Would Your Governor Sign Your State’s Small Biz Report Card?
The smiles in Texas must be stretching from Stetson to Stetson. The San Antonio Spurs made mincemeat of Miami and their state gets an “A+” rating in the third annual Thumbtack and Ewing Marion Kauffman Foundation survey of small business friendliness. Other “A+”-rated states in the survey are Idaho, Utah and Virginia. Colorado, Oklahoma, Tennessee and Louisiana grabbed “A” ratings. On the other end of the scale, small biz owners handed out failing grades to California, Rhode Island and Illinois. More specifically, the cities of Sacramento, Providence and Buffalo received the worst marks from those surveyed. While there was some movement between earlier surveys, most of the highest and lowest performing states seem to have a lock on their positions. Texas, Utah and Idaho have been among the top five every year of the survey, while California and Rhode Island have been bottom five cellar dwellers each year. Taxes vs regulations Although the highest ranking states are generally among the lowest taxing states—and the converse is true for the most poorly ranked states—regulatory compliance issues are a bigger driving force when it comes to final rankings. Fully two-thirds of all respondents feel they pay their “fair share” of their state’s tax burden. It’s licensing requirements and the hassle of filing taxes that get under the skin of small business owners. Have you seen the TV ad blitz that declares “New York State (is) Open for Business”? You probably have. The last time I saw a figure, Gov. Andrew Cuomo was spending $140 million on the campaign. Melissa DeRosa, a spokeswoman for the governor, told the NY Times that “we are doing everything we can to level the playing field to bring businesses and jobs to the state of New York.” The commercials and “The New NY” campaign tout tax-free zones, funding assistance, help finding resources, export tools and more. The program’s website offers a lot of information. However, despite this high profile effort, New York has only bumped up from a “D” grade in 2012 to a “D-plus” in 2014. There is one more point I want to note about New York; although it sports an overall low rating, it gets an “A-minus” for “training and networking.” The fundamentals I’m detailing what’s happening in New York for a specific reason: It’s not short-term government programs that create a positive climate for small businesses, it’s the long-term policies, approaches and infrastructure that make a place good for business. Politicians at all levels campaign on the promise to enact special programs to “create jobs,” but they are virtually worthless to an area’s long-term economic health. The key is to establish policies that make it easy to do business and then get out of the way—stop messing with things. That way the requirements of doing business are understood and predictable from year to year. So here’s some advice to New York and the other low-ranked states. Model yourself after Texas, Idaho, Utah and Virginia and then stand back and see what happens. Can you imagine how small businesses could transform this country if all 50 states received “A”...
read moreSmall Business Owners are Problem Solvers.
I’ve always said, show me a problem and I’ll show you a business opportunity. That’s exactly what happened to Keith Hayman, founder of Music City Pizza in Nashville, TN. Hayman moved to Nashville after having lived in New York and San Francisco, both well-known cities for their delicious pizza which can be found on nearly every city block. Hungry for a slice of pizza pie, Hayman began searching for a good pizza joint in Nashville. He learned while there were plenty of barbecue restaurants, pizza was hard to find. So he decided to take matters into his own hands. He’d open his own pizza parlor. But he didn’t stop there. Like most entrepreneurs, he had a bigger vision. A former touring musician, Hayman wanted to combine his love for music, pizza and beer into one package. Recently, his business caught the eyes of Capital One Spark and was featured in their “I Am Small Business Proud” campaign. In the past few weeks, award-winning filmmakers, Trisha Dalton and John Sears trekked across the country, visiting small businesses and telling their stories—Keith’s Music City Pizza was a hotspot they couldn’t miss. “I thought pizzas look like records and everyone comes to Nashville looking for a record deal,” Hayman said. “So I came up with a record deal for up and coming bands. What that means is I name pizzas after the bands, and they come and play my venue. They get exposure and for every pizza that sells the band gets a buck.” In addition to supporting area musicians, Hayman also works with local charities on fundraising activities. Like so many small business owners around the country, community support — giving back — is an integral part of the business culture. Open less than a year, Music City Pizza has had its share of obstacles. As luck would have it the venue launched at the same time as about 75 new restaurants in the Nashville area. Then Nashville was hit by the Polar Vortex which kept many potential customers inside their warm homes. But Hayman survived, and he says business is picking up. “This business operation is the perfect balance for me. I get the business and I get the creativity. I still play almost every day and I get to create music, too,” Hayman explains. What I love about the Music City story is that it is indicative of the spirit of entrepreneurship. And it has what I believe are the elements of a successful venture: * Identify a market need and solve the problem; * Make sure you love what you do; * And be unique. This is just one of the many inspiring stories profiled by the “I am Small Business Proud” filmmakers who crossed the country talking to business owners from all walks of life. I encourage you to watch the vignettes on YouTube. The entire campaign which ends June 14 after a 10 week road trip was sponsored by Capital One Business Spark. Editor’s Note: The opinions expressed herein are those of the author (yours truly) and are not indicative of the opinions or positions of Capital...
read more3 Steps for New Venture Success
Opportunity knocks but once. Nothing ventured, nothing gained. Carpe Diem. Just do it. The early bird…well, you get the idea. There are a lot of proverbs and sayings written to inspire us to act, yet reticence, hesitation and delaying tactics are often the order of the day. Talking to small business owners and aspiring entrepreneurs, I see this phenomenon all the time. An attribute of the human instinct for survival is fear of the unknown. We all have it in varying degrees. For a few, it is easily overcome. For others, it takes a little effort. And for some, it is very difficult to venture into the unknown. Where do you fall on that continuum? If you’re among the group that needs to spend months thinking through any new venture, there’s a good chance that you are missing out on some excellent opportunities. The odds are also high that someone else will pick up on the opportunity that you forgo. Have you every said yourself, or heard someone else say, “Oh, I had that idea years ago, but never did anything with it”? There are a few steps you can take to help you blow past any fears that might prevent you from pursuing a potentially successful new business venture. First, understand that failure is the “worst” thing that can happen. Unless your new business idea is to become a freelance tester of new parachute designs, the absolute worst thing that can happen is that the new venture won’t work out and you may lose a little money. Money can be replaced. Second, understand that failure is a prerequisite to success. The point here is not to view failure as an end result, but as a necessary place to pass through on the way to your greatest successes. I recently reviewed some survey results published by EMyth that looked at the traits of successful entrepreneurs. One of the most important traits for an entrepreneur is to be a “repeat offender.” In other words, when people get beyond their first business idea, they are much more likely to enjoy good success. Third, take the first step. I’m not going to go hunting for them right now, but I’m sure there are also a lot of adages that say the first step is always the most difficult. This is because our “reason” and our “will” are always battling one another. Sometimes reason tells us to do something, but our will puts on the brakes. Other times our will pushes us to do things that our reason says are ill-advised. If a new venture looks “reasonable,” don’t be thwarted by a balky will. Review the first two steps above and make the move. Once you complete the first step, the rest usually become much easier. Now it’s your turn: Have any successes or failures you would like to share? Image: David Benbennick, “Thumbs up,” © 2005, used under a Creative Commons Attribution-ShareAlike license:...
read moreDo You Have This Critical Success Trait for Small Business Success?
If you’ve been around entrepreneurs and startups for a while, you begin to compile a list of reasons why some are successful and others are not and you have to scratch beneath the surface. For example, some failed entrepreneurs might say they were undercapitalized. That’s more of a symptom than a cause. Why were they undercapitalized? Many success stories can be directly connected to the attitude that the entrepreneur brings into the project at the very onset. Is the neo-small business owner merely trying to create a job, or is he or she pursuing a bigger goal? Wisdom gained from answering these questions is applicable no matter what kind of startup you are going to pursue, whether it’s technology based, service based or a traditional business of some kind. Success traits EMyth (business coaches, online education and coach training) looked at these questions from the perspective of the traits found in seasoned entrepreneurs. And, if you re-read that last sentence, I want you to note the word “seasoned.” In the EMyth study, it turned out that having one failure under your belt goes a long way to establishing the traits that it takes to launch a successful startup. “There were a number of surprising findings,” says EMyth’s Chief Brand Officer, Jonathan Raymond, “but none more so than that a second-time business owner is overwhelmingly more likely to succeed than a first-time owner, even if that first time owner has been in business for 30 years.“ (Emphasis mine.) “The seasoned entrepreneurs were sustaining a five-year rate of growth over three times that of first-time owners. And, what’s more, it didn’t matter if they’d owned two, three, or even more businesses before. The magic factor was getting past the first one,” Raymond continues. Put growth center stage It turns out that some of an entrepreneur’s strongest points—passion and commitment—can be huge liabilities. These same qualities may prevent them from building a truly growth-oriented team, the study found. How you hire the people you surround yourself with usually ends up being your most important decision. You don’t just want to plug in people who are good at a particular task; you want people around you who have a vision for growth. Too often new small business owners try to maintain a tight-fisted control over where the company is going. It’s hard to let go. Operations and even goals get compartmentalized. Talented co-works wilt in that environment. You must be willing to let others flourish within the environment (leadership) you provide. Let’s be honest: Every startup is hard work. But do you want that hard work to be invested in a growing, flourishing business, or do will you merely allow it to keep you busy until you drop from exhaustion? You can get a deeper look at what the study found in a webinar and slides available at State of the...
read moreCongratulations! Your Small Business is Going to the Dogs
Cei and Suzanne, two team members at Hired, a tech career marketplace place, were recently recognized for their one-year anniversary with the San Francisco-based company. It’s not unusual for a company to recognize the service anniversaries of their employees, but this situation was a bit unusual. You see, Cei is a (pronounced “Ky”) is her 120-pound Leonberger — a really big dog. Cei comes to work daily with Suzanne and is a beloved part of the team. At the marketing services firm O’Hara Project offices, company mascot Chloe, is popular with neighboring businesses. She’s even a regular on the firm’s social media account engaging with clients. I mean with a face like that — who could resist her personality. So why are these small businesses going to the dogs? Because it’s smart business. Well, here’s the scoop. Experts agree that having a dog with you at work is an inexpensive way to increase productivity and reduce stress. Additionally, studies have shown that dogs also enhance collaboration at work. “The advantages to having dogs in our workspace is pretty clear to our team here at FreshBooks. Stress reduction aside, I can’t tell you the number of times that a co-worker I usually have little reason to interact with otherwise has approached to meet my dogs, Kitty and Carl. These interactions more often than not lead to new friendships and can result in employees from very different arms of the company discussing how they might work together on projects in the future,” explains Chris Richard, Support Rockstar at Freshbooks. Small businesses often find allowing their employees to bring their furry-four-legged friends to work is a unique and valuable employee benefit — something they can’t get from a large company. At Rover.com, the company’s policy is, “bring your furry friend to work, if it makes you happy.” Because today is Take Your Dogs to Work Day, I thought I’d share some guidelines with you if you’re interested in creating a dog-friendly or pet-friendly small business. 1. Types. You need to decide what types of pets will be allowed in the office. Not every pet is office appropriate. 2. Parameters. Determine what parts of the office the animals will be allowed. There may need to be pet-free zones. Taking dogs to meetings or having them in areas with high customer traffic may be problematic. 3. Limits. Establish criteria that forbids sick or dirty animals. Also, require proof the animal is current on its vaccinations and licenses. 4. Get buy-in. Make sure your entire team is on-board. You may have employees who are afraid of dogs or other animals or may suffer from allergies. 5. Clean-up. Require employees to clean-up after their dogs if there is an accident. Some businesses have a three-strike rule; three mistakes and you’re out. 6. Noise. Establish guidelines for noise levels, particularly in an area where there is a considerable amount of customer interaction. An incessantly barking dog is bad for business. You can find more information about how to make your office a dog-friendly or pet-friendly environment at dogfriendly.com. And if you have a furry four-legged team member, share your pictures here. ...
read moreWant to Sell Your Business Someday? Start Planning Now
We’ve touched on the subject of exit strategies here before and one of the most important points in that discussion is that you should have the end in sight even when you’re first starting a small business or buying an existing business. The ultimate buyer of your business when you’re ready to move one will determine the direction of the business, how you manage it and how you position it. So, now that you’re getting more serious about selling your business, who is it going to appeal to? Is your business basically an owner-operated company? If so, you’re going to have to find someone who has an interest in that level of day-to-day operations. Selling your business is a job of finding the right individual. Do you have management in place to run the business so it requires minimal oversight from you? If that’s your situation, it opens up other options for buyers. When your business falls into that second category you can be more creative in your hunt for a suitor. Think about companies who can use your business to achieve better vertical or horizontal integration. Enhancing another company’s position Is there a competitor in another area of the country that would benefit by expanding to your location? Maybe there’s a competitor who would like to snap up your business to gain market-share. This would be a horizontal expansion for the company doing the buying. Does it make sense for a related industry to buy your company to improve its efficiency and allow it to capture value added profits? If you’re retail, do you have a major supplier that would benefit from a retail presence? If your business is setup to continue beyond your ownership, an investor—a more local version of Warren Buffet—could be interested. This is especially true if the sector you’re in offers a good cash flow. To get the best price you need to do a lot of homework; and this isn’t high school—don’t put your homework off until the last minute. You must find out how similar companies are valued. There are a variety of formulas used and you need to see which typically apply to the kind of business you own and operate. Get ready for the scrutiny Once you understand how a potential buyer will look at your business when you start to negotiate its price, you can do a good job getting it ready to sell. You might need to make a significant effort to improve cash flow, reduce overhead, lower inventory levels or reposition your business in other ways to attract buyers at a price you can live with. Usually buyers will look at three years of profit and loss statements. This is why you need to be planning your end game moves well before you want to make the sale. There are websites such as BizBuySell.com where you can list your business and there are also professionals—brokers, mergers and acquisitions advisors and bankers—who can connect buyers and sellers. Find the right one for your business and start planning for your sale sooner rather than later....
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