Wyoming Entrepreneur Blog

Why Family Businesses are Special Today

Family-owned businesses are stable and optimistic, even in times of economic uncertainty. A recent national study by Kennesaw State University, the American Family Business Survey of family-owned businesses, studied the strengths, challenges and changes since a previous study done in 2002. It found that family business owners:
1 | Are optimistic about future growth - Even during some generally depressed business conditions, family business owners express optimism. Figures confirm that family businesses are better able to weather economic hardship and stabilize the economy than their non-family counterparts.
2 | Lack a sense of urgency about retirement and succession planning - Family businesses face some significant succession challenges. Over forty percent of business owners expect to retire in the next ten years, but many are less certain about retirement. Almost one third have no plans to retire, ever. Nearly another third report that retirement is eleven or more years away. This means that many owners plan to die running their business, which is not beneficial to their family, the business, its employees or its customers. Furthermore, nearly one third have no estate plan beyond a simple will.
3 | Select women as leaders - There has been an almost five-fold increase in the number of women leaders in family businesses in the last decade, far more than the increases seen in non-family businesses. The trend indicates that increased female leadership of family businesses should continue.
4 | Hold themselves and their employees to a higher ethical standard - Since family businesses are family and relationship oriented, they operate more ethically. Family owners have a major influence on their business and their values are emphasized in the business. Family orientation seems to translate into more ethical behavior and the resulting actions contribute significantly to their family’s identity in their communities.
5 | Expand on traditional management - There is a misconception that due to the relational nature of family businesses they are less professional. In one way this may be true, with only a few businesses having a written strategic plan or formal planning process. This is only one higher level of professional behavior. Despite the lack of formal strategic planning, they use other types of planning tools. Buy-sell agreements, business valuations, boards of directors, formal recruiting, performance appraisals, and benefits administration indicate their professionalism.
6 | More unified family values - Family unity and cohesion are critical to family business success and an important goal. Family members that agree on values, attitudes, and beliefs exhibit that unity and cohesion. The practice of these values result in increased levels of employee loyalty, commitment, and organizational citizenship. Similarity of values between family members in business and their customers can also improve relationships and foster economic stability.
7 | Place their trust in family members as key advisors – Overwhelmingly the business owner’s spouse is seen as their most trusted advisor, followed by their accountant, a business peer, parent, lawyer, and financial advisor.

Do I Need Key Man Insurance for My Business?

After reading an article recently, entitled, “Have You Insured Your Company’s Most Valuable Resource?” by Dana Sydney of Dayton & Sydney, LLC, an insurance advisor, I would say that there are several good reasons for your company to carry insurance on your key employees and yourself. Insuring a key person can spell the difference between the failure and survival of a business.

Here are some of the benefits of providing life insurance on the unexpected loss of a key person in a company and a few things to keep in mind when purchasing “Key Person Insurance”. Key person life insurance can help a company survive the operational loss and financial strain that follows the death of a key employee or owner:

• Business loans or investments can be repaid. When a key person dies, especially an owner, a lender may have the right to call existing loans. Life insurance proceeds can help pay off those loans or fund a buy/sell agreement.
• Credit can be maintained. At the death of a key person, lenders may become reluctant to lend new money to the business or refinance existing debts. Life insurance can help pay its bills from vendors in a timely manner in spite of the death.
• A suitable replacement can be recruited and trained. It may take months before a qualified
  candidate is found and it will then take time to train them to the point where they are as competent as their predecessor. So insurance proceeds buy time for the business to re-group.
• The business is sheltered from lost sales and profits. Insurance could help offset dips in revenue that will probably occur, at least temporarily, when a key person dies.
• Stock can be repurchased. If the business is a corporation, common stock owned by the decedent’s heirs can be repurchased by the company with the insurance proceeds. This enables a surviving owner to buy out a deceased owner’s share of the company.

Key person life insurance policy is owned by the business, it pays the premiums, and it is the beneficiary. The premiums vary based on the age, physical condition and health history of the insured. The need for key person insurance depends on your company’s structure, its continuation plans and the amount of financial hardship without that key person. Not all businesses need key person insurance. In large companies, there may be less likelihood that a single individual is
indispensable to a company’s continued success. In one-person firms, the business is not likely to survive without the principal, no matter how much money is available.

There are several valuation techniques that can be used to determine how much key person insurance is appropriate. No one method is best. Buying key person life insurance can be a relatively small expense and one that hopefully you will never have to collect on. But failure to invest in a key person policy and then have that person die; can be an enormous expense. Your company may be able to absorb the small expenses, but what about those big expenses created by the loss of a key person in your company?

I have recently been contacted by a company offering to help my website to be found by search engines. Are these companies good or are they fraudulent?

Yes and no on both counts.  If you cannot manage your website’s search engine optimization yourself, here are some things to look for and to look out for in any company you hire:

First, I would be very cautious about companies coming to you, especially those who telemarket or send unsolicited emails.  If they are good at what they do they shouldn’t have to engage in push marketing (people would find them on the internet, right?).  The exceptions would be a familiarity with your industry, geographic proximity or some other compelling reason to engage in business with them.

The next often-omitted step is checking references.  If the business was referred to you, this might already be taken care of.  Find out what they were able to do for other businesses and see what their expectations are for your website and what they can do to improve your search engine rankings.  This is important, as there are different levels of competition for different terms.  For example, imagine trying to be on page one for a Google search on “iPad” vs. “Procurement Technical Assistance Center in Wyoming” and you can imagine which term would be easier to have better rankings for.

Find out how they seek your input and keep up to date with your search terms.  The search terms should not be industry jargon.  They should be the words your customers use, especially when searching for you, your product or service and these search terms should appear in your webpages.  Normally these terms change over time, so what will they do to keep up?  Will they monitor and report your rankings on important terms?

Finally, if you have the slightest concern that the company might use unscrupulous techniques, stay away.  The techniques I am mentioning are things such as using phony web pages that backlink to you, stuffing your pages with text the same color as the background (Google (or any other search engine)can read it in the code whereas your visitors will not see it) and other tricks.  When (not if) Google catches people using these techniques it will blacklist the entire site.  Being blacklisted means instead of just being on the fifth page of results, your site will never be found. 

If you have questions about Search Engine Optimization (SEO), how your site is doing or would like some help optimizing your site, please contact us at www.wyen.biz.

 

What's the deal with getting a DUNS number?

A DUNS (Data Universal Numbering System) number is a unique nine-digit number assigned by Dun and Bradstreet (D&B) for each physical location of a business. The Federal Acquisition Regulation (FAR) provision or clause 52.204-6 requires an offeror to provide its DUNS number when it submits an offer to the federal government. FAR 4.11 also requires contractors to complete their Central Contractor Registration (CCR) before receiving government contract awards above the micro-purchase threshold (generally $3,000, but $2,000 for construction and $2,500 for services). Obtaining a DUNS number is the first step in the CCR registration process.

The General Services Administration (GSA) has a contract with Dun & Bradstreet to provide free DUNS numbers to businesses that need them in order to register in CCR. In the past, a business that needed a DUNS number for government contracting purposes could just call D&B, verify their information, and often receive it right over the phone. The process used to be really quick and easy! D&B now requires business owners to request DUNS numbers through their online webform and iUpdate process (this is the link for government contractors and grant applicants; if you click on any of D&B’s other links to obtain a DUNS number, you may find yourself inadvertently subscribing to a fee-based service). Quick and easy? Not so much.

Before beginning the iUpdate process, it is important to understand that D&B is in the business of selling credit information and other data about the companies in its database. D&B tracks public company records, such as UCC filings and bankruptcy filings, as well as business credit information that you might not have realized was out there. The firm even applies mathematical models to data about your business to develop a commercial credit score for it. You may be more familiar with the information in your personal credit report; your commercial credit score is an analogous evaluation of the risk involved in dealing with your company. However, the truth is that most owners of very small businesses are required to sign personal guarantees to obtain business credit, and their personal credit scores are likely to be far more important than their commercial credit scores in determining their creditworthiness. Also, just as there may be inaccurate information in your personal credit file disclosure, it is possible that D&B has inaccurate information on file for your business, so it’s not a bad idea to review this information. The good news is that if you use D&B’s new iUpdate process to create an account and obtain your DUNS number, you will be able to review and update the information that D&B has on file for your company, free of charge. You do not need to purchase anything that D&B sells in order to do business with the federal government.

If your business legal structure required a filing with the Secretary of State (such as a corporation or limited liability company), if you have ever applied for a business loan, or if you have a business telephone number, D&B may have already assigned a DUNS number for your business. You can find out by searching for your company and continuing to the iUpdate portal. Once you verify your identity, create an iUpdate account, answer security questions, and identify yourself as a government contractor, you will have access to your business summary and DUNS number. If you search and find that D&B doesn’t have your company on file, you will be able to go through a similar process to request a DUNS number.

The Wyoming PTAC team will be providing a free pre-conference training session at the GRO-Biz Conference & Idea Expo on February 22, 2012 in Laramie, and we will go over the new process for obtaining a DUNS number and other government contracting basics. For free and confidential one-on-one assistance with obtaining a DUNS number, using the iUpdate system to manage the information in your D&B report, or to find out more about the GRO-Biz Conference & Idea Expo, contact the Wyoming PTAC team: Jeff Sneddon in Casper (jsneddon@uwyo.edu, 307.234.3203); Natasha Stahla in Cheyenne (nstahla1@uwyo.edu, 307.637.5029); or me in Thermopolis (alea@uwyo.edu, 307.921.8499).

Creating a Capabilities Statement

Last week, I was on the phone with a business owner who mentioned they were planning to attend the GRO-Biz Conference & Idea Expo next month. We were getting ready to end our call when I said, "Don't forget to bring a capabilities statement to the conference!"

The person responded, "What is that?"

"Well, it's a summary of what your business offers to meet the needs of a specific government agency, customer, or opportunity. You might think of it as an expanded business card. It conveys that you understand the language and processes of government contracting. You can provide a general capabilities statement to any of your potential federal customers when you are getting started in government contracting, but a more experienced contractor will prepare a specific capabilities statement for each agency or opportunity."

The business owner asked if I had any tips for putting one together. Although I had read various capabilities statements, I had never really found any clear and simple guidance on how to put an effective one together. Much of what I read was either pretty vague, or seemed to be directed towards really large companies. I told the person I'd find some resources for them and get back to them shortly.

I immediately sent a Skype-chat to Jeff Sneddon, a procurement specialist in our Casper office, and former CO (contracting officer), for the low-down. Our conversation went like this:

Amy Lea

So Jeff...tell me about capabilities statements. You probably received tons of them when you were a CO. Do contracting officers actually read those things?

Jeff Sneddon

Nobody actually reads a capabilities statement, it's something you glance over. If it's not brief and very easy-to-read, it's useless. I met a lot of business owners at conferences like the GRO-Biz Conference, and if someone gave me a capabilities statement, it helped me to remember what they did later on. I kept a file with capabililities statements from companies I might be interested in asking for a quote or proposal if I ever needed what they offered. The key is that is has to be very clear and very brief - a contracting officer won't dig through a capabilities statement to try to figure out what a business does.

Jeff sent me some information, and I did some research on what was out there in cyberspace, but I still didn't feel like I had a useful summary to send to my client. So, I decided to try to try to distill the research I had done and come up with some guidelines.

Just as a resume or business card might be formatted slightly differently from business to business, you can determine how best to organize the information in your capabilities statement, but it will typically include the following:

1. Core competencies:
   Core competencies (also called “capabilities” or “core capabilities”) are the things your company does best. Differentiators (also called your “unique selling proposition” or “competitive advantage”) indicate what is special about your firm that distinguishes you from your competitors. You may also include bullet points with key personnel, special qualifications, facilities, and/or equipment, if the information is directly relevant to the agency or opportunity you are pursuing.
2. Corporate data (also called “company data” or “business information”):
   Provide a sentence or two describing your company’s history, the size of your firm, and the geographic area you serve. Include bullet points with any of the following information that pertains to your business (Note: this list includes a number of terms and acronyms for which full definitions and explanations are beyond the scope of this article, but the PTAC team can assist you with finding any of this information for your business.):
   • Data Universal Numbering System (DUNS) number
   • North American Industry Classification System (NAICS) codes and Product Service Codes (PSC) or Federal Supply Codes (FSC)
   • Commercial and Government Entity (CAGE) Code (this signals that your firm is registered in the Central Contractor Registration (CCR), because a CAGE code is assigned during CCR registration)
   • Any certifications/self-certifications that are relevant to government contracting (Historically Underutilized Business Zone (HUBZone), Woman-Owned Small Business (WOSB/EDWOSB), Service-Disabled Veteran-Owned Small Business (SDVOSB), 8(a), etc.)
   • Bonding capacity (construction firms)
   • Whether or not you accept credit and purchase cards
   • Contract number for your General Services Administration (GSA) schedule, Blanket Purchase Agreement (BPA), or other relevant federal contract (if any)
3. Past performance (also called “clients”):
   Provide three or four agencies or customers you have done business with, starting with those as similar to your target agency as possible. If you haven’t done other federal work, provide state or local government or commercial references.
4. Contact information:
   If you use company letterhead with your firm’s name, logo, and general contact information as a starting point for your capabilities statement, you may not need a separate section with this information. If you don’t have company letterhead, make sure to include a section with this information. Either way, make sure that somewhere on your capabilities statement you very clearly identify the person who handles government business for your company, and provide their direct email address and phone number.

Your capabilities statement should reinforce your company’s branding, so include your company logo, and use the same fonts and colors as your web site and other marketing materials. It’s also a good idea to clearly indicate that the document is a capabilities statement by putting the words “Capabilities Statement for Business XYZ” at the top.

If you take the time to create a capabilities statement now, when you have a conversation with a federal agency representative at the GRO-Biz Conference & Idea Expo next month, you will be ready to provide it to them. This will help them remember your business the next time they are looking for the supplies, services or construction that you offer. For free and confidential one-on-one assistance with developing a capabilities statement or other aspects of government contracting, contact the Wyoming PTAC team: Jeff Sneddon in Casper (jsneddon@uwyo.edu, 307.234.3203); Natasha Stahla in Cheyenne (nstahla1@uwyo.edu, 307.637.5029); or me in Thermopolis (alea@uwyo.edu, 307.921.8499).

Using Online Press Releases

Press releases have been the primary tool for communicating company news to the media since the first release was composed in 1906, disseminating news about a train wreck in Atlantic City.  Originally, a press release was exactly what the term says:  a release to the press.  The purpose of a press release was to get the media to write about you.  Now, in addition to the fact that most print media are available digitally, buyers have the ability to read your press releases directly, assuming that you post on your website and/or blog.   In addition, journalists are actively searching online for news and information.  According to the 2006 Middleburg/Ross Survey of Media Professionals, 92% of journalists went online to find story ideas, with 73% specifically researching press releases.  Those numbers have undoubtedly increased since that study was done.   If the media are looking online for news, then you need to be sure that your company news is also online. 

The key to writing a successful press release that will bring traffic to your website is including keywords and links that will improve the chances of the information being picked up by the search engines. Keywords are the words or phrases that people typically use to search for information on the Internet. 

Before writing a news release, you want to determine the keywords that best apply to the information in the release, and then use those keywords strategically throughout the text.  There are numerous keyword tools available on the Internet.  When you enter the word that best describes what your press release is promoting, the keyword tool will find related words and phrases that are actively being searched.  When you include those keywords that people most frequently search on to find your product or service in your copy, you will score well in the search engine results, and more people will find your information.  Once your release is posted online, a good way to check your results is to search on the keywords that you intentionally included in the release and see where your post comes up in the search results. 

In addition to looking at keywords, search engines also consider the quantity and quality of both outbound and inbound links.  Inbound links are important because most websites won’t risk losing credibility by linking to a site that does not provide value.  The more links from other sites to your site, the greater the likelihood that your site is considered valuable by other human Internet users.  You also want to link out to high quality, highly rated sites. 

There are numerous online companies that will distribute your releases to appropriate outlets for very reasonable prices.  In addition to distributing your search engine optimized press release, businesses should add a press release section to their website.  The press release center can serve as a home for supporting material, such as videos and pictures that journalists can easily access.  

Don’t miss this opportunity to “level the playing field” between your small business and ”the big guys.”  Do your research first.  Look at national and local newspapers and magazines.  Read what the large corporations are doing.  Locally, what your business is doing may be just as important.  You have news.  Broadcast it.

A Brief Press Release "How To" for Small Businesses

Press releases are a Great way to publicize your business and, best of all, they don’t cost anything but some time and effort.  There is always a trade-off for “free,” however.  Unlike a paid advertisement, there is no guarantee that a press release will be published, who will publish the information, or how the content will be edited.  On the positive side, if the information you released is published as an article in the media, that exposure, via a credible third party, offers a legitimacy that advertising does not. 

Typically, the objective of a press release is to attract favorable media attention to your business, product(s), or services.   Your objective is to pitch an angle about your business to the media that their particular audience will perceive as news, entertainment, or useful information.  If the audience will benefit, then the chances of getting your release printed are good.  Remember, the press is always looking for news.   

Small businesses often do not realize that they truly do have “news” to write about.  Community newspapers especially are often particularly interested in local business news.  You can write about sales growth, new or improved products or services, new offices or personnel, industry awards or recognition, participation in special industry events, philanthropic activities, and even “thought leadership,” or what your company’s stand is on key issues, views on trends, expert analyses, etc. 

Before releasing news, think about:

• Relevance.  Does your news relate to the community, a hot issue, or a prominent individual?
• Timeliness.  Does your news relate to a holiday, event or a particular time of year?
• Uniqueness.  Is your news unusual or thought provoking?

Creating a template for your releases will save time.  Be sure to include a date if the news is time-specific or use “FOR IMMEDIATE RELEASE,” if you simply want the news released right away.  List a contact name, phone number and e-mail address.  Use a strong headline, typed in all capital letters to bring attention to your news.   Keep the release to one page.   Begin the release with the city and state from which the press release originates and the date.  Your first paragraph should highlight the purpose of the release and include the “5 W’s” (who, what, when, where, why).  Tell your story concisely and precisely, limiting that first paragraph to three sentences.  Additional paragraphs should provide more detail about the story.  Quotes from company executives or customers are very effective.  Use bullets to break-up your copy.  Your final paragraph should include a short “boilerplate” paragraph about the company and links to the company website.  Use “###” at the close of the release to indicate the end.

Avoid jargon and self-promotion.  The purpose of your press release is to communicate news or information, not to blatantly advertise your company. 

When distributing your release, consider your media and select carefully.  Don’t waste time on media that are not a good fit for your news.  Decide whether to distribute by fax, e-mail or mail. 

Is Teaming with a Strong Sub a Guaranteed Contract Winner?

Teaming arrangements can enable companies to win contract awards they may not qualify when “standing alone.” Utilizing a teaming arrangement by including a member who can bring a high level of experience, technical capability, and past performance the team can score high on the evaluated criteria of the proposal and win the award.  

The Federal Acquisition Regulations (FAR) Subpart 9.6 describes contractor team arrangements as an arrangement in which two or more companies form a partnership or joint venture to act as a potential prime contractor; or a potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program.

There are also a number of benefits for the government to deal with firms involved in teaming arrangements including a single point of contact, reduced program management, increased completion and opportunities for small businesses, increased innovation, and support of small business development.

A partnership is a business enterprise consisting of two or more individuals or concerns who come together to co-own a trade or business for profit. The partners share ownership of a single business.  The partnership, and the members of the partnership, are in privity of contract with the government.

A joint venture is an association of two or more individuals or concerns formed to undertake a particular business transaction or project, rather than one intended to continue indefinitely. The members of the joint venture share in the profits and risk of loss. The joint venture entity, and its members, are in privity of contract with the government.

A subcontractor is any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor.

Privity refers to the direct relationship between the parties to a contract. Thus, there is privity between the government and the business (prime contractor) with whom the government has directly awarded the contract. Because the teaming arrangements of partnerships or joint ventures results in a legal entity which can directly be awarded a contract there is privity. There is no privity between the government and a prime contractor’s supplier or subcontractor.

This post was written by Jeffrey W. Sneddon, Wyoming Entrepreneur Procurement Technical Assistance Center (PTAC) Procurement Specialist

 

Why Can't People Get Along and Just Do Their Job?

By Dr. Sabrina Schleicher

Each personality type has an Achilles Heel. Left unchecked, your Achilles Heel will undermine you and keep you from attaining what you want most in life. Is your Achilles Heel wreaking havoc in your life?

Dr. Jones,* the owner of a busy private practice, is a Leader-People type on the PeoplemapTM Personality Questionnaire. He is known throughout his community as a caring, compassionate physician. He has strong personal values about how people should be treated. Dr. Jones regularly expresses his appreciation for his employees. In spite of his strengths in communicating and motivating others, morale has been low and there's a lot of conflict among his staff. There's a lot of drama at work! Why was this happening despite Dr. Jones' best intentions?
When Dr. Jones sought my services, he shared with me what he most wanted--to serve the people of his community with exceptional care and to build a great team whom he could support in achieving their goals.

Dr. Jones expressed his frustration with the on-going drama occurring with his staff. "It seems there is always one person stirring up trouble. When that person leaves, it settles down for awhile, but then the drama starts again. Why can't people just get along and do their jobs?"
Dr. Jones kept his nose to the grindstone and tried to ignore the "office drama." He ignored the finger-pointing and accusations among members of his staff. It seemed directed at one particular staff member, but Dr. Jones didn't want to confront her. He doesn't like confrontation. This staff member regularly came in late, left early, took long breaks, made insensitive comments to patients and generally performed poorly. This had gone on for several months and the situation was getting worse, instead of better. Dr. Jones confided in me that he fantasized about closing his practice just to end the drama.

Although the rest of the staff was extremely frustrated with this particular co-worker, they were even more frustrated with Dr. Jones for not doing anything about the situation. In fact, one of Dr. Jones' best employees confided in me that she was strongly considering a job offer she recently received. Dr. Jones had more problems on his hands than he even realized!
What was at the root of these problems in Dr. Jones' office? Dr. Jones' Achilles Heel was undermining the very thing he wanted most and wreaking havoc in his business. What he most wanted was a harmonious workplace where everyone got along. Instead, he had on-going office drama that just wouldn't go away.

What is Dr. Jones' Achilles Heel that kept undermining him despite his best intentions? Dr. Jones is overly concerned about the needs of others and he does not want to offend anyone. He was reluctant to confront his staff member because he did not want to upset her. In spite of her chronic poor performance, he did not want to fire her because she had a family to support. Dr. Jones was so focused on her needs that he was neglecting his own! Dr. Jones certainly had some challenges in front of him. He needed a lot of support to address his Achilles Heel as he turned the situation around. He did it. And, he learned valuable lessons along the way that he continues to apply.

*Dr. Jones is a fictitious name. The situation described above is compiled from several clients with whom I have worked. This scenario is one I hear often.

Dr. Sabrina Schleicher is a business and executive coach, corporate trainer and licensed psychologist. A certified PeoplemapTM Trainer and ChangeWorks® Practitioner, she owns Tap the Potential LLC www.tapthepotential.com, a coaching firm specializing in coaching and training to empower individuals and organizations to thrive! To receive more pointers about workplace communication, team-building and employee engagement, sign-up for Dr. Schleicher's newsletter at www.tapthepotential.com.

Register your business with the WY. Department of Employment - even if you don't plan on hiring employees NOW

One of the best kept secrets to businesses in Wyoming is the Wyoming Department of Workforce Services, Workforce Development Training Fund program (wyomingworkforce.org/wdtf). The program may be able to assist new and existing businesses by providing up to $2,000 per employee (owners are considered employees) per fiscal year for established businesses who need a skill upgrade or retraining. The program may also provide between $1,000 and a maximum of $4,000 per employee per fiscal year for new or expanding businesses, depending on the employee's full-time status and wage amount.

In order to register the business and submit an application for a grant, businesses must be in good standing with the Wyoming Department of Employment, Unemployment Insurance and Workers’ Compensation. The business must complete the “Joint Application Form” with the Department of Employment (wydoe.state.wy.us/wyereg/contactperson.aspx) prior to applying for a grant, regardless of entity type (sole proprietor, LLC, Corporation, etc.), even if the business has no employees (this can take 2 weeks to process). A business currently registered with the Wyoming Department of Employment does not need to re-register in order to apply for a Business Training Grant.

Time is of the essence when applying for a grant. The program provides a date calculator at (wyomingworkforce.org/wdtf/existing.aspx )under “What do I need to know about preparing an application.” This will let applicants know when an application can be submitted based on the start date of the training. Applying one day late can make the difference between receiving the grant or not.