Whether your wish list includes manufacturing, medical, transportation or technology equipment, how you finance major purchases may not only impact the return on your investment but the success of your entire company.
“Financing decisions impact cash flow and a company’s ability to capitalize on opportunities or respond to adversity,” says David Beckstead, Pacific Region sales manager for the Equipment Financing Division at California Bank & Trust. “Executives need to weigh their options carefully before making a decision.”
Smart Business spoke with Beckstead about the need for prudent financing decisions when purchasing machinery and equipment.
What should executives consider as they are reviewing various financing options?
The rule of thumb is to match the financing terms to the life of the asset. In other words, it’s best to use short-term financing for short-term business needs, and longer-term financing for long-term business assets such as equipment that will generate revenue or reduce operating costs for the foreseeable future.
You can avoid finance charges and interest by paying cash, but leasing the equipment or borrowing the funds lets companies preserve capital for other purposes. You should also consider the tax implications and the ultimate cost of the equipment along with your ability to make a substantial down payment to secure a traditional bank loan.
When does leasing make sense?
Leasing makes sense when companies want to preserve cash for future growth or expansion, they need flexibility or they don’t have a lot of cash to put down. Since leasing companies usually maintain ownership of the asset, companies can upgrade or return the equipment should their needs change. For example, you can align the lease terms with a customer agreement or upgrade to a bigger, faster model as your company grows. Plus, most leasing companies don’t require a down payment and it may be possible to negotiate a longer-term payment plan, improving cash flow.
With leasing you can usually deduct the lease payments as a business expense on your tax return, and on short-term leases the rental expense may provide a better tax benefit than depreciating the asset. You may be able to transfer the risk of ownership to the leasing company depending on the type of lease.
How can executives research the market and secure favorable leasing terms?
Prioritize your needs, and then search for the best combination of rates, terms, flexibility and customer service by contacting several firms. Bank leasing companies usually have high underwriting standards but lower rates, while finance companies can be more lenient lenders but generally charge higher rates. Vendor finance companies are a third option and are generally the most flexible about taking back or exchanging equipment. However, they usually charge higher rates.
Beware of upfront payments and fees, hefty residual payments, pay-off fees and other clauses that may boost the overall cost of the equipment. In fact, it’s a good idea to ask a knowledgeable third party to review the agreement so you don’t forsake the benefits of leasing by accepting disadvantageous terms.
What should executives look for in a leasing firm?
Always consider a firm’s reputation, check its references and read its contract before requesting a quote. Contracts differ between companies and impact everything from tax deductions and residuals due at the end of the lease to the responsibility for servicing the equipment. Finally, select someone you trust. Your financing partner should provide funding and be committed to your success.
David Beckstead is Pacific Region sales manager for California Bank & Trust Equipment Finance. Reach him at (949) 457-0458 or email@example.com.
Website: Business owners and entrepreneurs can visit our Business Resource Center.
Insights Banking & Finance is brought to you by California Bank & Trust
How often do you go to market without a solid business strategy? Probably never, right?
The reality is that if you’re like most organizations, then you’re doing this right now — and you don’t even know it.
That’s because most organizations do not have a well-thought-out marketing strategy. Instead, most are doing what somebody told them they should do. This includes creating a mobile website, engaging in social media and advertising.
All of these are “smart” marketing initiatives. But if they’re done in a vacuum, there’s no way to measure what results those initiatives are intended to accomplish. Worse, you’re chasing tactics instead of delivering results.
There is a significant difference between marketing tactics and marketing strategy. Marketing tactics are ways to bring channels to life. This could be a new website or a mobile-optimized version of your site. Or it could be creating new sales collateral. Tactics should be used to bring your brand message and value proposition to life.
Unfortunately, if they’re not tied to a cohesive strategy, you will not achieve the results you desire.
A marketing strategy, however, allows you to understand the results you should achieve. It also keeps everyone aligned with what you’re trying to accomplish and where you are in the process.
As an example, there are three main reasons for a website: to verify your organization’s brand message to potential customers, to deliver your value proposition and conversion.
Conversion can mean different things for different industries. In retail, it might mean picking out a product, putting it in your shopping cart and making the purchase. In business-to-business, conversion might mean picking up the phone to contact the company, providing a name, email and phone number, or signing up to receive a newsletter.
Without understanding how consumers behave, you may be selling your marketing efforts short. You might not be providing enough information to clearly articulate your brand message or value proposition or you might not be offering users an easy experience that allows for conversion. So how do you ensure that a consistent brand message, value proposition and the ability to target customers converts across all marketing channels?
First, understand who the target consumer is and their needs, attitudes and behaviors. This can be discovered through research, including focus groups or through industry-based segmentation.
Then, conduct a deep dive to understand your business goals and objectives. In retail, this might be the number of sales you want to drive. In B2B, it could be increasing the numbers of prospects in your pipeline.
Finally, evaluate your company’s existing marketing tactics — your website, marketing collateral and overall brand message.
Only then will you be well-equipped to evaluate your overall tactics and compare them to marketing best practices and the competitive landscape. This results in recommendations that include expected business results and return on investment.
Prioritize these by measuring the highest impact against investment levels, and then create a timeline to implement them over a one- to two-year period. Share this strategy throughout the entire organization so everyone understands what will be accomplished and what the expected results are.
Without strategy, and an understanding of everything that goes into it, any money you pour into tactics tends to be money poorly spent. Done correctly, your marketing strategy suddenly becomes your organization’s key driver and leads to tangible and measurable business results.
Dave Fazekas is director of digital marketing for Smart Business Network. Reach him at firstname.lastname@example.org or (440) 250-7056.
What is the best way to motivate employees? Some successful CEOs treat employees as friends, while other equally high-achieving leaders regard employees as merely hired hands, giving them a day’s pay for a day’s work and nothing more.
What’s the best approach to produce the best results for the company, the employee and the employer? Much of the issue lies with one’s definition of a friend and the culture of the organization. Many companies boast that their employees are like family. This sounds great, but can it work?
If either party crosses the fine line that separates the difficult-to-define business and personal space, both employer and employee can become disenchanted or worse. One way to think of it is that friendship is more unconditional. We accept a friend for what he or she is or isn’t. On the flip side, the reality is that most bosses embrace or reject employees for what they do on a consistent basis.
The military has its own way of handling fraternization between officers and the enlisted by making it a possible court martial offense. This stance is predicated on the belief that socializing between these two levels is “prejudicial to good order, discipline and partiality.” It is well recognized that business relationships without boundaries can produce too much drama.
Perhaps what we need is a new definition for a nonemotional, congenial, enjoyable and productive day-to-day relationship between leader and follower. This moniker could be employee-friend, or “e-friend” for short. “E-friend” isn’t an app but would describe an employer/employee relationship where there is mutual respect and a genuine appreciation of one another, underscored by an understanding, albeit perhaps unspoken, that when the time for talking is done, the boss has the final word on matters that occur between 9 a.m. and 5 p.m. Using these ground rules, both sides can have it both ways by using good judgment and treating each other as they would want to be treated if their roles were reversed.
The employee should expect from the boss that, when the chips are down, either on a business basis or when the employee has a personal problem, he or she knows that the boss will be there for him or her, providing understanding and advice and, when requested, helping the employee maneuver through rough patches. From the employer’s perspective, the employee would be someone who, through thick and thin, is there for the company and can temporarily put personal needs aside when there is a business issue that can’t be postponed.
The e-friend boss should know as much about the employee as the employee wants the boss to know, which can include sensitive professional problems or even family or medical issues. In a good relationship, the boss could certainly know, as one example, what the subordinate’s kids are up to in their lives and be the first to say to the employee that it’s more important for him or her to go to an offspring’s ballgame or play, rather than putting in extra time on the business project du jour.
Instinctively, employees know if a boss truly cares or is just going through the motions to be politically correct. They know if the head honcho is sincerely concerned about them as a person, not just another set of hands.
Not everything and everyone in the workplace are created equal. There will always be a pecking order; however, there is nothing wrong with truly enjoying the people with whom you work every day and sharing meaningful experiences, all of which lead to a more fulfilling role for both the employer and the employee. The best criterion to avoiding problems is using generous doses of plain common sense. There is a much-quoted line from the 1987 movie “Wall Street,” starring Michael Douglas as the ruthless tycoon Gordon Gekko, who proclaimed, “If you want a friend, get a dog.” This provoked both laughs and sighs, but in the real world, this attitude makes for a very lonely Ebenezer Scrooge-type life for the boss and a shallow existence for employees who must spend more than half, at the very least, of their Monday through Friday waking hours working.
At times, people can be difficult, both to work for and with. However, it’s the people who make the company and relationships that combine respect and a form of e-friendship that can make the real difference.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at email@example.com.
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Richard Branson is full of big ideas. The man who founded six companies that each rake in more than $1 billion annually dares to think big. For him, it’s all about the experience, making a difference and not doing things the same way as the competition. An idea captures his imagination and he sets out to turn it into reality.
For him, it’s not about the money. It never has been.
When he sees a situation where he thinks he can make a difference in people’s lives, he looks for a way to make a difference. He understands that “why” he is doing it is more important than the “what” or the “how.”
Author and consultant Simon Sinek agrees (see video link). He explains that Apple is wildly successful at what it does not because it can build computers better than anyone else but because it understands “why” it is doing so. It’s not that the competition doesn’t know what it is doing or that it doesn’t have talented people creating good products. It’s just that Apple understands why it is in business and focuses its message on that instead of what it does — which is build electronic devices.
Sinek says that people like to do business with people who believe what they believe, so they buy more on the “why you do it” rather than what you are actually doing. Notice that profits are secondary. If you do things the right way for the right reasons, profits come naturally.
You might already have a big idea for your business, but it will most likely never reach its full potential unless you understand why you are doing it. Have you ever stopped to think about why you are in business or why you are doing what you are doing? It can be an enlightening exercise.
With the demands of daily business, we seldom stop to think about the reasons behind our actions, and if we do think about it, the answer is often “to turn a profit.” But to what end?
When you understand why you are trying to make a profit and the answer goes beyond simple wealth, then you are getting to the heart of what differentiates a good business from a great one. Maybe the reason why is a social issue, such as eliminating hunger, or maybe it’s a medical issue, such as curing a disease. But it doesn’t have to be grand. The “why” can be something like “making computers easy for everyone to use.” The important part isn’t the scope; it’s understanding your business’s basic reason for existence.
When you’ve taken the time to understand that, your business will have the potential to do great things because employees and customers alike can unite around a common understanding.
It’s why Apple is a great company and it’s why Richard Branson is wildly successful. If you’re already doing it, you’re on your way. If not, take the time to think about it.
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or firstname.lastname@example.org.
According to Merriam-Webster, management is “the process of dealing with or controlling things or people.” While “controlling” is a bit harsh in my book, the definition is correct in it's focus on management of people. To be a good manager or team leader, you have to have an above average interest in people. Success in management is found in the relationship developed between leader and team.
The best managers see themselves as catalysts. They become that agent or force that provokes or speeds significant change or action. These managers get things done quickly by leading with solid people skills.
Here are 4 people skills that every good manager must possess:
1. Understanding the right way to give a critique.
The worst thing you can do if you want to get someone to listen to you is to criticize.
As human beings, we hate to be criticized. When we feel attacked, we usually attack back – even when we are in the wrong. Many of us fall into the trap of thinking “I know I am right and I am going to prove it to you.”
Over the years I have learned that this way of thinking simply does not work.
A good manager has the self-control and presence of mind to put aside the needs of his own ego and say “I've got a problem, will you help me?” Enlisting cooperation in this manner will always lead to better results.
2. Understanding the need to help.
If someone comes in to criticize you or to raise your game, under what circumstances would you be willing to accept the critique?
The answer for me is simple. If I think someone is really trying to help me, then I'll engage and listen.
On the other hand, if I feel that the person is just trying to get the job done or make himself look good, I may listen, but my heart will not be in it. My interest and creative energies will be lost.
The truth of the matter is: Managers will only have influence over their people to the extent that their people think they are sincerely trying to help them. It is simply the way human beings work. Good managers truly care about their team and work hard to help them.
3. Understanding no two people are the same.
As a manager, you do not influence everybody the same way. People do things for their own reasons – not for others and not for you.
Inspiring people to your company vision happens best when you help them to see what's in it for them. This varies from person to person. It is your job to discover what things motivate each member of your team.
Some people are motivated by a challenge, some by money and others by recognition.
It is about reading their needs, desires and wants and then leading in such a way that ensures their success at obtaining them.
4, Understanding the best way to get tasks completed.
An effective manager realizes that each time he has an interaction with someone about a task, there are two things going on:
a. A discussion about the task and how to get it done.
b. The way in which the interaction affects the managers relationship with the collegue.
The first is pretty straightforward, but it's success is determined by the tenor of the second.
It must be said that the task should not be sacrificed for the relationship at all costs. It must also be said that winning on the task is not good if the manager ruins the relationship. Both are important and the manager must do well in each area.
I refer again to the need for the manager to develop relationships with the team in order to understand the best way to get things done according to individual members needs, desires and strengths.
In the end, good managers know how to use their influence and power to help others achieve beyond their wildest dreams.
I like management guru Tom Peters' definition of power:
“My definition of power is understanding that all of managing — and this comes out of the old grade school book — is the notion of doing more than you and I can do by ourselves; that is, doing things through other people.”
He goes on to say:
“If you are interested in getting things done effectively and imaginatively through other people then what you're trying to do in the workplace is exactly what you're trying to do on the football field – which is to get people who work with you to achieve beyong their wildest dreams.”
Workplace managers understand that good people skills determine their success. They work hard to develop the skills needed to lead in ways that shows their interest in people.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email email@example.com or visit her website at www.delorespressley.com.
Instead of merely maintaining technology, IT service providers are increasingly being asked to become technology drivers and bring innovation and new product ideas to their clients.
Cliff Justice, author of the report, “The Death of Outsourcing,” was recently interviewed by CIO.com and stated that there was a shift around 2006 to 2007 from outsourcing as a commodity focused on price to a service that’s value-oriented.
“We’re clearly seeing this shift,” says Deen Ferrell, business development executive at Cal Net Technology Group. “Clients want an insourcing partner today. Insourcing requires a broader talent pool, one that offers skill sets in all areas where technology touches the organization. Ongoing research passes critical intelligence of emerging technologies to the field so it can be applied to benefit the client. The focus is on best practices that better integrate technology platforms into a working strategy that drives profit while reducing redundancy and cost.
“The good news is that this shift represents a stronger commitment from the service provider sector. Providers are now expected to add value beyond ground-level support,” Ferrell says.
Smart Business spoke with Ferrell about the trend toward IT providers who help move business goals forward and the benefits to businesses from advancements such as cloud computing and unified communications.
Why is the shift toward insourcing occurring?
Mom-and-pop shops aren’t getting the job done because of a lack of depth and bandwidth — the proverbial ‘can’t see the forest for the trees.’ Providers get so focused on dealing with immediate issues that they can’t step back and think strategically.
A successful insourcing partner impacts all areas where technology touches the organization, as well as providing standard IT support and maintenance that allows companies to maintain core efficiencies.
What has been the impact on information security?
Retaining and securing sensitive information is a critical component of IT services. In a global marketplace where information is king, an ongoing managed security strategy can give organizations peace of mind related to risk management, security assessment, compliance issues and gap analysis.
What is meant by unified communications?
A unified communications strategy allows information to flow seamlessly through an organization by using tools such as voice over Internet protocol (VoIP), video conferencing, mobility solutions such as iPhone, iPad and tablet integration, and call center functionality such as call recording and reporting.
How can cloud consulting benefit companies?
For cloud solutions to deliver on their promise of reducing cost and risk while improving competitive advantage, they must be viable, supportable and secure. Vendor research and management, with an understanding of hosted offerings such as Office 365, infrastructure as a service (IaaS) and software as a service (SaaS), are critical to helping the organization realize cloud potential while avoiding pitfalls.
How does insourcing promote innovation?
An innovative environment is one where workflow automation and collaborative computing free up valuable time and provide on-demand access to critical information through dashboards, scheduling and customer portals.
Insourcing partners are providing supplemental chief information officer services such as documentation, change management and vendor relations support, which allow companies to cut waste, streamline processes and better position themselves competitively.
With the insourcing crowd becoming increasingly innovative, cost-conscious and competitive, it appears that the outsourcing model is on its way out.
Deen Ferrell is a business development executive at Cal Net Technology Group. Reach him at (818) 725-5062 or firstname.lastname@example.org.
For information on the benefits of insourcing to Cal Net, visit http://www.calnettech.com/ourservices_OngoingSupport_InsourceBenefits.php.
Insights Technology is brought to you by Cal Net Technology Group
Most small business owners believe running their businesses through a corporation protects them from personal liability. Generally, this is true. However, courts can “pierce the corporate veil,” holding shareholders accountable for the liabilities of a company when it’s found to be the “alter ego” of the shareholders.
“When shareholders use a company as their personal piggy bank, ignore formalities when operating the business and leave no assets in the corporation, courts will not let them be shielded from liability,” says Matthew Montgomery, an attorney at Stradling Yocca Carlson & Rauth.
Smart Business spoke with Montgomery about responsibly maintaining the corporate form.
What protections does incorporating provide?
Corporations provide protection from liability at a level you can’t get as an individual operating as such in the market. It’s a good way of limiting liabilities for shareholders of a company doing legitimate business and following proper procedures.
For example, if a small incorporated business owner has a delivery fleet and a driver has an accident, the company would be liable, and not the owner or shareholder. Also, loans can be taken out through the corporation without the shareholder having personal responsibility for repayment. Further, incorporation shields a shareholder from being held personally responsible for any regulatory or non-criminal violations made by the company.
Are corporate protections limitless?
No. There are rules that guide how a corporation should be run. When they’re not followed, liability for the company’s actions falls back on the shareholder, whether he or she is a startup inventor or running a large corporation with hundreds of subsidiaries. Corporate business formalities need to be followed and a level of capital needs to be maintained to handle liabilities. In instances where the corporation is found to be the ‘alter ego’ of its shareholder, then direct liability can fall on the shareholder.
What happens if someone is using a corporation as his or her alter ego?
Should the company be sued and the shareholder has been incorrectly using the corporate form, even if not explicitly named in the suit, the shareholder will be held personally liable for the damages inflicted.
A company often generates much higher liability than an individual. Without the legal protections of a corporation, facing charges can be catastrophic.
What’s considered an abuse of a company’s corporate status?
Generally, courts look to see if you’re observing corporate formalities, which means they want to see that you’re holding board meetings and important company decisions are being made by a board, so board minutes must be kept.
It’s also common for individuals to loan themselves money from the business or treat it like it’s their own piggy bank. Owners often think they put money into the company and they deserve it back, which is true; but the corporate form has to be respected, so a salary must be approved and paid and loans generated from the company must be proper business loans that bear interest.
How can companies ensure their corporate veil will not be pierced?
Research what your state requires through its department of commerce, such as the necessary officers, records you must have and taxes you must pay. And seek the guidance of limited corporate counsel to ensure you’re following all corporate formalities. This step is often skipped because people think it’s too expensive, but if you have to hire a defense attorney, it’ll cost much more.
Take the time to understand how a corporation protects you. Otherwise, you may unwittingly unravel those protections and become the alter ego of the corporation you’ve created. Dealing with this issue before it becomes a problem will save you countless dollars and a lot of headaches.
There is great hope for those with coronary heart disease. Two-thirds of adults now survive the disease, which is 27 percent higher than a decade ago, and impressive new technologies and techniques show promise
Smart Business spoke with prominent Saddleback Memorial Medical Center cardiologist Sinjin Lee, M.D.; as well as Daniel Bethencourt, M.D., a renowned cardiovascular surgeon and national leader in robotic surgery at Orange Coast Memorial Medical Center and Long Beach Memorial to learn more.
What are the risk factors for heart disease and how can they be lowered?
Smoking, obesity, sedentary lifestyles, and consuming saturated and trans fats are prevalent among many Americans. These will negatively impact cholesterol counts as well as blood pressure levels and can cause dangerous plaque build-up in coronary arteries. Further, one in three California children are overweight, increasing their heart disease risks as adults, making family fitness essential.
For women, the symptoms can be subtle and include nausea; uncomfortable pressure; dizziness; tightness or heaviness in the chest; difficulty breathing; pounding heart; cold sweats; and shooting pain in the shoulders, neck, arms or back.
Lowering cholesterol and treating high blood pressure can reduce risks of dying of heart disease or needing heart surgery or angioplasty. Prevention includes maintaining an appropriate weight, eating foods low in cholesterol and fat, reducing stress, exercising regularly, regular check-ups, screenings and following your doctor’s advice.
What advances are available locally?
At the MemorialCare Heart & Vascular Institute, advanced diagnostic heart disease technologies and treatments are standard. These include open heart surgery, angioplasty, medical device implantation, stenting, catheter ablation and rehabilitation and cardiac centers for women. Emergency treatment times at our cardiac paramedic receiving centers beat the national average, as do our hospitals’ cardiac outcomes.
MemorialCare hospitals are ranked among the highest in terms of the number of robotic heart surgeries performed nationally. These procedures enable surgeons to operate with precision through tiny incisions with less trauma to the body, faster recoveries, and minimal pain and scarring.
Orange Coast Memorial is one of the region’s first hospitals that has a hybrid interventional operating room with both a cardiac surgical suite and cardiovascular catheterization laboratory combined. This revolutionary suite is designed for open heart surgeries as well as minimally invasive cardiovascular procedures. It also allows cardiac surgeons to perform diagnostic testing during and after surgery.
Saddleback Memorial’s new advanced biplane system allows physicians to perform high-level interventional cardiac and neurological imaging and treatment procedures. Dual X-ray sources and imaging cameras move through and around the intricate human circulatory system, offering three-dimensional views of the anatomy during minimally invasive cardiac and neurologic procedures.
How can we create a healthier workplace?
The workplace can help everyone achieve better health by ensuring the availability of fruits, vegetables and nutritious foods.
MemorialCare offers heart health worksite prevention programs and screenings to employers. Also, memorialcare.org offers tools to help evaluate medical risks. Health guides outline heart attack symptoms, heart-healthy eating and women’s wellness.
MemorialCare Health System, a not-for profit, integrated delivery system, includes six top hospitals — Long Beach Memorial, Miller Children’s Hospital Long Beach, Community Hospital Long Beach, Orange Coast Memorial, and Saddleback Memorial in Laguna Hills and San Clemente; medical groups — MemorialCare Medical Group and Memorial Prompt Care and the Independent Practice Association (IPA) Greater Newport Physicians; MemorialCare HealthExpress retail clinics; and numerous outpatient health centers throughout the Southland.
Daniel Bethencourt, M.D. is a cardiovascular surgeon at Orange Coast Memorial Medical Center and Long Beach Memorial. Sinjin Lee, M.D. is a cardiologist at Saddleback Memorial Medical Center.
Learn more about heart disease by taking a quick assessment at memorialcare.org/heart.
In today’s regulatory environment, banks are no longer lending based on collateral; they are focusing more on business history, the owners, their future plans and how they’ll repay the loan.
“A business plan is an excellent way to tell bankers about the story behind the numbers and let them know you have a good handle on the future of your business,” says Betty Uribe, executive vice president for California Bank & Trust.
Smart Business spoke with Uribe about how to develop a business plan to increase your chances of obtaining a business loan.
Why are business plans important?
When presenting a loan package to a lender, an organized, well-thought-out business plan can make the difference between getting and not getting the loan.
A business plan will show the lender if the business has a chance of making a profit and in what time frame. It also provides a well-thought-out estimate of how much the business needs to grow and defines the market, customers and the percentage of the market the business plans to reach, providing a clear revenue estimate. Importantly, a business plan can convince the lender to fund your business and show them potential issues and how they’ll be addressed.
What are the steps involved in creating a good business plan?
Start with an outline and fill in the blanks as you learn more about the process. Your plan should be only as big as necessary for your firm to run smoothly. In fact, the outline alone may suffice, particularly if you are not submitting the plan in a package to obtain financing.
Many seasoned entrepreneurs calculate a break-even analysis to predict future viability in their respective fields. This is a formula based on the relationship between revenue, fixed costs, variable costs and profit. The analysis can show you how much money you must bring in to stay solvent.
Another preliminary tool is a feasibility plan, a basic document that features a summary, mission statement, market analysis and required success factors. It also might include an initial cost analysis addressing pricing and potential expenses. This can help you determine whether starting a business can work for you.
What resources are available to help?
An abundance of user-friendly business planning software is available that is designed to help strategize, sort and calculate related financial data.
Also, agencies like the Small Business Administration and SCORE, the Service Corp of Retired Executives, offer detailed information on developing a solid plan.
How do you get started?
Most experts outline 10 key components for a basic business plan. Key components include:
• Cover sheet
• Table of contents
• Executive summary
• Company description
• Product or service description
• Market analysis
• Strategy and implementation
• Management team
• Financial analysis
What should a business owner do with the business plan once it’s written?
Start by recording overall business or long-term goals on a spreadsheet, setting the bar high enough to grow. Make sure your goals are specific, measurable, attainable, relevant and time-bound (SMART). They must be easily identified, quantified and understood by you and your management team or you won’t know when you reach them. Also, set quarterly, monthly, weekly and daily objectives, then record your progress but don’t share or discuss goals with negative individuals who might impede progress. Lastly, keep asking yourself, ‘Does this decision take me closer to my goal?’
Growing a business takes commitment and systematic planning. Educate yourself. The more you learn about your industry, competitors, finances and time management, the greater your chances of success.
Betty Uribe is executive vice president at California Bank & Trust.
For a full scope of tools and information through to help businesses get started, visit www.calbanktrust.com/team. Another valuable source of information for business owners is at www.calbank trust.sbresources.com.
Insights Banking & Finance is brought to you by California Bank & Trust
When KONE Inc., a global leader in the elevator and escalator industry, was looking to find a place to consolidate operations in 2010, the company came to Allen, Texas.
A 24,263-square-foot facility allowed KONE to combine its North American Supply and Technology operations into one location in the Allen Center Park. KONE also moved its central tool storage facility to nearby Twin Creeks Business Center.
“This new facility will provide KONE’s employees with a high quality work environment and quick access for our colleagues and visitors from around the world to many amenities,” Jeff Montgomery, KONE director of Development-Product and Supply for the Americas, said in announcing the new office space. “By making this move, KONE is showing our commitment to our people and striving to increase productivity and cross-functional collaboration.”
KONE was founded in 1910 in a machine shop in Helsinki, Finland, and now has more than 1,000 offices worldwide, eight global production units and seven global research and development (R&D) centers, including the R&D center in Allen.
KONE has made the Forbes list of the 100 most innovative companies in the world for two consecutive years, ranking 42nd in the 2012 list.
Smart Business spoke with Ron Bagwill, vice president, director of Supply Operations Americas for KONE, about the decision to move to Allen and the benefits of the new site.
What are your operations in Allen?
KONE has two locations in Allen. The first site is in the One Allen Center, 700 Central Expressway South building. On the first floor we have a lab used by our technology group to simulate and test complex elevator control and software systems. On the fourth floor we have our supply chain related functions: engineering, customer service, logistics, human resources, sourcing, quality, and the process owner for our supply chain operations globally. A large part of the global technical team is also housed there (R&D) as well as installation support functions.
The second location is in Allen Twin Creek Business Center on North Watters Road where we maintain and store specialized tools that are important to a safe and efficient elevator installation.
Why was Allen chosen over other location options?
The activities now located in Allen were previously located at a factory site in nearby McKinney, Texas, that had been in operation since the late 1970s. We were looking for a newer building site that offered our employees a great location to work. The Allen location offers our employees easy access to a multitude of nearby shops and restaurants to visit during lunch or after work hours. Since we are near our previous location, our employees have a similar length commute to work. This was important to our decision on where to locate.
One of the most important aspects to our decision to move to the One Allen Center was the capability to house both our office personnel and the lab equipment. The lab equipment required a unique lower floor location with capability to move in and out large pieces of equipment.
Allen is also a great place to live, and we see that as important when trying to recruit new employees to our company.
What role did the Allen Economic Development Corporation play in that decision?
The Allen Economic Development Corporation provided an excellent financial package that definitely was part of the overall decision of why we chose Allen. The AEDC team is very professional and experienced in bringing great businesses to Allen, and KONE is pleased to be one of those companies.
How has the location impacted your success?
The location and environment of an office can have a huge impact on the productivity and morale of an office staff, which has improved since moving to such a great office and city. Having a new and modern office also plays an important role in attracting new employees.
Would you recommend Allen to other companies looking to build or relocate?
Allen is a great place to locate a business. The city has easy access to major highways and the major airports are only 45 minutes away. The number of hotels, restaurants and shops are a great place for housing and entertaining guests or customers. Prospective employees will find Allen a great place to live with the different housing options available, and the great school system. AEDC is a great partner to assist a business when considering Allen.
Ron Bagwill is a vice president, director of Supply Operations Americas, KONE Inc. Reach him at (469) 854-8815 or email@example.com.
Reach the Allen Economic Development Corporation at www.allentx.com or call (972) 727-0250.
Insights Economic Development is brought to you by Allen Economic Development Corporation