Wednesday, 7 July 2010

"Women Entrepreneurs - The Secrets of Success" for Wednesday, July 7th

Maria Ross

Maria Ross’s mission is to engage, inform and delight audiences and keep them coming back for more. A born storyteller, she has over 16 years experience building brands, crafting marketing strategies and coaching businesses on how to tell the right story to the right people at the right time.

Maria is founder and Chief Strategist at Red Slice, a branding and marketing consultancy, and has worked with large companies such as Accenture, Business Objects, Discovery Networks, Monster.com and Microsoft as well as technology start-ups and small businesses like CRAVE and Mudbay in Seattle. She is the author of Branding Basics for Small Business (2010, Norlights Press).

In her free time, Maria is a volunteer, a published lifestyle writer and an actress. Maria received a B.S in Marketing, with a minor in Spanish from Indiana University, Bloomington. She lives with her husband Paul and their black Lab mix, Eddie, in Seattle, Washington

3:00 pm EDT
Listen to the live or archived show at:
http://www.blogtalkradio.com/CoachDeb

Tuesday, 6 July 2010

"Think Like an Entrepreneur" Live Author Chat on Tuesday, July 6th

Join me at the i-Virtual Assist blog for a live chat. Click on "Author Chat" to get into the conversation!

Think Like an Entrepreneur Live Author Chat
Where: i-Virtual Assist Blog
URL: http://www.i-virtualassistbooktours.blogspot.com/
Date: Tuesday, July 6, 2010
Time: 8:00 pm Eastern time

Monday, 5 July 2010

Pick the Wrong Bank

What do bankers and lemmings have in common? OK – that’s too easy. The technical term that economists use for bankers is pro-cyclical. That means bankers exacerbate booms by lending too much in good times, and make recessions deeper by tightening credit in bad times. Of course, that is not the total fault of bankers. Bank regulators push lending underwriters into pro-cyclical policies. When the regulators screw up and lots of loans go bad, they enforce tighter lending standards that restrict credit at exactly the time the economy needs loose credit.


Bankers are like also lemmings in that they don’t act in their own best interests. Bankers figuratively walk off cliffs blindly following their instincts as lemmings do. Like lemmings, most of the bankers I know don’t have great instincts or judgment. Prior to becoming loan officers, I suspect many worked as waiters or clerks at J.C. Penney. The guy who was trying to sell you a cheap suit last year may be championing your loan application before a bank underwriting committee. I’ll bet that gives you a warm feeling. While I am bashing bankers, in fairness, I should note that you can find good bankers. You just won’t find many, if any, in the large national banks. You have to look at local banks specializing in small business lending.

Let’s dig a little deeper into why a suit salesman will make a bad loan officer for you. This is how the loan application process works at large banks. First your loan officer, the former suit salesman, gets you to put together a loan package. The package likely includes business and personal financial statements as well as business and personal income tax returns. There is nothing wrong with the package itself. The problem is what happens with the package.

Unfortunately your loan officer will then look at the package. What is wrong with that? He / she likely understands only one number in the package – the bottom line from your profit and loss statement. Why is that bad? Your profit and loss statement shows if you are making a profit or are losing money. Why shouldn’t a banker rely on that information? For just about every small business, the amount of profit or loss in the financial statements can charitably be described as massaged. They could not so charitably be described as misleading. Smart guys like me are busy trying to get the profit number down to the smallest number possible for tax purposes in a lot of situations. Other smart guys like me are trying to find a way to show the largest profit possible. The profit number is only a small start in understanding the financial position of a business.

Here is an example how two identical companies can report entirely different results. First, let’s assume each company has revenue of $1,000 and operating expenses of $600 before the owner’s compensation. Company one is what is known as a C corporation and company two is an S corporation. What is the difference between C and S corporations? Well a lot, but this isn’t a tax course. I will just leave it as follows. C corporations pay tax twice on profits. They pay once on the company’s annual tax return and then again if the company pays the profits out as dividends to the owner. An S corporation pays just one level of tax. When some smart CPA is looking at company one’s tax situation at the end of the year (we know he / she is a smart CPA, since he is doing tax planning during the year for the company), he / she knows the company is about to face double taxation on $400 of profits. The CPA will recommend paying the owner a year-end bonus that is deductible from taxable income. That shields the bonus amount from double taxation. Let’s assume the bonus will be $300. That leaves $100 as the profit for the business.

Let’s now look at company two, the S corporation. The CPA will look at the same $400 of profit and, since this profit will only face one level of taxation whether there is a bonus or not, recommend that no bonus be paid. Therefore, the profit remains $400. As you can see, we have two companies with the same cash flow and operating results that are showing two vastly different profit numbers. Most bankers will not look favorably at company one’s loan application, but very favorably at company two’s application.

What happens next in the loan application process? The loan officer, or worse the assistant suit salesman, will enter the business and personal financial information into the bank’s credit scoring software. Above, I casually mentioned that most bankers really don’t understand financial statements except for the profit number, and as we saw above, they really don’t understand that number either. Now that same banker (or the assistant, who knows even less) will try to take the amounts from your company’s balance sheet and income statement and enter them into the computerized scoring program.

Once I got a call from a banker, who was trying to enter financial statements from one of my clients into the scoring system. He told me the balance sheet I had prepared didn’t balance. Of course, you could look at the balance sheet I had prepared and see very easily it DID balance. I even re-added the amounts while on the telephone with him to make absolutely certain. I then asked him to add the numbers on his adding machine outside the computer program. He did. The assets really did equal the liabilities plus owner’s equity, the basic accounting equation for a balance sheet. Now he had me perplexed. This was how I learned about the computer scoring program he was using. It wasn’t that my balance sheet didn’t balance. It obviously did. The problem was that he couldn’t get the balance sheet correctly entered into the program.

In his defense, the equity section of the balance sheet had a somewhat unusual line item called treasury stock. Treasury stock arises when a company buys back its own stock. This typically happens when the company’s money is used to buy out an owner. Treasury stock is a reduction in equity and appears as a negative number in the equity section of the balance sheet. My client’s banker was trying to enter treasury stock as a positive instead of negative number. In fact, it was worse than that. When I told him to enter the amount as a negative number, the computer scoring program rejected the entry. I justifiably blame him for not understanding the treasury stock concept he probably first encountered in accounting 101 back in his freshman year of college. I also blame the bank for an incredibly poorly written program. I can’t imagine this large national bank had never dealt with treasury stock before. How did a resourceful guy, like me, get around the problem? I had the banker subtract the treasury stock from retained earnings, another fortunately positive number in the equity section of the balance sheet. Problem solved!

Let’s assume the banker successfully enters all the financial statement amounts into the credit scoring program. What happens next? The numbers are analyzed by the bank’s credit scoring system, which resembles the machine from the Wizard of Oz. Why does it resemble the machine from the Wizard of Oz? There is very little substance behind the computer curtain. When you analyze misleading numbers, what do you get? You get a misleading analysis. Based on this analysis, the loan application receives a numerical score based on a fancy algorithm. Here is a financial principle for you. It will put you ahead of most bankers. When you analyze misleading numbers, you come to a misleading conclusion regardless of how much rocket science you apply. For small businesses loan applications, there are two predictable results. The loan is denied or the owner is offered a home equity line of credit. Neither is the result the owner wanted.

How does a small business owner avoid the mess above? Go to a small business bank. Your CPA should have personal relationships with several. Why are small business banks different? They are different in that real bankers can sometimes be found in small banks. If you are lucky, you will find a banker who can read financial statements and place the proper degree of reliance on them. He / she should be smart enough to determine real cash flow outside of one-time items like bonuses. If your CPA doesn’t know any such bankers, call me. I know several.

4 Tips for a Healthy Lifestyle for Women Entrepreneurs

by Shannon Wills

No matter how much we hate to admit it, women do have to put in extra effort because it is a man’s world. And although we may fight to fit in and eventually do so, because we are physiologically different and considered the “weaker” sex in terms of brawn, there are times when the struggle takes a toll on our health and leaves us drained and exhausted. Women are trying to do it all and succeeding – they are able to manage their homes, workplaces, and their personal relationships without shirking responsibility, but this success sometimes comes at the cost of their health. It’s not that hard to preserve and safeguard this great asset that we are blessed with at birth; all women entrepreneurs need to do is put in a little conscious effort:

1. Eat right: It’s very easy for busy entrepreneurs to forget to eat and then just grab whatever is available when hunger pangs strike. But this not only ruins your metabolism, it also plays havoc with your overall health in the short and long run. If you’re in the habit of keeping hunger at bay with unlimited cups of coffee or easy snacks like doughnuts or bagels, then you’re already in the danger zone. Make a conscious effort to make a positive change – wake up earlier to enjoy a small breakfast, eat lunch and dinner at around the same time, and keep healthy snacks at hand to satisfy hunger pangs throughout the day. It may seem odd at first to pay so much attention to food, but it’s your body and you have only one chance to keep it healthy.

2. Exercise regularly: I can almost hear the “I have no time” excuse when it comes to exercise, but I’m not going to accept it because all you need to stay healthy is 30 minutes of exercise four times a week. You can walk, jog, play a game, cycle, swim, work out with weights, do yoga, sign up for tai chi or pilates or aerobics – it just has to work your limbs and muscles and boost your blood flow. Exercise helps relieve stress and boosts your energy levels, besides keeping you active, fit, healthy and slim.

3. Find ways to de-stress; it’s not easy to avoid stress altogether because the workplace and home are both equal pressure zones, so the next best thing is to find ways to get rid of the stress. Do whatever works for you rather than following the herd – take a break once in a while with your friends or family or go away by yourself if that gives you peace and quiet; on an everyday basis, go for a jog, play a sport, listen to music, go for a long drive, take a warm bath, get a massage at the spa – whatever you do, it should serve to make you feel good about yourself and leave you refreshed and rejuvenated.

4. Tackle problems proactively: And finally, your mental approach to problems in life determines how healthy you are in the long run. If you obsess over every tiny issue and fret about it, you’re going to suffer ulcers and other stress-related illnesses. Rather, push your brain to work out a solution to those problems or tackle them differently. When you don’t let troubles push you down and instead try to claw your way back up, you feel positive and energized; this gives you health an added boost.


Shannon Wills writes on the topic of Physical Therapy Assistant. She welcomes your comments at her email id: shannonwills23@gmail.com.

Monday, 28 June 2010

Family Businesses Meed Extra Care

The family business is an American small business tradition, one that gives parents, spouses, children, and other relatives an opportunity to contribute to and share in a dream that can grow and prosper over many generations.

But without proper planning and management, family businesses can also be the source of contention, acrimony, and even irreparable harm to once-loving relationships. That’s why it’s important for aspiring entrepreneurs to fully understand the pros and cons of going into business with relatives and in-laws. The needs of the business may not always be compatible with family harmony, resulting in a situation that if handled improperly, can jeopardize the survival of both.

When bringing family members into a business for the first time, especially as investors or in a startup situation, you should consider putting the business relationship in writing. Family members sometimes buy into the excitement of a business startup without a clear idea of their role once the business is underway.

In an ongoing family business, it’s important to treat family members fairly. While some experts advise against hiring family members, that sacrifices one of the great benefits of a family business. Countless small companies would never have survived without dedicated family members. But avoid favoritism. Pay scales, promotions, work schedules, criticism and praise should be evenhanded between family and non-family employees.

Don’t become the employer of last resort for every distant relation who calls. Base employment on the skills or knowledge they can bring to the business. If your kids will be joining the business, make them get several years of business experience elsewhere first to help them gain perspective of how the business world works outside of a family setting.

Problems and differences of opinion are common in a family business, so it’s important to keep lines of communication clear. Weekly meetings to assess progress, air differences and resolve disputes work well for many family firms.

Just as solo entrepreneurs and non-related partners need to separate their business and personal lives, owners of family businesses need to prevent work-related issues from dominating family activities. While it may be difficult to totally confine shop-talk to the workplace, make it a standing rule not to discuss work and business issues at social gatherings or at designated “family times” where the focus should be on other things.

Many SCORE counselors owned family businesses. Why not have a chat with one of them and take advantage of their experience. Visit the SCORE website, www.scorehouston.org, to learn about our counseling, mentoring and education resources.

Sunday, 27 June 2010

Think Like an Entrepreneur Virtual Book Tour - Tuesday, June 29

Join us for a virtual book tour stop at the “Your Focus Blog” on June 29th. You’ll get to ask questions about my new book, “Think Like an Entrepreneur: Transforming Your Career and Taking Charge of Your Life” (and about self publishing in general) and have the chance to win a few prizes.

Think Like an Entrepreneur Virtual Book Tour
Where: Your Focus Blog
URL: http://yourfocus.wordpress.com/
Date: Tuesday, June 29, 2010
Time: 7:30 pm Eastern time

Friday, 25 June 2010

Get Your Priorities Hijacked - II

There are other ways your priorities get hijacked besides telephone / e-mail emergencies and reverse delegation. During breakfast two mornings ago my mother-in-law committed criminal felony third degree assault on my priorities. She raped my morning schedule. To understand how she did that, I will tell you my normal morning routine. When my routine is disrupted, I erupt like Mount Vesuvius spewing all sorts of profane ashes on the person responsible for the disruption.


I get out of bed at exactly 6 A.M. every morning. By exactly, I mean when the alarm goes off at 6 A.M., my ass gets out of bed. I don’t get up at 6:10 or even 6:02. If I wanted to get up at one of those times, I would set the alarm for one of those times. I then shower, shampoo and wash myself in exactly the same order each morning. I dry off and walk three steps, exactly three steps, to the sink, where I shave and brush my teeth. I pivot 197 degrees and walk back into the bedroom, where I get dressed. Next, I walk downstairs using the stair case that leads directly into the kitchen. I never use the curved one that leads to the front door. I won’t explain why. There is a good reason, but you might think I’m crazy - like you don’t already. I go outside through the single garage door not the double wide door, pick up the newspaper, and bring it back inside. I take out the sports section and place it on the breakfast nook table in front of the left chair that backs up to the window to the back yard. Then I prepare breakfast which consists of a banana, two slices of double fiber whole wheat bread spread with peanut butter fortified with omega three fatty acids from flaxseed oil. Why did I take you through the tedious detail of my mornings? Because standardizing my morning frees my mind to set out my work day’s priorities. That is my point.

Two mornings ago, I had just placed the newspaper in its proper place, when I noticed my mother-in-law standing in the hallway leading to the front door. This is NOT part of my morning routine. At the 6:45 point in my routine, she is supposed to be still in bed. Like a dumb ass, I asked her why she was up so early. I know she has a Bible study meeting one morning each week, but she doesn’t have to get up early to get there. Then the crime was committed. She had gotten up early to ambush me. She then informed me that someone was not in the proper bedroom the previous night. Let me tell you that no boys were in any of my daughters’ bedrooms. So you can understand when I tell you I didn’t give a damn. I didn’t give a half damn. My mind that morning was deep into considering how to pry a $225K tax refund out of the I.R.S. for a client. My second priority was helping a client find a million dollars or so of working capital. In my personal priority list, someone being in the wrong bedroom was about the 475 billionth item on the list. But she continued. It was clearly the most important thing on her priority list.

Physicists tell us that our universe is likely not the only universe. There are alternative universes all around us. Our laws of nature probably don’t apply in these other universes. These universes might be very large or very small. In my mother-in-law’s universe, tracking the occupants of our bedrooms is the highest law of nature. Her universe is very small. In my universe, different laws of nature apply. I shall explain why her behavior is a crime in any normal universe.

There are three methods of human communication. Do you know what they are? No, they are not radio, television, and newspapers. The three methods or purposes of communication are to amuse, to inform, and bitching. I will define them for you.

Amusement and information are pretty easy to define. In both of these types of communication, the purpose of the communicator is to leave the target of the communication in a better position than previously. For instance, when Larry the Cable Guy makes fun of his fat relatives, we are amused. We feel better. So therefore, we are better off. Similarly when someone gives us information, we are better off. When we tell a child, “The stove is hot”, we are imparting useful information.

Bitching is everything else. If the purpose of the communication is not to improve the target’s life in at least some small manner, it is just bitching. My former mother-in-law is an expert. She is a wonderful person, who raised a family as a single parent in difficult circumstances. However, she bitches as a way of making conversation. If the sun is out, she complains that we need rain. If the weather is rainy, she gripes because the sun isn’t out. My current mother-in-law committed the crime of bitching. Nothing she was telling me was for my benefit. Her intent was to create drama and enrage me. It worked.

Because my priorities don’t matter very much in my own house, I stormed out. I was still hungry, so I drove to the I.H.O.P. near my office. I went to the I.H.O.P. not just for the food. I went for the lack of conversation. I went because none of the wait staff speaks English. I envisioned breakfast going as follows. “I will have numero tres from the menu, senorita.” She would then bring me numero dos and then flip this gringo the numero uno sign. I used to think big restaurants were making a mistake in hiring people who don’t speak much English. Now I think it is a fine business decision made in our best interests.

Everyone has a bad day once in awhile. Clearly my mother-in-law was having one. The bedroom issue clearly bothered her. However, the other seven billion of us on the planet might have other priorities. What do I do when I have a bitchy moment? Our dog, Sidney plays a major role. When I come home from work in a bad mood, ready to indulge in a good bitching / pity party session, Sidney follows me upstairs and listens while I change into casual clothes for the evening. When she barks, I imagine that she is telling me, “Frank, you are right. Everyone else in the world is a total idiot. You are an absolute genius. You have every reason to gripe.” Of course, I don’t speak Jack Russell terrier. She could just as easily be saying, “Who cares moron? Get me a chicken treat.” I prefer to believe the former.

Charles Darwin wrote about the origin of human communication in his not so famous unpublished manuscript called, The Evolution of Human Communication. In his book, he described why dogs became the caveman’s best friend. After a long day of hunting mastodon, a caveman would come home to his wife and mother-in-law. They would tell him that people were sleeping in the wrong rooms in the cave. Facing that, is it so surprising a mangy, snarling wolf would look like good company?

Those of you who graduated from college with communications degrees probably feel pretty stupid at this point. I have just taught you more about communications than you learned in four years of diligent university study. If you had just read these pages, you could have graduated magna cum smart ass. What is the point you can apply to your business tomorrow? Expressing displeasure at having your priorities hijacked is acceptable. Your universe will be a happier place. Train your employees to respect your priorities.