Sunday, December 15, 2013

Obamacare 'perfect storm': Feds Reveal 10 Percent Error Rate

From CSBC, December 6, 2013, reprinted by permission

An estimated 10 percent of all enrollments now being made on the federal Obamacare marketplace contain data errors that could delay people from actually getting health coverage, officials disclosed Friday. And that error rate for enrollments submitted via and then sent to insurers before December was an estimated 25 percent, officials revealed. The rate fell in the past week, officials said, because of repair efforts to, particularly the discovery and fix of one particular software problem that was causing an estimated 80 percent of data errors, officials said.

But both past and present error rates are much higher than 1 percent, the rate which insurers considered to be unacceptable when doing business outside the Obamacare exchanges. And they are raising serious questions about whether significant numbers of people will actually be without insurance Jan. 1 despite believing they have enrolled.

A spokeswoman on Friday said the federal government and insurers now are engaged in a "very intensive process" to identify enrollment applications that contain the so-called "834 errors," and to get them fixed so that people will actually have coverage. The errors included forms not being generated, duplicate enrollment forms, and forms with missing or erroneous data. "We are going to get to a very granular level to identify the individuals who have been impacted, so we have the ability to reach out to them directly," said the spokeswoman, Julie Bataille, of the federal Centers for Medicare and Medicaid Services, which operates Bataille, whose agency before Friday had repeatedly refused to release its internal estimates of 834 error rates, also said that federal workers and contractors were laboring to fix the problems that are continuing to cause some 834 errors in current enrollments. She said people who have completed their enrollments online should make sure to make their initial premium payments to insurers — which could flag insurers that there might be a problem with that person's enrollment — or ask their insurer to confirm their enrollment is processed.

To fix the errors, insurers are often having to re-enter data by hand for each individual.

Bataille said the estimates of the error rates are based on sampling of enrollments, and that the variation in the kinds of errors have "made it difficult for us" to precisely quantify the error rate. "We do not have precise numbers," she said. Still, in October and November the error rate "could have been as many as one in four," Bataille said.

With the recent fixes, "we believe nine out of 10 834 transactions are now being successfully transmitted," she said. sells Obamacare insurance to residents of 36 states, and has to date enrolled more than 150,000 people. However, the 15 other Obamacare exchanges being run by 14 other states and the District of Columbia are also experiencing problems from 834 errors. After the botched, software-glitch-ridden Oct. 1 launch of, federal officials had initially denied there were any significant problems with 834 transmissions, despite reporting early on that insurers were seeing error rates as high as 50 percent. But in late October, after being recruited by President Obama to oversee the repair effort on the site, management guru Jeff Zients said 834 errors were at the top of his list of problems to address.

Robert Zirkelbach, a spokesman for industry trade group America's Health Insurance Plans, said, "The new process put in place this week is making a difference. The enrollment files are getting better, but there is more work to do to ensure consumers are covered."

Obamacare website ignites security warnings. Cristine Vogel, an associate director in Navigant's health-care practice, said the disclosure about the 834 error rates are troubling, and further support her belief that the Obamacare insurance program is facing a possible "perfect storm" of low enrollment and bad data. "While this is a measurable improvement, a 10% error rate is still a serious concern for the accuracy of the data, which has implications for insurers, providers and consumers, Vogel said.

"While we can now say that only 1 in 10 consumers is going to have a problem, that's still a lot of people," Vogel said. "As enrollment grows every day, this means we're adding more and more errors to the system. While we are decreasing the error rate, we're increasing the enrollment, which by design is increasing the number of people impacted."

Vogel and other experts told CNBC that the 834 problems and low enrollment could leave insurers facing possible losses from Obamacare policies, and hospitals and other providers facing increased costs.

"I try to be an optimist, it's just harder each day," said Vogel, who previously was special advisor for health-care reform to Connecticut's governor. She said she expects the cumulative effect will eventually hurt people providing and receiving care. "We all knew that it was going to impact the insurance industry, and now it's going to impact the provider and the consumer," she said. "It's difficult for me not to think that perfect storm that we've all been trying to avoid, and not plan for, may be approaching."

Since open enrollment for Obamacare insurance began in October, an estimated 330,000 people nationally have applied for eligibility and selected an insurance plan being sold through the federally run site or the 15 other health exchanges. That is only about 25 percent of the 1.2 million people federal officials originally estimated would have signed up in the first two months of enrollment. People have until Dec. 23 to enroll in Obamacare coverage to have it kick in by Jan. 1.

In addition to the 834 error rate, another persistent technical problem on is preventing it from sending applications for the government-run Medicaid program to the states where the applicants live. Both glitches could lead to unknown numbers of people not having insurance coverage on Jan. 1 as they assumed they would. And if those people get health-care treatment when they are not covered, they could default on charges they incur, Vogel and other experts told

Paul Tiede, executive leader of solutions for SunGard's insurance business, said the low enrollment to date in Obamacare insurance is not, in itself, a threat to the bottom line of most insurers, because it would represent a small fraction of their current business. But Tiede warned "that could change." "The great risk is the healthy 20- and 30-year-olds sit it out," and don't enroll, leaving insurers with a risk pool that is heavily overweighted with an older, sicker group of enrollees who use benefits, Tiede said, referring to a phenomenon known as adverse selection. "That would be serious."

Another expert, Nancy Thompson of CBIZ Benefits & Insurance Services, said "no one had the crystal ball" that predicted just how dire the enrollment levels and data problems in enrollment files would be at this point, more than two months after Obamacare launched.

"Let's face it, with the number of uninsured that we have in the United States, for us to be sitting at less than 400,000 enrolled, that's staggeringly low," said Thompson, senior vice president and sales director at CBIZ. "The bigger concern is, what kind of individuals are enrolling," Thompson said, echoing Tiede's concern about adverse selection. "The low enrollment numbers could absolutely play havoc on the rating structure." Thompson noted that when they designed their plans and set premium prices for 2014 for the Obamacare exchanges, the exchanges had never enrolled anyone, so there was no data to use to predict who would enroll, and what their level of benefit use would look like.

Now, with low enrollment levels overall nationally, and with the assumption that a disproportionate number of people who did enroll were previously uninsurable because of pre-existing health conditions, "there's no doubt that some of the insurers missed the mark when they set rating structures," Thompson said. That in turn could lead to higher premium prices next year, and to some insurers dropping out of the government-run exchanges, she said. But Thompson also said that some insurers who have been reluctant to sell on the exchanges would see an opportunity for business after data comes in from 2014, and then decide to start selling on the exchanges.

Even if enrollment picks up significantly on the exchanges this year, Thompson said, "the back-end technology is not fixed."

"Insurers are absolutely concerned ... because the information they are getting is not accurate," she said. And because that information is not accurate, some people who believed they actually enrolled "are going to experience significant, uncomfortable headaches when they go to utilize their benefits," Thompson said.

Marketing Blunders in the International Marketplace and How to Avoid Them

clip_image003This article was written by John Rau, SCORE Orange County Business Mentor

If in the development of your business marketing plan you have the desire and/or plans to move into the international marketplace, then there is a totally different set of marketing issues that you need to be aware of in your market research efforts. In this situation, your market research efforts will still include the need to address who your target audience is, what the demand is for your product(s), who is your competition (now both U.S. and non-U.S), how their products compare with yours in terms of price, quality and other features, how do you get your product(s) into this new marketplace and, more specifically, how do you “represent yourself” in the context of the different cultures that you will now encounter. Global marketing has its own set of issues that you will need to address.

You will need to be sensitive to not only cultural and emotional values when marketing your products but also language differences. The web contains an extensive collection of international marketing blunders to illustrate this point. Amusing examples from numerous web sites include the following:

  • When Mitsubishi launched its Pajero 4WD product in Spain, they forgot to take into consideration that the word “Pajero” means “jerk” in Spanish.
  • KFC’s slogan “finger-lickin good” was translated in Chinese to mean “eat your fingers off”.
  • GEC and Plesssey had a joint company in France called GPT. When GPT is pronounced in French, it sounds as “Jay-Pay-Tay” which is similar to J’ai pete, which means “I have farted”.
  • Scandinavian vacuum manufacturer Electrolux used the following in an American campaign: “Nothing sucks like an Electrolux.”
  • When Gerber started selling baby food in Africa, they used the same packaging as they did in the U.S., with the beautiful Caucasian baby picture on the label. Later they learned that in Africa, companies routinely put pictures on the label of what’s inside, since most people can’t read.
  • Pepsi’s “Come alive with the Pepsi Generation” when translated into Chinese came out as “Pepsi brings your ancestors back from the grave”.
  • Coors translated its catchy slogan “Turn it Loose” into Spanish. It read as “Suffer from Diarrhea”.
  • Clairol introduced the “Mist Stick” curling iron in Germany. “Mist” is German slang for manure.
  • Expanding to Mexico, the Dairy Association’s hugely successful “Got Milk?” was translated into Spanish with the result being “Are you lactating?”
  • When Schwepps was expanding into the Italian market, “Tonic Water” got translated into “Water from the toilet”.
  • Frank Perdue’s chicken slogan, “It takes a strong man to make a tender chicken” was translated into Spanish as “It takes an aroused man to make a chicken affectionate”.
  • When Puffs tissue started marketing their tissues in Germany, it didn’t do so well. The reason being that “Puff” means “brothel” in Germany.
  • When Hunt-Wesson introduced their Big John products in French Canada as Gros Jos, they forgot to note one thing, “Gros Jos” is slang for “big breasts”.
  • And lastly, the Japanese company Matsushita Electric (Panasonic) was promoting a new Japanese PC for internet users. Panasonic created a new web browser and had received license to use the cartoon character Woody Woodpecker as an interactive internet guide. The day before the huge marketing campaign they realized their pending advertisement error, namely, the new product featured the following slogan: “Touch Woody—The Internet Pecker”.

As pointed out by Karl Livingston in his article “Massive Marketing Blunders: What Were They Thinking?” (see, examples such as cited above show that promotional messages in one country might deliver one message whereas in another country the same message can be conceived as something else. He says that some of the things that need to be taken into consideration when launching a new product or creating a marketing campaign in a foreign country, as illustrated in the above examples, are: language, culture, emotional value and slang languages among many other things.

In his article entitled “Marketing Blunders & Global Culture”, Thomas Metcalf of Demand Media (see suggests what to do to minimize the chance of making global blunders. He says to plan ahead. “Select the countries where you intend to do business, and learn all you can about them. Find a native speaker who can help you with translations and guide you through cultural innuendo. You must familiarize yourself with language, graphics, color and symbolism. As you learn about the culture, examine the attitudes about aging, gender roles and tradition. Explore the economic conditions—not just the current state of affairs, but also how the countries have reacted to economic turmoil in the past. Make sure your name and brands are acceptable overseas. What is acceptable in one country may be insulting in another, and there may be regional differences within countries. With best efforts on your part, you should be able to shrink the barriers and enjoy good business relations.”

Changing Lanes. When Starting from Scratch, Let Organizational Vision Be Your Guidepost

From SUCCESS Magazine, December 2013 edition, reprinted by permission

After successful stints leading sales teams at Yelp and Twitter, Amanda Levy took a year off to travel and volunteer around the world before settling into a position that fit her—vice president of sales at leading online petition site

When taking a new path with a new crew, job No. 1 is to hone a new sense of purpose, she told SUCCESS. As ventures into new territory with its politician-to-constituent forum, for Decision Makers, Levy continues to blaze trails.

Q: What is one of the key areas of understanding when starting at that you needed to reach in order to do your job in the best way possible?

A: I think the most important thing was to understand our users and why they come to Change. For many of them, it is because they feel a strong desire to take action. They support a particular petition and they want to create social change. Our goal then is to connect these users with the great organizations that are supporting each of these different causes. So that means a lot of what I first need to do is meet with people and listen to everyone who will be using our platform.

Q: How did you build your sales teams at Twitter and Yelp, and how have you applied those philosophies and experiences to

A:When it comes to building a sales team, regardless of what company you are in, the process is remarkably similar: You must make sure to hire truly phenomenal personnel, who are in some ways better than you are. Then you train them in such a way that you set them up for success. And then everyone on the sales staff must be totally engaged in building the long-term sustainability of the product we are selling.

How to Negotiate a Lease -- A Beginner's Guide

In the fifth edition of his book Retail in Detail, retail business owner and consultant Ronald L. Bond offers small-business owners an updated, no-nonsense guide to the world of retailing. In this edited excerpt, the author offers expert advice on the ins and outs of leases and how to get just what you want in your retail lease.

Negotiating a lease can be as simple as buying a toothbrush or as complicated as buying a new car. Obviously, it's simpler if you're dealing with an individual owner who's very flexible or a large corporation whose policies allow for no negotiations. But we'll assume you'll be dealing with a leasing agent or shopping center manager and that there will be some room for negotiation, as is usually the case.

Leases for retail space usually have a minimum term of three years. The following are usually included in retail space leases, in various combinations.

  • A basic term. The lessee -- that's you -- is obligated to pay for the space for a specific time period (usually three years), whether or not your business survives that long.
  • A basic rental rate. This is calculated per square foot or as a percentage of gross sales, whichever is greater. Typical rents may range from $.90 to $3 per square foot per month or 6 percent of gross sales.
  • Assignment of maintenance responsibility. The lessee is normally responsible for maintaining all equipment serving the space, including electrical, plumbing, heating, air conditioning, and structural components.
  • Water and sewer. These are usually included in the lease rate, but expect to pay extra for gas, electricity, and trash removal.
  • Triple net. This is a monthly charge, usually for the expense trio of taxes, insurance, and common area maintenance, hence the term "triple net." This charge is designed to allow the lessor to pass on his or her variable costs to you. They can represent an additional 10 percent to 35 percent added to your basic rent.
  • Finish-out allowance. In return for the three-year term, the lessor will usually provide you an allowance to finish out the space to your specifications. This is typically $10 to $30 per square foot, which is sufficient for basic walls, ceiling, lighting, electrical, plumbing, heating, air conditioning, and insulation. It doesn't normally cover wall finishes, carpet and floor tile, signs, and any custom work to suit your specific needs.
  • Prepaid rent. This is typically one to three months.
  • Security deposit. This is usually zero to two months' rent.

As the first step in lease negotiations, contact leasing agents regarding spaces in which you're interested and ask for proposals. After receiving several, you should have an idea of the menu of terms and prices you'll have to deal with in your negotiations. At this point, you may find it desirable to engage a leasing agent to negotiate the lease for you, if you feel overwhelmed by the task or if you're not a particularly good negotiator. You can do it yourself, however, and by following some basic guidelines, you should be able to achieve reasonable terms.

It will help if you can locate at least two spaces that meet your needs, thus ensuring competition for your lease. After you receive the proposals from the leasing agents or center managers, don't let them pressure you into signing a lease prematurely.

You should have an attorney review your lease, but don't let him or her make decisions for you. Attorneys are paid to point out potential risks, and they may be overly cautious to make sure you don't later blame them for failing to warn you properly. Listen to the attorney's advice, but make your own business decisions.

Prepare and submit a counter-offer, in writing, in response to the proposals. Some proposals you might consider including are:

  • Lower basic rates
  • No payment of percentage of sales or a smaller percentage
  • Larger finish-out allowance and coverage of more improvements, such as floor coverings and interior partitions
  • Graduated lease rates, starting low but increasing over the lease term
  • Limits on "triple net" charges
  • Inclusion of some utilities in the base rate
  • Shorter- or longer-lease terms
  • "Escape" clauses to allow you to get out of the lease in certain circumstances
  • Free rent (one to six months, depending on market conditions)
  • Lower prepaid rent and security deposit

Include several or all of these in your proposal. You're unlikely to succeed with them all, but it will establish a good position from which to negotiate and help you evaluate the willingness of the lessors to engage in meaningful negotiations. Make sure the lessors are aware that you're negotiating with other centers.

After you feel you've gotten all the concessions you can get, choose the one that's to your best advantage and finalize the terms.

Sunday, November 24, 2013

So You Want to Be an Entrepreneur and Start a New Business! Do You Have What It Takes?

clip_image002This article was written by John Rau, SCORE Orange County Business Mentor

According to Wikipedia, an “entrepreneur is an individual who organizes and operates a business or businesses, taking on financial risk to do so”. Are you ready for this, that is, (1) to organize a business (or businesses), (2) to operate a business and (3) to take on the financial risk to do so?

Referring to, the Small Business Administration (SBA) suggests that you need to have the following characteristics and skills commonly associated with successful entrepreneurs:

  • Comfortable with taking risks
    • Being your own boss also means you’re the one making tough decisions. Entrepreneurship involves uncertainty. Do you avoid uncertainty in life at all costs? If yes, then entrepreneurship may not be the best fit for you. Do you enjoy the thrill of taking calculated risks? Then read on.
  • Independent
    • Entrepreneurs have to make a lot of decisions on their own. If you find you can trust your instincts and you’re not afraid of rejection every now and then, you could be on your way to being an entrepreneur.
  • Persuasive
    • You may have the greatest idea in the world, but if you cannot persuade customers, employees and potential lenders or partners, you may find entrepreneurship to be challenging. If you enjoy public speaking, engage new people with ease and find you can make compelling arguments grounded in facts, it’s likely you’re poised to make your business idea succeed.
  • Able to negotiate
    • As a small business owner, you will need to negotiate everything from leases to contract terms to rates. Polished negotiation skills will help you save money and keep your business running smoothly.
  • Creative
    • Are you able to think of new ideas? Can you imagine new ways to solve problems? Entrepreneurs must be able to think creatively. If you have insights on how to take advantage of new opportunities, entrepreneurship may be a good fit.
  • Supported by others
    • Before you start a business, it’s important to have a strong support system in place. You’ll be forced to make many important decisions, especially in the first months of opening your business. If you do not have a support network of people to help you, consider finding a business mentor. A good starting point would be to contact your local SCORE organization and make contact with one or more counselors. A business mentor is someone who is experienced, successful and willing to provide advice and guidance.

Bizcoach (see provides some good advice for what it takes to be an entrepreneur and the qualities for success, specifically:

  • You must have a clear vision. Entrepreneurs are able to visualize exactly what it’s going to look like when it’s done. To keep the end in mind is critical in creating a path to get there.
  • You must demonstrate proactivity in the sense that entrepreneurs tend to make things happen and are impatient with indecision. They make decisions and take action to move forward.
  • You must have tenacity. Entrepreneurs are not easily discouraged and will persist in spite of obstacles. In fact, entrepreneurs enjoy the risks of failure and accept challenges.
  • An entrepreneur has the ability to multi-task, which is required to run the various aspects of any successful business.
  • Entrepreneurs recognize a need and have the ability to take action.
  • You must have a belief in customer service. Provide extra care and they will return.
  • Most entrepreneurs possess some degree of competitiveness, but you should view competition as a way to improve your business.
  • You must set and achieve goals on a regular basis.
  • You must believe in yourself in that you can do it in spite of the risks and potential obstacles.
  • You must have a passion and zeal for what you do.

Research of successful entrepreneurs has documented that successful small business people have certain common characteristics. In this regard, the following brief checklist developed by SCORE won’t enable you to predict success, but it can give you an idea of whether you will have a head start or a handicap with which to work. Ask yourself the following questions:

· Can you persevere through tough times?

· Do you have a strong desire to be your own boss?

· Do the judgments you make in life regularly turn out well?

· Do you have the ability to conceptualize the whole of a business?

· Do you possess the high level of energy, sustainable over long hours, to make a business successful?

· Do you have significant specialized business experience?

While not every successful business owner starts with a “yes” answer to all of the above questions, three or four “no’s” and undecided answers should make you think twice about going it alone right now. But, don’t be discouraged. Seek extra training and support with help from a skilled team of business advisors such as accountants, bankers, attorneys and SCORE counselors.

In summary, starting a business is not for everyone. It brings a certain level of stress and strained financial resources. There is no simple formula or set of instructions that will teach you how to become an entrepreneur. Having the characteristics and skills as cited above by the SBA and possessing the above listed qualities for success will get you on your way.

How Do I Market My Service Business?

From Success Magazine, November 2013, reprinted by permission

Today’s question: What is a good way to promote my business as an independent service professional?

Bob Serling: Great question. To answer with me, I’ve asked Robert Middleton, a leading authority on marketing for independent service professionals.

As a service professional, you have to get your name and your knowledge out there where people can see it. One way to accomplish this is by creating list articles or list reports.

Let’s say you’re a consultant on productivity. Your list report might be something like, “6 Surefire Ways to Help Your Employees Be More Productive” with effective, easy to use productivity tips. Create a press release via PR Web or PR Newsletter to market your free list report. Both are very inexpensive press release services that allow you to target the kind of publications you want. If you’ve never written a press release, you can just Google press release templates and you'll find a number of excellent templates.

Also send your press release to the trade publications for industries you specialize in, who may publish your release for free. Be sure to include your website in the report for more information. On your website, create an opportunity for people to join your email newsletter in exchange for receiving your list article report for free. That starts the whole process for you.

Robert Middleton: Think about how you package your services. In my experience, I find packaging of services is often neglected. We’re looking for leads, for people to come to our site, for people to grow our list—all to help get the word out there, but people often forget that if they don’t package their service in a certain way they will limit themselves.

Instead of selling a one-day workshop for $5,000, turn that into a nine-month program for $30,000 to $40,000. To accomplish this, write up a really good sales letter for that high-end service. As an example, I did this four years in a row for my marketing mastery program. I wrote a really detailed in-depth letter about what this program was, why people need it, what the benefits were, how it worked, how it was structured—everything they could ever want to know about it. Then I had people apply to get into the program. I got 50 to 60 applications every time I promoted it. Then I met with those people, talked to them on the phone, and sold them a $10,000 to $15,000 one-year program and filled it completely four years in a row.

Everyone is focused on getting the word out about their services, but when I look at what they have to offer, it’s often, “Well, we offer management consulting services,”  or “We offer business coaching services.” When they talk to someone they don’t have a package. I call it putting a big package on your shelf so that you can sell it. It’s like if you’re going to sell beans, you can sell a small can of beans, a medium-sized can of beans, or the extra super jumbo size.

Bob Serling: That’s a great analogy.

Robert Middleton: Create bigger programs and write a lot of copy about them, because the more expensive they are, the more you have to write, the more you have to explain, the more you have to build a case for the value of it, the better the results you can get. Not many service professionals do this. We’ve helped people do this for medium-sized businesses, small-sized businesses, corporations, all kinds of businesses, and simply upped their vision or the upped the ante, so to speak, about what they’re offering.

Bob Serling: You mentioned that when you’re selling an expensive package it requires a lot of copy. At the same time, most people are afraid of creating long copy. They think that their prospects won’t read long copy, especially when it’s online. But the fact is that when you’re selling something that is complex, people want a lot of information in order to make an educated purchasing decision.

I was talking with one of my mastermind groups and telling them that the piece I wrote for my last program, which cost $22,500, was 14 pages long when printed out. A lot of people thought that nobody would read that much copy. Actually that answer is partially true—nobody who isn’t interested will read it. So you’re doing those people a service, you’re not wasting their time. But the people who are interested will read it and they’ll read every word because they want to make a good decision for themselves.

Robert Middleton: Exactly. Sometimes they’ll read it a few times.

Funding a Start-Up Today

This article was written by Julian Hills, October 2013 in Entrepreneur Magazine, reprinted by permission

You’ve got an awesome idea, a slick name in mind and the garage space to start your dream business -- but not the cash. I'm not surprised.

Financing a small business -- especially a startup -- is an uphill battle in a crowded field. In the U.S. alone, there are an estimated 27.5 million small businesses. And nearly 80 percent of them get their money through bank loans, credit cards and lines of credit.

It’s no secret that it is harder getting money through those avenues in the current financial climate. But just because it’s a bit of a fight, doesn’t mean your great idea isn’t worth fighting for. Here are some of the ways you can finance your startup, from standing in bank lines to going online:

Bank loans. Once thought of as a go-to option, national banks are still pinching pennies -- even after the Great Recession ceased.

As the economy continues to struggle, and bank loans remain elusive, here are some other financing options:

Finance companies: These private companies provide small, short-term loans. This type of financing often comes in the form of payday loans (or cash advance loans). The individual borrows an amount of money and agrees to pay it back with the cost of fees and interest tacked on to the principal. The lender uses the borrower’s next paycheck or a portion of their income as collateral to pay the loan back. The Federal Deposit Insurance Corporation warns that payday loans could be tricky for people using the cash to start up a company, as even just a $500 payday loan could carry a $100 fee. People will occasionally use these loans to cover immediate personal expenses in the startup process.

Unsecured lines of credit: People with high personal credit scores can often get an unsecured line of credit for their businesses. But it should be noted that this option can come with hefty rates. It’s important to decide if the cash your business is projected to reel in will be adequate to pay the loan back, as failing to do so could impact your personal credit and your business credit. The U.S. Small Business Administration released a report in July noting that lending to small businesses declined last year. Business loans of less than $100,000 dipped to $138.2 billion, from $139.5 billion in 2011. Even though conditions have improved in recent years compared with 2008 and 2009 (the height of the recession), business owners still find themselves facing roadblocks from banks that continue to restrict their lending.

Community banks and credit unions may serve as your next best bet. Since many community banks avoided the housing crisis, they’ll often have money to lend without the same standards as national banks. Local small businesses are finding success with community banks if they can convince lenders they’ll make a profit and pay back the loans.

You might also tap a credit union for available funding. As nonprofit organizations, credit unions may offer better lending terms for borrowers than commercial banks.

Credit cards. Having plastic has its benefits. The perks include immediate access to needed items, cash advances when you’re low on money and a way to track spending. When financing your business with credit cards, a major consideration should be whether you can pay off the balance monthly. Credit card companies know commercial loans are hard to come by and often jack up their rates -- sometimes upwards of 30 percent.

Government assistance. The SBA offers qualified financial assistance programs. While it doesn’t loan money directly, the SBA does set guidelines for loans made by third-party lenders (essentially a commercial loan with negotiated strings attached). Businesses that go this route must first prove they could not obtain financing at commercial banks with reasonable terms.

On the upside: SBA loans are usually structured with longer terms and lower down payments, and may come with lower interest rates. On the downside: SBA-backed loans tend to have a lot of stipulations -- often requiring lots of paperwork and time, as approval can take longer than loans from private lenders.

See if your business qualifies by carefully reading the criteria on

Crowdfunding is a relatively new and increasingly popular option people are using to fund business ideas. Most often, entrepreneurs will use sites like Indiegogo and Kickstarter to raise money from the crowd in return for token incentives like a prerelease product or a T-shirt. This process can cut out professional investors and brokers by putting funding in the hands of regular folks. It also might attract venture-capital investment down the line if a company has a particularly successful campaign.

Another, even newer option: equity crowdfunding through sites like Crowdfunder. Rather than giving funders a T-shirt, startups can offer equity in their companies instead. Know that only accredited investors (people with a net-worth north of $1 million, minus their home's value) may participate in this type of transaction.

10 Qualities Every Leader of The Future Needs to Have

This article was written by Martin Zwilling, from his Blog, October 29, 2013, reprinted by permission

The reigning theory in business has long been that "alpha" leaders make the best entrepreneurs. These are aggressive, results-driven achievers who assert control and insist on a hierarchical organizational model. Yet I am seeing increasing success from "beta" startup cultures where the emphasis is on collaboration, curation and communication.

Some argue that this new horizontal culture is being driven by Gen-Y, whose focus has always been more communitarian. Other business culture experts, like Dr. Dana Ardi, in her new book The Fall of the Alphas, argue that the rise of the betas is really part of a broader culture change driven by the Internet -- emphasizing communities, instant communication and collaboration.

Can you imagine the overwhelming growth of Facebook, Wikipedia and Twitter in a culture dominated by alphas? This would never happen. I agree with Ardi who says most successful workplaces of the future need to adopt the following beta characteristics and better align themselves with the beta leadership model:

1. Do away with archaic command-and-control models. Winning startups today are horizontal, not hierarchical. Everyone who works at an organization feels they're part of something, and moreover, that it's the next big thing. They want to be on the cutting-edge of technology.

2. Practice ego management. Be aware of your own biases and focus on the present as on the future. You need to manage the egos of team members by rewarding collaborative behavior. There will always be the need for decisive leadership, particularly in times of crisis. I'm not suggesting total democracy.

3. Stress innovation. Betas believe that team members need to be given an opportunity to make a difference -- to give input into key decisions and communicate their findings and learnings to one another. Encourage team-members to play to their own strengths so that the entire team and organization leads the competition.

4. Put a premium on collaboration and teamwork. Instead of knives-out competition, these companies thrive by building a successful community with shared values. Team members are empowered and encouraged to express themselves. The best teams are hired with collaboration in mind. The whole is thus more than the sum of its parts.

5. Create a shared culture. Leadership is fluid and flexible. Integrity and character matter a lot. Everyone knows about the culture. Everyone subscribes to the culture. Everyone recognizes both its passion and its nuance. The result looks more like a symphony orchestra than an advancing army.

6. Be ready for roles and responsibilities to change weekly, daily and even hourly. One of the big mistakes entrepreneurs make is they don't act quickly enough. Markets and needs change fast. Now there is a focus on social, global and environmental responsibility. Hierarchies make it hard to adjust positions or redefine roles. The beta culture gets it done.

7. Temper confidence with compassion. Mindfulness, of self and others, by boards, executives and employees, may very well be the single most important trait of a successful company. If someone is not a good cultural fit or is not getting their job done, make the change quickly, but with sensitivity.

8. Invite employees to contribute. The closer everyone in the organization comes to achieving his or her singular potential, the more successful the business will be. Successful cultures encourage their employees to keep refreshing their toolkits, keep flexible, keep their stakes in the stream.

9. Stay diverse. Entrepreneurs build teams. They don't fill positions. Cherry-picking candidates from name-brand universities will do nothing to further an organization and may even work against it. Don't wait for the perfect person -- he or she may not exist. Hire for track record and potential.

10. Not everyone needs to be a superstar. Superstars don't pass the ball, they just shoot it. Not everyone wants to move up in an organization. It's perfectly fine to move across. Become your employees' sponsor -- on-boarding with training and tools is essential. Spend time listening. Give them what they need to succeed.

Savvy entrepreneurs and managers around the world are finding it more effective to lead through influence and collaboration, rather than relying on fear, authority and competition. This is rapidly becoming the new paradigm for success in today's challenging market. Where does your startup fit in with this new model?

Tuesday, October 29, 2013

What an Employer Looks For

imageThis article was written by Barry McKinley, SCORE Orange County Business Mentor

A good interviewer is going to be looking for qualities in the applicant other than the obvious. They have already reviewed your resume so they know the facts they are now trying to learn about more you. They will be listening to what’s NOT being said, as well as what’s being said. Some of the items that can set you apart from the other applicants would be:

1. Creativity

Are you able to think “Out of the box”? Are you comfortable with the job and responsibilities changing. Are you willing to look at challenges from different perspectives?

2. Confidence

Do you relax in the interview? Are you able to project self-assurance to the interviewer?

Are you able to handle slowdowns in the conversation during the interview without showing nervousness?

3. Standards

All people are shaped and guided by their values. This becomes the core of our personality and being. Are your principles to get the job done at any cost or are good communications more important? Are you more motivated by quantity or quality? Will you be willing to accept the job being done 80% of the way?

4. Persistence and Follow-Through

These are skills (“backbone”) that help you complete jobs particularly when the going gets rough. The employer does not want to hire staff that will give up as soon as obstacles are placed in their way. They will be looking for accomplishments in your life that express your toughness.

5. Integrity

Are you willing to be responsible for your actions both when they are positive as well as negative. Are you quick to blame or point the finger away from yourself? Does your life show that you accept responsibility?

6. Clarity of Communications

Just because you believe that you spoke clearly and precisely does not mean that the listener received it that way. Top notch communication means accepting responsibility for the other person’s listening.

7. Passion

The interviewer will be listening to what you are passionate about. They will try to figure out what motivates you and if your passions will fit with their needs. They will want to insure that you have a thirst for life.

8. Personal Opinions and Views

The employer is seeking what you embrace or your philosophy of life. Do you see the glass half empty or help full. Are you more of a negative person always expecting something bad to happen? Do you blow up the smallest difficulty into a major issue?

9. Genuine

The interviewer is interested in the fact that you are acting like yourself or if you are putting on a front. They are striving to determine if you are comfortable with yourself and not trying to be something you are not.

Real Winners Keep Moving the Finish Line

imageThis article was written by Harvey Mackay, from his column 10/28/2013, reprinted by permission

When the World Series or the Super Bowl rolls around, there’s usually a reliable way to pick the winners: The guys who say "I’m just glad to be here," aren’t going to be the ones wearing the championship rings when the game is over. They achieved their goal before the game began.

What’s really more important, goal-setting or goal-getting?

A teen-ager will mow lawns all summer in order to buy the jalopy that he is certain will impress Mary Anne. The real lesson — learning solid work habits — is easily lost if Mary Anne is not impressed.

We all know companies that were household names, the bluest of the blue chips, that are fading memories today. W.T. Grant, Woolworth, Zenith, Studebaker, Montgomery Wards. Every salesperson knows an ace who was on top of the sales charts for years and all of a sudden lost his stroke. He didn’t go from first to second, he went all the way to the bottom.

In each of these cases, the goal was the same, to get on top. But once they got there, they started to lose their way.

They lost the hunger, the ability to innovate, to listen to their customers, to adopt to change, to be humble.

They had achieved their goals. Now was the time to reap the rewards. About 20 years ago, a fellow named Parkinson, wrote a series of books in which he cleverly framed his observations into "Parkinson’s Laws." Most are just as valid today, because these rules of human nature are timeless. One was, and yes, I’m paraphrasing a bit, "Whenever a company proudly announces the establishment of their beautiful, new, modern, efficient corporate headquarters, you can be sure they’re heading downhill."

Why? Because instead of focusing on their business, the company’s managers are focusing on themselves. Messy desks, cramped quarters, unlovely surroundings are the physical manifestations of people too busy getting the work done to care much about their own creature comforts.

The greatest danger to a business is not risk. It’s lack of risk: complacency. As success piles upon success, the goal changes. Number 1? We are number 1. Roll out the red carpet. Get that door, will you? And where’s my driver?

Look back at that list of corporate casualties and you won’t see Wal-Mart. It didn’t matter how much money Sam Walton made, he still drove a beat-up pick-up truck. Instead of hanging around a plush office, he got out and walked the floor of his stores and his competitors’ stores. His people were well aware of his habits. The Walton-lifestyle is ingrained into the Wal-Mart culture.

Dave Thomas, the founder of Wendy’s, was never so wrapped up in enjoying material things that he lost his desire to get the education denied him by his impoverished childhood. At 60 he went back to high school and got his GED. He attended the prom with his wife and they were crowned Prom King and Prom Queen. His fellow students voted him "Most Likely to Succeed." Not all of today’s high schoolers are in the dark about goal-setting.

What’s your goal? Whatever it is, I suggest you commit it to writing and keep it on your desk where you’ll see it every day. At least quarterly, give yourself a report card. If you ever achieve your goal, be like Curt Carlson, the billionaire founder of the Carlson Companies, the parent of the Radisson Hotels.

As a young soap salesman, Curt used to set yearly sales goals for himself, write them down and stick them in his wallet. About halfway through the year, when he reached his annual target, Curt would tear up the slip of paper, toss it, and set another goal.

Curt has the reputation of being a tough boss. There’s a reason: he’s never quite satisfied with himself.

Curt knows the answer to the question I posed earlier: It’s not goal-getting that matters. It’s goal setting. You never want to reach your goal.

Indiegogo Co-Founder Says Be Obsessed With the Problem, Not the Solution

This article was written by Catherine Gifford, October 25, 2013, in Entrepreneur Magazine, reprinted by permission

Most entrepreneurs tell you to be hyper-, laser-focused on solutions. But for Danae Ringelmann, the co-founder of the global crowdfunding platform Indiegogo, it is her obsession with the problem that keeps her going.

When she was in her early 20s and working in finance in New York City, Ringelmann went to a meeting of filmmakers and angel investors, largely, she thought, to watch the goings on, and, she admits, to get out of the office.

What she experienced was a shock. Ringelmann was one of a small handful of attendees from the finance world being eagerly sought after by veteran filmmakers who were desperately seeking funding. Ringelmann was one of the most popular girls at the party because the ratio of artists to funders left her in the significant minority. A few days after the event, she received a FedEx mailer with the copy of a screenplay from an elderly filmmaker, and a painstaking letter eagerly hoping that Ringelmann would fund his work. Ringelmann’s heart sank to learn that she -- a young, inexperienced finance employee -- would be the ticket to this older, experienced filmmaker’s dreams.

This level of inequity, combined with Ringelmann’s childhood, when she grew up listening to her small-business-owner parents struggling to get access to capital to grow their moving business, combined to plant a seed for Ringelmann. She left her 100-hour-work-week life of finance in New York City and went to the University of California at Berkeley Haas School of Business. There, she and her classmates began to pick apart what she saw as a problem: democratizing finance, putting the power of raising money in the hands of the people. It was at Berkeley that Ringelmann met her two co-founders, Slava Rubin and Eric Schell, both of whom came from tech backgrounds.

“If we want to live on this planet and be responsible, accountable human beings, finance is the number one obstacle for bringing the ideas of the world to life,” says Ringelmann. “As a world, we don’t have the option for it not to be fair. It has to be fair. I almost felt like it was my duty to see this idea through, like the world needed me to see this idea through.”

Ringelmann, now 35, and her teammates are well on their way. Since launching in 2008, San Francisco-based Indiegogo has hosted 150,000 campaigns for organizations, nonprofits and individuals raising money all across the world. Currently, Indiegogo is private and doesn’t disclose its financials. However, the company will say that it is distributing “millions of dollars” each week. Top campaigns have earned millions of dollars each, primarily for tech-related inventions.

Last year, Indiegogo launched in French and German. It accepts the British pound, the euro and the Canadian dollar in addition to U.S. dollars. What about bitcoin? “We are looking at everything,” she says.

In her journey from heartbreak to sitting at the head of one of the leading financial platforms, Ringelmann has learned a few things. Beyond the idea of putting your obsession with a problem above your obsession with any particular solution, here is Ringelmann’s best advice for entrepreneurs.

1. Iterate versus create. If aspiring entrepreneurs wait for the moment when they have a world-changing business idea, and they are absolutely prepared to carry out that brilliant idea, they will never launch, says Ringelmann. “Don’t wait for perfect. Don’t wait for the perfect idea because it will never appear,” says Ringelmann. Once you get started, then you can make adjustments along the way, she says. Indiegogo encapsulates this idea with its mantra “iterate versus create.”
2. Don’t wait for praise. Ringelmann attributes her fierce determination to her late father, who, she says, taught her to not be afraid of meeting resistance head on and to continue on your path even if you aren't met with gratitude and appreciation. “The world loves to say no, it is not its fault,” says Ringelmann of what her dad told her. “It is your job to say 'yes' and you are not going to get any pats on the back. I remember him saying that very specifically -- nobody is going to say, 'good job,' 'A for effort.' None of that. You have just got to stick to your guns. The world will say, 'thank you,' not by saying 'thank you.' They will just embrace it, and you will know you have done the world a service and that should be enough.” Ringelmann’s father died in October of 2008, but she still hears his voice in her head.

3. Don’t let competition slow you down. When Ringelmann launched Indiegogo, the word “crowdfunding” didn’t exist. Today, there are in the vicinity of 600 online crowdfunding portals. At Indiegogo, the team isn’t intimidated by the competition, but feels validated for having created a funding model that has been so embraced. “Potential competitors are potential partners at the same time,” says Ringelmann. “In general, we try not to be too focused on the competition and just stay really focused on what we think we are good at and what we want to accomplish, and so far that has worked.”

4. Take action. “Jump in,” says Ringelmann. Just start moving. You will learn from the repercussions, whether good or bad. “Have a bias towards action because in every action you take, there is an equal and opposite reaction and that opposite reaction might be a confirmation of what action you just took or it might be a denial of the action you just took.” Either way, you will start learning and eventually you will get closer to the idea you are searching for.

5. Make sure the reason you launched your company is something you care very deeply about. “Entrepreneurship is hard, and it’s being connected to that reason for being, that why, that will get you through the tough times,” says Ringelmann. If you aren’t committed to the problem you are solving, you may not have enough resolve to stick to your goals through challenges and turmoil of launching a business. For Ringelmann, that was -- and still is -- removing the gatekeepers from the finance world. “That has influenced absolutely everything we have done. It influenced our values, it has influenced our mission, it has influenced our strategy, our product. It influences the people that we hire, everything. If you have a really clear reason for the problem that you are solving, it will get you through a lot of hard times and help you make decisions in the future.”

How to Make a Good Product Video

From Success Magazine, October 2013 edition, reprinted by permission, a discussion with Bob Serling and Andy Jenkins

Today’s question is: What tips do you have for using videos to market my products on my website?

Bob Serling: To help answer that question, I asked my friend Andy Jenkins, the leading authority on website video marketing for small businesses and an Emmy-winning videographer. Much of what I do with video on my own site, I learned from Andy.

Andy Jenkins: There is a saying in the film, television and photography business that the best camera is the one that you have with you. A well-crafted video doesn’t have to be feature film or television broadcast quality—it just has to be on your website.

We’ve come to a point in video production where the cost of the technology no longer differentiates it from quality. I did an entire video series using an iPhone, which was indistinguishable from the video shot with a $7,000 camera by the time it was prepared for streaming on the web. In fact, the iPhone quality was magnificent.

You can get a Logitech C920 webcam that shoots in full 1080p, which is the highest form of HD resolution. That little $75 webcam with enough light is gorgeous and easy to shoot with. It’s auto-focus or you can manually adjust for color, white balance and other technical elements.

Another tip—good lighting. A $500 camera with good light will look as good as a $50,000 camera with poor light. So consider investing in good lighting equipment.

Bob: Adding good lighting made the biggest difference in my videos. I paid around $120 for two light boxes with stands and it made all the difference. People could see everything clearly, which removes a major distraction.

Andy: One of the wonderful things about digital video is that experimentation costs nothing. Take your iPhone or your Android smartphone or whatever camera you have and put your subject outside. Then get what’s called a bounce card. This is essentially a 2-foot by 2-foot or 3-foot by 3-foot solid white piece of foam core. [Try fine-grained Styrofoam sandwiched between matte or glossy paper, available at any craft store.] Use that to bounce the sun or the sky back up into the face of the person that you’re shooting [Try holding it above your subject.]. You’ll find that good light, especially outdoor light, can really make an amazing difference.

When you shoot inside, there are many different lighting kits that are available inexpensively. A Smith-Victor lighting kit was my first when I was a destitute creative artist. This was back in the ’80s, when $105 was all the money in the world. Fortunately, they’ve only gone up slightly with inflation, so a good Smith-Victor lighting kit is only about $120. It’s essentially two really big light bulbs in this lighting instrument that looks like a scoop that works great when you’re looking at the camera and talking directly to your audience. [You can also place a lamp on either side of yourself but never directly in front of your face, as this will cause overexposure.]

What’s even more important than the technical aspects of your video is the quality of your message. I teach a lot of subject matter experts who are very passionate about what they’re doing, but they all have the same concern—they think they aren’t experienced marketers. I always tell them that’s great and means they’re going to do fantastic.

Today we are desensitized to hardcore marketing messages, but something that will make us sit up and pay attention is the quality of the information. So here’s a formula I recommend for creating the message for your video: number one, teach; number two, teach to transform; and number three, transform to transact.

Make your viewers smarter than they were before they watched your video. Teach them to solve their problem. The transformation part relies on your personal experience. A viewer would much rather learn from someone who is teaching them from their personal experience, than from something that’s clinical and filtered out.

Finally, the transaction. We can never forget to ask for a transaction. Sometimes that transaction might be to hit the Add to Cart button. Other times it could be to hit the Like button, to hit the Share button or to enter your name and email and join my list.
The best skill for entrepreneurs is the ability to effectively communicate their message while being on video. Many of your competitors don’t have the will to create great video and the ones who do are using old principles from a decade ago that simply don’t work in today’s age of socialization. That puts you at a great advantage.

Bob: That’s true. I don’t worry about what I look like or what I sound like on video. I just try to be myself and connect with people. When you teach something of real value to people and come across as an authentic person, you can’t beat that combination.

Andy: You mentioned not worrying about what you look like. In my first videos, I was about 70 pounds overweight and didn’t want to put my face on video. So I created slideshows using Microsoft PowerPoint or Apple’s Keynote and recorded them using my voice for narration. So I didn’t even need a camera.

Bob Serling helps business owners and entrepreneurs generate more traffic, make more sales, and do both more often. Get his free e-book of interviews with 30 leading experts, including SUCCESS Publisher Darren Hardy, at

Andy Jenkins helps business owners and entrepreneurs create brands, build subscribers, and convert visitors into loyal customers with Story-Based Video Marketing. Dig into his massive resources of tips and Video Marketing tricks on his blog at

Friday, September 20, 2013

Get the Most From Your SCORE Counseling Session

imageThis article was written by Barry McKinley, SCORE Orange County Business Mentor

As a SCORE Counselor I have conducted more than 2,000 face to face counseling sessions. Through these experiences I have come away with a number of suggestions & observations. Successful people rarely reach the top without a lot of help along the way. The skill to ask for help and the willingness to accept suggestions is a key quality that stands out by those who are driven to succeed.

The function of your mentor is to give advice and share their wisdom. What problem(s) you may be facing for the first time your mentor may have experienced a very similar or same challenge in their career. They are able to help you to see the overall picture and solutions. Your mentor doesn’t need to have experience in your industry or be up on the latest trends and technology, there are other sources for that. In seeking counseling your goal should be help and direction in seeing the overall picture of what you are faced with and possible ideas and answers.

Steps for Success:

1. Be 10 minutes early for your appointment and prepared.

2. Google some of your questions and research your business ideas.

3. Keep in mind there is a big difference between a dream and reality.

4. Leave your ego in the waiting room. Never become defensive-sometimes the truth may hurt, but wouldn’t you rather hear it before you make a big investment?

5. Be brief but complete with your background, skills & expectations of counseling.

6. Learn to tell your story, clearly and to the point. Be sure to include any important information, i.e.: “the lease expires in two months, or I have two other partners!”

7. Be sure to clearly state your goals and what you would like the counseling session to help you with.

8. Know your mentors background or ask them for a brief resume review. This then provides a solid understanding of their opinions and knowledge.

9. Keep in mind your mentor is not a “Mind Reader”. They certainly can’t see the whole puzzle if you only give them some of the pieces and no picture.

10. Be prepared, have a list of questions that you want to ask. Be willing to accept other answers then what you expected or hoped for.

11. Be logical, do you really expect a bank to loan you money if you have poor credit, no assets or no business experience?

12. Be mindful of the time. Normally counseling sessions are for a period of time. If you waste time in your story, meaningless questions or small talk you will not have enough time to discuss your challenges.

13. Be willing to listen, the only time counseling becomes effective is when you are receiving input.

14. Take notes during your counseling session.

15. Be sure that you summarize what you have learned and clarify what the next step is.

Too many times in a counseling session the client, not hearing what they anticipated will try to defend their position. This is an effective way to force your mentor to offer no further options as it just creates arguments and tension. Over the years in business I asked for help 100’s of times. I learned to listen to the information and ask logical questions even if the answers did not agree with my beliefs or research. I then took all of the information I received and apply what made sense for me in my business situation.

It is critical to remember that a SCORE Counselor is doing this for FREE and they have absolutely nothing to gain by giving you certain information or seeing you multiple times. ‘For- Pay’ Mentors/Counselors and Life Coaches make their living by seeing clients, needless to say the more appointments they schedule the more fees they generate. So the smarter ‘For- Pay’ counselors give you just enough information to get you to return for your next paying appointment.

Your hour session with a SCORE Counselor could easily be an experience that you would pay $500+ per hour in the private sector. So be sure to get the most out of it.

Avoid Marketing Blunders When Starting Your Business

imageThis article was written by John Rau, SCORE Orange County Business Mentor

In developing your marketing strategy as part of your business plan, you need to be careful to avoid marketing blunders and related mistakes. These could occur in how you market yourself and your business as well as how you choose to name and advertise your products or services.

The potential for marketing blunders occurs very early in the start-up process. For example, one of your first steps would be to file a Doing Business As (DBA) or Fictitious Business Name Statement with the county in which you plan to operate. One reason for doing this is to avoid duplication of business names in the county. If you intend to incorporate your business, then the State Commissioner of Corporations may not allow you to use the same name as some other company already registered with the state. Your business name, product name(s) and related identifiers or logos may already be restricted for use by Trademark, Service Mark or even copyright constraints. You will need to check this with the U.S. Patent and Trademark Office as well as with the U.S. Copyright Office for any federal such restrictions. Checking with the state equivalent agencies will enable you to ascertain whether or not there are any state-level restrictions on the use of names or business identifiers you have selected. The “blunder” you are trying to avoid here is to be successful and make lots of money only to find out you have been selling a product with a name owned by someone else. They could easily sue you and demand some or all of the profits. Worse yet, if your product infringes on someone’s patent, you’ve got a real legal problem. These are all types of blunders that you can generally avoid early in the start-up process through working with your business attorney.

When coming up with creative ways to promote your business, you need to carefully think through your plans to avoid marketing blunders that might do more harm than good. A quick search of the Internet will reveal multiple articles regarding marketing no-no’s. A “non-attributable” summary of the “best-of-the-best” such examples by mistake category is as follows:

  • Market focus
    • Marketing to an audience that is too broad, that is, trying to sell your products and services to everyone and their brother, rather than directing your marketing message to a targeted audience. You have to clearly define your target market and narrow the groups of people your marketing is trying to reach.
  • Marketing budget
    • Your ad budget gets blown in a one-shot marketing gamble. If the first try doesn’t work (and often it doesn’t), there is no money left for a second or third try. Business owners who spend their entire marketing budget on a launch, set themselves up to fail in the long run.
    • Cutting marketing when the economy is bad. Marketing keeps you visible when the market is slow and helps generate leads, builds credibility and ensures that your prospects know that you are alive and well. Reduced spending and ensuring your marketing dollar is spent wisely is important, but cutting marketing is the biggest mistake small businesses can make in tough economic times.
  • Marketing message
    • Your approach to advertising is not consistent. You get consistent, long-term results by continuing your ad(s) over weeks and months.
    • Your marketing fails to tie different media together. Make your ads in different media all relate to each other. Don’t present mixed and confusing messages.
    • Your marketing gets lost in the crowd because of multiple marketing messages across many media that people receive daily. Separate your ad from the pack by making it talk directly to something the prospect really cares about. It should point out a problem your product or service can solve.
    • Ads are too passive in the sense that they do not have any “calls to action”. If your sales letters, flyers, brochures and ads are producing no results, the reason might be that they’re boring, poorly laid out, or offer the prospect no solid reason to take action. Some sales letters and ads don’t even tell the prospect specifically what they should do to respond to the offer such as call for more information, visit, e-mail or whatever. Tell them what you would like them to do.
    • Not having a clear marketing message. Marketing messages that are contrived, confusing, too subtle or too long can easily miss your target market entirely. The most ingenious marketing plan is wasted if no one gets it.
  • Social media and web use
    • Not using social media and your web site to your advantage. Social media has become the “top dog” in the overall marketing arena. Having a dormant social page is certainly not going to portray success, nor will it magically create a positive turnaround for any struggling business. Don’t believe the hype that the Internet is somehow dead or dying. Use your web site to give visitors all the information they need to understand and buy your product or service.
    • Ignoring the “out of sight, out of mind” principle. You need to be visible and keep your name before the public. Make sure that your web site can be found on the search engines via Search Engine Optimization.
  • Who are you and what are you selling
    • Lack of branding and/or inconsistent branding. Branding is an essential part of marketing. Launching an advertising campaign before identity has been established gives the impression that you’re not sure about your product or service either. Incorporate your logo, trademarks, service marks and any other identifiers on all of your literature so people will recognize who you are.
    • Marketing without a unique selling proposition. This is the one single statement that will single you out from amongst the competition. If you don’t offer customers and prospects one or more distinctive reasons to choose your company over the competition, you can be sure they won’t feel compelled to try your products and services.
  • Measuring results
    • Failure to measure which marketing campaigns actually benefit your business. You should establish metrics to enable you to assess what works, how well and what doesn’t.
  • Right team structure
    • Acting like a marketing expert when you’re not. Hire experts to help you do the marketing and promotion of your business thus enabling you to focus on what you do best, namely, running the business.
    • Not surrounding yourself with the right people. Don’t necessarily rely on friends and family unless they have a track record of successful business experience. Add experts and specialists to your team who have the proper success credentials.
  • Market research and testing
    • Lack of research and testing of your planned marketing efforts before implementing them. Conduct some “trial runs” with selected customers or focus groups to get their reactions before launching your marketing campaign.
  • Customer relationships
    • Failing to capture repeat customers. Don’t ignore your existing customer base at the expense of trying to capture new customers. Too often marketing campaigns focus heavily on attracting new customers and not building relationships with current ones. Remember that repeat customers can drum up new business for you.
    • Lack of focus on potential customer needs. You need to make sure that you really know what your potential customers need and want.
    • Giving up on your prospects after just one or two follow-ups. Effective marketers know that persistence and repetition are vital for success. By following up repeatedly, you will have a better chance of getting the sale if you are uppermost in their minds. You can only do that by consistently following up.
  • Market planning and strategy
    • Winging it—not doing proper planning. Set realistic goals for your business, assess how you will accomplish those goals, and then launch a marketing plan specifically designed to reach them.
    • Changing your marketing strategy too frequently. Just because you are tired of your marketing plan doesn’t mean it isn’t working. Too many businesses make changes because they think they have to. You should never stop using something that is still working. Try to use a slow, steady, gradual growth strategy because it takes time for marketing efforts to ramp up and gain traction.
    • Basing your marketing strategy on guesses, assumptions or advice from friends, relatives or business associates. The best way to develop a successful and profitable marketing strategy is to use the knowledge, experience and skills of those individuals who have already discovered the marketing approaches that do work as well as the approaches that don’t work. Add them to your team.
    • Starting too late. Time your marketing campaigns to coincide with new products, new services, seasonal sales or an upcoming event that will attract business. Seasonal marketing efforts should start well in advance of any holiday. If you wait too long, your competition may have already “beat you to the punch”.
    • Not focusing your activities. The value of developing a plan is to set the direction of your marketing activities so you can focus your efforts. Once you decide on your strategy, you need to stay focused on executing that strategy.
  • Competitive landscape
    • Ignoring what your competitors are doing and what they seem to be successful at. When a business owner loses market share to a competitor, there is a very specific reason why this is happening. There are only two logical answers, namely: either the competitor is doing something right or you are doing something wrong which your competition is capitalizing on. Always keep abreast of what your competitors are doing.
  • Company image
    • Focusing your marketing message on what a magnificent company you have, how many awards you have won and how you have grown over the last few years. This should be supportive information, not your primary marketing message. Your customers don’t care who you are or how great your company is. They only want to know how working with you is going to fulfill a need or a desire. The reality of the situation is that customers are really only interested in one thing, namely, “How is this product or service that you are offering is going to make their life better?” or “What’s in it for me?”

To put things in perspective, Martin Zwilling in his September 28, 2011 article in Entrepreneurs puts the above discussion in the proper context as follows. “The reality is that making mistakes is part of every successful growth effort. The one unforgivable mistake you should never make is to repeat a previous mistake. In the end, ask yourself this question: Is it better to try and fail, or never have tried at all? To grow in the business world, never trying is not an option.”

Building Bridges or Burning Them?

By John C. Maxwell, from his blog, February 3, 2013, reprinted by permission

I’ve been fascinated by bridges ever since I was a kid. I vividly remember a trip to Vermont one autumn with my parents. The orange and red leaves were spectacular, but what I remember most were the bridges. Vermont is a state full of beautiful wooden covered bridges.

I’m captivated by the bridges in Shanghai, too. They’re the opposite of Vermont’s—sleek suspension bridges that arch and loop and stretch to the sky. Each one is a work of art.

My last trip there got me to thinking about the bridges we have in our lives—the things connecting us to other people, our past and our future. I think, now that I’m in my 60s, I finally have a handle on which ones we need to burn, which to cross and which to build.

Burnin’ Love

Author and consultant Harvey Mackay says, “He who burns bridges better be a darn good swimmer.” I think that’s true—if you’re burning bridges to people. Those are not the kinds of bridges you want to destroy. Instead, incinerate the bridges that keep you stuck to past failures, self-doubt and the wrongs that have been done to you.

Let’s start with those “wrongs”—hurtful words, stabs in the back, your own lingering grudges. Stooping to other people’s pettiness only makes those sores bigger. The low road, moreover, is bad for the soul.

Forget the wrongs and the hurts. (It’s easy for me—I’m getting older and I forget stuff all the time). I like how writer and artist Elbert Hubbard puts it: “Successful people forget. They know the past is irrevocable.... Magnanimous people forget. They’re too big to let little things disturb them.” So get out your matchbook and burn, baby, burn.

Next you’ve got to stop hanging on to the useless feeling that life’s not fair. It’s not. Some people are bestowed the right gifts, the right talents, the right parents. Others aren’t. Some days we’re the pigeon and others we’re the statue. Grab your matchbook again.

A third bridge now stands between you and success. Examine your life and determine what is keeping you from reaching your potential. Now torch what I call those “growth inhibitors.” Is your workplace toxic rather than uplifting? Do something to fix it or move on. Are you clinging to bad habits? You know, in order to go up, you need to grow up. Break out the kerosene and feed your inner pyro-maniac as you let go of all the ways you hold yourself down.

You need to be realistic, of course, and look only at the inhibitors you can do something about. I’ll never be a musician, for example, because I don’t have the necessary gifts. But I can do something about the environment in which I choose to live and work, the people I surround myself with, the way I deal with hardships, and the tradeoffs I make to reach my goals.

VIP Crossing

Many people get caught up in the treadmill of their working lives. They wake up, go to the office, toil over their assigned task, go home and repeat. They work hard but don’t feel like they’re actually getting anywhere. How do you turn that around? Look for experiences that you can use as bridges to personal growth, and cross them.

One of my early mentors told me if you want to be great, you need to visit great places and meet great people. I took it to heart. When I go to a city I’ve never visited, I learn about its history and go to places where significant events have occurred. I make time to visit places associated with leaders who inspire me. Just a few weeks ago I was at John F. Kennedy’s presidential library. When I go to such a place, I absorb every scrap of material that might help me grow as a leader.

In 2011 I took a trip to Robben Island in South Africa and visited the cell where Nelson Mandela was held prisoner. He spent 18 years there, grinding rocks in a quarry by day and returning to his solitary cell by night. Here’s what I learned: You cannot lock up greatness. Our surroundings need not control our spirits. People who devalue us do not determine our value. And out of our brokenness we can be made whole and bring healing to others. I gleaned all that from crossing one bridge to see a place of inspiration and study one of my greatest role models.

People matter. “In everyone’s life, at some time, our inner fire goes out,” physician and humanitarian Albert Schweitzer once said. “It is then burst into flame by an encounter with another human being. We should be thankful for those people who rekindle the inner spirit.”

Find those people who light a fire under you and cross bridges to greet them. Who rekindles your spirit? Where do you find daily instruction? If you want your life to improve, you need to cross the bridge to personal growth every day.

Build to Last

If you have any success at all in your life, then there is a bridge you need to build—for those who follow.

I once had the opportunity to spend a few days with management expert Peter Drucker. He said that the No. 1 problem facing good leaders is their lack of a succession plan. Leaders don’t often enough raise up other good leaders and prepare a way for them.

Retired Supreme Court Justice Sandra Day O’Connor once said, “Our nation needs bridges, and bridges are built by those who look to the future and dedicate themselves to helping others. I don’t know what the future holds, but I know who holds the future: It is you.”

Your talent, skills, opportunities and experience have uniquely qualified you to do something in this world. Whatever that something is, you need to pass it on. You may do that with a single person or with thousands. The number is largely out of your control. What is in your control is whether you do it.

So if you haven’t already, start with one. I guarantee you, you’ll never regret it.

3 Ways to Determine Your Own Salary

By John D. Roth, September 18, 2013, reprinted by permission

Jason Bussanich runs Westlake Chiropractic in Lake Oswego, Ore. His wife, Kyra, owns Crave Bake Shop, a popular gluten-free bakery. They work hard, and their businesses do well, but you wouldn't know it from their meager paychecks.

"For the first two years I ran the business, I didn't take a dime," Kyra says. "Even now I take just enough to pay my household bills." Her accountant says she could pay herself more, but Kyra would rather reinvest in her business.

Jason faces similar issues. "I feel guilty if I don't put money back into the business," he says. "I'm in my second year now, and I've been paying myself less than my employees so I could afford a recent remodel and new equipment."

By the Numbers

• Base your monthly salary on the lowest monthly earnings from the previous 12 months, not the highest.
• The National Federation of Independent Business says that, as a general rule, owners of profitable small businesses don't take more than 50 percent of profits for themselves.
• Start an emergency fund. "Try to keep a minimum of one month of expenses in the business, just in case," says entrepreneur Jason Bussanich. "It keeps stress down. I usually won't pay myself if it means dipping into that one-month buffer."

If you're in the trenches of running your own business, this couple's predicament likely comes as no surprise. But here's the thing: Like them, you probably didn't launch a business to make less money than you did at your last job. The whole point is to follow your entrepreneurial dream to a better life, right?

I'm here to tell you that it's all right to think about funding that better life sooner rather than later. While there is no one correct answer as to how to pull this off, there are ways to put money in your pocket and grow your business. Consider these methods:

Pay yourself what you're worth

Make use of online resources such as or to discover what others in your position and geographic region typically earn. Some business owners find that this method motivates them to succeed.

"I set a salary for myself," says Amanda K. Larrinaga, a serial entrepreneur based in Denver. "If I can't cover everything, I hold off on my salary but mark it as a debt the business owes. It's amazing how quickly I've adjusted [my costs] to be sure I get paid."

Make every month a bonus month

Many business owners pay themselves whatever's left at the end of the day. "I pay all of the business-related expenses each month, set aside funds for taxes, and then the rest is salary," says Debbie Dragon, co-owner of Valley View, Pa.-based Trifecta Online. "It's different every month because the earnings are different every month."

Pay yourself the absolute minimum

If your business is in growth mode (any new company's default), consider paying yourself just enough to cover your mortgage/rent, car and household expenses. The Bussaniches, for instance, draw enough income to put food on the table while funneling the rest of their earnings back into their companies. But be sure you're working toward a plan to pay yourself. If your business model doesn't include a line item for your salary that grows along with your company, it's not a realistic model.

Thursday, August 29, 2013

Mistakes to Avoid When Starting Your Business

imageThis article was written by John Rau, SCORE Orange County Business Mentor

According to bizcoach (see, common problems faced by business owners include:

  • Lack of knowledge about what is happening in the business
  • Failure to understand business numbers and how they relate to one another
  • Not enough money
  • Not enough customers
  • Too much competition
  • Failure to look into the future and plan future decisions
  • Insufficient time
  • Rapidly changing technology
  • Lack of certain critical business skills
  • The mistaken belief that hard work will overcome all other deficiencies

The inability to successfully address these types of problems can increase your chances of business failure. This is important as statistics provided by the Small Business Administration (SBA) indicate that “two-thirds of new employer establishments survive at least two years, and 44 percent survive at least four years”. Other statistics suggest that 50% fail in the first year and up to 95% fail within 5 years. Clearly the odds are against you if you don’t do your homework and carefully plan the launch of your new business.

Susan Ward of Guide in her article entitled “8 Things Every Startup Needs to know, How to Make Your Startup a More Successful Experience” (see points out what everyone contemplating their own business startup should know, namely:

  • The playing field is never level
    • Owners of competing businesses may have more contacts in your industry, they may have access to more capital (deeper pockets), and they may even have a stronger support network of family, friends and investors.
  • People will not be keen to give you money
    • Particular types of startups are considered to be bigger risks than others. Banks and other traditional financial institutions are notoriously reluctant to loan money to retail or service startups.
  • It may make sense to keep your day job, if you have one and can keep it, until you are confident that your startup business will survive
    • Don’t expect to make money right away. In some cases, you won’t make enough from your new business to pay your personal monthly bills for an entire year-and it could be even longer! Keeping money coming in while getting your startup off the ground may be the best short-term plan.
  • Plan first, do second
    • A seat of the pants approach is a terrible way to start a business. There are a lot of things that need to be done for you to successfully launch a new business, and just haphazardly deciding to do this is a great recipe for disaster. Create a startup plan and follow it meticulously.
  • No matter how hard you try, you will never have all the expertise that you need
    • Initially you need to form a team consisting of at least a bookkeeper, an accountant, an attorney, probably an office manager, perhaps a social media manager, and other specialist types to help get your business going. You can expand the team as your business grows and the need arises.
  • A good idea is not enough
    • It’s not the idea, but how the idea is developed and marketed that makes the money.
  • Every small business owner has to be a marketer/salesperson
    • You have to pay attention to marketing and sales, especially in the startup phase. You must become the “spokesperson” for your business.
  • You should set it up right from the start
    • Set it up right includes such activities as getting the proper business structure, necessary insurance, meeting legal requirements (business license, government permits, etc.), bookkeeping and payroll services established.

In the context of Susan Ward’s good advice above, it’s easy to make mistakes such as pointed out by Mike Michalowicz in his article entitled “The 10 Biggest Mistakes Made by Small Business Owners” (see He lists the following:

  • Trying to do it all
    • The greatest mistake entrepreneurs make is to believe that they can do it all by themselves. Surround yourself with people who are strong where your talents are weakest.
  • Not being forthright
    • If your business tries to cover up a mistake, it is just a matter of time before word leaks out. Be the one to break your own bad news and you will be perceived as honest and trustworthy.
  • Having no clear marketing strategy
    • You never know where, when, or how a new prospect is going to hear of your business. If you have a mix of messages out there, the prospects will have an unclear expectation of what your business can offer. Your company must present a consistent, clear message on all fronts.
  • Cutting prices
    • Cheaper prices don’t necessarily mean more customers. Most customers are willing to buy more expensive items because of the greater quality or the added convenience.
  • Having no “rallying point”
    • Clarify the purpose of your company, beyond just making money, and you will set the stage for attracting like-minded employees.
  • Setting unrealistic financial goals
    • Set specific, measurable, accountable, realistic and time specific goals to ensure continual progress.
  • Being all business, all the time
    • Don’t put your personal life on hold to focus exclusively on your business. Balance your personal and business life and you will actually do better in both.
  • Being a weak leader
    • The success of your company is contingent on you being a strong, effective leader. Don’t try to be everyone’s buddy. Set the course for the company, communicate it constantly and inspire your team to get to the next level.
  • Assuming you have no competition
    • Even if you have the latest, greatest, never-been-done-before approach to something, don’t assume that you have no competition. Competition is more than just the direct, obvious competitors. Competition is also all the available alternatives.
  • Trying to get rich quick
    • If you go in expecting to be rich overnight, you may become discouraged early on and give up your dream prematurely. Success takes time, perseverance, and a little bit of luck. Give your business time to grow.

Try to avoid the above-listed types of mistakes and pay attention to what Susan Ward said above in terms of what you need to know. Her final word of advice is “Startup to succeed, not to fail”.