Plan B

Sorry we're closed signIn action movies, when the hero is thwarted by a situation, they employ Plan B to ultimately save the day. Business owners need to be able to do the same to maintain profitability and ensure sustainability of their company. Hurricane Dorian has shown some business owners the value of such a plan, and has shown others the need for one.

Unlike those in areas in the U.S. where Hurricane Dorian had significant impacts, and certainly for the Bahamas, most businesses in Florida were not affected by the storm. However, some were; those in areas that were evacuated as a precaution; those that performed work that involved the building, like installing skylights, solar pool heating, or involved alterations to the structure, and; those that performed work inside the building that was cancelled or rescheduled because the homeowners chose to leave the area to avoid the storm.

Businesses that did not have a “Plan B” as a component of their emergency operations plan (‘disaster plan’) or did not have a plan at all suffered a worse loss of profits than those with a Plan B.  Business owners need to consider how their company could function during an extended period without one or more of the inputs needed to operate. These inputs include: access to the premises, functioning utilities, ability of vendors to deliver, customer willingness to use the product or service, employee’s ability to get to work, and more.

Lack of access to the premises could be due to mandatory evacuation of an area, a vehicle crashing into the business, blocked entrances due to emergency construction like a broken water main, or damage to the premises themselves by fire, weather, or structural issues. If any of the preceding happened to a key vendor’s premises, they might not be able to deliver. Customers fearing a potential storm might postpone work on their house or business structure or may leave the area and cancel any work inside the home. Any number of issues could prevent employee’s ability to get to work including the need to stay home with children due to an unplanned school closure.

The response options in Plan B will vary with the type of business and the nature and duration of the interruption. Here are some examples from businesses I have worked with:

  • A few years ago, when there was a fear of a bird flu pandemic potentially closing schools and limiting public access to businesses, a bank developed a plan to provide expanded ATM access and online banking to all customers in the event that they had to close premised due to an insufficient number of tellers being available.
  • Both a print shop and a dry cleaner made mutual arrangements with a similar business two counties away to use the other’s shop after hours to produce work for their own customers.
  • A local newspaper made a similar agreement with another in a different county and each used that arrangement several times a year when their presses broke down.
  • A retail store planned pop-up stores in the mall and at a major flea market.
  • A home renovation business made a mutual agreement with a distant one to perform work as a subcontractor in the event that their business was impacted by an event.
  • Several restaurants and caterers planned to use each other’s kitchens, and in the event only the dining area was closed, some of the restaurants had a standby delivery service ready to implement.

As you can see, the options are only limited by the ingenuity of the business owner. The other ingredients for a workable Plan B are available cash or a credit line equal to one month’s expenses and having all important information available from anywhere by being in the cloud.

When I teach emergency operations planning, I begin by having attendees imagine that they are in their place of business when a policeman or fireman comes in and tells everybody to leave immediately without going back for any records, laptops, phones, or purses. He or she says this is due to a gas leak and tells everybody to walk swiftly to the end of the street. As everybody arrives at the gathering point an explosion is heard and there is a crater where the business was. I ask:

  • Can you account for all the employees and customers who were in the business?
  • Do you know your insurance company, agent and policy number?
  • Can you contact your customers? How will you serve them while the premises are rebuilt?
  • Do you know who your vendors are? Can you tell them where to deliver in the interim?
  • Is your alternate location ready to use?
  • Will your banking transactions continue seamlessly?
  • How will you notify the media about what customers and vendors can expect?

If you had a Plan B, answers to above would be ready to implement.

by Dr. Phil Geist, Area Director, Florida SBDC at UNF

Business Planning: Navigating the Early Stages of Business Growth

overhead image of laptop, clip board, coffee mug, glasses and graphSmall-businesses and start-ups range widely in their problems, patterns, and journey, and categorizing those experiences in a meaningful and useful way can be challenging. Yet, despite the uniqueness of their process, almost all entrepreneurs share a similar set of responsibilities. While timeframes, product complexity, organizational structures, and strategic goals vary, every entrepreneur faces at least three core responsibilities for their business: Survival, growth, and direction. These shared responsibilities occur continuously, simultaneously, and yet sequentially, since only if/once successfully managing one can the others be effectively addressed. Therefore, these ongoing activities might also might be considered as three cyclical stages of progress that all small-business owners face.  This article will discuss three core questions that any business owner should be able to answer clearly, concisely, and specifically at any stage if they want to navigate the difficult cycles of growth.  Continue reading here.

By Bethany Barnes, Prior Business Consulting & SBRN Member

Measuring is Knowing

hands drawing a bar graphI lived in the Netherlands  for 11 years and the Dutch have a saying “Meten is Weten” which means “Measuring is Knowing”.  In business, I translate this to “Know Thy Numbers”!  I have been working with entrepreneurs and small businesses at the Florida SBDC at UNF for over five years and I am still surprised at how many business owners do not have a handle on managing and administering their finances.  I would like to share with you what I call the “5-Line Income Statement”.  Author Sara Schafer’s Equation for Business” states:

Sales – Cost of Goods Sold (Variable Costs) = Gross Margin – Overhead (Fixed Costs) = Profit (Net Margin)

If you know these numbers you can also calculate your break-even sales number in two steps.  First you have to figure out your contribution margin (cm) which is your gross profit divided by your sales.  This is the percentage of every sale you have left over to pay (contribute to) your fixed costs.  This is also known as gross margin.  Then you divide your fixed costs by your “cm” and this gives you your break-even sales number.  The break-even calculation is handy because you can use it to see how much you have to increase sales to cover an added expense (fixed cost) of something (like a new employee or piece of equipment).  Many business owners are successful in spite of their financial illiteracy, ignorance or apathy.  They got lucky.  Other business owners skilled in financial management have built sustainable enterprises where others would have failed.  Which one are you?

by Mark Yarick, Business Consultant, Florida SBDC at UNF

 

 

Celebrate Small Business!

Small Business Week Celebration HeaderAs part of National Small Business Week (May 5th-11th, 2019) help us celebrate the SBA’s 2019 District and State of Florida Small Business Week Award Winners.  Did you know our Northeast Florida Region received seven out of the eight awards including the State of Florida Small Business Person of the Year?  Join us when our winners receive their awards at our 27th Annual Small Business Week Event and hear our keynote speaker Magie Cook, entrepreneur and creator of Maggie’s Award-Winning All Natural Fresh Salsa & Dips.  She will be telling her rags to riches story of starting a business that became a multi-million dollar success.

North Florida District and State of Florida Small Business Person of the Year-Mr. Jeff Turbeville, CEO, Sunshine Peanut Company (Jacksonville, Florida)

North Florida District and State of Florida Veteran-Owned Small Business Person of the Year-Mr. Frank Brewer, President, Alpha Omega Global LLC (Jacksonville, Florida)

North Florida District and State of Florida Rural Business Owner of the Year-Ms. Dallas Hart, President, Hart 2 Hart Academy, Inc. (Lake City, Florida)

North Florida District and State of Florida Minority-Owned Small Business Person of the Year-Mr. Courtney Powell, President, Ace Applications, LLC (Orlando, Florida)

North Florida District Woman-Owned Small Business Person of the Year-Ms. Laurie Morgan Lee, President, Elevate Business Law, PA (Jacksonville, Florida)

North Florida District Young Entrepreneur of the Year-Mr. Brandon Stallings, CEO, SmartBox (Jacksonville, Florida)

North Florida District Small Business Advocate of the Year-Ms. Sue Miller, Business Development Officer, Navy Federal Credit Union (Jacksonville, Florida)

North Florida District Community Partner of the Year-City of Jacksonville, Small and Emerging Business Program (JSEB)

Register Today!

Meet Kalai Sankar, founder of Shiva Robotics

Woman standing next to a robotKalai Sankar is the founder of Shiva Robotics Academy, a robotics education institution for students in grades K-8. A Carnegie Mellon Certified Robotics Instructor and professional LEGO educator, she has introduced after-school robotics programs in 18 Title I schools in Jacksonville. She has partnered with organizations like Renaissance Jax, Communities in Schools, and Girl Scouts of Gateway Council, to help hundreds of Florida students compete in tournaments nationally and internationally.  Kalai is the recent recipient of Florida’s Best Robotics Coach award and Jacksonville Business Journal’s Innovator in Education Award.

Where did the idea for Shiva Robotics Academy come from?

I was a stay at home mom for a number of years and I slowly began to realize that while I was watching Barney, the world was changing and evolving around me!  As a mom with two daughters I had been blogging about my parenting experiences and taking on various part time jobs. The first time I took a full time job was in the summer, so I needed to find a camp for my girls where their minds would be engaged.  I realized quite quickly that it wasn’t making financial sense to pay for camp based on my income, so I gathered the friends of my daughters and started conducting the camp myself.  I guess you could say that necessity was the mother of invention!

What are some of the activities you provide at Shiva Robotics Academy?

We offer a whole range of activities. The daylong robotics camps are our most popular.  We also offer weekly classes that consist of an hour and a half one day a week where any level of robotics learner can learn to build and program a simple robot to see what all the excitement is about.  This is a three-month course – 12 classes, after which students take an online exam to confirm what they have learned.  When they pass we ask these students to try out for the Robotics Teams.

With spring break and summer around the corner, what are some of the events you have coming up?

Spring camp for grades K – 8 will run two different sessions – March 11-15 and March 18-22.  We will have a thematic activity each day. For example, the first day is about animatronics, so kids will build robots that look like animals – spiders, snakes, elephants, etc.  Starting in June we will again run Summer Camp over the entire summer with each week focusing on a different theme.

How has the FSBDC at UNF helped you take this idea from where you are now and help you build your dream?

The SBDC has been very helpful – from the moment I stepped in the UNF office there were so many people there to offer assistance.  I felt reassured that I could make it with their help.  I first met with Don Zavesky, PTAC, who initially showed me all sorts of government opportunities that we could bid for and contracts I could win – he helped me see the bigger picture where I could take my business and helped me envision what could happen 10 years down the road. He then referred me to Linda Teza Kulka.  Linda has been more like a therapist at times – our first session I was sharing all my anxieties!  She is helping me create a master plan and helping me understand all the functions of the business that I will need to pay attention to as the company continues to grow. Having no business background, this has truly been eye opening and with this level of support I have much more confidence in the future.  In 10 years I will remember that the SBDC helped me build the foundation that allowed me to reach my goal.

2019: The Year to Plan Your Company’s Export Strategy

aerial view of cargo ship at loading dockWe say it every year, but it’s hard to believe another year has come and gone. 2018 was a year of professional and private ups and downs for most, but as we usher in 2019 many businesses look for new and sustainable ways to find customers and grow sales.

Economists and investors largely agree that the United States is due for another economic slump in the coming years. With the threat of another recession ahead, a targeted export growth strategy now, could be what sets one business ahead of others in an economic downturn later.

History has shown that companies that export are hardier, meaning that their broadened portfolio of customers outside of the United States bolsters their ability to handle currency fluctuations, varying consumption trends, and flagging employment rates. This makes sense when one considers that a poor economic year in the United States does not often mean the same for other countries. This was made evident after the Great Recession, when it became clear that the Financial Crisis of 2008 impacted developed countries in North America and Europe much more significantly than developing nations such as India. During this period, businesses that were already established in the global marketplace had a much less difficult time making ends meet, often relying in whole or in part on their export sales department.

It is also worth noting that companies that export are typically more profitable and pay higher wages than their non-exporting counterparts. So even if the economists are wrong and the U.S. economy remains in a state of growth and full employment for many years hence, an export strategy is an effective and energizing way to bring in the bacon. What’s more, with the prominence of platforms such as Amazon proliferating the field of e-commerce, there are more and more ways to easily reach customers abroad.

A great way to get started with an export strategy is to contact your local SBDC. The Florida SBDC (Small Business Development Center) has a network of international trade specialists around the state that can assist you with the development and implementation of an export strategy that fits your business culture and your financial goals. You may even be eligible for an Export Marketing Plan grant, which covers the majority of the cost of having an Export Marketing Plan written exclusively for you and your business by a trade specialist with experience in the field.

For more information about getting started with your own export strategy, please call (904) 620-2476 or reach us on the web at /sbdc-services/international-trade/.

by Julia Montgomery, International Trade Specialist, Florida SBDC at UNF

 

 

Tax Efficient Sales of Your Business

So you’ve decided it’s time to turn that lifetime of sweat equity accumulated in your business into cash to support your dreams of traveling around the world, or at least around a few golf courses. You are convinced that it is worth millions, but when that first offer comes, you find that at best, after a broker’s commission and income taxes, you will see a third or more evaporate before you have the chance to find a broker to invest those few remaining bucks.

Here are a few suggestions to consider:

1 – Allocate as much of the sale to the sale of goodwill, not toward non complete agreements or asset sales. That will maximize the portion of the sale to be taxed at capital gains rates.

2 – Consider selling under an installment agreement, meaning that you hold a note for a few years from the buying instead of taking it all in cash. That defers the income tax over the life of the note keeping your annual income down. It also will pay you a rate of interest somewhat higher than you would get at a bank. It might even get you a better price, because they can better afford to pay more over time than in a lump sum. It could save the buyer some closing costs over bank financing.

Continue reading here.

A Christmas Carol, or not…

Image of open laptop with new blog post typed on screenAs noted in my previous blog, Santa and the Elves, at the request of a number of long-time readers, I am bringing back updated versions of two of my Christmas fables for December. In this blog, business owner Dale Wright is visited by the spirits of Business Past, Business Present, and Business Future and learns some valuable lessons. Apologies to Charles Dickens…

Business owner Dale Wright awoke from a troubled sleep to see what appeared to be his former CPA standing over him. But Michelle Lerner was a ghostly apparition, he could see right through her! Sitting up in bed, he cried out “Who are you?  What do you want?”  “Don’t be an idiot Dale, didn’t you ever read A Christmas Carol by Charles Dickens,” replied the apparition? “Of course,” said Dale, “and I’ve seen several movie versions. But what do Scrooge and Marley in 1843 have to do with you?”

“I,” uttered the apparition, “am part of version 2.0, the updated story adapted to your business. I came here tonight to save your bottom line, which you have squandered away after my untimely death at the age of 93. Clearly, in the 32 years I was your CPA you did not learn how to project cash flow or write a business plan! And look where your complacency has gotten you…” Dale considered this. It was true. Since Michelle had passed away three years ago he did without a CPA, using software to file his tax returns, while ignoring all the management reports that could be printed. He was running his business by the seat of his pants, or to be more correct, it was running him… around in circles!

Continue reading here.

Speaking of Business Blog by Dr. Philip R. Geist, Area Director, Florida SBDC at UNF

Santa and the Elves

No, it’s not a new rock group. Santa and the Elves are successful entrepreneurs who employ good management practices to have an effective business model. Let’s take a closer look at some of those practices:

Branding, Public Relations, and Co-Branding: Santa and the Elves have established a world-recognized brand, promoted it to families with children and to the world in general in multiple forms of media. Those include verbal stories, songs, print and motion media, and even in dreams along with sugar-plum fairies. They have co-branded products from Coca-Cola to shampoos in order to achieve greater brand acceptance. A quick scan of product announcements will show that Santa is as popular as ever. Unless you brand your business and promote the brand, you will not stand out in the consumer’s mind.

Business Continuity: As Santa and the Elves must make their deliveries on a specific day and time, regardless of weather, they have developed a business continuity plan. By investing in a Reindeer with the latest in technology, the Nose-So-Bright option, Santa has ensured that even in fog he will be able to navigate the world and make on-time deliveries. If you identify the critical functions in your business and develop an alternative or can mitigate their impact, your business will be able to function as planned when it would otherwise be impeded.

Customer Relations: Santa and the Elves have created multiple pathways for boys and girls though out the world to contact them. They employ written mail addressed to “Santa, North Pole” via e-mail, by texting, contact via multiple Facebook and other social media sites set up regionally and in large cities, in-person with local representatives in branded outfits, and wirelessly by plain old-fashioned prayers. Unless customers and potential customers can easily reach your business by the contact of their choice, they will not be able to ask questions, share ideas and place orders.

Continue reading here.

 

Speaking of Business Blog by Dr. Philip R. Geist, Area Director, Florida SBDC at UNF

 

More than the cheese is moving…

wedge of cheeseHericlitus of Ephesus (circa 535BC – 475BC) was a Greek philosopher who is credited with creating and documenting the phrase, “Change is the only constant in life.” In the Handbook of Organizational Change and Innovation, edited by Marshal Scott Poole and Andrew Van de Ven [2004 Oxford University Press; ISBN 0-19-513500-8], a number of scholars examine how organizations react to change. A number of contributors discuss how businesses that have a perspective of strategic planning that includes adaptation and champions change are more likely to be sustainable.

Change, whether natural, man-made, or coming about a result of social changes and perspectives will always affect business. The increasingly violent weather and natural events, from hurricanes and floods, to earthquakes and volcanos, both causes tragedies and opportunities for businesses. Businesses in affected areas that did not at a minimum have a continuity plan will suffer, while those that did or were fortified have the opportunity to return to the market faster.  Each disaster event will spawn new business opportunities to provide a product or service to customers that will mitigate or prevent future damage. Continue reading here.

 

Speaking of Business Blog by Dr. Philip R. Geist, Area Director, Florida SBDC at UNF

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