Celebrating 25 years of serving the women business owners of Phoenix.
Spring 2011 • nawbophx.org
President’s Message 1985
2010
About NAWBO Founded in 1985, NAWBO Phoenix propels women entrepreneurs into economic, social and political spheres of power. Twenty-five years later, NAWBO Phoenix is still the only organization in the Valley that solely represents the interest of women entrepreneurs in all industries. For more information, please visit www.nawbophx.org.
This issue Page 2 Top Five Mistakes to Avoid to Successfully Secure a Bank Loan Page 4 How to choose the RIGHT accountant for your Business Page 7 Keep Cost Under Control… Try Outsourcing and more...
Phoenix Metropolitan Chapter of the National Association of Women Business Owners, 4600 E. Washington St., Suite 300 Phoenix, AZ 85034
This month we will be focusing on Finance. This is a topic of great important to me as I have been a Financial Advisor for a number of years. Our firm works with business owners to educate and help keep them on track with their personal and business finances. Understanding the finances of your business is fundamental to running a successful business. A key step in running a well managed business is to keep your finances organized. Business owners are very busy wearing so many different hats. Working long hours, focusing on your business goals, hiring new employees, and worrying about cash flow all weigh heavy on the business owner. It is critical to keep a focus on the business finances and most importantly your own personal finances. You want to build your business, but not at the expense of your own wealth. Being financially disorganized can: • Increase your costs • Increase your risk • Decrease the chance of real success A good way to keep on track is to work with professionals that are business partners and help keep you on track. A good financial professional will help you understand the real cost of living factors that can adversely affect your wealth. I would like to suggest some of the hidden cost of living factors can include: • New goods & Services – we are living in an era of “planned obsolesce”, goods are made to be disposable which means we are constantly replacing items that we need to live and work. • Taxation – there are many hidden taxes we all now are faced with, when those taxes are identified and added together, sometimes it adds up to almost 50% of our income! • Lifestyle upgrades – people who work hard like to play hard. The reward for long hours of hard work include bigger houses, a second or third house, vacations, etc. These things are great, but they can effect how much we save and set aside for the future. • Life events – unexpected life events are the biggest threat to our financial security, especially in the area of a disability. The ability to earn an income and finish working until our retirement date is one of the biggest reasons for bankruptcy.
Cindy Hynes President, NAWBO Phoenix
Be sure to consider all of your costs, including those listed above. Working with a trusted financial representative can assist you in keeping pace with the real cost of living by helping you make sure you’re organized, protected against the unknown and precise in accounting for your expenses. I wish you all continued success in your business! Kindest Regards,
602-772-4985 www.nawbophx.org • info@nawbophx.org
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Cindy Hynes NAWBO Phoenix Chapter President 2010-2011
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Top Five Mistakes to Avoid to Successfully Secure a Bank Loan
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Mistake #1:
Wait until you need a loan to contact the bank. The worst time to introduce yourself to a banker is when you need a loan. Business owners need to establish a relationship with multiple bankers even if they are only thinking of starting a business. Owners who show up at the bank hoping to get a loan based strictly on a business plan are at a disadvantage. Bankers need to get a sense of your personal integrity. Build a positive history with multiple bankers—these are the friends who will go to bat for you with the credit committee when you apply for a loan. Now’s the time to act—if you do not know a banker, ask other professionals, such as accountants, attorneys and other business leaders, to make an introduction.
Mistake #4:
Ignore competitive advantages. Many corporations are looking for women-owned businesses to satisfy their contract needs. To qualify as a women-owned business, the value of certifications is undeniable. Though certifications may not be right for every type of business, they can lead to securing corporate, retail and government contracts. You can get a leg up on competitors, especially if your customers are large, publicly held corporations. Certification is a marketing tool for raising your firm’s visibility and tapping into decision makers with an interest in diversity. Once you get the certification share the news of your certification and resulting successes with the bankers you know.
Mistake #2:
Show up with sloppy books. Secure a reliable and knowledgeable bookkeeper. Presenting clean, professional financial statements right from the start is key. First impressions count. Once you have your numbers together, ask an outside advisor to look at your financial statements. An experienced outside advisor can objectively review your financials and ask the questions that will be on the minds of the bankers. Candidates for financial statement review include part-time CFOs and certified public accountants. To find an advisor, check with other business owners as well as organizations that support women-owned businesses—like your local NAWBO chapter.
Mistake #3:
Put off creating a strategic plan.
Mistake #5:
Wait to build your team of advisors. A bank is more likely to look favorably on your business when you are supported by a great team of advisors. Get your attorney and accountant in place upon establishing the business, if not prior. Befriend part-time chief financial officers and seek their advice regularly. Surround yourself with professional service providers who are connected with the business community. Your team of advisors can help you identify the right bankers for your business and can often make an introduction. Seasoned accountants, attorneys and CFOs usually enjoy long-term relationships with local bankers. In the banker’s eyes, a strong professional service team implies a vote of confidence in you and your business. Actively network with other female founders through associations that support the female business owner, like NAWBO. Female founders not only provide helpful information, they can lead to opportunities you would not have otherwise encountered. Not to mention, local bankers are often members or sponsors of associations focused on women business owners.
Many business owners “jump in with both feet and get to work” without creating a business plan. “In the venture world, you have to have your act together to secure funding. Business owners without the immediate need for financing are not forced to create a business plan, so many simply do without one. Having no plan is a mistake. During the loan application process, bankers are looking for a solid strategic plan, along with financial projections. They want to know how the company will be managed. While a business owner may intuitively understand where the business is headed, it is important to communicate the specifics. You want a five-year plan with a financial picture that projects your revenue level, required financing, number of employees and profitability, among other factors.
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How to choose the RIGHT accountant for your Business By Barbara Appenzeller CPA, Treasurer for NAWBO Phoenix 2010/2011 Choosing the certified public accountant for your business is one of the most important decisions you will make as a business owner. This person should be looked at as a part of your management team and must have the right personality and credentials to be able to work with you to make your business as successful as possible. When choosing your accountant you Barbara Appenzeller should not be afraid to ask for references, what is their education and experience, how many clients has the practitioner had audited, what types of clients do they have and are they available after April 15. You will have many financial business decisions to make long after the tax return is filed and you need to know the accountant you choose will be there for you when you need her. When you meet with your accountant, it is important that you are as organized as possible so the meeting can be efficient, thereby saving you money. If you are using Quickbooks, bring a backup of the database
to the meeting. A good accountant will need to make sure your bank account(s) are reconciled before beginning any work for you. If the bank account is not reconciled, then there is no way of insuring all the income and disbursements are being reported. One important item all business owners should remember, do not pay your personal expenses from the business account. Instead, write a check from the business to your personal account and then pay your personal expenses from there. There are many legal reason why you should do this but it is also a much cleaner accounting method. Your accountant should not just be there to prepare your tax returns. The financial statements for the business should be a management tool, not just used to prepare the tax return. If you don’t understand your financials, don’t be afraid to ask for an explanation as to how to read and analyze them. Remember, your accountant is your business partner and you each have an area of expertise. If the accountant you choose isn’t willing to be that partner, then move on. Your business is too important to not work with someone who has your company’s financial future at heart.
NAWBO Phoenix Membership Drive NAWBO is in FULL DRIVE. Become a member during March and April and get more!
NAWBO’s “Can’t Miss” Events: • Monthly Luncheon Meetings 2nd Wednesday of the month | Central Phoenix location
• Monthly NAWBO University workshops
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$25 discount off your membership
2nd Wednesday of the month | Central Phoenix location
• Monthly FREE Happy Hours (Various dates & locations)
2. Certificate for a complimentary NAWBO luncheon
• June Awards Gala
3. FREE business “WeIlness Check Up” compliments of
• December Red Affair
Davis Miles Law firm
Visit our web site today for membership information. 6 0 2 -772 - 49 8 5
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NAWBO ® and Women Mean Business 4
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i n fo @ n aw b o p h x . o rg
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NAWBO Board of Directors Executive Committee
Board of Directors
President Cindy Hynes Hynes Benefits Consulting, LLC
Ambassador Norma McCormick Clean ‘N Fresh Cleaning Service, LLC
Secretary Marnee Weber Meaningful Methods, LLC Finance Director Barbara Appenzeller Barbara Appenzeller CPA, P.C. President-elect Kristine Kassel, Benefits By Design, Inc.
Public Policy Corner
Issues that business owners should to keep an EYE ON! The Arizona Competitiveness/Jobs Package passed by the legislature and signed by the Governor as HB 2001 in 2nd Special Session contains a number of reductions in tax rates, both in the corporate tax rate in addition to business property tax reductions in the assessment ratio-- from 20% to 19% in tax year 2012, and 18% in tax year 2013 for class one property. Additionally, the assessment ratio is reduced for agricultural property (class 2) from 16% to 15% in tax year 2013. The corporate rate reductions phases down the corporate income tax rate from nearly 7% to less than 5% over four years, beginning in tax year 2014. SB 1165 addresses a very serious tax issue that is developing in Arizona between businesses subject to the transaction privilege tax (sales) and Arizona cities. Arizona is one of only a few states in the country that allows for an independent municipal sales tax structure. Unlike other states, our system requires businesses to maintain two sets of books for the payment of sales tax—one for the state and another for municipal tax obligations. In addition to multiple points of contact for the payment of sales tax, Arizona businesses are also faced with the potential administrative burden of audits from the state as well as municipal auditors. SB1165 would prohibit cities from contracting with a for-profit company for the collection of sales taxes. Additionally, cities would be prohibited from employing or contracting with sales tax auditors on a contingent-fee basis.
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Immediate Past President (Past President Chair) Loretta Love Huff Emerald Harvest Consulting, LLC Executive Director NAWBO Office Deanna Anderson Organized Management Solutions, LLC Membership & Meeting Assistant NAWBO Office Megan Williams Membership & Events Administrator
Membership Services Lynda Bishop Summit Alliance Solutions, LLC
Awards Chair Becky Winterscheidt Snell & Wilmer
Media Relations Ilisa Keith Keith Block Communications, Inc.
Communications Chair Dorothy Wolden Creative Intuition
Mentor Program Barbara Baderman Life-Long Learning Solutions
Community Alliances/ Diversity Chair Ania Kubicki Angles Public Relations
Neighborhood NAWBOs Connie Zimmerlich ClickChick Photography
Community Service Director Choo Tay Media88, Inc. Corporate & Economic Development Chair Amy Bruske Kolbe Corp Honorary Advisory Council Kim Marie Branch-Pettit LeTip International Marketing Services Director Joan Risdon Smart Image Media
Programs/ NAWBO University Colleen O’Shaughnessy MetLife Public Policy Chair Ginger Lamb Arizona Capitol Times Red Affair Chair Erin Finn Finn Property & Development Women’s Enterprise Foundation (ex-officio) Adell Heinemann Juve Facial Rejuvenation
The Women’s Enterprise Foundation WEF is a 501(c)3 charitable organization that supports and inspires emerging women business owners within the greater Phoenix area who have a demonstrated business development need or who would benefit from specialized educational training and development opportunities. To learn more or to make a donation visit www.WEFPHX.org
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Business Financial Healthcheck Yes No
When we receive work we know we can complete it and be paid on our terms We invoice as soon as we complete work Our credit procedures alert us to overdue accounts We monitor and enforce our credit terms - taking deposits from “doubtful” payers Our pricing reflects true costs and appropriate margins We complete work efficiently We realize mistakes before they reach the customer We learn from our mistakes We continually monitor budgets We regularly review the viability of outsourcing work We are effective in negotiating materials and supplies contracts We forecast cash flow monthly and act on these projections Our bank is our partner, knows our business and its financial needs Employee overtime is strictly controlled The least expensive most capable employee always do the work Our standard operating procedures are written down and everyone follows them
If you have more “YES” than “NO” answers then give yourself a pat on the back. You’re business is in good financial health. If you have more “NO” than “YES” answers then it’s time to evaluate the financial picture of your business to get back on track .
SAVE THE DATE
NAWBO Annual Awards Gala
JUNE 8th 2011 @ 7pm Check our website for more details! www.NAWBOPHX.org
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Keep Cost Under Control… Try Outsourcing
By Lisa Bhella, Secretary for NAWBO Phoenix
Lisa Bhella
Your business is growing and that’s a good thing. Now you need help. You’ve considered hiring someone but maybe your should look at outsourcing as an option. Outsourcing can be the ideal way to manage your overhead and keep cost under control while you grow. The following is a helpful checklist when searching for the perfect outsourcing fit.
• F ind a contractor by referral if possible. Ask for testimonials. • Look beyond basic capabilities. Does the contractor have the bandwidth for your project? Are there potential conflicts of interest, such as ties with your competitors? How will the contractor deal with ambiguous instructions? What about interacting with your employees and other contractors? • Understand the cost structure—many contractors will work on an hourly basis. Are introductory rates available? Evaluate the expected costs in the context of the value a contractor will bring to your business. • Dip your toe in the water with a smaller project first. Agree upon clear project guidelines and sign a scope-of-work document. Watch for scope creep—consider a monthly cap on work hours. Agree on invoicing terms and pay invoices promptly. • Be clear about your expectations for working hours, meetings and travel requirements. Might any business hours be problematic for you or the contractor? • If sensitive information is exchanged, implement a confidentiality agreement. Understand any software license restrictions. Plan for contract termination—if things are not working out, be sure you can get out!
Get creative to keep your marketing train moving One way to improve the financial picture of your business is to find creative ways to continue to market and trim costs at the same time. In lean times many businesses cut their marketing budgets completely. Bad idea. Here are a few cost saving tips to keep your marketing moving. • Word-of-mouth marketing works. Use your associates to get referrals. • Create an e-newsletter. It’s much cheaper to market to previously acquired customers than creating new direct-marketing collateral. • Use YouTube. YouTube is a great free way for you to get the word out on your business. • Be a thought leader. Communicate on online forums and message boards. You’ll interact with potential clients and customers — for free. • Start a blog. You can advertise, review your offerings and give free tips as often as you’d like without worrying about running up your budget. • Use email. Email marketing campaigns will let you interact with specific customers about new products that might interest them. • Get to know your neighbor businesses. They might be up for splitting local advertising and promotion costs, such as sidewalk sales and mailing lists. • Get your clients to advertise for you. Ask them to write a testimonial on your Web site or tell their colleagues about your products or services. • Be a guest speaker. Speak at a community meeting or teach a business course to reach new potential customers. • Join trade associations. You’ll get industry-specific information, advice, sales opportunities and other member benefits. • Piggyback your advertising. Include advertising material in mailings such as invoices and sneak announcements or coupons into newsletters and other promotional fliers.
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NAWBO PHOENIX Corporate Partners
One of our missions at NAWBO Phoenix is to give back to the communities where we live and work. It's something we know that our membership and board values. Here is a list of the community service projects we are thrilled to have been a part of. Build a Home Project - Habit for Humanity • Clothing Drive - Save A Family Foundation Food Drive - St Vincent De Paul • Fundraising Breakfast - St Vincent De Paul Serve breakfast at St Vincent De Paul • My sister My Friend Toys Drive
Presidential Corporate Partners National Bank of Arizona Salt River Project State Farm Insurance Strategic Corporate Partner Media88 Executive Corporate Partners Hynes Benefits Consulting Kolbe Corp Southwest Gas Snell & Wilmer, LLP University of Phoenix Business Corporate Partners Anderson Security Agency, Ltd. Arizona Public Service Benefits By Design Border States Electric Bank of Arizona Estate Plan Store Fresh N Clean Paychex Price Kong, CPA The Car Source Wells Fargo Strategic Media Partners Creative Intuition NetworkingPhoenix.com Executive Media Partner AZ Capitol Times InBusiness Magazine CITY Sun Times KFNX News-Talk Radio 1100 KFNN 1510am Newsradio
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Build a Home Project - Habit for Humanity
My sister My Friend Toys Drive
Food Drive and Service Day - St. Vincent De Paul
Get social with NAWBO Phoenix It’s a great way to stay informed about NAWBO Phoenix and expand your online network. And once you’ve connected, don’t forget to spread the word to everyone you know about how great it is to be a NAWBO Phoenix member.