Leadership: Veterans Acquire Exceptional Leadership Skills

“In a Combat Situation, You Panic, You Die,” Ted Daywalt told me. He Is a Retired Navy Captain (O-6) and the CEO of VetJobs.com, Inc.

“In an entrepreneurship situation; you panic ― your company dies,” he says.

Daywalt believes that the military teaches employees and business owners how to manage risk without panicking.

Korn/Ferry, a prominent human resources firm agrees. It lists “the ability to remain calm under pressure” as one of the six leadership traits that military experience teaches. The other traits cited in the company’s 2006 report are:

•  Learning how to work as part of a team
•  Organizational skills, such as planning and effective use of resources
•  Good communication skills
•  Defining a goal and motivating others to follow it
•  A highly developed sense of ethics

The report called, “Military Experience & CEOs: Is There a Link?” can be downloaded from tinyurl.com/oo5ywa.

Veterans and employers can hook up at Daywalt’s site, VetJobs.com.

Jerry Chautin; SCORE Atlanta, Sarasota
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Marketing: Buzz and word-of-mouth can be effective and inexpensive

Buzz and its close cousin word-of-mouth can help you sell your products and services. While large companies spend millions to create it, small businesses can use buzz on a modest budget. In many instances, it is less expensive than conventional newspaper, radio or television advertising.

Restaurant and nightclub owners create buzz by inviting famous athletes and local personalities to frequent their establishments. Their cost is giving the celebrities complimentary food, drinks and VIP recognition.

Buzz marketing should be targeted to your most likely customers and may be as simple as participating in online chat rooms, message boards and newsgroups.

Interactive games, contests and newsletters on your Web site are ways of creating buzz. Add a “send it to a friend” feature to spread the word-of-mouth.

There are online and in real life, press-the-flesh networking opportunities to match every demographic. Check them out and frequent the ones that attract people most likely to become your customers.

Jerry Chautin; SCORE Atlanta, Sarasota
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Financing: Guess Who Might Make You a Small-Business Loan?

If it looks like a bank, sounds like a bank and makes business loans like a bank, it must be ….. a credit union? 

Not-for-profit credit unions were first conceived as small depositories designed to provide limited financial services to its members within a defined field such as a neighborhood, a company or an ethnic group. Their mission was to provide basic financial services to member-depositors who were underserved by larger banks. 

While many remain small, approximately 100 credit unions have assets over $1 billion and have extended their grasp well beyond their original field. But their mission is still to serve their members — sometimes when banks say “no.” 

In recent years, some credit unions have started making small-business loans that are partially guaranteed by U.S. Small Business Administration. Navy Federal, GTE Federal and MacDill Federal are examples.  

To find which credit unions are approved to make SBA loans in your area, contact the agency’s district office. Call 1-800-827-5722 or e-mail answerdesk@sba.gov to find out which SBA office services your location.

Jerry Chautin; SCORE Atlanta, Sarasota

Finance: Your Survival Depends on Matching Debt with Uses

Small-business owners can learn from the bankruptcy of General Growth Properties and Glimcher Realty Trust short-selling the Great Mall of the Great Plains in Kansas for $9.5 million less than its mortgage.

In both cases, the huge shopping-mall owners chose to finance long-term real estate assets with short-term loans of three to five years. Although it gave them lower rates and higher mortgage amounts, it also made the mall owners more vulnerable to the tight credit markets when they needed to refinance their debt.

SBA offers a handy guide for matching the appropriate loan-term to your needs. In general, SBA’s working capital loans are for seven years. Equipment loan terms are 10-years and real estate gets 25-year financing.

Credit cards are fine for entertaining your clients as long as you pay them in full every month. But if you intend to use credit cards for working capital or to buy equipment — don’t!

Take heed from the troubled real estate giants and do not mismatch short-term debt with long-term needs.

Jerry Chautin; SCORE Atlanta, Sarasota
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Marketing: Branding doesn’t have to be expensive

The cows of Chick-fil-A and the Aflac duck help identify the brands that these advertisers spend big bucks to communicate to us. More importantly, their ubiquitous brands play major role in selling lots of chicken sandwiches and more financial services, respectively.

Even though your company may not be as big as these two examples, there are fundamentals you can use for strengthening your brand too. In large part, it involves finding your niche to differentiate yourself from your competition. Just as the Chick-fil-A cows let you know that chicken, not hamburgers, is its niche, you also have to let customers know how you are different.

The process begins by creating a mindset among company employees to focus on the company’s principles and goals. It should be codified in writing so that everyone in your company sings the same song.

Management must be committed and all the employees must buy into the philosophy of building brand recognition. Additionally, management must make employees feel good about the company and its brand.

Savvy business owners understand that marketing is the key to getting customers. Moreover, effective marketing can cost less once you build a strong brand.

Jerry Chautin; SCORE Atlanta, Sarasota
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Legal: Big Penalties Possible for Mischaracterizing Your Independent Contractors

When Blackwater was were accused of shooting up the landscape in the Iraqi war zone, politicians seeking punitive retribution, questioned the legal status of its mercenaries. U.S. Sen. John Kerry, D-Mass. says they were mischaracterizing them as “independent contractors” to avoid paying $31.8 million in taxes. Back taxes and huge penalties are being sought.

Similarly, you may have to decide if your workers are employees or independent contractors. If they are employees, you may be on the hook for your share of payroll tax, workers’ compensation premiums, overtime salaries and the same health and retirement benefits that you take for yourself. But if they are independent contractors, you pay the contract amount and they are responsible for everything else.

Notably, the Internal Revenue Service’s definition of independent contractor is based upon the degree of control that you have over them. More specifically, they look at three categories: behavioral control, financial control and the type of relationship of the parties. A helpful pamphlet is available at tinyurl.com/2pfh68.

But adherence to IRS regulations does not necessarily mean that the Department of Labor’s requirements are being met. The DOL wants you to comply with the Fair Labor Standards Act. It deals with minimum wage laws, payment of overtime wages and child labor laws. Find out more at dol.gov.
Be sure to check out your state’s laws for its added requirements. And for more help, hire a local employment lawyer to unravel the complicated requirements.

Jerry Chautin; SCORE Atlanta, Sarasota

Inventions: Protecting Your Patent Can Cost You Millions

‘What most aspiring inventors don’t realize is that a patent is worth very little if they are not prepared to defend it,” says Duncan Cutler, a volunteer SCORE business counselor in Atlanta. He was an executive of engineering and manufacturing for a company that patented several of its machines and devices. “We showed a particular device at a trade show.” he says. “Six months later, three competitors showed copies of our invention.”

Small-business owners can expect to pay $15,000 and more in legal fees to obtain a patent. But defending a patent against knockoffs can cost hundreds of thousands more.

The federal government grants patents to give inventors exclusive rights to commercialize their products for a period of time without fear of competition. The objective is to encourage creativity. But in the real world, there is no mechanism for the government to enforce inventors’ rights. As a result, patent infringement is common and patent-holders are on their own to squash perpetrators.

“Often, I urge my clients not to go down the patent path,” says Douglas Cherry, a Sarasota-based intellectual property lawyer. “I have a book of legal statistics, and most patent cases easily get into the millions,” he notes and advises that, “an alternative is good marketing with trademark recognition.”

Sales & Marketing: Boast your Sales with Public Speaking

My first public speaking experience occurred when I was in my late 20s. It was during the annual convention of the National Association of Homebuilders. The scheduled speaker became ill and I was asked to substitute.

I nervously scribbled notes onto 3 by 5 cards, jotted down a few key facts and stumbled my way to the stage. The hotel’s ballroom room was filled with unsmiling builders and real estate developers that looked twice my age. They were anxiously waiting for me to tell them how to overcome the construction-lending crunch that hobbled the industry during the late 1960s.

My knees buckled a bit and I felt lightheaded. But I got through the speech somehow. My audience politely applauded and what happened next radically changed my career.

Several people followed me to the coffee kiosk outside the ballroom. They sought appointments with me to discuss their deals.

To perfect your speaking skills, advance your career and increase your sales, check out Toast Masters, Dale Carnegie and the National Speakers Association at www.toastmasters.org, www.dalecarnegie.com and www.nsaspeaker.org.

Jerry Chautin; SCORE Atlanta, Sarasota
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Finance: Lenders are Optimistic about Stimulus

Most banks are not currently lending to small businesses. But, there are signs that the lending freeze is beginning to thaw.

“We are pleased that we are beginning to see signs that the market place may finally be returning to normal,” says Scott Thomas, division president of Tennessee-based Community South Bank. “With the provisions outlined in President Obama’s stimulus package, we believe that the future is bright for the SBA lending.”

Among provisions outlined in the stimulus package, SBA’s guaranty can be increased up to 90 percent, from the previous 85 percent. Additionally, money will be pumped into secondary market activities so that originating banks can more easily sell the guaranteed portion of their loans. That’s how the banks substantially increase their yields to compensate for making more marginal loans.

Before the secondary market froze, banks received 10-point premiums plus servicing spreads to achieve an acceptable level of compensation. But with the higher guaranty percentage, the banks can sell more of the loan and snag acceptable yields from lower premiums.

In his March 3 survey, Tim Terry, president of Texas-based Terry & Associates, says that most lenders are willing to jump back in the market when premiums are over 5-points. Currently, premiums are below 2-points. “An astounding 59.3% of respondents expect their lending to increase with these new initiatives,” he says.

SBA lenders are optimistic about the stimulus initiative. But its success will depend upon refining the details and a smooth execution.

Jerry Chautin; SCORE Atlanta, Sarasota
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Communications: Business Success Depends upon Clear, Concise Writing Skills

“Don’t open the kimono until you ping the change agent for a brain dump and drill down to your core competencies,” comic-strip character Dogbert spoofs as an example of bad business communications. But in the real world, unintelligible communication is a disease that infects many business owners and corporate executives.

“Executives and managers at every level are prisoners of the notion that a simple style reflects a simple mind,” wrote William Zinsser in his book, On Writing Well. “Actually, a simple style is the result of hard work and hard thinking; a muddled style reflects a muddled thinker or a person too dumb or too lazy to organize his thoughts.”

The ability to convey your thoughts in writing is essential to communicating with employees and convincing prospective customers. Inability to do so greatly increases the probability of failure. In fact, studies by the Conference Board and Korn-Ferry determined that the capacity to clearly communicate your vision is the No. 1 skill necessary for business success.

Here are a few tips.

• Less is more. Keep it simple.
• Photos and graphics create interest.
• Tell a story to keep readers hooked.
• Grab your audience with a powerful opening sentence or headline.
• Tell your readers what you are going to say and what is in it for them. Then say it clearly.
• Finish by telling them what you have told them.

 

Learning how to convey your thoughts and choosing the right words are learned skills that will enhance your bottom line.

As Mark Twain put it: “It’s the difference between the lightning bug and the lightning.”

Jerry Chautin; SCORE Atlanta, Sarasota
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