Updates on Employee Benefits

Inc.com examines the challenges for small business in managing employee medical leave. One more program of good intentions colliding with governmental incompetence.
Entrepreneur.com examines the health insurance crisis. While some call it a crisis in health care, there is nothing wrong with health care in America. Our health care is the best in the world and getting better. The crisis is decades of a duplicitous relationship between big government and big corporations to try to artificially manage an industry.
NFIB looks at the latest on the social security debate. See my comments on the two issues above for my take on this mess.

How to Hire a Tax Accountant

Since fundamental tax reform is not likely to occur, new entrepreneurs need to think about hiring an outside accountant to help with tax work (do not do your own taxes unless you give yourself haircuts and perform all minor surgery on yourself such as appendectomies and open heart surgery). Start-up.com has offers some good advice on this process.
Here are my tips:
1. Start with referrals from other professionals and entrepreneurs and choose two to three to interview.
2. See if this is someone you want to work with for the next several years, often during some of your most difficult times. Personal fit with you and your team is critical. You need to be able to be open and honest with your CPA. Pick someone you can trust.
3. If they know your industry that can be a plus, but is not as important as when you pick an attorney.
4. Get honest and clear about their billing policies. If you are a new business, many accountants will give you some initial discounts. To some degree fees can be somewhat negotiable. Judge how sensitive each one is to your cost constraints.
5. Note things like how quickly they return your phone calls. They should be in their sales mode so this is as responsive as they may
ever get.
And when you pay your bill each year to your accountants for their tax work, remember the opportunity we missed this year to really reform the tax system in America.

New Report on New Business Survival Rates

From the Office of Advocacy of the SBA:
“Released at The Institute for Entrepreneurship, Leadership, and Innovation at the Howard University School of Business, findings of Dynamics of Minority-Owned Employer Establishments, 1997-2001 include:
– During 1997-2001, 27.4 percent of non-minority owned establishments expanded. At the same time, 34 percent of Hispanic-owned establishments expanded, 32.1 percent of Asian and Pacific Islander-owned establishments expanded, 27.8 percent of American Indian and Native Alaskan-owned establishments expanded, and 25.7 percent of Black-owned establishments expanded.
– The four-year survival rate for non-minority owned businesses establishments was 72.6 percent. The survival rates for minority-owned businesses were lower, including Asian and Pacific Islander-owned at 72.1 percent, Hispanic-owned at 68.6 percent, American Indian and Native Alaskan-owned at 67 percent, and Black-owned at 61 percent.”
I have two observations on this study. First, the public policy implications should focus on improving educational programs for these groups. Previous studies clearly show the power of education in improving survival rates in business start-ups. While I’d love to have them all come to Belmont, effective educational programs can be as simple as focused as workshops on planning and starting a business sponsored by local Chambers of Commerce, banks or community groups.
Second, these survival rates are phenomenal! Most studies from years past showed survival rates for new businesses in the 40-50% range. In entrepreneurs who have gotten training we tend to see 80-90% survival rates. This is the first study of the general population that finds survival rates in the general population of 60-70%. While this could be a measurement issue (this sample is drawn from census data), it could also mark a general improvement in survival due to better awareness overall about small business, more widespread access to information on managing new businesses, and/or a healthier economic and social climate for business survival.

Stimulating Growth and Managing it Effectively

I write and speak often about how to manage growth successfully. It comes from my own experience of dealing with run-away growth in our business. But growth requires planning and momentum. Entrepreneur.com has a good overview of traditional means to stimulate growth in a small business.
Here is a summary of their list of strategies:
1. Introduce a New Product
2. Take Your Product to a New Market
3. License Your Product
4. Start a Chain
5. Turn Your Business into a Franchise
6. Join Forces
7. Go Global
Since symmetry is always a good thing, keep in mind my 7 Challenges to Effective Growth to go along with these 7 strategies to create growth.
1. Beware of the Growth Myth. Focus on growing profits, not sales!
2. Vision Drift. Don’t lose your way.
3. Cultural drift. Managing the culture of your business is your job! If you don’t manage it, your culture will take on a life of its own.
4. Resource crises. Securing the fuel to support growth can be a constant strain…cash, staff, space, equipment, etc., etc.
5. Systems crises. The mundane and the complex all need development. From accounts payable to planning, all systems must be put in place are made ready for growth.
6. Muddled structure. Make sure your structure makes sense for your strategy and your culture.
7. Disjointed strategies. Your business and your strategy need to be consistent. All aspects of your business must be consistent and geared toward meeting customer needs and expectations.

Entrepreneurship Across Campus

The Nashville Business Journal wrote an editorial about our efforts here at Belmont to take entrepreneurship education across our campus.
“….Belmont University is eyeing an initiative to infuse entrepreneurial education into all its departments.
“Teaching entrepreneurial strategies to students in a business track is certainly nothing new, at Belmont or other universities. What is a departure is training students in other disciplines how to think like entrepreneurs.
“More students are entering college with the idea of forming their own enterprises. Whether they ever start their own businesses or just work in someone else’s, any training they receive that sharpens their critical thinking skills will only benefit them, their businesses – and all of us.”
It is such a gift to work with students and colleagues across such a wide variety of interests and disciplines. We are grateful that the Coleman Foundation has given us the means to begin this initiative here at Belmont.

More Convergence

Convergence in the technology world seems to be continuing to gain steam, and that means new opportunity for entrepreneurs who can take advantage of the changes that convergence creates.
That latest example is reported today at Red Herring.
“Handset makers at this week’s annual 3GSM mobile industry gathering are emphasizing strategies to turn mobile phones into digital music players, technology one analyst predicts could be an ‘iPod killer.’
“On Monday, Nokia took the industry by surprise when it announced that it had inked a deal to use longtime rival Microsoft’s music formats in its handsets, with the aim of allowing cell phone users to easily transfer music from personal computers equipped with Windows XP software. The Finnish handset giant said it would release a music-centric cell phone using an open mobile music platform from Loudeye, which will let users browse, download, and listen to songs, with charges appearing on their monthly bill. Users would also be able to transfer songs between their cell phones, digital music players, and computers.”
Such times are not for the faint of heart. While opportunities abound, today’s star can become a dog in a few short months.