Wednesday, October 7, 2015

Have You Ever Wondered What the Experts Have to Say About How to Be Successful in Starting a New Business? Well Here It Is:

clip_image002[1]This article was written by John Rau, SCORE Orange County Business Mentor

As you start down the path of entrepreneurship to start your new business, you should heed the advice of those that “have been there and done that” successfully. Good examples of such individuals are Richard Branson (founder of Virgin Group, which consists of more than 400 companies around the world, and author of six books) and Mark Cuban (co-founder of the Denver-based independent cable network HDNet , owner of the Dallas Mavericks basketball team and perhaps better known as a regular on ABC’s reality series “Shark Tank”).

Entrepreneur magazine through its web site (www.entrepreneur.com) conducted interviews with these individuals and here is what they had to say:

Richard Branson says in his interview “Five Secrets to Business Success” (see: http://www.entrepreneur.com/article/217284 )

  • If you don’t enjoy it, don’t do it. You need to enjoy what you are doing because starting a business is a huge amount of work, requiring a great deal of time.
  • You need to be innovative and create something different that will stand out. You’ve got to do something radically different to make a mark today.
  • Businesses generally consist of a group of people, your employees, and they are your biggest assets. Happy employees make for happy customers.
  • To be a good leader, you need to be a good listener. Get feedback from your staff and customers on a regular basis.
  • You need to be visible. Market the company and its offers by putting yourself or a senior person in front of the cameras.

Mark Cuban says in his interview “Mark Cuban’s 12 Rules for Startups” (see: http://www.entrepreneur.com/article/222524):

  • Don’t start a company unless it’s an obsession and something you love.
  • If you have an exit strategy, it should not be an obsession.
  • Hire people who you think will love working there.
  • Sales cure all. Know how your company will make money and how you will actually make sales.
  • Know your core competencies and focus on being great at them.
  • You don’t need an expresso machine and other in office employee perks.
  • Consider having no offices as open offices keep everyone in tune with what is going on and also keep the energy up. There is nothing private in a startup!
  • As far as technology, go with what you know as that is always the most inexpensive way.
  • Keep the organization flat. If you have managers reporting to managers, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.
  • Never buy “swag”, that is, no logo-embroidered polo shirts or similar types of items for your customers when you are in the startup mode. Your money is better spent elsewhere.
  • Never hire a Public Relations (PR) firm as you don’t need someone to sell you. Sell yourself directly to your potential customers. You don’t need an intermediary to do that.
  • Make the job fun for your employees. Keep a pulse on the stress levels and accomplishments of your people and reward them.

Other good advice from Entrepreneur magazine as provided by billionaire investors (see: http://www.entrepreneur.com/article/238174) is as follows:

  • Persist—don’t take no for an answer. If you’re happy to sit at your desk and not take any risk, you’ll be sitting at your desk for the next 20 years.” (Source: David Rubenstein—Net worth $3.1B. Co-founder of the Carlyle Group and investor in Dunkin’ Donuts, Oriental Trading Company, and Beats by Dre.)
  • There must be high risk—in fact, very high risk. It’s the key to success. If there is no risk, you have already missed the boat. Your competitors will already be there.” (Source: Tom Perkins—Net worth $8B. Founder of Sequoia Capital and investor behind AOL, Amazon.com, Google, Verisign, WebMD and Zynga: )
  • Live the present intensely and fully. Do not let the past be a burden and let the future be an incentive. Each person forges his or her own destiny.” (Source: Carlos Slim—Net worth $81.6B. Serial entrepreneur and investor in TracFone, New York Times and Philip Morris.)
  • The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.” (Source: T. Boone Pickens—Net worth $1.4B. Founder of BP Capital Management and investor in Exxon, Halliburton and Valero.)
  • Without passion, you don’t have energy. Without energy, you have nothing.” (Source: Warren Buffet--Net worth $67B. Founder of Berkshire Hathaway and investor in American Express, Direct TV, Coca-Cola, IBM and Wells Fargo.)
  • Since one fails often, address markets that make it worthwhile when one does succeed.” (Source: Vinod Khosla—Net worth $1.5B. Co-founder of Sun Microsystems and investor in Quantus, iLike and eASIC.)
  • There’s nothing more invigorating than being deeply involved with a small company and a young team of founders out to do something incredibly special.” (Source: Michael Moritz—Net worth $3B. Chairman of Sequoia Capital and investor in Google, PayPal, Yahoo and LinkedIN)

What great advice and words of wisdom from those that “have been there and done that”! Richard Branson in his article probably summarizes it best when he says: “When you’re building a business from scratch, the key word for many years is “survival”. It’s tough to survive. In the beginning you haven’t got the time or energy to worry about saving the world. You’ve just got to fight to make sure you can look after your bank manager and be able to pay the bills. Literally, your full concentration has to be on surviving.”

These 5 Things Are Ruining Your Life ... and you didn’t even know it. Here’s how to deal with some of life’s biggest troublemakers.

This article was written by Dann Albright, Success Magazine, August 14, 2015 Reprinted by Permission

You might think that you have your life pretty well figured out. You do the things that need to get done in a reasonable amount of time, you take care of your responsibilities, and you’re generally pretty happy. All’s good, right? Not so fast. There are a lot of things that have a big negative impact on your life—things you didn’t even realize were dragging you down. Here are five of those problems (and what you can do about them):

1. Excessive Email. A recent study found that just knowing you have an unread email in your inbox can make it more difficult to concentrate on the task at hand. So if you’re like most people, you have a constant stream of messages hitting your inbox—and that means you’re going to be distracted on a regular basis. The first step in keeping email from taking over your life is to stop checking it every 30 seconds. Close Gmail or Outlook while you’re working on other things, turn off email push notifications on your phone, declare an email curfew of 7 p.m. Literally turn off the distraction. Don’t let email steal your attention from what matters most.

2. The Productivity Culture. The Internet is chock full of helpful productivity sites, blogs and tips. But with our interest in maximizing efficiency, we’ve started to lose sight of an important fact: Not every moment of the day needs to be maximally productive. There is a time for productivity, but letting your brain rest is just as important. According to Skift, almost 42 percent of Americans didn’t take any vacation days in 2014, which clearly shows that people aren’t giving themselves enough time away from work. Not only do you need evenings and weekends to let your brain recharge, but you also need extra days throughout the year. Work burnout is real, and it’s unpleasant—so make time to recharge.

3. Too Much Focus on Focus. Similar to productivity, people now place a premium on staying focused. Fighting distractions is a good thing, but as with productivity, there’s a time and a place for singular focus. What many people don’t realize is that our brain does some of its best work when we allow our minds to wander. When you’re not focused on anything specific, your brain does a lot of unconscious processing, and that processing often connects different areas of the brain, helping you come up with creative ideas and innovative solutions to problems. This is one of the reasons people come up with great ideas while they’re in the shower or mowing the lawn. And it is especially true if you have multiple hobbies and encourage your brain to think in different ways on a regular basis. So it’s OK to let your thoughts drift, and you should try to get lost in something mindless—wandering can do wonders.

4. Lack of Purpose. Being productive or being focused for its own sake isn’t a useful activity. Not having a goal that to work toward makes it difficult to direct your efforts, measure progress and motivate yourself to keep going. Don’t know what your “purpose” is? Set short- and long-term professional and personal goals, like meeting a deadline, getting a promotion, paying off debt, improving your fitness or picking up a new hobby. Write your goals down—and be specific. Then review them regularly, and you’ll be more motivated on tough days.

5. Disorganization. How much time do you spend looking for things you’ve lost? Paperwork, receipts, emails, files, web addresses, clothes…. What if you could get all of that time back? Think of the things you could accomplish. Putting systems in place can make a huge difference in your daily life. Is messy your middle name? Try buying the necessary organizational tools, like a day planner, a filing cabinet and folders to fill it with, and a desk inbox/outbox. It may take a long time to get everything organized and under control, but it’ll save you a lot of mental energy in the future. So, now that you’re in the know, you can start making small changes to be more successful both at work and at home. All’s (almost) good. The direction of our lives is determined by the choices we make every day.

7 Do’s and Don’ts for Entrepreneurial Success

This article was written by Doreen Hardy, From her Blog, June 25, 2015, reprinted by permission

1. DON’T want what you don’t want. It’s easy to fall under the spell of someone else’s dream or be seduced by the scorekeeping of other people’s goals. Don’t. Follow your own path—not the Joneses’. Don’t let fear, envy or social pressure cloud your vision.

2. DON’T miss the point. Bigger is only better if it makes the smile on your face wider and brighter, and fills the journey with joy. Live today as you want to be remembered in the end.

3. DO the right thing. When faced with the choices that are the hardest to make—when your dreams, ambition and drive are begging you to do one thing while your conscience is telling you to do another—remember that the only way you’ll have an enduring smile is if you uphold your values.

4. DO trust your gut. Don’t wait until you’re 80 and filled with regret. Be the person you “could have been” now.

5. DO keep your resolve. Many entrepreneurs fail not because of their idea, their skill or the market, but because they give up when the summit is within reach.

6. DON’T forget why. Business will change you. Don’t forget who you are right now. Don’t forget who you were the day you decided to ride the entrepreneur roller coaster.

7. DO seek your greatness. You have been given incredible gifts. You are capable of awe-inspiring achievement and significant contribution to the people and world around you. You have a responsibility to use the potential you’ve been given, to apply it and grow it.

The 4 Finance-Related Areas Where Businesses Need the Most Help

This article was written by Joe Worth, in Entrepreneur Magazine, August 2015, reprinted by permission

Q: What are the first repairs you make when hired as CFO?

A: Despite every business owner’s belief that no one can operate their company quite like they do, the issues I first tackle with each new job have been remarkably similar, no matter the company’s size or industry. When I break out my financial toolbox, it’s usually to address any or all of the following.

1. Financial statements

I start with a look at the company’s financial statements, checking for inconsistencies or variances that pop off the page, as well as what’s missing, such as a statement of cash flows. To back up this review, I employ a third-party analysis package to give me all of the statement’s financial ratios and provide me with a comparison of those ratios over time as well as to the ratios of other firms of the same industry, size and geographic region.

Once I’ve identified holes in the statements, I talk with the staff to get a feel for the financial reporting processes and learn who does what, when and how (e.g., who sees the statements and how errors are handled). From there I can figure out what the company needs to do in terms of staffing, training, processes and systems to make the statements more timely, accurate and, ultimately, more useful.

2. Accounts receivable

This area invariably needs attention and provides the quickest opportunity to improve a company’s cash position. First, I run reports of the company’s receivables grouped by customer (largest to smallest), date (oldest to newest) and amount (largest to smallest). The customers at the top of these reports are my priorities. Then I work to collect these high-priority items while weeding out and writing off the junk receivables that will never be reasonably collected.

Going through this process often highlights issues with a company’s AR system that I can quickly correct. More often than not, billing—not collections—is the major issue: Invoices aren’t sent immediately, are going to the wrong people or are filled with errors. At one $25 million company I joined as CFO, we made straightforward changes that led to collecting $750,000 in six months—extra cash that allowed us to completely pay down our bank line of credit.

3. Reporting

As CFO, I’m all about the numbers, so I work with the owner/CEO and C-level executives to find out what makes the company tick and how to measure it. Sometimes the answer is simple, such as billings. But other times it may be units produced or quality measures. In those cases we boil everything down to a few key performance indicators, build a system to collect that data and a dashboard on our accounting software to track it. This way, whenever I’m asked, “How are we doing?” I have a precise answer. 

4. Cash forecasting

Nothing harms a business and stresses owners more than cash-flow surprises. To avoid them, I quickly institute a formal cash-forecasting system. If cash flow is tight, I’ll build a rolling 13-week forecast that I update weekly. If the cash position is stronger, I might back off to monthly forecasting.

As time goes by, I’ll review the previous forecast with the next, determining why we were short or ahead on any given week. After a few weeks at this, the forecasts become remarkably accurate, which results in more confidence throughout the business.

Case in point: Early in my career, I joined a company that couldn’t forecast its cash position a week out within $1 million. Six months later, our forecasting system got that uncertainty down to less than $50,000.

Friday, June 26, 2015

Current Trends in Business Sales

This article was written by Peter Siegel MBA- Founder And Administrator of BizBen.com, reprinted by permission

The total of 5,120 small and mid-sized California businesses sold so far this year is the highest number of completed transactions through the first four months of any of the past seven years. The information, posted by the BizBen Index, also notes that last month's count of 1,193 transactions represents the most April business sales in the state since 2010.


Two key factors responsible for the strong improvement in California's business for sales marketplace include improved availability of business purchase money loans and a growing sense of optimism among buyers and sellers, as the economy continues to improve. Californians are more willing to go ahead with plans involving business transfers when they notice lower unemployment and a boost in the profits and value of the state's large corporations and technology companies.


A third reason for the improved rate of business sales can be attributed to increasing use of creative business sales strategies as buyers and sellers learn about ways to overcome obstacles that might have prevented them from completing their deals over the past few years. Among those smart strategies are transactions incorporating earn-out provisions, alternative methods of financing, such as buyers assuming some of the seller's obligations to vendors, and inventory consignment plans allowing the buyer to delay payment to the seller for inventory items until they are sold. Some of these and other innovative strategies are reviewed on BizBuyFinancing (business purchase financing assistance) http://www.bizbuyfinancing.com


Large County Sales Growth
Some of the largest Southern California counties posted higher business sales totals last month compared to April of 2014. The count of 300 transactions involving Los Angeles County businesses represents a 12.36% increase compared to the 267 sales completed in April of last year. Orange County's sales total was 132 last month, a gain of nearly 6.5% over the 124 transactions posted the previous April. The sum of 78 completed transactions posted in San Diego County last April increased by about one-third to 103 sales last month. The April-to-April sales total nearly doubled in San Bernardino County to 59 deals from 29 in April 2014.


Among the largest Northern California counties posting strong sales increases last month are Santa Clara County with a total of 66 deals last month vs. 56 sales in April of last year, and San Francisco County posting 52 sales in April 2015 compared to 36 the previous April.


The total California business April sales stats by county recorded last month, available at http://www.bizben.com/stats/stats-monthly-apr.php are: 


Alameda: 44, Butte: 12, Contra Costa: 29, El Dorado: 4, Fresno: 31, Imperial: 13, Kern: 13, Lassen: 1, Los Angeles: 300, Marin: 9, Merced: 3, Monterey: 15, Napa: 4, Nevada: 1, Orange: 132, Placer: 16, Plumas: 1, Riverside: 48, Sacramento: 26, San Bernardino: 59, San Diego: 103, San Francisco: 52, San Joaquin: 22, San Luis Obispo: 21, San Mateo: 21, Santa Barbara: 19, Santa Clara: 66, Santa Cruz: 10, Shasta: 10, Solano: 3, Sonoma: 34, Stanislaus: 12, Sutter: 7, Tehama: 1, Tulare: 22, Tuolumne: 1, Ventura: 20, Yolo: 8


Sales totals posted by California county over the last nine years are available at: http://www.bizben.com/stats/stats-total.php


The BizBen Index has been collecting and reporting information about small California business sales for 17 years to help business owners/sellers, buyers and the professionals participating in this market make informed choices and achieve success.

The California Paid Sick Leave – A Brief Reminder

image This article was written by Robin Noah, SCORE Orange County Business Mentor

If you do not have everything in place for processing the new Paid family Leave Act here is a reminder. July is just around the corner.

Most California businesses are aware of the new law for businesses with operations in California passed Sept. 10, 2014. At that time Gov. Jerry Brown announced that California employers will now be required to give part-time and full-time workers at least three days of paid sick leave per year, starting in July 2015.This leave is not to be confused with the Paid Family Leave act.(See note at end of article)

As the July 1 deadline approaches employers need to be prepared for meeting the obligation of the benefits under the new mandatory paid sick leave law tilted The Healthy Workplaces, Healthy Families Act of 2014.

Employers need to be prepared for administering the new law. They are:

· Required to post a paid sick leave poster that advises all employees of sick leave rights and is in a conspicuous location. Willful failure to post can result in a penalty of one hundred dollars ($100) for each offense.

· Provide written notice of the paid sick leave to all new hires from January 15, 2015 and existing employees covering the basic points of the law.

· Understand that an employee may accrue and use paid sick leave and may not be terminated or retaliated against for using or requesting the use of paid sick leave and has the right to file a complaint against an employer who retaliates.

Payday Notices have to be updated with each payday notice presented providing the amount of paid sick leave available to the employee. If you use a payroll service make sure they are ready and understand the issues regarding paycheck stubs.

There is a lot more information available in the internet. One resource is the Q and A athttp://www.dir.ca.gov/DLSE/Paid_Sick_Leave.htm

If there is an existing paid sick leave policy in place and it is modified prior to the July 1 operative date, to comply with the new paid sick leave law, an employee notice regarding the change must be provided within seven days of the effective date of the policy change.

Any separately written documents to be presented with the payment of wages should be consulted with a labor law attorney, including any policy documents.

Recordkeeping: Retention of records that document Paid sick leave activity is required for at least three years including:

     1.   Number of hours that the employee worked

     2.   Paid sick days accrued by an employee

  1. Paid sick days used by an employee.

Failure to maintain adequate records establishes a presumption that the employee is entitled to the maximum number of hours accruable – unless the employer can show otherwise by clear and convincing evidence.

NOTE: California's Paid Family Leave (PFL) insurance program, which is also known as the Family Temporary Disability Insurance (FTDI) program, is a law enacted in 2002 that extends unemployment disability compensation to cover individuals who take time off work to care for a seriously ill family member or bond with a new minor child. Benefits equal approximately 55% of earnings and have a maximum per week.

The Paid Family Leave program is administered by the State Disability Insurance (SDI) program of the Employment Development Department. Benefits commenced on July 1, 2004.

Editor’s Note:

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Choose one of our many E-Mentors with the expertise and experience you need, click, email your request, expect an answer within 48 hours. That's all there is to it!

Buying Into The Senior Care Industry: Opportunities Worth Looking Into

This article was written by Peter Siegel MBA- Founder And Administrator of BizBen.com, reprinted by permission

     

It's no secret that Baby Boomers are changing our economy in many ways and predictions about how our aging population will impact the future keep rolling in.  From a small business perspective, the aging population in the U.S. presents a tremendous business opportunity for an Entrepreneur looking to get in to the senior care business.


Now as I've said in previous posts, this business and industry is not for everyone. While the numbers typically look good and this industry is thought to be recession proof, the truth is in order to be an owner-operator in a senior care business you need to be passionate about the service you provide.  So before you even consider what opportunities are available, think about what your role will be in the business and if it means working in a hands-on capacity you need to be honest with yourself as to whether or not this type of work is for you.  If you get past that, here are some opportunities that you can pursue to buy into the senior care industry.


Pharmacies

Buying a pharmacy is probably something most don't consider an opportunity in the senior care industry but it actually is. As more and more seniors are given prescriptions to stay healthy, the need for pharmacies remains steady. While big chains and grocery stores do hold a big portion of the market share, statistics show that independent pharmacies still comprise the largest segment of the retail pharmacy market.


Is this opportunity right for you?  If you are already working as a Pharmacist or in school to become one, it could be a great time to consider buying a pharmacy for sale.


Senior Helpers Franchise


In most every industry you can find a franchise opportunity and the senior care business is no different.  The Senior Helpers franchise is another way to get into this industry with the support of a franchise system behind you.  Senior Helpers provides in-home senior care which allows their clients to stay in the comfort of their homes but assists their family or caregiver in managing the day to day demands of an elderly relative.

The initial investment for a Senior Helpers franchise ranges from $80,000 to $104,000 and they require an ongoing royalty of 5% of your gross sales.  In order to qualify for a franchise you must have a net worth of $450,000 and $100,000 in liquid assets.  The business does not require a large office space and can easily operate in facility that is 800 to 1,000 square feet.


Is this opportunity right for you? If you meet the minimum financial requirements, this could be a great opportunity for just about any Entrepreneur.  While some of their successful franchisees come from a nursing or medical background, there are others that come from more of a business background.


Residential Facilities


Buying a residential facility is one of the most common things people think of when they are considering the senior care industry.  Residential facilities can be very profitable but that comes at a cost as this is a business that runs 24 hours a day, 7 days a week and it does not break for holidays.  You have to be prepared for that type of time commitment and understand the staffing demands of an operation such as this.


Is this opportunity right for you?  In my experience, people that are most successful in running a business like this have some sort of medical background.  It doesn't necessarily need to be in providing hands-on medical care but it is certainly helpful. As the owner you'll be responsible for making sure that the proper care is being delivered to your residents. 

 
In-Home Care Services


Much like the Senior Helpers franchise, there is also the option to provide in-home care services on an independent basis. In-home care can range from everything including actual medical care to helping with errands, laundry and other household chores.  There are also some in-home care services that just provide companionship.  The nice thing about an independent business like this is that it could most likely be a home-based business that doesn't require office space or a lot of overhead.


Is this opportunity right for you?  If you plan to be an owner-operator you must have a desire to work with the elderly.  If you don't truly care about their health and well-being you won't be successful in this business.


Hospice Services


Many people don't even realize that for profit hospice businesses exist but they in fact do.  A Hospice business typically provides end of life care to patients who are terminally ill and opted not pursue further treatment.  Hospice services are brought in to make the patient comfortable and assist family with their care throughout their last days.


Is this opportunity right for you?  I'll admit this is a tough business to be in.  While research shows that it is in demand and that the need for these services will only increase, you have to be very compassionate and be comfortable with being around clients who are going through a very stressful time.

Wednesday, April 8, 2015

If You’re Looking for a New Product or Service Start-up Idea, Give Some Thought to the Needs of Senior Citizens. Here’s Why.

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

To see why this is the case, one needs to start with an examination and evaluation of the latest Census data/information. In this regard, the latest information regarding the population of individuals age 65 years and over in the United States can be found in the 2010 Census results at http://www.census.gov/2010census. One also needs to examine related demographic analysis reports such as: “An Aging Nation: The Older Population in United States”, Report No. P25-1140, issued May 2014, “The Older Population: 2010”, Report No. C2010BR-09, issued November 2011, as well as various press releases found at http://www.census.gov/newsroom/press-releases/2014. These reports are all available on the Internet. The trends are important here. In this case, selected examples and observations derived from a review of this information are as follows:

· Between 2000 and 2010, the population 65 years and over increased at a faster rate (15.1 percent) than the total U.S. population (9.7 percent).

· The nation’s 65 years and older population is projected to reach 83.7 million in the year 2050, almost double in size from the 2012 estimate of 43.1 million. The baby boomers are largely responsible for this increase in the older population, as they began turning 65 in 2011. By 2050, the surviving baby boomers will be over the age of 85.

· The U.S. is projected to age significantly over the period 2012 to 2060, with 20 percent of its population age 65 and over by 2030 versus 13 percent in 2010.

· By 2032, Americans over age 65 will out-number those under age 15, which means that elders will be short on caregivers—not to mention that they will make up a large amount of the population marketplace.

In the December 2014 issue of the AARP Bulletin, there is an interesting article by Jo Ann Jenkins, CEO in which she states that “Next month (January 2015) Gen Xers ( those individuals born between 1965 and 1984) begin turning 50. Ten thousand people a day are turning 65 and that will continue for the next 16 years”.

The above-cited demographic results suggest that there are most likely many opportunities for start-ups if they were to focus on the needs of the elderly—specifically, there is a significant “customer base” and it is expanding.

To illustrate my point, in the November 17, 2014 issue of Time Magazine is presented an interesting article entitled “Senior Startups-Innovators are targeting a new demographic” by Katy Steinmetz in which she states that “the over 65 crowd is an expanding demographic with plenty of problems for innovators to solve”. In her article, Ms. Steinmetz points out that nearly 90% of those over age 65 say that they want to remain at home as long as possible, and many companies are trying to make it easier, or more pleasant, for them to live on their own. Examples cited in the article include a social network that connects older people, a smart watch that includes features such as pill reminders, and a sensor-based monitoring system placed on pillboxes and the refrigerator that family members can remotely use to assess activities within the senior households. As she points out in her article, “one reason that tech companies have been slow to target older consumers’ needs is that entrepreneurs are often young and tend to solve problems they know first hand”. This further suggests that the needs of senior citizens could very well be an “under-served” start-up opportunity.

Other suggested needs of this “customer set” can be found in Maureen McFadden’s April 2, 2010 article entitled “New technology could help senior citizens maintain their independence longer “ (see: http://www.wndu.com) and are as follows:

· New technology to help them maintain their independence longer

· Anything that can help a person stay in their own familiar surroundings is well worth it

· Products to insure security and safety, including fall prevention

· Products to eliminate medication errors

To help start-up entrepreneurs and inventors with commercialization of ideas for meeting the needs of the senior population, Edison Nation Medical, a business component of Edison Nation that produces the “Everyday Edisons” TV series, is searching for innovative product ideas to improve the health and wellness of the senior population through its Innovation Search Program (see: http://edisonnationmedical.com/live_product_searches/ENMEDICAL481) with “the objective of the Innovative Search being to uncover ideas for products, devices, technologies or apps that improve the quality of life and the ability to maintain independence for Seniors.” Promising ideas will be presented to leading medical device manufacturers and healthcare retailers with whom Edison Nation Medical has partnered with the end goal being to commercialize each qualified product idea. In this regard, Edison Nation Medical states that, in the context of this innovation search, senior health and wellness products cover a broad spectrum of product categories, including (but not limited to):

· Products that assist with daily living activities

· Health monitors

· Medication management systems

· Products that improve safety and mobility

· Senior-friendly portable products and devices

This product search is open to the public and innovators as well as small

business.

In summary, demographic analysis of the U.S. senior population shows that we have the “ideal new product and service opportunity situation”, namely, a customer base that is rapidly expanding with many needs and problems to be solved. Start-ups and inventors couldn’t ask for a more perfect situation. Go for it!

An Important Message from Microsoft:

Windows Server 2003 extended support ends on July 14, 2015. Start planning now with help from Microsoft.

As a part of normal product lifecycles and to accommodate the shift towards modern technology and mobility, Microsoft will completely end support for Windows Server 2003 on July 14, 2015.  Security patches and updates will no longer be available after this period.  This Alert from the Department of Homeland Security indicates the seriousness of this event, and Microsoft encourages all businesses to carefully evaluate a migration plan.

Research from IDC confirms that businesses should thoughtfully consider using this moment as a starting point for the shift toward modern technology. “We think customers should take advantage of this deadline and see it as an opportunity not only to move forward to a newer version of Windows but also to modernize and prepare for the next generation of computers. Hybrid and public clouds are important components of next-generation IT.”

Safeguard your business and make migration a priority with these helpful links:

5 Reasons to Upgrade

The Assessment and Planning Toolkit

Forbes Article on Embracing the Digital Age

Find a local Microsoft Partner to help

What Type Of Seller Are You? Selling Your Business Depends On Your Approach

clip_image002[5]This article was written by Peter Siegel, MBA, Founder and President of BizBen.com, from his blog. Reprinted by permission.

Most every Californian who owns a company wants to put it up for sale sooner or later. And if the owner doesn't have employees or family members ready to pay the money and take over, it means trying to find a buyer in the business-for-sale market. Sadly, only one-third of the hopeful sellers in this market will be successful.
The two-thirds of owners unable to connect with a buyer ready and able to pay a purchase price will ultimately have to close the business or give it away. The problem may be with the business - that it simply is not desirable. But just as frequently, the reason an owner can't make a sale is because he or she is one of the many seller types who inevitably will fail.
A review of the common kinds of sellers can help an owner determine which accurately describes him or her. And that's the clue to your chances of being able to achieve a satisfactory sale.
Those seven types are:


1. Make a Killing Mike: Also known as "Make a Million, Mike," this individual believes the business is worth more than any sensible buyer will pay for it. There are a number of ways Mike justifies the asking price. A popular idea is that a similar business recently sold for the price Mike wants. But no two businesses are alike, and Mike doesn't understand that the "similar" business is much more profitable and in a better location. The market may not reward Mike if he should eventually lower the price to a figure close to its value. Buyers often are not interested in investigating a business that has been on the market for a long time - whatever the reason.


2. Clarence Can't Carry: An important selling feature of most any business offering is the willingness of the seller to "carry back" part of the purchase price. Along with a cash down payment, the seller receives a promissory note usually secured by the business assets, to be paid off by the buyer over a period of time. It's reassuring for a buyer when the seller is willing to help finance, because it show the seller believes in the business and in the buyer's ability to operate it successfully. An offering that can only be purchased with all cash is almost always unappealing compared to other opportunities that come with seller financing.


3. Rita Rosy Picture: According to Rita, her business is about to become as much in demand as this week's most popular show business celebrity. She has the best inventory in town, the most helpful and loyal employees and greater prospects for the future than any buyer can imagine. Even a business that does excel in some respects has its problems and disadvantages. Buyers know that and often don't feel secure about an opportunity that is described only in the most optimistic way. When meeting with a seller who doesn't come across as honest and credible, many buyers get a negative feeling about the opportunity - the opposite of what the seller intended.


4. Nick Not Ready: Any prospective buyers meeting Nick will wonder how he could be trying to sell his business but not be able to produce current financial information, a list of assets to be included, or a definitive description about the premises lease that the landlord will provide to a new owner. Does the seller have something to hide? Is he really that disorganized? If so, what does that say about the condition of the business? Did he neglect to "get his stuff together" because he doesn't really believe the business is salable? These are questions that occur to buyers as they decide they aren't interested in what Nick has to offer.


5. Don't Worry Dorothy: When Dorothy tells a prospective buyer for her business that he or she shouldn't worry, it usually results in the individual becoming very concerned. Buyers want to know what happens if the customer who accounts for half the company's income decides to do business elsewhere. They want to understand what consequences might result from the large competitor moving into the neighborhood. If the seller doesn't have answers for these types of worries the buyers decide they won't worry about those issues. That's because they'll look for another business to buy.


6. Secret Sam: One of the things Sam likes to tell prospective buyers is how much of the company's income goes directly into his pocket without being recorded on the books.  He may be proud of his skimming habit. He may think he's quite clever at fooling the taxing authorities. He might think the buyer will add the total of unreported cash to the reported income and decide the business is making enough money to justify the asking price. But he's mistaken. The buyers who investigate Sam's business soon realize he can't be trusted and move on to find out about other opportunities.


7. Realistic Ralph: Since he is motivated to sell, Ralph wants to present his business in a way that will generate positive responses from buyers. He understands he needs to be proactive in preparing the business for sale. The asking price accurately reflects market conditions. His books are in order and ready to be investigated by qualified buyers. Ralph met with financial institutions with the help of a niche financial advisor who specializes in business purchase financing. The business has been prequalified for financing. And Ralph is willing to carry back 20% of the price with a note. His approach is a clear recipe for selling success.


Any prospective seller who sees himself or herself in the descriptions of one or more of the first six seller types should understand that the chances of selling the business may be limited simply because of these seller attitudes and behaviors. Are you similar to Mike or Rita? Sam or Dorothy? The best chances of achieving a successful sale are to assume the characteristics of Realistic Ralph. It's owner/sellers like him who account for the one-third of California business offerings that result in a sale.

Tuesday, February 3, 2015

Business Sold Statistics Rising

This article was written by Peter Siegel - BizBen.com, BizBen Index, reprinted by permission

California Posts Best Business For Sale Deal Total In Nine Years Says BizBen Index

Dublin, CA (January 14, 2015) With 15,513 deals on business for sale offerings last year, California saw its best rate of sales involving small and mid-sized businesses in nine years, according to the BizBen Index. The company said the figure was up 5% compared to the 14,764 sales completed throughout the state in 2013. An improved economy and easier access to business purchase loans were among the factors accounting for the growth.


"A sizable number of California's business owners who've been ready to sell for awhile, decided the time was right last year, because their companies were showing better performance than two and three years ago," said Peter Siegel, MBA, Founder and President of BizBen.com - a lot easier to make your case for a strong valuation when a business is showing improved revenues and an increase in profitability.
"Growth in the number of businesses for sale brought out unprecedented numbers of buyers who've been sitting on the sidelines the past few years, waiting for the economy to improve."
Siegel also said, "more and more lenders are getting back into the business for sale market after a long period following the mortgage crisis when they were hesitant to offer business purchase loans. That goes for financial institutions in the SBA lending network as well as banks and other companies with loan products not guaranteed by the Small Business Administration."
A third factor accounting for the increase in business-for-sale market activity, according to Siegel, is "smarter strategies being used by both buyers and sellers to solve the kind of problems that might have ruined their deals in the past. For example, we're seeing more earn-out provisions in sales agreements than ever before. That is a way to bridge the gap when the seller feels a business is worth more than buyers are willing to pay. The strategy is for parties to agree on a figure that will be temporary and might go up in response to improvements in a company's financial performance in the months and years following close of escrow. If the seller is carrying back part of the price, he can look forward to having the buyer's payments go up to correspond to the growth in the business."


A Slower December
Much of the gains in sales totals were achieved early in the fourth quarter last year, with a slight decline in the count of transactions last month. A total of 1,326, deals were completed during December 2014 compared to 1,403 business sales posted during the previous December. Among the winners in a December-to-December comparison were Orange County, with 165 sales last month vs. 140 for the previous December, Contra Costa County recording 57 deals in the just-completed month and just 30 sales the previous December, and Santa Clara, up to 65 deals from 60.
Large counties with a decline last month compared to December 2013 were Los Angeles County, 294 sales vs. 406; San Diego County with 102 deals vs. 128; and San Francisco posting 43 sales compared to 66 during December of the previous year.


The county totals recorded last month, available at: http://www.bizben.com/stats/stats-monthly-dec.php are as follows:


Alameda: 58, Amador: 2, Butte: 4, Calaveras: 1, Contra Costa: 57, El Dorado: 8, Fresno: 44, Humboldt: 2, Imperial: 5, Kern: 28, Lassen: 1, Los Angeles: 294, Madera: 1, Mariposa: 1, Merced: 8, Monterey: 19, Napa: 4, Nevada: 4, Orange: 165, Placer: 23, Plumas: 1, Riverside: 68, Sacramento: 38, San Bernardino: 59, San Diego: 102, San Francisco: 43, San Joaquin: 36, San Luis Obispo: 6, San Mateo: 21, Santa Barbara: 10, Santa Clara: 65, Santa Cruz: 6, Shasta: 12, Solano: 14, Sonoma: 31, Stanislaus: 23, Sutter: 6, Tulare: 18, Tuolumne: 3, Ventura: 19, Yolo: 9, Yuba: 2.
Sales totals posted by California county over the last nine years are available at: http://www.bizben.com/stats/stats-total.php
The BizBen Index has been collecting and reporting information about small California small business sales for 18 years, to help business owners/sellers, buyers and the professionals participating in this market make informed choices and achieve success when selling or buying a California small business.

Studies Show That A High Percentage Of Start-Ups Fail. Here’s Why.

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

An interesting article appeared in the on-line version of the Wall Street Journal several years ago entitled “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail” written by Deborah Gage (see: www.WSJ.com, dated September 20, 2012) in which she cited some interesting statistics from a research study conducted by Shikhar Ghosh, a senior lecturer at Harvard Business School. Mr. Ghosh examined data from more than 2,000 companies that received venture funding, generally at least $1 million, over the time period 2004 through 2010. He pointed out in his research that one needs to be careful how they define “failure” as there are different possible definitions of failure. If failure means liquidating all assets, with investors losing all their money, an estimated 30% to 40% of high potential U.S. start-ups fail, he says. If failure is defined as failing to see the projected return on investment such as a specific revenue growth rate or date to break even on cash flow, then more than 95% of start-ups fail.

Also, in her article Ms. Gage makes mention of several other studies of interest in this context of “start-up failure”. For example, of all companies, about 60% of start-ups survive to age three and roughly 35% survive to age 10, according to separate studies by the U. S. Bureau of Labor Statistics and the Ewing Marion Kaufman Foundation, a non-profit that promotes U.S. entrepreneurship. It was also pointed out that companies that didn’t survive might have closed their doors for reasons other than failure such as being acquired or the founders chose to move on to other ventures.

So, what’s going on here? To get some insight into the possible answers to this question, there have been several “post-mortem” type surveys and studies that might shed some light as to what happened and why.

First, a survey was conducted of founders involved in 32 start-up failures to summarize the common reasons start-ups fail and these results were published on January 11, 2011 at a blog site—specifically http://www.chubbybrain.com/blog. The results are shown below relative to the top 20 reasons these start-ups surveyed failed.

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Referring to the chart above, the top 10 reasons can be summarized as follows:

1. Ignoring customers—Being inflexible and not actively seeking or using customer feedback.

2. No market need—Building a solution looking for a problem, i.e., not targeting a market need.

3. Not the right team—Not the right mix of skill sets and inadequate checks and balances amongst the founding team members.

4. Poor marketing—Not knowing the target audience and not knowing how to get their attention and convert them to leads and ultimately customers.

5. Ran out of cash—Money and time are finite and need to be allocated judiciously, i.e., not adequately addressing the question of how one should spend their money.

6. Needed a business model—Lack of a well-defined business model that could be implemented. (Note: Here is one of the major strengths of the SCORE team.)

7. Product mis-timed—Need to understand the “window(s) of opportunity” and release the product and/or service accordingly.

8. Lacked passion—Lack of passion and genuine interest in the entrepreneurial pursuit.

9. Failure to pivot—Pivoting away from a bad product or service, a bad idea, a bad decision, a bad hire, etc. quickly enough. Didn’t take corrective action(s) steps soon enough.

10. Poor product—Tried to provide a “user unfriendly” product or service that didn’t adequately meet customers’ needs.

Second, another survey worth noting (and comparing with the above-cited results) was reported in an article entitled “Why startups fail, according to their founders” by Erin Smith on September 25, 2014 (see: http://fortune.com/2014/09/25) in which reference was made to an analysis conducted by CB Insights (a New York-based venture capital database company) of 101 post-mortem essays by start-up founders to pinpoint the reasons they believe that their company failed. These results are shown in the chart below.

clip_image004

Referring to the chart above, the top 10 reasons can be summarized as follows:

  1. No market need (42%)
  2. Ran out of cash (29%)
  3. Not the right team (23%)
  4. Got outcompeted (19%)
  5. Pricing/cost issues (18%)
  6. Poor product (17%)
  7. Need/lacked business model (17%)
  8. Poor marketing (14%)
  9. Ignoring customers (14%)
  10. Product mis-timed (13%)

What is really interesting is to compare the results of these two surveys, conducted approximately three years apart and with different samples, from the perspective of the top 10 reasons for start-up failures. In each survey, 8 out of 10 reasons were common, namely: ignoring customers, no market need, not the right team, poor marketing, ran out of cash, needed a business model, product or service mis-timed, and poor product or service. These are the “RED FLAGS” that need to be considered in planning your new business start-up.

Finally, some interesting observations are provided by Scott Shane in his September 26, 2011 article entitled “Why Do Most Start Ups Fail” (see In Startup Magazine) in which he states that “Not enough entrepreneurs have experience in the industries in which they are starting their businesses—specifically, a sizeable fraction of entrepreneurs start businesses in industries in which they have no work experience.” Consistent with the common results from the two surveys cited above, he states that “Many entrepreneurs fail to take the actions that research shows help businesses survive. Academic evidence shows that putting in place careful financial controls, emphasizing marketing plans and writing a business plan increase the odds that a new business will survive, yet many founders fail to write plans, have inadequate financial controls and don’t focus on their marketing plans.”

SCORE counselors and mentors have the responsibility to provide guidance and counseling to start-up entrepreneurs to increase the likelihood of their success, but, as pointed out by Scott Shane in his article, it is “true some start-ups fail because of factors beyond their founder’s control, but responsibility for much of the high failure rate of new businesses lies with the entrepreneurs themselves.”

How Start-Up Founders Can Stay Accountable

image This article was written by Brian Christie, CEO and Chief Innovation Officer of Fanaticall

If you head a startup company as a founder or CEO, having the total freedom to execute as you see fit may be part of what motivated you to take the position in the first place.  

But freedom shouldn’t be mistaken for a lack of accountability. Building a framework of accountability will ensure that you stay on track for completing projects, accomplishing goals and realizing the vision you set forth for your company.

Here are six suggestions to make yourself accountable as head of your startup:

1. Separate the CEO role from the chairman's.

This is a growing trend at public companies and increasingly recognized as a way to foster good governance: If a company has several co-founders, one can take the CEO position while another the chairmanship.

Or you can find an independent director, who can provide an outside perspective, to perform the role of chairman.  

2. Recruit an advisory board.

A good startup advisory board will provide complementary skills to a CEO and help make the leader become aware of blind spots.

By working regularly with an advisory board, you are committing to moving forward on areas of the business that may be outside your comfort zone. So recruit members for an advisory board.

3. Join a peer advisory group.

It can be tremendously helpful to get feedback from other entrepreneurs facing similar challenges by participating in a peer advisory group. I’m a skeptic-turned-fan of an advisory group in Washington, D.C., Netcito, which convenes monthly. Entrepreneurs hear about and respond to the big thorny issues of their peers -- and keep one another accountable for taking steps to resolve them.  

4. Find an individual coach.

Individual coaches can help keep you on track when tackling specific business or personal issues that affect the management of your startup. For example, there's the International Coach Federation with thousands of members.

For specific issues (such as health and wellness coaching), one of my company's clients, Capital Health Coach ECN, makes coaches available telephonically. For as little as $40 you can have a one-on-one session with a wellness coach.  

5. Privately commit your goals to writing.

There are plenty of competitive reasons to not publicly share your goals. But sitting down on a yearly basis to privately write down your startup’s goals for the next 12 months is a good practice. Or write a letter to your current self from your future self (five years from that day): This can help make you more accountable to your long-term vision.  

6. Find a venture capitalist or angel investor.

Not everyone has a business that's ready for an investor but if yours is, this should be done with caution as it can come with strings attached and risks.

A bad investment partner can cripple your business while a good one can help your business soar. 

Startups lack the structure and formalities of their larger company counterparts. Creating mechanisms to keep yourself accountable to your vision, goals and tactics can be one critical ingredient to help you realize your startup’s true potential.