Obama’s Small Business Plan

I have written prior posts suggesting the government provide significant and tangible assistance to small businesses, in particular the “micro” businesses which, in numbers of businesses, represent the largest sector of American business. Yesterday President Obama announced a program to help small businesses – a program that is designed to get banks lending through SBA financing, and provide some tax incentives and breaks. However, as I understand the program, it is still geared to collateral-rich mid-sized businesses and offers little assistance to micro businesses and no help at all for start-ups.

Read more about the program in this Wall Street Journal article.

Will Limkemann

Be a coach

As a manager or owner, it’s important that you coach your team to success. Coaches may take different approaches to assembling, motivating, and running a team, but they also share certain habits. They have the ability to create a strategy and set short and long term goals and energize the team to strive to accomplish them. Coaches assess, communicate with, and recognize their employees. A successful coach can be the edge a winning team needs and the difference between winning and losing – whether in sports or in business. To infuse winning ways in your team, put on your coach’s hat, and fire up your team to help each person make the most of his or her skills.

A good coach has a solid game plan – one that has been well thought out and detailed, but not so rigid that it’s never altered to meet unexpected problems and changes inthe marketplace. The competition is always shifting, and – to a degree – your plan should track the shifts. As coach of your team, it’s vital that you share with your employees your vision for your business and your action plan. Be sure everyone understands the goal and help your team remain focused on it.

Assess the strengths of each of your employees, and give them roles they can accomplish and which also provide individual growth. Consider each employee’s demonstrated and transferable skills as well as skills requiring improvement. Don’t discount an employee’s enthusiasm and willingness to take on a new challenge. Also learn the individual goals of each employee. The more you know about your employees, the better you will be able to fit them into your game plan.

Providing employees with proper training to learn new skills and improve their abilities is important. For entry-level employees, that may mean showing them how you want them to perform critical tasks. For management, focus on expected results and negotiable and non-negotiable actions. Cross-training employees for various roles can be a win-win: a well-rounded employee becomes
more of an asset to your business, and new experiences allow an experienced employee to stretch her comfort level, cultivate new proficiencies, and feel better about her work.

Managers are often so focused on catching the negative that they forget to reinforce the positive. As coach of your team, it is important that you recognize achievements and efforts when an employee exhibits positive behaviors or performs a task well. This encourages those actions to continue in the future and provides a blueprint for further success.

Good coaches communicate well on a number of levels. Their expectations and directions are clear and tailored to each individual. They often alter their coaching style to get the best out of each employee. Their ability to individualize communications often fosters a greater rapport and understanding between coach and player. To begin to build that rapport, provide immediate feedback regarding problems or successes, pass along your knowledge where appropriate, and solicit ideas and opinions. Be sincere in your actions and encouraging in your words.

Frustrated entrepreneur

On February 25 I posted an open letter to president Obama explaining the importance of micro-businesses to the economy and how the government and banks virtually neglect this important business sector.

Yesterday I received a passionate e-mail from a reader and small business owner in Alaska thanking me for standing up for small businesses. This frustrated and industrius woman has kindly given me permission to quote from her letter.

“Presently I own and have managed my computer technology shop for nine years, am a single mother who home schools, have built my home with hand tools, been told No upon my request for adding utilities to my home by banks who would let me build a new home as the solution.  I’ve started and run successfully two small businesses and yet now barely hang on due to high interest credit cards, a double mortgage, and high interest lending.

Had I started with, or been granted capital for, low interest loans for my business I would be very successful right now.  I’ve already paid off my first property though $24,000 still remains in debt and the banks had me take on a second mortgage.  I know with adequate funding, I can help many more than I do.  I also have had a 22% return on my service business although others went to products earlier than I.  Now I want to provide products fast.  I can find and have vendor relationships that are better than the nearest competition more than an hour of road travel away!

I’m not writing to sing the blues because I’ve been the one to carry my community, local businesses, and volunteered at the local schools and for my church.  I am writing to let you know within a few weeks I am considering surrendering to the banks the belongings and businesses I’ve built in order to find a shelter and collect welfare and drop the bills.

My preference is to acquire a grant quickly for computers and new parts and peripheral equipment that people in the area buy from me before I can keep it on a shelf.  If I could acquire $10,000 it would equip the entire store and all of it would be sold within 1-3 months to provide a return of more than $1,800 based on conservative estimates.

I am writing to thank you for your representation, what you wrote in February on my and my small son’s behalf.  He’ll have to pay back our national debt.  His lifetime will suffer for it, and I appreciate your attempt to help what I believe America should be built on- the multitudes of small businesses who’ve crossed unnavigable roads, repaired their own vehicle, built their homes from the land up using hand tools, lived in homes without utilities, designed off-grid systems that add to the quality of life, and who’ve started businesses to contribute to their neighbor’s quality of life.

I am also writing to ask you if you know of any immediate grants that are real, for a single Mom with two professional technology and planning businesses.  It really is keep working or collect from my system contributions over the years, and it’s a decision I have to make within a short time.  Will you offer your insight for immediate and real funding assistance?

It appears that I have been doing everything with my life that the President requests of us regarding women in business, technology innovation, single mothers from the only land she could buy to two businesses, and I have no return for it.  All I have- the banks own.  I don’t mind working for them, but when I cannot acquire a few thousand to begin to supply equipment  when the value of repair exceeds new- what are the President’s words for?  Has he actually made any of the billions they’re throwing around available for small businesses who are in touch with the land, real value from resources, and have the knowledge, foresight, and innovation to achieve growth?

Will you tell me if we are still America or if someone else owns us now?” 

There you have it – the real-world frustrations of a single-mom-entrepreneur who is about at the end of her rope.

Do you have a story like this? I’d love to hear about it.

Credit crisis

Have you wondered how we got into the mess we’re in? Here is a nice ten minute video that expains it clearly.

Credit Crisis

Will Limkemann

Credit Unions – source for business loans?

According to a recent Wall Street Journal article, credit unions were by and large spared the spate of bad assets that have depleted cash at other financial institutions, and have money available for loans. Small and start-up businesses needing loans are finding many credit unions are able to provide funding they can’t get at banks. See the full article at Small Businesses Find a New Source for Funding.

Will Limkemann

Genius Project

My friend, Tim McGinty, told me about a fascinating study called the Genius Project.

The Genius Project conducted by Jay Niblick of Innermetrix International had the objective to understand why some people seem to frequently succeed and with much less effort than others who are equally intelligent and put forth much more effort in a similar environment.

The project spanned seven years and studied over 300,000 people from 23 countries. Each person was given a scientifically validated instrument to measure ability in a wide variety of attributes relevant to individual performance. The attributes were naturally occurring talents that people possess based upon how they think and make decisions. The study was designed to compare the level of these natural talents in the most successful people against the levels in non-successful people.

The study looked at Natural Talents, or endowed aptitudes, and Acquired Talents, or the knowledge and experience gained through life.

In the end the study found that no single natural talent was more responsibile than any other for success. However, two acquired talents were present in all of the successful people, and absent in those who struggle with feelings of frustration, lack of fulfillment, and dissatisfaction with their personal performance and success. These two acquired talents are self-awareness and authenticity.

Self-awareness enables people to understand both their natural and acquired talents. Authenticity, in its simplest form, is “being true to you”.

The high performers, those who performed at the “genius” level were discovered to have both an extremely high level of  both self-awareness and suthenticity.

The findings indicate that people can dramatically increase their performance through developing self awareness and aligning what they do with their natural talents.

My friend Bob is counting the days, or I should say months, until he retires. While he is fortunate, and knows how lucky he is, to have a job in this rough economy, Bob, like so many employees is unhappy in his job and dislikes his boss. I, like many workers, have at some point in my career been in Bob’s situation.

He is a talented programmer who has been pigeonholed into work that has become meaningless and managed by a boss who, in turn, is directed to produce results within a increasingly decreasing budget

Like so many other model, but disgruntled, employees who work hard and meet deadlines, the problem is not Bob’s, but is a management failing.

Managers are so driven by financial results that many overlook the human side of the workplace. It is the rare manager who can balance his or her pressures with caring for and about the people who work for them. Of course, most of the blame for this starts with the chief executive. A CEO who is caring will develop a caring culture. A cold CEO driven only by financial results, bonuses, and wealth, will develop a cold and sterile culture.

Another cuuse is the lack of management training. People are often advanced into management positions without having developed any real “people skills” and not having receiving any significant and on-going training in management. Thus their style is reactive to pressures put on them rather that proactive in developing their staffs to work as teams who work together in meeting departmental objectives.

Bob will bide his time until he can retire. But this is of little consolation to all the younger people in the department.

Networking

I picked up a valuable tip on networking yesterday.

I suppose I’m as uncomfortable networking as most people, yet we all keep going to networking events hoping to make valueable connections. The tip I picked up says that we are all doing networking incorrectly. While most people are trying to find a potential client, what we should be doing is trying to build a relationship and find a friend. The power of networking is not in the people we meet, but in the people who know the people we meet. If the people we meet like us and understand what we do, they will tell their friends. Keep this in mind the next time you find yourself at a networking event. It will remove the pressure.

Will Limkemann

Bartering

Bartering is the process where two people, or companies, trade products or services rather than exchange cash. It provides a means of getting something of value that you can’t or don’t want to pay for in exchange for something the other party wants. In a time of tight cash, bartering is becoming quite attractive to some people. I once had a client in the landscaping business who was cash-poor but needed my consulting services. The client and I came to an agreement where I would provide a certain number of hours of consulting in return for specified landscaping services. We both benefitted, got what we needed, and no cash changed hands.

Bartering often enables an individual or business to acquire something the want and need but may not be able to justify the cash outlay. The key to bartering is that both parties must feel that they received equal value.

One note of caution. Even though no cash changes hands, the IRS considers the barter transaction as taxable and requires you to file a form 1099-B – proceeds from Broker and Barter Exchange Transactions.

Alternative revenue sources

Some businesses are today seeing their traditional sources of revenue diminishing or completely disappearing. I spoke this morning with a friend in the building industry who is experiencing a precipitous decline in sales and wonders how much longer his home remodeling business can hold on. Unlike some business owners in similar positions who wring their hands and are prepared to shut down, he has looked at the market and has evolved an alternative business plan to help home owners who are facing the possibility of foreclosure.

Small businesses have the advantage over large ones in that they are flexible and can quickly react to changing markets and trends in order to find alternative streams of income, if they just look. If your business is struggling in a market that is really declining, look at other markets and other ways of using your talents, experience, and expertise.