By Maxine McBride    

If any aspect of life at the office makes workers elicit a feeling of dread, it’s the countless number of meetings they must endure. Today’s businesspeople spend at least 25% of their working hours in meetings, and the higher you rise in the company, the more meetings you attend. People generally dislike meetings, but done right, meetings can be productive and even fun.

Here’s how to make the most of them—whether you are an attendee or the leader.

1. Arrive five minutes early. Get everything organized before hand, including your papers, reference materials, and technology. Say hello to each person in the room and others as they join.

2. Prepare. Preparation is the key to being a good meeting leader and participant. Give all attendees an agenda 24 hours prior to the meeting. This will allow them the time to think about the meeting’s purpose and discussion items.

3. ‘De-connect.’ It is inconsiderate to ignore the meeting while you catch up on your e-mail or play on your iPhone. If you must have a phone with you, put it on vibrate. Don’t check e-mail. Don’t text. And don’t use your phone as a clock; wear a watch. If you must take a call during a meeting, let the group know at the beginning of the meeting you have an important call that may come. Seat yourself at the door so you can leave quietly.

4. Start by ending. If you are leading the meeting, start by stating what time the meeting will end. Use the agenda to stay on track.

5. Take action. At the end of the meeting confirm tasks that need to be completed. Schedule individual or group follow-up meetings and discuss contingency plans as needed. After you leave the meeting, immediately take action and follow through on assigned tasks. If you were taking meeting notes, distribute them within 48 hours after the meeting.

6. Be aware of facial expressions. Seven universal emotions are hardwired into human beings—surprise, fear, anger, sadness, disgust, happiness and contempt. Since your face is what most people see when you are in meetings, learn more about your facial expressions and how to work with them. If you are unable to control your facial expressions, you are an open book to others in the room.

7. Watch body language. The language of the body is another important element to master for meetings. Here are some gestures you will want to use in your next meeting to convey your thoughts physically. “Yes” gestures include open palms, forward leaning, smiling, direct body orientation, enhanced eye contact and head nodding. “No” gestures include folded arms, tapping or fidgeting, hand holding up the chin or hand over the mouth, hands on the knees, constant eye movement and squinting, shaking your head, and a scowl. “Maybe” gestures include taking a sip of a drink, biting the tip of eyeglasses, cleaning glasses, scratching of the head and chin stroking.

These are just a few suggestions for mastering the art of corporate meetings. Remember that preparation and participation are the biggest factors that will make or break your next meeting.

Maxine McBride is the president of Clockwork Marketing Services, Inc., a full-service marketing firm She can be contacted at 904-280-7980 or at www.clockworkmarketing.com

By Steve Waterhouse   

Experts say the economy is going through a warming trend. Consumers are starting to spend more, but not enough for companies to justify adding staff. So, to meet increasing demands, you have to know how to get more out of your existing workforce. 

The problem is simple: You can’t do more with less if the “less” aren’t better than they were before. Trying to squeeze more out of the same employees, using the same methods, will only leave you frustrated.

Smart managers know that by working with employees more effectively, they can drive up sales and productivity, without expanding their staff  or burning out their current teams.

Unfortunately, employees are individuals, and each person responds to a different type of management style. This means that you cannot improve your company’s performance by using the same style for all employees.

How to treat whom? That’s the secret. Let’s look at an overall performance-improvement strategy as well as one for the sales department, which is (of course) the group who boost your top line.

An overall strategy

Remember that not every employee learns, becomes motivated, and responds to incentives the same way. Five changes to your leadership style can get more out of your employees, no matter their job function.

• Communicate better. Managers typically think their communication efforts are better than they really are. Here are some simple tips on improving your employee communications: Spend one-on-one time with each employee at least once a week. Never use e-mails for important information. Be open to receive constructive criticism. If you let your team offer suggestions (without fear you will chew them out or put them down), they will be more likely to listen to what you have to say.

• Improve the work environment. Studies have shown that employees who are happy at work perform better. Regularly do things (which don’t have to be expensive) to make the work environment both interesting and rewarding. For example, order pizza for your employees every Friday or run simple contests at work with a gift card or movie tickets as the prize. Whatever incentive you use, make sure it is something that is enjoyable to employees and that they are motivated to participate.

• Show appreciation. Employees want to feel appreciated and know that they are making a difference. Reward employees for jobs well done by sharing customer appreciation statements with them, showing them the pride you have in their work, and displaying their positive results for all other employees to see. If employees take pride in their work, they will consistently deliver better results.

• Avoid burnout. Burnout often occurs when stress is high and/or employees work at the same things without learning anything new. Preventing burnout in employees is not a matter of giving your employees less work (although that may reduce stress). It’s a matter of allowing for balance between work and home.

Employees who work seven days a week and have no time for leisure burn out quickly. Encourage your staff to do things outside of work that they find enjoyable, and provide the opportunities to do them.

• Be flexible. One of the biggest motivators you can offer employees is flex time. If you properly recognize that they have lives outside of work, you should provide reasonable flexibility to their schedules. Understand that their personal life is a priority, and at times, they should be able to work around it.

Productivity improvement for sales

The productivity of your sales department is a leading indicator of performance. A large disparity between your best and worst sales person means your managers are reaching only part of the team.

Three simple changes in the way you and your sales managers deal with your sales team can go a long way in improving their productivity.

• Get out of the way. Your sales team should focus on what they do best— selling. Filling out long reports or answering customer service calls takes away from making sales. Managers should do some of these tasks themselves, or hire support staff to handle them, so that sales people can sell.

• Give good leads. Any sales person will produce better results if they are given better leads. Create more effective advertising and marketing campaigns or consider hiring telemarketers to develop qualified leads. These things will increase the chances that each prospect your sales team approaches is a good fit for your product or service. Then they can close the deal.

• Support. Support. Support. Be there for your sales team to help them close opportunities. It’s the job of every manager and business owner to be the one to do everything that’s needed to make the final sale happen. Don’t rely on your salespeople to do everything and then criticize them when they fail. Instead, step in as early as possible and give as much help as they need.

By including these principles in their sales-improvement strategy, one biotech company increased its sales by 44% over two years. Restructuring the way in which managers and their sales team work together can produce dramatic results.  

Making these simple changes to your management style will increase sales and improve productivity from your employees. You will also gain their respect and loyalty.

Steve Waterhouse is president of Jacksonville-based Predictive Results (www.predictiveresults.com), a division of PI Worldwide. Predictive Results uses behavior and personality assessments to determine the best ways to improve employee performance, strengthen manager-employee relationships, and make hiring decisions. he can be reach at 904-269-2299, ext. 102.   

SIDEBAR

Customer-focused selling

Gaining new customers costs more than keeping current ones. There are five steps of customer-focused selling that sales people can use to help build long, lasting relationships with customers.

1. 1.      Be open. Build trust and credibility with customers.
2. 2.      Investigate. Identify a customer’s needs.
3. 3.      Present. Articulate the value you can bring customers.
4. 4.      Confirm. Agree to move forward with the sale.
5. 5.      Position. Create a customer for life.

Experts tell us the economy is in recovery. They also admit that hiring will probably be the last economic indicator to improve. If you are uncertain if you should hire (or rehire) employees, even though business is picking up, consider an alternative: temporary employees.

These employees can be used for special projects or to address increased activity during a peak season or as business begins to increase. Temps supplement your regular workers; they go to work for you with the knowledge that the job will last only a short, specified duration.

Alex Campbell

Another way to hire and use temporary employees is “contract to hire.” This is a “try before you buy” option offered by staffing firms, says Alex Campbell of Capital Staffing Solutions (www.capitalstaffingsolutions.com). “It’s the best way to build your staff. You use a contractor (temporary employee) for an agreed period. If you like the contractor, after the contract is over, you can make an offer of regular employment for no additional costs.”

This type of temporary employment situation provides a win-win-win situation: You win, because you get a tried-and-true employee. The staffing agency wins, because it earned a fee while the employee was on contract; and the employee wins, because he or she gets to work for a known entity.

How to hire temps

Hiring temporary employees requires careful consideration. Here are several things you should do to ensure the best outcome:

1. Prepare a job description. The job description validates your need for extra help; it also identifies the skills, knowledge, and abilities needed on the job. Campbell suggests, “The better the job description, the better the staffing firm will be able to find employees who are a good fit for you.”

2. Find a staffing agency that understands your business. Some agencies specialize in particular industries; others may have recruiters who have worked in your industry. Once you find a possible fit, invite the recruiter to tour your business and talk with you onsite. Knowledge is power in making good matches.

3. Discuss your goals. As you explore the possibility of using an agency, discuss your business goals, long and short. “Find a firm that is interested in helping you work with your budget, interested in you hitting your numbers, and understands what you are trying to accomplish,” advises Campbell.

4. Negotiate the contract. Beware of sticker shock; you will be paying a premium to use the agency, so be prepared for it. The contract you sign with the agency should designate the responsibilities of each party, including outlining the hiring process (who will interview; who will make the final hiring decision). You’ll also want to make sure it indicates how the contract can be terminated; who is responsible for withholding taxes and payment of taxes for the employees; who is responsible for workers compensation insurance; and any benefits that will be provided by the staffing agency.

5. Don’t forget your supervisors. Your supervisors should understand how the temp process works, their role in selection and training, and their role in supervising the work performed by temporary agencies. They need to know who to notify in case of an accident and workers’ comp claim and how to handle problem employees.

Finally, supervisors should have a role in evaluating worker performance and give feedback to the temp agency about its performance. Your supervisors are in the best position to judge if the agency met your needs.

SIDEBAR

After the hire, what’s next?

Although by definition a temporary worker will only be with you a short time, that person(s) still needs orientation and training in order to accomplish what you need to have done.

Here are some tips on how to use a temp worker effectively:

1. Ask the temp to report late the first day. The beginning of the work week is often chaotic. On the first day, ask the temporary employee(s) to come in 30 minutes after regular starting time. This will allow you or your supervisor to give the attention the person needs that first day.

2. Orient the new employee. Although the person will only be with you a short time, give him an overview of the work that your company does, and go over in detail the job description. Make sure he can see how the job fits into the big picture. Give a tour of facilities; tell him where he should park, eat lunch, and take breaks. And then introduce him to fellow workers.

3. Assign a trainer or ‘go-to’ person. Tell the temp who she can go to for more information and additional how-to information.

4. Train. Even if the temp comes into your workplace with experience in a similar company, take time to train him on your equipment and—just as important—your expectations.

5. Check back. Don’t park the new employee and forget her. Check back during the day to see how she is doing.

6. Make the agency earn its keep. Although you determine the work that is done, the agency is responsible for any problem areas, such as attendance issues or tardiness. Don’t hesitate to call the recruiter and discuss the problem as soon as it arises.

When cash is short, consider invoice funding

Is this scenario familiar? Your customers are late in paying their invoices, making you short on cash, and the bank isn’t making any short-term loans. At the same time, your employees expect to be paid on time. What do you do?

You might consider a short-term option called accounts-receivable funding, suggests Chad Todd, regional vice president of AR Funding, Inc. (www.arfunding.com). “Accounts receivable funding is the oldest form of financing in the country,” he explains. “It accelerates cash flow.”

Accounts receivable (AR) funding (also called accounts receivable factoring) provides a line of credit against invoices, and that is what differentiates this source of finance from bank financing. “Traditional bank financing focuses on the business owner’s personal credit, the assets of the company, the kind of business the company is in, and the balance sheet in order to determine if it will lend money,” explains Todd. “Accounts receivable funding does not. Instead, it looks at your customers’ credit. The most important thing in this industry is who you are doing business with.”

What it boils down to is this: If you have good customers, you can get advances on the money they owe you.

How it works

Essentially, in AR funding, a business sells its invoices to the funding company. When a small business works with an AR financing company, it gets a portion of an invoice immediately upon origination. The business, at the same time, advises its customers to send payment to a post-office box. Although the invoice is made out to the business, it actually goes to the finance company. Once the invoice is paid, the business gets the remainder of the invoice amount from the finance company, less the finance fee.

“The value to our customers is that it they perform a service or sell goods today and invoice today, they can receive funding from us today. They don’t have to wait 30 to 45 days for the customer to pay them. In any business, you need money for payroll, rent, insurance, fuel, and other things. You need money; we eliminate the wait to get paid,” says Todd.

Pros and cons

As good as accounts receivable financing seems, there is one disadvantage: Cost. “Compared to traditional bank financing, this type of financing is more expensive,” admits Todd. “I always tell anyone interested in using accounts receivable financing to go to a bank first. If the bank can’t get you approved or will not provide you a line of credit, only then should we talk, because it is more expensive than a bank loan.”

On the plus side, however, is that this type of financing is available for startups. “We fund startups,” says Todd. “The most important thing to us is who you are doing business with. A startup will not have financial statements. But if it can give us a list of customers and how much are it will be invoicing them each month, it can get financing. We’ve gotten deals done with very little. We’ve done deals based on the articles of incorporation and an expected volume of dollars each month.”

Todd says that although AR funding is a very old type of financing, many small businesses have never heard of it. “We are admittedly a stepping stone for small businesses. And, we know we will only have our clients for perhaps up to 24 months, and then they will graduate to bank financing. We’re happy about that.”

By Robyn A. Friedman    

The staff at American Electrical Contracting Inc. believes in sustainability. They monitor the thermostat, use occupancy sensors to cut the lights in unoccupied areas of their 12,000-square-foot building, have energy-efficient lighting, and recycle not only the firm’s trash but also old lamps and wire removed from completed client retrofits.

Toby Williams

“We started going green about three years ago,” said Toby Williams, a manager for the Jacksonville-based residential and commercial electrical contractor, which has about 65 employees.

Going green has done more for American Electrical than just giving its staff a “doing good” feeling. The firm is saving money too. “Probably 10% to 15% on our energy bills,” Williams said.

American Electrical is just one of the multitude of small businesses now adopting green principles. According to a report released in November by Siemens and McGraw Hill Construction, corporate America has integrated standard sustainability practices—such as recycling, green building, employee engagement, and partnering with non-profits—into their cultures and everyday operations. The report found that 75% of firms view sustainability as consistent with their profit mission—a twofold increase over the past three years.

Not only do corporate executives view going green as a way to improve their bottom line, but more than three-quarters (76%) expect that sustainability efforts will help them attract and retain customers as well as drop the costs of doing business, the Siemens report said.

Ellen Leroy-Reed

“Small businesses can not only reduce their materials used but also see an actual profit increase from going green,” said Ellen Leroy-Reed, president of the North Florida chapter of the U.S. Green Building Council.

Of businesses that haven’t yet gone green, the most common reason is a feeling that it’s too expensive. But experts say that although there may be a higher upfront cost to do things the green way, over time companies usually save money.

In addition, small businesses can do many things to go green that cost little or nothing. For example, companies can reduce their environmental impact by implementing simple green practices such as printing on both sides of their paper or turning computers off at night. About $100 per computer per year can be saved if power management functions are properly used, according to Claire Woolley, an environmental specialist with Howard Ecker & Co. in Chicago.

Another common reason for avoiding sustainability, according to Leroy-Reed, is the belief that “going green is something only tree huggers do.”

“If we install aerated faucets in our building, we will use less water,” she said. “That’s not doing something for the environment. That’s not being a tree hugger. That’s just smart business.”

David P. Barley

David P. Barley, a CPA with Barley, Martin & Wild in Jacksonville, agrees. “In the past, managers improved the efficiency of their businesses by getting more out of employees, improving inventory handling and things of that nature,” he said. “Now businesses are starting to think how they can be more efficient with the use of energy.”

Barley suggests that small businesses compare the benefits of going green to the costs. “Yes, the cost may be more, but if you’re going to be able to reduce your replacement costs because things are more efficient, as well as reduce your energy costs, this outweighs the cost, lowers your cost of doing business and improves your bottom line,” he said.

Numerous tax credit and rebate programs encourage energy efficiency, both at the federal and state level. Many local utilities also offer financial incentives. A complete listing of all the programs and financial incentives is at the DSIRE (Database of State Incentives for Renewables and Efficiency) Web site, www.dsireusa.org.

What can your company do to go green?

Marie Hurst

• Recycle furniture and fixtures

. Marie Hurst, owner of GreenSpace Interior Design in Jacksonville, furnished her office with workstations and chairs no longer wanted by other firms. She also gets supplies from companies that are downsizing or going out of business. “There are a lot of corporations that close down, and nobody goes through to clean out the desks,” she says. “So you can get a ton of supplies—hanging folders, paper clips, staples—all that stuff is left behind.  I look at that as a great cost-saver to my business, plus there is the added benefit of preventing all those materials from ending up in a landfill.”

• Improve indoor air quality. Many studies have concluded that employee health and productivity improve with better indoor air quality. As air quality improves, so do asthma, allergies, flu, respiratory ailments and headaches, leading to less absenteeism. Consider doing the following to improve indoor air quality: Ban smoking in or near the office; avoid paint and cleaning supplies with volatile organic compounds (VOCs); change air filters regularly; increase the amount of fresh air inside by opening windows and doors; and test for radon.

• Incorporate green principles into your location if you build or renovate. LEED-certified buildings have lower operating costs—10% to 20% lower, according to Energy Star—and that increases operating income. Another plus: Some studies have shown that buildings with an environmental certification can sell for up to 16% more than a similar building without certification.

• Replace incandescent light bulbs with compact fluorescent lights (CFLs). According to the Alliance to Save Energy, CFLs use considerably less energy. An Energy Star-qualified CFL will save about $30 over its lifetime and pay for itself in about six months, while using 75% less energy and lasting about 10 times longer than an incandescent bulb. CFLs cost between $3 and $15.

• Turn off lights and computers when not in use. Even better, unplug dormant appliances to reduce stand-by power consumption. Power strips make it easy to switch off all devices in one fell swoop.

For businesses that haven’t yet incorporated green principles, the process may seem daunting. That’s why experts say to start small.

“Don’t look at this as a huge obstacle, or think you have to change every aspect of your business practices—choose one thing, make it a habit and then choose another,” said Leroy-Reed of the U.S. Green Building Council. “And then spread the word. If you’re a small business doing good things in your office, there’s no reason why your customers shouldn’t know about it.”

That too is good for business.

Robyn A. Friedman is a contributing editor to Jacksonville Small Business Advantage. She can be reached at RAFWriter@att.net or through her Web site www.everythingwrite.com

SIDEBAR

Survey: ‘Green businesses’ important to consumers

The “greenness” of a company earns its business for a lot of Americans. According to a recent Harris Poll, conducted online among 3,110 adults, 27% of those who are “most green” patronized a business because of its environmental activities, and 23% of that group avoided patronizing a business because of its environmental activities or lack of them.

And it doesn’t take a “tree hugger” to make a difference to a business. Eleven percent of those who were “least green” patronized green businesses, and 9% of the same group avoided businesses that were not environmentally concerned.

Respondents to the poll were divided into four groups—least green (23%), not very green (29%), somewhat green (25%), and most green (22%)—based on their responses to four questions (“describes me completely, very well, fairly well, somewhat well, not at all, very well/completely”):

• I am environmentally conscious.

• I am a conservationist.

• I am an environmentalist.

• I am “green.”

The most frequent environmental activities respondents engaged in during the last year included:

• Installed more energy-efficient light bulbs (63%),

• Purchased energy-efficient appliances (36%),

• Started paying bills online (46%),

• Switched to paperless financial statements (40%),

• Donated an electronic device for recycling (41%),

• Switched from bottled to tap water (29%),

• Installed a low-flow showerhead (17%) or low-flow toilet (16%),

• Made energy-efficient home improvements (14%),

• Bought a more fuel-efficient car (13%).

Everybody has to get dressed each morning. Jason Sadler is no exception. But what makes Jason Sadler different from everyone else is that he gets paid to get dressed. Sadler is the head honcho—CEO and founder, if you will—of iwearyourshirt.com, a company that can best be described as a walking, talking social-media billboard business.

The business is simple, Sadler told a group at a recent Knowledge Is Power workshop, presented by Jacksonville Small Business Advantage and sponsored by Venture Plex (www.usventureplex.com). “Basically iwearyourshirt is this: You buy a day; I wear your shirt for that day; and I promote it via social media. I take photos and put them on Flickr. I make a video and put it on YouTube. I do a live video show every day on Ustream. I share it all with my Facebook and Twitter friends. I put it up on my Web site. That’s my business.”

And business is good. He started as a one-man walking billboard in September of 2008 and then sold all but one day of 2009. “I actually sold every day, but one company was going out of business and asked for its money back, so I took a day off,” he told the group.

His pricing structure is as simple as his business model: In , on January 1, 2009, a company paid $1 for Sadler to wear its shirt—and to promote its brand. The price increased a dollar a day; the company that bought December 31 paid $365—2009’s top price. In 2010, Sadler raised his price to $2 on January 1, with an increase of $2 a day thereafter. But, for the extra cost, buyers get extra exposure: Sadler’s buddy in California, Evan White, wears the same shirt and does the same type of social-media promotions as he does.

The uniqueness of his business model has caught the attention of major news outlets, such as ABC News with Charles Gibson, CBS News with Katie Couric, Reuters, The Wall Street Journal, the Chicago Tribune, and the L.A. Times, to name just a few. What is extraordinary about his success is that he has never advertised nor has he ever hired a publicist. He has become famous in the world of entrepreneurship just by doing one thing— using social media.

“Using social media the right way is very easy,” says Sadler. “All you have to do is join the conversation; find the right platform; and—most important—be yourself.” He gave the group seven tips on how they could work social media to their advantage, just as he has done for iwearyourshirt.com.

1. Choose the social media sites that are best for you. Select the ones your audience visits, and make sure they are a good fit for your business. “A lot of people try to find new and interesting social media sites. There are thousands of them. The point is to find things that work best for your industry,” he says.

2. Adapt to your audience. Sadler says you can’t just push messages out on the various social media. “My friends on Facebook are very different from my Twitter followers. I’ve got 21,000 Twitter followers; I’ve got over 4,000 friends on Facebook. I get many more clicks from things I put on Facebook because they are my friends, and I’ve met maybe 30% of them, and I adapt what I say to them.”

3. Consider before you commit. If you are not using Twitter, which Sadler says is an extremely powerful tool (“I would never have been successful without Twitter,” he says), don’t just jump on it. Consider the people you are trying to reach; think about how you can tie Twitter into your whole marketing strategy. He suggests, “If you send out a flyer about an event, put on it, ‘Follow us on Twitter.’ Then give updates on Twitter.”

4. Interact with your friends. More than 75 million people have Twitter accounts, he says. “I have 21,000 followers on Twitter. I try to interact with everybody. Don’t just spit out messages; talk to people. The more you believe you are ‘high and mighty’ and everyone wants to hear what you have to say, the less people will want to hear about you. They want to be involved in the conversation.

Sadler emphasized the importance of interactivity by pointing out a company that gets 5 million unique views a day on its Web site, but only has 12,000 followers on Twitter. Why the discrepancy? “All they do is put RSS news feeds on Twitter,” he says. “They never talk to anybody.”

5. Attend to content, but don’t forget context. “Content is king,” says Sadler. “My business model is based on content, all of which is optimized for search engines. People can always find it, and it will live on the Internet forever.” What Sadler posts to the Web is also contextual. He explains, “I give the content a voice. I give it my own personality. People come to listen to me talk about it and to watch videos of me doing fun stuff. That’s what my followers want.”

6. Make the most of pictures. “I’ve taken over 1,600 photos for Flickr,” says Sadler. “People like looking at photos. It’s an easy thing to do.” Put them in your blog, Facebook, Twitter, in your e-mails.

7. Create videos. “I think video content is the wave of the future, the way businesses are going to grow audiences,” he says. To demonstrate its effectiveness, Sadler said a video he posted a week before already had 16,000 views. “I recommend that if you are thinking about creating video, just make it good. A good video has a change to go viral.”

Social media by itself will not do the job, however. “You have to put in the time,” says Sadler. “I work 10 to 12 hours a day. I try to answer every one of the hundreds of e-mails I get. …I have a highly engaged, focused community, and I know that on a moment’s notice I can ask people to do things for me because I deal with them every day.”

Jason Sadler, a Jacksonville native, can be reached through his Web site, www.iwearyourshirt.com.

By Joe Palermo    

Does the thought of preparing your business tax return leave you with an uneasy feeling? Then do not wait to the last minute to get all your documents organized. Block out time and begin the process of gathering and organizing all of your financial documentation of all business-related expenses.

Some expenses are deductible and are applied in their entirety to lower your tax bill. Other expenses are capitalized, which means a portion of them are recovered over time. And some—personal expenses—do not affect your tax bill. Unfortunately, the IRS does not allow deductions for personal expenses, such as personal living costs or personal use of your automobile. (However, if a cost is both personal and business and can be broken down with documentation, the business portion can be applied.)

Your accountant will need documentation on the following types of expenses:

• Ordinary and necessary business expenses. This is a broad category of costs incurred to run your business. They include a number of different types of expenses, including employee pay; retirement plans; rent expenses for your business property; interest charged on money you borrowed for business activities; various state, local and foreign taxes directly attributable to your business; insurance for your business; and office expenses as part of operating costs.

• Cost of goods sold. If you manufacture products or purchase goods for resale, you must generally value the inventory at the beginning and end of each tax year to determine the cost of goods sold, which is used to figure gross profits for the year by subtracting the cost of goods sold from your business’ gross receipts.

As you prepare for tax preparation, collect information on the cost of products or raw materials (including freight), storage, direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products, and factory overhead expenses.

• Capital expenses. Capital expenses fall into three general categories business start-up costs; business assets; and improvements. Expenses incurred in these areas are not deducted; however, they are capitalized to help reduce your tax bill. In other words, you may b able to recover a portion of the amount you spent on a capital expense through depreciation, amortization, or depletion.

Joe Palermo, CPA, is a partner in B2B CFO and can be reached at 925-548-3395 or jpalermo@b2bcfo.com.

 SIDEBAR 1

What kind of documentation do you need?

• Bank deposit slips

• Invoices

• Credit card charge slips

• Form 1099

• Canceled checks

• Account statements

SIDEBAR 2

Prepare for 2010 taxes now

To make tax preparation easier in 2010, take these steps now:

1. Set up and maintain a file for each vendor and file paid invoices.

2. Establish a file for each customer.

3. Complete bank reconciliation for each month; never get behind.

4. Prepare financial statements each month.

5. Review the financial statement each month with your accountant or business advisor

Do you believe paying taxes is voluntary? Or that you don’t have to comply with an administrative summons about your taxes? Think again. These beliefs—and many others—are erroneous, says the Internal Revenue Service, which has released the 2010 version of its discussion and rebuttal of many of the more common frivolous arguments made by individuals and groups that oppose compliance with federal tax laws.

Anyone who contemplates arguing on legal grounds against paying their fair share of taxes should first read the 80-page document, The Truth about Frivolous Tax Arguments.

The document explains many of the common frivolous arguments made in recent years and it describes the legal responses that refute these claims. It will help taxpayers avoid wasting their time and money with frivolous arguments and incurring penalties.

Congress in 2006 increased the amount of the penalty for frivolous tax returns from $500 to $5,000. The increased penalty amount applies when a person submits a tax return or other specified submission, and any portion of the submission is based on a position the IRS identifies as frivolous.

IRS highlighted in the document about 40 new cases adjudicated in 2009. Highlights include cases involving injunctions against preparers and promoters of Form 1099-Original Issue Discount schemes and injunctions against preparers and promoters of false fuel tax credit schemes.

A focus group can give you insights about your products and services

Businesses often declare in their mission statement they will “meet or exceed customer expectations.” But, how do businesses know if they are accomplishing what they have set out to do?

It’s all a matter of understanding your customer, says Nancy Ulrich, owner of Ulrich Research Services, Inc. And that understanding comes from getting in touch with customers.

“There are a number of ways to do that,” she says. One of them is through focus groups.”

A focus group is a small group (usually from eight to 10) of selected individuals that explores potential issues and opportunities or tests concepts before a product or service is fully launched. “Whereas a quantitative study—such as a survey—tells you what people are likely to do or how many feel a particular way,” says Ulrich, “findings from qualitative research often explain why people do what they do. The ‘why’ may include motivating factors such as personal experiences, emotional insights, cultural influences, or even peer pressure.”

Qualitative research includes individual in-depth interviews and small group (two or three individuals) interviews as well as focus groups led by a moderator.

Although findings from a focus group are not considered statistically reliable nor can they be projected to represent the entire market, they are helpful to business owners because they provide insights into customer behavior.

Convening a focus group

Engaging an independent outside consultant to do the research has its benefits (it provides anonymity and encourages people to speak more openly), but a business owner or manager can do the research in-house by using internal resources. The key is proper research structure, including:

• Goals and objectives. This is the most critical step. “We tell our clients, ‘Do not do research just for the sake of doing research.’ Have your goals and objectives clearly defined,” says Ulrich.

• Questions. If you employ a researcher, the two of you will work together to develop questions based on your objectives for the group to discuss.

• Selection criteria. Your goals and objectives help identify who should be in the focus group—for example, current customers, lost or former customers, prospects, or customers of competitors. Other criteria you might consider include gender, age, number of children in the household, income bracket, level of education, type of work or job position, or even marital status. “You don’t want to blend too many criteria into one session,” cautions Ulrich, “or you may lose the ability to segment your audience or findings effectively.”

• Recruitment. If you engage a market research firm, you will work with the consultant to design a questionnaire that will help the recruiter screen potential participants to make sure they are placed in the right group. For example, you would not necessarily want to mix current customers with former customers.

• Compensation. It is not unusual to compensate participants for their time, says Ulrich. Typically, consumers are paid from $60 to $100 for a two-hour session. Small business owners usually received $125 or more; corporate executives, $150+; and specialty groups such as physicians, $250 or more. “Sometimes small business owners offer something in lieu of cash, such as a coupon to their restaurant, a free hour of legal advice, or something else that has a universal appeal to the targeted audience,” explains Ulrich.

• Venue. A research company that specializes in focus groups will have a facility with specially designed room having a one-way mirror and audio and video technology to record the session. However, a focus group can be convened at your place of business or at an outside facility, such as a restaurant or country club. A word of caution: If you convene your own focus group, never try to use it make a sales presentation or solicitation.

• Use of a moderator. Whether you conduct research yourself or hire a research consultant, the moderator should have training in how to facilitate a group without influencing individuals in their discussion. “Impartiality is important if you want to get honest opinions from the group,” says Ulrich. “The moderator has to remain unbiased.”

Format of the group

When the group is convened, the moderator welcomes them, asks for brief introductions, and then outlines the structure and time frame of the meeting. He or she also alerts the group if it is being observed and recorded.

Results

A focus group will give a small business owner a lot of food for thought, but qualitative findings should be considered directional, says Ulrich. “They are not necessarily definitive. They provide insights into the emotional side of the customer. Entrepreneurs often solicit feedback from friends and family. Unfortunately, those are the people most likely to kill a great idea or encourage a bad one! Focus groups conducted by a professional trained consultant bring independent objectivity to the scene.”

Whatever a business owner learns from a focus group should be considered a first step, says Ulrich. “If important issues and opportunities surface, the next step might be to test or measure them quantitatively. Just because a good idea does not play well with a particular audience does not mean it will not work in another geographic market or with another demographic. Keep exploring and be willing to change and modify. Don’t be afraid to try different approaches.”

Nancy Ulrich is president of Ulrich Research Services, Inc., (www.ulrichresearch.com) located in Orange Park, Fla. She can be reached at 904-264-5578.

SIDEBAR 1

Other ways to get customer feedback

Qualitative research, such as convening a focus group or doing individual or small-group in-depth interviews, is one way to get customer feedback, but it is not the only way. Consider:

• Customer comment cards. Put them in easily accessible locations.

• Postpaid comment cards. Mail them to customers after a transaction or service.

• Online surveys. Solicit input and suggestions.

• Telephone calls or short telephone surveys.

But don’t neglect the obvious: Talk to your customers! Ask them about your products or services. Ask your sales reps to conduct a brief survey after giving a presentation. And when you lose a customer, conduct a brief exit interview to find out what you could be doing better.

SIDEBAR 2

The Advantage experience

The value of facilitated focus groups has long been established, so Jacksonville Small Business Advantage decided to experience the process itself.

“We knew focus groups provided great feedback,” said Brian Barquilla, publisher of the magazine and Web site, “so, we decided to find out if we were on the right track with our magazine.”

The process

Before the focus group could be convened and facilitated, Barquilla worked with the facilitator to understand:

• Advantage’s goals in conducting the group—how small business owners perceive the magazine, broken down into specific areas, such as design and content;

• The intended readership of the magazine;

• Who should be included in the focus group—current readers or those who had never seen the magazine before?

Once the information was collected, the facilitator worked with Barquilla to develop questions and activities based on the magazine’s goals. The staff then recruited small business owners for the focus group, which was convened at her company’s location, to take advantage of the facility’s one-way mirror and recording capabilities.

In one of the research activities participants were asked to select from a pile of local and national magazines a business magazine that appealed to them. “Watching them make their selections was more stressful than I thought it would be,” said Barquilla. “I kept thinking, ‘What if they don’t select Jacksonville Small Business Advantage?’ But, a number of them did. I felt like cheering!”

Later, each member of the group was provided copies of the magazine and asked specific questions about the design and content. “That was very telling,” said Barquilla. “The facilitator gave them a minute to look over the magazine before guiding a discussion. We were able to watch facial expressions and body language. It was interesting to see the response of individuals as well as to listen to their suggestions and comments.”

Barquilla considered the overall experience: “Anyone who does this has to be prepared to hear negatives. Not everything said will be good. But it was a good experience. We learned some things and are considering some changes to better meet the needs of our readers. I would definitely recommend the process to anyone in business.”

Mirrored room used for focus groups

Observation room for focus groups

By Robyn A. Friedman    

After 14 years of being in business for himself—and at the age of 56, Charles T. Brackett, P.E., owner of Brackett and Associates, Inc., a structural engineering firm, decided to go back to school to pursue an MBA. After completing the rigorous two-year program at Jacksonville University, he’s glad he did.

“I had been successful because of my natural instincts, but I wanted to get a stronger background in business and have better control over the management of the organization,” Brackett said. “Now I’m more productive, and I’ve learned a lot more about marketing strategies, which will help us get jobs internationally.”

Employers routinely invest in their employees, encouraging them to pursue additional education—and then reap the benefits of that education through increased productivity, reduced turnover and improved employee morale. But advanced education and training are just as vital to small business owners, who need to keep their skills sharp as well as develop new ones.

Today’s workforce is rapidly losing its skills. According to a recent survey by the Society for Human Resource Management, 58% of human resources professionals reported that some workers lack competencies needed to perform their jobs, up from 54% in 2005. Workers—including small business owners—need to keep their skill sets current in order to compete in an ever-changing global economy.

Even if small business owners are technically competent in their own field, they may not have managerial competence. That may prevent them from taking their business to the next level. Lack of human resources skills, for example, may lead to difficulties in attracting or retaining employees.

 “No matter what industry they’re in, small business owners need to be able to make sound strategic business decisions,” said Diana Peaks, director of transfer, adult, and graduate enrollment at Jacksonville University. “By going back to school and taking courses like finance, accounting or communications, they get a better perspective of the business at large.”

But the process of choosing additional education can be daunting. Should you brush up your skills at workshops sponsored by an organization like SCORE or matriculate in a degree program at a major university? Attend classes in person or online? And what course of study is best? Consider the alternatives.

Workshops and seminars

Many local organizations, such as SCORE and the Small Business Development Center at the University of North Florida, offer free or low-cost workshops on topics such as government contracting, accounting or social networking. The Small Business Development Center even offers an online academy called SmallBizU that was created specifically to meet the education and training needs of small business owners and entrepreneurs. Courses range from three to four hours and cost $30 each.

Workshops and seminars are useful and practical, but they may not be the ultimate answer for everyone. “They were not in-depth enough,” said Brackett. “When you take actual classes, you spend more than just a day or half day on a topic so you have more time to absorb it.”

Industry-specific classes

Continuing education is required for many small business owners. Attorneys and medical professionals, for example, are required to keep their skills current. Even if not required, however, classes that lead to certification in a particular field can be beneficial. A real estate agent who gets certified as an Accredited Buyer’s Representative, for example, may gain a competitive edge.

Specialized classes also lend credibility to a business owner. “Certificate programs and courses are extremely important and valuable,” said Joe McCann, dean of the Davis College of Business at Jacksonville University. “Many lenders and insurance companies, for example, increasingly expect and value owners who keep current with the latest business issues and build skills.”

Life-long learning

Options abound for those who want more than a workshop but who have no desire to matriculate in a degree program. The University of North Florida’s Division of Continuing Education, for example, offers non-credit courses for those who want to change careers, advance in their current position, or master new skills. “It’s practical, hands-on stuff, as opposed to the theoretical things you would get in an MBA or other credit program,” said Tim Giles, director of continuing education at UNF. “We offer a lot of programs that deal with marketing and sales that are very beneficial for people who are running their own businesses.”

Giles said that classes range from half-day courses that start at $99, to 12-week certificate programs costing $900. Topics include human resources, project management and communications.

Degree programs

Enrolling in a degree program offers small business owners a concentrated education in what they do in the real world—run a business. In the past, MBA programs were geared toward the needs of large organizations; today, many schools offer programs designed for entrepreneurs. These programs offer the opportunity to network with other business owners and executives as well as to learn from case studies involving other companies. They are more expensive than non-degree programs, and applicants need to go through the college admissions process. Classes are offered at convenient times, such as evenings and weekends, to accommodate the needs of executives. Many offer online classes as well.  

Robyn A. Friedman is a contributing editor to Jacksonville Small Business Advantage. She can be reached at RAFWriter@att.net or through her Web site www.everythingwrite.com

SIDEBAR

Taking the next step

Ready to sign up for some classes to advance your education? Here’s some advice from the experts:

• Make sure the class will benefit you and your customers. “There are so many options available,” said Giles. “You really need to think about what your goals and objectives are and then look for programs that will help you meet those goals and objectives.”

• Do your homework. Look at what the different institutions and organizations in your area have to offer. Visit each one, and talk to current students. Ask what it’s like to be a student there—and what benefits they received from completing the program.

• Make sure you understand accreditation. “If someone says to you, ‘Yes, we’re accredited,’ do your research and find out if the accreditations they have and if your credits will transfer,” said Peaks. “Too often people spend time and money in a program and then want to transfer and find out the institution they’ve been attending is not regionally accredited and that there are few schools that would accept those credits.”

• Just do it. If you decide to invest your time in more education, then dedicate yourself to it. “People get overcome by circumstances,” said Candace Moody, vice president of communications for WorkSource, which provides employment and training assistance for both businesses and job seekers. “Budget your time as carefully as you budget the money for it, and make sure that if you’re going to invest in education that you get something back out of it. Most educational courses—no matter what level, no matter what subject—are only as good as the time and energy that you put into them.”