Interest Rates and Small Business Borrowing

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Many believe that the increase in the interest rate will have a minimal effect in consumers wallets, and others believe small business borrowing will have no change despite this.  Borrowing for the small business owner  they believe is not a matter of whether the interest rate is high or not, but whether the small business owner believe borrowing can benefit their business or not.

For more about this and other topics follow the links below.


Everything You Need To Know About How The Rate Hike Will Affect Your Wallet

For the first time since 2006, the Federal Reserve has announced that it will raise interest rates by 25 basis points. This means that it is increasing the target for short term interest rates to a range of 0.25% to 0.50% from a range of 0% to 0.25%.

Within minutes of the Fed’s decision Wednesday, Wells Fargo, JPMorgan Chase and US Bancorp became the first banks to announce that they would increase their prime rate, a rate used for consumer loans like mortgages. Effective December 17, the prime rate at Wells, JPM and US Bancorp will move from 3.25% to 3.5%. Later in the afternoon, Citibank announced a similar move; many other banks are likely to follow suit.

Yet despite this and despite all the hubbub surrounding the Fed’s decision – journalists and Fed watchers have literally been talking about a rate hike for years – the immediate impact to consumers’ wallets will be virtually indiscernible. Fed chair Janet Yellen even said as much in her Wednesday afternoon press conference.


Small businesses like Nick’s Roast Beef may be easy targets for the IRS, says expert

Nick’s Roast Beef, a small family-owned business in Beverly, was federally indicted Monday and charged with reporting false tax statements.

As it turns out, Nick’s may be just one of many small businesses the IRS keeps a close watch on, according to Forbes.

Small businesses that run cash-only operations make easy targets for the federal government, defense attorney Joel Androphy told Forbes. All the while, bigger, more sophisticated businesses get a pass because the work to prove evasion can be more complicated, requiring more time and work, he said.

Many of the cases the IRS works on come from the “Whistleblower” program and involve small businesses with claims under $2 million, which is small in comparison to what some large corporations may be hiding, according to Forbes.


Don’t expect Main Street to accelerate borrowing overnight

What’s more relevant to small business lending appetite is optimism.

As years of low interest rates start to wind down, don’t expect Main Street to accelerate borrowing overnight.

There can often be a disconnect between the Fed and smaller businesses, which are driven by other variables including cash flow, business opportunities and loan availability and terms. If you’re a growing business, you’ve likely already signed onto loans. For the rest of the smaller guys, however, it’s likely borrowing will ramp up gradually to stay ahead of higher lending rates. And if anything can trigger more borrowing for small companies, it’s a more upbeat mood about business prospects.

“Business credit is so different than consumer credit. It’s driven far less by rates and far more by availability in terms of both loans and market opportunities,” said Jeff Stibel, vice chairman of business researcher Dun & Bradstreet. “Rates are almost irrelevant.”

The Federal Reserve, as widely expected, approved a quarter-point increase in its target funds rate on Wednesday. It was the first rate increase in nearly a decade.


A Way to Limit Common Management Mistakes

64510516You’ve probably heard this saying, “Insanity is doing the same thing over and over again and expecting different results.”  It’s commonly attributed to Albert Einstein, but that’s a mistake – the exact origins of the quote are unknown. However, as mistakes go it’s a “no harm, no foul” one.

Like this one, some mistakes are little ones, and then there are those big enough to close businesses.  The ones big enough to close businesses usually are the result of the owner’s and manager’s repetitive, unproductive behaviors (i.e. insanity).  The kind of mistakes that they repeat over and over, regardless of facts which show the behavior isn’t working.

Maturation in humans and animals is the process of being able to learn from our mistakes, which results in positive behavior changes.  That’s what we call experience – I tried this, it didn’t work, I learned from it and will try something else that’s hopefully better (and repeat). 

There are several common management mistakes which most people make.  However, there’s a simple time tested way to avoid or minimize the damage from them.  A way which has evolved over centuries and has the power of experience behind it – ask for help. 

The majority of small businesses start because the owner knows something about the product or service.  He’s worked in a specific field for someone else and then gone out on his own.  He’s good at what he does and knows his product, but what he’s not good at is the “other stuff” (i.e.  marketing, accounting, legalities and regulations, human resources, taxes). 

Nor should he be.  While those areas are important in running a successful business, no one has the level of expertise or experience to understand them all.  He shouldn’t expect to be good at or knowledgeable about everything it takes to run a profitable company.

Yet, overwhelmingly small business owners expect just that of themselves.  They won’t ask for help, because they see it as a personal failing.  They believe they can and should figure it out for themselves.  However, they get sidetracked by trying to do the things they aren’t good at and lose focus on their strengths.

One of the best ways to limit mistakes in business (and life) is being willing to learn from others.  Learning from other’s mishaps saves us from having to go through the costs and hardships of making them ourselves.  There are more than enough chances in life to mess up, why not take the opportunity to let someone else do it for you when possible.


So You Want to Buy an Online Business?

business (2)There’s a cycle in the development of any new technology and how it enters the business community.  Part of the growth process for any new idea is to be a good enough model to establish a business around it, and have that business become valuable enough to resale.

In the small business community we’re beginning to see the maturing of the online business market.  Up until very recently when people talked about owning an online business they were talking about starting one.  But, that’s beginning to change – small online businesses are trickling into the business-for-sale market. 

Owning and running an online business, like any business, has its positives and negatives.  The way to increase the positives and decrease the negatives begins with the buying process, nothing takes the place of solid due diligence.  Here are 2 vital areas to consider.

Technical

An online business is in a volatile and rapidly changing industry.  How much technical knowledge do you have and how much is needed for the business?  Do the ideas of regularly tracking site traffic metrics, developing SEO tactics, rooting out plagiarized content and maintaining your legal/ethical responsibly for security excite or bore you?

If you can’t or don’t want to manage the day to day technical issues you should have answers to these questions – who will, how much will they cost and how hard are they to find?  The problem of attracting and retaining qualified people is an on-going issue that’s not going to be resolved any time soon, if ever.

Financial

Be sure to assess the company’s actual value, risk and outlook.  Traffic totals are routinely unknown, manipulated and lied about.  Traffic is money, so don’t accept guesses or vague numbers.  The financial information should line up with the site’s metrics, all of which should be hard numbers gathered over a realistic time period.

If you aren’t an expert hire someone who is, someone who knows the industry’s past and current benchmarks.  As well as, someone who understands and has the data for the future outlook specific to your product or service.  Over inflated forecasts for the financial potential of online businesses are legendary.

Don’t be swayed by the hype.  The process of buying an online business is the same as buying one in a more established area (i.e., retail or food store, machine shop, insurance agency).  Taking your time and doing the due diligence is still the key. 


4 Ways to Increase the Bottom Line

donk1-300x266The majority of small businesses fail because they aren’t able to generate enough operating capital, they simply run out of money.  But, there are ways to prevent this.  The lack or loss of money is overwhelmingly caused by internal problems.  Contrary to most owners’ beliefs, external forces are responsible for just a fraction of small business failures.

Companies run out of money because the owners won’t or don’t know how to address their structural and operational problems.  Commonly, the actual causes of the typical business’s collapse can be traced to 4 problem areas.  Therefore, if addressed in a timely manner, profit and profit margins can be increased when the problems are identified and fixed.

Key to an efficient operation is putting the right person in the right job.  It’s vital to accurately assess employees’ skills, everyone has strengths and weaknesses.  This is especially true in small businesses where family and friends are often in jobs they aren’t suited for.  Putting people in positions they’re not trained to do or just aren’t capable of doing affects the bottom line. 

Lack of accountability – for owners (who usually don’t hold themselves accountable for their actions), managers and workers – is an enormous problem in workplaces.  This area all by itself can financially affect a business to the point of closing.  Employees, owners and managers must be accountable for their responsibilities and behaviors. 

Another area that directly affects profitability is lack of or poor internal and external communication.  Billions of dollars have been lost simply because somebody didn’t pass on important information, talk over a problem, speak up with a concern or listen enough.  Prioritizing effective communication, at all levels, is a smart fix.

The final area, improve production efficiency, is a no-brainer.  Some of the benefits include: it’s cheaper to produce the product, requires less rework, increased customer satisfaction, is easier to sell, generates referrals and decreased waste. All of which contributes to increased earnings.

These are 4 main ways a company can increase its bottom line.  If a small business owner is willing to learn some new skills, and consistently apply them, the monetary and non-monetary rewards (i.e. time off, happier employees, secure future, increased quality of life) are well worth it. 


Motivating Your Workforce

62227730When you are a small business owner, you concentrate in making sure the success of the company is possible by working hard and having employees that can help you achieve your goals.  Your goal is to optimize employees work to reach the success you envisioned.  Dedicated employees that can help you achieve your goals are an important part of having a business, and many employers fail to engage or value key employees that are an integral part to the success of their business.

For more small business news, follow the links below.


How Business Owners Can Stay Motivated Every Day

One of the biggest challenge that business owners face is motivation. Yes, they are motivated enough to start their business but there is no one really on top of them telling them what to do, how to do it, why to do it. They need to figure it out on their own. Entrepreneurs need to motivate themselves each day to get out of bed and create the perfect business.

That takes emotional fuel and it sometimes runs out. Wouldn’t it be great to figure out a strategy to load up on the emotional fuel needed to stay motivated? Imagine you can drink some kool aid that was legal and you can feel motivated with no low after. Sugar can get you hyper but it will also get you down right after it runs out. Real motivation comes from within. Here are a few strategies that have worked for me.

Create Clarity – The most important thing that you can do to feel great about yourself and your business is to have a clear strategy, purpose and vision. You need to be clear on why you are doing what you are doing. Once you know exactly how you will be spending your time and why you will be doing each thing that you are doing you will have two decisions to make.


Working hard to feel better: The importance of corporate wellness

Your shoulders ache, your head pounds and crashing on the sofa after a long day in the office is the only thing for which you can muster any enthusiasm.

If this sounds familiar, you’re not alone. Work-related stress — compounded by poor eating habits and lack of exercise — affects most of us at some stage, leading to low energy levels and, in extreme cases, cardiovascular disease and certain cancers.

While many strive to lead a healthy life, working for more than 40 hours a week inevitably takes its toll, and with the results of a recent IPSOS survey showing that 42 per cent of UAE employees find the workplace stressful, is there more employers can do to improve employee wellness?

“Absolutely,” says Andrew Picken, managing partner at Bespoke Wellness in Dubai, which offers corporate wellness programmes throughout the country.


Going Millennial: The Perks of Hiring Generation Y

Millennials: The Benefits, the Challenges and Why You Should Hire Them.

America’s population statistics are changing, and so is the workforce. Millennials now officially outnumber Baby Boomers 83.1 million to 75.4 million, according to themost recent US Census.

This means the workplace will soon undergo a transformative change—if it hasn’t already.

As more Baby Boomers reach retirement age, more millennials join the workforce. With this  drastic change in maturity comes a dramatic change in style—and we’re not just talking fashion!

Millennials have different takes on life, different motivations and vastly different expectations of the world compared to the generations before them. Businesses that want to remain successful would be wise to keep up with the times and find new ways to appeal to these burgeoning masses.

 


Entrepreneurial Stubbornness – the Good, the Bad, the Ugly

59948705Persistence, not listening to the nay-sayers, determination, following your dream: All things which contribute to starting and building a thriving business. All things which are fueled by good old-fashioned stubbornness.  I have yet to meet a successful small business owner who doesn’t have a very large streak of it.  Unfortunately, that’s not always a positive.

The Good

Stubbornness is a positive quality when it’s driving you to create, build and sustain a business.  The desire to “do things my way”  is a powerful motivator.  It’s what keeps you on track to work the long hours and make the hard decisions.  It has built multi-national Fortune 100 companies, as well as the local machine shop.

The Bad

As the saying goes, “There are 2 sides to every coin.”  There’s a bad side to entrepreneurial stubbornness.  It’s human nature to become attached to our own viewpoint – not only do we get stuck in ruts, we furnish them for additional comfort.  This makes it difficult to see other’s (accountants, consultants, employees, managers) points of view and listen to their ideas. 

Ideas which are good for you and your company.  When a company is growing there’s a juncture when the owner should shift from “a one-man show” style of management to a team approach.  Many don’t make that change, they stubbornly hang on to old ideas and ways of doing things, which often leads to the ugly.

The Ugly

There comes a time when an owners’ refusal to modify his inflexibility crosses the line from poor management skills to self destructive behavior-“the old way is good enough, no  one is going to tell me what to do”.  Resulting in — due to the owner’s unwillingness to recognize and adapt to changing ideas, technologies, employee’s needs and market requirements — a bankrupt company. 

Good entrepreneurial stubbornness often turns bad and ugly over time.  Owners fail to understand that we all need to evolve if we are to thrive in an ever changing world, and we have to be willing to listen to others to do so.  As Benjamin Franklin said, “We are all born ignorant, but one must work hard to remain stupid.”


Is SEO For The Small Business Owner?

Customer Relationship Management business chart on a digital tabFor some businesses SEO sometimes does not make sense.  It is no wonder then that many of the small businesses in the United States are not engage in trying or using SEO for their business. If you are a small business owner you may not have the budget or the incentive to undertake SEO as well. And although many businesses struggle to measure the ROI when hiring a company to do they search engine optimization, it is important to be aware of the benefits SEO brings to businesses when they do it well.


7 Credit Card Perks for Small Business Owners

You won’t get these sign-up bonuses and introductory APRs with consumer cards.

Owners of both new and established small businesses can benefit from a broad range of valuable perks offered with credit cards. Business credit cards not only provide a means for building and establishing business credit, but they can assist in record-keeping, preserving cash flow and separating business and personal finances. Much like consumer credit cards, the right business card can offer a plethora of rewards that you can redeem for flights, hotel stays and cash back on purchases.

Here are seven significant credit card perks for small business owners.

1. Valuable sign-up bonuses. Many credit cards offer a range of one-time promotions designed to attract new cardholders and business owners. These promotions might include sign-up bonuses allowing you to earn hundreds of dollars if you meet a specific spending requirement within a few months of opening the account. Sign-up bonuses may also award enough miles and points that you start out with free airline flights or hotel stays, simply for using your credit card.


Why Aren’t More Small Businesses Using SEO?

For more than a decade, thousands of businesses have enjoyed the benefits of high rankings in Google searches (and searches on competing engines) thanks to their SEO efforts. Larger corporations pour hundreds of thousands of dollars and allocate entire departments to gaining more online visibility, but even small- to mid-sized businesses can use a fraction of that budget to get more traffic and sales.

However, according to a recent survey by the Small Business Authority (SBA), less than 50 percent of small business owners in the United States think of inbound traffic from search engines as an “important” source of future business. Another 14 percent declared themselves unsure.

It’s also worth noting that only 17 percent of surveyed small business owners are actively investing in SEO. However, a startling 39 percent of business owners aren’t investing in any marketing strategies whatsoever, indicating that SEO alone may not be the problem.


How will the candidates help small business?

All politicians express support for small business. These enterprises are the engines of our economy and represent the entrepreneurial grit that has made this country great. Unfortunately, these rhetorical commitments to Main Street have not always been accompanied by meaningful actions. As a result many small businesses are finding it difficult to launch or grow, while others are failing altogether.

Since the misdeeds that led to the financial crisis of 2008, the federal government has adopted a myriad of regulations and requirements designed to reduce risk-taking by Wall Street. The quest for safer banks and greater financial stability is a good thing. However, we must be careful of what we wish for. The most stable financial system is one with no lending at all and many small businesses today are struggling to find credit.


Strategic Planning For Small Business Owners

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Developing a business strategy is for many small business owners a fundamental step that they cannot afford to ignore.  Hiring a business consultant to brainstorm ideas and the steps to put this strategy in place is imperative for the success of the strategy.  Many small business owners ignore the importance of not only developing the strategy , but implementing it as well.  Consistent effort should give you the results that a good implemented strategy can bring to your business. For more about this and other news follow the links below.


STRATEGIC PLANNING: Planning for the future

When you bring up the term “strategic planning” to most company owners, you normally get some hesitant stares and mumbled words. Most owners think strategic planning is only for large companies and the time and resource commitment is too large for them to bear. If done properly, it does not have to be so at all. When most companies really think about how much time they think about and discuss all of the future needs of the business, it probably adds up to more time than an actual planning process would take.

Many companies think they have a strategic plan, but what they really have is a one-year operating plan or budget. A strategic plan looks at all phases of the business over a longer time horizon, normally five years or more. It helps companies set a long-term direction that drives short-term activities and behaviors, and helps allocate time and resources to future endeavors, challenges and opportunities that are out there. We all hear “be proactive, not reactive” all the time — a strategic planning process makes you do just that. You can plan for more than you think you can.

 


The 5 Steps of Strategic Planning for a Small Business

Strategic planning for small business is not a process that is completed overnight–or even within one week. According to the U.S. Small Business Administration (SBA), planning for growth should include a “high level review of the different elements of your business,” almost as if you were “describing” your company for the first time.  Take a close look at the marketplace, delineate the precise “needs you are trying to satisfy,” and describe to yourselves (to owners and top managers) exactly how your “products and/or services” are meeting the needs of your target “consumers, organizations and/or businesses.” Honestly evaluate your “competitive advantages,” and your “competitive weaknesses,” within your industry and locale. Then, take your time within each of the following business areas.:


Is budgetting drowning strategic planning in your organisation?

“The budget is not just a collection of numbers, but an expression of our values and aspirations”…Jacob Lew

We can hardly see any organisation that does not have a well outlined budget in place. Organisations often rely on their budgets to guide them. It is not out of place to have a budget, but it is not enough to rely only on budget in driving the vision of the entire organisation.

Most organisations have missed it. How? They have allowed the budget to drive the organisation’s vision. Such organisations have worked day and night to develop a well outline budget but may not have realised the need to develop a strategic plan first. For the purpose of clarity, your organisation’s vision and the strategic plan are what drive your budget, and not vice versa.

Organisations that are reactive in their operations have low level of planning effectiveness. They allow the budget alone to drive the plan for the entire organisation. They also view planning as synonymous with financial objectives alone. Some other organisations are traditional in their planning effectiveness, and surprisingly are even better than the reactive organisations.


It’s Time to Get Serious About Strategic Planning

business (11)It’s that time of year again. The time of year when companies are — or should be — developing their strategic plans for 2016. Compared to larger companies small business owners are in an enviable position. They have more control over the development and execution of their plans. They can have a greater impact on the profitability and success of their business, with significantly less hassles and politics.
But, the downside is they have fewer resources (people, experience and knowledge) to draw from while formulating their plans. Often, in a small business, owners don’t know where to start or what’s needed to put one together and they need to figure it out for themselves. Here are 3 things they can do to fill in these gaps.
Combine data with intuition
Successful planners strike a balance between relying on just their gut or just the numbers. Usually, an owner falls into 1 of 2 camps — the “I don’t even look at the numbers, I go with my gut” guy and the “I’m a by-the-numbers, they don’t lie” guy. Neither is productive for the long term health of the company, good strategic thinkers use both to counterbalance each other.
Develop a trusted group
The most effective planners solicit information from others (i.e., peers, experts, employees, managers, vendors, customers) who’re successful. Because no one can know everything they seek out knowledge they don’t have. They cobble together their own panel of specialists. However, this isn’t group decision making — it’s about owners gathering data and opinions, and then reaching their own conclusions.
Be willing to learn
Questioning and listening aren’t the same thing. We all know people who ask questions, then don’t pay attention to the answer. The best strategic thinkers are open to what others have to say. They don’t substitute someone else’s judgment for their own, but they’re willing to learn from others.

In addition, not only do they seek knowledge, they look for insight from others. Businesses fail everyday because the person(s) in charge made mistakes based on uniformed, misguided assumptions, ideas and biases. Effective planners learn from mistakes and don’t do them again; ineffective planners make the same ones over and over expecting different results.
Successful, well thought out strategic planning relies on good critical thinking skills, which leads to good decisions. As one of our greatest generals Dwight D. Eisenhower said, “In preparing for battle I have always found that plans are useless, but planning is indispensable”.


Ohio Business Registrations Now Easier Than Ever

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Paperwork is always considered when rating the best states to start a business.  With the new filing fees in Ohio-$99-it is easier now  to file and pay your fees on line and have your business registration done the same day. If you were dreading the filing and the time it took the government to complete the paperwork, dread no more.  Ohio is making the start of your small business easier than ever before.

For more about this and other news follow the links below.


More Ohio business owners to hire, boost paychecks

By Staff Staff

Staff report

More small- and medium-sized business owners in Ohio and nationwide expect to increase hiring and wages for their employees over the next six months, and they also are increasingly optimistic about the prospects for their own businesses, according to the most recent PNC Economic Outlook Survey findings released today, Oct. 1.

The fall findings of PNC’s bi-annual telephone survey, which began in 2003, show that about 36 percent of Ohio business owners said they expect to boost employees’ pay in the next six months, up from 26 percent last spring. And 59 percent of those business owners that do plan raises say the amount will be 3 percent or more. Nationally, the prospect of salary increases is even more promising: 42 percent intend to give raises, which is the highest percentage since 2007.


Ohio’s small, mid-sized firms report worker shortageOhio’s small and midsized businesses say they are having a harder time finding workers.

PNC Bank’s fall survey of business owners and executives released on Thursday found that 4 in 10 businesses say it is more difficult to find qualified employees than it was six months ago. Eleven percent of businesses that aren’t hiring say it is because they can’t find the right skilled workers.

Ohio’s jobless rate dropped to a 14-year low of 4.7 percent in August, and the number of unemployed workers has tumbled in recent months. In central Ohio, the rate is even lower: 3.6 percent.

Some industries are being hurt by a lack of skilled workers. For example, construction workers might have moved on to other industries during the recession, said PNC Bank economist Mekael Teshome.

Teshome said he also has heard of manufacturers struggling to find workers with the technical skills and experience needed for some openings.

In other instances, it is a case where employers aren’t quite ready to raise pay, he said.


Ohio cuts price of new business paperwork to $99

Last week, Ohio became the least costly state in the region to start and maintain a new business. On Thursday, joined by leaders from around our state, I was pleased to announce we’ve cut the cost of registering a new business in Ohio to just $99. We also launched a partnership with Google to help connect new entrepreneurs with resources to get their businesses online, registered with Google Maps and Search tools and other important marketing resources.

Elected officials and candidates talk every day about creating jobs and making it easier to do business, but what exactly does that mean? I suspect even some of the people who say these things don’t really know.

The Secretary of State’s office is the first stop for anyone wanting to do business in Ohio.

We’re working every day to try to make this first interaction positive by implementing more services to help you get your business idea off the ground. Now, we’re taking it to the next level: We’re cutting the cost of starting a business in Ohio.