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Business Tech

SBOCTeam — Thu, 02 Jul 2009 13:54:54 GMT

These five high-tech products make a lot of low-tech sense

By Max Berry

It seems that there is always some new gadget to buy, some new breakthrough that you, the small business owner, supposedly can't live without. It can be hard to separate the essential business tools from the latest tech novelties. Here, to help you make some sense of the deluge, are five innovations that will truly put your business on the cutting edge.

1. Looking for an ultra-thin laptop at a reasonable price? The folks at MSI Computer have granted your wish. The MSI X-Slim X340 Notebook ($899; see us.msi.com for retail information) weighs in it a svelte 2.86 pounds and is only .78 inches thick at its widest point, making it ideal for easy travel. It is also the first notebook to utilize the Intel ULV CPU, which requires just 1/6th the power of a standard mobile CPU. The LCD monitor offers HD resolution and you'll have 320 GB of storage at your disposal. And did we mention it costs less than $900?

2. For office work on the go, Brookstone's Laptop Essentials Kit ($50, Brookstone.com) provides all the standard accessories of your desktop computer in a zippered travel case. The kit includes a USB numeric keypad, retractable optical mouse, and gooseneck USB light. Earbuds with an integrated microphone allow you to use Skype and other Internet-based phone services and a retractable high-speed Internet cable will help you log on even when doing business in a place without wireless access. A four-port USB hub is also included for additional peripherals, so you can utilize all the gadgets and accessories standard to your office no matter how far from home your business takes you.

3. Metal staples are flimsy, eco-offensive, and often lead to annoying nicks and scratches. Get rid of them altogether with an E3 Living Staple Free Stapler ($6.95; e3living.com). The contraption may sound like a contradiction in terms, but the staple free stapler punches out tiny strips of paper and uses them to sew together as many as five sheets. In addition to the environmental benefits and low likelihood of personal injury offered by E3 Living's product, you'll also save money on staples and have an easier time recycling paper since there are no metal scraps to deal with. If you're looking to fasten more than five sheets of paper, might we recommend jumbo sizes paper clips or reusable binding clasps?

4. If you're a serious techy, chances are you already have an iPhone. Why not soup it up with some applications designed with the small business owner in mind? PC2Me allows you to connect remotely to your Windows desktop and costs $29.95 for the year. QuickBooks Online gives you access to your QuickBooks data. The monthly cost of $9.95 covers you and your accountant. The Splurge app keeps your spending in line by tracking and organizing expenses while Billing Manager, free from Intuit, is great for easy invoicing on the go. Doing business internationally? TokTok Translator provides quick translation between Chinese, Japanese, English, French, Dutch, German, Italian, Spanish, and Arabic, among other languages. And, naturally, you'll want to stay abreast of all the latest gadgets to help your run your business. Get All The Tech is a preconfigured RSS reader that sends you feeds from tech sites like Engadget, Gizmodo, Slashdot, Techcrunch, and Wired.

5. It might not be a gadget, per se, but YouTube is an excellent technological resource for marketing your business. Simply transferring your local television spot to the web might be a good idea for your own web site, but YouTube presents a different kind of challenge-and opportunity. If you're a craftsman, make a video of yourself at work, documenting your process from beginning to end. Stone Brewery, of Escondido, California, has posted a dozen or so videos on YouTube offering an inside look at their brewing process-a craft beer aficionado's dream. Just remember that the site is a community of users looking to be entertained, not pitched to. Feature your product or service in a quirky way, like Orem, Utah's Blendtec did by producing a series of videos in which the high-powered blender manufacturer put its product to the test by attempting to blend odd items like glow sticks and hockey pucks. It all adds up to an innovative marketing scheme and-best of all-it's free. Participate in the site's discussion forums and comment on other videos to start getting your name out there. And don't forget to include your e-mail address and URL in your video. YouTube can bring people who wouldn't normally hear about your business directly to your door, or at least your inbox.

Taking One for the Dream: Paying Yourself Nothing

SBOCTeam — Thu, 02 Jul 2009 13:12:22 GMT

When, if ever, does it make sense for an entrepreneur to stop taking a salary?

By Reed Richardson

It's a long-held rule of running your own small business: don't forget to pay yourself. However, in an upside-down economy that continually provides exceptions to all the old rules, many entrepreneurs are finding that paying themselves is yet another piece of conventional wisdom worthy of reconsideration. But before you go cold turkey on salary, it's important to ask yourself several questions to make sure you don't unnecessarily risk both your own future as well as your company's.

What are the rules about how much salary a small business owner can/must take?

For most entrepreneurs, there really are no hard and fast legal rules about what they can pay themselves. As a general rule, it's best to pay yourself close to a "market rate" salary for your profession or industry. In fact, a good business plan should already figure in an owner's paycheck as a top-line expense because deferring that salary is, in effect, ignoring a real liability of the company. Still, many sole proprietor and general partnership startups launch with no one on the official payroll and some will end up paying their first few employees a salary before their owners see a substantial return.

Incorporated small businesses, on the other hand, have much clearer rules. Even the founder/owner of a C Corporation is considered a company employee, and so, according to tax laws, he or she must draw a market rate salary. A small business CEO that draws a suspiciously low or zero salary is in danger of arousing interest from the IRS, which might suspect the company of trying to avoid paying its fair share of employment taxes. (Too-high salaries also raise tax alarms, as they could be seen as a way of disguising dividend payments to small business owners.)

Is it really necessary to take $0 as salary?

While salary.com's 2007 Small Business Executive Compensation Index found that the median annual salary for a small business owner was $233,500, most budding entrepreneurs make far less than that. As a result, going "all-in" and accepting no salary to help your struggling startup survive might seem even more necessary, but, by the same token, a consistently lower annual salary also suggests having less money socked away to go income-free for long periods of time.

Instead, small business owners could consider taking a significant pay cut rather than a pay freeze. One tactic might be accepting only enough salary to pay your personal overhead-mortgage/rent, food, car loan, light bill, etc.-and forego any other investing or saving for retirement. This decision particularly makes sense if you're also asking employees to sacrifice a percentage of their salary to buoy your business's chances in tough times. After all, you would never expect them to work everyday for no pay, so to be fair, you shouldn't ask that of yourself either. Also, it's important to recognize the singular role that many small business owners' personal credit score plays in their company's ability to access capital-wreck your own credit rating by skipping a few car payments and, in effect, you've wrecked your company's credit as well.

If I do decide to forego all salary, am I crazy?

Any entrepreneur that foregoes any salary in the early days of his or her company should never feel alone. But in this bleak economic climate, even stable, well-established business owners are joining the club. In fact, a recent American Express Small Business Monitor survey (http://home3.americanexpress.com/corp/pc/2009/mtr.asp) found that 30 percent of small business owners were not currently taking any salary and 27 percent had done the next best thing, by enlisting a family member to work at the business for free. Retail entrepreneurs, in particular, were more than willing to sacrifice a personal paycheck, as more than four in ten-42%-reported taking no salary to help their business survive the recession.

Taking no salary functions like a periodic personal loan you give back to your business. And in an era in which many of the traditional fallback sources of capital for budding entrepreneurs-home equity lines of credit and personal credit cards-have dried up, temporarily recycling all of your salary back into your company offers the advantages of being both simple and immediate. By helping your business's cash flow remain robust enough to meet payroll, keep up with sales demand, and pay vendors in a timely manner, your company will remain attractive to its customers and suppliers, while building solidarity and loyalty among its employees. And by preserving your business's morale, reputation, and credit position, this short-term sacrifice makes your company more attractive to those constituencies that often determine long-term growth and success-lending banks and equity investors.

What are the broader drawbacks and disadvantages to taking a $0 salary?

Make no mistake, if foregoing a paycheck becomes more than a short-term, emergency measure, you are no longer running a business as much as you're running a benevolent employment agency. So, if after several months of no salary your company's fortunes still haven't turned around, that might be a signal that it's time to seriously examine the long-term sustainability of your business. This is particularly true if multiple business partners are subsidizing the company by refusing a salary. In addition, potential capital partners like banks or equity investors will be reluctant to inject any capital in a company that continues to rely upon this cash crutch to survive, even if the money is being plowed back into research and development or expanded production.

From a personal standpoint, taking no salary represents a dangerous, slippery slope for small business owners. For dedicated entrepreneurs, forgoing a paycheck for a few weeks or even a few months can seem like a small price to pay to keep a dream alive. But at some point, reality must set in. Even if your only retirement plan involves selling off your business in forty years, that future sale of your successful business won't put food on the table today. After all, if your company sinks and ends up bankrupt, you can always start another one someday, but that's much harder if your personal fortune goes down with it.

Off Season Training

CommunityTeam — Fri, 05 Jun 2009 18:40:44 GMT

All Four Seasons
Running a seasonal business presents a particular set of challenges-and opportunities

By Max Berry

Running a seasonal business may seem like an entrepreneur's dream: Work hard for part of the year and earn enough for the whole of it. But running a seasonal business, just like any other kind, is a yearlong endeavor-one that requires meticulous time management and an extra degree of financial savvy. Here are ten ways to get the most out of your seasonal business at every time of the year.

1. Take Advantage of the Off-Season
Banish the notion of down time altogether: By developing an airtight business plan during your off-season, you can ensure that the money you earn once things pick up again is managed effectively. The off-season is also an excellent time to develop a marketing plan; while you have a minute, poll your patrons to better understand how to serve them and use the information you gather to develop new ideas. You can use your slow season to take care of logistical matters as well. Make sure your lease is in order, lock in your staff as early as possible, and negotiate pay rates before you draw up your budget.

2. Make The Most of the On-Season
One of the perks of running a seasonal business is that, during the busy period, demand for your product or service is high. But the accompanying cash flow can create a false sense of security heading into those lean months ahead. Be financially mature, now matter how booming your business is for those few months. Pay yourself a livable-but not extravagant-salary, put all the money you can into a business savings account, and don't farm out jobs you could do yourself.

3. Diversify
Don't feel like your business is bound to one product or service. You can add to your income by hosting some "extracurricular" events to complement the services you already provide. If you run an art gallery, approach an artist whose work you're displaying about offering art classes at night. If you run a surf or ski shop, try offering lessons on the side.

4. Remember the Locals
Even if tourists represent the bulk of your business, don't forget to cater to the locals too. This can be an especially effective way to drum up business in the off-season, when the tourists are gone. Seasonal restaurants, in particular, can treat the end of tourist season as its own kind of beginning. A well-publicized locals night, celebrating the end of a successful tourist season, will remind your year-round regulars that you're there for them too, and will strengthen your business' place in the community.

5. Have Two Business Models
Rather than shutting down completely, adjust your business model to accommodate the seasonal shift in customer needs. Many summer camps keep revenue flowing in the fall and winter by renting space for special events, retreats, and conferences. It's also regular practice for restaurants that cut back on their hours in the off-season to remain open year-round for private events and holiday parties. While these events will provide a less consistent cash flow than the day-to-day business of your "on" season, patrons will pay more for private use of your space.

6. Make The Scene
Be on the lookout for events to help promote your business; trade shows run year round and taking part in local festivals, fairs, and holiday activities is a great way to increase brand visibility and make a personal connection with the people in your community. Include your goods or services in a local charity auction-whether it is during your busy season or not-to keep your business fresh in peoples' minds.

7. Appeal to the Entire Family
You may eliminate the off-season altogether by appealing to several demographics at once. Don't forget, if you run a restaurant, lounge, or other public community space, that every season is sports season. A television and a liquor license will attract a large crowd on game day, whether that game involves hoops or mitts. But stay family friendly. Games and a special menu for the kids-as well as a smoke-free environment-will make your business a viable destination for anyone's night out.

8. Give Them Something to Get Into
If there is one particular season that sags for your business, give it some life by initiating year-round clubs and competitive leagues for your customers. Bars and restaurants can bring in business with billiard leagues or regular darts tournaments; bookstores can host regular book club meetings and creative writing workshops; and restaurants can offer a series of cooking classes specializing in local fare and holiday favorites.

9. Start a Complementary Business
Perhaps the surest way to survive a seasonal business' down period is to start another business for another season. Some landscapers, for instance, do interior floral arrangements and design work in the winter. As long as the two businesses are complementary, the reputation you've built through one will lend you credibility in the other.

10. Stay In Touch
Stay fresh in your customers' minds by starting a mailing list. This way you can send periodic updates on developments in your business, new products, and information on when you'll be opening for the season. You can also send valued customers special offers and discounts to keep them coming back. A quality web site, with a section for similar news items and updates, will also give you a way stay at your customers' service throughout the year.

Travel Smart

CommunityTeam — Fri, 05 Jun 2009 18:36:35 GMT

Travel Smart
Ten tips for travelers on a budget

By Max Berry

Travel can be hard on a small business owner's budget, especially now that airlines are charging fees for once-complimentary services like checking a bag. But with a little forethought and a willingness to root out the best deals, your next business trip could take you through friendlier-not to mention more cost-effective-skies than your ever imagined. Here are ten tips for business travelers on a budget.

1. Appoint a travel guru
Assign someone in your office the task of compiling a bookmark folder of Internet travel tools and discount sites. Sites like Priceline.com and Hotwire.com come in handy for discounted airfare and hotel rates, while Hopstop.com maps public transit routes and offers taxi fare estimates for America's largest cities. When the need to travel arises, save yourself some time by letting your travel guru hunt for the cheapest fares and discounts. Once they've narrowed the options, you can select the itinerary that works best for you.

2. Research your destination

Base your travel budget on realistic destination costs rather than an arbitrary per diem. If you maintain a set budget for every trip you take, you may find yourself running out of money fast. Likewise, if you bring a Manhattan-sized roll of bills to Tulsa, you may find yourself with far more than you need. Do some research on the city you'll be traveling to; how extensive is its public transportation system? What constitutes eating on the cheap in your destination city? Sites like Yelp.com and Citysearch.com will help you gauge just how much your stay will cost you.

3. Negotiate

Priceline's name-your-own-price option is a valuable tool for budget travelers, but many hotel managers will negotiate rates directly with customers. Most innkeepers won't advertise this fact, but if you'll be staying with them for a prolonged period of time, you can use that as leverage to get a better price. Angle for your own "corporate rate" by telling the manager that the slight discount you're seeking may make the difference between staying with them or going to another property nearby.

4. Take advantage of special offers

Frequent flyer programs and credit cards that award points for hotel stays and airfare are smart moves for any frequent traveler. Also consider signing up for a mailing list or two. Sites like Orbitz.com send regular e-mails detailing featured discounts on airfare while most major hotel chains offer special deals to frequent customers. Not every offer will be of use to you, but if it gets you a deal on your next business trip, it will be well worth sorting through the bulk mail.

5. Plot a course

If you are flying to your destination and will need to take a car from the airport, check the likely cab fare ahead of time (Hopstop.com is good for this). You may also want to use Mapquest or Google to familiarize yourself with the most direct route. Some cabbies will take a more circuitous path in order to drive up the fare if they sense you don't know your way around.

6. Pack light

This is sage advice now more than ever. Many airlines are charging $15 and up to check even one bag on domestic flights. If you can squeeze everything you need into a carry-on, consider foregoing baggage check altogether. Or, if possible, fly one of the discount airlines (like Southwest or JetBlue) that still allow you to check a bag for free.

7. Car rental tips

A general rule of thumb for saving money when renting a car is to reserve the smallest model at the lowest price. If the agency runs out of compact cars, they will be required to rent you a larger model at no added cost. You may also opt to waive the insurance. While the added precaution couldn't hurt, chances are you won't need it. Plus, you may already be covered through your own auto insurance or the credit card you used to book the car.

8. For short notice

When traveling on short notice, check airlines' special offers pages first. If your schedule is flexible and you are open to the idea of odd departure and arrival times, you may be able to snag a last minute deal. This is especially true for flights in the middle of the week. Some discount airlines also offer walk-up fares that are considerably cheaper than those of their large competitors.

9. Exercise some discipline

It may seem obvious, but resisting temptations like the mini-bar, room service, and in-flight cocktails will add up to big savings. Just as little expenses you'd barely even factored into your budget account for much of your day-to-day spending, small services like these are designed to turn a profit on travelers who are tired, unfamiliar with their surroundings, and lack a better option. Don't fall for them.

10. When in Rome...

Once you arrive at your destination, try to take some cues from the locals. There will be no better authority on how to eat, shop, and get around cheaply. If the people you are doing business with live in your destination city, ask them for some advice. If the city you're visiting has them, local blogs and Internet message boards-not to mention Yelp-are excellent sources for advice on how to do as the Romans do.

When Good Business Plans Go Bad

CommunityTeam — Fri, 05 Jun 2009 17:14:14 GMT

Preparing for the worst will keep you functioning at your best

By Max Berry

Every entrepreneur goes into business hoping for the best, but this doesn't mean you shouldn't be prepared for the worst. Whatever business you're in, there will always be a number of things that, at any given point, could go wrong. Developing a contingency plan-or several of them-will help you survive the bad times in minimum time and at minimum cost. It will also make your business stronger as you get back on track for more good times. Here are some important steps to take when crafting your contingency plan.

Seize The Opportunity

Small business owners are optimists by nature, so sitting around preparing for a disaster that may never occur might not seem like the most valuable use of an entrepreneur's time. But doing so provides a chance to gain a deeper knowledge of your business's strengths and weaknesses. Before you even identify the risks you need to safeguard against, get in the mindset that contingency planning will, through enhanced awareness of your day-to-day operations, only strengthen and validate the confidence you already have in what you're doing. With any luck, you'll never need to put a contingency plan into effect, but it won't hurt to know that you could.

Identify The Risks

Before you can develop a contingency plan, you'll need to identify the risks to which your business is vulnerable. Depending on where your firm is located, these could include natural disasters like fires, floods, or hurricanes. If you run a tech business, you may need to develop a plan for dealing with an IT glitch or data loss. And, in this digital world, information security should always be a priority. When making your list, include all possible incidents, no matter how unlikely they are to actually occur. Also bear in mind that, while huge natural disasters and sweeping tech breakdowns snag the lion's share of the headlines, most businesses are much more likely to suffer from "quiet disasters," like subtle economic shifts and small computer glitches, or internal issues such as the loss of integral employees.

Spread The Responsibility

If your business consists of several departments, you may want to let each department come up with its own contingency plan. Your IT department will face an entirely different set of potential setbacks than will your PR guru and will naturally need to address them in vastly different ways. Designate one person from each department to oversee the contingency planning, stressing that everyone who may be affected by a disaster-which is to say everyone at your company-should have a say in how it is handled. While each department is at work crafting its own plan, it will nonetheless pay for you to oversee the processes of each, checking in regularly and maintaining a clear picture of how all the plans will work together.

Assess the Risks

Each department should keep track of each its own responsibilities-both autonomous and shared-and make a list of everything that could go wrong throughout the process of fulfilling them. Working with the other employees from the department, the contingency leader can then rate both the likelihood of each setback and the potential damage it could do to business operations. This will provide a precise framework for each department's contingency plan and help you to prioritize which potential setbacks to address first.

Structure the Recovery

When envisioning your business's recovery from a particular setback, put down a series of milestones each department will need to reach, from the immediate aftermath of the incident through the eventual return to normal operations. Determine how you will deal with the event-both internally and with external parties like clients and investors-then determine the appropriate order in which to restore business functions. Name the employees who will be key to every step of recovery and make sure that each of them knows what their responsibilities will be. If possible, try to determine the total amount of time and money needed for recovery.

Test Your Work

Once each department has finished its own plan, review them all to see how they work together. Keep an eye out for overlap between plans; if two departments plan on handling the same task, decide which is best equipped to actually take on the responsibility. Once you've gone over all the plans and made necessary changes, provide time for interdepartmental reviews. Once each plan has passed this revision process, test them by simulating those crises you are able to simulate. The people carrying out functions in the test run should, naturally, be the ones that would carry them out during a real incident.

Revise the Plan

After you've tested your plan, record what worked and what didn't and make changes accordingly. In general, remember that a good contingency plan should be updated regularly. Every time you make a major administrative or structural change in your business, adjust your plan to account for it.

Handling an Actual Crisis

Don't panic. You've got a plan.

Keeping It Real

CommunityTeam — Fri, 05 Jun 2009 17:10:44 GMT

Tailoring your goals and expectations to reality will help you succeed

By Max Berry

A certain amount of ambition is necessary when running your own business. If you aren't expecting a lot from your idea and yourself, it will be hard to deliver much to your customers. But at what point does ambition become a hindrance? If your expectations are too high for one person-or one business-to meet, they may be doing more to hold you back than push you on. Dreams of glory are healthy, but so is the understanding that every race is run one step at a time.

Pace yourself
"There is something rewarding about crossing things off a list," says Duncan Brodie, director of UK leadership development company Goals and Achievements (goalsandachievements.co.uk), "but there is also something rewarding about not putting so much on the list that you set yourself up for failure. The bottom line is that you have twenty-four hours in a day."

Some of us are list-makers and some of us aren't, but a great many of us do our best work under pressure. Approaching a project with the belief that stakes are high and success is imperative can galvanize everyone around you. But without a measured perspective on just how much quality work can be crammed into one day, that galvanizing pressure can quickly give way to a whole lot of stress. "Ultimately, if you don't manage expectations well, you'll become stressed out, you'll lose focus, and you'll start doing substandard work," says Brodie.

Rather than placing all your focus on achieving one goal as quickly as possible, Brodie recommends taking the long view. "There is a difference between one-time wins and losses and running a long term business, achieving sustainability," he says.

Whether you're hoping to run it until you retire or take it public and cash out young, try seeing your business as an evolving enterprise. It is unlikely that one great quarter or one successful project will turn your company into a Fortune 500 sensation overnight, but it may put you on the path to a wider array of clients and more brand awareness. These are both great achievements for any business owner, and meeting either should be seen as a success, whether they're your ultimate goals or incremental steps on your path to something more.

The eyes of others
The most difficult expectations to manage are often the ones that others place on you. Chances are that neither your employees nor your clients expect you to be a superhero, but people aren't always upfront about their expectations, which is why you need to be proactive about discussing them.

"You need clarity with the client," says Brodie. "Ask them questions: ‘What do you want to happen by the end of the project? What do you want to be different?' Clients are often vague about their expectations. It helps if you can give them clarity."

Set the tone with customers at the outset of a project. Establish an agreement and, if applicable, provide your client with a time and cost estimate. When setting a timetable for a project, be realistic. This helps not only with achieving your objective, but also in building confidence in employees and clients. If your timetable doesn't seem reasonable and grounded it may actually cause those around you to question your judgment. You want to project confidence in your abilities, but be careful not to commit yourself to more than you are capable of completing, or to completing the job in less time than you need to do it well.

This doesn't mean you can't strive to outdo yourself. "The reality is, subconsciously, most small business owners will go the extra mile to make the project a success," says Brodie. "They want that relationship to be long term. Surprise [clients] a little bit by giving extra."

As you carry out the steps of a project, provide progress reports to the client and meet frequently with employees to discuss how you're all measuring up to your own expectations. When the project is completed, ask for feedback. Maintaining a dialogue even after the job is done builds trust and encourages future business.

Handling the inevitable
No matter how well you manage your expectations and those of the people around, there will be moments when you wind up frustrated that you couldn't do more. Nobody with high standards will feel like they passed with flying colors every time. The key is to take the disappointment in stride, and to have a support system in place. "For self-preservation, it's important that you've got someone to speak to, someone you can use as a sounding board," says Brodie. Chances are that if you confide your frustrations in someone else, they'll tell you what you probably knew along: that if you never got frustrated that you couldn't do just a little bit more, you'd probably never achieve much either.

Bearing that in mind, it gets easier to see the value of the occasional disappointment. "Think about what you have, in fact, achieved and use your setbacks as opportunities to learn," advises Brodie. "When things don't go well, you can often learn more than if they go perfectly."

Dealing with Customer Complaints

CommunityTeam — Wed, 03 Jun 2009 16:46:28 GMT

Here are some tips on how to deal with unhappy customers and where to draw the line in resolving their problems

By Christopher Freeburn

Small business owners understand the necessity of attracting customers to their business. But keeping those customers happy and coming back means more than just offering good products and services at reasonable prices. It means properly dealing with the inevitable complaints from customers who have a problem with your company's products or services, or with the way in which they were delivered.

Knowing how to properly resolve customer complaints is crucial. According to a recent study by the Technical Assistance Research Programs Institute, 91 percent of customers who have an unsatisfactory experience at a business while making an expensive purchase will not do business with that company again. And even when the item purchased was inexpensive, the study found that more than half of the customers surveyed indicated that they would shop elsewhere after an unresolved complaint.

In most cases, losing a customer over a complaint is unnecessary, says John Tschohl, president of the Service Quality Institute. "Nine times out of ten, just a little bit of effort by the business to address the customer's complaint would have soothed the situation and probably kept the customer coming back." Indeed, if your business handles the situation properly, not only can a customer's dissatisfaction be remedied, but you can also build additional loyalty to your business. "If a customer sees that your business is responsive to his or her problems, they are actually more likely to come back to your for additional purchases, since they know that they can count on your to help them through any future issues," Tschohl adds. Not only does this make for repeat individual customers, but it can help spread a positive image of your company through word of mouth, since satisfied customers ar

Steps to address complaints

Listen carefully. "The most important thing in handling a customer complaint is making sure that the customer feels that he or she is being heard," says Tschohl. Nothing increases customer anger more than the impression that the company doesn't care. "Whether it's the business owner himself or a salesman or representative talking with the customer, it's important to make sure the customer knows that someone is listening." Tschohl advises empathizing with the customer and reassuring him or her about the importance of their complaint and your desire for continued business.

"When customers feel that their complaints have fallen on deaf ears, they will probably take their business elsewhere in the future," says Tschohl. "Worse for your business, they are very likely to tell their friends and family about the experience," he adds. A disgruntled customer can spread his or her dissatisfaction by word of mouth in a way that can turn a potentially large number of prospective customers away from your business. If your business happens to be in a small town, this effect can be magnified, since small communities have limited customer bases.

Admit any errors on your part. Even the best companies sometimes make mistakes and even small errors can irritate customers who were counting on you to deliver the right goods or services on time. If your company did indeed make a mistake, the best thing you can do, Tschohl says, is to admit the error and work toward correcting it. If the wrong product was sent to the customer, for instance, ship them the correct product without charge. If you can't correct the error itself, offer some form of compensation for the customer's lost time or inconvenience.

Apologize. "Say your sorry that they've had a bad experience and that you want to make things right. Just saying you're sorry-even if you admit no blame-goes a long way toward cooling off someone who's upset," Tschohl notes. Customers want some acknowledgement of their distress, and in some cases Tschohl says that just providing that acknowledgement may be enough, even if there is nothing else you can do for the customer.

Offer solutions. In most cases, customer complaints can be resolved by offering something small like a discount on future purchases, or by granting a refund. "It's better to lose some money settling a customer complaint than to lose additional business," Tschohl says, "because 87 percent of angry customers will tell their friends about what happened, and that could cost you a lot more in potential business."

Follow up. Once you have reached a solution with the customer, be sure to follow up after a little time has passed. Not only does this allow you to see if the complaint has been fully addressed, but it reinforces the customer's impression that your company really does care about keeping their business. That will go a long way toward moving your company's relationship with that customer beyond the problem and toward future purchases.

Running a Family Business - Keeping it in the Family

CommunityTeam — Mon, 01 Jun 2009 17:48:08 GMT

How to keep your family business alive, prospering and-most importantly-in the family

By Christopher Freeburn

Entrepreneurs who have invested years of time, dedication, and resources into building a business often want to see that enterprise live on as a family asset even after they step aside from the actual operation of the company. Many hope to see their new business become something that each new generation of their family can inherit, passing the business from themselves to the children and grand children and beyond.

Unfortunately for these ambitions, the track record of family businesses is not good. "Keeping a family business alive is perhaps the toughest management job on Earth," says John L. Ward, author of Keeping the Family Business Healthy: How to Plan for Continuing Growth, Profitability and Family Leadership. "Only thirteen percent of successful family businesses last through the third generation. Less than two thirds survive the second generation," he adds, noting*, "Only five percent of all businesses ever started actually become family businesses through the appointment of a successor from the next generation."*

Many family business fail to remain under the control of the originating family because of changing market conditions, financial difficulties, or disinterest by succeeding generations. Most, however, fail to pass from one generation to another simply because the original business owner failed to plan for the smooth transition of ownership and management to successive generations.

The Necessity of Planning
The first step toward making sure that your business stays in your family after you step down is to develop a clear, well-considered succession plan that clearly defines who owns the company and who will run it once you leave. In fact, you should have a succession plan in place long before you consider stepping aside. Without planning, the business and family can be thrown into confusion or rancorous dispute in the event of a sudden and unexpected change in company leadership.

One reason many small business owners neglect succession planning is the emotional issues that such planning raises. Making succession decisions requires the business owner to choose who should get control or ownership of the business in the future. This requires taking a levelheaded view of the available family members to determine who among them has the requisite skills and temperament to manage the business, and who does not. Difficult questions have to be raised and answered: Who will run the business? How will the ownership of the business be distributed? Which family members will not be included in the business's management and ownership? The answers to these questions are sure to provoke some measure of hurt feelings among family members, since not every one can be the CEO.

Further complicating the planning process are the divergent interests of various family members. Not every family member may be interested in joining the business. "The natural desire of a child to steer a course independent of his or her parents can also nip succession plans in the bud," says Ward. A family business can also magnify family issues because the separation between family life and the workplace is thin or non-existent. "Human emotions such as pride or jealousy may become enlarged when work and home are intertwined," warns Ward. There may be disagreement among family members about the distribution of ownership or responsibility in the company. "These are emotionally trying issues for all concerned. As a result, many families abandon the effort at succession because they fear it will destroy the family," Ward says.

Nevertheless, proper planning is the only way a family can assure that a business remains in its hands over the long term. The sooner such planning is undertaken, the better. Succession planning should incorporate a variety of scenarios including potentially disinterested heirs, or a lack of viable family managers in succeeding generations. Putting together a plan in advance will help family members confront these issues as they arise in future years.

In order to increase the chances of your family retaining control of the business, your succession plan should incorporate things that combine family and business activities. For instance, creating a business-training program that offers young family members internship-like positions at the business during their school-age years is a good way to orient them toward participating in the business as they mature.

Family problems
"Many family businesses find that the family itself becomes a stumbling block," says Ward. "In later years, the family's growing financial demands tempt the owners to harvest the company's profits rather than reinvest them in additional growth." Over time, a family can come to see a business as merely an asset, rather than a place where they wish to continue working. In such cases, succeeding generations are often tempted to sell the business for an immediate profit to a non-related third party. This is the fate of many family-owned businesses.

Running a business can often exacerbate interpersonal pressures that already exist within the family.

"The rigors of business also sharpen such typical family problems as sibling rivalry or competition between generations," says Ward. Hurt feelings and ruined relationships can result from decisions made in the business, especially those involving which family members have what responsibilities at the firm. To some extent, there is almost no way to completely mitigate the fallout among family members from business decisions, since there is rarely a way to please everyone.

In the end, constructing a clearly defined succession plan as well as management structures and policies that have been spelled out beforehand will go a long way to reducing the natural friction that running a family business can generate.

Small Business Administration and Stimulus Package

CommunityTeam — Tue, 12 May 2009 16:02:52 GMT

By Reed Richardson

As part of the economic recovery package passed in mid-February, Congress and the President temporarily relaxed several lending rules and also added more than a billion dollars in additional funding to make loans more accessible and attractive to small companies. These measures are aimed at reversing the significant drop in small business lending that accompanied the larger credit market contraction that began last October. Below is a breakdown of the new stimulus package's effect on various governmental loan programs.

7(a) Loans - The most basic and most common type of Small Business Administration loan, 7(a) loans enjoy partial financial backing of the federal government as a way to encourage lenders, also known as participants, to provide capital to small businesses. These SBA guarantees typically range from 50 to 85 percent of the principal, depending on the loan's size and terms. Normally quite popular, the number of 7(a) loans issued plunged by roughly 50 percent during the last three months of 2008 when compared to the same period a year earlier. So, to encourage greater lender participation in 2009 and allay fears about defaults, the recently passed economic recovery package allotted an extra $375 million to the 7(a) and 504 loan programs (for more on 504 loans see below), which will enable the SBA to eliminate loan fees for borrowers on both types of loans and increase to 90 percent its loan principal guarantees on 7(a) loans through the rest of calendar year 2009. And to further revive 7(a) lending, the SBA to will also set up a new temporary loan program that will assist the broker-dealers who purchase 7(a) loans on the secondary market. For more on SBA 7(a) loans, click here: http://www.sba.gov/services/financialassistance/sbaloantopics/7a/index.html.

504 Loans - Another popular SBA loan program, 504 loans provide small businesses long-term fixed-rate financing for major capital projects like purchasing real estate or upgrading company infrastructure. Typically, the financing of 504 projects involves a mix of private-sector loans, government-guaranteed loans (often from a nonprofit Certified Development Company), and equity investment from the small business. As mentioned previously, the $375 million allocated to this program by the stimulus package is aimed at encouraging more lending by eliminating throughout the rest of 2009 any upfront loan fees paid by qualified small business borrowers, and in the case of 504 loans, third-party lenders as well.

In addition to this money from the economic recovery package, the Treasury Department has also directed that up to $15 billion of the remaining funds from the Troubled Asset Relief Program (TARP) be dedicated to purchasing pooled 504 and 7(a) loans in the secondary market, in an attempt to further loosen the small business lending market.

For more general info on 504 loans and mortgages, go to: http://www.sba.gov/services/financialassistance/sbaloantopics/cdc504/index.html.

America's Recovery Capital (ARC) loans - A new $225 million program created as part of the economic recovery package, ARC loans are designed to provide a quick, short-term injection of cash flow into small businesses that are struggling to make payments on existing business loans. These deferred-payment loans-companies can wait a full year upon receiving the cash before beginning to repay it-top out at $35,000 and are fully guaranteed by the federal government.

Microloans - By providing an additional $30 million to the SBA's microloan program, the economic recovery package will enable up to $50 million to be disbursed in small, community-based loans (like the ARC loans, microloans are capped at $35,000 each). In addition to this money, $24 million in technical assistance grants will also be available for the microlenders. For more background on the SBA's microloan program, go to: http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_microloan_intermediary.pdf

Surety Bond Guarantees - An additional $15 million will be provided to expand the SBA's Surety Bond program in an attempt to encourage more small businesses to compete for the economic recovery package's many city, state, and federal projects. To further assist small businesses in competing for these projects, the economic recovery act also raised the maximum qualifying amount on contracts that would qualify for an SBA Surety Bond from $2 million to $5 million. For more on the SBA's Surety Bond Guarantee program, go to www.sba.gov/osg/.

Community Development Financial Institution (CDFI) loans - The stimulus package passed this past winter allocated roughly $400 million in additional funding over the next two years to the U.S. Treasury's CDFI Fund, nearly quadrupling 2008's annual federal funding. Not under the SBA's purview, this government money, which is provided directly to lenders in underserved rural and urban low-income neighborhoods, is intended to help stabilize local economies and invest in small businesses that might not otherwise have sufficient access to capital. For more information on CDFIs or to locate one nearby, check out http://cdfi.org/.

To find more info on the small business-oriented aspects of the economic recovery plan, go to: http://www.sba.gov/idc/groups/public/documents/sba_homepage/recovery_act_overview_033009.pdf

How to handle workplace gossip

CommunityTeam — Wed, 06 May 2009 16:36:40 GMT

By Reed Richardson

"Have you heard the latest?" Every day, this phrase or one similar to it, can be found in nearly every workplace, whether it's written in the subject line of a discreet intra-office email or spoken in hushed tones across the water cooler or behind cubicle walls. What follows this conspiratorial come-on is more often than not unverified, unsubstantiated, and occasionally unseemly information, the type of office chatter that can appear, on its face, as harmless speculation or good-natured ribbing but that, if left unchecked, could ruin someone's career or wreck someone's business. Smart business owners, in other words, should recognize that office gossip and workplace rumors can have a profound effect on their bottom line and that not having a strategy to handle them could be a recipe for disaster.

"You're never going to erase gossip altogether," acknowledges executive coach Peggy Klaus. "Still, I really counsel people and businesses to stay away from it as much as possible because it's an energy-suck, a time-waster, and it's very debilitating for morale." A recent Randstad survey of more than 1,500 U.S. employees found that most employees recognize the pernicious effect of gossip. In that survey, three out of five adult workers listed gossip as their top workplace pet peeve. But if so many of us view gossip as annoying, unwelcome behavior, why then did the survey also find that only 8 percent of workers complained to their boss or supervisor about it?

A natural tendency
"It's just human nature," explains Klaus. "We are social, and gossiping is seen as a way to build relationships and alliances with people. It also lets you feel like you are in the know and more in control." And she points out that this tendency for employees to secretly speculate about who's up and who's down or what a company's future holds is exacerbated during turbulent economic times. "Anxieties are at an all-time high right now," she notes. "And the recession is like a giant Petri dish for gossip."

Coupling this economic uncertainty with a small business can make for even more trouble, says human resources trainer Hunter Lott. "Think about the potential effect that one or two gossips in an office of 20 can have versus an office of 200," he says. "Because of that, it's more imperative for small companies to stay on top of office gossip and rumors."

Gossip may be at least somewhat true
It can be a challenge to do that, however, since office gossip often begins as a slight embellishment of the truth. In fact, social scientists Nicholas DiFonzo and Prashnat Borida, authors of the book Rumor Psychology, found during their research that "most workplace rumors are 95 percent accurate." Matt Shollenberger, a licensed counselor from West Chester, Pennsylvania, who has worked with several victims of workplace gossip, agrees. "If the gossip is something that's believable, it's harder to defeat," Shollenberger says. "Whereas outrageous rumors are usually able to be squashed very quickly."

Still, business owners ignore outrageous rumors at their peril, he notes, as those have the greatest potential for harm. Shollenberger says he has counseled several clients whose careers unraveled because they could not shake nasty personal rumors about themselves, many of which put them in a kind of a Catch-22. "Despite denying all the gossip and swearing a rumor isn't true, co-workers and supervisors can still remain suspicious of a gossip victim because, well, what else are they going to say in their defense?" Shollenberger notes. "And if an incendiary rumor about an employee goes unaddressed by HR or management for too long, the victim can start to feel isolated and betrayed, like everyone knows the gossip." That kind of poisoned work climate-where petty office politics outranks productivity-can soon lead even well meaning companies astray and makes a company ripe for a lawsuit.

Make your values clear
To combat an out-of-control gossip situation, business coach Klaus counsels her business clients to first give a "state of the union" speech. "You come out and reiterate your company's culture and values and be very clear about what will and won't be tolerated," she says. In addition, she recommends that small business owners then follow up by providing their employees with safe, non-judgmental ways of dealing with serious, hurtful rumors, like a confidential suggestion box, an open door policy, or, in cases that might directly involve the boss or business owner, third-party mediation. "The more transparent the process and the more feedback you give, the better," Klaus says.

Human resources consultant Lott notes that, to be effective, any anti-gossip effort must not play favorites. "What I tell bosses now, especially those in small businesses, is that there is a performance aspect to every job and there is a behavior aspect to every job," he explains. "They are separate, but equally important elements." If this clearly becomes a company's standard, Lott says it becomes much easier to discipline that obnoxious salesman whose customers love him but whose rumor-mongering is detrimental to the office atmosphere. "It's great to have a behavior policy as a benchmark," he adds, "but it doesn't have to be an official policy as long as there are clear, commonsense consequences to bad behavior."

A teaching opportunity
To prevent minor office rumors from spiraling out of control (and to save small business owners from constantly refereeing petty squabbles), it's also a good idea to teach employees how to address or deflect gossip on their own. The number-one way to do this, most experts agree, is confrontation-+diplomatic+ confrontation. "Gossips typically don't like being confronted," says licensed counseler Shollenberger. And he adds that gossips will typically back down and think twice about doing it again if they're faced with the prospect of repeating their rumors directly to the subject or if someone else calls their bluff and suggests they take action instead of complain behind another employee's back.

Nevertheless, confrontation, while good in theory, rarely occurs in practice. The Randstad survey of workplace pet peeves found that just barely over one-third-34 percent-of workers were willing to express their displeasure directly to the gossiper. This unwillingness to confront a workplace gossip often arises from two distinct worries.

The first of these, Klaus acknowledges, is the very real fear of being ostracized, something she says she has experienced first-hand. "I was teaching at a graduate program in England and a colleague kept trying to get me to provide him with some personal information about someone else," she explains. When Klaus wouldn't comply, she says she quickly became persona non grata among most of the staff and, for a couple of weeks, no one would really talk to her. "You're suddenly seen as a self-righteous prig or goody two-shoes and you're not one of the cool kids anymore," she explains. "So, it's not surprising that when it comes to confronting or rebuking a gossip, we often don't do it."

The right way to confront
The other main obstacle to directly addressing a nasty office rumor revolves around the fear of instigating an ugly shouting match at work. But confrontation, Shollenberger explains, doesn't have to turn into a conflagration. "So many clients, when they come to me, don't know how to diplomatically confront someone," Shollenberger acknowledges. "I teach confrontation with a small ‘c.'"

To do this, he counsels against using the word "you" when addressing a potentially gossiping co-worker. "That word puts people on the defensive right away," he says, heightening the chances of a conversation escalating to something unprofessional. In addition, he recommends following up with sets of what he calls "facts/feelings." "For example, you might say ‘I've heard a nasty joke is being told behind my back about my recent absence from work and that makes me feel angry and hurt." This strategy, Shollenberger explains, gives the gossiper the benefit of the doubt and prevents minor misunderstandings from erupting, while, at the same time, making clear the repercussions of the rumor and the fact that it won't go unanswered.

In the end, perhaps the best way to reduce gossip and workplace rumors is to preempt them from happening in the first place. "When employees don't know what's going on or why certain decisions are being made, that's when gossip and rumors start up," says Lott. "So if a business wants to prevent gossip and rumors, a simple solution is to talk with employees as much as possible to fill that communication gap instead." After all, gossip doesn't tend to go very far around the office if the answer to "Have you heard the latest?" is always "Yes, I have."