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The Importance and Benefits of Small Business Certifications

The Importance and Benefits of Small Business Certifications

There are many important benefits and advantages available to businesses owned by women and/or minorities, but in order to qualify for them a business must become certified as a minority- or woman-owned enterprise. Connections, marketing assistance, and technical training are just some of the benefits that come with certification, says Susan Rittscher, president and CEO of the Center for Women & Enterprise, the New England affiliate of the Women’s Business Enterprise National Council, a leading certifier of women-owned businesses. (Others include the National Women Business Owners Corporation and the National Association of Women Business Owners.)

“First and foremost, if the diverse-owned business is interested in pursuing bids or contracts with a large corporation with a supplier diversity program, a state agency, or a federal agency, they must be certified in order to count toward supplier diversity goals,” Rittscher says. Another benefit of certification is connections to other certified businesses, which can be a powerful network of potential partners, clients, and advisors and mentors. “Certification is a strong marketing and selling tool for business owners when leveraged effectively,” she adds. Certified businesses may also have access to exclusive programs and services such as professional development workshops and networking and matchmaking events.

Tom Greco, vice president of ThomasNet.com, a free platform with a database of more than 610,000 companies, notes that there are many different ownership/diversity certifications that provide a competitive advantage to qualifying companies, and many businesses and government agencies are anxious to do business with them. “Indeed, 72 percent of buyers recently surveyed by CAPS, a research arm of the Institute for Supply Management, said they would be increasing their spending with diverse suppliers. Diverse businesses include Women-Owned Businesses and Minority-Owned Businesses as well as Veteran-Owned Businesses, Small Disadvantaged Businesses, HUBZone Businesses, and Service-Disabled Veteran Businesses,” he says.

While the process for obtaining various kinds of certification varies, Greco suggests that a business seeking any of the certifications mentioned above start by self-registering with the federal government’s System for Awards Management (SAM), since that is a requirement for most types of certification. Next, seek out one of the major certification organizations for your diversity group—such as WBENC for a women-owned business or the National Minority Supplier Development Council for a minority-owned firm. In most cases, minority-owned business certification falls under the purview of the individual states. Check out this useful list of certifying agencies by state to learn more.

It is important to note that in order to qualify for minority- or women-owned certification, the business must not only be owned by minorities or women but also controlled by them, says Dean dt ogilvie [ed. note: lack of capitalization is intentional and should be retained], the dean and a professor of business strategy at the Rochester Institute of Technology’s Saunders College of Business. “They have to be the ones making the decisions about strategy, business, and structure. They can’t just be figureheads to get the certification,” she warns. Owners must provide required documentation to prove ownership and control; they must have contributed capital and/or expertise to the business; they must be U.S. citizens (or, for some programs, resident aliens); and they must be independent in decision-making, Rittscher says.

Lisa Firestone is president and owner of Managed Care Advisors (MCA), a woman-owned employee benefits and disability management consulting and workers’ compensation case management firm based in Bethesda, Maryland, and she believes certifications and the set-asides to which they provide access play an important role in leveling the playing field for companies like hers. MCA is a certified minority business enterprise in Maryland and several other states and a WBENC-certified woman-owned business. In 2012 it also became certified as an Economically Disadvantaged Woman-Owned Small Business. “Honestly, before my business entered into government contracting, certifications and set-asides were unfamiliar concepts, and ones that made me a bit uncomfortable,” she says. “But what I have learned is that there really is no ‘special consideration,’ but just an opportunity to level the playing field and compete effectively. Certifications can get your business noticed, but they are not a direct conduit to a contract. You still have to get out there, compete for that business, and win it.”

May 15, 2014 Today's Business, , , , , , , , , , 0 Read more >

Using Your Benefits of Certification To Advance Your Business

Using Your Benefits of Certification To Advance Your Business

There are many important benefits and advantages available to businesses owned by women and/or minorities, but in order to qualify for them a business must become certified as a minority- or woman-owned enterprise. Connections, marketing assistance, and technical training are just some of the benefits that come with certification, says Susan Rittscher, president and CEO of the Center for Women & Enterprise, the New England affiliate of the Women’s Business Enterprise National Council, a leading certifier of women-owned businesses. (Others include the National Women Business Owners Corporation and the National Association of Women Business Owners.)

“First and foremost, if the diverse-owned business is interested in pursuing bids or contracts with a large corporation with a supplier diversity program, a state agency, or a federal agency, they must be certified in order to count toward supplier diversity goals,” Rittscher says. Another benefit of certification is connections to other certified businesses, which can be a powerful network of potential partners, clients, and advisors and mentors. “Certification is a strong marketing and selling tool for business owners when leveraged effectively,” she adds. Certified businesses may also have access to exclusive programs and services such as professional development workshops and networking and matchmaking events.

Tom Greco, vice president of ThomasNet.com, a free platform with a database of more than 610,000 companies, notes that there are many different ownership/diversity certifications that provide a competitive advantage to qualifying companies, and many businesses and government agencies are anxious to do business with them. “Indeed, 72 percent of buyers recently surveyed by CAPS, a research arm of the Institute for Supply Management, said they would be increasing their spending with diverse suppliers. Diverse businesses include Women-Owned Businesses and Minority-Owned Businesses as well as Veteran-Owned Businesses, Small Disadvantaged Businesses, HUBZone Businesses, and Service-Disabled Veteran Businesses,” he says.

While the process for obtaining various kinds of certification varies, Greco suggests that a business seeking any of the certifications mentioned above start by self-registering with the federal government’s System for Awards Management (SAM), since that is a requirement for most types of certification. Next, seek out one of the major certification organizations for your diversity group—such as WBENC for a women-owned business or the National Minority Supplier Development Council for a minority-owned firm. In most cases, minority-owned business certification falls under the purview of the individual states. Check out this useful list of certifying agencies by state to learn more.

It is important to note that in order to qualify for minority- or women-owned certification, the business must not only be owned by minorities or women but also controlled by them, says Dean dt ogilvie [ed. note: lack of capitalization is intentional and should be retained], the dean and a professor of business strategy at the Rochester Institute of Technology’s Saunders College of Business. “They have to be the ones making the decisions about strategy, business, and structure. They can’t just be figureheads to get the certification,” she warns. Owners must provide required documentation to prove ownership and control; they must have contributed capital and/or expertise to the business; they must be U.S. citizens (or, for some programs, resident aliens); and they must be independent in decision-making, Rittscher says.

Lisa Firestone is president and owner of Managed Care Advisors (MCA), a woman-owned employee benefits and disability management consulting and workers’ compensation case management firm based in Bethesda, Maryland, and she believes certifications and the set-asides to which they provide access play an important role in leveling the playing field for companies like hers. MCA is a certified minority business enterprise in Maryland and several other states and a WBENC-certified woman-owned business. In 2012 it also became certified as an Economically Disadvantaged Woman-Owned Small Business. “Honestly, before my business entered into government contracting, certifications and set-asides were unfamiliar concepts, and ones that made me a bit uncomfortable,” she says. “But what I have learned is that there really is no ‘special consideration,’ but just an opportunity to level the playing field and compete effectively. Certifications can get your business noticed, but they are not a direct conduit to a contract. You still have to get out there, compete for that business, and win it.”

 

April 30, 2014 Today's Business, , , , , , , , , , 0 Read more >

7 investment principles for entrepreneurs

inc7 investment principles for entrepreneurs

by Karl Stark and Bill Stewart

 

7 investment principles for entrepreneurs. Those of us who have large investments in private businesses aren’t like typical savers. We need a different strategy for our personal investments.

 

Most personal finance experts tell a fairly consistent story about the need to build a diversified investment portfolio focused on long-term growth. But that type of investment strategy doesn’t necessarily apply to entrepreneurs and owners of private businesses, especially high-growth businesses.

We are a unique lot. Our concentrated investment in a risky but highly attractive company means that our overall investment portfolio is skewed differently than the average investor. One business owner once told us, “My business is my retirement strategy.” This perspective underscores the importance of building a plan that’s unique to your risk profile and your appetite for entrepreneurial opportunities. 7 investment principles for entrepreneurs

 

7 investment principles for entrepreneurs. Here are seven personal investment principles we have learned to keep in mind when your job is growing a business:

 

1. Build a “no touch” portfolio.

When you invest in stocks, bonds, and mutual funds, put them out of reach by creating “no touch” portfolios in accounts that you will never access. This will reduce the temptation to dip into long-term investments to address a short-term need for a cash infusion if your business is struggling. You can create more protection by loading up your retirement accounts and your kids’ education accounts. These are places where there is a huge financial penalty to accessing those funds, which will keep you honest. 7 investment principles for entrepreneurs

 

2. Protect your assets.

Structure your investments–and your company–so that creditors can’t reach your money if the business runs into financial or legal peril. In addition to structuring your business appropriately, this also involves transferring assets to spouses and children where possible and investing within retirement accounts and real estate, which in some cases are out of reach. 7 investment principles for entrepreneurs

3. Diversify away from your business.

Seek investments in your portfolio that are counter cyclical to your industry and business cycle. Investing in commodities may be risky in general, but if your business is heavily linked to the broader economy or public equity markets, a counter cyclical asset such as commodities may be attractive.

 

4. Invest more conservatively outside your business.

Most investment professionals recommend a heavy equity portfolio for younger professionals and a larger fixed-income portfolio for older individuals. Given that an entrepreneur’s business may largely cover her “equity risk,” she may be better off with a more conservative portfolio outside of her business. 7 investment principles for entrepreneurs

 

5. Build a cash cushion for future entrepreneurial ventures.

Most of us can’t pass up a good deal when it comes along. That’s why we became entrepreneurs in the first place. If you have the luxury of cash outflows from your business, put a sufficient amount aside so that you can keep some dry powder when new opportunities present themselves. 7 investment principles for entrepreneurs

 

6. Make smart business investments.

The best way to protect your personal finances is to ensure that your business has a sound, balanced approach to investing its capital. Our recent column on a growing business’s investment strategy discussed this in some detail. 7 investment principles for entrepreneurs

 

7. Build a great business model.

Of course, the best personal investment strategy may be your business itself. After all, your business can be your retirement strategy if it’s successful. Building your business should be what you do best. So focus your time and effort there and leave the investing to a professional. 7 investment principles for entrepreneurs

We should note that although we advise private investors on investing in growth companies, we aren’t investment advisers. We can share our own thoughts and experiences, but for more targeted advice you should seek a professional investment adviser. 7 investment principles for entrepreneurs

 

Article provided by Inc.com. © Inc.

June 1, 2013 Today's Business, , , , , , , , 0 Read more >

Profit Centers: How to know how much money your business needs to survive and grow

Profit Centers: How to know how much money your business needs to survive and grow. Today small business get in trouble by not focusing on the things that make them more profitable – they do not take advantage of their profit centers – as a small business you must know and realize where you make the most profits – KNOW YOUR PROFIT CENTER!

Running a business day to day and figuring out your profit and loss (P&L) usually end up a task for an accountant once or twice a year, however maintaining a healthy business, you have to track all your revenues and expenses for your business at least quarterly to understand your debt, your tax liability, how much to reinvest in your business and build up a cash reserve. You need to know and understand and compare your business  every business in your industry.

Here are a few thing you know to be mindful in assessing your profit center.

  1. Trim the fat. Trimming the fat in your business
  2. Know Your Profit Center – You Must Focus on Your Target
  3. Small Business Needs Large Profits
  4. Minimize Overhead Results in Higher Profits
  5. Network Your Business and Use Social Media to Grow

 

October 11, 2012 Today's Business, , , , , , , 13 Read more >

Discounting’s Downside: The long-term costs of constant price cuts and ‘always-on sale’ mentality by Cindy Waxer

Discounting’s Downside: The long-term costs of constant price cuts and ‘always-on sale’ mentality by Cindy Waxer.

Customers love a good bargain. But for a small business, deciding on a price that will lure shoppers while still generating a profit is a difficult endeavor. After all, if you price a product too low, a deep discount can significantly eat into a company’s profits. At the same time, by failing to offer an appropriate price cut, you might push consumers into the arms of competitors.

While there’s no secret formula for setting a price, successful small businesses watch out for the dangers of deep discounting. Read what today’s experts have to say about seven important risks of constant price cuts.

Price sensitivity. Selling your products and services at a fraction of the cost can drive consumer price sensitivity, affecting shoppers’ buying preferences and encouraging them to pinch pennies rather than part with their hard-earned dollars. “You’re attracting a discount coupon shopper and that’s not how you make money,” warns Bob Phibbs, a retail consultant and author of Groupon – Why Deep Discounts are Bad for Business. “With constant discounts, the only way you’re going to keep customers coming back is by giving them equally as big a discount every time.”

In fact, according to a recent Retail Systems Research report, Retail Pricing In a Post-Channel World, 67 percent of survey respondents report consumer price sensitivity as a top-three business challenge, up from 46 percent in 2010.

Discounts_PQ.jpgEroded profit margins. While price chopping pleases shoppers, it can drastically eat into a small business’ profits. “Companies don’t run on revenue; they run on profit,” warns Brad Sugars, founder of business coaching firm ActionCOACH. “The moment you start discounting, you lose a lot of your profits.”

Phibbs agrees. “When we give these deep discounts, we kid ourselves and say that it’s because the economy is bad or we need the money. But what we’re essentially doing is giving up on being able to charge full price.”

Lost customers. Consider the loyal, long-time shopper who purchased a blouse in-store for $80 and then discovered that her neighbor purchased the same item on the company’s website for $60. Chances are, you’ve not only angered that loyal customer, but you’ve lost her to the competition. By failing to consistently cut prices across multiple channels, Phibbs says, “Your loyal customers are going to wind up very upset with you. That’s because someone who hasn’t made you successful is now getting a better deal than them.” Instead, Phibbs recommends that small businesses “understand that it’s about getting people who already love you to come back more often.”

The wrong customer. Face it, says Sugars: “The simple reality is there are always going to be people who go towards the best price.” But do you really want those folks to be your key customers? According to Sugars, small businesses that heavily discount their products and services will “start attracting a type of customer who isn’t there for the service, the loyalty, or the value you add; they’re there for the price. The moment you start targeting these price shoppers, your quality customers will be long gone.”

What’s more, this discount pricing strategy may devalue your brand’s ultimate appeal. American automakers learned this hard lesson during the early part of the last decade, when their heavy reliance on incentives to sell their cars temporarily boosted sales but sent the wrong, long-term message to consumers. As Claes Fornell, director of the National Quality Research Center, explained in a Ward’s Auto article from that period, consumers began to perceive non-discounted vehicles from imported brands as having more value than the price-chopped domestic brands. “And once you start discounting it’s hard to get out of the habit, and consumers come to expect it,” Fornell noted. “Discounts are a two-edge sword and have a negative effect. Low price contributes to a low opinion.”

Price wars. Pricing your products competitively is key to running a successful business, but not if it means engaging in an all-out war where business owners lose perspective. “There’s always somebody out there willing to give a lower price than you—I don’t care what it is,” says Phibbs. “But it’s a bad rabbit hole to go down.”

Ignoring the obvious. A trap that many small business owners fall into is focusing more on competitors’ prices than on their customers’ needs. “Learn how to sell,” advises Sugars, whether that entails offering customers special services such as home delivery, or refining your sales pitch. “At the end of the day, the best stores are going to curate the best customer experience,” says Phibbs. “And by giving people the experience they want, customers are going to drive past a competitor to get that experience again. He cites customer-conscious companies such as Lululemon Athletica and Victoria’s Secret as businesses that are “hitting on so many levels that are right because the customer experience isn’t just okay, it’s great.”

http://smallbusinessonlinecommunity.bankofamerica.com/community/managing-your-finances/accountingandbudgeting/blog/2012/09/12/discounting-s-downside-the-long-term-costs-of-constant-price-cuts-and-always-on-sale-mentality

September 12, 2012 Today's Business, , , 5 Read more >

When is the Right Time to Bring Small Business Financial Experts on Staff?

When is the Right Time to Bring Small Business Financial Experts on Staff?Small Business – When is the Right Time to Bring Small Business Financial Experts on Staff? by Susan Caminiti.

One of the distinguishing characteristics of nearly all entrepreneurs is the passion they bring to their businesses. But whether you’re a skilled butcher, a terrific baker, or the best candlestick maker in town, there are functions of your company that you’ll need help with. And there’s no aspect of running a small business where this is more apparent than your finances for your small business.

“Money is so personal and that makes many entrepreneurs more skittish about handing over control,” observes Mark Koziel, CPA and vice president of the American Institute for Certified Public Accountants (AICPA), the world’s largest association representing the accounting profession. “A small business owner who wouldn’t think twice about reaching out for IT help is often the one who thinks that they, or maybe a bookkeeper, can handle all their finances.”

To figure out the kind of financial expertise your business needs—and when it’s time to hire a controller or even a chief financial officer—experts say it’s essential to answer a few basic questions:

What kind of growth do you envision for your small business? Will it remain a fairly small venture or will the business eventually expand to the point where it requires hiring dozens of employees?
Does the business finance receivables and inventory? Will it need funding for additional locations, offices, and equipment?

Are you looking to attract venture capital or any other type of private equity?

“When I work with small business owners I ask them to honest with me about how big they really want their companies to be,” says Barbara Steinmetz, president of Steinmetz Financial Planning in San Mateo, California. “Not every business owner wants to run a huge company with hundreds of employees.”

In that case, she says, a good bookkeeper is often enough. This person, says Steinmetz, can be full-time or part-time and should be able to keep accurate financial records that are detailed enough to enable an outside accounting firm to prepare your company’s taxes. Don’t wait until tax season, however, to discover that certain information might be lacking. Advises Steinmetz: “Keep in touch with your tax professional throughout the year. Ask if they have the documents they need and if they truly have your company’s complete financial picture.”

Despite what many small business owners may believe, there’s not one milestone revenue figure that signifies it’s time to move beyond a bookkeeper and hire a controller. Even if your business is small sales-wise, if it’s growing quickly and adding customers at a rapid clip, you should hire a controller, says Koziel of the AICPA.

Peter Fazio, executive vice president of Sterling Affair Caterers in New York City, first hired a controller two years ago when he was “done making so many mistakes.” In the early days of his company, he says, having a bookkeeper on staff was enough to handle Sterling’s bills and its receivables. But as his company grew—it now caters nearly 500 events annually—and Sterling began working with more and more vendors, Fazio says he knew it was time to bring in someone who could take a more holistic approach to Sterling’s finances.

For instance, when he was interested in looking for alternatives to the company’s outside payroll vendor, his controller was able to investigate different options and negotiate a better price, saving the company about $15,000 this year. Sterling’s controller was also the person who initiated conversations with different banks to get a better rate on the company’s line of credit. “I may have the idea of different things to look into, but I don’t have the time to follow through,” Fazio explains. “[The controller] has enabled me to take this company to the next level because I have her to focus on all the financial issues while I run the company and plan our events.”

One of the biggest obstacles in hiring any financial expert on staff is the trust factor. Fazio admits it was tough at first. “This employee knows every single thing about your business, including what you pay each employee and how much money you make,” he says. However, he is adamant about one thing: “If you try to segregate out information or just give a controller some information and not all of it, the relationship will fail,” Fazio warns. “Sign whatever confidentiality agreement you have to, but make sure your controller has all the facts.”

In addition, if a company is looking to attract venture capital or any other type of private equity, then it’s likely to need a chief financial officer. Ron Johnson, president of WAGIC, a product design, engineering, and manufacturing company based in Los Gatos, California, has had a CFO on board since his firm’s earliest days in the mid-1980s. “We raised outside capital when we were first starting out and those investors wanted to know we had someone who had plenty of experience managing the finance side of the business,” he says.

Johnson does acknowledge that for many small, early-stage businesses, cost is a factor. “At the end of the day, it does come down to what you can afford,” he explains. “However, spending $3,000 or $4,000 a month to have the services of a part-time CFO may be the best money you’ll ever spend because of the level of financial expertise they bring.”

February 24, 2012 Today's Business, , , , , , , , , , , , , , 3 Read more >

Payroll Best Practices: What Fits Your Small Business Best?

By Cindy Waxer.

Most small businesses understand the value of smart payroll practices. But many fail to anticipate the negative impact of this business-critical activity if poorly executed. While a solid payroll system can keep employees happy and the government satisfied, poor payroll practices can create tax-related nightmares, send labor costs skyrocketing, and prompt an employee exodus.

Fortunately, small businesses need not invest millions in high-end software programs or high-priced consultants to make the most of payroll. Here, experts and entrepreneurs alike chime in on what it takes to put in place world-class payroll practices on a small business budget.

1. The benefits of a do-it-yourself strategy

When it comes to payroll, using pen and paper or a simple Excel spreadsheet is still commonplace. That’s because a manual payroll system is easy to get off the ground and one of the most cost-efficient approaches to issuing checks and tracking payments. What’s more, a DIY-payroll system doesn’t have to bend to the constraints of an off-the-shelf software program. Nor must small business owners spend thousands of dollars customizing a manual payroll system.

Pull-Quote-Tall.pngHowever, there is often an opportunity cost to entrepreneurs who take on the burden of handling their own payroll. After all, hours spent calculating overhead, figuring tax withholding, and issuing payments translate into time not spent on things like refining your business’s current production capability, brainstorming new product ideas, or prospecting for new customers. These intangible losses won’t directly show up on a profit and loss statement, but after a few years of stagnant growth, an entrepreneur might discover that their time is too valuable to be devoted to back-office clerical work like payroll.

2. Deploy a software program that’s right for your business

These days, there’s no shortage of payroll software packages promising to simplify accounting, calculate and remit payroll taxes, print paychecks, ensure government compliance and provide paystubs to employees.

Just ask Barbara Kittrell, owner of Kittrell/Riffkind Art Glass, a Dallas-based art glass studio specializing in custom-stained glass. “When I used to do my taxes, it would take hours because I had no way of tracking it manually,” recalls Kittrell. “It used to take way longer and it all had to be done by hand and then verified. I tended to be a little dyslexic with numbers so I had to do everything over and over just to make sure it was right.”

That is until Kittrell converted to a small business accounting and payroll software solution. Today, Kittrell says payroll activities that used to take an hour-and-a-half now require “just minutes” to complete. Better yet, the system allows her to easily add and subtract new workers as they come and go, making it easy to adjust to seasonal workflows.

CrowdSPRING’s introduction to payroll software wasn’t quite as smooth as that of Kittrell’s but the adventure has since paid off. The Chicago-based online marketplace for buyers and sellers of creative services began with one payroll package that Mike Samson, the company’s co-founder, describes as nothing short of “awful.” Plagued by an unfriendly user interface and poor customer service, he eventually switched to a different software provider and now Samson says crowdSPRING’s 14 employees couldn’t be happier.

“They have access to their accounts, they can print a copy of a check stub, or sign right in and have access to everything,” says Samson. “It saves us money and our employees love it because [with its direct deposit capabilities], nobody wants to have to deposit a paycheck nowadays.”

3. Consider outsourcing

Sometimes running the most seamless payroll processes means not running them at all. At least, not in-house. Many small businesses turn to third-party providers to oversee their payroll practices.

“Because of its complexities and the changing rules and regulations, I’m a fan of outsourcing payroll,” says Tom Gegax, founder of Gegax Advisors and author of The Big Book of Small Business: You Don’t Have To Run Your Business By The Seat Of Your Pants. “A small business doesn’t want to mess around with payroll. Plus, it’s so inexpensive to outsource payroll—for a tiny company, it’s worth it.”

To learn more, check out our earlier article on the decision to outsource payroll.

It’s easy to do the math. Simply calculate the number of hours your employees spend on a weekly basis tending to payroll activities. Then compare these costs to the price of the packages being offered by third-party providers. Don’t forget to factor in additional in-house costs such as printing expenses, distribution fees, creating tax documents, and more. Chances are, you’ll save money by handing over payroll activities to an outsourcing company.

But not all small business owners are ready and willing to sing the praises of outsourcing. As far as Samson is concerned, payroll software offers “phenomenal access to information” while outsourcing arrangements can make business owners feel as if they’ve lost control over their finances and payroll processes, so choose accordingly.

Be true to your company

Doing it yourself, using a payroll software package, or paying for a third-party provider—these are a small business owner’s major choices when it comes to satisfying your employees and providing the best possible payroll practices. But remember: Just as no two companies are alike, no two small businesses are likely to have exactly the same set of processes. So decide what’s right for your specific company and industry.

November 10, 2011 Today's Business, , , , , , , , , 57 Read more >