Small Business Center

Join the folks at BlackBerry and me for another webinar, designed to help small businesses like ours tackle some of the business challenges we’re faced with today.  It’s called, “Moving Your Business Forward Even When the Economy Won’t Cooperate.”

In this FREE webinar, we’ll cover:

• Sales strategies that work to get customers to loosen their purse strings
• Smart ways to keep expenses down – without holding back your future opportunities
• Advice for managing a positive state of mind so you can lead your organization to new heights
• Dealing with employee compensation even when your finances are limited
• How to jump on new trends and opportunities, such as the coming mobile growth

This session is for small business leaders, including business owners, managers, consultants and service providers to small businesses.

Presenter: Anita Campbell, CEO and Editor-in-Chief of Small Business Trends (that’s me!).  I will be joined by Andy Birol, Profitable Growth expert.

What: FREE webinar – Moving Your Business Forward Even When the Economy Won’t Cooperate

When: February 25, 2010, at 1:00PM EST (10:00AM PST)

Where: In the comfort of your home or office with your computer. Join us live! (The archived event will be available afterwards.)

Register:  Go here to register

Hashtag for Twitter discussion: #SMBMobility

Sometimes business leaders need a rally cry to get themselves in gear.  For his call to arms, George Coultier choose to twist the old football axiom (“winning isn’t everything, it’s the only thing”) for his book, Profits Aren’t Everything,They Are The Only Thing.

Coultier, founder of American Management Services, used his 30-year career of turning around financially troubled businesses to assemble “rules” for hot to prevent your business from falling into financial and operational collapse. He wrote the book as an “attitude adjustment” for business owners.  He espouses “the need to run over anyone or anything that gets in the way of your company’s paramount need for profits.”  I bought a copy to understand this  adjustment better.

Great Discipline Leads to Results

Profits sets a clear tone that unrelenting discipline and execution is a key to profits.  Coultier’s perspective shines when applied to addressing tough questions and to operations judged by measurement.  For example, Coultier is a pay-for-performance advocate, emphasizing it on sales teams specifically, but also for all employees to achieve profitability.  He denounces sweat equity, insists on a plan on which the business lives or die, and contends owners must get closer to the sales process. He also suggests no great leader abdicates on financials:

“No one should know your financials better than you.  Your balance sheet is something that is in your control.”

Owners must apply “fingertip controls” to know the status of the business at all times and to subsequently delegate without haphazard follow up.  Profits emphasizes  answer-ability — from owners getting involved with sales teams to understanding inventory — and asserts all the while a connection between micromanaging decisions and financial security.

In the process, Coultier makes an ironclad argument that businesses must organize its processes to share linchpin decision-influencing information.  He suggests owners receive daily vital business information called  “flash points,” operational red-flags for profit and loss.  Establishing dashboards and creating a culture around monitoring the pulse of operations has been advocated among business intelligence professionals, but Profits makes it less technical and more down to earth.

Non-Stop Profit Motive Sometimes Needs a Pause

The book’s tone, however, is concerning.  There’s a myopic emphasis on making an attitude change.  The material is not enhanced with commentary from outside research, as is the case in some business books advocating change such as Dan and Chip Heath’s Switch.

For example, he makes the controversial suggestion that business owners are “not in business to pay vendors.”  He  considers slow payment as a valid strategy to increase cash flow:

“Instead of stressing over writing checks to your vendors, you should view them as your best source of financing.”

Profit Rule 10 – each maxim is a numbered chapter – goes on to suggest ranking the order of how you pay vendors according to the vendor’s impact on your company’s product or service (Rank A being the most disruptive to the business if payments are missed, Rank C being the least).   However,  slow payment is not an ongoing strategy.  It is a cash flow “black swan” that can obscure cash management problems best addressed through revised arrangements.  Many small businesses are not in a position to continually pay slow.  Some suppliers eliminate troublesome B2B customers — your company may be the one they eliminate.

Personal Issues Not Aside

The maxims on personal matters can lead some business owners to think “I don’t agree.”  For example, Coultier recommends that owners place their businesses first, even on weekends:

“The commitment it takes to reach that level of profitability in your business does not stop at 5 o’clock on Friday …. Weekends are for work.”

While Coultier is not saying remove church from one’s personal schedule , he is saying to evaluate one’s personal time outside of the clock to ensure attention to business growth (Chapter 13 is on eliminating golf, trade shows, and retreats).  But most business owners already know that their firms consume all their time (see Anita Campbell’s comments on The 4 Hour Work Week for comments on shortened worktime).  And there are instances of well-run businesses that maintain policies to keep a day sabbath, like Chick-Fil-A, the Southern chicken fastfood chain which closes its offices and restaurants on Sundays and B & H Photo, a renowned New York City photography and video retailer, that closes on Saturdays.

Some of the most controversial statements are about family. The book espouses that the best business “has one family member in it” and that one should “love your business more than your family”.   An aside:  In recent video presentations since the book’s publication, Coultier has modified his statement to “love your business as much as your family”.   The vision is for business owners to evaluate family dynamics carefully and make uncompromising personal decisions for the business. Coultier states:

“If you are not focused – if family, friends, community and church fill up your busy weekly schedule – you are probably failing to deliver real profits for your company.”

With Coultier called the “ultimate contrarian” on the cover, Profits understandably was written with an unorthodox state, bankruptcy, in mind.  In paying vendors late, for example, Coultier states that it “isn’t what Harvard Business School teaches you. You won’t find a how-to guide that advises you to use and abuse your vendors as much as you can, albeit legally and politely.”

But the material displays a need for supporting research to address business states outside of financial or behavioral extremes. A number of the “maxims” in the book do not have enough support to translate into solutions that business owners should use.

Furthermore, zero-sum commitment avoids the concept of managing risk, and it’s mismanagement of risk that can be the culprit for dire financial straights.  While the rules may aid business owners who don’t understand risk, the Profits maxims oversimplify to the point where one can overlook other causes of problems.

How to Benefit from Reading “Profits”

As a business owner, you will benefit most from Profits as “food-for-thought” for your own management and operational style.  But you should not believe the rules as a comprehensive solution for business problems.  The suggestions address extreme financial duress.  However, you should enhance your reading with other books on the lifestyle and culture of running an organization.

There are plenty of other books, like Ram Charan’s What The CEO Wants You To Know, that can offer guidance with less alarm and more researched processes.  Profits is a tough road, rightfully so for bankruptcy conditions.  But the beauty of maps is the ability to see other roads that may permit you to see more on your journey.

As the health-care debate rages on in Washington, I thought it would be a good time to take a quick look at how things are shaping up. Both house of Congress have passed bills. President Obama has invited Congressional leaders from both parties to a meeting on February25th to discuss the issue and attempt to iron out their differences. (The meeting is supposed to be televised.)

The Wall Street Journal reports that the Senate bill did get some support from big corporations and business groups. However, the House bill, which places more stringent requirements on employers to offer their employees health insurance, has met resistance from businesses both large and small.

What’s bugging business about the current bills? Big businesses don’t like a provision of the Senate bill that would tax a government subsidy on drug benefits for retirees; the accounting adjustments it would require could mean that many companies’ earnings would drop steeply in 2010. Big companies are also concerned about new taxes and fees in both the Senate and House bills.

What about small businesses? Some small-business groups, such as the U.S. Chamber of Commerce, contend that health-care reform will increase small business owners’ costs, making it harder for them to hire and retain employees. However, most taxes in the Senate bill are targeted at health-insurance companies, drug companies and other big corporations in the health-care system—not at small companies.

White House spokesman Robert Gibbs has said future negotiations to come up with a final bill must focus on how to control costs. The Senate bill has no public option (government-run health care), but the House bill does. Making sure insurance alternatives aren’t too expensive will be crucial if the House is to give up on the idea of a public option.

Here are the key elements of the Senate bill that specifically affect small businesses:

• Creates health-insurance exchanges where individuals and small employers could buy coverage.
• Requires employers with more than 50 employees to provide coverage or pay a fine of up to $750 per employee.
• Expands tax credits to help small businesses with up to 25 employees (and an average wage of $50,000 or less) buy coverage.
• Requires insurers to cover all comers, including people with pre-existing medical conditions.

SInce there’s so much rhetoric flying back and forth, a good place to keep up-to-date with changing proposals is the Kaiser Family Foundation Web site, which has detailed and frequently updated information about both the House and Senate plans.

Small business owners complain a lot about taxes. But the issue is typically about all of the filing requirements – all the things you have to do that give you major heartburn.

There are so many tax related activities required for small business that the IRS publishes a small business tax calendar every year. It’s a really useful tool that is normally released during the fourth quarter of the year. It’s out of stock now, but you can still view a handy interactive copy of the tax calendar online. Plus if you want to make sure you don’t miss any deadlines, you can subscribe to the tax calendar in your outlook calendar.

Since taxes are top of mind right now, I checked in with two of my favorite tax professionals, Suzette Flemming, President of Flemming Business Services Inc. and Kay Bell, Tax Journalist and author of The Truth About Paying Fewer Taxes, to get their thoughts on the key obstacles for small business owners, where they take some missteps and what they should do about it.

Key Obstacles for Small Business

“The biggest obstacles for small business owners are knowledge and understanding because tax law is constantly changing,” says Flemming. “Most small business owners have no time or desire to keep up with these changes.

Nobody thinks about taxes when they start a company. Did you?

According to Bell, “The variety of taxes that a small business faces often is a shock to start-ups. In addition to the well-known federal income tax, businesses also face various types of state and local taxes, including income, franchise and/or sales taxes. If you have employees, you must deal with payroll taxes, including not just payments but information filings to the government and your employees. Many businesses also face specific excise taxes. And even the type of business entity you’ve chosen (sole proprietor, partnership, LLC) affects your taxes. Too often a small business overlooks or misfiles some of these tax responsibilities.”

Is your head spinning yet? That’s why so many small business owners take the wrong steps when it comes to taxes.

Common Tax Mistakes Small Business Owners Make

Flemming and Bell both agree that the most common mistakes are not keeping good records, not planning to pay taxes – you know that old saying the only sure thing in life is death and taxes – and not setting aside the funds to pay the taxes you owe.

You also need to be conscious about classifying workers properly. Classifying workers as contractors when they should be employees could get you in a heap of trouble. Make sure you follow the IRS guidelines carefully to save yourself from future headaches (and potential fines and penalties).

Do It Yourself or Hire a Professional?

It’s very tempting to be a “do it yourselfer” when it comes to filing taxes. After all, there are plenty of software packages that will help walk you through the steps. But Flemming and Bell both think you would serve your business better by focusing on what you do best and hiring a professional who specializes in small business to prepare your taxes.

A professional knows the ins and outs of allowable deductions and can help you not only file properly, but will make sure you get the deductions you deserve along with identifying things you can do to reduce your taxes for the following year.

And remember, small business taxes aren’t just a do it once, set it and forget it activity. Bell notes that a tax professional can help you manage and meet these ever-present deadlines.

So where do you weigh in on small business taxes? Are you confident enough to do it yourself or do you place this important activity in the hands of a trustworthy professional? Tell me about your approach by leaving a comment.

Editor’s Note: this article was previously published at OPENForum.com under the title: “Take Steps to Minimize the Pain of Small Business Taxes” It is reprinted here with permission.

Late last year I quoted a statistic that said that 80 percent of small businesses were one-man [cough. Or woman] shops and that 50 percent of SMB owners worked from their home. With that in mind, it’s easy to see why so many small business owners and entrepreneurs have taken to the Web to chat and commiserate with others “like them”. But the Web can be intimidating. If you are a small business owner looking to connect with other entrepreneurs, where should you go looking?  Where can you hang with fellow SMB owners online?

Here are a few suggestions.

Entrepreneur-Themed Communities

It seems fitting that as the Web continues to spur Internet entrepreneurs, it’s also spurred communities targeted toward helping them. Web communities like StartupNation, Young Entrepreneur, Brazen Careerist, and EntrepreneurConnect give solo entrepreneurs a place to talk about common problems, share resources and help one another out when possible. These communities often have associated knowledge hubs where people can tap into expert articles, download eBooks, create networking events, and have real discussions. And, of course, they also offer the ability to establish friendships, both professional and personal.

Related to these communities are social voting communities where small business owners can submit and promote their content. Doing so helps others find information that may help them and they can also use it to brand themselves in a particular area. BizSugar.com [disclosure: This site is owned by Anita Campbell] is one example of a site allows SMB owners to promote themselves and others through their content. There’s even an associated BizSugar Twitter account they can connect with.

Question & Answer Sites

Question and Answer communities are another place that entrepreneurs can gather to make connections and get answers to questions. There are tons of great communities that specialize in this, including LinkedIn Answers, Business Answers and the just-launched QuickSprout Answers (really excited for this one). All provide great avenues for entrepreneurs to explore when looking to bounce ideas off one another or make new connections.

Twitter Lists

I know, Twitter is the answer to everything these days, right? Obviously, Twitter’s a great networking tool, but thanks to Twitter Lists, it’s also a great way for entrepreneurs and small business owners to find one another. Listorious is a really useful site that lets you search for people and Twitter Lists based on keywords.

For example, you can search for Twitter Lists titled [entrepreneurs], lists titled [small business] or whatever keyword you’re interested in. You can also perform the same searches to target actual Twitter users instead of Twitter Lists. For example, you can find users who identify as being [New York florists], [Florida wedding planners] or [your town + keyword].  People “like you” are out there, you just have to search for them.

[Twellow and Twitter Grader will also allow you to find people in your immediate area with common interests.]

Entrepreneur Podcasts

Okay, so this may not help you actually “meet” other people, but it can help you learn what other people are doing and about the faces that you could possible reach out to. Podcasts like Ducttape Marketing, Mixergy, Six Pixels, This Week In Startups and Untitled Startup conduct interviews with entrepreneurs that you can learn from and seek out.

Entrepreneur-Focused Blogs

Reading blogs geared toward the entrepreneur lifestyle helps SMB owners to feel more connected to the work force. I know I sometimes have a difficult time working day after day in my home and never seeing another person. Reading blogs puts you back in the mix, reminds you that others are going through the same struggles, and it lets you become part of a community where you can exchange ideas with others.

For me, blogs have been my preferred way to form relationships with other people. Both in publishing content myself and in commenting on the stuff other people put out. Blogs like VentureHacks, Toilet Paper Entrepreneur, Bootstrap Business, Jonathan Fields, Penelope Trunk, and, of course, our own SmallBizTrends give entrepreneurs satellite communities that they can feel a part of.

Online Coworking/IM Groups

Once you start to make some connections, organize online chats where people can connect on a deeper level. I know lots of SMB owners who keep IM and Skype groups open all day so that they can chat with people when things come up, ask questions or just use it as a virtual office cooler. It’s a little bit of coworking activity without having to leave your house. [However, I suppose you could move your IM Group to a real coffee house, if local and so inspired.] Sometimes having someone right there that you can shoot a question to is both handy and comforting.

Just because you work at home or have limited coworkers in your small business, doesn’t mean you should live your life void of social contact and confidants. Use the Web as your ultimate networking ground. After all, I’m pretty sure that’s why it was invented, right?

Most of the discussion of what’s happened with self-employment during the recession has focused on overall trends. “Has the number of self-employed people gone up or down as a result of the downturn” has been the typical query.

While global patterns are important, different groups – men and women, immigrants and non-immigrants, people of different ages and races – don’t all show the same trends. In particular, recent data from the Bureau of Labor Statistics (BLS) indicates that the recession has not affected self-employment activity the same way across different races.

From the fourth quarter of 2007 through fourth quarter of 2009, the total number of non-agricultural self-employed people fell. But the number of self-employed Blacks increased 5.7 percent. In contrast, the number of self-employed Whites decreased 3.4 percent, self-employment among Asians decreased 10.5 percent, and self-employment among Latinos remained flat.

If we measure from the third quarter of 2007 through the third quarter of 2009, the total number of non-agricultural self-employed also fell. This decline was seen among Latinos and Whites, with the number of Asian self-employed remaining flat. But again, the number of self-employed Blacks increased.

Why has the recession affected self-employment rates so differently for Blacks? No one knows for sure. The research hasn’t been done yet so we can only speculate.

One possible explanation is that the patterns merely reflect pre-recession trends. In the years before the recession, Black self employment had been growing much faster than White self-employment. Though he measures self-employment differently from the BLS data described above, analysis by Professor Rob Fairlie at the University of California at Santa Cruz shows that between 1990 and 2006 the number of Black self-employed increased 58 percent, while the number of White self-employed only increased 6 percent.

Moreover, the 2008 U.S. Global Entrepreneurship Monitor Report shows that Blacks “have higher levels of start-up activities than whites (13.9% vs. 8.4%) while having significantly lower rates of established ventures (8.1% vs. 1.8%).” Perhaps the strong growth trend in Black self-employment resulted in increases during a period when other races experienced declines.

Another explanation might be differences in the the prospects of industries in which different races tend to be self-employed. Historically, Blacks have been more likely than Whites to be self-employed in personal services and have been less likely than Whites to be self-employed in construction, manufacturing, and finance. The recession’s effects were much worse in the goods sector, especially manufacturing and construction, than in the service sector. The differences in the industry distribution of self-employment across racial groups might account for the increase in self employment among Blacks and the decline among Whites.

Alternatively these patterns could be the result of how the labor market treats different racial groups. As Rob Fairlie of U.C. Santa Cruz speculates, “With fewer opportunities for wage and salary jobs, minorities may be increasingly turning to self-employment.” Implicit in that statement is the view that when employment gets tight, job losses fall harder on Blacks than on others, leading them toward self-employment at a faster rate.

We don’t know which of these or any other explanations account for why Black self-employment bucked the overall downward trend during the recession. But the numbers suggest that the recession affected self-employment differently among racial groups.

Pricing has always been one of the greatest games in business. In lean times, this is more true than ever. The price you offer has to reflect value, convey trust and cover costs of sales, delivery, and unfortunately, collections. And you have to be able to get your price.

How do you know when a price is right? Let’s say that you meet a prospect for lunch in an attempt to close a deal. When you finally come to the point of stating your price, one of three things happens:

• Your prospect immediately says no, stands, and walks away.
• Your prospect immediately says yes, shakes your hand, and treats you, the waiter, and everyone at the surrounding tables to champagne.
• Your prospect contemplates the offer. The long silence feels like an ocean in your head until you hear that magical word: Yes!

In two of the three situations you closed the deal, but only in the third have you done it right.

If the prospect rejects the offer out of hand, he believes the price is too high, which means that you have failed to sell the benefits of what your company provides.

If the prospect takes the offer immediately, you have given away too much value for too low a price; your prospect feels like he’s discovered a Van Gogh original at a garage sale!

You know you’ve got it right when your prospect accepts your offer only after some deliberation. In this case, he knows the value he is losing if he says no.

Ultimately, your price is your demonstration of value. If you are getting your price in difficult times, congratulations, for you are truly valued for the value you bring.

It doesn’t matter how many blogging ideas you’ve got stacked up. Sometimes you just get in a rut. You feel like you’re writing the same thing over and over again. You feel like you’re not providing any value and you’re so bored with what you’re writing that YOU don’t even want to read it, let alone anyone else. So what do you do? How do you get back in your blogging groove?

You put some spice back into it by getting out of your comfort zone and incorporating different kinds of blog posts. You give readers something fresh and that they maybe weren’t expecting.

Here are some different blog post varieties that you can count on to put some flavor back into your blogging.

1. Lists: List posts have become something of a blogging cliché because everyone does them. But they do them because they work and readers respond to them. These posts are attractive to bloggers because they’re quick to write, have an easy structure and they allow for a bit of fun. Readers love them because they provide information in bite-sized, scannable chunks. If you’re looking to quick start some fun in your blog, write about the 10 things you can’t live without, the top 5 mentors who have inspired you or the 20 things you’d like to see happen in your industry this year. The possibilities for what you can write about in lists post are endless. And that’s why they’re great.
2. Rants:  Rant posts allow you to let your hair down a little and talk openly and honestly about whatever is on your mind. If you’re worried about causing a stir, your rant doesn’t have to be overly controversial. Maybe, as a florist, you just want to rant about Valentine’s Day. Or perhaps you want to ‘rant’ about how much you love a certain type of flower. Rants give you the opportunity to get a little fired up and a whole lot passionate about whatever it is that’s on your mind. And when you get fired up, you give your audience license to do the same. They’re sure to jump start conversation.
3. How-To Guides: Creating a How-To guide for your industry helps build authority, attracts links and extends your reach in the community. These posts are often instructional in nature and explain, in detail, how to do whatever it is you’re an expert at. How-To guides are different from regular posts in that they can usually stand the test of time, meaning that they become evergreen content pieces that your audience can bookmark and continually look back on. It gives you a chance to offer free information to your community, while also branding yourself as the go-to person for that topic.
4. Conduct Interviews/ VIP Profiles: A fun way to add some life back to your blog is to introduce new voices to it by conducting interviews or profiles on people who provide value to your audience. When looking for people to interview or profile, don’t be afraid to step out of your immediate bubble. A person doesn’t have to do what you do in order to be relevant to your conversation. The more differing voices you can add, the better.
5. Collaboration Posts: An offshoot of doing interviews with noted people in your industry is to ask a bunch of people a series of questions and post their responses as a collaboration post. The work involved in putting it together is fairly minimal (you just come up with the original questions) and in return you get a bunch of new voices for your blog and some added exposure through their communities. And if you’re worried that people won’t want to participate – don’t. The Internet loves talking about itself. Promise.
6. Reviews: Even if they’re not related to your business, you use products every day to help make you more efficient. Well, your audience does too and sometimes they may need advice on which are the best ones to buy. Why not break up the monotony by writing reviews about your favorite ones? Doing so will increase your usefulness to your audience, and may also bring you new customers who are searching for [keywords + review]. Review-based searches are notorious for bringing in high search volumes.
7. Personal Posts: If you’re in a rut and having a hard time feeling inspired, consider blogging about it. Or if not about that, blog about something else that’s personal to you. Opening up your blog and getting personal every now and then is a good way to recommit yourself to your audience and to let them feel closer to you. It helps spice things up after you’ve been nothing but business for the last month. After all, you’re supposed to be creating relationships, right?
8. Video Posts: Some people find it a lot easier to talk to their audience than to write something out. And thanks to the rise of low cost video equipment, we’re seeing more and more bloggers adopt a multi-media approach to blogging. Just because you typically write your posts  doesn’t mean you can’t fire up the Flip camera and post a quick video hello to your gang. Actually, it means that you probably should. Changing mediums is a fun way to spice things up and lets your audience connect with you in a new way. Maybe a video tour of your audience is in the works for today. Or a quick chat with a new employee. The office dog, perhaps?
9. Link Posts: I’m a sucker for a good link post. In fact, over at my other blog, Outspoken Media, we do link posts every Saturday morning to share content that our readers may have missed otherwise. A link post isn’t much more than a collection of links from around the Web. It could be stuff related to your industry, things they should be aware of, or even just a silly list of things to laugh about at the end of the week (that’s what we do on Saturday’s). I’m a big fan of Link posts because they can help expose your audience to content they may not have seen otherwise.

The posts types listed above are the ones that I know I can always turn to when my blogging is feeling a little tired. Which ones work for you? Which can you not believe I missed and can’t wait to correct me on?