SCORE Orange County, CA Newsletter

CROWD FUNDING; a good source of capital for my Business ?

2012-05-25T09:35:00.001-07:00

This article was written by Dennis Wright, SCORE Orange County Chairman

That was a question I couldn’t answer when recently asked.

Now I’m not known for being caught without words, but there I was, unable to give that business owner the definitive response he was looking for. Why was that, why couldn’t I answer that question… because the rules have yet to be written. And there will be RULES.

The JOBS Act was passed, certainly, and an element within it is the idea of crowd funding. But now the regulators have at least 270 days to craft language that spells out how it’ll work; from who can apply, the forms that’ll be needed, reporting requirements and procedures, establishing an SRO (Self Regulatory Organization) and intermediaries or funding portals, a source of data that will facilitate SEC (Securities & Exchange Commission) oversight and on to who can invest. Lots to be done yet!

I guess I could have simply said: “that depends”. There is enough uncertainty surrounding the matter this point. But all things considered I think a better response would have been: “we’ll have to wait and see”. Not every business is the same, not every business owner is in the same position, so in spite of the promise Crowd Funding holds it may not be the right solution for all.

So that’ll be my response next time I’m asked: “we’ll just have to wait and see”…

4 Money Trends to Watch — and 2 You Can Ignore

2012-05-25T09:32:00.001-07:00

This article was written by Kevin Casey on May 21, 2012

Your business can’t do much without money, but your financial health hinges upon far more than just making the cash register ring. Given the abundance of advice, stats, and other data available, how do you avoid information overload and uncover what’s important to your enterprise?

The Intuit Small Business Blog asked a few financial pros which recent news headlines are most relevant to entrepreneurs like you. Here are four money trends worth watching — and two you can ignore (for now).

Trends to Watch

1. Retirement plans are changing. If you offer an employer-sponsored retirement plan, now is a good time to reassess your choices. Likewise, if you have never offered a retirement program, now may be a good time to consider doing so. One reason is the pending implementation of new government rules on how 401(k) fees are disclosed. Financial adviser Sean Dowling, president of The Dowling Group, says the change will give small businesses more investment advisers and plan administrators from which to choose. “This is a boon for business owners and plan participants, because pricing is already growing increasingly competitive,” he says. Dowling recommends that employers review their existing plans, even if they just recently set them up. “Many employers are going to be surprised by the amount of money they are paying.” Meanwhile, financial planner Adam Koos, founder and president of Libertas Wealth Management Group, notes the increasing popularity of adding a Roth 401(k) option to company-sponsored retirement benefits. These plans, once rare, enable participants to save after-tax dollars and withdraw their investment gains tax-free in retirement. And, unlike the Roth IRA, there’s no income limit for eligibility, Koos notes.

2. Cutting costs isn’t just for recessions. Brett Anderson, president of St. Croix Advisors, says financial belt-tightening is now a standard operating procedure rather than a short-term survival strategy. When it comes to reaping a profit, keeping costs in check can be just as effective as increasing revenues. “While we all saw the necessity for expense reduction and right-sizing our small businesses in 2008, even four years later this focus on expense reduction for the sake of the bottom line is no less important.”

3. Health care, health care, health care. Anderson adds another item you’ve probably heard before: health care. The pending U.S. Supreme Court case and upcoming presidential race bear watching, whether you’re just worried about your own insurance or a group policy that also covers your employees. “As health-care legislation churns, business owners need to keep their ears to the ground to make sure that they, as well as their employees, stay abreast of requirements and potential cost implications, so they aren’t sunk by unforeseen expenses,” Anderson says.

4. Interest rates will inevitably rise. An extended period of rock-bottom interest rates may have created a false expectation that they’ll stay that way forever, according to John Hauserman, president of Retirement Quest Wealth Management. He says a variety of factors, including the U.S. government bond market, could cause rapid changes in interest rates — and they don’t really have any place to go but up. “Now might be a fine time for small-business borrowers to lock in financing rates, while avoiding locking in rates for their savings.”

Trends to Ignore

1. Consumer spending is up. Economic headlines are continuing to turn a bit rosier in the wake of recessionary doom-and-gloom. Don’t let that wield too much influence in your decision-making. “While studies show that consumer spending is up, this will not necessarily impact every business,” says Patricia Stallworth, author of Squeeze the Most Out of Your Money. “It is important for owners to keep a watchful eye on their own businesses and their cash flow versus what they read in the news.”

2. Cash produces paltry returns. Another trend to tune out, Stallworth says, involves the nearly invisible returns business owners are getting on cash. In particular, short-term vehicles like savings accounts, certificates of deposit, and money-market funds haven’t been making anyone wealthy in recent years. “This may cause some owners to wonder if it is worth it to continue to invest their working capital,” Stallworth says, “but there are still options, and stopping investing is never a good idea.” Those options do require you to take on more risk and offer less liquidity, and Stallworth says that owners who can swing it could consider commercial paper, mutual funds, and ETFs as alternatives, while being mindful of related investment fees. Another option: “If businesses really find themselves with extra money, this is a great time to invest directly in the business or even purchase a piece of another company.” The bottom line: Don’t start stuffing cash under your mattress because it’s earning close to zero interest in the bank.

SCORE Mentors Business Students

2012-05-25T09:12:00.001-07:00

The Orange County Chapter of SCORE has established a strong collaboration with the CSUF Myhalo Entrepreneurship over the past 7--10 years. During the most recent semester, 5 of our members serve as 'Student Coaches', assisting student teams both in class and directly with their respective clients. Other SCORE members have contributed offering advice in specific areas of expertise when SCORE was utilized as a potential solution for those student teams and their clients.

We are proud to build a base for future business owners and leaders by supporting the students at the Myhalo Entrepreneur Center.

Two teams from Cal State Fullerton’s Mihaylo College of Business and Economics earned first and third place honors at the Student Consulting Project of the Year Competition, a national contest sponsored by the Small Business Institute.

The competition combines student teams with companies through the student consulting program to match the companies’ needs. CSUF’s undergraduate team earned first place for their project for the Irvine staffing firm FORTIS Resource Partners.

The six business students enrolled in the “Marketing for Entrepreneurs” course taught by John Jackson, director of the Center for Entrepreneurship, worked with Fullerton alumna Kira Bruno, CEO of FORTIS, to develop a business plan.

“We met with the client as a group and listened to her story. After we identified the business challenges, the group divvied up the elements so we could each focus on specific sections,” said Crystal Gosselin, the student team leader. “Each of us then fed our respective section to make one complete, consistent consulting report.”

The graduate student team earned third place in their division.

The group of graduates enrolled in “Business Strategy Capstone” course taught by Dmitry Khanin, assistant professor of management, worked with Connection III Entertainment Corp. to create a 24-hour TV network.

“Their work was very professional and I appreciated the effort that the students put into the study, the amount of detail, and extensive resources, research and concepts they brought together,” said Cleveland O’Neal III, with Connection III Entertainment’s CEO.

Powerful Real Time Live Chat on SCORE OC Facebook

2012-05-25T08:59:00.001-07:00

This article was written by Michelle Russillo, SCORE Orange County Management Counselor

Social Media combines various activities of social engaging to help companies increase marketing opportunities to build customer relationships and increase sales. Being in the social networking marketplace is critical for business; Rieva Lesonsky is one of the leading people to teach SCORE clients how to increase their understanding of the critical marketing tools for Social Networking.

The live chat is free, convenient – just sign into Facebook, go like SCOREOC and then join the live chat. Get more information at http://LiveChatInc.com/. You can use your mobile device.

Rieva Lesonsky, founder and CEO of GrowBiz Media, is a recognized small-business consultant and author of the book Start Your Own Business. Former Editorial Director of Entrepreneur Magazine, Rieva has been meeting with, consulting to and speaking to America’s SMBs—and the big corporations that want to reach them—for over 25 years. This experience has given her an inside perspective on what entrepreneurs want, how to connect with them, and how to help them grow successful businesses. Rieva has worked with B-to-B marketers including American Express, Dell, State Farm and many others, and with organizations including ASBDC, SCORE and the SBA, to market to and educate entrepreneurs. Rieva is a featured blogger on the SCORE Success blog.

Join Rieva live May 31, 2012 at 9:30 on SCOREOC – Facebook

The chat will last half-hour.

To join the chat click to like www.facebook.com/scoreoc and then join the SCORE OC Chat Group at www.facebook.com/groups/scoreoc/.

Rieva will be answering your questions, giving information and helping you grow your business while increasing your understanding of how to use Social Media to find new customers, promote your products, and most importantly increase sales. In addition , there will be SCORE OC members on-line to assist you with making an appointment with counselors for no-charge consulting, attend a workshop or learn more about SCORE OC services.

Mentors are great, but an increasing number of executives are finding that sponsors are the ones who really send you to the top.

2012-05-25T08:56:00.001-07:00

This article was written by Jennifer Alsever, in FORTUNE Magazine, May 2012 edition. Reprinted by permission

Barbara Adachi was always a hard worker. But even after 11 years running the San Francisco human capital division for Deloitte Consulting, when it came to a key promotion she had something many senior executives lacked: an influential backer who believed in her.

Mike Fucci, a partner running the company's Eastern practice, had reviewed her candidacy for partner six years earlier. When he lobbied for her promotion into a new major role, she didn't feel ready, but Fucci convinced Adachi that he would teach her what she needed to know to be successful. Ten years later she now runs Deloitte's national human capital practice and has a coveted seat on the company's senior leadership team. "By giving me that chance and recommending me for that role, he put his reputation on the line," Adachi says. "We still are hand in glove, and I know he's got my back. He knows I'm 100% loyal to him."

In today's career maneuvering, having a mentor is nice. But having a sponsor is what will get you to the top. What's the difference? A mentor can coach you, give advice, and help prepare you for your next position. A sponsor will go out on a limb for you, open the door to your next job, introduce you to the right people, and make the case for you in those top-level conversations that could make or break your career. "A mentor will talk with you, but a sponsor will talk about you," says Heather Foust-Cummings, senior director of research at Catalyst, which has conducted research on sponsorships.

More: 5 ways to escape middle-management hell

The idea of sponsorship has gained momentum lately as companies aim to move more women into corporate leadership. A 2010 Harvard Business Review study of 4,000 high-level employees reported that 19% of men say they have a sponsor, compared with 13% of women. Yet women who have a sponsor in their corner are far more willing to negotiate raises and more likely to see more promotions, higher salaries, and more career satisfaction -- and get to the top. "Sponsorship is the only way to get those top appointments," says Sylvia Ann Hewlett, president of the Center for Talent Innovation and co-author of the Harvard Business Review study.

Sponsorship is gaining ground across the board. Research shows that the vast majority of both men and women feel more satisfied with their rate of advancement when they have sponsors.

The latest research has prompted several companies to launch new sponsorship programs. Unilever recently began hosting extended networking sessions to develop sponsorship opportunities, while Deloitte, PepsiCo (PEP), Intel (INTC), and American Express (AXP) have started programs aimed at helping their women executives find sponsors.

These relationships often can't be scripted. And protégés do not usually do the picking. Ramona Cappello, CEO of Corazonas Foods in Los Angeles, says her early career was shepherded by a well-placed executive at Nestlé. When he learned she'd been accepted to Harvard Business School, he told her to delay it for a year and promised that she would get a great education by staying with the company. She did so and rose to become assistant general manager at Nestlé in the mid-1990s, then VP at Celestial Seasonings, and an executive vice president at Kendall-Jackson. Her sponsor, Timm Crull, became CEO of Nestlé USA. "I was found," she says, "and he made sure I had all the right roles."

Are you a potential protégé?

Performance counts. Great work is a must, and before anyone can take a chance on you, they must see that you're loyal, trustworthy, and dependable. These executives are betting their own reputations on your career, says Heather Foust-Cummings, a senior director of research at Catalyst, a nonprofit dedicated to expanding women's career opportunities. "You don't take a donkey to the Kentucky Derby," she says. "No one will take the risk on you."

Find your star power. Don't assume that putting your head down and doing your work will get you noticed. You need to become a known entity, says Foust-Cummings. Volunteer for bigger assignments, attend conferences, and become active in your industry.

Don't force it. Most relationships evolve naturally and won't happen if you flat out ask someone to be your sponsor. Hedge your bets against your sponsor leaving the company by nurturing relationships with multiple people, says Sylvia Ann Hewlett, president of the Center for Talent Innovation.

Be confident. If you're worried you're not qualified for that major assignment or concerned about your 2-year-old at home, do not share your honest ambivalence with a sponsor. "Show you're hungry for an opportunity," says Hewlett. When you get feedback, handle it with a thick skin and be prepared to act on advice given.

Return the favor. Unlike a mentor, a sponsor will expect your loyal support in return. A sponsor benefits, too, from the "power of the posse" to build his or her own career. After all, no one gets to the top alone.

Innovative Ways to Innovate

2012-04-19T09:25:00.001-07:00

This article was written by Steve Tobak, in Money Watch, reprinted by permission

COMMENTARY: There's no magic formula for coming up with the next big thing, and there's no shortage of people trying. Luckily, there doesn't appear to be any shortage of demand for innovative ideas and products.

Having been around entrepreneurs, startups, and innovative companies my entire career, I've seen quite a few methods that seek to foster innovation. Here are eight "innovation catalysts" that really work:

Standing on the shoulders of giants. Innovators often elevate others' ideas into products people can use. There's a device called a ScareCrow that detects pesky animals like birds or rodents and shoots water at them. It's actually a motion sensor combined with an impulse sprinkler. It works, it's relatively inexpensive, and it's ingenious because there's nothing new; it's just two inventions used together in a unique way.

Unintended consequences. More often than not, products go viral or succeed for different reasons or uses than originally intended by their entrepreneurs. McDonald's (MCD) started with a hotdog, not a burger. Mark Zuckerberg's first stab at Facebook, dubbed Facemash, was to rate whether female Harvard University students were hot or not. Google's (GOOG) founders created a search engine, but the company's remarkable business success comes entirely from an advertising business model.

Think different. MP3 players, smartphones, and tablet computers were around long before Apple (AAPL) introduced the iPod, iPhone, and iPad. But Apple doesn't develop products the way other companies do. It ignores the status quo, doesn't use focus groups, and when it outsources functions it manages them meticulously, like a vertically integrated company. Apple doesn't look at competitive devices and ask, "How can we make it better?" It asks, "What do people really want to do that they can't" -- and delivers.

Innovators don't see different things -- they see things differently.
Where does innovation come from?
Unusual origins of 15 innovative companies

Meet customer needs, one step at a time. Sony (SNE) was originally a radio repair shop. Toyota (TM) made looms. Nokia (NOK) was a paper mill. IBM (IBM) sold weight scales, meat slicers and coffee grinders. Xerox (XRX) made photographic paper. Sometimes, you just start somewhere, put one foot in front of the other, and end up somewhere else entirely. It helps if you follow the needs of your customers.

It's not the end; it's the beginning. Some people and companies have a great idea or develop a unique product, become incredibly enamored with what they've managed to come up with, and promptly sit on it. Kodak (EK) actually invented the digital camera. Tivo (TIVO) lost control of digital video-recording technology. Stanford Research (now SRI) and Xerox PARC had loads of inventions that were commercialized and popularized by others. And don't even get me started with RIM (RIM) and its BlackBerry smartphone. Once you've come up with something, don't stop -- keep innovating.

A focus group of one. Some people have a unique ability to intuit what customers want before they even know it themselves. Others have flashes of inspiration that come from who-knows-where. How do you know if someone in your organization has some of that Steve Jobs or Albert Einstein magic going on? I don't know, but for some people and organizations a focus group of one is all you need.

Fish or cut bait? Sometimes you've got to have a sense for when to keep going and when to quit. How do you know? I've heard everyone from top venture capitalist Steve Jurvetson to Oracle (ORCL) CEO Larry Ellison essentially say that, to be a successful entrepreneur, you need to be prepared for 100 people to tell you you're an idiot. I guess that means fish ... and keep fishing.

Brainstorm. Brainstorming has become a watered-down term in business. Like any process, there are a few ways to do it right and many ways to do it wrong. Nevertheless, if you get the right people in a room, the right leader, the right goal, ask the right questions, and use the right methodology, you'd be amazed what you can come up with. I know, that's a lot of rights, but believe me, it can be done.

Are You Complying with Labor Laws or Are you Inviting a Law Suit?

2012-04-19T09:22:00.001-07:00

This article was written by Robin Noah, SCORE Orange County Management Counselor

Labor law compliance gets more difficult each year… and it is not going away anytime soon.

Managing risk to prevent lawsuits is a challenge for every employer. Consider that being kind, allowing variables from policies and sometimes flexibility in work schedules is an invitation to violate employee laws. An act of kindness can sometimes become a business liability.
There are many areas that are governed by some rule or regulation or policy. Here are some of the most common areas where employers can get into legal situations:

Exempt/nonexempt employee classification
Meal breaks
Independent contractor status
Harassment and discrimination
Hours of work
Leaves of Absence
Overtime Pay
Deductions from wages
Use of At Will
Final paycheck
Termination

A good example is the new AB 469 signed by Governor Brown October 2011. Known as the Wage Theft Protection Act of 2011 it became effective January 1, 2012. The bill requires that all employers must provide non-exempt and other employees at the time of hire with a written notice that contains specified information. It must be provided in the language the employer normally uses to communicate employment-related information to the employee.

The Labor Commissioner has made available a template that complies with the requirements of the notice.

This bill would make it a misdemeanor if an employer willfully violates specified wage statutes or orders.

I suggest that you learn more about this law as soon as possible.

You can find specific information relating to this law at several web sites:

§ www.dir.ca.gov

§ http://www.employers.org

Your best protection is knowledge. There is a wealth of information on the internet. Make it a practice to visit the websites that affect employer/employee relations.

Start off by visiting the United States Department of labor web site www.dol.gov/compliance/ ; for the state of California labor laws visit www.labor.ca.gov/laborlawreg.htm.

When making inquiries regarding labor laws, be sure to ask for the California rule to ensure that you are complying with your state’s laws.

As usual be aware of any collective bargaining agreements that may override policies and labor law rules.

LLC Taxation – a Brief Overview

2012-04-19T08:50:00.001-07:00

This article was written by Mike Capsuto, SCORE Orange County Management Counselor

A limited liability company (LLC) is a popular form of organization for small businesses. LLCs are organized under state laws to provide its owners (called members) protection of their personal assets from business creditors. Even though the formation of a LLC is relatively simple, the tax rules can be complicated.

To start with, LLCs do not pay taxes. They are pass-through tax entities similar to a proprietorship, partnership or S corporation. Each member reports and pays taxes on LLC income on their personal state and federal tax returns and are responsible for filing and paying quarterly income taxes. Losses are also passed through to members and claimed on their tax return. The percentage of income or loss allocated to each member is stated in the LLC operating agreement. However, a LLC can distribute profits and loses disproportionately if it meets certain technical rules. This is called a special allocation. To claim a loss the member must have an active role in the organization and not be a passive investor. In a single member LLC all profits or losses will pass through to the sole owner

LLCs will be classified as a sole proprietorship or partnership for tax purposes based on the number of members. These are called default classifications. LLCs with one member will be classified as an entity disregarded from its owner (the technical term for a sole proprietorship). LLCs with two or more members will be classified as a partnership. An election can be made by any LLC to be taxed as a corporation. In general, the tax laws and regulation as determined by your filing classification must be followed. Federal and California tax laws are similar but each has different reporting requirements.

Federal Tax Reporting Requirements

LLCs with one member will have a default classification as an entity disregarded from its owner (a sole proprietor). Its income, deductions, gains, losses and credits are reported on the one or more of the following schedules to be filed with the owners Form 1040:

• Schedule C, Profit or Loss From Business (sole proprietor).

• Schedule C-EZ, Net Profit or Loss From Business (sole proprietor)

• Schedule E, Supplemental Income or Loss.

• Schedule F, Profit or Loss from Farming

LLCs with two or more members will be classified as a partnership and have the same reporting and filing requirements as any partnership entity. It will file Form 1065, U.S. Partnership Return, and issue each member a Schedule K1 showing the their share of LLC's profits or loss. The member reports the amount on their individual tax return.

LLCs classified as a disregarded entity or partnership can elect to be classified as a corporation. This is accomplished by filing Form 8832, Entity Classification Election, a copy of which must be attached to the Federal income tax return of each member. Corporations are taxpaying entities and as such profits and losses are not allocated to the members.

California Reporting Requirements

LLCs that organize in California, register in California, or conduct business in California are required to meet the following reporting requirements:

• LLCs must conform to the same classification used in their Federal tax returns.

• LLCs classified as partnerships or disregarded entities, are required to file California Form 568, Limited Liability Company Return of Income. California Form 568 must be filed by the 15th day of the 4th month after the close of the LLC’s taxable year. Form 568 has the instructions for reporting the distributive share allocated to each member.

• LLCs required to file Form 568 must pay an annual tax of $800, and also be subject to a fee based on total income from all sources derived from or attributable to the state of California. The annual tax is due by the 15th day of the 4th month of the taxable year, and is paid using CA Form 3522, Limited Liability Company Tax Voucher.

• In addition, LLCs filing Form 568 that has members who are not residents of California must file FTB 3832, Limited Liability Company Nonresident Members' Consent with Form 568. FTB 3832 is signed by nonresident members and foreign entity members to indicate their consent to be under California’s jurisdiction to tax their distributive share of income attributable to California sources. For every nonresident member who did not sign a FTB 3832, the LLC must pay the tax.

• LLCs classified as corporations must file CA Form 100, California Corporation Franchise or Income Tax Return. The California Form 100 needs to be filed by the 15th day of the 3rd month after the close of the LLC’s taxable year.

• The LLC will be taxed at the current corporate tax rate and will be subject to a minimum tax of $800.

• If an LLC does not file Form 568 and/or does not pay all tax, penalties, or interest due, its powers, rights, and privileges may be suspended.

The above is not intended to be comprehensive. Its purpose is to give some understanding of the complexities of LLC taxation. Each LLC is unique. It is advised that you review the tax situation with a tax professional. A tax professional can help with the filings and prevent the LLC from being suspended and its members from being audited or paying interest and penalties for noncompliance. Keeping your LLC active and in compliance with tax laws can provide the needed protection not only for you but also your family.

Looking for a Loan? Don't Wait For a Big Bank

2012-04-19T08:45:00.001-07:00

This article was written by Catherine Clifford, in Entrepreneur Magazine, reprinted by permission

If you are looking for a loan for your business, big banks aren’t your best bet right now. Instead, you might be better to turn to a community bank, a credit union, of any number of alternative lending sources, such as account receivable financiers, microlenders, or Community Development Financial Institutions (CDFIs).

While overall, the lending market has been showing signs of life, the biggest U.S. banks approved a smaller percentage of loans in March than in February, according to a recent survey by Biz2Credit, an online credit marketplace in New York that connects small and midsize businesses with lenders.

Loan approvals at big banks -- defined as those with more than $10 billion in assets -- dipped to 10.9% in March from 11.7% in February. The slide in approvals at the biggest U.S. banks comes as approval rates at smaller banks, credit unions and alternative lenders stayed steady or ticked up slightly. The approval rate was also below the 11.6% approval rate from the largest U.S. banks in March of 2011.

The availability of credit for small businesses has been improving over the last year, says Rohit Arora, the CEO of Biz2Credit, but the recent slowdown is troubling.

The contraction of the big bank loan approval rate also comes as big banks tout their expansion into the small business lending arena, Biz2Credit says.

For example, Bank of America recently said it is hiring 90 new small business bankers across North and South Carolina and Georgia, part of an initiative to add 1,000 small business bankers across the country by the middle of the year. In particular, Bank of America said it increased new credit to small businesses by 20 percent in 2011, compared to the previous year.

In the wake of the recession, small businesses have been gripped the hardest by a tightening on the spigot of loans and have been increasingly looking to new and alternative ways of accessing capital. In an effort to get capital flowing again to small businesses, the JOBS Act was signed into law just last week. The new law aims to make capital more available to entrepreneurs and small-business owners by stripping away certain regulations, making it easier for entrepreneurs to raise money and go public.

The Biz2Credit index was calculated by analyzing lending applications from 1,000 candidates seeking loans on Biz2Credit.com. Loan requests ranged from $25,000 to $3 million, the average credit score was 680 and the average life of the business was two years.

The '118': The Modern Elevator Pitch Creating the perfect business pitch in a matter of seconds

2012-03-23T10:50:00.001-07:00

This article was written by Jeffrey Hayzlett, in Success Magazine, reprinted by permission

I have always liked the idea of the elevator pitch—that is, the ability to sell yourself and what your company offers in the span of an elevator ride. But the elevator pitch has become too slow for our times. It even sounds slow.

Technology has made everything faster, so your pitch has got to be faster too. Today your “ride” lasts no more than two minutes and sometimes as little as 30 seconds. Message is key, and knowing how to deliver your company’s message and value quickly is essential.

How many sales presentations have you sat through with 100-plus PowerPoint slides and wondered afterward, “I don’t get it. What’s in it for me? How is this relevant to me as a client? Forget the slides of the company’s biggest clients, the awards received last year…. What is the bottom-line value to me as a consumer? And make it quick!”

That’s why I created the “118.” That’s the number of seconds you actually have to win over your prospects… eight seconds to hook them and 110 seconds to reel them in.

Those first eight seconds are crucial (the lean-in factor). In researching the idea I discovered that the length of time the average human can concentrate on something is as little as eight seconds!

You know how you hear something in a conversation and you lean in because you want to hear the rest of it? That’s exactly what you want from your prospect in those first eight seconds of the 118. Aim for speed and immediate relevance. A compelling, attention-grabbing 118 presents who you are and the value of what you do and sells that to anyone. Used effectively, it can only help your business grow bigger.

Your 118 should also describe the thing that separates you from your competition. I don’t care what businesses you are in or what other services you offer—how are you different? How do you convey it? What’s your story and how does that story connect to your prospects?

Leaders need to get away from the bland pronouncements that say, “We do this,” and focus more on “What we do for you.” You’re supposed to understand not just what you’re selling, but what it offers to your prospective client.

Here’s what you’ve got to do in those 118 seconds:
» Grab the attention of your would-be customer.
» Convey who you are.
» Describe what your business offers.
» Explain the promises you will deliver on.

How to Construct Your Own 118

Step 1: Create the First Eight Seconds

The first eight seconds are the most important part of your entire pitch. That’s when you grab the attention of your prospect and let her know you know who she is. If you do not connect in the first eight seconds, then you probably will not have her attention for the remaining 110. This is a great time to compliment something the prospect has done recently and show how you complement her business or at least know what it is that she does.

- The Good: Mentions your product or service and tells how it will help your prospect. “In less than two minutes, I will tell you how the use of [me, my company, my service] will grow your development department 115 percent.”

- The Bad: Mentions what you’re offering, but lacks any reference to what it offers your prospect. “My name is Sam Maybe-Somebody, and my company The Hopeful-Whatever wants to work with your company using our We Think It’s Super Service.”

- The Ugly: Makes no mention of your company or service and how the prospect will benefit. “My name is Sam Nobody, and my company wants to work with your company because we think we can help you.”

Step 2: Convey the Real You

Let your prospects know who you are. They want you to tell them what it is you do most passionately. Do not waste time telling them who you work with or for—they need to know who you are. This is not the time to drop the names of people and companies you’ve worked for in the past, and it is definitely not the time to mention any negative moments in your career. Talk about your passion and excellence!

- The Good: Mentions your experience without namedropping and shares your passion for work that connects to what your prospect needs. “For 15 years, I have lived my passion for designing the most cost-efficient communication systems in the business.”

- The Bad: Briefly mentions your experience and previous responsibilities but puts the spotlight on the previous organization. “For 15 years, I developed communications systems for Zapidio Communications, which focuses on university communication systems.”

- The Ugly: Mentions your previous company and a negative outcome. Does not mention your specific area of expertise. “I used to work for Zapidio Communications and then I was downsized, and I’m looking for freelance work in the communications field.”

Step 3: Describe What Your Business Offers

Let your prospects know who or what your business is. Potential clients want you to tell them what you do better than anyone else. What is your bottom line? Why do they need this information? Provide specifics of what your company does and why you’re the best in the business for the specific needs of your prospects. If you’re pitching marketing expertise, pitch marketing expertise and table discussing your other strengths until later.

- The Good: Has specific details about why your company is effective and the best at what it does. “My company increases the customer satisfaction ratings of struggling companies by using the power of technology to communicate effectively and efficiently through email, social media and Twitter.”

- The Bad: Briefly mentions what your company does, but not specifically enough to address what the prospect needs. “My company works with other companies to help them communicate better with their customers using technology like social media and email.”

- The Ugly: Vaguely refers to what your company does but with no mention of how it will benefit your prospect. “My company works with other companies to help them communicate better.”

Step 4: Explain the Promises You Will Deliver On

Your prospects want more specifics on what your brand offers. Remember: a brand is nothing more than a promise delivered. So what promise are you making to them? Know what will create buzz for your prospects, because if the bottom line is not measurable (sales is not buzz) or directly beneficial to the prospects, then they will have no interest in anything you’re proposing.

- The Good: Has specific details and knowledge about what your company can do for the prospect. “After reviewing the last two quarters of sales from your online web development company, we believe the use of our social media networking program will increase your sales by 25 percent in the next quarter.”

- The Bad: Shows limited knowledge of the prospect’s needs and offers a brief idea of what area you desire to work with. “I’ve been watching your company on the news, and I think that the use of our new machine could increase your production rates.”

- The Ugly: Does not know what the prospect’s needs are and makes no reference to your expertise—only broad and overly general platitudes. “Our company will work hard to address any and every need that you have to grow your company.”

Once you’ve built the message, you’ve got to learn how to deliver it. Look in the mirror and polish your 118—make it shine! Recite it as often as you can so when opportunity knocks, you can open the door and sell.

To capitalize on these opportunities and grow, businesses always need to be selling themselves and the changes they make in everything they do. Not doing it is like squatting with spurs on. You can do it, but it’s gonna leave a mark. In other words, be smart or get stuck.

Nothing sells itself forever. Never stop selling your company… and yourself. Now saddle up and ride. You’ve got work to do!

Brought to you by SCORE, America's small business mentors

2012-03-23T10:50:00.000-07:00

Would you know what to do if your competitor opened up shop across the street? Your product was featured on NBC's Today Show? Or, what if your best employee just quit? Sometimes, an entrepreneur needs a sounding board with whom to discuss new business opportunities or looming problems.

In just 60-seconds, we'll show you how to find, develop and nurture a business mentor that will help you through the booms and busts of small business ownership.

0:60 Figure Out What You Need Help With—and Yes, Everyone Needs Help from Time to Time
Pick out the top three challenges you or your business faces—and prioritize them in order of having the biggest impact on your business success.

0:46 Carve Out Time in Your Busy Schedule to Devote to Meeting with a Business Mentor
It's not easy for entrepreneurs to find time to meet with a mentor when so much is happening with the business that appears to be and maybe is, more pressing. But, in order to get help, you have to commit some of your time and energy to meeting with your mentor. It's just like exercise—you'll be glad that you did it and will feel energized when you finished.

0:38 Find a Mentor you Click With
Visit www.score.org for an online, or “virtual,” mentor; select Mentoring. You will be prompted to ask a question, or enter a few keywords, to help you search for the online SCORE mentor with the expertise you need. When the results from the search are displayed, you can peruse their experience and, in many cases, view a biography that details career information, education and professional affiliations. Then, just select the mentor who best meets your needs.

0:20 Ask Your Question
Now you have a chance to expand on or revise your business question based on learning a little bit more about the mentor you've chosen. Type in your question and click "send". Your SCORE mentor will get back to you via email within 48 hours. You can search for different mentors to help you with different areas of your business and can send up to three messages to mentors each day from the SCORE Web site.

0:11 If Online Mentoring is Not for You, Try Face-to-Face
Not every small business owner, or complex business question, can be fielded properly online. Or, you might just want that in-person contact to meet with consistently—or as needed—to bat around those new ideas. If this is the case, visit www.score.org and select Mentoring. Enter your zip code, city and state and search for a small business counseling office near you—there are 389 nationwide. Contact the office to set up an appointment and you're on your way.

0:03 Oh, Did we Mention it's Free?
Now, that's advice entrepreneurs can't afford to miss out on.

0:01 And now it’s more convenient!

In the left-hand margin of every newsletter, under the heading “Quick Links” you’ll find quick access to our counseling calendar. All you need to do it click on “Counseling Calendar” and the available counselors, their appointment openings, and their field of expertise will be delayed. You can schedule your own appointment just by clicking the appropriate button. What could be easier?

How to Raise Money for Your Startup -- Now

2012-03-22T23:42:00.001-07:00

This article was written by Jason Fell, January 11, 2012, reprinted by permission

LONG BEACH, Calif. -- Raising capital for a startup venture during these difficult economic times has been a major obstacle for many aspiring entrepreneurs. But it's not impossible.

There are several steps budding business owners can take to get in front of prospective investors and to help make sure they pony over the cash you need, says Asheesh Advani, author and co-founder of CircleLending, a peer-to-peer lending service that was acquired by Virgin Money USA in 2007. He now serves as CEO of asset management services company Covestor. Advani was a speaker at Entrepreneur's Growth Conference here on Jan. 11, 2012.

Here are Advani's best tips for landing the money you'll need to get your business off the ground:

Know the different types of investors. There are three types of people who might invest their money in your business idea: friendly investors, hobby angels and professional investors. Friendly investors are the people you know personally, namely friends and family. Hobby angels are individual investors who are most likely professionals themselves who have some money to spare. Professional investors, of course, include venture capitalists, angels and banks. "Professional investors care most about the economics of your business," Advani says. "Whether they understand your business or not, they're required to consider your business idea, as well as countless others."

Make a list of prospects. Scour your industry and your professional network to put together a first group of people and test your business pitch, he says. If the people in this initial group appear to be interested, expand your list of prospects from there.

"When I started my businesses, I wound up raising money from 75 different investors," Advani says. "Not because I wanted to. I needed to."
He suggests keeping track of your contacts, your meetings and your goals for each of the meetings. Keep in touch with the contacts throughout the pitching process.

Set a closing date. Determine a specific, official date for when interested professional investors need to get you the money they promised -- and hold them to it. When dealing with friendly and hobby angels, Advani suggests a "rolling closing date," meaning that you'll accept the investment money as soon as they're willing to give it. Also, be sure to be clear with friendly investors about what happens if the money they invest isn't paid back on time or at all.

"These are people who are close to you, so do everything you can to maintain a good relationship," Advani says.

Use middle men carefully. Third-party groups can be great for two things, Advani says. They can help connect entrepreneurs to individual investors they didn't otherwise know. Examples include peer lending and investing sites Lending Club and Prosper.

Crowd funding sites are another option. These services -- including Pro Founder and Peerbackers -- can help entrepreneurs collect numerous investments from people via social networks.

But be careful about sharing your business idea online, Advani warns. "Before you post a profile on any of these sites, remember that everyone will know what you're planning to do," he says.

5 Ways to Engage your Customers with Video!

2012-03-22T23:34:00.002-07:00

This article was written by Pete Lisoskie, CEO, BeLocal.com

How can you better leverage this content to drive sales and enhance your communication with site visitors?

Using video content to engage customers and drive new prospects is still an under-utilized strategy with brands big and small. When we ask in our Authority Marketing seminars who uses video for marketing, very few business owners raise their hands. Not only is it relatively inexpensive to use but video content can be leveraged in many different ways and is easy to promote through social media.

Video is powerful! It allows you to connect to your audience on a personal level, builds trust, and holds the prospective customer’s attention longer on your message.

So why is video so important?

• The “virtual” personal connection

• Help you stand out from your competition

• Personal branding

• Builds trust & rapport

• Shows a product or service in action

• Video holds attention longer

Here are the different video types that can be used to engage prospective customers.

· Sales Letter Video

· Content Delivery Video

· Authority Video

· Testimonial Videos

· Before & After Videos

· Webinars

The 5 Secret Video Tips

Now that you know the power of video and the different types of videos you can produce, how do you use video to engage our customers? Here are 5 secret tips on how to get it right:

Tell your Story: The most powerful selling sequence was established by Aristotle and that is Ethos, Pathos, Logos – or establish credibility, appeal to their emotion, and then apply logic to close a sale. With video you can follow the powerful sequence by telling your story and presenting your products and services. You can establish credibility and appeal to emotion.

Start a Video Diary: Video diaries are a great way to show an inside, relaxed viewpoint of a brand or company. You can produce video diaries and promoted your company site through your own YouTube channel.

Use Video to Highlight your Products: Video is a great way to demonstrate how your product works. More powerfully, you can help the customer imagine what it would be like if they owned and used your product which directly appeals to their emotion. If you get them to say, “That’s Me!” or “I Want That!” then you have a sales.

Video Humor to Drive Traffic: Humor, done well, always is a massive hit on the internet. There are so many examples of humorous videos that have gone viral and generated several hundred thousand views. BlendTec is an example of a company that used video to skyrocket views and revenues. Cracked! is another successful example. They went live in 2009 and their episodes have been viewed over 13 million times! So if you have a humorous streak, then apply it to your products or services.

Video as Customer Outreach: What I mean here is the use of video as product tutorials to teach your customers how to use a product of yours. The second, and most powerful way, is to teach them how to submit video testimonials about their experiences with your company. If you want to see how the successful company Zappos.com does this, go to http://bit.ly/AvzzXu. What results is lots of free press for your company in the process.

One thing to remember, video doesn't have to be complicated to record or produce. All it takes is a video camera, a YouTube channel, your motivation, or some willing customers. It's a well-known fact that video makes a site "stickier", and that means longer site visits and lower bounce rates.

Get your video marketing started this week! The longer you wait the greater chance your competition will beat you to the clicks you deserve on the internet.

Good Marketing Research Will Help to Create a Better Market Strategy

2012-02-28T15:45:00.001-08:00

This article was written by Michelle Russillo, SCORE Orange County Management Counselor

A marketing strategy will help you in define business goals and develop activities to achieve your short and long term marketing plans. Your marketing strategy is a concise description of your business’s products, anticipated sales and position comparative to the competition. Your marketing plans are the specific actions you're going to undertake to achieve the goals of your marketing strategy. Furthermore, market research is extremely beneficial; the information gathered can provide a more accurate base for making profit and increase your profit potential.

Your business will not succeed just because you want it to succeed. Determining if there is a market for your products or services is the most critical item of planning. Once you decide on your product or service, you must analyze your market -- a process involving interviewing competitors, suppliers and new customers. Knowing your market is one of the biggest factors. Write down the benefits of your products or services. Describe your company's unique selling proposition. Answer these few questions.

· Who are your customers?

· Where are they located?

· What are their needs and resources?

· Why do your customers buy from you?

· What benefits could you offer that would entice more non-customers?

· How can you sell to more of the loyal customers?

· If you add features or services, will people pay more for them or will they attract more customers?

· Is your service or product essential in their day-to-day activity?

· Can the targeted consumer afford your service or product?

· Where can you generate a demand for your service or product?

· What areas within your market are declining or growing?

· Describe how you will position your products or services. Can you effectively compete in price, quality and delivery? What is the projected profit? In addition, define your current marketing methods.

· Knowing your competition is another critical step in creating a marketing strategy.

· How many competitors provide the same service or product?

· What is the overall market trend and how are you holding up in terms of market share and profit position?

· How do you really rank against competitors?

· What substitutes are there to your products and how much of a threat are they?

Measuring your marketing strategy is the next step. Measuring will let you know if what you are doing is working. Analyzing the marketing strategies helps you to figure out where the customers are coming from. Don’t keep doing the same old thing without measured results. It's about what your target audience desires and you being able to deliver before your competition. Make sure your marketing message is aimed at fulfilling that desire.

Define your target market to aid in the organization of marketing plans. Market strategy assists you in the development of critical short/mid-term goals and knowing your market's profit boundaries. Next critical element is having a budget. It is important that you have a budget developed for your marketing plan By revisiting your marketing plan and your measured results at least once every quarter, you can make revisions to your budget necessary based on your targets. Marketing is an investment, a budget is necessary. Knowing your next steps you can increase your market share and make decisions whether you will advertise, use Internet marketing, direct marketing, mobile marketing or public relations?. Make the changes based on the general economy of your service or product area.

Once you have obtained and analyzed this information, it will become the foundation of your business plan. Marketing research is important because it supports the basic assumptions in your financial projection and creates your marketing strategy. Know the changes necessary to meet your customers' socio-economic conditions. To be successful, a small business owner must know the market. Market research is merely an orderly, objective way of educating yourself about people -- your current position and your customers.

The Fourth Level of Leadership: People Development

2012-02-28T15:43:00.001-08:00

By John C. Maxwell, in Success Magazine, March 2012, reprinted by permission

In the February issue, I wrote about the third level of leadership, Production, from my book The 5 Levels of Leadership. This month I want to acquaint you with Level 4, People Development, which few leaders achieve. On this level, leaders gain influence by developing others to become effective leaders. People follow because of what you’ve done for them personally.
Here are a few insights to help you to understand and work toward this level:

1. People development sets you apart from most leaders.
To expand your organization and its potential, focus on growing leaders. You must value their dreams and believe they are worth investing the time, effort, energy and resources needed to develop them. As you search for people to develop, look for individuals with leadership potential who are open to growth and instruction, regardless of title, position, age or experience.
Becoming a Level 4 leader allows you to serve people in a special way. To help people reach their potential, get outside yourself and adopt the attitude of speaker and master salesman Zig Ziglar, who said, “If you will help others get what they want, they will help you get what you want.”

2. People development assures that growth can be sustained.
If you want your organization to thrive without your continuous personal involvement, you must develop leaders. This is a lesson I learned after I left one organization and many things I built ceased to thrive—or in some cases, even to exist—after my exit. As a Level 4 leader, you can ensure the future of your organization when you:
• Transfer ownership of work to those who execute the work.
• Create the environment for ownership where each person wants to be responsible.
• Coach the development of personal capabilities.
• Learn fast yourself and encourage others to learn quickly.
Leadership is the art of helping people change from who they’re thought to be to who they ought to be. By helping your people reach their potential, your organization will reach its potential.

3. People development empowers others to fulfill their leadership responsibilities.
Many organizations are limited by leaders who hold leadership positions but can’t lead. Because they can’t empower and motivate, their area of responsibility suffers and their people go nowhere. There is another kind of leader who also limits an organization: the competent person who won’t share responsibility.
People development shares responsibility for getting things done. It invites people into the process of leadership, and that’s good because many things can be learned only through experience.
When established leaders focus on people development and empower others to lead, everybody wins. The first benefit comes to the people being led. When new leaders are developed, they become better at what they do and help everyone who works with them to do the same.
The second benefit comes to the organization. Every developed leader adds more horsepower. Expanding leadership also enables the organization to increase its territory and take on new initiatives.
The final benefit comes to the leaders doing the developing, because new leaders share the load of responsibility.
To empower others, leaders must set the right expectations. Level 4 leaders take responsibility for providing training, tools and opportunities while creating an environment conducive to development. The up-and-coming leaders take responsibility for their growth through their choices, attitude and commitment.

4. People development empowers the leader to lead larger.
Insecure leaders worry about their position and standing. They have a hard time investing in others because they fear someone will take their place. If you have insecurities, you must overcome them to reach Level 4.
Many leaders don’t want to share responsibility because they don’t want to lose any of their power. But when good leaders share power, it doesn’t take anything away from them. It actually gives them something valuable: time. Level 4 leaders are freed to do important thinking, envisioning and strategizing, which will take the team to the next level.
Delegating can be difficult, especially if you believe the person won’t do the task as well as you would. It’s short-term thinking to do the work yourself rather than developing others to do it, however. Here’s my test for delegating: If someone on my team can do one of my tasks at least 80 percent as well as I do, then I give him or her the responsibility. To be an effective leader, you must move from perfectionist to pragmatist.
Your goal isn’t to make others think more highly of you. It’s to get your people to think more highly of themselves. Set your ego aside so team members share their ideas. Give your team members credit so everyone shares a sense of pride.

5. People development provides great personal fulfillment.
In the organizations I have led, developing people has been a high priority. I tell the leaders who work for me, “Your job is to work yourself out of your job.” I want leaders to figure out how to do the job with the highest level of excellence, recruit a team, develop each member, model leadership, find a potential successor, train and develop that person, and empower him or her to lead in their place. They’ve worked themselves out of a job and are ready to move up to the next job.
Not only does people development bring the organization success, and them advancement, but it also gives them great satisfaction. We are most fulfilled when we forget ourselves and focus on others.
In addition, we are often closest to people when we help them grow. In the process, they often become lifelong friends.
Helping others grow and develop brings joy, satisfaction and energy to a leader. If you can achieve Level 4, you will create a sense of community where victories are celebrated, gratitude is evident, and loyalty is shared. Level 4 is the sweetest of all levels a leader can achieve.

Women’s Business Owners Conference, Friday, March 23, 2012

2012-02-28T15:41:00.001-08:00

In Southern California, women business owners are increasingly becoming more successful. According to the Bloomberg News, private businesses owned by women have grown in numbers and hired more workers than male-owned businesses. The U.S. Department of Commerce notes that women-owned businesses have swelled in the last few years, adding revenue and jobs to the local and national economy.

Donna A. James, Chair of the National Women’s Business Council, states women now account for 35 % of total entrepreneurial activity and closing this gap further will require improving the existing infrastructure for startups, enhancing efforts to nurture innovation, and promoting high growth business models for women. Events such as.the Women Business Owners Conference can help to do this.

SCORE OC is committed to helping women business owners develop the skills to grow their business knowledge and revenues. The Women Business Owners Conference is an ideal venue for networking while discussing the unique challenges and issues related to managing a business in today’s economy. The conference offers female entrepreneurs an opportunity to hear from leading authorities how enterprises can survive and thrive in this economy as well as share new ideas and enhance their leadership capabilities. It will be an excellent opportunity to improve business skills and increase marketing insights.

Well informed speakers will address conference participants, and high-quality leadership and skills-building workshops will help women business owners to learn how to apply newly acquired skills, benefit from available expertise on critical topics for marketing goods and services and discover opportunities to win a competitive advantage. Topics to be covered would include social media, global marketing, and government contracting; among others. Local entrepreneurs will share inspiring success stories.

For more details, and to register for the conference visit:

http://www.wboconference.com/about.asp

Six Mistakes Entrepreneurs Make When Seeking Venture Capital

2012-02-28T15:38:00.001-08:00

By Catherine Clifford, Entrepreneur Magazine, January 17, 2012, reprinted by permission

Pitching venture-capital investors to launch or grow your business is a delicate process, so you need to tread carefully. There's an art to making a successful pitch, says Aaron Levie, cofounder and CEO of Box, an online content-sharing company based in Palo Alto, Calif. He has raised $162 million in five rounds of funding and estimates he has pitched investors a few dozen times. "You should have a fully refined, bulletproof story," Levie says.

Making an effective pitch is more important than ever, as venture capital remains relatively scarce. In 2007, venture-capital firms raised more than $31 billion to invest, according to data from Thomson Reuters and the National Venture Capital Association. But they raised only slightly more than $18 billion last year. "Our cottage industry is indeed getting smaller still and that will impact the startup ecosystem over time," Mark Heesen, president of the association, said in a statement.

To take your best shot with venture capitalists, avoid these six common blunders:

1. Don't contact every VC in Silicon Valley. Blindly reaching out to VCs with a generalized pitch is not going to improve your chances of getting funded, according to Brian O'Malley of Battery Ventures in Menlo Park, Calif. Not all investors are interested in the same kinds of companies, nor do they all invest the same amount of money or at the same time in a company's life cycle.

Research the VC you plan to pitch, figuring out the kind of companies it has invested in and at what stage in a company's growth. This basic, yet useful, information can often be found on the investor's website. "If people don't display the most basic sales characteristics, then I worry about their ability to be successful as an entrepreneur," O'Malley says.

2. Don't overdo the PowerPoint presentation. Some entrepreneurs create lengthy PowerPoints that leave investors bored and with little time for questions and answers. John Backus, founder and managing partner at New Atlantic Venture Partners in the Washington, D.C., area, recommends a maximum of 15 slides for a one-hour meeting. That number of slides will take up about half the meeting, he says, leaving 30 minutes for questions. Also, make the slides as visual as possible. "We are not going to remember a list of data,” Backus says.

3. Don't disregard questions that come up. VCs will likely have questions that interrupt your presentation, and you may be tempted to hurry through them to get back to your rehearsed pitch. Instead, always answer questions as completely as possible. After all, if you secure funding with a VC, it's likely going to be a long-term relationship – and communication is key. "When I invest in your company, we are going to be married for five to seven years," says Johnathan Ebinger, investment partner of BlueRun Ventures in Menlo Park, Calif. Sometimes "it is like they are playing whack-a-mole with my questions," he says. "Let's try to have a conversation."

4. Don't exaggerate. While VCs are hunting for the next Google, Facebook or Twitter, they don't want to hear unrealistic pitches. "There are probably five companies out there in the world that have gotten to $10 billion, $20 billion, $30 billion," Backus says. "Be realistic and tell me how you are going to win." One way to make your pitch credible: Identify your potential rivals and explain your competitive strategy. "There is always competition," Ebinger says. "You have to be open to the fact that the world is going to get by without you."

5. Don't try to raise money just for the short term. O'Malley often hears entrepreneurs say they're trying to raise cash to cover expenses for a period of time, usually 12 to 24 months. But he discourages short-term thinking. Instead, he urges entrepreneurs to raise money to hit milestones, such as reaching 500,000 downloads of your software or application, hiring a vice president of marketing or signing a distribution deal. Also, raising a bit more money than you'll need is better than too little. "Of my seed investments I have made, half of them wished they had raised more money," O'Malley says. "None of the others that raised more than they needed ever regretted it."

6. Don't rush to disclose what you think your company is worth. You will need to discuss how much money you are seeking, but don't immediately share what percentage of your company's value that represents. "I have talked to a lot of my venture friends, and it turns them off when they see the value of the company" declared too soon, says Lori Hoberman, chairwoman of law firm Chadbourne & Parke LLP's emerging companies/venture capital practice in New York.

Instead of putting your estimated valuation in the presentation, allow it to come up naturally in conversation. The valuation will be “a very hotly negotiated point between you and the investor," Hoberman says. The issue usually surfaces at the end of the first meeting, she adds, when you discuss what percentage of the company you are selling for the investment.

New Labor Laws for the New Year

2012-02-01T08:45:00.001-08:00

This article was written by Robin Noah, SCORE Orange County Management Counselor

California Governor Jerry Brown has signed a number of new employment bills making significant changes in California employment law, requiring reviews of employer human resources policies and employee handbooks. The new laws are effective January 1, 2012, unless otherwise indicated. The three discussed in this article are considered the most significant for small employers.

Pay Notice: AB 469, the Wage Theft Protection Act of 2011, amends the Labor Code to add Section 2810.5, which requires employers to provide a written notice to nonexempt employees with specific wage information at the time of hire.

The law also requires employers to notify employees in writing of any changes to the information in the notice, within seven calendar days after the time of the changes, unless the changes are reflected on a timely wage statement or other writing required by law.

The written notice includes the rate of pay, the amount of allowances (such as meals or lodging), the designated payday, the employer’s name and any fictitious business names, the physical address and telephone number of the employer's main office, information regarding the employer's workers' compensation insurance carrier and any other information the California labor commissioner might determine is necessary. This law also increases penalties for wage violations

The Notice to Employee form can be found at www.dir.ca.gov/DLSE.

Public employers need not worry about this - they are exempt from the requirement! Most employees covered by a valid collective bargaining agreement also are not entitled to the notice (if they make more than 30% more than minimum wage).

Pregnancy Leaves: California will require more employers to continue health care coverage for women on pregnancy disability leave under a new law.

Senate Bill 299: the mandate for this bill is that group health coverage is extended for pregnancy leaves. It requires an employer to maintain and pay for coverage under a group health plan for an employee who takes Pregnancy Disability Leave, up to the entire four month duration of the leave, and under the condition that coverage would have been provided had the employee remained continuously employed.

The extension of health coverage will apply even if there is not entitlement under the federal Family Medical Leave Act.

This subject is lengthy and has many variables. It is recommended that you access the text of the bill for complete knowledge and understanding regarding compliance. Insurance Providers will be a great resource with the new mandates.

Independent Contractors: Another issue that has endlessly vexed employers, and more than a few lawyers, is whether a worker should be treated as an employee or an “independent contractor.”

Currently California uses the "California common law" test for Independent Contractor income tax withholding, unemployment insurance and disability insurance. With this test, "the most important factor in determining the correct classification is the right of the principal to control the manner and means of accomplishing a desired result". Basically, the more control the employer has, the more likely the worker is liable to be classified an employee. The www.IRS.gov web site has information regarding the process for determining if the individual is correctly classified as an IC.

The new bill SB 459 imposes a civil penalty of between $5,000 and $15,000 for each violation on a person or employer that willfully misclassifies an individual as an independent contractor. Willful misclassification is defined as avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor. The penalty increases to between $10,000 and $25,000 for each violation if the person or employer has engaged in a “pattern or practice” of willful misclassification.

The law also subjects paid, non-attorney advisors to joint and several liabilities with the employer if they knowingly advise the employer to treat an individual as an independent contractor and the individual is not found to be an independent contractor.

Extra Construction Industry Penalty: California’s licensed contractors are in for extra pressure. Any final determination of misclassification must be sent to the Contractors’ State License Board which “shall” initiate disciplinary action against the contractor within 30 days.

Employers can improve their position and protect themselves financially by acquiring information on the new laws and the relevant compliance issues. It is recommended that employers seek legal counsel as needed.

6 Ways to Engage your Customers with Video!

2012-02-01T08:43:00.001-08:00

This article was written by Pete Lisoskie, Founder, BeLocalGroup.com

Using video content to teach, build trust, and engage customers is still an under-utilized strategy with many business owners. By learning how to do this, you can quickly set yourself apart from your competition. It is relatively inexpensive to create the video content. Video can be your “virtual” personal connection to your customer, help you stand out from your competition, build your personal brand, show a product or service in action, and hold attention longer. Even more powerful is video content can be leveraged in many different through social media.

The most common question we get at beLocal Group is: How do we best use video to engage our prospective customers? Here are 6 powerful video applications:

1. Use Video to Tell Your Story: Video is a very visual and compelling way to communicate emotion about you and your company. If you are passionate about your company and its products, that comes across in your video. All you need is your computer, a webcam, and clarity in your message.

2. Content Delivery Video: These types of videos provide your prospective customer a step-by-step demonstration of your product or service so they can fully experience you prior to purchase. These videos should always end with a Call to Action to tell the customer what to do next after watching the video.

3. Testimonial Videos: These days, written testimonials are commonly mistrusted because anyone can write one, put a fictitious name on it and call it a testimonial. Video testimonials provide a real and genuine connection to the prospect. And if you prospects to think, “That’s Me,” then you have them as a customer!

4. Video Humor Goes Viral: The most heavily trafficked videos on the internet usually involve some type of humor. People love to laugh and if you can show yourself, your product or service in that light, chances are you will snag a lot of traffic to your website.

5. Before and After Videos: Showing a before and after of a product or service is a powerful way to demonstrate value and makes your product or service more believable. Customers can actually visualize how your product or service will work in their lives and you can build emotional desire at the same time which stimulates the purchase.

6. Webinars: Webinars are PowerPoint presentations in a video format with you talking about each slide. Webinars are very powerful as they provide educational marketing. They teach and inform and are rich in content.

Video doesn't have to be hard. Here are some quick tips when making your own video. Keep your videos 2 – 4 minutes in length. Your prospects are both time and attention challenged in this technical day and age. Get to the point quickly. Present one specific top per video. Make your video believable and humorous. And, no matter what, always have a Call To Action! Ask them to call, email, text. Direct them to the next step in your sales process.

Video equipment is also simple. All it takes is a video camera, a simple script of what you are going to say, and a YouTube channel.

And it's a well-known fact that video makes a website "stickier", which means longer site visits, lower bounce rates, and higher conversions from prospects to customers. While Video Marketing is just one piece of the Authority Marketing principles we use at it can be very effective in getting your business in front of thousands of customers. It’s time you chose Video Marketing as your medium to add to your marketing arsenal. Here’s to making you the Authority in your local marketplace!

Research for a Better Marketing Strategy

2012-02-01T08:34:00.001-08:00

This article was written by Michelle Russillo, SCORE Orange County Management Counselor

A marketing strategy will help you define your business goals and develop activities to achieve your short-term and long-term marketing plans. Your marketing strategy is a concise description of your business’s products, anticipated sales and position compared to the competition. Your marketing plans are the specific actions you’re going to undertake to achieve the goals of your marketing strategy. In creating both your strategy and plan, market research is extremely beneficial. The information you gather can provide a more accurate foundation for making decisions and increase your profit potential.

Your business will not succeed just because you want it to succeed. Determining if there is a market for your products or services is the most critical item in the planning process. Once you decide on your product or service, you must analyze your market—a process that involves interviewing competitors, suppliers and new customers. Knowing your market is one of the biggest factors in success. Write down the benefits of your products or services. Describe your company’s unique selling proposition. Answer these questions:

Who are your customers?
Where are they located?
What are their needs and resources?
Why do your customers buy from you?
What benefits could you offer that would entice more non-customers?
How can you sell more to your loyal customers?
If you add features or services, will people pay more for them, or will they attract more customers?
Is your service or product essential in your customers’ day-to-day activity?
Can the targeted consumer afford your service or product?
Where can you generate a demand for your service or product?
What areas within your market are declining or growing?
Describe how you will position your products or services. Can you effectively compete on price, quality and delivery? What is the projected profit? In addition, define your current marketing methods.

Knowing your competition is another critical step in creating a marketing strategy. Be able to answer these questions:

How many competitors provide the same service or product?
What is the overall market trend and how are you holding up in terms of market share and profit position?
How do you really rank against your competitors?
What substitutes are there for your products and how much of a threat are they?

Measuring your marketing strategy is the next step. Measuring will let you know if what you are doing is working. Analyzing your marketing strategies helps you figure out where your customers are coming from. Don’t keep doing the same old thing without measuring results. It’s about what your target audience desires and you being able to deliver it before your competition. Make sure your marketing message is aimed at fulfilling that desire.

Define your target market to help you create a marketing plan. Market strategy assists you in the development of critical short/mid-term goals and knowing your market’s profit boundaries. The next critical element is having a budget. Develop a budget for your marketing plan. By revisiting your marketing plan and your measured results at least once every quarter, you can make the necessary revisions to your budget based on your targets. Marketing is an investment, so a budget is necessary. Knowing your next steps will help you increase your market share and make decisions such as whether you will advertise, use Internet marketing, direct marketing, mobile marketing or public relations. Make changes based on the general economy of your service or product area.

Once you have obtained and analyzed this information, it will become the foundation of your business plan. Market research is important because it forms the foundation for the basic assumptions in your financial projection and creates your marketing strategy. To be successful, a small business owner must know the market. Market research is merely an orderly, objective way of educating yourself about your market.

The Language of Business – Why You Need to Understand Accounting

2012-02-01T08:31:00.001-08:00

This article was written by Jim Chamberlain, SCORE Orange County Management Counselor

On January 31, SCORE presented a new workshop for entrepreneurs, managers and consultants who want to learn the basics of accounting. The purpose of the workshop is to familiarize individuals who want to achieve a fundamental understanding of the most important accounting concepts.

How does a business executive know whether his company is earning profits or incurring losses? How does management know whether the company is solvent or insolvent and whether it will be solvent, say, a month from today? More importantly, how does management know when they will achieve a sustainable cash flow position and when this will be accomplished? The answer to these questions in one word is accounting. Accounting provides the critical information for making business decisions which will enable management to guide the firm on a profitable and solvent course. What business decisions could be intelligently made without the use of accounting information? Examples would be difficult to find.

All business concerns large and small, in every kind of industry, find it necessary to record transactions and prepare periodic financial statements from accounting records. As a result of attending this workshop, you will learn how to “read” the numbers for the purpose of seeing potential threats to the business that might not be apparent to the owner. You will also learn the key performance measurements that will add value to the company.

Topics covered in this workshop include the accounting equation, accounting terms, bookkeeping vs. accounting, cost accounting, financial statement preparation, analysis, ratios, journals, debits and credits, ledgers, cash vs. accrual, depreciation methods, and budgeting.

Should Your Business Go Completely Wireless?

2012-02-01T08:29:00.001-08:00

This article was written by Heather Clancy January 6, 2012 in ZDnet,Reprinted by Permission

Summary: Before you decide to ditch your wireline connection completely, understand the tradeoffs in bandwidth, access speed and hidden costs.

I had a conversation with an IT services company in December that I haven’t been able to get off my mind, especially since I have had my share of Internet connectivity challenges in the past two months.

I was talking to this executive about whether or not software as a service was catching hold with his small-business clientele and was shocked to find out that many of his customers are resisting such a notion. Philosophically speaking, many of them don’t like the idea that they won’t “own” the application they are using. But the even bigger challenge is this: some of them — even in major, major cities — still don’t have reliable high-speed Internet access.

Yep, the next time someone in New York or California or Georgia or one of the other states where broadband Internet deployments are happening most quickly whines about spotty access or slow connection speeds, they might want to consider what it might be like if they lived somewhere in rural Kansas or Iowa or other states where progress is happening more slowly.

This particular executive, who happens to hail from St. Peters, Mo., related to me a story about how the local telecommunications company wanted one of his clients to pay at least $10,000 for a reasonable Internet connection in its new offices. The even more shocking revelation: this wasn’t some historic building that hadn’t been refurbished. This was a relatively new office building.

Which brings me to the point of this particular commentary. The severe weather in northern New Jersey over the past three months has really got me thinking about my own Internet access options. I’ve had to improvise a number of times because of wireline outages, sneaking down to the local coffee shop and library, and also relying on the mobile hotspot service that is part of my iPhone data contract. That has allowed me to tether my notebook computer in a pinch.

Back in early November, after the freak snow storm in the Northeast AND after a service person told me I needed to have all the wires in my house replaced because of squirrel damage and water leakage (I kid you not), I decided to splurge on a mobile wireless hotspot device running on a 4G network and ditch my hard-wired contract. I decided to pay for both for a month or two, before dropping my cable modem entirely.

Long story short, I am glad I waited. There are several reasons why, all of which you should consider if you’re contemplating how to get a better handle on expenses related to your Internet connection.

Are you impatient? One of the biggest frustrations that I have personally encountered over my experiment with cutting the cord entirely was the connection speed. I don’t care what they say about 4G, the fact is that it will be slower than your typical wired high-speed Internet connection.
How much data do you really use on a monthly basis? The hotspot contract that I purchased was for 5 gigabytes of data, which seems like a lot except that it really isn’t. If you have an iPhone, for example, that needs to update mobile apps with a WiFi connection, it will eat that plan up awfully fast. If you have an iPad, too, suddenly it is mid-month and you will be faced with spending $10 per extra gigabyte of data consumed.
Do you use a landline phone line? I wasn’t trying to angle for special pricing treatment, but when I called to cancel my cable Internet service earlier this week, with some reservations, I was surprised at how flexible the pricing suddenly became. For starters, the company lopped $20 off my monthly fee. (I don’t get any sort of special pricing right now, because I don’t watch television and don’t need that service.) Then things got really interesting. I have been thinking for some time about ditching my home office line, which I use very rarely. I had briefly considered Internet telephony but just kind of got lazy about doing the research and was vaguely worried about the cable line problems I seem to have at least twice a year because of rodents and oak trees in my neighborhood. Yet, I pay roughly $75 per monthly for monthly telephone service, separate of my cable connection. I’m changing that next week, by rolling everything together. I’ll be keeping my Internet connection and adding telephony service. Yes, I am taking a bit of a risk. Although, the line problems that I had back in November have mysteriously disappeared even though I didn’t pay hundreds of dollars on rewiring. (We’ll see if that lasts.) That will make that one bill go up by about $35 per monthly (after the set-up feel and the charge for moving my number). I’m giving it a try, despite a bit of worry over the reliability of my wiring.
Understand what you will really save. If you factor in the fact that I am still paying for my mobile hotspot, I will still save at least $45 per month under my new communications scenario. That is because the mobile hotspot will enable me to drop two other fees I have been paying for wireless access. If my line DOES go out again, the mobile hotspot will keep me at my desk instead of roaming around my neighborhood. And, because it can run off battery power, it is a good backup option if the power goes out.

I challenge small businesses to really sit down at the beginning of 2012 and understand what they are truly playing in Internet and mobile data access fees. Chances are, you really don’t know what you are paying because some of those bills are being paid by the telecommunications department, some might be run through your IT organization and some might be hitting your travel and entertainment budget line. That latter expense is particularly important to consider, as wireless carriers begin changing their policies for unlimited data plans.

Like me, you might be tempted to go completely wireless, but there will absolutely be tradeoffs in connectivity and the switch might not be as cost-effective as you think.

How To Make Your Facebook Business Page Go Viral

2011-12-23T09:34:00.001-08:00

This article was written by Pete Lisoskie, CEO, BeLocal

Next in the series of articles from beLocal is social media marketing. The reason: Your potential customers are using Facebook, LinkedIn, and Twitter in massive numbers. And they use social media to share, communicate, and interact with others and with products and services. Y our potential customer’s eyeballs have shifted from TV to social media. And Facebook has now surpassed Google in weekly traffic! So you need to be there. Facebook is by far the largest social media platform at over 800 million users. The numbers are staggering! In this article we’ll show you how to get a Facebook business page and then make your Facebook business page to go viral. Here’s how:

For those companies who do not currently have a Facebook page, the process to get one is very easy...

1. Go to Facebook.com and click Sign Up.

2. Provide some basic information like a valid email address. You will receive an email confirmation. Confirm and you now have a Facebook profile.

3. To create a Facebook page, go to http://www.Facebook.com/pages/create.php

4. Type in the name of page exactly as you want it to appear and as you think users will search for it (Important: you won't be able to change this later). Try to pick a name that customer’s would use to search for the page not necessarily your company name.

5. Select the category most appropriate for your business. (Note: avoid choosing other unless there is absolutely nothing else that matches your business)

6. Add content and publish your page — and you are done!

7. Review the help guidelines at http://www.Facebook.com/help.php or send an email to info@Facebook.com if you experience any problems.

Creating a Facebook business page is only the first step. Now you have to optimize and promote the page to benefit from the free viral marketing that Facebook can provide. And we have some great ways for you to do just that.

· Make your business personal — People primarily use Facebook to share information with friends and family; although they do “Like” pages of interest. As a business, you need to make your Facebook business page “Like-able” with products and services content that connect with users on a personal level. The more you show the human side of your business, products, and people to the community, the more likely you are to be successful.

· Use News Feed — the news feed on a Facebook user’s home pages tells them what their friends are doing. When users become your fans, News Feed tells their friends and invites them to become fans of you as well. This leads to a friends-of-your-friends viral effect. This viral effect can really drive traffic to your Facebook page.

· Update your Facebook page frequently — Facebook was designed so that people can share content on a regular basis and Facebook highlights new information and recent content changes. Updating your page with fresh content will result in more users coming back regularly to visit and interact – especially if what you are putting up there is interesting to those that “Liked” your page. You can also send updates to fans (Facebook's term for your subscribers, friends or colleagues) to announce new products, in-store giveaways, special promotions, coupon, contests, or events. To find out more about how to do this, visit http://www.belocalgroup/Facebook.

· “App” up your Facebook page — Facebook users and developers have created hundreds of applications you can integrate into your page to provide more functionality and make it feature rich! The apps you are interested in; however, relate to the business aspect of using Facebook pages so that you are not missing out on valuable traffic that could be potential customers or clients. Check out our Top 13 Must-Have Facebook Applications for Business by going to http://www.belocalgroup/Facebook.

· Promote your page with Facebook Ads — Facebook ads are a way to laser focus on a desired audience with relevant targeted ads. If the ad image and copy is well-designed and executed, it produce amazing branding and lead conversion results for you and your business! These are pay-per-click ads that run in both traditional banner format and in the news feed. The ads can be audience targeted based on age, gender, geography, educational level, interest, relationship status and keyword. Facebook ads do not always convert well, but if you test and measure you may come across a winning campaign and more importantly, you are developing “mental” brand with these ads by getting thousands of impressions in a short amount of time.

There you have it! While Facebook is only a small piece of Authority Marketing principles we use at beLocal, it can be very effective for getting your business in front of thousands of potential customers. And with proper integrated marketing techniques, it can be very powerful. If you would like to know more about Facebook business pages or how to use Facebook to get in front of potential customers or clients, go to http://www.belocalgroup.com and look for the Facebook tab. Here’s to making you the Authority in your local marketplace!

In Pete’s 14+ years experience as a small business entrepreneur he created businesses in financial services, publishing, seminars, recruiting, construction, network marketing, radio shows, and internet-related products and services. His groundbreaking book “Customers for Keeps” led the customer relationship management movement. Lisoskie applied these timeless concepts to the internet platform when he founded beLocal [http://www.belocalgroup.com] and developed the exclusive “Authority Marketing Program” for local small business.

Raising Money From Informal Investors

2011-12-23T09:29:00.001-08:00

This article was written by Asheesh Advani, in Entrepreneur Magazine, December 2011, reprinted by permission

The devil's in the details when taking money from--and structuring a deal with--friends, family and angel investors

No matter who you're raising capital from and no matter whether you're raising money in the form of debt or equity funding, you'll be faced with the prospect of financing agreements that are written to favor the investor over the entrepreneur. Over the years, the agreements used by more informal investors have come to mirror the investor-friendly agreements used by venture capital firms. So it's critical, especially during the startup stage when your negotiating leverage with investors is often weak, to know the difference between what is tolerable and what is intolerable when it comes to structuring a financing deal.

Your guiding principle should be this: Look into your crystal ball and choose your first investor carefully. Don't agree to terms that will limit or restrict your ability down the road to grow your company or attract additional investors. When raising money from angel investors or relatives and friends, the terms negotiated by your first investor in a financing round tend to be the terms that last for the entire round. Similarly, the terms you agree to in your first round set the stage for later rounds. And giving away too much could come back to hurt you or your business.

So here are a few tips about what to look out for to get a deal that works for you:

Don't give pro-rata rights to your first investors. If your first investor (or his or her attorney) negotiates pro-rata rights (which means the investor is given the right to maintain ownership in the company through future investment rounds), all the investors in the round are likely to also want those rights, even if most wouldn't have otherwise requested them. Although anti-dilution provisions are in the interest of early investors, they're off-putting to later investors. So you'll need to balance the needs of your early investors to protect their stake in the company with how attractive your company will appear to later institutional investors.

Avoid giving too many people the right to be overly involved. The follow-the-leader mentality described above gets particularly problematic when you give up control of the business and require investor consent for business decisions. If you're not careful, you may find yourself in the tedious and time-consuming position of needing signatures from all or most of your shareholders to make future financing decisions or management choices--all because you gave these rights to your first investor. Similarly, some investors will want detailed reports on a weekly, monthly or quarterly basis. Agree to this only when it seems necessary. Spending a lot of time preparing and mailing reports, and requesting and collecting signatures, is probably not the best use of your time.

What You Need to Know about Universal Product Codes

2011-12-23T09:25:00.001-08:00

This article was written by Jim Fulton, SCORE Orange County Management Counselor

SCORE gets frequent questions about the Universal Product Code (UPC), expressed as a barcode, now found on virtually every package in commerce. In Europe, these codes are known as EAN’s. However, the UPC and EAN are the same and do not duplicate each other. If you are going to distribute your products beyond the local boutique or your own website, you will need to obtain a set of codes. There are two closely related items to discuss, the UPC code and a manufacturers part numbers.

Part numbering is strictly a convenience for the manufacturer and indirectly the distributor and retail outlet (primarily for their inventory control). Historically, a part number started on the right with a variation number or letter, preceded by a number designating a specific part. As things got more complex, it became common to have another number on the left indicating a product or assembly number, and so on.

The UPC code is strictly of use in the distribution channel. It starts on the left. The left most code describes the country (indirectly the continent) of the part manufacturer or supplier. The next code group to the right defines the particular manufacturer (or source) of the material. Then comes a long code group that the manufacturer or supplier can use any way he pleases.

To aid distribution, every variant in the packaging of a product is given a separate UPC code. If you sell a package of four items, it gets a UPC number. If you sell a box of ten packages of four items, it gets a UPC number. If you sell a case of 100 packages of four items, it gets a UPC number. The case may include ten boxes, but the case and box have different UPC numbers. If color plays an important role in your product, packages containing different color products get their own UPC.

It is useful to prepare a table of all of your products down to the level of major part or assembly numbers (including color or other parameter that is important). The number of pigeon holes in this table indicates the number of UPC codes you need to acquire. Once you get all of your product offerings identified, you will convert the table(s) to a serial list with an individual UPC number for each item in the list. Leave empty spots in the serial list wherever they occur naturally. These can be used later for revised parts/packages etc.

You now have a list of unique UPC codes that can be tied to your separate pricing information and any separate more detailed parts lists related to a specific UPC or group of UPC codes. When a distributor handles your product, it will create a computer program assigning their sale price to the UPC of your product and track the quantity and location of your product through their system with a separate inventory control program.

You need to purchase a block of UPC codes from an authorized vendor/registrar. I usually suggest a start up purchases a block of 100 codes that start from the left with identifiers for your country and company with the numbers farther to the right initially unassigned. You then assign these numbers on the right to specific products or assemblies as you release them into the market place. If the above tabulation suggests you need more UPC codes, acquire the appropriate number, they are cheaper by the dozen, or 10,000.

I suggest you Google universal product code on the internet and read up on the whole subject. A good place to start might be How the UPC Works, http://electronics.howstuffworks.com/gadgets/high-tech-gadgets/upc.htm