This is a organization that was referred to me by friend & colleague, Paul Linzmeyer. I looked through their website and found it to be a good source of information that is as free of bias as most I have seen. I subscribed to the newsletter and today I bring you some snippets from the 9/23/10 issue. Yes, it is 2 weeks old … it was a busy month!!
The group is called the Small Business Majority and their tagline is: Small Businesses Driving Practical Policy. I don’t know about you, but I am more than ready for a return to reasonableness and calm, well-thought out conversation. This group hits those notes for me. I hope you find it of interest as well.
Please let me hear what you think!
Healthcare reform: six months later
Six months ago, the Patient Protection and Affordable Care Act was passed. A number of provisions take effect today (9/23), including new rules forbidding insurance companies from denying coverage to children under 19 with preexisting conditions, and the requirement that all insurance plans must provide free preventive care such as annual check-ups, mammograms and colonoscopies. Policies that already took effect this year include tax credits for small businesses, along with a reinsurance plan for seniors that will provide them with much-needed financial relief so early retirees can get affordable care.
Small Business Majority has spent the summer educating small business owners, organizations and policymakers about the new law, and moving into fall, plans on continuing an information campaign about this important and complex legislation. Most recently, Small Business Majority National Policy Director Terry Gardiner and National Outreach and Government Affairs Manager Rhett Buttle held a call for small business owners and organizations, where they answered questions on and explained the details of a form released by the IRS to help small businesses determine their tax credits for next year’s tax returns.
From their newsletter, links to articles of interest:
Tax credit bonanza for small businesses from CNN Money on 9/22/10
Lightening the Health Care Load for Small Businesses from The New York Times on 9/17/10
Report: Massachusetts deprived of 40k green jobs from the Boston Business Journal on 9/14/10
What You Need to Know About the Small-Business Bill from Entrepreneur on 9/13/10 (yes, this bill has come up a lot lately!)
Tax credit for health premiums target small firms from The Chicago Tribune on 8/16/10
From their “Resources” section:
A report by the Commonwealth Fund, released on Sept. 2, found that the small business tax credits will reduce health insurance premiums, and the exchange, once implemented, will expand coverage for millions of workers employed by small businesses.
The Kaiser Family Foundation just revealed the impact of increasing healthcare costs on small business owners and their employees in a recent survey.
Want to learn about business in the De Pere Area? Check out our Work Section …
The Wall Street Journal posted a few interesting things about our friends across the pond:
The Dutch have a well–deserved reputation for being inventive –– witness the land that they’ve reclaimed from the North Sea. Today, the Dutch boast one of the lowest unemployment rates among industrialized countries (3.9% in October 2009) thanks to conservative fiscal policies and a clever “short–work” program first initiated during the Nazi occupation in World War II. In an economic downturn, the Netherlands offers a short–work program that provides payroll subsidies to companies that keep people working in their jobs at a reduced number of hours per week. The government makes up part or all of the wages lost from the reduction in work hours. The idea is to avoid mass layoffs, control the cost of unemployment benefits and keep people working long enough for an economic recovery to start. One short–work program requires the firm to demonstrate a 30% drop in revenue over a two–month period; the government then pays workers 100% of all lost wages. Over 2,000 companies participated in the program. To date, the Dutch government has spent $2.9 billion on various short–work programs and some participating companies are now seeing an increase in orders.
The scope of the U.S. budget deficit pales in comparison with the deficit in Britain. There, the deficit is $280 billion –– at first blush, the amount isn’t as bad as the one trillion dollar U.S. deficit. When expressed in terms of gross domestic product, the British deficit represents a far greater percentage of GDP –– 12.5% –– which is almost twice the deficit level from the economic recession in the 1990s. In comparison, the U.S. deficit represents just 9.6% of GDP; across the European Union, it is just 6.9%. Good news? Unemployment across Britain is 7.9% although it exceeds 16% in some parts of the country. And, in January, Britain became the last nation in the Group of 20 to officially emerge from the recession –– registering an anemic but positive 0.1% growth rate for the 4th quarter of 2009. Shadow chancellor George Osborne cited the deficit in his remarks about the weak 4th quarter growth: “We urgently need a new model of economic growth that includes a credible deficit reduction plan that keeps mortgages low, creates jobs and doesn’t choke off recovery.”
“A Dutch Formula Holds Down Joblessness” by Adam Cohen. The Wall Street Journal. December 29, 2010.
“Big Deficits Cloud Britain’s Future” by Alistair MacDonald. The Wall Street Journal. January 8, 2010.
“UK scrapes out of recession but growth figure disappoints City” by Ashley Seager. The Guardian. www.guardian.co.uk
The consulting firm Booz & Co., reports that major corporations are being more strategic in how they spend R&D funds.
In a survey of the world’s 1,000 top research firms, the Booz & Co. study reports that:
* Firms are defining more stringent criteria for research projects.
* Companies are focusing research on opportunities that can generate revenue faster.
* There’s been a shift from basic research to using existing technology to develop new products.
* New product opportunities in emerging markets are driving many corporate R&D efforts.
The Booz study also finds that companies are wary of cutting R&D expenditures too much in a recession because the company will be less prepared for the economic rebound.
Caterpillar, for example, developed its mainstay diesel engine for earthmoving machines in 1931 during the Great Depression. Tana Utley, is Caterpillar’s chief technology officer. Looking back at the 1931 example, she explained, “We spent $1 million on that and I’m sure my predecessor felt some of the same pressure I feel today. If you don’t invest in R&D during the downturn, you’ll feel like a hero during the day because you saved money, but you’ll be a heel in the history books.”
While Caterpillar significantly cut R&D expenses by 13% last year, research funding as a percent of revenue jumped from 3.2% to 4.4%.
“With Eye on Competition, Firms Keep Spending on R&D” by Dana Mattioli. The Wall Street Journal. November 30, 2009.
JD Milburn, Small Business Specialist from Wisconsin Main Street, sent me this article a few days ago and I thought it was a good once for business owners and managers.
With the high cost of postage, paper and printing, you may want to consider using the Internet more as an alternative selling partner.
Online marketing is more affordable, it facilitates one-on-one communication with customers, it can produce faster results, and it is more environmentally friendly.
Here are six quick tips to maximize the marketing power of the Internet during the sluggish economy and beyond:
- Steer customers during meetings and at trade shows to your company’s Web site rather than mailing out four-color brochures.
- Use keyword phrases in online content to boost the search-engine rankings — and visibility — of your organization’s Web site.
- Communicate and follow up with customers using e-mail.
- Drive traffic to your Web site by including a link at the end of every company email.
- Announce new products or offers online and in e-mails.
- Test and tweak new products or services on the Internet before offering them on a more expensive marketing platform.
JD Milburn, Small Business Specialist from Wisconsin Main Street, sent me this article a few days ago and as I know from my days as a business owner and my days here tracking it for the Chamber as a business – cash flow is a big deal! It is still true, Cash is Still King.
Here are some tips and info if you are watching your cash as closely as I think all of us are:
Riding Out the Recession On a Wave of Cash
You can barely read or listen to business news these days without hearing the phrase cash flow. Recent eye-catching headlines, for example, include:
Companies Use Software to Track the Flow of Cash Into and Out of the Bank Accounts of Subsidiaries;
AHS Predicts Cash Flow Could Run Out Soon;
Lukoil Resets Strategy to Focus on Free Cash Flow.
Clearly, cash flow is a big deal. No matter how solid your organization is in other ways, cash-flow management should always be a priority. But it gains significance in a tumultuous economy. To strengthen the grip on your company’s cash flow, here are six suggestions to help get cash faster and hold on to it longer:
1. Forecast and Compare. The first step toward maximizing cash flow is understanding how and when cash is generated and used. Come up with a monthly cash flow forecast for a clear picture of when cash will come in and where it will come from, as well as when it will be paid out and where it will go. The cash flow outlook should include the following three elements:
Operating Cash Flow: This is the sum of the cash receipts and payments that are part of your organization’s normal operations. Inflows come from sources such as cash sales and collections on accounts receivables. Outflows include contractual payments and other operating expenses.
Investing Cash Flow: This is an estimate of expected changes such non-operating activities such as dividend and interest income, sales or redemptions of stocks, bonds, and other investments, as well as purchases of capital assets.
Financing Cash Flow: This predicts changes from financial dealings such as getting a bank loan, selling shares in your company and paying out cash dividends.
Rule of thumb: To make forecasts as accurate as possible, underestimate revenue and overestimate expenses. As well, use actual financial commitments and other solid cash data.
2. Invoice quickly and make paying easy. Bill customers as soon as they receive their purchases. Invoices should clearly note the due date and the penalties for late payment. Consider accepting credit and debit cards if your business doesn’t already do so. Your company will pay a processing fee, but will get paid faster and save on the costs of mailing and re-mailing invoices.
3. Follow up promptly. As soon as a payment is overdue, send a reminder. People sometimes inadvertently forget to pay a bill, but they need to know that you expect payments on time and you charge late fees. The sooner your company chases after slow-payers, the better its chances of getting money ahead of less aggressive businesses.
4. Pay suppliers just in time. Early payments are not the way to manage your company’s own bills — they keep your enterprise from maximizing cash flow. Wait as long as possible before settling the bills. That way, your company keeps more of its cash for a longer time.
If you have a strong payment history with vendors, you may be able to negotiate better credit terms. For instance, if you can stretch a payment period to 45 days from 30 days, you wind up keeping cash for 15 extra days. And when looking for suppliers, don’t make the mistake of thinking that the lowest price is always the best deal. Sometimes flexible payment terms can improve cash flow and be more valuable than discount prices.
5. Keep customers close and bankers closer. Customers are the lifeblood of your organization, but if they’re hurting from the economy, they may not be providing enough business to keep your company profitable. It helps to have a banker who understands your business and is willing to provide short-term financing if customers become scarce or unexpected expenses pop up.
You might also consider establishing a line of credit with a bank or credit union. If you do this, however, never let the balance exceed more than about one third of the limit. Once you show the institution that your business can manage the credit, it may boost the limit. Don’t wait until the last minute before arranging credit. The best time to negotiate is when your company’s financial situation is strong.
6. Renegotiate contracts. If your business has long-term contracts it arranged when the economy was stronger, it may be time to revisit those agreements. For example, if you’re leasing real estate and paying a hefty monthly rent, you might be able to arrange easier terms with the landlord. Many real estate companies are experiencing large commercial vacancies and are often willing to renegotiate leases to keep the tenants they have.
Last Word: Inventory is not cash. In fact, inventory ties up cash. The leaner your company’s supplies, the more cash it has for other uses. Find the right balance by determining how much stock your company needs to meet customer demand and long it would take suppliers to fill last-minute orders. In addition, keeping inventory lean reduces the odds of being left with obsolete merchandise your business will have to write off, potentially generating a loss.
Your accountant can help you come up with other ways specific to your industry and your business to better track and manage cash flow. It will put your organization in a position to weather this downturn and take advantage of opportunities when the economy rebounds.
I can’t make up my mind today what I want to post about (and since I have three to chose from), I’m doing all three!! Bonus for readers.
- The labor market is going to take years to “correct”, so we should get used to all the impacts of an underemployed workforce;
- People are saving at a rate that is historically higher than at any time in recent history, even though in aggregate they’re earning a lot less;
- Consumer confidence, and spending, is not coming back quickly or willingly
- Even with the 2009 equity markets rebound, personal wealth is 20% below what it was in 2007, so anyone who was thinking about retirement plans is probably now thinking about delaying retirement
- Finally, Dr Ward concluded that Americans need to accept that our standard of living has taken some permanent steps backward, with no short-term fixes identified.
And Greg concludes in his entry:
My friend (and client) Cheryl Perkins, a globally recognized champion of innovation, was quoted a few weeks ago in BusinessWeek, saying “Often open innovation starts with a burning platform.”
Well, our platform is certainly still burning, which according to Ms Perkins makes now a great opportunity to create new models and ways of thinking. Now is the time when we all need to decide what we want to do about it. Whether or not we embrace that metaphor as an urgent call to action will go a long way to determining whether the pain of this recession lingers interminably, or if we’re able to prove the economists wrong with the speed of our recover. With all due respect, Dr . Ward, I’m out to prove you wrong.
This time last year, I wrote about the 10 ways social media will change 2009, and while all predictions have materialized or are on their way, it has only become clear in recent months how significant of a change we’ve seen this year. 2009 will go down as the year in which the shroud of uncertainty was lifted off of social media and mainstream adoption began at the speed of light. Barack Obama’s campaign proved that social media can mobilize millions into action, and Iran’s election protests demonstrated its importance to the freedom of speech.
- Social Media Will Become a Single, Cohesive Experience Embedded In Our Activities and Technologies
- Social Media Innovation Will No Longer Be Limited By Technology
- Mobile Will Take Center Stage
- Expect an Intense Battle As People and Companies Look To Own Their Own Content
- Enterprises Will Shape the Next Generation of What We’ve Called “Social Media”
- ROI Will Be Measured — and It Will Matter
- Finally: Real, Cool and Very Bizarre Online-Offline Integration
- Many “Old” Skills Will Be Needed Again
- Women Will Rule Social Media
- Social Media Will Move Into New Domains
I can’t wait to look back to see if this list is right, but, I think yes!
Third, and on a *completely* different vein:
The summary is:
Most of us have genes that make us as hardy as dandelions: able to take root and survive almost anywhere. A few of us, however, are more like the orchid: fragile and fickle, but capable of blooming spectacularly if given greenhouse care. So holds a provocative new theory of genetics, which asserts that the very genes that give us the most trouble as a species, causing behaviors that are self-destructive and antisocial, also underlie humankind’s phenomenal adaptability and evolutionary success. With a bad environment and poor parenting, orchid children can end up depressed, drug-addicted, or in jail—but with the right environment and good parenting, they can grow up to be society’s most creative, successful, and happy people.
This was very interesting to me, first because I find genetics deeply fascinating, but more so because I’ve always wondered at nature versus nurture. At many times in my journey as a parent, I was convinced it was all nature and no nurture; but as my daughter firmly enters adulthood, I again believe it is some kind of mix of the two.
Nearly every time I’ve seen media coverage of a horrific crime, I wondered, “what must his/her Mom be thinking and feeling?” As a Mom, I know I would be running every moment of my child’s life through my head, every interaction, every argument, every thing I ever said or did and asking myself what did I do wrong or not do right? What signs did I miss? How did my child make this horrible turn and I didn’t do anything to stop it or turn it before it was too late? My husband says it is “a Mom thing” to think and worry that way. He might be right.
I suppose articles like this make me see the glass as half full, that even if my kids got some genetic flotsum maybe my trying my very best to be as good a Mom as I can be might turn the tide for them. Maybe it is a Mom thing, but I’m good with that!!