Have extra cash due to lower fuel costs? Here’s what to do with it
Amazon.com founder, Jeff Bezos, isn’t very enthusiastic about posting profits. After all, when there’s a profit at the bottom of your balance sheet, the taxman comes knocking – no, pounding – at your door. Bezos would rather create cash flow and plow it all back into the growth of Amazon.com. While none of us have a hefty Amazonian-sized cash flow to play around with, many small businesses are enjoying improved cash flow right now because of lower energy prices. To put this quite frankly, if you let all that money flow down to your bottom line or personal income, you’re going to lose a big chunk of it to the IRS. The net result will essentially erase the benefits you seem to be enjoying today due to lower energy prices. Instead of giving it to multinational oil companies or OPEC nations, you’ll be giving it to Uncle Sam. Here are some approaches to dealing with the extra cash you may have on hand because of lower energy costs. Improve and grow Invest in your business. This is the Bezos strategy. Depending on how much you are saving due to $50-barrel oil you can do things such as: Increase your marketing budget, Hire temporary employees to handle special projects, Research/develop new markets and new products, Catch up on deferred maintenance, Improve/expand your facilities, Redesign your website, Buy new equipment, Boost inventory by negotiating lower pay-on-delivery prices. Resuscitate your retirement Another tax-free way to deal with the extra cash is to invest in yourself. Plow it into your retirement accounts. Talk this over with your accountant or financial advisor. There are a variety of retirement accounts available to small business owners and if you’re at least 50ish, you can often make larger contributions, and now is the ideal time to do that. And since I’ve mentioned professional financial advice, there are some strategies that require more scrutiny that I can offer here, including: Boosting cash reserves in a contingency fund, Depositing with a bank in order to help qualify for a loan or line of credit, Setting up a holding company where you can park the cash, and others. Look to the future Having a windfall of cash due to lower energy prices is a good thing, even if some of it flows to the net income line of your tax form. But remember, energy prices will go up again. Be careful about investing this increased cash in ways that will cause you problems when your fuel bills return to higher levels. In fact, that suggests another way to spend the money: Launch an energy efficiency project, upgrading equipment and facilities, then when prices go up again, they won’t take such a big bite out of your bottom line. Image: R. Manley from public domain graphic....
read moreThis Week in Small Business: Predictions and Practical Advice
Success in small business is a constantly moving target and if you want to hit it, you need to move with it. Check out this current news and information to keep yourself well positioned. Politics and Government Small business deductions as well as the corporate tax rate are issues likely to be considered by the new Congress. Will it be gridlock-as-usual or will meaningful legislation come out of Washington, D.C.? One promising development is that among the newcomers to Congress are several entrepreneurs. Take a few minutes to get to know them. Over in Illinois, Gov. Pat Quinn just signed a law that requires businesses with more than 25 employees to have a retirement plan. Small Businesses are snubbing the federal SHOP health exchanges when seeking coverage. Owners and brokers blame limited tax credits and few options. Small Biz Inspiration Beer sales are down overall by about 2 percent but craft beer sales are up 17 percent. There may be a lesson here for small business owners. Need an “Ahhh” moment? You’ll love what this young entrepreneur did with her holiday down time. Scroll through these 15 startup ideas if you’re looking for a new venture or plan to expand. This really doesn’t belong under the topic of “Inspiration” – “Warning” would have been a more suitable heading. But no matter how it’s categorized, this cautionary tale of failure turned into success offers sound teaching. Marketing January is a good time to take stock of your business and how you’re leveraging inbound marketing. And while you’re at it, see you’re using funnels properly and reaching Generation Y prospects. Make sure your sales reps are using the marketing content you’ve taken such pains to create. And since it’s the beginning of the year, it’s time to come up with your content marketing plan. Of course you’ll want to measure leads, sales revenue, and growth, but what other data should you consider? As we head into a new year, Geektime lists five marketing KPIs you need to track in 2015. Here’s what the top agency, digital and brand players have to say about creative digital marketing in the year 2015. Want a quick preview? Automation and people are both up; Facebook is down. Adobe’s Suresh Vittal has a few differing views for 2015, including the “lonesome death” of organic search. Mark your calendars and attend some of the innovative 2015 marketing events across the nation. Economy and Finance A big chunk of the economic good news can be attributed to improvements at small companies. For those of you who would like to take a deeper look – including graphs – review this report from Intuit. Concern about taxes replaces sales as the biggest problem for small businesses. This is good news. Small business lending – loans less than $1 million – continues to lag. And if you need proof, lending fell in November. More venture capital funds were closed in 2014 (308) than in 2013 (247), but the number of funds was still lower than in any year from 2010 to 2012. Tomorrow Today It’s possible that the next hot career will be marketing professionals who are experts in creating 360-degree cyber experiences. At least the tech gurus behind the Oculus Rift headset think so. The only job requirement for being...
read moreFive Hot Trends for 2015: Which Will Benefit Your Business?
Predicting trends is always risky business. However, I’m confident the five I’m enumerating here will definitely command their share of headlines over the next 12 months and beyond. But frankly, whether I – or anyone else – publish an “X Number of 2015 Trends” article is not important by itself. Any value lies in determining which trends are most suitable for advancing your business throughout the year, so it’s from that perspective that I’ll examine these five trends, starting with what I believe is the biggest and most important. #1: 2015 will offer major small business growth. If you had a “Magic 8-Ball” rolling around your house when you grew up, you know that one of its answers is, “All signs point to yes.” That’s the way I feel about significant small business growth in 2015: It’s going to be there for those who are well positioned and ready to work hard. This has major practical implications for your business. You need to be sure that everything is in place to participate in 2015’s opportunity for growth. If growth requires funding, put it in place. You may need to hire. You could need more space. I have additional comments on some of these areas below. Also, during the recent difficult years, many small business owners deferred funding their retirements. Go into 2015 with a positive attitude, ready to grow and aggressively build your retirement accounts. #2: Savvy marketers stop chasing trends (with the exception of #5). Recent years have seen small business marketers go “all in” on the “trend du jour,” whether it was Facebook ads, content marketing, SEO, automated CRM or any number of tactics. In 2015, businesses will bring a sane and holistic approach to their marketing programs. All of these sales and marketing strategies have their place, but in 2015 small business owners will look at the big picture and design their own “marketing blend” that includes several of these, plus they will bring in more traditional marketing devices such as direct mail. #3: The color of money will be in flux. Major wars will be fought over payment systems and even currencies. Mobile acceptance systems, smart cards, smart phone-based payments, and cryptocurrencies like Bitcoin will be battling it out for chunks of this huge market. Some small business owners can sit out this war until some clear victors begin to emerge. Others need to get involved. Consider the customers you have today and the ones you hope to have tomorrow. Will the ability to use Apple Pay or one of the other players in this Kabuki drama impact their decision to do business with you? #4: The “home office” is officially listed as an endangered species. Virtual workers, coworking spaces and cloud computing will continue to change the complexion of the small business workforce. As you plan for your 2015 growth, you need to seriously consider all of these major trends. For example, if your planned growth includes opening up new territory, your initial foray could take advantage of a low-cost coworking space and perhaps even a virtual employee. If you have successfully moved critical infrastructure to the cloud, you can locate team members anywhere. #5: Mobile and local marketing are promoted from kings to emperors. Marketing professionals will continue to develop new systems and...
read moreHow to Practice Safe Hiring in 2015
Have you ever gone to a Chinese restaurant where every server seemed to be of Asian descent? Or do you know anyone, ahem, who has been served in a Hooters by anyone other than an attractive woman? Please spot me as I tread on somewhat dangerous ground, but I think we all know that these situations are quite commonplace and in some cases – as with Hooters – they are a major component of the business model (no pun intended). However, businesses need to be very careful to obey state and federal laws that prohibit employment discrimination – as one New York City restaurant found out recently. Want ad wording Owners of Sistina, an Italian restaurant on the Upper East Side, got slapped with a $5,000 fine for using the word “hostess” in a Craig’s List ad. (They are currently fighting the fine.) The word “hostess” is gender specific, which is a no-no per the state’s Commission on Human Rights. Also, the commission “tested” the restaurant by sending two email replies to the ad, one from a male name and one from a female name. The commission says that only the response from the female name was opened. The restaurant says that it originally wrote the ad without giving it much thought and that failing to open the email from the male name could have just been an oversight. While we don’t know the ultimate disposition of this case, it does highlight the care business owners need to take during the hiring process. First, your attitude cannot be casual. You need to be familiar with the law, perhaps to the point of consulting a lawyer – especially if you’re new to hiring. Protected classes Over the years, the 1964 Civil Rights Act has been amended to prohibit discrimination based on race, color, sex, pregnancy, religion, national origin, age (40 or over) and disability. You can find a list of prohibited policies and practices on the Equal Employment Opportunity Commission website. State or local laws may go further, naming groups such as homosexuals or transgenders. People who feel they have been discriminated against under the federal law need to file a complaint with the EEOC. However, note that in the New York case, the state commission acted on its own and apparently not at the behest of an applicant who felt he had been discriminated against. This underscores the value of consulting a lawyer to be sure you’re starting off on solid ground. As a general rule, start the employment process with a good job description. When you put the job requirements in writing, it makes them easier to review by yourself and others to be certain you are not mixing in any elements that could be considered discriminatory. Stick to the script Further, when you interview you need to stick to discussing the actual job requirements per your description and not accidently slide into areas prohibited by law. Also, it’s a good idea to have standard questions that you pose to each applicant. This will help you keep the conversation focused. I’m hoping that 2015 will be a major growth year for small businesses and if that materializes, many of you will be in the hiring mode. Don’t let a careless slip cost you big money and send you...
read moreCozy Up and Enjoy Some Success Story Cheer
Christmas and the holiday season unite us all in at least one thing: Celebration! With our shared interest in small business and entrepreneurism, I thought we should take this special time to celebrate small business success and the entrepreneurial spirit. So let’s wrap some small business success stories in festive paper and put a big bow atop each one. Low tech leveraging high(er) tech We occasionally read about some young tech whiz who programs an app and makes a bundle of money. But don’t for a moment think that’s the only path to success. Back in 2006 sisters and stay-at-home moms Tammy Nelson and Nycole Pederson launched an online (that’s the tech part) business selling yard signs (Sassy Signs); what could be more low tech than that? According to Family Circle, it cost the sisters $25,000 in startup manufacturing costs and after three years they were booking more than $200,000 in sales. From delivery guy to franchise owner Pakistani immigrant Nadeem Bajwa is the second largest franchise owner in the Papa John’s Pizza system. He came here in 1991 to pursue a triple college major of management, marketing and accounting. He took a job delivering pizza – first for Domino’s and then for Papa John’s. He was soon promoted to management and in 2002 he signed a deal that gave him ownership of two locations in Ohio. Before long he was operating 127 locations in the US and Canada. The American dream is alive and well. A kid cares for pets We have always taken inspiration from immigrants like Nadeem Bajwa who work hard and enjoy tremendous success. Through our history we have also been inspired by youth who come up with great ideas and couple it with a natural entrepreneurial spirit. Houston eighth grader Lincoln Dow is an example of a young man with an idea that he is set on pursuing. After once having to consign his pet Blue Doberman to an airplane cargo hold, he decided to start his own pet transport business: People and Pets Dog Airlines. The 14-year-old pilots a single engine plane and his plan is to use it to transport pets in comfort to virtually any location. The pets will ride in the back seat and Lincoln will make stops whenever his passenger requires it. Sounds like a (business) plan. The best social program Ryan Blair grew up in a poor home, in a bad neighborhood and surrounded by both drug and domestic abuse. With his siblings in prison and his mother an alcoholic, he became a ward of the state and turned to gangs as a replacement for the family he didn’t have. His mom eventually straightened herself out and connected with a man who moved them out of their crime-ridden neighborhood. The boyfriend believed in Ryan and gave him the confidence to start his first business. In 2005, he founded a fitness and weight-loss business, ViSalus, that is now worth some $600 million. Ryan took the gritty education he got in the school of hard knocks and used it to propel himself to success in the business world. What is the difference between Ryan and the thousands who opt to deal drugs or just become poverty statistics for our society to bemoan? Someone came alongside Ryan, helped him gain confidence...
read more