This article was co-written with Lloyd Chapman, President of the American Small Business League. Lloyd will be on my weekly radio show this Monday at 4 PM. Please visit smallbusinesshour.com to listen.It is time for America's small businesses to unite and take ACTION!In a recent national address, President Barack Obama boldly proclaimed that his Administration's economic stimulus package was working. Meanwhile, small businesses in middle class America struggle to simply keep their doors open. Despite thousands of business closures during the last several months, the mainstream media has spent little time discussing the importance of small businesses to America's economic vitality. Our nation's political leaders routinely recognize small business as the backbone of our nation's economy, but to date small businesses have largely been left out of efforts to stimulate America's economy.

America's 27 million small businesses generate more than $6 trillion in annual revenue and collectively account for more than half of our nation's Gross Domestic Product. U.S. Census Bureau data indicates that companies with less than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of net new jobs.

When small businesses thrive, our economy grows. Yet today, millions of these businesses are being threatened by the very plan that was supposedly intended to help them. The president's stimulus package, rather than providing aid to small businesses is diverting resources to save mismanaged corporate giants.

Congress earmarked a mere 1.9 percent of the initial $789 billion stimulus package to assist small businesses. Worse yet, to date, less than one half of one percent has been distributed to small businesses. The irony of this is that in the long run small businesses will bear the burden of paying nearly the entire tab for this extravagant spending package and receive almost NOTHING in return.

The new administration is taking capital and revenue from the mouths of America's small business owners and feeding it to the big national banks, greedy Fortune 500 CEOs and Wall Street executives. This theory enraptures Wall Street, yet alienates Main Street. Even the Small Business Administration (SBA) is led by venture capital vipers who are licking their chops at a chance to infiltrate and dominate federal programs designed for small businesses.

The SBA was planning to guarantee $20 billion in loans during fiscal year (FY) 2009, yet it is currently on-track to reach half of that mark. Loan programs like the ARC [America's Recovery Capital] have been purposely structured so that few small businesses can qualify and banks literally have little motivation to lend. Even more disconcerting, every year, billions of dollars in federal contracts intended for small businesses are diverted to Fortune 500 corporations and other clearly large firms. Since 2003, more than 15 federal investigations found fraud, abuse, loopholes and a lack of oversight have led to widespread abuses in federal small business programs. The American Small Business League (ASBL) has estimated that every year up to $100 billion in federal small business contracts are diverted to corporate giants.

On top of this, small businesses are facing a hike in taxes for those earning more than $250,000, limits on itemized deductions, higher dividend taxes and shouldering more responsibility for worker health care.

While the Fortune 500 corporations have an army of lobbyists in Washington, small businesses are on their own. For this reason, it is more important than ever that small businesses unite. Regardless of political affiliation or industry association something needs to be done to stop this insane, wasteful spending spree. The ASBL and the Small Business Hour Radio Show are urging small business owners to make their voice heard. They collectively will be working together to shine a brighter light on issues facing America's 27 million small businesses, and to help the small business community organize a more powerful unified voice. To participate in this united movement towards change, please listen to the Small Business Hour with Mark Deo at smallbusinesshour.com and become a supporter of the ASBL by visiting http://www.asbl.com/joinasbl.html.by Lloyd Chapman and Mark Deo

Lloyd Chapman, President of the American Small Business League
A vocal crusader for the rights of small business, Mr. Chapman is a familiar figure at the Small Business Administration and in the United States Congress, where he has continued to work tirelessly during the last two presidential administrations to prevent federal small business contracts from being diverted to large corporations. He is regularly quoted by the media on small business contracting issues. He can be contacted at www.asbl.com

Mark Deo, Host of the Small Business Hour
Mark Deo is a small business advocate, author, journalist and business owner. For 12 years he has been the host of CBS radio's, "The Small Business Hour." He has been voted "Journalist of the Year" by the Small Business Administration; his weekly radio show can be heard at www.smallbusinesshour.com.
Thank you for your feedback, and have a great week!-Mark Deo

It is not often that I find myself without words. I usually have plenty to say about any topic imaginable. But recently when speaking with a CEO who had asked my advice about how to deal with a particular challenge in his business, I was rendered speechless. This CEO had recently lost a key supplier to the competition thereby disrupting his supply chain and causing production and delivery problems.

As we discussed his challenges, the CEO seemed forthright and was open to hearing ideas of how to handle this. So I told him about several other clients that had experienced the same problem and how they created a foolproof method for avoiding such circumstances in the future. I suggested he engage in some planning to create a network of suppliers with contingencies for those that fail to maintain loyalty. I suggested that in the future, he should try to avoid depending too much on any one supplier unless there was an exclusive arrangement in place. I told him that the key was doing some careful planning to identify competitive suppliers and play one against another.

His response both stunned and surprised me. He said. “Wow, that sounds like it would take a LOT of time. I don’t have time for planning!” I asked him if he now had time to find a new supplier. He answered a sheepish, NO and went on to tell me about how he was working 60+ hours per week just trying to manage all of the details of his business.

I think this is a fairly common problem with business leaders today. We spend so much time working IN our business that we fail to work ON the business. Peter Drucker said that on the average one hour spent planning is worth 5 hours of execution. Are you spending enough time planning? Do you need to take a step back and look at the big picture and identify some contingencies?

This might be the very time to do just that. For more information on planning and planning resources, check out our library of articles.

Mark Deo and Cory Halbardier, as well as other SBA Network consultants are available for keynote presentations and other type of speaking engagements. Contact Cory Halbardier at 310-320-8190 to ask about availability.
-Mark Deo
mark@markdeo.com

Greetings and happy holidays to all! With the end of the year just around the corner, now is the time to look back at 2005 and evaluate how our business performed. There are five areas in which you should evaluate your performance to make sure that you have all of the knowledge you need to compete in 2006.

1. Review your business from the client perspective- how successful were you at attracting the type of client that you desire? What do they think about how well you did this year? Go through the clients that make up the bulk of your business, and interview them to discuss any concerns they have about your ongoing business relationship. Find out what goals they have for 2006, and how you fit into those plans.
2. Review your employees- how do your employees view your business? They are on the front lines, especially those in sales- find out from them what concerns they are hearing about your company, and what suggestions they have for changes you can make. You should also review their performance, and make sure they are on track with the goals you mutually set. Now is the time to discuss incentive plans, and to make sure that they will be hit in 2006.
3. Tax planning- Take some time now to review past years taxes, and see how things from this year match up. Instead of waiting until your accountants and bookkeepers start preparing returns, gather all documentation they will need now, and make sure that you understand what they typically deduct so you have plenty of time to ask questions before you must submit your return.
4. Holiday Cards and Gifts- You should send out cards and/or gifts to as many clients and contacts as you can. It is best to send these early, because yours will likely be the first gift they receive, and will stand out more. These are not a way to “bribe” more business, but are a marketing function of just showing genuine appreciation for the relationship you have with this client.
5. Investment Review- evaluate your investment portfolio, both personal as well as corporate. Do you have nay real estate holdings? Stocks, bonds, etc.? How did they perform in 2005, and what changes might you want to make in the year ahead? Make sure to actively ask questions of your advisors so you understand how well your money is working for you.

I strongly encourage you to review your 2005 performance, look for areas in which you need to change, and make 2006 even more successful. Thank you for being a loyal business update subscriber. Happy holidays! –Mark Deo

When Key Employee Life Insurance Is the Right Tool

By: Randy Riley, Northwestern Mutual Financial NetworkIf you own or manage a business, you probably understand the importance of a good business plan – a plan you and other key staff members can regularly revisit and revise as your company’s market and customer base evolves.You also know you need a sound personal financial plan that ensures that you’ll have the resources to retire when you choose, support your loved ones if you become disabled, or leave them with adequate financial resources in the event of your death.Similarly, your business’s ability to weather a crisis may depend on your ability to go beyond basic cost and revenue forecasts and anticipate areas of significant financial risk such as the loss of a key employee having such a plan in place.Five years ago, the attack on the World Trade Center shut down much of the country’s business activity for more than a day. Many businesses in Lower Manhattan were closed for much longer. During the months following the attack, the people who owned these businesses faced the difficult task of maintaining them despite the loss of colleagues with essential skills and unique knowledge about customers and business operations. The fate of these businesses depended on the capabilities and resources of their remaining employees, who were also struggling with grief and fear.Fortunately, few businesses will ever face a crisis of that magnitude. But the World Trade Center disaster underscores a key point to remember when you assess your business’s financial risk: The most important income-producing asset of any company is its people.Businesses that depend on a particular piece of equipment typically insure it. Key employee life insurance is an essential component of a business financial plans’ long-term success, because businesses recognize that the loss of a key employee can have a serious financial impact. In addition to the human tragedy, the loss of a key person often means the loss of important customers, skill sets or business relationships.A key employee is anyone who makes a significant contribution to your company’s financial success – a company president, talented sales director, a product designer, a partner who makes key management decisions, or an executive who is a TV advertising personality. And, unlike a machine, key employees are not so easily replaced.Businesses purchase life insurance to protect against several different types of risk related to the loss of a key employee:Loss of skills or experience. Small or family-owned businesses are particularly susceptible to this risk.Business financing or credit protection. Some financial institutions require businesses to purchase key employee life insurance to secure business financing, particularly if the business’s credit is contingent on the experience or reputation of an owner or partner. Life insurance also offers credit protection to partners who might otherwise be saddled with additional debt should a partner die, and a policy’s cash value can be used as collateral to secure funding.Transitional expenses / disruption in business. Key employee life insurance can provide badly needed funding if your company anticipates a short-term revenue gap after the loss of a key employee due to a drop in sales or during the time required to hire and train a replacement.Buy/Sell Agreements. Life insurance can provide partners with funding to resolve the thorny issue of business ownership should a partner die unexpectedly.Additional needs that can be addressed through key employee life insurance include:Retirement funding. A life insurance policy can serve as a funding mechanism for a senior partner’s retirement – a particularly effective strategy for family businesses since the senior generation’s assets are often tied up in the business.“Golden handcuffs.” Supplemental executive benefits are often informally funded through key employee life insurance. Such benefits provide an added incentive for valued employees to stay with the company.Key employee life insurance is a business planning tool, not a business plan. Before you buy life insurance for key employees, devote some time and careful thought to a comprehensive “discovery” process determining your business’s needs. Assemble a team of trusted advisors – including a qualified financial professional who understands the uses and flexibilities of key employee life insurance, your attorney and your CPA – and work with them to identify your key employees and areas of risk.Your goal is to develop an insurance plan that not only anticipates your employee-related financial risks and provides the funding you’ll need to address them, but also sets out strategies for assuring your business’s long-term survival through comprehensive succession planning.

All this talk about working on improving our businesses marketing more effectively and building more valuable, long lasting relationships is nice but it’s all TALK! And like my grandfather used to say, “talk is cheap.”

Anybody can read books, listen to CDs, take classes to gain knowledge. However, true improvement only occurs when we take action. It is admittedly difficult to adapt business improvement strategies to our industries and personal circumstances. How can we “implement” the strategies which seem to make “so much sense” when we hear, learn and read about them yet seem so foreign when we attempt to put them into practice?

By developing an implementation plan or “plan of action.”

Our action plan must include various elements that we have talked about in these weekly business updates. I recommend creating a one page summary outlining the following components in preparation for developing the action plan:

1. Your competitive positioning in the market. — This outlines how your competition is perceived in the marketplace. See our article on the competitive landscape profile:http://www.sbanetwork.org/articles/articles_view.asp?id=164  

2. Recognize the “thought trends.” – Examine the products and services that you are deciding to market and the thought trends of that customers who demand them. It is critical that you fully understand the trends in customer thinking. Check out our article on “thought trends”:http://www.sbanetwork.org/articles/articles_view.asp?id=144 

3. The profile of your target audience. – Most entrepreneurs go after the big target. They try to get the biggest piece of the pie. I say go after the smallest possible market that you can find. Far better for you to be a big fish in a small pond rather than a little minnow in a great big sea. See our article on target marketing: http://www.sbanetwork.org/articles/articles_view.asp?id=190

4. Your exclusive marketing position. – Everyone is talking about having a unique solution and differentiation. This is not enough today. We must not be satisfied with having a unique solution we in fact must find a way to be the ONLY solution. Read about the “exclusive marketing position” in this article: http://www.sbanetwork.org/articles/articles_view.asp?id=109 

5. Your branding statement. – How can people recognize you in crowd? Today EVERY industry and product or service category is inundated with copycat solution providers. The client has over-choice, in the extreme. How will people consistently recognize who you are? See our article on branding: http://www.sbanetwork.org/articles/articles_view.asp?id=25

6. Your informational marketing strategy. – Today it is not enough to persuade people; we must educate, influence and inspire them. How does your action plan accomplish this? Check out this article: http://www.sbanetwork.org/articles/articles_view.asp?id=175 

Please feel free to give me some feedback and let me know what you’d like to us discuss in these update by visiting our survey. It will only take you 2 minutes to compete and when you do I’ll share with you my audio presentation on “Why Most Marketing Fails.”

Is your business just a job?

Could you sell your business today? How much do you think someone would be willing to pay? Is that enough for you to sail off into the sunset?
What are you doing to build a property that has long-term value?
Believe it or not most small businesses are nothing more than extensions of the owners. If the owner disappears, the business disappears. How can you make your business a property that has marketable value? It takes time and a great deal of effort but it also requires a strategic plan.
A strategic plan helps the owners or principals of a business to plan for the growth of the business by deliberately investing in resources that will add value and strategically dovetail with goals and objectives. It helps to define the anticipated income and expenses for each fiscal quarter as related to specific initiatives. Each of these initiatives must have an action plan including responsible parties, a timeline for completion, an ROI model and a contingency plan in the event that the initiative needs to be abandoned prematurely.
At the SBA Network we have created a successful format for developing small business strategic plans. In fact you are reading the fist of a series of seven segments where we outline the step-by-step the activities that are required to develop a practical, working strategic plan. This Strategic Plan – E-Learning Program comes with seven 10 to 15 minute audio files, a strategic planning workbook and sample strategic plans from actual small businesses which have doubled and even tripled their profitability. If you are interested, listen to the first audio file FREE by clicking here!But this article is about helping YOU, so let’s take a look at the seven steps that are part of developing a comprehensive strategic plan:
Step 1: S.W.O.T Analysis – This is where we analyze the company’s strengths, weaknesses, opportunities, and threats. This is a critical first step because it allows us to pragmatically evaluate the company’s internal and external operating variables. What factors are under our control and what factors must we accept as current conditions. This sets the stage for how to bring about change in the business. Check out my article on SWOT Analysis.
Step 2: Competitive Intelligence – We recommend using a competitive landscape grid which we teach in our “Out-Marketing the Competition Series.” This helps us to evaluate the competition on a number of different levels. It includes market position, product or service features/benefits, pricing, terms, corporate personality, customer service issues, risk tolerance, financial position and growth potential. Check out my article on competitive landscape profile development.Step 3: Values and Vision – This is where we look at the cultural absolutes against which we must weigh all of our decisions and how that plays into the ultimate vision of the company. This essentially is a “standard of care” that we want to foster in our business. Check out my article on how to create a Standard of Care for your business.Step 4: Goals and Objectives – What is it that you want to accomplish? Where, when how, how much? This is where the rubber meets the road in terms of growth. Few business owners spend much if any time on objectives. So is it any wonder that of the 92% of companies that fail in their first five years of operation, only 2% had written business objectives? Check out my article on goal setting.Step 5: Strategic Options – Here we simplify our options. We live in a changing world. In fact change is about the ONLY thing we can count on. We need to plan for several options in terms of initiatives. So when things change, as they certainly will, we can move to our contingency plan with fluidity.Step 6: Action Plan – In this step we will establish initiatives and directives. This will outline a specific plan for each action item and who will be responsible for accomplishing it? What is the timeline for completion? What are some of the barriers to accomplishing it and how will we overcome them? What resources will be required and how will we acquire them?Step 7: Metrics – How will we measure our progress? In this step we put into place the tools that will be used for measuring the effectiveness of our initiatives in the strategic plan. This includes several critical reports that every business needs to have: Sales Forecast, Cash Flow Analysis, Departmental Budgets, Product/Service Position Report. These reports must be prepared and reviewed on a regular basis.The most important fact to keep in mind is that our strategic planning represents a process rather than an event. The outgrowth of a strategic planning process can contribute to the long term success and survival of a business enterprise. More importantly it is becoming skillful with this type of planning process which is the first step in building a business that has value and equity which extends far into the future and which can out-live even ourselves.Again if you are interested in finding out more about how to develop a strategic plan for your business, listen to the first of our series of 7 audio files for FREE by clicking here!In fact, we have available now, the series of all seven segments where I provide business coaching on all of the steps involved in developing a comprehensive strategic plan. This Strategic Plan – E-Learning Program comes with seven 10 to 15 minute audio files, a strategic planning workbook and sample strategic plans from actual small businesses that have doubled and even tripled their profitability.
I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mark@markdeo.com 

Mark Deo

Robert Kiyosaki, author of the International bestseller Rich Dad, Poor Dad was my guest this week on Small Business Radio in Los Angeles.  In case you missed the show, click here to listen over the Internet to an archive of the show for free.

 On this show we discuss the importance of investment for business owners, and some strategies for increasing your wealth through your business.  We also discuss his latest book, Rich Dad’s Before You Quit Your Job which deals with 10 real life lessons every entrepreneur should know about building a multimillion dollar business.  Learn Robert’s thoughts on where you should be investing your money today, how the soaring price of oil will affect your business, and what to do to leverage your business assets by becoming your own landlord. Special BonusAs a subscriber to my business update, you are also eligible to receive my Free Guide to Growing Your Business.  In this e-book we offer tips on taking your business to the next level.  Learn about niche marketing and how shrinking your market will help you see huge dividends.  Download a copy for free at:http://www.sbanetwork.org/grow
 Have a great week!

The road was wet and dark as truck after truck entered what is known as the most dangerous tunnel in Southern California. Even under excellent conditions, most drivers have grown to fear its sharp curves and dips. On this cold evening, these drivers were unaware of what was about to take place. A fiery wreck consumed the lives of 2 people, and dramatically altered the lives of many others. 

October 14th was a tragic night on the 5 freeway, just north of Los Angeles. In addition to the loss of human life, the closure of this freeway for several days prevented travel between LA and Northern California. As a major trade route that sees millions of dollar of cargo daily, shockwaves were sent through the business climate in Southern California. 

Companies often face unanticipated challenges like these. Do you have a business plan ready to execute next week for an interruption in your supply chain, recession, terrorist attack, sudden drop in the stock marketing, or a spike in oil prices? The best businesses are ready. Many have even profited from events that destroyed or damaged their competition. 

For companies that want to turn fatal blows into near-fatal blows, they must plan for the unexpected. 

How do you plan for the unexpected? David Shechtman, who was on our radios show a few weeks ago, does just this. He calls it “Scenario Planning,”which involves drafting out various possible scenarios and planning for them. 

Possible scenarios that exist for you may include: 
1) If this new product does not gain traction in the marketplace, how will we react? 
2) If our smallest competitor moves to a dominate position in the marketplace this year, how will we react? 
3) If the trucks are not able to make delivery due to forces outside our control, how will we react? 
4) If a key employee decides to leave and go to a competitor, how will we react? 

When you have a plan for overcoming these setbacks, you can move forward without skipping a beat. 

It’s likely you are very busy. If there was a quick way to plan for scenarios, would you be interested in hearing about it? 

Use your lunchtime. Take your executive team to lunch and brainstorm everything which could go wrong. Create an exhaustive list without working through it. 

At the end of the lunch, choose two scenarios and have your team jot down ideas for how to navigate those problems over the next week. Take them to lunch again in a week and discuss your ideas. Do this every week over the next few weeks and you will have planned for the unexpected. 

If you foresee this meeting venturing off onto tangents, or you believe it will not be effective, hire a facilitator to manage these lunch meetings. If you’re not sure who to contact, contact us for recommendations. 

Listen to our LIVE radio show this Friday at 4 pm PST at www.smallbusinesshour.com , where we’ll be interviewing the president of Bank of America Small Business. Call in to speak with us at (323) 443-6878 code: 226287

–Cory Halbardier

It is not often that I find myself without words. I usually have plenty to say about any topic imaginable. But recently when speaking with a CEO who had asked my advice about how to deal with a particular challenge in his business, I was rendered speechless. This CEO had recently lost a key supplier to the competition thereby disrupting his supply chain and causing production and delivery problems.

As we discussed his challenges, the CEO seemed forthright and was open to hearing ideas of how to handle this. So I told him about several other clients that had experienced the same problem and how they created a foolproof method for avoiding such circumstances in the future. I suggested he engage in some planning to create a network of suppliers with contingencies for those that fail to maintain loyalty. I suggested that in the future, he should try to avoid depending too much on any one supplier unless there was an exclusive arrangement in place. I told him that the key was doing some careful planning to identify competitive suppliers and play one against another. 

His response both stunned and surprised me. He said. “Wow, that sounds like it would take a LOT of time. I don’t have time for planning!” I asked him if he now had time to find a new supplier. He answered a sheepish, “No,” and went on to tell me about how he was working 60+ hours per week just trying to manage all of the details of his business. 

I think this is a fairly common problem with business leaders today. We spend so much time working IN our business that we fail to work ON the business. Peter Drucker said that on the average one hour spent planning is worth 5 hours of execution. Are you spending enough time planning? Do you need to take a step back and look at the big picture and identify some contingencies? 

This might be the very time to do just that. For more information on planning and planning resources, check out our library of articles.

Mark Deo and Cory Halbardier, as well as other SBA Network consultants are available for keynote presentations and other type of speaking engagements. Contact Cory Halbardier at 310-320-8190 to ask about availability.