WELCOME

For over 30 years, MBA has worked with fledgling companies to help them move forward and succeed. Now, with the gloomy economic forecast, there are more people living on unemployment and, consequently, there is renewed interest in starting a business. Here's a tip for remembering what's most important as you take your dream to reality:

Creating a home-based or one-person company has its own set of opportunities and advantages, but pitfalls abound. A common occurrence when starting a business is borrowing money from family or friends.

Here's what typically happens: everybody is excited about Joe who is an expert at fixing computers. Joe wants to start his own company but needs capital for an initial hardware purchase. His family kindly offers a loan. "Pay it back when you can, Joe," says his mother. Can you see what Joe and his family aren't seeing?

A loan from family and friends sets up the possibility of ruining relationships. So be sure to prepare for the worst before it happens. And safeguard those who are safeguarding you by consulting an attorney about your loan to make sure everyone is protected.

Libby Beatty, Chair
MBA Board of Directors

NEWSWORTHY

Changes at the Postal Service

The United States Postal Service (USPS) has announced that mailing service prices are changing starting May 11, 2009. Changes include the price of first-class stamps increasing to 44 cents. The 17 cent rate for additional ounces will remain the same.

On May 11 the price of Forever Stamps will also increase to 44 cents. However, Forever Stamps previously purchased for 42 cents will continue to be honored whenever they are used with no need for additional postage for a one-ounce letter mailing.

The USPS explained that the change in prices is the result of rising operational costs. Postal officials point out that despite recent price increases, they still offer some of the least-expensive postal services in the world.

As a further indicator that the USPS is susceptible to current economic conditions, efforts have been made to cut costs and reduce work hours. In fact, the USPS has asked congress for permission to reduce delivery service to five days a week.

Energy Efficient Grants for Small Business

In an effort to help small businesses become more energy efficient, Pennsylvania has created a Small Business Efficiency Grant program.

The program provides a 25 percent reimbursement (up to a maximum of $25,000) towards the purchase of energy saving equipment or projects. The most common projects include installing energy efficient lighting, heating, cooling, refrigeration, and insulation. Applications are being accepted up until May 2009 or when the allotted $3 million is dispersed.

The Pennsylvania Department of Environmental Protection and the federal Energy Star are hosting online seminars to introduce grant applicants to the Energy Start Portfolio Manager program, which is required for these grants.

BACK TO TOP

MARKETING

Marketing Madness

Sometimes you can drive yourself crazy trying to come up with your next great marketing campaign. The good news is that you don't have to do it alone. Check out this online marketing resource the next time you need some inspiration:

MarketingSherpa.com: This site publishes free reports including tips, guides and ideas from experienced marketers.

Researching your Research Team

Market research can have dramatic results for your bottom line, but asking the right questions while shopping for a research firm is as important as the questions they'll be researching. Here are some questions to ask any company you are considering:

Q: Have you worked with businesses like mine before?
Most research firms offer specialized services for specific industries and different-size client bases. Always ask for a list of references, and if you see competitors on the list be sure to ask the market research firm to sign a nondisclosure agreement.

Q: What research methods will you use?
Market research is usually conducted in three ways: face-to-face interviews, online and over the phone. Basic questions are most efficient for online research. But if you are considering targeting a new market, you would be wise to have face-to-face interviews as part of the research.

Q: Will I own the rights to the research?
There is no black and white here. Most companies own the rights to the research in which they have invested, but some research companies may want rights to their work. Negotiate this matter before signing a deal.

BACK TO TOP

YOUR FINANCES

Clearing the Confusion over Financial Statements

The standard for accounting practices is commonly referred to as the GAAP (generally accepted accounting practices), and most every financial statement reflects these rules. Here is a list of financial statement types to help you understand the hierarchy and use of each one:

Internally Prepared: Generally considered the least valuable to lenders and bankers, these statements are prepared by companies that do their own books and prepare their own interim and annual statements.

Compiled: These are prepared by CPAs from business data supplied by their client. They generally adhere to all GAAP standards but are not assured to be 100 percent accurate. Banks and lenders usually value these statements more than internally prepared.

Reviewed: One step up from compiled, reviewed statements use analytics and inquiry techniques to create a substantial picture of a company's financial situation. They are considered more valuable to lenders and banks.

Audited Statements: This is the highest level of financial statement an accountant can prepare. All publicly-held companies are required to have audited statements by the Securities and Exchange Commission.

Protecting Yourself from Employee Credit Card Abuse

Employee theft can be a hard thing to monitor and even harder to prove. If you have a company credit card and employees who have the access to abuse it, you need to know how to set up a system to protect your business. Here are some guidelines:

Written Policy: Create a policy that outlines the specific do's and don'ts of your company's protocol. Have each employee read the policy and sign an agreement stating they have read, understand and agree to the terms.

Enforcement: Having a policy is a good first step, but it needs to be enforced and actively monitored. An administrator should conduct reviews of monthly statements.

Work with the Credit Company: Ask your credit provider what kinds of protections can be built into the credit card network. Credit companies recommend using a programming code to operationally block the card from being used in certain locations, specifically near gambling establishments. You can also set spending limits by user, per transaction or per day. That way large expenses must be approved on a case-by-case basis by a supervisor or the business owner.

BACK TO TOP

FOR THE HOME-BASED BIZ

Let Them Know How Great You Are:
One-Person Businesses Have a Special Challenge

A home-based business has to work a bit harder than its employer and employee counterparts when it comes to marketing. Your product or service not only has to be good, but you have to be good at letting people know about it. First, come up with a plan:

Who are your customers? When you answer that, then your next question is how to let those prospects know about you. Sometimes, your product should be modified to fit your customers' needs.

Next research and analyze the competition. Not only will this give you an idea of what products are selling and for how much, it will help you compare your promotions and price breaks to what is already working.

Here are a few basic methods to promote a home-based business:

• Try advertising in a complementary business's newsletter or promotional literature. For instance, a painter might want to do reciprocal advertising with a home decorator.
  
  
• Put together a catalog of your best work and add testimonials from those satisfied customers.
  
  
• Start your mailing list now. Include current customers, prospects and referrals. Consider buying a list. Keep adding to your file as you develop new sources.

BACK TO TOP

HUMAN RESOURCES

How to Keep Workers' Comp Under Control

The cost of workers' compensation continues to rise and can put small businesses in jeopardy. Although the premiums are mostly based on things businesses can't control, your employees' workers' compensation history can help keep your costs from rising:

Discuss Benefits of Safety: Employee safety discussions can become a point of contention, but it's important to explain how the cost of claims affects the ability of the business to compensate its employees.

Higher Standards: Creating a safety program isn't just about creating a plan, it is about implementing it. Try rotating schedules allowing employees to change tasks during the day. This can help keep them actively engaged, reducing the amount of risk. Insurance underwriters also take company safety programs into account. This could decrease the impact of past occurrences, thus decreasing premiums. Visit osha.gov for ideas on safety initiatives.

Don't Mis-categorize: In an effort to reduce the workers' comp rate some businesses misrepresent the actual tasks of their employees. If you are audited by your insurance company, they are likely to drop your policy. Most likely, finding another insurer will be difficult.

BACK TO TOP

IT

Audio-Visual E-mails Made Easy

In the past, attaching bulky audio-visual files (such as videos, slideshows, presentations, etc.) to your e-mails was a heroic and often futile task, as storage and bandwidth issues often rendered the message undeliverable or unwatchable. Now small businesses are taking advantage of second-party servers to store and play their messages.

Here are a couple of companies who can help you create material, store it and play it on demand for customers:

Goldmail.com is an application that allows you to combine a recorded message, web pages, Powerpoint slides, business card images, etc. into a web-hosted slide show that is easy to create and deliver. After downloading the editing application you can create presentations up to 10 minutes long that can be viewed by simply clicking on a hyperlink embedded in an e-mail. Visit goldmail.com to try the free 14-day trial.

Eyejot.com is slightly less complicated than Goldmail as it requires no application downloading. Instead, you create a one-minute video with your computer and upload it to Eyejot's web browser. By e-mailing a link to your targets, your video can then be viewed on Eyejot's server.

Keeping Data Storage Costs Down

As many categories of IT spending are reportedly decreasing, data storage has not yet seen a downturn. That's because more and more businesses turn towards providers to keep their data safe and accessible. Here are some ways businesses are storing their data:

Storage-as-a-Service (SaaS) allows businesses to remotely store data and software that can be accessed from any location. Most companies charge monthly rates for the service which often includes maintenance and upkeep of files and programs. Mozy.com is one of the more popular SaaS sites.

Virtualization of data means combining various networks or storage devices to create the appearance of a single storage unit. Vendors like LeftHand and EqualLogic offer storage virtualization solutions to small businesses.

A Solid State Drive (SSD) is a high-performance storage drive that has the ability to plug into most computer systems. Otherwise known as flash-drives, SSDs are extremely convenient for securing data on the go.

BACK TO TOP

NEW MEMBERS

When our member base increases there is more of everything: more creative networking, more benefits and more experienced, enthusiastic business owners. All move our members toward growth, success and the entrepreneurial spirit.

Click here to meet our newest small business partners.

BACK TO TOP

MBA EVENTS OF INTEREST

BusinessLink Networking Event

Join us for bagels, coffee and business, and bring plenty of business cards!

Thursday, March 26, 2009
8 AM - 10 AM
MBA Conference Room - Broomall, PA

$5 for members,
$15 for non-members to attend,
$30 for non-members to attend and join MBA

Click here to learn more or register

BACK TO TOP

Sponsors of MBA's AR Online Newsletter

Sun East Federal Credit Union

(610) 485-2960, extension 217
Offer a great employee benefit

Unless specifically indicated, MBA does not intend mention of companies, products or services discussed in this publication to be construed to be endorsements. The information in this publication is offered as examples that may be useful to our small business readers. Please consult with an industry professional before implementing any of the tips or subscribing to any of the services described above.