Is your product a commodity? As we think about the business that we are going to start or the new products/services we will be introducing into the market place, we should first evaluate where that business or product is positioned in the minds of the consumer. What is a commodity? A commodity is a product/service that the market place does not perceive has any differentiation. They are alike, and it does not make any difference which is chosen. It is the difference between a distinct brand and a generic. They all provide the same purpose and there is no difference in [...]
Are consultants good for you? After consulting for many years and working with a great deal of small business owners and not-for-profit organizations from startups to mature companies, I have come to the conclusion that most companies and not-for-profit organizations hire consulting-coaching firms without specific expectations of results or outcomes. I try to understand the mentality of the decision makers of these firms. The typical consulting firm charges anywhere from one thousand dollars a day to one thousand five hundred dollars a day. I ask the clients I work with what is their expectation from spending this amount of money and [...]
What is the real value of your company? It is interesting that when someone wants to know the value of a company the first thing they do is go to the balance sheet. This lists the assets (what you own), liabilities (what you owe) and the difference is the equity (your ownership part of the business). Of the assets, what the creditors do not own the stockholders, partners or individuals own. But is this the real story? Let’s look first at some public companies-those that sell on some sort of exchange. As an example we can take some very popular ones [...]
MARKETING: GETTING A BANG FOR YOUR BUCK? Most small businesses that I work with have very little understanding of marketing. Most think that marketing is advertising and of course this is not true. Advertising, or Promotion, is a component of marketing but there are many other components of marketing such as Sales Promotion, Product/services that you are delivering, the Price that you are charging, where you are distributing the deliverables such as the Placement of the Product/services and of course let us not forget the People that are representing the company. Notice we have just defined marketing from a 101 Marketing [...]
Budgeting-Why do it? Many companies are starting, planning, and completing their budget process for the upcoming year. Those that are not doing any of the above are simply flying by the seat of their pants, and hoping for the best. Lack of planning allows the unexpected to cause reactions vs. being proactive and looking ahead. Budgeting is typically viewed at as planning for the future. I take a different perspective and look at budgeting as managing the future. Budgeting is not a once a year process but a process that is used to monitor what is expected, comparing it, to what [...]
If you have been following my articles over the past few years, I hope you realize that I truly believe that one of the most important assets of a company are the human resources, which does not pop up on the balance sheet. But equally important are two other intangibles-creativity and innovation. It is very easy for companies to get into their comfort zone and forget about the world around them. It is much less work and effort to do what you have always done rather than challenge the status quo. I find this very common in most businesses-small and large. [...]
Beware of misclassification of an employee Treating employees as non-employees You will be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold them because you treat an employee as a nonemployee, including yourself if you are a corporate officer, and you may be liable for a trust fund recovery penalty. Refer to Publication 15, Circular E, Employer’s Tax Guide for details about the trust fund recovery penalty or Independent Contractor for more information on employee classification.