Utah Business Blog

By Daniel Hannaher, SBA Regional Administrator

The recession has hurt the financial bottom line of most small businesses across the nation.  It is hard enough to keep a small business running during good times, let alone during an economic downturn. The counselors at SCORE (Service Corps of Retired Executives) have developed the following six strategic steps that a business owner can take to stay profitable during the recession.

1. Some customers are more profitable than others.  Prioritize your customer lists to focus on the ones that have the greatest potential for a sale.  Determine which customers are unprofitable or lack growth potential so you can delete them or re-allocate time towards  your good customers.

2. Increase your marketing activities.  A recession is not the time to decrease your marketing activities.  Chances are that your competitors will follow this unwise strategy and lose market share. Look at an economic downturn as an opportunity - not a death sentence. Now is the time to increase your business’ visibility and gain customer recognition.

3. Have you checked your NOL lately?  Check with your accountant to determine if your business has any NOL (Net Operating Loss) carry backs. In 2009, the IRS increased the carry-back period from two years to five years.  This new tax provision could provide immediate cash relief to your bottom line.

4. Implement a forward looking cash flow report.  A forward looking cash flow report is an estimate of your future cash availability, not a historical picture such as a balance sheet and income statement.  An informal cash flow report starts with an opening cash balance and projects cash receipts and expenditures over a 10 to 12 month period. Cash flow is the life blood of all small businesses - especially during a recession.  This report is too critical to delegate it to your accountant or bookkeeper.

5.Virtual office space can reduce overhead expense.  This may be the year to consider shifting part of your business activities to a virtual office.  A virtual office provides basic mail service and communications support at an office site location.  Typically, the business owner only pays for the services provided and does not include rent.  A small business owner can reduce their rent expense by as much as 95 percent while retaining essential facilities.

6. Never carry excess inventory during a recession.  Stale inventory is a drain on cash flow and can destroy a small business already hurt by the recession.  Huge discounts on old or outdated inventory always brings the price conscience consumer to any business. Consider using one day sales to blow out excess inventory. Many keen business owners are now announcing these sales on social networks like Facebook and Twitter. According to one business owner, this type of sale can generate approximately one month’s worth of revenue in one day.

Small business owners that think strategically during a recession will have the best chance of surviving over the long term.  For expert advice on other ways to profit during the recession, contact your local SBA  office.  Go to www.sba.gov for the SBA office in your state.

(Daniel Hannaher is the SBA’s Region VIII Administrator based in Denver. He can be reached at Daniel.hannaher@sba.gov)

By Clark Roundy, Luxul Wireless VP of Marketing

Small business is the lifeblood of Utah’s economy. Of the roughly 62,000 Utah firms with employees, 97 percent of them are classified as small (less than 500 employees) and provide 50 percent of the state’s private-sector employment. To varying degrees, this is true across the nation. According to Bureau of Labor Statistics’ Business Employment Dynamics (BED) figures, small businesses have accounted for about 65 percent of the private-sector net job creation over the past 15 years and represent approximately 50 percent of the nation’s 120 million private sector jobs.

That being the case, why has small business been largely ignored and excluded from the $787 billion economic stimulus bill? A February survey of small business owners by Discover Financial Services found that 70 percent said the stimulus bill had no impact on their businesses. Only 10 percent said it helped, and 17 percent contend it hurt their businesses. Furthermore, BED data suggests that small firms have suffered over 60 percent of the job losses from 2008 to the second quarter of 2009.

More recently, starting with the State of the Union Address, the Obama administration has been moderately aggressive about campaigning for a small business plan. Some of the key elements of the plan include:

• $30 billion in diverted TARP funds to community banks for the purpose of lending to small business.
• $5,000 tax credit for small businesses that hire new employees and incentives to increase wages or hours for existing employees.
• An increase in the maximum SBA 7(a) loan size from $2 million to $5 million.  This is SBA’s primary loan program designed for start-up and existing small businesses.

· Continuing tax incentives that allow small businesses to more quickly write off investments in new equipment, rather than having to depreciate it over time

• Elimination of capital gains taxes on investments in small businesses.

While rather late to the game, on the surface these proposals seem to be a reasonable start for helping small business towards full recovery. On the other hand, what firm wants to be strapped with even more debt in an economic contraction? The fact is that unlike big government, entrepreneurs are experts in adapting to change. Most small business owners have already made appropriate adjustments to keep their doors open and will be skeptical about embracing programs from an administration that has been largely perceived as anti small business—and with good reason.

The fear of small business owners is well founded—the Obama administration has shown questionable integrity in supporting this important segment of the economy. Are struggling business owners willing to take the risk of expanding when a host of new taxes and more government regulatory oversight is clearly on the horizon? Why hire workers or increase operations amidst massive government expansion when you don’t know how high the tax bill will be after they get done implementing “hope” and “change?” From a business perspective, the expansion argument is not very compelling if these temporary tax credits and incentives are taken back through higher taxes and fees or increased interaction with ever-growing regulatory bodies.

While the Obama administration’s small business plan proposal may indeed be a step in the right direction, there is only one way to jump start small business expansion and job creation. Entrepreneurs and business owners need to be convinced that taking risks will result in real rewards—enabling them to keep more of what they earn without being overly burdened by unnecessary regulatory and government intrusions. The Obama administration has some serious work to do.

About Clark Roundy, Luxul Wireless VP of Marketing

Clark Roundy is VP of Marketing at Luxul Wireless. Throughout his 20 year career, he has worked extensively with early stage and emerging companies to identify core competencies and implement key growth strategies. Mr. Roundy has held key executive positions at Linux Networx, Penguin Computing, Parvus Corporation, Alta Technology, and the Eyring Research Institute. His roles have included sales and marketing leadership, strategic planning, international business development, product management, and professional services program development. In his role at Luxul Wireless, Mr. Roundy is responsible for marketing strategy and oversees all outbound marketing programs as well as product and brand management.

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.

By Daniel Hannaher, SBA Region VIII Administrator

While many small businesses are in “survival” mode during the current
economic downturn, there are still strategic decisions that can be made
today which may have a positive impact on this year’s bottom line. Small
businesses account for 30% of all U.S. exports–a staggering $300
billion per year.  The fastest growing segment of U.S. exporting
companies–comprising 65% of all U.S. exporters–are firms with 20 or
fewer employees, demonstrating that size is no longer a requirement for
success in global markets. With domestic customers still reeling from
the recession, small business owners may want to diversify their market
base by exporting their products or services. The following are seven
reasons why small firms should consider exporting as a way to expand
sales base and lessen the effects of a down economy.

1. Market growth. Where is your company’s potential growth? If you look
at world demographics, you will find that 95.5% of the world’s
population is outside of the U. S.  (Today the world population stands
at just over 6 billion - up over 2 billion since 1973. It is estimated
that this number will grow to 9.5 billion in 2050) If you have a product
or service to sell, you want to go where the buyers are and,
increasingly, that is outside the United States.

2. Economies of scale. Assuming your firm has excess production
capacity, it will be marginally less expensive to produce 500 units than
400 units, so your per unit cost will come down as you expand your sales
into new overseas markets.

3. Extend product life cycle. A product that may be nearing obsolescence
in this market may still have demand in Asia or South America. Exporting
that product will extend the product’s life cycle. Or, by licensing the
technology to an overseas producer, a company could continue to generate
a revenue or royalty stream from the product through off-shore
production.

4. Moderate seasonal production cycles. Any company that produces
products related to the seasons-such as camping gear or ski
equipment-should be aware that there are two summers and two winters
every year on the planet. By selling seasonal products south of the
equator during its off season, a company could moderate seasonal
fluctuations in its production cycle–a big benefit both to the company
and its employees.

5. Faster growth, higher profits. Several years ago a comprehensive
study was done that showed that exporters tend to grow 22% faster than
non-exporting companies, that they have higher profits, and that they
stay in business longer. Exporters are winners, by definition, because
they have shown that they can “think outside the box” and successfully
compete in global markets.

6. Competition.  The U.S. market is extremely competitive compared to
many other countries around the world where market share might be easier
to obtain and profits might well be higher.  Due to increased
competition within the U.S. market - which could come from either
foreign or domestic companies, or both - a firm might decide it needs to
enter other markets in order to grow the business. Also, a small
business might explore international opportunities as a response to its
chief domestic competitors doing so, in order to remain competitive in
the long run. The competitor might be trying to lower production costs
and/or attempting to use overseas profits or economies of scale to more
aggressively compete at home.

7. Enjoy what you do. Part of life is having fun - even at work. Many
entrepreneurs would jump at the opportunity to visit their new
distributor in Paris, or make sales calls in Tokyo or Berlin.  It is
exciting to learn about new cultures, to make friends with people from
other countries, to try unusual, often exotic, foods. Not only is it
fun, but it brings the world closer together.

International trade can benefit everyone, by lowering costs,
establishing friendships and making economies and companies more
productive and competitive.  Have you made international sales a part of
your business strategy for 2010?  The U.S. Small Business Administration
has a number of programs and services to help entrepreneurs take their
business international.  For additional assistance, contact the SBA’s
Utah District Office at 801-524-3209 or visitwww.sba.gov/international.

Daniel Hannaher is the SBA’s Region VIII Administrator based in Denver.
He can be reached at Daniel.hannaher@sba.gov

by Dave Young, President of Paragon

A 20-year study by Dalbar concluded that between 1987 and 2007 the average investor only earned 4.5%. During that same period of time the S&P 500 returned 11.8%. We all know it is tough to make money during bad markets. But why, even during the best of times, do the majority of investors suffer from poor performance?

One of the reasons is that they don’t stick with their investment strategy during difficult markets. When markets go up, investors are attracted to the market and stay invested easily. When the market starts to go down, most investors still stay invested. It’s usually after the market has fallen significantly that panic sets in and investors bail out. They usually bail out close to the bottom right before the market starts to rebound. This pattern repeats itself over and over with the result being that most investors are constantly buying high and selling low.

If your investment risk tolerance is set too low, you won’t generate the returns you should. If it is set too high, when market conditions become difficult, you will likely sell your investments and miss out on superior long-term returns. Setting your risk tolerance and then aligning your portfolio with it allows you to reduce your portfolio volatility to a level that you can live with.

Before you invest, you need to ask yourself how you will react if your portfolio drops five percent. What about 10 percent? What about 20 or 30 percent? At what point would you want to sell out of your investments and run for the hills?

Once you answer that question, then your portfolio should be invested so you never hit the point that will force you to sell at the market lows. That will allow you to follow your investment strategy over the long-term and be invested when the best opportunities present themselves. It will also allow you to generate the best possible returns over the long-term.

Over my 23 years of wealth management experience, I believe that determining your risk tolerance is one of the most important steps an investor should take.

If you are married, both you and your companion should take the questionnaire and compare the results. Since identifying your tolerance can be difficult, Paragon Wealth Management created a short risk tolerance questionnaire to simplify the process.

Click on this link- risk tolerance survey, to complete a short questionnaire to help you identify your investment risk tolerance.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions.  Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy.  All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice.  This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.  Past performance is not a guarantee of future results.

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.

By Clark Roundy, Luxul Wireless VP of Marketing

As we kick off the new year, it’s a good time for organizations to take inventory of last year’s marketing programs to evaluate what has been working and what needs to change. In many cases tweaks will be made—in others, a complete overhaul may be in order. Regardless, it’s safe to say that in the new economy most marketing managers are being forced to look at more creative ways to deliver their key messages.

Luxul Wireless is no different. Some of our 2009 programs have been tremendously successful and we will look to expand upon and improve them. At the same time, there are other marketing activities we will certainly reconsider and perhaps discontinue. After all, every program has a cost—even the “free” ones. And, with limited resources and a competitive market, it’s important that we focus on those activities that will deliver the best results.

As a company that sells primarily through distribution channels, much of our marketing effort goes towards leveraging channel partner programs. These programs consist of everything from advertising in channel publications to participation at tradeshows to providing sales training. Each of our channel partners has any number of marketing opportunities, some of which have been fantastic in helping to build Luxul product and brand awareness.

Nevertheless, we can never underestimate the importance of independently building the Luxul brand—a strong brand inspires confidence and is critical to the success of channel and partner activities. However, traditional brand development activities such as advertising and tradeshows aren’t a significant part of the plan. Rather, to further carry out our brand development efforts, we will be looking to complement our channel programs with targeted media relations activities, website optimization, social media marketing, educational webinars, and opt-in email campaigns. Doing more with less is a key Luxul product message that also epitomizes our business philosophy.

Personally, I’m glad to have 2009 behind us and am looking forward to the start of this new year. Overall, 2009 was a solid year for Luxul. More importantly, it was a year in which we positioned the company for high growth. In executing our 2009 strategies, some interesting markets and applications were identified that have lead to new product developments and some fantastic partnership opportunities. These opportunities will further alter some of our marketing strategies, messages, and programs. In my experience, that’s the best news of all—if those things aren’t evolving, then the company is dying. So stay tuned for some significant and exciting Luxul announcements in the coming months.

For many marketing managers with shrinking budgets, 2010 will be a year to show just how creative and resourceful you can be. As you evaluate your marketing strategies and budgets, be sure to explore online marketing, PR, and other tactics that can replace or supplement some of the more costly traditional programs. As we continue to adapt to this new economy, may we all enjoy a successful and prosperous year in Utah business!

About Clark Roundy, Luxul Wireless VP of Marketing

Clark Roundy is VP of Marketing at Luxul Wireless. Throughout his 20 year career, he has worked extensively with early stage and emerging companies to identify core competencies and implement key growth strategies. Mr. Roundy has held key executive positions at Linux Networx, Penguin Computing, Parvus Corporation, Alta Technology, and the Eyring Research Institute. His roles have included sales and marketing leadership, strategic planning, international business development, product management, and professional services program development. In his role at Luxul Wireless, Mr. Roundy is responsible for marketing strategy and oversees all outbound marketing programs as well as product and brand management.

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.

Continued from Financial Life Planning Part I…and adapted from articles:  Financial Life Planning:  What do you want to be? By Diliberto and Anthony and 20 Tough Questions for an Easier Future by Liz Pulliam Weston

George Kinder, in the goals-setting portion of his “Seven Stages of Money Maturity” distinguishes between having, doing and being. What do you want to have? What do you want to do? What do you want to be? Americans have put who they want to be on hold for what they can have. The fact that so many people wish they were doing something else cannot be good for individuals, the family, the workplace or society as a whole. Change can be brought through a meaningful dialog around client goals.

For example, someone who thought he wanted an early retirement may find instead that the most important thing to him is spending time with his young children. He may decide to throttle back on his career and retire later so that he doesn’t miss out on his kid’s formative years.

Or a physician who focused on working harder and creating a more aggressive portfolio in order to retire earlier, when what he really wanted was to get out of medicine because he felt the stress was killing him. The doctor’s fear of stress was creating much more stress. Ultimately, he decided to work half-time and reallocate his portfolio to be slightly more conservative, which reduced stress in his life.

The real work comes in trying to figure out how to change your life to reflect your values. Here are some questions to help accomplish this task:

* What’s standing in between me and what I want?

* What’s my plan for overcoming each of these obstacles?

* What do I have, in terms of personal strengths and outside resources, that will help me deal with these obstacles?

* What skills and knowledge do I need to add to accomplish this change?

* Are there other people I can call on for help in overcoming these obstacles?

* How can I make these changes happen sooner?

* Do I need my family’s support for making this change?

* If so, how can I rally that support?

* How can I evaluate and monitor my progress toward my goals?

It is important to not only discover your goals in regards to retirement, funding college educations, estate planning and family protection, etc., but also discover what your desires are. Instead of the obvious “I want to retire in five years”, “I want to double my money in 10 years”, etc., you should ask yourself about you core values and what is most important in your life. This begins a dialog that results in a process that will help merge your money with your life.

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.

By John Pilmer, President of PilmerPR

Big buzz surrounds the comments of BYU QB Max Hall and the reported bad behavior of University of Utah fans. On the opposite sidelines is alleged mistreatment of Utah coach Whittingham’s daughter by BYU fans. As an alumnus of both schools in question, my thoughts about the infractions in question have covered a lot of yardage defining the problem and suggesting a solution. So, here goes nothin’. Hut! Hut! Hut!

The challenge is not solely the bourgeois behavior of fans or a rude comment by an athlete. After further review from a business communications perspective, the problem is that high profile customers gave these schools a failing grade as a host.

The company (university) challenge is creating a safe environment and a positive buying experience for customers (fans)—both home and visitor. One could easily make a case that sports tourism, whether from city to city or nation to nation, has a huge impact on school, city and state revenue. Some states allocate funds to ensure they get their piece of the tourism pie through sports. In addition to tourism, think about the legal risk for a school for out of control fans.

It is estimated that the recent MLS All-star game played in Rio Tinto stadium is to have generated about $3.5 million in economic impact for the state of Utah according to Laura Shaw, marketing director at the Utah Sports Commission.

If we can agree that each fan deserves a safe and positive purchase experience, win or lose, then perhaps all universities share the challenge and the opportunity to communicate with fans and potential customers to attract the maximum number of fans (customers).

Here are some areas to cover in such a public policy statement:

• Appreciation to fans for their attendance and support
• Value of athletic competition to the school, students and the community
• Commitment to providing safe and enjoyable atmosphere for all fans, including visitors
• Zero tolerance policy for behavior that does not create this atmosphere

(See sample public announcement)

Regardless of our school colors, or if we have more than one allegiance, I believe we can “root, root, root for the home team” without giving offense to others.

About the Author

John Pilmer, APR is the founder and president of PilmerPR, LLC. In its 6th year, the award-winning PilmerPR team provides enterprise-level expertise at a small business price. The company is a 2008 recipient of the Provo/Orem Chamber of Commerce Arthur V Watkins award for excellence. PilmerPR was recently recognized at the National Press Club in Washington, DC for its work in Corporate Social Responsibility (CSR). Also, see the KSL Channel 5 interview of the author regarding crisis communications.

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.

By Dave Young, President of Paragon Wealth Management

Adapted from articles:  Financial Life Planning:  What do you want to be? By Diliberto and Anthony and 20 Tough Questions for an Easier Future by Liz Pulliam Weston

A new school of thought among investment advisors and financial planners is “financial life planning.” Financial life planning takes an in-depth look at the bigger picture– not only considering a client’s investment goals, but a client’s investment goals in conjunction with their life dreams, values and happiness. Instead of isolating only the monetary side of things, the life planning approach is more holistic and considers a client’s most deeply-held values.

The objective is to assist clients in visualizing their goals, then home in on what’s really most important in their lives. With the core values identified, an investment plan can be built to help make the dream an eventual reality, while helping the client incorporate those ideals into day-to-day living.

While writing the book, “The New Retirementality” by Mitch Anthony, Anthony would gather groups of professionals and half-kidding ask, “What do you want to be when you grow up?” He was always amazed at how many of these individuals, many in their fifties, dreamed of doing other things–of being something other than what they currently were.

An accountant talked about being a consultant. A consultant talked about being an investment advisor. A marketing executive talked about being a creative director, and a creative director talked about being a speaker and trainer. A speaker and trainer talked about going into television. A television personality talked about going into sales. A sales professional talked about being an executive coach.

When these people, who said they weren’t fully engaged, were asked why they didn’t just do what they dreamed of doing, without fail, they cited money issues as the reason. How many people have mortgaged who they are in favor of what they could get, and later wished they had made a more informed decision? Some estimate that it may be as much as 70 percent of our society. If it is indeed a money issue holding an individual back from his or her ultimate dream, then it may be permission from a financial professional that helps them move forward.

To be continued…

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.

By Clark Roundy, Luxul Wireless VP of Marketing

For the past week I’ve been traveling in the land of the Gaucho, Che, and Evita. As anyone that has visited beautiful Argentina can attest, it certainly has its allures. It is a country extremely rich in culture, diverse landscapes, and vast resources. With so much going for it, it’s hard to understand why Argentina hasn’t become more of a player on the world stage. Interestingly enough, some decades ago Argentina was recognized as one of the wealthiest nations and considered an emerging world power—neck and neck with the United States. So what happened?

While the answer to that question is far too complex for a single blog entry, the simplest answer comes down to leadership and bad management. Truth be known, Argentina has made bad management an art form that starts with government policy and leaches into everyday life. If you want a good look at how government meddling in the free market and imperious leadership can impact the psyche and culture of an entire nation, Argentina is the perfect case study.

Argentina is renowned for producing some of the best beef in the world. The conditions are also favorable for virtually all kinds of agricultural production. With the right focus and mindset, Argentina is capable of feeding the entire world. Yet, bizarre government restrictions, unclear regulations and high taxes on many agricultural exports act as a deterrent to export many products to other countries. Government meddling in the ranching industry has kept beef prices low, while forcing many cattle ranchers to look elsewhere to make a living. When it comes to imports of technology products, high taxes have made modernization a real challenge. Likewise, outrageous taxes on items considered to be luxuries can mean double the price for an automobile that would hardly be considered a luxury in the U.S.

These governmental idiocies have had a trickle-down effect on Argentine business, society, and culture. Farmers have been known to burn their crops, rather than sell at government regulated prices. Argentine banks are magnificent architectural specimens, yet simple transactions can take hours due to bureaucracy or outdated methods and technologies. Labor strikes are commonplace—happening pretty much on a weekly basis. During another recent visit, I traveled to Rosario, a city of some 1.5 million residents located 150 miles northwest of Buenos Aires. Upon arrival, I immediately noticed something peculiar—there was not a single taxi to be found. Apparently, all the taxi drivers were on strike because a driver had been assaulted the night before. Are you kidding me? Welcome to Argentina, where nonsensical leadership has produced a citizenry where common sense is not always so common.

As business leaders, it’s important to remember that corporate culture starts at the top—YOU set the tone. Corporate culture is more a reflection of leadership style and policies than of the individuals that make up your team. Your leadership style will show in the culture you create—and will ultimately be reflected in the bottom line.

About Clark Roundy, Luxul Wireless VP of Marketing

Clark Roundy is VP of Marketing at Luxul Wireless. Throughout his 20 year career, he has worked extensively with early stage and emerging companies to identify core competencies and implement key growth strategies. Mr. Roundy has held key executive positions at Linux Networx, Penguin Computing, Parvus Corporation, Alta Technology, and the Eyring Research Institute. His roles have included sales and marketing leadership, strategic planning, international business development, product management, and professional services program development. In his role at Luxul Wireless, Mr. Roundy is responsible for marketing strategy and oversees all outbound marketing programs as well as product and brand management.

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.

By Allen Bostrom, CEO Universal Accounting

In December, every retailer in Utah is focusing on sales for the holiday season.  Forecasts are predicting another uncertain holiday spending season, but retailers can take steps to bolster volume and revenue per capita.

The key to a successful holiday retail season is to have an established plan complete with daily goals and targets.  In particular, retailers should consider the following tips to enjoy a successful 2009 holiday season:

1. Use sales numbers from past holiday seasons as a milestone to create a plan based on specific sales, volume and net income goals.

2. Share daily and weekly performance goals with all staff and provide incentives and rewards for achieving those goals.

3. Compare sales performance goals to actual performance on a daily & weekly basis & review with employees.

4. Focus on strategies to increase store volume and revenue per customer (free offers such as free shipping, gift wrapping, gift with $100 purchase, complementary product packages, etc.)

5. Promote your gift card program. Estimates indicate more than 10% of holiday sales will be for gift cards.

Retailers should know their accounting numbers from the previous two seasons, and track and compare daily figures to stay on top of their organization’s ongoing progress and objectives.

Allen Bostrom is the CEO of Universal Accounting and an expert in business management. He is the author of In the Black, and Red to Black in 30 Days.

The content of this  blog reflects the views and opinions of the author, and not necessarily those of Utah Business.