The simple answer to the seemingly complex question of “Who needs a business advisor?” is … everyone responsible for operating a business. That’s right. The Fortune 50 CEO to the one-person show needs an advisor.

The CEO of a public company has mentors as well as a board of directors to turn to. They often donÂ’t have a choice of who their advisors are but small business owners do. Unfortunately, with this choice of advisors comes another choice that is often made instead. That choice is to not get any help at all.

Not getting any help at all is very often the cause of the business failure statistics we hear so much about. The small business owner will often claim that they donÂ’t have the time or money for an advisor. Think about that comment. How can you not have the money to get help from someone that can potentially save or make you more money since you obviously are not getting it done on your own? Or how about that time you are lacking? Maybe if that owner sat down for an hour with an advisor, they would be able to see why they donÂ’t have time and do something about it with the help of someone who has already been in those shoes.

A coach or advisor gives to small business owners something most of them don’t have; a sounding board and a board of directors to turn to for advice. These are two great resources to use when trying to avoid “trial and error” decisions and processes.

IÂ’m not knocking trial and error as the way to learn things. IÂ’ve personally used that method and faired well in many cases. But that is a case-by-case basis, not for on-going daily concerns. DonÂ’t forget that this method is also very costly and time consuming. Why not ask someone who has probably already faced the problem?

What many business owners do not realize is that they rarely go through any trials and tribulations that someone else has never dealt with. Not to mention that about 70-75% of their business is the same as every other business including HR, finances, sales, marketing and funding. The other 25-30% is industry specific.

Small to mid sized business owners take away much more from an advisor than big businesses. This, if for no other reason, is the case because the smaller companies have owners that wear a lot of hats. Many of those hats take time away from the things the owner actually needs to make a priority to see their company succeed. Things they should be doing that they donÂ’t have time to get to or things they are taking care of that they have no experience in doing. These situations take away from them doing what they do best. ThatÂ’s a problem.

The question now is how to find an advisor. There are many types of business advisors out there. Some are purely “coaches” and others are true developers and implementers that will roll up their sleeves with you when asked to. It’s up to you to pick the type of person you want or need. Here are a few things to think about:

- Do they click with your personality? There are many good advisors out there but if they don’t click with you as a “business friend”, don’t bother with them because you will end up fighting them even when you agree on the advice.

- Have they owned a small business before? Gray hair does not equal business ownership knowledge. I promise you that the ex-CEO or Senior manager from a huge company knows very little about successfully operating a small business. These are two significantly different worlds.

- DonÂ’t worry if a potential advisor doesnÂ’t know your specific industry. Remember that a lot of your troubles have nothing to do with your industry. It would help though if the advisor had contacts/resources for you in your industry for when specific problems are addressed.

- Look for flexibility. A potential advisor that pushes for more than 20 hours a month of your time from day one is probably out for money. Until they start working with you, there is no way of knowing that they need that much time per month to meet your goals and timelines. A good advisor will understand that you have made a commitment to get back on track just by the fact that you are talking to them. They shouldnÂ’t need to try and get a ridiculous time/money commitment from you if they want to help.

- Make it a local thing. This suggestion is a two-part issue. First, the advisor should agree that when face time is needed that they come to you. Second, there is absolutely no reason why a small business with locations in one state needs a business advisor that must fly in or travel more than 2 hours to see them. These companies somehow find suckers to take their so-so advice and huge reports full of fluff and also pay for travel costs. There are plenty of advisors local to every company in this country. Yes, even in Hawaii.

Once you made the very intelligent decision of getting help in making your business a success, keep a few things in mind. You should really commit to working with your advisor for a good 6 months. Nothing gets fixed overnight. Also, since you are paying for it, please do yourself a favor and be open to suggestions, bring important things to your advisor for help in making a decision and make the use of your time with the advisor a priority. DonÂ’t forget that an advisor or coach should never make a decision for you. ItÂ’s your company, they are there to make suggestions and guide you.

Working with an advisor can be a very enlightening experience. You will start to see the forest from the trees and not feel like you are the only person on the planet going through tough times as a business owner.

All business owners eventually need help. The successful ones put aside their pride and desire to be at the center of all aspects of the company and get the help. Do yourself and your company a favor and be one of the truly successful business owners. Get an advisor and get all you can out of them. If your advisor loves what he/she does for a living as such as you love what you do, you canÂ’t go wrong.

Article Source: http://www.articledashboard.com

George J Sierchio is a Principal at Action Business Partners, Inc., a small business advisory company dedicated to helping business owners meet their goals. Mr. Sierchio has over 13 years of experience owning and operating various successful businesses and frequently writes/publishes business related articles. Contact him at:
gsierchio@actionbusinesspartners.com www.actionbusinesspartners.com

Very few entrepreneurs want to close their business. Sell, yes. Merge, maybe. Shut it down, I doubt it. The reality is that more than 50% of all new companies opened in the U.S. and Canada close within the first three years. That means you need to know when, in fact, it may be best to cut your losses and get out.

Yes, it might happen to you. ItÂ’s happened to me so IÂ’m speaking from a lot of experience here. Perhaps the single biggest obstacle to overcome is to accept the reality that when you start a business, you need to be prepared to close it. You should have included in your initial business plan a formula or timeline with a set of criteria to determine if the goals you feel are necessary to survive are being met.

In many ways, knowing when it may be time to close down a business is a particularly tough call for a small businessperson. Not only do large corporations have significantly greater resources to address potentially fatal problems, but the lone wolf mentality that allows an entrepreneur to flourish can also blind him/her to reality. A business owner has to go into operating a company with an attitude that says “I am excited and I will succeed” but they also must be aware of the possibility that the company may not survive. A true entrepreneur often gets emotionally attached to their company because of the passion and efforts needed to make it even have a chance to succeed. Unfortunately that emotional attachment can also cause them to not see what is actually a sinking ship and not just a rough sea.

Keep the following points in mind. They donÂ’t mean the ship is necessarily going down, but noticing them may allow you to reverse a bad situation that will sink the ship you worked so hard to keep moving full steam ahead.

Cash Flow. You know full well that you need to turn a profit to stay in business. But take that precept a step farther and keep a close eye on your cash flow. If, for instance, you’re struggling to balance income and outgoing expenses on a monthly basis, that may be a signal that things are simply too tight to continue for long. In particular, watch for cash flow problems that persist for several months in a row. This could be the start of a huge tailspin that needs to be stopped immediately, or itÂ’s time to bail out.

Quality Issues. Numbers can be a powerful signal that a business is genuinely struggling. Equally compelling are signs that will never appear on a balance sheet. An increase in customer complaints, for instance, may hint at problems with products or services that may ultimately bring down an operation — particularly troubling if you’ve already taken steps to try to address what’s wrong. If you’re losing customers or, by contrast, find existing customers cutting down on their business, that too may signal a potentially fatal flaw. Again, this can be reversed, so donÂ’t just give up on quality issues.

Lying to yourself. As a manager or owner of a business, you need to be optimistic and get through inevitable tough times. But that should never slide to the depths of delusion or being dishonest to yourself. Little lies to yourself turn into big lies then you canÂ’t figure out where you truly stand.

Let me give you an example from my own experience. I once made a hire of a fairly high paid employee. He had a diverse background, lots of contacts and seemed well worth the money. Unfortunately, I had this notion that I could convert a technical guy with project management experience into a consultant that could also bring me business. Well, letÂ’s just say it was never going to happen but I kept lying to myself and saying that heÂ’s got the ability but heÂ’s just not catching on as quickly as I wanted. A year and a half later of a lot of wasted time (I re-did most of his work) and money ( I took a pay cut in hopes of this guy eventually bringing me a lot of business as promised) my little lies to myself turned into a few huge problems. DonÂ’t get into this rut.

Lies on paper. Fibs limited to your inner monologue are one thing; distortions of the truth that make their way onto documents and other company material take that red flag to a whole new level. Ever hear of Enron or WorldCom? Fudging company numbers in a struggle to keep things looking positive is a bona fide signal that things may be beyond salvaging. And you will get caught if this is being done to lie to a bank or other lender. Not only wonÂ’t you get the money, but you may be blocked by anyone else that gets wind of your ways, especially if it ends up in a credit report.

Excessive turnover. Employees can often see a failing business more readily than the owner. The sign that this may be the case is an unforeseen exodus by multiple employees at the same time. If this seems to be the case, ask in exit interviews if they have concerns about the long-term viability of the company. Sometimes this could just be a great maneuver by a slick competitor to take your best people or it could also just be a rumor mill that has people running scared about nothing. Find out for yourself with the exit interviews and maybe some department meetings on employee concerns.

Excessive price cuts. If you find yourself slashing prices more than you thought you would, that implies a desperation that may be fatal — if for no other reason than you’re cutting into your profit margin.

Paying with plastic. If you’re resorting to a credit card to meet payroll, you’re only adding to a debt level that’s ultimately going to strangle you. DonÂ’t bankroll your payroll with a credit card. A Visa card is not the answer to meet payroll unless you are purposely trying to dig yourself a debt grave. Find out exactly why you donÂ’t have the cash. Slow payers? Lack of work? Too much R&D spending? It could be a number of things and each of them has their own way to be fixed. The key here is- when you are ready to hire employees, you should get yourself a line of credit from a bank that will cover 2 months worth of payroll, benefits and taxes if possible. At least a monthÂ’s worth.

Too much stress or not enough happiness. Keep an eye on yourself as well. If the business is killing you- trouble sleeping, short temper and the like- that can signal a business that may not be worth keeping afloat. Remember your enthusiasm to get working everyday when you started the company? Well, you canÂ’t expect to have the same exact passion a few years down the road but you sure should expect to get up in the morning to see how your personal creation of a money machine is doing. You got in it for freedom, or money, or creativity or something that made you feel good about yourself. If youÂ’re still not at least a little pumped for a new business day, you might have a problem on your hands.

Knowing signs of trouble may allow you to head problems off in time. Listen to those closest to you for guidance and counsel — not merely for potentially fatal flaws but insight that may solve the problem before it becomes terminal. Talk to your advisors, your lawyer and accountant. They can often tell you when your business is in real trouble. Friends and family members can also often see the signs without even being involved in the business, but by being involved with you.

Article Source: http://www.articledashboard.com

George J Sierchio is a Principal at Action Business Partners, Inc., a small business advisory company dedicated to helping business owners meet their goals. Mr. Sierchio has over 13 years of experience owning and operating various successful businesses and frequently writes/publishes business related articles. Contact him at:
gsierchio@actionbusinesspartners.com www.actionbusinesspartners.com

YouÂ’ve come up with the best idea since sliced bread, figured out a business name and formed a corporation. There is, however, one small problem. You need money. Welcome to the world of investing.

Business Funds

Unless Bill Gates is your friend, money is going to be a problem for every new business. Even the might Google had to hunt for cash with one of the founders of Sun Microsystems finally kicking down a much needed $100,000. Whether you decide to pimp your business plan to anyone breathing or beg your step-mother for funds, here are some issues to consider.

Investors are looking for the best deal, to wit, the most stock possible in an entity. If you are asking them for cash, they have the leverage. DonÂ’t be so desperate that you give away the farm. All to often, I speak with individuals who started a business on a whim and have become disillusioned because they have lost equity in the business.

Assume I start a corporation and need funds. My neighbor agrees to kick in $20,000 for 20% of the stock. Things go great, but four months later I need another $50,000 for inventory and cash flow. My aunt agrees to kick in $50,000 for another 20% of the stock. Yikes, I am not even through the first year and I have given up 40% of the equity!

What happens in year two when I need a $100,000? I give up more stock and suddenly own less than 50% of the business. Inevitably, this leads to feelings of resentment and bitterness. “It was my idea, but now these blood suckers are going to get most of the money and they aren’t even working on the business.” This sentiment is so common that it would be laughable if it weren’t so depressing.

As a general rule, you should only sell ownership in a business as an absolute last resort. Instead, try to get loans from investors, banks, home equity lines and even credit cards.

If you must sell stock to raise funds, be very careful when valuing the stock. You should place a value on each share as though the company was already a raging success, not just starting out. Further, make sure you sell only small allotments of stock such as three to five percent. If you owned IBM, how much of the ownership would you sell for $20,000?

In Closing

When starting a corporation, guard equity as though it is the Holy Grail. If you donÂ’t, you risk becoming a disillusioned shareholder down the road.

Article Source: http://www.articledashboard.com

Richard A. Chapo is a San Diego business lawyer with www.sandiegobusinesslawfirm.com – a San Diego business law firm in San Diego, California.

Capitalizing a new business entity is a critical step of the formation process. Failing to take the step can lead to serious legal problems if the entity is ever sued. So, what is capitalization and what steps must be taken?

Capitalizing Your Corporation

“Capitalization” essentially refers to funding your corporation. In essence, you are providing substance to the entity in the form of money or property. Typically, the funding process works in two ways.

Corporate Stock

You must own stock in a corporation to be considered a shareholder. You are already familiar with this concept if you trade on the stock market. For instance, assume you bought stock in Sirius Radio in anticipation of Howard Stern moving to the station. You purchased stock through a brokerage or retirement vehicle by exchanging money for shares. Technically, you are a shareholder in the corporation. Your own corporation is no different.

The fact that you paid money to have a corporation formed does not make you a shareholder. You must exchange property, cash or services to obtain stock from the entity. Only then are you a shareholder in the entity. This is more easily explained with an example.

Assume I start a corporation for the purpose of providing consulting services to other businesses. The corporation is formed with 10,000 shares and I am going to be the sole shareholder. I have cash and certain assets that I am going to use as part of the business. I decide to exchange $3,000, a copier, fax machine and computer equipment for stock in the entity. This exchange should be reduced to writing, but will constitute the capitalization of the corporation.

Corporate Loan

You can also loan money to a corporate entity for start-up costs. There is no prohibition against a shareholder providing money to a corporation. The loan process should not completely replace the purchase of stock. From a tax perspective, however, dividing your initial capitalization into a partial loan can have distinct advantages.

Inadequate Capitalization

State laws govern the formation of a corporation. Inevitably, these laws set forth amounts or formulas for determining the minimum capitalization amount required for a corporation. You must review the laws in your state to determine the amount and make sure you meet the contribution minimums.

Failure to properly capitalize you corporation can result in disaster if the entity is ever sued. Simply put, the suing party may argue that the lack of capitalization means the corporation was never a viable entity because it had insufficient funds to back debt obligations. The argument gets complicated, but suffice to say you are in serious trouble if a court agrees with the argument. Typically, the court will “set aside” the corporate entity, exposing each shareholder, director and officer to the risk of personal liability. Obviously, such a scenario would be a disaster.

In Closing

If youÂ’ve purchased a corporation from online service, you have work to do. Make sure you determine the minimum capitalization requirements in your state and comply with them.

Article Source: http://www.articledashboard.com

Richard A. Chapo is a San Diego business lawyer with www.sandiegobusinesslawfirm.com – a San Diego business law firm in San Diego, California.

HereÂ’s an interesting notion: Do you realize that there are mistakes you can make at various stages of your businessÂ’ growth that can be slowly killing it for months or even years if you donÂ’t watch for them?

Well, these mistakes do exist and they are not just reserved for the rookie companies. Many working businesses, including those you might think are “successful” because they’ve been around for 10+ years, are often still making them… and are possibly losing a lot of money and/or wasting a lot of time in the process.

Although some of these big and sneaky mistakes seem aimed more at service type companies, they really do fit the bill for almost any type of industry. IÂ’ve done my best with the listings below to give examples to prove it.

Underestimating Project/Service Time- This is a big one and it pertains to service companies as well as companies that sell a product. This is a service companyÂ’s bread and butter. If you donÂ’t estimate your time to perform each and every service in your repertoire, you will get burned and there is little you can do about it but bite the bullet and learn from it. The best way to estimate time is to do it once yourself or watch your best employee do the task and then throw in a little fudge factor on top of it. For product companies, time becomes an issue with logistics so be aware!

Not Knowing YOUR Company Numbers/Incorrectly Setting Prices- Notice I emphasized the word “your”. It’s a common mistake to use a competitor’s as your pricing gauge without actually knowing why they use those numbers. Think about the nightmare you will get yourself into if you take a competitor’s price, cut it by 10% and then start selling. What if the competition has a bad pricing structure and is barely making money or even losing money?!?! What if your costs are more than theirs?!?! You can use competitor as a starting point but you can’t base your whole strategy on it.

Different industries have their own variables as far as costs go and you need to be aware of them for your project or product pricing. What you pay for a product you are going to sell is not the only cost to have in your head when you are pricing products. How much your labor and materials cost for a service is only a piece of an hourly rate. Employees cost more than just salary and not every employee is part of your labor cost. Every company has insurance to pay for. There are tons of overhead expenditures that need to be part of your price. Oh, by the way, the big one that many people forget about in their price is the quality factor. What you include as “standard services” or “standard product features” as well as job site etiquette or in store service or warranties all need to go into your pricing. I’ll get to more on why in the next segment.

Not Charging for All of Your Time & Costs- This seems like a stupid statement to some but I bet most business owners will admit that they have given away a little too much of the farm at times. Hey, there is nothing wrong with giving a little extra here and there to show you care. But either way, thatÂ’s not what IÂ’m talking about here. What concerns me are those that put a lot of quality into their work or products or stores and do not cover the cost for it. As an example, say you run a service company and your competitors donÂ’t do a certain standard service that you do. You canÂ’t just undercut their price to steal a job; you need to have that cost covered in your rate and advertise the fact that it comes with the price upfront. Stores undermine themselves, for example, when they put more people on the floor for customer service but donÂ’t charge for it. These things cost you money and when your competitors donÂ’t do them it costs them less money. Put out better service and then under price them, and your competition just has to wait a little bit for you to fall on your face so they can swoop back in.

As a business owner you need to believe that you are providing your clients worthwhile wares that deserve to be paid for. If you get the chance to explain why your prices are higher, then take that opportunity and do it. If they donÂ’t like the fact that you include things that others charge extra for later or that you treat them better, then they are most likely completely price shoppers. You donÂ’t want them as regular customers anyway. Trust me.

Not Getting Paid Fast Enough- ThatÂ’s right, the old cash flow issue. As long as you are actually making enough money to pay the bills, this problem can be solved, prevented or at least made to be not as bad as it could be. HereÂ’s the deal:

First off all, bill customers very promptly. It is very common for a small business to not have the procedures or systems in place to get invoices generated and out the door in a timely fashion (see the next segment for more). Again, this would seem unlikely since thatÂ’s the reason why we are doing the work- to get paid. But it is very easy for the people responsible for getting this info to the billing people to be too busy to get it there or not have enough organization to give it to them the right way.

The second part to slowing down or stopping a regular cash flow crunch is to make the quickest payment deals possible with customers and the slowest possible with vendors and employees. If there is any way not to pay employees any more than twice a month, you better do it. Contractors always have an issue with this. If you must pay weekly, then tell them before they are hired that they will be getting the first week held back, essentially buying you a week. It will help, I promise.

Part three involves credit. If your company can get a credit card, then get it. This allows for certain important things to be bought (that you can afford) that might come up during a cash flow crunch. Better yet, especially if you have no choice but to deal with 45+ day customer payments, do your best to get a company line of credit. This is a must if you plan on selling to the government or doing commercial service work. These clients often have 60 to 90 day wait periods.

Failure to Have Solid Systems and Procedures in Place- Too many procedures (known as “red tape”) is the reason why many people start their own business in the first place. Unfortunately, having no procedures and systems in place at all is not an alternative. Depending on the type of industry, business owners must come to a happy medium or chaos and the unknown will ensue. Some basic examples where procedures or systems are needed include billing, collections, payroll, hr (interviewing, hiring, vacations, benefits, job responsibilities, etc.), manufacturing, operating equipment, maintaining equipment, inventory, sales calls/visits and logistics to name a few.

Even a one person show needs to have some admin procedures in place. This will make it easier to hire temps and subcontractors and control what they are doing for you. Without at least a watered down version of a system or procedure to do everyday work, you will be to blame for causing many major headaches as your company grows. I canÂ’t emphasize how important this is for when you bring on new employees. IÂ’m sure you heard this before, but I am also a big proponent of having an employee handbook even for one employee. ItÂ’s amazing the trouble people can cause business owners just because they allow you to pay them.

Spending Advertising Money Just to Say You Advertise- I would almost rather see my clients not advertise then to spend without regard to tracking the results. There is no point in a marketing campaign if you do not put things in place that allow you to measure how well the plan is working. The other wasteful part of marketing that many people make the mistake of doing, is not tracking their previously successful campaigns. Why some people think that just because a $400 dollar a month ad worked once very well for one busy season, that it will automatically work every year after that is beyond me.

Spreading Yourself Too Thin- This is a classic mistake made by every entrepreneur. The key is to figure out when you are at that “wearing too many hats” point and start getting some help. The solution here is to know your strengths and to be able see when you are not performing the duties that demand these skills. If you are the best sales person on the company, you can’t get caught up in day-to-day operations. If you do, sales will slip and eventually you won’t have any operations to worry about. Think about this to help you figure out if you are spread too thin: Did you really go into business for yourself to work 80+ hours a week?

Not Getting Help Soon Enough- Set goals to know when to hire people to take over where you are light on knowledge. Not getting help or waiting too long can kill a company. Most people who start a business do it because they are good at the technical end or the sales end. If you know the best way to make a widget, then your strength is in production and that is where your time should be spent. Hire an outside company or consultant to take care of the sales and marketing and then hire inside when you can afford someone full time. DonÂ’t be something to your company that you are not. It will only hold you back.

The three big issues people like to tackle themselves but usually are least knowledgeable about are legal issues, accounting/bookkeeping issues and daily operations issues. The odds are that these three things are your weakest link so if you donÂ’t have a partner that has the background for these subjects, then be prepared to get help as soon as possible. ItÂ’s preferable that you do this before you start a business.

Although looking for these problems at any time is a good idea, the end of a year or season is an excellent business interval to make sure you are not making these errors. Take the time, or make the time, to fix these problems. If you donÂ’t know how to reverse the problems, then get some help. If you really donÂ’t have enough time to either figure out if you have these issues or know they are there and canÂ’t break away long enough to do it right, then get some help.

Article Source: http://www.articledashboard.com

George J Sierchio is a Principal at Action Business Partners, Inc., a small business advisory company dedicated to helping business owners meet their goals. Mr. Sierchio has over 13 years of experience owning and operating various successful businesses and frequently writes/publishes business related articles. Contact him at:
gsierchio@actionbusinesspartners.com www.actionbusinesspartners.com

As the Vice President of Operations for an online retailer of contact lenses, I am used to the potential problems related to doing business on the World Wide Web. Like any other online retailer, we have a responsibility to our customers to maintain their personal and payment information with the strictest of confidence and within regulatory guidelines mandated by our government. Security is a top priority, as it should be for any business who, by the very nature of the marketplace, exposes itself to the potential hazards of doing business in cyberspace. With so many opportunities for things to go wrong, businesses such as mine must take a proactive approach to avoid falling victim to an ever-increasing variety of threats.

Recently, a virus infiltrated our system through a disk brought in by an employee. It worked it’s way onto our database in no time at all, and the potential for serious restriction of our ability to maintain functional operational status was obvious. While we have administrative and IT security safeguards to protect us from things of this nature, our precautions were inadequate to avoid this particular problem. Luckily, we had instituted a disaster recovery plan some years earlier that allowed us to rid our databanks of the virus without any loss of data, even the data collected on the day in question.

For me, this was an eye opening event. My previous thoughts on disaster recovery were limited to external events that might pose a potential risk. Despite all our efforts to the contrary, we were exposed and vulnerable. It wasn’t the things that we worked on daily to maintain security that protected our company, but a plan of action conceived years earlier that had all but been forgotten. I now realize that there is so much more to disaster recovery than I previously thought. We were lucky in this instance, but now I can’t help but think of what might have happened had we not been prepared.

Article Source: http://www.articledashboard.com

Visit www.zonecast.com/ for business continuity, disaster recovery, IT services, IT security and more.

So much has changed in the last several years after 9/11, and yet most businesses are still inadequately prepared for disastrous situations. Not only are they vulnerable from the threat of terrorism, but from security and natural disaster standpoints as well. While a terrorist act poses a substantial threat to business operations; data loss, internal and external theft, floods and fires can be just as harmful. Unfortunately, of the few businesses that have some semblance of a disaster preparedness plan, there is still little consideration given to business continuity management. When disasters happen, not only do businesses need to be prepared to immediately offset the effects of the detrimental event, they must do so while maintaining core operating functions. Disaster preparedness without continuity management can be likened to fortifying a strategic position without a progressive plan of action. What can make things more complicated is the tendency for businesses to implement a disaster preparedness plan without fully considering the consequences.

A good disaster preparedness plan shouldn’t hinder a businesses ability to continue functioning. Initiating a disaster preparedness plan that will protect the interests of the business should be an all inclusive affair, with due diligence given not only to limiting damage from the situation at hand, but to keeping operational status. Given the uncertainties faced by businesses in the post 9/11 world, continuity management can often mean the difference between success in the face of adversity or a complete loss of business. So often, companies take steps to limit their loss liability, but rarely consider the fact that most loss liability can be avoided altogether with the proper safeguards in place. A well thought out business continuity management plan, which should include a contingency centered around disaster preparedness, can prove triumphant in the face of what would otherwise be considered tragedy. As the old saying goes, “An ounce of prevention is worth a pound of cure”.

Article Source: http://www.articledashboard.com

Visit www.zonecast.com/ for business continuity, disaster recovery, IT services, IT security and more.

There are many types of symbols. Money from investors, banks or financial organisations is one such kind of symbols.

A successful Business Plan (=a successful manipulation of symbols) is one which brings in its wake the receipt of credits (money, another kind of symbol). What are the rules of manipulating symbols? In our example, what are the properties of a successful Business Plan?

(1) That it is closely linked to reality. The symbol system must map out reality in an isomorphic manner. We must be able to identify reality the minute we see the symbols arranged.

If we react to a Business Plan with incredulity (“It is too good to be true” or “some of the assumptions are non realistic”) – then this condition is not met and the Business Plan is a failure.

(2) That it rearranges old, familiar data into new, emergent, patterns.

The symbol manipulation must bring to the world some contribution to the sphere of knowledge (very much as a doctoral dissertation should).

When faced with a Business Plan, for instance, we must respond with a modicum of awe and fascination (“That’s right! – I never thought of it” or “(arranged) This way it makes sense”).

(3) That all the symbols are internally consistent. The demand of external consistency (compatibility with the real world, a realistic representation system) was stipulated above. This is a different one: all symbols must live in peace with one another, the system must be coherent.

In the example of the Business Plan:

Reactions such as: “This assumption / number/ projection defies or contradicts the other” indicate the lack of internal consistency and the certain failure to obtain money (=to manipulate the corresponding symbols).

(4) Another demand is transparency: all the information should be available at any given time. When the symbol system is opaque – when data are missing, or, worse, hidden – the manipulation will fail.

In our example: if the applicant refuses to denude himself, to expose his most intimate parts, his vulnerabilities as well as his strong points – then he is not likely to get financing. The accounting system in Macedonia – albeit gradually revised – is a prime example of concealment in a placewhere exposition should have prevailed.

(5) The fifth requirement is universality. Symbol systems are species of languages. The language should be understood by all – in an unambiguous manner. A common terminology, a dictionary, should be available to both manipulator and manipulated.

Clear signs of the failure of a Business Plan to manipulate would be remarks like: “Why is he using this strange method for calculation?”, “Why did he fail to calculate the cost of financing?” and even: “What does this term mean and what does he mean by using it?”

(6) The symbol system must be comprehensive. It cannot exclude certain symbols arbitrarily. It cannot ignore the existence of competing meanings, double entendres, ambiguities. It must engulf all possible interpretations and absolutely ALL the symbols available to the system.

Let us return to the Business Plan:

A Business Plan must incorporate all the data available – and all the known techniques to process them. It can safely establish a hierarchy of priorities and of preferences – but it must present all the possibilities and only then make a selection while giving good reasons for doing so.

(7) The symbol system must have links to other, relevant, symbol systems. These links can be both formal and informal (implied, by way of mental association, or by way of explicit reference or incorporation).

Coming back to the Business Plan:

There is no point in devising a Business Plan which will ignore geopolitical macro-economic and marketing contexts. Is the region safe for investments?

What are the prevailing laws and regulations in the territory and how likely are they to be changed? What is the competition and how can it be neutralized or co – opted? These are all external variables, external symbol systems. Some of them are closely and formally linked to the business at hand (Laws, customs tariffs, taxes, for instance). Some are informally linked to it: substitute products, emerging technologies, ethical and environmental considerations. The Business Plan is supposed to resonate within the mind of the reader and to elicit the reaction: “How very true!!!”

(8) The symbol system must have a discernible hierarchy. There are – and have been – efforts to invent and to use non-hierarchical symbol systems. They all failed and resulted in the establishment of a formal, or an informal, hierarchy. The professional term is “Utility Functions”. This is not a theoretical demand. Utility functions dictate most of the investment decisions in today’s complex financial markets.

The author(s) of the Business Plan must clearly state what he wants and what he wants most, what is an absolute sine qua non and what would be nice to have. He must fix and detail his preferences, priorities, needs and requirements. If he were to attach equal weight to all the parts of the Business Plan, his message will confuse those who are trying to decode it and they will deny his application.

(9) The symbol system must be seen to serve a (useful) purpose and it must demonstrate an effort at being successful. It must, therefore, be direct, understandable, clear and it must contain lists of demands and wishes (all of them prioritized, as we have mentioned).

When a computer faces a few tasks simultaneously – it prioritizes them and allocates its resources in strict compliance with this list of priorities.

A computer is the physical embodiment of a symbol system – and so is a bank doling out credit. The same principles apply to the human organism.

All natural (and most human) systems are goal-oriented.

(10) The last – but by no means the least – requirement is that the symbol system must be interfaced with human beings. There is not much point in a having a computer without a screen, or a bank without clients, or a Business Plan without someone to review it. We must always – when manipulating symbol systems – bear in mind the “end user” and be “user friendly” to him. There is no such thing as a bank, a firm, or even a country. At the end of the line, there are humans, like me and you.

To manipulate them into providing credits, we must motivate them into doing so. We must appeal to their emotions and senses: our symbol system (=presentation, Business Plan) must be aesthetic, powerful, convincing, appealing, resonating, fascinating, interesting. All these are irrational (or, at least, non-cognitive) reactions.

We must appeal to their cognition. Our symbol system must be rational, logical, hierarchical, not far fetched, true, consistent, internally and externally. All this must lead to motor motivation: the hand that signs the check given to us should not shake.

THE PROBLEM, THEREFORE, IS NOT WHERE TO GO, NOT EVEN WHEN TO GO IN ORDER TO OBTAIN CREDITS.

THE ISSUE IS HOW TO COMMUNICATE (=to manipulate symbols) IN ORDER TO MOTIVATE.

Using this theory of the manipulation of symbols we can differentiate three kinds of financing organizations:

(1) Those who deal with non-quantifiable symbols. The World Bank, for one, when it evaluates business propositions, employs criteriawhich cannot be quantified (how does one quantify the contribution to regional stability or the increase in democracy and the improvement in human rights records?).

(2) Those who deal with semi-quantifiable symbols. Organizations such as the IFC or the EBRD employ sound – quantitative – business and financial criteria in their decision making processes. But were they totally business oriented, they would probably not have made many of the investments that they are making and in the geographical parts of the world that they are making them.

(3) And there are those classical financing organizations which deal exclusively with quantifiable, measurable variables. Most of us come across this type of financing institutions: commercial banks, private firms, etc.

Whatever the kind of financial institution, we must never forget:

We are dealing with humans who are influenced mostly by the manipulation of symbol systems. Abiding by the aforementioned rules would guarantee success in obtaining funding. Making the right decision on the national level – would catapult a country into the 21st century without having first to re-visit the twentieth.

Article Source: http://www.articledashboard.com

Sam Vaknin ( samvak.tripod.com ) is the author of Malignant Self Love – Narcissism Revisited and After the Rain – How the West Lost the East. He served as a columnist for Global Politician, Central Europe Review, PopMatters, Bellaonline, and eBookWeb, a United Press International (UPI) Senior Business Correspondent, and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

Until recently, he served as the Economic Advisor to the Government of Macedonia.

Visit Sam’s Web site at samvak.tripod.com

Every business should protect proprietary information when dealing with independent contractors, vendors and other businesses. The best way to do this is to use a non-disclosure agreement, often referred to as an “NDA.”

What is an NDA?

An NDA is an agreement between two parties to protect confidential information disclosed in a business transaction. The proprietary information can include business methods, finances, client lists, and anything that isnÂ’t already readily available in the public arena. If a party subsequently breaches the NDA, the injured party can sue for damages, an injunction against further disclosure and attorneyÂ’s fees.

Directional NDA

In many situations, only one party requires the protection provided by an NDA. If you invent a new product, you are going to need an NDA from manufacturers, distributors, etc., before you discuss the product with them. While this may seem like common sense, most businesses fail to carry the thought through to their daily activities.

Practically every business hires independent contractors, but they rarely obtain NDAs prior to disclosing information to the contractors. For example, do you use third parties to create or maintain your websites? Did you obtain NDAs from any of them? If not, whatÂ’s to keep that party from using your business methods on other sites? A directional NDA can keep this from occurring.

Mutual NDA

As the name suggest, a mutual NDA allows two parties to protect confidential information. The mutual NDA is typically used when two businesses are negotiating a joint venture. Each party must disclose enough information to make the negotiations viable, but neither wants that information made public if the negotiations fail. If negotiations go well, additional non-disclosure information will be incorporated into the joint venture agreement to protect additional information revealed during the joint venture.

Refusing to Sign an NDA

Alarms and warning lights should go off if a party refuses to sign your NDA. Unless they can provide a very compelling reason for the refusal, you should walk away from the business relationship.

When An NDA isnÂ’t really an NDA

Just because a document is titled, “Non-Disclosure Agreement”, does not mean it provides you with protection. You should ALWAYS read the language of an NDA because the document may establish that you are WAIVING all confidentiality rights. The waiver might be very direct and read something like, “The disclosure of information pursuant to this Agreement shall not be considered confidential.” Alternatively, the language may be more indirect and read, “The parties acknowledge and agree that all information exchanged pursuant to this agreement has previously been established in public forums.” Regardless, the “reverse NDAs” strip you of protection and should not be signed.

Obtaining non-disclosure agreements should be a standard practice for your business. DonÂ’t exposure your proprietary business secrets to others without this protection.

Article Source: http://www.articledashboard.com

Richard A. Chapo is a San Diego business lawyer with www.sandiegobusinesslawfirm.com – providing legal services and legal advice to businesses in San Diego, California.

Getting a corporation designated as an “S” can be a bit confusing. If you are committed to getting an “S” corporation, here is how you do it.

“S” Corporation

The “S” in S corporation refers primarily to a tax designation. While electing to be an S corporation does have legal implications, such as no more than 75 shareholders, the designation really concerns pass through tax issues. Put in layman’s terms, the designation simply means the corporation will “pass through” its taxes to shareholder in proportion to their ownership interests. This allows shareholders to claim profits and losses directly on their taxes and avoid the double taxation of a C corporation.

To become an S corporation, you must file an election with the IRS. Typically, no documentation is require to be filed with any state entity, but make sure to check you particular jurisdiction. Regardless, the filing with the IRS is made using form “2553 – Election by a Small Business Corporation.”

To fill out form 2553, you will need to supply the following information:

1. The name and address of the corporation,

2. The tax year to be covered by the election,

3. The date the corporation first had shareholders or began doing business,

4. The name, address and social security number of EACH shareholder, and

5. The signature of EACH shareholder.

If you have shareholders located around the country, making an “S” election filing can be problematic. Getting everyone to sign off on the document can take time and time is not on your side.

Time Requirements

The IRS puts strict deadlines on filing “S” elections. In technical terms, the election must be filed before the 15th day of the third month of the tax year for which you are electing the status. Ah, the IRS is so poetic.

In laymenÂ’s terms, you should file the election within 75 days of the incorporation. From a practical point of view, I suggest you get the election signed and filed as absolutely soon as possible. You should also file the election through registered mail so you have a little proof if the IRS claims a late filing.

I donÂ’t know why, but the IRS gets cranky when it comes to S elections. If you follow the above steps and get the filing in as soon as possible, you should be okay.

Article Source: http://www.articledashboard.com

Richard A. Chapo is a San Diego business lawyer with www.sandiegobusinesslawfirm.com – providing legal services and legal advice to businesses in San Diego, California.