Small business owners, win $10,000!

I’ve previously written about the Greater Seattle Chamber of Commerce’s “It’s Time for Business” campaign to promote regional economic recovery. And recently, the Chamber released another innovative opportunity for small businesses in their “It’s Time for Business with Office 2010 Video Contest.” The contest is part of an ongoing effort by the Greater Seattle Chamber of Commerce and Microsoft Corporation to help small businesses increase productivity and profits through technology training and tools.

$10,000 is on the line for the best video/grand prize winner, with $1,000 each going to the best foreign language video winner and best video by a woman-owned business. Submissions will be judged on five criteria: originality, creativity, concept, information, and overall presentation. The contest deadline is Aprill 22, 2010. No purchase is necessary, you just have to be a small business in Washington state with seven full-time employees or fewer. (But just in case, here are the official contest rules.) [Disclosure: I’m currently working with the Chamber on some of their policy initiatives.]

Why not give it a try? No video experience is required, but you will need to take a few steps to enter the contest. With a $10,000 jackpot, it just might be worth you while. Get your camera rolling, “it’s time for business!”

Photo courtesy of Fabiofco.

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Richard Branson’s Entrepreneurial Philosophies

There’s no reason to not read a list like Sir Richard Branson’s “34 Rules for Maverick Entrepreneurs.” He’s a famed businessman who has created over 200 branded companies and employed approximately 50,000 people in 29 countries over the course of his lifetime, as of yet. And it all started with a loan from his aunt because banks weren’t interested in his initial venture. Now, with what’s been cleverly named as the “Virgin Model,” Richard Branson has done exceptionally well by looking at what others are doing and finding ways to do it better. He’s done so well that at 59 years old, Forbes listed him as the 212th richest billionaire in the world this year.

With a brand like Virgin, that encapsulates everything from music, to credit cards, to a major airline, it’s fitting that someone like Richard Branson would come up with some intriguingly clairvoyant business philosophies. He’s competitive, he’s flamboyant, he’s an entrepreneur. Check them out:

1. It’s got to be a BIG idea that you, your team and your customers can “get” in seconds.
2. Strive to create 10x – 100x in value for any price you charge. Your rewards are always proportionate to the value you provide.
3. You must charge a premium price so you have a large margin to provide an extraordinary value & experience.
4. Provide a ‘Reason Why’ customers should do business with you and pay you a premium.
5. Get paid before you deliver your product or service. And when possible figure out how to create recurring revenue from transactions.

Legal Resources For Startups and Entrepreneurs

A couple of lawyers at Davis Wright Tremaine LLP write a Startup Company Law Blog that I’ve enjoyed reading. Legally speaking, this is a great hot spot resource for legal business information, particularly in Washington state.

However, it was just today that I noticed a link on their “Noteworthy Blogs & Sites” list: Legal Resources for Startups. This resource list is offered by Read Write Start, which is sponsored by Microsoft BizSpark, a program designed to help accelerate the success of early stage startups. So it goes without saying that there’s a bit of money and work going into what is presented. Regardless, this post has a really nice offering of blogs, articles, websites, Venture Capital tips and other online resources for entrepreneurs and startups. It’s important to have information like this at your fingertips. And I even enjoyed the site’s links to the “Top 10 Reasons Why Entrepreneurs Hate Lawyers” and “How to Work with Lawyers at a Startup.”

I hope this post serves to be helpful, and possibly a part of your business reference toolbox. It’s now a part of mine, in the “Go to the Source” list in the right column of my blog.

Photo courtesy of North Bay Biz.

What’s Your Critical Number?

Your critical number. The number that is the one ratio where your business is weakest relative to your competition. As a small business, you’re sure to size up your own business against competitors in your market – why not take it one step further?

This New York Times article got me thinking about how businesses prepare for the best. Preparation also concerns knowing where your business is at its weakest; a standard question to answer when writing a business plan. Business plans are a great outlook on success, but they should identify areas of risk as well. And they’re also a great reference point at any stage of your business, whether your just starting or are seasoned with years of experience.

Now to defining your critical number. Business owners often have a tendency to rely heavily on their accountants when it comes to tracking their company’s critical numbers. But, as a business owner, the financial health of your business is your responsibility only. You don’t need a graduate degree or an in-depth understanding of double-entry accounting to know which numbers are the most critical to the health of your business, but you do need to be financially literate. With regard to defining and tracking your critical numbers, consider the following:

• Start with the basics – your balance sheet, income statement, and cash-flow statement.
• Focus on key profitability terms – gross margin, net income, and EBITDA.
• Learn your key ratios to create a number dashboard as a reference – sales/revenues, net profit, defensive numbers, quick ratio, total inventory, and debt to equity.
• Think about other critical numbers personal to your business or industry – see this list and this list for ideas.

With your critical numbers at hand, the next challenge is to get your employees to think like owners. Employee engagement is one of the best distinguishing success factors separating organizations that are thriving from those just barely surviving. Make it fun; consider developing a bonus program, profit sharing or variable compensation plan.  This can be beneficial for two reasons:

1. Tying bonuses or profit-sharing to your critical number creates an insurance policy for your business that makes certain that everyone involved focuses on your business’ biggest weakness.
2. These plans become an educational tool to teach each and every employee how he or she can make a contribution toward improving your critical number and enhancing the strength of your business.

And if you’re uncertain of how to obtain the critical numbers of your competition, become resourceful. If your competition includes public companies, this information may be found online. Dunn & Bradstreet (a global commercial database containing millions of business records) could also be a useful resource. You might also check with your banker; bank credit departments often have access to lots of data these days.

As the NYT article promoted, your critical number, whatever it is, will soon become the hub of your business activity; your business operations are connected to it in different ways and it affects your business’ long-term performance. The sooner you determine your critical number, the sooner you’ll be able to hit related performance goals – and the faster you’ll succeed over your competition. That’s certainly critical.

Photo courtesy of BiggerProfits.com.