Friday, January 30, 2009

FREE MONEY $$$$$$$$$ FOR SMALL BUSINESS: The Myth Lives On

Once in a while I stay up pretty late watching some old movie that I can't seem to pass up. It's during this late night venue that the commercials and ads often feature someone discussing their latest book on how to obtain "free money" from the government for starting a business, paying your household bills, etc.

I've always wondered: IF this free money exists, why isn't the person in the infomercial getting some? Why do they have to sell a book?

Heck, if money were that easy to come by, I'd be out there myself signing up for it, and you'd find me vacationing in Tuscany rather than writing this Blog!

So, I've set out to find what is written about FREE MONEY and better educate you on that subject.

Here's a good response by Business Week's Karen Klein: http://www.businessweek.com/smallbiz/0001/sa000111.htm
It's a bit dated, but it still holds true today.

Business Week stepped up to the plate on this issue again in 2008, with the resulting response by Kerry Miller, definitively touching on my favorite question-mark-coated book author: Matthew Lesko, of late night running-around-the-capitol fame.
About.com has a great two part article on Government grants you may want to check out:

Hopefully, this will answer some of the questions you may have had on where to find all of this grant money that really does not exist. I just got a new kitten, and I forgot how often they run around in circles chasing their tail until they figure out it is attached to their body. Hopefully, this will save some of you from having to run around in those same circles looking for that ever popular, in late-night-ads and on-the-internet, free money myth.

Thursday, January 29, 2009

Is Your Small Business Healthy?

Today was Wellness Day at The University. Employees are invited to spend their day being proactive about their health and well-being by attending hour sessions and activities geared to sparking enthusiasm about taking care of themselves. It's a very good day, not only in that it exposes us to many ways we can work at becoming stronger and healthier in the upcoming year, but because it's a well-organized program with plenty of good things to learn!

This got me thinking. When can we say a small business is healthy? Is it simply a matter of profits, or are there other things involved. So I did some research, and below is a synopsis of what the experts say makes a small business a healthy business. You may be surprised at some of the items.

(1) The business has a clear direction, mission, or set of goals and is clearly defined and focused.
Focused businesses have people all working toward the same thing, and not running around in circles trying to accomplish 50 things at once. They are not trying to be all things to all people, but they are trying to be the BEST at some THING that they do very well. Focus also involves employees, making sure they know what is expected of them in their jobs, and asking them to meet the requirements of performance for each of their positions.

(2) The goals are monitored/measured as to what is achieved on a monthly, semiannual and yearly basis.
Goals are meant to be measured. You don't just set them and say "that's nice." You set them and check back on them regularly to see how far you've come in meeting them. That's why every goal should have the following elements: (a) state the objective; (b) state the expected result; (c) quantify the goal for measuring purposes; (d) set a deadline/date for completion.
An example of a poorly worded goal might be: "Improve customer contact to be more effective."
There is no mention of how to improve it, by when, or how improvement will be measured. AND, who defines "effective?" What exactly will be considered effective? A better way to word that goal would be: "Monitor customer interactions by surveying 10% of the customer base each year." This goal implies a survey will be designed as a measuring tool, one which would ask questions that help us define what is and isn't effective. The goal also tells us exactly how many surveys we will do in the course of a year (12 month period). Ultimately, many better measurements could come from this goal.

(3) Business owners set aside time to plan for the business' success.
I've met plenty of business owners who tell me they don't have the time to do alot of things. They don't have the time to take classes and continue their education. They don't have the time to attend business functions, community activities, or networking opportunities. They don't have the time to plan, they are too busy running their businesses!
I do understand that running a business is, well, BUSY....but, if you don't make the time to plan for your future, to set those goals, to set the direction, you will eventually find that you are not as competitive in the marketplace as you should be. Planning is key to the success of a business.

(4) Owners examine their environment, including their competitors, regularly.
This can almost be tied to number (3). Time needs to be given to watching what is happening in the marketplace around the business, to examine what competitors are doing, and to figure out what responses YOUR business will make (if any) to the findings. If you know, for instance, that a competitor is missing the mark with a certain type of customer, you may be able to fill that gap and supply that customer with what he or she needs. But you won't know that unless you make some time to look the situation over. Healthy, successful businesses do not live in their own little shell. They are constantly interacting with their environments and surroundings, pulling pieces of information from their interactions which may be used to better their businesses.

(5) A healthy business has the resources available to do what it has planned. (And if it doesn't, it finds them and puts them in place.)
The term "resources" applies to many things: people, capital, facilities, equipment, etc. A business should not plan itself OUT of business. That is, if the goal requires more people with certain types of capabilities be employed in the business to see the goal through, then the business needs to have the capital in place to hire those individuals and find those capabilities. If it doesn't, it may have to scale back or attempt the goal in phases. It's okay to set some challenging goals for the future, but don't rush into them until you have the resources in place to assist you in achieving them.

(6) The owner understands how to construct a Cash Flow Statement.
If there's one thing I know for sure, it's that a Cash Flow Statement is the truest picture a business can have of the flow of money in and out of the business. If a business owner could only pick one statement to concentrate on in terms of helping them to understand trends in their business, and how those trends affect their available cash, this is it! If you are thinking right now that you have no idea what a Cash Flow is, go back up to (3) above and set aside some time to take a seminar in understanding Cash Flow. (You may also sit down with an SBDC counselor and have them explain it to you.)

(7) A healthy business pays its people and its vendors regularly.
This probably doesn't need much of an explanation. If you are good at (6) above, you have a head start. Healthy businesses maintain their expenses. It's as simple as that.

(8) A healthy business is a fun place to be.
There really wouldn't be anything healthy about going to your business on a daily basis and hating it. You have to like what you do. You also need to work at making your business environment a great place for your customers, suppliers, employees and others to be.

These are just a few of the characteristics I've found that are related to healthy businesses. Can you find more? If you do, post a comment and tell us where you found the items, or give us your opinion on what you think makes your business healthy!

Wednesday, January 28, 2009

STARTING A BUSINESS?

What do you need to know when thinking about starting a business? Well, we recommend a number of things.

First, you need to know that you will be dedicating alot of hours to your start up and to running your business in general. Also, that in the initial stages, you may wear alot of hats: bookkeeper, planner, owner, marketer, etc. You need to be prepared for this. It isn't easy and it's going to require your persistence and enthusiasm every day.

You also need to sit down and begin to put the "operations" of your business in writing. Often called a business plan, this document will serve as a measuring tool down the road, and a guide for you and others who join the business.

As part of your plan, you will be doing research regarding the type of business you are looking to open. Hopefully, this is something you are interested in, have a background in, and perhaps may have even worked in the field and/or been educated in the field before start up. You don't have to know every nuance of the field, but you have to be aware of some of the basics involved. For example, a person who worked as a buyer for a local women's clothing store for five years, would be an excellent candidate to think about starting their own shop. They know the basics of the business, have experience in some of its aspects in terms of management, and have a basic understanding of the market and costs associated with opening this type of concern.

Trade associations are a good place to look for information that is industry specific, such as how much consumers spend in a given industry, sales and outlook forcasts for the industry, and other significant and specific information relative to each sector. To find a trade association geared toward the type of business you wish to start, go here: http://en.wikipedia.org/wiki/List_of_industry_trade_groups_in_the_United_States. While not a comprehensive listing, it is a start. You can also "Google" your industry, plus the words "trade association" to find more associations in your business category. (Example: Womens Retail Clothing Trade Association).

We advise that you explore all the expenses and costs associated with starting your business, to help in the development of a solid CASH FLOW document. A good example of cash flow statements (with an excellent discussion and explanation) can be found at this site: http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P06_6400.

Once your cash flow is constructed, look at the bottom line--the full year of projected cash flow--and ask yourself: "Do I have the capital to cover this activity in my business for the first six months? The first year?" If not, you may need to seek outside sources of funding. To start up without making sure your business is covered financially will mean you will start "undercapitalized" and this can cause problems down the road, such as relying on personal credit cards to finance your business, not being able to pay your accounts payable on a timely basis, etc.

In the State of Pennsylvania, there are three basic items a would-be entrepreneur needs to consider for start-up purposes. These include: (1) registering the name of your business; (2) obtaining an Employers Identification Number; and (3) obtaining a sales tax number. There may also be some local or municipal concerns in terms of business start up. It all depends on where you are located and what type of business you are starting. For example: If you decide you would like to start a car wash in a given municipality, there will most certainly be zoning and environmental issues surrounding this type of start up.

The University of Scranton SBDC can assist you in your start up, by guiding you through the steps discussed above. For more information on how you can become a client, contact our Center at (570) 941-7588 or 800-829-SBDC. You may also fill out an online "Request for Counseling" form on our website: http://www.scrantonsbdc.com/.

(1) Fictitious Name Registration in PA

(2) Employers Identification Number
http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

(3) Pennsylvania State Sales Tax
http://www.pa100.state.pa.us/


Tuesday, January 27, 2009

Food Specialty News

If you have ever thought about packaging up that sauce that everyone tells you is SOOOO good, and selling it in the food marketplace, you may want to attend the Nebraska National Small Food Manufacturer Conference, April 23-24, 2009 in Lincoln, Nebraska. For more information on the conference go here: http://www.fpc.unl.edu/nsfmc/ (a nice overview of the conference, topics and break out sessions).

More local, and upcoming, is the Pennsylvania Association for Sustainable Agriculture's (PASA) http://www.pasafarming.org/conf2009/ farming for the future conference held in State College. If you farm or are a producer in Pennsylvania, this is a must go! Let us know if you are going to be there, and after the conference, let us know what session you liked best!!!

If you have other questions with regard to developing your specialty product, you can contact our Agribusiness and Food Specialty Center at (570) 941-7588. Ask to speak with Maria or Elaine!

Scranton SBDC Joins The Blog World!



Welcome to the University of Scranton SBDC Blog!

We hope you will check back often to see what's happening at the SBDC, to ask questions about starting and running a successful business and to tell us about yourself and what you need to succeed in the small business world.

The SBDC offers FREE and CONFIDENTIAL one-on-one consulting to small business owners and those thinking about starting a business. The SBDC also offers training and educational programs in various aspects of small business management, start up, and business planning. We will be sure to post upcoming trainings to the blog!

In the meantime, be sure to check in for tips in strengthening and running your business in a difficult economy.

The network of SBDCs is 18 strong in Pennsylvania. For a list of where the PA SBDCs are located, go here: http://www.pasbdc.org/. Not just limited to Pennsylvania, the SBDC network can be found nationwide. For a listing of an SBDC near you, go here: http://www.asbdc.org/.

The SBDC network in PA is funded by the Small Business Administration and the Department of Community and Economic Development (Commonwealth of Pennsylvania), as well as, in most cases, by the college and university host institutions at which they are located. This public/private partnership allows you to access small business assistance to assist you in keeping your operations competitive, viable and successful.

For more information on the Scranton SBDC program, go here: http://www.scrantonsbdc.com/.
Happy Blogging!