Thursday, September 27, 2012

Public Relations (PR) on a Budget

There’s a way to connect with journalists, bloggers, and freelance writers to help you get your company’s name and products/services out to potential customers and others. These are others who may be helpful to the growth of your business such as bankers, investors, or future employees. This article discusses how to do so and launch a strong public relations (PR) initiative in a cost effective and time effective manner.
Read the fulll article PR on a Budget at
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Wednesday, September 26, 2012

Fund Your Company With a Self-Directed IRA

Please note: You can fund your company with a self-directed IRA but you cannot do it directly. As per IRS rules, you CANNOT use your IRA to directly purchase stock in a private company you own the majority or controlling stake in.

According to Wikipedia, “If the account owner or beneficiary engaged in a prohibited transaction, the account is treated as distributing all its assets to you at their fair market values on the first day of the year in which the transaction occurred." Hence, you want to make sure that you follow all the rules in setting up then transferring out the proceeds.


What you have to do is set up a legal entity in your name as trustee of your IRA. As the trustee, you can then invest the funds into your company. It's similar to the way your IRA Rollover account is set up and then works when you rollover your 401K. It’s a bit circuitous, yes, but it is completely legal.

Read the rest of the article at Use a Self-Directed IRA to Fund Your Company.
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Monday, September 24, 2012

Exploiting a Niche

People walking down urban street lined with apartments.
University-area apartment buildings are a niche that many have exploited.
Musings on exploiting a niche: I was at a recent dinner party for a nonprofit Board I was invited to join. (And I did. ) One of the attendees was talking about how he exploited the student housing niche over the last 2-3 decades. He started with one apartment near a large local university (in this case, the University of North Carolina, Chapel Hill). He focused/stayed on it until it cash flowed nicely, then he did it again. And again. And again. And so on.

This individual honed his strategy and his systems. He branched out to a broader geographical area but with the same focus - apartments near colleges and universities. He has done quite well (i.e., he is wealthy and financially independent) doing this. He advocated that I do the same.

I also read an article in the Wall Street Journal (WSJ) about smaller entities buying up ailing older mall properties. This is the same principle - niche exploitation. You make more money and get better at what you do (not necessarily in that order!) when you focus on learning about, serving, and ultimately exploiting a niche.

Even if you wish to expand your offerings, focusing on one niche at first, allows you to hone your product, system, marketing and strategy and do one thing extremely well. This is a play on the saying, "You can please some people some of the time but you can't please everyone all of the time. "

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Liens Are One Way to Protect a Contractor's Right to Payment

As the primary contractor or a subcontractor or materialman, getting the construction or supply contract is the first order of business. The second? Ensuring you get paid. Without either, your business will wither and die. Properly structuring your contract is necessary for both.

The law provides contractors, subcontractors, and materialmen with several payment remedies
including bonds, liens, and claims under a provision called the Prompt Pay Act.  Those who provided services or materials for the construction or improvement of private property but did not receive payment on a reasonably timely basis may file a lien in the amount that is past due to secure the right to payment. Filing a lien creates an interest in the property in the amount filed.  A number of states disallow companies and individuals from filing liens against public property or projects but most public projects require bonds. In such cases, the contractors would pursue payment remedies against the bond.

To finish reading the article, Protecting Your Right to Payment: Liens, click on the link.
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Friday, September 21, 2012

SMBs and the Impact of Bankruptcy Law Changes

According to an article in the New York Times, Adviser to Businesses Laments Changes to Bankruptcy Law, “changes in bankruptcy law have given unsecured creditors more power and made bankruptcy more expensive." Previously bankruptcies could take years and years to finalize but now the maximum time rarely exceeds three years.

I have worked with companies that have been under financial duress. The key is communication. If you are in a cash crunch and are not sure when it will end yet you still have paying (albeit slow paying) customers and sufficient revenues, notify your suppliers and vendors as soon as you become aware of slowing receipts and the associated hitch in cash flow. The earlier you communicate, the better for your relationship with your significant vendors because the additional time gives them time to plan and potentially come up with options to assist you...and them.
To continue reading this article, go to Bankruptcy Law Changes' Impact on SMBs.
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Thursday, September 20, 2012

PEO Benefits

Venture capitalists like PEOs (personnel employment organizations). Why? Because they enable rapidly growing enterprises to ramp up their hiring without getting bogged down in all the administrative tasks related to onboarding new employees. VCs like founders and co-founders to focus, focus, focus on running their start up.  On what, pray tell? On products, production, services, customer service, sales, and marketing.


PEOs handle all the administrative details related to hiring. They provide interview forms, interview guidelines (what not to do), I-9 and W-4 forms, ready-made templates, HR and related training, and the list goes on. They also provide benefits and benefits administration which are key to enticing new employees. And when a company is growing rapidly, it's doing all it can to hire people fast enough to cover demand. If the management team had to focus on more of the human resources than recruiting, interviewing and ensuring a good fit, how could they be sure they focused properly on the other areas necessary to support rapid expansion? Answer: They could not.

To read more on the subject, read the article Benefits of Personnel Employment Organizations (PEOs) .

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Tuesday, September 18, 2012

Steps to Crowdfunding

Due to the inherent risk of an unproven venture, business start-ups rarely garner the support of the banking or investment community. However, if you can induce one group of individuals or one company to invest or lend, you can typically leverage that into additional funding. Why? Because people rarely want to be the first. Once they see that someone else is interested and felt comfortable enough to put their money in, the perceived risk drops.

If you can get this many people to participate, you can raise large sums of money for your business!

So how do you get the first group to invest? With the JOBS act, crowdfunding will become a more popular way of doing just that - getting the first group to invest. Crowdfunding - and the marketing that goes along with it - can be a great method of enticing smaller angel investors to invest in your company.
Want to know more? Click on the link to read the remainder of the How to Crowdfund; 3 Essential Steps article.
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Sunday, September 16, 2012

Real Estate andR Small Business Loans

According to an article posted in the American Express Open Forum, most small business loans are collateralized by real estate. To be more specific, most are backed by the owners' (or, in a few cases, the investors') primary residence. The second most common source is rental property owned by the entrepreneur or the office building (or warehouse or retail outlet) owned by either the company or the entrepreneur. Admittedly, I didn’t know the statistics on this, but in my years of advising small businesses and their owners, this has been my experience.
Per the article, “The Real Reason Small Businesses Struggle to Get Credit” by Courtney Rubin,  “Nearly all of the businesses surveyed own some sort of property, and the assets’ declining values cut small business’s clout with creditors.”
Read the entire article at
Many small business owners with little business collateral must use their homes as collateral.
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Tuesday, September 11, 2012

Is PE a Bad Word?

Ok. PE is not a word but an acronym. But that title didn't look quite right to me. Remember, those of you who weren't so athletic in school, when you had to go to PE class and you'd try to avoid it as much as the academically challenged avoided chemistry or calculus? That "PE" stood for physical education. Those that didn't like it would question its value. Many schools have eliminated PE classes. And now America has a growing child obesity problem. Do you think there's any correlation between the two? Just a teeny bit, eh?

The new "PE" stands for private equity. And many try to malign it. Like the PE above, some people don't understand the role private equity plays in the financial health of the US (and beyond). Sorry. I'm not here to explain today, just compare. If you want to know more about PE firms and what they do and why they have value, check out Fortune's Dan Primack and his daily "Term Sheet". It's a free daily update.
Sent via BlackBerry from T-Mobile

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Monday, September 10, 2012

More Tech Firms Are Going Urban

Well, it seems more tech firms are making their way to urban centers. This is great news for all hose start-ups and newbie companies that don't have the cash to bring the lattes and massage therapists and gourmet food in-house. By locating in the heart of cities, tech firms can continue the boot strapping theme. Want a latte? Go hit up the Starbucks two blocks over! Want great food? There are so many great eateries around, take a break and go check 'em out! And there's at least one day spa within walking distance or 1-2 subway stops where you can at least get a neck massage. Ok. So the start-ups have to pAy higher rents. But they save on in-house perk provisions...and they are close to where the people they hire live. If you live 2 stops away, you can work until 7 pm, take your run, go home and shower, then come back and work until midnight. Convenient, eh?

Yes it is. And that's why more tech firms are intown. (That, and the lower cost of infrastructure. Boy has start up costs plummeted in a decade!) Sent via BlackBerry from T-Mobile

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Business Owners Delaying Retirement

According to a WSJ article, more business owners are delaying retirement because they can't sell their companies for what they need to comfortably retire. I ask you, when did that become the valuation criteria?

I say over and over (and perhaps it is a good thing that I am brown skinned and have a summer tan so you can't see the blue in my face!), you MUST create value that others appreciate in order to sell your business for a good price. How does one create value, you ask. By installing some professional management (i.e., a CEO or COO and CFO or Controller and a VP of Sales) for starters. If you have all the relationships and run the company without help at the high levels, I am just buying a job with the risk of you (the seller) becoming my greatest competitor!!

If you transfer the relationships to the head of sales, the risk drops. Or if your customers are locked up under 3-5 year contracts. Many of the owners in this article were working 12 - 16 hour days and/or hadn't taken a vacation in years. Come on now. With that description, would you want to buy the company? If you've run it for 15-20 years and that's where you are, what makes you think someone else can come in and do better? This is why the companies are not selling. Make the fundamentals more attractive and begin revamping your business into a salable asset, and it will sell. It may take a few years to shift it all, but it will be well worth it. Sent via BlackBerry from T-Mobile

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Saturday, September 8, 2012

Rains are Necessary

Rain is sometimes unwanted, but necessary for growth.
I am sitting outside Staples waiting for the rain to abate. What's the term? "It's raining cats and dogs. "
Some people complain about the rain. I don't. If you've ever been through a drought, you learn to welcome the rain...even if it messes with your plans. Rain provides the sustenance for things to flourish and grow.
Business issues can be like rain. You have a great customer that leaves you. You have short term cash flow issues and find it hard to pay your bills. You have a strong employee that just quits.
You can use these issues to look deeper and find the real reasons these problems arose. You can welcome the rain as a means to clear away you or your company's fog or haze and see what's really going on.
Or, you can refuse this opportunity. Then, eventually, the issues will erode your business and the pouring rains will last for weeks. Without a strong business foundation, your business will wash away until it's just a shell of its former self.
Respect the rain and use it to strengthen and thrive. Sent via BlackBerry from T-Mobile
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