Wednesday, May 20, 2020

Is a Pandemic the Right Time to Start a Business? It Just Might Be

Written by:  Amy Haimerl

Ngoc Huynh, who is planning to open a Vietnamese food stall at Salt City Market, said its entrepreneurs were helping one another.Credit...Mustafa Hussain for The New York Times

Previous financial crises gave rise to high-profile American companies. The spread of the coronavirus challenges entrepreneurs to meet new needs.
Previous financial crises gave rise to high-profile American companies. The spread of the coronavirus challenges entrepreneurs to meet new needs.

Past downturns produced some high-profile American companies: Airbnb, Disney, General Motors, Hewlett-Packard, Microsoft, Slack, Uber and Venmo, to name a few.

“Downturns or challenging times are seen as good times to start a business for two reasons,” said Rashmi Menon, entrepreneur in residence at the University of Michigan’s Zell Lurie Institute for Entrepreneurial Studies. “One is, there is less competition for resources. The second reason is that whatever changes we face, positive or negative, bring up new customer needs. And customer needs are at the core of any business.”

In March, as small businesses across the country were shutting down amid the spreading coronavirus pandemic, Shanel Fields was about to open one up.

For Ms. Fields, the timing couldn’t have been better. Her company, MD Ally, allows 911 dispatchers and other responders to route nonemergency calls and patients to virtual doctors, to help local governments improve their emergency response systems.

“Something that a lot of people don’t know is that more than half of calls that go to 911 are nonemergency,” said Ms. Fields, whose father’s experiences as a volunteer emergency medical worker sparked the idea. “Those nonemergency calls overcrowd E.R.s and delay ambulances.”

But she also recognizes how crazy it sounds to start a business during an economic collapse. She knows that while she’s hiring, many small businesses are worrying about whether they’ll ever reopen.

She’s not alone: New businesses are forming despite the pandemic, though at a significantly slower rate than before.

There have been more than 500,000 applications for an employer identification number since mid-March, according to the Census Bureau, although that is down nearly 20 percent from a year ago. Between mid-March and mid-April, the Small Business Administration issued nearly 300 start-up loans worth about $153 million, a 36 percent drop from year earlier. Stripe, the credit card processing firm, said it had handled more than $1 billion in sales for businesses that started on the platform during that time.

For Ms. Fields, opening now meant greater access to top talent. She hired her fourth employee and said more than 200 qualified applicants had submitted résumés. And being in the health care sector during a pandemic has raised her profile with funders and governments: MD Ally, which is based in Philadelphia, recently signed its first customer and closed its first round of investment worth $1 million.

For others, the timing can mean low interest rates for borrowing start-up capital, cheaper equipment as businesses sell off inventory or lower lease rates as landlords scramble to fill empty spaces.

“I’m already seeing a huge uptick in requests for kitchen leases and subleases to be used for carryout kitchens or production spaces,” said Jenn Smith, a commercial real estate agent in Detroit.

In the best of times, 20 percent of new businesses don’t survive their first year, according to federal statistics; economic headwinds present greater challenges. A restaurant or bookstore opening on Main Street, however, faces very different risks from those of a new tech firm whose employees can work from home and whose customers don’t need to gather.

“There are going to be industries that are winners, and others that are going to be losers,” said David Brown, who co-founded the start-up accelerator Techstars during the 2008 recession. “I probably wouldn’t want to be in a business right now that caters to business travelers, but I’d love to be in a business that helps enable telemedicine.”

Determining what customers need now, rather than before the pandemic, is crucial. Ms. Menon and Mr. Brown see opportunity in offering solutions to the challenges that people now face: educating their children, working from home, managing supply chains, getting a haircut or the house cleaned, seeing doctors and therapists, entertaining themselves. Even new restaurants might be successful if they consider the future of customer service rather than recreate old systems.

“If you can find innovative ways for people to feed themselves right now, that might make sense,” Ms. Menon said. “You just have to address a need.”

Figuring out how to open the food hall of the future is the task facing Maarten Jacobs, the director of community prosperity at the Allyn Family Foundation, a regional philanthropic organization in Syracuse, N.Y.

That’s not a role Mr. Jacobs expected, considering his background is in community and economic development. He is overseeing the foundation’s investment in a new four-story, 80,000-square-foot building designed to be a community gathering space and incubator for the city’s small food entrepreneurs. A mix of apartments and nonprofit offices is planned for the upper floors, but the heart of the project is Salt City Market, which will feature food stalls run by women and entrepreneurs of color, a coffee shop and a cooperative grocery store.

The project is scheduled to open in November, so Mr. Jacobs is focused on finding the safest way to open a 24,000-square-foot market even as the world is questioning when — and how — people will want to gather again.

“It keeps me up at night, that’s for sure,” Mr. Jacobs said.

He’s looking at global trends on how restaurants are opening and the safety precautions being put in place to see what he might do in Syracuse this fall. He’s considering foot-operated doors, mobile sanitation stations and a new furniture concept.

“In the past, we just wanted to make sure furniture looked cool; now it has to look cool and be built like a tank and stand up to robust cleaning,” he said.

But his biggest worry is the entrepreneurs. He doesn’t want to set them up for failure.

The foundation supported Salt City Market as a way to foster entrepreneurs who might not have the resources to open their own restaurant. It hosted a community competition to identify eight small food businesses for the market. The winners received months of technical training on everything from marketing to inventory management, as well as the promise of a commercial kitchen stall with all the equipment they need. Chefs are responsible for their own signage and small goods, like plates and napkins, as well as a start-up investment of $30,000.

“We wanted a loan that if everything goes sideways, they aren’t crippled,” Mr. Jacobs said.

But everything has gone sideways. So Mr. Jacobs wants to open in a way that ensures they can succeed. “We don’t want to jeopardize them,” he said.

So far, all eight chefs plan to move forward. But several face the hard choice of leaving their day jobs to pursue their dreams, which may have seemed romantic in normal times but is terrifying in a severe downturn.

Chef Ngoc Huynh said she was scared but still excited to open her Vietnamese kitchen in the market.
“I like to be optimistic and hope for the best,” Ms. Huynh said.

She knows the challenges of restaurant life from watching her mother and aunt run a small food and catering business while working other full-time jobs. But Ms. Huynh is reassured by the fact that she’s not doing this alone. She and the other chefs are receiving technical support from the foundation and collaborating on ways to open a restaurant in a socially distant world. The group is considering new menus and hiring delivery drivers to serve all the stalls.

“We’re thinking about this together,” Ms. Huynh said. “That’s the beauty of it. We’re all competitors, but there is a network of support.”

  • You want to start a business now? Ms. Menon suggests you ask yourself these five questions first.
  • Have I identified a new need that customers have as a result of the current crisis?
  • Can I serve this need in a way that is substantially better than the current alternatives?
  • Am I qualified to solve this customer problem?
  • If I don’t have the experience, can I hire others or find a co-founder to help me?
  • Do I have access to funding that can tide me over until my business is profitable?

Tuesday, May 5, 2020

5 keys to building a scalable businessWhat is scalability in business? 5 keys for success + 3 business organization tools


Written by: Jeanette LeBlanc

Tips on scaling a business:
  1. build a solid foundation
  2. focus on scalable business solutions
  3. embrace strategic planning
  4. focus on your core strengths
  5. be patient
If you are like most small business owners, you started really, really small. Probably just you, your laptop, and an idea.

Now growth is on your mind. Maybe you’re impatient and chomping at the bit to get to the next step, or maybe you’re scared and holding back. Either way, most small business owners have dreams that are bigger than their current reality.

The problem is, when the day to day of small business ownership can be so overwhelming, it’s tough to know what you should be doing now to ready your business for a successful future. What is scalability in business and what are your limitations? An understanding is fundamental to your success.

“We all feel some level of impatience that our businesses are not growing fast enough. Every time I look at the latest iteration of my DIY website or the stack of big ideas still in the to-do bin, I think ‘man, I’m so not where I want to be yet!’ But the beautiful thing about being in business for yourself is that you get to direct your own evolution. And allowing that evolution, however organic or stunted it may feel in the moment, is a stellar strategy in itself. Like a conductor with a symphony, you learn the rhythms and movements over time. You’ve got to grow at your own pace and feel out the bumps along the way.”
Amy Birks, The Strategy Ninja

So, how do you build a scalable business? Follow these five keys for business scalability success:

5 keys to building a scalable business

True scalability in business allows for expansion and revenue growth while minimizing increases in operational costs. Even if you’re not ready to grow right now, there are things you can do to set yourself up for scalable growth and success.

1. Build a solid foundation

Right now—while your business is small—is the perfect time to invest your time and energy in foundational systems that will allow your small business to grow into a much larger entity. These systems and processes can help you avoid the painful (and expensive) growing pains that can hit when you’re not prepared.

Having robust systems—such as a solid CRM or powerful e-commerce software—can help you untangle the web of time-consuming details and free you to focus on the parts of your business that will drive growth and expansion. Automation is the small business owner’s friend.

Review your business to see what aspects are repetitive or monotonous and make it your ultimate goal to automate them as much possible so that your attention remains focused on growth-related activities.

2. Focus on a scalable business model

In the early days it can be tempting to go with the quick (or cheap) fix. Money, time, and expertise can be in short supply, and investing in basic solutions that don’t require a huge financial investment or learning curve can seem like the wisest solution. Resist the temptation to slap together a myriad of inexpensive and inadequate options and think ahead to what will serve your business best in the future. A forward-thinking mindset can help you avoid a common small business trap: a patchwork maze of systems that just aren’t getting the job done.

Think as the owner of a business 10 times larger than your current reality. Choose solutions that will serve what is AND what may come: quality over quantity.

Simran Thadani, the executive director of Letterform Archive, a nonprofit organization that has a library of typography and design elements, has a few tools up her sleeve that helped her achieve scalable growth:

  1. Trello: Imagine digitizing your wall of sticky note to-do lists. That’s basically what you get with Trello. Using the app, you can create note cards that you can put on lists and then move them around by clicking and dragging them. Trello gives you a flexible, interactive, collaborative tool with which you can chart out anything from team roles on a specific project to your company's 18-month road map. You can also use it to simply to track your to-do list.
  2. Gusto (formerly Zen Payroll): This app allows companies to manage payroll and benefits in one solution. Plus, when employees receive their first paychecks, the app says, "Hey, you've just been paid. Isn't today a beautiful day?" with a picture of butterflies and flowers.
  3. Google Ventures Design Sprint: A word of advice from Thadani: “Slow down to scale up.” The sprint begins with quiet time to brainstorm. Employees are told there are no bad ideas, then asked to write everything they think of down on a sticky note and stick it up on a wall
    This helps to eliminate one voice dominating, or dead silence from all.

    People then use stars or tallies to vote on their favorite ideas. Generally, you’ll find that it’s not just one person with all the good ideas. Typically, all parts of the company will be represented, and all employees have ideas worth contributing.

    Next, you talk about validating the idea, asking the team: Why did you choose this idea? Why did this idea have three stars and the next had five? What's the best way to pursue the idea? From there, you can prototype the idea. The exercise brings tremendous validation—not just of the best ideas, but of the people who brought up those ideas.

    The frequency of your sprints depends on how frequently you feel you need to iterate on something new, whether it’s to improve a process or come up with a new idea from scratch. The design sprint works in a range of different situations. Bt you don’t want to rely on it as a crutch, like going back to the drawing board because it didn’t work. Take the time you need, but don’t get stuck in too many meetings. Use the sprint to figure out the path to the next idea. Iterate from where you’re stuck. Be confident in the good ideas you’ve had thus far, and then take things from there.
3. Embrace strategic planning

Strategic planning is the link between a great idea and true success and growth. More a philosophy of operation than a one-time event, it requires ongoing attention to detail and an investment of time. Knowing your business inside and out can prepare you to deal with challenges and prepare you for opportunities to scale.

"When you take the time to define where you’re going, you can develop a plan, stay on course, make adjustments as needed and reach your destination."
—Keap CEO Clate Mask

Develop a series of quarterly and annual priorities, a mission that sets the tone for the next three to five years of operation and a BHAG (Big Hairy Audacious Goal) to keep you reaching for success.

4. Focus on your core strengths

You can’t be everywhere. Focusing on your core strengths and hiring or outsourcing the rest of the tasks associated with running your small business is essential to a scalable business. Concentrate on working on your business instead of in your business; scalable business owners are experts at leveraging outside resources. Build a staff or team of freelancers to do what they do best so you can concentrate on letting your own native genius work its magic.

5. Be patient

Rome wasn’t built in a day. Good things come to those who wait. Patience is a virtue.

Cliché or not, there’s a reason these little gems of wisdom are so pervasive. In your small business, patience is just as important as it is in the rest of life. Take the time along the way to maximize the systems, processes, and people you rely on to make your operation a success so that when opportunities present themselves, your business is ready to grow.

Remember, a path of slow and steady growth is much more sustainable–and scalable–in the long run.

Startup vs. Small Business: What’s the Real Difference?

Written by: Emily Kate Pope

Startup vs. Small Business: The Main Difference

While the difference between a startup and a small business is subjective, it often comes down to the company’s growth goals and revenue forecast. Startups focus on disrupting markets and driving top-line revenue at a fast pace. Small businesses, on the other hand, often set their goals on long-term, stable growth in an existing market.

If you work in the tech industry, you’ve probably heard the term “startup” thrown around a lot. Especially if you live in a tech hub like Silicon Valley, Hong Kong, or New York. You probably even know a few people building their own startup—if you’re not building one yourself!

Despite the fact that hundreds of thousands of new startups are established every year in the US alone, many people still don’t understand the difference between a startup vs small business—and trust me, the two are very different. To distinguish these two organizational entities, let’s take a deeper dive into the definition of a startup.

What Is a Startup?

For years, investors treated startups as smaller versions of large companies; this was problematic because there is a vast ideological (and organizational) difference between a startup, small business, and large corporation, which necessitates different funding strategies and KPIs.

According to serial entrepreneur and Silicon Valley legend Steve Blank, a startup is a “temporary organization designed to search for a repeatable and scalable business model.” A startup, which he argues in the context of the tech industry (and this conversation) should be short for “scalable startup,” is searching to not only prove their business model but to do so quickly, in a way that will have a significant impact on the current market. Which brings us to our first major difference between a startup vs small business.

A “Scalable” Startup Has The Intent To Become A Large Company

The first real difference between a startup vs small business is really the growth intent behind the business.

As Blank describes it, a scalable startup founder doesn’t just want to be her own boss; she wants to take over the universe. From day one her intent is to grow her startup into a large, disruptive company. She believes that she has come across the next “big idea,” one that will truly shake up the industry, take customers from existing companies or even create a new market.

This stance is in stark contrast with the definition of a small business, which the U.S. Small Business Administration (SBA) describes as “independently owned and operated, organized for profit, and not dominant in its field.”

A small business owner might be starting a business that they believe solves a gap or provides a service within an existing market—one that will provide steady, long-term revenue.

Therefore, the driving force behind the two business models is different: The intent of the startup founder is to disrupt the market with a scalable and impactful business model; whereas the intent of the small business owner is to be her own boss and secure a place in the local market.

To be sure, the latter is the prevailing model of entrepreneurship in the United States: grocery stores, delis, hair salons, plumbers, electricians, etc. and their contribution to the local economy cannot be overstated. Small businesses (those businesses with fewer than 500 employees) employ over 40 million workers.

However, for better or for worse, the ultimate motivation behind a small business is fundamentally different from that of scalable startup.

A Startup Is Temporary

Another major difference between a startup and a small business? How long it plans to exist.

The organizational function of the startup is to search for a repeatable and scalable business model. According to Blank, this means that a startup founder has three main functions:

  1. To provide a vision of a product with a set of features.
  2. To create a series of hypotheses about all the pieces of the business model: Who are the customers? What are the distributions channels? How do we build and finance the company, etc.
  3. To quickly validate whether the model is correct by seeing if customers behave as your model predicts (which he admits they rarely do).

Given this definition, it stands that once a business model has been proven the function of the organization must shift to produce outcomes and execute said model; in many cases removing the agility and innovation that once existed in the early days of the business.

A Startup Is Funded Differently

While both a startup and small business will likely start with funding from the founder’s savings, friends and family, or a bank loan; if a startup is successful, it will receive additional series of startup funding from angel investors, venture capitalist, and (if it’s lucky) with an initial public offering (IPO). With each series of funding, the startup founder gives up a piece of her company–this is called equity, and everyone who has it becomes a co-owner of the company.

Eventually, a startup may cease to exist as an independent entity via a merger or business acquisition. To a small business owner, relinquishing control would defeat the purpose of running their own business; however, for the startup it may be necessary to sustain seemingly infinite growth.

Although a startup vs small business are still run by entrepreneurs (small business owners or not); the intent, primary function, and funding of their respective business model’s are radically different. Watch Steve Blank describe the difference further in the video below.

A Startup Assumes a Lot of Risk

A startup is trying to see if their vision of a product or service does indeed disrupt a market. Though lots of research and time go into the pre-launch of a startup, entrepreneurs are essentially making an educated bet that their idea is going to have traction in the market. Oftentimes, it doesn’t. Investing your time and money into a startup is a huge risk.

That’s not to say small business owners don’t assume any risk either. In fact, 20% of small businesses fail in their first year—though small business failure is often a result of cash flow management and funding. But with a small business, there’s less of a risk that the business idea won’t have a fit in the established market.

Testimonial Melly Rocha, Health Home Assistance LLC

Saturday, May 2, 2020

What services are provided by a small business accountant?

Written by: Erasmus Pretorius

One of the questions I get asked most when I am speaking to a new or prospective client, is what additional services do we offer our clients, apart from the traditional accounting services of keeping your books and finances organized

A Good Accounting Team and its Accounting Services

The truth is, a good accounting firm will offer a number of different accounting services that are included in what most people consider traditional accounting. You see, as an accountant, I get to see the core numbers for a business. I get to see where the business is bleeding cash, or missing out on revenue. I get to see which processes are working, and which aren’t. I get to look at businesses at the kind of granular level that most people don’t ever see. And because of that, I, as an accountant or as part of a team of accountants, can provide valuable advice to an owner or to a business’s management team.

What most people understand as additional services are, in fact, the core services for any good accounting team. What I am going to try to do here is give you an overview of what services are offered by an small business accountant.

1. Tax Returns and Strategy

Everybody knows that small business accountants do tax returns. That’s just common sense. But we do much more than that. You see, we do the tax returns for hundreds of businesses so we have to know the tax code, inside and out. We have know what’s changed, what’s in for a certain year and out the next. And, even more than that, we need to know how that affects your business. So if there is any coming change to the tax code, we know about it first and we can help you to plan accordingly.

Oftentimes we get clients that come on board and they’ve never had a proper accountant do their financials for them. And what we see a lot of the time is that they are missing out on valuable information about tax exemptions or tax breaks for their business that can even be the difference between the success and failure of the business. So that’s probably one of the key accounting services that we offer as accountants for small businesses, the ability to create a clear and effective tax strategy for you.

2. Debt Planning and Reduction

Debt planing, credit card management and debt reduction are other key areas where an accounting company can help a small business. One of the biggest challenges today for any small business is obtaining cost effective financing, and then managing that debt. The great advantage we have as accountants is that we have a working knowledge of most of the financing services that are available on the market, and we can help you choose the financing model that works best for your business.

For some clients one of the first things we do is advise them to adopt a debt restructuring strategy that drastically reduces their monthly payments to service their debt, which then frees up their cash flow.

3. Operational Bookkeeping and Payroll Management

We find that one of the biggest challenges for any many businesses today is managing their payroll, especially if the business has only recently started to take on employees. So that’s another key area that we get to provide consulting and advisory accounting services to small business. In fact, it’s probably a good thing to talk to your accountant before making any new hire, first to make sure that your business is in line with current employment legislation, and second, to make sure you take all the associated costs for a new hire into account when you are deciding on salaries and benefits.

4. Management Consulting

Management consulting for small business includes all of the items above, but I think it’s important to mention it here again because it provides an important context for an experience that is common to most small business owners; they often struggle to find somebody to whom they can turn to when they need advice.

I speak personally when I say that one of the main reasons to hire an accountant (or an accounting firm in most cases) is that you have somebody who you can go to when you need advice. Most times when a business owner asks us for advice, we’ve seen a similar situation before at other business and we can provide him or her with relevant and practical advice based on what we’ve seen that works.

5. Business Development and Valuation

One final accounting service that an accounting team can offer that I think is important to mention is in business development and valuation. There comes a time for most business owners when they need to think about selling their business, either because they are reaching retirement, or because it’s part of their business plan and they are ready to move on to the next project.

Again, remember that your business won’t be the first business that we would have offered this service to, so we will know how and were to go to build your business’s value so that when it comes time to sell all or a part of it (maybe you are ready to take on a new partner) you have all the information you need.

In conclusion

In conclusion, along with the core accounting services we offer, accounting firms provide a number of key additional services that you as a business owner should take advantage of to stay financially organized, tax compliant and help your business to grow. You shouldn’t look at your accounting firm as merely an outsourcing cost for bookkeeping, but as a key business partner. It’s what we like best about being accountants here at The Accounting Team. we get to use our knowledge and our experience to help your business grow.

Erasmus Pretorius is a Chartered Accountant and CEO of The Accounting Team. He has been helping small business grow since 2001.

Thursday, April 30, 2020

Why The Coronavirus Pandemic Should Motivate You To Start A Company And Eight Excuses That No Longer Matter

Written by: Bernhard Schroeder

This coronavirus pandemic will spawn new startup companies across the world.

What were you born to do? Were you born to be an accountant, a marketer or a project manager? Probably not. And who started the company that you are working for? The people that started the company at some point became entrepreneurial and asked themselves, “Why am I working for this person or company?” So, is this the right time for you to start a company?

Just like Uber, Slack, Square, WhatsApp, and Instagram were created coming out of the last recession, there will be many innovative companies spawned from this coronavirus pandemic. Quite a few talented people are being furloughed and, like you, they might be re-examining what they really want out of life. And there is reason to be optimistic. The good news is that more people are now actively seeking to become entrepreneurs. A new report from the Global Entrepreneurship Monitor (GEM), sponsored by Babson College and Baruch College, finds that 27 million working-age Americans, nearly 14%, are starting or running new businesses. And Millennials and Gen-Z are driving higher interest in entrepreneurship as 51% of the working population now believes that there are actually good opportunities to start companies. So, why haven’t you considered starting a company?

There are several reasons for you not being more entrepreneurial but none of them are valid. Start to identify what is holding you back by examining and then mitigating the reasons/excuses listed below.

Fear of failure. While starting a business could be risky, so is thinking that you will have a company(s) that will take care of you and offer you employment for 30 years. Nothing in employment is guaranteed, you have to perform and get better at whatever you do or you will be replaced. Well, if that’s the case, that sounds riskier then starting a company where the control is in your hands. Life is an adventure, working for someone else for 30 years is not.

Few resources to start a business
. People like to believe have little to no money to start a business. They also do not know where to find the capital they need to start a business. So even if they want to start a business, the lack of capital is a huge stumbling block for them. Well crowdfunding exists today where you can raise money through pre-sales of the product or even get investors. And other cloud based services like Shopify for e-commerce, etc. allow you to get up and running for very little money. There has never been a better time to start a company.

Don’t know anything about entrepreneurship. You may have never been exposed to entrepreneurship so you simply don’t consider starting a business. You can change that by joining other networks of entrepreneurs or adding more entrepreneurs to your network. The more you meet and learn from these people, the more normal it will seem to start your own company. The more knowledge you acquire, the lower your risk factor.

Entrepreneurship can be stressful. Starting and managing a business can be very stressful. It typically means understanding the market, developing the right products that will address the needs of the target market, and possessing the skills needed to jumpstart and run the business. However, working in a job or career where you have different people managing you to their expectations is also stressful. Most people in life want the freedom of choice to determine the shape of their lives and what better freedom than to create your own company and be responsible to you.

You love your job.
You may actually love your current job, and there’s nothing in the world you want to do but work in your current job. You already feel that the corporate world gives you the challenging, exciting environment that you crave. There’s no reason to resign and start a business because you have already found the perfect job. Right up until the company is merged or sold and you need to start proving yourself all over again after ten years of hard work. If you love “what” you do, then you can do the same thing for yourself inside your company.

Starting a business is hard work. There are people who work 16 hour workdays, or work in two or three jobs (aside from their full time jobs). But despite the hard work and the long hours they put in, they still have barely make enough to live comfortably. They are living paycheck to paycheck. If they are already working that hard to earn a decent livable income, they think that starting a business requires double that effort, which they don’t want. Not true. It’s not about how many hours you work but the quality of those hours. And if you are going to work hard anyway in your career, might as well work for yourself. Plus, when you work on your own company and its something you love, it does not feel like work.

You fear selling. Whether you work in a service-oriented business or producing a product, being in business means selling. And, while you may not be in sales, whether you realize it or not, you have been selling your whole life. At a minimum, you have been selling you and perhaps even selling your companies products or services. At networking events, you are selling your company. When you truly care about your company and your products or services, it will feel less like selling and more like helping people.

Security of a steady paycheck
. Starting a business can seem daunting. Sometimes you’re up and sometimes you’re down. This means that there might be days of strong revenue, but also days when cash flow is extremely tight, especially during a down economy. There are people who cannot live with the downs and ups of running a business, and instead prefer the stability and security of a job and a regular paycheck. The real issue is that unless you work for the government, there is no guarantee of jobs for life. Do you wonder why so many companies are started in a recession? They are started by people who got laid off from their jobs.

Assume you will have a long and great life. And that you will work 30-40 years doing things you love. If you are going to work that long at something you love, might as well do it for yourself. The freedom and reward for building a great little company is amazing.

Wednesday, April 22, 2020

How Can a CFO Help in a Time of Crisis?

how can a cfo help in a time of crisis

Written by: Bill Palmer,

The current economic uncertainty has many businesses closely evaluating their current and future staffing needs. While some positions are being cut, especially in the hospitality and travel sectors, many businesses are strategically hiring financial professionals into executive leadership positions during the downturn.

Companies that previously had tasked their CEOs with handling finance functions are now hiring dedicated CFOs (or outsourcing CFO roles to reputable third parties) to ensure they will be able to weather the new economic storm. With ambiguity over how long businesses will need to keep their offices and storefronts closed paired with unpredictability in the stock market, business owners and CEOs are feeling increased pressure to make critical strategic financial decisions for the health of their organizations.

An experienced CFO can provide multi-scenario modeling to aid in tactical decision-making, offer an unbiased financial perspective, act as a confidential sounding board for the CEO, and handle negotiations with essential parties to benefit the overall organization.

Modeling & Planning

Unlike accounting, which is fundamentally about the past, finance is focused on planning for the future.

Seasoned CFOs can use current financial indicators and their previous experience to model and plan for the various scenarios that a business may face in the coming months and years. These plans can inform critical decision-making related to spending cuts, rightsizing the labor force, and timing planned business investments. CFOs can forecast the short and long-term impacts of these decisions to better position the company in response to economic shocks.

With new federal and state business relief packages being rolled out, new employee protections being passed, and additional financing options being offered by payment processors and vendors, an experienced CFO can help navigate the myriad options available to aid businesses in this difficult time.

In this way, a CFO not only mitigates the effect of a downturn of a business proactively but can also help right the ship when the company is struggling in a sea of a difficult financial conditions. 

A consulting CFO is a neutral, independent voice in the room. Experienced CFOs typically follow the facts without pushing a personal agenda or engaging in office politics anyways, but consulting CFOs are even more likely to provide an unbiased perspective. Business owners and executive leadership teams can be reassured that a CFO consultant is acting in the best interest of the company and its stakeholders (owners, employees, and investors) rather than for job protection or other personal agendas.

Outsourcing the CFO role also provides an experienced and confidential sounding board for the CEO, which is especially important in family-owned businesses. While all business owners and CEOs feel some measure of emotional isolation, family businesses exacerbate this situation by adding personal relationship dynamics into the mix. Business leaders at family-owned companies may find themselves needing to balance family relationships and business success, especially in times of crisis. In this scenario, a CFO can provide the confidential conversational space that a CEO needs to make difficult decisions and prioritize the health of the business. Additionally, a consulting CFO can even act as a scapegoat for unpopular but necessary decisions, allowing the CEO to preserve existing internal relationships.

Third Party Negotiations

Because of their experience a CFO can also add credibility to the perceived quality of management and build bridges with capital providers to gain acceptance of forecast projections and strategic plans. The result is a company with less perceived risk and a higher perceived value, which is crucial in establishing mutually beneficial financial solutions while working with external parties.

A consulting CFO has credibility with lenders and personal relationships with banks to facilitate negotiations with these key players. The scope of a CFO’s experience will also aid in negotiating with third parties like landlords, vendors, and customers through difficult times when financing and payment options may need to be changed.

The impact of COVID-19 on latino-owned businesses

Tuesday, April 21, 2020

Testimonial Lore Greenberg, Feeling Fabulous

The Top 10 Mistakes That Keep Women Entrepreneurs From Scaling to $1 Million

Written by: Julia Pimsleur

Though women own 40 percent of U.S. businesses, making 'real money' is oftentimes more the exception than the rule. Here are some things getting in our way.

Where are the million-dollar women? In 2018, just 1.7 percent of women-owned businesses generated more than $1 million in revenue, and the challenges are even greater for women of color entrepreneurs. Why is it that even though women own 40 percent of all businesses in the U.S., making "real money" is more the exception than it is the rule? What's getting in our way when it comes to business ideas that make bank?

As a scaling coach and founder of Million Dollar Women, I work with hundreds of women across the country who are scaling up, and I interviewed dozens of successful female CEOs who built multimillion-dollar businesses from scratch in my book. In my experience, here are 10 of the mistakes that tend to get in our way.

Mistake #1: Doing it all yourself

Any entrepreneur who reaches $1 million in revenue likely knows how to delegate, and they usually have one or more full-time staff members, off-site contractors, virtual assistants and/or interns. In my experience, many women tend to be hesitant about delegating, in part due to perfectionism. Even when they know they’re stretched too thin, many women avoid delegating — they're afraid the job won’t be completed correctly, they don’t want to spend the money or maybe they don't have as much relevant experience in management. As a recovering perfectionist myself, I believe that until women learn to become “delegation ninjas," it's difficult to focus on work and effectively scale ups. In the Million Dollar Women community, we call this a shift from being the do-er to being the leader. 

Mistake #2: Lack of internal systems and processes

The secret to scaling up isn't usually about doing more of what you're doing and working longer hours. (You probably already work too much.) It's about working smarter, not harder. Finding the right internal systems and processes for your finances, marketing, sales and operations is crucial. While it can seem challenging to carve out the time to get these right, having good systems helps allow for rapid growth. To reach $1 million in revenue and beyond, we need to fine-tune the “moneymaking machines” at the center of our businesses. This means having a proven strategy, a sales playbook and functioning sales funnel, the right team and software the automates much of the work. 

Mistake #3: Not busting limiting beliefs

A quote often attributed to Henry Ford says it best: “Whether you think you can or think you can't, you're right.” We may think we're making rational decisions all day based on facts and figures, but in reality, our subconscious tends to drive the show. Many entrepreneurs think ramping up sales is the ticket to rapid growth, but without the right mindset, many entrepreneurs lack the belief in themselves required “go big.” In my view, it’s rarely competence holding women back — instead, it's confidence and a mix of beliefs about money, whether they deserve success and the fear of the potential sacrifices involved in going big. A powerful mindset is important because it's the foundation on which you build your mansion, and it's the number-one thing the women I interviewed for Million Dollar Women underscored as critical to their success. Replacing limiting beliefs with empowering ones can make it possible to truly embrace success. 

Mistake #4: Not understanding the scalable part of your business

Being able to identify the scalable part of your business can mean the difference between hitting a plateau and the “hockey stick” growth that we all aim for. It can also help make your company attractive to investors because your company could feasibly grow X times bigger without having to hire X times as many staff members (or spending X times as much on marketing or infrastructure). It takes approaching your company with that lens of “What is scalable, and how do I productize my services so I can charge more and reach more customers?"
Mistake #5: Not working with coaches, mentors and advisors

In some ways, women aren't taught to invest in ourselves — we're taught to put other people’s needs in front of our own. But in my view, the fastest way to scale your business is to learn from people who have been there, done that and can show you the way. Of course you can find your way to success on your own, but it could take significantly longer. And more than 50 percent of small businesses go out of business within the first five years. Having the right coach or entrepreneur program is the way to make sure you avoid the crash and burn scenario and are on track for high growth.

Mistake #6: Insufficient financial know-how

Finances tend to be the “Achilles heel” of business for many women entrepreneurs I know, and this can result in not poor financial planning or management and running out of cash. We don’t need to have finance degrees or MBAs to run our businesses, but we do need to educate ourselves in order to create a cash runway, steward our money better and effectively raise capital when necessary. 

Mistake #7: Not having a cash runway

I recall one of my advisors telling me, “You can be low on cash for a long time, but you can only run out of cash once.” Many businesses fail or start sinking simply because they run out of cash. In my research for Million Dollar Women, I learned that women are twice as likely as men to shut down their businesses because they run out of cash. I made some errors in the early days of one of my businesses that almost cost me the company, so this one really hits home. You can better avoid this issue by working with an advisor on your cash flow projections or finding a great accountant who can walk you through your numbers. Don’t be afraid to ask for help or say you don’t understand, and be sure to look at what you owe and what is owed to you on a weekly basis so you can have a healthy cash balance.

Mistake #8: Good on vision, bad on execution (and vice versa)

Every entrepreneur has a different skill set. Some are excellent when it comes to having a vision for their company but not so good at execution. Some are excellent at getting things done but lack the mindset for big-picture planning. Both are essential to your business success, so figuring out your strengths and hiring for your weaknesses (or creating an advisory council to help you) is imperative. Without good vision, how can we create one-, three- and five-year plans for our businesses? And without good execution, how can we build the systems and hire the teams that allows us to keep scaling up? Successful entrepreneurs learn to work on the business not just in the business (or during the work day) and to make strategy a priority. They learn to both “plan the dive and dive the plan” — in other words, take time for planning and make sure everyone knows their role in executing on that plan. 

Mistake #9: Improperly tracking marketing spend

One of the dangers of running out of cash (see #7) is runaway marketing spend. Between bidding on Google search terms, trying Facebook ads and other online and offline marketing, marketing is one biggest expenditures for fast-growing companies. There was a time at Little Pim where we didn’t track where our customers were coming from and didn’t know which marketing channels were performing and why. Eventually, we started keeping a closer eye on our marketing spend — that way, we were able to avoid falling into the money pit that marketing can be and begin getting excellent ROAS (Return on Ad Spend). We implemented what I call the "75/25 marketing budget rule" (part of the "moneymaking machine" we built that I referenced in #2). Figuring out which marketing channels work for you and rigorously tracking your spend is a key part of scaling up.

Mistake #10: Not investing in networking or personal growth

I snuck two mistakes into this last one. We don’t know what we don’t know, right? So the only way to learn what we don’t know is to surround ourselves with people who can help us stretch to the next level. Make time for personal and business growth, whether it’s reading business blogs and books, attending conferences, joining organizations for entrepreneurs, watching videos or finding the right coaches and mentors. I did all of these, and most of the women I've spoken to who make it to $1 million in revenue and beyond did some combination of the above. Make time for your business and personal growth, and it should pay off in spades.

If any of these resonated with you, now you know what to work on in 2020. Remember that "you can only grow your business as big as you grow yourself" — so here's to a year of exponential growth.

Saturday, April 18, 2020

Careers advice: stop telling women to talk like men – ask men to talk more like women

A therapy session illustration
A viral Twitter thread has explored an “unpopular opinion” about women in the workplace, and it makes a lot of sense.

The year is 2020, we’re all in lockdown due to the ongoing coronavirus pandemic, and we’re using social media more than ever . As such, the internet is absolutely full of so-called “unpopular opinions” – perhaps more so than ever before.

One such “unpopular opinion” growing in popularity, however, is Dr. Charlotte Lydia Riley’s commentary on women in the workplace. And it’s one which we here at Stylist can 100% get behind, too.

“Apparently an unpopular opinion, but I don’t hate that I say ‘does that make sense?’ all the time in a professional context,” she writes, in a Twitter post which has been shared almost 20,000 times in under 24 hours.

“It lets other people into the conversation and gives them the chance to ask questions. Maybe sometimes feminised speech patterns are… good? Helpful?”

Continuing her train of thought, Riley adds: “I’m not keen on the way that all these things relate to language in a way to tell women to be more declarative, more dominant, more loud and assertive. Maybe it would be better for men to, I don’t know, listen more? Ask more questions? Leave room for doubt?”

It’s an opinion which is shared by author Ruth Whippman, who recently penned a careers advice piece for The New York Times entitled: ‘Enough leaning in. Let’s tell women to lean out.’

In the piece, Whippman further explores the idea that the assumption that assertiveness is a more valuable trait than, say, deference is itself the product of a “ubiquitous and corrosive gender hierarchy.”

“Until female norms and standards are seen as every bit as valuable and aspirational as those of men, we will never achieve equality,” she notes.

“So perhaps instead of nagging women to scramble to meet the male standard, we should instead be training men and boys to aspire to women’s cultural norms, and selling those norms to men as both default and desirable. To be more deferential. To reflect and listen and apologise where an apology is due (and if unsure, to err on the side of a superfluous sorry than an absent one). [And] to aim for modesty and humility and cooperation rather than blowhard arrogance.”

Of course, gender shouldn’t be a factor in whether or not a person can be a great leader – a person’s leadership abilities should depend on their individual strengths and personality traits.

However, there’s no denying that women have been repeatedly told to embrace those traits which are still traditionally viewed as being more “masculine”: strength, courage, independence, and assertiveness. However, research has repeatedly shown us that those traditionally “feminine” traits (empathy, sensitivity, caring, and compassion) should be nurtured by all genders, as they lay the groundwork for better leaders.

Indeed, a 2017 study looking into personality and leadership identified the key characteristics of effective leaders (emotional stability, openness, sociability, methodicalness, and good communication skills) and found that women score higher than men in four of the five traits – thus concluding that women “are better suited for leadership than their male colleagues when it comes to clarity, innovation, support and targeted meticulousness.

The research, led by professors Øyvind L. Martinsen and Lars Glasø from the BI Norwegian Business School, assessed nearly 3,000 managers in the private and public sectors and pinned down the following personality traits of effective leadership.
  • Ability to withstand job-related pressure and stress (leaders have a high degree of emotional stability)
  • Ability to take initiative, be clear and communicative (leaders are outgoing, with a high degree of extraversion)
  • Ability to innovate, be curious and have an ambitious vision (effective leaders have a high degree of openness to new experiences)
  • Ability to support, accommodate and include employees (effective leaders display a high degree of sociability)
  • Ability to set goals, be thorough and follow up (effective leaders are generally very methodical)

Women ranked higher in initiative and clear communication, openness and ability to innovate, sociability and supportiveness, methodical management and goal-setting. The one area the study showed men to be stronger in was dealing with work-related stress; Glasø said the findings suggested that “female leaders may falter through their stronger tendency to worry – or lower emotional stability.”

However, he pointed out that the trait did not invalidate the other areas in which women excelled, saying: “This does not negate the fact that they [women] are decidedly more suited to management positions than their male counterparts.

“If decision-makers ignore this truth, they could effectively be employing less qualified leaders and impairing productivity.”

Martinsen said: “These findings pose a legitimate question about the construction of management hierarchy and the current dispensation of women in these roles.”

This evidence seems to prove that promoting “feminine” qualities such as deference, humility, cooperation, and listening skills will be beneficial to pretty much everyone – particularly businesses.

In the words of Beyoncé Knowles-Carter: “We need to reshape our own perception of how we view ourselves. We have to step up as women and take the lead.”

Of, to put it plainly, if we can disregard outdated stereotypes, learn from ourselves and from those around us, then we’ve got this.

Images: Getty

Sunday, April 12, 2020

6 effective ways to build a sustainable business

Written by: Samiksha Jain Former Staff,

Vanitha Narayanan is the Managing Director of IBM India Private Limited. While addressing the gathering at TiEcon Delhi 2015: Balancing the Act held on 16th - 17th October, Narayanan spoke about how startups can build sustainable businesses in future.

Most businesses don’t possess a deeper understanding about sustainability. From a broader perspective, a sustainable company is one whose purpose and actions are equally grounded in financial, environmental and social concerns. But unfortunately, the road to sustainability for most businesses is not easy. Hence, below listed six ways will enable business leaders shape a more sustainable future for the company as well as their community.

1. Building your business on belief

One can change everything about your business other than your core beliefs. Building business on your beliefs is about value creation. Your business might be depending on what your beliefs are. If your beliefs are little specific, localise your business or if they are more time bound, then you must go back and revisit the business mission. But it has to be consistent with what you as a company are going to do to drive value.

2. Standing still and embracing change

When you change and act fast, you can be the biggest, boldest and brightest unicorn, but if you remain still and don’t change and adapt to the situation, then you are as close to extinction as you can.

For instance – In the 80s, IBM got as close to extinction. In fact, we were featured on the Forbes and Fortune cover along with Dinosaurs. So the idea is there’s no standing still every day. I may have a great idea which works, but it doesn’t matter how big is the idea until you actually find ways to take it to the market quickly.

3. Focus on creating value proposition

It’s not that great people don’t exist; it’s not that the technology built was not the greatest technology, but it’s about figuring your go-to-market strategy that drives value, in terms of what the client is looking for to his/her problems. So if you don’t get the timing right and if you lose touch with the value preposition, then you can get completely lost.

Don’t ever lose sight of the fact that in the end of the day the business purpose is to drive value for your customers. Focus on creating high value, high capabilities useful for people. This doesn’t mean that you need to be an expert at everything; it’s about creating value on the top end with the existing resources.

4. Growth and comfort don’t co-exist

We are not longer in 50s, 60s, and 70s era. Things are changing in the blink of an eye. IBM had gone through very uncomfortable times, and frankly speaking, it still continues to be uncomfortable. It’s no secret that our industry is going through the biggest shift ever. But it’s not just the technology industry, the shift in the technology industry are creating subsequent shifts in every industry.

For Instance – If you are a banker, your new competitors are completely different. If you are in retail, now everybody is a retailer. Similarly, if you have been in the mobile business, then you can see that it’s no longer an industry; it’s a platform, it’s a capability. So, IBM is completely changing the Payments, Retail, Banking, and Mobile industry since they all are becoming capabilities on cloud for everyone to leverage. Businesses should also focus on delivering value in innovative ways for their customers.

5. Focus on excelling in an area

It’s no longer about one company delivering value to every client at every place; it’s about being a part of an ecosystem. If you are not part of the ecosystem, then you are limiting yourself. You might have a successful start, but eventually it starts becoming difficult. Further in the bigger ecosystem, you are going to become a part of many ecosystems. In some, you might be a significant player and in others, you might be a small player. But in the end, it’s all about the contributions you are making in each of those ecosystems. So don’t try to be a big player in every ecosystem, rather look at how things work to drive the incremental value.

6. Focus on constant reinvention

When you are part of a company/single entity, then it’s all about constantly re-inventing what you do, it’s about reimaging how you do it and at the same time retaining a core belief system because you want your employees, your clients, and your partners to work with you and for you.

Friday, April 10, 2020

The Number of Latinx-Run Startups Is Rocketing. Their Funding Is Not. Here's Why That's a Big Problem

Written by: By Guadalupe Gonzalez Staff reporter, Inc

Unless we solve the "scaling gap," we're missing out on the opportunity to grow employment and GDP.

Latinx entrepreneurs have been starting companies at a record clip. From 2009 to 2019, a 34 percent increase in startups by these founders has made them the fastest-growing startup demographic, by a long shot. The number of startups by white entrepreneurs, by comparison, has decreased 6 percent.

So it would be reasonable to believe that Latinx employers--who are concentrated in growth industries such as transportation, construction, and leisure and hospitality--would also be enjoying funding and sales growth in the same proportion. But they aren't, and that's both a mystery and a shame. Only 3 percent of these founders have reached the $1 million mark in annual sales, according to the Stanford Latino Entrepreneurship Initiative (SLEI), part of the Graduate School of Business. That's just a third of the numbers for the non-Latinx-owned businesses, an extraordinary gap.

The data on funding is equally skewed. Although Latinx entrepreneurs apply for loans at the same rates as their peers, only a quarter receive the full amount they're asking for, compared with half of white business owners. Maybe that's the reason that some six in 10 Latinx entrepreneurs who wanted a loan didn't apply. Some of them simply assumed it would be denied, says Marlene Orozco, lead research analyst at SLEI. The difference in funding that these founders and white entrepreneurs receive "is what we refer to as the 'scale-up' or 'opportunity' gap," she says.

In January, SLEI reported that even when Latinx business owners get financing, it's under terms that are either risky or costly. For example, 47 percent of those who apply for financing get loans that are factored, which basically involves selling their accounts receivables to a lender at a discount. This means they never see the full amount of the revenue they generate.


34 percent
Increase in the number of businesses started by Latinx entrepreneurs from mid-2009 to 2019.

-6 percent
Decrease in the number of businesses started by white founders during the same period.

The scaling and opportunity gap isn't just a problem for one demographic; it causes cascading issues across the economy. How? Latinx companies now employ more than three million people and contribute nearly $500 billion in annual revenue to the economy, according to research by Inc. data scientist Arnobio Morelix in conjunction with SLEI. If these employers grew at the same rate as their white counterparts, Morelix reports, they would contribute a million additional jobs and another $410 billion in revenue annually. That's roughly 1.9 percent of U.S. GDP.

It naturally raises the question of why these founders can't get funded at the same rates as others. Peter Maldonado, the son of a Colombian immigrant who co-founded the dried meat brand Chomps in 2012, is an example of how this opportunity gap retards growth. When Maldonado needed $1.1 million to grow Chomps substantially in 2016, no bank would fund him.

Maldonado instead raised two short-term debt rounds from friends and family, and grew Chomps to more than $10 million in sales by 2017. The staff has grown from one full-time employee--Maldonado--to 18 today, and annual sales are now more than $30 million. But it took Maldonado more than five years to be able to afford a team and an office.

You could argue that Maldonado is a model of the perseverance that marks all entrepreneurs, but that misses the point. He's actually lucky, statistically speaking, in that roughly half of all new businesses fail within five years. His could have been one of them. Seeing the problem, some banks have now begun earmarking funds for outreach to founders like Maldonado.

There's one other gap that Latinx owners need to solve: awareness. They often don't know about resources meant to help them. Becoming a certified minority business owner, for instance, allows them access to government contracts. But the process requires lots of documentation that Latinx business owners may not have readily available. Likewise, businesses located in opportunity zones--which were created to push development in low-income areas--have higher-than-average growth rates. Though 14 percent of Latinx-owned businesses surveyed are based in opportunity zones, fewer than a third of them even know the program exists. Oroz­co says it's critical for Latinx owners to expand their mindsets to include large organizations like governments and corporations as potential customers, given their more relationship-oriented approach to business. Likewise, she says, "it is also important for the government and corporations to reach out and shed light on the path toward procurement."

Not every company that scales succeeds. But those that do can then boost their growth rate. Conversely, being unable to borrow and scale creates an unvirtuous cycle--Latinx companies can't scale for lack of funding, making them even less likely to get funding in the future. "If Latinx businesses continue to start small and stay small because the support doesn't exist, we'll be stuck in a holding pattern," Orozco says. "There's just going to be a new wave, a turnover of folks starting businesses and stalling them--and again not moving that needle forward."

With the economy bumping along at 2.9 percent annual growth, we need everyone moving the needle forward.


Tuesday, April 7, 2020

Testimonial Valentina Marquez, Athena Cleaning Services

Soledad Tanner: Entrepreneur Recognized


Thank you University of St. Thomas (UST) for Alumni’s recognition. “I serve my clients as a CFO-on-demand,” Tanner noted. “Nothing makes me happier than showing entrepreneurs and small business owners how their numbers work and creating strategies for increasing their profit and productivity".

 In the present pandemic crisis, she is invaluable, assisting businesses in securing their share of the government rescue funds for keeping employees through the economic downturn”. 

STC Consulting is a Business & Financial Management Consulting firm that helps improve the profit & productivity of businesses. Services are CFO on demand for Corporations, Financial Management, Business Consulting and Financial Training for Business Owners and Startup Boost for Startups.

Saturday, April 4, 2020

Go Ahead and Start a Business — But Don’t Quit Your Day Job

Written by: Dorie Clark

Many professionals dream about becoming their own boss — a full 62% of Americans, according to one survey. They often envision the classic image of entrepreneurship: triumphantly giving one’s notice, and then pounding the pavement to hunt for clients. But that “all or nothing” strategy is needlessly high risk and, almost always, is the wrong path forward. Instead, the correct answer to “Should I become an entrepreneur?” is two-fold: Go ahead and start your business. But don’t quit your day job.

Of course, there are some basic challenges to overcome — making time for a side hustle, and ensuring that your new venture doesn’t violate company policy. You should double check the rules, but most often, if you’re operating a different type of business — say, freelance writing when you work for an investment bank — there won’t be any perceived conflicts.

But once you get started, the rewards of building your own business, while being fully employed, are substantial. Here are five reasons to simultaneously pursue both and ways they can enhance one another.

“Failure” can benefit your career.

When you’re making a binary choice about entrepreneurship — “Should I quit my job to start my own business?” — the financial consequences of failure can be devastating. (The mortgage must be paid, regardless.) But when you have the safety net of income from your job, you can treat entrepreneurship as a learning journey: Even if the venture fails, you’ve still gained valuable skills that can enhance your career.

That was the case for Bozi Dar, a pharmaceutical executive I profiled in Entrepreneurial You. His first entrepreneurial idea — an app to help users change their moods — failed miserably. But he became smarter about sales and marketing in the process, and leveraged those lessons into multiple promotions at work.

You’ll have more time to validate your business idea.

In the entrepreneurial world, the most important initial goal is to find “product-market fit” — i.e., identifying the right audience and the right offering that they will pay for. This process can take quite a while, and without other sources of income, your clock will be ticking loud and fast. But without immediate financial pressure, you can take the time to truly understand your customer and their needs, leading to a far better and more successful product.

Entrepreneur-turned-author James Altucher started a web development company on the side and kept his day job for a full 18 months, even hiring a dozen employees in the process, before he left to run it full-time. That slow buildup ensured he could maintain his salary level and financial obligations with the new venture.

You can more easily stake out a premium position in the marketplace.

When you’re dependent on your nascent business to generate revenue, you’ll often have to accept low-paying or undesirable gigs. Early in my entrepreneurial career, I accepted plenty of short-term projects for a few hundred bucks. But if money isn’t your primary object at first, you can be far more selective, over-indexing on unpaid but prestigious engagements (guest lecturing at business schools or giving TEDx talks, for instance) and avoiding low-margin work or questionable clients that could taint your brand later on.

You can fund valuable professional development for yourself.

In the early days of an entrepreneurial venture, professional development funds are in short supply: All funds go toward creating or marketing the new product. The downside, of course, is that the company leader may be unprepared for certain aspects of the job, and doesn’t have the resources to get the help they need. That’s not true when you keep your day job, however.

I first met Sher Downing when she attended a mastermind retreat I organized nearly four years ago. She was still employed as a university vice provost full-time, and used the retreat to plan out a detailed, two-year runway toward starting her own business. Buoyed by the strategic connections and choices she made during her final years in her day job, she today runs a successful education technology consulting practice.

You can enjoy your professional life much more when you’re operating in both worlds.

An entrepreneurial side hustle adds spice to what might, at times, feel like staid or repetitive activities in your day job. And while you’ll certainly want to take your business seriously, the financial security afforded by your day job helps you maintain perspective: a delay with your new prototype, or a client who doesn’t renew, may be a setback, but it’s not life and death. Working in both realms enables you to tap into the creative joy of learning and experimenting, which can often get lost — quickly — when they’re overlaid with financial exigencies.

To many, starting your own business means leaving your job and your company behind. But many of the smartest professionals recognize that you can — and quite possibly should — keep both. The combination teaches you more, and faster, than would otherwise be possible, and enables you to custom-craft a career that’s uniquely interesting and meaningful to you.

Sunday, March 29, 2020

Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave


IR-2020-57, March 20, 2020

WASHINGTON — Today the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.

The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee's own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.

Key Takeaways
  • Paid Sick Leave for Workers

For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees' children's schools are closed or child care providers are unavailable.
  • Complete Coverage
  • Employers receive 100% reimbursement for paid leave pursuant to the Act. 
  • Health insurance costs are also included in the credit. 
  • Employers face no payroll tax liability. 
  • Self-employed individuals receive an equivalent credit. 

  • Fast Funds

    Reimbursement will be quick and easy to obtain.
  • An immediate dollar-for-dollar tax offset against payroll taxes will be provided
  • Where a refund is owed, the IRS will send the refund as quickly as possible.

  • Small Business Protection

    Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.
  • Easing Compliance
  • Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.


The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.

Paid Leave

The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee's pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee's pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee's pay.

Paid Sick Leave Credit

For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee's regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

For an employee who is caring for someone with Coronavirus, or is caring for a child because the child's school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee's regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee's regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment for the Cost of Providing Leave

When employers pay their employees, they are required to withhold from their employees' paychecks federal income taxes and the employees' share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer's business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.

For More Information

For more information about these credits and other relief, visit Coronavirus Tax Relief on Information regarding the process to receive an advance payment of the credit will be posted next week.