Successful Blog

What Are You Doing to Weather the Economic Storm Clouds?

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Depending on which financial analyst or politician you listen to, the U.S. has either averted going off the financial cliff for now or is poised to run into even tougher financial roadblocks ahead.

So, what should small business owners be doing to position their companies for what appears to be slower economic growth for the remainder of this year?

First and foremost, do not panic.

Small business owners need to remember that the economy always goes through its ups and downs, so doing a major layoff or cutting back dramatically on one’s advertising and marketing budgets, those kinds of moves typically do not make good financial sense.

As one who runs a small business, think about the following:

* Manpower – Whether in good financial times or not, having the right size staff in place is very important. If you find that finances are dictating you need to cut some people, look at a few options. First, how would your business be impacted if you lost some people? Would it impact the services you provide to customers? Secondly, would those remaining employees be asked to take on added responsibilities while still receiving the same salary they are now? If so, will that create some morale issues in the office? One option before cutting is talking to those you are thinking of letting go, seeing if they would stay on at a reduced salary and possibly decreased benefits or picking up more of the tab to continue receiving benefits;

* Promotions – One of the biggest gaffes small business owners make when the economy gets challenging is cutting back on their advertising, marketing, and public relations campaigns. The thinking is oftentimes that competitors are doing the same, so it is a safe time to trim this area of business. Actually, it is probably the worst time to do it, as some competitors are doing just the opposite. While there may be times you need to trim such budgets here and there, never go into a full-scale cut, because you will likely miss out on potential sales. Instead of trimming your main promotional budgets, look to do more with free promotion vehicles such as blog posts and social media;

* Future – Undoubtedly, tough economic times will pass for many who run small businesses, so it comes down to a matter of surviving the difficult stretches, allowing you to prosper when things improve. You should always be thinking growth and not contraction as you look at the big picture. What can you do to grow more with the resources you presently have? How can your company pull itself away from the pack and give customers something no one else can? Finally, how can you as a business owner safely guide your company through some stormy financial seas, knowing that there is a light at the end of the tunnel? Always be thinking about what the next step takes to grow your business;

* Past – Finally, never forget where you started from and where you are now. In order to be a successful business owner going forward, you need to learn from your past mistakes. Whether it was some bad hires or layoffs, some bad investments, or even spending too much money for products and services needed for you to run your company, never make the same mistake twice.

As a small business owner, what are you doing to make your company as economically sound as possible in 2013?

Photo credit: mozy.com

About the Author: With 23 years’ writing experience, Dave Thomas covers small business topics for a variety of websites, including Reputation.com.

Dear American Worker, Are You Pessimistic On Your Retirement Plans?

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The last few years have brought some unwanted news for many American workers and that does not appear to be changing anytime soon.

According to a recently released report from the Employee Benefit Research Institute (EBRI), worries regarding one’s job security and mountains of debt are leaving many American more doubtful than ever when it comes to their retirement.

The recent EBRI survey (approximately 1,270 workers and retirees ages 25 and up) shows that a mere 14 percent of workers claim to be “very confident” they will have enough money to live a comfortable life during their retirement years. Meantime, 38 percent of workers claim to be “somewhat confident” and 23 percent report they are “not at all confident.”

According to many of the survey respondents, current priorities trump retirement plans at this point and time.

Job Security a Major Concern

The survey shows that approximately 42 percent of respondents claim a lack of job security is the number one issue they are facing, with only 28 percent of workers claiming to feel very confident they will be gainfully employed for as long as necessary. Lastly, 62 percent of workers report that their debt is their biggest challenge now.

Money put away for retirement is a big obstacle right now for many American workers, as approximately 60 percent of those surveyed report having total savings and investments of less than $25,000 (excluding the value for their residence and defined benefit plans). Even scarier, nearly 30 percent of these respondents claim to have less than $1,000 in their savings.

According to an EBRI spokesperson, “A lot of the people who have either lost their jobs or are worried about losing their jobs are trying to put a little money away for a rainy day and just don’t have money to put into savings right now.”

High Health Care Costs Prove a Burden

One of the major factors right now eating away at available money to put into savings are high health care costs. According to the survey, only 13 percent of respondents state they are very confident they will be able to meet medical expenses when their working days are over. Meantime, just 26 percent of workers claim to be very confident that they will even have the necessary funds to cover basic expenses.

As the American population ages, the irony of the health care issue is that advances in that very area leads to longer life expectancy for millions and millions of people. Living longer lives also means needing to put away more money in order to meet those needs.

With retirement funds scarce for many American workers, more and more are delaying retirement in order to keep a regular paycheck coming in, while increasing their Social Security benefits by waiting to ages 67 and 70 to start taking benefits.

On the down side of that idea, approximately half of current retirees report they exited the workforce unexpectedly due to health matters, a disability, or an employer that let workers go or even ceased operations.

So before gloom and doom set in from reading these numbers, the report does point out that more employers are automatically enrolling workers in retirement plans such as 401 (k)s, with many of those companies increasing contribution levels on a yearly basis.

EBRI’s spokesman pointed out that “We continue to find that employees lucky enough to be working for an employer that sponsors retirement plans — and who choose to take advantage of it — are not only much more likely to have a significantly higher amount of retirement savings, but also much higher confidence.”

As an American worker, what do you view your retirement to be like?

Are you confident today that you will have enough money for tomorrow or should you be doing A, B, and C to right your financial ship moving forward?

Photo credit: gobankingrates.com

Dave Thomas, who covers among other topics workers compensation and credit card processing, writes extensively for Business.com, an online resource destination for businesses of all sizes to research, find, and compare the products and services they need to run their businesses.

Invest or Pay off Debts in Today’s Economy?

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While the stock market seems to have settled down, many individuals can’t help but question whether it is best to invest while there are some good stocks available or should they pay off debts, especially credit cards?

Even though there is no set answer, individuals need to realistically look at their own situation to see which financial decision is more prudent for their case.

Issues to Confront

In the event you are weighing which road to travel, you need to determine the larger number, the return on investment or the interest you are currently paying for your credit cards. For those people who are paying greater interest than they could earn, they are advised to pay down their debt first.

When it comes to paying down debts, some financial experts will advise you to place your debts in order, from those charging the largest interest rates to ones charging the least.

On the flip side, others will advise placing them from smallest to biggest, paying off the smallest one first and making at least minimum payments on the others. Some view this as not only getting a debt paid off, but giving a consumer something to feel good about when the debt is removed.

Know the Tax Implications

With tax season here for the next few months, another factor for individuals to consider is what tax implications will befall them.

Individuals should look at whether the interest on their investment is taxable, along with if the interest on their debt is tax-deductible. When investing in items like traditional IRAs and 401 (k) plans, you can decrease your taxable income, so those investments can assist you.

Individuals should also take into consideration that investing is best done when finding returns that significantly top the interest on their debts.

Over time, individuals will be able to pay off high-interest obligations, while likely tracking down save investments that offer a better return on their money as opposed to paying more on their lower-rate debts.

Preparing for the Future

Finally, while credit card and other debts are something you can’t run and hide from, remember that your future financial picture is even more important today, given the questions about the strength of Social Security when you retire down the road.

If you’re able to eliminate high-interest consumer debt, start saving as much as possible. The best place to kick things off is a 401(k). The next best choice is an IRA.

Along with placing money in a retirement account, you will need to have a “rainy day” fund that’s readily available in an emergency so you do not rely on credit cards.

You should put aside enough funds to hold you over for three months if your paycheck suddenly ceased. If you have less-than-steady income, think about putting aside six months of income, potentially through a high-yield savings account or money market fund monthly basis until reaching a desired amount.

As noted earlier, each situation will warrant its own analysis, but paying down debts and investing in your future are both win-win scenarios.

Do the Math

If you’re still not sure about the best avenue to take regarding your financial situation, consider this example:

Let’s say you’re behind $15,000 on a credit card and your savings account contains some $15,000. Throw in a credit card interest rate that is at 10 percent and the bank is compensating you less than 2 percent on your account.

While your first inclination is to pay off the credit card and move that debt behind you, make sure there are no investment opportunities that could arise. Yes, investing in pretty much any product or brand is a risk, but the rewards can be great.

Should you come across an investment option or find some stocks or bonds that are providing good returns, you may think twice about putting all that money towards the debt, rather doing some investing. Perhaps you should do both?

As someone who has had to deal with debt due to a divorce and job layoff, I can tell you from firsthand experience that paying down a debt is a great feeling, even if it takes some time to do it.

In the event you’re still having questions as to which road to take (debt or investments), consider a few questions:

  1. What if the proposed investment does well after you’ve paid off your debt?
  2. What happens if you postpone paying down the debt and put the money towards the investment and the investment tanks? Where does that leave your psyche?
  3. What if you put half the money towards your debt and half towards your investment? Can you live with not fully paying down the debt and continuing to carry a balance?

As you can see, there are a number of roads to travel when deciding on paying down debt or investing those dollars.

Whichever road you head down, map out your plans ahead of time so you don’t get lost.

Dave Thomas, who covers topics such as starting a small business, writes extensively for Business.com, an online resource destination for businesses of all sizes to research, find, and compare the products and services they need to run their businesses.

Cool Business Idea: Credit Unions

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Todd Hoskins Reviews Tools for Business

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Todd Hoskins chooses and uses tools and products that could belong in an entrepreneurial business toolkit. He’ll be checking out how useful they are to folks who would be their customers in a form that’s consistent and relevant.

Cool Business Idea: Credit Unions
A Review by Todd Hoskins

I’m taking a break from reviewing tools this week to provide some thoughts on where to put your money as a small business owner.

Like many Americans, I’ve had some frustrating experiences with megabanks prior to the Great Recession. Since 2008, it’s been awful. Not just tight lending, but terrible service has been rampant. Too often the power to please customers has been taken away from local branches and consolidated in a corporate call center.

The greed of banking institutuions has been well-documented, which is one reason I encourage everyone to explore the not-for-profit option of credit unions.

Credit unions are member-owned, meaning profits go directly towards improving the products, rates, and service for member-owners, instead of appeasing stockholders. Unions, corporations, and government entities often have their own credit unions.

The other reason I support credit unions is they are community-based. In addition to sponsoring Little League teams, attending neighborhood festivals and fairs, or donating time or money to local organizations, credit unions provide another way to root your business in your geographic community. Even if you’re not selling products or services to people and businesses in your vicinity, there is great value in supporting and being supported by the other entrepreneurs and merchants in your area.

My credit union serves a few neighborhoods, and with less than 10,000 members, is relatively small. But the service is personal, and they also provide education and assistance to immigrants, young people, and those trying to establish themselves financially. So, the local businesses that “bank” with the credit union are actually improving the neighborhood around them.

You can check for credit unions in your area here.

I’m curious what other alternatives are out there. An online bank? Who do you trust with your money?

Money or Principles: Do We Have to Pick One?

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Are We Better than That?

Tonight AiraBongco said “. . . it’s an issue on what a person values: principles or money.”

I know. But it’s not like it’s been all honey up until now. I don’t know anyone who’s been living easy. I can’t imagine you’ve had it much differently. Do you know anyone who’s life hasn’t been hard won?

We use easy to describe some other guy’s life not our own.

Yeah, I worry about how things came this bad and where they’re going. The story is complicated, on the other hand, nothing new happens where humans are concerned. The good keep being good and the bad, well you know. People keep doing the same people stuff again and again.

Didn’t we see misbehavior like this on the playground and survive it then? We’ve made it out with self-respect in tact and our feet on the ground before.

money grabber

Warren Buffet, one of the richest men in the world, didn’t gain the confidence of million dollar handshakes by being untrustworthy. His businesses were built on his principles.

I guess I look at it this way, principles will get you through times of no money better than money will get you through times of no principles.

Maybe we should write that on a wall.

Do we have to pick one — money or principles?

–ME “Liz” Strauss
Work with Liz!!

The Politics of Money and Race in the South

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Storm on the Horizon

There’s a political storm brewing in my current home state that I only became aware of because of an attention grabbing headline at the Drudge Report this morning.

White Atlanta suburbs push for secession…

It’s just the sort of thing to make this former New York Yankee now living in the Deep South here in Savannah perk up and take notice of some state politics. So I did a little quick poking around ala Google and here is what I found out.

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Background

Atlanta is the county seat of Fulton county although a portion of the city extends over into DeKalb county, which seems to be a curious result of the original sight selection for a railroad terminal. Apparently there was a strong “not in my back yard” mindset in North Georgia in the 1830’s because the residents of Decatur were worried about train noise and insisted the proposed terminal be built well outside of town to the west across the Chattahoochee River. From what I can gather Fulton county was formed from the western half of DeKalb count round about 1853 as the area west of the river grew (due to the railroad terminal, of course).

Then skip ahead to the Great Depression in the early 1930’s. The two poor, rural, scarcely populated counties just to the south (Campbell county) and north (Milton county) of Fulton county were all merged together because the poorer counties were going bankrupt at the time. It created a sprawling elongated Fulton county, with the areas of the two former counties being referred to as North Fulton and South Fulton. It seemed all was well. [Read more…]