Partnerships are Like a Marriage

This article was written by Hillel Pitlik, SCORE Orange County Management Counselor

Getting into business with multiple participants requires more than vetting the business idea but a clear understanding of the personal involvement of each partner. Although the business may be exciting and potentially profitable, the partners must be aware of a major pitfall that lies ahead of them.

Before you decide on the corporate structure, the pecking order in the business, the way you’ll split the profits, you must resolve the obligation of each partner to serve the enterprise. Namely, what do each of you bring to the party, in time and resources?

This entails a frank discussion of each party’s role in the success of the business. This is not a short term matter but a long term commitment. Many a business has had problems because the extent of each member’s commitment was not defined in specific terms at the outset. In fact, the commitments defined in such a discussion form the basis for what part of the pie each member receives from the business. And further, if the member’s obligation is not fulfilled, how the remuneration is to be adjusted. Certainly, this requires the definition of the methods for evaluating the fulfillment of the agreed upon tasks.

These discussions are tricky and by no means straight forward. They demand honest discourse and will form the basis for the many decisions that must be made in commencing the business.

You might ask, “Is this the first priority?” Absolutely! The partners are best able to agree on these matters well before the big bucks cloud your views.

Just as in a marriage, the partners must agree on the methods available for detaching themselves from the enterprise (divorce).

The result of all of the above discussions should be a legal agreement, prepared by an independent legal counsel and signed by the partners. Now you can get on with the business at hand and count the shekels with confidence that your venture will proceed with all parties moving in the same direction.

FORM I - 9 ELECTRONIC STORAGE

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

Dep’t of Homeland Security’s Immigration and Customs Enforcement (ICE) division issued a final rule on electronic storage of Form I-9, replacing an interim rule that’s been in place since 2006.  The final rule takes effect August 23 and a complete copy of the final rule is available at http://edocket.access.gpo.gov/2010/2010-17806.htm.   Some of the questions addressed in the rule are:

1.     Time frame for completing Form I-9?  Within three business days (not calendar days) of the date employment begins.

2.     OK to use a combo of electronic and/or paper storage systems to retain copies?  Yes.

3.     OK to change electronic storage systems, as tech evolves?  Yes, so long as new system meets stated requirements.

4.     OK to store in electronic system with no option to produce a hard copy of the record?  No.

5.     OK to store ancillary docs (i.e., copy of proof of identify and/or authorization to work in U.S.) electronically?  Yes.  Not required to keep them at all but if you decide to, do it for all employees to avoid discrimination claims.  It’s really everyone or no one.

6.     OK to store I-9 with employee’s other records?  Separately?  Yes to both.  OK to keep I-9 with individual employee’s record, or put all I-9s together in a discrete file.

7.     Required to store the entire Form I-9?  No.  You do not need to store the instruction pages, only the pages with employee or employer data entered.

8.     Must required audit trail on each Form I-9 track every time file is accessed, even when record not modified but only viewed?  No.  Audit trail should track each time file is “created, completed, updated, modified, altered or corrected.”

9.     Must employer supply a receipt of transaction to every employee who completes an I-9?  No, only if employee requests it.

10.   Can I have a license or contract restriction on my electronic storage system that limits or prohibits access by U.S. government agencies?  No.

Take Care of Your Current Customers!

This article was written by Carl Woodard, SCORE Orange County Chairperson

Keeping your current customers happy is as important today as ever….perhaps more so. Analyze the cost to gain 10 new customers and you will realize that keeping ten current customers is far cheaper. And, you already know their buying habits, preferences, payment history and how to attract their business. How do you keep them, given today’s business environment? First, keep supplying them with top quality products and personal service. And follow up with them to see how they think you are performing….but be careful how and when you ask for that opinion.

Recently, I entered my local bank and found the usual long line of customers waiting to be served. I became line member number 17. The line moved slowly and I noticed that there were eight teller windows at the long counter, but only three were occupied. After several minutes, a well dressed employee moved down the line and, with clipboard in hand and a smile on his face, asked me “How can we help you today?” I suggested that he count the number of people who were backed up, drop his clipboard, go behind one of the open windows and start serving customers. His response was, “I wish I could” ….and he moved to the next in line….and asked the same insincere question. The result was a few dozen customers being vividly reminded that they were not being helped very well.

Customers know good quality in products and services which they receive. It is expected, appreciated and leads to loyalty. Loyalty can give you the edge even though your price may be higher and your store smaller than competitors. And, when you ask your customer how you can help them, be ready to demonstrate that you mean it by taking some action. Now, that will impress them.

At SCORE Orange County, we like satisfied customers. We first try to determine exactly what help you need for running your business. Do you need a business plan, or tips on how to improve sales? Do you need to understand your cash flow or learn how to use social networking to introduce your business to an expanded customer base? SCORE offers workshops throughout the county, most at no charge. Then we follow with personal, confidential, one on one counseling either in person or via the internet, always at no charge. We are well stocked with experts on finance, marketing, sales, human resources and other specialties. And you can receive these services free. Simply call us at 714-550-7369 and arrange an appointment or visit us at www.score114.org and sign up for a workshop or reserve an exhibit table at our next Women in Business breakfast meeting.

You will find that, when SCORE asks you, “How may we help you?” we really mean it. Try us!

Reinvent Your Business

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. Some broad steps to take:

• Review the market-what business needs are you fulfilling 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

How do you do this? 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 these.

When Does the “Other Shoe” Drop?

This article was written by Ben McCulloch, SCORE Orange County Business Counselor

Interest rates, credit crunch, employment, stock market, real estate, retail sales, gas prices, inflation …

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. Jan Norman’s small business column has been 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) 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.