Saturday, April 11, 2009

Let’s Hear It for Marketing

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

I’m sitting in the back of the room during a workshop on ‘Marketing:  How to Find and Keep More Customers’.  If you haven’t seen it (or, if it’s been a while), put the next one on your calendar (here’s the link).  As Tom Patty, our presenter, explains: ‘marketing – like physics – works the same for everyone on the planet’.  Of course that includes you. 

But it also includes us:  we want more customers.  With 100 seasoned counselors, we have the ‘head room’ to grow our service to the OC small business community.  And, if ever there was a need for relevant and affordable (we’re ‘priceless’) business advice, the uncertainty in today’s economic environment is it. 

Back to the workshop … Tom’s now talking about the marketing ‘Big 5’ (target, benefits, value, purchase process, and growth).  Let’s look at just one, the benefits of working with SCORE.  And, especially important in this economy, we offer you: 

  • Convenience-- You’re busy, so we’re expanding your choices for getting the information you need with   more workshops and new workshop locations.  We’ve added Saturday counseling every other month, and are experimenting with online ‘self-serve’ scheduling to give you greater flexibility in getting with the right counselor for you. 
  • Relevance-- We hear your feedback and are adding the workshop topics you want.  More than that, we are re-tooling existing workshops so the strategies and techniques make sense in today’s context.  Our counselors not only cover the full-range of business function and industry … they’ve dealt with serious downturns and can help you navigate the uncertainty.

Tom’s on his last slide, and it’s a big one:  ‘How to Retain Customers’.  For us, it begins with helping you deal with the downturn, so you’ll be positioned to seize opportunity when this cycle ends … and it will.  As far as retaining your customers, schedule an appointment with us … better yet; come to our next marketing workshop.  We look forward to seeing you again!

Collections and Accounts Receivable Procedures in These Times

score_tjpg_Ginnaty This article was written by Dick Ginnaty, CPA

In my twenty five years of practicing accounting, a major area that many companies (that have eventually failed) have had significant problems with, is collections and accounts receivables. The old adage that a sale is not a sale until the cash is collected is still true. It is imperative now (and always) to have a policy and procedure in place for dealing with collections and accounts receivables.

The policy and procedure should address; the gathering of relevant facts about the customer you are extending credit to, the setting and monitoring of limits of credit to be extended, and the steps in collecting accounts receivables including the timing of placing the receivable in professional collectors hands.

I encourage you to communicate your policy to all new customers, and to send your policy to any customer that is in arrears on their debts to you. The second old adage that is appropriate is that the squeaky wheel gets fixed first, so take it as your personal responsibility to call/contact customers the day after the due date of your invoice. Do not rely on oft heard excuse, “my industry always pays in 45 (or 60 or ??) days”. This is the time to change. Explain to your customers that you honor your commitments to pay on time and expect them to do likewise. Remember they have negotiated the terms, including the dating of such, and that they have agreed to pay within the negotiated time frame, and the pricing they received reflects payment within that time frame. Interest payments and late fees should be added as additional incentives to take your terms seriously.

For those customers (especially the big elephants that you have to deal with) that ignore your terms or the interest or late fees added on to their account, you should adjust their pricing accordingly. If you don’t do this then you are not getting the gross margins you anticipated, and will not have the same profitability you projected.

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)

The “Stimulus” Bill

score_tjpg_seelinger This article was written by John Seelinger, SCORE Orange County Management Counselor

On February 17h, President Obama signed “the American Recovery and Reinvestment Act of 2009”, frequently referred to as “the stimulus bill”. At several hundreds of pages long, this legislation outlined steps and spending priorities that the government hopes will get the economy growing again. Many of our Score clients are asking how this will affect them, whether this Act will make it easier to obtain financing to start or grow their businesses. Unfortunately, as with many pieces of major legislation, the Act itself is a broad brush and staff members and governmental departments need to fill in the implementation steps after the legislation becomes law. As of today, much of this is still ongoing, with the result that many questions are still unanswerable. But we do know, in order to get money flowing into the economy as quickly as possible, much of the stimulus is intended for “shovel ready” projects and most of these projects will be bid out by federal, state and local governments.

Importantly for small businesses, under the Act, the SBA has been able to increase the amount of its guarantees and also eliminate the guaranty fees both on its working capital loan program (its 7(a) program) and on its fixed asset program (its 504 loan program). While the guaranty fees to the borrower, you, have been eliminated, the SBA guaranty itself has been increased for most 7(a) loans, up to 90% on loans up to $150,000, for example. What this means is that, in many instances, a bank can now make a working capital loan to your small business and be at risk for only 10% of the loan amount. There are other features affecting loans under $35,000 but, since the vast majority of our Score clients avail themselves of 7(a) and 504 loans, these are highlighted here. Any guaranty fees you may have paid between February 17th and today are refundable.

Under the SBA’s 504 fixed asset loan program, borrowers may now take advantage of today’s generally lower prevailing interest rates by refinancing an existing 504 loan that may have been fixed in the past at a higher interest rate than that which is available today. And, again, the SBA guaranty fee has been eliminated. Additionally, the SBA has been authorized to support these loans in the secondary market, restoring liquidity to the marketplace.

One key point is that these enhancements are designed to get the economy going and are not intended to be permanent. The SBA estimates that these stimulative enhancements will be available through December 31st although, obviously, this is subject to further legislative change should Congress deem it appropriate.

Another key point to keep in mind is that the decision to lend still rests with the banks and the banks are under heightened regulatory scrutiny today. Four banks in SoCal have been seized and another ten have had regulatory sanctions imposed on them recently and it has been estimated that as many as twenty banks in southern California will fail by the end of this year. So, yes, the “stimulus” bill and the SBA are making it more attractive for banks to lend to small businesses, but banks are being told by their regulators to tighten their underwriting standards. So, if you have a solid, up to date business plan (remember, the banks underwriting standards are getting tighter) and collateral, it may be time to speak with your bank’s SBA Lending Department again.

SCORE’s Women in Business Breakfast – May 8th, Networking for Women

This article was written by Laurie McCulloch, SCORE Orange County Management Counselor

wib-logo The monthly Women in Business Breakfast event concentrates on exchanging resources and referrals, expanding contacts, improving networking skills, making business  connections and build relationships with like-minded women.  No matter how hard you work, you cannot live up to your full potential as an entrepreneur operating in total isolation. Even if you are not a social-preneur by nature attending business events can accomplish four key things to help you both personally and professionally:

  1. Educational Benefits in Networking: You will likely learn at least one new tip or strategy, or maybe an easier way of doing things. Having others to brainstorm and bounce ideas around with can save you time, money, and headaches.
  2. Networking Improves Your Credentials and Professional Appearance: You can beef up your website and business credibility by talking about the events you attend. The more serious you are about investing time into your business, the more serious others will be about your business, too.
  3. Networking Boosts Your Confidence and Sense of Pride: You feel more empowered and validated as an entrepreneur when you participate in the “live” business world.   It is easy for work-from-home moms to feel like they are an “impostor” business woman because they work in jammies at the kitchen table answering emails at 2 a.m.

    It is important to remember that no matter where you work from, how small your business is, or even if you are taking a loss right now, if you own a business you are still an entrepreneur. Meeting other women in various stages in their own professional lives (including working from home offices in ratty sweats) can be very encouraging.

    Getting to network face-to-face is exciting and rewarding because you get to talk about your business with others who are like-minded. When others share your enthusiasm it can help restore your vision and passion for your own business.
  4. Make New Business Contacts: And last, the obvious benefit of networking: you will make new business connections that could lead to clients, sales, investors, and other important contacts.

Online contacts are often like blind dates and take longer to establish, but meeting someone face-to-face gives instant gratification and affords you the ability to more quickly assess if a potential business relationship is worth investing time and attention to develop further.

Try your networking skills at SCORE’s next Women in Business Breakfast – May 8th at the Center Club, Costa Mesa starting at 8:00 a.m. You can make a reservation on the Score114.org website.

Five Ways to Improve Your Managerial Communication

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

Various studies have shown that managers spend anywhere from 50% to 80% of their time communicating. Effective communication is rarely discussed as a prime factor in a manager’s success. Yet, if one spends this much time communicating one should try to be quite good at it.

For example, assume you are responsible for managing a team of five people to achieve stated monthly goals. How could you successfully lead your team without constant effective communications? Answer: You couldn’t. It’s not just how well you speak or the spoken words you use.

You must write effectively, too. You’re probably required to write e-mails, memos, policies, and procedures. Readers must understand your words and act in the manner you desire. Good communication is critical to effective management. Here are some simple suggestions to improve your managerial communications.

  1. Get feedback from your staff. Top athletes know how important feedback is. That’s why they hire personal coaches. One trick to good communication is to ask your staff person(s) to replay the instruction or goal you just communicated.
  2. Spend quality time assessing your communication in an honest and straight forward manner. One of my CEO’s used to communicate to the employees at the 13th grade level. Many employees were confused because the average successful communication grade level is at the 8th grade level.
  3. Examine your company impartially to learn how their communication affects your staff. The effectiveness of communication should be based upon the company culture. Decide how corporate communication is affecting your team. Is it a positive? Is it causing some problems? Should it be lacking, give some extra effort to improve your personal style.
  4. Work with your staff to create a consensus about how to handle communication issues. Ask, “What everyday information should be available and how should it be shared and communicated?” Or “How do you believe we should handle disagreements?” Staff agreement on these simple issues invariably leads to better communication for all.
  5. Listen, listen, and listen. Learn to be a dedicated listener. There is no better simple tip to become a better communicator than to really listen to the comments from your staff, your peers, and your superiors.

Good communications tends to be more art than science. Your success is often dependent simply on establishing communication lines that are open and honest. Sometimes, even unpopular decisions made by senior management can be expressed in positive and meaningful ways.