Business Enhancement Associates Aha! Moments: June 2011

Monday, June 27, 2011

Five Tips to Transform Your Business

A look at the best turnaround tactics from small companies around the U.S.

Entrepreneur.com
By Entrepreneur Staff | June 27, 2011

… The economic downturn has been merciless on small business owners. But there are many resilient entrepreneurs who refuse to give up, remaining steadfastly determined to turn their companies around. And indeed they do.

Consider the advice gleaned from the turnarounds featured in our 'Small Business Comebacks' series and how it might be useful in your business.

1. Rally your team for ideas. When revenues at Suzanne Bates' Wellesley, Mass.-based executive coaching firm took a $600,000 recessionary dip in 2009, she turned to her employees to help find a solution. The 10-employee team at Bates Communications brainstormed how to make coaching services more relevant -- and current clients more engaged in the business. …

As a result, Bates Communications pulled in $2.3 million in annual revenue for 2010, compared with $1.3 million the previous year.
Read more: Rallying the Team for a Recovery

2. Analyze sales data to market more effectively. Recognizing that its' own website sales would not carry it through the recession, New Hyde Park, N.Y.-based Tuccini Corp., shifted greater attention to selling its fragrances through Amazon.com. Founder Nick Uresin gathered and tested pricing data three times daily for five months to determine how price adjustments -- and the timing of those changes -- affected sales. For example, he learned that adjusting product prices at 6 p.m. drew in more orders than at, say, 2 p.m.

Using the data, he came up with formulas that led to creating a software program to track sales and automatically adjust prices. For the past four years, Uresin had also been developing another software system to monitor where orders were coming from. Combined, the two systems would help Tuccini greatly improve sales and purchasing.

In 2010, the company more than doubled its annual sales to $3.3 million, compared with the previous year. It also paid off a $500,000 line of credit. The company is now debt-free.
Read more: Rebuilding Sales After Deep Discounts

3. Shift resources into initiatives that drive revenue. At brand strategy firm Parker LePla, the recession knocked 2009 revenues … down 15% from the previous year. Co-founder Lynn Parker suspended the usual year-end bonuses for employees and used the savings to boost the … advertising budget by more than 80 percent. New initiatives included an online sponsorship with local NPR radio station KPLU, which gave the … company a mention each time a listener visited the station's website and clicked on an audio clip.

"… it was a very successful purchase," says Parker, who also created a new division of the company focusing on digital branding to get clients thinking about a website's overall user experience.
The digital division quickly began to generate new business, accounting for as much as 30 percent of annual revenue. Today, Parker LePla employs 11 full-time employees and 2010 annual revenues totaled $2.5 million.
Read more: A Reinvention for the Long Haul

Image via CrunchBase4. Revamp your pricing structure. … GovernmentAuctions.org stopped requiring an annual subscription for customers to view its listings of government auctions, it started to win back customers. The new pricing model started with a free three-day trial followed by only monthly subscription fees – a more lucrative offer for price-conscious consumers.

"If we made it less risky for our customers, they would be more likely to activate an account," says co-founder Ian Aronovich.

Today, nearly 60% of the people who opt for the company's free trial stay on to sign up for a monthly subscription. The new pricing model generates nearly six times more revenue for every customer who stays for a full year compared with the original $40 flat rate.
In 2010 the company earned … a 58% increase … in annual revenue from the year before.
Read more: How Pricing can Power a Turnaround

5. Re-examine your business model.
… HuePhoria LLC had once found success selling its hand-painted party glassware to upscale gift boutiques. … [The] … microbusiness began forging relationships with drop-shippers, other manufacturers and retailers willing to manage the inventory and ship product on-demand. It was a way to expand product offerings without the hassle and expense of housing the inventory.

Taking a page from direct-sales companies … in which sales reps, mostly women, sell products during parties they throw for their friends, HuePhoria also launched "Ball Moms" in November 2010. The direct-sales program offers women start-up kits for $150 to $599 so they can host parties and sell HuePhoria products for a 25% cut of all sales.

With eight direct-sales reps, Ball Moms now account for 44% of HuePhoria's revenues, while drop-shipping accounts for 35% and third-party retail sales only 19%.

Sales in the first quarter of 2011 are up 72%, compared with the same period last year. …
Read more: Banking on a New Business Model

~ Jane Porter, Jason Fell, and Kelly K. Spors contributed to this article.

Thursday, June 23, 2011

E-waste bill in House would crack down on exports

Waste & Recycling News

Rep. Gene Green, D-TX

Image via Wikipedia

June 23 – A bill that would restrict the export of certain electronic waste was reintroduced in the House of Representatives June 22 by Rep. Gene Green, D-Texas, and Rep. Mike Thompson, D-California.

The bill, called the Responsible Electronics Recycling Act, would establish a new category of restricted electronic waste that could not be exported to developing nations. Used equipment could still be exported for reuse as long as it has been tested and is fully functional. Non-hazardous parts or materials would not be restricted under the bill.

Similar measures were introduced in 2009 and 2010; both were referred to the committee on energy and commerce. Neither bill advanced past the committee.

To read the text of the new bill, H.R. 2284, click here.

Contact Waste & Recycling News reporter Jeremy Carroll at 313-446-6780 or jcarroll@crain.com.

Rep. Mike Thompson, D-CA

Image via Wikipedia

A new option if you want to invest in startups |

VentureBeat

Image via CrunchBase

Just a decade ago, if you wanted to invest in a startup you had to know someone. Today, it’s a lot easier to become an angel investor, due to crowd funding, micro lending and investment sites like MicroVenture Marketplace Inc., which is opening doors to those looking to invest $1,000 to $10,000 or more.

Diagram of the typical financing cycle for a s...

Image via WikipediaThe way to win at angel investing, of course, is to invest in the right startups. To get there, you need:

1) Good deal flow from which to spot potential winners.
2) The ability to invest in multiple deals so you gain experience.
3) A knack for spotting companies, and more importantly people, who will succeed.

Wednesday, June 22, 2011

How to Combat a Slow Economy

Don't join the ranks of miserable complainers. Instead, use this time to improve your networking skills.

Entrepreneur Magazine
By Ivan Misner | June 17, 2002 | Comment
Q: When the economy is slow, new business is harder to get. What can I do to build my business in a recessionary economy?
A: …While you cannot control the economy or your competition, you can control your response to the economy. Referrals can keep your business alive and well during an economic downturn.

During the last recession, I watched thousands of business owners grow and prosper. They were successful because they consciously made the decision to refuse to participate in the recession. They did so by developing their networking skills and learning how to build their business through word-of-mouth. You can do the same during a slow economy by:

Diversifying your networks. You need breadth and depth. Participate in different kinds of groups.
Refusing to be a "cave-dweller." Be visible. Get out there and meet people at business events.
Learning how to work the meetings you attend. It's not called "net-sit" or "net-eat," it's called "network." Learn networking systems and techniques that apply to the different kinds of organizations you attend.
Being prepared. Prepare effective introductions and presentations to give to other business professionals at networking events and meetings.
Developing your contact spheres. These are a groups of business professionals who have a symbiotic or compatible, noncompetitive relationship with you.
Knowing your goal. Perhaps most important, understand that networking is more about farming than it is about hunting. It's about building relationships with other businesspeople.

Don't let a bad economy be your excuse for failure. Instead, make it your opportunity to succeed. It's not what you know or who you know, it's how well you know people that counts. In a tough economy, it's your social capital that has value. Make good use of it, and you'll thrive while others struggle.

Ivan Misner is founder and Chairman of BNI, a professional business networking organization headquartered in Upland, Calif. Dubbed the "father of modern networking" by CNN, Misner is a New York Times bestselling author.

Monday, June 20, 2011

Survey: Employees willing to take a promotion without a pay raise

Employee Benefit News
According to a new survey, conducted by OfficeTeam, 55% of workers would accept a promotion that didn’t include a pay raise.

"Some companies may want to reward employees for taking on heavier workloads but aren't able to offer immediate raises due to budget constraints," says Robert Hosking, executive director of OfficeTeam. However, Hosking adds, “professionals should think carefully about taking on increased responsibilities if a raise isn't in the offing. Before accepting a new role, workers may consider requesting a compensation review in six months or discussing other perks."

The Big Idea: Before You Make That Big Decision...

Image via Wikipedia

Key ideas from the Harvard Business Review article by Daniel Kahneman, Dan Lovallo, and Olivier Sibony

The Idea in Brief

When executives make big strategic bets, they typically depend on the judgment of their teams to a significant extent.
The people recommending a course of action will have delved more deeply into the proposal than the executive has time to do.
Inevitably, lapses in judgment creep into the recommending team’s decision-making process (because its members fell in love with a deal, say, or are making a faulty comparison to an earlier business case).
This article poses 12 questions that will help executives vet the quality of decisions and think through not just the content of the proposals they review but the biases that may have distorted the reasoning of the people who created them.
This HBR In Brief presents key ideas from a full-length Harvard Business Review article.
To continue reading, subscribe now or purchase a single copy PDF.
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Written By

Image via WikipediaDaniel Kahneman is a senior scholar at the Woodrow Wilson School of Public and International Affairs at Princeton University, a partner at The Greatest Good, a consultancy, and a consultant to Guggenheim Partners. He was awarded the Nobel Prize in Economic Sciences in 2002 for his work (with Amos Tversky) on cognitive biases.

Dan Lovallo (dan.lovallo@sydney.edu.au) is a professor of business strategy at the University of Sydney and a senior adviser to McKinsey & Company.
Olivier Sibony (olivier_sibony@mckinsey.com) is a director in the Paris office of McKinsey & Company.

Monday, June 13, 2011

Seven common attributes of retirement plans

Employee Benefit News

According to Robert Lawton, the best retirement plans have seven common attributes of success. Based on these characteristics, is your plan a winner?

Giving Clients What They Need

Advisor One
Are there ways to prevent clients from acting on self-defeating impulses and faulty thinking? Look to the fascinating findings of behavioral finance.

In his new book, What Investors Really Want (McGraw-Hill), Meir Statman, Santa Clara University professor of finance and behavioral finance researcher, provides deep insight into just what drives investor decisions.

Friday, June 10, 2011

System Failure: Cleaning up Waste's Dirty Deals

Waste Management World
Tom Freyberg illegal e0waste exports

20 May 2011
A new report on illegal e-waste trafficking will once again spark debate over developed countries' cavalier attitudes when it comes to shipping off broken computers to Third World countries, says WMW chief editor Tom Freyberg.
… However, the scandal of illegal e-waste dumping, or waste trafficking as it's known, is not new. Over the years newspapers and environmental groups from around the world continue to publicise horrifying pictures of African and Asian children in developing countries putting their health and lives at risk.

A kid with old cathode ray tubes. photographed...

Image via WikipediaSmall amounts of valuable metals, such as gold and copper are the target and obtaining these materials by hand is a dangerous task. … Copper wires are bundled and set on fire to remove flame-resistant coatings. CRT monitors are smashed with hammers. Any leftovers are often dumped in landfills, rivers or again, burnt. During this manual process toxic dioxins and plumes of cadmium dust are released.

… In 2009, a joint investigation found e-waste deposited at a council civil amenity site in Hampshire, England ended up in an electronics market in Lagos, Nigeria. … Many nations may point the finger of blame towards developed European countries but a new report from the Environmental Investigation Agency (EIA) has found that the U.S. also joins the list of 'e-waste usual suspects', including the UK, Germany, Belgium and the Netherlands.

Image via WikipediaCurrent regulations mean it is illegal to trade hazardous waste across national borders, if the receiving country does not consent to receive the goods. It's also prohibited for the EU to send hazardous waste to non-OECD countries. …

… Traders knowingly sell on e-waste for illegal export to developing countries, in the process breaking 'duty of care' responsibilities.
So what can be done? … The EIA recommends all electronic goods leaving civic amenity sites should be quantified and audited before being taken away.
Increased enforcement and funding will help with the issue but it ultimately comes down to one factor: companies should find profit elsewhere and take full global responsibility for their actions.
- Tom Freyberg is the chief editor of Waste Management World magazine.
EIA undercover investigations have revealed the extent to which illegal e-waste smugglers have penetrated the waste stream at every level. The full report can be read HERE

Friday, June 3, 2011

This Month, a New Financing Crisis for Small Businesses

Smallbiztrends blog
June 3, 2011
By Dawn R. Rivers
Since a lot of folks (primarily policymakers) seem to think that small businesses don’t need anything at all but access to debt financing in order to thrive, it’s interesting that we have a couple of highly relevant bits of nongovernmental research on the subject this month….

Financing, From a Slightly Different Angle
MultiFunding’s National Lending Snapshot for the first quarter of this year finds what it calls a “national collateral crisis” underway. According to its findings, MultiFunding divided small businesses into three groups: A) Asset-Rich Borrowers (31 percent of small businesses, in this survey), B) Moderate Borrowers (47 percent), and C) Non-Lendable Borrowers (15 percent).

The A borrowers should have no trouble getting bank financing and getting great rates, because they not only have the credit rating and the cash flow, they also have assets with which to secure loans.

The B borrowers have the credit and the cash flow, but they lack collateral and would have to turn to alternative lenders (factoring, unsecured loans with higher rates, friends and family, etc.).

The non-lendable borrowers, or C borrowers, are just what they sound like. Their only option would be microlenders and, even then, the amount they could borrow would be severely limited (most microlenders cap loans at $35,000 to $50,000).

Image via CrunchBaseMicroFunding concludes that we are facing a collateral crisis among small business owners. The challenge is particularly acute among small businesses earning less than $1 million in annual income but, no matter how you slice it, this survey suggests that a whopping 62 percent of small business owners would be unable to qualify for a bank loan right now (and only 20 percent would qualify for an SBA loan).

“Research showed that, in today’s economy, collateral is a key factor in determining interest rates. Credit and cash flow, previously important in assessing a small businesses’ credibility, have taken a backseat to equity in their balance sheet.”

Buyer Beware

Image via WikipediaA new study by the Pew Charitable Trusts has found that American households receive more than 10 million offers per month for business credit cards, and the majority of those cards have “potentially harmful terms that would not be legal on those labeled for consumer use.” That’s because consumer credit cards fall under the jurisdiction of the Credit CARD Act of 2009, while business credit cards (the primary form of financing available to most microbusinesses) remain unprotected….

About the Author

Dawn R. Rivers, an award-winning small business journalist, regularly reports and analyzes small business policy and research as the publisher of the MicroEnterprise Journal. She also publishes research at the Microbusiness Research Institute and she blogs at The MicroEnterprise Journal Blog.

3 Common Reasons Businesses Fail–and How to Avoid Them

BNET
By Margaret Heffernan | June 2, 2011

Margaret Heffernan

Biography

Margaret Heffernan

Cover via AmazonMargaret Heffernan worked for 13 years as a producer for BBC Radio and Television before running her first company. She has since been CEO of five businesses in the United States and United Kingdom, including InfoMation Corporation, ZineZone Corporation and iCAST Corporation. She has been named one of the Internet's Top 100 by Silicon Alley Reporter and one of the Top 100 Media Executives by The Hollywood Reporter. Her books include The Naked Truth, How She Does It: How Female Entrepreneurs are Changing the Rules for Business Success , and the upcoming Willful Blindness. She has appeared on NPR, CNN, CNBC, and the BBC, and writes for Real Business,The Huffington Post, and Fast Company.

… After every disaster - Lehman Brothers, Deepwater Horizon, WaMu, Fukishima and 50 - 80 percent of M&A deals - participants look back and see all the warning signs they missed at the time. What made them so blind?

Multiple psychological, neurological and social causes explain willful blindness. But some of the biggest causes of disaster are among the simplest to avoid. Here are three:

1. Too little sleep … Just because we can keep turning up to work, we assume that we’re still competent. The brain science says otherwise. When tired, most of our energy goes to keeping awake; what we lose is our capacity for critical thinking. … But critical thinking is what we most need when doing deals and making crucial decisions.

2. Too much money
Lots of companies … pay ridiculous salaries. … But there’s a mounting body of evidence that shows that, the more money you have, the less socially engaged you are. You simply stop caring about other people. This is not a great mindset with which to do business.

3. An aversion to conflict

Image via Wikipedia… Conflict is a vital way to test new ideas and forge new thinking. The challenge isn’t to avoid conflict - but to learn to do it well. The National Transportation Safety Board estimated that 25 percent of all aircrashes could have been prevented if the pilot had been challenged when making an error. …

More sleep, less pay and a little more debate: that can’t be that hard — can it?

Watch my interview on the BNET Live show on this topic here:

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Monday, June 27, 2011

Five Tips to Transform Your Business

A look at the best turnaround tactics from small companies around the U.S.

Thursday, June 23, 2011

E-waste bill in House would crack down on exports

A new option if you want to invest in startups |

Wednesday, June 22, 2011

How to Combat a Slow Economy

Don't join the ranks of miserable complainers. Instead, use this time to improve your networking skills.

Monday, June 20, 2011

Survey: Employees willing to take a promotion without a pay raise