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Entrepreneurship Gone Wild! Companies growing their ventures by over 2000% during the recession
Success Driven Formula
Doing Business In Africa
From Risk To Reward
Powerful Pyramid Paradigm
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October 2010
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entrepreneurs contents
Featured Articles 07 Passion-Driven Formula For Success
Passion powers the phenomenal success of CEO Mary Ellen Londrie’s award-winning P3S Corporation. When she founded her company in 2005, Londrie gave it a unique name with a specific formula in mind: P3S = Performance, Productivity and Powerful Solutions - cubed.
34
Powerful Pyramid Paradigm Learning from the Past Building on the Future In the modern-day corporate vernacular, he is one entrepreneur who is not afraid to think outside of the box, push the envelope, or create a new paradigm. In fact, Sanjeev Tirath, Co-founder and CEO of Pyramid Consulting, Inc., is a visionary with such a passion for providing global IT solutions, that he has taken his company from a basement-based think tank to a booming business‌
Entrepreneur Anchor Magazine
October 2010
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entrepreneurs Editorial Publisher/Editor-in-Chief Ethelbert Nwanegbo Freelance Journalist Susan D. Brandenburg Kelly Estes Art Creative Director Felicia Wright Contributing Writers Dr. Jarik Conrad Suzy M. Jackson Rudy Jamison Coach Jay Steve Schoenly Sandi Smith J Dianne Tribble Felicia Wright Jo-Ann Yau Web Designer Eva Bailey Associate Char Cain Subscriptions (904) 265-0765 www.entrepreneursanchor.com 1884 Dean Road Jacksonville, FL 32216 (904) 265-0765 ©Entrepreneurs Anchor Magazine 2010 All rights reserved. Disclaimer: Entrepreneur’s Anchor Magazine is intended to provide general information about business topics, but does not provide legal business advice. The views and opinions presented on all articles and advertisements are solely those of the authors, and do not represent those of the company. Therefore, Brain Media Group , LLC will not accept any liability in respect to any incorrect, incomplete, or unacceptable statement on the magazine.
Entrepreneur Anchor Magazine
contents Articles
New Businesses
Finance, Accounting, and Taxes
Marketing and Networking
09
Sweet Daddy’s BBQ
13 10 Steps to Raising Venture Capital 14 10 Common Accounting Mistakes 32 From Risk to Reward 36 Social Security 39 Dealing With Fraud Matters
29 42
Everyone is Selling Something Building Relationships
Business Management and Compliance
19 44
Trademarks, Patents, Copyrights Avoiding the 10 Common Traps of Diversity Training
Mind, Body, and Soul
22
You Can’t Live Yesterday Today
Business Tips
11
Develop the Mindset to Overcome Any Challenge
10 18
Leadership Sales and Use Tax
Doing Business in Africa
October 2010
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Back to the Basics “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education alone will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” -- Calvin Coolidge Growing up, persistence and determination were words I heard on a daily basis as I struggled with difficult topics in Chemistry and Physics. I dreaded going to these classes, as the introduction of new topics and materials added to my woes. I was determined to pass these subjects but couldn’t continue on in the same way in areas that were confusing. It took changing the way I studied the materials, and referencing other texts that further simplified the concepts, for me to experience a breakthrough and pass the nightmarish Chemistry and Physics subjects. The word “persistence” surrounds our daily lives and its application is seen in our daily endeavors. If persistence is a ritual for success, what then is the fabric of persistence? There is a saying that “you cannot keep doing the same thing and expect a different result.” Hence, it is very important not to confuse the use of the word “persistence” in your business with applying the same wrong concepts or business process over and over and expect a different result. The mixed U.S. economic data of late is worrying business owners and managers of small, medium, and large corporations. No organization is protected from the impact of the economic mayhem that plagues the world economy. However, the economic “tsunami” did not leave business owners and managers without a lesson- “know your business; offer the right product.” Organizations are now implementing policies to mitigate rising costs, removing unprofitable business segments, outsourcing business functions, and eliminating business waste that plagues businesses’ bottom-line. This is a move in the right direction, however, there is more to it than meets the eye. Have a Strategic Plan in Place Going back to the basics begins with having a strategic plan in place. As businesses struggle with dwindling sales, rising costs, and increases in competition, it is imperative that the products offered in the marketplace create utility and satisfy consumer needs. Thus, consumers are no longer gravitating towards a product, rather, businesses are gravitating towards the needs of the consumers. It has become more necessary now than ever to ensure that all the barriers to strategic implementation are removed. The following are the four types of barriers to strategic implementation: 1. Vision Barrier – No one in the organization understands the strategies of the organization. 2. People Barrier – Most people have objectives that are not linked to the strategy of the organization. 3. Resource Barrier – Time, energy and money are not allocated to those things that are critical to the organization. 4. Management Barrier – Management spends too little time on strategy and too much time on short-term tactical decision-making.
Entrepreneurs Anchor Magazine and You Our (Entrepreneurs Anchor Magazine) goal is to be the informational resource house for business owners and managers, impact business process and management with our informational tools, and promote business success through education and awareness. We have gone digital to cater to the needs of online readers of the magazine. We also have the digital version of the previous issues of Entrepreneurs Anchor Magazine currently on our website: www.entrepreneursanchor.com. We want to hear from you. Please tell us which article met your needs, or suggest areas on which you would like us to focus on more. We are in business because of you and to assist you in your success. Thank you so much for giving us the opportunity to serve you. Ethelbert Nwanegbo Publisher/Editor-in-Chief
Entrepreneur Anchor Magazine
October 2010
Contributing Writers Dr. Jarik E. Conrad is the author of the award-winning book, “The Fragile Mind,” which explores emotional intelligence, the complexity of race relations and the causes of urban violence. As president of Conrad Consulting Group, LLC, Dr. Conrad helps organizations boost their results by helping their employees be more productive and work together more effectively. For more information, visit www.ConradConsultingGroup.com Suzy M. Jackson is a financial and business development coach for individuals, small businesses and non-profit organization. She has over 20 years experience helping people make their financial goals a reality. For information visit: www.bsecenter.net Rudy Jamison is a native of Jacksonville, FL and Founder | Area Director of eBack9, Inc.; A Sales Training and Consulting Company. Rudy has an undergraduate degree in Biology from Florida A&M University, and M.Ed. from University of North Florida. He is a current Ed.D. student at University of North Florida. He firmly believes that education and knowledge is imperative to the edification of mind, body, and spirit. eBack9’s mission is simply Intellectual Ownership and On-Demand execution; Behavior because of who you are not what you have been told to do. For more information about Rudy F. Jamison Jr. or eBack9, Inc., please visit www.rudyjamison.com or www.eback9.com Coach Jay is a Professional Speaker with more than 12 years of experience. Coach Jay has a self-published and bestselling eBook with more than 50,000 sold called “I’m Tired of The Pain.” “I’m Tired of The Pain” teaches, encourages and inspires, women and men to deal with their personal issues and rid themselves of the inner pain. Coach Jay is recognized among many of his peers for his work on issues of personal and spiritual development. In 2000, Coach Jay developed Now I See & Associates Inc., a company to coach individuals in living a better life. Coach Jay has invested time and energy in studying eastern philosophy to become more educated on self-awareness. Coach Jay has also been developing and implementing innovative strategies for maximizing organizational and individual potential. In 2005 he became co-founder of the Bordes-Kohn Foundation, which has been focused on changing the lives of thousands of teenagers across NE Florida. For more information visit: www.bkfnetwork.org Steve Schoenly is the Director of Development for Sunflower Accounting. Sunflower Accounting is a professional services firm providing on-site and virtual accounting, bookkeeping and control-related services to small to mid-size companies. Financial controls services include internal audit, Sarbanes-Oxley and accounting policy and procedure reviews. Technology-related services are also available to small businesses, including blog, wiki, social media and other web applications, as well as internal audit EWP software implementation and training. For more information visit: www.sunfloweraccounting.com Sandi Smith has lived fear and risk by co-piloting a single-engine airplane around the world. She studied fear and risk while earning her neuroscience degree. She teaches fearlessness and risk management while coaching high performers to achieve in the very top percentile of their profession. Visit www.BrainWaysTraining.com J Dianne Tribble is a certified Christian Life Coach and motivational speaker with more than 20 years of leadership experience in various roles, including mentor, focus group discussion leader, women’s development and empowerment group leader, employee development manager, supervisor, counselor, and life development coach. She is the founder and leader of “At the Table” Women’s Forum in Corporate America. The focus of the forum is to provide female employees with a network of business professionals, to enlighten, educate and inspire women; to enhance the work environment and to provide opportunities to develop new friendships. J Dianne Tribble resides in Florida with her beloved husband of 28 years. They are the proud parents of three successful adult children. For more information about J Dianne Tribble and the Forum “At the Table”, please visit: www.atthetableinc.com Felicia Wright is the President and Chief Branding Officer of Mygani Design Studio, a certified brand consulting firm that provides creative marketing services to businesses and individuals. Felicia has over 13 years of experience as a graphic designer and has worked for companies such as Stein Mart, Inc, Interline Brands, and The Florida Times-Union. She is very active in the community and volunteers with several non-profit organizations in a personal and professional capacity. Earlier this year, the company launched, Accessorize Your Asset™, a personal branding workshop for professional women. The goal of the workshop is to educate and empower professional women, by aligning their personal brand with their company’s brand. For more information about Felicia Wright or an upcoming workshop, please visit: www.mygani.com Jo-Ann Yau is a Business Attorney, focused on Trademarks, Patents, and Franchising. She also is a Litigation attorney, representing clients in Personal Injury and Criminal Defense cases. In addition, she is a Magistrate Judge, presiding over the Civil Traffic Courts of Duval county and an Adjunct Professor at the Florida State College of Jacksonville. She is actively involved in the community and serves on the Board of the following associations: - Jacksonville Asian American Alliance - Florida Coastal School of Law Alumni Association - University of North Florida’s Pre-Law - Business Women of Color Committee of the Women’s Business Center For more information about Jo-Anne Yau, please visit: www.YauLaw.com
Entrepreneur Anchor Magazine
October 2010
Success-Driven Formula for 3 P S Success! by Susan D. Brandenburg
Passion powers the phenomenal success of CEO Mary Ellen Londrie’s award-winning P3S Corporation. When she founded her company in 2005, Londrie gave it a unique name with a specific formula in mind: P3S = Performance, Productivity and Powerful Solutions – cubed. A woman with a plan – and 12 years of experience in the federal sector – Londrie launched her federal contracting business with vision and purpose, determined to efficiently streamline the often ponderous and complicated processes in place between private business and the federal government. “My role during my tenure was working for the Depart-
ment of Treasury Franchise Fund, basically to help agencies stop duplication of effort, obtain services quicker and save taxpayer dollars,” Londrie said. “As a liaison or broker of services, I ensured that the federal government was receiving the services it was paying for. During those years, I saw a great need for industry to have woman-owned, minority companies (8(a) certified) that truly understood the customer’s needs and could supply them. These were rare qualities in the businesses that served the federal government.” Finally, Londrie decided to fill the gap and enhance the process of serving the federal government by taking a leap of faith and launching her own minority company. With her deep understanding of both the customer and the requirements, in addition to her qualification as an 8(a) certified business, Londrie was prepared to plunge back into the world she knew so well and make a big difference in the way federal contracting was done. Obviously, her preparation has paid off. Her 5-year-old San Antonio-based federal contracting company, P3S Corporation, was listed in Inc. Magazine as one of the 2010 Inc. 500. Inc. Magazine also listed P3S as the 135th fastest growing business in the U.S., the 9th top Hispanic-owned business, and the 23rd top government service business. P3S Corporation was a one-employee firm in 2005 and has expanded to more than 350 employees in 29 states across the United States. During the initial planning stages for P3S, Londrie (recognized in 2008 by the San Antonio Business Journal as one of the top “40 Under 40” business leaders in the city) made certain she was as debt-free as possible. As a back-up plan,
Entrepreneur Anchor Magazine
October 2010
she set aside enough money to feed her family and pay her bills for six to eight months. “It’s critical that you do your homework before you start a new business,” she said, “but more importantly, I put my trust in God and took the leap.” While her 8(a) certification as a minority, woman-owned company definitely gave her a foot in the federal door, Londrie still faced some major obstacles, particularly the ability to obtain a line of credit. She overcame banks’ reluctance to extend capital to an unproven start-up company by turning the loan application process topsy-turvy. “Instead of going to a loan officer at the bank, we made an appointment with the senior vice president. Instead of begging for their help, we interviewed the bankers to find out whether or not they were a good fit for our company; whether they were flexible enough to fit in with our plans for advancement,” Londrie said. “It was a matter of giving them the opportunity to be a part of it, anticipating the question, and clearly articulating to them in person why our business was different and why we were a good risk. That’s not to say it was a slam dunk. There were certainly bankers that laughed us out the door, but there were others that recognized our potential and backed us.” Another way Londrie overcame the obstacles of launching a new business was to take advantage of every resource available to start-up companies. This included businessmentoring organizations and mini-seminars available to entrepreneurs through local chambers and universities. By employing preparation, planning and persistence – squared and quadrupled – Londrie’s P3S Corporation experienced phenomenal growth very quickly. Londrie credited her innovative business model as she recounted two of P3S Corporation’s early successes. “We started consulting for a large government contractor immediately, helping a couple of companies improve their position with the federal government based on my experience,” Londrie said. “That gave us a track record of sorts. Then, after seven months, we landed our first big government contract with the Air Force ($3 million), and we had an opportunity to prove what we could do on a large scale. We have been blessed beyond measure.” Moving forward, Londrie says there is little that she would change in the way she began her company. She contends that teamwork is the essence of a good company and plans to continue surrounding herself by excellent staff and seeking mentors, executive advisors and others that have been where her company is headed.
Entrepreneur Anchor Magazine
October 2010
Londrie has several bits of advice she is happy to pass on to anyone considering opening their business in this down economy (which, by the way, she considers an advantage in that some of the best people are currently in the job market and available to enhance a new company with their expertise). 1. Seek top leadership quality when hiring. 2. Prepare your company to grow by bringing in experts.
3. Engage professionals like business consultants, accountants, and tax professionals to increase the chances of business success. Do this at the very beginning by taking a good look at your strengths and filling in the gaps with experts. 4.
Prioritize your needs and focus on your goals by analyzing your SWOT (Strengths, Weaknesses, Opportunities and Threats), and delegating to those in your company that can help you succeed.
Stick to the basics and do what you are good at doing, Londrie advises. As to passion, that intangible but alwayspresent fourth “P” in P3S Corporation?
“You can never lose that passion,” she says. “Passion pushes you to do more than you thought possible.”
The P3S corporate building, San Antonio, Texas
Sweet Success By Kelly Estes
Sweet, tangy and addictive—that’s the Sweet Daddy’s BBQ sauce
that Jacksonville, FL. residents Brian and Rodney Clark are serving up. Demand for their product is high, and rapidly increasing.
Sweet Daddy’s is fast becoming the BBQ sauce of choice. The
sweet tasting BBQ has a universal appeal and many ethnic groups from different backgrounds have given it a thumbs up as the best BBQ sauce they have ever tasted.
But while they’ve got a very unique sauce in the Sweet Daddy’s
BBQ bottle, they need to expand in order to meet demand. And in order to
cookouts, a family tradition, wowing friends and neighbors. Their barbecues got so popular that people would ask them to bring their special
BBQ sauce for a birthday or christening party. Brian and Rodney were happy to do it, and they never charged for it either.
It was always their pleasure to barbecue and came naturally to the
social duo. But at a recent cookout, a friend exclaimed how delicious their BBQ sauce was and encouraged them to bottle and sell it.
Brian seized the moment and starting mixing up batches with his
brother Rodney, bottling and selling it just through word of mouth. Now
an order for a case of the BBQ sauce has come in and the plans to market and expand are on the front burner.
Rodney, a retired ex-Navy man who sampled quite a range of food
in his travels, now helps mix up batches of the sauce when he gets home from work. He said his Filipino wife influenced the flavor of the special sauce. The unique ingredient? Banana.
While it doesn’t taste like banana, and it’s not mustard or dipping
sauce, the Sweet Daddy’s BBQ sauce is very popular. It’s best to put it
on a fatty piece of meat, on the grill during the last 5-10 minutes, giving the meat a caramelized-glaze of sugar and spices. Sweet Daddy’s
penetration of the meat gives the BBQ best flavor and provides an unbelievably tasty glaze.
“If you taste it, you’ll see the difference between our Sweet Dad-
dy’s BBQ Sauce and Sonny’s or Bono’s,” Brian said.
As deeply entrenched as Asian food is in our culture, it’s a safe
bet that the addictive flavor of that type of food means that Brian and expand, they need a partner or private investor, who can make that offsite BBQ bottling a reality.
It’s going to happen. The two brothers are working overtime to mix
up batches of the sauce in their kitchens to meet the word of mouth de-
mand. Having sold 60 bottles in 3 weeks just through the grapevine, the brothers can tell they’re on the verge of something big.
The sauce is a variation of a family recipe from their father, a for-
Rodney Clark’s new BBQ Sauce will appeal to a huge segment of the
population.
With little to no competition as far as similar flavor in a BBQ sauce,
potential partners and investors should be lining up for a stake in the company.
Contact Brian Clark at 904-704-8976 or visit their website for more
information: www.clarkdaddysbbq.com.
mer Maine restaurant owner. Sweet Daddy’s BBQ sauce evolved in North
Top picture-
Carolina, where Brian and Rodney grew up, getting together with family
Sweet Daddy’s BBQ Sauce
and friends in backyard cookouts. Those cookouts were very popular, as the brothers learned the art of barbecuing from their father and started putting their own stamp on BBQ’s.
Bottom picture-
Of course, there were some rough beginnings. While Rodney burned
Sweet Daddy’s BBQ Owners Rodney & Brian Clark
his first piece of chicken on the stove (burnt on the outside and raw on the
inside), it was that lesson of cooking low and slow from his mother that stood him in good stead for the past 15 years.
During those years, Rodney and his brother have hosted tons of
Entrepreneur Anchor Magazine
October 2010
• Define your objectives; develop a plan on how to achieve them.
tips leadership
• Build a team committed to achieving the objectives. • Ensure that every member of the organization understands the vision, mission, and objectives. • Set goals and develop a metrics for measuring your achievements of the goals. • Be open to the best of what everyone, everywhere, has to offer; transfer learning across your organization. • Get the right people in the right jobs and give them the right tools. • Encourage a performance based environment; an informal atmosphere is a competitive advantage. • Make sure everybody counts and everybody knows they count. • Legitimate self-confidence is a winner - the true test of self-confidence is the courage to be open. • Business has to be fun - celebrations energize an organization. • Integrity - the most important requirement; without it everything else is for nothing. • Never underestimate the other guy. • Ensure work-life balance. • Understand where real value is added and put your best people there. • Know when to meddle and when to let go - this is pure instinct. • Ensure the work process is defined; management is mostly about processes. • Leadership is not a position, it is mostly about behavior. • Be a good manager of emotions and disappointment never get emotionally negative with people - no shouting or ranting, even if you feel very upset or angry. • Lead by example - always be seen to be working harder and more determinedly than anyone else. • Fairness - treat everyone equally and on merit. • Be firm and clear in dealing with bad or unethical behavior. • Always take the responsibility and blame for your employee’s mistakes. • Always give your employees the credit for your successes. • Never be self-promoting. • Back-up and support your employees. • Be decisive - even if the decision is to delegate or do nothing if appropriate - but be seen to be making fair and balanced decisions. • Ask for people’s views, but remain neutral and objective. • Always do what you say you will do – keep your promises.
10
Entrepreneur Anchor Magazine
October 2010
develop the mindset to
overcome any challenge by Coach Jay
Are you saying to yourself, “I’m tired of the pain”? If so, you’re reading the right article. Life can often appear this way more than we like for it to, but despite popular misunderstanding, it’s not life; it’s our choices... Yeah, I know it doesn’t make much sense to choose or to agree to put ourselves through what seems like a downward spiral at times. Most of us have grieved for the loss of family, friends and the daily challenges, but we continue to experience life by taking more risks emotionally and physically without anticipating change or rejection. The pain of losing a job has people questioning their self-value and self-worth. Unfortunately, many of us define ourselves by our position and income. We standardize our self-worth by what we accomplish or do not accomplish. In other words, if we’re not making good money, we’re a failure. If I’m making good money, I’m wonderful. So, now that so many of us are out of work, who are we? The most common reaction is anger, so we ask, “Why me?” Or we cast the blame on the powers that be: “My boss HATES me,” “It’s all about the money with these guys,”or, “This is company politics.” Anger is draining and it’s nothing more than an attack against yourself. What we fail to recognizes is that “life happens for you, never to you,” so the problem is, we take on the role of “THE VICTIM.” There are NO solutions in this state of mind. Whatever or whomever pushes our buttons or shakes us up, has something important to teach us. If we do not assume responsibility for our actions, we play the part of a victim. Ask rather, “How can I improve?”
we engage our senses without involving the inner-self. We therefore, remain on the surface and give away the power of controlling our own lives. Thus, we find ourselves increasingly disconnected from the world and others, more and more afraid of close encounters, of change and intimate connections. u We all want to make a difference in the world and in our private lives. To achieve this, we must do so from the inside out. u As we express anger, sadness, fear and judgment, we separate ourselves from the reality and truth of the situation. Separation always supports fear, since it opposes the fundamental natural urge of unity in every being. When we fear, it is a call for love. Through love we learn about ourselves and gain insight; and so we begin the journey of unity, the journey of love… We are more than just a set of behaviors. Conventional therapy works on the assumption that we are defined by our behaviors, and that changing the nature of a behavior will somehow bring about fulfillment and happiness. This approach works well for people who have not looked beyond their level of identity, but it is an unfulfilling reality for those who are sick and tired of being sick and tired. It is not possible to resolve our problems or issues in life if we do not know who we are, as both a human and spiritual being. The more we know ourselves at all levels, the less we will be controlled by our lower nature and the less we will project aspects of our own unconsciousness onto others. Self-knowledge is the basis of all knowledge, and the foundation for being able to be of true value to others.
u We tend to view the world in which we live from an analytical and physical perspective. When we do this, Entrepreneur Anchor Magazine
October 2010
11
NORTH FLORIDA OB/GYN ASSOC.ST.V.5 Felix N. Acholonu, M.D. • Elyse D. Beaubrun, ARNP
The office of Dr. Felix Acholonu provides a range of OB/GYN health services to the people of Jacksonville. He is committed to providing the highest level of patients care. The services he provides include but are not limited to:
y y y y y y
Urogynecology and the Treatment of Urinary Incontinence Advanced Laparoscopic Procedures (including laparoscopic hysterectomy) Gynecological Surgery y Hysterectomy Endometrial Ablation y Consultations PMS Management y Evaluation and Treatment of Infertility Essure Procedure
He specializes in the care of Obstetrical patients, performs annual well-women’s exams, diagnosis and treatment of Cervical Dysplasia, Uterine Fibroid, Menopausal Care Breast Health, Endometriosis, Contraceptive Management and Adolescent Health. Dr. Acholonu enjoys speaking to youth groups regarding prevention and treatment of sexually transmitted diseases, teen pregnancy, bringing to them other evidence based issues that affect today’s adolescents. The office accepts most major health insurances and is accepting new patients. Current insurance card and co-payment (if applicable) are required at the time services are rendered. Membership: Dr. Acholonu is a member of North Florida OB/GYN Associates, P.A, and is a Divisional Director, for St.Vincent’s Division Five
2 Shircliff Way, Suite 920 (9th floor of the DePaul building) Jacksonville FL, 32204 12
Entrepreneur Anchor Magazine
October 2010
(904) 387-1401
10 Steps to Raising Venture Capital By Ethelbert Nwanegbo
1) Understanding your business is key. Understanding your products or services, your target market, and the need for your product is key to making a good presentation to investors (Venture Capitalists). More so, your projections must be supported by market known facts. 2) Launch your idea and know how to raise capital. VCs are not interested in dreams. Your chances of success are high if your idea is launched and valuable. You have to prove that there is a market for your service or product. For any organization to survive it must create utility; ensure that your products or services are filling a need. 3) Prepare to take a long ride; be honest. No one will be willing to invest in a proposal without having adequate knowledge of the business, and the ability to forecast the chances of success. VCs have the smartest in the industry, so don’t expect to get away with an unsound business idea that promises heaven in a few days. 4) Know the type of Capital you want. There are three different types of capital you can get: early stage, expansion capital, and buyout capital. Before approaching VCs, make sure you know what type of capital you are going after. If you are trying to raise a few hundred thousand dollars, you are better off approaching angel investors. There are two types of investors: the first can just provide you with money and the second can provide you money and knowledge. The second type of investor is called a strategic investor.
5) Having a Business Plan is not the deal maker. It is advisable to have a sound written plan to ensure that you know where the business is headed. However, VCs do not have time to read a 30 page business plan. The executive summary must be succinct and straight to the point. You must ensure that the revenue strategy and business strategy are well written and must make sense. 6) Simplify your Business Model. Your business model must be very simple that even a “five-year-old” could understand what you are trying to do. Complex business models are hard to explain and may not be the best. 7) Contacts & Approach. One way to prove to the VC that you know your “onions” and that your business model is top-notch, is to get introduced by people the VCs trust. The best introduction would come from successful entrepreneurs who may have been a client of the VC. 8) Practice your pitch. Most VCs do not have all the time in the world and would not give you much time to present your proposal. Hence, you are given between 30 minutes to an hour for your first meeting. You need to be precise and concise in delivering your message. 9) Have due diligence materials ready. You must have your projections, operational stats and related legal files (as recommended by your lawyer) in one place, so that you can share the information with interested investors right away. 10) Hire a good lawyer.
Entrepreneur Anchor Magazine
October 2010
13
ten 10 Common
Accounting Mistakes By Steve Schoenly
E
“Excellence is in the details. Give attention to the details and excellence will come.” - Perry Paxton
veryone makes mistakes, and if they aren’t bad mistakes, everyone can recover from them. Yet accounting mistakes can have long-lasting effects; customers and vendors can leave, and the IRS and financial institutions will certainly take notice, too. Managing the money that comes in and out of your business is one of the most critical tasks facing you and your company on a daily basis. If you pay attention to the details and you are aware of the problems that can arise from simple accounting errors, you have a head start on avoiding the worst mistakes. The following accounting mistakes are among the most common errors facing small businesses. Some simple actions can save your small business big money. Some of the most common accounting mistakes are listed below: 1. Failing to follow accounting procedures. Even the smallest business needs accounting procedures. Too many small business owners think that they can “just wing it” when it comes to procedures, but one of the first steps towards success for a small business is the establishment of accounting policies and procedures. Controls need to be established and documented. Even the most detail-oriented owner can forget to instruct employees or accountants on the rules for their business. Setting the rules early on ensures that the business is protected in the event that the owner is too busy to oversee every last accounting transaction. Controls need to include even the simplest activities, such as the proper way to accept, document and deposit payments, pay bills and deal with routine issues like payroll and taxes. Put the procedures in writing; create a policy binder and make sure you - and your accountant or whoever provides accounting services - is aware of every step that needs to be fol14
Entrepreneur Anchor Magazine
October 2010
lowed. If you’ve written the policies correctly, you’ll make it possible for any employee or accountant to quickly and easily record transactions the right way... the first time. 2. Forgetting about systems. The days of accountants toting big leather-bound ledgers while wearing green eyeshades are long behind us. Most small business owners would like to think that the choice of accounting systems might not make a big difference, but that choice may be one of the most critical ones they face. Finding a system that meets the needs of the business, one that easily and quickly provides information the owner needs, may be the difference between spending time trying to worry about out data versus getting out and generating revenue. Owners need to make sure that the system they choose works not only for their business and their accountants or bookkeepers (if any), but for THEM. A good accounting system should be easily customizable to provide the reporting and analysis that an owner needs on a regular basis to analyze the financial health of his or her business. 3. Thinking your business doesn’t need a budget. Most small business owners like to think that they are careful with spending. They keep an eye on every dollar that’s going out the door, and consider whether the expenditure is worthwhile or not. Many owners think they don’t need a budget; that a careful consideration of expenses on a case-by-case basis is enough. Wrong! You can’t control overspending in one category or invest a surplus in another if you don’t know they exist. Budgets are the key to understanding the progress of your business. They offer a baseline that can be used to measure where the business is
versus where it could be. Budgets don’t have to be complicated. They can be general and high-level, but they do need to be drawn up. Some expenses can fall into “miscellaneous” categories - but not too many. Any business can look at the average of the last few months’ expenses, for example, to determine a reasonable budget; but any business owner who dismisses this step because he or she “watches expenses” is making a serious mistake. 4. Outsourcing too many functions. Small business owners may look to outsource some basic functions that require particular expertise: accounting, taxes, IT or marketing. All of these functions are good candidates for outsourcing if the owner doesn’t have experience in that area. But reliance on outside contractors and firms can be a weakness if the owner chooses simply to dump the responsibility for that function. Owners need to have an understanding of every aspect of their business. If areas are outsourced to contractors, those contractors should be overseen. If functions like IT, accounting or taxes are sent to outside firms, the owner of the business has a responsibility to meet with the firms on a regular basis to review the status of work and make sure he or she is aware of upcoming issues or challenges for the business. Even if functions like accounting are outsourced, any small business needs to have at least one person working for the company who understands accounting. Recording the transactions that might affect the business is simply too important to toss out the back door. 5. Failing to record details. Many transactions can be roughly categorized into a few general categories. Sales, Travel, Office Expenses. But if transactions aren’t recorded with a sufficient level of detail, then some of the key business intelligence an owner needs to keep the business running profitably is lost. The key step here is setting up the initial chart of accounts. Making sure that the business transactions are properly categorized in the correct accounting when they are initially recorded can save a lot of time and trouble down the road when researching and recreating the original transactions might be difficult. 6. Relying on “experts” who don’t understand your business. When choosing an accountant, tax advisor, bookkeeper or other financial professional, small business owners have to make their first order of business verification that the person or firm who are being hired have experience with their type of business. Accounting principles are generally universal, but some specific types of business may have particular rules and compliance issues that are specific to that type of business. If an owner isn’t aware of ALL of the issues facing their business, they need to find advisers who are. 7. Disorganization. It’s sad to say, but sometimes half of the battle is simply making sure that documents and records are properly filed. Disorganization with receipts, bank statements and other critical documentation can create problems with accounting and taxes, of course. But a hidden cost - one that probably costs small businesses more than many other errors - is simply the amount of time and effort it sometimes takes to research a transaction, contract or other record. Hours are lost constantly due to intensive searches for that one little piece of paper.
Small businesses need to establish filing systems and focus intently on ensuring that the filing is followed without fail. Paperwork is the bane of small business, but clearing that inbox out on a daily basis - and filing it, instead of dumping it into a “to be filed” stack - can make a big difference in efficiency. 8. Ignoring petty cash. Petty cash seems almost quaint in the 21st century, but many employees will be reluctant to incur expenses, even on a company credit card, if it isn’t paid by the company. Many small businesses still maintain a petty cash fund for stamps, deliveries, office supplies and so on. The amount of money seems small compared to the many other expenditures incurred, but the simple fact is that petty cash is one of the most easily abused assets of a company. If controls aren’t established and regular reconciliations aren’t performed, petty cash can quickly slip away. Petty cash usually flies under the radar of auditors, owners and even many employees, but it’s an easy way for unscrupulous employees to swipe a dollar here or there. 9. Making data entry errors. We’ve all made the mistake where we’ve entered a $432 in place of a $342 in a spreadsheet at some point in our lives. It’s an easy error to make, and a costly one if you’re a small business owner. Certain levels of data entry errors are just par for the course for any small business. These accidents happen, and the controls that you would need to prevent them up front (entering all numbers twice, for example) are too costly to consider. However, there are ways to prevent data entry errors from hurting the business long-term. The number one method? Reconciliations. Make sure that accounts are reconciled against bank accounts frequently and that any accounts requiring frequent data entry are routinely reviewed and reconciled - before month end, if possible. Small errors don’t just disappear - they eventually become bigger problems. 10. Backing up information. With the increasing reliance on servers and cloud computing - as well as long-lived desktops and notebooks - everyone is assuming that data is safe. Not so. The customer contact information you keep in your Blackberry might not be getting backed up on your server, and that invoice you sent might disappear if you created it after your daily backup has already run. Even the best backup system has holes, and a small business owner has to be aware of the amount of data and time that will be lost if any system goes down, any time. Think of backups as insurance. It’s likely they’ll never be needed, but the one time you do they’ll be invaluable. Just the first step... Paying attention to these common mistakes won’t necessarily do a thing to attract customers, get the lowest prices from vendors or generate revenue. But failure to pay attention to these common mistakes can be the difference between a small business that stays afloat and one that fails. Paying attention to these common problems, especially early on in a small business’s life, can make a huge difference. As the old saying goes, “An ounce of prevention is worth a pound of cure.” Entrepreneur Anchor Magazine
October 2010
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How SATISFIED are you with your sales volume and bottom line? Balancing Branding and Marketing Risk in a non-differentiated market Identifying new and emerging markets for your products or services Today’s business environment has made new product introduction, new market identification, product branding, and effective marketing plan a must for business success.
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Ask the experts?
We want to hear from you – If you have questions regarding any of the following – please contact our experts at www.entrepreneursanchor.com. • Business Accounting • Business Taxes
• Retirement Planning - Individual
• Small Business Payroll Compliance • Business Compliance
• Non-Profit Registration & Filing • Business Valuation
• Small Business Banking • Legal Issues
• Business Development
• Doing Business in Africa
Entrepreneur Anchor Magazine
October 2010
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tips sales tax
Sales Tax & Use Tax
Here are some activities that require the collection of sales tax or the payment of use tax: • Sales of taxable items at retail. • Repairs or alterations of tangible personal property.
• Rentals, leases, or licenses to use real property (for example, commercial office space, mini warehouses, or short-term living accommodations). • Rentals of short-term living accommodations (for example motel/hotel rooms, beach houses, condominiums, timeshare resorts, vacation houses, travel parks, etc). • Rental or lease of personal property (for example, vehicles, machinery, equipment, or other goods).
• Charges for admission to any place of amusement, sport, or recreation. • Operating private membership clubs that provide recreational or physical fitness facilities.
• Manufacturing or producing goods for sale at retail.
• Importing goods from any state or foreign country, for sale at retail or for use in the business. • Selling service warranty contracts.
• Ordering and using, on a regular basis, mail-order products on which no sales tax was charged. • Operating vending or amusement machines.
• Providing taxable services (for example, investigative and crime protection services, interior nonresidential cleaning services, and nonresidential pest control services). (Source: http://dor.myflorida.com/dor/forms/2009/gt800030) Your Service Business May Be Taxable • Amusement services • Cable television • Data processing • Debt collection
• Information services • Insurance services • Internet access
• Motor vehicle parking and storage
• Non-residential real property repair, restoration, or remodeling • Personal property remodeling or repair • Personal services
• Real property services • Security services • Taxable labor
• Telecommunication
• Telephone answering services
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Entrepreneur Anchor Magazine
• Utility Transmission and Distribution October 2010
® © ™ tradE marks copyrights, & patents for the entrepreneur By Jo-Anne Yau
T
rademarks, copyrights, or patents? What is a business owner to do? The success of a business depends on its uniqueness and innovation. As an Intellectual Property and Franchising attorney, there are three main ways I help my clients protect their intellectual property. Trademarks Trademarks are a fundamental necessity for a business. A trademark is any feature that a consumer uses to identify where their products or services originate. The most common trademarks are the business name, the logo, and
the slogan. However, savvy entrepreneurs come up with a number of ways to identify themselves to their customers, like having a unique uniform, or clever product packaging. Even sounds, like NBC’s 3 chimes, can be trademarked. It is a myth that a company has to use the trademark before a trademark application can be submitted. The truth is that the business cannot claim any rights to a trademark until it has been used. Whenever possible, I encourage my clients to begin the trademark process as early as possible, since it could take about a year for an application to move
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How do you know whether another party is already using a name, logo, or slogan? A trademark’s availability is not guaranteed just because the business is registered with the State’s Division of Corporations. It is also not enough to have purchased a domain name. Only a thorough trademark search can reveal existing trademarks that are the same or confusingly similar. While there are trademark search companies that can conduct this search, only a trademark attorney can give a legal opinion as to whether another trademark is “confusingly similar.” As soon as a company decides on a name, logo, or slogan, the (TM) symbol should appear next to it. Once a trademark is registered with the U.S. Patent & Trademark Office, the (R) symbol should be used. These symbols put the public on notice about the status of the mark as a registered trademark, and helps prevent infringement. Trademarks are vital for a business planning to expand and grow. Franchising and licensing options depend on protected business methods and registered trademarks. Copyrights Copyrights prevent other parties from copying any creative work and calling it their own. Copyrights in the business sector pertain mostly to written materials, such as Policy & Procedure Manuals, Employee Handbooks, and website content. Copyright registration also takes about a year to process. Thus, for content that is likely to be frequently edited, updated, or changed, I do not recommend registration. However, where the content remains relatively static and the written work has creative value, I would recommend copyright registration. Particularly in an era where others can access digital formats of the work and “Copy & Paste” the material, copyright registration becomes more important to prevent misappropriation. Patents By far the most expensive of the three, patents prevent new and useful devices. The most common type of patent is a utility patent, which protects the way an invention is put together. It is essentially the “recipe” for building the prod-
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uct. Ironically, I do not recommend patents for food recipes. Because patents are available to the public, it would not be wise to publish a successful recipe for competitors to access. Rather, food recipes are best protected by trade secrets. As opposed to utility patents, there are also design patents. These are much less common than utility patents because they only protect the functional design of a product. Also, utility patents are valid for 20 years, whereas design patents are only valid for 14 years. Despite the limited scope of protection of design patents, they do serve a particular purpose and offer protections not available under utility patents. As with trademarks, a patent search is essential to determine whether the invention has already been disclosed. The Patent Office requires disclosure of even similar inventions, and the inventor must explain why the present invention is a new, useful improvement on existing inventions. To date, it takes at least a month to properly prepare a patent application. Once submitted to the U.S. Patent & Trademark Office, it takes about 25 months before the inventor should expect to get a response. During that time, however, the inventor may claim “Patent Pending” status and begin to promote and sell the product. A word of caution, without patent pending status, if an inventor uses, describes, sells, or promotes the invention in public, that inventor will only have one year to file a patent application. After that time, the Patent Office will not allow an application to be submitted. Businesses have many obstacles to face. It is always beneficial in attracting customers, to offer unique and new products and services. To keep competitors from exploiting your competitive edge, protect yourself properly with trademarks, copyrights and patents.
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through the system. During this year, almost all my clients begin using the trademark in commerce, thus putting it in a position for registration.
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Page 1
Branding & Marketing Q & A
Q: How important is it to the clients on the way you dress? Is image important? Should you “look” a certain way for your clients, technical positions tend to “dress down” marketing positions tend to “dress up”. How important is your image? If you look like you are a million dollars do you come off as unaffordable to your clients? A: In a professional environment image is very important. But it’s not all about your external appearance, but also about your interpersonal skills. How well do you communicate with others, internally and externally? Each organization and industry has a different set of “dress code rules”... depending on the message you are trying to convey or the audience you are trying to reach will determine what is appropriate for you and your company. Lorna Morris LMMGraphics
Felicia Wright is President/CBO of Mygani Design Studio (904) 860-8440 • www.mygani.com
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October 2010
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You Can’t Live Yesterday Today: Maximizing Performance and Expectations in Your New Role By J Dianne Tribble
W
ow! Look at you! You did it! You desired it. You researched it. You did your homework. You put the word out as you networked, letting others know you were pursuing a dream. You took care of every detail demanded of you in order to realize the dream; the desire of your heart. All of your diligent hard work has now paid off. You have obtained the prize you set your eyes upon. You have set an example and raised the bar among your circle of influence. You have shown them that it is indeed possible to set your heart upon a desire and live the dream. I applaud you in your great accomplishment. However, now that you have obtained the desire, this is not the end of your hard work; it must mark the new beginning. Your success within your new role will be measured by your performance and expectations. Just as you funneled your energy and actions to obtain your new role, it is important to keep moving forward. This will require quality goal setting as you channel your efforts towards maximizing your performance. Well thought-out goals are realistic goals. What do you want to accomplish? Have you established a time-line for your expectation? Setting goals will assist you in keeping focused, staying on track, and centered in maximizing your performance and expectations. Setting
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goals will keep a mental picture before you as you work towards obtaining the goal. A habit has been defined as, “An acquired behavior pattern regularly followed until it becomes almost involuntary.” (Dictionary.com). Habits therefore, can be affirmative or habits can be detrimental. Maintaining habits which promote progress, and adding more affirmative habits will be beneficial in reaching realistic goals. Within your new role, it is imperative that you live your life today, avoiding how you lived yesterday. YOU CAN’T LIVE YESTERDAY TODAY! Have you ever wondered why life seems so difficult or why you feel so stressed and frustrated? Could it possibly be that you are trying to do things today the same way you did them yesterday? It will not work! It is not supposed to work that way. Today is “today.” You have moved to a new level. Remember, you have raised the bar. As a result, maximizing your performance will require you to formulate new or adjusted habits. To assist you in your new role, consider implementing some of the following suggestions:
3 Are the working hours different? Set your clock to properly accommodate the new working hours. Avoid cutting your time too short to properly prepare. 3 Select clothing and accessories the night before. Stick with your selections as much as possible. 3 Coffee drinker? Scoop your coffee the night before. Have your coffee ready to percolate when the alarm goes off. 3 Enjoy your morning. Allow time the following morning to read, meditate, pray, exercise, etc., prior to heading out. 3 Look in the mirror as you prepare for the day and speak positive affirmations over yourself. For example, ‘It’s a good day. I’m ready to make a difference. I love my new position. My business is growing. I am a good negotiator. I’m a good problem solver…’
and you are now positioned to help others. 3 At the close of your day, take time to reflect upon the good and positive aspects of your day. Consider starting a journal of thanksgiving to track your triumphs! This journal will provide encouragement to you and help you refocus in trying times. Where you were yesterday, has prepared you for where you are today. Be determined to maximize your performance and expectations within your new role. Take full advantage of affirmative habits. Implement new habits to enhance your progress. Above all, keep moving forward.
3 Avoid getting comfortable. Maintain your cutting edge by increasing your knowledge base. 3 Keep smart, role model people in your circle. Make sure you are not the smartest person you know. 3 Be watchful of your words. Make sure your words align with your desires and expectations. Speaking positively yields positive results. The same is true when speaking negatively. Negativity yields negative results. Does it make sense to expect positive results when your words are negative? 3 Eliminate any procrastination which impedes progress. Procrastination is a thief, which will delay or prevent progress in maximizing your performance. Recognize it. Take authority over it and keep moving forward. 3 Prioritize your day. Plan the day, allotting time for every task you must accomplish. 3 Take a break or two. Disconnect during the day long enough to enjoy your lunch; a conversation with a friend; or a brisk walk. 3 Have your commercial ready, on the tip of your tongue. Be prepared at all times to share who you are and what you do, or what you desire to do. Share your commercial with confidence and with a smile. 3 Always strive to be approachable. 3 Spend quality time with your family. 3 Be willing to share your success with others. Your accomplishment can be used to inspire others to pursue their dreams. Remember, you’re now a role model. You did it,
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October 2010
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POWERHOUSE ANCHOR MANAGEMENT CONSUL
Business Valu
PowerHouse Anchor’s Manag experts are value-focused wh you in assessing the worth o
Business Consulting Services PowerHouse will assist you in achieving your performance goals and rewarding competitive edge. We will provide the missing links that will help power your business operation in the following areas:
t Strategy Consulting Services t General Business Analysis t Internal Operational Analysis t Risk Management Service t Small Business Counseling t Employee Training t Business Planning t Job Task Analysis t SWOT Analysis t Business Registration t t Marketing Strategy Formulation t Market/Product Research 24
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October 2010
t Capital Structure and Planning t Buy/Sell Agreements t Economic Damages t Business Mergers, Acquisitions t Tax Regulatory Authorities Claims
Tax Services
PowerHouse Anchor manage requirements, policies, and a of individuals; small, medium reporting government-admin can prepare your federal, stat representing all states.
t Business Tax t Individual Tax t Sales and Use Tax t Pre-Sales Tax Audit t Tax Planning
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gement Consulting hen it comes to assisting of your business or assets. will help you on the following areas:
t Funding and Investing Options t Partnership Dissolution or New Engagement t Buying and Selling a Business t Estate and Gift Tax Planning
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t Business Tax Compliance t Transaction Tax t Estate and Trust Taxation t State and Federal Tax Deposit and Filing
t Compilation t Bookkeeping ( Monthly, Quarterly and Annual Bookkeeping Services) t Financial Statement Analysis t Cash Flow Management t QuickBooks Training t Accounts Payable Outsourcing t Accounts Receivable Outsourcing t Fixed Assets Management Outsourcing t Accounts Reconciliation Outsourcing t Invoice Billing and Management t Budgeting and Forecasting t Payroll Services t Part-Time CFO Services t Project and Job Costing t Accounting Software Selection and Implementation t Data Entry and Conversion Services t Sales Tax Filings t Forensic Accounting & Investigative Services t Cost Reduction Planning and Evaluation Entrepreneur Anchor Magazine
October 2010
25
Doing
Business in Africa
Opportunity vs. Risk! By Ethelbert Nwanegbo
The Africa’s real gross domestic product is expected to grow at the rate of 7 percent in 2011. The level of economic growth reported by most emerging markets in Africa has continued to exceed the “trendy analysts” economic forecast of the world’s poorest continent - Africa. Africa is poised to become the new center of world trade and demand by 2025 if the level of growth is maintained. The top African economies: South Africa, Egypt, Nigeria, and Kenya, are expected to lead the way in building the road to the continent’s future economic growth. Opportunities in the African Economy In the last decade, the telecommunication industry has reported an explosive growth in the continent. From 1999 to 2004, cell phone use in Africa grew at an annual rate of 58 percent. There are, however, pros-
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pects in several other areas of the African economy: u Oil and gas extraction and refining equipment industries u Mining u Agro-industrial machinery and chemical u Food processing equipment and
technology
u Power and Energy u Generic pharmaceutical products u Reconditioned industrial equipment u Cosmetics u Professional Services u Commercial Construction u Tourism
Strong economies of the world like China, the United States, and others within Europe are increasing their strategic interest in the African continent. The continent is expected to be the leading supplier of petroleum products to the United States. China and India are also doubling their bets and strengthening their trade relationship with the African region. The continent of Africa is a “demand powerhouse” with more than 1,000,000 people. The continent is hungry for goods and services. The emergence of new businesses and influx of business activities create opportunities in the continent. Hence, the mechanisms of trade and business development are needed to support or meet the increasing demand of the product and service hungry continent. Identification and Assessment of Business Risk It is imperative to assess the level of risk in doing business in the continent of Africa. The continent is plagued with investment risk just like most emerging markets of the world. The perceived risk level, expressed by businesses and organizations without sound knowledge of the African region and its cultural environment of business, is higher than the real risk. It is also wise to follow the finance concept that measures the level of returns based on the level of risk (the higher the risk, the higher the returns). These risks can be broken down into controllable and uncontrollable risk and are market or country specific. There are 54 countries that make up the African continent and these counties are unique in their business dealings, culture,
politics and governance; hence, there are no commonalities in the risk. Businesses and individuals considering or already doing business in the continent, can mitigate or manage identified controllable risk through the use of key mechanisms such as: u Performing a country-by-country risk analysis u Developing mutually beneficial partnerships u Engaging the services of professionals or agencies in
performing the business’s due diligence.
u Doing one’s own research u Understanding and differentiating
between good and bad risk
u Innovating to mitigating risk on projects u Understanding the economic drivers u Diversifying the risk in your portfolio u Exploring blue oceans - identify new or unsaturated
markets to enhance your chances of a high return.
U.S. Government Assistance within the African Region Companies and organizations can turn to the U.S. government for assistance when doing business in the African region. There are agencies and institutions accessible to businesses and individuals considering or already doing business in the region. Some of the available agencies include: The United States Commercial Service, which is part of the Department of Commerce, is represented in Dakar; which covers 18 Central and West African countries except Nigeria. Most embassies, consulates and U.S. Government offices overseas, have commercial sections that can provide market research, counseling services, and assistance in making contacts with U.S. businesses. Export-Import Bank (EXIM) of the United States is an independent agency of the federal government. The EXIM Bank has one mission: helping the private sector create and maintain jobs by helping finance exports. www.exim.gov The Overseas Private Investment Corporation (OPIC) offers U.S. investors political risk insurance against certain adverse action by foreign governments and against political violence. www.opic.gov
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Doing Business in Africa RESOURCES http://www.usaid.gov/regions/afr/dobusiness.html” \t “_blank”USAID The Unites States Agency for International Development is part of the U.S. Government’s effort to expand trade and investment partnerships with Africa. http://www.usaid.gov/business/small_business/” \t “_blank”OSDBU/MRC, The Office of Small and Disadvantaged Business Utilization and Minority Resource Center: The OSDBU/MRC is the initial point of contact at USAID for U.S. small businesses, small disadvantaged businesses, women-owned small businesses, HUB-Zone small businesses and service-disabled Veteran-owned small businesses. OSDBU/MRC is a small business advocacy and advisory office with the responsibility for ensuring that these enterprises receive access to USAID programs. http://www.agoa.gov” \t “_blank”AGOA The African Growth and Opportunity Act of 2000 is a road map for how the U.S. and Africa can tap the power of markets to improve the lives of their citizens. Matchmaker programs have been created for trade with 38 eligible countries. http://www.africacncl.org” \t “_blank”Corporate Council on Africa (CCA) The CCA is a major partner of the AGOA. Their programs help match African and American companies in a variety of industry sectors. http://www.buyusa.gov/westafrica/en/” \t “_blank”U.S. Commercial Service, West and Central Africa The U.S. Department of Commerce provides up to date information about West and Central Africa market research, matchmaking services, and will locate the most qualified buyers and partners for your company. http://www.buyusa.com” \t “_blank”BuyUSA.com for U.S. Exporters BuyUSA.com is an online service for the U.S. Commercial Service of the U.S. Department of Commerce that puts trade tools and specialists at your service. They will act as your online global business partner and connect you to thousands of qualified international buyers, distributors and agents, with their online service. A $50 subscription to the service will allow you to: Post your company profile for automatic matchmaking Search for and email qualified international buyers Receive email notices of new trade lead opportunities Submit and respond to offers to sell your product Conveniently track trade leads and matches in your “MyBuyUSA” http://www.tda.gov/pipeline/index.html”U.S. Trade and Development Agency (USTDA) The U.S. Trade and Development Agency (USTDA) advances economic development and U.S. commercial interests in developing and middle income countries. The agency funds various forms of technical assistance, feasibility studies, training, orientation visits and business workshops that support the development of a modern infrastructure and a fair and open trading environment. http://web.ita.doc.gov/ticwebsite/afweb.nsf!OpenDatabase&Start=1&Count=500&Expand=23” \t “_blank” Trade Information Center (TIC) The U.S. Department of Commerce’s, International Trade Administration’s website, is primarily for U.S. businesses engaged in exporting.
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For help or consultation on helping your organization mitigate the risk and ensure a successful launch into the African market, please contact PowerHouse Anchor Management Consulting, Inc at (904) 265-0765.
Entrepreneur Anchor Magazine
October 2010
By Rudy Jamison
everyone is
selling something
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October 2010
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E
very relationship that you have (friend, client, business partner, etc.) is quid-pro-quo. An equal exchange, give and take, reciprocity, all defines the nature of your associations with others. It is as if we are on a perpetual interview to validate our/their worth and position. The reality is, as soon as an alliance inequity or lack of value is perceived, there is a relational shift. In order to elude this sense of disparity, we continuously seek buy-in with respect to our affinity. Although the term ‘sales’ typically carries a negative connotation, the truth of the matter is that everyone does it every day. On your job, regardless of what you do, you sell a ‘product/service’ and have internal and external ‘customers.’ For example: • Take a city government employee who may not support a particular commodity. Their ‘customer’ may be a subordinate who has to buy into a system/process (their ‘product’) or their ‘customer’ could possibly be a superior to whom they must convince of their capacity to perform (their ‘product’). • Consider a politician who successfully campaigns on a particular agenda (their ‘product’) to prevail. Is it fair to say that his constituents (their ‘customer’) purchase a proclamation? • Finally, imagine a tenth grade school teacher who is responsible for teaching the periodic table (their ‘product’) to 26 students (their ‘customer’) at 7:00 am in the morning. If that doesn’t take persuasion, I don’t know what does. If you are not convinced that ‘Everyone in Selling Something,’ try not doing what you say you are going to do, stop performing effectively, or bring less ‘value’ to the table. Inevitably, that relationship degrades because of an inability to deliver your ‘product/service’ or a dissatisfied ‘customer.’ What is your ‘product,’ who is your ‘customer,’ and how well do you sell? Many times we take significant relationships for granted because they do not present immediate financial compensation. Although the end user, or the one making a monetary exchange for our product/service is usually how we define our customers, some relationships should be treated as such.
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We all have significant others, superiors, subordinates, and associates who we consistently relate with, validating our worth and position. We regularly seek buy-in while arbitrating thoughts, feelings, and ideas. Even though some people are better than others at this, relationships require a distinct degree of communication that we can all improve upon. When an executive law enforcement officer was asked ‘Who is your customer?’, he quickly responded that very few law enforcement employees would characterize their relationships in terms of customers. We agreed that although citizens of the community (external customers) were the end users of a public service, internal personnel (internal customers) were absolutely as important. A major concern was that, although a quantitative reduction of crime represents performance, the intangible challenge is minimizing the ‘fear of crime.’ Attractive crime statistics don’t always translate into a feeling of ‘safe.’ Internally, there is an uncompromising culture that demands buy-in. We talked about a common inability for officers to embrace the customer-driven philosophy, consequently impairing matriculation through the agency’s organizational structure. It was interesting to hear of such sales-like issues in such an antisales environment. In a conversation with a Health Department Director, the challenges were not as severe, however, they were apparent enough to cause frustration. As a municipal entity that rarely experiences monetary exchange, this ‘customer philosophy’ is deficient at best. One thing that we undoubtedly agreed upon was the need of strong communicative skill sets and better business acumen regarding interactions within the department. When given an ounce of thought, the mantra ‘Everyone is Selling Something’ rings true in any industry, organization, or department. Can you authentically articulate your product? Do you know who your customers are? Do you efficiently penetrate the market in which they exist? In order to increase productivity/profitability, identify your customers, understand them, and relate to them. Great Selling!
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from Risk to
Reward Understanding How Risk Affects Decision-Making By Sandi Smith
H
ave you ever wondered why some entrepreneurs take extreme risks and others are far more conservative? It’s because we all have our own built-in tolerance level for risk. Some people are just more risk-averse than others.
Take a Flying Lesson We can learn a lot from high-risk industries such as aviation, where decisions literally affect life and death. These industries:
When you think about it, the amount of risk we’re willing to take, greatly impacts the decisions we make in our business. It impacts the pace of growth of the business, the amount of mistakes we’re willing to make, and even whether the business makes it or not.
3 Use checklists so that errors are minimized. Where can you use checklists in your daily routine to help you avoid missing an important piece?
Evaluating risk is certainly not a science and a prime and painful reminder of that is the number of businesses that fail each year are far greater than the number that succeed. But, we can improve our skills in evaluating our risks in business so that we minimize our mistakes and hopefully maximize our successes. Here are a few tips:
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Checklists help you design procedures so that you don’t have to reinvent the wheel each week. Everything from posting accounts receivable, to scripting a sales call, to delivering your service or product, can benefit from a checklist and reduce your risk of making costly errors. 3 Build in redundancy and backup procedures. There’s a reason airplanes have up to four engines; when
one breaks, the others can keep the plane in the air. In an airplane cockpit, pilots have two of almost every major instrument they need, because when you’re in mid-air, you can’t exactly run down to Costco when a part fails. Where do you need backup systems in your business to reduce your risk? Backing up your computer files is one idea that comes to mind. Anything you don’t want to lose, you should have a copy of in a safe place. You can also back up key skills in your business team through employee crosstraining. You might even go as far as having two PCs, two ways to get your email, and two phone lines. The use of redundancy helps you avoid costly downtime and helps you respond more easily when a crisis hits. You won’t have needless worries when you have properly cross-trained your staff, backed up your computer system, stored important papers digitally, digitized important photos, insured assets that could be lost, and purchased two or more of each item you can’t afford to lose. In these cases, it’s the decisions you didn’t make that can hurt the most: the backup you failed to create, the employee who was the only one who knew that client account. Watch for these; the results of not doing something can hurt the worst. Get a Clear Head A lot of times, entrepreneurs can tend to make decisions out of fear (which are often spontaneous) and not from their goals (where they take the time to think and plan). Don’t be pressured into making hasty decisions. 3 Write down the pros and cons of a decision you need to make. This will help you clarify the risks and rewards of both sides of the decision and help you see the best way to go without being hasty. 3 Get advice from friends. You can gain perspective from people who have more experience than you and who have already done what you’re trying to accomplish. Seek those people out to learn what you need to make an informed decision. 3 Know yourself. Every decision contains an emotional component, so be careful that you are balancing your logical and emotional side. This takes work, and emotional
intelligence is a skill you can learn and master over a lifetime. Know Where You Fall on the Risk Scale Are you a thrill seeker like Richard Branson or a comfort-loving, certainty-seeking risk avoider like most of us? Or maybe you’re somewhere in the middle. Know where your natural bias for risk falls so you can compensate if you need to. If you’re a big risk taker – a thrill seeker – then you probably need to slow yourself down and stop winging it so often. Find a partner who can counteract your need for thrills and allow them to ask you the right questions before you make a big decision. If you’re a conservative risk-avoider, then you may need to practice getting more comfortable with uncertainty. Here are some tips to stretch your risk envelope: 3 Plan new experiences. At least once a year, plan to do something you’re not quite comfortable with: ride in a hot air balloon, climb a “Fourteener” in Colorado, take a trip overseas alone, swim with the stingrays in Stingray City, or volunteer with the Red Cross Disaster Action Team. In business, this might mean calling a mentor you’ve admired but never spoken to, accepting a speaking engagement that will stretch you, or bidding for a client that will grow your business. 3 Push the envelope. When you’re already in a scary situation and you’ve managed to get it under some amount of control, take advantage of your unique circumstances and stretch yourself even more to see what you can do. This is a distinguishing characteristic of exceptional people; they take advantage of every opportunity to test their mettle. If you’re a parent, there are opportunities like this all the time. In business, look for opportunities in the boardroom, in meetings, and during speeches to show people what you’re made of. When you’ve developed your skills for assessing risks in business decisions, you will be far ahead of the entrepreneurial pack.
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October 2010
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Powerful Pyramid Paradigm ...Learning from the Past Building on the Future by Susan D. Brandenburg
In the modern-day corporate vernacular, he is one entre-
preneur who is not afraid to think outside of the box, push the envelope, or create a new paradigm. In fact, Sanjeev Tirath, Co-founder and CEO of Pyramid Consulting, Inc., is a visionary with such a passion for providing global IT solutions, that he has taken his company from a basement-based think-tank to a booming business with more than 1,500 associates providing stellar services around the world. Much like the Pyramid for which it is named, Tirath’s company has aimed skyward from the beginning, planning each step with precision, fully utilizing both internal and external resources, reacting with flexibility to challenges, and setting each detailed goal with a view toward controlled growth and high achievement.
liked the U.S., especially when the work took me to Atlanta. It was such a nice green town. I liked the people and the kind of work I was getting here.” Tirath remained on a work permit, with the dream of starting up a business of his own in Atlanta someday. His dream was realized in 1996 when he co-founded Pyramid. After having honed his skills in IT development, integration projects, and marketing as a senior executive with several leading software consulting firms including Wipro, TCS and Unisys, Tirath boldly joined the entrepreneurial world.
After earning his bachelor’s degree in Electrical and Electronics Engineering at Pilani’s Birla Institute of Technology & Science (BITS), one of the top ten engineering colleges in India, Tirath came to the United States in 1986.
Tirath’s decision to start his own business was reinforced by the layoffs he saw in large U.S. corporate entities. “I saw people laid off when they needed money the most, and this was a huge driver for me,” says Tirath. “I didn’t want to work for anybody else, and I split from Unisys in 1996 to form my first start-up technology company. That soon led to Pyramid.”
“The company I was working with in India brought me, first, to Dallas, Texas to do some projects,” he recalls. “I
Tirath’s initial idea was to be an IT service-oriented company, and Pyramid Consulting remains focused on IT
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services today, but he has faced some major challenges along the way. One of those challenges occurred when Unisys decided to move its headquarters from Atlanta to Detroit, and then dropped the idea. “It was a crucial time for our new company,” said Tirath. “We grew rather slowly for a while after that announcement by Unisys - going from ten to fifteen people in 1996 to only twenty-five people in 1998, and we incubated Pyramid Consulting in the basement of our house until 1999, when we got our first real office space. It turned out to be an awesome time for technology. All of a sudden, it seemed everyone wanted our services. Everyone, including Pyramid Consulting, Inc., was flying high until the dot-com bust.” That was the second big challenge for Pyramid Consulting. “The dot-com bust took the air out of us for a while,” recalls Tirath. “We lost a lot of our small start-up clients because many of them disappeared with the bust, owing us a lot of money. That was when we began focusing on the brick and mortar clients – the large Fortune 500 companies – and truly found our future direction.” One of the ways that Pyramid Consulting found a solid and successful future direction was by becoming a member, in 2000, of the Georgia Minority Supply Development Council (GMSDC), which is a national organization with affiliate chapters in nearly every state. The GMSDC’s concept is to provide networking opportunities for small companies with larger companies. “Networking events were absolutely essential to our growth,” declares Tirath. “Our first major client was General Electric, and after going through the dot-com bust, Pyramid gained substantial new business providing IT Staffing services to GE. We learned how to successfully do business with a large client. Working with GE was the beginning of our real growth, and then – another challenge - we were hit by 9/11.” GE’s decision to offshore their work after 9/11 was extremely instrumental in the growth of Pyramid, which soon expanded its services to India and the U.K. and, with GE’s references, developed multiple global relationships with Fortune 500 companies such as Home Depot, UPS, and others. “It was another evolution for us,” Tirath states, proudly noting that in 2003, 2004, 2005, and 2006, they were named
one of the Top Minority-Owned Companies in the U.S., and in 2007, Pyramid passed the $50 million mark in annual revenue, earning several awards and accolades, including a listing in Inc. Magazine as one of the 5000 Fastest Growing Private Companies in America. “Today we are on fast forward and our services include our Lifecycle IT Solutions,” says Tirath. “Our growth has been almost completely internal and we’ve done much of our IT development totally from scratch, but we have found that advice from outside resources such as accountants and attorneys has helped us grow, too. Now we see a lot of need in the global marketplace for our services in Asia and Africa. In fact, we got our first order from Rwanda recently, partnering with the Department of Justice there. We are always working on further customizing our products and services for the many different industries we serve.” On the company’s website (www.pyramidci.com), there are new images, a new look and a great deal of new content, including the announcement of Pyramid’s Centers of Excellence and the updated IT Staff Augmentation section. In his Letter from the CEO on the website, Tirath writes: “Change … it seems to be the very nature of this business. Changes in software and information technology – how to create it, use it, and manage it – come at every organization with such lightning speed.” Lightning speed is also an apt description of the phenomenal growth that is now being experienced by Pyramid Consulting, Inc. From IT staffing solutions to funding innovation zones; from IT software augmentation to products for document management and business process management, Tirath’s former basement-based company now provides the finest of turnkey IT services to some of the world’s most demanding companies. Sanjeev Tirath has this advice for the aspiring entrepreneur: “Persistence is the key. Success does not come easily or quickly. In the face of challenges, stick with your business plan, know what the marketplace demands, and most importantly, stay passionate about your dream.” When asked about future goals, Tirath paused for a moment, smiled with satisfaction and said, “We’re having fun in the company right now and we will just continue growing. We don’t have a defined exit plan.”
Entrepreneur Anchor Magazine
October 2010
35
Social Security: Plan Now for Benefits Later By Suzy M. Jackson
of Americans struggled to provide for themselves and their families. In the midst of all this, the Social Security Act brought hope to some of our most vulnerable citizens, giving elderly Americans income security and bringing us closer to President Roosevelt’s vision of a Nation free from want or fear. For the better part of the last century, Americans have had the benefit of a backup plan for their retirement income. Today’s citizens are asking, “will it benefit me?” The answer is “it will!” But what we don’t know is “how much?” Social Security, like all areas of our current and future finances, needs our attention and management to bring us the most benefit. We have to get a thorough understanding of how the benefit works, as we plan our social security income. August 13, 2010, President Obama signed a proclamation to commemorate the 75th anniversary of the Social Security Administration. The proclamation begins with these words: On August 14, 1935, President Franklin D. Roosevelt signed into law the Social Security Act to protect ordinary Americans “against the loss of a job and against povertyridden old age.” Our Nation was entrenched in the Great Depression. Unemployment neared 20 percent, and millions
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The Basics Social Security provides benefits to four groups of individuals: • People who are currently retired • People who are disabled • Survivors of workers who have died, and • Dependents of workers
To be eligible for Social Security benefits, you must an extended retirement. have worked in a job covered by social security for 10 years If you do decide to delay receiving your Social Security or 40 quarters. The time worked does not have to be conincome benefit, you still need to sign up for Medicare at age secutive quarters or years or employers. Please note, certain 65. pension programs could actually reduce your social secuEveryone needs to keep tabs on their future social retirerity benefit. For example, if you worked for a government ment benefit. Even if you don’t believe the amount will be agency that did not participate in Social Security, the SSA relevant to your future, you earned it, so you should make benefit may be modified based on the pension you will rethe most of the investment. Make a habit of reviewing your ceive even though you have worked more than 40 quarters annual Social Security Statement. The Statement is mailed in other covered positions. These automatically to every worker over age 25 every reductions fall under the Windyear. If you’re not sure if you received the latest fall Elimination Provision and Statement, you can request it online or by mail. Year of Full (Normal) the Government Pension Offset Brith Retirement Age guidelines which you can review There are a couple of important uses of your 1937 or 65 on the Social Security website. Statement for your personal financial planning. earlier First, you want to review the statement for accura1938 65 & 2 months Many people think of age 65 cy. Like any large system, there is the potential for 1939 65 & 4 months as the magic retirement age. Demistakes. Make sure the earnings record on page 1940 65 & 6 months pending on when you were born 3 of the statement is correct. 1941 65 & 8 months 65 may not be your full retirement age. Your full retirement Everyone wants to reduce their taxable in1942 65 & 10 months age is important to know because come, and by law everyone has the right to “le1943-1954 66 it affects the amount of benefits gally” reduce the taxes they owe the government. 1955 66 & 2 months you will eventually receive. As a business owner, you have the most control. 1956 66 & 4 months You can decide to pay yourself nothing and allow 1957 66 & 6 months Everyone who is eligible for more value to build up in the business for future 1958 66 & 8 months Social Security can begin receivgain. But work with your tax and financial advisor 1959 66 & 10 months ing benefits at the early retirement to include Social Security as a factor in determinage of 62. If you take early retireing your income levels. Your Social Security inment you will receive a lower come benefit is based on the highest 35 years of monthly benefit, as much as 25% lower, permanently. documented income. Another important and potentially costly factor to consider, is that you still won’t be eligible for Medicare until age 65. For one retiree, the early retirement decision not only meant the 25% income benefit decrease, but the health insurance cost $4000 - $5000 annually between ages 62 – 65 because of her age, and the pre-existing conditions that can be common when we’re over 60. The other important age to know for Social Security is 70. If you have other sources of retirement income, you may want to consider delaying receiving benefits. Depending on your full retirement age, you could increase your benefit amount by as much as 8% per year. Now, an 8% increase may not have raised an eyebrow in 2007, but now that we have been reminded that we can have extended periods of low, slow or wildly fluctuating investment growth, it can impact someone’s ability to maintain their standard of living in
For 2010, the Social Security tax for the self-employed is 12.4% on earnings up to $106,800. The Medicare tax is 2.9% for all earnings. Both taxes can be offset by income tax provisions if you are self-employed. For many people, retirement represents the opportunity for business ownership. The decision may be to take the Social Security benefit to provide for income while they grow the new business. If you have not reached your full retirement age, your income benefit will be reduced in 2010 by $1 for every $2 over $14,160 in earnings. If this is the year of your full retirement age, the income benefit will be reduced by $1 for every $3 over $37,680. If you are already at full retirement age, there is no reduction of income based on earnings. Use your Statement to help develop your personal disability risk plans. If you develop a disability that is expected
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to last at least a year or result in death, then you are eligible for Social Security disability benefits.
• When this year’s Social Security Statement comes in the mail – OPEN IT!
Please note that Social Security disability is extremely hard to get. It takes several months to get through the application process, and a large percentage of claims are turned down the first time. Numerous claimants resort to hiring an attorney specializing in this area to assist them. Many people who own a business also maintain full-time employment, usually for the benefits as well as for a steady stream of income. Some employer sponsored disability plans require that if a disability is expected to be long-term, the employee must apply for Social Security disability and if received, it is “coordinated” with the employer benefit.
• Compare the earnings record to your records and make corrections if needed.
Use the Statement as a basis for family income planning. What happens to “them” if you’re no longer here or unable to work? Social Security provides for benefits to spouses and dependent unmarried children under age 18 (19 if still in secondary school), or over 18 if severely disabled before age 22. While most of us certainly want to provide more than Social Security for our families, consider that at various times during the future, the investment we leave may be depressed in value, property may be illiquid and an ongoing business concern may be unable to generate revenues at previous levels due to the overall economic environment. For unmarried couples, it is important to assess each person’s Social Security options. Sometimes a partner will work in a business at $0 salary. Thus $0 taxes are being paid into the Social Security system for that individual. Part of the planning may include making sure the partner at least has earnings that meet the minimum requirements earning credit (40 quarters of covered Social Security earnings), which for 2010 is $1,120. Additional planning should be done with respect to Social Security if there are special needs children. Next Steps Now that you’ve reviewed some of the basics, commit to making sure Social Security works for you. Consider doing the following:
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• Let it motivate you to increase the amounts you contribute to your personal and company sponsored retirement plans. • Tell your financial advisors you want to include a look at your Social Security as part of your end of year planning meeting. You may want to shift income. • Log onto www.ssa.gov • Get familiar with the site • Read up on topics that interest or concern you. Depending on your money advisors knowledge base, you may be learning together. • Use the calculators and benefit estimators to set timelines and get projections to use with your ongoing financial planning. • Surf the net for more ideas from expert planners on getting the most out of your Social Security benefits. For example, if you are already taking benefits but experience rapid growth in income from your business, there is a little known law that allows for a “do-over”. You can repay the government and increase future payouts. but don’t try this without professional help. One last point – if you’ve been dreaming of retiring to an island paradise, living abroad may actually be cheaper. The Social Security income that you’re earned follows you anywhere.
Dealing with
Fraud Matters in the Financial Service Industry By Ethelbert Nwanegbo, CFE
G
ood internal control is essential in deterring fraud, but unfortunately, it is not a panacea for total eradication of the intent to commit fraud. From a regulation standpoint, organizations are committed to operating in a fraud-free and highly ethical environment. No organization is sheltered from fraud; rather, financial organizations face high risk of fraud from within and without. The sweet and desirable goals set by management, and which formed the basis of investors’ decisions, can be dashed by the unquenchable fire- fraud. In some cases, fraud has led to the untimely demise of both strong and mighty organizations. Dealing with fraud in and of itself is as dangerous as the fraud. A careless approach to dealing with a fraud matter could drain an organization of its resources, gulp valuable management resources, lead to high legal payout and may cost the organization it’s existence. An organization’s internal control environment should be able to create the room for a fraud-free business place. I contend that a good and effective internal control system helps to prevent fraud mostly at the lower level of the organization. Organizational victims of fraud are mostly those
that have placed high trust on employees with long service years. The advent of computers and the movement in technology has impacted the financial services industry both positively and negatively. Technology has led to an increase in customer satisfaction, productivity, and effective business operation; but has also brought with it winds of vulnerability to fraud, especially in the financial service industry. Because fraud in the financial service industry has so many faces and forms, there is no actual standard for wiping out fraud within or without. Some form of fraud could be prevented through a fraud awareness program, building an anti-fraud culture and an effective internal control environment. Dealing with fraudulent matters requires due diligence and care to ensure that what appears to be fraud in form, also passes the smell test. Approach to fraud matters may end up favoring the fraudster, thus leaving the organization worseoff from a legal or liability standpoint. What is a Fraud Matter? Fraud matter is any action that appears fraudulent in form or actions that have been determined to be fraudulent
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based on the act in question. Fraud matter is deemed to be fraud after substantial initial evidence gathering has been concluded. Remember, it is not fraud until you can prove that the action is fraudulent or has a fraudulent intent. Financial institutions tend to shy away from prosecuting fraud because of the nature of it’s products and services and the impact of negative press. Thus, dealing with fraud in organizations begins where the dealing with fraudulent matter ends. All actions that have yet to pass the fraud test are referred to as fraudulent acts or matters, and referred to as fraud after convincing evidence has been gathered that such an act can boldly be so named. A fraud matter could be a time-bomb if wrongly approached. Moreover, much could be lost on the altar of time, and in some cases lead to a going concern of disaster. Certain actions in an organization could be mistaken for fraud, among them: unintentional financial errors, unauthorized action for the benefit of the organization, unauthorized use of the company’s property for organizational gain and other irregularities in an organization that are not for personal benefit. Dealing with a Case of Fraud Dealing with fraud matters demands a step-by-step approach, which should be part of the standard business operation procedure. This approach will begin by gaining an understanding of the organization’s internal controls, identifying the high risk areas, and assessing actions that would constitute fraud-- if it could be gathered that fraudulent intent exists or existed. Time Time is the key. Dealing with fraud matters promptly is very essential. It could help unveil fraud in the making, undo the harm, recover the loss, or dismiss the notion of fraud. I cannot emphasize enough, how important it is to approach fraud matters tactically and with urgency. A lot could be lost or recovered on the altar of time when dealing with fraud. Have a Standard Fraud Policy Where the action has passed the fraud test, and it could be determined with all certainty that the action is fraudulent, steps to uncovering the fraud and gathering of evidence should be standardized. There are certain rules of engagement in order to successfully deal with fraud matters:
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Equity Approach the investigation with an unbiased mind (goclean). This will help the organization pass the fairness and integrity test. Being biased in the conduct of an investigation obscures the true image of the fraud. It could also help the fraudster dismiss the case of fraud, or lead to begging of the question of fairness while sacrificing the main issue- fraud. Policies and procedures should detail the approach to the investigation; communication should be based on the organizational strata where the fraudulent activity is identified. In an academic paper written by Peter John Lynch, “Strategic Control Plan in Dealing with Fraud and Corruption”; he opined the importance of reporting all fraudulent instances to senior management. He also went further to express the importance of having an alternative means of reporting fraud matter of concern, involving fraud or unethical activities, within the organization’s framework. Evidence Gathering and Securing of Evidence Dealing with fraud matters: embezzlement, theft, fraud, breach of confidentiality, lapping, procurement lapses, deception, and asset misappropriation, can be a nightmare if not properly approached. Hence, evidence gathering is very essential in substantiating the case of fraud. All evidence must be correctly and adequately gathered. A proper evidence gathering procedure should be followed to ensure that the evidence is admissible. If evidence is not properly handled, it could be dismissed. Recording the evidence and storing the evidence will also impact the admissibility or inadmissibility of the evidence gathered. It is worthy of notation that evidence gathered must be sound, verifiable, and supported. The soundness of the evidence is in its relevance to the fraud. Can the evidence be attached and traceable to the fraud? Verifiability of the evidence is also very important. Can any reasonable person gather the same evidence if exposed to the same information gathering process? Can the evidence support the case that the fraud is committed and pass the “beyond the reasonable doubt test” Conclusively, securing the evidence could impede the admissibility of the evidence. It is highly imperative that evidence is secured with at least three personnel as witnesses. Some people will ask the question: why three? With two witnesses, it could be proved that there is collusion. The case of collusion is usually hard to prove with three personnel witnesses.
I N V E N T O R Y C A R R Y I N G C OST F R A M E W O R K
Price level change Price adjustment cost
Inflation cost
Inventory Investment cost Capital cost Interest on capital Insurance cost Inventory Carrying Cost
Inventory Service cost
Taxes Interest
Opportunity cost Storage space cost
Other capital or space usage Plant warehouse Rented warehouse Public warehouse Company paid warehouse
Inventory risk cost
Obsolesces Damage Pilferage
Labor Cost Relocation costs
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Building Relationships by Felicia Wright
A
s an entrepreneur, part of your job is to make your clients feel comfortable and welcome. If you are the owner, you are the face of the company and you set the tone for your employees and clients. Being in business for yourself can be very rewarding and challenging. We all want to make money and secure clients, but what is your strategy in getting there? Developing long-term relationships with your clients and colleagues requires three phases: starting the process, building the relationship, and maintaining the relationship. Think about how you met your last client. Was it through social media, at a networking event, or through a referral? What happened once you had a chance to follow-up with them? Most entrepreneurs I know dislike attending networking events, and social media can be time-consuming. The networking process can become tedious and inconvenient. Before you decide to attend that next networking function or join an on-line group, develop a plan. Ask yourself:
• Is the event going to be beneficial for me and my business? • What do I what to achieve by attending or participating? • Will I be able to help someone else?
Once you make a connection with someone, you must also make a genuine effort to follow-up with them. It is a
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waste of time for both parties if you just shake hands, pass out business cards or connect online without follow through. The key to building a business relationship with someone is getting to know them personally. It doesn’t mean you have to go to their house or meet their family, but making a connection with them will increase your chances of working with them in the future. It will add credibility to your relationship, so they refer others to you. Try meeting with them in a neutral place other than the office. You would be surprised at how much you can really get to know someone outside of a formal setting. Remember, it takes time to build a relationship. The more you know about your clients and colleagues, the better position you are in at helping them with their needs. In order to maintain your business relationship, you need to be consistent. Be honest and open with your connections. They can be your greatest allies and you theirs. This is especially true for entrepreneurs, because people do business with people they trust. It is not always about purchasing products or services from each other. Build a foundation with your network by supporting one another, recommending referrals and sharing resources. These factors not only show good faith efforts, but builds trust over time. Starting and building business relationships is critical to the success of any small business. Make sure you take the steps to develop and maintain your relationships on a long-term basis.
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avoiding the top 10 common traps of
diversity training By Dr. Jarik E. Conrad
o
ne of the most dreaded phrases in corporate America is “diversity training.” People’s eyes start to roll and they squirm in their seats at the mere suggestion they attend. “I have already had that before,” is a typical reaction. They desperately search to fill their calendars with other responsibilities on class days. In response, we diversity practitioners counter by giving the training fancy names like “inclusion training” or “cultural competence training,” but when people realize this is simply a code name for diversity training, they still react unfavorably. While this response is disheartening, it is quite understandable. Much of what organizations offer has been, at best, boring and unhelpful; damaging at worst. Effective diversity training challenges not only the participants, but the trainers as well. It can be difficult for trainers to present information objectively because they often struggle with some of the same issues they are trying to address. Sometimes evident in their body language, attitude and tone is the indication that they, too, have challenges understanding human dynamics. While there are many approaches to developing and delivering effective diversity training, organizational leaders and individuals responsible for the training should be sure to avoid the most common pitfalls.
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Entrepreneur Anchor Magazine
October 2010
1. Lack of a Compelling Business Case It is true that diversity training doesn’t always guarantee exceptional business results. However, nothing in business is guaranteed. The ability to attract and retain the best available talent, and the ability to understand and react to an increasingly diverse customer base is just the beginning of where diversity training can make an organization stronger. 2. Too Little Focus on the Impact of Emotions Failure to consider the role of emotions in recognizing and understanding relevant cultural differences is a common, costly mistake. Emotions shape our perspectives and distort our ability to analyze information accurately. In other words, they convert the objective to the subjective. Any training that does not acknowledge and identify the emotional framework under girding issues is useless. 3. Lack of Engagement from All Levels of Management Having senior level management buy-in for diversity initiatives is crucial. The senior level sets the vision and determines the priorities for the organization. But they need to “walk the talk” as well. In other words, instead of purchasing tables at the local Martin Luther King Jr. celebration and sending members of the company’s diversity councils, they need to show up themselves.
While senior management commitment is essential, many of the day-to-day decisions around hiring, training and career development actually happen at lower levels in organizations. In fact, the first-line and middle-management teams are often the main people threatened by diversity efforts. 4. Failure to Engage White Males Researchers indicate that many white males don’t consider themselves to have a culture, so when they hear talk of cultural issues, they tend to think of other groups. Some diversity trainers have perpetuated this fallacy by consciously or subconsciously presenting diversity as other than white and male. For instance, they often refer to “protected classes” as including other racial groups and women, while the civil rights laws actually address race and gender. In other words, a man cannot be fired for being a man, and a white person cannot be fired for being a white person. They are, therefore, “protected.” In fact, consider other “protected” categories that white males could potentially belong to—veterans, the disabled and people over 40 years old. White males are truly diverse. 5. Too Intent on “Changing” the Dominant Group Similar to #4, all too often, the conscious or subconscious approach taken by human resources personnel, consultants and diversity trainers, is the idea of “fixing” whites, Christians, men, heterosexuals or any other group that represents the majority. These groups are not the only groups struggling to understand and embrace diversity. In fact, not only do all groups have difficulty understanding other groups, they often struggle with the diversity within their own groups as well. 6. Forcing People into Boxes Here are just a few tidbits about me: • Married • No kids • African American • Grew up in public housing in East St. Louis, Ill. • One of five siblings • Extrovert • Big picture thinker • Attended an Ivy League school • Live in the south • Earned a doctorate degree • Enjoy playing golf, acting and drawing • St. Louis Cardinals baseball fan I could have listed thousands of items, but what is the item most different on the list? Of all of the listed items, the only one that is obvious by just looking at me is that I am African American. The other items could have been from someone else’s list, regardless of their ethnic background. Unfortunately, because it is the characteristic that people see, it becomes the one people use to define me. When I say something, people think I feel this way just because I am Black. What a mistake! It is impossible to just speak as an African American; moreover, it is impossible to speak for African America. One person cannot adequately express what it is like for every person that shares one of these bullet points with them, because each person has thousands of other bullets that help shape their perspec-
tive. Depending on the subject matter, other individual characteristics become more pronounced in shaping opinions and behaviors. If we are talking about child rearing, the fact that one has no kids becomes a really important factor. If the subject is poverty, the fact that one grew up poor matters a lot. If we happened to be debating relationships, being married certainly shapes one’s opinion. All of our individual experiences form bullet points that are inextricably tied together. We fill too many boxes to be placed in one based on age, race, gender, or religion alone. 7. Compliance Driven Check-the-box training undermines the whole concept of diversity. If managers are implementing such programs just because they have been directed to do so, they are likely to implement them incorrectly, which will cause all sorts of problems. When things do not go right, people who say the organization didn’t need those programs anyway would feel reinforced in their beliefs. If someone does something just because you tell them to, in their haste to just get it done, they might miss opportunities to explore creative, innovative approaches beyond what they are directed to do in order to achieve the desired results. 8. Reactive, Not Proactive It is common for organizations to introduce these initiatives when there have been complaints. After someone has threatened litigation, is far too late in the game to start thinking about a diversity initiative. As with any potential source of competitive advantage, those who are ahead of the curve with diversity and inclusion have a better chance of reaping the rewards faster. Being reactive with training and slow on implementation is the perfect recipe for never reaching the ultimate goal. 9. Inability to Move From Theory to Practice One of the challenges with any training is to effectively transfer the knowledge gained in the classroom to the job. Application regarding diversity and inclusion lessons might be particularly difficult because people are often so afraid to say or do the “wrong” thing. To avoid this challenge, training should include sufficient practice in real workplace scenarios. Further, training should be part of a comprehensive, sustainable effort to make one’s organization as open and inclusive as possible. 10. Failure to Make Difficult Decisions Everything in this article hinges on one thing: what leaders do when times get tough. What do you do if your top salesperson has made some culturally insensitive remarks? What if a customer tells you he does not like to work with women? What if one of your direct reports goes on vacation as Paul and returns in two weeks as Paulette? How leaders handle these issues will make all of the difference between success and failure of any diversity training initiative. On top of avoiding these common pitfalls, individuals responsible for the training must consider how it will be communicated to the organization, what goals will be established by what timeframes, and how progress will be measured. In other words, the training must be deliberate and strategic.
Entrepreneur Anchor Magazine
October 2010
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oct
calendar of events
October 27 Learn How to Cut Your Tax Bills With Effective Tax Planning 9:00am - 10:30am PowerHouse Anchor Management Consulting 1884 Dean Rd, Jacksonville, FL 32216 Contact: c.cain@phanchor.com Cost: Free October 27 Women of Color Business Summit ll 9:00am - 11:00am Beaver St Enterprise Center 1225 W Beaver Street Jacksonville, FL 32204 Contact: kathy.bolesworth@myjaxchamber.com Cost: Free October 27 Government Contracting 101 11:30am - 1:00pm UNF University Center (SBDC) 12000 Alumni Drive Contact: www.sbdc.unf.edu Cost: $20 October 28 Tax Facts 6:00pm - 9:00pm UNF University Center 12000 Alumni Drive Contact: (904) 620-2476 Cost: $40 in advance or $50 day of workshop.
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November 1 Reading and Understanding your Financial Statements Part 1 (For-Profits and Non-Profits) 9:00am - 10:30am PowerHouse Anchor Management Consulting 1884 Dean Rd, Jacksonville, FL 32216 Contact: c.cain@phanchor.com Cost: Free November 2 Beaches Mixer 5:30pm - 7:30pm Sticky Fingers 363 Atlantic Blvd., Atlantic Beach, FL Contact: beaches@myjaxchamber.com Cost: $5
November 3 Professional Women’s Council Meeting 11:30am - 1:00pm Maggianos Little Italy 10367 Midtown Pkwy. Jacksonville,FL Contact: pwcmeetings@yahoo.com Cost: $15/members November 4 Social Media Workshop 9:00am - 11:00am TBD FSCJ or BSEC Contact: www.bsecenter.net Cost: $45 November 4 Quick Books for Small Business Owners 1:00pm - 4:00pm UNF University Center (SBDC) 12000 Alumni Drive Contact: www.sbdc.unf.edu Cost: $60 November 4 Personal Branding Workshop for Professional Women Sponsored by Florida Bank 6:00pm - 8:00pm Aloft Hotel (Jacksonville Airport) 751 Skymarks Dr, Jacksonville, FL 32218 www.myganinov4.eventbrite.com Contact: (904) 860-8440 Cost: $39 (includes heavy hors d’oeuvres) November 5 Campaign Planning: A Workshop for Non-Profits 9:00am - 12:00pm UNF University Center (SBDC) 12000 Alumni Drive Contact: www.sbdc.unf.edu Cost: $50 November 8 Reading and Understanding your Financial Statements Part 2 (For-Profits and Non-Profits) 9:00am - 10:30am PowerHouse Anchor Management Consulting 1884 Dean Rd, Jacksonville, FL 32216 Contact: c.cain@phanchor.com Cost: Free
If you would like to have an event listed in Entrepreneurs Anchor Magazine email information to info@entrepreneursanchor.com 20 days prior to the next issue.
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Entrepreneur Anchor Magazine
October 2010
calendar of events November 8 2010 Military Appreciation Luncheon 11:30am - 1:30pm Hyatt Regency - Jacksonville Riverfront Contact: events@myjaxchamber.com November 9 Where’s the Money And How Do I Get It? 6:00pm - 9:00pm UNF University Center (SBDC) 12000 Alumni Drive Contact: www.sbdc.unf.edu Cost: $40 in advance or $50 day of workshop. November 13 Mandarin Council Chili Cook Off 11:00am - 3:00pm Riverplace Shopping Center San Jose Blvd. Jacksonville Contact: Randy “Chili” Thomas (904) 735-9088 Cost: $15/members November 15 Annual Trade Show at the Beach 5:00pm - 8:00pm UNF University Center 12000 Alumni Drive Contact: Misty.Galeani@myjaxchamber.com Cost: $5/drink November 15 Reading and Understanding your Financial Statements Part 3 (For-Profits and Non-Profits) 9:00am - 10:30am PowerHouse Anchor Management Consulting 1884 Dean Rd, Jacksonville, FL 32216 Contact: c.cain@phanchor.com Cost: Free November 16 Social Media Workshop 9:00am - 11:00am TBD FSCJ or BSEC Contact: www.bsecenter.net Cost: $45 November 16 How to Start Up Your Own Business 6:00pm - 9:00pm UNF University Center (SBDC) 12000 Alumni Drive Contact: www.sbdc.unf.edu Cost: $40 in advance or $50 day of workshop.
November 17 Learn How to Cut Your Tax Bills With Effective Tax Planning 9:00am - 10:30am PowerHouse Anchor Management Consulting 1884 Dean Rd, Jacksonville, FL 32216 Contact: c.cain@phanchor.com Cost: Free November 30 Business Plan Basics 6:00pm - 8:00pm UNF University Center (SBDC) 12000 Alumni Drive Contact: www.sbdc.unf.edu Cost: $40 in advance or $50 day of workshop.
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December 2 Health Council Meeting 11:30am - 1:00pm Brighton Bay Resort Style Retirement Living Contact: travis.webb@rht.com • (904) 997-9960 Cost: $15 December 3 Professional Women’s Council Meeting 11:30am - 1:00pm Maggianos Little Italy 10367 Midtown Pkwy. Jacksonville,FL Contact: pwcmeetings@yahoo.com Cost: $15/members December 3 West Council Presents: Holiday Runway 6:00pm - 8:00pm Florida Bank 221 San Juan Ave., Jacksonville Contact: swelker@flbank.com • (904) 562-6001 Cost: $20 December 9 Beaches Holiday Luncheon 12:00pm - 1:30pm Casa Marina Hotel & Restaurant Contact: (904) 366-6600 Ext. 7606 Cost: $20 December 14 Year End Accounting & Tax Returns 6:00pm - 9:00pm Beaver St Enterprise Center 1225 W Beaver Street Jacksonville, FL 32204 Contact: P.A. Wallace (800) 651-0477
If you would like to have an event listed in Entrepreneurs Anchor Magazine email information to info@entrepreneursanchor.com 20 days prior to the next issue.
Entrepreneur Anchor Magazine
October 2010
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Entrepreneur Anchor Magazine
October 2010