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Wednesday, April 29, 2009

Create Your Own Economic Stimulus

Strategic planning combined with positive action can take your business to the next level, even in a downturn.

By: Pattie Simone, 04/15/2009

Now more than ever, the time is ripe for intrepid entrepreneurs to take their business to the next level. Here's what you need to know to deal with assorted growing pains and develop a strong, achievable expansion plan.

"The best managers and the smartest people hire people who can replace them," says Sandra Fathi, 38-year-old president and founder of Affect Strategies, a New York City PR and marketing firm specializing in technology. Business owners seeking stability and growth can take that advice to the bank. Fathi's firm went from a solopreneur-run resource to a company with more than 10 people in fewer than eight years--all while she juggled mommy duties for a growing family (she has two children, ages 8 and 3).

Of course, Fathi did a few other things right along the way, including creating a professionally designed website and collaterals, mining her industry connections and sourcing projects (paid hourly) to other talented, senior-level women who were putting family first. Fathi also was prudent with expenditures, subletting space from another woman business owner only when she had the business in place that required hiring more people.

She also mapped out a business plan that included a proposed budget and timeline, as well as a strategy detailing the types of clients she would seek out and how she would go after them (through her website, blogging, social media tools and industry organizations).

Here are Fathi's top six tips to take your business to the next level:

1.Know how to run your business and how to build your own financial reports.

2.Get your team in place, including: an accountant, lawyer and key service providers, along with independent contractors and part-time help.

3.Prune your work force. Fathi says some people have issues you can't resolve. Knowing your limits and their limits can help you make the right decisions.

4.Concentrate on your core business.

5.Get lines of credit in place before you need them. When Fathi started out, that included raising the limits on several credit cards, using them strategically as a last resort to make payroll.

6.Invest in marketing. Fathi recently rebranded her firm and has several significant campaigns running so that her company is top of mind when prospects are ready to do business.

Although Fathi has never wanted to own a large company, she considers it a great time to build her firm. "There are a lot of opportunities in a down economy; it's about survival, but it's also about planning for the future. What people don't do now will put them six months behind (their more aggressive competitors)."

You Need Passion and Planning

Nikki Hardin's journey to success started with the vision of a new kind of magazine, one that was a little literary and a little feminist, with a lot of style. So the then-50-year-old South Carolinian (a native of Kentucky) created Skirt! magazine with $400 and a dream--working hard with a friend to sell ads until they had enough to fund the first printing. She didn't take a salary for two years and didn't have health insurance.

Expand Your Business Here are seven tips to get you where you want to go:

1.Watch your cash flow.

2.Make a strategic action plan.

3.Work your networks.

4.Gather smart team members.

5.Seek out a mentor.

6.Invest in systems, polish procedures.

7.Market your business with gusto, especially in a variety of online and social networking platforms.

No matter what business you're in, it takes strategic planning and positive action to get your business on the expansion track, and keep your bottom line healthy in any economy.

"It was a crazy, stressful time, but I had a very creative designer, and I traded with her to create the brand and make up an oversized layout, " says Hardin, who admitted it took several years before her rates were high enough to make any money. Thinking ahead, she formed an S Corp and trademarked the name statewide and nationally. Hardin and the designer worked out of home offices, and a commissioned salesperson soon took over selling ads.

When it appeared she was onto something, Hardin reached out to two friends: investors who kicked in $12,000 apiece for (at that time) almost worthless stock. In 2003, this pioneering publisher sold her company for a tidy sum--netting her investors a huge return.

Hardin's ultimate success did not happen overnight and most certainly didn't happen by accident.

Here are Hardin's four suggestions for building momentum in your business:

1.Make sure you have enough money. Hardin suggests a two-year cushion.

2.Choose a business that not only you love, but that other people love as well. To do that, thoroughly research what you are going to provide.

3.Hire professionals. According to Hardin, not scrimping on that area of her business kept her on the straight and narrow.

4.Have some sense that you are filling a niche.
While Hardin and Fathi's paths are different, their accomplishments came about because they share two critical components: They have a passion for what they do, and they took action to move their dreams forward.

If you've got the passion and a product or service people need, you can achieve similar results, even with limited resources. Be authentic; engage in meaningful conversations with prospects, peers and clients; and go the extra mile.

As president of and, and founder of, Pattie Simone empowers execs and entrepreneurs around the country, sharing her sales and marketing savvy and communications expertise as a mentor, speaker and writer.

Find Hidden Opportunities in the Senior Market

Learn how to research the market, i.d. trends, and get a resource guide to help you stay cutting-edge or start up your business today.

By Elizabeth Wilson, April 16, 2009

The senior market is booming, and opportunities are plentiful. To get a better understanding on how businesses can successfully market to seniors, talked to USC Assistant Dean of Gerontology Maria Henke.

What are some specific tips you have for entrepreneurs who want to start a business serving the senior market? The rules of starting any business still apply to serving the senior market. Offer a product or service of value that meets an unmet need, put together a business plan, etc. When targeting older persons it's especially important to consider the functionality and safety of the product and how well that matches up with their needs. Depending on what you're selling you may also have to consider providing support services such as assistance using a new technology or device. Think "universal design"--a rapidly growing concept with the design community [meaning design that's useful to everyone]. Not only will entrepreneurs make and sell better products in the senior market; they will also be more successful to a broader range of consumers.

When it comes to marketing, seniors are a tough crowd. Puffery is wasted on them. They've seen it all when it comes to advertising. Today's octogenarian grew up listening to radio jingles and watching six decades of commercial television. As we mature, we become much more savvy consumers and are more likely to ask ourselves "do I really need this?" than, say, a 14-year-old. It also goes without saying but is especially true for older adults: Avoid stereotyping in your promotional efforts, and make sure your sales force is not condescending or impatient.

Try to segment a particular piece of the senior or baby boomer market. This is not one big homogenous group that ranges in age from 55 to 95. Consider defining your market by education, cultural values, employment and health status. For example, the needs of a healthy, active and employed 65-year-old will differ sharply from a retiree of the same age with poor health. The market segment you choose to target will greatly affect how your product or service will be distributed and how much you can charge.

If you are a small, community-based business, it will be helpful for you to do a little networking with your local aging network or people you suspect are working with or on behalf of the older adults in your community. If you don't know where to start, the U.S. Administration on Aging offers an "Eldercare Locator," which can put you in touch with local agencies serving your community.

What tips can you give to those already in the business? Businesses already serving the senior market may need to change the products and services they offer to the baby boomers who are now just entering their 60s. While it has been a long-held belief that baby boomers are and will be healthier and more active than any other previous cohort of seniors before them, the recent downturn in the economy indicates that many baby boomers will not be retiring as soon as they thought.

Businesses that rely on retiree travel and leisure, for example, may want to come up with a new strategy to accommodate work schedules for older adults. In addition, due to the collapse of the housing market, many baby boomers owe more on their homes than they are worth, and it will be difficult for them to transition into retirement housing. While this is a gloomy situation, it does present opportunities for businesses that cater to older persons aging in place. Successful business models may include operations that can provide community-based or home-based services, including health care, meals, personnel care or can assist home-based businesses in areas such as technology support.

Are there things you see businesses doing wrong (such as in marketing or other aspects of their business) that you would recommend they do differently? The No. 1 mistake is to ignore this huge market. It's also wrong to assume that older people don't know how to use technology. In fact, older adults are the fastest-growing group of internet users. According to the U.S. Census Bureau, people over the age of 65 spend more than $7 billion dollars per year online. Another mistake people make is to assume that people's consumption habits don't change over time. If older Americans are as brand loyal as they're made out to be, then the American auto industry certainly would not be in such dire straits.

What's your top 5 check-off list addressing how entrepreneurs should go about senior-market research? Good market research doesn't change just because you're targeting a particular demographic--all the rules still apply. It would be helpful to hire a gerontologist as a consultant to inform any focus group or survey questionnaires used in product research to find out:

1.What need is to be met with the introduction of the product?

2.How will those needs change over the life of the product?

3.How significant are functionality issues related to familiarity with technology/physical ability, etc.?

4.What language is appropriate and what messages resonate with this target audience?

5.How might the target audience define themselves (e.g., do they think they are "older women" or do they define themselves as "boomers" or "seniors")? How congruent are your views of this audience vs. how they self-identify?

You may also want to consider hiring older adults--who better to understand your target audience and effectively communicate to them than their peers?

What's happening right now that's different than before for businesses that cater to seniors? There's a revolution in the way we view older people, and this is slowly beginning to be reflected by the media. In many ways life does become an imitation of art; when older people see themselves portrayed as active, relevant individuals, they have raised expectations for themselves. For example, movies like "Young@Heart" and "Love in the Time of Cholera," made in the past few years, reflect interesting and vibrant older characters who have not been relegated to institutionalization. That's the good news. The bad news is that the current major economic downturn is going to affect consumers' ability to save for retirement, spend in retirement and be as active as they thought they would be.

The health-care reform that's happening right now will also certainly have an impact on the types of products and services that will be reimbursed by Medicare. We may, I hope, see more funding available for prevention programs, for example. There are lots of new regulations affecting businesses particularly related to health care. Regulatory market changes have created a need for new and different ways of storing, managing and accessing information. Communication channels have also evolved to be more instantaneous and more accessible to consumers 24 hours a day. There are more specialized ways to market new products and programs through both additional avenues in traditional media as well as new online mediums.

Also helpful is, the world's first age-relevant search engine, which is useful for discovering the sites seniors actually go to rather than websites designed to attract seniors.

Wednesday, April 22, 2009

Stimulus Stings Some Businesses

Some entrepreneurs are surprised by the out-of-pocket insurance mandate in the new law.

By Dennis Romero | April 08, 2009

When Congress approved the Obama administration's economic stimulus package in February, a little-known provision aimed at easing the pain of healthcare costs for laid-off workers triggered a financial affliction for business owners.

The American Recovery and Reinvestment Act reduces the amount laid-off workers have to pay in order to extend optional healthcare coverage under federally mandated COBRA (Consolidated Omnibus Budget Reconciliation Act) rules. Instead of writing monthly checks for 102 percent (the extra 2 percent for administrative costs) of the healthcare premium they enjoyed on-the-job, they now have to front only 35 percent. The caveat: The remaining 65 percent must be paid, up-front, by employers, which can then withhold the amount of the payments from their next federal payroll-tax contributions.

"This is a drastic change," says Luis Campos, regional vice president for Priority Payroll. "It will affect small business."

Celebrating the passage of the stimulus bill, Obama put it this way: "…We'll help folks who've lost their jobs through no fault of their own by providing the unemployment benefits they need and protecting the healthcare they count on."

In the meantime, the coverage subsidy means business owners, even in states where "mini-COBRA" statutes cover business below the 20-employee federal threshold, can probably count on a cash-flow headache.

"You have to have the cash to make the payment first, and there is a lag time with payroll tax credits--and there is a cash crunch with small businesses right now," says Bill Rys, tax counsel for the National Federation of Independent Business.

The employer-paid subsidy started March 1 for workers who were laid off and elected to stay covered under COBRA as far back as Sept. 1. The subsidy lasts until the end of the year, and laid-off employees can extend their own group health benefits for 18 months under COBRA.

"At a firm with 10 people on COBRA at $1,000 per person, the employer would be laying out $650 each, which would be $6,500 per month," Campos says. "If that firm only has limited revenue, the $6,500 a month could be significant."

What's more, there will be lag time between COBRA payment and the tax breaks, depending on the frequency of payroll taxes for each company. "It's a short-term loan to the government with a term from anywhere from one to three months," says Jim Edholm, president of Business Benefits Insurance.

There are other complications, too. Employers must track down COBRA-covered employees who were laid-off as far back as September to let them know that they are eligible for the subsidies. And it still isn't entirely clear who qualifies for the COBRA subsidies at a time of record layoffs.

"What about those with early retirement packages," Edholm says. "What about a mutual parting of ways? The employer must specify in writing that this was an involuntary termination. There are still a lot of Is to be dotted and Ts to be crossed."

It's one part of an otherwise benevolent stimulus package that will have some small-business owners questioning whether the Obama administration truly empathizes with the challenges of small business, experts say.

"I think there is definitely some resentment," says labor law attorney Joshua Zuckerberg of Pryor Cashman in New York. "This came down without a lot of guidance."

About Me

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Cathy Harris is an Empowerment and Motivational Speaker, Non-GMO Health and Wellness Expert, Self-Publishing and Business Coach.