In these tough economic times many businesses are struggling for survival, some will be forced into extinction. 

      If you are one of these business owners that have found yourself contemplating selling or liquidating your business, Venture Point understands the magnitude of your decision.

      We can not guarantee that your business will sell quickly during these tough times. But we would like to help by offering business owners the opportunity to post their business for free, as long as needed on www.VenturePointOnline.com.                       

      If you have any questions or would like to list your business, please contact Karen@VenturePointOnline.com.  

Karen Torbett ~ President ~ Venture Point, LLC

    www.VenturePointOnline.com

When the going gets tough, the tough go it alone.

During recessions, when other job opportunities dry up, the ranks of the self-employed rise, says Brian Headd, economist at the U.S. Small Business Administration, or SBA.

Right now, about 12 million people are thinking about or launching a business, says Paul Reynolds, visiting professor at the School of Public Policy at George Mason University.

That’s about 5 percent more than in 2008, he says, and it’s more than the number of people getting married this year.

It’s about as difficult to succeed in your own business as it is to make a marriage work. “After five years, about 49 percent of startups that were launched during recessionary times are still surviving,” says Headd. (The success rate for businesses born in good economic times isn’t much higher — about 52 percent or 53 percent reach a five-year mark.)

Studies show that there’s a big link between people who seek out classes or counseling on starting a business and entrepreneurial success, says Reynolds.

Fortunately, there are thousands of places around the country offering free or low-cost help, Reynolds says.

Anyone who asks a banker for a business loan is likely to be pointed toward help, says Rose Oswald Poels of the Wisconsin Bankers Association. Lenders expect a reasonable business plan before handing over a check, and help constructing a plan is a main offering of entrepreneurial help centers.

Indeed, enthusiastic entrepreneurs can easily overestimate their business savvy. “Bankers want to see a business plan that’s no longer than about seven pages, but a lot of people come in here with 100 pages and more,” says Sarah Winters, program assistant at the Center for Women & Enterprise based in Boston.

You don’t know what you don’t know. If you’re open to taking advice, says Reynolds, you’ll stand a better chance of going it alone.

Each locality may have its own offerings, like classes sponsored by a city development office or chamber of commerce.

Here, though, is a primer on three of the prevalent programs nationwide:

1. Small Business Development Centers, or SBDCs, which operate under the auspices of the SBA, are the most prevalent entity offering help, Reynolds says.

These centers endeavor to grow entrepreneurial efforts across the country, but each center operates somewhat uniquely.

Even though the aim is to spur startups, don’t be shocked if an SBDC counselor frowns on your idea.

For instance, Carol Cornell, director of the Northern Kentucky University SBDC, says she’s now seeing many laid-off workers who want to open a restaurant, store or franchise outlet.

The poor economic climate, plus the fact that many pink-slipped workers think of these business opportunities as a “default” option because they’re discouraged looking for work, often bodes ill for a business launch, says Cornell.

Instead, she encourages many to scratch their entrepreneurial itch by selling their expertise — whether it be accounting, marketing or other service — on a freelance basis, while still devoting some time to a full-time job search.

You might not be able to immediately secure a one-on-one counseling session with an SBDC. “We encourage people to enroll in a course or go to one of our resource libraries and develop a business plan before (individual counseling),” says Charles Penner, regional director of the Michigan Small Business and Technology Development Center in Ypsilanti, Mich.

Courses may be free or fairly low-cost, such as a few hundred dollars for a three month course, meeting once weekly. Find out more and locate an SBDC near you.

2. Women’s Business Centers, or WBCs, are also affiliated with the SBA. There are about 100 centers in the U.S., originally born to allow women to feel comfortable asking questions about business basics in a female-friendly environment, says Winters.

There’s nothing special that women need to know about starting a business, Winters says. Men are also welcome at the WBCs, says Mary Laughlin, marketing director for the Women’s Business Development Center in Connecticut. “In fact, this year, we’ve seen a 20 percent jump in the number of men we’re serving. That’s because we have been focusing on access to capital and redirecting after layoffs.”

Classes and individual counseling are available through Women’s Business Centers just as with Small Business Development Centers.

Community colleges and extension services at state universities already team up with SBDCs and WBCs to offer courses. Courses may carry a fee, says Winters, but scholarships are often available. Most community colleges also offer noncredit seminars on single topics like establishing a Web site or marketing a small business for minimal fees, says Tommy Goodrow, a vice president at Springfield Technical Community College in Massachusetts.

3. SCORE, a nonprofit also affiliated with the SBA, is composed of volunteers, mostly retired business owners and executives who pass through a training course on startup counseling.

SCORE maintains 370 offices. At some offices, like the one in New York City where volunteer Martin Lehman works, “We have people walk in, and they can usually get an individual counseling session in a few minutes,” he says. Other offices set up appointments between volunteers and entrepreneurs at places such as libraries and coffee shops.

“We’re trained to listen,” says Lehman. Then, after they hear about a client’s plans, counselors should ask pointed questions, such as the total anticipated startup costs, says Martin.

The SCORE services are free. Online counseling is also available, which allows entrepreneurs to question SCORE volunteers with expertise in a particular field.

For more information on all three of these programs, visit the SBA Web site.

Author;  MARILYN KENNEDY MELIA, BANKRATE.COM

AS THE CREDIT CRUNCH rages on, debt collectors have become even more aggressive. And while consumers are largely shielded from debt collectors’ more obtrusive money-gathering techniques, business owners have few protections.

Barbara Clark, co-owner of Healthy Home Insulation, a spray foam insulation contactor in Vero Beach, Fla., found this out when she let three of her loan payments slip past their due dates. Clark says she had never been late on payments before, but as her sales plunged 50% in the past year, she started struggling to afford them.

The collection calls soon followed. Clark says her three telephone lines regularly receive anywhere from 30 to 90 calls from a single debt collection agency each day. When she complained to her bank, she was told to “pay up.” And while she intends to do so, Clark says having to answer the phone every few minutes certainly doesn’t help. “I’ve done everything I can do to avoid this. But business is really slow right now… I’m not a deadbeat,” she says.

Delinquencies on commercial and industrial loans jumped to 3.1% in the first quarter of 2009, up 117% from a year ago, according to the Federal Reserve. As sales continue to slide, many more businesses are expected to join these ranks, says Michelle Dunn, a small business credit and debt-collections consultant in Groton, N.H.

Making matters worse, businesses aren’t protected from debt collectors under the Fair Debt Collection Practices Act (FDCPA), which bars consumers from being threatened, harassed or called at work, and state laws offer few protections to businesses, she says.

Of course, one way to avoid an onslaught of collections calls – not to mention a blemish on your credit report – is to do everything in your power to make your debt payments, says Dunn. Cut costs and explore other revenue-raising activities that can help. If you’re in debt trouble today and those options are no longer viable, here are some ways to get the debt collectors off your back:

Establish a repayment plan

Contact your creditor or vendor that you’re late in paying immediately, suggests Doug Rosner, a director at Goulston & Storrs, a corporate law firm in Boston. “Communication is vital, especially if it’s with a vendor [or creditor] you want to maintain a relationship with,” he says. Explain your financial situation then ask if they would consider a repayment plan in which you could pay a reduced amount over a longer period of time, he says.

To get vendors or creditors to accept such an arrangement, provide a promissory note, a personal guaranty or collateral such as a lien against a second home or equipment, suggests Charles Thomson, in-house counsel for the Doall Company, an industrial supplies and machine tool distributor in Wheeling, Ill.

Work out your debts

If paying in full is impossible, request a “workout” under which all parties agree on a reduced debt amount, says Robert J. Hobbs, deputy director of the National Consumer Law Center in Boston. If your only other option is filing for bankruptcy protection, vendors, creditors and even debt collectors will often be much more accommodating, he says. If your debts are “unsecured” – that is, they aren’t backed by assets that may be liquidated in a bankruptcy proceeding – creditors risk getting nothing if you file for bankruptcy, says Hobbs.

Make partial payments

Another option for borrowers who can’t handle paying in full is to make partial payments toward reducing their outstanding debt upon each new order they place, says Thomson. So a debtor would pay $1,000 toward his or her old balance with every order for $500 in new goods, he says. This strategy works well with debts owed to vendors with whom they’d like to continue working, he says.

Play hardball

If you suspect the debt collection agent who is calling you isn’t legitimate, ask whether they’re licensed, (most states require collection agencies to hold a permit or license), says Thomson. If they don’t have a license or if they’re not forthcoming, notify the regulator in your state. Depending on the state, the regulator may be the Department of Professional Regulation, the Department of Financial Institutions or the Secretary of State, he says. Just keep in mind that the law only applies to third-party agencies trying to collect debts on behalf of creditors. They do not apply to one merchant calling up another merchant and demanding payment of a past due invoice, says Thomson.

Worst-case scenario: File for bankruptcy

If all else fails, filing for bankruptcy can get rid of those pesky debt collectors, says Hobbs. While this is an expensive process and one that you undoubtedly want to avoid, it is a business’s primary form of protection from creditors, he says. It will often wipe out most – if not all – of your business’s debts, especially those held by debt collectors, which are generally unsecured, he says.

-Write to Diana Ransom at dransom@smartmoney.com

If you have studied marketing in college, or if you’ve purchased an off-the-shelf marketing plan template, you’ve undoubtedly heard of the so-called “four Ps” of marketing:

• Product – what exactly is the product or service you’re providing? If you’re IBM, is your product digital technology, or is it problem solving?
• Price – whether based on the law of supply and demand, consumer research or your gut instinct, what is the ideal price for maximizing long term profitability? How much do I need to charge and sell to achieve break-even?
• Placement – how will I reach buyers? Will it be direct, two-step or three-step distribution? How many distribution points will I need? How will I grow?
• Promotion – what should my budget be and what is the right mix of paid versus earner media (PR)? How should my company and product brands be positioned? What should be my company’s personality?

These are all things that you plan and manage to increase your chances of success. Most marketing practitioners will tell you that if you’ve intelligently and extensively spelled them out in a master marketing plan, then manage them with purpose over time, you should have what it takes to succeed. But there is one more “P” decision that you need to plan and manage, and it’s every bit as important as the first four Ps.

The fifth P is Pleasure.

What experience do you need to deliver for your customers to say or think, “It’s been a pleasure doing business with you.” This area of marketing is a subset of brand management. It’s called Experience Management. Remember, someone cannot “not” have an experience when interacting with your brand. So your decision is not whether to create an experience or not; rather, your decision is whether or not to plan and manage customer experiences to be consistently pleasurable.

 Your decisions related to the experience you deliver can make the difference between being perceived as a commodity or as a unique brand. Perhaps the greatest example of a business genius and brand visionary was Walt Disney. He built an entertainment empire around a single word – magic – and has found ways to consistently deliver positive customer experiences, built around magic, at every touch point.

 It’s not a coincidence that Walt Disney’s initial Florida property was named The Magic Kingdom. It’s not by chance that when you visit the park you never see trash on the ground, trash containers being emptied or food being delivered. He decided when the Magic Kingdom was built to have an underground system for taking care of these seemingly necessary things that can tarnish an otherwise great experience.

 So no matter what decisions you make about Product, Price, Placement and Promotion, unless you make fundamental decisions about how you will create Pleasure in the mind of your target audience, you have not gone far enough.

Author; Bill Nicholson  Owner and Strategy Director, At Large Marketing Solutions / 111 Antrim Drive, Greenville, SC 29607 / 864.527.1244 office / 866.541.0192 toll-free /www.atlargemarketing.com

Several years ago I read a case study about how IBM spent over $1,000,000 and a year’s time to arrive at the name “Think Pad” for its line of laptop computers. They used an internationally renowned brand consultancy with dozens of employees engaged in brand research and design. The case study ended with a quote from a C-level IBM executive, saying it was money well spent.

So you have a business, and you believe in the power of branding, but you are saying to yourself, “so what about IBM, I don’t have anywhere close to that kind of money!” The good news is – you don’t have to.

Whether it takes a month or a year, and whether it costs $1,000 or  $1,000,000, the steps needed to build and manage a brand are identical. Furthermore, they are not terribly complicated and far more affordable than you might think.

Big budget or small, successful brands are guided by a strategic framework that includes differentiated products and services, a defined Brand Positioning and Personality, audience-specific Messaging, and Standards applied for consistency. This framework must always begin with two basic steps:

Step 1: Research

A.     Marketplace

·        What are the trends, opportunities and threats? What can you do to capitalize on the opportunities and avoid the threats?

B.     Competition

·        Who are they and how are they positioning themselves? What are their strengths compared to your brand, and what are your weaknesses. What are their weaknesses compared to your brand, and what are your strengths?

C.    Communications

·        What strategies and tactics have you tried, what has worked, what hasn’t worked, and why? What are your competitors doing that you are not, and does it seem to make sense to join them?

D.    Perceptions

·        What do your customers, employees and stakeholders think of your products and/or services, both positive and negative. Are the negative ones true? If so, what must be done to fix them? If not, what must be said and done to change perceptions?

Step 2: Design

A.     Positioning

·        Applying what you learned in the research, who is your specific target (demographic and psychographic descriptions), what is your competitive set (are you a bank, or are you a lending institution?), what two or three keys benefits will customers realize, and what is your most powerful and relevant point of competitive difference? This is the rational side of your brand identity.

B.     Personality

·        If your brand were a person, what type of personality traits would your target audience want you to have? Should you be lighthearted or serious? Earthy or highbrow? Flexible or rigid? Come up with a dozen or so, make sure they are not polar opposites, then be or become them. This is the emotional side of your brand identity.

We have guided companies large and small through these fundamental steps, usually as a starting point for developing a better system for managing their brand. It’s a system that replaces personal opinions with brand opinions as the basis for making communications, marketing and even operational decisions. Whether we guide you through this process – at a fraction of the cost that you might expect – or you do it yourself, JUST DO IT (sorry, Nike).

Author; Bill Nicholson  Owner and Strategy Director, At Large Marketing Solutions / 111 Antrim Drive, Greenville, SC 29607 / 864.527.1244 office / 866.541.0192 toll-free /www.atlargemarketing.com 

I once had a mid-sized regional bank client, whose very successful, wealthy and eccentric founder would not allow anyone to even mention the words “brand” or “branding” when talking to him about his bank’s advertising and marketing efforts. He had a staunch rule – “My bank does not do brand advertising. It’s a waste of money!”

The man was wealthy and successful, but he was also very wrong. Everything the bank did, from its print and broadcast advertising to the way customers were treated in the bank was “brand advertising.”

So what is “branding” and why should I care? I would not normally start a definition by explaining what something isn’t, but due to a great deal of confusion, even among advertising professionals. Branding is not just designing a logo or stationery, it’s not just a slogan and its not just making every ad or TV spot look similar and without mention of any product or service (like the Nike spots). Branding is all of that…and a whole lot more.

Branding is the unique configuration of words, images, ideas, and experiences that forms a consumer’s total perception of a company, product, or service – and gives it relevance to them. Every phone call, every email, every personal interaction, and every ad is branding. Your fundamental marketing question is NOT, “do I or don’t I brand?” Your fundamental question is, “how haphazard or controlled do I want my brand to be?” If you want to be more successful, you manage the way these interactions are created and delivered.

If you want to have a fair amount of control over how your brand is perceived, then one of the most important things you can do is establish a brand positioning and personality. Combined, they are your fundamental brand identity…your Yin and Yang. Some call it your Brand DNA. Others call it your Brand Platform. Whatever you call it, use it as the starting point for all decisions about the people, places and things you manage that help form consumer opinions (good, neutral or bad) about your brand.

Author; Bill Nicholson Owner and Strategy Director, At Large Marketing Solutions / 111 Antrim Dr. Greenville, SC 29607 / 864.527.1244 office / 866.541.0192 toll-free / www.atlargemarketing.com

Let’s say you want to sell or buy a business. Or, suppose you want to gift a piece of your business to your family. Maybe you want to raise capital?

Well, you’ll need to determine the value of your business.

So, to get some perspective on the topic, I spoke to Scott Gabehart. He has valued over 700 businesses since 1991 and has written several books on the topic, such as The Business Valuation Book (with CD-ROM) .

According to him, there are several approaches to getting a valuation:

Do-It-Yourself: Yes, the valuation process can be extremely complex. But Gabehart has an easy system that will provide a rough estimate.

First, you will need to calculate your company’s adjusted cash flow (ACF). This is:

Net income
+ Your salary
+ Your perks (personal travel, discretionary expenses)
+ Depreciation
+ Interest expense

After all, it’s common for owners to use their business to pay for personal expenses. Thus, it’s important to factor our certain items (for example, depreciation is a non-cash expense).

Now, once you have the ACF, you need to multiply it by a multiple. Generally, the higher the ACF, the higher the multiple.

Here are some guidelines from Gabehart:

·                                 ACF up to $250K, multiples of 1 to 3

·                                 ACF between $250K and $500K, multiples of 3 to 5

·                                 ACF between $500K and $1m, multiples of 5 to 7

·                                 ACF over $1m, multiples over 7

Online Services: There are some web sites that generate basic valuations, which are usually based on real transactions. Examples include: BizBuySell.com and BizComps.com.

However, you need to be wary. According to David C. Baker (who operates ReCourses), valuation web services may “essentially be billboards to get you to hire a consulting firm, with very little hard content from a thought leadership perspective.”

Hire a Valuation Firm: Like any consulting industry, there are varying degrees of quality (yes, some valuation firms are fairly mediocre).

So, when selecting a valuation expert, look for the following:

·                          *    Is the person certified? The main organizations include: Institute of Business Appraisers, National Association of Certified Valuation Analysts, American Institute of Certified Public Accountants and American Society of Appraisers.

·                           *    Does the firm have a web site? This shows that the firm is serious.

·                           *    References? Don’t be afraid to ask for them.

·                           *    Costs? These should range from $2,000 to $15,000, depending on the reason for the valuation and the scope. Also, don’t pay the fee up-front; instead, pay based on different stages (the first may be the initial meetings for data input and the second could be the actual report).

About the Author; Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements . He also operates MergerBook.com.

Blogging is the new form of communication that enables us to voice our opinions, to ask questions and get questions answered. 

The Venture Point Business Blog was created for business owners, potential business owners, CPA’s, business Attorneys and Business Brokers, to ask questions, submit articles, tips or ideas that people may be in need or help with.  

As a small business owner, I’m always looking for information on ways to run my business more efficiently, networking communities that I can reach new colleagues and clients, and opportunities to grow Venture Point.

If you would like to submit an article that you feel would be informative for business owners/potential business owners please contact Karen@VenturePointOnline.com. 

Karen Torbett

New Hampshire Law Changes Affect Health Insurance Coverage for New Hampshire Employees and Their Federally Taxable Wages

The New Hampshire Legislature has enacted three new laws in 2007 requiring New Hampshire employers to extend health insurance coverage to additional classes of individuals. Previously, typical coverage was extended to an employee’s same-sex spouse, a “qualifying child” (as defined in the Internal Revenue Code Section 152), and/or a “qualifying relative” (as defined in the Internal Revenue Code Section 152). The new laws passed in 2007 have added the three categories of individuals eligible for health insurance coverage:

• HB 790 signed on July 17, 2007 expanded the definition of “dependent” for NH insurance purposes to include a child who is less than 26 years of age, a resident of New Hampshire (or alternatively, enrolled as a student at an institution of higher education), unmarried, and not provided coverage under any other health plan or Medicaid. – Effective September 15, 2007
• HB 437 signed on May 31, 2007 extended coverage to same-sex spouses resulting from Civil Unions. – Effective January 1, 2008
• SB 197 signed on July 18, 2007 requires the continuation of coverage for three years to an ex-spouse in the event of divorce or legal separation. – Effective July 18, 2007

Under Internal Revenue Code Section 106(a), an employee’s taxable wages do not include employer provided coverage under a health plan that compensates the employee for injury or sickness of the employee, the employee’s spouse, or dependents. Therefore, NH employers providing coverage for any additional individuals due to the new law changes, must include the incremental costs of coverage in the employee’s wages as a taxable fringe benefit for federal tax purposes. Additionally, the employee-funded portion of the premium associated with the additional coverage may constitute a “post-tax” deduction.

Many health insurance providers and payroll service providers are still digesting what this will mean for their clients and what changes they will need to make to accommodate these new provisions. In the meantime, please contact BNN with any questions you may have on how this will affect your payroll administration and annual tax filings.

The information above is intended to provide information only and should not be construed as tax, legal or financial advice. For more information, please contact a Baker l Newman l Noyes tax professional, 280 Fore Street, Portland, ME at 800-244-7444.

“It’s time.” You obtained an independent appraisal of your company, listed with Venture Point, and now you are in escrow to sell the company in a leveraged buyout. As you are acutely aware, leveraged buyouts carry the risk that the buyer will operate the company with less skilled than you have employed over the years, and will find himself unable to service the acquisition debt. Human nature and life experience tells us that his thoughts will then turn to how to recover the losses from you. The general subject of asset protection planning is beyond the scope of this article, but here is some encouragement with respect to the pension, profit sharing, or 401k plan terminated as part of the sale transaction.

When you retire, you may roll over your qualified deferred compensation account to your personal individual retirement account. While those funds are in the corporate plan, they are protected from all claims except those of the tax man and former spouses. Your personal IRA, on the other hand, is protected under state law only to the extent you do not need it for a dignified retirement. Being a subjective call, you are at the mercy of a judge who may have been a million-a-year partner at a big firm (who will think you poor and let you keep the IRA), or who may have been a $30,000-a-year lawyer for a poverty agency (who will think you rich and turn over all or most of your IRA to your creditors).

The Fourth District Court of Appeal introduced a fresh view of this creditor-friendly circumstance. In McMullen vs Haycock (2007) 147 CA4th 753, 54 CR3d 660, the court ruled that private retirement plan assets that are transferred to an IRA continue to be completely exempt from the claims of judgment creditors.

This requires the account holder to be able to trace the funds, since the federal exemption applies only to the former plan assets and accretions thereof. The more restricted exemption for IRA funds continues to apply to the remainder.

Also keep in mind that the state law exemption for IRA’s is pre-empted by federal law (unlimited exemption) in bankruptcy cases.

As mentioned, the McMullen case arose in the Fourth Appellate District (Orange County and environs). That makes it controlling law within the district. Since other California district courts of appeal have the right to reach their own conclusions, the McMullen case is persuasive law, not controlling. Statewide effect as controlling law takes place only upon a ruling by the California Supreme Court, usually when two or more lower courts reach differing conclusions on similar facts.

Author Bentley Mooney Jr.; His practice in North Hollywood, rated “av” by Martindale-Hubbell since 1976, author of nine books and many law journal articles, hold a LLM(Tax) degree, certified by the State Bar of California as a specialist in estate planning, trust, and probate law, and have maintained a concentration in asset protection planning since 1983.

  With merger & acquisition activity running rampant, timing proves to be a critical factor in determining company value  

These are two professionals that I personally would not be in business without. I count on both to keep me straight legally. When it comes to taxes I want the security of knowing my numbers all add up and the digits are going in the right places. And an attorney to make sure my “I’s are dotted and “t’s crossed or to handle any legal issues that may unexpectedly arise.

Large corporations will often have them on staff. But for a small business owner or someone looking to buy or start up a business you will need to acquire their services.

They are both crucial in the buying and selling of a business for auditing books, valuation of the business and of course closing. In this process I would suggest hiring your own and not sharing these services with the buyer/seller of the business. You will want someone that has your best interest in mind.

When I was looking at starting Venture Point I really had no one that I could ask on where to find an attorney versed on e-commerce businesses. The few people that I did approach didn’t even know what an e-commerce business was much less understand what I was trying to do. I looked in the yellow pages with no success. So like most of my research I went on the internet. Here I was able to find an attorney with e-commerce knowledge; however I found it interesting that there were only a couple actually listed in my state. I’m not sure if it was because of lack of advertising or because e-commerce businesses grew so quickly that the legal profession has had to swim diligently to catch up.

This is what prompted me to add “professional services” to the Venture Point website. Venture Point does not advise on accounting or legal issues. The intention of this website is to be a resource. And based on the questions that Venturepointonline.com receives through e-mails this is a much needed service.

So back to the question, “should you acquire the services of a CPA or Attorney?” There services can be costly, but more costly to you in the long run without them. Not a risk I’m willing to take.

The following is an excellent article on how to hire a business attorney;

http://smallbusiness.aol.com/manage/managing/article/_a/how-to-hire-an-attorney/20051213183309990009

When I decided to take the plunge into business ownership, I looked at a number of businesses for sale, and had several ideas for business startups. Never did I imagine an e-commerce website.

Most of the research that I did I only had to reach as far as my computer. The internet has not only become a major form of communication but is an infinite source of information. With a few clicks you can reach or find anything your heart desires any where in the world. This has made the internet an increasingly popular avenue for people that want to buy and sell things. All of this combined formed my conception of Venture Point.

Starting an e-commerce business up has had its challenges just like any startup business, I continue to learn something new all the time. But I have to say working with something that is intangible has been one of my greatest obstacles to overcome.

I’m not selling a product or meeting with people face to face. Any communication is done through e-mails. Even revenue generated is handled over the internet. Aside from advertising through various media forms, it is truly a virtual business.

My main objective with Venture Point is to provide a service that is a beneficial resource for people seeking to buy or sell a business. I will continue to stay open to ideas and suggestions on how to improve or make the web site better as long as it does not interfere with the integrity of the site.  

http://www.entrepreneur.com/ebusiness/gettingstarted/article159398.html

Anyone that already owns a business knows the challenge of finding the most cost efficient form of advertising that will maximize bringing customers to your door.

When starting up a new business, advertising will be where some of your most trials and tribulations lie as well as expenses. If you hire an Advertising Agency or PR Company be prepared it is not cheap. There are alternative options if you’re willing to do the research. Such as using a freelance writer if you need articles written, independent designers for advertising and layouts. Professional printers will usually have a designer on staff that can help with ideas and layouts also. Even radio and television have discounted spots, you just have to be careful on what time slots you’re paying for to see if this direction would be worth it for you.

It not only takes time to find out what avenue will work best for advertising your business, but finding the right people to work with that will provide you with the quality you pay for and share your vision can be a learning process as well.

A big part of advertising is the consistency of keeping your name out there.  Not giving up to soon. However when to say when is a judgment call. I am still in the experimental stage of trying to figure out what works and what doesn’t. And have made some costly mistakes. All I can do is chalk them up as a learning experience and move on.

    I look forward to hearing your thoughts, ideas and issues you have personally experienced and would like to share.  

http://www.entrepreneur.com/ebusiness/gettingstarted/article159398.html

If you’re a business owner, you should already know this. But for those looking to either start up a business or buy into a pre-existing one, this information is crucial.  

Before starting Venture Point, I looked seriously at buying a pre-existing business. A couple that I looked at I discovered in my research that strong competitors would be moving next door to the business in a matter of months. This would easily force it either into struggling for survival or extinction.  

I couldn’t help but wonder if the owners knew this was about to happen. Perhaps they didn’t have the confidence or maybe the additional resources it would take to stand toe-to-toe with the competitor? They may have decided it was time to bail out while they could still get a decent asking price. If someone had bought these businesses without researching the locations where competition was or was about to be, it could have been devastating. 

It’s not uncommon to see a Best Buy and Circuit City or a Home Depot and Lowe’s across the road from one another, and the same with certain restaurants. These are large chains that can afford to fight their competition. But for a small business owner, a large chain moving down the road that sells a similar product for less is suddenly in a fight for survival. I live in a high growth area so I see this happening quite a bit. 

Competition is always going to be out there. A savvy business owner must keep up with who and where competitors are and understand what must be done to stay ahead of the game. This is equally important for someone looking to invest in a business. Buying a business without knowing the status of its competition could require additional funding that you were not anticipating, or more of an investment than what you’re willing to make. This information can help you to decide if it’s even worth the investment. 

When buying a business there are a number of things to look for. 

One that is sometimes overlooked is the reputation of the business. The reported sales or revenue of the business doesn’t always tell the story. 

I have witnessed a group of successful investors that make a living buying, building up, then reselling a business, make this crucial mistake. Financials indicated that revenue was being maintained and even showing some growth. What this information did not show was how much of it was “new” clients vs. “repeat” clients. 

If it had, the investors would have realized that clients were not coming back because of dissatisfaction with the company. A heavy sales force was keeping the flow of new clients coming in, helping to keep revenues intact, but as anyone in sales knows, eventually you’re going to reach the bottom of that barrel.  

The business and its reputation were being run into the ground but its sales hadn’t reflected it yet. Everything the investors saw indicated a successful business with a tremendous future outlook. But, because of the company’s reputation and some other variables, the new owners are now fighting for survival and have contemplated closing the doors. 

The money they invested in what they thought was going to be used to “building up,” the company quickly turned into money necessary to “rebuild” the company. They would have done better to have started one up like it, instead. 

Bottom line here, when buying a business, check its reputation out in the community with clients and vendors, and as well as its standing within the industry it competes in. This information is extremely important. If you don’t take the time to research this it could be a death sentence. 

Prepare A Business Plan;

            www.VenturePointOnline.com offers a business plan outline on our “Resource Library” page. Or visit your local SCORE office or Business Development Center. If you’re not comfortable with writing one yourself there are companies that specialize in this.

Tax Structuring;

           www.VenturePointOnline.com offers a breakdown on the “Resource Library” page of the most common forms; corporation, sole proprietorship, general partnership, limited partnership, “S” corporation and limited liability company. It is advisable to consult an attorney or CPA for advice on which form will be the best fit for your company.

Personal Credit;

            If you intend to use a financial institution or investor for funding of your business, check your credit report first. The three major credit report agencies are; Equifax/ www.equifax.com, Experian/www.experian.com, and Transunion/www.transunion.com.

Register The Name Of Your Business;

            You will need to make sure that the name you have chosen for your business has not already been taken. This can be done by calling the Secretary Of State’s office or go online. If it is available then you will need to register it with your county office. If you intend to trademark your company’s name or logo, to check for US availability and applications go to; ourwww.USPTO.gov. A business attorney that specializes in patents and trademarks can also help you with this process. 

Business License;

            You will need to obtain a business license for the municipality in which your business is physically located.

Tax ID Number;

            This form is SS4 and is available through the IRS, your CPA or tax advisor.  The IRS website to obtain this form is : http://www.irs.gov/businesses/index.html

Register Your Business With Your State Tax Commission;

            This form is available through your state office or CPA and can be used to obtain an employer withholding number if you have employees and a retail license.

Real Estate;

            Whether buying or leasing real estate have an attorney review all transactions in case there are special considerations. And as a lessee make sure you are clear as to who is responsible for maintenance, up keep or damage to the property.

Zoning Regulations;

            Check with your city or county offices for zoning, occupancy permits, and sign permits.

Insurance;

            You will need to consult an agent on liability, Workers’ Compensation, casualty insurance, bonding etc. this will vary according to the type of business and number of employees.

Bookeeping;

            If you are not using an in house accountant or bookkeeper then you will need to consult one for advice on establishing a bookkeeping system.

Checking Account;

            Open a business checking account. Do not use your personal accounts for business transactions.

Credit Card Merchants;

            If your business will be accepting credit cards, check with the bank you are doing business with, and then shop around to make sure you are receiving the best possible rate.

Special Licensing or Permits;

            According to the type of business or industry you are going into it may require additional licensing or permits; Health Department, hazardous materials, occupational and professional licensing boards, OSHA, ABC, Department of Agriculture, etc.

Quite often, while working on various client matters, the phone rings with a prospective client on the other end of the line.  I spend a few moments listening to their issues thinking to myself…if only they’d called before; I might have been able to save them some money and headaches.

For patent issues, entrepreneurs or small business owners don’t realize the significance of disclosing their inventions to others prior to securing their patent rights.  In the United States, a patent may only be filed in the name of the inventor and must be filed no later than one year from public use or public disclosure.  Practically what does this mean?  If you have an idea and share it with someone else, who then improves or adds to its functionality, that someone else may be a joint inventor.  If so, that someone else equally owns the patented invention, no matter what his contribution. If you openly share your idea with someone else, there is no guarantee that he or she won’t tell others or use the idea for their own benefit.  Your disclosure may have started the clock ticking on the one year time bar in the United States. Thus, prior to obtaining input from others, a patent application should be filed or an agreement of non-disclosure of information and ownership rights to improvements should be entered into.

In this global economy, protecting an invention by securing patent rights only in the United States is often not significant.  Inventors also don’t know at the time of invention or filing for United States patent rights whether their invention is the next “big” one.  Outside the United States, almost every country requires absolute novelty for patentability.  Practically what does this mean?  If you disclose or use your invention publically anywhere in the world prior to filing a first (called “priority”) application, you cannot file in a country with the absolute novelty requirement.  In other words, all your rights outside the United States are lost if you publically disclose or use the invention prior to filing the priority patent application.  Once a priority application is filed, public use or disclosure of the invention is no longer a worry.  Keep in mind, however, that there is a one year time period from filing the priority application to file in other countries.

In naming any business, there is much thought, creativity and emotion involved.  After the perfect name is decided on, the next step is registering the business name, designing a logo, ordering business cards, creating stationary, etc.  Each one of these steps requires spending money.  What if after starting your business, you receive a call or letter asking you to stop using your “perfect” name because a third party already has rights to the name either through federally registered trademark rights or under common law trademark rights?  This can happen if you have not taken the precautionary steps to research your name prior to use.  Trademark rights begin upon use in commerce and there is no law requiring someone to register their name for use on goods or services.  Practically what does this mean?  To prevent unnecessary costs, a thorough trademark search should be conducted prior to using your “perfect” name as a business name or placing your “perfect” name on a good or service.  The issue of prior user rights exists not only with the name of a business, but also with any products or services sold.

In each of these instances, the loss of patent rights or the pain of resolving disputes with third parties could easily be avoided by seeking professional legal advice early from intellectual property counsel.  Myers & Kaplan Intellectual Property Law, L.L.C. is a boutique intellectual property law firm practicing exclusively in domestic and international patents, trademarks, copyrights, litigation and related matters.  Myers & Kaplan prides itself on providing high quality representation at competitive rates.  Every Myers & Kaplan attorney is registered to practice before the United States Patent and Trademark Office and specializes in providing complete and thorough intellectual property law representation.  Additionally, the attorneys have been in the “real world,” most having had significant business and/or technological experience prior to their professional legal careers. Because of this wealth of experience, we have the unique ability to provide our business and entrepreneurial clients with “business-practical” advice and legal services, across a unique cross-section of industries and practice areas. Please visit our website at www.mkiplaw.com for more detailed information.

Authored by Cheryl J. Tubach, Esq., Director of Corporate IP Affairs.  Ms. Tubach practices law with the firm of Myers & Kaplan Intellectual Property Law, L.L.C.  Previously she was in-house counsel for The Coca-Cola Company and Eastman Chemical Company.  Ms. Tubach received her law degree from Georgia State University in 1992 and her Bachelor of Science degree in Chemical Engineering from the University of Kentucky in 1984.

In my last blog entry I talked about the need to place enough importance on a business plan.  This time, I want to discuss the opposite problem – placing too much importance on a plan.  Ironically, the same issue causes it; a business plan is a fluid document that naturally undergoes changes.  Whereas some entrepreneurs will look at this nature and place too little importance on the plan, there are other entrepreneurs who will get caught in the trap of rewriting the entire plan every time something changes with the business. 

The business plan changing is normal.  As a result of the business plan being a reflection of the business, when the business changes the plan will also change.  Let me give you an example.  If a TV network changes its programming lineup on a specific night, the TV listings will change in order to reflect what is going to be shown.  It is the same concept with a business plan; as the business changes so does the plan.

I have seen many entrepreneurs who have gotten stuck in a pattern where with they spend so much time rewriting their plan that they never move forward.  Every time a change is made, they rush back to the plan and rewrite it.  While it is important, to update your plan to reflect where the business is at, it is equally as important not to let the changes prevent you from moving forward with the business itself.  Make sure that the main points of the plan are up-to-date and accurate, and fill in the details when you have the time.  Is it important to update the plan if you have changed the sales strategy?  Absolutely.  Is it important to update the plan if you have decided not to use wrap advertising?  Yes and no.  If you have the time to make that update, do so, but it is not going to make or break your plan.

While I have spoken at length about the importance of taking a business plan seriously, I want to end by reminding you that a business plan is fluid.  It will change.  Be prepared for this and be willing to adapt.  Not a single one of the startup companies I have personally been involved with has seen everything go according to the plan.  Instead, as the business grew and developed the plan and direction of the business was shifted to allow the business the best possible chance of succeeding.  A shift in the business is not a bad thing.  Rather it is a sign that you have a better understanding of the business and what you need to do to make it succeed.  Embrace these changes and adjust the plan accordingly. 

Remember that while the plan is a roadmap for your business, the business itself is most important.  Move forward with your business, and adjust the plan accordingly. 

Kevin Kundinger is a Managing Partner with Einstein Enterprises, LLC, a company that specializes in writing business plans for small businesses and startup companies looking to secure financing. For more information, visit the firm’s website at www.einstein-enterprises.com, call (888) 732-4202, or email Kevin directly at KevinK@einstein-enterprises.com. 

While the understanding of business plans has increased greatly in recent years, there are still many misconceptions surrounding such a document.  In large part this is due to the nature of the document itself.  Unlike an annual report, employment posting, or the majority of other business documents that are routinely created, a business plan is a much more fluid document.  Every business plan will undergo changes at various times due to the ever-changing nature of the business itself. 

Unfortunately, this fluid nature of the plan leads many entrepreneurs to discount its importance.  This results in plans that lack the breadth and depth that a solid business plan should have.  I encounter many people who mistakenly think, “If the plan is going to change anyways why put too much effort into it now?”  Instead they put more time and effort into ‘getting the business going’ rather than fully developing the business plan.  In fact, in your excitement over the new venture you yourself may be tempted to forge ahead without spending enough time thinking through the pitfalls, risks, and other problems that are bound to occur with your business.  Sadly, this is the same type of thinking that has caused many businesses to fail because their owners did not put in the time necessary upfront to establish a solid road map for where the business is headed.  As a result the business simply did not have the foundation necessary to succeed. 

It is during the process of developing the business plan that you will see problems with the plan that need to be addressed.  It is much better to deal with these potential problems upfront rather than a year down the road when the business is beginning to grow.  I cannot think of a single client I’ve worked with whose idea of the business was exactly the same from the day I started working with them to the day we finished. The business plan creates a roadmap for where the business is headed. 

Not placing enough importance on the business plan is akin to someone jumping in the car and heading somewhere with only half of the map of how to get to their destination.  They are so excited to start the journey that they fail to accurately plot out where they are headed.  Would you go on a long trip without knowing all of the steps of how to get there?  However, this exact same scenario is played out time and again when businesses do not plot out where they are headed with their business plan.  While not every business needs a 60-page document complete with appendices, call-out boxes, and graphs, every business does need a roadmap.  Make sure you have a solid roadmap before starting out on your journey. 

Next time I’ll address another common problem that occurs with the development of a business plan due to its fluidity – placing too much importance on the business plan. 

Kevin Kundinger is a Managing Partner with Einstein Enterprises, LLC, a company that specializes in writing business plans for small businesses and startup companies looking to secure financing. For more information, visit the firm’s website at www.einstein-enterprises.com, call (888) 732-4202, or email Kevin directly at KevinK@einstein-enterprises.com

My job is to build comprehensive business plans for our customers that are marketable to investors and banks so that our customers can secure the financing they are seeking.  We assist in building marketing strategies, sales strategies, and doing the proper due diligence necessary to understand the market a customer is entering.  Although we assist with the business planning and strategy aspect of a company, I think the most important part of our job is turning the plan into a marketable document that our customers can take with confidence to an investor.  

 Many business owners and startup companies that I speak with underestimate the power of a well written and well composed business plan when seeking financing.  Put yourself in the investor’s shoes for a moment.  Imagine I hand you a document that outlines my entire business strategy in 4 pages.  The document has grammatical errors and is in black and white.  What impression is that giving you as a potential investor?  First, the length of the document is discouraging.  While every good business plan needs a solid 1-2 page Executive Summary that instantly attracts the attention, you can’t outline the entire business strategy in a couple of pages.  A business plan needs to include all of the major strategies of the business so an investor can understand my thought process and where I plan to take the company in the next 3-5 years.  Second, the appearance of the document is unprofessional.  Having grammatical errors shows the lack of time and effort that went into developing the plan.  

 Let me provide you with a few tips that can help your business plan sell itself:

1.)   Executive Summary – A clear, concise Executive Summary will go a long way in selling your business plan.  Key information you want to have present includes: Industry Overview, Product Details, Target Market, Financial Information, and your Management Team

2.)   Formatting – Take the time to add “flare” to your business plan.  Investors are used to seeing plain business plans, so make yours stand out.  Try using call-out boxes for important information.  Use a color logo on the main page and in the header of each page.  Incorporate charts and graphs that are relevant and can add value to the topic you are discussing.  Catching an investor’s eye with your use of color and design will help your plan stand out from the rest.

3.)   Due Diligence – Show your potential investor that you have done your due diligence.  They want to make sure you understand the industry, your target market, and how you are going to provide them with a return on their investment.  Use facts that can be verified by credible sources, and make sure you are complete in your analysis.  Be complete, but don’t add unnecessary information just to make the plan longer.

Josh Eich is a Managing Partner with Einstein Enterprises, LLC, a company that specializes in writing business plans for small businesses and startup companies looking to secure financing.  For more information, visit the firm’s website at www.einstein-enterprises.com, call (877) 608-0785, or email Josh directly at JoshE@einstein-enterprises.com.