Small Business Tips

January 2019 Archive
Getting Your Product to the National Market

Most small business owners have a desire, deep down inside, to go national someday, but it’s a process that takes patience and work. Stick to these steps and you’ll be off and running.

Direct Sales
Start off by selling directly to friends and family and the people they refer to you. You can trust them to give you feedback regarding any improvements you can make in your product or packaging before you expand, and, if they’re pleased with your product, they’ll provide some word-of-mouth advertising.

Local Stores
Your next step is to sell a small bulk package to independently owned stores in your area. Call the manager or owner for an appointment to stop by and show them your product and ask if you can sell it in their store.

Clearly this involves determining who you should be selling to. For example, if you design t-shirts, then you’ll want to look into selling them at the clothing store downtown. If interested, they will either sell the shirts for you, while taking a percentage of the sale price for using their store, or buy in bulk and turn around and sell the shirts to their customers, and hopefully ask for more.

Regional Stores
Once you’ve had some success on the local level, expand to some stores in your region, including neighboring states. Be sure to have numbers on hand for your sales over the past few months. Consistent or increased demand for your product is a great way to show the regional stores that it’s worth getting involved with your business.

You will need to be successful on the regional level for a decent amount of time (probably at least a year) before you attempt to go national. Depending on your product, the mass market can include everything from large chain retail stores like Wal-Mart and Target, to catalogs such as LTD Commodities or Collections, Etc.

It’s important that you determine where your product will be most successful before you approach retailers. They will know immediately whether your product belongs with their association or not, and you don’t want to waste time pushing to retailers that won’t bite.

Also, be sure that you are ready for mass production before reaching out to the mass-market. If your product is successful, but you can’t meet the demand, then you may risk losing deals with the national retailers. Have the equipment and man power ready to produce your merchandise in bulk before stepping through that door.

Source: Selling Your Invention

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Adding Value to Your Business
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By Michelle Cramer
Thursday, January 31st, 2019 @ 12:00 AM CDT

Marketing |

Which Internet Browser Should You Choose?

I made a switch this week after reading’s The Latest in Browsers by Mike Hogan. I have been using Internet Explorer for as long as I can remember (after the fuss over AOL passed, anyway). But just the other day I decided to give Mozilla’s FireFox 2.0 a try, and I love it.

For starters, it’s important you know that there are three main browsers out there for your PC websurfing enjoyment: Internet Explorer (of course), Firefox, and Opera. Macs users also have the option of Apple Safari. Each of them has recently released a new, upgraded version. And all are free to download and use.

Now, to be honest, the new IE 7.0 took some getting used to, with a number of features getting relocated on the browser. I will admit, I sort of liked the fact that the favorites menu would actually stay open for me. On the older version, it would often disappear if my mouse so much as strayed a millimeter from the box. But it actually took me awhile to find it. And even now, months later, I’m still having problems remembering where the “home” and “print” tools are.

My brother-in-law (Chris Brunner, the owner of GreatFX Business Cards), who is a computer guru and really knows his stuff, has been using FireFox for awhile. So I already assumed it was probably of better quality somehow. But, I hate to change things around on my computer once I get used to the way they are, and I really didn’t feel up to re-learning a whole new browser when I was just beginning to get used to IE 7.0.

But Mike Hogan’s article really got me wondering what’s so special about FireFox. It supposedly has stronger security than IE, but what about the features? Oh well, I decided. What harm could it do to download something for free and try it out? So I did, and boy and I glad.

The first thing that jumped out at me was the condensed version of the tool and URL bar… one sleek line. As I began to explore, I noticed that the Favorites menu, deemed “Bookmarks” on FireFox, has this great feature that allows you to place your favorite bookmark folders right on the toolbar, while using only minimal space. Saves some time and effort, which is always nice.

I also love the simplicity of the options. With IE, I could never fully understand what option I was selecting, with everything in computer-programmer jargon. But with FireFox, all of the options are put in layman’s terms, so I really have the opportunity to make my browser do what I do and do not want it to. And I especially love the fact that there is a spell-check feature that checks absolutely everything I type, just like Word or WordPerfect… and believe me, I need that!

Overall, I found that things were really easy to navigate, and, though I still have a lot to explore on FireFox, the transition has been fairly easy and I’m glad I switched, at least for now. I haven’t disregarded IE entirely, it’s just been placed on the back burner. Apparently I may need it in the future in order to run Windows Update or for using ActiveX when FireFox isn’t sure the website is safe, but I am.

Granted, I haven’t given Opera a far advantage here… in fact, it’s received none at all. I didn’t even look at it as a possibility because I had never heard of it. But that doesn’t mean it’s not just as effective at security and ease.

It’s going to take some time to get anyone to switch browsers, with, as I understand it, 80% of internet users still loyal to IE. And that’s great. To each his own, but I have been converted.

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By Michelle Cramer
Wednesday, January 30th, 2019 @ 12:02 AM CDT

Technology |

Ideas to Generate Business on Valentine’s Day

Many say Valentine’s Day is just another scam by American businesses to try and get more money out of consumers. And so what if it is? The holiday benefits businesses and reminds us to celebrate the people we love, because all too often we forget.

So, in the interest of tapping into the profits that are to be had, here are some ideas to help you lure in additional customers on this heartfelt holiday:

1. Pictures
Hire an inexpensive local photographer (maybe one that’s just getting starting so that you help his business and yours) to come to your place of business and offer pictures of couples for free or a very small fee.

Have a fun lovey-dovey background for the pictures and make sure your photograher uses a digital camera. That way, you can email the finished product to the customers, and advertise your business (and the photographer’s) a second time.

2. Contests
Advertise a greeting card, love song or poetry contest. Be sure to start things around mid-January, with a deadline the week before Valentine’s. Announce the winner on Valentine’s Day and provide them with a special prize, such as a gift certificate to your business and dinner for two at a local restaurant.

Other smaller scale contests could be the couple that has been married the longest, the couple married the shortest, who proposed in the most creative way, etc. You could even have couples registered for a make-shift newlywed game and have them compete for a prize. The couple that knows each other best, wins.

3. Giveaways
Consider conducting a drawing for a larger giveaway, sponsored by your business, for a cruise or 4 day/3 night getaway. Couples are entered when they spend a certain amount at your business (say $10-$25). That way, you don’t have the whole town trying to get in on the fun, and you make some money back from you investment.

Also, if your business provides products or services that are often used for weddings, such as photographer, catering, wedding coordination, etc., consider giving away a package to an engaged couple. This will generate interest in your product/service and, though you’ll only be giving it to one couple, will bring in potential clientele who would be willing to pay if they don’t win because they like what they see.

Regardless of how you wish to take advantage of the revenue Valentine’s Day brings in, be sure you advertise whatever special event you choose. The local newspaper is a good choice, but your best venue is usually local radio stations. Investing in some air time to advertise the special contest or giveaway, and your business, will probably reach the biggest audience.

And don’t forget to call your local TV stations to let them know what’s going on. If it’s exciting enough, they’ll want to be there to see who the big winner is, and you’ve get even more advertising for your business.

I realize today is actually Valentine’s Day, so the above ideas won’t do much good to help you this year. But these things take time and planning, so starting now will get you well on your way to bringing in that twitterpated crowd on the next Day of Love.

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By Michelle Cramer
Tuesday, January 29th, 2019 @ 12:01 AM CDT

Marketing |

A Newer Way of Avoiding High Energy Bills

Warmer temperatures are anticipated for the year (the groundhog didn’t see his shadow this time, which means early spring). Inventories abound for natural gas and prices are falling. Things might actually be at a good state right now, and it’s time your business took advantage of it.

How? By tapping into (no pun intended) fixed rate natural gas contracts. Basically, you are locked into a fixed rate per therm (a measurement of natural gas) and pay the same amount each month.

The contracts last up to three years and are provided by companies such as Xcel, IDT Energy, Accent Energy and CenterPoint Energy. Basically these and other firms come to an agreement with utility companies to deliver natural gas to consumers through a pipeline. The utility company makes a profit off of the transmission charge, so they are willing to contract out the supplying of the gas, as long as the transmission charge is paid.

Using fixed rate natural gas contracts can save you money, but it can also cost you more. It simply depends upon whether gas prices go up or down. Right now, they’re down, which means it would be smart to get in on this opportunity now, with a lower fixed rate, and pay less later.

Another advantage of these contracts is stability and consistency in your bills. A fixed energy bill will allow you to budget the expenses of your business more easily, causing less stress come bill paying time.

They’re worth looking into for any business owner. Anything that is easier or cheaper over the long term is usually worth it.

• How to Avoid Sky-High Energy Bills
• Fixed-rate Gas Plans No Bargain for Some

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By Michelle Cramer
Monday, January 28th, 2019 @ 12:04 AM CDT

Money, Operations |

Help Wanted: Advertising Job Openings Online

As the use of the Internet continues to expand worldwide, business owners across the country are seeing opportunities to broaden the prospects for job openings. Instead of just placing a help wanted ad in the paper, many are expanding to online job searches to reach potential employees on the national level.

There are a lot of job searches on the Internet, so how do you know which ones to use? Nowadays, the most popular searches are and, and they also tend to be the most reliable. It’s not free though. Monster’s prices range from $300 for smaller cities/towns, to over $500 for larger cities per job posting. CareerBuilder’s job post prices start at $419 for one post, and lower rates per post if you buy in bulk.

What about searching the resumes on these sites? Well, the prices on Monster’s resume search range from $650 for two weeks/400 views to $7,000 for annual/20,000 views on a regional level. That price, of course, goes up if you want to search nationally.

CareerBuilder’s resume search provides unlimited viewing at $900 for two weeks to $8,988 for one year.

But what if these top job search engines are way out of your price range? There are other options available to get your job openings out there online. More than likely, your local newspaper has a website with a classified search available. If you place a help wanted ad in the paper, they may very well also have that ad on their website, or post it online for a small additional fee.

Another option is the career center at colleges in your state. Most colleges provide some sort of resource to their students to help them find a job after graduation, and many of these career centers have online job postings through their website. The fees would probably vary, but the cost would be significantly lower than the more high end search sites. It’s a good idea to post a job with career centers even if you use Monster or CareerBuilder.

Of course, you should also start a “Job Opportunities” section on your own website. This will bring in prospective employees that are interested in your company, which makes for potentially better applicants.

Regardless of where you post your job openings online, take advantage of the opportunity it presents. Posting a job online allows you to be as thorough as you want to be about the position, what is required to be considered for the position, and why someone would want to work for your company (incentives). With a newspaper ad, you only have so much space available, so the information you can provide is limited. But with online postings, the sky’s the limit.

Related Reading:
• Posting Jobs Online, the Right Way

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By Michelle Cramer
Sunday, January 27th, 2019 @ 12:02 AM CDT

Human Resources |

Finding the Right Price for Your Product or Service

The price of the product or service you provide determines whether your business succeeds or fails. If the price is right (as Bob Barker says), then your business will produce profits and grow, but if it’s wrong, your business could be destined for bankruptcy.

Far too many businesses choose the price of their product/service based upon only one calculation, when there are actually a number of elements you should consider together to come up with the best amount.

When determining a price for your product/service, considering the following:

Cover the Costs
The price you come up with should include enough to cover the cost of manufacturing the product or providing the service your business has to offer. If you travel, include the cost of mileage and expenses. If you provide mass quantities of a product, divide your costs to determine what it costs to make only one. If you can’t cover your overhead in the price of a product, your company will never break even or even make a profit.

Consider the Competition
And when I say consider, that’s exactly what I mean. Don’t price your product/service to be cheaper than the competition, just in the hopes that you’ll get all their business. If consumers trust your competitor more or like his product more, they will still go to him, even if he is more expensive.

However, when determining your prices, keep your competitors’ prices in mind as a range, since you don’t want to set your prices gobs higher (or too much lower). Also, look into how much business they generate and how that relates to prices they provide. Supply and demand really comes into play here.

Calculate the Value
Determining the true value of the product or service you are providing by looking at what consumers are paying others for it. eBay is a great example of how every person values things differently. Ask people you trust, such as friends, family and employees, what they would be willing to pay for your product/service and what they would expect would be included at that price.

Find out what clients would do if your product/service wasn’t offered. Also, ask them how your product/service is helping. If Bob tells you that you are saving him tons of money because your product is so inexpensive and delivery super fast, then you should probably be raising your prices a bit and charging more for a speedy delivery (while still giving Bob a great deal, of course).

Make sure you are looking at all of these elements when determining what your prices should be. And don’t worry about changing your prices if what you currently charge isn’t working. Most consumers won’t even notice, and you can simply explain to the ones that do that you really weren’t making it on the previous prices. If they are loyal to your business and like the product/service you provide, they’ll understand.

Supplemental Information:
The following questions are things you should take into account when establishing your prices–

1) What are the direct costs of your product or service?
The direct materials and labor associated with your offerings.

2) What are your business’s indirect expenses?
Often referred to as overhead and include expenses such as insurance, advertising, rent, office expenses and more.

3) What is your breakeven point?
Breakeven is where your costs and your income are equal–meaning, there’s no profit.

4) How is your competition pricing their offerings?
Compare your products to the competition. Adding value enables you to promote your products more profitably.

5) What is the state of your industry?
What was hot last year may not be this year. Understanding the market landscape will help you make better business decisions now and in the future.

Set your prices accordingly, but don’t be afraid to adjust them to your business’s need and market changes.

Source/Related Reading:
• Pricing – The Magic Number
• – Set the Best Price for Your Product
• – Setting Your Product’s Price
• – Pricing

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By Michelle Cramer
Saturday, January 26th, 2019 @ 12:01 AM CDT

Operations |

National Minimum Wage on the Verge of Increasing

It’s been over 10 years since the national minimum wage was increased. Ten years! I find that simply astounding. The cost of living has gone up in that amount of time, without a doubt, but the income that many families generate hasn’t budged. There is something very wrong with that picture and the Senate is pushing for a change.

The plan is to increase the current minimum wage of $5.15 per hour to $7.25 in three increments over the next two years. I like the idea of easing into the change, so that small businesses can adjust accordingly. The Senate bill also includes some tax breaks for small business to ease the transitional pain, while hitting up the large corporate businesses for more money to balance things out.

The bill currently under examination will no longer allow corporations to deduct the cost of jury verdicts or out of court settlements in lawsuits, generating an estimated $540 million over the next ten years. A beautiful plan if you ask me. Even though I work for a law firm that represents local corporations, I think that a corporation that is found guilty of wrong doing in a jury trial should not be allowed to deduct the funds it has to pay out from the judgment. It seems to defeat the purpose of punishment.

Also, the tax-defered portion of severance or retirement packages given to former corporate executives will be limited. Instead of all $210 million like former Home Depot Chaiman-CEO Bob Nardelli received (don’t even get me started on that one) being tax deferred, the amount defferable would be limited to $1 million a year or a figure equivalent to the five year average of the receipient’s taxable salary. Another brilliant idea, especially since it is expected to generate $810 million in revenue over the next 10 years.

What’s funny to me is that those in the Senate who are against the minimum wage increase claim that the beneficiaries would likely only be teenagers with part-time jobs, rather than the working poor. Uh, hello, I beg to differ! As one whose husband stocks shelves in a grocery store to help pay for college, I am well aware of the fact that the minimum wage increase would be highly beneficial to our income.

Additionally, there are plenty of people working at McDonald’s that do so full time to support a family who would benefit from the increase. I used to work in day care, and even those teachers are barely paid just over minimum wage (around $6 an hour), at least where I’m from. Explain to me how these people wouldn’t benefit?

The House version of the bill doesn’t include tax breaks for small businesses (boo), but they plan to address those issues in a separate bill. This will cause a bit of a slow down between House and Senate in getting the bill passed on to the President, but ultimately I think both the increase and tax breaks will become law. Congress would be imbeciles not to pass them. It’s simply time for it.

Minimum Wage Increase Chart

Minimum Wage Increase Chart

• AOL Small Business: Minimum Wage Bill Divides Businesses

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By Michelle Cramer
Friday, January 25th, 2019 @ 12:01 AM CDT

Money, Taxes |

Is Your Business Online Yet?

If you’re reading this, chances are you did a little websurfing, and are familiar with the vast space known as the World Wide Web (and it’s called that for a reason). So if you’re reading this and don’t yet have a website for your own business, I have to ask, what’s the hold-up?

There are many excuses as to why some businesses don’t have websites, all of which are misconceptions, such as:

Myth: A website is too expensive to start and maintain.
Fact: There are many website services online that provide everything from free webhosting with pre-established templates, to inexpensive webhosting (less than $60 a month) with a little more glam. Any of these can be put together and maintained by anyone who is familiar with the internet, but doesn’t know any of the programming jargon. Simply type free website in Google search and you’re on your way.

Myth: No one will use the website.
Fact: EVERYONE will use the website, if you let them know it’s there. Put it on your business cards, your ads, your receipts. I guarantee that everyone who visits your business will visit your website at one time or another, if for no other reason but to cure websurfing boredom. And if you have lots of exciting features and information, they will be glad they did.

Myth: A website won’t help my business sales.
Fact: Nearly everyone spends time on the Internet, and Internet sales increase on a continual basis. Even if you don’t have the capabilities available on your website for customers to purchase your service, providing as much information as possible and a means of contacting you will inevitably lead to an increase in clientele and sales.

People use the internet to “brand surf.” Most, when interested in a product or service, will turn to the internet first to see what’s available. I can’t tell you how many times I’ve looked up a service online, found listings for local providers, and then been disappointed because the provider I’m interested in learning more about doesn’t have a website.

A recent example was when I was buying furniture for our new home. I wanted to go online and see what the distributors carried instead of driving all over town. Even if I couldn’t buy it online, I wanted to narrow down the prospects. But many of the local businesses didn’t have a site, and I ended up wasting lots of my time going to places that had nothing I liked. The last thing you want to do is frustrate your potential customers like that.

The Internet is a valuable resource for establishing and growing your business, and every small business owner should be taking advantage of it. If you’re already online, great! I hope to come across your site sometime and see what you have to offer. If not, then you’re way behind and, to put it bluntly, it’s time you caught up to the rest of the world. So, get busy punching those keys and making your business readily available to everyone!

Related Readings:
• 10 Web Tips for Entrepreneurs

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By Michelle Cramer
Thursday, January 24th, 2019 @ 12:01 AM CDT

Marketing |

Is Viral Marketing Effective?

Turner Broadcasting created quite a stir in Boston last week with their advertising campaign for a new show on the Cartoon Network. Traffic jams and police involvement were the result of the reportedly “suspicious packages” planted throughout the city on bridges, subways and other high traffic areas.

The packages were actually magnetic lights that were placed throughout 10 cities across the nation, including New York and L.A. although Boston seemed to be the only place they caused a stir.

I don’t think that Turner execs planned to cause so many problems with their advertising campaign, but I would imagine that the resulting national news coverage was far more than they had expected from this successful ruse. Viral marketing at its best.

For those of you aren’t familiar with the term, viral marketing is a means of advertising in an off-beat manner with the intention of generating media coverage and massive word-of-mouth distribution and a minimal cost. And that’s exactly what happened for Cartoon Network. A bit on the extreme side, maybe, but effective nonetheless.

Another avenue that many companies are taking advantage of is video-viral marketing through YouTube. On average, over 100 million videos are watched and 65,000 clips uploaded a day on YouTube. Most are home videos, but many are now advertisements and movie trailers. The appeal is the low-budget, soft sell video that doesn’t shove a product down a viewer’s throat.

Some other examples of viral advertising of past and present:

The Blair Witch Project — admit it, you thought it was real home video just like the rest of us… and you went to see it because of that, didn’t you?
Burger King’s Subservient Chicken — having chicken “your way” by using this interactive website to make the guy in the chicken suit do whatever you can think of.
Borat — Did it take you awhile to figure out he wasn’t real?

So, is viral marketing effective? Absolutely! All you have to do is appeal to people’s curiosity and you’re well on your way. There are clearly some boundaries that shouldn’t be crossed, but, if your business has reached an advertising plateau, viral marketing is well worth considering.

Sources/Related Readings:
• Viral Marketing
• Contagious Commercials
• Fresh Inc. – Weblog: Jan. 31 – A Viral Campaign Bombs
• Two held after ad campaign triggers Boston bomb scare

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By Michelle Cramer
Wednesday, January 23rd, 2019 @ 12:00 AM CDT

Marketing |

Effective Logo Design for Small Businesses

Effective Logo Design for Small Businesses

McDonald’s has the golden arches, Coca-Cola the scripted font, and Apple… a multicolored apple. A logo is probably one of the most important elements of marketing your business. As your business develops, your logo will become synonymous with the quality of service you provide.

Your logo also conveys information to new clientele. The style and dynamics can speak volumes. Take Coca-Cola’s logo for example. The scripted text not only gives the familiarity of hand-written words, but also provides and indication that the drink is cool and refreshing. The style of the logo makes you want to say “aaahhhhh,” and I’m sure that’s something they were going for.

Continue Reading: “Effective Logo Design for Small Businesses”

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By Michelle Cramer
Tuesday, January 22nd, 2019 @ 12:05 AM CDT

Marketing |

Why Your Business Isn’t Growing

As we can all probably guess, most of the growth a business will undergo occurs in the beginning. And it is much easier to grow a small business than a large one. Therefore, if your small business isn’t seeing much growth, it’s likely because you’re missing a necessary element.

Examine these areas of your business:

Continue Reading: “Why Your Business Isn’t Growing”

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By Michelle Cramer
Monday, January 21st, 2019 @ 12:02 AM CDT

Marketing |

Fire Bad Clients to Increase Profits

Are your profits being hindered by deadbeat clients?

Examples of client bad-habits you should consider cutting loose:

• Non-paying or Low-profit Clients
If they’re not paying you for your services, then they are obviously not worth working for. There is, of course, an exception to this rule. If a client is generally appreciative and can’t afford their entire bill, make payment arrangements that work for both of you. If they still won’t pay, even after you’ve given them a break, then drop them and consider suing them for the unpaid balance.

Continue Reading: “Fire Bad Clients to Increase Profits”

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By Michelle Cramer
Sunday, January 20th, 2019 @ 12:08 AM CDT

Money, Operations |

Technology Could Make Waitresses Obsolete

Within the past ten years, most restaurants have installed touch-screens at the server work stations, for the servers to enter in the order for their tables. Now, technology has taken things one step further by recently giving restauranteurs the opportunity to put touch-screen ordering terminals at the table, replacing waiters and waitresses all together.

uWink Media Bistro, which opened in a Los Angeles area mall in October 2006, is the first of it’s kind. The restaurant was founded by Nolan Bushnell, who also founded Atari and Chuck E. Cheese’s, and he hopes to begin franchising this year.

Diners order on a touch-screen terminal at their table, and runners bring the food when it’s ready. In the interim, the terminal doubles as a video-game console to pass the time. If you need a refill on your drink, you simply touch “refill,” and 30 seconds later you have a full glass in front of you.

Lets weigh the pros and cons, shall we:

Continue Reading: “Technology Could Make Waitresses Obsolete”

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By Michelle Cramer
Saturday, January 19th, 2019 @ 12:03 AM CDT

Technology |

Learning from Google’s HR Techniques

Fortune Magazine released it’s “100 Best Companies to Work For 2007” and Google’s Mountain View, California campus was number one. Their employees are exceedingly loyal. “A team of wild horses couldn’t drag me away,” says one employee. They’re even more than willing to work all night without question or complaint.

What would make someone want to enjoy working that much? Check out these college-like incentives:

Continue Reading: “Learning from Google’s HR Techniques”

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By Michelle Cramer
Friday, January 18th, 2019 @ 12:00 AM CDT

Human Resources |

What Ever Happened to Customer Service?

Customer service is hard to come by these days. So much so that advertising agencies are coming up with ad campaigns that emphasize the effective customer service a business provides. Instead of it being an expected part of everyday business dealings, quality customer service has become a commodity. I know I’m not the only one who finds that appalling.

Let’s look at recent news for an example, shall we. How about that American Airlines flight the Friday before New Year’s, traveling from San Francisco to Dallas (usually a 3.5 hour flight). The flight was diverted to Austin, Texas because of bad tornado weather in Dallas.

Continue Reading: “What Ever Happened to Customer Service?”

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By Michelle Cramer
Thursday, January 17th, 2019 @ 12:05 AM CDT

Customer Service |

Pulling Your Teen Out of the Financial Hole

Regardless of how old your child is, it’s never too late to teach him how to properly handle his money. The lessons that you can teach your teenager are vitally important. He is on the verge of being on his own. If he doesn’t know how to handle his money the right way, you are going to have to watch him endure years of financial woes. Take what little time you have left as an authority in his life and show him how it’s done.

Checking and Savings
Start by opening checking and savings accounts under your teen’s name. Whether she have a part-time job or just does some babysitting on the weekends, use the opportunity to show her that its better to use a checking account so that you can keep track of where the money goes.

Sit down with her each month when the account statement comes in and be sure she understands how to balance her checkbook. Explain the importance of recording every transaction in the register and figuring the current balance after each purchase or deposit.
Be sure that she understands the ATM balance shown after a withdrawal is rarely accurate and to never depend on it.

These tasks may seem common sense, but many people have no idea. I have a close friend who works in banking and she could tell you crazy stories. For example, she has many people who have bounced checks and swear by the fact that they thought there was still money in the bank just because there were still checks in their checkbook (Hello!)

Establish a Budget
Help your teen come up with her own budget to determine how her personal earnings will be spent. Determine whether she will be responsible for paying the insurance on her car, what she will be putting in savings each month, if she will be responsible for buying her own new clothes, etc. Compare her budget to the family budget so that she gains an understanding of how easy she really has it at this stage in her life.

Make a chart, indicating each spending category and how much each is allotted every month. Have your teen keep tabs on how much is left in the budget by writing down what she spends in each category and how much remains after that purchase. This will help her to know where she is overspending and to see how she can stick with it. It may be difficult for her in the beginning, but she’ll get it eventually.

Teach Real Debt
Nothing gets me more that parents who buy their teen a brand new Mustang for their 16th birthday… and, when he totals it, a Mustang convertible to replace it. Grrr. Those parents aren’t teaching their kids anything except that they can always count on daddy to get them whatever they want.

If you want your teenage to understand the real world, then teach him what it means to really be in debt. Go ahead and buy him a car, if you have the means, but get something more reasonable (say, less than $5,000) and have your child pay you back, with interest.

Make a monthly payment plan — something that is feasible based upon your teen’s income. Predetermine a percentage rate that won’t overwhelm him, but will convey the weight interest bears to him. Five percent is a good number.

Put the entire matter in writing, and be sure to include what the consequences will be for a late or missed payment (loss of driving privileges, TV time, etc.). Having a written document as a reference point helps to eliminate excuses. Also, map out a “loan payoff” chart, showing when each payment should be made and what remains on the loan after its application, all the way to zero. This will help your teen to see how much they will really be paying in the end and just how long it takes to get out of debt.

I also recommend you show them how long it would take to pay off (and how much more it would be) if they purchased the car on a credit card with the average 18-21% interest rate. I would imagine this would deter your teen from ever wanting to use a credit card for anything they couldn’t pay off each month.

In my opinion, this method is far more effective than the “prepaid card” that many parents use because the prepaid card is not teaching them the reality of debt. All it teaches is that prepayment is different from debt, but not the consequences and hardships debt can bring. Many teens end up getting a credit card anyway when they move out, without the proper education on how to handle one.

Truthfully, the possibilities are endless for teaching your teenagers about money. Anything you can do to help them understand being on their own (anything comparable to what you do) will help tremendously. Just don’t give up and don’t get frustrated. It will be well worth it to see them succeed.

Related Readings:
• Teens, young adults need money skills
• Teach Your Teen Financial Responsibility
• 5 Steps to Teach Your Teen to Budget
• Teaching Your Teen About Money

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By Michelle Cramer
Wednesday, January 16th, 2019 @ 12:00 AM CDT

Family Business, Money |

Teaching Your Child About Money

For most of my life I knew very little about how to handle money. My examples growing up were usually of living paycheck to paycheck, and, when finally on my own I followed suit for a long time. The only advice I ever received was from my grandmother who told me regularly to “save, save, save,” but never told me how to get to a point where I could actually do that.

Unfortunately, my story is all too common. Today’s children are tomorrow’s business owners and many of them will go through years of financial struggles because they were never taught by their parents how to properly handle money. I firmly believe that teaching our children about money from the moment they are able to count (around 2 years old), is vital to their future happiness and survival.

The Boxes Method
When you’re little one can count to 10, she can begin to understand money. Remember, kids learn by observation and repetition. Give her a small allowance in increments that can be divided. I recommend starting with three pennies each day. I know, pennies sound small, but that is about all that will hold their attention span at a young age. Provide her with three small boxes and label them: spend, save and give. Show her each day that she should put a penny in each.

The “spend” box is, of course, the money that she gets to spend. Buy some stickers and new barrettes or, for your little man, a packet of baseball cards or bubblegum. Give him the opportunity to buy a piece of gum immediately, or wait until tomorrow so he will have two cents to buy a baseball card. What seems like an insignificant process will help him to understand how spending works.

The purpose of the “save” box is obvious as well. Give him ideas of things he can save for and buy at the store within the next month, such as a matchbox car. Tell him how many pennies it will take and remind him how close he is to buying it each day.

Avoid the temptation to help him along by adding extra funds. At such a young age, he may get the idea that mommy and daddy will always help him get what he wants. You want him to learn personal responsibility, not dependence on you.

Using the “give” box depends on your preferences. I am a firm believer in giving to charity, whether it be offering at church or donating to the local shelter, so it’s part of my teaching strategy. I believe that giving will eventually produce a return.

For example, the Rockefellers are an extremely well-known and wealthy family. What most don’t realize is that from John D. Rockefeller on down, the family has always been predominately givers. John Rockefeller gave over half of his $1 billion fortune during his lifetime, and the tradition continues through the generations.

Get Them Involved
As your child gets older, expand the financial lessons (and the amount of allowance) accordingly. Make her aware of your family’s position on finances – explain where your money goes.

Too many parents feel that it’s none of their child’s business how their money is spent, but that attitude is all wrong. You child learns by watching you. Your attitude about finances will become hers as she gets older. Openness will only help her to learn more and be more responsible with her own money down the road.

Let your child have input on what the family saves for, such as a family vacation, summer camp, or new family bikes. Map out how much you will need to set aside as a family each month in order to reach your goal, and have the kids contribute some of their allowance savings (such as $5 a month). Show them how even a small amount helps you to get there that much quicker.

Teach Debt Early
It’s also important to start teaching your child the shackles of debt. When you child begins to ask for a luxury item, such as an X-Box, agree to purchase that item with the understanding that your child will pay you back out of a portion of his allowance (Christmas is an exception, of course).

You may even consider adding a small percentage of interest, say 2%. Seem harsh? Well, it might be to some, but it’s highly effective. He will soon realize that it’s better to save up for something big and be patient than to spend money that you don’t even have yet. This will also begin to teach him the difference between needs and desires.

But what if your child is already a teenager and you are starting to witness the repercussions of not teaching her earlier about finances? Don’t worry, it’s not too late. As long as she is still under your roof, you still have ample opportunity to teach her how to handle money correctly — before she gets in trouble out on her own.

Tomorrow I will cover how to reach a teenager about finances, even when it seems impossible.

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• 15 Ways to Teach Kids About Money

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By Michelle Cramer
Tuesday, January 15th, 2019 @ 12:05 AM CDT

Family Business, Money |

Relating to NBC’s “The Office”

If you haven’t seen NBC’s “The Office yet, and you’ve ever worked in an office, then you should definitely catch an episode. Its Nominations for two golden globes this year are not surprising, as the show just keeps you rolling. It’s one of my favorites and I think the appeal is not only in it’s humor, but that at least one of the characters on the show reminds each of us of someone we’ve worked with.

Angela from Accounting
I think I can probably generalize that everyone has unfortunately had the pleasure of working with someone like Angela. There have been too many to count for me.

The woman is tiresome. Her holier-than-thou complex is just down right rude, not to mention obnoxious. She is absolutely convinced that no one can do anything as well as she can — that everyone in the world but her is a moron. We could all do without the “If I were you” statements that continually spill out of the mouths of the Angelas in our office.

Inevitably, however, everyone puts up with Angela, doing nothing about her behavior. Despite the fact that we couldn’t help but feel relieved if the soda machine tragically fell over on her (or is that just me?).

Face it, when it comes to the Angelas in our office, we all just roll our eyes, mumble obscenities to ourselves and move on. We don’t say anything because the boss clearly sees something in them that keeps them around and we don’t want to risk losing our job by pointing out the elephant in the room. Say la vi.

Michael, The Manager
Incompetent is the word that comes to my mind. How the man obtained the position of manager, I’ll never understand. How did he kept a job at Dunder-Mifflin long enough to even be considered?

I have most definitely had managers like him, especially in the food service industry. You’d be surprised how many managers in a fast food restaurant stand around dumb-founded most of the time (well, maybe you wouldn’t).

I’ll have to give it to him though, he tries. Well, he doesn’t try to do the job, he tries to get everyone to like him. Granted, his attempts are often ridiculous, but the occasionally margarita party would probably bode well in any office.

Michael is genuinely concerned about what people think of him. He lacks the self-confidence that most stereotypical managers thrive on. He’s a rarity in that regard, at least in my experience.

Dwight, the…. Uh…
What does he do again? Besides brown-nose, that is. Much like the Angelas, we could all do without the suck-up Dwights of the business world. When was the last time we heard anything about Dwight’s actual job on the show? While he deems his position “Assistant Regional Manager,” Michael is often quick to correct him, noting that he is “assistant TO THE regional manager.”

The basic scenario is all too familiar — Dwight’s desire to be more than he is requires him to spend too much of his time at the bosses beck and call to get anything done. And guess who is stuck with picking up the slack, while the Dwights try and take all the credit? But we keep on doing the work, with the meager hope that someone will notice.

Pam, The Receptionist
Now she is the type of co-worker that everyone could get along with. The co-worker we all wish sat next to us. And she is a rare jewel. Pam is sweet, caring and even funny. When Michael is down, despite the fact that she often loathes him, she will help to pick him back up. She even covers him when he’s messed up (as usual).

If we all just strived to be like Pam, work would be much more bearable. The reality is, however, that there will always be someone you work with whose personality clashes with your own. That’s just how it is. The best way to cope is to watch “The Office” and find some laughter in the familiarity.

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• Is Your Office Like “The Office?”

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By Michelle Cramer
Monday, January 14th, 2019 @ 12:04 AM CDT

Operations |

Baby Boomers Expected to Lead Business Boom

Baby boomers, those born between the years 1946 and 1964, represent 75 million of the nation’s population. And, in 2008, the first of that generation will hit the early retirement age of 62. Many boomers, however, don’t plan to retire. The new wave of business start-ups that is expected in the next couple of years will probably not be headed-up by 20-somethings as in recent years, but, rather, by potential retirees.

I Dream of Ownership
Of over 2100 people surveyed in a Yahoo poll conducted last year, 55% checked “own my own business” as the work they would prefer to do late in life. And 37% of those plan to start their businesses in the next five years. Ten percent of the general population owns their own business and, as a basis of comparison, 16% of baby boomers do. They make up 54% of all business owners.

Is there something in the water these days that has caused the boomers to keep on working through their golden years? You could say that. Many have a love of labor (who would of thought). But overwhelmingly it is their desire to be free and independent. Baby boomers are known to have what is called a “Peter Pan Complex.” They reject growing old in the traditional fashion, instead seeking new stimulations and challenges in their lives.

I can’t help but think about those commercials for retirement investments that talk about how, these days, retirees are looking at retirement in a whole new way. Instead of sitting in the rocking chair watching TV and darning socks, boomers reaching retirement age are taking motorcycle trips across country, skydiving, and just overall living the life they always wanted to. Why not add starting a business doing something you love to the list?

Want-to or Have-to?
Many boomers are going into business for themselves at retirement age out of necessity rather than desire. It’s the only way they will have an income during the latter part of their life. An unfortunate 90% of 45-54 year olds have less than $250,000 saved up for retirement. That equates to less than $10,000 annually to live on for 30 years.

You may be asking what the baby boomers have to offer that can lend to their success as entrepreneurs. Well, the typical stereotype associated with those reaching retirement age generally doesn’t apply to the boomer generation.

Baby Boomers:
1. are better educated that previous retiree generations.
2. are more willing to take on challenges.
3. have more funds available that younger entrepreneurs because they typically don’t have kids at home to support and have their mortgage paid off.
4. have more time available to develop their business correctly.
5. have years of experience in the real world.
6. have a vast network of connections from, frankly, years of being a part of this world.

I can’t help but cheer the boomer generation on. That’s what retirement should be… doing what you love. And why not make money doing it to support you in the years ahead? And let’s not forget, the successful businesses to come from the boomer generation will help the rest of us too, by creating new jobs, decreasing the tax burden and aiding the economy.

All I have left to say is, in the words of the 20-something generation to which I belong: “More power to ya!

• Start-Up Explosion on the Horizon
• Most Americans Dream of Starting Business
• Entrepreneurship and the Retiree
• Baby Boomers Boost Home-Based Business Market

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By Michelle Cramer
Sunday, January 13th, 2019 @ 12:13 AM CDT

Ownership |

What to Expect from Technology in 2007

Have you seen Apple’s PC vs. Mac commercials (click to view ads)? You know, the ones where:

Two men stand side by side in front of a featureless, white background. “Hello, I’m a Mac,” says the guy on the right (who is much younger and dressed in jeans). “And I’m a PC,” says the guy on the left (who wears dorky glasses, ill-fitting khakis, and a jacket and tie). The two men discuss the many advantages of using a Mac and seem to agree that Macs are “better” than PCs [description courtesy of].

I love those commercials, and I’m utterly a PC fan. But they are so well made and appealing (which, of course, is the idea). In fact, the ad campaign is rather brilliant, I’d say.

And, with 2007 being a war of new technology release between Microsoft and Apple, I would say that we’ll be seeing this ad campaign for awhile. Both companies will be releasing new versions of their main computing operation systems this year. The releases are expected to lead to upgrades to both the inside and outside of computers as we know them, as well as increase the selling price, for the first time in nearly 10 years, by 20-25%.

Microsoft will be releasing Windows Vista toward the end of January. The new operating system boasts features such as Windows SideShow, a technology that enables laptop manufacturers to include a secondary or auxiliary display in future laptop designs, which can be used to easily view the critical information you need (such as e-mails), whether the laptop is on, off, or in sleep mode.

Other Windows Vista features include voice recognition and Windows Backup, which allows you to access lost elements of your hard-drive more readily, even if the system crashes.

Apple’s new operating system is called Leopard. Some features include Time Machine, a similar program to Windows Backup, which allows you to search for deleted or lost files. Another feature, Spaces, organizes your on-screen windows into categories such as “work” and “play.”

Apple is also due to release iTV, a video-streaming technology, this year. This unit, a box similar to the Mac mini and designed to send video from a computer or iPod to your television screen, is expected to sell for around $300.

Intel has jumped on the release train as well. Due to release this year is their new wireless technology, Santa-Rosa, which will feature the latest Wi-Fi as well as greater power saving capabilities and faster access to memory. Robson, another innovation that is designed for Windows Vista, helps to speed up the start-up and application loading processes, making them up to two times faster (finally!).

There is also expected to be a boom in the ultra-mobile PC industry that Sony and other electronics manufacturers have already tapped in to. A cross between a notebook and smart phone, ultra-mobile PCs are designed for the consumer to be able to take their entire computer absolutely anywhere.

I don’t know about you, but I’m looking forward to the innovations coming our way in 2007. It never ceases to amaze me how rapidly technology advances right under our noses. Who knows, maybe we aren’t far from the world of The Jetsons afterall.

• Tech – The Look Ahead to 2007

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By Michelle Cramer
Saturday, January 12th, 2019 @ 12:00 AM CDT

Technology |

Business Trends in 2007

Ah, the joyous time for New Year’s resolutions. Dieting to getting fit, spending more time with your family, redecorate a bedroom… the list goes on and on. I’ve made more of a commitment than a resolution this year. I plan to start my own business.

I know, it seems kind of odd that I would write all of this information about small business and not have my own. But I have learned so much writing this blog the past few months. Enough, in fact, that I have the confidence to really follow my dreams and start something.

Some 671,800 small businesses started up in 2006, two-thirds of which can expect to be in business for at least two years. So, now it’s our turn. Are you ready? 2007 is our year, right?

Okay, so you may be with me on a positive outlook for starting a business this year, but your enthusiasm may be lacking due to the fact that you don’t know what kind of business to start. We all have ideas, but whose to say that our ideas land in a flourishing market? Don’t worry, help is out there.

The most important key to picking the right business to start in 2007 is to pay attention to the world around you. Find a trend and revamp it to fit your style and a specialized market. If ideas are scarce, is ready for you with their Hot Center — a list of the hottest business trends for 2007. And it’s a long list. You’re bound to find something you would enjoy.

Here are some possible ideas to get you brainstorming:

Home Sales Parties
Many stay-at-home moms are tuning into this trend in order to add a little adult time to their lives, as well as bring in some extra funds. Pick a product you believe in, whether it be makeup, jewelry, spa treatment supplies, home décor, scrapbooking supplies, etc., and arrange to have “parties” at other people’s homes. You get a certain percentage of the profits and your friends who host the party get special incentives as well.

Personal Service Industry
Put simply, saving time for someone else. It could be anything from a grocery shopping service, to walking their dogs, to putting together the scrapbooks others can never seem to get around to (one of the areas I plan to make part of my business).

If you have the talent, then put it to good use. One of the largest growing internet industries these days is a need for copywriters. Businesses want their webpage text to draw the consumer in, and they need good writers to do that. One of the best parts is that, typically, it’s a freelance job so the possibilities are endless.

This is an industry that will probably never go out of style. People want beautiful yards, whether it be for their home or business location. If you have a talent for sculpting the spectacular from rocks, water and flowers, then you should definitely consider this industry.

In a category all their own, despite the fact that you can practically find one on every corner. Thing is, if you have a block near you that doesn’t have a coffeehouse, chances are that you could start one there and be very successful. Everyone’s got to have their coffee. And if you can beat the prices and selection of “those other guys,” you’re in business.

I could go on and on. There are so many wonderful possibilities for a successful business in 2007 that, as long as you stick to the trends, you really can’t go wrong.


• What’s Hot for 2007?
• 13 Niches to Investigate for Part-Time Business

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By Michelle Cramer
Friday, January 11th, 2019 @ 12:01 AM CDT

Ownership |

Elements of a Franchise Agreement

If you’re planning on investing in a franchise, it’s important to know what you’re getting into. Though I can’t speak from experience on this issue, it’s clear from my research that most Franchise Agreements (which I will hereafter refer to as “FA”) are complicated and highly weighted toward the favor of the franchiser. defines a FA better than I could as representing a license to use a specific business operating system employing registered brands and trademarks for a specific period of time in exchange for a specified payment structure. And there is no doubt that a FA is specific about every little detail.

A Franchise Agreement does not mean that you are becoming part owner in the company. On the contrary, all rights to the brand, trademarks and operating systems remain solely the property of the franchiser. As a franchisee, you are more or less an investor, often temporarily.

Be sure that the terms of the FA reflect how the business is portrayed in the UFOC mentioned in yesterday’s post, Finding the Right Franchise. Though every FA varies tremendously based upon the company and product or service provided, most contain the following basic elements:

Operation of the Business
The rules, restrictions and obligations of the franchiser and franchisee regarding the successful operation of the business from the franchiser’s perspective. This includes the repair and maintenance that you are expected to contribute as well as the regulations regarding trademarks, patents, advertising policies, etc.

Where your specific business will operate and any exclusivity rights that may apply. Be aware that part of your investment in a franchise may be the purchase of real property for the business location. Many FAs require that, upon the termination of the agreement, the property be sold to the franchise company, often under market value.

The training and operational support provided by the franchiser throughout the lifetime of the FA. However, this is typically at some cost to the franchisee.

Duration and Renewal
The initial duration of the agreement and your renewal options. The initial term can range from 5-20 years, more frequently toward the shorter end with multiple renewal periods. Most franchisers prefer this policy because any changes made to the FA during the initial term are automatically put into effect upon renewal, and you typically have no idea what those new regulations will be beforehand. Therefore, the longer the initial duration of the FA, the better it is for you, the franchisee. Also remember that, the better your performance, the more favorable the changes will be.

Typically ongoing and usually 4-8% of monthly sales.

What your rights are regarding the sale or transfer of your franchised unit. Usually this contains an option for the franchiser to buy back the unit or have “right of first refusal.”

Dispute Resolution & Termination
The franchise regulations regarding the policy for resolving disputes between franchiser and franchisee, as well as the process for termination of the FA, if necessary.

As a legal assistant, I cannot stress enough how important it is that you have an attorney assist you with your review of the Franchise Agreement. An attorney can interpret the legal jargon usually found in a FA, and consult you accordingly to avoid an unfavorable situation later on.

• Free What’s in a Franchise Agreement?
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By Michelle Cramer
Thursday, January 10th, 2019 @ 12:00 AM CDT

Business Law, Startup |

Finding the Right Franchise for You

McDonald’s, Two Men and a Truck Movers, AlphaGraphics printing — well known national franchises whose appeal can be quite positive to the potential businessperson. With more than 5,000 franchise opportunities spanning the globe, knowing where to begin can be a bit cumbersome.

Should you invest in a franchise?
You must first determine if a franchise is even the right business endeavor for you. It’s important to understand that franchises are all about consistency. Each franchise unit is run by the same standards as the rest of them. If you are interested, you need to be able to answer “yes” to the following questions:

1. Am I willing to follow and embrace someone else’s business system?
2. Am I capable of being a follower?
3. Am I willing to be part of the franchise network, including accepting decisions that benefit the whole network, but not necessarily me as an individual?

It’s also important to evaluate your professional strengths. A franchise owner must have strong management and customer service skills to fully succeed in this type of business.

What franchises are you interested in?
With so many choices available, you will have to narrow your search to those options you are most interested in. The International Franchise Association and The American Association of Franchisees & Dealers provide franchise directories, reviews and guides to help you sift through the options. The Franchise Business Review provides reports on franchises based upon surveys taken by the franchisees themselves.

There are franchise consultants out there, but before you rely on one, be aware of the fact that franchisers pay them for the new prospects they bring in, so a consultant’s motivation may be a bit biased in favor of the companies they are working for.

What do the details tell you?
Once you’ve narrowed it down to the few franchises you are interested in, it’s time to dive into the details for each of them and figure out which is best for you. Be sure to obtain a Uniform Franchise Offering Circular (UFOC) from each franchise. The UFOC contains information regarding how the business is ran, any litigation or bankruptcy filings, investment costs and fee requirements, the franchise rules and restrictions, and contact information for each of their franchise units.

Take advantage of the fact that you have the contact information for those who have been where you are. Contact other owners in the franchise and get feedback from them. Find out how long it took him to earn a profit. Ask her if the franchiser is as helpful and supportive as he should be. And most importantly, has it been worth the time and money — would he do it all again?

How do you make it official?
Once you’ve determined which franchise you would like to get involved with, you should hire an attorney who specializes in franchising. It’s important that you don’t make a final decision until you’ve consulted an attorney and he/she has examined the Franchise Agreement thoroughly on your behalf.

Franchise Agreements can be tricky and, depending on the details, can turn you off to the idea completely. If you go it on your own, you may not know the fine print requirements. An attorney will help you to comb through the details so that you can be certain that the potential franchise is the right fit for you.

Check back tomorrow for more information on what a Franchise Agreement should contain and what snags to look for.

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By Michelle Cramer
Wednesday, January 9th, 2019 @ 12:00 AM CDT

Startup |

MasterCard Global Small Business Survey 2006

Mastercard Corporation has posted an interesting global survey of small business owners and their outlook for the future.

A total of 4000 small business owners from around the world who manage businesses with 1 — 99 employees were polled. A total of 500 respondents were surveyed from eight countries, including the United States, United Kingdom, Mexico, France, Brazil, China, Hong Kong and Australia.

Small business owners around the world have differing views on the current business climate but feel more optimistic (28%) than not (21%) about the upcoming year. They work a little more than 50 hours a week but spend 18 of those hours on administrative tasks. While competition was seen as the top challenge they will face next year, half of small business owners around the world feel that globalization will help their business, rather than hurt it.

The section that stuck out the most to me was the question of what motivates small business owners to run their businesses:

Globally, small business owners say that making enough money to cover living expenses (70%) and having more control over the future (64%) are important motivations for running their own business. Small business owners in Brazil are the most likely out of all those surveyed to say that providing employment (71%) and contributing to society or the community (64%) are important motivations, while small business owners in China are the most likely to say that building something that can be passed on to their family (59%) is an important motivation. Those in the United States are the most likely to say that being their own boss (67%) is an important motivation.

MasterCard Global Small Business Survey 2006

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By Chris Brunner
Tuesday, January 8th, 2019 @ 12:00 AM CDT

Ownership |

Preparing for an IRS Audit

Unfortunately, no matter how hard you try, sometimes you might make a mistake on your tax returns and the IRS will audit your business. Most audits are prompted by large losses in your business over a number of years, which would lead the IRS to wonder how you’re producing an income.

Typically, IRS audits are face-to-face, but about one-third of them are letters from the IRS asking for an explanation regarding a specific item on your tax return. Audits can be regarding your entire return or just a portion that the IRS has questions about.

If you receive a letter requesting an explanation, first consult whoever prepared your return. If it was prepared by someone who is not a professional accountant, you should consult one to find out the best way to handle it. Respond in writing, on your company’s letterhead, and provide copies of all related documentation. Always send any correspondence with the IRS by certified mail, so that you can confirm the package was received.

If you have to face the IRS in a personal meeting, make sure that you obtain representation by either a lawyer or CPA (Certified Public Accountant). Don’t try and take care of the situation by yourself, as there are probably many laws and regulations you aren’t fully aware of. You can also have the meeting video taped, but you must give the IRS ten days written notice if you choose to do so.

Logically organize all of your records regarding the issue(s) in question, categorically and chronologically. Neatness and organization will build your credibility with the auditor. Also, be sure that you only bring documentation related to the items that the IRS wants information about. Extra documentation is burdensome and unnecessary, and you don’t want to volunteer information about your taxes if they don’t ask about it.

At minimum, you will need to provide the following documentation:
• bank statements and cancelled checks
• receipts
• print-outs and disk copies of electronic records and logs
• appointment books, calendars and/or journals
• worksheets showing your calculations for each item
• an extra copy of all documentation

It’s important that you keep your cool and don’t get overly defensive, as that might make you seem guilty to the IRS auditor. You may even want to prepare some notes for yourself to remember events and explanations. When you’re in the meeting and under that kind of pressure, you can often simply go blank or stumble over words. Having notes on what you want to convey to the auditor will help you to keep things straight in your head.

After the meeting is over, the auditor will provide a written report regarding his conclusions and what additional taxes, if any, you owe. Keep in mind that, if the meeting and result are unsatisfactory, there is an appeals process available. This is where having a video tape of the meeting will come in handy, especially if the auditor was not willing to hear you out. There is also an appeals process available for any liens, levies or property seizures resulting from an audit, including appeals for hardship reasons.

Overall, if you are prepared and organized and can show that the issue at hand was a legitimate and unintentional mistake, then you will probably only face paying additional taxes. If nothing else, you will have definitely learned from the experience.

• Preparing for an Audit
• WorldWideWeb Tax: How to Prepare for an IRS Audit

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By Michelle Cramer
Monday, January 7th, 2019 @ 12:02 AM CDT

Taxes |

The Right Way to Write-Off Business Expenses (Part 2)


As a continuation of yesterday’s post, below are some additional tax deductions you should handle carefully.

Home Office
If you work from home, you can only write-off the percentage of your bills related to the area dedicated solely to your business. For accuracy, which is something the IRS appreciates, hire a contractor to measure your home office space professionally and provide the square footage that your home office occupies.

Once you have the measurements, figure out what percentage of your home is dedicated to your business. You can then write-off that percentage of your mortgage/rent, utility bills, etc. Keep in mind, however, that this area of your home must be used exclusively for your business. If it is, in any way, used for personal matters (i.e., your home computer is used for both business and personal), then you cannot right off percentages of your household bills.

Home Computer
If your home computer is used for both personal and business matters, then the expense of the computer is not deductible. Instead, you will need to keep a log of the time you use it for business purposes, much like with your home office. Then, determine a percentage of your time in which you use the computer for business and that is how much of the computer is deductible.

Another option would be to invest in a laptop that you use for business purposes only. This will allow for the entire expense of the laptop to be deductible.

Phone Bills
If you have a home office, phone bills do not fall under the category of bills you can write off a percentage of. As long as your phone, whether a mobile or landline, is not used a lot for personal calls, then you can write off the entire bill.

However, if you use the phone for both, then you will have to be sure and get an itemized bill from the phone company and indicate which calls, both incoming and outgoing, were business related. It’s a good idea to also indicate which client each call was related to.

The best and easiest way to avoid extra time and effort is to simply purchase a separate cell phone or get a separate phone line in your home for business calls only. If you opt for the separate cell phone, you can also write-off the phone itself.

As a general rule, if you can wear it outside of your job, such as a new suit you wore for work but also to church or a funeral, then it is not deductible. However, if you perform as a clown for children’s birthday parties, then your clown costume is deductible. Another example would be the costume a Las Vegas showgirl might wear.

These are just a handful of the vast expenses that you might be able to write-off each year. It’s a good idea to consult with a professional accountant if you are not familiar with all the regulations. It’s better to spend a little extra money getting some help the first few times than to make a mistake and get audited.

Part 1: Travel Expenses and Vehicle Usage

• Top Tax Write-Offs That Could Get You in Trouble

Recommended Readings:
• Google Answers: Tax Write Offs When Self-Employed
• Top Business Write-Off Audit-Triggers
• 5 Year-end Small Business Tax Tips

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The Right Way to Write-Off Business Expenses (Part 1)
Moving from a Home Office to a Commercial Space
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By Michelle Cramer
Sunday, January 6th, 2019 @ 12:00 AM CDT

Taxes |

The Right Way to Write-Off Business Expenses (Part 1)


Write-offs can be headache when it comes to preparing income tax returns for your business. They are often what causes a business to be red-flagged by the IRS because there are so many regulations and many small business owners just aren’t sure how to do it right. I will be addressing this in two parts, simply because there are so many different items to cover.

Here are some pointers on how to handle a couple of the most common tax write-offs correctly.

Travel Expenses
With any travel expenses that you plan to write-off, you will need to be able to prove that the travel was directly related to your business, such as a product convention or meeting with a client.

Flight costs typically aren’t a problem, even if you always fly first class. It’s the limo from the airport to the hotel that would be cause for concern. Meals are deductible at a rate of 50% of the bill. If you are taking client to dinner, you will need to be able to show that you discussed business at the meal.

This is where a journal or electronic log really comes in handy. When traveling on business, be sure to document your daily events, like which clients you spoke to, where and when you met and what you discussed. Should your business ever be audited, the IRS will require you to produce such a journal.

Family vacations are not a tax deduction, unless your family members are part of your business. You have to justify that by holding business meetings or by all parties attending a business convention while on the trip. If you go to the Bahamas and lay on the beach all five days, chances are you really shouldn’t try to write that off.

Vehicle Usage
If a vehicle is used exclusively for your business, then generally you can deduct the entire expenses for operation of the car. However, the standards of “exclusive use” are hard to meet. It’s more likely that your vehicle is used for both personal and business and you will, therefore, have to determine what operation expenses are considered deductible.

Generally, travel between two business destinations is considered a deductible operation of the vehicle. This can mean travel from your home office to the post office to deliver mail or the supply store to get office supplies. This also includes travel from one client’s location to another’s and back to your place of business.

Travel to work locations that are different from that of your regular place of business also count. However, travel from your home to your regular place of business on a daily basis is NOT deductible, even if you have your business advertised on the side of your car.

Generally, travel deductions using a vehicle are calculated by mileage. Again, in your journal, indicate the odometer reading upon departure from a business location and upon arrival at your new business destination. Also indicate how this travel relates to your business.

Part 2: Home Office and Clothing

• Top Tax Write-Offs That Could Get You in Trouble
• Travel Expenses, Meals & Entertainment

Recommended Readings:
• Google Answers: Tax Write Offs When Self-Employed
• Top Business Write-Off Audit-Triggers
• 5 Year-end Small Business Tax Tips

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The Right Way to Write-Off Business Expenses (Part 2)
IRS Audit Triggers
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By Michelle Cramer
Saturday, January 5th, 2019 @ 12:02 AM CDT

Taxes |

IRS Audit Triggers

IRS Audit

Part of being a self-employed business owner is the requirement for a lot of record keeping. Incomes and expenses probably make up the majority of those records, simply because it is necessary in order to keep up with the IRS and their grueling and complex rules governing taxes on the income your business generates. If you don’t meet their expectations, your business could be red-flagged and even audited, and that’s something I’m pretty sure we all want to avoid.

So, how do you avoid it? First and foremost, you must keep accurate records. Estimates and assumptions about the income and expenses associated with your business will only draw attention to you. Your best bet is to write everything down, each and every day, even if it seems insignificant.

There are a number of things that trigger the IRS into examining your business practices more thoroughly. They are:

1) Not Filing
This is probably the most obvious trigger, and you would expect it would often be avoided. But many business owners, especially those who are just starting out, fear they won’t have the funds to pay the taxes they will owe. So they simply don’t file returns. Bad idea. It’s better to file and owe back taxes than to go to jail for not filing at all.

2) Overpaying Family Members
If a family member works for you, be sure that you pay them according to their actual responsibilities and experience and at a rate comparable to the rest of the job market. Don’t pay them more than they’re worth just because they’re family.

3) Income Boost
If your income for the current year is excessively higher than previous years, the IRS will want to know why. The reason may be legitimate, like the fact that the demand for your business skyrocketed. But keep in mind that the IRS will then expect your return to show additional expenses in order to meet that increase in demand.

4) Inconsistencies
Make sure your federal tax return is consistent with your state tax return; that the income and expenses match down to the last penny. If there are differences, even subtle ones, you’ve caught their eye.

5) Bad Accountant
The IRS has a checks and balances system with which they keep tabs on accountants and other tax preparers. If a preparer is doing something wrong, not only will they get audited, but so will all of their clients. This means you. So check your accountant’s references thoroughly before hiring him.

6) Extreme Expenses
If you have an itemized expense on your tax return that just doesn’t match up with your income, the IRS will notice. For example, if you’re claiming an income of $30,000 and itemizing a $5,000 desk for your home office… well, it’s pretty obvious that something’s not right and the IRS will want to follow-up.

7) Write-offs
As every business owner knows, incorrect write-offs are one of the largest triggers for an audit. If what you’re writing off doesn’t match what is expected of your business practices, the IRS will probably want an explanation. There are so many rules regarding write-offs that it’s a whole other topic in itself, which I will address tomorrow.

Bottom line: pay attention and be thorough when it comes to your income and expenses throughout the entire year. Don’t wait until January to put everything together for the previous year, but keep record as you go. This will help you to avoid mistakes that trigger audits.

Also, be smart. Don’t try to find loopholes and “work the system.” That’s what gets business owners in trouble. The IRS is cracking down on small business these days, so it’s best to just stick to the rules, even if it hurts a little.

• Top Tax Write-Offs That Could Get You in Trouble
• WorldWideWeb Tax: How to Avoid an IRS Audit

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Last Minute Tax Tips
What IRS Auditors Look For
The Right Way to Write-Off Business Expenses (Part 1)
The Right Way to Write-Off Business Expenses (Part 2)
Preparing for an IRS Audit

By Michelle Cramer
Friday, January 4th, 2019 @ 12:05 AM CDT

Taxes |

The Warning Signs of a Doomed Partnership

Just as in an unhappy marriage, the problems in an unstable business partnership tend to result in feeling unappreciated and ungratified, having unmet expectations and facing events that cause doubt and distrust. Problems left unattended will result in one or both of you dissolving the partnership.

To keep your partnership in tact, watch for the warning signs:

1) Communication Breakdown
If every conversation you attempt to have with your business partner turns into a war of words, then chances are you’re having a hard time communicating. When we’re holding a grudge against someone, we often have a tendency to always go on the defensive. Our ears shut off and our mouth won’t quit. If you can’t listen to each other, then you’re not communicating at all.

2) Everything is a Competition
Your partnership should be a compliment of each other’s strengths and weaknesses, but, when tensions rise, things tend to become competitive rather than complimentary. If you are constantly trying to out-do your partner, rather than work with him, then there’s probably an underlying issue that needs to be addressed.

3) Financial Problems
This can be anything from the business being under financial stress, to different views on how money should be spent, to disagreeing on the division of profits. If money is an issue, than so is something else.

4) Dominance Issues
If you’re fighting for control of the business, then you are probably not happy with the way your partner is managing her share of the responsibility. When you try to do everything yourself it comes down to a trust issue. There is something that has caused an inability to trust your partner’s productivity.

5) Different Goals
It’s safe to assume that, when you started the business, you and your partner had the same vision for the future. But, as time progresses, those goals may change and differ. That in itself is not a danger, but the inability to compromise and combine your visions is.

Keep your eyes open for the warning signs and meet issues head-on before they become problems. And, if things look bleak, you may want to consider going to a partnership coach before calling it quits. More often than not, an unbiased mediator can help put your business partnership back on the path to success.

• Your Partnership About to Crash and Burn?
• Business and Professional Coaching

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By Michelle Cramer
Thursday, January 3rd, 2019 @ 12:05 AM CDT

Ownership |

Picking the Right Business Partner

Nearly 70% of all partnerships fail, typically because the people involved were so excited about their idea that they didn’t take the time to make sure that they were compatible for a business relationship. The majority of partnerships are formed between friends who assume that since they already get along, there shouldn’t be a problem. There are distinct differences between getting along with a friend (or family member) socially and the relationship remaining strong under the daily stress of running a business.

Business partnerships are often compared to marriages. In fact, if you are in a partnership, you will likely spend more time with your business partner than you do with your marital spouse. Much like in a marriage, it’s important that you take time to first find out if you and your perspective partner are even compatible for the long term.

When considering starting a partnership with someone, you must first examine your own strengths and weaknesses to determine if you are partner material. If you have a tendency to work better alone, or prefer to do so, then a partnership is probably not for you. If you can consider the suggestions of others and be open-minded when making decisions, then you’d probably make a good partner. Talk to your spouse, family and friends to get their input as well.

Once you have determined that you are able to meet the challenges of being a business partner, you should to examine the relationship you currently have with the other person.

Ask yourself the following questions:

• Do we have the same motivation?
• Do we have the same values and work ethics?
• Do our skills and strengths complement each other?
• Are we able to communicate with each other, even on touchy subjects, in a cool, calm and respectful manner?
• Deep down, do I 100% trust this person?
• Have we been able to adequately resolve conflicts/disagreements in the past?

Hopefully the answer to all these questions is “yes.” If not, then the next item on your list should be to sit down with your prospective partner and discuss the reservations you may have about the partnership. Laying those items on the table, and monitoring the other person’s reaction to them, will be a strong indicator of whether or not the partnership will work.

Also, talk to the other person’s previous partners and employees to get their feedback on how well he/she works with others. Be aware that, should your prospective partner refuse to provide you with contact information for her former counterparts, then that is a red-flag that you probably shouldn’t do business with.

If all signs point to proceeding with the partnership, then it’s time to test the waters. Take on a challenge together, like meeting a deadline, as see how that goes. Determine your expectations for the other person and see if they are met throughout the project. It’s also important to clearly define the responsibilities of each person, as this will be something a partnership requires every day.

Take your time and be sure this partnership is the right one for you. Don’t let the excitement of your idea allow you to rush into such a commitment. The failure of a business partnership can be devastating, both to your business and personal relationship with the other person. Taking time to find the right business partner can result in a mutual motivation and support, as well as a highly successful business.

• Is a Partnership the Right Choice for You?
• The Art of Picking the Right Partner

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By Michelle Cramer
Wednesday, January 2nd, 2019 @ 12:04 AM CDT

Startup |

Internet Business Sees Holiday Shopping Boom

Now is the time to have an Internet business, as holiday shoppers are increasingly finding their stocking stuffers through online retailers.

From November 1st to December 3rd of this year, internet shopping rose to $12.42 billion, an increase of 25% since last year. The number of people making Internet purchases jumped 17%, while the amount of money spent by each buyer increased by 7%.

The retail areas seeing the most increase: videogames, jewelry and even tickets to concerts and shows.

An abundance of holiday Internet shopping occurrs on what is called “Cyber Monday,” the Monday following Thanksgiving each year. That is when online retailers debut their holiday products, virtual door busters and promotions such as free shipping with purchase.

However, with increased Internet shopping comes increased security concerns. An average of 46% of the 155 million web shoppers are concerned about the security of their personal information when making a purchase, but those numbers are typical.

Software developers such as Microsoft have been working hard to counteract shopper woes, such as upgrading security features of Internet Explorer web browser. The new version warns users if the site they are visiting is an imposter rather than an actual retailer. The down side is, as a new system, this only works 30-40% of the time.

Online retailers are also taking extra precautions. More frequently they are purchasing liability insurance that will cover themselves and their customers in the case of identity theft. By advertising this protection on their websites, retailers hope to encourage buyers to proceed with a bit more confidence.

Despite the reservations that the risk of identity theft pose, online purchases are expected to continue to increase over the holiday season and in future years as consumers enjoy shopping from the comfort of their own home. After all, who really wants to fight the crowds when you can get deals just as good online?

Online Holiday Sales Statistics

• Business Week: Web Shoppers Spend More for Holidays
• Stamford Advocate: Online Shopping Popularity Continues to Rise

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By Michelle Cramer
Tuesday, January 1st, 2019 @ 12:00 AM CDT

Technology |