How Entrepreneurs Can Profit with Obama

Regardless of your feelings about Obama—and I say this as a right-leaning small business owner—it's time to take notice of our smart counterparts out there who know his Presidency can translate into lots of profits. Remember, these savvy entrepreneurs know all about surviving and profiting from one political wind to the other. While the rest are watching football or Family Guy this Sunday, you can bet these folks will be plotting their strategy for later in 2009 when the Administration changes and the new Congress takes over. Here are a few shrewd moves and predictions we should all consider.

Think energy.

Sure, gas prices have dropped recently. But we're legitimately spooked. Spooked enough to motivate the next President to commit to doing something about our reliance on foreign oil. Obama plans to invest $150 billion in clean energy technology over the next 10 years. He also plans to create a federal Renewable Portfolio Standard that will require 25% of American electricity be derived from renewable sources by 2025.

Smart business owners will be following this money trail. And they won't even need to be in the energy sector to benefit. They'll just need to be selling and servicing those companies that are in the sector. They'll be changing their marketing, buying new lists, advertising in new places, and attending different conferences than before.

Don't forget about other markets.

It's not just the energy-related industries that will benefit from the next Administration. Obama plans to invest in child care by doubling support for after-school programs and expanding the Child & Dependent Care Tax Credit. He plans to invest $10 billion a year over the next five years to upgrade information technology systems used in the health-care industry. He plans to invest a bunch more money in improving the information and communications technology used to support public safety systems. He will be supporting investments in biomedical research, medical education, and training in health-related fields. He will be a proponent of stem-cell research and will allow more government funding in this area.

Smart business owners will be fathering more children from test tubes and getting them Microsoft (MSFT)-certified while they're still in diapers. Just kidding. Actually, they'll be asking themselves why they're wasting time selling into struggling industries when the next President is saying: Where the money's going to flow.

Let's play some games with our income.

I know that my taxes are going to go up next year. I've seen Obama's proposals. And the strong Democratic majority in Congress. People making more than $250,000 per year will face higher rates. Capital gains rates will go up, too. So will Social Security taxes. And business tax rates.
Smart business owners will recognize as much income as possible this year before potential new tax laws take effect. That means, depending whether you're on cash or accrual basis, getting as many invoices legally out the door and/or as much cash in the door as you can. These savvy business owners will also be finding ways to distribute income over the next few years. Think paying family members at lower rates, bartering, deferring income, and shifting profits overseas. Smart business owners will be lined up outside their accountant's door already, planning these strategies for 2009 and beyond.

Drive up expenses while investing for the future.

Our President-elect has already stated the need for investment in technologies. He's probably going to continue to support the IRS Section 179 Rule which allows qualifying small businesses to deduct certain equipment purchases. He also plans to eliminate all capital gains taxes on startup and small businesses to encourage innovation and job creation. And he plans to make the research and development tax credit permanent.

Smart business owners know that taxes will come down one day. But in the meantime, at least in the next few years, we know it's time to spend to invest, keep taxes low, and prepare our businesses for the next decade. I think we've all learned that investing in the stock market isn't the greatest idea any more. Maybe the guy's right, and we should plow our money back into something we can control.

Take a careful look at employees.

Obama's a big supporter of unions and a worker's freedom to unionize. He's going to change some of Bush's classification rules which will enable more people, formerly classified as supervisors, to become protected by federal labor laws. He's going to be on the side of striking workers. He's going to step up protection of employees who faceworkplace discrimination and encourage flexible work schedules. He's going to raise the minimum wage. And the Family & Medical Leave Act? He's going to expand that, too, to effect businesses from those now employ 50 or more to those that employ 25 or more. Oh…and something's going to happen with health care. I don't know what. But guess who's going to wind up paying? It's going to be good times for workers. Not such great times for employers.

Smart business owners will always need good people. Valuable, hard-working employees working at good small businesses will have job security. But if the costs of employment are going to increase, then we're going to do everything we can to minimize the number of people we employ. Look for a big push for outsourcing. Look for a new rise in subcontractors. Watch us use the remote technology available today and hire people around the country to do those tasks that we formerly had employees do. Watch us be very, very careful about hiring people over the next few years. The incentives for employing people have shrunk. Our motivation to find ways around these rules will be strong.

Have a few drinks with our estate attorney.

Estate taxes will be higher than ever. Where there was once a hope of lowering, or even eliminating estate taxes, an Obama Presidency means death for that idea (sorry, couldn't resist). Obama's estate tax will be 45% of assets over $3.5 million.

Smart business owners will immediately be seeking out their attorneys and learning the nuances of estate and trust laws. Christmas will start early. Gifts will need to be made, and fast. The transfer of assets to children, grandchildren, and significant others is going to be accelerated. The rest of us will just make sure not to die in the next few years.

So, let's face reality. Smart business owners, with a little forward thinking, will prosper during the Obama )residency. So bring it, baby…bring on the change!

Gene Marks, CPA, is the owner of the Marks Group, which sells customer relationship, service, and financial management tools to small and midsize businesses. Marks is the author of four best-selling small business books and writes the popular "Penny Pincher's Almanac" syndicated column. He frequently speaks to business groups on penny-pinching topics. More penny-pinching advice from Marks can be found at www.quickerbetterwiser.com.
By Gene Marks

10 Great Tips To Boost Your Business

After the rush of a small-business launch and the initial influx of curious customers, many small businesses reach a plateau. The proprietors are busy working hard to sustain the business doing what they've always done because it's worked so far, but this approach often means the business acquires and retains a certain customer base and sales volume and then "hits a wall".

Any business, but particularly a small business, must constantly adapt to changing market conditions, new business tools, and new sales opportunities to continue to grow and prosper. The small business owner must have one eye on routine operational tasks and one eye scanning the horizon for new opportunities. In this article we will discuss 10 breakout ideas for small businesses looking for growth opportunities.

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Start your own small business
Add complementary products and services
A great way to increase sales and bring new customers to your sales base is adding new complementary products and services. But how do you decide what to add without turning your business into a third-rate Wal-Mart? A great place to start is by reviewing the definition of your business.

For example, if you sell house siding, ask yourself, are you in the siding business or the exterior building materials business? The result may be that you redefine your business and add gutters and downspouts, roofing and other coverings to your product line.

6 steps to a better business budget
Can you handle a home-based business?
Another surprisingly simple way to build a list of new products or services is to ask your customers what else they might buy from you if your business sold it. A few friendly conversations with customers and staff will likely get you more information than thousands of dollars spent on professional customer surveys.

Be sure to ask how much they would want to buy and how often to get a sense of whether the demand would be great enough to warrant the additional costs of building up this area of your business.

Explore new market niches
One way to find a new market niche is to seek alternative applications for your existing products and services, and we have a Cheez-y example of how this works. Kraft started out with a spreadable cheese product in a jar that could be spread on crackers for snacks - it was called Cheez Whiz.

Is buying a franchise wise?
This was fine, but selling a cracker topping will only take you so far in this world. That's why Kraft expanded the scope of Cheez Whiz and started promoting it as a base for a variety of dips and food toppings. Soon Cheez Whiz was an ingredient in all sorts of recipes. Kraft wasn't satisfied with only human consumption though. One of the latest unique uses of Cheez Whiz comes from a California fishing lure and bait company that sells Cheez Whiz in a prepackaged bait application, and it buys Cheez Whiz in 55 gallon drums.

If Kraft had stuck with the spreadable-cheese concept, sure, it would have covered a lot of crackers. But by thinking outside of its original intent, Kraft expanded the market and attracted customers it never would have targeted initially.

Find an unmet need in your industry and fill it
When you talk to your customers and clients, listen closely for this phrase: "If only they made/sold X". Your job as a business is to find out what X is and provide it. It sounds obvious, but customers will tell you what they want if you will only take the time to listen. And the good news is that if you can find a way to fill that need, breakout sales are virtually guaranteed.

Take, for example, the local lumber yard that feels the heat as big box retailers muscle their way into the lumber business. There's no way the smaller outfit can compete with the large volume and low prices of the big boxes. Instead the owner listens to his customers who tell him that the big chain stores lack custom or hard-to-find millwork and hardware.

This is an unmet need just waiting to be filled, and it could bring a new client base of suburban do-it-yourselfers who want to buy their unique weekend needs all in one place.

Use Internet and catalog sales tools
If you are reading this article, you're no doubt aware that that the Internet has more to offer than photos of pets dressed up like humans ... or humans dressed up like pets.

Many small businesses limit their sales reach and distribution to on-site, over-the-counter sales, but ecommerce can enhance your market reach, customer base and sales volume. Rather than the standard brick-and-mortar sales front, consider selling from a website, from an online storefront, a blog or from a printed catalog.

Let others sell your private-label products
By allowing distributors, wholesalers, big box stores and competitors to sell your products under their own label (also known as a white label product), you may be able to realise the benefits of increased production volume, including reduced unit cost, increased fixed-cost amortization possibilities, and increased sales revenue, all of which can bring significant bottom line growth to a small business.

This technique also allows the possibility of market segmentation under your own or other labels.

Build a better mousetrap - or at least buy one
We're all aware of the "build a better mousetrap" strategy as a breakout technique, but many small business owners don't know how to find technological innovations, patented products and processes in their industry, or how to license needed new technologies. There are a number of proprietary property licensing firms servicing companies of all sizes. These are easily found online if you search for "Technology Licensing".

There are two types of licensing (in-licensing and out-licensing) and not all firms handle both types. In-licensing involves searching for a particular tech innovation to make a better or different product, or a technique to make it at a lower cost.

In this instance you would ask a proprietary licensing firm to search and acquire a license for your business to acquire the needed, and usually protected, technology. Conversely, if your firm has developed and patented proprietary technology that you want to license to others, an out-license firm will search for businesses interested in buying a license for the technology or innovation from your firm for their own use.

Improve productivity and efficiency through enterprise management software
Enterprise management software integrates your company's existing and separate business functions and project tracking into one system. This streamlines operations, and can provide a parallel off-site system for backup and access from anywhere in the world. Software like this was once reserved for large firms with large budgets and the only suppliers were industry icons like SaaS, Microsoft and SAP.

These approaches can significantly reduce administrative staff load and costs, enhance productivity, efficiency and project tracking accuracy. This functional improvement can bring your business to a whole new level. The good news is that this software can now be had at reasonable rates from a variety of smaller software companies.

Align your products and services with popular values and trends
You may be able to align your company brand, products and services with local festivals, sports teams, known tourism sites, etc., to piggyback on their advertising, promotions and branding. In some cities local merchants combine their advertising with weekend festivals, the regional NFL and AHL team promotions, and profit from package bus tours to local historical sites.

Your business may also benefit from an association with popular commonly held themes such as an environmentally oriented program. This type of branding can enhance the reputation and credibility of your firm in your region and hype your sales.

A small business can often benefit from identifying with "hot" issues. Rather than offering direct dollar discounts, many auto dealerships and auto companies began offering free gasoline points as fuel prices skyrocketed in 2007-2008. The move spiked their sales and spread their promotional costs over an extended period.

In a similar vein, many small-scale fruit and produce farmers were feeling a price squeeze from the supermarket chains until they banded together to fund "buy locally grown food" campaigns.

Make use of clubs, associations and your competitors
Present your products and services to organizations with members who could be customers. Take advantage of your podium access at local service clubs like Rotary, Lions Club, Elks, VFW and the American Legion.

If you are a chamber of commerce or trade association member, volunteer to be a presenter at some of their seminars. If you can speak directly about your business, that's always best, but your presence and individual contacts at these meetings are excellent breakout opportunities.

As a presenter at one of the service clubs you are viewed as an expert and an authority on the subject. Your bio will include your company name, and people like to work with an expert.

It may sound crazy, but it also pays to work with your competitors to grow the market in your industry. Rival hotels and golf courses in resort locations often work together closely to bring more customers to their location. They then compete for the business once the location visit is confirmed. It's called "destination marketing".

Co-competition and "clustering" with competitors can be a breakout technique that works to increase your business.

Export your products and services
Exporting your products and services takes some preparation in documentation, setting up dealers or distributors in foreign countries, learning the importation rules and tariff schedules for the destination countries and learning something about payment conditions and letters of credit.

Determining your transportation mode, understanding transfer of ownership laws, and being knowledgeable about any cultural issues involved is also important.

Exporting makes the world your marketplace and exposes you to customer populations with huge sales potentials, especially in emerging markets with a growing middle class.

Conclusion
There are many ways to adapt, invigorate and position a small business for a breakout to the next level of sales growth and profitability. It takes owner vigilance, awareness and creativity. It also tends to be the fun part of the business as well as its best chance for continued growth and success. In the business world, the only constant is change.

Adapt, break out and prosper.

Dan Barufaldi, Investopedia
http://inhome.rediff.com/money/2008/nov/01invest.htm

Small Business Survival Guide: Surviving The Downturn

Entrepreneurship Director Gives 10 Tips for Business Owners

With Wall Street hitting record lows and one of the bleakest economic outlooks in decades, small business owners are preparing to weather hits from the trickle-down effect of a recession.
What will make the difference between the businesses that survive and those that don't? Is there a way to remain resilient in the midst of so much uncertainty?
Dan Steppe, director of the nation's top-ranked entrepreneur program at the University of Houston's C. T. Bauer College of Business, and Ron Wuensch, an instructor at the Cyvia and Melvyn Wolff Center for Entrepreneurship at Bauer, have decades of experience in guiding businesses through good times and bad. The two have been busy advising current students about how to weather the current financial upheaval, and recently sat down to compile 10 things small business owners can do to emerge from this down cycle unscathed: 1. Face facts -- but don't get drawn into what Steppe calls "the media melodrama." The political maneuvering that prefaced the eventual signing of a $700 billion financial rescue bill threatens to
detract from a more important reality, he says. "We got into this problem because we have too much debt and not enough collateral. These problems have not been solved. We are going to be or are already in a recession."
2. Look for places to reduce debt and only invest in necessities. "Cut
back on everything," Steppe says. "Be cruel and heartless about
what you need to be in business. Get rid of everything you don't
need. Know exactly why you borrow what you do." Wuensch adds:
"With a change in economics you have an opportunity to really look
at your business, and adjust it to the next economic reality."
3. Remember the basics of sound business. Never borrow money on a short-term
loan if you aren't really able to repay it until long-term.
"Forget that you're a financial genius," Steppe says.
"If you're borrowing money, it needs to be paid back over the
life of the asset you're buying. Don't take out a 12-month loan
assuming you'll be able to borrow at 5 percent or borrow at all when
it comes due."
4. Really get to know your customer. Rip out your answering machine, step up
your service and ask what they need. Understand how your target customer
has evolved. In general, "It's best to target high-end or
budget buyers, the middle is gone," Steppe says. "Do something
fast or you're about to go out of business. People will be buying
what they need and cutting back on their wishes and wants."
5. Embrace the current economic reality, Part I. "The bottom of the
cycle is a really good place to start a business," says Wuensch,
"because when you start off on an up cycle, your assumption is that
this (level of profitability) is going to go on forever." Those who
have studied the history of business will be comforted by the knowledge
that downturns always eventually go up.
6. Embrace the current economic reality, Part II. Competitors' failed
businesses present an opportunity. "If the fundamental need of their
business didn't go away, people who understand this can exploit it
(often by buying the failed company or hiring top employees left without
a job)," Steppe says.
7. Postpone a new business launch, and consider the intervening months or
years a gift. "Those who have experience are better off. Go work for
someone else for a few years, fill in the holes of your education and
keep working on your business plan," Steppe says.
8. Network and join together with other business owners. Vote, and act as a
group to wield influence on local and national levels in order to create
a better business environment.
9. Narrow your focus. Energy and technology-based businesses, for instance,
are two fields that will continue to have needs even as the economy
falters.
10. Remember that the most successful business people are highly adaptable.
"That's the heart and soul of being an entrepreneur,"
Wuensch says. "Reading the environment and reacting to it is what
an entrepreneur does." He adds: "Figure out your position of
strength, make good solid decisions based on your position of strength
and the odds really are in your favor.


HOUSTON, Oct 28, 2008 /PRNewswire-USNewswire via COMTEX/ -- UH Bauer Entrepreneurship Director Gives 10 Tips for Business Owners