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Coulee Bank

September 2017 E-Newsletter

Business Corner: 4 Tips for Managing the 'Nuts and Bolts' of Business

Even in today's digital age, some small business owners, surprisingly, are still bucking the online trend: A CNBC poll recently found that only 45 percent of small business owners polled said they had business websites. And that's a problem.
Another problem: Of those businesses that did have a website, only one-third used them to communicate with customers.
Now, a website, as important as it is, is only one aspect of the much larger blueprint needed to construct a successful company. That leaves an observer to wonder about those two-thirds of businesses polled that acknowledged they had no website: What else are they doing wrong?
In fact, building a business is a lot like building a home. Both need solid foundations that won't crack under pressure, and both require a tremendous amount of attention to detail, because all the pieces must fit together to create something viable. That means that more than a great idea is needed to sustain a growing business.
Business owners need to pay attention to the nuts and bolts of operation -- details that are often overlooked in favor of the allure of overnight success. Navigating and juggling these components is essential to fortifying a new business against collapsing -- usually with the entrepreneur inside it.
The nuts and bolts of building a business
According to a U.S. Bank study, cash-flow problems account for 82 percent of business failures. In addition to a lack of funding, these problems may include issues with office management, compensation or vacation packages and buy-sell agreements.
Such practicalities are often put off until a startup has already taken off, but the reality is that not making time for them sooner can make or break a business. For instance, seasonal businesses must account for the ebb and flow of profit when analyzing their cash flows, in order to budget accordingly. Many other businesses lack standardized invoicing practices, which disrupts billing and may affect loan payments.
It's easy to be overwhelmed by all these details when you're starting a business, and priorities must be set. But scaffolding your business should be one of those priorities. Here are four strategies for ensuring you're building a framework for success.

1. Never lose sight of your blueprint, but don't be afraid to update it.
Know the industry and research whom your business is really being built for. Business, marketing and, most importantly, financial plans should already be established before a product is launched. And the research and planning doesn't stop after the initiation phase. A strong business with consistent growth is the result of focused planning and re-planning.
Sophia Amoruso, former CEO of Nasty Gal, offers a cautionary tale of poor planning. Nasty Gal's sudden rise through the fashion industry led to many financial and structural changes, including lucrative partnerships with fashion and footwear brands that enticed venture capitalists. Yet CEO Amoruso's inability to restructure and refocus her plans in accordance with the company's transition led the company to fail to keep pace with its growth, resulting in bankruptcy.
2. Dot those i's and cross those t's.
A viable agreement between partners is something needed from the start: Ensure that every avenue that can be covered is covered, with agreement as to when and how a partner can sell his or her ownership and what happens in the case of a personal crisis, a break from a partner and so on.
The history of entrepreneurs is littered with people who have failed to get things down on paper. Most famously, perhaps, is the case of the Winklevoss twins and their partner, Divya Narendra. They claimed that their then-Harvard schoolmate Mark Zuckerberg, whom they'd hired to write some code a few weeks earlier, stole their idea for a social networking site called ConnectU.
After the launch of Facebook, Narendra and the Winklevosses sued the new company for millions in lost income, a lawsuit that might have been avoided had Zuckerberg been required to sign an agreement.
What's more: The tighter these agreements are, the better a business will be established for the future.
3. Stifle the jack-of-all-trades mentality.
An incredibly common trait of smaller startups is the jack-of-all-trades mentality. This mentality, often applied to both executives and low-level employees, says that those who don't exceed the expectations of their job description aren't considered team players.
This approach can weaken accountability, hurt the company dynamic and lead to burnout -- which more than 60 percent of American workers already suffer from, according to a survey by CareerBuilder. What's more, if people within a company are unsure of whom to report to or what their core responsibilities are, efficiency will suffer.
Ensure early on that your employees have access to equipment, training and mentors to help them take ownership of their work. It's much easier for people to shirk responsibility if they believe they don't have the necessary job tools. So, give them what they need, and make sure everyone knows his or her job parameters to prevent overwork.

4. Get the digital word out.
While it's common for a tech startup to have a website and social media accounts, many companies that don't do their business online have the misconception that establishing an online presence is a low priority or, worse, unnecessary.
This type of thinking ignores a striking reality: Facebook reported that, as of October 2016, more than 1 billion people were visiting Facebook business pages each month. A company's online presence, which should be much more than a website and a Yelp page, can't be overlooked.

A reality check? Most small businesses continue to rely on traditional word-of-mouth marketing, but entrepreneurs who aren't bolstering their outreach with a digital campaign are leaving a huge pool of potential customers untapped. Moreover, an active social media presence increases visibility and ensures that the right people are controlling the image of a brand.

In sum, all too often, entrepreneurs let a million-dollar idea blind them to the painstaking work that goes into fulfilling it. To truly become more than just the creator of another also-ran, entrepreneurs have to be willing to approach building their business with the same care they'd put into building their house -- by tightening every bolt properly and stabilizing the foundation from the start.

How to Improve Your Credit Score

Almost no one is perfect when it comes to credit scores. The average score for Americans has been inching up over the past decade and is now close to 700. Many lenders consider that a good number, but the highest possible score is 850, according to Fair Isaac Corp., or FICO, which developed some of the most widely used models for credit scoring. The lowest possible score is 300.
So how can you nudge your score higher? Here are some simple steps you can take to improve your credit score over the next year:
  • Make your credit card payments on time every month. Pay every bill by the due date, even if you can only cover the minimum due. The biggest factor affecting your credit score is your payment history on installment loans, credit cards and other debt. It accounts for 35% of your score. So if you have a good track record with paying your bills on time, it can go a long way toward improving your credit score. If you have trouble remembering payments, look into online automatic bill pay from your checking account. Your check won’t get lost in the mail either.
  • Pay off your debts as soon as possible. Ideally, you’ll want to get rid of bills that charge the highest interest rates first. But as long as you’re eliminating debt, you’re taking steps to increase your credit score. You can use loan calculators to figure out how long it will take to pay off your debts.
  • Check your credit reports. Visit to get a free copy of your credit report from each of the three major bureaus — Equifax, Experian and TransUnion — once every 12 months. You’ll want to make sure there aren’t any errors or other problems in your records. If you find a mistake, alert the reporting bureau about it and ask for a correction. It would also be a good idea to send the same message to the lender that provided the information. Fixing errors can take months, but keep in mind that if you don’t ask for corrections, no one else will. So do your part to make sure your records are 100% accurate.
  • Don’t rush to close a credit card after paying it off.  Your credit score may improve if you reduce the amount of credit you’re using compared with the amount you have available — a measure known as credit utilization ratio. An unused but open account can help your utilization ratio. A closed account can’t.
When it comes to credit scores, chances are there’s room for improvement. By consistently paying your bills, getting rid of existing debt and checking your credit reports for accuracy, you can gradually improve your score and increase your chances of getting approved the next time you need to apply for a loan.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Coulee Bank's Q-Tip: No Secret Bank Accounts to Pay Your Bills

Another day, another scam. Case in point: the Federal Reserve Bank of New York reports that scammers are telling people they can pay their bills using so-called “secret accounts” or “Social Security trust accounts” and routing numbers at Federal Reserve Banks. In exchange for personal information, like Social Security numbers, people get what they think is a bank account number at a Federal Reserve Bank. But this really is just a way to get your personal information, which scammers can then sell or use to commit fraud, like identity theft.
It’s good to keep in mind that people do not have accounts at Federal Reserve Banks. Only banks can bank at the Federal Reserve. But what happens if you try to use this “secret” account? Well, the Federal Reserve Bank will deny the payment, since you don’t really have an account there. Once the payment is rejected, you’ll be notified that you still owe the money – which is about when you might figure out that this was a scam. At that point, you may owe a late fee or penalty to the company you thought you were paying. You also may owe fees to your bank for returned or rejected payments.
If you see a video, text, email, phone call, flyer, or website that describes how you can pay bills using a Federal Reserve Bank routing number or account, report it to the FTC. It’s a scam. And remember: never give your credit card, bank account, or Social Security number to anyone who calls or emails and asks for it – no matter who they say they are.
Q-Tips are provided by Coulee Bank's IT Network Risk Manager, Quentin Fisher. He is always on the lookout for ways to keep our customers' information safe, here at the bank, at work and home.

3 Reasons You Need an Automatic Savings Plan

“Save money” is a timeless bit of personal finance advice, but actually doing it can be another story. If you need a way to boost your savings and stay consistent with your goals, setting up an automatic funds transfer can help.

There are two ways you might do this. You can set up a transfer from your checking to a savings or investment account at your financial institution. Another method can be having a portion of your paycheck directed into a retirement or other account by your employer, if possible. Here’s a closer look into why saving this way might help you reach your goals.

1. No effort needed after setup
Once you start automatic transfers, which might be made every week or two, you don’t have to give it another thought. This can be helpful if you tend to second-guess your saving decisions, such as whether you actually need to save 5% or 10% of your income this month. This way you can avoid doubting yourself and keep the savings flowing.

2. Building the habit of spending less than you make
Automating the process lets your savings grow unattended. If you schedule the transfer around the time that your earnings arrive, the money for savings never really mixes with your spending funds. Over time, you may get used to living on that smaller amount too, making it easier to let your savings build.

3. Keeping accounts separate
Transferring funds this way can help you limit your spending based on what’s available in your checking account. Plus, if you want to tackle multiple savings goals at once, such as putting away funds for a vacation, retirement and emergencies, these transfers can help you contribute to them consistently. You can stay organized and not have to worry about forgetting a transfer one week or losing track of your goals.

For these reasons, using automatic transfers can empower you to save without investing much time or energy. Think about it: You can achieve a goal simply by sitting back and letting your money grow.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Coulee Investment Corner: What Today's Workers Can Expect from Social Security Tomorrow

Did you know that the age at which many workers will qualify for full Social Security benefits has risen to 67 from 65? If that's news to you, you're not alone: The majority of workers are still in the dark about Social Security eligibility requirements and many expect to qualify for benefits payments sooner than they actually will.
Combined with lingering questions about the long-term financial health of the overall Social Security program, these facts reinforce the importance of understanding exactly what you might expect from Social Security during your retirement.
Benefit Basics
The exact amount of your Social Security benefit will depend upon your earnings history. According to the Social Security Administration (SSA), your benefits will be there for you when you retire. However, the SSA also acknowledges that some changes to the present system may be required.
For example, when Social Security was created, the average life span was less than 65 years. But today, many people are living longer, healthier lives. And because the nation's 76 million baby boomers are in or approaching retirement, there will be almost twice as many older Americans in 30 years as there are today.1
What's in Store?
Ideally, Social Security takes in more in taxes each year than it pays out in benefits. However, based on SSA projections, by 2034, the Social Security trust fund will be insufficient to allow for full payment of scheduled benefits. Recognition of these issues is growing, and legislators are now looking at funding and investment options to resolve them.2
While your Social Security benefits are an important piece of the retirement income equation, you probably shouldn't plan to rely on Social Security alone for your future income. Your employer-sponsored retirement savings plan, company pension, and personal savings may need to provide the major portion of your income in retirement.
1Source: U.S. Census Bureau, "Projections of the Population by Sex and Age for the United States: 2015 to 2060," 2014.
2Source: Social Security Administration, "Fast Facts & Figures About Social Security," 2015.

Required Attribution

Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.

© 2016 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.


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