Thursday, December 20, 2012

Cottage Food Businesses- Awake!

imageThis article was written by Tom Snell, SCORE Orange County Business Mentor

Sweep out your cottages, the law has changed! But don’t open the door yet, we’re not quite there.

Until recently, California state law prohibited sales of food products from home production facilities. However, starting on 1 January 2013, a change will allow small home-based operations to produce non-hazardous materials for sale. But not until 1 January 2013, and you will require a permit to do so. A shorthand version of the non-hazardous rules means that anything that requires for refrigeration is a no-no. This whole new deal is called cottage food operations.

Remember, everything that follows here is to ensure food safety for all of us.

While this is good news for some of you, as yet there are no application forms developed nor have the fees been fixed. The OC health department is feverishly working on both of these and hopefully there should be information on this any day now. When they are ready, you will be advised are two separate programs, trickily called programs A and B:

A) This allows you to produce at home and sell directly to consumers. That would apply to bake sales farmers markets, swap meets, church functions etc. For this you will simply have to register with the health department.

B) This is for sales made by you to another party who in turn sells to the consumer. For example, you sell hamburger buns to Joe’s gourmet hamburger outlet. Then the complete hamburger is sold by Joe to the consumer. For this you will require a permit from the health department. There will be a one-time startup inspection of your facilities. You also allow them the right to inspect your inspection under carefully controlled conditions.

This is small business, not big business. There is a limit of $35,000 of sales per calendar year for 2013. But Mama, that’s a lot of cupcakes! The limit goes to $45,000 in year 2014. You are expected to keep track of your sales against this limit.

So what might you be able to do in the meantime, while we wait for the pot to boil? Here’s a couple of ideas for you:

1) Determine exactly what it is you want to make. If it’s cookies you will have to say cookies not baked goods which can include a lot of things. For either A or B you will have to tell them what you will be making on your application and if you change it later, you will have to notify them.

2) Determine how you plan to sell your goods, since it makes a difference as to which program you are applying for. If you’re selling it yourself it will be A), but if you’re selling it to a retail outlet it will be B).

3) Figure out how you’re going to package your goods. You will have to have an informational label on them which will include ingredients, allergen warnings, indications that this is a homemade product etc. Hopefully, soon we will be able to provide a sample label. You can count on it that it will be a lot of information on a very small space, and that is attached to your package with something stronger than bubblegum.

4) Insurance! Aaargh!! Lawsuits against food producers are frequent, big, nasty and expensive. You will need very extensive liability insurance.. First you can check with your homeowners policy, but I think in most cases you will find they will not provide this coverage to you. This means you must check with another insurance company that provides it. This is important. If you want to do one of these programs you could start this investigation right now.

5 ) Get an authorized food handlers certification, you’re going to need one.

Since food safety is so important, the California Public Health Department food section is working on a specific list of products that can be made as well as a new training class for a mandatory certificate on food management, a considerably expanded version over the current food handlers document. Stay tuned, this could be fun!

The ink is only half dry on the new law. Be patient. There is much more to tell even if you don’t really have a cottage.

An opportunity awaits for those that wish to try this new program. We at SCORE will be here to help you implement your own success.

Obamacare Pre-Existing Condition Fee To Cost Companies $63 Per Person

This article was written by RICARDO ALONSO-ZALDIVAR 12/10/12, Associated Press, Reprinted by Permission

Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The Art of Delegation, Part 2 of 2

This article was written by Barry Mc Kinley, SCORE Orange County Business Mentor

imageIn last month’s article we discussed the need for entrepreneurs to learn the art of delegation. We covered the most common excuses used for not delegating, and we highlighted when to delegate. This article will cover some of the other questions you must consider before and during delegation.

The first question you must ask is, by delegating would failure be critical? As in learning any new skill the person will be slower and very cautious at the start. As they develop more proficiency they will become more confident and accurate. With that being said would it make sense to delegate a first solo flight in a thunder storm to a brand new pilot? This would be no more effective then teaching somebody how to swim by throwing them in the deep end of the pool and telling them, ‘learn to swim or drown’.

There are some tasks that should not be delegated. For example, one of the most common mistakes business owners make is delegating hiring employees to other employees. By doing this the interviewing employee will hire who they like and who will not challenge them in their job. But what business owner would want weak, unskilled and non-motivated employees?

When choosing a person to delegate tasks to consider the following: Do they have the experience, skills and knowledge to complete the assigned task? Do you have the time and resources to provide the training needed? Does the employee have the work style and independence to accept the challenge? Does the employee’s job interest and long term goals align with the job proposed?

You must also consider the current workload of the employee. Will they have enough time to take on and complete the work or will this just require reshuffling and not completing other tasks. Will you work with them to decide what tasks to start and what can be put to the side? This is also a great opportunity to explain to the employee how to prioritize their workload and just as important, why.

To be successful at delegation you must;

· Clearly explain the desired outcome.

· Define constraints and boundaries.

· Clarify the lines of authority and accountability.

· Explain what to do if the employee runs into a problem.

· Be reasonable on the work load that you are delegating.

· Expect the employee not to be able to work at your level or standard.

· Provided adequate support and be available to answer questions.

· Be focused on results (your way may not be the best way).

· Do not micro-manage.

· Establish and maintain control.

· Discuss timelines and deadlines.

· Agree on a schedule of checkpoints where you will review the process.

· Be willing to make adjustments.

The Art of Delegation at the start can feel like it is more hassle then it’s worth, however by delegating effectively, you can greatly expand the amount of work that you can deliver.

To delegate effectively, choose the right tasks to delegate, identify the right people to delegate to, and delegate the right way. With experience you will become better at delegation just as the people you delegate to become more skilled. Together you will develop a winning team.

Effective Delegators: Work Less---Accomplish More!

Turn High-Traffic Day Visitors Into Regular Customers

This article was written by Connie Certusi , BusinessNewsDaily Contributor, 7 Dec 2012, reprinted by permission

High-traffic days, such as holidays, are an opportunity for small businesses to establish themselves as a shopping location/website of choice and increase their customer base. And these do not need to be only seasonal windows of opportunity. Busy times can be a launch pad to increased visibility and more engaged customers while providing momentum for the rest of the year. Connie Certusi, Executive Vice President and General Manager of Sage Small Business Accounting Solutions, suggests the following for making the most of high-traffic days and leveraging the customer insights gained:

Be on your best behavior — High-selling seasons such as holidays or back-to-school shopping have the potential to attract new customers and, as such, you should be prepared to shine. Be ready to showcase or offer samples of your best products or services and pay particular attention to your customer service. You get one shot at impressing visitors so don't spare any effort or appropriate expense in achieving this goal.

Incentivize your customers — If you want to increase the probability of first-time customers purchasing your products or services again, you may want to offer a gift or discount that can be redeemed on their next visit. One efficient way to give out coupons is investing in a payment terminal that automatically prints discounts along with the customer's receipt. Coupon details can be programmed and customized in advance, saving you the time and trouble of remembering to provide the coupon every time you help with customers' purchases.

Social Media — Use social media tools like Facebook, Twitter and Pinterest to promote your deals and encourage conversations about your business . Present your followers with a discount or gift when they visit you, bring a friend along or recommend your business on their profiles. After those high-traffic days, encourage people to write reviews of your business and their customer experience.

Track customers and best-selling items — Keeping records of the clients who visit your business on busy days can aid customer retention. For starters, be sure to get their email address, and put systems in place to track their purchases. This information gives you an opportunity to thank customers for shopping and reward them with exclusive offers. It also helps you understand customers' shopping behaviors better when planning how to retain their business. Additionally, track what sells best and what extra inventory is leftover afterward to identify sales trends, potential discount items and if additional staffing will be needed in the next busy period. Depending on your size and needs, consider either a contact management or customer relationship management tool to track these relationships more effectively, and an accounting system that can track inventory details and purchasing habits for your customers.

Cash in on mobility — Worldwide, businesses big and small are experiencing the many benefits of integrating mobility into their operations. Canadian menswear retailer Harry Rosen Inc., for example, uses a Sage customer management system its sales associate's access via in-store kiosks or their personal devices. Associates have customers' preferences about garments and tailoring sizes as well as details about average purchases per visit at hand whenever assisting someone. Since the mobile app is web-based, associates never need to download information to their devices and are disconnected from each store's network once they step outside. The CRM strategy has helped the company capture 40% of its market.

If you haven't tried mobility yet, consider testing a few tools during your business' next high-selling season. Have your employees use a mobile payment tool via smartphone while assisting customers in the store, or look up inventory on a trial mobile app. You can also mobilize your customer data onto smartphones and tablets so sales associates can use the information to make purchase recommendations when speaking with loyal customers. After the trial, you can better determine if implementing mobile tools can further help improve your sales and customer service