Resources

A Business of One is Really a Business of Many

By David Fant, chairperson of SBAM’s Strategic Communications Advisory Committee. From SBAM’s member-only Focus on Small Business magazine.

Sitting here in my home office, I got to thinking about the idea of a company of one. Working alone can be a daunting task. Basically isolated, so many distractions (television, the kitchen, the couch for a nap are just a few) that focusing can be difficult at times. I remember when I first started my business 20 years ago. My wife would come home from her work, ask how my day was and I would recount the various talk show topics of the day. Her immediate question to me was, “Are you actually doing work? ” To which I answered, “Yes, I am!” But in the beginning business is slow and prospecting is difficult-so you find distractions to fill your time.

Now, 20 years later, I find myself in a totally different world. I have clients who need the attention, vendors who need prodding to get me information I need. Marketing, accounting, client meetings, administrative work – not to mention volunteer work with the Small Business Association of Michigan, the American Marketing Association and the Advertising Federation – all take up time and energy in the day. However, I got to thinking about my business and what resources a business of one may need to have at their finger tips and came up with a daunting list of support options for a company of one.

Accountant – This person is critical to understanding your cash flow, what purchases will most positively impact your bottom line, and most importantly, your accountant can provide you with a realistic view of profitability today and in the future.

Banker – If you need a loan, or cash to build/grow your business, your banker can be your best friend. He can also help you better understand your needs for bank accounts and how to best utilize them to maximize your cash flow and minimize processing costs. In addition, your banker is in touch with hundreds of other small and large businesses and may be able to assist you in identifying new or growing markets.

Trade Associations – Meeting others is one way of getting out of the office. Networking can be the lifeblood of a business when first starting, and later on in a business life cycle you become a resource for others to turn to for advice.

Customers – Each of them can provide input regarding new products/services to sell, and they can offer ideas as to other areas you may want to expand in to. Last year, a client of mine told me about a conference I should be a sponsor for. I decided to try it and got eight new clients with gross sales over $20,000. Not bad for an investment of $2,500. Use your customers as a sounding board for new/innovative ideas.

Vendors – The number of new products in the marketplace never ceases to amaze me. Talk to your vendors, see what’s hot, what’s working and what’s not. This knowledge can help you in the long run develop new and innovative products and services.
Family – There is no one more attuned to my business than my wife. She can tell when something isn’t going well. She will listen, offer advice – she is someone who I can count on to help me talk through a problem or issue that I am having difficulty solving. An asset often over looked in a small business.

What does this all mean? A company of one is not just you. It’s you and everyone you come in contact with. Everyone has friends/family/customers/vendors/service providers who can and will help you when needed. All you need to be is open, willing to share and most importantly, be willing to ask.

David Fant is a long-term SBAM member and the chairperson of the Strategic Communications Advisory Committee.

SBAM's Rob Fowler on Detroit Free Press online chat: today, noon - 1 p.m.

Rob Fowler, president and CEO of the Small Business Association of Michigan, and Jennifer Owens, vice president of business development at Ann Arbor SPARK, will participate in an online chat on Tues., March 22, noon - 1 p.m. at freepopinion.com (Detroit Free Press website.) The topic is the impact on Michigan companies from potentially losing tax credits in Michigan’s next budget and the opportunities for other types of funding for growing businesses. Rob will certainly weigh in on the governor's tax/budget plan, "economic gardening" and growth opportunities for second-stage companies. We invite you to participate!

SBAM Launches Online Campaign to Rally Small Business Support for Repealing the Michigan Business Tax

MBT RIPThe Small Business Association of Michigan (SBAM) kicked off an online campaign today to educate small business owners on Gov. Snyder’s efforts to repeal the Michigan Business Tax and rally support for the proposal. A website – www.sbam.org/MBT-RIP -- gives small business owners a chance to sign an online petition, donate to the repeal effort, take a survey on the impact of MBT elimination and participate in a discussion forum. The association also set up an “MBT R.I.P” Facebook page.

“Supporters of Michigan’s tax system status quo have ferociously attacked Gov. Snyder’s tax and budget plan,” says SBAM President and CEO Rob Fowler. “We want to give small business owners the tools and information they need to fight back, help lawmakers bury the MBT and propel a new economic direction for Michigan.”

SBAM estimates that under the governor’s plan, over 95,000 companies will no longer have to file a state business tax return, ending a practice of double taxation for those companies that already pay tax on business profits under the individual income tax. The governor proposal also provides for investment in critical business and economic development by supporting Pure Michigan ($25 million), promoting business attraction and economic gardening ($50 million from the 21st Century Jobs Fund) and funding business attraction and retention ($50 million).

Finding Balance: Family, Work, Personal Interests, New Ideas for 2011

By Paul Hense, CPA. From the Small Business Association of Michigan’s member-only Focus on Small Business magazine.

I love to spend time with my wife, kids, grandkids, brothers, my farm in Cheboygan, my Boston Whaler, the apple orchard and berry patch, our vineyard, vegetable garden, University of Detroit basketball, making wine, fishing, reading history, traveling, eclectic music , writing articles, my SBAM activities, politics, and hiking, etc. I also have to work, exercise, and pay bills. All of those things are important to me. Obviously they are not all going to be satisfied. They therefore must be prioritized. And at the start of the New Year, trying to prioritize all of these things together with the natural sense that you have to start the year off with a bang can be a challenge!

I think it was Bruce Springsteen who wrote a line in a song that went, “cause tramps like us baby we were born to run.” Bruce may be expressing a universal truth. Some of us were born to race and some to plow-and you can’t interchange them. Maybe entrepreneurs were born to attempt to live three lives at once. Being married to, the child of, sibling to, employee of or any other relationship with self employed people is probably difficult. But it’s never boring.

So what is the solution to balancing business, family and yourself in our hectic world – and satisfying the goal to start the year off with a refreshed and reenergized team, new ideas and a finely-tuned strategic plan? Be creative, use your gifts and personal strengths to positively affect the areas important to you, delegate and realize that you cannot do it all alone!

I realize that’s easier said than done. Here are a few things I’ve done to help achieve balance in my life:

1. Your business provides your family with its sustenance. In the current economic situation, having a source of income is a blessing, and in order to maintain the business, you must attend to it. Make sure your family understands that. Have a family meeting to discuss your need to be attentive to the business. Don’t assume they understand. You are important in their lives and they would like more of your time. Not having as much of your time as they would like might be easier for them if they understood everything you have on your plate and adjust expectations to avoid disappointment.

2. Include family time in your priorities. I have been in business for 38 years. At the end of the day, week, year – your family will be by your side long after a demanding customer is forgotten. My kids eventually understood my dilemma when they faced adult responsibilities. I think it’s important to let your family know you love them and that providing for them is the driving force in your business.

3. As you start the New Year, ask the people you consider family and friends what they would like from you. You make business commitments everyday and you honor them. Honor your commitment to friends and family. Take it as seriously as you take your delivery dates and meeting commitments. Your rewards may be greater.

4. Then there is you. What feeds your soul? Take a day off and think about that. In order for me to be happy, I have to grow things. Some people need to hunt. What blows your hair back? Do it. You work hard. You deserve it. If you love work, you are lucky. But that is still only one aspect of your life.

Life is difficult. Being a responsible adult is complicated. Delegate what you can. Take care of your physical and emotional health. Give as much of yourself as you can to the people who love you. After you have done all that, take a deep breath and go back to work.

Paul Hense is a Grand Rapids-based CPA and long-time SBAM member and supporter.

2011 Entrepreneurship Score Card Shows Michigan Holding Steady

The Small Business Foundation of Michigan’s seventh annual Entrepreneurship Score Card finds that, compared to the previous year, Michigan is generally holding steady relative to the other 49 states. “The goal of the Score Card, as in previous years, is to help policymakers understand how entrepreneurship is faring in a Michigan economy that, while struggling, nevertheless displays hopeful signs of recovery,” says Rob Fowler, president and CEO of the Small Business Foundation of Michigan and Small Business Association of Michigan.

Some important positive insights gleaned from this year’s Score Card data:

• Michigan’s fast-growing “stage two” small businesses are weathering the economic storm and are continuing to lead the way in the state’s economic reinvention.
• The University of Michigan has launched as new Masters Degree, Entrepreneurial Education, representing an important educational commitment to entrepreneurship development.
• Michigan continues to maintain high marks in those areas necessary for a vibrant global economy, such as high tech workforce and quality of higher education.

However, Michigan’s ranking on the Entrepreneurship Sensitivity Index, a composite score developed last year to detect very recent (annual) changes in small business formation and growth, fell from 22 in 2009-10 to 33 in 2010-11 – not an unexpected result given the state’s recessionary predicament.

The Score Card is available for download here. Printed copies may be requested by calling (800) 362-5461.

The “Smart” (Phone) Money Is on Apps to Win & Tablets to Show!

(By John Westra is Director, NuWave Government Solutions. From the Small Business Association of Michigan’s member-only Focus on Small Business magazine.)

Why are (apps) running on iPhones, iPads and Android powered Phones & Tablets fast becoming an indispensible part of every “Smart” Small Business Toolkit?

In the past 24 months, we’ve witnessed an explosive growth in the use of “Smart Phones.” In 2007 an In-Stat study, commissioned by CIO magazine, estimated “The number of smart phones in use throughout the world will increase by an average of 33 percent each year through 2012.” A report released this November by Canalys, a company that tracks technology market data, reveals 3rd quarter 2010 smart phone sales “grew by 95 percent, compared with the same period last year, with total sales for the quarter reaching 81 million devices!”

The key factor driving this incredible growth in smart phones is Mobile Applications (Apps). People have fallen in love with the incredible variety of personal and business applications at their fingertips. These mobile apps keep them constantly connected to their friends, business associates and an ever-expanding wealth of information in the Internet Cloud. People also love the touch-oriented user interface of mobile applications that allows them to quickly touch, flip, drag and click their way to the information they want.

These mobile applications are so popular; they are also driving record sales of a whole new class of mobile device, the “Tablet Computer.” Tablet computers like the iPad and Android-powered Samsung Galaxy are listed as the most frequently asked for technology item for Christmas 2010. They are so popular, they are expected to outsell netbooks, the smaller less powerful cousins of laptops and the darling of Christmas 2009, by a ratio of 2:1!
Tablet computers and apps offer the same type of “instant-on,” touch-based user interface as smart phones, with the advantage of increased screen real-estate and more peripheral options. These peripheral options, which are also available for some smart phones, include wireless keyboards, mice, external storage and docking stations that offer a quick connection to larger displays, wired network connections, printers, etc.

Between their use on smart phones and tablets, the number of apps being downloaded is staggering. Earlier this year, Steve Jobs of Apple was quoted as saying: “Three billion applications downloaded in less than 18 months – this is like nothing we’ve ever seen before.” The market for Android applications is no different, with the main Android app Market reporting over 100,000 applications available for download as of October 2010, and tens of thousands downloaded each day.

Although iPhones and Androidbased (Droid) phones are the fasted growing mobile application platforms, Rim (BlackBerry) still has the largest installed base of legacy smart phones. Their latest Torch (smart phone) and PlayBook (tablet) offerings are the first BlackBerry devices to include a touch-style application interface. Nokia, another once dominant smart phone vendor, uses the Symbian touch-style interface on their latest phones. Microsoft has just introduced their Windows Phone 7 series that sports a unique style of touch interface that may or may not appear on future tablet devices. Unless there is some type of divine intervention, the pioneering Palm (HP WebOS) smartphone platform is dead (R.I.P.).

So what does this mad rush towards mobile applications have to do with Small Business? Mobile applications give you and your team the ability to be productive and stay connected to each other, clients/customers and prospects 24/7/365, limited only by increasingly ubiquitous carrier and WiFi access. Mobile applications are also transforming the way people connect with advertisers in a way the traditional media channels of Print, Radio, TV an

Market Your Product? Look for Ways You Can Manage Perceived Value

Ernesto Sirolli in his book Ripples from the Zambezi (a business book even if it doesn’t sound like one) cites three key business areas as his “Management Trinity.” He says, “If one is missing, the business is not a business, it shouldn’t be called one, and it will never succeed. No matter how big or small a business, three areas must be handled:

  • Technical skills to produce the goods or services (whether shoes or travel tours)
  • Ability to market one’s goods and services 
  • Ability to financially manage one’s affairs.”

I’m not much in favor of long, multiple step guidelines, so we simplify the steps into one statement – “Manage perceived value.”

“Technical skills” produce “value.” Making the absolute best product isn’t enough; it has to have user value. Many early PC manufacturers engineered ultimate machines, only to find the public couldn’t handle (and thus didn’t want) complex functions. “Value” was an easy-to-use machine to make routine tasks easier.

Instant contact glues (Krazy Glue, etc.) originally came in a two-ounce bottle, half of which was thrown away when drips glued the cap on. Quantity was not value. Now you buy one-tenth the volume in three one-use tubes (at same price) but there’s a lot less frustration because you use it efficiently.

Are there ways your staff skills could produce more value, not just in faster production but in a more customer-attractive product or service? Customer requests and unusual applications are a good first step. There are probably others out there who would like to learn about that value. Can you combine production steps AND improve your final product? What resources do you have that aren’t being used? Disney World boosted revenue by opening all night for high school graduation parties. Think.

”Market one’s goods and services” relates to “perceived” and usually gets a lot of planning attention – “How can we sell more?” Improve perceived value of your product by focusing on benefits (not features) in your sales messages. Focus ads on their problem that you solve, not on what you do. Sales pitches should start with “what is your biggest problem” not “here’s what we sell.”

The saddest words a salesperson ever hears are, “We just bought one. I didn’t know you did that.”

Improved perception comes from sending messages where your target market gets new information – Facebook, Google, newspapers, magazines, seminars, trade shows, etc. Target your prospects’ “watering hole” – make a few visible connections, not a bunch of invisible ones over the year. Be perceived.

“Ability to financially manage” is more than a prompt monthly statement (although knowing last month’s results by the fifth of this month allows you to take informed action for the next 23 to 26 days).

“Manage” means every asset allocation. Are you priced to capture ALL the value you provide? Do you have the right people (assets) in their best slot (value) to produce value? Could you manage inventory more effectively? Sometimes that’s more inventory to improve delivery times, sometimes it’s less to lower investment. Most importantly, do you have someone polite and firm (NOT your sales people) who will make continual calls to be sure you get paid for your effort?

Manage is an active verb. If you have a staff, it’s also a collaboration verb. Gather ideas from everyone you work with. Many won’t bear fruit, but a good idea can come from almost anywhere.

Sirolli says that it’s difficult for one person to be passionate and proficient enough in all three areas to competently produce the product, market it and manage the finances. (Personal example: I hated accounting. It was the second job I off loaded.) He says identify what you are most proficient at and most passionate about, and then find a partner to improv

Small Business Association of Michigan Names David Jessup as Director of Government Relations

David JessupThe Small Business Association of Michigan announced that David Jessup has been named the association’s Director of Government Relations. Jessup will assist Vice President Government Relations David Palsrok in administering the association’s government relations activities.

Before joining the staff of the Small Business Association of Michigan, Jessup was the Government Relations Director at the Michigan Association of Broadcasters and was on the staff of the Michigan House of Representatives.



Weekly legislative roundup: budget/tax details, 1099 repeal, item pricing, ergonomics

Budget
Taxes
1099
Item Pricing
Ergonomics

Highlights of the governor's budget proposal include:


  • Higher education would be cut by 15 percent, with $83 million set aside for distribution to universities that keep tuition increases below 5-year, system-wide averages. Universities will be funded through a formula beginning in fiscal year 2013 based, in part, on graduation rate.
  • Statutory revenue sharing of more than $300 million would be eliminated and replaced by $200 million in combined money distributed to those municipalities that adopt best practices to be announced in March.
  • A 48-month lifetime limit on able-bodied welfare recipients.
  • No cuts, as promised earlier this week, to Medicaid services.
  • The closing of one prison facility, privatization of some prison services such as food service and prison stores and Corrections employee concessions.

Highlights of the governor's tax reform proposal include:

  • Honoring of those "contractual" credits promised under the MBT (e.g. MEGA, Brownfield, etc.) through a yet-to-be-determined manner (either by allowing the businesses to elect to continue filing and paying the MBT or by applying the credits to the new tax structure).
  • Lowering of the individual income tax rate from 4.35 percent to 4.25 percent in October, 2011 as scheduled - but locking the rate at that level.
  • "Flattening" of the individual income tax base by elimination of nearly all credits and exemptions, including the Earned Income Tax Credit (EITC), and the exemptions applicable to both private and public pensions.

For more information on specific portions of the budget recommendations, you may view the Governor’s recommendation in their entirety here.

1099 Reporting Repeal Finds Footing the House

Legislation to eliminate the 1099 reporting requirements created under the Patient Protection and Affordable Care Act is receiving a great amount of attention in the U.S. House of Representatives.

This week, the House Ways and Means Committee voted to repeal the reporting requirements. However, a disagreement among committee members on how to pay for it resulted in the approval of two measures.

The panel first approved H.R. 4, which only repeals the reporting requirement. The committee then voted to approve H.R. 705 that not only includes the repeal of the Form 1099 requirement, but also provides for an offset to the cost of the repeal. The measure was approved by a 21-15 vote along party lines, with Democrats opposing the effort to offset the associated cost.

H.R. 705 is expected to head to the House floor by May 1. As previously reported, the Senate voted to repeal the Form 1099 reporting requirements, also with a language that would offset costs thanks to an amendment offered by Senator Debbie Stabenow (D-MI). However, each version of the bills contains differing language on how the offset is made. With conflicting offsets, a compromise will eventually need to be agreed upon.

Supporters of repeal argue the new health care law places an unnecessary and expensive paperwork burden on small businesses, making legislation rescinding the provision imperative. Specifically, current federal statute requires businesses to use 1099 to report all payments to corporations in excess of $600 for goods and services to the Internal Revenue Service.

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