Business Banking E-Newsletter - April 2013

Seven Habits of Great Small Business Owners

When looking at the players in any industry, there are usually a handful of businesses that stand out ahead of the pack. So what exactly goes into making some more successful than others? More often than not, it comes down to the kind of leadership they have steering their efforts. Being a strong small business owner is an elusive enterprise, there is no one secret recipe to achieve. If there was a sure-fire way to be a dynamite small business leader, it would undoubtedly include the following 7 components:

1. They take care of themselves
Smart small business owners recognize that having a sharp mind requires having a healthy body. Attention is paid to eating healthy and making time for physical exercise. What lesser business owners might see as overly indulgent behavior is seen by truly astute managers as necessary maintenance of their most crucial tool: their brain.

2. They have lives outside their business
Spending too much time focused on any single interest will almost always lead to hitting mental walls. Leading a balanced life – taking time for interests outside of work – means exposing yourself to a diverse range of mental stimuli (you never know what might trigger a great idea), and giving your work brain the rest it needs to be focused.

3. They look forward
Being a great small business owner means being a great leader. Being a great leader is all about being bold and forward thinking enough to go beyond simply following proven business and market trends. The best small business managers are pioneers, even in small ways, and always keep their eyes open for new ways to accomplish things. This means taking chances, but if anything is a critical part of running a small business successfully, it’s a willingness to do just that.

4. They are organized
Sometimes having a head full of innovative business ideas can lead to being a bit scattered. The difference between a smart person who remains an ineffectual business owner and someone who takes command of their industry falls on having an ability to not just have good ideas, but to be organized enough to follow through with them. Keeping your meetings, deadlines, and business plan on a highly organized schedule, and sticking to it, will be what sets you apart from other small businesses that fumble in disorganization.

5. They nurture relationships
When you're overseeing the management of a company, it can be easy enough to get caught up in the day-to-day work and forget to look up from your desk. The importance of taking time to stay in touch and have thoughtful, generous interactions with clients and professional associates cannot be undervalued.

6. They make decisions
Small business owners have to be decisive. It’s simply not optional. From daily operations to broad directional choices, your job is to lead your company, which means waffling with indecision just will not work. The ability to make decisions is directly related to your sense of confidence, so if you find yourself not knowing which choice to make, remind yourself that you are an expert at what you’re doing and trust your gut. If the particular decision on the table involves a part of your business that you aren’t a total expert about, deciding to consult someone more informed is still a valid decision.

7. They cut the fat
Proactive small business owners are constantly evaluating and re-evaluating which parts of their company can be more streamlined, including which vendors and suppliers could possibly be swapped out for better sources and how work is divided. Knowing how your company’s time, man power, and financial resources are distributed – and paying steady attention to keeping that distribution as efficient as possible is how small business owners keep their company thriving ahead of the competition.

Source: http://www.forbes.com/sites/thesba/2013/02/26/7-habits-of-great-small-business-owners/


Five Elements of a Highly Productive Office

Not all small businesses have the luxury of being able to hire a professional to design their work environment in the most optimal way to beget the highest possible degree of productivity. Even still, there are many steps you can take as a small business owner to subtly overhaul your workspace, and those of your employees, to have a healthier, happier, more overall productive workday. Here are our top 5 strategies to do just that:

Sound control.  Whether you’re working at home and trying to mitigate sound from kids or pets, or in a busy office with 30 other people and awfully thin walls, controlling which sounds inhabit your workspace is important to productivity. What “sound control” means for your small business environment is going to be very specific to you, so we won’t issue too much general advice, save to say that taking time to address sound flow in the workplace is never time wasted. Maybe it means installing sound-absorbing panels in a room where lots of noise tends to occur, or maybe it means playing a mutually agreed upon playlist to keep energy high in a communal workspace, or maybe it just means figuring out what kind of sounds, white noise, or music keeps you motivated, and investing in a really good pair of headphones. Whatever solution fits for your business and your office, paying attention to aural harmony will smooth out your whole day.

Good lighting.  Having adequate light for any workspace is important, but if you want to truly step up the energy level in your office, go a step further and use daylight color balanced high powered CFL bulbs. The bulbs come as close to mimicking sunlight as possible, which is naturally energizing. It might seem like a small detail, but you can expect an overall big improvement in the atmosphere of your office. Increased productivity won’t be far behind.

Ergonomic consideration.  Employee productivity (and your own) can only go so far as their physical body can carry them. At the end of a long workday, muscles in the neck and back start to ache, even headaches can set in. Carpal tunnel is a bummer. In the “there’s always more work to do” lives of small business owners and employees, more often than not, you stop working because you feel physically compelled to. Investing a little time and money into making sure that desks and computer screens are at appropriate heights, and that you have good office chairs. It’s not a terrible idea to have some work stations set up to be worked at while standing, just to give yourself or employees the option to switch it up.

Smart arrangement.  Far too many offices are set up with little to no focus on how work is actually performed in the space. Maybe the copier is where it is because there was an available power supply and room for it to fit. Nevermind that it sits at the opposite end of the building from the receptionist, who uses it most frequently. And to get to it, she has to walk through three other people’s work spaces, creating noise and distraction multiple times per day. See what we mean? Your office space should be functioning in service to the people in your office, and how they work, not the other way around. It’s worth doing a little creative brainstorming to figure out ways to streamline the layout of your office.

Task-specific work stations.  If you can make this alternative work environment practical for your business, it’s a fantastic, innovative way to conduct the day. Instead of having everyone do all their work in their own personal “area” – desk, office, etc. – try setting up different stations in your collective space that are for individual tasks. This works especially well if everyone in your business does similar things all day. For example, if your business involves putting together packets of information for clients, maybe you have one station specifically for printing, and another that has all the hole punches, staplers, folders, and other assembly materials, and still a third station for preparing outgoing mail.

Having specialized stations that are available for everyone to use works for a few reasons: you don’t have to have multiple of the same item – like packing tape, or staplers – since everyone will be going to the same place to use them, and employees get a chance to leave their desk, stretch their legs, keep their blood flowing, and their view changing, all of which is fantastic for keeping the brain out of a slump. Also, when each area of the office is set up for only achieving certain specific things, you increase employee efficiency right away – if your employees aren’t stuck doing everything at their own desks all day, you have a much smaller chance of them zoning out in front of their computers. Task-specific work stations keep the office moving, busy, and productive.

Source: http://www.forbes.com/sites/thesba/2013/02/22/5-elements-of-a-highly-productive-office/


Top Ten Qualities that Make a Great Leader

Having a great idea, and assembling a team to bring that concept to life is the first step in creating a successful business venture. While finding a new and unique idea is rare enough; the ability to successfully execute this idea is what separates the dreamers from the entrepreneurs. However you see yourself, whatever your age may be, as soon as you make that exciting first hire, you have taken the first steps in becoming a powerful leader. When money is tight, stress levels are high, and the visions of instant success don’t happen like you thought, it’s easy to let those emotions get to you, and thereby your team. Take a breath, calm yourself down, and remind yourself of the leader you are and would like to become. Here are some key qualities that every good leader should possess, and learn to emphasize.

Honesty.  Whatever ethical plane you hold yourself to, when you are responsible for a team of people, it’s important to raise the bar even higher. Your business and its employees are a reflection of yourself, and if you make honest and ethical behavior a key value, your team will follow suit.

Make a list of values and core beliefs that both you and your brand represent, and post this in your office. Promote a healthy interoffice lifestyle, and encourage your team to live up to these standards. By emphasizing these standards, and displaying them yourself, you will hopefully influence the office environment into a friendly and helpful workspace.

Ability to Delegate.  Finessing your brand vision is essential to creating an organized and efficient business, but if you don’t learn to trust your team with that vision, you might never progress to the next stage. It’s important to remember that trusting your team with your idea is a sign of strength, not weakness. Delegating tasks to the appropriate departments is one of the most important skills you can develop as your business grows. The e-mails and tasks will begin to pile up, and the more you stretch yourself thin, the lower the quality of your work will become, and the less you will produce.

The key to delegation is identifying the strengths of your team, and capitalizing on them. Find out what each team member enjoys doing most. Chances are if they find that task more enjoyable, they will likely put more thought and effort behind it. This will not only prove to your team that you trust and believe in them, but will also free up your time to focus on the higher level tasks, that should not be delegated. It’s a fine balance, but one that will have a huge impact on the productivity of your business.

Communication.  Knowing what you want accomplished may seem clear in your head, but if you try to explain it to someone else and are met with a blank expression, you know there is a problem. If this has been your experience, then you may want to focus on honing your communication skills. Being able to clearly and succinctly describe what you want done is extremely important. If you can’t relate your vision to your team, you won’t all be working towards the same goal.

Training new members and creating a productive work environment all depend on healthy lines of communication. Whether that stems from an open door policy to your office, or making it a point to talk to your staff on a daily basis, making yourself available to discuss interoffice issues is vital. Your team will learn to trust and depend on you, and will be less hesitant to work harder.

Sense of Humor.  If your website crashes, you lose that major client, or your funding dries up, guiding your team through the process without panicking is as challenging as it is important. Morale is linked to productivity, and it’s your job as the team leader to instill a positive energy. That’s where your sense of humor will finally pay off. Encourage your team to laugh at the mistakes instead of crying. If you are constantly learning to find the humor in the struggles, your work environment will become a happy and healthy space, where your employees look forward to working in, rather than dreading it. Make it a point to crack jokes with your team and encourage personal discussions of weekend plans and trips. It’s these short breaks from the task at hand that help keep productivity levels high and morale even higher.

Confidence.  There may be days where the future of your brand is worrisome and things aren’t going according to plan. This is true with any business, large or small, and the most important thing is not to panic. Part of your job as a leader is to put out fires and maintain the team morale. Keep up your confidence level, and assure everyone that setbacks are natural and the important thing is to focus on the larger goal. As the leader, by staying calm and confident, you will help keep the team feeling the same. Remember, your team will take cues from you, so if you exude a level of calm damage control, your team will pick up on that feeling. The key objective is to keep everyone working and moving ahead.

Commitment.  If you expect your team to work hard and produce quality content, you’re going to need to lead by example. There is no greater motivation than seeing the boss down in the trenches working alongside everyone else, showing that hard work is being done on every level. By proving your commitment to the brand and your role, you will not only earn the respect of your team, but will also instill that same hardworking energy among your staff. It’s important to show your commitment not only to the work at hand, but also to your promises. If you pledged to host a holiday party, or uphold summer Fridays, keep your word. You want to create a reputation for not just working hard, but also be known as a fair leader. Once you have gained the respect of your team, they are more likely to deliver the peak amount of quality work possible.

Positive Attitude.  You want to keep your team motivated towards the continued success of the company, and keep the energy levels up. Whether that means providing snacks, coffee, relationship advice, or even just an occasional beer in the office, remember that everyone on your team is a person. Keep the office mood a fine balance between productivity and playfulness.

If your team is feeling happy and upbeat, chances are they won’t mind staying that extra hour to finish a report, or devoting their best work to the brand.

Creativity.  Some decisions will not always be so clear-cut. You may be forced at times to deviate from your set course and make an on the fly decision. This is where your creativity will prove to be vital. It is during these critical situations that your team will look to you for guidance and you may be forced to make a quick decision. As a leader, it’s important to learn to think outside the box and to choose which of two bad choices is the best option. Don’t immediately choose the first or easiest possibility; sometimes it’s best to give these issues some thought, and even turn to your team for guidance. By utilizing all possible options before making a rash decision, you can typically reach the end conclusion you were aiming for.

Intuition.  When leading a team through uncharted waters, there is no roadmap on what to do. Everything is uncertain, and the higher the risk, the higher the pressure. That is where your natural intuition has to kick in. Guiding your team through the process of your day-to-day tasks can be honed down to a science. But when something unexpected occurs, or you are thrown into a new scenario, your team will look to you for guidance. Drawing on past experience is a good reflex, as is reaching out to your mentors for support. Eventually though, the tough decisions will be up to you to decide and you will need to depend on your gut instinct for answers. Learning to trust yourself is as important as your team learning to trust you.

Ability to Inspire.  Creating a business often involves a bit of forecasting. Especially in the beginning stages of a startup, inspiring your team to see the vision of the successes to come is vital. Make your team feel invested in the accomplishments of the company. Whether everyone owns a piece of equity, or you operate on a bonus system, generating enthusiasm for the hard work you are all putting in is so important. Being able to inspire your team is great for focusing on the future goals, but it is also important for the current issues. When you are all mired deep in work, morale is low, and energy levels are fading, recognize that everyone needs a break now and then. Acknowledge the work that everyone has dedicated and commend the team on each of their efforts. It is your job to keep spirits up, and that begins with an appreciation for the hard work.

Source: http://www.forbes.com/sites/tanyaprive/2012/12/19/top-10-qualities-that-make-a-great-leader/2/


Why Too Many Choices Will Hurt Your Small Business

There are a lot of choices for consumers. In fact, the 16,000 Starbucks’ locations in this country serve over 20,000 choices of what to drink. This is why the line moves so slowly!  The American consumer tends to think that more is always better. But, is it really for small business? While this wide variety may be a good thing for Starbucks, it is not a benefit for a growing small business.  It poses these problems for a company:

1. Focus. It does not allow the small business owner to focus on what the company does best. Trying to be all things to all customers just dilutes the company’s effort at excellence, especially in the early growth stages. In order to be the best, companies typically have to do less, not more.

2. Brand. It does not allow the small business to brand itself in the mind of the customer. Early on, it is best to get known by the consumer for doing one thing really well. This allows the company to become distinct from other competitors.

3. Delays. It is actually more difficult for a consumer to choose a product they want to buy if there are more choices rather than less.  They easily get overwhelmed and it leads to buying delays.

4. Capital. The more products a company has, the more capital that is usually needed to maintain stock. This also consumes precious cash flow that the company may need in other areas.

5. Competition. In this world without geographic supplier boundaries, the wider the product offering, the more competitors a company will have that are only a click away.

Successful small business owners should develop a niche expertise rather than a “one stop shop” brand. It will give them the reputation for doing one thing extremely well. In this social media connected world, this also activates more sharing with their friends that will drive additional business.

Source: http://www.forbes.com/sites/aileron/2013/02/20/why-too-many-choices-will-hurt-your-small-business/


The Benefits of an IRA

Have you forgotten your IRA? If you don't have one, should it be part of your overall investment plan? Here are some compelling reasons why this vehicle can help you plan for your future.

  1. Tax deferral: Traditional IRAs allow your investment earnings to grow tax deferred until withdrawn, typically at retirement. For 2012, the maximum contribution is $5,000, but for those aged 50 and over, the limit is $6,000.

  2. Deductibility: If you are a single taxpayer who doesn't participate in an employer-sponsored plan and you earn less than an amount set each year by the IRS, you can deduct your contributions to a traditional IRA off your income taxes. Note that Roth IRA contributions are not deductible.

  3. Investment flexibility: IRAs typically give investors access to a wider range of investment options than workplace-sponsored plans such as a 401(k). Depending on the financial institution you use to open your account, you can invest in a broad array of mutual funds, ETFs, individual stocks and bonds, CDs, annuities, even commodities and real estate.

  4. Convertibility: Traditional IRA holders can convert to a Roth IRA to enjoy some of the additional benefits listed below. But before you decide make a switch, be sure to investigate the tax consequences of such a move.

  5. Portability: If you have assets in an employer-sponsored plan and you leave your job, you can easily roll over those assets into an IRA. Rolling over your assets can make sense particularly if you change jobs frequently and don't want to devote too much time to coordinating and tracking your accounts.

Additional Benefits of Roth IRAs

  • Qualified tax-free withdrawals: Since Roth IRAs are funded with after-tax dollars, your withdrawals are tax free, as long as you have held the account for at least five years and are over age 59 1/2.

  • No RMDs: Unlike traditional IRAs, Roth IRAs are not subject to required minimum distributions (RMDs) once the accountholder reaches age 70 1/2.

Contact your financial professional to discuss a strategy for your IRA or to see if investing in an IRA makes sense for you. Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax. (In the case of a Roth, it must be held five years as well.) Gains from tax-deferred investments are taxable as ordinary income upon withdrawal.

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