Looking for Business Capital, What Are Your Options?
By Terry Benelli 
It Takes Money to Make Money

We have all heard the cliché “It Takes Money to Make Money.”  I have done a little to research on the origin of the statement; it does not seem to be attributed to any one historical figure, philosopher, business mogul or average person trying to make a success of their business.  The statement does seem to based in reality; an investment of operating capital is required before a business can open its door on any given day, not to mention opening the door for the very first time.

The Best Case Scenario – A Bank Loan

A bank or credit union can most often lend money to a business at the lowest rate.  They have access to a large loan fund.  Some banks are certified to offer SBA Loans that are guaranteed by the Small Business Administration Department of the US Department of Labor.  Bob Hope, a comedian, once said, “A bank is a place that will lend you money if you can prove that you don't need it.”  Of course he meant this to be funny, but for anyone that has ever been turned down for a bank loan, it rings true and probably does not seem so funny.

What Should You Do If You Hit a Brick Wall? Translated -You get turned down for a loan at a bank

o DON’T be discouraged, give up and get in further trouble
o DON’T close your business or give up on your business idea
o DON’T start to use credit cards to support your business
o DON’T turn to a high interest, predatory type lender
o DO look into Community Development Financial Institutions (CDFIs).

What Is The CDFI Fund?  

The Community Development Financial Institutions Fund (CDFI Fund) was created within the U.S Department of Treasury to promote economic revitalization and community development.  The vision of the CDFI Fund is “an America in which all people have access to affordable credit, capital and financial services.”   The fund invests in and assists Community Development Financial Institutions (CDFIs).  The characteristics that define a CDFI are: it has a primary mission of community development, it serves a specific target market, it is a financing entity, it also provides development services, it remains accountable to its community, and it is a non-government entity.

What is NEDCO?

Neighborhood Economic Development Corporation is a CDFI that is certified by the US Department of Treasury to provided Alternative Financing Programs anywhere in the state of Arizona.  Traditional bank loans can be hard to qualify for with a start-up business, a new venture or a business or business owner that has or is struggling financially.  Loans available from NEDCO, or another CDFI, are far more cost effective and flexible than the options listed above as DON’Ts.  Also, the qualification factors for a loan are weighted differently than a bank.  An added bonus is that along with funding, NEDCO provides development assistance: education, networking and support. 

Neighborhood Economic Development Corporation is a collaborative partnership between private and public sectors, a vehicle for institutions to meet community reinvestment and community development goals.  It is a funding mechanism for implementing such opportunities in Arizona, opportunities that neither the private sector nor the public sector alone can do.

Most importantly, NEDCO knows that helping you and your business succeed helps the community, helping the community creates opportunity for more businesses and more people.  NEDCO knows how important you and your business are to the big picture.

                  Terry Benelli is the Executive Director of Neighborhood Economic Development Corporation.   
                  For more information on NEDCO visit their website at www.NEDCO-Mesa.org or
                  call 480-969-1093

IT Needs for Small Business – On Staff vs. Outsourcing – Part 1
By Brad Eastman

It’s an undeniable fact that most businesses have computer workstations, printers, servers, and a whole slew of other office machines along with the networks that interconnect them.  They know this is the backbone of their company’s information infrastructure, but it’s much more than that. 

Bad Things Happen to Good Businesses
Due to all these forces working against a business’ computers, eventually each and every one is going to run in to some sort of problem at some point.  Sometimes they are minor and you can even go on with business as usual, however sometimes they are catastrophic and you may not even know it.  For example, we all know “the error message” that always pops up when you open a certain program, or every time you load Windows, we always just click “OK” or “Ignore” right?

That’s because that’s what we all want to do as business owners is to just get past the problem so we can get our computers to do what we need them to do, and without a headache.  Well, very rarely are those error messages okay to ignore, nine times out of ten they are a sign of a more serious problem on the horizon, that has not totally manifested itself.  The unfortunate reality is that the majority of business owners and their employees aren't "computer literate" enough to distinguish between the little problems and the ones that are seriously threatening; let alone be able to solve critical problems once identified.

What’s A Small Business to Do?
So you’re a small business and you have a serious computer problem that has just popped up out of the blue.  Or maybe all of your equipment is working perfectly, but maybe you’re not planning for a disaster. When it comes to technology of any kind it’s not a question of if, but WHEN disaster will strike; whether it’s Mother Nature, in the form of fire or flood; or perhaps from criminal activities like hackers or theft, or maybe negligence of the every day user. 

Having a full time staff IT manager is one option, but almost always not a viable one for small businesses because of the cost incurred paying them salary.  When you think of your budget in comparative terms, take into account that most mid sized companies and larger corporations pay their full time IT staff quite well.  The most basic technicians for example make somewhere between $30,000 and $50,000 per year, & on the high end of the spectrum a full blown IT Manager or Network Administrator can make $75,000 to $125,000 or more depending on skill level, experience, and the size of the company.  Unfortunately for a lot of small businesses that would be either a large chunk of their gross annual income or in some cases that may even exceed it! 

These are just a couple of the options available to businesses out there.  Be sure to check back for some of the other types of solutions and to find answers to other computer technology problems… in “On Staff vs. Outsourcing – Part 2”

About the Author:

Brad Eastman has been in the Information Technology industry for over 7 years, with experience in systems integration and network support.  Brad has conducted workshops, training, and staff education for dozens of small to mid-sized businesses spanning a vast array of industries.  He has authored and published various works on computers and technology. His career includes time being an Information Systems Manager for Sony Online Entertainment, Inc & Sony Computer Entertainment America, Inc.  Brad has built hundreds of computers, designed and implemented countless networks, conducted workshops, training, and staff education for dozens of small to mid-sized businesses in industries such as medical, dental, financial, mortgage, and staffing, just to name a few.  He has developed a number multimedia projects and taught many people how to use a variety of software suites.  His contact information follows:

Brad Eastman - President & CEO - Eastman Modern Technology

Brad@EastmanModern.com  - Office: (480) 321-9321

“Selecting the Right Solution”

By Major Williams

A common issue business owner’s face is selecting technology solutions. Selecting
solutions in an environment of rapid change from a multitude of options can be
overwhelming. Unfortunately, many companies find themselves with a great solution
that doesn’t fit their business model. To help you select the right solution for your
business, the principals of JR2 Solutions offer these tips:

Tip #1

Review your strategic goals
Knowing where your business is going by reviewing your business plan to focus
attention on the emerging needs of the company. If you don’t have a business plan, this
would be a great time to develop one. Many times business owners are distracted by the
neat features and the advancement of technology--but are they the right solutions for the
company? Identify a few key goals for your business, and how technology can help you
reach those goals. Avoid selecting technology based on bells and whistles when all your
business really needs is a horn.

Tip #2

Understand your processes
As a business owner, you may be removed from the day to day processes of your
business. Since operational performance is a critical piece of the puzzle, don't assume.
Meet with key individuals in your organization who have grassroots knowledge of the
processes and how they have changed or will change over time. Understanding your
processes helps identify technological features that are most beneficial to your company.

Tip #3

Determine your budget
We place this tip 3rd for a reason. It is very common for business owners to set the price
range before really knowing the true value of the solution to the company. Until you
review your business goals and processes it will difficult to know the value of the solution
you’re seeking. Once you have performed steps 1 & 2, the true value of the solution to
your business is quantifiable. Understanding the solutions will save you and the
presenting vendor time and money.

Tip #4

Seek Help
There is nothing wrong with asking for help. As small business owners, we can not have
the answers to everything. Leveraging the knowledge of other business owners is
encouraged. In addition, there are independent consulting firms that are willing to assist
you in making an informed decision.

Choosing the right technology solution is not easy. It is also a decision that should not
be taken lightly. Following these tips will allow you to make a more informed decision in
selecting the right solution.

JR2 Solutions is an 8A Certified Provider of Technology Solutions based in Glendale,
Arizona. Created and owned by Rick Moody and Major Williams, the firm is dedicated to
restoring quality and service to the IT industry. For more information, visit :

Website: http://www.jr2solutions.com  ; Phone: 623.444.8360; Toll Free: 866.439.7080;

Email Address: info@jr2solutions.com

To Be a Franchise or Not To Be?

Invest research and time before making a Franchising investment decision. Check out the following Franchise Websites:

Take time to check resources/websites that list franchise opportunities in varying degrees of detail. Try out those websites that do no require one to first fill out a questionnaire before providing one with information.

www.MinorityFranchising.com :
This website, where there is no charge to franchisors for listing their systems, is designed to promote those franchises that actively encourage the recruitment of minorities into their systems. It includes very detailed profiles on over 500 such franchisors, each noting a breakout of minority franchisees in their systems, as well as any specific programs they might have aimed at minorities.

www.Entrepreneur.com/franchises :
Entrepreneur Magazine provides abbreviated profiles on a large number of franchisors, including unique historical operating unit growth over the past four years. For more details, you must fill out a questionnaire.

www.Franchise.org :
This is the website for the International Franchise Association, the industry trade association. Detailed profiles are provided on over 800 members of the IFA.

www.WorldFranchising.com :
This site is unquestionably the most comprehensive and up-to-date on-line directory. It provides a very comprehensive directory on over 1000 North American franchises. One of the key advantages with this website is the ability to sort the universe of franchisors by six different search categories (alphabetically, industry type, average total investment, average franchise fee, average royalty fee and total operating units). If you already know in which industry category you want to invest, you can sort by category and see franchisors that provide similar products and services. Via www.frandata.com , the franchising industry is broken into 30 primary categories and 227 subsectors.

A Google search will yield more sites: www.franchise.com , www.bison.com , www.franchisesolutions.com , and www.franchisegator.com .

Books and Publications on Franchising:

Read, Read, and Read more about Franchising to earn a level of expertise on the investment process.

For industry specific books check out www.sourcebookpublications.com where the site lists over 25 books on franchising, industry surveys, and franchisee satisfaction surveys. Some information books include: Bond’s Franchise Guide, the IFA’s Franchise Opportunities Guide, Tips & Traps When Buying a Franchise, “How Much Can I Make?”, Franchising for Dummies, the Minority Franchise Guide and The Franchise Bible.

Monthly magazines include: Franchise Times ( www.franchisetimes.com ), Franchise Update ( www.franchise-update.com ) and Franchising World ( www.franchise.org ).

KEY INFORMATION:
Before a franchisor can sell anyone a franchise, it must be registered with the Federal Trade Commission or various states under the Uniform Franchise Offering Circulars (UFOCS), which contains most of the key information one needs before investing. If one desires to learn more about a company or its competitors before committing oneself, the UFOC can be purchased. Check out the website www.UFOCs.com for the database of current filings and historical UFOCs dating back to the 1980s for a cost of $220. Remember to check on item 19 in the firm’s UFOC, which provides an earnings claims statement. This statement can prove to be highly beneficial regarding projected costs, sales, and profit margins.

Conservative Financial Management
- Hon. Rainow Byrd-Baldwin

Conservative financial management—a growing construction firm must be very careful about cash flow and receivable.  This consultant has seen otherwise capable companies fail because of sloppy financial management.  Businesses fail even in these days of prosperity—turning otherwise profitable enterprises into dismal failures—often in a surprisingly short time.

This column frequently discusses thise topic of financial management and it’s its role in business success.  There are quite a few detailed surveys conducted by Business Research Organization.  These surveyed organizations have identified many management traps and to survive you must avoid them.

Whether a firm is a giant in its field, or is a relatively small firm, the businesses that fail are guilty of one or more lapses of good management, and fall into one or more traps.  The main trap (see future columns for others) is:

Keeping Inadequate Records or Slipshod record keeping:

*  Poor records lead to an absence of adequate financial information to allow management to know the results of operations.

*  While larger firms often skip this problem because of the lack of full- time staffs, inadequate record keeping was the greatest single cause of business failure unearthed.

A recent client session acknowledges the impact of this point.  The client has now felt the affect of growth without a comprehensive financial plan and previous discussions dealt with the facts that “growth cost cash.”  Under these fast growth conditions, with no strong plan, you just run out of cash.  With no cash and when efforts to secure funding prove unsuccessful, you maybe unable to sustain operations.

If your management team detects the company in that position, you must now follow the process of Analysis, Diagnosis, and Planning to develop a comprehensive financial plan.

The major tool for survival and beyond is “MANAGEMENT.”  Some of you may be thinking more money.  You’ve heard the phrase a thousand times: “It takes money to make money,” but without sound financial management practices, the only thing more money makes is more waste.

 

Rainow Byrd-Baldwin has authored and published numerous articles on small business management that have appeared in national and international Trade and various publications. He is a recognized lecturer and speaker to both national and international audiences of associations and government entities. He is active in Small Business Education having taught college classes in Job Cost Estimation, Business Plan Development, and Management Principals. He is a well-known, top-level operational and strategic management consultant specializing in improving capabilities, asisting in achieving proficiency in the technical skills involved in construction contracting. Rainow has received his Bachelor of Science Degree in Business Management from Metro State College in Denver, Colorado; Urban Horticulture from Denver Community College in Denver, Colorado.

Hon. Rainow Byrd-Baldwin - 480.545.1356

 

 

 

 

Reaching the pinnacle of success

By Loretta Love Huff

 

Do you have goals you’ve given up on or just haven’t made the kind of progress you desired?

 

Whether you’ve given up on them or completed the ones you set and moved on, here are some tips you can use to stay motivated and keep on track.

 

1. Maintain a positive, expectant attitude.

This comes from what I call the BBR Theory.  Our Beliefs shape our Behavior and our Behavior dictates our Results.  Believe that your goal is attainable and that you deserve to attain it.  Many people fail to reach their goal simply because they give up before they get to the goal line.  Don’t be one of them.  If you believe you won’t make it…you won’t.  Wayne Gretzky once said, “You'll always miss 100% of the shots you don't take.

 

2. Take a toddler approach

Have you ever watched a toddler just learning to walk.  They stumble and swerve and fall down. But when they fall, do say they “Oh!  I’m such a failure.  I’ll never walk!”? No!  While they might not be very conversant, you can see in their eyes the determination that says “OK, it didn’t work that time, but if they can do it, I can do it!”

 

3. Model the masters

Don’t try to re-invent the wheel.  Whether you’re building wealth, sculpting a new body or finding that ideal relationship, learn from people who’ve succeeded at what you’re at work on.  Study the lives of men and women who have risen from the ashes of poverty to wealth.  Eat and work out like people who have lost weight and stayed thin.  Find out what people who enjoy happy, supportive relationships do to attract them.  It’s back to the BBR Theory:  find out what they think about and the actions they take if you want to have a life like they have.

 

4. Get past the plateaus

Whether you’re working at building your business or losing weight, it’s natural to get discouraged along the way.  It doesn’t mean you should give up.  Try something new.  Vary your routine. 

 

Work out on different equipment or try a new DVD.  Join a group of like-minded people to get the encouragement and support you need.  For your business, use local resources like the SBDC (SmallBusinessDevelopmentCenter) and other city, county or state organizations that offer counseling and classes.  

 

5. Keep your goal in sight and your reason in your heart and mind

Your mind works in mysterious ways.  It is multi-sensory; it works utilizing all of your senses.  The more of them you can engage in the pursuit of your goals, the more optimally your mind will work.  Hang that slightly-too-small yellow polka dot bikini on the wall and look at it.  Cut pictures out of a magazine and make a collage of the thing(s) you most desire (e.g. love, travel, beautiful home, healthy body, car, etc.).  Include words that capture how you’ll feel when you reach your goal (peaceful, happy and content.).  Remembering why you want something is just as important as remembering what you want.

 

Above all else, write your goals down.  A study done of HarvardBusinessSchool graduates showed that the defining factor in income achievement was having written goals.  Only 3% of the HBS graduates studied had written goals, but that 3% earned an astounding 10 times as much as the other HBS grads!  Similar studies have shown that people with written goals tend to have better health and happier marriages than those without goals.

 

Better yet, once you’ve written your goals down, find someone to hold you accountable for staying focused and on track.  If you’re like most people, going public with your goals will inspire you to take action in a way that staying private about them won’t.  Think about it, aren’t you more likely to keep promises you’ve made to someone else, than those you’ve made to yourself?

 

One of my mantras is “People and teams exceeding their dreams”.  Your future is in your hands, your mind and your actions.  Stay focused and never give up.  

 

Loretta Love Huff is a speaker, business consultant and an executive coach. She works with business owners, leaders and teams on performance improvement, business development, conflict resolution, and leadership development.  She can be reached at loretta@emeraldharvest.com  or 602.454.7787.  Visit her website at www.emeraldharvest.com to receive free performance enhancement tools.

 

 

 

 

What is Data Management ?

By Sasha Frugone

 

For many companies it is a computer “junk drawer.”  Data no longer sits in plain sight but no one is quite sure where any of it now resides.  The old cardboard box is more efficient (though not very practical in the electronic age) as you only have one place for file retrieval.  Creating a system that is easily understood by all for accurate, on-demand information retrieval and flow is Data Management.

 

Case Studies

 

Client 1

A “Mom and Pop” interior plant design company - during the first interview - the client was unable to locate a new client (would become their largest client) contract.  As the mêlée ensued, a time study/investigation was initiated.  The president spent over 30 minutes talking with everyone about how important it was to find the contract, while lifting anything covering a surface.  His assistant, directly behind him repeated the same process.  It took 5 people (including the President) over 1.5 hours to discover that the document had been left on the copy machine.  The lost time profit equaled $63 (many years ago) a large amount for a little plant company.  The delay also caused a contract reduction – more profit lost.

 

New computers sat in their boxes unopened.  The Information Facilitator consultant had to convince them that they needed these foreign objects and that the use of these objects would not result in the entire office staff experiencing migraines.

 

Typewriter carbon contracts were converted to Word mail merge documents, the plant design/order lists to Excel documents (with built in forms) with a macro that joined the two.  The Information Facilitator consultant orchestrated the programming and implementation of the Data Managementsystem.  The staff was able to focus on their jobs with a minimal amount of down time, resulting in improved profitability by the simplicity, accuracy and speed of future paper processing.

 

Client 2

A specialty waterproofing contractor with a union shop constantly paid fines for underpayment of union dues, payroll taxes, and workman’s compensation.  At the time of the Information Facilitator Consultant’s intervention, the contractor was facing fines of $20k from his union and $7k from the IRS.  The Client was set up with QuickBooks Pro bookkeeping and payroll service.  This became the data capture source that outputted to Excel, Word and Access.  Within each of these software packages a program was written to automate reporting functions. The audit portion of the consultant’s Data Management system determined that the client had paid everything to the  union via Los Angeles County (most expensive reporting county) while most of the work had actually been performed in Ventura County (one of the least expensive). 

 

The Outcome - by allocating the hours to the appropriate counties, the client earned a $2k CREDIT!  Further, the audit revealed that payment application had been made to the wrong payroll quarters and all fines were rescinded by the IRS.  Since the implementation of the Data Managementsystem, the client reports over 40 public works projects per week (versus the 1 prior to the system), operating with the same number of administrative staff that the contractor had 7 years prior, and the client has not been fined for underpayment of payroll taxes, workers compensation or union benefits.  Client is lauded as one of the most accurate job reporting contractors directly impacting the client’s receipt of timely payments, resulting in:

Ø      materials purchased on time without late interest fees

Ø      loans not taken to meet overhead

The Outcome translates into the Bottom-line - Interest Saved is Profit Gained.

 

Information Facilitators designs custom databases in Access, Excel and Word that handshake with other databases (QuickBooks) and output to PDF (Adobe Acrobat Professional) for review, electronic dissemination, and paperless office filing – Information flows in/out from/to many sources - Data Management is controlling that flow.

 

The firm’s focus is small business.  The firm offers affordable Data Management, using software that is often already owned by the client.  It has hands-on experience with all of the administrative functions, giving the firm the necessary insight to implement a system with the least amount of down-time – a profit saving advantage.  The firm is a certified QuickBooks Pro Advisor. It stresses that businesses can pay once to achieve on-demand information with absolute accuracy or pay penalties and employees to correct mistakes forever.

 

What is Data Management?   It is harnessing the untapped power of your computer system to provide accurate, on-demand data flow to many sources from many sources with a single action.

 

Sasha Frugone – Owner of Information Facilitators, is an avid crafter with her husband and mother-in-law.  She is also the proud Mom of Kiki and Tiggar.

 

Information Facilitators ♦ Data Flow Solution Providers

623 ♦ 466 ♦ 4163

informationfac@gmail.com

http://infofac.homestead.com/

 

VoIP Communication – The Right Solution for Small Business

By Germaine Hall

 

Voice Over Internet Protocol (VOIP) is a method for making telephone calls over the Internet by sending voice data in separate packets, just as e-mail is sent. Recent technology improvements have made VOIP as seamless and smooth as a regular telephone call. VoIP offer many features that eclipse traditional telephony, including open flexible standards, increased choices of end-users phones, and quick deployment of productivity enhancing applications all on the same network as your email or any other PC application we have come to enjoy.

 

Voice over Internet Protocol (VoIP) technology sometimes referred to as IP telephony has been going strong for over 10 years and it has changed significantly over the past few years, focusing on small and medium sizes businesses. A highly available, scalable and secure small business can build a VoIP call center with only 15 phones and in can scale up to 1,500 devices with an initial infrastructure investment of $3000.

 

The typical lifespan of a PBX/telephone system ranges from 5 to 10 years because VoIP is scalable. You would never have to replace the system, rather one would simply add to the infrastructure. As VoIP becomes the platform of choice, prices will drop and new developments will continue on the platform. There are a number of situations in which a VoIP solution could benefit small business:

 

- End of lease with PBX/Telephone equipment

- Lower cost than PBX

- Integrating one central Voice and Data platform.

- Growing existing office or adding and connecting remote and home office locations.

 

The platform delivers a broad range of services with ease. Non-technical personnel can make individual or system-wide changes with the click of a mouse, and as business needs evolve, the system can as well.

 

MicroMillennium is an IT Supply Chain Service Provider and Value added Reseller that will assess technical requirements and design complete solutions to meet small business needs. The results are a solution that delivers measurable ROI by improving organizational and employee productivity, enhancing a firm’s ability to serve its clients and partners.

 

MicroMillennium is proud of its roots in IT (Information Technology) diversity, emerging as a leading Small and Minority Business Enterprise (MBE) We deliver Supply Chain Services as a Value Added Reseller without compromise, providing vendor diversity participation mandated, required, and encourage by socially conscious and political institutions.

 

MicroMillennium brings together a vast selection of business computing products and a complete suite of service offerings to make procuring and supporting IT products simple and cost effective. MicroMillennium offers more than 100,000 products from more than 750 manufacturers plus a broad service offering that includes basic configuration, advanced design, implementation, and technical support, flexible and customized solutions to meet client requirement.

 

 

Tax Tip of the Month (October)

Aldo Aprile

 

Employees VS Independent Contractors

 

For this month’s topic, Aldo is going to address questions that many business owners  encounter while running their business.   Are the people working for you employees or independent contractors? The answer will impact tax withholdings, tax contributions as an employer, and dictate the type of the documentation that must be used in either case.  Employers that classify employees as independent contractors can find themselves in trouble on a tax bill that will include the owed tax plus penalties and interest.

 

The answer to this question is “it depends.”  The IRS has stated that in order to determine the worker status, three broad characteristics are to be used:
• Behavioral Control
• Financial Control
• Type of Relationship

 

Behavioral Control- Deals with the fact that business has direct control over the workers, informing them of how the work is done by means of training, or through direct instructions such as:
• When and where to do the work
• What tools or equipment to use
• What workers to hire or to assist with the work
• Where to purchase supplies and services
• What work must be performed by a specified individual
• What order or sequence to follow

Financial Control- Deals with the facts that show whether the business has a right to control the business aspects of the worker's job include:
• The extent to which the worker can realize a profit or loss
• The extent to which the worker has unreimbursed business expenses  
• The extent of the worker's investment
• The extent to which the worker makes his services available to the relevant market  
• How the business pays the worker

Type of Relationship
• Are benefits offered to employees
• Written contracts defining the intended relationship
• The length of the relationship
• The impact of the worker’s services to the company

If any of the three characteristics is identified, then the work status must be classified as an employee, and not as an independent contractor.

 

Types of Workers-There are four types of workers:

1. Independent Contractors- Professionals such as attorneys, architects, designers, contractors, etc., who offer their services to the public, are usually considered independent contractors.  No taxes need to be withheld from employees.

2. Common Law Employees- The substance of the relationship is what matters, if business treats the worker as an employee, even, if the worker is labeled as an independent contractor.

3. Statutory Employees- An independent contractor under the common rules can still be treated as an employe