employees, e.g., temporary, part-time, or contract workers; 4) pre-existing job appraisal data related to successful performance of critical post-reduction functions; and 5) disciplinary actions taken for severe or persistent performance problems. 
  • Identify the individual abilities of similarly-situated employees in necessary positions to perform essential job duties.  Analyze the comparative performance and skills of employees with emphasis on fulfilling the post-reduction job functions and requirements.  Whenever possible, base performance comparisons on current or prior performance appraisals. 
  • See if there will be any disproportionate effect on minorities, women, or workers 40 years of age or older.  If so, evaluate whether the selection of these individuals can be justified by business necessity, or in the case of older workers, by reasonable factors other than age.  If not, consider alternative selections of individuals who are outside the protected classifications. 
  • Management can reduce their exposure to individual and class-wide claims of discrimination dramatically by obtaining releases of such claims from employees who participate in voluntary and involuntary workforce reduction programs.  Strict compliance with legal requirements is critical to the effectiveness of any release. Check with an employment law attorney to be certain the release meets all requirements.

After completing a voluntary resignation program or an involuntary reduction in force, management should take affirmative measures to optimize the company’s stronger and leaner position and re-energize remaining employees to meet new challenges.