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Saturday, December 27, 2014

Bank Survey


I recently came across an article describing a small business survey you may find useful. The U.S. Bank 2014 Annual Small Business Survey measured the opinions of more than 3,000 small business owners on the state of the national and local economy, general business conditions and challenges, as well as their outlook for 2015, which is trending positive. Here are some of the survey results:

The Economy
In 2014, 56 percent of small business owners said they feel that the national economy is in a state of recovery or expansion, up significantly from 46 percent last year.

Looking ahead to 2015, more small business owners are hopeful about the potential for economic growth. Fewer business owners think the economy will be in recession in 2015 (41 percent), and while fewer think the economy will be in recovery in 2015, significantly more believe the economy will be expanding in 2015 (16 percent) than those who believe it is expanding now (4 percent).

Business Conditions
More than two-thirds of business owners (70 percent) believe their business is in good financial health today, up from 64 percent five years ago. The percentage of those who report higher revenue continues to hover between 25-30 percent, which has been the case since 2010. The percentage of business owners who said they expect revenue to be higher next year dropped significantly in 2013, and increased only slightly in 2014. Those who say they plan to hire, make capital expenses or who have needed to seek financing for their business remains below 30 percent.

Top Issues Facing Small Businesses
Last year, with the fiscal cliff and government shutdown unfolding, more than one in five saw the federal budget deficit as the most important national issue. This year, only 14 percent of owners list it as their top concern, down 8 percent from 2013. While no single issue is top on the minds of owners, healthcare is now tied with the federal budget/deficit as the primary concern, followed by taxes.

Technology
Small business owners nationwide are ahead of the curve when it comes to technology. According to survey, they are more likely than the general population to define themselves as innovators and early adopters of new technology, and mobile capabilities are among the ways they are using it to get an edge. Across the country, 75 percent of small business owners said they have integrated mobile technology into their business strategy, whether through mobile banking, social networking, web design, payments or other uses. Among them, business owners said that offering a mobile-friendly website added the most value for their business.

In addition to looking to new technology to position their businesses in the marketplace, 64 percent of small business owners maintain a social media presence to make connections, find talent or market their business. Those who maintain a presence said that Facebook was most effective, followed closely by LinkedIn.

How does your business compare? Are you positioned for 2015?

 

Steve Koenig, SCORE Counselor


 

Monday, December 15, 2014

Exporting Considerations You Better Know


7 BASIC AREAS  FOR YOU TO UNDERSTAND
The continuing changes in the world marketplace suggests awareness in order to mount the best possible campaign.

I    KNOW IMPORT REGULATIONS IN YOUR TARGET MARKET
Non tariff trade barriers pernicious to market entry.  Ex:  1.    Consumer safety laws in the EU.  2.    Import licenses & quotas in Latin American countries.  3,    Import Tariff valuation - is shipping chgs. part of the applicable tariff?

II    LOGISTICS
Transport facilities locally - food prods. delayed at entry port with total loss due to deterioration.  Check out free zone
facilities.   Ports costs & fees that affect the landed cost to your customer.

III    DISTRIBUTION
Determine if any local gov'ts. have bias toward the USA.   Ex:   Some Middle East countries stigmatize types of prods. that have ethnic issues.   Obviously the full progression of know prods. are moved toward the user need to be understood from wholesale to retail to ultimate destination.   Regional dist. cntrs. are an effective way to enter the market.  Packaging should be consistent with what the local client has had experience with - not radical changes.

IV    CREDIT PATTERS
Know how customary payment is made.   Ex:   60 day delays are considered same as cash.    Or, 180 days from billing date is not unusual.   NOTE:   Learn how to gather credit info on your clients - thru D & B, local refs., other US exporters,  

V    ADVERTISING    TV and magazine publication vary widely due to the demographics of wealth.    Rely on your customer -   some type of co-op.  News papers are widely read & noted.  

VI    LEGAL
Protective measure taken to avoid loss of brand names.   Register it or it may be bought up by a rival.  Know what after sale rights your costumers have.   Prior to any contractual arrangements determine what is involved upon cancellation.
Ex:   In Puerto Rico a contract is a lifetime agreement and can only be cast asunder by the local signee.

VII    STATISTICS
Be aware of your competition.  Where is it coming from.   China?   Or, a local alternative product.

Bottom line:   NEVER agree to any territorial market on the basis of just getting an order.   Every agreement must have an ending date based on mutually agreed performance.


Henry Samuel Certified SCORE counselor;    hanksamuel2@gmail.com

visit us at: www.scoresouthflorida.net

Saturday, December 13, 2014

Product Deficiencies


At best product deficiencies are an embarrassment and tarnish your reputation. At worst they put you out of business! So you must pay attention to this issue even if you do not manufacture the product yourself. Let me cite some examples as reminders:

Auto companies have done such a poor job of dealing with this issue that government agencies have been created to attempt to keep them within bounds, and even that has not been foolproof.

Restaurants and food suppliers often provide food products that make people sick, once again, even with government oversight at some levels.

A man recently purchased some new brand name boxer shorts. The normal boxer short has a fly section that is about 6-7 inches long. These measured about 2-3 inches and the opening started just below the waste band. Think about that for a moment. I do not know many men who would find this opening of much value.

A tour company promises to show customers rare animals in their natural habitat but the animals do not make an appearance.

There are more examples of course. How about those in your business? Have you trained your employees on handling such issues?

 

Steve Koenig, SCORE Counselor


 

 

Monday, December 8, 2014

SCORE Announces Entrepreneur of the Year Awards


At the Annual Luncheon, held December 5th, at Gleaneagles Country Club, in Delray Beach, Florida, Boca SCORE announced the winners of the annual Entrepreneur of the Year awards. They are:

2nd Runnerup: Joseph Riano, President, 3iTechworks, for their innovative Beacon technology,

1st Runnerup: Dennis DeZeeuw, Sustainscape, Inc, for demonstrating rapid growth in revenue and services while providing outstanding sustainable landscaping for Florida residences

Entrepreneur of the Year: Ankit Jain, Pres., Ankit.com,  for the creation, development, and marketing of a host of items, among which his "ear buds" have achieved national distribution, and significantly contributed to sales volume in excess of one million dollars.

In addition to the SCORE Awards, each winner received a personal letter of Congratulation from the Florida Office of Economic Development.

The  annual event was attended by Chapter members,  and also included numerous community and civic leaders

 

Marty Kahn, Score Mentor


 

Sunday, December 7, 2014

The Seller


WHETHER YOU ARE CALLED A VENDOR, A SALESPERSON, A REPRESENTATIVE, AN ACCOUNT EXECUTIVE, A SALES MANAGER, A DIRECTOR OF SALES, A SALES COORDINATOR OR A VICE PRESIDENT OF SALES YOUR JOB IS TO SELL, SELL, SELL, SELL.

GONE ARE THE DAYS OF WILLIE LOMAN AND BACK SLAPPING ROAD SALESMEN. TODAYS SALES EXECUTIVES ARE PROFESSIONALS WHO DEAL PROFESSIONALLY WITH BUYERS WHO ARE EXREMELY KNOWLEDGEABLE AND PROFESSIONAL.

WHAT IS NECESSARY TO BE A SUCCESSFUL SELLER:

- OVERLAPPING OF OBJECTIVES -

     KNOWLEDGE OF BUYERS MOTIVATION AND OBJECTIVES.

     TURNOVER, PROFIT, ROI, CUSTOMER SERVICE.

     UNDERSTANDING MANUFACTURING PROBLEMS.

     CREATING A MARRIAGE OF COMPANIES.

- STUDYING THE MARKET AND THE MARKETPLACE -

     COMPETITION - STORE AND PRODUCT.

     STORES BUSINESS AND BRANDS.

     OTHER PRODUCTS, PRICES, QUALITY AND SERVICE.

- MARKETING OF PRODUCT -

     FITTING INTO THE MARKET.

     GETTING INTO THE STORE.

     PROMOTIONS AND GUARANTEE.

     HELPING THE BUYER DO HIS OR HER JOB.

- INTEGRITY, BELIEVEABILITY, HONESTY, PARTNERSHIP -

     THE COMPANIES SHOULD BLEND AND BE COMPATIBLE.

     SALESPEOPLE SERVE THE NEEDS OF THE CUSTOMER.

- PROPER PLACEMENT OF  ORDERS -

     HONEST ASSORTMENT OF MERCHANDISE.

     CORRECT BREADTH AND DEPTH.

     TEST FOR QUALITY, FASHION AND PRICE.

SELLERS SHOULD PLAY FOR THE LONG RUN PARTNERSHIP.

 

Herb Douglas, SCORE Counselor


 

 

 

 

 

 

 

Saturday, December 6, 2014

Customers Count


I recently came across an article in an airline magazine discussing some results of a survey by Vision Critical, an analytics organization. They outlined the following as crucial to keep people speaking highly of your business:

Annual cost of unhappy customers = $537 Billion

Businesses that claim customer experience as a top priority = 90%

Businesses that deliver excellent customer experience = 3%

Customers who won’t buy from businesses with negative online reviews = 80%

Lost Customers who say companies could have prevented it =81%

 
Is there something you can learn for your business from this?

 

Steve Koenig, SCORE Counselor


 

 

 

 

Wednesday, December 3, 2014

Impact of Property Ownership


Many small businesses rent the property they use, but how many really understand the implications of who owns the property? Do you?

I am aware of two adjacent retail complexes in the same city that have very different ownership issues. In one complex (called “A”) consisting of retail and office space one person owns all the rental units. In the second complex (called “B”), each unit is individually owned, consists of retail, office and residential units and operates as a condominium.  Which of these models would you think is better for the tenant business? After all, the goal of the retail space owner is to maximize income from the space in either model.

Both models have unified rental policies for their complex, “A” because one person owns them all; “B” because there is one condo board that creates general guidelines for unit owners.

“A” gives a prospective retail tenant space options that are or may become available, sets the rent and attempts to insure compatibility among the tenants. The unit owner in “B” attempts to hold on to a prospective retail tenant for his unit only, has to compete with other units in the complex for rent, and does not pay much attention to compatibility among others in the complex. All this makes movement from space to space and landlord to landlord a way of life in “B”.

“A” makes sure the tenants understand the “rules”. “B” hopes the unit owners pass the “rules” on to the retail tenant, leading to potential confusion at best. Legal issues and closed businesses are also a result. In this case it is up to the prospective tenant to seek out the “rules” in advance and stay on top of them over time.

“A” operates like a monopoly within it’s complex, “B” is a competitive market within it’s complex.

When the economy is tough, both complexes have space available.

 
Which is better for your business?

 

Steve Koenig, SCORE Counselor


 

 

 

Tuesday, December 2, 2014

2014 Tax Provisions for Business: A Review


Whether you file as a corporation or sole proprietor here's what business owners need to know about tax change for 2014.

Standard Mileage Rates
The standard mileage rates in 2014 are as follows: 56 cents per business mile driven, 23.5 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

Health Care Tax Credit for Small Businesses
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $51,000 (adjusted for inflation).

Starting in 2014, the tax credit is worth up to 50 percent of your contribution toward employees' premium costs (up to 35 percent for tax-exempt employers). For tax years 2010 through 2013, the maximum credit was 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities.

Year-End Tax Planning for Businesses

While the fate of several business-related tax extenders such as R & D credits, bonus depreciation, and Section 179 expensing that expired at the end of 2013 is uncertain, there are still a number of end of year tax strategies businesses can use to reduce their tax burden for 2014.

Purchase New Business Equipment

Section 179 Expensing. Business should still take advantage of Section 179 expensing this year for a couple of reasons. First, is that in 2014 businesses can elect to expense (deduct immediately) the entire cost of most new equipment up to a maximum of $25,000 for the first $200,000 of property placed in service by December 31, 2014. Keep in mind that the Section 179 deduction cannot exceed net taxable business income. In addition, unless Congress reauthorizes it, the bonus depreciation expired at the end of 2013 and is not available for 2014.

While most businesses follow a calendar year, for those that don't there is an exception to the $25,000 cap that allows those business to take advantage of the $500,000 Section 179 benefit. However, only businesses whose calendar year begins in 2013 and ends in 2014 can take advantage of this.

Qualified property is defined as property that you placed in service during the tax year and used predominantly (more than 50 percent) in your trade or business. Property that is placed in service and then disposed of in that same tax year does not qualify, nor does property converted to personal use in the same tax year it is acquired.

Note: Many states have not matched these amounts and, therefore, state tax may not allow for the maximum federal deduction. In this case, two sets of depreciation records will be needed to track the federal and state tax impact.

Please contact our office if you have any questions regarding qualified property.

Timing. If you plan to purchase business equipment this year, consider the timing. You might be able to increase your tax benefit if you buy equipment at the right time. Here's a simplified explanation:

Conventions. The tax rules for depreciation include "conventions" or rules for figuring out how many months of depreciation you can claim. There are three types of conventions. To select the correct convention, you must know the type of property and when you placed the property in service.

The half-year convention: This convention applies to all property except residential rental property, nonresidential real property, and railroad gradings and tunnel bores (see mid-month convention below) unless the mid-quarter convention applies. All property that you begin using during the year is treated as "placed in service" (or "disposed of") at the midpoint of the year. This means that no matter when you begin using (or dispose of) the property, you treat it as if you began using it in the middle of the year.

Example: You buy a $40,000 piece of machinery on December 15. If the half-year convention applies, you get one-half year of depreciation on that machine.

The mid-quarter convention: The mid-quarter convention must be used if the cost of equipment placed in service during the last three months of the tax year is more than 40 percent of the total cost of all property placed in service for the entire year. If the mid-quarter convention applies, the half-year rule does not apply, and you treat all equipment placed in service during the year as if it were placed in service at the midpoint of the quarter in which you began using it.

The mid-month convention: This convention applies only to residential rental property, nonresidential real property, and railroad gradings and tunnel bores. It treats all property placed in service (or disposed of) during any month as placed in service (or disposed of) on the midpoint of that month.

If you're planning on buying equipment for your business, call us first. We'll help you figure out the best time to buy it to take full advantage of these tax rules.

Other Year-End Moves to Take Advantage Of

Business Energy Investment Tax Credit

Business energy investment tax credits are still available for eligible systems placed in service on or before December 31, 2016, and businesses that want to take advantage of these tax credits can still do so.

Business energy credits include solar energy systems (passive solar and solar pool-heating systems excluded), fuel cells and microturbines, and an increased credit amount for fuel cells. The extended tax provision also established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems. Utilities are allowed to use the credits as well.

Partnership or S-Corporation Basis. Partners or S corporation shareholders in entities that have a loss for 2014 can deduct that loss only up to their basis in the entity. However, they can take steps to increase their basis to allow a larger deduction. Basis in the entity can be increased by lending the entity money or making a capital contribution by the end of the entity's tax year.

Caution: Remember that by increasing basis, you're putting more of your funds at risk. Consider whether the loss signals further troubles ahead.

Retirement Plans. Self-employed individuals who have not yet done so should set up self-employed retirement plans before the end of 2014. Call us today if you need help setting up a retirement plan.

Dividend Planning. Reduce accumulated corporate profits and earnings by issuing corporate dividends to shareholders.

Budgets. Every business, whether small or large should have a budget. The need for a business budget may seem obvious, but many companies overlook this critical business planning tool.

A budget is extremely effective in making sure your business has adequate cash flow and in ensuring financial success. Once the budget has been created, then monthly actual revenue amounts can be compared to monthly budgeted amounts. If actual revenues fall short of budgeted revenues, expenses must generally be cut.

Tip: Year-end is the best time for business owners to meet with their accountants

 

Barry Eisenberg, SCORE Counselor