Are Small Business Prospects Trending Up?

Two small business studies by major companies — FedEx and Kelly Services — back in 2010 provided inspirational insights. The studies indicated the economic climate was trending positive for small business.

But ObamaCare and other misguided policies by the Obama Administration began to take their tolls, many articles in this portal’s Public Policy section document why.

Indeed, just two-and-a-half years later, small business optimism plummeted to one of its lowest levels in history when the National Federation for Independent Business (NFIB) proclaimed small businesspeople were depressed by their prospects.

ambro at www.freedigitalphotos.netIndeed, in 2013 I was motivated to write, “Do Entrepreneurs Really Feel it’s National Small Business Week?

Additionally, the nation’s most-authoritative and widely quoted economist, Peter Morci, Ph.D., keeps publishing worrisome economic forecasts and analyses each week.

Let’s review what could-have-been: The two optimistic studies by FedEx and Kelly Services.

A “Signs of the Times” study by FedEx Office showed 72 percent of responding U.S. businesses believed they’ll help lead the charge to business recovery. Conducted in April, 2010, the study included small businesses with five to 100 employees with minimum revenue of $100,000.

The temporary help company, Kelly Services, funded a global study which revealed 20 percent of respondents worked as entrepreneurial independent contractors and another 50 percent aspired to work for themselves. It was a survey of 134,000 people in 29 nations in Asia, Europe, and North America.

FedEx study

Fifty-one percent of responding businesses indicated they’re already recovering or will be in great shape by the start of 2011. That’s quite a change. In 2009, 54 percent were worried about the economy.

Eighteen percent were looking to hire workers compared to just 9 percent in 2009.

Marketing will have a bigger priority – 42 percent budgeted for marketing in 2010. Thirty percent increased budgets for sales activities.

“Small businesses are definitely getting it right when it comes to identifying and investing in the tools that will help them bounce back from a difficult period,” said Randy Scarborough, vice president of marketing for FedEx Office. “From print ads and direct mail campaigns to online marketing programs and a social media presence, small business owners today are smart and savvy about how to maximize their budgets while connecting effectively with new and existing customers down the street and around the world.”

In the early stages of the recession back in 2008, a previous FedEx study revealed relatively few small businesses were fully aware of the effects of the downturn.  That’s when 41 percent said they anticipated increasing their marketing budgets. But in 2009 when virtually every business felt the negative impact of the downturn, 44 percent were looking to increase their marketing budgets.

The current study indicated 34 percent slashed their marketing in 2009, but 31 percent regreted making the cutback.

Eighty-seven percent believed in the importance of print marketing collateral, and 61 percent believed traditional marketing tools will yield a better return on their investment than the Internet.

Ironically, 51 percent of the 18 to 34 year-old demographic advocate banners, posters and signs vis-à-vis 36 percent of those aged 55 and older.

But many of the respondents said they will embrace the Web more – 46 percent online and 36 percent on social media.

But the study’s red flag: Many small businesses had not designed a cohesive logo and tagline. Sixty-four percent admitted their messaging was “somewhat consistent,” 23 percent couldn’t afford to design messaging and branding, and 13 percent admitedt spending too much because they didn’t have the ability or time to research possible deals.

Kelly Services

It wasn’t just about companies cutting back to save on employee benefits, according to Kelly Services. Uncertainty about economics is what is really triggering the trend for entrepreneurship or independent contractors.

The increase in free agency: Twenty-six percent in North America,19 percent in Asia and 17 percent in Europe.

Nearly 25 percent of all respondents indicated a desire to launch a business, especially 48 to 65 year-old males.

“The economic downturn has resulted in a new way of thinking about careers and job security. Many people have watched their jobs disappear and now want to do something that puts them in more control of their career,” says Kelly Services Executive Vice President and Chief Operating Officer, George Corona. “These are often people with many years of experience, who may have been displaced and who have taken an entrepreneurial approach to marketing their skills.”

Other results:

  • Some 20 percent were  freelancers, consultants, independent contractors or free agents. That’s 28 percent of baby boomers, 20 percent of Gen X and 18 percent of Gen Y.
  • Another 12 percent would love to be independent.
  • Younger people were worried about failing and older folks fear healthcare costs.
  • Thirty percent of Gen Y wanted to start their own business, but only 22 percent of Gen X and 14 percent of baby boomers wanted to do so.
  • Forty-eight percent felt their abilities were adequate. Fifty-four percent of baby boomers and Gen X and 40 percent of Gen Y felt confident.

“Many of those who lost their jobs as a result of the global economic crisis have had to reinvent themselves as independent contractors, freelancers and consultants. This self-employment trend may continue as more people become attracted by the autonomy, independence, and flexibility of working for themselves,” Corona added.

Using a metaphor, as Reggie Jackson once said about his Mr. October capabilities as a New York Yankee: Entrepreneurs “are the straw that stirs the drink” in economic growth.

Let’s hope those in the Obama Administration drink some strong coffee and learn their lessons about left-wing politics. But are small business prospects trending up? No.

From the Coach’s Corner, Jerry Savin, an authoritative consultant at Cambridge Technology Consulting Group, has a reminder about your online presence:

“Today, we received a frantic call from a former client asking why their website was down,” writes Mr. Savin. “As it turned out, their domain registration had expired. Oops.”

His suggestions:

  1. Check the expiration dates of your current domain registrations.
  2. Confirm that the Administrative Contact on the Domain Registration is current and the contact’s email address is correct.
  3. Pay attention to the email reminders. Domain Registrars send out multiple domain registration expiration emails.
  4. Renew your domain registrations before they expire.

“Google gives slightly more weight to domains with longer registrations,” he adds. “So registering domains for 5 years or longer makes sense.”

His Web address:



From the Coach’s Corner, here are three small business tips:

Energize Your Customer-Loyalty Program with 6 Steps — The quickest way for established businesses to optimize revenue is to have a stellar customer-loyalty program — there are six steps you can take for repeat sales and referrals.

Checklist to Increase Your Startup’s Cash Flow — It’s true that cash flow is the salient dynamic that leads to the failure or success of a business. Whether your new company’s performance is stagnant or you’re growing quickly, cash flow is paramount.

Tips for Preventing Robberies and What to Do If You’re Hit — As a business owner, you don’t like to think about the frightening prospect of being robbed. You could lose money and merchandise. More importantly, you and your employees could be severely hurt or even killed.

“In  America, small business is a big deal.”
-Bob  Beauprez


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy by ambro

Small Business Success Is Key for Washington’s Sustainability


April 6, 2010

Washington state’s small business owners are getting a first-hand look at ways to improve their economic environment, thanks to the Washington Policy Center (WPC).  The think tank is taking 24 ideas on the road and sharing them in 24 locales around the state.

“Small businesses are the backbone of Washington’s economy,” wrote Carl Gipson, director of WPC’s Center for Small Business. “We are committed to helping improve the small business climate in our state, and going on a tour of Washington is a great way to get the conversation started.”

The topics in the WPC tour range from unemployment insurance to state taxes. They’re included in the WPC report, Lead the Way: Small Business and the Road to Recovery. The ideas were provided by small business owners throughout the state in late 2009.

Mr. Gipson provides this ominous reminder: “Recent data shows Washington’s small business failure rate is the second-highest in the nation.”

To be candid, this Biz Coach site has long voiced concerns about government behavior – the theft of economic freedom and political freedom — so I really appreciate Mr. Gipson’s observation:

“The proper function of taxation is to raise money for core functions of government, not to direct the behavior of its citizens,” he wrote.

“This is true whether government is big or small, and this is true for lawmakers at all levels of government,” he added. “Many lawmakers think of the tax code as a way to penalize ‘bad’ behaviors and reward ‘good’ ones. They have sought incessantly to guide, micromanage and steer the economy by manipulating the tax laws.”

Then, there’s this reminder: “The State Auditor has conducted 23 audits as of December, 2009, ‘identifying billions of dollars in unnecessary spending, potential cost savings and economic benefits and recommending numerous ways to improve state and local government operations’,” he wrote.

“Too often, policymakers act without considering or measuring the impact of their decisions on the owners of mom-and-pop businesses, even though those are the very businesses that are disproportionately hampered by the regulations and taxes they impose,” wrote Mr. Gipson.

And he shares some history about the impact of small business.

“During the 2003-2004 recovery period from the recession from the early 2000s, businesses with fewer than 500 employees hired almost 1.9 million workers, while businesses with more than 500 employees laid off over 200,000 workers,” he wrote. “In Washington, using both the state government’s and Washington Policy Center’s definition of small business (fewer than 50 employees), small businesses make up 96 percent of all registered businesses while employees of small businesses account for 41 percent of the state’s workforce.”

Here is the WPC tour schedule:

WPC’s Web site:

From the Coach’s Corner, a reminder if you need business counseling at no charge, consider the Small Business Development Center nearest you (SBDC).

How Healthcare Law Would Affect Small Business


Updated May 14, 2010

Some 350,000 small business advocates have joined the legal fight against the healthcare law. They are members of the National Federation of Independent Business. The so-called healthcare reform pushed by Congress and the Obama Administration has caused more angst for small businesspeople than any issue in recent memory. For fiercely independent entrepreneurs, there are questions of socialism and constitutionality. They see a further deterioration in the makeup of the United States.

They’re grateful to the 14 state attorneys general who are fighting the law’s constitutionality. Republicans are hoping for enough votes for their candidates in the November elections to mount a revocation drive when Congress reconvenes in 2011.

Meantime, if the law is allowed to stand, it’s important for small businesspeople to understand how they’re affected. For starters, make sure you convert from a sole proprietorship to a limited liability partnership or corporation.

There would be no limits on premium rate hikes before 2014.

If you have 50 more employees, the government would fine you if you don’t provide coverage to your workers. Employers with less than 50 workers are exempt.

However, personal coverage is mandatory.

There would be 19 new taxes.

Generally, indigent self-employed are likely to get Medicaid. You can’t be denied insurance if you have a pre-existing condition.

Starting with your federal tax filing for 2010, employers with 25 or fewer workers that pay half of the workers’ premiums would get a 35 percent write-off. If employers purchase health insurance through an exchange beginning in 2014, they’ll receive a 50 percent deduction for healthcare premiums on their tax returns.

To save money, companies with as many as 100 workers can join a pool – Small Business Health Options Programs (SHOP). It’s hoped that such SHOP exchanges will enable a lower of premiums.

Federal subsidies would be available to the self-employed for healthcare who earn up to 400 percent of the federal poverty level. Subsidies would be available to families of four earning as much as $88,200.

Dependent children – up to the age of 26 – would be covered on their parents’ policy.

Beginning in Sept. 2010, insurance coverage would include a lot more than basic catastrophic coverage. Preventative care must be included.

For individuals earning $200,000 and families making $250,000 beginning in 2013, the Medicare rates will increase from 1.45 percent to 2.35 percent. For businesspeople getting capital gains, dividends or interest income, there will be an extra 3.8 percent tax.

Lifetime maximum limits on insurance policies would be outlawed.

Finally, regarding the so-called “Cadillac” plans, companies that pay more than $10,200 for individuals or $27,500 for families would be required to pay another 40 percent in the form of a tax. Naturally, this would be a huge hit to many small businesses.

My sense is that the so-called healthcare reform is a denunciation of individual economic and political freedom. And I fervently believe there are grounds to over-rule the law on constitutional grounds.

From the Coach’s Corner, in conjunction with April being “National Financial Literacy Month,” the Small Business Administration is offering entrepreneurs free webinars on its Web site to learn fiscal fitness.

Why You Can’t Get Work and Small Businesses Can’t Hire Workers

Are you one of the countless baby boomers who is relying on Social Security before you reach retirement age? You’re not alone. The dearth of jobs has prompted many Americans to accept lower Social Security payments at the age of 62. This means Social Security is forecast to start paying out more in benefits than it receives starting in 2017.

The government believes 15 million people are jobless. That’s only an estimate. It doesn’t include the high number of self-employed people desperately taking independent contractor projects because they can’t find jobs, or the under-employed taking temporary jobs.

These numbers also hurt job creation. Higher unemployment rates charged to business by government is a disincentive, too.

After having worked through 6 major economic downturns, my analysis of the data and the trends is that the real unemployment rate is about 25 percent. That’s depression-like, not recession-like numbers.

A study proves it’s getting worse for American workers. The Center for Labor Market Studies at Northeastern University in Boston sums up the problem in its study’s subtitle – “A Truly Great Depression Among the Nation’s Low Income Workers Amidst Full Employment Among the Most Affluent.”

For the nation to catch up, most experts believe 100,000 new jobs need to be created every 30 days. But veteran pragmatists know it won’t happen. Count me as one of those.

The job drought is not a new phenomenon in the sense that it’s been years in the making. The federal government began tracking the number of unemployed in 1948.

Job losses

Many jobs have not and will not return. Not to over-simplify, institutional investors own increasing numbers of companies. Largely, they extract profits by slashing payrolls and encouraging offshoring of jobs in Latin America and Asia where labor is cheaper.

Since 2000, automation is responsible for cutting 5.6 million jobs.

After each recession since 1970, job-growth rates have decreased. Published reports indicate that even before the Great Recession, it was less than one percent a year and was only 2.4 percent in the 1990s and 1980s, according to the Labor Department figures.

Based on trends following recessions, I’m in agreement with economists who forecast it will be at least five years before the unemployment rate returns to more palatable levels – hence, the term, jobless recovery. Even then, I’m not sure it will happen.

Consumer spending

Historically, consumer spending has been a key ingredient for economic recovery. But that won’t happen unless there’s a fundamental economic change.

This also means the tax revenue pie for governments at all levels will remain flat.

For good reason, Americans have returned to 1930’s money values. They’re becoming tight-fisted with their money and are demanding government accountability.

The housing bubble resulted in a high volume of excise taxes, but the high rate of foreclosures alters that scenario.

Big lender behavior

Talk to anyone who checks credit for consumers or small businesses. The aggregate level of bad credit is huge – largely caused by the predatory behavior of big lenders. They’ve nearly destroyed the livelihoods of small businesses with mega interest rate hikes for bogus reasons.

Small business has historically has been the main job-creation engine, but no more.

Small businesses do not have the financial firepower expand and create jobs. New credit card legislation does nothing to correct the injustices.

Instead of focusing on helping business, government at every level, is hindering the economic climate. Economic and political freedoms are being stolen each day by bad government policy (see this portal’s Public Policy section).

The largest employer in many communities is government. Public-sector agencies are still growing, while spending and taxing at ever-increasing levels. For the common good of all Americans, change is needed.

Businesses and consumers can no longer afford the status quo in taxes. Government must reform.

From the Coach’s Corner, here is the essence of the 2010 credit card law:

  1. Credit card companies cannot increase the rate in the first year until the introductory rate expires. The banks must give 45 days notice to change the rate.
  2. Unless two months past due, rates can’t be changed.
  3. The original interest rate must be granted once payments are on time for six months.
  4. The fine print will be easier to grasp.
  5. Activation and annual fees can’t exceed 25 percent of the credit limit in the first year; and will be unlimited after 12 months.
  6. Credit card statements must be sent three weeks in advance.
  7. Transactions can’t take place over the credit limit unless the cardholder agrees.
  8. The “universal fault” nonsense (if you were late one day on one payment, the other credit card companies jacked up your rate) is stopped and interest rates on existing balances must stay the same (see No.1).
  9. Companies can’t give students or anyone under 21 a car unless she/he has a co-signer or the autonomous ability to pay statements. Schools have to make public any credit-card marketing deals, and companies cannot stage publicity or giveaway events on or near campuses.

“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”

-George Washington


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Sen. Cantwell Is Right to Question Risky Derivative Dangers, Geithner


Updated July 15, 2010 – 3 p.m.

An influential U.S. senator, Sen. Maria Cantwell (D-WA), worked to regulate the perilous use of derivatives by Wall Street bankers, and criticized the Obama Administration in the process. But her derivative strategy worked. The sweeping financial reform legislation will regulate the risky, intangible instruments.

This means derivative trading now faces regulation, and financial institutions will have to set up a fire wall by moving their derivative departments elsewhere.

“This isn’t about poking the White House, it’s about getting capital flowing to small businesses,” Sen. Cantwell said in an interview with Les Blumenthal, a reporter for McClatchy’s Washington state newspapers.

She helped lead the fight against investment bankers, who were bailed out by taxpayers only to shell out big bonuses and who are at it again. Instead of extending credit to business, Wall Street is back to the old tricks of playing risky derivative games that helped lead to Wall Street’s meltdown and the global-financial disaster.

She’s also had a testy exchange with Treasury Secretary Timothy Geithner over the failed efforts to bail out community banks and the associated credit issues faced by her Washington state constituents and other American businesses and consumers.

“We are trying to keep the focus on what needs to be done to get credit flowing and avoid another bubble,” Sen. Cantwell also said. “Do I wish the White House team was more attuned to these issues? Yes.”

 Yes is right. It’s commendable that she’s become outspoken about regulating Wall Street’s behavior.

If she’s successful, we’ll see job creation – the only way out of this mess. I’ve been harping about this and asking for answers to questions for an extended period of time starting with this column, “Is it Time to Police Pay at Wall Street Banks?

And she was right about voting against the reappointment of Fed Chair Ben Bernanke. Few in Congress seem to understand Main Street issues and his tardy, tepid handling of the Great Recession at the Fed.

Firewall partnership

Sen. Cantwell partnered with Sen. John McCain (R-AZ), the former GOP presidential candidate, to bring back the commercial/investment banking firewall. This will prevent risk-taking by commercial banks that exacerbated two downturns in the 1930s and the most-recent  financial chaos. The two worked together on the Senate Commerce Committee.

Cash flow and credit are critical for operating a business. With too-few funds available in loans, businesses have been failing or, at least, suffering from bad credit as a result of not having access to capital.

Efforts by the Obama Administration and Small Business Administration to provide more loans are to be commended. However, they are way too-little and too late. Most afflicted small businesses now have poor credit because of the cash cutoffs and they won’t qualify for any the funding.

Credit card regulations were too late, too.

Nothing has been done to help repair the credit of the millions of small businesspeople and consumers who were victimized by the credit card companies – domiciled in a handful of states that permit predatory behavior – their rapacious interest rate hikes for bogus reasons and slashed credit lines.

Sen. Cantwell also indicated her disappointment that the Obama Administration twice reneged on promises for action on the proposed firewall between commercial and investment banks.

“Their economic team is not living up to what they said they would,” she explained to Mr. Blumenthal.

Hmm. Broken promises? That’s not what America needs, but we can appreciate Sen. Cantwell’s candor and successful efforts.

From the Coach’s Corner, on another somber note regarding credit: Customers of the hospitality industry are ostensibly the No. 1 target of hackers, here’s the article.

Management and HR for Higher Performance

 Part three: How to grow your small business

In analyzing the growth rates of small businesses – every great entrepreneur has one salient quality – the ability to be an effective manager.

An effective manager efficiently allocates resources for achieving goals. Quality management usually results from an independent SWOT analysis – assessing internal strengths and weaknesses along with evaluating external opportunities and threats.

Self-employed people need to carefully inventory their own strengths and weaknesses as business personalities.

free stock photo Laptop, Brunette, Background, TiredThey should also assess how to maintain their good health because they’ll suffer if they don’t.

Larger companies should focus on several factors in a strength-weakness analysis of their human resources, such as recruitment, training and development, compensation, culture, leadership, reliability, and salespeople.

Once a business owner looks in the mirror to assess management strengths and weaknesses, then he or she is ready to analyze opportunities and threats for a strategic plan.

Even if a strategic plan is well-written, beware: Management practices that work well in the early growth of a small firm often cause problems later, according to a series of articles in the Harvard Business Review (HBR) by Dr. Larry E. Greiner.

“Creative activities are essential for a company to get off the ground. But as the company grows, those very activities become the problem,” Dr. Greiner wrote in a 1998 HBR article, “Evolution and revolution as organizations grow.” His thesis is still accurate.

Red Flags

Business expert Neil Delisanti agrees that managers often fail to solve red flags:

“There are forces inside the organization that they control; forces outside the organization over which they have little, if any, control; and probably most important, red flags in themselves, about which they may or may not be aware. A good manager must be constantly aware of the impact of all these forces. One of the common failings in managers is that they blame all sorts of things for their failures, rather than admitting they didn’t have a good handle on what’s happening.”

Mr. Delisanti has gifted insights because he speaks from both an academic and solid mentoring perspective. He was a faculty member at both the University of Puget Sound and The Evergreen State College. As the guru for the Small Business Development Center in Tacoma, he counseled more than 2,000 companies.

Quality management usually results from an independent SWOT analysis – assessing internal strengths and weaknesses along with evaluating external opportunities and threats.

Mr. Deslisanti believes too many small business owners micro-manage:

“Many folks start a business and believe it is their inspiration that made it a success. Although this is sometimes true, what we find on closer inspection is that it was their perspiration and natural management ability that was more responsible. They have invested a lot, money, time, and sanity, in their enterprise and find it hard turning it over, often even small parts, to someone else to possibly blow it. Any business can grow to where the owner just cannot physically, mentally or emotionally, do it all.”

Does he believe managers limit their business growth by poor human-resource management techniques?

“Often, yes. This is particularly true of a company that starts with an owner and spouse sitting at the dining room table. Not only are there innumerable government restrictions on what is legal, we have to look at what the workforce expects from employers today. The management of people isn’t as simple as the old my way or the highway anymore. Diversity in all areas requires that SBOs have to look at differences in age, gender, race, ethnicity, education, background and experience – just to mention a few facets that have to be considered.”

So, one key step is to partner with your employees.

When to start HR function

“I strongly recommend that as a business gets above the 15-20 employee range, the owner set up some sort of human resource function, and get some assistance in designing job descriptions, recruitment policies, pre-tests, application forms and very importantly – interview policies and procedures,” he suggested. Here’s a checklist of strategies to succeed as a new manager.

To underscore his concerns about HR precautions, I agree. I’ve been called upon to help two businesses:

1. A cable TV company was fined $15,000 by U.S. District Court for sexual discrimination of an applicant. The company’s law firm asked me to provide a three-hour seminar on Equal Employment Opportunity laws as part of the sentencing to close the case.

2. An interstate trucking firm was fined $100,000 and required to design a new wage and compensation plan (Note: the company’s pay system worked fine when it was smaller).

In both cases, the bosses were nice people unaware of the dangers in a litigious society.

Because small businesspeople often seem to feel they’re under siege, Mr. Delisanti suggests:

“Have a vision or goal and incorporate it into a strategic plan, which is different than a business plan. This can come in many forms, but it should be organized and written. Identify your vision and then develop a list of goals that will let you succeed, quantify them, put some time frames on completing them. Most important – assign some responsibility to someone to get it done. This will have you on a course of your choosing and let you become proactive instead of reactive.”

Premature growth

He says some companies grow too fast:

“This happens when growth gets out of control when you can’t fill the orders, due to a lack of materials, equipment, people or cash. This can also happen when the company gets too big for the owner to handle.”

Mr. Delisanti believes others grow too slow to cover added costs and expenses:

“Usually, this is a result of overly optimistic forecasts that bring about expenditures that far exceed revenues. Many reasons cause this, such as an SBO’s enthusiasm; level of success with business on a smaller scale; and non-credible or insufficient marketing research,” he said.

Mr. Delisanti warns about unforeseen situations in the external environment:

“Even the best forecasting can’t predict a tsunamis, earthquake and the level of destruction that natural disasters can wreak upon an industry. Consider skiing in the Pacific Northwest some seasons – there can be a bad time to open a new ski shop.”

He says challenges result from miscalculating factors in what he calls an “uncontrollable” industry environment:

“When a business conducts an opportunity-threat analysis, it should look closely at a number of factors and make its decision, based on what it thinks will happen and how the chain of events will impact its goal attainment. If the business thinks incorrectly, it might lose the competitive advantage over somebody thinking correctly. Remember: Everybody can’t win. If you look at all the data and think that interest rates will go up 9 percent and take the actions that will best help you achieve your goals under those conditions, but if they only go up 2 percent, other companies will probably have an advantage over you.”

One other thought, here’s how and when you should develop an exit strategy.

So, there you have an overview – how to grow your small business – in a three-part series.

For the other two parts in how to grow your small business, see:

From the Coach’s Corner, here’s a must read: ‘The Book…on Business from A to Z’.

I believe managing is like holding a dove in your hand. If you hold it too tightly you kill it, but if you hold it too loosely, you lose it.”

-Tommy Lasorda


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Small Business — Errors to Avoid So You’re Not Singing the Blues

Known primarily for her big voice, Ethel Merman (January 16, 1908 – February 15, 1984) was a Tony Award-winning star of stage and film musicals.

She was born and raised in New York City. Her mother was a school teacher and her father was an accountant in Manhattan with a wholesale dry-goods company, James H. Dunham & Company.

Her dream was to sing and she never took singing lessons. With her powerful mezzo-soprano voice, precise elocution and enunciation, and pitch, she introduced many standards from “I Got Rhythm” to “I Get a Kick Out of You.”



As a performer, she was duped a few times after being promised roles in musicals.

Despite her show-business talent and being raised by an accountant, she didn’t have success with businesspeople, including three of her four husbands (William Smith, a theatrical agent; Robert Levitt, a newspaper executive; and Robert Six, a pioneer in aviation as president of Continental Airlines).

Regarding her marriages, in 1979 she told a Canadian radio interviewer: “We all make mistakes, that’s why they put rubbers on pencils, and that’s what I did. I made a few loo-loos!”

Ostensibly, she got solace from her singing roles. So figuratively, she sometimes sang the blues — just like many small businesses.

You can avoid some loo-loos and having to sing the blues by following these basic tips:


1. Have a business plan. It isn’t always necessary, but a business plan is usually imperative. You’ll need to have a financial forecast for cash flow. So you need to know your financial needs, your challenges from competitors, and how you’ll sustain your growth and survice.

So you’ll need a break-even analysis, profit and loss forecast and a cash flow analysis (see Primer for Best Practices in Preparing Financial Statements).

2. Be pragmatic in your planning. Don’t start with a large loan whether it be from banks, credit cards, home equity lines of credit or borrow from someone you’ll be obligated to repay. Don’t plan on a profit right away — it rarely happens. Watch your expenses. Be very frugal. Don’t overspend.

3. Choose the right ownership structure. Consider your potential liability. Decide whether to be a sole proprietor, set up a partnership, establish a limited liability company as an LLC or corporation. Select the right one to protect your personal assets.

4. Plan for efficiency and productivity. Hard work isn’t a cure-all for success in business (see Business Success Checklist to Work Smarter, Not Harder).

5. Don’t forget about marketing and sales. You’ll find countless tips in the Marketing and Sales section here on this portal.


1. Install processes and systems. Document every process, establish goals, designate procedures, and create and implement an operating manual (see Management Best-Practices Include Solid Operations Checklists)

2. Hire talented people and don’t micromanage them. Define their roles and train your employees but let them do their work by not micromanaging them. You’ll generate loyalty, trust and productivity. You need to focus on the big picture.

3. Focus on productivity and eliminate clutter. The first hour of every day should be spent addressing your biggest headache, then focus on marketing and sales. Have a clean and orderly work area.

4. Share your vision. By hiring the right people and sharing your vision for growth, your employees will excel. One of your objectives should be a turnkey operation so you can focus on sales and the big picture.

If you want maximum profit, consider partnering with your employees (see Profit Drivers – How and Why to Partner with Your Employees).

5. Budget time for family, rest, recreation and exercise. Owning a business is one of the most difficult challenges of all (see 30 Time Management, Stress Reducing Tips).


1. Save and organize your receipts. Receipts of small expenditures might not be required in your tax returns, but save them as documentation for your writeoffs.

2. Get a competent bookkeeper. In the long haul, it will save you time and money and help you to increase profits. The job will be swiftly finished and you’ll benefit from having a second person to spot problems and offer solutions.

But remember Embezzlement is a widespread nightmare (see Embezzlement – 21 Tips to Protect Your Nonprofit or Company Assets).

3. Record your reimbursable expenses. Don’t make the mistake of paying bills on your personal credit card or out of your wallet, but then failing to keep track of them so the business can reimburse you.

4. Make sure you communicate well on your financials. Business owners often fail to communicate on financial matters, such as providing information on transactions and receipts for the bookkeeper.

5. Know your financial situation. Reconcile your bank statements with your books every month. Cash flow is paramount and you’ll want to avoid errors. And make sure you protect your bank account from cybercrime (see Small Business Tips to Protect Your Bank Accounts).

6. Create paper trails and backup your financial records. In the event of computer failures, backups are essential. You should also keep the hard copies for a paper trail (see 5 Data Recovery Planning Tips for Computer Failures).

7. Make sure you deduct sales tax from your total sales. If you fail to do so, you’ll show an mistaken total sales amount and you’ll be responsible for the tax.

8. Follow GAAP or generally accepted accounting priniciples. Make certain that expenses and other transactions are correctly categorized and set up as few categories as you can.

9. Maintain an accurate petty-cash system. Whenever money is taken out of the petty cash, documentation should be inserted in the file. So, when you expend all the petty cash, you’ll have documentation that equals the original petty -cash amount.

10. Avoid problems with state and federal regulators by properly classifying your workers. In this day and age, companies are hiring contractors but fail to remember they’re not bonafide employees. Unless you’re using a staffing firm for workers, non-employees are not usually allowed to use your equipment and you’re not to direct their activities as you would an employee.

11. Don’t hire employees you don’t need. Recordkeeping, unemployment taxes, workers’ compensation insurance are all expensive.

12. Don’t  rent space you don’t need. And if it’s possible, work from home.

13. Know how to collect receivables. Inevitably, you’ll encounter situations where clients and customers fail to pay on time.

14. Pay attention to pricing. Learn to manage the sweet spot – between your price-optimization and costs (see Strategies for Stronger Profits by Optimizing Prices).

15. Watch the chargebacks. Increasingly, merchants are being victimized by chargebacks in illicit of behavior credit-cardholders (see Plagued by Chargebacks? 5 Ways to Fight Back). 

From the Coach’s Corner, here are more tips:

For the Best Cash Flow, Manage Your Inventory Costs with 8 Tips — With proper inventory management, you can lower your expenses and increase your cash flow. For many businesses, that means taking a look at your inventory costs. When your products aren’t selling, obviously, it hurts. 

13 Management Tips to Solve Employee Absenteeism — Absenteeism causes migraines for a lot of bosses. Obviously, your company will make healthier profits, if you don’t have an absenteeism problem. Check your attendance records. Monday is the most-abused day of the week and January is the worst month for absenteeism. 

Why Companies Fall into the Management Lawsuit Trap — News headlines continue to show there are a myriad of ways managers set themselves for lawsuits. Small and many big companies are ripe for EEOC complaints. In one year alone, 2011, AT&T was forced to settle an age-bias lawsuit. 

12 Tips for Profits to Keep Your Business Dreams Alive — Most businesspeople agree the economy continues to be challenging. Signs of a lingering downturn are everywhere. Business activity is slow. Governments at all levels report low tax revenue and are restructuring, and not spending. On top of it all, customers want you to cut prices. 

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”
-Peter Drucker


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

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Seattle business consultant Terry Corbell provides high-performance management services and strategies.