Best Practices for Your Business

Today's small business owner is confronted with new business problems and opportunities on a regular basis. Running a company requires the ability to look outside the business for solutions, ideas, and best practices. However, borrowing ideas and best practices can be wrought with danger. Learn what big business already knows about benchmarking best practices and how to effectively borrow or steal ideas, tactics, and strategies.

What is a Best Practice?
A best practice is the process of finding and using ideas and strategies from outside your company and industry to improve performance in any given area.

Big business has used best practice benchmarking over decades and realized billions in savings and revenues in all areas of business operations and sales. Small business can reap even greater rewards from best practices.

Benefits of Best Practices for Small Business
Reduce Costs:
Small companies often do not have the deep financial pockets of big business to "re-invent the wheel". By learning what other companies have successfully done, a small business can save money without testing new ideas.

Avoid Mistakes:
Solving business problems on your own can result in costly errors. Learning what others have done can keep your business in business.

Find New Ideas: 
Adopting the "Not-Invented-Here" attitude can spell disaster for small business. Learn to borrow the best from beyond your company.

Improve Performance:
When your business looks for best practices outside your business, a wonderful thing happens. You raise the bar of performance and set new standards of excellence to propel your company forward. How to Bake a Best Practice Cake?
 The methodology for best practice study is critical. This is where most small businesses fail. It is like baking a cake. You need the exact ingredients and recipe to create the same result. This also applies to business.
 For example, you learn of another retailer running in-store seminars to drive traffic and sales. Instead of rushing out to try the new idea, you'll need the recipe. What results did the retailer achieve? And how did they achieve it?
 After careful, probing you discover the in-store seminars have increased traffic and sales by 6% and 12%, respectively. Also, you find the key ingredient is to make attendance confirmation calls to all the seminar attendees the day before or else attendance drops to zero. After finding all the steps to success than you are ready to effectively implement the idea in your company

Steps for Best Practices

• Identify one business process or service to improve. (Product delivery)
• Look for one metric to measure. (Late Shipment %)
• Find competitors and companies within your industry and outside your industry.
• Collect information on the successful, best practices of other companies.
• Modify the best practice for your situation. 
• Implement the process then measure the results.

Remember to survey companies of all sizes. And the time to complete a best practice study doesn't have to take months. A few weeks of literature research and telephone interviews are often enough for small business.

Do you have examples of best practices that you have used in your business and can share with others? Please share below...

Do Your Homework When Starting Your Business

Avoiding Legal Problems
Arm yourself with basic knowledge of business law so you're alert to your company's obligations and rights.

Practice prevention. Have your attorney review contracts and agreements before they're signed.

Get your attorney's opinions on documents you have drafted - such as employee policies - before you put them in place. You want to make sure they meet the requirements of the law.

Familiarize yourself with trademark and patent laws so you don't violate them. Learn how to apply for a trademark or copyright should you need to do so.

Understand the law as it pertains to your organizational structure. Your legal obligations as a C corporation, for example, will differ from those as a sole proprietor.

Policies for Employers to Implement
A policy, which states the company is an equal opportunity employer and strongly enforces a nondiscrimination policy.

A strong sexual harassment policy detailing what isn't accepted at your place of business.

A policy about phone and/or e-mail communications.

Expectations of employees.

Include how your company plans to monitor or take action on all of the stated policies.

Obtaining a Lease
Be prepared to negotiate. The landlord's printed lease will most likely favor the landlord.

Match the lease to your business's needs. If location is important, you'll want a longer lease - or a shorter one with options to renew.

Understand who pays what - such as utilities, repairs, insurance and even taxes. You may want to pay slightly higher rent for eliminating these items.

Be aware that your negotiating power is stronger in a market where lots of commercial space is available.

Remember that a lease is a legal document. Have your attorney review it before you sign.

Advertising Legally
Don't engage in false, misleading or deceptive advertising. Make sure your claims are accurate.

Obtain written permission to use photographs, endorsements, or quoted matter. Remember that some material is protected by copyright.

Don't use words and phrases like "free" and "easy credit" unless they're true. Easy credit, for example, means you offer credit to poor risks without charging them more for it.

Remember that consumers can sue you for deceptive advertising, and federal, state, and local governments can take action against you.

Consumer Credit Basics
Know the laws. If you must grant credit directly to consumers, familiarize yourself with both federal and state consumer credit statutes.

Tell the truth. The Truth in Lending Act requires you to disclose exact credit terms, such as the monthly finance charge and annual interest rate.

Follow correct procedures for handling billing mistakes. If you don't, you may have to give the customer a $50 credit even if your billing was right.

Don't discriminate on the basis of race, color, religion, national origin, age, sex or marital status when granting credit.

Developing an Employee Handbook
Some company policies have to be in writing - such as policies on sexual harassment and discipline - so employees know what's expected of them. These can form the basis of an employee manual.

Draft your employee handbook yourself or assign someone else in the company to do it. Then have it reviewed and fine-tuned by your lawyer.

Include a disclaimer stating clearly that the manual is in no way a legal contract.

Make sure every employee receives a copy of the handbook and signs a statement saying they've read it. Review it every six months or so and update it as needed.

Protecting Yourself from Employee Lawsuits
Obey the laws regarding employees. Don't discriminate in hiring, for example, or permit sexual harassment.

Hire carefully. Look for people with a strong work ethic and avoid hiring those who feel life owes them something.

Adopt strong employment policies. Communicate them clearly to employees and enforce them.

Keep good records on employee mistakes, even when they're not firing offenses. Document your own actions and the reasons behind your employment decisions.

Consider buying employment-practices liability insurance (EPLI).

When Military Duty Calls
Employees have the right to use their vacation time or personal days during their service; they may also opt for unpaid leave.

You aren't obligated to pay employees who are absent on account of military duties, unless your company policy says you will.

If your company does have a paying policy for military service time, you can't require employees to use their vacation or paid leave time.

You must extend the same benefits to employees who are absent for military service as you do to employees who are on nonmilitary leaves of absence.

You may temporarily fill vacancies left by military employees absent for service. However, upon their return, military employees are entitled to the same positions they left.

Brought to you by SCORE, "Counselors to America's Small Business."

The Basics of a Good Business Plan

A good business plan has two goals: It should describe the fundamentals of your business idea and provide financial data to show that you will make good money. Beyond that, the content of your business plan depends on whether it's for potential investors or a financial projection just for yourself.

How Will You Use Your Business Plan?
Depending on whether you're trying to attract investors or are creating a blueprint for your own use, a business plan can take somewhat different forms.

Attracting Investors
If you will use your business plan to borrow money or interest investors, you should carefully design your plan so that it sells your vision to skeptical people. Normally this means your business plan should include:

• persuasive introduction and request for funds
• statement of the purpose of your business
• detailed description of how the business will work (including what your product or service will be, whether you'll have employees, who will supply your goods, and where you will be located)
• an analysis of your market (who your customers are)
• an evaluation of your main competitors
• a description of your marketing strategy (how your business will reach plenty of customers and fend off your competitors)
• a résumé setting forth your business accomplishments, and
• detailed financial information, including your best estimates of start-up costs, revenues and expenses, and your ability to make a profit.

Together, all the parts of your plan should reveal the beauty of your business idea. You want to show potential lenders, investors, or people you want to work with that you've hit upon a product or service that customers really want. In addition, you should prove that you are exactly the right person to make your fine idea a roaring success.

Get Help If You Need It
Because your business plan will be submitted to people you don't know well, the writing should be polished and the format clean and professional. Your numbers must also be accurate and clearly presented. However, not all business people are great writers or mathematicians. Consider paying a freelance writer with small business savvy to help you polish your plan. Similarly, if you are challenged by numbers, find a bookkeeper or accountant to provide needed help.

Funding the Venture Yourself
If you're not looking for outside money, your financial projections will be the most important part of your business plan. These projections will tell you the cost of your products or services, the amount of sales revenue and profit you can anticipate, and, perhaps most importantly, how much you'll have to invest or borrow to get your business off the ground.

Because you won't use your plan to ask for money, you can create an informal business plan that omits some of the elements listed above. For example, you don't need to worry so much about making a sales pitch or a slick presentation, and you may decide to skip the résumé of your own business accomplishments, but think twice before leaving out too much. Any new business will need to introduce itself to people -- for example, suppliers, contractors, employees, and key customers -- and showing them part or all of your business plan can be a great way to do it.

Financial Projections
Forecasting the finances of your business may seem intimidating or difficult, but in reality it's not so bad. Good planning consists of making educated guesses as to how much money you'll take in and how much you'll need to spend -- and then using these estimates to calculate whether your business will be profitable. Here are the financial projections you should make:

• A break-even analysis. Here you'll use income and expense estimates to determine whether, in theory at least, your business will bring in enough money to meet its costs.
• A profit-and-loss forecast. Next, you'll refine the sales and expense estimates that you used for your break-even analysis into a formal, month-by-month projection of your business's profit for the first year of operations.
• A cash flow projection. Even if your profit-and-loss forecast tells you that your business will have higher revenues than expenses -- in other words, that it will be profitable -- those numbers won't tell you if you'll have enough cash on hand from month to month to pay your rent or buy more inventory. A cash-flow projection shows how much money you'll have -- or how much you'll be short -- each month. This lets you know if you'll need a credit line or other arrangement to cover periodic shortfalls.
• A start-up cost estimate. This is simply the total of all the expenses you'll incur before your business opens. If you need to pay off these costs during the first year or two of business, they should be included in your month-to-month cash-flow projection.

Again, no matter who your audience is, you should be as thorough as possible when calculating your break-even analysis and profit-and-loss forecast. The last thing you want is to experience the very real misery of starting a business that never had a chance to make a solid profit.

Helpful Tips When Preparing Your Estate Plan

Forbes recently published an article that provides helpful estate planning tips for both those with estate plans in place and those who are just beginning the planning process. The five estate planning tips listed in the article are below:

• Prepare a will that declares who inherits both financial and nonfinancial assets. Assets that have beneficiary designations may not be governed by a will, so it is important to consult with the appropriate financial institution to determine what rules apply. 

• A trust can help ensure that certain assets are allocated to cover specific expenses like college and special needs expenses.  

• Consider using tax-efficient strategies to lower or eliminate the estate and income tax your beneficiaries will owe on their inheritances. These strategies include gifting amounts to beneficiaries and leaving taxable assets to charities while giving tax-free assets to beneficiaries.

• Life insurance proceeds can be used to offset estate and income taxes. Life insurance proceeds are tax-free, and the entire amount can be used to pay taxes owed by beneficiaries. 

• One of the best way to create an effective estate plan is to work with an estate planning team. Involving an estate-planning attorney, a tax professional, and a financial advisor can help ensure that the estate plan is the best fit for the size of the estate and the outcome desired.  

Not Sure What it Takes to Form a Company?

The thought of forming a small business can be extremely exciting but also very overwhelming.  The truth of the matter is that the American dream of growing a business from the ground up doesn't have to remain a fantasy--it can become reality.  Of course, it's going to take a lot of hard work and, most importantly, research. If you handle it correctly from the onset, your foundation will be made for a very successful business.

Your very first decision should be figuring out exactly what type of business you want to form.  Many entrepreneurs decide to form corporations, which exist as a separate legal entity from their owners and provide a layer of protection for owners when it comes to their personal assets.  The following ten tips should help get you started as you consider the logistics of forming a corporation.

Choose a Business Name.  You'll need to research the specific regulations governing corporate names in your state, and check whether your desired name is available.  Make sure you choose one that is professional, but appealing to consumers.  It's a good idea to have a few alternatives in mind, just in case your top pick is taken.

Appoint Corporate Directors.  Directors play a crucial role in corporations.  They're responsible for making major policy and financial decisions for the business.  Examples of decisions directors typically make include authorizing stock issuance, appointing corporate officers (and setting out their salaries), and approving loans to and from the corporation.  Make sure to select trustworthy people to take on this role!

File Articles of Incorporation.  Once you choose a business name and decide on which directors to appoint, your next step will be to file Articles of Incorporation (or whatever your state calls them) with your state's corporate filing office.  For most states, this responsibility lies with the Secretary of State's office in the state's capital city.  Articles of Incorporation do not have to be complicated or overly involved.  They must, however, specify a few vital details such as your corporation's name, principal office address, the names of its directors, and the name and address of one person who will serve as the company's "registered agent."  Typically, that individual functions as the person who can be contacted in the event someone wishes to serve a lawsuit against the corporation.

Draft Corporate Bylaws.  Bylaws are the internal rules and regulations that will govern the daily operations of a corporation.  Examples include when and where the corporation will hold directors' and shareholders' meetings, and what the voting requirements for directors and shareholders will be.  The corporation's directors typically adopt the company's bylaws at their first board meeting.

Hold First Board Meeting.  Speaking of which, the next step for forming a corporation is holding the first meeting of the Board of Directors.  The purpose for this initial meeting is to handle a few items of official corporate business like setting the corporation's fiscal year, appointing corporate officers, adopting the corporate bylaws, authorizing the issuance of any shares of stock, and adopting an official stock certificate form and corporate seal.  Also, if the corporation is intended to be an S corporation, the Board will approve the election of S corporation status.

Issue Shares of Stock.  Corporations should not conduct any business until they issue shares of stock, which formally divides up the ownership interests in the company.  Simply put, if the corporation wants to be treated as its own legal entity, then it must behave that way, doing business as a corporate entity rather than just an extension of its owners.  The formal requirements must be met in order to qualify for the legal protections offered by forming a corporation.

Securities Registration.  It's crucial that the corporations follow all securities laws when issuing stock.  Fortunately, most small corporations are eligible for exemptions from securities registration.  Typically, those corporations who issue shares to a small number of people (generally ten or less) who will actively participate in running that business will qualify for exemptions to securities registration.  Be sure to research the specific requirements in your jurisdiction, however.

Obtain Necessary Licenses and Permits.  If you've filed your articles, approved the corporate bylaws, held the first Board of Directors' meeting, and issued stock, you're almost there!  Now you need to obtain all required licenses and permits that all new businesses must acquire (like a business license), along with any extras like obtaining an employer identification number from the IRS, a state seller's permit, or a zoning permit from your local planning board.

Sounds like a lot but it's really not as overwhelming as it seems. Once you've had your attorney (whether internal or external) give the corporation the legal thumbs up, it's official.  Your corporation can open for business and the only thing left to do is have fun growing your company.

Take These Questions into Consideration BEFORE Starting a Business

You are super excited about starting your business. That's fantastic. However, there are some things you should consider, kind of like "preventive medicine".

Have you set goals and a plan for reaching them?

Without a clear idea of where you want to go and how you plan to get there, you may find yourself stumbling through the stages of starting a business and facing unwanted stress and frustration.

One of the most important steps is setting goals that outline what you want to accomplish in the short term (1 month, 3 months, 6 months, etc.), as well as over the long term (2 years, 5 years, etc.).

Once you have created your goals, it's time to make sure you have a plan for your business that will guide you along the way. It's also helpful to understand your motivation for starting a business in the first place.

Will I be able to follow my plan without breaking any laws or regulations?

There are a number of legalities that you should consider and explore when starting a business.

• Deciding on the structure of your business (sole proprietorship, partnership, corporation, limited liability company)
• Registering a business name
• Obtaining necessary licenses and permits
• Planning for business taxes

Have you fully considered the financial implications of starting a business?

Money is a major concern when you start a business, especially if you will be leaving behind a steady paycheck and if your business has significant start-up expenses.

Some business financing options to consider to ease the financial transition include starting your business on the side while continuing to work full time, working a part-time job until your business becomes established, waiting to start your business until you have saved up a financial reserve, and borrowing the necessary funds to bridge the gap.

Is your support network in place?

We accomplish very little in life completely autonomously, and the same is true in business. Even if you plan to be a sole proprietor, you can benefit tremendously from creating an external support system to keep you on track.

Your support network may include family, friends, colleagues, a mentor, a coach, and anyone else who can help you navigate roadblocks. When you have an effective support system in place, you will find that you have a cheerleader, consultant, moral support and even a devil's advocate when necessary.

Do you have what it takes to make it as a business owner?

Being a successful business owner requires a unique mix of personality and small business character traits. While there isn't a standard formula that makes one type of person more successful than another, some entrepreneur-friendly personality traits that can ease the process of getting started as a business owner include passion, drive, dedication and self-discipline. And it doesn't hurt to be an effective communicator and someone who is willing to take measured risks.

These questions are likely to spur a few more specific to your situation. Now is the time to consider all of the possibilities ... then you can let your enthusiasm take your dream to the heights you expect.


What mistakes did you make because you simply "Didn't Know What You Didn't Know"? Help others to learn by sharing below.

EXTENDED - Florida Enhanced Short Sale Relocation Program

The Florida Enhanced Short Sale Relocation Assistance Program has been extended to December 12, 2011.

This program offers enhanced relocation assistance to help encourage homeowners to engage with Bank of America on a pre-offer short sale. Homeowners may be eligible for relocation assistance between $5,000 and $20,000.*

Eligibility:

• Homeowners with property in Florida
• Short sales initiated without an offer between Sept. 26 and Dec. 12, 2011
• The customer will have to be eligible for one of the without an offer programs, such as the Home
• Affordable Foreclosure Alternatives (HAFA) program or Bank of America's proprietary program (specific investor participation and eligibility criteria do apply to these programs)
• Successful closing of the eligible short sale by Aug. 31, 2012

Exclusions:

• Ginnie Mae, FHA, VA and USDA loans are ineligible for participation
• Lot loans are ineligible for participation
• Properties outside Florida are not eligible for participation
• Short sales initiated with an offer are not currently eligible for the enhanced relocation assistance

Frequently Asked Questions:

How can I find out if my client/homeowner qualifies for this relocation assistance?
Call a Bank of America short sale specialist at 1.877.459.2852,
Monday-Friday 8 a.m. - 10 p.m.; Saturday 9 a.m. - 5:30 p.m. Eastern

Do I have to do anything different to initiate or complete the short sale?
No. If the homeowner's short sale is initiated between Sept. 26 and Dec. 12, 2011, and the property closes by Aug. 31, 2012, the homeowner will be eligible.

Will the relocation assistance funds be reported on the HUD-1?
Yes, they will be documented on the HUD-1, and a 1099-MISC will be issued.

Can the relocation assistance funds be used to pay off existing liens?
Yes, if the investor approves it.

Will this enhanced relocation assistance waive the homeowner's deficiency?
An additional benefit for these pre-offer programs, such as HAFA and Bank of America's proprietary program, is that deficiency may be waived for homeowners who qualify.

Is the relocation assistance added to any other incentives, such as HAFA or Bank of America proprietary program incentives?
No. A homeowner will receive the $5,000 to $20,000 in place of the typical incentive paid out by these programs. The relocation assistance is essentially an enhancement to the standard payout offered on these programs.

Is the enhanced relocation assistance available for other programs?
The enhanced relocation assistance is currently available only to short sale programs initiated without an offer. However, as we gauge the success, we may extend this incentive to other programs.

Questions?
Homeowners and agents may call 1.877.459.2852 Monday-Friday 8 a.m. - 10 p.m.; Saturday 9 a.m. - 5:30 p.m. Eastern to speak to a Bank of America short sale specialist about this exciting relocation assistance offering.

* The relocation assistance payment is calculated based on the unpaid principal balance of the homeowner's loan and the type of short sale that the homeowner completes, but will not be less than $5,000 or more than $20,000. The payment amount will be calculated based on the homeowner's loan balance as of August 2011 and the short sale program in which the homeowner is eligible. The payment will be delivered at the time of closing if the homeowner complies with all terms and conditions of the Short Sale Agreement, including the satisfaction of all second liens and presentation of clear title for the property (the relocation assistance payment can be used to clear those liens). If the homeowner does not comply with all terms and conditions of the Short Sale Agreement, the homeowner will not receive the relocation assistance payment. Even if the homeowner receives relocation assistance, Bank of America, N.A., and their successors and assigns may reserve and retain the right to pursue collection of any deficiency following the completion of the short sale, unless otherwise prohibited by law. The amount of the deficiency and relocation assistance will be reported to the Internal Revenue Service (IRS) on the appropriate 1099 Form or Forms.  We suggest that homeowners contact the IRS or their tax preparer to determine if they have any tax liability. This offer is for Florida properties only. To receive the relocation assistance, the property must close by Aug. 31, 2012.