“I run a commercial printing business with 10 employees.  Our business has suffered with the recession, and I desperately need to cut payroll, but I really don’t want to let anybody go.  We’ve become like family, and I know when the economy improves I will need every one of them.  I understand that in lieu of downsizing someone, you can reduce all of your employees’ salaries across the board, or ‘furlough’ them by reducing their working hours.  What are some of the legal things you need to think about before you do that?” 

Payroll, or “headcount,” is the first place many owners look when they’re looking to trim costs, but one of the most painful experiences any business owner will face is terminating a good, faithful, hard working employee due to “economic conditions”.  “Halfway” measures, such as reducing all of your employees’ salaries or working hours (called a “furlough”), are seen by many owners as a way to reduce costs while avoiding painful job cuts.

But just because “everyone’s doing it” doesn’t mean it’s the right thing for your business, says employment lawyer Roseann Padula of Sullivan Schoen Campane & Connon, LLC (www.sscc-law.com/ourattorneys-padula.php).

While acknowledging that it’s painful, “eliminating and restructuring jobs may be the best thing for your business in the long run,” says Padula, explaining that: “it’s a one shot deal – when it’s done, it’s over, and everyone understands where they stand.”  Even if spread across the entire company (including perhaps – ahem – yourself), furloughs and salary reductions are often seen as penalizing your successful performers who, after all, are the ones you most strongly wish to retain in a difficult economy.   

“It’s the ‘Death of a Thousand Cuts’ – long, painful and insecure,” says Padula.  “It’s likely going to be at least a one-year impact on your employees’ income, and there’s the risk your good employees will jump at the first chance to move to a better paying position.”   

If you do decide that furloughs and salary reductions are the best approach for your business, here are some of Padula’s tips for doing it the right way: 

First, look at your contracts and employment offer letters.  If you have written agreements with your employees saying they “will” receive a certain salary and benefits or are guaranteed a set number of hours per year during the life of the contract (including collective bargaining agreements if you have unionized employees), then you cannot unilaterally reduce their pay or hours without breaching their agreements and exposing your business to lawsuits.  “Promises you make during employment interviews, and the rosy, glowing forecasts you make during sales meetings, can be problems as well because in some states they have been construed as implied contracts,” says Padula. 

Next, make sure your hourly and salaried employees remain properly classified.  Padula cautions that employees who receive a fixed salary regardless of the number of hours worked (called “exempt” employees under federal and state wage and hour laws) may be reclassified as hourly (or “nonexempt”) employees if you improperly tie their salary reduction to a reduction in hours worked. 

Next, check your state unemployment compensation laws.  In some states, significant reductions in hours (especially for hourly employees) may trigger a right to unemployment benefits, which could increase the payments you make into your state unemployment compensation system. 

Next, watch out for unlawful discrimination.  If the only employees you furlough are those protected by employment discrimination laws, you may be opening your business up to a lawsuit.  “Make sure there is a connection between the workers who are impacted and your business needs,” cautions Padula, who adds that furloughing only your most highly paid senior employees is “a really, really bad idea” if they are also your oldest workers. 

Next, don’t violate your own rules.  If you tell employees to take Fridays off without pay, warns Padula, “don’t call them on Friday to ask them questions.  They are not to WORK AT ALL during the furlough time.”  Padula adds that if you send a nonexempt employee an e-mail on Thursday night and he replies on the Friday morning he is not paid, this could lead to an investigation by your state Department of Labor for wage and hour violations.  The problem is more difficult to manage, Padula says, if you cut back a number of hours each working day rather than cutting an entire day each week, because “it’s very difficult for conscientious workers to stop working precisely on time when the rest of the world is still open for business.” 

Finally, be careful how you communicate changes both inside and outside the company.  “You don’t want your salespeople whining to customers about their hours being cut, because your customers will start thinking you’re in trouble,” explains Padula. 

The bottom line, says Padula, is to review your furlough and salary reduction plans with a competent employment law attorney before you execute them.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2009 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

“I have been running a successful distribution business for several years.  I have two or three key employees that I would hate to lose.  Because of the economy my business has fallen off and I’m thinking about asking these people – actually all my employees – to take a reduction in pay or reduced work hours.  Because I don’t want to lose these key people, though, I’m thinking about giving them some stock in my corporation so that when the economy gets back on track they will be able to grow along with it.  What do you think about this, and what are some of the legal things I need to think about before I make them this offer?” 

Whenever you have key employees in any business, it’s always a good idea to make them part owners of the business so they are motivated to stay on board during difficult times. 

The problem here is that your business has been in operation for several years, so it has an actual value.  By “giving” stock to your key employees, you will be creating a tax headache for them, because the IRS sees this as part of their overall taxable compensation. 

The IRS rules here are really very simple.  If you mow my lawn and I pay you $20, that $20 is income to you.  You must report it on your annual tax return and pay taxes on it.  If you mow my lawn and I give you a share of stock that’s worth $20, the result is exactly the same.  You must report $20 on your annual tax return and pay taxes on it.  Now, the last time I looked, you can’t pay your tax bill with shares of stock, so you will have to come up with some cash to pay the taxes on that $20.  The $20 you have to report is called “phantom income,” because you never actually received cash money. 

When a company is first getting started, it’s okay to “give” stock (called “founders’ shares”) to the people who will make the business successful.  Because the company has no real value, neither does the stock, so there is no “phantom income”.  Because your company has an actual value, giving stock to your key employees will require them to report “phantom income” in an amount equal to the value of your company multiplied by the percentage they own.  For example, if your company is worth $100,000, and you give an employee stock equal to one percent of the outstanding shares, the employee will have $1,000 in “phantom income” and will have to pay taxes on it come tax time. You can’t really avoid “phantom income” in a situation like this, but here’s a way you can reduce its impact on the employee:

• first, have your company valued by your accountant or a local business valuation firm;
• then, figure out what percentage of the company you want each key employee to have;
• multiply the value of your company by that percentage, and make that the “purchase price” the key employee will pay for his or her stock;
• have each employee sign a “promissory note” agreeing to pay this purchase price three or four years down the road, plus interest; and
• then, keep the employee’s salary at the same level, but apply a portion each payroll period to pay off his “promissory note” – this effectively reduces the employee’s cash salary as you were planning to do anyway.

Because the employee is paying fair value for his stock, the purchase price would not be “phantom income” to the employee.  The payroll deductions reducing the note would be “phantom income” to the employee, but the tax liability would be spread out over three or four years rather than payable all at once.  The employee might also be able to deduct the interest portion of each payment on his note, reducing the “phantom income” even further (although the interest payments will be “phantom income” to your company).

The numbers get a little tricky in a transaction like this, so be sure a good accountant or tax lawyer helps you put it together.   Since you are currently the sole shareholder of your corporation, make sure your lawyer prepares a “shareholders’ agreement” between you, your company and all of the new employee-shareholders spelling out their rights and obligations as shareholders of your company.  I would strongly recommend that their shares be “non-voting”, so that you keep control over your company and how it conducts business. 

What if you put this deal together and one of your key employees quits anyway?  The transaction documents should provide that the ex-employee’s “promissory note” will terminate, and he will receive only the shares of stock he’s already paid for -- no more than that.  If the employee is terminated “for cause” (he steals money from your company, for example), he should receive no stock at all.

The latest fad in motivation is the Law of Attraction or more popularly The Secret after the motion picture and book by Rhonda Byrne.  The idea being that if you use the power of The Secret  you will attract health, wealth and friends to you in abundance. 

The Secret takes an old idea and repackages it for today’s society. The core idea is that your thoughts control the world around you.  If you have positive thoughts, good things come your way.  If you have negative thoughts then bad things come your way.  In other words, if you wish hard enough for the things you want -- you will get them.  Simple.  Or is it?  If it were simple, then countless people throughout history would have figured it out over and over, and it would not be much of a secret.  Perhaps it takes a little more effort than suggested  – or perhaps it is just a pipe dream.

We, as modern educated people, need more proof. In order to make it palatable to the skeptic in us, The Secret adds an element of science.  We are told that quantum physics has identified that all things at the sub-atomic level exist as both particles and as waves – constantly shifting between being solid matter and being pure energy.  It is then proposed that our thoughts create brain waves, which in turn influence the sub-atomic waves of the entire universe.  The Secret claims that the more intent you are in your wish the faster the universe will act upon it.  Is it real, or is it VooDoo.science? 

If real, it sounds wonderful!  Now, if I understand correctly, if I wish real hard I can become a concert pianist and play to a sold out audience in Carnegie Hall?  I only see one hitch: I’ve never had a piano lesson in my life.

The Secret also presents the Law of Attraction as if it had been intentionally ket hidden for centuries. That it was suppressed and held by a few conspirators so that they could control all the wealth of the world.  Unfortunately, that notion is nothing other than a marketing ploy to generate interest in the book.  It also contradicts the concept of Law of Attraction.  The idea that a select group of people has kept it away from the masses intentionally preys on the destructively negative emotion of envy. 

To the contrary, people who have understood the Law of Attraction have made numerous attempts at sharing it with the world at large.  The best example is Andrew Carnegie, who was one of the most successful so-called “Robber Barons” of the Industrial Age.  Carnegie hired Napoleon Hill to research the most successful people in the world, how they got that way, and then record his findings in a book.  The book is Think and Grow Rich and was published in 1937. 

The best thing about Think and Grow Rich is that it takes the mysticism out of the Law of Attraction.  So, for those of you who find wishing on a star a bit difficult to swallow as a method for acquiring wealth, here is the real secret: 

Identify your goal.  Make a written plan to acquire that goal.  Work your plan persistently.  Give it your time, attention and energy.  The more time and effort you give, the quicker you will achieve it.  Visualize it coming to fruition.  Draw it, illustrate it, photograph it, then keep it in front of you. Revise your plan as your knowledge grows.  Be open-minded to opportunities that arise that may deviate from your plan, but still move you toward your goal.  

The world’s most successful people were extremely focused on achieving one goal.  They focused to the exclusion of everything else including family, friends, lovers, recreation, entertainment, vacations and hobbies. 

Next, tell everyone you know about your goal. Spread the word, so that people who can assist you are aware of your intentions.  I truly believe that positive minded people attract more opportunities to themselves because they are so pleasant to deal with. 

The formula is simple, but most of us compromise our goals because we want to enjoy a full balanced life.  A life filled with friends, family and good times.  We focus on our goals when time allows, and in turn, our goals take much longer to achieve.  The true secret is staying focused on your goal. 

Robert Evans Wilson, Jr. is a motivational speaker and humorist.  He works with companies that want to be more competitive and with people who want to think like innovators.  For more information on Robert's programs please visit www.jumpstartyourmeeting.com.

“I’m starting a small business with a good friend of mine, and we’ve just formed a limited liability company (LLC) that we own 50/50.  Your column last week on putting money into a company was terrific, but we want to know how to take money out of the company in the most tax-advantaged way possible, and without changing our 50/50 ownership of the business.”

Generally, there are three ways (and only three ways) that you can take money out of a business if you are one of the owners.  Either:

• the company pays you compensation for your labor;
• if you have loaned money to the company, the company repays your loan; or
• the company makes a distribution of profit to you (this is called a “dividend” for a corporation, or a “distribution” for a partnership or LLC).

• we had $10,000 in gross sales; and
• we had $2,000 in operating expenses, leaving $8,000 in the LLC checking account.

• you will report $3,000 as income (your $2,000 compensation plus your $1,000 distribution); and
• I will report $2,200 as income (my $1,000 distribution plus the $1,200 portion of the loan repayment that is treated as “interest” for tax purposes – the other $800 is not taxable because it is a return of my principal)

“I’m starting a small business with a good friend of mine, and we’ve just formed a limited liability company (LLC).  We’re dividing everything up 50/50 between us, but our accountant is telling us to put all our money into the LLC in the form of loans.  Why is she telling us to do that?”

Generally, there are two ways (and only two ways) that you can put money into a business if you are one of the owners.  Either:

• you make a loan to the business; or
• you make an “equity investment” in the business.

Loans.  When you make a loan to a corporation or LLC:

• the corporation or LLC is legally obligated to pay it back to you on a certain date, or in installments over time, with interest on the outstanding balance of the loan;
• the corporation or LLC can deduct payments of interest (but not principal) on your loan;
• loans to a corporation or LLC need not be made “pro rata” – if you lend money to the company but your partner does not, you remain 50/50 owners of the business;
• unless you are also a director, officer or manager of the corporation or LLC, as a lender you have no right to make business decisions or judgments as long as you are receiving your principal and interest payments on time; and
• if the company fails, people who have made loans to the company get their money back before anyone else does.

That’s the basic tradeoff with loans:  you have at least some protection if the business should fail (there’s no guarantee that the company will have enough assets to pay your debt, but you will have “first call” on whatever assets the company owns when it fails), but you don’t get a say in running the business.

Equity Investments.  Whenever you put money into a company in exchange for a percentage of the business profits and losses (a partnership interest in a partnership, shares of stock in a corporation, or a “membership interests” in an LLC), you are making an “equity investment” or “capital contribution”.  When you make an equity investment in a corporation or LLC:

• you get to call the shots -- equity owners get to elect the managers who run things, or appoint themselves to act as managers;
• the corporation or LLC is not obligated to repay your investment at any time – any payments the company may make to you as an investor (called “dividends” for a corporation, “distributions” for a partnership or LLC), are entirely at the discretion of the company’s management;
• the corporation or LLC cannot deduct any distributions or dividends it pays to you;
• capital contributions to a corporation or LLC must be made “pro rata” – if you contribute capital to the company but your partner does not (or, since you are 50/50, you make a greater investment than he does), you are no longer 50/50 owners of the business – your partner’s ownership percentage is reduced, or “diluted”, by the amount of your “excess” investment divided by the fair market value of the business;
• if the company should fail, you and your partner will have to wait until all of the company’s creditors are paid in full before you split up whatever’s left over. 

That’s the basic tradeoff with investments:  unlike a lender, you have no assurance you will ever get your money back (much less a return on your investment), but to compensate for that you are given the right to run the company so you can do everything possible to protect your investment.

• As a lender, your return is limited to the interest the company is obligated to pay you (although you can build in an “equity kicker” allowing you to collect a percentage of the company’s monthly or quarterly profits as “additional interest” over the stated interest rate);
• If you load up your company with too much debt, there’s a risk the IRS will reclassify your debt as “equity” and disallow your company’s interest deductions; and
• If your company files for bankruptcy protection, the court may “subordinate” your loan, meaning you will have to wait until those creditors who are not also owners of the business are paid in full.

Half a century ago marketing consultant, James Vicary, pulled a hoax on the American people as a way to promote his advertising agency.  He reported that he flashed the words “Drink Coca-Cola” and “Eat popcorn” on the screen for a millisecond during a movie in a theater, and caused large numbers of people to visit the concession stand. He called the effect Subliminal Advertising.  Subliminal means that the effect functions below the threshold of consciousness. Years later, when others failed to duplicate his results, he admitted that he made the whole thing up. Never-the-less, the myth continues.

So, is there any advertising that does work below the threshold of consciousness?  Yes.  Much of advertising is clearly designed to speak to you on a subconscious level. Ads are created to get you to relate to the setting; the background music; the age, race and gender of the actors; their clothing; and the activities in which they are involved.  The idea is that you will recognize yourself in these people and, in turn, make the connection, “Ah, this is my kind of product.”  You don’t think it... you feel it.  And, feelings move us to act. 

A few years ago I was involved in non-profit fund-raising for a Christian Mission in Africa.  In order to learn what type of appeal would bring in the most money, we conducted a series of focus groups.  We asked, “Which would you be more likely to do: A. Give money to feed starving babies; or B. Give money to teach people how to grow drought resistant crops that would end starvation in their community.” The answer they gave was almost universally: B.  The comments we heard frequently included the proverb: “Give a man a fish and you feed him for a day; Teach a man to fish and you feed him for life.” 

We then tested both appeals. Oops, the focus groups were wrong.  The appeal for feeding starving babies won by a landslide.  The lesson we learned was that the emotional appeal to save the life of a child is much more powerful than a logical appeal for teaching a village survival skills that would eliminate starvation.  From that point forward, the heart-tugging stories of babies dying headlined every ad we ran. 

Emotion trumps logic every time.  Take for example, Nick Ut's 1972 photograph of a 9-year-old Vietnamese girl who was naked, shrieking and running away from her village that had just been bombed with napalm. Fear, despair and suffering were written all over her face.  More than anything it was her complete vulnerability that captured our attention.  One snapshot revealed the gut-wrenching horror of war, and millions of people, whose hearts were touched, turned their attention toward ending the Vietnam War. 

Perhaps you recall hearing these potent words in a speech by Jesse Jackson back in 1984: “These hands...  these black hands...  these hands that once picked cotton will now pick presidents.”  Thrilling words.  Exciting words.  I remember them well.  And, even though I wasn’t his target audience, they created a powerful image in my mind, and when he finished, all I could say was, “Wow!”  Meanwhile, for millions of African Americans, it was the motivation needed to put apathy aside and go to the ballot box. 

We are charged and moved by many emotions.  Here are just a few: acceptance, amusement, anger, angst, annoyance, anticipation, arrogance, awe, anxiety, bitterness, calmness, caution, confidence, courage, determination, disappointment, discontent, disgust, desire, delight, elation, embarrassment, envy, excitement, fear, friendship, frustration, gratitude, grief, guilt, hate, happiness, impatience, inadequacy, irritability, inspiration, joy, jealousy, kindness, loneliness, love, lust, modesty, negativity, nostalgia, paranoia, patience, pity, pride, regret, resentment, sadness, self-pity, serenity, shame, surprise, timidity, torment, worry, yearning, and zeal. 

Which ones move you? 

Robert Evans Wilson, Jr. is a motivational speaker and humorist.  He works with companies that want to be more competitive and with people who want to think like innovators.  For more information on Robert's programs please visit www.jumpstartyourmeeting.com.

Until last Friday (January 30), the short answer to this reader’s question was “yes”.

In August 2008, Congress passed the Consumer Product Safety Improvement Act (CPSIA) which, among other things, prohibits the sale of certain items intended for consumption by children 12 years of age or younger.  Specifically, beginning February 10, 2009, children’s products cannot be sold if they contain more than 600 parts per million (ppm) of lead.  Also, certain children’s products manufactured on or after February 10, 2009 cannot be sold if they contain more than 0.1% of certain specific phthalates (chemicals that are added to plastics to give them more flexibility).

But the people who drafted CPSIA forgot one thing.  One of the few laws that will never be repealed, amended or superseded is the “law of unintended consequences.”  Perhaps the best expression of this law is the old saying “the road to Hell is paved with good intentions”, attributed to the medieval cleric Bernard of Clairvaux (1091-1153).  Sometimes, when trying to do good for some people, legislators and lawmakers effect harm on other people.  Most of the time, this is unintentional – laws and regulations are often passed quickly, under deadline pressure and heat from the media, to respond to an immediate need or public concern.  But when it happens, it still hurts.

Last month, the U.S. Consumer Product Safety Commission (CPSC), the federal government agency responsible for implementing and enforcing CPSIA, began to get the idea that the “testing and certification” requirement wasn’t going to work for a lot of people.  It issued a policy statement clarifying that “sellers of used children’s products, such as thrift stores and consignment stores, are not required to certify that those products meet the new lead limits, phthalates standard or new toy standards.”

Good news for people selling doll clothes and teddy bear outfits on eBay, but only if they didn’t actually make the stuff themselves. Even then, there could be trouble.  The CPSC added the following cryptic warning:  “resellers cannot sell children’s products that exceed the lead limit and therefore should avoid products that are likely to have lead content, unless they have testing or other information to indicate the products being sold have less than the new limit. Those resellers that do sell products in violation of the new limits could face civil and/or criminal penalties.”

So, are resellers off the hook as long as they stay away from certain toys -- such as metal soldiers -- that are likely to contain some lead, or must they educate themselves to recognize the CPSIA’s banned chemicals?  How many questions must they ask their vendors or consignors, who probably don’t know the answers themselves?  No answers, at least not yet.

Even assuming resellers are off the hook, what about the home handicrafters, who could still be considered “manufacturers” under CPSIA?  Since Congress did not give any guidance when they passed the law, the CPSC did the only thing they could do under the circumstances:

They deferred the “testing and certification” requirement for one year, until February 10, 2010, in order to “give the [CPSC] staff more time to finalize four proposed rules which could relieve certain materials and products from lead testing and to issue more guidance on when testing is required and how it is to be conducted.”

Whew!  So is it safe to start sewing teddy bear outfits again?  Probably.  But if you’re making children’s jewelry items, make sure there’s absolutely no lead in them – that specific ban is not subject to the one-year stay.

For more information on CPSIA, go to www.cpsc.gov/about/cpsia/cpsia.html.  But don’t expect answers, or clarity.

“Three friends and I are going off on our own to set up an information technology consulting business.  We want to form a limited liability company for this business, but we want it to be flexible enough that we can grow and attract venture capital investors.  What are some of the things we should be thinking about legally?”

 Limited liability companies (LLCs) are very easy to set up when there are only one or two people involved in the business, or the business is not likely to grow rapidly (for example, a family owned retail or service business).  When people who aren’t related and don’t know each other very well go into business together, things get a bit more complicated.

Here are some of the things you and your friends should discuss before committing to this venture:

Who Will Own This Business?  Right off the bat I see a problem -- there are four of you.  If you divvy up the LLC ownership equally, you’re setting up a situation where if two of you want to “zig” and the other two want to “zag”, the LLC cannot function.  We lawyers call that “deadlock”.  Try to divide up the equity so that one or two of you own 51% or more of the LLC ownership shares (called “membership interests”).

Who Will Run This Business?  You should consider forming a “board of managers” to run the LLC business, similar to a corporation’s board of directors. 

Three of you should serve as the “managers” of the business to avoid “deadlock” situations.  So the fourth person won’t feel left out, you can add a “supermajority voting” clause to your LLC Operating Agreement (similar to a partnership agreement) requiring that the four LLC owners unanimously approve major decisions affecting the LLC business (such as the admission of a new member, a merger or acquisition, or investments over a certain dollar amount).  Your lawyer can provide you with a list of common matters that are covered in a “supermajority voting” clause.

Capital Contributions.  At some point, your LLC will need additional infusions of cash.  If you do not make these “pro rata” (in proportion to your respective LLC ownership percentages), then your percentage ownership of the LLC will change depending on the amount actually contributed by each member.  To keep this from happening, consider a clause in your LLC Operating Agreement requiring that any additional infusions of cash be made in the form of “loans” – that way if one or more members cannot pay their fair share, the others can make up for it without changing the ownership of the LLC.

Compensation.  Since all of you will be working in the business, you will want to make withdrawals from the LLC checking account from time to time to pay your living expenses (called “draws”).  Work out a formula now as to how each of you will take “draws,” or put a provision in your LLC Operating Agreement requiring the members to vote unanimously on “draws” each month.

Voluntary Withdrawal.  If one of you has trouble meeting his obligations to the LLC, or comes under family pressure to “get a day job” if the LLC business isn’t providing him with a decent living, you will have to figure out a way for him to “withdraw” from the LLC.  You should agree to pay him fair compensation for his LLC ownership interest if he withdraws, but make sure (1) the LLC pays him over a period of five to 10 years so as not to burden the LLC’s cash flow, and (2) he or she is bound by a noncompete clause not to steal business from the LLC or otherwise compete unfairly with the remaining members.

Involuntary Withdrawal.  If one of you dies, becomes disabled, is divorced from his or her spouse, or files for bankruptcy, there’s a chance a “stranger” will end up owning a piece of the LLC.  Have your attorney draw up a “buy-sell” agreement requiring the LLC to purchase the ownership interest of any member who dies or becomes disabled, or any person who acquires a piece of the LLC in a divorce or bankruptcy proceeding.

As soon as possible after you form the LLC, the LLC should purchase “key person” life insurance and “disability buyout insurance” on each of the four owners (or those owners without whom the business couldn’t function).  That way, if one of you dies or becomes disabled, the proceeds of the insurance policy can be used to purchase his or her ownership interest without impairing the LLC’s cash flow. 

Watch Out for Noncompetes.  Since it appears some or all of you are leaving “day jobs” to start this new business, make sure you haven’t signed any “noncompete” or similar agreements with your current employer.  Even if you haven’t, try to avoid contacting your employer’s customers, suppliers or employees for at least a year after you start the new business.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2009 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

• “my 401(k) has lost a ton of value, there aren’t any safe investments out there right now, so why not use at least some of what’s left in my 401(k) to provide an income stream and a future for myself?”;
• “franchises are generally safer than standalone small businesses – you get lots of hand-holding and support from the franchise, and there’s a ‘structure’ to running a franchise that’s similar to what you have in a corporate environment”;
• “franchises aren’t forever – the typical franchise term is between 10 and 20 years – but that’s okay in my case since all I’m looking for is a ‘bridge’ until I can retire at age 65 or 70 – at that point I’ll sell the franchise to someone else and have some fun before I die.”

• it was your fault – you weren’t a sufficient “fit” for the franchise, or didn’t give it the old college try; and
• you should sell your franchise to someone who can do a better job with the franchise territory than you did.

That’s okay if we’re talking about an established franchise like McDonald’s® or Burger King® -- hey, if you own one of these and are having trouble making money, you must be on Mars somewhere.

But the franchises most people are looking at nowadays are “early stage” franchises – with fewer than 100 franchisees, and sometimes less than 50 – that are still testing their business models.  If a franchise like THAT doesn’t work out, there’s just as good a chance it’s the franchise’s fault as it is yours, and the franchise should let you out of the deal.

That’s easier said than done, though.  Not only do most early stage franchises not give you an opportunity to get out of the franchise if things don’t work out, they actually impose penalties – sometimes LARGE penalties -- if you ask to be released early.  For example, if the franchise imposes a “minimum monthly royalty” requirement on their franchisees, the franchise will require you to prepay all monthly minimum royalties for the balance of the franchise term, sometimes in a single lump sum installment.

Crunch the numbers:  if you have a 10-year franchise term, your minimum monthly royalty is $500, and you elect to terminate the franchise at the end of Year Three, that leaves seven years remaining on the franchise term, or 84 months.  Multiply that by $500, and it will cost you $42,000 just to get out of the franchise and get on with your life (the franchise will discount this amount to “present value,” of course, but the reduction won’t be more than a couple thousand dollars).

I recently reviewed a franchise program – a very early stage program with fewer than 30 franchisees nationwide – where the franchise got this right.  Here’s how this program works.

When a franchisee signs up, she commits to a monthly royalty of 8% of her gross sales, and signs a “promissory note” agreeing to pay the franchisor a total of $200,000 in royalties (without interest) during the 10-year franchise term.  As the franchisee pays royalties each month, the amount paid is applied to reduce the note so that once her total royalty payments reach $200,000, the “promissory note” ceases to exist.

If the franchisee wants to quit the franchise before the $200,000 “promissory note” is fully paid, she has two choices.  She can either (1) agree not to compete with the franchise for a three-year period, or (2) refuse to sign the noncompete agreement.  If she chooses to sign the “noncompete”, the $200,000 “promissory note” is forgiven.  If she elects to compete with the franchise, however, the balance due on the $200,000 “promissory note” becomes payable in monthly installments at 6% interest per annum over a five-year period.

If the franchisee elects to quit the franchise after the $200,000 “promissory note” is paid in full, the noncompete period is reduced to one year and the franchisee doesn’t owe anything to the franchise.

An approach like this one not only gives franchisees a choice of “exit strategies” if the franchise doesn’t work out, but it also demonstrates a little humility on the franchise’s part – an acknowledgment that nobody really knows whether the franchise model will work in all locations, in all economic climates, and under all circumstances. 

Sadly, most franchises are not as enlightened as this one.  If you are planning to buy a franchise anytime soon, be sure you understand clearly what your “exit strategy” will be if things don’t work out.  And don’t buy a franchise if there’s even the slightest doubt you can last out the full franchise term.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2009 CLIFFORD R. ENNICO. ALL RIGHTS RESERVED.  DISTRIBUTED BY CREATORS SYNDICATE, INC. 

Almost every company has a web site these days. 

But, are you using the internet to market more effectively? 

The internet has allowed marketers to promote their value propositions and talk directly to customers in ways never before possible. And, we constantly hear that this way of one-to-one marketing has fostered more customer centric strategies.

However, from what I see not every CEO has adopted a completely  proactive approach to dealing with customers using the internet. Many have just taken their literature and posted it on their web sites with some forms for interested customers to fill out and e mail to the company. Others have gone one step further and have set up other forms to allow for ordering off of the their web sites.

The internet offers many more wonderful ways to promote your business more effectively than traditional methods of the past. It certainly allows you to cast a much wider global net and directly motivate more customers, if you use it properly.

Some of the more obvious benefits of marketing via the internet are:

Professionally done product presentations

One of the best things the internet provides is the ability to create professionally done product presentations and demonstrations. One of the things that used to bug me as a CEO was the way in which salesmen would present our products to prospective customers. After some sales calls I would ask “whose product were you selling”?

Depending upon the experience, education and personality of the salesman each would make a different presentation. If we were selling a product that required technical knowledge and experience, it was even worse.

Now with the internet you may not even need a sales force any more because everything that any customer needs to know should be available in a standard professional format with graphically sophisticated demonstrations of how to use the product, as well as highlighting its benefits and advantages. This can be supplemented with online availability of a company expert to talk to or FAQ's.

Selling today can be conducted via phone with access to the internet. You can show customers where anything that they need to know can be found on your web site and you can take them through demonstrations over the phone referring to your site on their screen.

Webinars further enhance this process of continuous customer education about your value proposition.

Broadcast product updates and promotions

Another beautiful aspect of online marketing is that you can broadcast updates to your product offerings to your e list of customers. In addition you can broadcast promotions, sales and other incentives. This ability to motivate customers and keep them directly aware of new product developments instantly is a powerful tool.

Historically, you would hope that customers would see your advertisements, or react to a snail mail promotion, or see something new in your store. This was a haphazard, catch as catch can approach, at best. Now you can be assured that every customer on your e customer file receives information about new developments.

Share success/application story's

Customer success story's sell product – it's a know fact. Now you have the ability to share these success story's over the internet with the confidence that all of your good customers will see it! Business is about solving problems for customers.

Customer profiling/market research

Every time you have a transaction with a customer it is a great opportunity to capture another piece of their DNA as a consumer. Over time the bits and pieces of these transactions create a mosaic of individual customer types and their preferences and requirements.

In addition, now that you can establish a one-to-one relationship with customers you have another wonderful opportunity to ask them how you can continue to help them with their individual requirements or solve problems that they have. These solutions for individual customers usually become very saleable enhancements for other customers.

This is about customer relationship marketing – CRM. The goal should be to use all of the tools now available to you via the internet to collect invaluable information about customers so that as I have said in other articles – you can delight them.

I hope these few practical examples motivate you to explore how you can take advantage of the internet to market your value proposition more effectively, if you are not already doing so.

If you would like to start a dialogue on internet marketing – let me know. 

Just think about how you have been motivated via internet promotions.

An entrepreneur himself, Bob has spent most of his career involved with starting, growing and selling businesses. Having held managerial positions with IBM, Pfizer and Exxon, he draws upon extensive organizational experience with large and small companies in advising CEOs of growing firms. He is available online to answer questions from Chief Executive readers, as well as offer workshops, tips, books to read and a monthly online column about common issues facing CEOs of growing firms. Bob has been featured in USA TODAY for his work with Inc 500 firms and is associated with NYU's Stern Graduate School of business in their Center for Entrepreneurial Studies where he is a Venture Mentor, Marketing Strategist and Business Plan Reviewer.

He is the author of GUIDEBOOK TO PLANNING - A Common Sense Approach to Building Business Plans for Growing Firms, which has recently been reprinted. He is a past contributor to Chief Executive and one of his articles was featured in The Best of Chief Executive.  Email Bob at: rmdonnelly@chiefexecutive.net

By Robert Evans Wilson, Jr.

I know an advertising agency owner who never fully takes a vacation.  He takes his family to fairly exotic locations, but never so alien that they are outside the reach of modern communication.  In other words, he is never further than a cell phone call or email away.  He checks in with the office several times a day – much to the chagrin of his family who want him to be fully engaged in the holiday at hand.  So, he ends up sneaking off under the guise of visiting the restroom, or going to the bar for a cocktail, in order to connect with his staff, a client or a prospect.  His wife and kids aren’t fooled; they just sigh and accept the inevitable.  I used to think he was a control freak – someone who couldn’t let go and let someone else take over – until I came to understand the concept of Momentum.

In science, Momentum is equal to Mass times Velocity.  Or just think of Indiana Jones in Raiders of the Lost Ark running as fast as he can out of the tunnel while that huge stone ball rolls faster and faster after him.  In business, Momentum is the point at which success begins to come easily.  Business veterans jokingly refer to it as having, “paid my dues.” In short, Momentum is an accumulation of acquired knowledge, skill, experience and connections.  And, those who understand it... also know it can be fragile and easily lost.

Sales professionals who have achieved Momentum will tell you that you must pursue a number of activities to generate sales leads: phone calls, emails, sales letters, networking events, etc. You keep it up building dozens, then hundreds of leads at a time.  Then to convert those leads to sales you keep following up on each of them in a timely fashion.  Meanwhile, you are still maintaining all the activities that continue to generate leads.  So between generating leads, following up on leads, then turning leads into sales, you begin to feel like the guy in the circus who spins plates on top of poles – rushing from one plate to the next to keep them spinning.

No wonder these folks hate to take vacations – it breaks the Momentum they’ve spent months or years creating and they know it takes time to get it going again.

Years ago when I first started giving speeches, a seasoned professional speaker advised me, “It took me ten years to quit sweating cash flow, but even so, it is still all about non-stop marketing.” In other words: maintaining Momentum.

For a growing company, Momentum is the point where you have done enough advertising, marketing, public relations, networking, customer service, and so forth that business begins to flow.  It is the point where you are garnering the precious and often elusive word-of-mouth referrals.  Momentum is about building a reputation.  Acquiring it, however, doesn’t mean you can taper off on your efforts... but it does mean that your efforts will become easier.

The best thing about Momentum is that once you get it, motivation becomes self-perpetuating.  Momentum is energizing.  It keeps you on your toes.  And, the rewards come quickly and regularly.

I have found this to true in all pursuits.  Even when I am writing fiction there is always a certain point in a novel that it takes on a life of its own and demands my daily attention, energy and focus until it is complete.  Unfortunately, nothing quite puts the brakes on Momentum like finishing a book, or completing any other major task.  The trick to avoid losing that Momentum is to begin another book or another task before you complete the first one.  Then you just shift your energy over to the next project that is already under way.

Robert Evans Wilson, Jr. is a motivational speaker and humorist.  He works with companies that want to be more competitive and with people who want to think like innovators.  For more information on Robert's programs please visit www.jumpstartyourmeeting.com.

I had the privilege of speaking this week to the local chapter of SCORE (the Service Corps of Retired Executives), a volunteer organization of senior and retired business people who devote a portion of their time to providing free advice and counseling to struggling small businesses (contact www.score.org to find the chapter nearest you).After all of the usual questions about legal and tax issues, a woman in the back of the room raised her hand and asked:  “Cliff, we appreciate your advice, but we need some inspiration too.  Everything we read in the media and see with our customers is scaring the heck out of us.  Can you tell us anything that will give us some comfort and help us through these extremely difficult times?”

I admit I was a little thrown by the question.  Franklin Delano Roosevelt famously answered this question 76 years ago by saying “we have nothing to fear but fear itself,” but heck, I’m no Franklin Delano Roosevelt.

Still, the question had to be answered.  I did it by talking about two words – two simple words – that you should write down on a Post-it Note®, put it on your computer, your bathroom mirror or anywhere else you will see them several times a day.  Make them your daily mantra, for these are the words that will help you get through whatever economic troubles we have to live through the next few years.

Humility.  Let’s face it, the past 50 years have been a wonderful party.  Three successive living generations – Baby Boomers, Gen Xers and Millennials – have known nothing but good times.  There have been stressful times, of course – several recessions, the Vietnam War – but these things never really impacted most of us personally.  War, famine, epidemics, and suffering were things that happened to other people far, far away – we watched them on television, and the better-minded of us tried to muster support to stop them, but we never actually experienced them ourselves.  And a lot of us were arrogant and deluded enough that we thought this would never change.

The idea of real hardship – not knowing where your next meal is coming from, losing your house or being evicted from an apartment, not having enough money to do what you want to do in life, accepting less out of life than we want because we simply can’t have it – is totally alien to us, and as a result we are not as emotionally prepared for it as our parents and grandparents were.  To them, hardship and suffering were an accepted part of the cycle of life; to us, they are an aberration.

Add to that the Baby Boomers’ outlook on personal sacrifice and self-restraint, best expressed in the Grass Roots’ classic 1969 pop hit “Live for Today” (“Sha la la la la la live for today . . . there’s no worries, ‘bout tomorrow, heeeyyyyyy . . . .  ), and it’s no wonder a lot of people in America have been feeling invulnerable.  If it did nothing else, the past year has brought all of us back down to Planet Earth.  A lot of people – including some with wonderful track records – have shown themselves to have feet of clay, and even some very good, intelligent people have done some very bad, silly and downright stupid things. And KNEW they were doing them at the time.     

If after 2008 you still think you know what you are doing, think again.  Entrepreneurs are particularly prone to believe their own marketing shtick, but now is not the time for arrogance or self-delusion.  It’s time to take a sober assessment of your business and yourself, find out who you really are, what you really can and cannot do, and avoid selling yourself as something better unless you can back it up with action.

Discipline.  The current living generations of Americans have, as a rule, not been very disciplined about a lot of things.  We are a rather soft, easygoing, self-indulgent and forgiving lot, inclined to “get along by going along” and accept that anything anyone wants to do is “okay” as long as it doesn’t hurt anyone.  The idea that you shouldn’t do something even though no one will throw you in jail for doing it (what our ancestors referred to as “sin”) is alien to us.  The idea of personal discipline strikes us as being vaguely authoritarian and manipulative, imposed as it was in days past by religious institutions to keep people in line -- something to be resisted, ridiculed and ignored.

Make no mistake – surviving in these times will require TONS of discipline, self-restraint, and personal sacrifice.  Aside from being morally wrong, your “sins” these days can kill your business.   It’s time to take a close look at your company and ask yourself:  are we running tight enough?  Do we let things slide?  Are we too forgiving of people’s mistakes or ambivalent about our values as a company?  Do we not insist hard enough on work, performance and results?  Are we demanding enough with our people?  And are we willing to punish those who don’t live up to our expectations?While you’re at it, ask these questions of yourself as well . . .

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2009 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

“I am looking to market a consulting business, and am very interested in the various ‘social networking’ websites such as Facebook and MySpace as potential marketing vehicles.  I confess, though, that I’m a bit confused by the sheer multiplicity of sites that are available now – there are at least 10 social networking sites that might be a marketing venue for my business.  How do I choose between them, or do I simply sign up for all of them in an effort to reach the maximum number of people?”

If you are serious about marketing your business on the Web, there are three New Year’s resolutions you need to make right now:

(1) set up a “profile” page on at least one of the major Web 2.0 social networking websites;

(2) mention your “profile” page everywhere else you have a presence online (such as your Website and “blogs”) and offline (such as your business card, office stationery and telephone answering message); and

(3) resist the temptation to be “everywhere, all at once” by spreading yourself too thin.

At first glance, resolution # 3 seems to contradict the first two resolutions, but it really doesn’t.  There are four things you need to know about social networking websites:

(1) certain sites attract certain types of people – while many people have multiple “profile” pages, certain sites develop stronger followings with some people than others, and you want to focus your marketing efforts where the people you want to reach “hang out”;

(2)  social networking sites can be “time vampires” – you will be creating profiles, taking part in discussions and responding to messages virtually every day; and

(3) social networking sites are interactive – you are not in control of your marketing message on any of them – people will comment on your products and services, and some people are more interested in expressing their own opinions than in helping you build your business.

(4) social networking sites overlap a lot -- hardly a day goes by in my office without receiving an e-mail from a Facebook “friend” who wants me to join his profile page on LinkedIn, and vice versa.  A lot of the people you are reaching on Website A are the same people you are already reaching on Website B.

So how you do decide where to “plant your flag” in the Web 2.0 universe?  I’ve looked at most of the major sites, and here is my totally unscientific, personal, opinionated view of the major ones:

MySpace – this is where the kids are hanging out.  Great for rock bands and others who are targeting the “tween and teen” markets, and for celebrities, authors, sports stars and others who are looking to build a mass fan base (good book: “MySpace Marketing” by Sean Percival).  This is where I want to be if I want to build readership for this column.

Facebook – great for personal networking with family and friends.  If you have an extended family and want to keep them all up to date on your latest adventures, this is the place to be.  Several friends of mine used their Facebook profiles to send out holiday messages this year (bad news for Hallmark) (good book: “Facebook Marketing” by  Steven Holzner).

LinkedIn.com – great for businesspeople and professionals who are interested in “serious” networking.  This is where I want a profile tied to my law and business development consulting practice (a new e-book from marketing expert Jan Wallen, “LinkedIn in Seven Days or Less”, available at http://janwallen.com/works.htm). 

Plaxo.com – originally an online address book and calendar manager for people who use Microsoft Outlook (and still probably the strongest product in that area), Plaxo has developed a Web 2.0 site (called “Plaxo Pulse”) with a look and feel very similar to Facebook but with a little stronger focus on business networking (no books yet on Plaxo, sorry).

Squidoo.com – great for subject matter “experts” who want to create interactive wikis (called “lenses”) on specific topics of interest to build “niche interest” communities (good e-book: “Do You Squidoo?” by Joel Comm).

Twitter.com – a “microblogging” site where you can post short announcements (called “tweets”) of things you are doing elsewhere on the Web (good book:  “Twitter Means Business” by Julio Ojeda-Zapata).

Specialty sites – “special interest” Web 2.0 sites are exploding right now – such as feng.com for financial services executives – and may help you build followings within tightly targeted niches.

If you must – absolutely MUST – be on multiple social networking platforms, be sure to use a “social networking automation” product – such as friendfeed.com or secondbrain.com -- to automatically update all your profiles without having to log into each platform.  Also, use “Google Alert” or a similar product to notify you of new postings on your profiles, so you can respond promptly to someone who’s broadcasting to all your “friends” what an idiot he/she thinks you are.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

As we evaluate the high costs of the current financial crisis it is important that we don’t overlook an existing issue that is only being exacerbated by the situation- the cost of presenteeism. Presenteeism is where I “show up” for work, but I am unwilling or unable to fully engage because of an underlying illness or distraction. This could be directly from my own situation or the situation of a family member.

A recent study by Cigna Healthcare provided some pretty startling statistics-

• U.S. workers reported that they spend two to five hours per week resolving personal issues at work, a productivity loss of 5 to 12%
• 61% of U.S. workers have reported to work while they were ill or dealing with personal matters
• Of that group, 62% felt that they were noticeably less productive or attentive to their duties
• 46% missed at least one day of work in the preceding six months, with 22% of those absences related to family matters

A different study by the National Mental Health Association estimated that the costs of this productivity loss are over $200 billion annually. Let’s put that in perspective that means in three and a half years we have reached the point where these losses are equal to the Federal bailout!

Now I want to make another point, these losses were calculated before we entered our current financial crisis! I would venture to say that the scores have not improved over the last few months.

I have been a practicing human resources manager, executive, and consultant for almost 30 years. I went through the time when our philosophy was that employee’s needed to “leave their problems at home”, well, obviously those days are over.

For the purposes of balance, I want to provide you with the snapshot of the alternative- a workplace where people are engaged.

Organizations whose employees are fully engaged enjoy the inverse of the statistics I just shared with you-

• Moving an employee’s level of engagement from low to high results in an average 21% increase in productivity
• Organizations with high levels of employee engagement typically enjoy a 20% per capita higher performance level than their peers
• Organizations with high total engagement (employee and customer engagement) typically outperform their peers on key financial metrics by 100%!

So what is my point? You have an investment in participating in addressing these issues, and there are cost effective tools available for you to do so. One of the tools available to employers is the Employee Assistance Plan. While these plans have been around for years, current estimates say that only between 2 and 8% of employees are utilizing them.

Effective employee assistance plans offer much more comprehensive solutions than their predecessors did- they aren’t just about substance abuse and anger management anymore. A good EAP will offer access to wellness training, debt counseling, financial management, credit counseling, and potentially even legal advice. Very sophisticated EAPs even have supervisory training and mediation services available to help employers deal with root cause and systemic issues rather than just putting a “patch” on a situation.

I don’t mean to imply that providing EAP services to your employees is going to create engagement, but I do want to go on record as saying you employ and manage whole people. Ignoring the issues and concerns your employees are experiencing in other parts of their life, or worse yet because of issues in the work setting, are costing you money directly and indirectly.

I can assure you from personal experience that the costs of offering EAP services to your employees and their dependents are much cheaper than expensive mental health services or employee litigation.

Engaged workforces are a competitive advantage, period! Recognizing and protecting your investment in your employee’s health and mindset is an important step in creating that environment of engagement, and at a fairly reasonable cost. Can you afford to “give up” 5 to 12% of your worker’s productivity every year?

Mark F. Herbert is a consultant, author, and speaker with over thirty years of experience building and managing engaged workforces in organizations ranging from Fortune 100 to small entrepreneurial businesses. He has been a speaker on leadership and human resources topics on a regional and national basis and has recently published the book Managing Whole People- One Man’s Journey. You can reach Mark at Mark@newparadigmsllc.com or visit his website at www.newparadigmsllc.com.

When GM introduced Saturn with great fanfare back in 1990 I wondered to myself “will this new GM brand ever be what it can be, or will it just become another tarnished brand added to the heap along with all the others”?

Remember the “little” Cadillac brand – the Cimarron? Or, the Chevy - Vega? How about the Pontiac – Aztec, so ugly it appealed to no one? Most recently, Oldsmobile – “your fathers Oldsmobile”.

When introduced as a stand-alone company with great promises as GM’s answer to foreign competition, the Saturn brand was embraced by customers looking for a no frills, no haggling, utilitarian offering that “fit” their unique requirements at the time. Even some Toyota and Honda owners traded into the first Saturn models.

Loyal Saturn customers even had “love-in’s” at the Saturn plant in Spring Hill, Tennessee, much like Harley Owners Group (HOG) get togethers.

GM projected annual sales of 500,000 Saturns!

Needless to say that volume never materialized primarily because there just were not enough customers looking for that value proposition. This highlights the first marketing lesson to be learned from the Saturn experience.

Lesson One: There are only so many customers for every value proposition, not an infinite number.

GM has never been good at marketing and branding, and they certainly have never been very customer conscious.

My question is: “where did the 500,000 come from”? In the best year for Saturn (1994) only 286,000 were sold. That’s 43% less than forecast? Saturn sales have hobbled along at about 200,000 a year, plus or minus some since then. This year the Saturn share of the car market here will only be about 1.4%.

The first branding mistake was to reduce spending when it was needed most during the late embryonic and early growth years of the brand. Brand equity results from the continuous investment in promoting the brand, as I have illustrated in earlier columns.

It’s about share of mind. Not only do you have to invest to get a share of mind, you also have to continue to invest to keep it!

Shifting management, the pursuit of other car style trends, and financial stresses doomed the Saturn brand. After having its best year in 1994, Saturn was abruptly relegated from the initial concept of a separate entity with its own identity, to become part of the parent company’s “small-car operations”.

Worse yet, after being relegated to “one of many,” no new Saturn models were developed for the next five years! Guess what happened? All the original Saturn owners and those that they convinced to buy a Saturn, and who were anxiously awaiting the next generation of Saturn models, tired of waiting and bought another foreign brand.

Lesson Two: To sustain and grow brand equity there has to be a next generation of models after the initial model introduction, much like Honda, Toyota and Nissan have mastered so effectively. Without this and a continuing investment in maintaining share of mind, any brand will quickly fade from memory. Aztec?

For the last years, Saturn models have morphed into another nondescript series of cars offered by GM until recently when several new models were introduced like the Aura, the Vue and the Saturn Sky sports car, designed to reincarnate the brand. But, without sufficient promotions to rebuild the brand, or even stem the continuing decline in sales.

Lesson Three: If you are going to invest what it takes to create a new car model, you must also invest at least an equal amount, or more, to regain share of mind. Have you seen many, or any, promotions for these new Saturn models? Or, even the “rethink” slogan that was developed for them?

The real question now is “what is the unique selling proposition for Saturn”? I don’t know – do you?

Unfortunately, one of these new models the mid-size Saturn Aura is probably one of the best unknown brands on the market today. Given market conditions this good American built car may disappear before it has a chance to grow up.

Another amazing fact highlighted by Advertising Age is that in 2007 $4.6 Billion was spent by the U.S. auto makers on advertising their car brands. According to Advertising Age that’s 3.3% of total U.S. advertising spending and 5.9% of total U.S. network TV spending.

In a recent study done by Interbrand of the top 100 of the most valuable brands in the world 52 are from American companies.

However, only one U.S. car brand made the list – Ford. Ten foreign car brands made the list, but none from GM!

What has GM been promoting with all their advertising? Apparently - not their brands. And, certainly not the Saturn brand.

Alex Taylor in his excellent piece on the history of GM in FORTUNE captured the marketing ineptitude at one of the largest firms in the world in his summary: “the story of General Motors since the 1960’s is a tale of accelerating irrelevance”!

The Saturn example is just one of many branding faux pas, but hopefully one that is easy to see and relate to. As I have said before success at branding and creating brand equity is a long term marketing strategy that has to be carefully planned and executed.

If you are struggling with how to build a brand effectively let’s start a dialogue.

Don’t let what happened to Saturn happen to your good brand(s).

An entrepreneur himself, Bob has spent most of his career involved with starting, growing and selling businesses. Having held managerial positions with IBM, Pfizer and Exxon, he draws upon extensive organizational experience with large and small companies in advising CEOs of growing firms. He is available online to answer questions from Chief Executive readers, as well as offer workshops, tips, books to read and a monthly online column about common issues facing CEOs of growing firms. Bob has been featured in USA TODAY for his work with Inc 500 firms and is associated with NYU's Stern Graduate School of business in their Center for Entrepreneurial Studies where he is a Venture Mentor, Marketing Strategist and Business Plan Reviewer.

He is the author of GUIDEBOOK TO PLANNING - A Common Sense Approach to Building Business Plans for Growing Firms, which has recently been reprinted. He is a past contributor to Chief Executive and one of his articles was featured in The Best of Chief Executive.  Email Bob at: rmdonnelly@chiefexecutive.net

No doubt about it – it’s getting pretty scary out there.  People are cutting back on expenses, doing more things themselves that they used to “outsource” to small businesses like yours, and slowing down their payments for your products and services.

In an economy like this one, survival is all about cash flow.  Keep a positive cash flow at all times, and you will make it through the tough years to come.  While cutting costs will help you maintain a positive cash flow, at least for a while, sooner or later you run out of things to cut.  The tougher, but longer term, way to maintain your cash flow is to do everything you can (short of selling below cost) to keep business flowing in the door. 

I recently conducted a very informal (and very unscientific) poll of some local small businesses to find out what they were doing to cope with the current economy.  Here are some of the survival strategies they’ve come up with – not only do they seem to be working, but some of these businesses are actually growing!

Strategy # 1:  Don’t Be Too Picky About the Work You Take On.
A couple of weeks ago I had a plumber over to my house to fix a leaking faucet in one of our bathtubs, and I asked him how his business was doing.  “Well, it’s tough, but we’re managing,” he said.  “There’s no construction work being done right now, so we’re not doing any big jobs.  But there are lots of little, ‘emergency type’ jobs out there, and we’re doing okay with those – you are my fifth call today.”

You can make money doing a few big jobs.  You can also make money doing lots of little ones.  Since the little jobs require less money, people are more likely to pay to have them done, especially if they’re “emergencies”.

Strategy # 2:  Find the “Dirty Jobs” People Are Still Willing to Pay For.
I’ve always said that succeeding in a service business is a two-step process:  (1) find a dirty job that no one likes to do but has to get done; and (2) charge lots of money for doing it.  The same process applies in difficult times, except that if the job isn’t really all that dirty (mowing the lawn, for example), people will start doing it themselves.  You’ve got to find the really filthy jobs people will still pay others to do for them.

Here are some local businesses that are not only surviving but growing right now, to give you some ideas:

• “pooper scooper” services that come to your home and clean up after your large, vicious dog;
• “water damage” services that clean up your basement after you’ve had a flood;
• tax return preparation services;
• home health care aides for elderly people; and
• automobile service stations that specialize in one or two popular makes or models (so as to compete more effectively with the auto dealerships’ service departments).

Strategy # 3:  Turn Your Customers Into a “Family”.
Lois Mirabella of Mirabella Miniatures in Fairfield, Connecticut (www.miniaturecorner.com/retailers/ct.htm) sells dollhouses, dollhouse furniture, and miniature reproductions of household objects.  In an economy like this one, you would think her store is failing, especially since she doesn’t have a Website or a presence on eBay.  But you would be wrong.  Her store is always packed with customers who come from all over New England to check out her merchandise.

What’s the key to her success?  “I treat each of my customers as if they were family,” Mirabella explains.  “With this economy, people want hobbies they can do as a family, and dollhouses are perfect for that.”  But it’s not just a question of increased demand:  Mirabella keeps detailed track of each item her customers purchase, calls them on the telephone (no e-mail, because “it’s too cold”) when she receives new items she knows they will be interested in, introduces her customers to other customers with similar interests, and hosts “events” at her store where customers can meet the craftspeople who make their favorite miniatures. 

Create a “community” where none currently exists – it’s easy to say “no” to a vendor, but it’s a lot tougher to say “no” to a friend.

Strategy # 4:  Convert Your “Luxury” Products Into Affordable “Splurges”.
A French gourmet restaurant saw a sudden downturn in business earlier this year.  Rather than shut down, they downscaled their entire menu, losing their $50 entrees and offering “bistro fare” at $15 to $20, along with an expanded wine-by-the-glass selection and “appetizer size” portions of their traditional gourmet fare.  Most of the lost business came back, and they are picking up new customers that wouldn’t have considered eating there under their old business model.

One of the greatest ways to keep your customers in tough times is to convince them they do not have to give up entirely the luxuries they love as long as they (ahem) “control their portions,” and that your business will help them do just that.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO. ALL RIGHTS RESERVED.  DISTRIBUTED BY CREATORS SYNDICATE, INC.

“Last year, we sold our small-sized, family business corporation to two individuals.  The deal was that they both pay us half of the purchase price for the business and get equally 50% ownership.  While the first person paid his share all in cash, the second person chose to pay his share in 10 monthly installments.  The year passed by and he (the second person) did not pay a penny.  Now, the new owners aren’t talking to each other – they can’t agree on even basic business transactions.  Unfortunately, the first person can’t get out because he personally guaranteed the retail lease for the business.  The second person has a poor credit score, due to a prior bankruptcy, so the second person can’t put the lease in his own name.  It feels like we are stuck.  What are the available options to solve these disputes?”

Let’s take this one step at a time.  First, if I understand your e-mail correctly, you sold your business to the two individuals, not to a corporation or a limited liability company (LLC).  This means that they purchased the business as a partnership, which means that they have “joint and several liability” for the purchase price and all other partnership debts.  In plain English, each partner is liable for the whole purchase price (not just the amount he paid you at the closing), and you can pursue either or both of them if payment is not made. 

Clearly, the second person is at fault for not paying his share of the purchase price.  But you have every legal right to collect the entire balance of the purchase price due from the first person, or from both partners, unless you promised the first person in writing you wouldn’t do that.  The first person can then bring a legal action against his partner seeking reimbursement for his share of the purchase price – lawyers call that a “contribution and indemnity suit”.  Given the second person’s poor financial condition, the suit probably won’t be successful, but as the teenagers say nowadays, “that is SOOOOOO not your problem!”. 

Why did you wait for the second person to miss all 10 of his installment payments before bringing the subject up with him and his partner?  If I were in your shoes, I would have been yelling at the top of my lungs and demanding payment the minute the first installment date was missed.  It appears to me that you have become a little too friendly with the first person:  you have been listening with a little too much sympathy to his “tale of woe”, and are reluctant to hold him accountable for his partner’s default.  Nevertheless, you sold your business in good faith and have every right to collect the full purchase price due to you.  What happens between the two partners has nothing to do with the debt owed you, and you have a duty to yourself and your family to collect that debt from whoever has a pocket deep enough to pay.

Assuming that neither partner has the resources to pay you at this point, you have to look at the possibility of taking control of the business back from them.  Hopefully, when you sold the business, you insisted that the partners put up some collateral – their stock in the corporation or the assets of the business – for the second person’s loan.  If the loan transaction was properly drafted, you can “foreclose” on that collateral, take back the business, and satisfy your debt out of the business’ future income.

Of course, this will mean you will have to reassume the lease of the retail space where the business is being conducted.  If the two partners owe any back rent or other amounts to the landlord, you probably will have to pay these current in order to stay at that location.  You also need to look at the paperwork you and the two partners signed at the closing – if they “subleased” the retail space from you for the duration of the lease term, you may still be on the hook as a “guarantor” of their lease obligations until the lease expires – that’s the way the law works in most states. 

My strong suspicion is that this was a “handshake deal” with no lawyers on either side, and you probably are “stuck”.  Aren’t you glad now you saved a few bucks in legal fees?

• never sell or buy a business without competent legal help;
• whenever you agree to “loan” money to someone, get it in writing and be sure to take collateral in case there’s a default;
• when assigning or transferring a lease, make sure the landlord releases you in writing from any future lease obligations;
• never buy a business as a partnership – form a corporation or LLC to act as the purchaser; and
• never go into business with someone who has a prior history of cheating his creditors.

As I sit here writing this column against the deadline, I’m reminded of my days as a young advertising copywriter when I occasionally needed a deadline as motivation to finish a boring project.  The deadline did more than motivate me to finish -- more often than not, it was what finally stimulated enough creative thinking to move me forward -- in other words, it motivated me to think outside of the box.

“Thinking outside of the box.” Boy, has that phrase become overused.  People are so often telling us that we need to think outside of the box that it has fallen into the realm of cliche.  Never-the-less it is still true.  Sometimes, however, we need to be put into a box first before we can think outside of it.  A deadline is just such a box.

I used to believe that the more freedom I had, the more creative I could be.  But it doesn’t necessarily work that way.  Ingenuity needs to be motivated by something, and if the desire to achieve isn’t there, then an uncomfortable boundary may work.

Have you ever watched a man or a woman with one leg running a marathon or competing in downhill snow skiing?  I have, and every time I’m deeply impressed because I have both of my legs and I can’t do either one.  I used to wonder why they were able to do so much more than me when I was the one born with the greater advantage.  Now I can see that the difference is that they were challenged by a boundary and I wasn’t.  Some of them might even argue that they were the ones born with the greater advantage.  Being unable to walk made them uncomfortable, and conquering their disability became a powerful motivating factor.  They had to get out of that box!

Think of creativity as a prisoner trying to bust out of jail.  When your resources and opportunities are limited you must become innovative.  A good illustration of this is the World War II movie The Great Escape.  It is an amazing tale of ingenuity.  Men with little to work with escape from a German POW camp. In addition to digging three tunnels without shovels, they made hand drawn traveling documents and identification papers that looked authentic enough to pass for ones made on a printing press. Now that was a box to get out of!

I have enjoyed working for myself most of my adult life.  People frequently tell me they wish they could be self-employed like I am. They say things like, “If I could just get one client then I could quit my job.”  My response is always the same, “Until you quit your job, you are never going to find that first client. There is nothing like the deadline of a rent or mortgage payment staring you down at the end of the month to motivate you to get out and look for clients.”

Everyone works under some kind of deadline.  They force us to prioritize our responsibilities; they limit procrastination; and they help us achieve our work related goals.  But, we often lack them in our private lives.  We are not given deadlines to accomplish our most important personal goals and without those boundaries procrastination can creep in and destroy our best intentions. The trick is to impose a deadline on yourself.  But it has to have some teeth to work.

Here’s how to do it:  Write down your goal.  Then set a reasonable date in which you can achieve it.  Next, go to your bank or attorney and set up an escrow account.  Now add the teeth --  put into the account an amount of money that will hurt to lose: $1,000...  $10,000... $100,000...  you decide!  Set it up so that if you haven’t achieved your goal by the deadline then the funds go to a favorite charity...  or make it even more motivating: let the funds go to your worst enemy!

Not ready to try that?  Then try the buddy system.  Pair up with a friend and each of you take responsibility to follow up on the other one.  You can get together once a week and check on each other’s progress.   If goals aren’t being met, then nag each other into the UnComfort Zone!

Robert Evans Wilson, Jr. is a motivational speaker and humorist.  He works with companies that want to be more competitive and with people who want to think like innovators.  For more information on Robert's programs please visit www.jumpstartyourmeeting.com.

Positioning won over prattle in the current election. Obama isn't a household word, but change is. 

The entrepreneurial CEO won out over his more mature competitors. 

As I have said in many of my columns marketing is the battle for the customers mind. This election was the epitome of that marketing maxim. 

The goal of positioning anything a brand or a concept, in this case the value proposition – change, is to get the message to “stick” in the voters mind. To occupy a position in a voters mental value grid. To own a share of their mind. To get through the word filter in the mind. To connect with an existing value threshold, and resonate. 

Whether marketing a product or a presidential candidate it's about “differentiation”. Reis and Trout in their seminal tome on positioning said the “whoever gets into the mind first – wins”. Obviously, in this case Obama did just that. 

If you are successful and can maintain that position you prempt your competition from owning it. We see that time and time again with many familiar brands like: Polo, BMW, Coke, Apple, Nike and many others. 

Obama coined change and stuck to it throughout the campaign. While his competitors referred to change and used many other words to reflect their positions, Obama was first to own the word change. And each time one of his competitors used the word they only reinforced the position already established by Obama. 

His primary competitors Clinton and McCain had many slogans with varying value propositions, Clinton started with “experience”, then shifted to “countdown to change”, and ended up with “solutions for America”. None of which resonated like “change” from Obama. 

McCain had so many slogans like the “straight talk express”, “hero”, “maverick”, and others, that his message became blurred and incomprehensible. While Obama stuck with and reinforced change, in his advertising and promotional strategy funded by the chest full of money he raised during the campaign. 

Shifting promotional messages has never worked as well as consistency. Think about how many different slogans Burger King has had, or Pepsi for that matter. McDonald's and Coke are still the market leaders with the same consistent value proposition year-in and year-out. 

To win and create a position takes repetitive promoting of the value proposition. Brand equity is built on the repetitive broadcasting of a brand's unique selling proposition. Look at how much Mercedes spends to remind us the they are promoting the “best engineered car” and BMW advising that they have the “ultimate driving experience”.  

In every market successful marketers win the battle for the customers mind by promoting their solution as either: the best, something unique, or the cheapest. If your value proposition doesn't “fit” one of those primary criteria that customers are looking for then you have a “fuzzy” image. 

In an economic and political climate looking for something different, or a new way forward – change was the word that worked. Whoever owned change and could reinforce that value proposition won! 

It's about perception and common sense. Perception is reality in marketing. The voter is looking for something to believe in like the consumer is looking for value in the products they buy. Your marketing message has to be clear, consistent and resonate with customers. 

The political rhetoric of candidates in an election has to meet the same criteria. Every word is dissected by the press and the population. Stumbling over not knowing how many homes you own or talking about “soccer Mom's”, and using phrases like “you betcha” does not instill confidence in voters when compared to the calm deliberate and clear presentation of your competitor. 

This election campaign was marketing at its best and many lessons can be learned from the way the battle for the voters mind was waged by our new Chief CEO. 

If you have questions about how to position your company or brands let me know and let's start a dialogue. Contact  me at  rmdonnelly@chiefexecutive.net.

An entrepreneur himself, Bob has spent most of his career involved with starting, growing and selling businesses. Having held managerial positions with IBM, Pfizer and Exxon, he draws upon extensive organizational experience with large and small companies in advising CEOs of growing firms. He is available online to answer questions from Chief Executive readers, as well as offer workshops, tips, books to read and a monthly online column about common issues facing CEOs of growing firms. Bob has been featured in USA TODAY for his work with Inc 500 firms and is associated with NYU's Stern Graduate School of business in their Center for Entrepreneurial Studies where he is a Venture Mentor, Marketing Strategist and Business Plan Reviewer.

By Robert M. Donnelly

Innovation is becoming the lens through which leaders are directing a laser-like focus on business transformation. It’s easy to see why. Margins and product life cycles are shrinking, competitive pressure is growing, and the need for customer responsiveness has never been more important. Every company needs an edge. Enterprise innovation is not the sole domain of the entrepreneur. It can be practiced by CEOs of large firms, too.

Two CEOs in very different industries have applied the same basic innovation template with dramatic results. Doug Conant, 56, president and CEO of Campbell’s Soup, and Fred Hassan, 62, chairman and CEO of Schering-Plough, changed the culture of their firms by engaging their management teams in a focused concentration on customer sensitive innovations. Their similar leadership styles and focused emphasis on driving their business unit managers to come up with new solutions for customers’ problems not only improved returns to shareholders, but also won recognition for each CEO (Hassan in 2006 and Conant in 2007) by Fairleigh Dickinson’s Rothman Institute as “Leaders in Innovation.”

Before Conant and Hassan assumed control in 2001 and 2003 respectively, both companies had allowed their brands to lose luster and were in a downward spiral in their respective markets. Campbell’s declined to the point where the Torrance Family, owners of the majority of the 140-year-old company, decided on a complete reorganization. Schering-Plough was losing patent protection for its leading product, Claritin, as well as experiencing a sharp decline in its $1 billion hepatitis C business. Both CEOs approached their similar situations with determination and a belief that the right team and the right focus on innovative customer solutions could reverse these trends.

Building a Team
While using different acronyms and employing different tactics, both CEOs saw team building as the cornerstone for their transformation strategy.

Based in Camden, N.J., and employing 23,000, Campbell’s is an $8 billion maker of simple meals, including soup, baked snacks and beverages. Its products, representing 20 brands, are sold in 120 countries around the world. Doug Conant, who brought 25 years’ experience from General Mills, Kraft and Nabisco, used a concept perfected by the Gallup Group called the Engagement Ratio. The theory is that to have a team dedicated to the company vision and mission of total customer satisfaction, the majority of the employees must be fully engaged in their respective jobs.

Gallup’s premise is that to reach world-class levels of productivity you need to have 12 engaged people for every one actively disengaged. Conant reckons Campbell’s engagement ratio in 2003 was no better than 2 to 1. By 2007, this was changed to 9 to 1.

Fred Hassan, on the other hand, began by developing a document on Leadership Behavior that he shared with all employees. It was a motivational explanation of how to approach individual day-to-day responsibilities so that Schering-Plough would be delivering the best customer experience possible. This document captured his philosophy on a variety of critical management issues like teamwork, customer focus, quality, engagement, leadership, culture, competitiveness and communications.

Hassan prepared his treatise because, when he took over in 2003, he found the behavior of the team he inherited, compared to industry standards in terms of quality, engagement, leadership, working climate, competitiveness and communications developed by Towers Perrin, was negative on almost all points. As a result of implementing his team-building strategy, by 2006 all of the critical management factors were positive and growing.

In terms of the management team, Conant replaced 300 of the top 350 leaders in the first three years. But of this group, 150 were promoted from within. His initial observation of the team he inherited upon taking over was that the only reason they were still there is because they could not find jobs anywhere else. This was also evident in Gallup’s initial survey of engagement ratios.

Hassan replaced the entire top management team he inherited in his first 18 months. After carefully evaluating each position he felt that to save the company and transform it he needed a very strong set of new executives that he hand picked, function by function.

Innovation at Campbell’s
Conant developed a 10-year plan called “The Campbell’s Journey” around his concept of focused, mission-driven innovation. Broken down into three phases beginning in 2001, the first was the Transformation Plan from 2001-2004, the second was the Quality Growth Plan, and the last, currently under way, is the Building for Extraordinary Growth Plan from 2008 to 2010.

The mission is to build “the world’s most extraordinary food company” which he equates to “a sustainably good company.” In the first three years, Campbell’s went from being non-competitive to competitive by upgrading the management team, improving employee engagement and working on innovative product improvements. In the next three years, the target was quality growth through enhancing the overall value proposition for customers and above average total shareholder returns. As a result, earnings per share has improved every year for six straight years in a very competitive marketplace.

Today, the goal is to deliver the best total shareholder returns in the food group. Since 2005, Campbell’s has delivered a higher return to shareholders than the S&P Packaged Foods Group. Campbell’s set the following targets: to grow sales by 3 to 4 percent, adjusted earnings before interest and taxes by 6 to 7 percent and adjusted earnings per share by 5 to 7 percent.

The biggest problem Conant’s team faced was the overall deterioration in the company’s biggest volume category—soup sales. The company was selling basically the same old soup packaged in the red-and-white cans that generations of moms and dads grew up on. Competition, on the other hand, was offering healthier, more wholesome soup packaged in more attractive, easier to use cans and in sizes more in keeping with current customer consumption requirements. Campbell’s was stuck in a mass-market mode of thinking, while competitors like Progresso and other specialty soup makers were successfully implementing niche market strategies.

Conant’s team noticed early on that supermarket customers had difficulty finding their favorite soup on the shelf. The competition, however, had visible shelf space that appealed to consumers. A time study revealed that customers do not want to spend more than 20 seconds looking for a particular soup. But the same study indicated that it took consumers 70 seconds to find a similar Campbell’s soup.

Furthermore, the arrangement of its soups was confusing and labels were hard to read as compared to competitive brands. The solution: a new shelving system, easier to read labeling and healthier soups. In addition, the team added simple innovations like pop-top cans that increased sales of their condensed soups 8 percent in 2005 and another 5 percent in 2006. They also introduced lower sodium soups with natural sea salt. Campbell’s current portfolio consists of 43 varieties of reduced sodium soups with over $400 million in sales.

The team simultaneously began to upgrade product quality. By 2003, the company launched a new line of products, starting with microwaveable healthier soups that are now a $300 million business. In addition, the company rebooted its international marketing strategy by targeting two giant foreign soup markets: China and Russia. The two largest soup consumption markets in the world, both are dominated by homemade soups. Campbell’s put researchers in homes in both countries to conduct ethnography sessions to determine these customers’ deeper cultural values associated with soup. As a result, the company came up with a way to create a consistently higher quality broth that saved between two to six hours in the household soup preparation process. This gave the firm another successful major new market entry strategy.

Conant’s goal is to increase total shareholder returns by achieving exceptional employee engagement. Doug says, “Extraordinary things are achieved by people determined to leave a legacy.” Among the top managers, Campbell’s 2007 engagement scores were 35:1, up from 8:1 in 2003. Campbell’s was also awarded the Gallop Great Workplace Award, which recognizes the most engaged and productive companies in the world. From 2002 to 2007, sales grew from $5.8 billion to $7.9 billion with a 6 percent five-year CAGR.

For Campbell’s 2008 fiscal year, while soup sales increased by only 2 percent in a tough economy, beverage sales increased more than 10 percent, resulting in overall profits of $1.17 billion, up from $ 854 million in 2007. Based on these results Conant reiterated his expectations for a 5 to 7 percent earnings increase in the coming fiscal year. Given the economic circumstances since then, it will be challenging for any company, including Campbell’s, to achieve these expectations. However, Conant and his team are positioned to weather the economic storm with a line of food products for the masses. We all have to eat, even if it is more hearty beverages and healthy soup than before.

Innovation at Schering
Fred Hassan was working his plan during this same time period. Although operating in a highly regulated industry with technical constraints, he was, like Conant, focused solely on customers. “The most critical engine of innovation in any organization is a passionate attitude of customer focus and people who are liberated to pursue that passion,” he said.

His team started by studying the market for Claritin, which had switched from a prescription to an over-the-counter (OTC) product in December 2002. Claritin had been the No. 1 product in the prescription market, bringing in more than $2 billion in annual sales. By the end of 2002, Claritin sales in the U.S. had declined significantly due to patent expiration.

In 2003, Hassan and his team focused first on restoring the company’s top line sales and product market shares. Their goal was to put themselves in the shoes of the consumer and to communicate in ways that resonated. An important early step was to build more brand equity in OTC-Claritin through a new consumer campaign in the U.S. called “Claritin Clear.”

The campaign was launched in 2004 with a series of commercials that illustrated the patient benefits of the product. Building on consumer insights around a “foggy-to-clear” presentation, the innovative messaging contributed to Schering gaining market share in the U.S. This campaign was followed by a series of similar innovations designed to deliver a better consumer experience. The team broadened the Claritin product franchise through a series of line extensions and product re-formulations, such as a new chewable form, improved syrups for children and a greater emphasis on Claritin Redi-Tabs (easier to swallow because they dissolve in the mouth).

Hassan also focused his team on prescription pharmaceuticals R&D. The average commercial life of a branded portfolio product in pharma is about 10 years. So renewing the product portfolio became the key driver. Hassan inherited an R&D spend of less than $1.5 billion. By the end of 2007, he raised that to nearly $3 billion.

One beneficiary of this investment was Remicade, a product first launched in 1999 for rheumatoid arthritis. By investing in clinical research to investigate new applications, Schering identified and received regulatory approval for six additional indications; psoriatic arthritis, adult Crohn’s Disease, pediatric Crohn’s Disease, ulcerative colitis, ankylosing spondylitis and plaque psoriasis. As a result of these indications and growing demand, Schering-Plough’s sales for Remicade increased from $349 million in 2003 to more than $1.6 billion at the end of 2007.

The company revived another older product, Nasonex, a spray for allergies. Research indicated that patients wanted an unscented form of the product. Working side-by-side, scientists and manufacturing teams reformulated the product without the rose-scented alcohol ingredient. The marketing team then focused on an overall brand transformation— building a blockbuster in just a few years.

By educating patients on allergy symptoms and promoting the unscented formula with a series of “Bee” animated commercials, the product generated over $1 billion in 2007 sales globally, more than double the sales in 2003. The work on Claritin, Remicade and Nasonex demonstrated the power of listening to customers and close collaboration among research science, marketing and other parts of the company.

The overall cultural change implemented by Hassan’s leadership behavior model and emphasis on innovation has proved successful, especially at a time when the industry is seeing a drop in the productivity of more traditional R&D work. From 2004 through 2007, Schering delivered a total shareholder return of 41 percent, the best among its peer group. Sales went from $8.6 billion in 2003 (when Fred Hassan arrived) to $15.2 billion in 2007, a CAGR of about 15 percent.

The recent economic downturn pulled 2008 3Q profits down 23 percent, to $551 million from $713 million in 3Q 2007. But revenues are up 63 percent in 3Q, to $4.58 billion from $2.81 billion, suggesting that Fred

Hassan’s business model makes good strategic sense in facing both turbulent economic times and stiff competition from generic drugs threatening Schering’s cholesterol drug franchise. “The company is on track with a cost-cutting plan that will trim its staff, while keeping it in a solid position financially in a turbulent market,” Hassan said. “Schering-Plough has more than $3 billion in cash on hand, with no need to access capital markets and no debt maturities upcoming.”

Focus + Innovation Works
What these two CEOs accomplished working independently of each other after inheriting similar circumstances speaks to the power of team building and motivation by CEOs with a vision and steadfast focus on innovation. This is not to say that either CEO doesn’t have continuing issues with competitors. The global marketplace never stands still, and technology always evolves. Campbell’s continues to have a serious competitor in industry giant HJ Heinz. Last year, Campbell’s sold off Godiva, a line that did not “fit” its mission, and purchased the complementary Wolfgang Puck line of soups, but there is more work to be done to achieve the goals Conant has set for the future in a U.S. soup market where it already has a 70 percent share.

Schering, on the other hand, has had a few bumps recently with the recent disclosure that its cholesterol drug Vytorin does not achieve the expected results, as initially promoted, against the cheap generic form of Zocor. Sales declines resulted in job losses and may impact forecasted future results.

Changing the culture of an organization is not easy, and the larger the company the more difficult it is. These two CEOs did it, largely through getting the people aligned with expectations. “You may have a technology edge today, but somebody else will have the same thing tomorrow,” Conant told a group at NYU’s Stern School. “The real competitive advantage is your workforce and its ability to be agile and deal with dynamic markets and situations.”

Bob Donnelly writes the online “Entrepreneurial CEO” column for Chief Executive. He can be reached at redonnelly@chiefexecutive.net.

You would think that anyone starting a business would have a well thought out and written business plan – wouldn’t you?

How about someone who has been in business for years – maybe?

But the truth is that many CEOs of growing firms do not have a well done business plan. Some don’t even have a good budget. Case in point: Arnie Miller, CEO of Matrix Essentials. When I met Arnie he was running a $220 million business with about 800 employees and no business plan. He was running alright, running just to keep up.

I wrote a seminal article for Inc. Magazine a while ago about one of their Inc. 500 firms entitled “Stop the treadmill – I want to get off.” It was about another CEO of a rapidly growing firm who was in danger of losing his business and his family because what he set out to achieve – fast growth – was strangling the life out of him and leaving him no time for his family.

In both these cases, and many more, I was able to get these CEOs to step out of the combat zone and put away their fire extinguishers long enough to focus on the age old questions facing any CEO:

Where are we now?

Where do we want to be?

How are we going to get there?

Without a plan every day is a crisis. What else can it be?

When the only plan you have is to sell more today than yesterday, and when that doesn’t happen panic sets in, there is no way you can think clearly. Many CEOs of growing firms that I have met spend more time planning their vacations day-by-day, and sometimes hour-by-hour, than planning for the future growth and profitability of their business.

Planning is anticipating the inevitable, but if you do not know what the inevitable will be you certainly can’t plan for it.

Business is a numbers game pure and simple. It’s about customers, competitors and your unique selling proposition. Many CEOs I have met cannot clearly articulate what their unique selling proposition is, or in other words what is really different about their product or service than those of their competitors? The fundamental rule of the marketplace is that if you are not offering anything different, even if it's just better customer service, why should customers select your product or service over those of your competitors? For that matter why should they even seek you out?

Isn’t that the fundamental problem that American car manufacturers have gotten into? Except for a few niche models there really is nothing unique or different about their cars when compared to their foreign competitors, notably Toyota. Toyota has achieved excellence in the three basic components of perceived customer value: quality, service and price.

Did that happen by chance? No – it was planned.

Planning is the process by which an organization can become what it wants to be. Planning is the identification of what we as a company can do to satisfy the specific requirements of a defined collection of customers better than our competitors. It is our core technology converted into our unique selling proposition for those customer types.

Planning is the identification of a problem that a distinct number of customers have and the packaging of your solution in such a way that it makes it difficult, if not impossible, for your competitors to duplicate for those customers. It is the work required to identify these types of opportunities and the allocation of resources in the form of a strategy to exploit them.

These strategies need to be clearly laid out in a narrative describing in detail who is going to do what with what resources in a specific time frame, and what are the expected profitable outcomes; and how are we going to control and measure progress along the way quarter-by-quarter?

The real purpose and value of planning is to determine what we must accomplish this week, or this month, or this year so that our business will continue to grow profitably over the next years.

Success at planning requires information – information about customers and their changing requirements. If the customer gets to the future before you do, they will leave you behind. I have met many CEOs of growing firms who really do not know their customers as well as they need to. In reality, you are in the customer business.

One of the first questions I ask when I meet the CEO on a new planning assignment is “who is your most profitable customer?” Typically, the response is “you mean who we sell the most to?”

Or, “our most profitable products are?” No, I am interested in which customers buying what mix of products represent your most profitable customers?

Business is about solving problems for customers. The goal should be to delight the customers with solutions to problems before they know they have them. Isn’t that what any well managed company does? It is part of their planning process. They are constantly looking for ways to deliver excellent customer satisfaction by modifying their products to keep up with their constantly changing requirements

Isn’t that what Toyota has done with the Camry? And now with the Avalon and Lexus? Are you planning for the changing requirements of your customers?

My next column will be on the need for an Advice Squad for CEOs of growing firms like you.

Email me  at  rmdonnelly@chiefexecutive.net with questions or comments so that we can begin a dialogue to help you to get your business to where you want it to be.

An entrepreneur himself, Bob has spent most of his career involved with starting, growing and selling businesses. Having held managerial positions with IBM, Pfizer and Exxon, he draws upon extensive organizational experience with large and small companies in advising CEOs of growing firms. He is available online to answer questions from Chief Executive readers, as well as offer workshops, tips, books to read and a monthly online column about common issues facing CEOs of growing firms. Bob has been featured in USA TODAY for his work with Inc 500 firms and is associated with NYU's Stern Graduate School of business in their Center for Entrepreneurial Studies where he is a Venture Mentor, Marketing Strategist and Business Plan Reviewer.

“I have been thinking for some time of setting up an eBay Store.  I’ve been researching what to sell on Worldwide Brands (www.worldwidebrands.com), and I have found some really interesting items, but I’m still not sure what my niche should be.  In the meantime, I’m planning to make my business a ‘sole proprietorship’.  I want to start doing the legal papers right away, but my problem is that I’m still not sure what to sell, and I want to find my niche before getting my DBA (‘doing business as’) license, because when you fill out the DBA form you have to pick a name.  If my DBA fictitious name is ‘John Doe the e-store’, do I have to name my eBay Store ‘John Doe the e-store’ or can I call it something else?  I want to file my DBA as soon as possible, but I don’t want to name my eBay Store now.”

Technically, you don’t have to file any paperwork to create a “sole proprietorship”.  A “sole proprietorship” is merely a human being who is of legal age and who is engaged in a trade or business.  If you are using your name as the business name (for example, “Clifford R. Ennico, Attorney at Law”), you don’t have to file any legal paperwork because that is your legal name, and you are always allowed to do business under your legal name.

The only paperwork you have to file for a “sole proprietorship” is as follows:

• the IRS allows you to use your Social Security Number as a tax ID number, but I don’t recommend it – fill out IRS Form SS-4 at www.irs.gov and get a separate tax ID number for your business; and
• if you are doing business under a name different than your legal name (for example, “Clifford R. Ennico doing business as Cliff’s Antiques”), you have to fill out an file a DBA registration form with your county clerk or town clerk – this is a legal notice letting people know that if they are run over by a truck that says “Cliff’s Antiques” that Clifford R. Ennico is the person who should be sued.

You should not be filing a DBA form at all until you have a fictitious or DBA name for your business.

Now for the tougher question – should your eBay Store name be the same as the DBA for your business?

According to Janelle Elms, a leading authority on eBay Stores and “visionaire” of the Online Success Institute (www.osirockstars.com), you should name your eBay Store in a way that will be picked up by the Google search engine spiders, because this will have an effect on your search engine rankings.  “Calling your eBay Store ‘Janelle’s Stuff’ doesn’t give the spiders a lot to go on,” says Elms, who recommends using words that specifically describe your merchandise as part of your eBay Store name (for example, “Mildred’s Toys and Marbles”).

“You want the buyers who are looking on Google,” explains Elms, “because 72% of all online searches are being done on Google.  If you’re not one of the first five listings on page 1 of the Google search engine results, nobody’s going to see it.”

But Elms cautions that you can go too far the other way:  naming your eBay Store “Antique Banks, Toys, Games, Cast Iron” is great for search engines, but it won’t help you build a recognizable brand on eBay.  Explains Elms:  “You have to lose the mentality that you will always remain small.  Even though you’re small now, we all strive to have our business name become a household word.  If your business name is ‘Cliff’s Oddities’ then that should be part of your eBay Store name, for example ‘Cliff’s Oddities and Antique Toy Banks’.”

Elms adds that your eBay Store name is not the only place you can put search engine keywords; they should appear in your Store description, categories, and custom pages for starters.  This will assist the  Google search engine spiders in finding and ranking your eBay Store.To create a profitable list of search engine keywords, Elms advises starting at eBay Pulse (http://pulse.ebay.com) and looking there for the most common searches people are making within your eBay product category.  

Finally, Elms advises that when choosing keywords for your eBay Store name it’s important to use your buyer’s vocabulary.  “What the people with money call something is more important than what you call it,” says Elms.  So, for example, if you call something a “coin bank” but your buyers call it a “penny bank,” you will lose lots of sales if your call your eBay Store “Cliff’s Coin Banks” because people won’t be searching on eBay for “coin bank”. 

Elms has just released “The Profitable eBay Store Video” series, an almost 30-hour step-by-step video program on building a successful eBay Store, which can be purchased for $299 plus shipping at www.onepercentcoach.com.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO. ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

Hi, all.  I just returned from an investment conference where for four days from 9 AM to 3PM (when I usually manage your accounts), I listened to numerous industry experts, economists, strategists, money managers and analysts from our company, its affiliated investment funds, and a couple of “screamers” from CNN, who discussed the current economic environment.  Even though these were the same people who loaded us up with mortgage-backed securities and forced us to be sold off to The First National Bank of Southern North Carolina earlier this year, we have every reason to believe these are the right people to help us through some challenging times, especially now that they’re no longer worried about their jobs and can focus 100% on the task of rebuilding our company with your money.

The consensus was the same:  no one had expected or experienced a time such as what we are now going through.  As for how long it will last, the experts were also in agreement:  “sure beats the Heck out of us”.  Having gotten that out of the way, the panelists then told us (and you) what you should do in these difficult times. 

In his opening address (titled “Oopsie!  Didn’t See That One Coming”), our president O. Leo Leahy said:  “I know a lot of people say that we’re stockbrokers, and that the primary duty of a stockbroker is to get their clients into the market when it’s down, and get them out of the market when it’s up.  Which means that you all should have put your client’s funds 100% in cash in the first quarter of 2008.  But we are NOT stockbrokers.  We leave that business to the ‘day traders’ and that’s what you need to tell your clients right now.  What we are . . . are . . . FINANCIAL ADVISORS, which means we are bound by the higher laws of finance to focus on the longer term, no matter how much the World may be crashing around our ears today!”

Virtually all experts felt that the markets bottomed on October 10th and that we are going through a “retesting” of that bottom.  “You’ve seen bottoms before,” said Leahy, “and you’re looking at one now.  We may see several more bottoms before we see the real bottom.  But let me assure you, ladies and gentlemen, that when the Dow Jones Industrial Average hits zero, we are absolutely certain that will be the last bottom, and the market will have nowhere to go but up!”

The experts also were optimistic about the nation’s political future.  “Now that the 2008 election is over, the 2012 Presidential race is under way, and it becomes ever more likely we will be a one party state within the next few years,” said Leahy, “we will NEVER, EVER AGAIN be plagued by market-disrupting election year uncertainties, and will be able to focus our full attention on growing assets for our Government to take over. That way, the Chinese will be sure to buy our assets in 20 years and ‘the World will be as one’.”

So what does an investor do now?  The experts were unanimous that what you should do now is to “stay the course” and keep putting what little money you have into the stock market.  They gave four reasons for this:

• any roller coaster rider knows the ride down is a lot more thrilling than the ride up;
• you will make it easier for the “day traders” to get THEIR money out before the market tanks;
• the market is bound to go up again someday, and you will recoup your losses (assuming, of course, you have some cash to buy stocks with and can handle a 50% capital gains tax); and
• hey, if you put everything in cash there won’t be anything for us to do, and nothing for the experts to talk about.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED DISTRIBUTED BY CREATORS SYNDICATE, INC.

With a new Democratic administration due to take over Washington in January 2009, there’s been a lot of speculation about exactly what President-elect Barack Obama will do, what he won’t do, and what he will be able to do given the current economy.

About the only thing the pundits have agreed on so far is that the new administration is likely to be much more “pro labor” than the current one, so we can expect new laws and regulations giving workers increased leverage over their employers.

Maybe so, maybe not.  My crystal ball is no clearer than anyone else’s.  But if the new administration is indeed focused on “jobs, baby, jobs,” something important is being overlooked – something that hasn’t gotten a lot of attention in the press.

It’s no secret that millions of Americans have been downsized from corporate jobs over the past 20 to 30 years.  When pressed for a reason, the pundits and politicians have mostly focused on the “outsourcing” trend – companies (mostly in manufacturing and heavy industry) that shut down plants in the United States and hire workers in China, India and other countries because they’re cheaper than American labor.

But something else is going on in the economy that has contributed at least as much, if not more, to the decline of the American middle class.

That something is . . . technology.

Since the late 1970s, we have been (and still are) living through a historic period of technological innovation and change – one rivaling the Industrial Revolution of the 1800s in size and importance.

Anyone old enough to remember what it was like to work in an office in 1980 will appreciate the total transformation of that environment since then.  Back then, I worked for a law firm that had over 100 attorneys in two offices.  These attorneys were supported by approximately 150 staff employees – secretaries, administrative assistants, librarians, mailroom personnel, copy machine operators, messengers, etc.

Today that same firm has over 600 attorneys in eight offices around the globe.  Those attorneys are supported by only a couple of dozen staff employees – mostly professional types such as marketing and human resources experts.

What happened to all those jobs?  Well, if you walk down the hallowed corridors of that law firm and look in any attorney’s office at random, what will you see sitting on his or her desk?  A personal computer, of course.  Today lawyers do most of their own document production from their desktops, and most of their legal research online.  That reduced drastically the need for secretaries, librarians or “admins” in the traditional sense.

If you ran a billion dollar (in sales) company in 1980, you needed hundreds if not thousands of middle management employees to run the complex systems that made that business possible.  Today, with the right information technology solutions, you can run a billion dollar company with fewer than 100 full-time employees.

Think I’m exaggerating?  Last year Google acquired YouTube (the online video website) for $1.65 billion.  At the time YouTube had only 65 full-time employees.

No argument – technology has freed us in ways that couldn’t be imagined back in 1980.  I wouldn’t be able to do what I do for a living without desktop computers, laptops, cellphones, PDAs and the Internet.

I only point out the obvious – that what technology gives with one hand, it takes away with the other.

Please don’t get me wrong – I’m all for saving the American middle class and increasing employment.  But trying to hang onto jobs that have been made obsolete by technology is the wrong way to go about it.  Not only will it keep American labor costs artificially high and a burden to employers, but it will set us back in the global competitive race that will inevitably mark the 21st century.

What we need are laws that encourage and embrace technological progress, so that the mind-numbing, soul-destroying factory and middle-management jobs of the past can be replaced by more creative, challenging, intellectually fulfilling jobs at smaller companies with horizontal, collaborative management structures.  Perhaps also some programs (like the one already in place for workers whose jobs have been outsourced overseas) to help American workers get the education, skills and training they will need to perform those jobs.

Wouldn’t you much rather live in an economy with thousands of smaller employers offering fast career tracks than a few corporate behemoths where it takes five years to climb each rung of the management ladder?  As I recall, Mr. President-elect, you got where you are today pretty fast.  Please make it possible for others to do the same.

Clearly, the past several weeks have not been kind to small businesses (heck, they haven’t been kind to ANY sort of business).  There is a growing consensus that we are looking at some “hard times” in the world economy for at least the next several business quarters, and possibly longer.

If your business has experienced a falloff in sales, now is the time to take action.  You will need to examine your business model very closely, and make whatever changes you feel necessary, no matter how painful that might be.

Here is a “checklist” of questions you should be asking yourself right now.

First, look at your customers. 

Who are my most loyal customers, and what do they look like demographically?  Are these groups going to grow or shrink in the coming years?

Have any new types of people started buying my products or services in the past several months?  Would it make sense to target these groups as future growth opportunities?

If I am seeing less of a certain type of customer, why is that?  Is there anything I can do to bring them back without drastically cutting prices?

Are people in this area looking for products and services that nobody is providing, and how difficult or costly would it be for me to provide them? 

What are the products and services that people will still shell out hard money for even in difficult times like these, and how many of those can I provide?

Have I been saying “no” to people’s requests for certain products and services?  Should I change my mind and start offering these?

Are there any markets for my products or services (for example, overseas or on the Internet) that I haven’t pursued aggressively enough?

Might there be uses for my products and services that I’m not aware of, and that might create new marketing opportunities?

Am I giving my customers too good a deal on any of my products and services?  If so, can I possibly increase my prices and still beat the competition?

Am I spending too much time providing services to lots of small accounts when I should be working for fewer and bigger accounts?

Am I doing business with anyone who owes me money?  If so, will putting the customer on a payment schedule resolve the situation?  If not, should I fire the customer so as to focus my full attention on the customers who are paying their bills on time?

Next, look at your competitors. 

What are my competitors’ biggest liabilities and weaknesses?  How do I take advantage of them?

What are my biggest liabilities and weaknesses?  How do I keep my competition from taking advantage of them?  If my competition is a lot stronger than I am, is now the time to sell out and either join them or strike out in another business direction?

Can I “leapfrog” the competition by offering new products and services that are better “fits” for people’s current needs?

Next, look at your costs.

Do I really need all of the employees I currently have?  Can I or a member of my family step in and do the work of some of these employees so we can reduce costs?  Can I bring in my minor children to help out part-time on evenings and weekends?  Are there software or other technology solutions that will do what any of my employees are doing for a fraction of the cost? 

Do I really need an office or storefront for this business?  Can I work instead out of a home office?  Can I possibly negotiate a reduction in rent with my landlord?

Where are my customers coming from, and how are they hearing about my business?  Where is the “fat” in my advertising budget, and what programs should be cancelled or renegotiated at this time?

Should I replace my landline telephone with a cellphone?  Should I replace both with a low-cost computer based telephone service such as Skype?

Am I taking advantage of every possible tax deduction I can take?  Can I negotiate “flat fees” with my accountants, lawyers and other professional advisors?  Instead of using a large firm where they bill by the heartbeat, can I save money by spreading my legal or accounting work among several local “solo practitioners” who work out of their homes?

Lastly, look at yourself.  If there are any notches left in your belt, now is the time to tighten them.  If you have no notches left, drill some new ones.

Do I really need a new car this year?  Should any of my credit card debts be “rolled over” into my home equity credit line so that I can reduce the overall rate of interest and deduct that interest on my taxes?  Can I save money by converting from oil to natural gas heat?  Can I get a lower quote on my homeowners’ insurance premiums?  Instead of a vacation, should I be taking tax deductible classes that will enable me to learn new, more marketable skills that will generate new business?   

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

“Last week’s column on ‘The Changing World of eBay’ got me thinking a lot about building an e-commerce presence for my small business.  Do you have any thoughts on the right way to do that in a rapidly changing online environment?”

Consider the octopus.

The octopus basically has two parts:  a combination head and digestive system, and a bunch of tentacles that spread out from the head into the surrounding water, enabling the octopus to swim and catch prey (okay, okay, I’ve been watching too many nature documentaries on cable TV, but you get the general idea . . . ).

The tentacles of the octopus contain numerous “suckers”, which catch prey in the open water and then “feed” the prey to the mouth of the octopus, which then digests the prey.

That system of operation is exactly what you should strive to build when you create an e-commerce empire on the Internet.

The “head” of your online octopus is . . . your business Website.

Five years ago, I would have conceded that there are at least some very small, local businesses that don’t need a Website to be successful.  Not anymore.  These days, every small business, whether it does business primarily online or offline, needs to have its own Website.

Why?  For two reasons.

First, people these days expect that you have one if you are in business.  When someone hands me a business card at a speaking engagement or networking event, the first thing I look for is a Web address so that I can find out more about the person (assuming of course that I want to).

If I don’t see a Web address, or if it’s written by hand on the back of the business card (never do this, by the way – it sends the signal that you’re too cheap to send the right marketing message to your customers), the person instantly loses credibility in my eyes.

Second, and more importantly, there is one place . . . and only one . . . on the entire Internet where you can sell merchandise and keep 100% of the proceeds of each sale.

That place is your Website.

Whenever you list merchandise for sale on a platform other than your own Website (such as eBay, Yahoo! or Amazon), you have to pay fees for the privilege – either a listing fee, a “success” fee (a percentage of the sale amount or winning bid), or some combination of the two.

When you sell stuff from your Website, you don’t have to pay nothing to nobody.  So, here’s a “pop quiz” question:  when selling merchandise online, where do you want the bulk of your sales to come from?  Why, your Website, of course!

The “head” of the octopus is your Website, but you need “tentacles” as well.  Your merchandise listings on eBay, Yahoo!, Amazon, or Craigslist, your online “blogs” and your profile pages on the major Web 2.0 networking sites (MySpace, Facebook, LinkedIn, Plaxo and Squidoo) are all examples of the “tentacles” you will put out in the e-commerce ocean once you’ve established your own Website.

What exactly do tentacles do?  Well, at least according to the nature documentaries I see on TV (my experience with real “octopi” doesn’t go much further than fried calamari), the tentacles on an octopus serve two basic functions:

• they use their sticky “suction cups” (or whatever they’re called) to  trap and ensnare prey that may be swimming by; and
• once having caught prey, the tentacles use their “suckers” to pass the prey backwards towards the mouth of the octopus, located in the head, where the prey is consumed and digested.

Your e-commerce “tentacles” serve much the same goal.  Your presence on eBay, Yahoo!, Amazon and other high-traffic e-commerce sites serves to attract customers surfing the Web who would otherwise not find you in a million years.  People are searching for things on the Web every day, but only rarely will people be searching specifically for your Website, at least until you are so well established that your business is a “household word” (and I hope that happens someday).

Once customers buy a few things from one of your “tentacles” and become “hooked” on your merchandise or services (or “sucked in,” since we’re talking octopus), they will want more.  That’s when your “tentacles” should be feeding them to the “mouth” of your e-commerce empire:  Your Website.  Where you can sell lots of stuff to these customers and keep 100% of what you make.

Now, sometimes it won’t be easy for you to build an Internet octopus for your business.  Some online platforms, particularly eBay, have rules restricting your ability to post your Website URL on your listings or otherwise drive traffic off of their site.  But with a little creativity, some online research and professional advice, you can find effective ways to assemble your Internet octopus so that the maximum Web traffic occurs in the places where it really impacts your bottom line the most. 

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

In my almost thirty years of experience as a manager, executive, and consultant I have had one lesson taught to me over and over again. Culture eats strategy, period.

Ron Willingham, creator of the Integrity Systems model™, sets the basis for this when he talks about two related areas. The first is the construct of our values and beliefs. He proposes that we operate on three levels – each larger than the other. The three levels have been depicted as a “snow man” and I think that is an excellent metaphor.

The “head” of the snowman is our rational processes or “I think”. The next circle is the emotional or “I feel” and the last and largest dimension of our processors is the “I am.” The “I am” is that cluster of experiences, learnings, and related activities that shape what we call our values. It also holds our world view of ourselves and others.

The next concept from Willingham is that of congruency. Dr. Willingham talks about congruency on several levels – our view of an activity, our view of our ability to perform the activity, our view of the activity as it relates to our values, commitment to do the work, and our belief in the product or service.

I would submit that organizations have these same kinds of constructs- we just don’t talk about them.

When we go into an organization within an intention of changing the “culture” without consideration for these underlying constructs, we will achieve at best short term compliance but most likely near and long term failure.

Elements of a culture include the following:

• Values
• Norms
• Beliefs
• Behaviors

If we don’t take these elements into consideration, do we really expect to sustain meaningful change?

I spent a number of years in the credit union industry working with organizations that wanted to create a “sales and service” culture. That is a more difficult proposition than it sounds like as many of the people in credit unions are “refugees” from traditional banking or financial services because they feared or were incongruent with the concept of selling. They felt, as a member based, not for profit organization, “pushing” products was both uncomfortable for them and inconsistent with the mission and values of the organization. Only by accepting and embracing the concept of congruency between beliefs, values and behaviors, were we able to make meaningful differences in creating a sales and service cultural shift.

The good news is that identifying cultural issues and addressing them will significantly improve your chances of success. The bad news is you have to go further. You must also look at your systems.

In this context when I talk about systems I am including the following:

• Measurements
•  Models
•  Tools
• Connections

You have to reinforce your “new” values through your hiring and selection process, your reward systems and your products and services. You have to continuously benchmark and realign them.

You might be asking yourself – why do I want to go to all this trouble? This sounds like a lot of work. I submit a very simple reason:

The Environment Is Changing!

• From Process Focused Business To Customer-Needs-Focused
• From Name or Product Loyalty to What Best Meets Needs
• An Increasing Need for Higher Per-Worker Productivity
• Changing Employees Expectations

There are other reasons, as well, but the reasons listed above are some pretty compelling reasons.

My partner and I share a very simple premise:

“People join and support a culture not a system. Long term success will only be achieved and sustained when employees believe that embracing a culture is in their best interests and the interests of their customer. Changing systems without changing culture will not sustain long term success.”

So we change cultures. We call our model: Moving from compliance to Commitment™.

Ron Majetka in his book Why This Horse Won’t Drink, describes commitment this way-

“Commitment is the act of being physically, psychologically, and emotionally impelled. It means that employees gladly give up other options.”

By making cultural changes that create congruency between employees’ values and how they view their work, you will have an organization of committed employees who value their work.

Think about it. How would you like your employees to describe their relationship with your organization?

Mark Herbert is a principal in the firm of New Paradigms LLC and has assisted organizations including Honeywell, Spectra Physics, Mobius, Oregon Research Institute, and Oregon Community hire the right people. He can be reached at MarkHerbert@newparadigmsllc.

“Over the years my company has developed a close working relationship with one of our suppliers, and we’re thinking of setting up a joint Website where we can offer each other’s products and services, sometimes with blended or reduced prices if people buy ‘packages’ of our products.  Do you see any potential legal issues with that?”

Generally, whenever two people or companies either hold themselves out as partners, or conduct business in such a way that people can reasonably believe they’re partners, the law will impose a “de facto” partnership on them even though they never actually intended to be partners (even, in fact, if there’s an agreement between them saying they are NOT partners).

So, for example, let’s say that I sublease office space from another lawyer.  We are not partners, although we may share some expenses (such as salary and benefits for a joint receptionist/admin person).  You are a prospective client.  When you walk up to our office door, you see a sign that says “Cliff Ennico and Joe Blow, Attorneys at Law”.  The receptionist answers phone calls the same way.  The business card and marketing brochure you pick up in our lobby say the same thing.  Your appointment is with Joe Blow, not me.  Joe doesn’t even mention me during your meeting with him.  If Joe Blow should commit malpractice on your legal matter, you can sue both Joe and me, even though Joe and I clearly agreed we were not partners.  The law in this case would look at things the way you yourself looked at them – you had every reason to believe that Joe and I were partners, and the law will back you up on that.

Another example:  you are a computer consultant, and I hire you to do an e-commerce website for me.  You’re terrific at the techie “under the hood” stuff, but you’re not the greatest Web designer in the world, so you subcontract that portion of the job to your cousin Suzie Creamcheese (any Frank Zappa fans out there?).  You and Suzie show up together at every meeting with me, and both you and Suzie call me with questions about the project.  Even though I know Suzie is primarily responsible for the Web design work and you are doing the other stuff, unless one of you specifically tells me that the two of you are not partners, I have every right to believe you are partners.  So if I get a nasty letter alleging that some part of my website design infringes another company’s copyright, I have the right to sue both of you even though Suzie was clearly responsible for that fiasco.

As the boldface language in the above example indicates, the way to avoid creating an “inadvertent partnership” with someone is to make sure third parties (customers, suppliers, etc.) know that you are not partners.  In the Web design example above, I would actually put a clause to that effect in my contract with the customer.

In the case of your joint Website, I would divide the site into two clearly identifiable spaces so that people know you are two separate companies.  While your products can be listed on a single order page, I would clearly distinguish which products are being offered by Company A, and which are being offered by Company B.  Your e-commerce “shopping cart” should clearly indicate which company is receiving your payment and will be responsible for refunds, returns, and so forth.  And there should be a clear statement at the bottom of the order page (preferably a “click through” box requiring the customer’s agreement) that “www.whatever.com is a joint website offered by two independent companies, _________, Inc. and _________, LLC.  ___________, Inc. and ________, LLC are not partners or agents of each other, and each company is not responsible or liable in any way for the other company’s products or services.” 

Also, each company should post its own Privacy Policy along with a statement that customer information will be shared freely between the two companies.

A better approach would be for each company to have its own e-commerce website for its own products, with links back and forth between the two sites allowing customers to obtain discounts on products that are offered on each site if they can prove purchase of one or more of the other company’s products (or that they were directed to the site from the other company’s site).

One more thing:  if your two companies are technically competitors, creating a joint Website like this one may create antitrust and “unfair trade practice” issues.  Be sure you work with an attorney who is familiar with “joint ventures” like this one to make sure your Website will not be viewed as a way to engage in illegal “price fixing”, “tying arrangements” (requiring customers who buy Product A from one company to also buy Product B from the other company), and other antitrust violations.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

Imagine getting in your car and expecting to get to your destination without gas. Silly, right? Now, imagine trying to create a successful business without marketing? Hmm…see where I’m going with this?

By Randye Spina

Marketing IS the gas that fuels your business.

There simply is no other way to bring revenue in the door without some form of marketing. It’s just flat out impossible.

Now, before you say “I’m just starting out, I don’t have a marketing budget”, or “times are tough, I don’t want to spend a lot”, let me stop you. You can market your business without spending a fortune. Perhaps without even spending at all.

Let’s look at some amazingly affordable marketing solutions you can implement right now:

1. Email – Do you have signature block at the end of your emails? If not, you are missing a large opportunity to get the word out. Make sure you include all the ways to contact you & even add a tag line. You’d be surprised how much mileage you can get out of this consistent branding opportunity.
2. Email Marketing – At every opportunity, try to collect emails from prospects as well as existing clients. Then, using your existing email system (no subscriptions required) just be sure to send them something relevant & of course don’t forget to use the “BCC” line to protect everyone’s privacy.
3. Phone – Do you have a message on your after hours, or voice mail system that plugs your business? A short, simple message that states “Thank you for calling _____. The company that ____. This is ____. No one can take your call right now, so please leave us a message & someone will return your call as quickly as possible.” Even if you use your home phone as your business line, do it! Remember, for a first-time caller, impressions are everything. You may also want to consider stating your cell number for client emergencies.
4. Business Cards – Be sure you have them stashed everywhere. In your briefcase, padfolios, wallet, purse, notebook, pockets – I mean everywhere! You never know when an opportunity arises to give someone your card, or to put it up at a community location. Also, don’t forget to include a business card with every piece of correspondence you send out. It can subtly say “pass me along”.
5. Write articles – If you want to set yourself up as an expert in your field, set aside time & write articles that will get people’s attention. Send them out on the web & be sure to send them to your local media outlets & publications.
6. Website – If you already have one, be sure to consistently update its content to stay fresh & of course, add to it as necessary. Learn how to update verbiage yourself. It’s not that difficult and you can save money by doing these yourself.
7. Network – Pick up the phone & call 5 people everyday that you think will be great resources for you. Call friends & ask if someone they know needs your product or service. Ask everyone, everywhere you go & make time to network once a week. I like Fridays when people are more relaxed & open to a quick (& I mean QUICK!) chat. Then, ask those people for more referrals & the list keeps going.
8. Do reviews – Go to book sites & review books within your industry & area of expertise. Get your name out there & be sure to include links to your email & website, if you have one.
9. In store/office – If you are lucky enough to have a retail location use it to your marketing advantage. Invite speakers, have distributors give product demonstrations. Then serve tea or wine & cheese and invite your customers & prospects. Tell them to bring a friend. You’d be surprised how well this can work for you.

Good luck!

Randye Spina is the Chief Solutions Officer at Affordable Marketing Solutions, LLC and can be reached at 203-559-8838.

By Lawrence Garvey

If your firm or company is anything like mine, the credit market crisis did not start last week but rather sometime late last year. What Wall Street is experiencing now has been apparent, on a lesser scale, throughout our region for some time. Lines of credit have been closed or reduced, small business loans have become almost impossible to obtain and the dire circular effects of this credit squeeze, now being prophesized by every talking head with a microphone, have been apparent to us for some time.

Receivables are way up, payables are climbing, good clients and customers are cutting back wherever they can and many of us find ourselves spending more time on business development and collections then actually completing the work needed to continue to feed the monster. When I first started my law practice, I asked a friend who had been practicing for a number of years, how I would know that my practice was a success? His reply was simply “you’ll know when you look at your accounts receivable they make you want to throw up”. Thankfully, my firm passed that threshold some time ago, but I now see that some small and medium sized businesses have their very survival at stake due to the uncollectability of the money they are owed from clients and customers who just a year ago were their best payers. This very real threat is the true fallout of the credit crisis, not the banks on Wall Street.

The situation leaves the small business owner in a tough spot. You need the money to continue your operations and you need the client or customer for your future survival. What if the client can’t pay? What if the customer goes bankrupt? Should the business owner get aggressive immediately, change payment terms, insist on everything up front and risk losing the business or alienating the client? What about the business owner’s vendors and suppliers, they have to get paid also, we need to survive as well!

The answer is threefold: Communicate, Negotiate, Litigate.

Communicate. Keep the lines of communication open with your clients and customers. We run our businesses on our personal relationships. If your client is slow paying call him or her up and find out why. Don’t even address the situation directly (believe me he or she will know why you’re calling) commiserate about the economy, read between the lines and find out if he or she is just slow in getting paid from his/her clients or if there is real trouble. If there is no personal relationship, call and ask when you can expect payment. Call early and call often. The squeaky wheel does get oiled and your job as a business owner is to work your way up your customer’s payment priority list. Most importantly, keep communicating, if possible through direct telephone or face-to-face conversations.

Negotiate. Start with your older receivables and offer them a discount if they pay quickly. A customer who has owed you five hundred dollars for over a year may jump at the chance to pay just $350.00. You get some cash, the customer gets a way out and maybe even the customer becomes a customer again. Try this also with your current slow pay customers. Be flexible, take some now and some later, work with the customer. Remember, right now CASH IS KING. These are not the times to be obstinate about full payment. You need to survive! Get what you can and move on. When times get better you may want this customer again. On the other hand, in a matter of months or weeks some of theses customers will be gone altogether and on their way out someone like me will be advising them on who they should and should not pay. Unless you have collateral or a personal guarantee, believe me, you will end up on the no pay list.

Litigate. When all else fails, use the courts. If you are in a lower invoicing business, figure out how the small claims courts work and use them. Don’t wait, file and again be open to negotiation. For larger collectables, get a lawyer. You may be surprised at how quickly a heretofore silent account will wake up and respond to the attorney’s letter. If the letter fails, then speak with your attorney about the cost analysis of full scale litigation. Be informed and make an informed decision. Attorneys have different payment arrangements and may work with you on a full or partial contingency or offer a flat rate. After all, we’re business owners as well.

Lawrence Garvey is partner at Cushner & Garvey LLC. Cushner & Garvey is a full service Law Firm with an emphasis on Business and Personal Financial Matters, Trust and Estate Planning, as well as Corporate Law, and Litigation. The firm represents clients throughout New York and New Jersey. For more information, visit their website at www.cushnergarvey.com or call (800) 644-2733.

“We opened up a franchised retail store using a home equity loan a couple years ago. We’ve been keeping our head above water, but with the current economy things are going south. To add insult to injury, the home equity line of credit has been since frozen by the bank because the value of our home has gone down.  I looked at our lease, and we are stuck with a personal guarantee for the rent for 10 years. I think we are going to have to close the doors and was wondering what I should do about the lease.”

The basic problem here isn’t the rent – it’s cash flow.  Obviously the business isn’t generating sufficient cash to pay the rent each month and pay you a living wage without your having to tap your credit line.  Do everything you can to get your costs down to rock bottom – fire your employees and hire your kids and teenage nephews and nieces.  Not only are they inexpensive labor, but you actually get tax breaks for that.

Then, call your franchise, explain the situation, and ask them for a “break” on your monthly royalty payments until you turn cash-positive.  If that doesn’t work, tell the franchise you want to sell your location, and start looking for buyers.  Focus on recent immigrants to the United States – these folks will jump at the opportunity to own their own business if the price is affordable, and they stand a much greater likelihood of success because their cost-of-living expenses are likely to be much lower than yours.

If all else fails, it’s time for a “heart to heart” conversation with your landlord.  Explain your situation, and be prepared to back it up with hard numbers so the landlord doesn’t think you’re a “crybaby”.  Offer the landlord a monthly “percentage rent” in exchange for a reduction of your fixed monthly rent – this is a percentage of your gross sales each month, and usually is in the range of two to five percent.  Doing this makes the landlord a partner in your success or failure – if the economy improves, he may actually do better with this arrangement than he is currently with just a fixed monthly rent payment.

If the landlord isn’t willing to “play ball” (and many won’t, because their mortgage banks are playing the same games with them that your home equity lender is playing with you now), then it’s time to throw in the towel.  Tell the landlord that you will have to vacate the space in a few months, and let him know he needs to show the space to prospective new tenants.  If your landlord is able to find a new tenant for your space before you run out of money, you will still be liable on your personal guaranty, but there’s a good chance you won’t be called on it if the new tenant is a solid one.

If the landlord has to reduce the rent for your space in order to attract a new tenant, you will be on the hook for the difference between the rent you were paying and the rent the new tenant is paying.  Offer to pay this amount each month rather than in a  “lump sum” installment.  Not an attractive prospect, of course, but it’s a whole lot better than being on the hook for 10 full years of monthly rent charges.

“We’re a small business that’s been operating in the same location for over 40 years.  Our lease is up for renewal in a couple of years, and we’re a little worried.  We live in a very upscale community, and our landlord feels he should be getting a lot more rent per square foot from his tenants because other landlords in town are getting a lot more rent from theirs.  Earlier this year our landlord asked for 50% increases in rent for two other stores in the center whose leases came up for renewal – the owners had to go out of business or move out of town because they couldn’t afford the increase, and the store locations remain vacant to this day.”

Hopefully your landlord’s experience with the two other tenants will “wake him up” to the idea that his rent increases are unreasonable, but you can’t assume that will happen.  Start looking for other space in town, and focus on spaces that are owned by large commercial realty companies as opposed to “Mom and Pop” landlords.  “Professional” landlords don’t make decisions based on emotion or guesswork – whatever you are offered will probably reflect a fair market rental for your area.  Once you get an acceptable quote, show it to your current landlord with an offer to renew your current lease on the same terms – and the implied threat that you have somewhere else to go if he refuses.  Hopefully that will bring him back to reality.

I love this quote by Gandalf the Gray from the book Lord of the Rings by J. R. R. Tolkien, “When we despair we cease to choose well.  We give in to short cuts.”  It’s so true and we all know that we have been guilty of it at some point in our lives. 

It reminds me of the Dot Com Bubble that burst in March of 2000 and caused the stock market to crash, I remember those heady days of “irrational exuberance” as Federal Reserve chairman, Alan Greenspan referred to it. It seemed like everyone was worried they were going to miss out on the digital revolution.  They were motivated by the dreams of easy money.  It was all about taking a short cut. 

Several start ups approached me to help them promote their new Internet businesses in exchange for stock options.  I looked at a couple of cobbled together companies that were little more than a guy with a website and the hopes of mining some venture capital.  The idea was to generate web page hits with a clever name or gimmick, sell a ton of stock at the Initial Public Offering, then retire a millionaire.  I decided to stick with those willing to pay in cash. 

After the burst, I read about a repo man in Silicon Valley who repossessed the expensive cars of former Internet millionaires.  He reported that he frequently found dozens of losing lottery tickets in the cars -- evidence that the former car owners were acting out of despair and looking for short cuts back to the elusive wealth that had slipped from their grasp. 

Beverly Sills, the famous opera soprano, once said, “There are no shortcuts to any place worth going.”  But, too often when times are good we pile on the responsibilities.  Later on when we encounter adversity, we look backwards instead of forward.  We attempt to go back to where we enjoyed success in the past even when it is counter-productive to our current goal.  

In my seminars on innovation, I conduct a fun exercise that demonstrates how we frequently feel we must go backwards before we can go forward.  A volunteer from the audience is selected and sent out of the room.  The audience chooses a simple behavior they want the volunteer to do (like jumping up and down on their left foot). What makes it fun is that the volunteer must guess the behavior.  The audience can only help by saying the word, “yes” when the volunteer does anything that comes close to the desired behavior.  They are not allowed to say, “no” or give any other hints.   

Once the volunteer performs the desired behavior, the audience rewards it with a round of applause.  I ask for a second volunteer, but this time we change the rules after the person leaves the room.  When the desired behavior is reached, the audience goes silent, says nothing, and gives no applause. Since the volunteer is no longer getting feedback in the form of “yes” he or she will go back and repeat behaviors that did elicit a “yes.”  The audience, however, remains silent. 

As we watch the volunteer, we can see despair forming on his or her face.  The volunteer will then go further backward to find a previous behavior that generated success.  Eventually the volunteer quits going backwards and starts initiating brand new behaviors in the hopes of regaining another, “yes.”  It is after several new behaviors are performed that the audience is signaled to applaud and reward the volunteer for his or her efforts.  The purpose of the exercise is to force the volunteer to backtrack to the point that he or she realize success can only be found by moving forward. 

In life, the trick is to stay focused even when our luck seems to be changing.  We may have to slow down or make changes in our methods, but the goal must remain the same.  Henry David Thoreau observed, “We rarely hit where we do not aim.”  In other words, if you’re moving backward you are moving away from your goal... and it’s hard to hit a target when you’re facing the wrong direction. 

Robert Evans Wilson, Jr. is a motivational speaker and humorist.  He works with companies that want to be more competitive and with people who want to think like innovators.  For more information on Robert's programs please visit www.jumpstartyourmeeting.com.

A rose by any other name…… I just read a study on successful change management and it totally reinforced my belief in our Compliance to Commitment™ model, again. The study, commissioned by Global Knowledge indicated that people issues remain the key problem in deploying or upgrading enterprise level software systems. Another study cited in the same article indicated that 70% of "re-engineering projects fail, and a third study which examined efforts ranging from "strategy deployment" to "culture change" showed a similar failure rate – 66%. One in three efforts yielded success!

So what caused all these failures? Well, the studies conclude that the two biggest impediments to successful change initiatives come down to two primary drivers- employee resistance and lack of proper training. Just for the record, employee resistance is by far the bigger issue. They have actually been able to identify the three key reasons employees "resist" the change:

1. Fear of job loss
2. Fear of increased responsibility
3. Frustration with the process

So how do we address these issues? We have several suggestions-

• Recognize and address the "people side" of change management- this may sound intuitive, but given slightly better than a one third success rate I would suggest not. We talk about re-engineering, restructuring, resource reallocation, etc. There are treatises written on processes, policies, procedures, and technologies to improve "efficiencies", but at the end of the day people do the work.
• Develop and hone effective interpersonal and communication skills for front line managers- some of the key skills that help people deal with change include team building, coaching, constructive feedback, effective delegation, and clear expectations. These skills are not being taught in the business schools! You are going to have to "buy" them or develop them in house.
• Recognize that change is systemic and inevitable- change has become an organizational reality. In our dynamic environment nothing is static. If you have not built an ongoing system for monitoring your environment and incorporating changes into your strategies and systems you are in trouble.
• Anticipate resistance and plan for it- step back and look at change from your employee’s perspective. Reacting to resistance is inefficient and frustrating. It is management’s job to guide employees through the process. Make sure your leadership team has the skills and the tools to implement the change proactively.

Some Practical Tips
There are some very practical things you can do to make change occur more efficiently and reduce resistance.

• Tell people the truth and give them as much information as possible as often as possible
• Give them reasonable time to "process" the news- don’t expect immediate buy in.
• Give them time to vent and recognize that some level of anger is normal.
• Empathize! You don’t have to agree, but you can try to understand and recognize their concerns.
• Recognize that trust will be off balance temporarily. Be patient , it will return
• Get them involved! You worry about the what; let them participate in the how. Let them participate in determining the tasks and timelines.
• Build on their ideas. Their ideas may surprise you; after all they do the work.
• Be proactive. Discuss the new realities constantly and be sure your management team are effective communicators.

Some of this sounds familiar I hope from previous articles on our Compliance to Commitment model™ with its five elements of Respect, Responsibility, Information, Rewards, and Loyalty and our more recent information about successful engagement strategy. We talked about the financial and organizational successes of companies who embrace the models. So you have to ask yourself a question, similar to engagement strategy two thirds of "change" initiatives fail- Which category do you want to be in?

Mark F. Herbert is a principal in the management consulting firm New Paradigms LLC. He has successfully helped organizations manage their change management strategies on a regional and international basis. He can be reached at Mark@newparadigmsllc.com.

Robert Evans Wilson, Jr. is a motivational speaker and humorist.  He works with companies that want to be more competitive and with people who want to think like innovators.  For more information on Robert's programs please visit www.jumpstartyourmeeting.com.

“Cliff, we love your column, and we would love to hear your reaction to the Wall Street shenanigans of the past several weeks.  Do you have any special wisdom on how small businesses can survive the coming, almost certain, financial storm?”

This is a column of practical advice for business owners, and I generally try to avoid political and “macroeconomic” topics.  It’s not that I’m squeamish, or afraid to take a stand on an issue – I actually have very strong opinions about what’s happening in the business and financial world right now.  It’s just that this column is not the place for them.  There are many, many places – both online and off -- where you can get information and opinion on this topic, and I doubt I would have much to add to the thousands of pundits, commentators, and “citizen journalists” who are weighing in with their opinions.

Having said that . . .
I do strongly believe there is one thing business owners need to have in order to survive in these unsettled times – something that has been sadly lacking in the business world the past few decades. 

What is that something?  It’s not cash.  And it’s not love or passion for what you do.

It’s discipline.  Discipline and self-restraint, pure and simple.  The ability to say “no” to a deal that doesn’t make sense when everybody else is saying “yes”.  The ability to set standards for who you will do business with (and who you won’t) and sticking to them.  The ability to set a budget for yourself and stay within it, even if it means making sacrifices (remember when people actually made personal sacrifices for things?) in other areas of your life.

The last 50 or so years have been a great time to be alive in America.  Three whole generations of Americans have grown up thinking that nothing bad ever happens here.  Wars happen, but they’re always on the other side of the world – just wave a few protest signs in the air and even those go away.  Recessions happen, but they’re short and shallow and the economy always bounces back quickly.  Poverty and starvation happen, but only to people in developing countries.  Ten years ago someone actually wrote a book called “The End of History”, arguing that historical cycles of good and bad economic times are gone for good (or can be easily managed) due to our technological brilliance and intellectual flexibility.

In a word, “oopsie”.

Just as Andrew Jackson once said, “eternal vigilance is the price of liberty”, eternal discipline is the price of a free market economy.  Just because the law permits you to do something doesn’t mean it’s the right thing to do, or that you should do it – even if “everybody else is doing it”.  Your parents didn’t buy that argument when you were a teenager, and neither should you when running your business.  Thinking about bad times when times are good is very difficult to do – it’s a little bit like negotiating the divorce terms right after someone has accepted your proposal of marriage – but it has to be done. If you wait until the bad times to discipline yourself, you may not have to time to correct the problems and weaknesses that expose you to disaster.

Back around 400 B.C. a Greek guy named Aesop wrote a short story about that.  It’s called “The Ant and the Grasshopper”.  You probably haven’t read it since childhood.  Go back and read it now.  It’s the best business advice you will ever get about surviving tough times.

Once you have discipline, there are two things you DON’T need.

Fear.  In similar times, a famous U.S. President once said “we have nothing to fear but fear itself.”  He was right.  When you panic, you do and say things you (and society) live to regret later.  Action is the surest cure for fear.  Stop worrying.  Look for threats, and take action to avoid them. Look for opportunities, and take action to exploit them.

Anger.  As Shakespeare said, “what’s done is done; it cannot be undone.”  The time for anger was years ago.  Being angry now is a waste of your precious time.  Also, when you are angry, you do and say things you (and society) live to regret later.

We are all upset about what’s happened on Wall Street.  We look for someone to blame.  But as Shakespeare (again) said, “the fault, dear Brutus, lies not with our stars, but with ourselves.”  We are all responsible for the current mess.  Every last one of us.  Either we were living beyond our means, or we failed to insist loudly enough that the spending-and-lending habits of those who were be curtailed.  If you must be angry, be angry with yourself – look closely at the things you did, or did not do, that contributed even in a small way to the credit crunch.

And make a vow to yourself, and to your children, that they will never happen again.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

We’ve got so many ways to connect  --  voicemail, email, texting, fax;  landline, cell phone, PDA and probably mental telepathy. Downside:  we’re assaulted by offers ranging from the unwanted to the unspeakable. To just function, we’ve got to spam filter and call-screen. Even in good times, we try to keep out everything – and everyone -- but the essential.

Doing What Comes Naturally
You may have seen women as more naturally inclined to work together, to help each other. Certainly we share personal confidences on life’s most intimate adventures, including our loves, our bodies, and our children, as well as our career experiences. Thousands of women gather to support each other every minute of the day, from the informal traipse to the ladies’ room to the formal standing ovation we offer in salute to women community leaders who inspire and support us.

(Hey, and just maybe this week you feel like you know more of the ones Madeleine Albright had in mind when she proposed the "… special place in hell for women who don't help other women." )

If a few too many days feel like you’re fighting the tide, take a break. Beyond spending time kvetching over coffee, get right out of the office and do some good for somebody else for a change. Volunteer for a shift at a food bank or meal shift at a shelter…and don’t wait for Christmas or Thanksgiving. Struggling to balance work and family? Consider taking the kids, too.  That can get your whole family thinking about things with a lot more gratitude.

How hard would it be to find ways to join forces in common cause rather than go it alone? Imagine the positive change we would make in our lives, in our businesses, and in our communities by treating challenging times as a call to come together.

Judy Bradt , The Smart Woman’s Guide to Government Contracts, is Principal of Summit Insight LLC (www.summitinsight.com; blog at www.sell2usgov.com) in Washington DC.  As author and expert consultant, she offers her clients business strategies for government contracts made easier.

The US federal government will spend over $400 billion this year on goods and services. State and local government contract spending will hit $5 trillion. Those contracts will include commercial and consumer items and professional services as well as highly specialized niche technologies, and everything in between.

If your business is already performing well with your commercial customers, government contracts can drive your business growth…or they can drive you crazy. Knowing what to expect makes all the difference. These five tips suggest whether you’re ready to take on the world’s biggest buyer.

1. Strong Performance Today & Determination For Tomorrow.

Government customers want reliable suppliers with established track records. And successful suppliers are prepared to finance the up-front investment to pursue, win, and then perform government business. Remember, you don’t get paid til after the work is done – so working capital is essential.

2. A Unique Value Proposition – for Government.

Successful vendors know just how to research exactly which government buyers benefit most from what they offer, and craft their marketing campaign precisely to reach those buyers. (Free data, consulting services, and personal networks all help.) Then they create online content and literature to focus on issues and challenges that government buyers face. They can articulate in the buyers’ language how their offering stands apart from the alternative options the buyers have.

3.  Relationship Mastery.

Successful vendors know that when you sell to government, you’re not selling to a process or an order machine. Government buyers do business with people they know and like and trust, people who understand their needs exquisitely well – even when they have to follow complicated rules to do that.  Winners build  formal networks (like creating a connected corporate board of advisers), contribute to specialized industry networks in which their buyers participate, and are alert to the casual perfect connection that a friend or neighbour can bring. 

4.  Focus on the Details.
While relationships are essential to attract the business, governments operate under complex rules that vendors must know. Companies who hold government contracts – whether as a prime contractor or a subcontractor – must be aware of and comply with dozens of precise requirements. Government contracts carry legal obligations that can include workplace regulations and contract administration as well as product specifications or service performance standards.

5.  Value Specialized Help.
Winners are prepared to invest considerable time and money to develop cost-effective and successful government marketing strategies. They pinpoint their prospects, and know how they’re superior to their competitors in every way. That effort includes getting the best insider expertise they can – about opportunities, competition process, and connections. They make the most of free resources, but they understand that the right specialists can dramatically shorten their time to market.

What’s next? Get reading!

• www.sell2usgov.ca
• www.business.gov/topic/Government_Contracting

Judy Bradt, Principal & CEO of Summit Insight LLC of Alexandria VA brings 20 years’ experience helping over 5000 clients land over $200 million in government contracts. She has been covered by Entrepreneur Magazine, Fortune Small Business and ABC Radio, and has just launched “Answers in an Hour”, a new turnkey service for clients who want government contract ideas they can use right away. email: Judy.Bradt@SummitInsight.com Web: www.summitinsight.com Blog: www.sell2usgov.com

“I do a lot of public speaking to promote my small business.  Most of my speaking is for local organizations; I don’t charge them a fee, and there’s no contract involved.  But lately I’ve been contacted by some event planners to speak at trade shows around the country, and their contracts are several pages long!  What are some of the things I should be looking for in these contracts?  Do I need an attorney to look at each of these when I receive them?”

Generally, when I look at speaking contracts, I focus on three basic questions:

“How and When Do I Get Paid?”  Speaking contracts are usually clear about the amount you will be paid for speaking, but you would be amazed how many contracts are “fuzzy” about when payment is due.  Most event planners will want you to submit an invoice for fees and expenses after you speak, which is fine, but if there are significant expenses involved – such as cross-country air travel – you might want to ask to have those expenses reimbursed before you board the plane.  Watch out for language saying the event planner will pay you if they or their client are “satisfied with” or “have accepted” your work – that can be awfully subjective, and you don’t want your payment held up on somebody’s whim.

“Who Owns My Presentation?”  There should be only one answer to this question:  YOU should own the copyright and all other rights to your PowerPoint slides, handouts and other materials you give to attendees, and any other content you create for the event.  Many speakers’ contracts require you to assign your copyright to the event planner, and you should resist these provisions as much as possible.  Once someone owns your copyright, they can do whatever they want with your presentation, you get nothing for it, and you can’t use that same presentation anywhere else.  Consider instead giving the event planner a “nonexclusive, perpetual, royalty free” license to use your content only for certain specified purposes – such as posting the content for a limited time on the event’s Website. 

 “Am I Restricted From Speaking for Someone Else?”  Never, ever sign a noncompete agreement for a speaking event.  No event planner has the right to prohibit you from speaking for other organizations or clients.  If they protest, tell them you won’t agree to a noncompete unless the planner agrees to give you a minimum volume of speaking business each year while the noncompete clause is in effect.

It’s a good idea to have an attorney review your first couple of speaking contracts.  I would recommend you meet with the attorney and have her “educate” you on the things you need to look for to avoid getting into legal trouble with the event planners.  After that, you can probably review these yourself, keeping your attorney on “speed dial” if a particular contract has language you haven’t seen before.

“I am a corporate training professional who conducts programs at hotels and convention centers in my state two or three times a year.  While I can limit myself to my home state, a future goal is to offer training in other locations across the country, and I understand I may be subject to income and sales taxes in other states if I conduct programs there. What’s the best way to learn about the tax rules in each state where I may wish to conduct training?”

When you conduct training classes in another state, especially if the classes last for more than one day each and/or you conduct several classes in the state each year, you may have “nexus” with that state for tax purposes.  This means you are responsible for paying income or sales taxes to the tax authority in each state where you conduct training programs.

To find out a state’s “nexus” rules, find the state tax authority’s Website – you can search online for “[name of state] revenue department”, or go to www.taxsites.com/state.html for a nationwide directory of state tax Websites.  Once you get to the state tax authority’s Website, search for the “nexus information” page.  There almost always will be one.

Each year, the Bureau of National Affairs in Washington, D.C. conducts a survey of state tax departments about their “nexus” rules and publishes the survey in book form --  for a current copy of this survey, call BNA at (800) 372 1033 and ask for Item STSV01.  But be forewarned:  it will set you back $185.

As a last resort, you can always call the state’s tax department, ask to speak to a Revenue Examiner, and ask them flat out if your proposed activities within the state will subject you to income or sales taxes.  The good news is that they’re usually fairly friendly, and will tell you exactly what to do.  The bad news is that they will almost always find you have “nexus” in the state and will have to pay taxes.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

“I have a small service business.  I was doing okay until recently, but in the past several months a lot of my business has dried up and I’m struggling to stay afloat.  Do you have any tips on how to run a service business in difficult times?”

When you run your own business, there’s never anything BUT difficult times.  The rules of good management apply no matter what the economy’s doing at a particular moment.  Having said that, though, recent events in the financial world have shaken a lot of people’s confidence, so it’s a good idea to review the basics.

“Talk to Me, So You Can See, What’s Going On . . . “  With apologies to the late Marvin Gaye, a sudden drop in business usually means you have a marketing problem.  Your customers have had a change of heart about you and what you’re doing, and you’ve got to find out what’s happening.  Sitting around the office thinking about the problem won’t solve it.  You’ve got to get out into the marketplace and start talking to your customers.  Ask them point blank why they’re no longer calling.  Is it something you’re doing or not doing for them?  Are their needs changing?  Is there a new competitor in town who’s offering them better prices, better service, or a more convenient location?

Frankly, you should be doing this ALL the time, but especially now you need to worship your customers.  Offer them a little something for participating in a telephone survey and they’ll probably give you an earful.  Oh, and if they’re telling you they want something new and different from your business, say “yes” and start offering it . . . whatever it may be. 

“Is There Anybody Alive Out There?”  With apologies to Bruce Springsteen, changing times create new marketing opportunities as well as threats.  For each customer who’s drifting away from you, there are others who are being abandoned by other service providers.  Take a good, long look at your community – what’s NOT being done that people are willing to pay good money for?  If two or more customers ask for Service X and you are offering only Services Y and Z, maybe Service X needs to be added to the mix.  Chances are, a lot more people are looking for Service X, and it’s good to be the only one in town (or in your industry) doing it.

Maximize Revenue, Minimize Cost.  These are the two cardinal rules of growing a business in tough times (or indeed, any other time).  Here are the key questions you should be asking:

Are your prices high enough?  Since your customer base is declining, you will have to squeeze more cash out of fewer customers.  Your gut instinct is to cut prices in difficult times, but if inflation is pushing everybody’s costs higher, now may be an excellent time to actually RAISE your prices because people are more resigned to it. 

Are there other complementary products or services you can sell your regular customers?  If you are a rare coin dealer, you should not be selling just the coins themselves but also the supplies that coin collectors need.

Are there new markets or uses for your products and services?  Consider selling internationally via the Web – there may be huge markets in Brazil for stuff you can’t give away in the United States.  Perhaps you can reach out to an ethnic group in town that’s not being adequately served by your business (three little words that will dramatically expand your service business – “se habla espanol”).  Perhaps there are new uses for your products that people aren’t aware of.  In good times, a bicycle is a fun way to exercise.  In tough times, it might be a primary means of transportation.

Are you spending too much money on anything?  In tough times you have to be downright ruthless about cutting expenses and living on “a drop of water”.  Do you really need a second employee working on Saturdays?  Can you get another year out of your old truck?  Most of us don’t spend wildly on high-priced items, but the little expenses -- $10 here, $20 there – really add up.  Cut your spending by even $20 each day, and you will save $140 each week, and $7,280 each year.

At all times, there are two steps to success in any service business:

• Find a dirty job that has to get done but that no one likes to do; and
• Charge a premium price for doing it.

People will always pay good money to have work done if they are too nervous, time-starved or nauseated to do it themselves.  In tough times people are more motivated to do mildly objectionable things themselves, but they will still outsource the really scary, distasteful jobs.  Be prepared – and willing – to tackle some of the really nasty stuff people want done, especially if your competitors are too squeamish to do it. 

You won’t love it, you might not smell too great, but you will survive.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

When you write a column like this one, you get lots of e-mails from public relations firms talking up their clients who offer services and “resources” to business owners.  Most of them are “ho hum, same old, same old” – companies offering employee benefits, information technology services, and the like, with little that is new, exciting or innovative.

But every once in a while a company comes along that “kicks it up a notch” and leverages the awesome power of the Internet to solve some long-standing problems for entrepreneurs.  Here are two cool new Websites, launched just this week, that you should know more about.

Are you thinking about buying a franchise?  Are you worried that you will not find the right “fit” with your skills and interests?  Are you afraid of dealing with franchise brokers because they deal only with a limited number of franchises and you are concerned they will try wherever possible to fit your “square peg” into one of the “round holes” they have available?  Then you should check out www.ezmatchfranchising.com – a new website that uses behavioral matching technology to match entrepreneurs with the franchise of their dreams.

  “We intend to do for franchising what eHarmony.com and other dating sites have done for couples,” says Chris Delaney, CFO of EZMatchfranchising.com, explaining that “we are the only website that provides a behavioral assessment questionnaire specifically designed to help some 20 million adults annually who seek to find a franchise.” 

There are franchise portals on the Web, of course, but most of these are merely directories of franchises organized by product or service type.  So, for example, if you love ice cream, you may think you are a good fit for an ice cream franchise.  By looking at these other websites you can find a list of franchises that specialize in ice cream.

But Delaney points out that an ice cream business may be a terrible choice for you:  “how do you feel about working seven days a week, supervising minimum wage employees with a 60% turnover rate each year, and starving during the winter months?  That’s what an ice cream business is all about.” 

While ezmatchfranchising.com offers a traditional franchise directory for those who know what they’re looking for, it also offers a behavioral assessment survey for those who don’t.  You fill out the “personality report” (it’s free) describing your interests and skills, as well as answering questions such as “do you mind working weekends?” and “do you prefer working alone?”.  Delaney says the process takes about ten to fifteen minutes on average. 

When you hit the “send” button, up to 10 franchises pop up that meet the criteria you specified in the survey.  You can then click through to look at a longer one page description of each franchise.  Your information is automatically sent to the franchise, which will contact you via e-mail to continue the discussions.

 The site currently does not charge either franchises or prospective franchise buyers for using the site, although there is a small charge to franchises for forwarded leads.  “The franchise industry’s number one complaint is poor lead quality,” says Delaney.  “By scientifically matching prospective franchisees with models that fit their personalities, both parties will be more productive and efficient.”

In another first for the franchise industry, EZMatchfranchising.com will introduce state of the art video presentations designed to enhance a franchise’s image.  Videos will also allow prospects a way to “see and feel” an organization as part of their selection process.

Why use EZMatchfranchising.com instead of a traditional franchise broker? “We do in fifteen minutes what it takes franchise brokers months to do,” responds Delaney, adding that because the site does not receive any portion of the upfront fees if a prospect decides to buy a franchise “we don’t have a vested interest in people buying a franchise the way that traditional brokers do.”

www.uradeadbeat.com.  Any business owner who’s been cheated by a customer who fails to pay bills knows how difficult it is to get justice from the small claims court system or the Better Business Bureau.  Along comes www.uradeadbeat.com, which uses Web 2.0 social networking technology to solve an age-old problem:  how to give a deadbeat a proper “black eye” in a quick, cost-effective manner.

For $9.99 a pop, you can post a complaint about anyone who has cheated you. The site then generates an e-mail to the accused and/or sends an 8.5 x 5.5 inch color postcard in the U.S. mail, notifying the accused that they have been added to the “Deadbeat List”. 

The accused is given the chance to rebut the accusation, which is also posted, and posts are never taken down. A dialogue back and forth can go on for as long as both parties participate.  The “Deadbeat List” is searchable, so people can check on businesses or individuals they may associate with.

Just be sure everything you say in these postings is 100% accurate, or else you open yourself up to a libel lawsuit.

Cliff Ennico (cennico@legalcareer.com) is a syndicated columnist, author and former host of the PBS television series 'Money Hunt'.  This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.  To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com.  COPYRIGHT 2008 CLIFFORD R. ENNICO.  ALL RIGHTS RESERVED. DISTRIBUTED BY CREATORS SYNDICATE, INC.

Some of you may already be familiar with our concept of moving your organization from Compliance to Commitment™, which I have also referred as the concept of building in employee engagement as a strategic weapon in your competitive arsenal. I will admit that much of the information I have shared with you previously has been anecdotal, but a new white paper I just received from Peppers & Rogers Group, entitled Engagement - the New Competitive Advantage, provides some interesting facts that I think it is important to discuss here.

One of the first things that study distinguishes is a new view of engagement. They distinguish between the traditional view of the intellectual, behavioral, and emotional elements we have traditionally associated with engagement. To describe those a little more fully, the intellectual level is where an employee agrees with your company vision statement and/or a customer values the attributes of your brand. The behavioral level, recommending or purchasing your product or service is where you start to see energy or discretionary effort. The third level, the emotional level, is where you actually see "buy in" and enthusiasm. You can see in some ways this parallels Ron Willingham’s three dimensions of congruency; the I think, I feel, and the I am. Willingham pointed out, and Pepper and Rogers agree the emotional "buy in" is much more impactful than the intellectual appeal.

They go on however, to describe a different more comprehensive model which includes five levels and incorporates critical concepts like satisfaction, quality, and loyalty.

The "new" levels in hierarchical order are; satisfied, loyal, recommend, best products and services, and pride. Most importantly they also describe the critical foundation that this system is based upon, a foundation called trust. The point here as I have discussed thoroughly is without a trust based relationship, the rest of the engagement initiative is a wasted effort; and trust is built at the front line level between the immediate supervisor and the employee. It is the trust factor that the five elements of Compliance to Commitment™; respect, responsibility, information, rewards, and loyalty address. There is also a clear relationship to the Human Resources Pyramid™ that I have described before as well.

While I am not going to go into a great deal of detail describing each of these "elements" one of the important differentiators between this model and others is that it points out that willingness to recommend is not the peak performance an organization can achieve, and more importantly it measures the relationship over a long term. Pepper and Rogers point out the "satisfaction" index can fluctuate from transaction to transaction or you can "game the system" by asking the "right" questions. Manipulating the more comprehensive index becomes much tougher, especially factors like pride or excitement toward the organization.

This model also takes into account both employee and customer engagement and argues they are inextricably linked. They also say that true engagement affects three critical elements that every organization should be concerned about: Productivity, Performance, and Sustainability.

The most important thing in this article is it provides some pretty definitive numbers in each of these categories.

Productivity
Depending upon what business you are in your costs for "human capital" on average represent 60 to 70% of total expenditures. As we know in some businesses it is much higher. As we point out, the best companies are recognizing this and leveraging their return on investment in this area. A 2008 study by Development Dimensions International (an international training and consulting firm) indicate that moving an employee’s level of engagement from low to high represented a 21% increase in individual performance. Employees at the highest levels of performance have per capita productivity of 20% higher than the average across industries and offices with high levels of engagement are 43% more productive according to studies by the Society for Human Resources Management and the Hay Group.

Engaged customers also enhance your productivity through repeat business and word of mouth recommendations.

Performance
In addition to the productivity increases you also direct correlations to financial performance. Engaged employees tend to stay with their current employers at a rate of 85% versus 27% according to a 2008 study by BlessingWhite, an international consulting firm. The savings from reduced turnover alone are huge. Additive to that other studies showed similar correlations to companies with double digit versus single digit revenue growth and an average total shareholder return of 24% for organizations where 60 to 70% of employees rate themselves as engaged versus 9.1% total shareholder return for organizations with an engagement percentage of 49-60%. In retail environments stores in the top 25% engagement level deliver 36% higher operating income than stores with low engagement.

Customer engagement shows similar statistics including higher loyalty, increased revenue, increased profit, and increased wallet share. When you combine high employee and high customer engagement the results show literally a 100% difference in financial performance on a peer to peer basis.

I don’t know about you, but to me those kinds of bottom line impacts get my attention!

Sustainability
Beyond the financial and productivity gains let’s talk about sustainability of the organization. I want to talk about three different areas that Peppers and Rogers identified:

• Brand- a 2003 study stated the experience a customer has with your employees influences repeat purchase decisions so much that "they are your brand." In the same study they reported that 51% of consumers report than "outstanding service" is the number one reason they continue to do business with an organization and that conversely 80% state they will discontinue doing business because of a bad experience.
• Strategy- the biggest reason CEO’s fail is not bad strategy, but bad implementation of their strategy according to a study by Ram Charan reported in Fortune magazine. Engaged employees play a critical role in that implementation.
• Human Capital- over the next 10 to 15 years the demand for experienced talent is expected to increase by 25% while the supply decreases by 15%. Under these circumstances retention of critical talent becomes even more important. Remember that "engaged" employees are 87% less likely to seek alternative employment.

The 2008 BlessingWhite study that I referenced earlier identifies less than 30% of employees as being engaged. The same study identifies 19% as being "disengaged", but it gets worse, disengaged workers are not the most likely to leave- they "quit and stay".

The same study found that only 27% of organizations globally have a formal program or strategy to increase employee engagement and 19% don’t even have it on their radar screen.

So let’s go back to the beginning. Consistent with our thinking at New Paradigms, the foundation of employee engagement is the same as any healthy relationship- mutual trust between the parties. We believe there is a direct relationship between the five elements of Compliance to Commitment™ and building that foundation of trust.

I think that what we describe in our case study- A New Paradigm for Credit Unions is a real illustration of employees and customer/members beyond the "recommend" level that we have accepted as the ceiling of employee engagement. In that setting we were able to create "pride". That "pride" translated into some pretty impressive results including:

• 4000 new membership accounts
• A 21% increase in asset size
• $150 million in net revenue
• A significant increase in "wallet" share

It sounds remarkably consistent with the statistics in the Peppers and Rogers study, doesn’t it? The reality is that technology or processes or outsourcing or off-shoring are not going to create engagement. You are not going to have customer engagement without employee engagement. You are not going to have employee engagement without trust.

So let’s go back and review those numbers again:

• A 21% per capita productivity increase opportunity
• An average 60% higher retention rate for valued employees
• A shareholder return of over 50% higher than non-highly engaged companies.
• Financial performance of 100% higher than peer groups for organizations with both high employee and customer engagement scores.
• Less than 30% of organizations with a program in place.

So in summary I would say that if you don’t do it for reasons of employee satisfaction, retention, or other related factors consider it as a competitive advantage.

In the end I will leave you with this thought from Margaret Wheatly-

In organizations, real power and energy is generated through relationships. The patterns of relationships and the capacity to form them are more important than tasks, functions, roles, and positions.

It would seem like the "numbers" bear that out. Compliance to Commitment™, simply a better way to manage your organization, the "numbers" tell the story.

Mark F. Herbert is a principal in the consulting firm of New Paradigms LLC. He has over 30 years of experience as a corporate executive and consultant specializing in optimizing organizational performance. He speaks and writes frequently on topics related to human resources management, organizational development, and executive and managerial coaching. He has developed and implemented a management system called Compliance to Commitment ™ that has seen significant measurable results in multiple organizational settings. His first book, Managing Whole People will be published in the fall of 2008. He can be reached at mark@newparadigmsllc.com or www.newparadigmsllc.com  

Often my clients ask me to review existing or prior print ads they have used but that did not produce the desired results. 99% of the time I see the same few issues again and again.

No matter what product or service you are marketing, I do believe that a business owner can create their own effective ads if they follow a few basic guidelines and understand that advertising is just ONE marketing method that when implemented correctly creates a cohesive marketing strategy.

Following are some basic “isms” as I call them to help make this process easier for you to create ads as well as purchase the space they’ll appear in that has a much better chance of succeeding for you.

First – Sell the sizzle, not the steak.
Because they are so close to their own product or service they know what it is, but not why people buy it. In other words, they are selling features not benefits.

The fix - Try this fun but powerful exercise to try for yourself - Turn 3 features of your product or service into benefits. For example, “weights less than a pound” would be stated in all marketing and advertising as “lightweight and portable”.

Second – Twice and Thrice is Better than Once.
Another powerful concept in advertising is frequency. This means that an ad seen just once is lost in the jungle of advertising. Ads seen more than once will produce much better. The problem is that is costs more and most small businesses are looking to save money.

The fix – design a smaller ad and place it more than once. This will be approximately the same cost as a larger ad placed once and should (all other things being equal) pull better for you.

Third – Audience is everything and 60% of your marketing success relies on getting this right.
It’s easy to fall prey to those salespeople who call and promise you the “best way to advertise” but is it really best for YOU?

When you get a call from a well known media outlet and are sure who their audience is, great. That’s an easier decision. Then it comes down to price and whether your budget is available. Of course, some due diligence is required here as well.

But when you get a call from an unknown or lesser-known publication do your homework with a thorough due diligence. Do not fall prey to very seasoned salespeople.

The fix – Ask the right questions. Ask for a media kit (often they are available online). Ask for rerun rates (how many advertisers rerun their ads). Ask if they have a graphics department and if the ad creation is included in the price. Ask if they offer remnant rates (last minute discounts for available space). 

Bottom line it’s your budget, your image, your company – do your homework and your chances of success are higher.

Fourth – be clear and concise.
Esoteric, vague or overly designed ads can be great when used by a fashion house or other well-known higher end brand that has an established image. But when trying to sell an unknown, be as clear as you can be about the offer.

The fix – send the ad for review to friends and family. Ask them for their honest evaluation. If they saw this ad in print would they know what the product’s benefits are? Where they can buy it? Why they should buy it? If not, rewrite it to be sure you don’t lose buyers.

Fifth – be sure to proofread.
Have you ever read an ad and saw a typo or other mistake? You have to wonder how THAT happened.

The fix - Dial the phone number, log on to the website and send an email to the address in the ad. Make sure your ad reads perfectly before it goes to press.

Once you have the benefits down and know the right way to implement marketing and advertising, you are well on your way to creating an impactful, successful campaign that will drive revenue to your bottom line.

Randye Spina is Chief Solutions Officer of Affordable Marketing $olutions (www.myaffordablemarketing.com) and can be reached at (203) 559-8838 or randye@myaffordablemarketing.com

In business, we can borrow from the classic three-act drama of Ibsen and the contemporary high concepts of Tinsel Town.  Here are three structural elements of an effective pitch – they may seem obvious yet they are seldom optimized:

1. Use a strong hook to capture initial interest (perhaps an intriguing fact, question or brief anecdote).
2. Describe and solve a problem or meet a need in a unique way (including how your process or approach is timely, different, or measurably better).
3. Conclude with evidence of success, growth, or visionary ambition. Perhaps an endorsement or very brief (one sentence) anecdote can work as a finish. You don't want to tell the whole story, you want to induce curiosity and prompt a question or response.

Pitching your elevator speech or brand vision is uncannily similar to pitching a two-hour film in less than five minutes.  It must be brief yet far more specific than the sweeping goals of a codified mission statement.  “Deliver world-class service” or “value-added” aren’t sufficient – an elevator speech needs to say “how” and “why” in a few words to elicit a distinct response.

• Align your pitch with your current mission, vision and values statements (these are sometimes updated separately and don’t always create a consistent theme).
• Define your value proposition and it’s target market in one or two sentences (think problem-solution scenario).
• Clearly articulate differentiation from top competitors – be specific.
• Include active language that conveys momentum, generates inquiry, avoids generalities (that sound like any other business), and stimulates discussion.
• Edit your pitch to about 75 words (or 30 seconds, more or less). Remember that this is a distillation of your core business.  You can convey more dimensions of your business during follow-up conversation. That’s when concise anecdotes (case study summaries) and salient talking points become brushstrokes for your complete brand picture.

THE WHOLE STORY: BRAND TALKING POINTS

• Include input from your executive team, managers, board, or other relevant stakeholders – everyone should be on the same page and tell a consistent story.
• Make sure that the points reflect your mission, vision and values statements, and convey your best core competencies and most successful outcomes.
• Like a good story, edit the talking points to convey the essence (not minute detail) of how your organization meets challenges and solves problems.
• Use brief anecdotes and case studies when appropriate – specific, colorful examples always help demonstrate a point.
• Avoid statistic overload – a few exceptional numbers capture attention, while too many numbers dilute the overall impact
• Work with your communications team to practice delivery and Q&A.  If media will be present, the communications team will brief you accordingly.  If you don’t have a communications team, use your managers or executive team to anticipate questions and practice response scenarios.

1. Be prepared.  The more you know how to articulate your content, the more confidence you’ll convey.  Memorizing the basic elevator speech is good, but be fluent enough to improvise based on the audience and situation.  Agility is vital.  Preparation includes practice!  Be sure to include practice answering hypothetical and challenging questions.  Don’t pull punches.  Be objective and assertive when challenging yourself.
2. The handshake is often underestimated and, like eyes and body language, it triggers a first impression.  Make it a firm and brief shake (don’t oversell), with direct eye contact.  The handshake also signals time for you to listen carefully to the person’s introduction and perhaps their elevator speech.  It’s your moment to get a sense of your audience.
3. Maintain eye contact.  DiVinci said it best: “The eyes are windows to the soul.”  Studies reveal that first impressions are formed within the seven seconds of contact, and opinions are formed within minutes.  Your authenticity will project (or not) from your eyes – it’s subconscious but very real.  If you’re bored, the best written elevator speech can fail. Unless you’re a highly polished and expert salesperson, it’s difficult to hide your feelings when you have solid eye contact.  (Of course, eye contact etiquette and introductions vary with different cultures.)
4. Define when to emphasize key words and phrases, and when to fluctuate your volume.  When memorizing or practicing, underline what you want to emphasize.  Be selective.  Everything can’t be emphasized.   Volume can become an irritating din if the level never varies (even if it’s a good level).  Would you want to hear or watch a story with one energy, one pace, beginning to end?
5. Apply the Three P’s – Punctuate with Powerful Pauses.  Know when you’ve made a point that should sink-in for a moment, or when you’re building anticipation for the next sentence.  The well-placed pause can have as much impact as the best information you can imagine.  It’s a visceral impact – personal delivery communicates on an emotional level first and an intellectual level second.  Effective pauses help to sustain connection.
6. Show your passion and personality.  If you aren’t inspired by your content, and if you don’t deliver it with personal conviction, it simply won’t work.  You must generate emotional chemistry.  Conversely, if your enthusiasm appears to be affected or obligatory, you’ll seem like a game show host.  Be an authentic true believer.
7. Visualize successful images of your organization or it’s accomplishments.  Specific images are best.  This requires practice over time, but it will produce results – what you visualize can fuel your attitude and drive your delivery.

It’s said that the object of art is to give life a shape.  Your brand story is art for giving shape to your organization.  Actively champion your brand with an articulate plot and colorful characters.  Rise above the competition.  Get prepared.  Practice.  Tell your story, then your elevator speech will have full impact.   

As a consultant and executive with my formative background and education in human resources management, I typically have a semi facetious response to executives and business owners who ask me what differentiates great companies from "good companies". My response is "It is the people, stupid!" The organizations with the best people aligned in the best way always win. This is especially important to those you running small businesses, where every hire is a critical hire!

So how do we define the best people? I have a couple of recommendations for my clients.

• Identify Key Attribute for Success and Hire "Right"
• Incorporate Responsibilities Into All Job Descriptions
• Provide Appropriate Training
•  "Retrofit" Skills and Attributes of Existing Staff
• Coach and Mentor

So what do I mean by all that "HR stuff"? Very simple, I want everybody on my team to share some common attributes:

• Commitment To The Team
• Ability To See The Big Picture
• Ability To Learn And Share New Skills
• Listening For Key Information

If they can’t or won’t do these things or lack these attributes, I don’t want them on my team – period.

There are reasons why I have focused on attributes rather than skills. You have probably heard some of these before but they bear repetition.

• You can teach smart people to do almost anything!
• It is hard to teach people to be smart!
  
• People who are committed to your mission will reflect it!
• Changing people’s core values is very hard!

Again, in my sarcastic way, I have compared trying to violate these "truths" to trying to teach your dog to sing. It just exhausts you and it pisses the dog off.

People who know me would tell you that patience is not always one of my most noticeable virtues. However, when I have been called in to "retrofit" a number of cultures, I believe there is a very respectful way to go about doing that – a way that requires patience to bring about the desired changes. I believe that companies have the right to define their cultures as long as they do so within the context of the law and are respectful to all employees.

While businesses and most organizations are not democracies, I do suggest to all business owners and leaders that, beyond the attributes that I mention above, they need to ensure that everyone in a leadership role either possesses or is trained in some key skill sets:

• Establishing Clear Performance Expectations
• Giving Periodic, Constructive, and Clear Feedback
• Taking Appropriate Corrective Action

I can honestly tell you that, if 90% of management had mastered and demonstrated these skills on a consistent basis, at least half of the management consultants in the world would be unemployed. You will notice that none of these skill sets address technical skills like financial analysis, marketing, etc. That is not an oversight. Technical skills are task competencies and can be taught. You can have excellent technical skills and be an awful manager. If you don’t believe me, ask staff if they would rather work for a manager who consistently performs my list or a manager who is technically "gifted."

I believe that employees have an absolute entitlement to four and only four things-

1. Respect For Individuals
2. Clear Expectations
3. Meaningful, Balanced Feedback.
4. Equitable , Clear Reward System

People have said to me "What about empowerment and development, and mentoring?" I think those things are awesome and contribute to growing organizations and

reinforcing commitment, but the first four are absolute entitlements that form the basis for the others.

I also encourage clients to "re-recruit" existing staff using the following model:

• Train Current Staff Must On New Competencies And Expectations
• Compliance Works Short Term But Commitment Is Essential For The Long Term
• Retrain, Re-Assign, or……..
• Remember WIIFM (What’s in it for me!)

In the long term, you simply cannot tolerate performance that won’t or can’t meet your expectations. Asking or forcing people to leave your organization is hard on them, on you and on their colleagues, but leaving them in a role where they are not thriving or happy is worse. That’s why I suggest we hire right up front. If you do you reap the rewards.

In the words of Jack Welch- "If you pick the right people and give them the opportunity to spread their wings and put compensation as a carrier behind it you almost don't have to manage them."

Now you have to admit, that it is a pretty exciting thought!

Mark F. Herbert is a principal in the consulting firm of New Paradigms LLC. He has over 30 years of experience as a corporate executive and consultant specializing in optimizing organizational performance. He speaks and writes frequently on topics related to human resources management, organizational development, and executive and managerial coaching. He has developed and implemented a management system called Compliance to Commitment ™ that has seen significant measurable results in multiple organizational settings. His first book, Managing Whole People will be published in the fall of 2008. He can be reached at mark@newparadigmsllc.com or www.newparadigmsllc.com  

By Jane Applegate

By now, you know the sky is falling and the economy is in a tailspin. But successful small-business owners always find the upside of down times. In these challenging times, you have a real opportunity to shine—especially if your competitors are cutting back on promoting their products and services.

Here are some cost-effective marketing tips to boostmorale and profits:

1. Ask for discount advertising rates. Newspapers, radio and cable television stations are selling a perishable commodity and need to keep the cash flowing. Many newspapers will discount ad rates at the last minute, so be ready to send your ad over just before deadline. Ask for a better rate for all forms of ads; you have nothing to lose.

2. Cut through the email clutter by sending an old-fashioned letter to current and prospective customers. Save money by purchasing several hundred 41-cent “Forever” first-class stamps before the rates go up again in May. Offer a discount on certain products, free shipping or a two-for-one promotion with a short expiration date. Use this mailing as a way to update your database. It pays to use a first-class stamp because if you do, the post office will return undeliverable mail and note address changes. Bulk mailing doesn’t provide this service. Plus, your customers and clients will appreciate receiving a piece of mail that isn’t a bill.

3. Sign up to participate in a local trade show, community fair or charitable event to generate free publicity. Rent a booth and show off your products or services. If you sell a food product or beverage, give away free samples. (You can also hire in-store demonstrators to promote your products year-round). If you have a retail store or are located in a building with foot traffic, put out a big, brightly colored barrel or basket to collect clothing or nonperishable food for a homeless shelter. My mother asks local businesses to ask their customers to donate soap, little bottles of shampoo and bath gel from hotels. She and her friends pack them into colorful party favor bags. They add a disposable razor, a toothbrush and toothpaste, then donate hundreds of these “personal care kits” to a shelter for battered women and a church program for homeless men. The local newspapers love stories like this.

4. Turn your best customers into salespeople. Don’t be shy about asking your customers or clients to recommend you by making an email introduction. Volunteer to draft the email. Be sure to include a link to your company website and your contact information and ask them to send you a copy of the message. This way, you can follow up directly a few days later.

5. Get on the horn. Spend at least an hour a day calling current and former customers. These aren’t cold calls because you know the people. It’s a good way to reconnect, and you may generate new business. If your contacts have changed jobs, ask for current information so you can keep your contact list current. We do business with people we know and trust. It doesn’t matter what company they work for. Leave detailed voice mail messages. Even if they don’t call back, you’re back on their radar.

Jane Applegate is the founder of The Applegate Group Inc. (www.theapplegategroup.com), a multimedia communications company specializing in the small-business market. She’s the author of four books on small-business success and a popular keynote speaker.

By Rieva Lesonsky

I have spent much of the last 22 years of my life advocating for women business owners. In the course of my career at Entrepreneur magazine (where I was the editorial director for many years), I started three magazines aimed at this market—and for various reasons all of them failed. I also helped Entrepreneur.com launch its website for entrepreneurial women, and I have given dozens of speeches to people like you.

And now I’m one of you. I recently left my job of 26-plus years at Entrepreneur to launch my own business, a marketing and communications company helping the country’s major business marketers better serve the needs of entrepreneurs.

All of us entrepreneurial women (I am so excited to be able to actually call myself that) have different reasons and motivations for going out on our own. Although there were many successful (and legendary) women business owners in “the old days,” women-owned businesses truly started taking off in the 1990s.

While a horrific economy propelled a lot of women out of recently attained corporate jobs into businesses of their own, another factor was the infamous glass ceiling. That ceiling definitely existed then and, sad to say, it still exists today. I recently read that younger women in college think the glass ceiling no longer exists, even though female college grads earn less at graduation than young men. In fact, working women aged 25 to 34 make 88 percent of what men in that age group do. While that may be progress, it is simply not good enough.

As a result, many women quickly figured out that the path to equal (or better) pay doesn’t lie on the corporate ladder, but in taking charge of their work lives and running their own businesses. I think that’s a lasting legacy from my generation of women—the baby boomers.

The beauty of entrepreneurship is it’s more or less customizable. As the owner of the business, you get to decide what you want to do and when you want to do it. Of course you need to be realistic—you’re not going to make millions working part time (especially at the beginning).

Now that I’m one of you, I can better understand your concerns, challenges and fears because I’m facing them myself. But I’m trying to heed the advice I’ve given over the years— here’s the abbreviated version, the 4 P’s of success: Follow your passion; plan; stay positive; and be persistent.

And I’m going to add one more here, even though it’s not a “P”: Help other women. Back in the ’90s, at the beginning of the entrepreneurial women’s revolution, a successful woman business owner asked me why should she help aspiring entrepreneurs when no one was there to help her. I told her that was the wrong attitude. And that’s still true today. I strongly believe we women owe it to ourselves (and our daughters and granddaughters to come) to help one another succeed. As Madeleine Albright, the nation’s first female Secretary of State, said, “I think it’s important for women to help one another. There is a special place in hell for women who don’t.”

Rieva Lesonsky is CEO of SMB Connects and Editorial Director of Moran Media Group. She can be reached at askrieva@gmail.com

By Melanie Schutt

Diane James’ floral design skills were in demand long before she started a business. James created artistic silk flower arrangements as a hobby, and friends began requesting her designs for their own homes. One friend suggested that James provide a floral arrangement to auction off at an upcoming fund-raising event. The item sold for $1,700, and the woman who purchased it asked for 11 more. Other attendees inquired about her services. That was James’ first inkling that her hobby had business potential. A decade later, Diane James Designs Inc. is an international enterprise.

James’ standards of quality led her to discover an underserved consumer niche. She grew up “surrounded by flowers” with a mother who loved gardens. After her family moved to Europe, she attended flower arranging classes in both Belgium and London. She continued creating fresh bouquets when she returned to the US, but also wanted floral décor with more durability. At the time, James found that silk arrangements had a poor reputation. With her design background, an artistic approach and top quality materials, she initiated a high-end market for “decorative florals.”

An opportunity with Bergdorf Goodman indicated this market’s promise. In the spring of 1997, an acquaintance was marketing vases through the store and asked James to contribute floral designs for in-store displays. The vases were top sellers, and customer feedback revealed that many shoppers were purchasing the items because of the flowers. Bergdorf Goodman asked James to create her own line. That same year, the first Diane James Designs collection was introduced, and the collection quickly sold out in two weeks.

James had more demand than she could single-handedly supply. She was handling design, production and administrative functions from a 10 x 20 foot room. To grow, she would need staff, a larger space and business advisors she could trust. Her daughter Cynthia James Matrullo came on board to help manage operations. One of her early tasks was performing an industry analysis and identifying target markets. Orders continued coming in, and Carolyn James McDonough, Cynthia’s twin, joined the team a year later.

“Small businesses learn by doing,” McDonough says. Their initial strategies and target clients changed along the way. To finance growth, they formed a relationship with a local bank that understands small-business needs. Most recently, the team developed a comprehensive plan for the future.

McDonough explains their expansion strategy as “extending the Diane James aesthetic to other home accessories.” New additions include decorative spheres and sculpted flowers.Diane James vases and signature candles will complement the existing collections. The family views their products not just as individual pieces, but as important contributions to a room’s environment and visual appeal. “We’re creating something that people connect to emotionally,” McDonough says.

Today, Matrullo and McDonough are vice presidents running the Norwalk, Connecticut-based business while James focuses on design. Diane James products are available in 32 states, Canada, Japan and England, including Fortnum & Mason in London and 39 Neiman Marcus locations.

At this level of success, James still appreciates the day-today work experience. “I’m doing something I love and working with people I love,” she says. “It doesn’t get better than that.”

Melanie Schutt is a freelance writer and marketing consultant based out of New York City.

By Tim Keane

For most businesses, cash comes from a variety of sources—the best source being sales revenue. Managing cash is a critical function for all of us with new or growing ventures. This is especially true when we have revenue, but our cash flow is at or below break-even.

Here are five tips garnered from long experience in the cash-flow trenches:

1. Use your business model to build an early warning system. A business model reveals how your business plans to make money. It incorporates all of the assumptions you are making about your business. You can easily check frequently to make sure the timing and amount of your assumptions are accurate.

Those assumptions include:

• How much you will spend to make your product or provide your service, and whether you make a big investment in the systems needed to do it yourself, or pay a vendor to do it for you;
• How much profit margin you will make on each sale;
• What price you will charge relative to others in the market;
• What your operating expenses are; and
• What your operating income is;
• The timing of all of these activities—how long it takes to make your product or provide your service; how long it takes to get orders; the customer repeat rate; and so forth; and
• A break-even calculation that tells you how many units you must sell to have neutral (that is, breakeven) cash flow.

From this data you can chart the amount and timing of cash requirements. This is the central financial management skill for both startups and growing ventures.

2. Burning the boats is almost never a good idea. Every entrepreneur is faced with a choice: making do with less, or swinging for the fences. “Burning the boats,” by spending more cash than is prudent and leaving you little or no margin for failure, is very risky. If the business model is proven and the input of cash at this level will create real growth, fine. But it’s a rarer situation than most of us think.

3. When seeking cash, match the source of cash to the risk associated with the investment. Banks don’t invest; they lend money at low rates, and they expect to be repaid. Investors seek opportunities to take more (apparent) risk than a bank—and earn a higher rate of return. If you have a bankable business, then debt is your best source of cash. An honest investor will be leery of a situation in which the return opportunities seem much higher than they need to be based on the risk.

4. Clearly understand your biggest source of cash—the customer. You need to know, directly, what the customer is thinking, how well satisfied they are with your product or service, what else they are considering, and if their repeat purchase rate is going up or down. Get this information yourself, not from someone else in your company. There’s no cash management substitute for firsthand information about the biggest source of cash most of us have.

5. Make everything possible an indirect cost. There will be plenty of time to build a factory or hire more people—after your business model is proven. In the meantime, wait until objective proof exists of your business model’s performance. Then, and only then, investigate ways to use capital investment to lower per-unit costs.

Keeping these five principles in mind will help keep your cash flow steady and your business growing.

Over at Vosges Haut-Chocolat in Chicago, exotic and delectable truffles are packed in elegant purple boxes made from 100 percent recycled paperboard. White sun shades hang from office windows to reduce air-conditioning bills in the summer. Printer cartridges always get refilled— not thrown out—and junk mail finds another life as paper for printers or packing material once shredded. Employees are offered incentives for riding bikes to work, and organic ingredients are used whenever possible. And in the next year or two, the company will achieve its biggest environmental goal yet: opening a LEED platinum manufacturing facility that will be 100 percent off the grid and generate almost no waste.

To be sure, running a green business is a top priority for chocolatier and founder Katrina Markoff—but it wasn’t always that way. Though she launched in 1998, it wasn’t until about two years ago that she decided it was time to extend the commitment she had to environmental issues in her personal life to her business. “I just kind of slapped myself in the face,” says Markoff, 34, who projects sales of $20 million this year. “I was like, I can’t be a hypocrite anymore. I have to apply the same principles to my business.”

Many entrepreneurs today are thinking the same thing but are held back by cost and other concerns. “There are a lot of preconceived notions with businesses,” says Rebecca Kinnestrand, senior associate with Cascadia Consulting Group Inc., an environmental management firm in Seattle. “When I walk into businesses, they think that green costs money. On the contrary, going green often does not cost money. Even if it does have a little bit of capital outlay, it has a very quick payback.” And, she adds, it’s incredibly easy to get started.

Reduce your carbon footprint. Buying environmentally friendly company cars is a start, but you should also encourage employees to carpool, take the bus (you can provide free passes), ride their bikes or even telecommute one day a week. “It really makes a difference for those people not to be on the road that day,” says Kinnestrand. In terms of lighting, install motion sensors, dimmers and timers so lights turn off when not in use.

Purchase earth-friendly office supplies. Some examples include used furniture; mugs instead of Styrofoam cups in the break room; Energy Star appliances; paper, folders and other office supplies made from recycled materials; nontoxic cleaning supplies; and “green” packaging for your products. Instead of water bottles, install a water filter in the office.

Take a serious look at your paper consumption. According to the Environmental Defense Fund, paper and pulp is the third largest consumer of energy. So don’t just recycle paper, buy recycled paper—and use less of it. Print only when necessary, widen the margins of your documents and use both sides when printing.

Green your tech. Unplug BlackBerries, cell phones and other gadgets when they’re done charging, turn off monitors when you and your employees leave for the day, and recycle old PCs properly. When buying new ones, choose energy-efficient products.

Experts agree that before long, the expectation will be that all businesses are green businesses. “It will just simply be the way that business is done,” says Kinnestrand. “There is just no way that a business can remain on the track of the oldschool thinking.”

Charlotte Jensen, a journalist in Orange County, California, specializes in business topics.

I recently wrote an article on the effectiveness and importance of executive coaching as a tool for business growth. My premise in this article was that just like successful professional athletes I believe that business people can benefit from working with the right coach.

I have had a number of inquiries as a result of my article as to whether or not "certification" of a coach should be a critical criterion in the selection process. That caused me to pose that question to my "network" and I received a number of interesting and illuminating responses. I actually asked the question regarding two professions that are highly interpersonally related and that are seeing a definitive movement towards certification, Human Resources and Coaching.

While you could say simplistically that the answer is "it depends", I think there is a more definitive thread in what I received.

Although almost everyone agrees that a certification is not a guarantee of effectiveness or relevant experience in a particular setting it does provide a few key indicators:

• The person has committed themselves to a course of study and education to improve or form a "baseline" of skills in their chosen profession.
• They will have at least been exposed to the fundamental competency areas that are part of the profession.
• They will in all likelihood have been required to possess some experience, passed an examination, or received training in their area; potentially all of the above.

It is also true that all "certifying" institutions are not the same. There are organizations which apply the standards and requirements with a great deal of rigor- some examples would be a Certified Public Accountant or Professional Engineer.

I will suggest these guidelines for you if you are seeking out the services of either a "coach" or human resources professional:

• When in doubt check with references and ask for referrals from colleagues who you trust and respect and who has had occasion to utilize similar services.
• Certification may be a good first screen- especially in areas where the person’s qualifications and experience in their field are not immediately obvious to you.
• Check relevance not only to their profession, but to your situation. The person may be highly competent in their chosen field, but may not possess an appropriate understanding of your business or requirements.

At the risk of alienating huge numbers of various professions I have also determined some other helpful experiences.

• Professions like teaching or counseling do not automatically translate into effective coaching and/or human resources professionals. In some cases they may possess the "people" skills, but not the "technical" skills.
• The practice of law, even employment law, is not a direct substitute for human resources experience. The law is primarily about compliance and interpretation. I once had a colleague who was a very successful attorney state," I can tell you whether or not it is legal, I can’t tell you how to make it work in a practical application."
• "Liking "people is not a guarantee of effectiveness as a coach or human resources professional. In fact both of these professions are about increasing successful performance; either personally, professionally or both. This means holding people accountable. They don’t always enjoy that process.

In the absence of personal knowledge or a strong referral certification is an excellent tool to narrow the field, just don’t assume it is a guarantee.

Mark F. Herbert is a principal in the consulting firm of New Paradigms LLC. He has over 30 years of experience as a corporate executive and consultant specializing in optimizing organizational performance. He speaks and writes frequently on topics related to human resources management, organizational development, and executive and managerial coaching. He has developed and implemented a management system called Compliance to Commitment ™ that has seen significant measurable results in multiple organizational settings. His first book, Managing Whole People will be published in the fall of 2008. He can be reached at mark@newparadigmsllc.com or www.newparadigmsllc.com  

By Kathleen Moran

Is the clutter in your office getting in the way of your success? An organized, peaceful work environment is essential not only for your day-to-day business activities, but also for your well-being. Eliminating office chaos will improve your overall workflow and productivity. Whether you are working out of your garage, at your dining room table or in an office, make sure you have an effective clutter-busting system in place.

Here are five basic rules to keep your office clutter-free.

1. Clean out. In order to work at your desk, you need to see it. A messy desk will clutter your mind with too many distractions, and you’re more prone to losing important papers or being unable to find them when you need them…like when your biggest client calls. Remember this rule: Messy desk =stress.

The same tenet applies to a messy office. If you moved into your new office five months ago, it’s time unpack those boxes in the corner, and hang the pictures leaning against the wall.

2. Everything in its place. Set up a filing system. Instead of letting papers pile up on your desk, file them as soon as you are done with them. Some documents can be filed electronically, saving space and eliminating paper waste. Use baskets, containers and shelving. Arrange reference guides neatly on a bookshelf. Keep today’s “to-do” pile in a basket on your desk. If you’re one of those people who needs to have papers “in your face” or you forget them, use an upright file holder on your desk, or a wall-hanging folder holder, to keep folders corralled so you don’t have piles all over your desk. Place a wastepaper basket or shredder within arm’s reach so you can discard unneeded papers right away. When you have dealt with something, either file it properly or throw it out immediately. Apply the “everything in its place” principle to your office, and you’ll never be searching for the stapler again.

3. Keep it ergonomically correct. Ergonomic design focuses on designing a workspace to fit your body’s needs. If your chair is uncomfortable, you will tire sooner and won’t be working to your full potential. Invest in a good chair that’s adjustable to your height and has proper back support. Make sure your computer setup doesn’t put undue strain on your neck, shoulders or wrists. Your elbows should be at a 90-degree angle when you type; your computer screen should be angled so you don’t have to strain your neck either up o downward to read it. Use a pullout keyboard tray under your desk for your keyboard, if needed. Make sure your office is well lit, both overhead and task lighting such as a desk lamp for reading. Position your computer screen so it is free of glare from the windows. Provide an ergonomically correct workspace for each employee, as well.

4. Keep your computer clean. Just as a clutter-free office runs more efficiently, so does a clutter-free computer. Run maintenance programs on a regularly scheduled basis to debug your system and purge unwanted files. Keep your security software up-to-date to prevent viruses and potential hackers from gaining access to your files. Streamline the look of your office by controlling loose cords. In addition to being aesthetically unappealing, this can cause safety hazards such as tripping or electric shock. Your office supply store has many options for bundling cords together to keep them neat and out of the way.

5. Be consistent. At the end of each work day, leave your work area organized. Put everything back in its proper place. Take 10 or 15 minutes before you leave to organize your workspace. The next day, you can start with a clean slate and focus on seizing the day.

Kathleen Moran is an interior designer and workspace organization expert. She can be reached at katmo66@mac.com.

By Cassie Kreitner

Entrepreneurs seeking new and innovative ways to distribute their products and create more revenue should consider QVC, the world’s leading home shopping network and online retailer.

For those whose products match QVC's customer-focused principles of quality, value and convenience, QVC can be a new channel of distribution for a company’s product line. Showcasing products on QVC can expand awareness of your brand dramatically, as the channel's 179 million phone calls and $7 billion in net sales in 2006 illustrate.

Tarte Cosmetics, a New York City cosmetics company that focuses on healthy products for the skin, partnered with QVC in 2005, almost five years after its products first debuted in stores.

Founder Maureen Kelly decided to expand her product line to the home shopping network after she realized “it’s a way of exposing my brand to millions of women at once. It’s also an incredible outlet because I get to tell my story without having it watered down or changed in any way,” she says. “I also get to reach a larger and more diverse audience.”

Before agreeing to the partnership, Kelly wanted to make sure her brand would be able to handle the inventory and operations changes that would occur once Tarte was introduced on QVC. Since the channel is so large in scope, she knew that the brand’s reputation would be at stake if something went wrong. “We didn’t want to mess up,” she says.

Today, Kelly typically appears on the channel twice a month to promote Tarte, while the QVC website also features over 80 Tarte products that can be purchased online. Tarte, which is sold in department stores, high-end boutiques and beauty stores, takes advantage of the wide audience and demographics of QVC viewers. Since the channel reaches approximately 96 percent of all U.S. homes with cable, women who might not have access to Tarte products in stores are now able to purchase them through QVC, where the audience is typically older than Tarte’s in-store customers.

QVC is such a lucrative opportunity for any company because it doesn’t charge a fee to evaluate a product or sell airtime to promote it. If a product is chosen to appear on the channel, a minimum purchase order of $30,000 to $35,000 per item at wholesale cost is placed.

With a set format of one product selling for eight minutes, or eight products grouped together in a one-hour segment, it is easy to see how quickly sales can add up on QVC. The company website says it is interested in products that are “highly demonstrable, solve problems, make life easier, appeal to a broad audience and have unique features and benefits [that] are of interest to QVC.”

Beyond beauty products, QVC can help any small business succeed. Over 1,600 products are featured each week, with themed hourly programming targeting different audiences. Product searches are conducted multiple times annually to evaluate new products that will continue to attract an “upscale discerning, and loyal customer base” to QVC and QVC.com.

Cassie Kreitner is a freelance writer in Syracuse, New York

Jennifer Walzer of Backup My Info! a company that sells hosted backup services to businesses, always tells me that her number-one concern is her employees. She says her employees’ number-one focus is Backup My Info customers. This is powerful. Unfortunately, many business owners don’t follow Walzer’s lead of pouring their primary energy into employees. If you have great employees who feel empowered, challenged, loved and happy, they’ll take care of your business and work to ensure your customers are taken care of.

A few weeks ago I sat down with Paul Albright, general manager, SMB and CMO for Success Factors, a company that sells HR and employee management software. Paul helped me understand the power of technology in managing and building a motivated and dedicated team of employees.

There are many components to building the right pool of talent. Much of it does not involve technology. However, technology can surely aid in retaining employees.

For instance, consider performance reviews. If your performance reviews are scattered in a variety of paper files, even if they are in nice and neat folders, you can’t get a transparent and global view of your employees the way you could if this data was systematized.

As your company grows from five to 50 employees, or from 50 to 100 employees, you’ll need a tool that can help you keep up with growth and manage employee performance.

Using technology to help you manage your employees means that good employees rise to the top and are clearly visible–you know who to promote. It also means employees who are not so good also become clearly visible, so you know who needs more training, needs to be reassigned or needs to be let go.

Project management software tools ensure each project is on time, profitable and aligned with your business goals. Employees are no different. You need to ensure that your goals and vision for the future are aligned with your hiring policies.

Part of ensuring that great employees are acknowledged and rewarded is giving employees (and others) the ability to praise or acknowledge other employees. An employee management tool makes this not only possible, but also easy to do. Imagine any employee being able to tell management what a great (or not so great) job a colleague has done.

According to Success Factors, performance and talent management software provides a holistic approach to maximizing your company's potential by helping your employees realize theirs. It encompasses a set of technological solutions and processes that help you:

• Identify your talent needs, your best applicants and your star players.
• Align employees' goals with the organization's goals.
• Evaluate performance, coach people to improve over time, and reward excellence.
• Eliminate favoritism and politics from the compensation process, increasing employees' commitment and engagement.
• Build motivation by giving employees responsibilities and challenges that spur them to higher levels of performance.
• Link succession planning with career planning and create a shared vision of an exciting future with your employees.

Some employee management software programs to consider are those from Halogen Software (halogensoftware.com), iEmployee.com, Softscape (softscape.com) and Success Factors (successfactors.com). Take the time to think about your needs and what you are seeking in an employee management tool. Then carefully assess what each software tool can do for you. The right performance and talent management program can help your business outperform the competition.

Ramon Ray is editor and technology evangelist for Smallbiztechnology.com.

By Julie Moline

Business travel used to mean being out of touch—with the office, with the family, with the world. Now the lives of road warriors everywhere are made more productive with electronic devices that help you communicate, work and network (with people and with technology) while you’re away. Here are a few new, very clever, products to keep in mind:

Virtual keyboard. This gadget is not only the salvation for sore thumbs everywhere, but is also incredibly cool: The i.Tech Bluetooth Virtual Keyboard uses a laser to project a full-size QWERTY keyboard onto a flat surface. There are even sound effects (clicks) so you know when you’ve successfully tapped the key you want. (You can also adjust the device to accommodate your typing style—feathery, pounding or in between). The unit is light (3 oz.) and connects to a compatible Bluetooth-equipped computer, PDA or smart phone. For pricing and other information: virtual-laser-keyboard.com.

Converged device. ASUS, a brand name well known in Asia, has just launched its first product in the US : the P527 GPS smart phone. Smart is right: it won the Innovation, Design and Engineering Award from the Consumer Electronics Show in January. Besides combining a cell phone, navigator and PDA in a slim (candy-bar) form, there are two noteworthy features for road warriors: Travelog, which lets you record travel routes, and Location Courier, which sends your GPS position to five preset phone numbers in case of an emergency. Other features: a 2.6-inch color screen and alphanumeric keypad. For pricing and other information: usa.asus.com.

Networking tool. Go to a lot of conferences, conventions and trade shows? Spotme is a handheld, wireless communication device that combines an RFID card reader, positioning technology, color screen, keyboard, and a wireless microphone and speaker. Meeting-goers can use it to keep organized via personalized agendas, meeting scheduling and electronic business card exchange. Have trouble matching the name with the face of the dozens of people you’ve just met? You can browse the participant list by photo. Looking for a group of people with something in common? Enter a few keywords in a text box, and Spotme returns a list of participants that match those key words. For pricing and other information: shockfish.com.

Universal Charger. Portable electronic devices make you more productive—unless they run out of juice. To keep the various gadgets you carry charged, consider the MFUEL Universal Power Bank, an external battery pack that can boost a laptop’s run time up to 12 hours (so useful on long flights) and a cell phone up to 100 hours (so useful when you never know when you’ll find a conventional plug). There’s a car charger adapter, and 27 hot tips that double as power and data transfer cables. Travel internationally? Another adapter lets you charge and power your electronic devices in 120 countries. For pricing and other information: mfueldirect.com.

Portable Internet device. Think of the chumby as a way to access your favorite Internet sites without touching a laptop. A little bigger than a coffee cup, the chumby uses a Wi-Fi connection to deliver whatever Web-based content you want: streaming Internet radio stations, custom “alarm tones,” news, weather and entertainment. You can also use it to share photos, widgets and e-cards with family and friends. CBS, MTV Networks, MySpace, The Weather Channel Interactive, AOL’s SHOUTcast and Scripps Networks are now all offering content through the Chumby™ Network. For pricing and other information: chumby.com.

Julie Moline, is a freelance writer, editor and editorial consultant in New York city.

• Handling or managing change
• Working well within a team environment
• Interpersonal relationships
• Developing or enhancing "executive" presence (speaking ability, communications, etc).
  

You can see just in the target skills that the type of coaching has a huge role in selecting the right resource and the coaching plan.

Why Entrepreneurs Need Coaching
Whoever coined the phrase "It’s lonely at the top" must have had the entrepreneur in mind. It doesn’t get any lonelier. You are the business is many cases. You have direct reports, family, maybe even a board; but there is no "organization" to hire a coach for you if you need additional resources, or even to require or suggest you might benefit from coaching. You face the same issue as the "corporate" CEO; you just don’t typically have access to the same resources.

I have found most the successful entrepreneurs that I have worked with to have a number of characteristics in common; they are visionary, driven to the point of obsession, have a high need for control, and in business dealings may tend to be more loners. They have built the business from the ground up. They made the decisions and founded the key relationships.

Skills like delegation, collaboration, and "process management" do not come naturally to them. They will seek advice from technical advisors like accountants, attorneys, and the like, but many of the "business" skills that those of us learned in corporate America are not part of their experiential base.

I have seen them struggle with things like delegation, selection of staff, succession planning, and team or collaborative based decision making. Bluntly, many of the "technical" advisors have limited experience outside of their core competency areas. The relationship between them and their clients grows from trust and time, not always broad expertise. I find their advice tends to be biased from their area.

I will freely admit my "core competency" is in the management of people. I have designed hundreds of human resource management systems with the elements of hiring, selection, training, performance management and related skills.

As an entrepreneur and C level executive I was also required to broaden my skill set to include other functional skills like marketing, finance, sales, etc. Because of my corporate experience I am comfortable reaching out to others with technical skills in those arenas. That makes me in my experience a bit of an anomaly as an entrepreneur.

As businesses move forward and evolve you will find it is critical to do several things:

• Recognize and link your "human" processes and business results
• Develop and strengthen relationships with your "team", including succession planning for yourself and other key staff.
• Be able to clearly articulate your personal mission and vision, especially as the business grows and becomes less "personal".
• Create feedback opportunities for your staff to discuss with you both their needs and your "opportunities for development."
• Delegate portions of your responsibilities to allow you to move to the "30,000" foot level and focus on the long term success of your business not the day to day.

Annika Sorestram, Tiger Woods, Venus Williams; besides being world class athletes, what do they all have in common? They all have a coach.

I also believe that in smaller or closely held businesses some of the issues targeted by executive coaches are even more critical. In the small organization every hire is a key hire, every decision is a key decision. A significant erroneous business decision doesn’t mean I don’t get my "bonus" it means I might lose my life savings and my home. I have found from personal experience the "golden parachute" I have from my business seems a little more like it was constructed from that liner in chewing gum wrappers.

Another interesting note for those of you that like statistics-

• A return on investment study from Fortune 1000 companies showed an average of a 600% return on the dollars they invested in executive coaching. They saw specific improvements in productivity, quality, organizational strength, and customer satisfaction.
• Another study showed a 529% ROI directly attributable to coaching and other intangible benefits. When they included the savings from decreased turnover the number was 788%.

I don’t know about you, but those are the kind of numbers that get my attention, and my bankers, and my accountants!

So in conclusion I think the case for "executive" coaching is pretty clear, the issue is hiring the right coach.

I won’t presume to tell you who the "right" coach is for you, but I will give you these tips.

First, two effective questions to ask prospective coaches:

1. What kinds of clients do you work with particularly effectively?
2. What kinds of clients do you not work with effectively?

The second tip I have for you, with apologies to the various entities out there that are "certifying" coaches, is what I and others believe are essential competencies in an effective executive coach. These include:

• They must be competent at coaching and influencing others. They must be self aware, empathetic, excellent listeners, and have the ability and willingness to give candid, balanced feedback in a nonjudgmental or confrontational way.
• They have to be trustworthy. You will need to be able to trust them with intimate, sensitive information about your business.
• They have to have at least a baseline understanding of your business and business in general. A coach with no experience in business practices, organizational "dynamics" and other areas won’t do you much good.
• They must have the integrity and strength of character to stand up to you, even if it means losing your business.

Mark F. Herbert is a principal in the consulting firm of New Paradigms LLC. He has over 30 years of experience as a corporate executive and consultant specializing in optimizing organizational performance. He speaks and writes frequently on topics related to human resources management, organizational development, and executive and managerial coaching. He has developed and implemented a management system called Compliance to Commitment ™ that has seen significant measurable results in multiple organizational settings. His first book, Managing Whole People will be published in the fall of 2008. He can be reached at mark@newparadigmsllc.com or www.newparadigmsllc.com

By Patti Fralix

If your company is like most today, you’re struggling with the challenges of managing a work force that includes more diverse generations than ever before. Different perspectives and goals among employees are further complicated because of the age differences between managers and employees. As a business owner, you can’t assume that employees of varying ages will understand each other or have the same perspectives and goals. In order to be successful, managers need to understand and value the differences, perspectives and goals of each generation.

Each generation has always complained about those in younger age groups. So the fact that there are differences in the generations is nothing new. What is new today is the magnitude of the differences. It is time to understand and value this diversity so that we can benefit from it. Today’s workplace requires successfully managing generations—and failing to do so can harm your business.

There are predominantly three generations coexisting in today’s workplace:

• Baby Boomers—born between 1946-1964
• Generation X—born between 1965-1976
• Generation Y (also referred to as Millenials or Echo Boomers)—born between 1977 and the present

The differences between the generations create many challenges in the workplace. These challenges can be negative or positive. It is the manager’s job to make sure that these challenges are turned into positives. Here are some of the most common differences between the generations and ways to make sure that each group’s talents are recognized, accepted and maximized.

Different Work Attitudes
One of the most common complaints Boomers are heard to make about Gen Xers and Gen Yers is that “they don’t have the same work ethic!” Well, they don’t, that is true. This does not mean they are not hardworking. What it does mean is that they place a different value and priority on work. While many Boomers have a love/hate relationship with work, Boomers consider work an end in and of itself. Not so for Gen Xers and Gen Yers. They work to be able to fulfill other, more important priorities. Although Gen Xers and Gen Yers are motivated by different things, both age groups need the following:

• Frequent communication, including being told the “why,” not just the “what” of projects and priorities.
• To be included, and not just in what affects them most directly.
• To have fun at work, with a capital “F!”

To motivate Gen Xers:
Make sure you provide the flexibility needed for them to manage their other priorities, such as dependent children, aging parents, and even educational endeavors. This flexibility can be as simple as providing schedule changes to accommodate these needs. Understand that these are needs, not wants.

Provide many opportunities for collaboration and teamwork. This is the generation that “fuels their fire” through teamwork.

Provide recognition in ways that connect with what they value the most. Some value handwritten thank-you notes for a job well done, while others are motivated by a tangible gift, such as flowers or gift certificates.

To motivate Gen Yers:
Provide Gen Yers flexibility in when and where work is done. Gen Yers resist what they see as rigid workday starting times. They do not understand why coming to work 15 to 30 minutes late is viewed by Boomers as irresponsible behavior. If you can provide technology that allows them to work at home one or two days a week, all the better!

Gen Yers are interested in change and challenge. They will leave a higher-paying good job for the opportunity to experience something new. They do not see their careers as needing to be linear, and they are right. Remember, these are workers who will have at least five different careers, not just jobs, over their life span. Their tenure in a particular job is often no more than two to three years.

Do not interpret their rebellious nature as negative. Let them vent, do not take it personally, and by all means, avoid “writing them up” for it. This is the generation that will challenge and change much of what needs to change in today’s workplace.

To motivate Boomers:
Boomers are typically motivated by position, power and prestige. Boomers are often traditionalists, and perks of the position matter. They want titles and authority commensurate with responsibility.

Allow Boomers to participate in associations and conventions that keep them professionally connected to their peers. Boomers are motivated by working together on professional projects in affiliation with others like them.

Compensation that is more long term, such as profit sharing and health care benefits including long-term care.

Different Loyalties
Boomers have always been seen as loyal to their companies. They feel a sense of belonging and dedication based on their history. This is not so for the Gen Xers and Gen Yers. They are more focused on the present and future. They do not see a problem in going elsewhere when another, better opportunity comes along. This is often seen as disloyal to their current company, but this isn’t necessarily true. Xers and Yers can be very committed to their work, although not to a particular job. They will do what is required—not because of a sense of belonging based on tenure or what the company has provided in the past, but because they find meaning in the work. They need to feel that they are making a difference.

How can you motivate a work force whose loyalty lies mostly within? The answer is simple, although the solutions are not always easy to provide. To motivate Gen X and Gen Y, directly connect the job to their interests, and make sure that they find meaning and fun (yes, fun!) in their work.

Providing fun in the workplace does not mean goofing off or wasting time. Examples include:

Provide regular work group outings, such as sports, picnics and concerts. Be sure that the social outings relate to the culture and interests of the coworkers. Make them optional; not all will be interested.

Celebrate successes, both work-related and individual. Throw a late afternoon party at a favorite watering hole when an important project is completed, or throw a party for no reason at all occasionally.

Be more creative than just a monthly birthday celebration. When someone in the group has an important moment, such as school graduation, new baby or new house, celebrate with them. Vary the celebrations, so surprises can accentuate the fun. Again, make these optional, so that those who do not want or need these types of activities are not made to feel they are not a part of the group.

Close the office unexpectedly an hour or two early on occasion, and send people home to play, to have their own fun.

Try some of these ideas for managing different generations differently, and you may be able to avoid the revolving door syndrome that is very costly in terms of advertising, recruiting, hiring, training and replacing your work force.

Each generation requires a different set of standards to motivate them at work. In order for a company to be truly successful, all generations in the workplace need to understand and value each other, even when their perspectives and goals are vastly different. Management plays a key role in how the different generations interact.

Instead of looking for a quick solution, spend some time getting to know your employees, focusing on their perspectives and goals. Then everyone will be in a better position to minimize the challenges of generational differences, and to capitalize on the strengths the differences can bring.

PATTI FRALIX, author of How to Thrive in Spite of Mess, Stress and Less, inspires positive change in work, life and family through speaking, consulting and coaching. She is founder and president of The Fralix Group Inc., a leadership excellence firm based in Raleigh, North Carolina. Fralix has spent the past 20 years providing practical solutions to audiences of all sizes. Contact her at pfralix@fralixgroup.com.

By David Levy

It’s a big day. Your printer just dropped off your bright shiny new product brochure. This is the big marketing push for the year. The mailing list is purged and clean. Your entire staff of five got in at the break of dawn, coffee in tow, to stuff, stamp and bag. Hope is high and you’re licking your chops in anticipation of the phone ringing off the hook and inventory flying off the shelves. It really is a good day.

On the way to drop off the mailing at the post office, your eye is drawn to the giant billboard of a competitor in town announcing a big sale event. Ouch! As you punch the buttons on the car radio trying to ease the frustration, you catch a local TV celebrity singing the praises of your chief nemesis, who is introducing their new core product, a niftier version of your best seller.

Suddenly, that shiny new brochure has lost some luster. That familiar feeling of frustration and helplessness creeps into your mind as it has for a long time. You ask, How can I compete when the big fish are outspending me 100 to one and dwarfing my marketing efforts?

If this story sounds familiar, that is not surprising. You are one of millions of small businesses competing with larger companies that have significantly more powerful marketing budgets and sales resources than you have. That is the reality of small business in America today.

But don’t despair. You have what it takes to outthink, outwit and outsmart those bigger competitors. Here are six ways to do it. Let’s get started right now.

1. Build a Board of Advisors.
A Board of Advisors (BOA) is anywhere from three to 10 people you know who have diverse experience in areas that can help your company grow. A BOA can provide great advantages over competitors who are relying entirely on their employees. An experienced and well connected BOA can help your business grow and prosper in ways you’ve never imagined.

Your BOA will help you make better, faster and more informed decisions. Collectively, the board should have deep experience, powerful resources and valuable contacts that can lead to new business opportunities. The BOA also acts as part of your sales team, touting the virtues and strengths of your company.

Your BOA can be particularly helpful in areas like marketing, operations, human resources, legal and finance. These are all areas where small businesses are generally weak due to the expense needed to staff such positions.

THE BENEFITS OF YOUR BOA ARE:

• Unbiased perspective from people you trust
• Provides powerful influence for networking and new business referrals
• Enhances community and public relations
• Added credibility for customers, vendors and lenders
• Helps you avoid costly mistakes
• Adds key skills to the management of the company
• Provides support for key strategic planning and decisions
• Lends a calm hand and knowledge in times of crisis
• Helps anticipate changes in the market and trends

Board members generally meet once a quarter for about 4 hours, and should be paid for their time. Very small businesses can generally get away with a meeting fee of $500 per board member. For midsize companies, the fee generally ranges from $1,000 to $1,500 per member. You need about three to five board members with a range of various expertise.

2. Become a “competitive intelligence” detective.
You can’t outsmart your competitors if you don’t fully know what they are doing. By taking the time to study your competitors and understand as much as you can about them, you can develop ideas for ways to differentiate yourself, and identify tactics to compete better and win business. Just by answering some essential questions, you will be amazed at how easy it is to see new paths and creative opportunities to gain a competitive edge. Answer these three vital questions:

• WHO ARE MY COMPETITORS? List them all.
• HOW DO THEIR CUSTOMERS PERCEIVE THEM? First, collect and make notes on all the marketing tools your competitors are using. Then, stand in the shoes of your target market and view that competitor from the customer’s point of view. Write down your observations and feelings about each of your rivals.
• WHAT COMPETITIVE EDGE DO THEY HAVE? Be honest with yourself and answer to this question from the customer’s point of view.

This effort will take some time but is well worth it. Enlist friends and family to help. They can “mystery shop” the competitors in person, on the phone or online. Get input from business associates, vendors and people in the media such as local newspapers’ business reporters. Your Chamber of Commerce, library, Small Business Development Centers (SBDCs) and trade associations are all excellent sources of information about competitors.

In order to easily compare and contrast your various competitors, create a simple matrix grid by listing the competitors vertically with the question categories along the top. Just fill in the answers and you will then have an easy-to-compare snapshot of each competitor.

3. Create your competitive edge.
Now that you have studied the strengths and weaknesses of the competition, coming up with ideas to take advantage of opportunities is limited only by your imagination. In business, you need to find ways to stand apart from the competition. Being different, in a relevant, meaningful way, is the foundation to establishing your competitive edge.

Since you now have a clear understanding of how your competition is perceived by their customers, how they market themselves and their products, and their competitive advantages, carefully consider what makes your business unique. Evaluate the benefits and strengths you provide to your clients and identify those that are different from and superior to your competitors. Or create new ideas based on opportunities you have identified that your competitors are not taking advantage of.

For example, your small size may enable you to be more nimble and provide better customer service or customize your offerings. Or you may have identified an opening in the market that your competitors have missed. Now you can take full advantage of your size and ability to act quickly and get the jump on your rivals.

Once you have pinpointed the reasons why potential customers should choose you over your competitors, and why current customers should buy more and remain loyal, you need to find clever, affordable ways to reach your target audience with your new messages, over and over again. There are a number of smart, inexpensive ways to accomplish just that.

4. Treat your customers like gold…and you’ll earn more gold.
It’s amazing how many companies look right past their current customers when they think about building their businesses. Growing any business should always start with its existing base of business—its customers.

It takes far less money and time to build a business with current customers than to find new customers. Think about this. If you learn your current customer retention rate and create a plan to increase that by 10 percent, you have just added 10 percent to your growth rate. Considering the high cost of promoting to and wooing new customers, centering your growth strategy on your current customers makes great financial sense.

Remember, you now know your competitors’ strengths and weaknesses. You have created new ways to get a competitive edge. Here are several good ways to let your customers know about these important new reasons to continue doing business with you:

• CONNECT WITH CUSTOMERS. Customers want to know you are thinking about them and care about what they have to say. Construct a simple survey to get feedback on your customer service, current products, special offers or new product offerings. Use the survey to send messages about your new competitive strategy. Or create a newsletter to share helpful information, new product offerings and specials, your press clippings and any other positive messages.
• MAKE COMPLAINTS WORK FOR YOU. When a customer lets you know they are unhappy, either in a survey, over the phone or in a letter, they are likely to complain to many others in their sphere of influence. Create a program to handle these complaints quickly and find creative ways to go the extra mile to win the client’s confidence again. If you do this consistently and satisfy the customer, they are actually more likely to remain a happy customer and to tell others about the impressive way you handled their issue.
• GET TESTIMONIALS. Once you have created a two-way communications channel with your customers, you will be able to identify those who are exceptionally happy with your services. Offer a small reward or certificate of recognition to those who would be willing to provide a testimonial quote about why they do business with your firm. Post testimonials on your website and incorporate them into your outbound marketing tools.
• GET REFERRALS. Create a program to reward your customers for referrals. These are simple and easy to manage. And best of all, your customers will appreciate that you value their business.

5. Form strategic partnerships to generate qualified leads and referrals.
One of the fastest routes to closing a deal is to begin the sale with a qualified lead or referral provided by a strategic partner. These partnerships are one of the most efficient and cost-effective ways to generate frequent and reliable leads for your business.

A strategic partner is a company that is doing business with your target audience and does not compete with you. An example of such a partnership would be a web developer and a marketing consultant. The web developer could refer the marketing consultant to its clients for strategic assignments; the marketing consultant could generate new business opportunities among its clients that need web work.

Begin this process by identifying businesses that complement yours and serve the same customer base. Discuss the potential advantages with your partnering prospect and work out a business deal that benefits both sides equally. Each business prospers since it receives opportunities that it might never have been able to acquire on its own.

Make sure that you select your partners carefully. Be certain that the companies under consideration are financially strong, trustworthy and have a solid reputation. A failed partnership could create an uncomfortable situation among your referred customers.

6. Jump into online social networking.
Social media marketing is providing a new wave of business promotion and brand building, and you’d be smart to jump on board. It’s called business social networking. There is no cost to join, and by participating in these vibrant and growing communities, you can build business relationships and promote your products and services.

Social networks attract members who have shared interests and opinions. As the network grows, a trusted cluster of connected associates and friends is established. When a member discovers your business or product and recommends it or comments about it, it has a powerful “word of mouth” impact. If you spend the time needed to establish your social networking presence, you can build leads and referrals and convert those into sales.

Just Google “business social networking” and investigate the various sites that can contribute to your particular business or niche. Then create and monitor content, track your referrals and leads, and keep building on your experience and success.

You can start outsmarting the competition tomorrow. The process is simple. Take it one step at a time and you’ll be amazed at how much progress you can make. The best part is that you can generate serious business growth without adding anything extra to your budget. In fact, a wise strategy is to gauge your success and reinvest a portion of the new profits these six steps generate into bigger and better marketing tactics. Before you know it, you’ll be one of the “big fish” that the others will be trying to outsmart.

David Levy is president and owner of GrowthFactorX (www.growthfactorx.com), a virtual full-service marketing solutions firm based in Philadelphia. GFX provides strategic marketing expertise and a full range of creative and media services to both large and small businesses.

By Steve Cooper

Eliminate your fears of Web 2.0 and begin embracing it. Web 2.0 is today’s toolset you need to stay competitive. That’s not to say that you need every bell and whistle that will wow your 13-year-old, but in order to make your web presence look and feel contemporary, a splash of new technology will go a long way. Who knows? You may already have Web 2.0 technologies on your website and not even know it.

Defining Web 2.0
What’s the difference between Web 1.0 and Web 2.0? In Web 1.0, websites offered static content that could be read or viewed with little or no interaction. Web 2.0 offers interactivity and collaboration that wasn’t possible before. The rise in this new functionality is largely due to the widespread adoption of high-speed internet. There are infinite buzzwords pertaining to Web 2.0 that all refer to the varying technologies that enable these new capabilities. Here are some of the terms you should know:

AJAX: A combination of two popular computer languages, XML and JavaScript. This new language allows websites to act more like desktop software applications and has been the engine for many of the new online innovations.

BLOG: A regularly updated online journal. Blogs range from personal musings to company updates. Popular platforms include Blogger, Live Journal, Moveable Type, TypePad and WordPress.

MASHUP: The combination of two or more applications or types of content to create a single enhanced application. One popular use is to mash a map with data to show gas prices in a particular area, for example.

PODCAST: The syndication of audio content through the internet, typically using RSS feeds. (This has nothing to do with Apple’s iPod, although you can listen to podcasts on an iPod.)

SOCIAL BOOKMARK: A method for internet users to save, organize, share and manage bookmarked pages on the internet. Most of these bookmarks are tagged which allows others in a particular social group to quickly access your preferred pages. Popular social bookmarking sites include: del.icio.us, Digg, Newsvine, Reddit, StumbleUpon and many more.

TAG: A keyword or term used that is relevant to an item such as an article or picture. Many items have one or more tags that are used to access and organize information. Many blogs and news outlets tag their content.

WIDGET: Simple, self-contained applications, typically with a single purpose. Many widgets display feed results, others offer a saying of the day or picture of the day. The possibilities are infinite. Widgets are also a good way to reach a mobile audience.

WIKI: A website that allows visitors to quickly edit, modify or delete content on the web. The most popular wiki site is Wikipedia.

XML: An open standard computer language for exchanging structured documents and data over the internet. Think of it as a newswire for your website. RSS feeds work the same way. According to a report by Awareness, a provider of social media technologies, 74 percent of businesses with fewer than 500 employees use Web 2.0 technologies. Blogs are the most-used technology, being employed by 87 percent of respondents.

“Web 2.0 tools have made it easier and more cost-effective for small companies, in particular, to have a web presence with rich functionality,” says Katherine Spencer Lee, executive director of Robert Half Technology, a recruitment and staffing firm. “The No. 1 question I get right now is, How can I drive business value from social software?” says Anthony Bradley, research director at Gartner. “The second one is, Where do I start?”

Great questions. Some businesses have already begun to figure out the answers.

Businesses Using Web 2.0
When done right, Web 2.0 engages, connects and adds value for visitors. Domino’s Pizza recently updated its website with a few new tools to do just that. In January, Domino’s launched a campaign that allowed visitors to create their own pizza, give it a name and track how many customers ordered their creation. The contest ran for 10 days and awarded the winner a $500 gift certificate. Domino’s new website also included a pizza tracker tool—an industry first. This allows hungry patrons to track their pizza from the time they order until the pizza is delivered.

Dove concluded a campaign earlier this year asking customers to submit their own 30-second video commercial for Dove Cream Oil Body Wash. Over 1,200 videos were submitted and voted on, with the final two appearing during a commercial break of the Academy Awards. Viewers were then asked to text their final choice. The winning video has been viewed more than 50,000 times online. Amazingly, one of the losers has been viewed over 70,000 times.

According to Bradley, GM used its GM FastLane blog to get community feedback on the new Camaro leading up to an auto show. As a result, GM had a record turnout at the auto show and received and implemented many ideas from the community.

GM isn’t the only one wanting to use new online technology. A study by the Kelsey Group, a research and analysis company, found that 59 percent of auto dealers said they plan to use internet video on their own websites during the next 12 months. The study also showed a large increase in the number of auto dealers wanting to add social networking to their sites.

Auto dealers aren’t alone. A survey of senior executives by the Economist Intelligence Unit found that 79 percent see the collaborative web as a way to boost revenues and cut costs.

“One of the really interesting things is how social software interrupts the leverage model. I call this the Tom Sawyer effect,” says Bradley. (Remember how Tom Sawyer convinces his friends it’s fun to paint his aunt’s fence, and they end up doing the job for him?) “That kind of an approach is very difficult for companies to grasp. I anticipate a growing bifurcation between older-thinking companies versus those that understand how to catalyze the community, and that really disrupts the leverage model.”

What Else Can Web 2.0 Do?
One of the largest boons for small business is the emergence of cloud computing. Cloud computing allows small businesses to take advantage of world-class technology and infrastructure from established players like Amazon, Google and Microsoft.

“Historically, you’d have to build a data center in advance of the business. You don’t have to do that now; it’s already built. You’re using it on an as needed basis,” says Bradley.

So rather than building your own video hosting platform and storage infrastructure, businesses can sign up and use YouTube, for example, for free. This dramatically changes the barrier of entry in regard to technology and shifts the challenge toward innovation.

Bradley highlights dating site PlentyOfFish.com as an example of how Web 2.0 has changed the game. Bradley says their revenues are $10 million a year. Want to guess how many employees they have? One and a half! Founder Markus Frind, with help from his girlfriend.

Taking Advantage of Web 2.0 Services
Your business could be the next big fish. In a report by Scene7, a provider of rich media technology and a unit of Adobe Systems Inc., 63 percent of manufacturers and retailers said Web 2.0 technologies increased the number of clicks and usage on their websites. Sixty percent reported an increase in their conversion rate, 47 percent saw a boost in their revenue, and 30 percent saw an increase in repeat purchases.

There are a lot of easy things you can do to add Web 2.0 functionality to your business’s website and take advantage of Web 2.0 technology. Here are a few online software service providers to explore:

ADDTHIS (addthis.com): Allows businesses to add social bookmarking and sharing capabilities.

APP2YOU (app2you.com): Lets visitors create custom interactive web applications without programming knowledge.

COGHEAD (coghead.com): A webbased system that allows visitors to create their own application such as a CRM or project manager through a drag-anddrop interface.

DAPPER (dapper.com): Extract and use information from any website on the internet through feeds without any programming.

FEEDBURNER (feedburner.com): Helps promote and deliver feeds. Users can also monetize their feeds through the Feedburner advertising program.

OCTOPZ (octopz.com): Online collaboration software using text, voice or video chat that enables creative professionals to share and annotate media files including videos, documents and images.

SENDALONG (sendalong.com): Allows users to send large files to any e-mail address.

WIDGETBOX (widgetbox.com): Lets users add or create their own widgets to share with site visitors.

WIKIDOT (wikidot.com): Offers free wiki hosting and publishing.

There are an infinite number of other services available including blog platforms, mobile applications and so on. The key is to take the first step and understand why.

Taking the First Step
“Don’t ignore [Web 2.0]; don’t think that it’s for the bigger players or the teenagers,” says Bradley. “Definitely explore it. The top three things for social software success are purpose, purpose and purpose. Know what you’re building it for and build a business case and measures of success.” Sixty-eight percent of senior executives expect Web 2.0 tools and methods to be the single biggest factor changing the ways their company interacts with customers, according to the Economist Intelligence Unit. Furthermore, 49 percent believe Web 2.0 will have the same impact on how employees interact with each other and the company.

“Web 2.0 also is about serving the needs of clients and customers, which requires an understanding of what appeals to specific audiences who visit your site,” says Lee.

When seeking outside help, Lee recommends looking for IT experts who have web development experience, application engineering and database management experience. Web 2.0 isn’t a single language, but a series of tools and languages. Some specific programming skills to keep an eye on are AJAX, Java, .NET and Open Source application development. Also, ask to see examples of their previous Web 2.0 creations.

“Experts in Web 2.0 often collaborate with marketing and other non-IT staff members to develop a company’s online strategy,” says Lee. “So, in addition to solid programming skills, hiring managers should look for job candidates with strong business communication, project management, web design and consumer marketing skills.”

The Risks of Web 2.0
Web 2.0 may be the future, but it still has some wrinkles that need to be ironed out. Many businesses are putting the kibosh on Web 2.0 activity for fear of security and bandwidth usage.

Gartner issued a press release identifying the top five challenges facing business regarding social software. Among the challenges are delivering business value, overcoming cultural barriers, ensuring privacy, governing participant behavior and managing personal and professional time.

A lot of time is spent on watching online videos. Nielsen Online shows that the highest web traffic for online video happens between 12 p.m. and 2 p.m., when most people are at work.

“There are significant challenges, not necessarily due to the nature of social software, but due to complexity of human interactions and social behavior in particular,” says Bradley. He explains that even though businesses build a particular tool with specific intentions, how visitors use that tool or not is a challenge many businesses struggle with. Remember, you can’t control human behavior.

Security is another major concern. A study by CA Inc. predicts that social networks and Web 2.0 will be among the top potential targets for online attacks in 2008. On the flipside, preventing an employee from sharing company secrets or intellectual property also has become increasingly difficult.

Bradley says businesses need to understand the tradeoffs of what they’re getting, what they’re gaining or saving financially and what they are risking, such as control of user behavior and control of their files if hosted by someone else.

Regardless of the risks, Web 2.0 is the future. “Web 2.0 represents a significant opportunity for the emergence of smaller competing businesses,” says Bradley. So grab your paintbrush and get to work— or if you’re Tom Sawyer, just have your friends do the painting for you.

By Geoff Williams

Heather Stouffer, 34, started her Alexandra, Virginia based business because she had a need and couldn’t fulfill it. In the case of Mom Made Foods, Stouffer’s need was healthy, fresh foods for her baby son, Emory, born shortly before the organic market exploded. “As a new mother, I wanted the best for my son, and so I was making all of his foods from scratch, spending most of my Sunday making them and freezing them for the week,” says Stouffer, whose meal-making time was mostly scotched during the week due to her job as a business development director at a high-tech consulting company.

Her Martha Stewart methodology, though, was wearing and wearying, and that’s when the idea of creating her own line of organic baby foods hit her. But there’s a wide chasm between a concept and actually launching a business around it. Stouffer, who soon quit her day job, knew it, too, which is what led her to the Small Business Development Center in Alexandria.

At the SBDC, Stouffer was given what she describes as “a whole load of information,” including contact information for the Department of Agriculture and the Department of Health, both agencies she was going to have to get to know. The SBDC told Stouffer (who, no, isn’t related to the family that owns the frozen food giant) about a program at the Virginia Tech Business School, which did a competitive analysis for her company.

Her counselor pointed her to a book, which became her bible: From Kitchen to theMarket: Selling Your Gourmet Food Specialty by Stephen Hall. And the SBDC also provided a database of information that ultimately helped Stouffer connect with Whole Foods, which now carries her line of products in several states.

“The SBDC has been an incredible resource,” says Stouffer. “Their willingness to help has just been extraordinary.”

Word of Stouffer’s business has since “spread like wildfire,” she says. In the last two years, her products have been featured on “The Oprah Winfrey Show”, and she has been able to continually release new product lines. Mom Made Foods is currently in seven states and Washington, DC, as of this writing; by the time you read this, it will likely be in quite a few more.

Meanwhile, Stouffer can be pleased Emory was born when he was. Today, she would have no trouble finding baby organic products on the shelves and quite possibly wouldn’t have started her business. The organic market, of course, has exploded, where one can find anything from organic bed linens, laundry detergent and even toilet paper. In both riding the organic industry wave, and finding a friendly neighborhood SBDC, Stouffer found herself in exactly the right place at the right time.

By C.J. Prince

Entrepreneurs may have a keen intuition about their businesses, a clear understanding of the markets that move them, and a cool finger on the pulse of their industries. But when it comes to the capital they need to grow, many still have a lot to learn. According to a survey of small-business owners by OPEN from American Express, many entrepreneurs harbor a number of misconceptions about basic financing terms and the strategies that will put cash in their coffers. The following are a few of the more popular myths, debunked.

1. Financial credit options are all alike. More than one-third of survey respondents believed a term loan and a line of credit were pretty much the same—a mistake that could lead them to the wrong financial tool, and possibly to debt they can’t afford. A term loan capitalizes a specific asset for a specific period of time. In general, you want to match the loan to the life of the asset you’re buying, says Rebecca Macieira-Kaufmann, executive vice president and head of Wells Fargo’s small-business segment in San Francisco. “If you knew you were remodeling a space that had a five-year life, then you’d want a five-year loan to match that depreciation,” she says.

A line of credit, on the other hand, is a revolving finance tool you can tap as needed. The lender sets the maximum amount it will make available, and interest typically accrues only when you use the funds, says Jed Scala, vice president of small-business finance at OPEN from American Express in New York City. Its quick availability makes it ideal for short-term cash-flow needs.

2. My bank will save me. Almost half of entrepreneurs who completed the survey believed banks commonly make loans to loyal customers in the midst of a cash-flow crunch. That’s not entirely false, says Tom Nist, senior vice president and manager of the small-business segment at PNC Bank in Pittsburgh, but it depends on the reason for the crunch. “If it’s an issue of approaching insolvency, of not generating the revenue and so on, we’d probably not grant credit,” he says. If, on the other hand, the sudden need is a result of rapid growth or building a new warehouse to accommodate the expanding customer list, “those are what we call positive cash-flow crunches, consistent with growing the business,” says Nist. He recommends that before business owners undertake any significant growth plans, they discuss them with their banker so there are no surprises.

3. One egg, many baskets. Nearly 4 in 10 respondents believed it made good business sense to cast a wide net by applying for loans with as many lenders as possible. Sounds logical, but Scala points out that every request you make for credit shows up on your credit report. So if you’re close to using up all your lines with other providers, all the requests for cash can raise red flags with lenders’ risk-management departments and hurt your chances of receiving financing. “Instead,” says Scala, “it’s best to limit your inquiries to a small set of financial institutions at a time.”

4. More money can fix whatever is wrong with my business. Nearly one third of survey respondents said their biggest frustration was needing more money to grow their business and having difficulty finding it. In some cases that need is legitimate, but experts say that too often, business owners think more cash can crank up a slow business. “They over simplify the problem and focus on needing more money when, in fact, they haven’t done a good enough job assessing what their business is, what the target markets are, and how their business is running,” says Michele Abraham, director of Ohio’s Small Business Development Centers in Columbus. They also tend to focus on fast growth as a remedy, even when higher sales at the wrong price point can lead to a loss. Growth is good, she says, but “you really have to grow strategically.”

Reprinted from Entrepreneur magazine, ©2007. C.J. Prince is a New York City writer specializing in business and finance. Reach her at cj@cjprincemedia.com.

By Roger Pierce

It’s difficult to know what to believe about self-employment. Tell anyone you’re considering starting your own small business and you’ll receive plenty of conflicting advice and differing opinions.

To help you decide whether or not entrepreneurship is your next career move, it’s important to challenge some common myths:

Entrepreneurs make a lot of money. During the first few years of your new small business, you may earn less than employed friends. However, you’ll enjoy much larger income potential. In North America, 75 percent of millionaires are self-employed.

You need a business degree to run a small business. While a formal business education can help, you may actually trip over that MBA while running your small enterprise. Practical, real-world and hands-on tactical skills will help the most, and are easily obtained through part-time courses or work experience.

A business idea must be kept a secret. The more people you tell about your idea, the better. You’ll receive valuable feedback, attract people who will help you develop it, and reinforce your personal commitment to actually starting your small business.

A great invention makes entrepreneurs rich. It’s not what your small business does, but how it does it. Successful companies simply brand, market and serve clients better or differently than their competition. Look for opportunities to improve on an existing product or service rather than invent something completely new.

It takes a lot of money to start a small business. Some very successful businesses are launched with just a few hundred dollars. Others may cost millions and still fail. Your skills as an entrepreneur make the difference. Start small, think big, seek advice and be patient.

You can lose everything. Entrepreneurship does carry financial and emotional risks. However, smart small business owners protect themselves by separating their personal and business assets, spending less than what they earn, and listening to the advice of an accountant and a lawyer.

Running a business is easy. It just looks that way! In reality, most entrepreneurs work 60 hours per week. As a micro-company, small-business owners must endure considerable stress associated with getting, doing and managing all of the work.

Businesspeople must be tough and ruthless. While that may be true for big business, small-business owners typically operate with high levels of integrity, trust, honesty and fairness.

It’s lonely. True, you may feel some isolation if you choose to operate your business from home. However, with 25 million other small businesses in the United States, you’ll find growing small business communities offering plenty of great opportunities to network and interact with fellow entrepreneurs.

Bottom line, you won’t know what entrepreneurship is truly like until you try it yourself. After all, nothing ventured is nothing gained.

Roger Pierce is co-founder of Canada’s largest small-business training company, BizLaunch.ca. He has launched nine small businesses of his own and has personally experienced what he calls “the good, the bad and the ugly” sides of entrepreneurship. Pierce is also the Entrepreneurship columnist for The Toronto Sun and 24 Hours. He may be reached at www.bizlaunch.ca.

By Ruth King

Inheriting a city with a budget deficit of $82 million in 2001, Mayor Shirley Franklin treated Atlanta as she would any major business. She made difficult choices, restored accountability to city government, and worked to improve the quality of life for the residents of Atlanta. Leading by example, she cut her own salary by $40,000 before eliminating half of the staff positions. She also eliminated job vacancies and convinced the public of the need for raising taxes (which was done).

With the city’s budget finally balanced, Mayor Franklin focused on making Atlanta a “Best in Class” city. The Atlanta citizens gave her their overwhelming support and re-elected her to office in November 2005. Mayor Franklin received more than 90 percent of the votes cast.

Her accomplishments as Mayor include:

• Balanced five budgets, which has generated a healthy reserve for the city of Atlanta.
• Implemented one of the strongest ethics reform programs in the country and an Ethics Task Force.
• Laid the foundation for a $3.2 billion overhaul of the city’s aging water and sewer system
• Established a commission of city leaders to study the problem of homelessness in the city and created the “Blueprint to End Homelessness in Atlanta in 10 Years.” The Gateway Center, designed to serve 500 people a day with needed personal and health services, opened in July 2005.
• Created “Next Step…The Atlanta Promise,” a program designed for high school seniors in the city’s public schools to plan for their future beyond high school. The 2005 program raised $1.9million, including $1.1 million in scholarships for 300 graduates.
• Administered the $150 million Quality of Life Bond Program, which leveraged funds to add new sidewalks, beautify major arterials and enhance both pedestrian and vehicle safety. Nearly 1,200 projects are underway or completed.

In 2005, Mayor Franklin was finalist for the Top Ten Mayors in the World contest. She received numerous supporting statements for her nomination. All pointed to her compassion and dedication to making Atlanta a better city in which to live. Comments included: “She does what she says she will do and is what she says she is.” “She cares deeply for the city and its people, especially those in economic distress.” “She reaches across political boundaries to focus on ‘rolling up our sleeves and getting the job done.’ ”

Since this is her last term as Mayor, Shirley Franklin is committed to leaving a legacy of urban development and growth as well as making Atlanta a better place to live than when she was first elected mayor. It is my opinion that Mayor Franklin’s legacy is firmly in place.

By Julie Moline

For more than 30 years, long before diversity became a buzzword, chemical giant DuPont has been seeking out and hiring minority-owned and women-owned lawfirms whenever it out sources legal services. For DuPont, this route wasn’t taken just out of a sense of corporate social responsibility. The company also benefits immeasurably from the talent and superb services these firms provide.

DuPont, along with dozens of other Fortune 500 companies, including Microsoft, Xerox, Accenture, Pepsi-Co, Nike, Aetna, Marriott, Domino’s Pizza and Harley-Davidson, feel so strongly about supporting women- and minority-owned firms that they have become corporate sponsors of the National Association of Minority- and Women-Owned Law Firms (NAMWOLF).

The organization, based in Milwaukee, was founded in 2001 and has worked as a tireless advocate, building the case (literally and figuratively) that diversity is not only the right thing to do ethically, but also the right thing for the corporate bottom line. Besides catering to the needs of its members, part of NAMWOLF’s brief is as pirational: It believes that the best way to increase diversity in the legal profession overall is through partnerships between big business and small law firms of exceptional ability

How? Minority- and women-owned law firms hire and promote minority and women lawyers at much higher rates than majority-owned law firms. That, in turn, leads to more opportunities in the legal profession for minority and women lawyers. It’s a virtuous circle that ought to be imitated in many more industries.

NAMWOLF, like most associations, serves two constituencies: the buy side, which in this case includes the major corporations with diversity initiatives that encourage bidding by minority- and women-owned firms; and the sell side, the minority- and women-owned firms, which need to market themselves on a national scale but often lack the resources and expertise to do so. Having a blue-chip company as a client gives considerable legitimacy to a small law firm; hiring a woman- or minority-owned firm gives corporations a chance to put a mission statement into action.

For law firms, merely joining NAMWOLF adds credibility to visibility. Members are carefully vetted by NAMWOLF’s executive committee in a painstaking process that can take six to eight months. Once they’re in, NAMWOLF is committed to facilitating partnerships on their behalf. “We often find,” says spokesperson Yolanda Coly, “that companies want to hire women- and minority-owned firms, but have no idea where to find them. So we’ll help them locate suitable firms with the specialties they need. For our members, having an association act as an intermediary gives them access to potential clients they ordinarily wouldn’t be able to reach.”

The lesson to learn from NAMWOLF is this: Corporate procurement programs with a diversity element are an essential conduit to big business and prime contractors. Finding an association in your business’s field and joining its business networks is one of the smartest, most strategic investments your small business can make.

Recently I began a task I thought would be relatively easy—stripping linoleum from my kitchen floor and replacing it with shiny, new tiles. The linoleum had probably been there since the Civil War and was quite old, ripped, and ugly.

As I grasped the first inches of linoleum, I realized that this was not a simple task. After tearing off a few more inches, it became obvious that this process was going to be absolutely grueling.

Could I stop now? No, the floor was a mess and I really wanted a better-looking floor, so I pressed on. I learned much about technology while stripping the floor, and I think the lessons learned will help you, too.

When in doubt, research.
My computer is never far from me. Taking a break, I wiped my hands off and went to my favorite search engine, Google, to find out if there was any easier way to get this job done. Yes, there was—something called adhesive remover.

What does this mean to you?
If you have no clue about what computer to purchase, take some time to read a few good magazines or websites. For instance, if you are buying a notebook computer, Walt Mossberg of The Wall Street Journal publishes an annual notebook buying guide. My company has a notebook buying guide (www.smallbiztechnology.com/notebook) and many other sites (Cnet, PCWorld, PC Magazine) have great notebook-buying resources as well. Of course, buying a notebook is only one example; doing research applies to all technology.

Verify your research.
I went to Home Depot and picked up two cans of adhesive remover. But before making my purchase, I talked to a few customers and the Home Depot staff about what I was doing and got their input. Everyone was very helpful and gave me good tips and guidance (“Expect a lot of blood, sweat, and tears” is what I heard the most).

What does this mean to you?
Once you do “desk research,” get advice beyond a search engine or magazine, especially if you’re spending a lot of money. If you are buying a $20 piece of software you don’t need as much advice as if you're buying a $2,000 computer or $10,000 phone system.

Start small and then progress.
I’m the type of person who will hop into the pilot seat of an airplane and try to figure things out as I go. Unfortunately this does not always work. I wasted half of the first bottle of adhesive remover because I didn’t know how to apply it properly. Although the instructions explicitly state wait 15 minutes (it was in big red letters on the front of the can), I figured 15 minutes could also mean 5 seconds. Only after seeing minimal results did I let the chemicals sit for 15 minutes and then my scraping speed became faster.

What does this mean to you?
Before rolling out technology to your entire company (assuming the company is more than just you and your dog), do a test or pilot phase first. Maybe you want to move from PC-based sales management software to one hosted exclusively online. Instead of forcing your employees to switch the next day, ask two or three of them to evaluate the new hosted application. This small group can help work out problems, see if the service works for your company, determine how hard it is to learn, help evaluate the cost of training and migration from your current system to the new system, and see if they will even use the new system. After this pilot phase, you can then roll out the service to the entire company, knowing what challenges you’ll experience thanks to the pilot phase.

Hire an expert.
I’m glad that I finished the floor myself—I love hard, manual work (as most of my life is spent in front of a computer screen and in meetings). That said, I probably would not do it again. Next time, I’ll spend the money to hire a professional. I’m sure they could do it in less time and my body wouldn’t feel like a golf ball after Tiger Woods hit it for a few hours.

What does this mean to you?
Sometimes it’s nice to do things yourself. But sometimes it’s not in your best interest or the interest of your company to do so. You’re an expert and guru in your business. Maybe it’s accounting, carpentry, gardening, law or graphic design. You are not an expert in every aspect of technology. Instead of securing your own computer network, it’s best to hire a professional who can ensure that your network is as secure as possible. Instead of trying to install your own server to save a few bucks, get it done right by having an expert do it for you. And, if you’re interested, my kitchen floor came out great!

The U.S. Small Business Administration announced a new initiative to boost entrepreneurship in 11American inner cities as the latest component of its strategy to advance entrepreneurship in underserved markets. The SBA’s Emerging 200 initiative will focus on small, poised-for-growth inner-city companies with potential for job creation. The designated cities where the program will begin are Boston, Philadelphia, Baltimore, Memphis, Atlanta, Chicago, Milwaukee, Albuquerque, New Orleans, Des Moines and Oakland.

“SBA is increasing outreach to areas historically challenged by high levels of unemployment and poverty,” said Steven C. Preston, SBA Administrator. “We believe bolstering entrepreneurial success in these areas will generate new jobs, attract investment, and provide amore sustainable economic base in distressed areas.”

The SBA also intends to modify its Community Express loan program so that it is simpler for lenders and borrowers to use and focused more on underserved markets. This program, which has the highest minority participation of any SBA lending product, involves a cooperative effort between SBA lenders and development resource partners to focus the agency’s financial and technical assistance on distressed communities.

According to SBA’s Office of Advocacy, small businesses are the greatest source of net new employment in inner cities and account for 80 percent of total employment. However, the job growth rate in inner cities lags behind the rest of metropolitan areas (“State of Inner City Economies: Small Businesses in the Inner City,” Oct. 2005).

As part of a broader initiative on underserved markets announced in September, the agency is working to accelerate entrepreneurship in inner cities through new and improved SBA programs and activities that fall into four main tracks:

• Improving entrepreneurial literacy and technical assistance in inner-city communities
• Providing more advanced financial and developmental assistance to emerging growth companies in innercity communities
• Enabling access to capital across underserved communities
• Improving access to government contracting opportunities.

In October, the SBA announced a partnership with Operation HOPE Inc. in New York City’s Harlem neighborhood to provide training, counseling and business education to budding entrepreneurs. In this first series of pilot programs, the SBA and its resource partners, the New York Small Business Development Center and SCORE, will provide free business counseling and one-on-one training to local entrepreneurs at the Harlem HOPE Center location. In FY 2007, SBA made more than $5 million in loans and counseled and trained more than 1,000 entrepreneurs in Harlem.

The SBA has many resources to help entrepreneurs and small-business owners in underserved markets, such as Small-Business TrainingNetwork online, theHUBZone program, SBA’s network of Small-Business Development Centers, Women’s Business Centers and SCORE Chapters. Information on these programs can be found on SBA’s website, www.sba.gov.

Greg Brooks, 42, figures he’s participated in or played a major role in approximately 200 public-sector bids. But the one that he played his first major role in is the one he remembers best.

Today, Brooks is co-owner with his wife, Grace, of West Third Group, a Plattsburgh, Missouri, marketing, public relations and communication firm that frequently competes for government projects. But back then, it was 1997, and Brooks, then an employee at Kiewit, a giant construction and mining company, was a key part of a $1.3 billion RFP (request for proposal), a bid for a 15-mile design-build reconstruction project of Interstate 15 through Salt Lake City. It was Brooks’ first major involvement in a government bid, and the then-32-yearold was learning from the master, a man named Jerry Pfieffer, his mentor, who he fondly refers to as “the most anal-retentive, organized person on the planet… He was an evil genius.”

It was a time, reminisces Brooks, of “war rooms, allnighters [and] clever tricks that screwed up the other bidders.” Good times. If they won the bid, Brooks would have a job handling the public relations nightmare that was sure to come as soon as commuters understood the depth of the delays and detours in store for them. If they lost, then Brooks would have missed a plum opportunity to dash up the corporate ladder.

“Typically,” says Brooks, “the idea of a good bid means neat handwriting on the bid form. I mean, your whole universe involves knowing your costs, but when you’re doing a design-build project, it’s a new beast because you’re going to partner with another company. You’re designing and building, so you’re selling Company A and Company E’s services.” And when you’re working on a project worth $1.3 billion, you want to do your best possible job, period.

So they did. These bids were presentations in front of 40 people on the review committee, so leaving nothing to chance, Brooks and about 30 coworkers put together an elaborate PowerPoint production involving numerous speakers and 200 slides. They timed it until they had everything down to a 15-second margin of error.

They didn’t stop there. Brooks and the others put out ice-cold drinking water for the audience. They gave away trinkets like pens with the company logo. They even anticipated the questions that might arise during the Q&A, so that when someone brought up a new issue, the speakers could address it and quickly pull up a new slide.

All went smoothly, and when the speech was over, Brooks and his coworkers gathered their belongings— including the pitchers of water. This unnerved the next team, which had been assuming that the Department of Transportation had provided the refreshments. The night before, Brooks had also bought the rights to all of the color copying at the local Kinko’s, in case Kiewit needed emergency printing—which had the desired effect of forcing their competition to drive 20 miles to the next copy center.

Kiewit won the right to the project. What did Brooks take away from all of this? “There were a lot of lessons,” he says. “There is no detail too small to overlook, and you can teach elephants to dance: We took engineers who were brilliant but should not be allowed in front of a podium, and we made them effective speakers.”

But maybe most important, says Brooks, “There are always three types of competitors on any job where there are multiple bidders. There’s the guy who is expected to win it. There’s the guy who it would be politically expedient to give the project to. And then there’s the guy who has so overwhelmingly anticipated all of the questions that they’re flummoxed when they stop talking to you. You want to be that last guy.”

Geoff Williams is a writer in Loveland, Ohio. Reach him at  gwilliams1@cinci.rr.com.

The U.S. government is the largest consumer in the country, spending nearly $560 billion each fiscal year on contracts. It’s probably the most complex consumer as well. Different types of agencies–defense, civilian and intelligence–have different types of needs to help meet different mission requirements and objectives.

Doing business with the government requires an understanding of these unique needs and challenges, as well as an appreciation and understanding of the nuances involved in doing business with such a vast consumer. It also requires a good amount of logistical know-how, and following a handful of “must do” steps.

If you’re reading this article, chances are you’re already on the GSA (General Services Administration) Schedule. The GSA establishes long-term, government wide contracts with commercial firms to give customers access to millions of state-of-the-art products and services at volume discount pricing. Getting a GSA contract, and getting on the GSA

Schedule of contracts, is a good choice. The lowest-cost way for a commercial supplier to enter into government contracting is to get onto the GSA Schedule. Doing so enables you to enter into a buying environment rather than just a contracting environment. (If you have not yet done this, now’s the time. Visit gsa.gov for more information about getting on the GSA Schedule.)

Understanding GSA in 2008 and Beyond
Let’s face it: GSA got rocked in 2007. From congressional hearings to contract disputes and more, GSA had its share of being in the spotlight last year.

This year, however, you’ll see a shift in focus back to its benefits and advantages. This year you’ll see:

• Expanded offerings, which have the potential to bring contract holders into new markets
• Companies that had left the program coming back into the GSA fold, and more companies joining the program for the first time

A handful of trends will drive these changes, not the least of which is a new administration. In fact, with an actual FY08 budget in place and a new administration on tap, you’re likely to see a larger and quicker flow in government spending, as agencies and programs spend the money they’ve been allocated.

What does this mean for you, the contract holder? It means the requirements will be there for the bidding. Your job is to be prepared.

Here are some truths you may not know about the GSA Schedule that can maximize your exposure within GSA and increase the chances of winning that bid.

1. CHANGE IS GOOD–AND ENCOURAGED.
In winning any kind of business– commercial or government–flexibility is key. You may not know just how flexible you can be in your bidding process, as well as in overall schedule contract maintenance–i.e., changes and tweaks you can make to your contract during its duration.

For example, did you know you can add and delete services and products from your contract at any time? This holds true whether you provide office supplies, technology, office furniture, cleaning services or vehicles. This means:

• If you upgrade your technology or your product offerings, you can change your contract.
• If you change your service offerings in any way, you can change your contract.
• If you acquire a company and expand your services and products, you can change your contract.

This flexibility helps both the contractor and the federal buyer. For you, the contractor, it ensures you can always offer the latest technology and services to what may potentially be your largest customer; it means you can stay up-to-date and competitive. This flexibility means your contracts are not stagnant–you’re not boxed in.

For the government buyer, it means having the chance to buy the newest services and technologies. It means the customer is not locked in to a particular version of a product or a particular level of service. From the customer perspective, this flexibility means they’re guaranteed continuous improvements. It’s the proverbial win-win.

2.BPA TOOLS ARE YOUR FRIEND.
Blanket Purchase Agreements (BPAs) are one of the most powerful vehicles for a contractor selling to the government. If you’re providing services or products through a BPA, make sure your sales team is aware of all the tools they can use to sell within the schedule program. “Spot pricing” is one of the greatest advantages your BPA can offer. Through spot pricing, you can readjust your price at any time, in any size order. Why? Your BPA contract permits you to refer to three ingredients when setting your price: inventory, sales goals and market penetration. This means you have a fair and reasonable discount, but you can reduce it at any time.

Say, for example, you have a high inventory; that can affect your price. If you’re below your sales goal, the contract allows you to change your price. Or, if you want to get into a particular market segment–if it’s a new segment for you or you’ve been previously unsuccessful getting into this market, you can adjust your discount accordingly.

Many contractors believe their contract discount is set in stone. On the contrary. You should view your schedule discount as the ceiling price–you can always go lower.

Speaking of pricing … pay attention to your Economic Price Adjustment (EPA) negotiation agreement and execute it on time. Make sure it’s in line with your commercial business prices.

Something else to be aware of with regard to your BPA contract: A BPA is designed to keep the contractor focused. It includes a 30-day cancellation provision. In a traditional environment, the government won’t cancel your contract. Some companies take advantage of that.

According to a BPA agreement, however, the government customer can cancel. Look at the terms and conditions of your BPA. You need someone on your staff monitoring it to ensure the necessary level of service is being met.

3. YOU’VE GOT MORE FLEXIBILITY THAN YOU THINK.
You already knew (or if you didn’t, you just learned) that you can change your schedule contract discount at any time, and add or remove services and products at any time. Your contract flexibility does not stop there.

Chances are you’ll be asked for a firm-fixed price, unless you can show that you cannot accurately estimate the extent or the duration of the work. With the green light there, you’ll be asked to provide a time-and-materials estimate– with a ceiling price. This significantly enhances your pricing options even beyond those mentioned above, by allowing you to work under a fixed price or a time-and-materials price, depending on the product or service provided.

4.YOU CAN USE THE SCHEDULES E-LIBRARY TO YOUR ADVANTAGE.
When you’re awarded a GSA Schedule contract, your company name, contract number, service/product, point-of-contact information and more is automatically listed within the Schedules e-Library on the GSA website. The Schedules e-Library provides a listing of the latest contract award information for the GSA and Veterans Affairs (VA) Schedules, as well as Government wide Acquisition Contracts (GWACs).

Once you have a GSA Schedule contract, there is nothing you need to do to get this listing. However, there’s more you can do to take advantage of it once you’re there.

First, make sure all the information is correct. Also make sure your keywords are accurate. Government customers can search by keyword, contract number, Special Item Number (SIN), GWAC category, etc. There will also be a direct link to your website.Make sure it works.

Customers can also search by socioeconomic status. In other words, if you’re a small, disadvantaged, women-owned and/or veteran-owned business, it’s in your best interests to ensure this information is available and accurate.

State and local government customers have direct access to your contract information as well, as the Schedules e-Library identifies those contractors participating in Cooperative Purchasing and/or Disaster Recovery Purchasing. (More on state and local government in No. 9.)

5. GSA ADVANTAGE!® CAN GIVE YOU AN ADVANTAGE.
The Schedules e-Library provides a direct link to GSA Advantage! This is essentially an electronic shopping and ordering system for the government– an online catalog. Government customers look here frequently, so once you’ve got a GSA Schedule contract, make sure your company and product information is available through GSA Advantage!

Unlike the Schedules e-Library, your information is not automatically listed here; you must populate GSA Advantage! yourself. Many times, business owners get so caught up in celebrating their contract award(s), they forget to take advantage of this free marketing opportunity. Populate GSA Advantage! You’ll get more exposure and will have a better chance of getting noticed.

6.E-BUY IS AN E-MUST.
The Schedules e-Library also provides a direct link to e-Buy, which is a component of GSA Advantage! It is an online Request for Quotation (RFQ) tool, designed to help both the contractor and the buyer get a broader–yet more targeted– response to a service or product request.

It works by sending you an automatic notification when an RFQ has been issued in your service or product area. For example, if an office within the Department of Health and Human Services needs copier maintenance, copier companies participating in e-Buy are automatically e-mailed that RFQ.

Before we go any further, let’s define our terms:

• An RFP is a Request for Proposal. An RFP eventually becomes a “contract.”
• It takes about 268 days for the federal government to award an RFP.
• An RFQ eventually becomes a purchase order (PO), or a “buy.”. It takes between 30 and 45 days for an RFQ to be awarded.

The advantage of e-Buy is immediate notification of an RFQ–which can turn into a PO within 45 days. When dealing with the government, it’s one of the fastest ways to win a bid.

7. YOU CAN, AND SHOULD, EXHIBIT AT GSA EXPO.
If you haven’t been to GSA Expo, go. It is the GSA’s annual conference where thousands of federal, state and local, and military employees gather to see what kinds of services and products they might need to help them better achieve mission success.

Once you’ve attended an Expo and understand the lay of the land, take advantage of the opportunity afforded only to GSA Schedule and GSA GWAC holders and secure a booth.

In most cases, booth space sells out in less than an hour. If you’ve got a booth at GSA Expo, you have the opportunity to reach as many as 14,000 people in two days. It’s one of the most highly targeted audiences you’ll come across. It will be well worth your investment. GSA Expo is an annual event, held in the spring. You can find more information at expo.gsa.gov.

8.GSA OFFERS FREE MARKETING.
As you already know, getting your schedule contract(s) means you have the opportunity to compete. Getting the attention of the government buyer–and winning the order–is an entirely different proposition. You still need strong sales and marketing tactics and teams.

GSA’s bimonthly magazine, MarkeTips, covers acquisition programs, training and upcoming events. As a GSA schedule holder, you are entitled to free advertising in this publication. The wait for ad space is usually quite long–but it’s free advertising. Hard to beat that.

9. YOU MAY HAVE INCREASED ACCESS TO STATE AND LOCAL GOVERNMENT.
The state and local government market is enormous–larger than the federal market and potentially growing to over $25 billion this year, according to FedSources.

Today, state and local governments use Schedule 70. In recent months, however, states have been looking more favorably at GSA as a way to help offset their decline in revenue base yet expand buying options. GSA and the states are both pushing for open, cooperative purchasing across all schedules in 2008.

If all schedules are opened for the states to use, this means GSA Schedule holders have the opportunity to be in front of a vast audience they have not been privy to before. To prepare for this, you should stay informed of the policy and political landscape, and make sure your company is aligned to target and support a new state and local market.

10.GSA IS GOING GREEN.
Going green is a major objective in government, and its importance is only expected to increase. Agencies are feeling pressure from within and outside government to make eco-friendly choices.

The GSA has set up an Environmental Aisle as part of GSA Advantage! to help buyers more easily find “green” choices among the thousands of schedule offerings. According to GSA, “Customers are encouraged to purchase products designated for preferred procurement: biobased and recycled content, ENERGYSTAR and FEMP qualified, water-efficient, and non-ozone depleting materials.” Green is good. Get yourself green, and get yourself set up in the Environmental Aisle. You won’t regret it. Bottom-Line Advice: Stand out When’s the last time you heard someone say, “This contract is going great”? It’s probably been a long time, if ever. We hear a lot about contracts that go wrong, or integrators that do not provide what was promised.

There is a way to stand out among the thousands of other suppliers on the GSA Schedule contract. In addition to preparing for upcoming trends by following the above advice, the number one way to get noticed is: Prove yourself. Demonstrate your ability to be a stable provider. Show that you’re experienced and you’re engaged in government for the long haul by having a strong business development team. There’s a long runway before acquisitions take off. Show that you’re reliable, trustworthy, and will provide whatever support will be necessary now and for the foreseeable future. Once you prove yourself, business will come to you.

Bill Gormley is president and chief executive officer of the Washington Management Group, the leading GSA Schedule contract and VA Schedule contract consulting services firm in the nation. For more information on Washington Management Group, go to www.washmg.com.

For centuries, English foxhunters dragged a red herring in front of their hounds in order to distract them from the scent of the furry little guy. In time, this practice produced the metaphorical “red herring,” which is an attempt to win an argument or negotiation by diverting attention from the real issue.

Introducing a red herring in a sales discussion or negotiation can be a handy defensive tactic. But sometimes we use personal red herrings, which essentially means when we lie to ourselves.

It’s one thing to use red herrings with others as a communication strategy. But when we use them on ourselves, it’s unproductive at best and destructive at worst.

Shakespeare addressed this issue five centuries ago in Hamlet, when Polonius said: “This above all: to thine own self be true…”

If you can’t be true to yourself, you can’t be true to your dream. And a false dream is an entrepreneurial atomic meltdown waiting to happen.

Perhaps the most difficult challenge you’ll face is knowing when to continue to believe in whatever you’re working on and when it’s time to move on. One of my mentors helped me learn how to face these “go—no go” decisions by asking this question: “Do you have a fighting chance or just a chance to fight?” The key to success in business, and indeed in life, may be as simple as knowing the answer to that question.

One way to tell if you’re dragging a stinking fish across the trail of your dream is by checking your position. Here are three examples:

1. Have you conducted enough due diligence to find out if your plan has a reasonable chance of being successful? If not, telling yourself things will work out is a red herring.

2. Is your activity resulting in any success? If nothing is working, convincing yourself that you just need to work harder is masking reality.

3. Are your assumptions performing? If you’re only consuming resources without creating opportunity, you must tell yourself this truth: I’m not on the right trail— yet.

If even small successes can be found mixed in with the failures, you may have a vision merely in need of adjustments and worthy of extra effort. In order to evaluate all of this, small-business owners need all the facts they can get their hands on. And they need the truth from all parties— especially from themselves.

The marketplace is formidable enough. Use red herrings for foxhunting and negotiating, not on yourself. Write this on a rock ... “This above all: to thine own self be true.”

Jim Blasingame is the award-winning host of The Small Business Advocate Show and creator of the small-business knowledge base www.AskJim.biz. Also find him at www.SmallBusinessAdvocate.com.

Julius Howell, Sr., 54, knows something about the wisdom of backup and the value of good leadership. After all, as a master sergeant when he retired from the Air Force after 22 years, Howell saw history in the first Iraq War and was in the thick of things during hot spots in Somali and the American raid on Libya in 1986. So after retiring in 1995 and making the transition to the civilian life by working at a chemical manufacturing firm, Howell quickly recognized that the company lacked leadership.

“I really thought I could do a better job, so I left,” recalls Howell, “but not intending to do what I’m doing now. I was going to be an independent distributor.”

Today, Howell owns Deep Reflection Products & Services, Inc., a janitorial services company in North Wilkesboro, North Carolina that services churches, professional offices, banks, schools and some of the biggest agencies in the U.S. government. The company, started in 1997 and now staffed with 56 employees, brought in $2.7 million last year and continues to expand exponentially. But Howell is quick to point out that his success never would have had happened without skilled backup supporting his mission.

In his case, it was the Small Business & Technology Development Center, headquartered in Raleigh, North Carolina and with over a dozen branches across the state. After his underwhelming experience in chemical manufacturing, Howell became an independent distributor selling chemical-based janitorial cleaning products. One of his customers worked at a facility owned and maintained by the Federal Emergency Management (FEMA).

“They were having problems with the chemicals. I went up there to talk about the problems they were having,” says Howell, who soon found himself being talked into starting a janitorial business and taking the FEMA facility as his first client.

Knowing he didn’t have the infrastructure or experience to start his own business, Howell happily took the advice to visit the SBTDC, where a counselor walked him through the steps of putting people on a payroll and a host of other complicated tasks. “I had never written a business plan,” says Howell. “I knew nothing about how to do that, or anything with the registration process. I didn’t know what a Dun & Bradstreet number was, or any of those things that are necessary to do business with the government. They even aligned me with an accountant, who is still my accountant to this day.”

They also helped him get a business loan. With two kids in college, Howell was paying for his life with credit cards to the point where his credit score was in tatters. Despite a representative from the SBTDC accompanying him every time, Howell was turned down for a loan at 12 banks. He finally was granted a $2,000 business loan from Wachovia.

Even there, he got the loan because he found a loan officer who had a lot of knowledge of the SBDC in general. And the loan officer understood what should be a no-brainer—it was worth lending the man $2,000, so he could have the working capital to secure a $100,000 contract.

“FEMA, in turn, paid their invoices within 10 days, so we could have cash flow,” says Howell. “The SBTDC, my contact at FEMA and Mr. Billingsley at the bank basically formed a circle with me in the middle to help me succeed.”

And Deep Reflection has, not just for giving Howell a legacy and employing citizens in North Carolina. Howell, you see, never forgot how the leadership at the chemical manufacturing plant treated, or didn’t treat, the staff. That’s why Howell gives his workers full benefits, including dental, life, cancer, accident and of course, health—all plans that the SBTDC helped Howell implement.

“I’ll always be a client,” says Howell. “You’ll never know everything.”

Monika Moo-Young, 34, may be a small business owner but she’s definitely no stranger to big business. Since founding MYI Consulting, an information efficiency firm, in 2000, Moo-Young has won procurement deals with the United States Environmental Protection Agency, the U.S. Department of Transportation and even IBM. By helping government agencies, pharmaceutical companies and transportation-related organizations manage large sets of data and processes for their internal projects, she has put her Chester, Pennsylvania-based business securely on the map.

Moo-Young’s current endeavor is to provide project management and coordination support for one of Hewlett-Packard’s infrastructure rollout projects—a multi site, $75 million effort. In order to close the deal on the contract, Moo-Young had to undergo an intense selection process which involved compiling a 50 page Request for Proposal report detailing information about her company’s internal operations, quality processes and past performance—with a turnaround time of less than 48 hours. “We had been given a ‘window of opportunity,’” says Moo-Young, whose revenues are just under $1 million, “and we had to deliver.” The 18-month HP contract has greatly added to the company’s credibility, has possibly opened doors to more procurement opportunities down the road, and has granted Moo-Young invaluable insight into how to work effectively with big businesses. “It has given us an opportunity to boost our skill set on other projects,” says Moo-Young. “We know what things need to happen in those kickoff meetings and [how] to communicate with the customer.”

Winning corporate contracts can single handedly make a small business—but it can also break one. Having personally reaped the benefits of such opportunities, Moo-Young advises other small-business owners to have their own procedures and processes securely in place before pursuing a contract, to be prepared for every type of contingency, and to have the financial means to independently fund the project if necessary. “Payment may not happen in 30 days,” she says. “Some companies have different payment terms.”

Entrepreneurs who are still just trying to get their businesses noticed should start by registering their businesses online. A lot of corporations, including HP at www.hp.com/go/supplierdiversity, will allow suppliers to register on their websites to be considered for procurement opportunities. HP also proactively searches for small businesses by attending Business Matchmaking events, trade shows hosted by organizations like the National Minority Supplier Development Council and the Women’s Business Enterprise National Council of which they are members, and by hosting their own trade shows, says Brian Tippens, manager of HP’s Global Supplier Diversity Program. According to Tippens, the program spends more than $1 billion on minority owned, women-owned and veteran-owned businesses in the U.S. per year.

Once they’re given the spotlight, entrepreneurs can shine simply by avoiding one very common mistake. “All too frequently small businesses come to HP and say, ‘Hey, what can I do for you?’ rather than saying, ‘This is what I can do for you. I know what the competitive landscape looks like, I know how I stack up in comparison to my competitors, I know how I can add value to your enterprise,’” says Tippens. “At the end of the day, it doesn’t matter if you’re small, minority- or women owned. If you can’t add value to the supply chain, you can’t do anything for HP.”

In order to sweep a corporation off its feet, entrepreneurs should be prepared to roll out the red carpet if so desired–even when working within the constraints of a small-business budget. Knowing that a job well done would pay off in the end, Moo-Young went out of her way to over-deliver on the HP contract, assigning 12 people to the project even though the initial proposal only called for one. She explains, “You have to figure out creative ways to create that kind of importance with the customer.”

Sara Wilson is a writer in New York City.

Are you thinking about government contracting? Are you in the process of competing for a government contract? Have you already landed a government contract? Whatever your level of experience with government contracts, a Procurement Technical Assistance Center can help.

The 93 nonprofit PTACs nationwide provide an invaluable source of information for small businesses looking to expand their knowledge of government contracts. Last year, 99,000 contracts totaling over $14 billion were awarded to small businesses that are PTAC clients.

The centers serve as a liaison between government organizations and the small-business contractor community. Their purpose is twofold. PTACs help small businesses expand their market and obtain more contracts. They help government agencies reach their quota of small-business suppliers, while providing them a wider variety of competitive bids to choose from.

Congress authorized the Procurement Technical Assistance Program (PTAP) in 1985. to help expand the number of small businesses contracting with local, state have opened throughout the country in cities, on college campuses, and in government buildings.

The United States is split into 10 PTAC regions so that programs can be tailored for different geographic areas and demographics. While the services and resources PTACs offer may vary depending on location and the needs of their surrounding areas, each center is well equipped with trained and experienced professionals offering the latest, up-to-date information. Services offered at most locations include marketing (ranging from developing a brochure or presentation to an entire marketing plan), helping with pricing strategy, contract proposals, accounting and more.

For beginners, procurement professionals at PTACs can help you learn the steps behind the necessary registrations and certifications, and can help you become familiar with the time-consuming process of bidding on a contract. For those with prior contract experience, PTACs provide a range of resources ranging from networking seminars to one-on-one consultations. Small businesses can also reach out to PTACs for follow-up assistance even after a government contract is secured.

PTACs primarily aim to fill contracts for the defense industry, since the PTAP program was first administered by the Defense Logistics Agency, part of the Department of Defense. However, a range of other areas within the government now use clients from PTAC as well.

If you’re considering entering government contracting, PTACs can help you determine whether federal contracts are a good untapped source of business, or whether you’re better off focusing on other markets.

For more information on Procurement Technical Assistance Centers and how to find a location near you, visit www.aptac-us.org/new/.

Cassie  Kreitner is a sophomore at Syracuse University majoring in magazine journalism and marketing. Search the Web: Syracuse University Search News.

Whether you’ve already launched a business or are just thinking about it, the odds of long-term success are against you! How do the survivors successfully identify, attract and keep good customers? What’s their secret?

Whether you’re just setting up shop or already have your business off the ground, you need marketing strategies that get new customers in your door and keep them coming back. The following steps will help your business not merely survive— but thrive.

1. Profile your customers. Who are your most valuable customers, and what do they want? While it’s important that you understand the products and services that you offer customers, it’s even more significant to understand what your customers value and why, so you can fulfill their needs. Don’t assume you know; ask them.

2. Play 20 questions with your clients. Imagine that your five most important customers are sitting in a room with you. What questions would you ask them about their purchases, their needs and interests, and the factors that influence their decision-making processes? Compile a list of 20 questions that will help you define your customers.

3. Keep your friends close but your enemies (i.e., competitors) closer. Identify several companies that offer competitive products or services. Discover what their benefits are to potential or current customers. Now compare your message, value proposition and target audiences. Make sure you can answer the question, “What sets you apart?”

4. Identify partners that support win-win relationships. What do you expect from a partner and how can it contribute to your growth? Can a partner’s strengths be leveraged to empower your business? A strong marketing alliance can reduce risk, share costs and improve time to market, so choose carefully.

5. Find out if perception is reality. How do your customers and prospects perceive you? Branding is the impression you leave through every customer touch point and involves more than a nice logo or cool tagline. Everything you do has to incorporate your message, because if you dilute it in any way, you won’t be sending a clear definition of the value you provide.

6. Prepare a strong elevator pitch. Ever find yourself in a room with a key prospect and you couldn’t succinctly explain your business to him or her? Perhaps you rambled on, never getting to the point, or you froze up. A 30-second elevator pitch will help you whet prospects’ appetites and get them interested in learning more.

7. Align marketing programs to meet sales goals. Sales and marketing have to work together to support growth. Develop a marketing program based on how many sales leads you need to generate and how long that process will take. Be proactive in planning your marketing strategy so it generates critical bottom line sales results.

8. Harness your passion as a strategy. Even the most successful companies have their share of ups and downs. How will you use your passion to get through the rough patches? List 10 reasons why you feel passionately about your business. Post this where you’ll see it every day to remind yourself why you’re going to work each day (even if that’s just down the hall). These 10 reasons will keep you motivated on the good days as well as the bad ones!

Beth Goldstein, author of The Ultimate Small Business Marketing Toolkit, is president of Marketing Edge Consulting Group (www.m-edge.com). She has more than 22 years’ experience in sales and marketing, teaches at the Boston University School of Management and is the instructor for the InnerCity Entrepreneurs business growth program. She can be reached at bethg@m-edge.com or 508-893-0976.

By Julie Moline

Kermit the Frog may have lamented that it’s not easy being green, but suppliers of environmentally responsible products and services are finding that there has never been a better time to be green.

Companies large and small, colleges and universities, nonprofits and NGOs, along with government agencies, from the federal government to the pokiest of local municipalities, are making concerted efforts to adopt procurement strategies that give preference to environmentally sound products and practices. The interest in all things green is sweeping, from the bulbs in light fixtures and the paper in copiers to the vehicles in fleets and the computers on every employee's desk. These organizations’ objectives are far-reaching, too, beginning with a desire to be responsible stewards of the planet and including the need to save financial and other kinds of resources—time, natural, human. At some organizations there’s even a willingness to rise above the lowest-price at- all-cost mentality, allowing buyers to purchase certain green products even if they’re more expensive than conventional ones.

Buyers have become so sophisticated in their green procurement efforts, in fact, that they’re considering the environmental track record of every company in their supply chain when they choose vendors. That means there’s a focus not just on whether a supplier offers a green product, but also on whether it exhibits green best practices in manufacturing and distributing that green product.

The Private Sector
Corporations are looking at ways to green up their consumers, too. General Electric, BP and DuPont all have programs that seek to reduce their and their customers’ environmental impacts. Wal-Mart has stepped up as an unlikely leader, using its ubiquity and purchasing power to educate and enlighten customers on the benefits of energy-efficient and nontoxic products. That initiative, called Sustainability 360, began last year, and also included a summit bringing together suppliers to figure out ways to move away from using nonrenewable energy in manufacturing the goods that Wal-Mart sells. One quick result of the summit was an agreement by manufacturers of laundry detergent to produce more concentrated formulations. That offers a triple benefit: It reduces packaging, lowers the cost of shipping, and produces fewer emissions during transportation.

Philips Electronics has also been a leader in encouraging its suppliers to better their environmental track records as it works to boost its own energy efficiency, water conservation and responsible manufacturing. (It is seeking to reduce or eliminate hazardous substances such as lead and mercury used in the manufacturing process). For two years in a row, Philips was ranked the top-performing company in its sector (cyclical goods & services) by the Dow Jones Sustainability Indexes. “We’re proud of this achievement,” says Barbara Kux, chief procurement officer at Philips. “But besides what we’ve been able to accomplish internally, we’re also looking at our entire supply chain to deliver an even greater impact.” Suppliers must agree to commit to sustainability and ethical practices to continue doing business with Philips, she explains. Philips, which is interested in helping vendors meet its own green criteria, created self-assessment tools so suppliers could follow Philips’ example. Beyond that, regular audits, using internal and external auditors, nudge suppliers toward compliance. (Noncompliant companies, Kux says flatly, are rejected by her organization.)

Another area where there is significant opportunity for green suppliers is in construction. The quick embrace of green building has led to an explosion of newly built and/or retrofitted buildings that consider every conceivable detail that could be made green: in the structure itself (construction materials), the interior design (green flooring, furniture and fixtures), maintenance (cleaning supplies and paper products), heating and cooling (alternative energy sources, insulation and coated windows), lighting (energy- efficient fixtures/bulbs and skylights), water use (restricted flow devices), and landscaping (green roofs, xeriscaping and composting). LEED certification is the ultimate objective; along the way, buyers are looking for recycled materials, from lumber to concrete to paint, and for supplies that come from renewable sources (upholstery fabrics made from soy rather than petroleum, hardwood flooring made from bamboo).

In Portland, Oregon, one of the most environmentally savvy cities in the U.S., green purchasing case studies are posted on the city website as a way to share its experience with the quality, price and performance of the green products it’s testing out. You can read about Portland’s experience with recycled and extended-life antifreeze in city owned vehicles, vegetable-based inks, retreaded tires, rerefined motor oil and solar-powered parking meters.

Portland, like many cities, also gives preference to small, local, and women and minority-owned businesses in its quest to be green. The vegetable-based ink it uses is supplied locally by Great Western Ink. Exterior latex paint from MetroPaint, another local organization, is consolidated, meaning it’s sourced from the city’s hazardous waste collection program, filtered and blended with other discarded paint. This process is far less resource-intensive than manufacturing new paint; reusing 10 gallons of latex paint saves 1,060 kilowatt hours, enough energy to power the average Oregon household for a month, the city claims. And since recycled paint involves minimal processing, no new VOCs (volatile organic compounds, a pollutant that can cause health problems) are produced during its formulation.

The Public Sector
The government is a voracious consumer—and is probably the single largest purchaser of green products in the nation, if not the world.

The government’s efforts to buy green date back several decades, but became formalized in 1997, when Federal Acquisition Regulations (FAR) were enacted to reflect the government’s preference for environmentally sound and energy efficient products and services. An affirmative procurement program was established, favoring items that contained the maximum “practicable” content of recovered materials. The choice of wording allowed some discretion on the buyer’s part, allowing him or her to balance availability, cost and performance in a purchasing decision.

More recently, the FAR issuing agencies amended their procurement rules to complement the Energy Policy Act of 2005. The amendment now requires all federal acquisitions of energy-consuming products and all contracts for energy consuming products to be

ENERGY STAR rated or Federal Energy Management Program (FEMP) designated products. Products in either case are in the upper 25 percent of energy efficiency in their class.

In January 2008, NASA, the Department of Defense and the General Services Administration announced they were requiring all new computer purchases to meet Electronic Product Environmental Assessment Tool (EPEAT) standards as well. These standards cover everything from energy efficiency to the level of toxic materials used in manufacturing to the recyclability of components. The three departments join the Department of Energy, the earliest adopter of EPEAT products. The DOE has integrated

EPEAT into agency requirements and purchased more than 10,000 EPEAT computers, valued at more than $10 million, in fiscal 2007.

Not surprisingly, the Environmental Protection Agency has acted as a lead agency in developing green purchasing policies and programs. One of its most sweeping achievements is Environmentally Preferable Purchasing (EPP), a practice for buying products and/or services that have a less impact on the environment and human health than competing products and services that serve the same purpose. The website (epa.gov/oppt/epp) is a massive clearinghouse of information, tools, tips and best practices in EPP.

The idea behind EPP was not only to help federal buyers buy green and contractors to sell green, but to use the federal government’s enormous buying power to stimulate market demand for green products and services in the private sector as well. Although it’s geared mostly toward the consumer (government and otherwise), there are several areas on the EPP site that will help vendors understand green purchasing requirements, and find the information on standards and requirements that they’ll need for bids. Several sample contracts are posted, covering everything from recycled paper and copiers to hydraulic fluid and insulation made out of recycled denim. There are also links to green contract language and specifications used by federal and state governments and others to buy environmentally preferable products and services. Also worth a look is EPP’s Promising

Practices Guide (epa.gov/oppt/epp/ppg/toc.htm), which includes 16 success stories highlighting how government agencies have successfully incorporated environmental concerns into the purchasing process.

A tool called the EPP
Assistant helps buyers analyze products from cradle to grave so they can prioritize their EPP efforts by purchase type. The tool, developed as a joint venture between the EPA and the Texas Commission on Environmental Quality, lets buyers drill down to a granular level; they’ll be able to see the relative environmental impact of each commodity, and compare two different purchasing scenarios to determine which offers the best outcome.

Interestingly, the creators of the EPP site are especially sympathetic to small and midsized businesses, and acknowledge that many SMBs have difficulty navigating the complex and often arcane rules of government procurement. Accordingly, the site has an excellent FAQ section, an entire area called “information for vendors,” details on preference programs for small, minority- and women-owned small businesses, and the email addresses and phone numbers of EPP experts at each agency.

Many major government agencies and individual states have their own dedicated green purchasing websites; for example, The Department of the Interior’s, called Greening the DOI, can be found at doi.gov/greeningnew; and the state of Massachusetts has an in-depth EPP microsite on its main mass.gov site.

With so many tools to help you, and so much demand from both private sector and public sector buyers, now is the time for small businesses to start seeing green and reaping the many rewards of being environmentally friendly.

Julie Moline is a freelance writer, editor and editorial consultant in New York City.

By  Mark Amtower

If you’re reading this, I’m assuming that you currently sell (or want to sell) to the government, whether via GWAC, GSA Schedule or an open market (micropurchase) approach. (If you do not have any track record in selling to the government, go to GovernmentExpress.com, click on “Resources,” and spend a few days clicking on the links there. This web site is a tremendous free resource for the novice—and even for the experienced contractor, because in this market, the learning doesn’t stop.) Here are a few facts to put the potential of the government market in perspective:

• The U.S. government market (federal, state and local) represents over 25 percent of the GDP. If you add in education and health care, it comprises one-third of the GDP.
• There are over 87,000 governments in the U.S when you include the feds (1), states (50), territories (5), counties, school districts, townships and municipalities, special district governments (like transit authorities) and Native American tribal nations.
• There are over 20 million full-time government employees in the U.S. The Bureau of the Census reports that there are 151 million full-time employed adults in the U.S., which means that more than one in eight employees in this country works for a government or school district. Combined, these activities purchase every imaginable business product and service, as well as some consumer products and services.

In the business-to-government (B2G) arena, we deal in the “T” word—a trillion dollars spent annually— and it grows each year!

So, you want to market to a niche audience in the biggest business arena anywhere. Where do you start?

The first thing you have to understand is that this market, like any other, is driven largely by relationships: who you know, how you know them, and what they think and know of you. Once this process is started, you may have the basis for success.

The second thing you have to know: This is a slow-moving market, and no one makes a big hit quickly. Market share grows very slowly here. The third thing you need to know is that not all traditional B2B marketing methods work well here. Even if they do work, they may need some tweaking to conform to the rules and regulations (such as government ethics standards) that apply.

Here are the marketing methods most widely used to sell to the government—plus my take on the pros and cons of each, based on my 25 years in this market.

Marketing That Works
Developing an integrated marketing campaign to reach a specific government audience is predicated on many things, but mainly two: how they buy, and how they gather information. As my friend Fred Diamond of Diamond Marketing (www.FredDiamond.com) says, marketing that does not support sales is a waste of time. So make certain your marketing plans are aligned with your company’s sales goals.

SPACE ADS are the major traditional method of getting your message out to an audience. As there are many publications that target government audiences (Federal Computer Week, Government Security, Governing, Government Product News and many more), there are many places one can advertise.

There are some problems with space advertising, though. First, it is expensive, especially when you consider that space ads work only when you buy several and run them over time. According to research in the annual federal buying study by Market Connections(www.marketconnectinc.com), space ads are not that effective in the government market.

DIRECT MAIL still works in the government market, but with several caveats. In Washington, DC, the mail is still irradiated due to the anthrax issues a couple years back. This not only delays the mail, but makes packages less than attractive when they finally get through.

Mailing to regional offices has a better chance at being delivered and being effective–if you are targeting the right people with your mailer. Catalogs are still popular with both mailers and recipients, if they are targeted to the right people.

NETWORKING: We know from experience that face-to-face contact works. Selecting the right special interest group (SIG) or association to network within is critical. There are many to choose from, and often these forums have both private-sector and public sector members. The best way to determine which group you should join is to ask your customers which groups they belong to, and find out if contractors can join.

SEMINARS & EVENTS: Another way to get valuable face time is to host your own seminar or briefing. As these happen frequently any major city, there are a couple of ways to get attention and attendees for your event. The first way is to partner with another company, association, SIG or publication to publicize it. Another way is to make it more convenient for attendees by hosting a webinar or teleseminar. While there is no face-to-face during the actual event, you can offer those who attend and need more information a visit from one of your salespeople. There is much less cost associated with a webinar or teleseminar, and attendance should be higher.

EMAIL: Without a doubt, this is the most popular method of reaching audiences in recent years—but does it work? Government officials find email as annoying as everyone else does, and they are more likely to receive more of it–until the spam filters kick in. Government spam filters are set by the agency webmasters and predicated largely on two things: the amount of email coming through from a specific ISP and the time window in which that occurs. For instance, the webmaster may say that any email from a single ISP exceeding 150 emails in a 90- minute window triggers the filter. Spam does not work here. And if you are on any government contracting list, you have surely received emails from those offering the Instant Roadmap to Government Success via an email list of your buyers. Do not, under any circumstances, buy and use this stuff.

Reputation Matters
If you want credibility in the government market, you get it in only three ways: experience (reputation), speaking at key events, and being written about in the industry publications relevant to your audience.

PUBLIC RELATIONS: There is a credibility that comes with being in an article that you can never get from ads. Reporters are perceived to interview only experts, so if you appear in an article, you are obviously an expert. Selecting the right PR firm or getting out there and meeting key editors and reporters yourself is the only way to accomplish this. I have been quoted in several government trade publications, business magazines and other publications, and I can tell you this takes lots of work and lots of trust from editors and reporters. Once these relationships are established (note the “R” word again), however, you will be quoted with some frequency.

SPEAKING AT EVENTS: Speaking at an event often requires being an exhibitor, but not always. You must contact the event at least six months prior to the conference date(s) and ask about speaking opportunities. Have a one-page bio sheet (pdf format is good) prepared with your photo, brief bio and previous speaking engagements you have done.

A good way to break in to speaking is to offer to be a last-minute replacement speaker and/or a last-minute panel replacement speaker. All conferences have last-minute cancellations. Contact the event producer again 60, 30 and 10 days out from the event to remind them you are available as a replacement. Make it as easy as you can for them to select you.

SALES REPRESENTATIVES: Sales reps visiting government offices are important components of any marketing effort, and they must go armed with enough marketing and sales collateral to cover any contingency. Work closely with your reps to understand their needs and develop whatever they need to go bring home those sales.

CONFERENCES & TRADE SHOWS: One of the best ways to increase face time is to exhibit at industry conferences and trade shows. There are too many events all over the country every week for you to be at all of them. So you pare down the list two ways. First, ask your customers which events they attend. These go on the “possible” list.

Second, see if the event producer has a history of doing events in this market. After 9/11, many fly-by-night companies emerged to offer “exclusive” events with “key government decision makers.” My experience is, the more adjectives used in the promotion, the less likely the event is to deliver. Several companies also employ high pressure telesales to get exhibitors and sponsors. Some industry associations, like AFCEA (afcea.org) and ACT/IAC (actgov.org) have long track records producing events. The Federal Business Council (fbcinc.com) produces over 100 events annually and has been doing so since 1976. Select the events you attend and exhibit at carefully.

WEB SITE: The most important item on the list is your company web site. In order to compete successfully in this market, you must have a web site that “speaks government”–that uses the language of the public sector and understands and treats this market as separate from the business world. Government is about delivering service to citizens, accomplishing missions mandated by public law, and keeping our country safe. If your web site does not address these issues, you will never maximize your market share.

If you do all of the above correctly and manage your relationships well, you will start to get the much-desired colleague referrals. These are worth their weight in gold, as they cannot be purchased and they are coming from people that government buyers respect and trust. Now, you are well on your way to achieving success in the biggest market in the world.

Mark Amtower, founder of Amtower & Company, is one of the best-known marketing consultants in the government market. His web site, FederalDirect.com, is one of the most visited pages in the government industry, and his book Government Marketing Best Practices (GovernmentMarketingBestPractices.com) is in its fourth printing. Every month tens of thousands read his enewsletters and books, listen to his radio show “Amtower Off Center” on FederalNewsRadio.com, and attend conferences and events to hear him speak. He consults with a limited number of CEOs each year. He can be reached at Mark@FederalDirect.com.

By Tim Keane

Every one of us whose company has sold to large customers has faced this issue. It’s usually some form of waiting for an order. The customer (almost always a middle manager) has told you that you are the selected vendor. It’s just a matter of a “bureaucratic” step or two, and things will be great.

In the meantime, of course, you wait. And since the order is large, quite a bit depends on it.

The inequality in your relationship with the elephant often causes you to hesitate about doing what you know you should do. Each time you talk to your contact, you get reassurance—and, after a couple of times, a little testiness. So you wait. After all, you do not want to lose the order because of a perceived pushy attitude on your part. So you wait.

And, more often than not, you get a very rude surprise. . .at the very last minute. “I’m really sorry,” says Marvin Middle Manager. “Our CEO/CFO/COO/CTO has decided to cut back on XYZ and, well, we’re going to postpone this order until next month/quarter/ year.”

How can you protect yourself from this rude awakening happening again? The next time you’re trying to sell to the elephant...

1. Realize that when Marvin Middle Manager tells you, “Everything is great,” he believes it. At least, he believes it 90 percent. Be positive and sympathetic when he explains the situation to you.

2. Realize, however, that he’s seen orders like this cancelled by his superiors before. Ask him directly about the last time he saw a similar order cancelled and why. This can give you some insights to help you avoid the same fate.

3. Listen for the sound of office politics. If there are opposing camps surrounding this purchase, don’t assume your contact has won the battle just because he tells you he has.

4. If the specs change, worry. I recently saw an “order” coming that Marvin had specified in writing. “It just has to light up and blink,” he said. No problem. A month later, there was a whole lot more than that happening. New requirements. Competing camps. Non-cash alternatives.

5. Be positive with the client, of course. But plan— hard and severely—for the “Sorry, but...” phone call. Don’t bet the business on getting the order, or you will leave yourself no alternative but a very painful one.

6. Don’t tell Marvin how badly you need the order. He probably can’t do anything about it, and he may use this information to save face with his boss in a way that can hurt your reputation. (“Yes, Mr. Big, I now agree with you—I don’t think they are as financially sound as we had hoped.”) It’s not very nice, but it happens more frequently than you’d like to think.

7. If you have a client who gives you straight answers, doesn’t hedge and always delivers, do everything you can for them—above and beyond the call of duty. They are a pearl of great price.

Tim Keane is the Entrepreneur in Residence at Marquette University in Milwaukee.

By Dyanne Ross-Hanson

Experts and laymen agree that one constant of successful companies is a loyal, motivated group of key employees. Who are these key employees? They behave much like you, the business owner. They think like you and they act like you. They typically ask for more challenges and opportunities. They want to prosper and grow as the company does. These qualities not only contribute to corporate success, they are also a key component to the business owner’s successful exit strategy.

You may be wondering what motivating your key employees has to do with exiting your business. Should you decide to sell your business to a third party, you’ll discover that potential buyers place significant value on the strength of your management team—if that management team can be expected to remain after you have left the business. Similarly, if you contemplate selling the business to family (or to employees), the amount you’ll receive for the business after you’ve left is entirely dependent on the strength of your remaining management team. In short, capable management remaining with the company is the key to getting top dollar for your business.

One of the many factors involved in creating, motivating and keeping key employees is the creation of a properly designed incentive plan for key employees. Successful plans share four basic elements:

First, the plan is specific. Employees know, in advance and in writing, what standards need to be met to receive the incentive. These performance standards need to be measurable, i.e. company net income or revenue levels. The key employee earns the incentive bonus based on this performance standard, which when attained, increases the value of the business. This element is critical in a properly designed incentive plan.

Second, the incentive is substantial. For many years, a bonus of at least 10 percent of annual compensation (either in stock or cash), was the minimum necessary to motivate a key employee. But today, the minimum potential incentive has risen to 25 percent of annual compensation, and sometimes more.

Third, the plan handcuffs key employees to the business. Employees are motivated to stay with the company. If the employee severs employment before he or she is “fully vested,” he or she forfeits at least part of the deferred benefit.

Fourth, the key employee plan needs to be communicated in writing. To be successful, key employees must understand exactly how the plan works. It is best to present the plan face-to-face, with advisors present to answer any questions.

Having identified the elements that make up a successful incentive plan, you (as an owner) and your advisors must determine whether a stock-based plan or cash-based plan (or some combination thereof) will best motivate your key employees and cause them to stay with your company.

Equity-Based Plans
Providing the opportunity for stock ownership is one of the most powerful motivating and retaining factors a closely held business can offer to a key employee. It ties them to the company by making them part of it. It often requires them to pay for ownership.

This demonstrates their dedication and commitment to the company. Stock ownership also provides strong incentive for increasing the value of the company. These are all great reasons for transferring stock.

I would be remiss, however, if I didn’t mention the “not-so-great” aspects of transferring stock to employees. Even a minority position carries with it significant rights. Shareholders enjoy more than the right to share in the growth of the company. They also enjoy the right to access company books and records, the right to be informed about the financial condition of the company (including your salary and “perks”) and often, a right to be consulted and given the opportunity to vote on major company decisions including future sale of the business.

Cash-Based Plans
Most key employee incentive plans are cash-based rather than ownership-based. Or they take the form of rights to appreciation in stock value rather than stock itself. The primary cash-based incentive plans include:

• Non-Qualified Deferred Compensation plans (NQDC);
• Phantom Stock plans and
• Stock Appreciation Rights (SAR) plans.

The NQDC plan is a promise to pay benefits in the future. When contributions are based upon performance standards, funding the plan is often tied to profitability. Contributions are flexible and carry no minimum or maximum limits, unlike most Qualified Retirement Plans. NQDC plans can be completely discriminatory. Owners can vest future benefits or make them totally contingent upon staying with the company for a designated period of time. Forfeiture provisions are commonly part of the plan design. Benefits awarded to a key employee under a NQDC are not taxable until received. It is often advantageous to structure the payout over a multiple-year timeframe. This reduces the employee’s tax obligation and prevents giving a vested employee “seed money” to start a competing business.

Phantom stock offers key employees something that looks like stock, grows in value like stock and can be turned in for cash just like stock, but is not stock. Phantom shares corresponding to shares of stock are allocated to the participating employees’ account. The value of the phantom stock increases as the true stock value increases. When the employee terminates employment, the company pays him or her the per share equivalent value for each of the vested Phantom shares in his or her account.

A Stock Appreciation Rights (SAR) plan is similar to the phantom stock plan in that the value of benefits in the SAR plan is tied to the value of the corporation’s stock. Unlike phantom stock, the employee under a SAR plan is only entitled to receive the appreciation on a certain percentage of SAR units valued against the corporation’s stock, not the entire principal value of the stock. In all of these cash-based incentive plans, success depends on the careful design of vesting, forfeiture, payment schedules and funding devices.

Motivating key employees is critical to the overall success of your business. Not only do they represent your greatest business asset, they likely will be sending you the checks to support your retirement years.

Dyanne Ross-Hanson is the founder of Minnesota-based Exit Planning Strategies, LLC. Her company helps business owners achieve their financial and exit planning goals by making more informed, more strategic, and more tax-efficient choices. She can be reached at drh@exitplanstrategies.com.

By Chris Penttila

Walk into Fluid’s New York City studio, and you’ll see the firm’s 20 employees hard at work on music and editorial post-production projects for companies including eBay, FedEx and Sony. The company’s workload generates more than $6 million in annual sales. But on any given day, Fluid’s employees might also be doing pro bono work to help a nonprofit organization. The company’s pro bono projects have included producing post-9/11 public service announcements for the New York City mayor’s office and working on ads for the Alzheimer’s Foundation. “Our skill set allows us to do all kinds of promotions, ads and things like that,” says co-founder David Shapiro.

Fluid is just one company where employees—either individually or as a team—use their specific job skills to help a nonprofit entity. “There’s a lot of buzz around skills-based volunteers right now,” says Jason Willett, communications director for VolunteerMatch.org, an online nonprofit in San Francisco that connects nonprofit organizations with companies.

Large companies pushing the skills based trend want more from their employee volunteering efforts than good PR; they see volunteerism as a recruiting and retention tool and a way to groom company leaders. They’re also looking for better ways to measure the impact of their philanthropic efforts. “More and more businesses are tying their philanthropy—both their charitable donations and support for workplace volunteering—to their strategic business goals,” says Robert Goodwin, CEO of the Points of Light Foundation, a Washington, DC, organization focused on nationwide volunteering. “It’s not simply random philanthropy but is tied to a larger set of objectives.”

Skills-based volunteering taps every level of expertise a company has to offer. “You can go to the highest level of professional skill development, and volunteers [are] needed for that,” Willett says. “There’s especially a need for [highly specialized volunteers] because those are typically the most expensive skills to pay for professionally.” Meanwhile, the Deloitte/Points of Light “Volunteer Impact Study” done in 2006 found that 40 percent of volunteers actively look for opportunities to use their workplace skills.

Shapiro sees skills based volunteer projects generating direct benefits for Fluid, such as publicity and greater artistic freedom. But he warns entrepreneurs to manage the time investment, because pro bono projects have a way of expanding. “In the heat of the moment of doing something good, you can create a logjam in your company,” he says. Fluid tends to take on small, local projects to keep things manageable.

Want to get in on the trend? Start thinking about in-house expertise that could transfer to a nonprofit setting and the benefits it could generate. Ask employees for their ideas, too. “They might know about needs in the community that aren’t even on your radar,” Willett says. Be careful how you approach nonprofit organizations, however, because it can be hard for them to create specific opportunities on the spot. “Be sensitive to what the nonprofits are actually looking for,” Willett says. It could take a while to get an effective skills-based opportunity up and running. Once you do, get regular feedback from employees and the nonprofit organization so you can track results.

The impact of the skills-based trend will also depend on how well nonprofit organizations attract the help they need. Only 12 percent of nonprofit organizations in the “Volunteer Impact Study” matched projects to volunteers’ specific workplace skills. For employers who find the right fit, however, the payback can be compelling. “There’s a good feeling,” Shapiro says, “[in] doing something in your day that helps people, as opposed to just making money.”

Reprinted from Entrepreneur magazine, ©2006.Chris Penttila is a freelance journalist in the Chapel Hill, North Carolina, area.

By Dennis Stauffer

Alright, you’ve gotten the message that to compete in today’s global economy, you need to be innovative. That part of the discussion is over. If you’re not already persuaded, stop reading now.

You’ve also heard about “the creative class” and the need to become the sort of place where talented, creative people want to work, but you’re still a bit skeptical. You wonder: Exactly what sort of “creative” people are we talking about? Moody, artistic types? Flighty “idea people” with little sense of the practical and relevant? You reason quite correctly that “creative” can be used to describe many different personalities. Yes, you need people with great new ideas, but those ideas need to be relevant to your business and all the hard realities that implies. You want people who are creative, yet practical; who are doers, not just thinkers; who understand that creating real value in the marketplace and capturing some of that value are crucial business objectives.

Those are the kinds of innovative people you need to find, not just the merely creative. So, how do you do that? How do you attract employees who will help drive your future growth, while screening out those who would “rock your boat” just because they think it’s fun? There are several answers to that question, and in many respects they are surprisingly old–fashioned.

Provide meaningful work.
This is a much bigger deal than many business owners realize. Very few of us go to work solely to earn a paycheck. Sure, we want to be paid, and fairly, but we also need to feel that we’re making a contribution to something beyond ourselves, that what we do matters. Research, going back more than 20 years, demonstrates that this is especially true of creative work. People are most creative when they enjoy the work itself and find intrinsic satisfaction in it. That can’t happen in an environment in which the larger purpose is unclear or discounted, or where employees feel no personal connection to a goal.

The bottom line is always important, but if that is the only objective you can point to, you’re not just failing to attract innovative people, you’re driving them away. There’s also some simple logic at play here: If you want people with ideas that connect to your business, you have to first ensure that your business connects with them.

Be flexible and challenging.
Do your people have real autonomy in how they do their work—including sufficient time to consider better ways of doing it? If everything’s nailed down and carefully monitored, you’re squeezing out everyone’s creative impulses. My dad, who worked for decades in retail management, used to say, “There are two kinds of bad employees: those who won’t do what they’re told, and those who won’t do anything else.” He wasn’t talking about managers, but he could have been, because managers set the tone that allows (or fails to allow) for that initiative. Creative people crave challenging opportunities to stretch themselves and use their wits. Are you leaving room for the “anything else”?

Get serious about cleaning up your “messes.”
It’s time to deal with the manager who berates people instead of coaching them. Control freaks? Rein them in. Hidden agendas? Expose them. Information bottlenecks and poor communications? Fix them. All those personnel and relationship issues you’ve been putting off dealing with because they’re not urgent to your business objectives? Think again. In the new economy, the so–called “soft” skills are the new “hard” skills.

Extensive research has found that employees can readily identify good and bad working environments, based on characteristics that measurably impact creativity. Trust, transparency and a low level of conflict are among those essential characteristics of an innovation culture, not to mention the sort of working environment we are all entitled to. When those characteristics aren’t present, your most capable and creative people are the first to recognize such problems—and, if those problems are not addressed, they’re the first to leave. Dysfunctional behavior is something you can no longer afford. Make everyone accountable for eliminating it.

Relax and laugh.
Seriousness does not equate with productivity. During the boom days of the ’90s, much was made of companies bringing in foosball tables and basketball hoops, and building creativity centers. Such steps may or may not be appropriate for your organization, but what’s always appropriate is a healthy sense of humor and a little playfulness. It energizes people, especially those who are creative. The Harvard Business Review cites research showing that highly effective managers use twice as much humor as their average counterparts.

Forgive.
Creativity and innovation are about trying things that haven’t been done before. Inevitably, not all attempts will succeed, so you have to allow people to fail. When you come down on someone for trying a new idea, you’re sending a powerful message to them and everyone else: “Don’t do that again.” Result? They won’t. You can’t eliminate all risk from new ideas, so focus on managing that risk by setting appropriate boundaries and implementing thoughtfully, leaving some room to experiment and even play a little. You want people taking thoughtful risks, so create an environment that makes it safe to do so.

Get going.
Does this sound too “touchy feely”? It shouldn’t. What makes a great working environment hasn’t changed, but those characteristics now have greater value. They’re needed to attract and keep those individuals who will drive innovation for you. And there’s another benefit, an important one: The same strategies that attract innovative people (and, yes, if you do these things, the word will get out) are strategies that will turbo-charge the creativity of every employee you already have. What’s especially reassuring is that none of these things compromises your business objectives.

Oh, and what about those flighty, flaky types? No problem. This is much too practical an approach. They just won’t connect.

Dennis Stauffer, founder and president of Insight Fusion Inc., works with organizations, associations and global companies to boost their innovation and growth. He’s the award–winning author of Thinking Clockwise: A Field Guide for the Innovative Leader. For more information, go to www.InsightFusion.com or e-mail info@insightfusion.com.

By Ruth King

Atlanta, Georgia, has always been a magnet for people. Its geographic area, moderate climate and transportation advantages have always attracted residents and visitors to the city. From the early 1800s when it was called Terminus (because many different railroads terminated in the center of the city) to today, when it has become a metropolitan area of over 5 million residents, people have been drawn to the city’s genuine Southern hospitality.

Railroads, and subsequently cars and airplanes, were responsible for Atlanta’s exponential growth and its concomitant problems and solutions through the centuries.

Now, the city is proactively dealing with its over 20 percent growth rate since 2000 and becoming a “Best in Class” city.

Some history: Atlanta’s first airport was started by visionary William Berry Hartsfield in 1925. As mayor from 1938 to 1961, he oversaw tremendous growth in the city. As a result, Atlanta slowly became racially divided, with the African-American population in the urban areas and the white population in the suburbs. Atlanta was becoming a city where race was an issue that divided the city and caused it to lose its attractiveness.

In 1969, when racial tension was high, the city’s leaders formed Leadership Atlanta. The organization’s purpose was to foster communication and understanding and to create an environment for different races, cultures, religions and beliefs to work together.

Leadership
Atlanta achieved its goal. It is now the oldest training program of its type in the United States and is the model for many other cities. (Full disclosure: I was a member of the Leadership Atlanta Class of 1991).

Airports and roads contributed to the continued growth and urban issues. When Hartsfield Jackson Atlanta airport was expanded in the late 1970s, then-mayor Maynard Jackson was instrumental in ensuring that at least 25 percent of the work on the $450 million new airport went to minority-owned businesses. This became his legacy: an airport that was completed on time and on budget with white and minority business owners truly working together.

In the 1990s the city experienced more growing pains. The population swelled to well over 3 million people, and the city faced budget deficits and government corruption.

A strong public leader emerged. Shirley Franklin had never run for public office. However, she was instrumental in Maynard Jackson’s term in office, and was the most senior female executive on the Atlanta Committee for the Olympic Games (ACOG) for five years before and during the 1996 Atlanta Olympic Games. In 2003, Ms. Franklin was elected Mayor of Atlanta and began the difficult task of turning around the city and leading its growth once again.

She asked Bain and Company whether they would assist her in determining what a “Best in Class” city would look like. They agreed to assist the City of Atlanta pro bono. In the spring of 2003 Bain and Company began looking at best practices and developing the “New Century Economic Development Plan” (EDP). The EDP was approved by the Atlanta Development Authority in December 2004. The goals that were set were aggressive and not easily achieved.    

In addition, Mayor Franklin had to convince both the public and private sector that the EDP was a worthy goal for Atlanta. She succeeded, and over 50 private, city, county and state organizations banded together to work towards becoming a “Best in Class” city. The chart below shows the goals and results of their efforts to date.

As a result of the New Century EDP, three key initiatives emerged: the Atlanta BeltLine, The Peachtree Corridor and Downtown Development. All are receiving national attention and scrutiny.

The Atlanta BeltLine
The city wants to entice people who are interested in having greenspace and mixed developments to move to Atlanta. As in every great city, increased greenspace is a major driver for economic development. Mixed-use communities are attracted to the linear park and new park acreage. The BeltLine’s park system will be as important as its railroads, streetscapes and other infrastructure in determining the location and concentration of development in Atlanta.

The Trust for Public Land has named the Atlanta BeltLine as one of its top program initiatives. The Trust for Public Land (TPL) is a national, nonprofit, land conservation organization that conserves land for people to enjoy as parks, community gardens, historic sites, rural lands and other natural places, ensuring livable communities for generations to come.

Today, Atlanta ranks near the bottom of U.S. peer cities in available park land. The BeltLine proposal increases greenspace in a connected linear system that would become, in effect, one of the nation’s great regional parks. It is the part of the New Century EDP that has progressed the least since 2004.

The goal is for the BeltLine to add 1,200 acres of greenspace to the existing 700 acres. In addition, the BeltLine will create a linear park to connect 40 of Atlanta’s existing parks.

This is a very challenging goal. However, like the 1996 Summer Olympic Games, this project has captured the imagination of Atlantans and their leaders. The beauty of the BeltLine is that it runs through 45 of Atlanta’s neighborhoods, while also touching areas that are abandoned or underutilized.

The BeltLine’s unique configuration and prime location provides the framework to concentrate Atlanta’s growth for retail and industrial business, as well as housing. As Will Rogers, president of the Trust for Public Land, stated, “This is the most exciting urban greenspace project in any American city.”

At the present time, it is 17 percent towards achieving the goal in 2009.

The Peachtree Corridor
Peachtree Street has always been synonymous with Atlanta and the heart of Atlanta. In the 1800s it was the Terminus. Atlanta’s growth has expanded in all directions from Peachtree Street. The Peachtree Corridor, which encompasses Peachtree Street and some connecting streets and loops, is 14.5 miles in length. For some perspective, it is two miles longer than Manhattan Island. The corridor stretches through the heart of Atlanta, and is the cultural and economic spine of the city. It links many of the city’s attractions, and more than a quarter-million people travel to the corridor every day.

The Peachtree Corridor represents both the center of Atlanta’s existing economic strength and one of the greatest opportunities for economic development and commercial activity. Effectively coordinating, planning and developing the city’s efforts will encourage balanced growth in the corridor and, with other city initiatives, will support increased connectivity in Atlanta.

The Peachtree Corridor Task Force has just completed its comprehensive set of recommendations to Mayor Franklin. The plan includes trolley systems as well as residential, commercial and walking areas.

The recommendations are for a pedestrian-friendly Corridor, supported by a transit system that will promote economic development by encouraging significant new commercial and residential activity. It is modeled after Michigan Avenue in Chicago, the Champs-Elysees in Paris, and many other walking city streets worldwide.

The overall plan is for a 20-year, approximately $1 billion development that brings together public and private money. Although the Peachtree Corridor will not be completed by 2009, it shows the ability of the city to bring public and private sectors together to work toward a common goal that is good for the city and the region.

Downtown Development
Creating and sustaining a true middle class is an important goal of Mayor Franklin, according to Sonya Moste, Communications Director for the Atlanta Development Authority. This requires both housing and job opportunities.

Housing
As part of the New Century EDP, Mayor Franklin established a goal of creating 10,000 units of affordable workforce housing by 2009. To assist in accomplishing this endeavor, the city, the Atlanta Housing Authority and the Atlanta Development Authority have partnered to implement a new $75 million workforce housing initiative for persons and families who desire to reside in the city. The program has already received unanimous support from the City Council, the Atlanta Housing Authority Board and the Atlanta Development Authority Board of Directors, and funding should be available in 2008.

More than 900 housing unit buildings have been approved for the homeless and are in various stages of construction. The goal is to end long-term homelessness and help homeless families stabilize their lives and regain a stake in the community.

The single-family mortgage assistance program is geared toward helping people make down payments to purchase their first homes. It attracts potential buyers who might not have been able to afford a home in the city without the assistance.

The Eastside Tax Allocation District (TAD) Affordable Housing Purchase Program is helping to make home ownership affordable for low- and moderate-income buyers. There are more than 180 homes available within TAD, and since 2006, 24 homeowners have purchased homes.

Other programs are ongoing with the Atlanta Development Authority the Atlanta Housing Authority, and private builders to reach the goal of an added 10,000 housing units for the Atlanta workforce.

Job Opportunities
Job opportunities are also critical for those who seek jobs and those who run businesses.

For job-seekers, many organizations are working toward attracting businesses to the Atlanta area. The Economic Development arm of the Metropolitan Atlanta Chamber of Commerce is committed to creating a high-quality business environment in what the chamber calls “Industries of theMind.”

These are companies that are heavily dependent on intellectual capital, including biotech and other technology-oriented companies, as well as logistics/transportation, computer software and services, and telecommunications companies.

The Chamber’s 2007 goal is to bring 50 new companies and 3,900 new jobs to Atlanta. This will spur a ripple effect that brings the Chamber’s contribution to new job growth to 10,000 in 2007.

For business owners and potential business owners, help is available to start and grow businesses. Metro Atlanta is home to three thriving business incubators and at least one more will be completed this fall.

Major Atlanta universities teach business and entrepreneurial courses as well as offer aid to new and existing business owners. The Small Business Development Centers, with offices at Georgia State University and other locations around the metropolitan Atlanta area, and Georgia Institute of Technology, with its Atlanta Technology