Archive for the ‘EDGAR for LqP Newsletters’ Category
EDGAR: Happy New Year!
January 5th, 2012
Happy New Year! New Ideas, New Plans
As 2012 begins, it is inevitable that we start thinking about our priorities and our dreams. Things we want to do, things we should have done, or maybe even a chance for a major life change – like buying a business!
Business ownership is a major life change for most everyone and if you are interested in this type of venture there are a few tips that you need to know before you start the purchase process.
- Be willing to ask for help! In today’s economy lending institutions will not lend money without a strong business plan and solid business financials. The best way to get this pulled together is to work with an economic development organization.
- Be patient. Transitioning a business or starting a business requires a lot of work on your part. For a project to be successful you must be willing to take a long hard look at your personal and professional life. You must be realistic about how much money, time, and effort it really takes to run a business and be your own boss.
- Build strong relationships.
a. Share your thoughts and ideas with your local economic development professional. Confidentiality is imperative to their work so you can share all of your concerns and dreams with them. They want to ensure that your business venture is successful and they are willing to help at any time.
b. You will need to develop a strong bond of trust with the existing business owner. This means complete confidentiality. They need to know you are not going to share private business information with your friends and family. You need to know that they are not going to discuss your plans until the project is finalized and loan documents are prepared. Two-way confidentiality is a must!
c. Have an informal conversation with your favorite banker about your plans. They have an invaluable insight into the local business environment. If you don’t have a strong connection with a local financial institution, start one. Letters of recommendation from your previous loan officer or financial manager can be helpful. - Don’t be afraid to ask the tough questions. Most important question: Why is the business owner selling? There are many red flags to look for – but if they are willing to share detailed information and answer your questions you are on the right track.
- Things you need to know, documents you need to see and questions to ask:
a. Review certified business financial documents for the last three years. This should include income statements, cash flow, and balance sheets.
b. Review company tax returns submitted to the IRS.
c. Review company debts; including real estate, notes payable, accounts payable, equipment leases, etc.
d. Will the owner help with the transition?
e. Are the employees aware of the potential sale? If not, why?
f. What is the staff turnover rate? If staff are not staying long term, why?
g. How would you rate the customer service of this business? How loyal are the customers and why?
h. What type of relationship does the business have with its vendors?
i. Is the work environment in every area somewhere that you would be willing to work in every day? Are there any work hazards that you see?
j. What is the actual condition of the fixed assets that come with the business? Things like office equipment, machinery, vehicles, etc. all need eventual replacement. Buildings and other structures need maintenance, repair and cleaning.
Are you a business owner considering the sale of your business? Are you willing to share this information with a prospective buyer?
There is a lot more that needs to be included in this type of process and the Lac qui Parle County Economic Development Authority is here to help you from start to finish. There is no charge for our services. Everything is completely CONFIDENTIAL. We will help you complete this process at your own pace.
Creating and maintaining successful businesses in Lac qui Parle County is our mission. No project is too small. Call us today!
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EDGAR: Holiday Marketing Tips for Businesses
November 9th, 2011
Pamela Lehmann, Executive Director
Below are some tips to share with our local businesses before the holiday season begins. These tips come from Scott Taddiken at the Washburn Small Business Development Center in Kansas.
- Don’t overlook any potential markets. Gifts are huge, but decorations, candy and food, flowers (poinsettias and others), greeting cards and postage, etc. are also big. These categories make up to 25% of Christmas spending!
- Black Friday is big, but it isn’t everything. Traffic is extremely high on the day following Thanksgiving and some say up to 25% of shoppers will start at 5 a.m. However, Black Friday isn’t always the biggest spending day – for brick and mortar businesses, the last two weekends prior to Christmas may be the biggest.Many people are looking for good deals and a place to have fun. Black Friday is something fun to do with family and friends. While many people get out to shop on Black Friday, stores must have a plan to bring them back in to buy.
- People are shopping online. Online purchases tend to increase as the season progresses (people have checked out store specials and done comparison shopping).Monday, Tuesday and Wednesday are often good online – people shop in stores over the weekend and then shop online at the beginning of the week. This means that retailers must close the sale on the weekend while shoppers are in their stores.
- Spending the week after Christmas and into January continues to increase! Find a way to bring these shoppers back into your stores. Hand out “good for ___% off your next purchase” coupons to holiday shoppers. Offer surprises with future purchases and make sure to promote your after Christmas and January sales.
- When they are buying from you, be sure to “Bundle ‘em up”! Create gift packages (corporate gifts, related products, etc.). Remember people are four times more likely to buy something they can touch, so have items available. Ask your vendors for displays or use displays that suggest a product’s use or someone else’s enjoyment in receiving a product.
- Gift Cards. Did you know that 56% of people spend more than is on the card? So make sure all shoppers know you offer gift cards as a great gift idea. Another benefit of gift cards is that they expose new people to your business – great advertising! And remember, some gift cards never get used.
Above all be positive, cheery and enjoy the season – Your customers will notice!
Local Residents – Remember to BUY LOCAL!
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EDGAR: Top 10 Reasons Small Businesses Fail
September 16th, 2011
There is a website www.allbusiness.com that has some great resources for those interested in starting a business and those already in business. The “TOP 10” list below from their website is very insightful and I thought it could help all of the businesses in our region to consider their shortcomings and find a way to overcome them.
The following is taken directly from AllBusiness – Champions of Small Business resource center.
“About half of all small businesses fail within the first four years – a statistic that generates a shudder of fear in even the most dauntless entrepreneur. Most of the failures, however, resemble one another in crucial ways. And once you identify these harbingers of failure, you can increase your own chance of success.”
Procrastination. When you own a small business, you will find that tasks and paperwork pile up like snowdrifts on your desk. Putting them off is like piling up debt; eventually they could overwhelm you.
Ignoring the competition. Consumer loyalty has declines sharply in recent years. Today, customers go where they can find the best products and services, even if that means breaking off long-term business relationships. Monitor your competitors, and don’t be ashamed to copy their best ideas (assuming that doesn’t mean violating patent law). Better yet, devote some time each week or month to devising new methods, products or services for your firm.
Sloppy or ineffective marketing. Contrary to popular cliché, few products or services “sell themselves.” If you don’t have time to market your product effectively, hire an experienced person to do it for you. Marketing keeps your products selling and money flowing into your business. It’s crucial that you do it well.
Ignoring customers’ needs. Once you attract customers, you’ll have to work hard to keep them. Customer service should a key aspect of your business. If you don’t follow through with your customers, they’ll find someone who will.
Incompetent employees. Hire only workers who are essential to your operation. When you do hire employees, make sure they’re well trained and able to complete the tasks expected of them. And remember that happy employees make good workers — try to create a work environment that keeps your staff happy and motivated.
Lack of versatility. You may be great at making hats or painting houses or fixing computers, but that’s not enough to make your millinery shop or house painting business or computer consultancy successful. Successful business owners tend to be adept at a number of tasks, from accounting to marketing to hiring.
Poor location. Even the best restaurant or retail store will fail if it’s in the wrong place. When you’re scouting a location for your business, consider factors such as traffic (how many potential customers pass your business during the course of an afternoon or evening?) and convenience (how hard is it for your regular customers to get to your location on a regular basis?).
Cash flow problems. You need to know how to track the money coming into and out of your business – even a profitable venue will flounder if it runs short of cash. In addition, you must learn to make cash flow projections that will help you decide how much money you can afford to spend and warn you of impending trouble.
A closed mind. Everyone goes into business with some preconceptions – don’t be surprised if you find that many of yours are wrong. Look for mentors who can give you advice and run your ideas by them before you make important financial commitments. Read books and magazines about small business, visit business-related Web sites and network with your peers in the business community.
Inadequate planning. Start with realistic but precise goals for your firm, including deadlines. For example, don’t just say you want to increase sales; instead decide that you want sales to reach $100,000 by next holiday season. Then write down the steps you can take to meet those goals on time, and set deadlines for completing those steps. Consult your goal list every day, and make sure you are doing what you need to do to meet your objectives.
EDGAR for LqP - Economic Development: Generating Area Revitalization
By: Pamela G. Lehmann, Executive Director
Lac qui Parle County Economic Development Authority
“The mission of the Lac qui Parle County Economic Development Authority is to be the catalyst for economic growth, job creation and improving the quality of life in Lac qui Parle County.”
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EDGAR: Should You Be An Entrepreneur?
August 4th, 2011
Daniel Isenberg, a professor of Management Practice at Babson College, developed a 2-minute Entrepreneur Test.
Answer “YES” or “NO” to the questions below to determine if you should consider being an entrepreneur:
- I don’t like being told what to do by people who are less capable than I am.
- I like challenging myself.
- I like to win.
- I like being my own boss.
- I always look for new and better ways to do things.
- I like to question conventional wisdom.
- I like to get people together in order to get things done.
- People get excited by my ideas.
- I am rarely satisfied or complacent.
- I can’t sit still.
- I can usually work my way out of a difficult situation.
- I would rather fail at my own thing than succeed at someone else’s.
- Whenever there is a problem, I am ready to jump right in.
- I think old dogs can learn, even invent, new tricks.
- Members of my family run their own businesses.
- I have friends who run their own businesses.
- I worked after school and during vacations when I was growing up.
- I get an adrenaline rush from selling things.
- I am exhilarated by achieving results.
- I could have written a better test than Isenberg (and here is what I would change . . . )
If you answered YES on 17 or more of the questions above – it’s time to call the Lac qui Parle County Economic Development Authority to discuss what it takes to start your own business!
This test and information came from the Agurban e-newsletter. Check out their website at
www.boomtowninstitute.com for more great articles and information.
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