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February 2010

Income taxes matter even when you lose money

Income taxImage by alancleaver_2000 via Flickr

They call it an "income" tax.  If you are losing money, you can ignore it, right?

Well, no.  In fact, ignoring income taxes in a loss year can be very expensive, as a Georgia entrepreneur just learned in tax court.  He waited until 2007 to file his returns for 2001 and 2002, years when he lost money.  He then tried to use the "net operating losses" from those years against his 2003 income.  It was too late.

The tax law normally requires you to carry back business losses to the two years preceding the loss year; only losses left after applying them against the earlier years' income carry forward. Taxpayers can waive the carryback and elect to carry it all forward, but you have to do this on a timely return for the loss year. You have three years after the due date of a loss year return to carry back its NOLs.

By not filing timely 2001 and 2002 returns, our Georgian lost his opportunity elect to carry his losses forward.  By waiting more than three years after his loss year 1040s were due to carry back his losses, he lost his chance to get refunds from 1999 and 2000. 

There's an extra reason for businesses with tax losses to be on top if their 2009 taxes.  A temporary provision allows taxpayers with 2008 or 2009 net operating losses to carry them back up to five years, instead of the normal two.  But there's a catch - you must elect the five-year carryback by the due date of your 2009 tax return, including any extensions you obtain.  That means corporations have until March 15 to make this election (Sept. 15 if they extend the return), and individuals have until April 15 (Oct. 15 with an extension). Taxpayers who don't elect the five-year carryback in time get the usual two-year carryback.

The five-year carryback can be very valuable, especially if you are coming off more than one bad year. Many taxpayers have to go back that far to have enough income to absorb 2008 or 2009 losses.  By filing a timely return a money-losing business can get back some badly-needed cash from Uncle Sam.  If you are under the gun for getting the return done on time, get an extension.

Sadly, Iowa only allows a two-year carryback for individuals and no carryback at all for corporations.

Update, 5/6/2010: IRS allows automatic relief for late NOL elections.

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Celebrate Your Way to the Top

Whether you’re trying to lose weight on your own or as part of a team, slimming down can be a challenge of endurance. Health experts understand that keeping the momentum going requires setting and achieving incremental, short-term goals while working toward a larger target. 91430142

But the benefits of reaching short-term goals, personally and professionally, often only is realized when you take time to celebrate each accomplishment.  

Sports teams make it to the championship only if they have the most wins in their division. But often their success is based on celebrating accomplishments not captured on the scoreboard – such as mastering a new play. Successful coaches make time to honor each victory while keeping their eye on maintaining a winning streak. They’re always working toward the big prize – like a bowl win as University of Iowa football coach Kirk Ferentz did this year.

Celebrating success also is fundamental to keeping your business team motivated. Long-term projects can fail if the organization isn’t focused on each accomplishment throughout the process. The Times Online developed a list of simple suggestions to recognize success at any level:

  • Keep it simple
  • Get the CEO involved
  • Make it memorable
  • Spread the word
  • Give prizes
  • Hold a party

Remember to take breaks and celebrate after milestone achievements. You’ll cultivate a culture of collaboration, strengthen team relationships and keep employees motivated.

Profile of a Millennial

Pew Research released its full comprehensive study, which answers the question “who are the Millennials?” For those still trying to figure out this demographic of young folks born between 1980 and 2000, the 150-page survey paints one of the clearest pictures to date of this generation.  In future blog posts, I’ll referring to their findings as a reference point. 4333190477_5c6dd02540

The Pew study makes a number of conclusions, and as a good study always does, it creates a number of other  questions. Below are a number of conclusions, and other questions I believe come up as a result.

40 percent of American Millennials are minorities

Will this amplified sense of cultural awareness change workplace view on what's right?

80 percent sleep with their cell phone

Will this change courtesy of when its appropriate to connect with people?

Two-thirds text while driving

What other new laws will overwhelming target the next generation?

40 percent have a tattoo (half of them have more than one)

Will work attire become more lax on what is considered professional?

25 percent are not affiliated with any religion 

How will the church change to reflect this new dynamic?

40 percent were raised in a single-parent home

Will those experiences create a bigger need for belonging?

2 percent are veterans or currently serving in the military, yet are very civic minded

Will this change the profile of a U.S. soldier to be less aggressive?

Two-thirds supported Barack Obama Obama for president, but half have since cooled to him

What kind of impact is this group looking to have?

Millennials don’t rank work ethic as a high priority, but 60 percent realize that and agree they should do better in this area

How does this focus on working smarter not harder change the dynamic of work?

This profile can tell us much about where this next generation is headed, but the right follow-up questions need to be asked.

Three Keys to Closing More Sales ...Follow Up! Follow Up! Follow Up!

"Networking" and the success and failure of those who do it has been the topic of many conversations over the last month or two.  Perhaps it is because businesses have pulled back on what they spend for marketing these days, but it seems that their are more people attending networking events and they are asking how do you convert these new relationships into clients.

Bigstockphoto_Freeway_Sign_-_Follow_Your_Cus_6350248 The answer is ... FOLLOW UP!  FOLLOW UP!  FOLLOW UP!

Several months ago Mike Torticill of Cool Life Systems in Montgomery, New York shared these statistics with me. They make the point.

  • 2%  of sales are made on the 1st contact
  • 3%  of sales are made on the 2nd contact
  • 5%  of sales are made on the 3rd contact
  • 10% of sales are made on the 4th contact
  • 80% of sales are made on the 5th-12th contact

The last statistic bears repeating.  Four out of five sales made are after the fourth contact. 

Now, consider these statistics.

  • 87% of all leads are never pursued
  • 45% – 63% of the all leads eventually buy the product or service from someone
  • 48% of all sales leads that are pursued are dropped after the first call/meeting

Again, most leads are never pursued!  Even though around half of all leads eventually buy from someone, most appear not to be buying from the company that captured them as a lead first. 

The money question for business owners and sales professionals is this.  How would it impact my business if we systematically were able to maintain regular contact with every lead we captured?

“I ACCEPT” “I ACCEPT” – License Agreements for real businesses

EULAImage by [Brian] via Flickr

Scroll through the 5000 words and click “I accept the terms”. Most likely, you just entered a license agreement.

A license grants someone (licensee) permission via contract to engage in an activity or to use property owned by the person granting the license (licensor). These prolific interactions are part of daily transactions. Obtaining a hotel room for a night is a license. Franchise agreements involve a license. The computer on which I am typing this has software licenses from Microsoft, Apple, Intel, and HP.

My iTunes license agreement is 4,289 words long.

For personal use, license agreements are often reasonable. What about when you click through for business? Sometimes not. There may be specific provisions stating you cannot use certain programs, images or words for business. The license agreements may reserve a fair amount of control for the licensor. Additionally, various other terms are working their way into license agreements. (See my prior two posts: nondisclosure agreements and indemnity agreements).

The licensor will request the licensee not share business secrets obtained through the license agreement and will also ask the licensee to indemnify, or hold harmless, the licensor in the event of injury or damage from the licensed item.

What does this mean? If you post a Microsoft Word document on your website, are you violating your Microsoft License Agreement? What if your link allows the user to access Word through your server?

Step 1: Read that long long long boring license agreement.

Step 2: Decide if you are engaging in any activities that may extend beyond the term of the license (e.g. making copies of a program for other business computers or using the source code for your own custom program or simply using images for which you have no license. Yes, they will sue you even if you are a “little” business.

Step 3: Ask yourself whether your business property, such as your website, would benefit from a license agreement, which should not be 7,000 words long.

Is the license for exclusive use of the licensee or is it non-exclusive – can it be used by multiple people at once? What is the term of the license? Can you charging a fee or a royalty for use?

If your business owns a patent, trademark or has a business model that works, a license is one way that you may be able to protect your asset. Or perhaps earn money from that asset. It is a wise, and sometimes mandated, decision to work closely with a licensee to be sure that your business property is not used in a manner that is inconsistent with your business.


Getting sued for violating an agreement is not fun. The best way to avoid that lawsuit is to read the agreement before clicking "I agree". Reading the agreement may give you ideas about which of your products you wish to protect and how you will create that protection.

- Christine Branstad
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The Paradox: Ego & Humility

Cover of "Good to Great: Why Some Compani...Cover via Amazon

Humility. The quintessential character trait. Right?

Remember when Jim Collins, in his book "Good to Great," said that two-thirds of the companies he studied didn't make the leap from good to great because they were weighed down by the "presence of gargantuan personal ego that contributed to the demise or continued mediocrity of the company?"

Extreme personal humility was one of the two unique traits his "Level 5" leaders had.

We recognize the names of many who fit in that two-thirds group: Ken Lay and Jeff Skilling (Enron), Bernie Ebbers (WorldCom) and Carly Fiorina (HP). The list goes on and on.  And that's only the business world. What about Tiger Woods and John Edwards? Any "gargantuan personal ego" at work in their cases? You think?

What is it about ego that allows leaders to get to good, but without humility, does not allow them to move to great? Doesn't it seem like ego is something we've got to have if we want to succeed, but having it often interferes with the success we're after?

Columnist Linda Campbell (Fort Worth Star-Telegram) said in her Feb. 7 editorial, "When ego trumps self-awareness" in the Des Moines Sunday Register, that "Presidents and Oval Office aspirers are egotists. The tame and insecure don't have the self-assurance to convince themselves or others they can lead the free world's most powerful nation...But self-awareness and good judgment are crucial in successful national leaders."

That's the paradox, huh?

In their book, Egonomics, David Marcum and Steven Smith say, "Ego is a free radical." I love that analogy. Our bodies need free radicals to be healthy, to fight viruses and bacteria. But when free radicals go amok, they can kill us, attacking our good cells and vital tissue. That's exactly what ego does to leaders' character when their egos run amok.

In my workshops, I talk about a concept called, "crucial moments." Crucial moments are those points in time when the next action we take will either take us down a good path; a path we will feel good about having taken because it leads to what we ultimately really want. Or our next action takes us off-course, down a path we might later regret.

Everyone of us faces scores of these crucial moments every day. Many of these moments are of small significance. But occasionally, the next step we take -- the next choice we make --  can lead to a life-changing outcome. It did with the leaders mentioned above. It can with you and me. And we often don't know at the time the significance of that one "next step."

There's the rub, huh?

Think of your daily crucial moments. What role does your ego play in those choices? Like the tag line for the CHARACTER COUNTS! in Iowa program: "Everywhere, all of the time."

Our ego -- like our character of humility -- is always there, always available, always at risk. Every moment counts!

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Time For Education


This spring there will be three tremendous educational opportunities in regards to employee ownership, ESOPs and open-book management. There will be three annual conferences held this April and May, and two of them are right here in the Midwest.  They are long- standing events that provide a wide range of perspectives and speakers on the issues of employee ownership, ESOPs and open book management.

I have attended these conferences over the past 10 years and have never been disappointed.  I have always walked away with new and pertinent information that I could use.  The speakers are knowledgeable and passionate about their topics.

It is also a great way to meet your peers as owners, leaders and employees who are living the experience and more than happy to share their story and knowledge.  You will hear the real life version of how these concepts are played out from these individuals. 

Please check out the links below and make plans to attend one of these educational events.

The NCEO/Beyster Institute Employee Ownership Conference  April 20-22, 2010 Minneapolis, MN

The ESOP Association's 33rd Annual ESOP Conference May 12-13, 2010 Washington D.C.

The Great Game of Business's 18th Annual Conference on Open-Book Management May 5-7, 2010 St. Louis, MO

First-Time Business Buyer?

The current state license plate design, introd...Image via Wikipedia

Buying a business for the first time can be like buying your first car - the color is right, the dealer is extending you credit and you sure would look good driving it!  As with a first-time business buyer, you want to make sure you understand what you are getting yourself into with your purchase.

Make sure you are ready.

One of the first items you need to understand is your motivation(s). As part of that understanding, you will need to temper you enthusiasm for purchasing a business with realistic expectations and a strategic plan, the business could tank as fast as the new car when the oil is not changed.

1. Is your family prepared for you to own your own business?
A person buying a business needs to understand that they are not just committing themselves to the success of their business, they are making commitments for their family as well. They may have to ask members of their family to assist them in the business, their family may have to make financial sacrifices, and, at a minimum, their family will be spending a lot less time with the new entrepreneur as the business demands additional time. Is the entire family prepared for this commitment?

2. Is the new business going to give you enough income?
This goes along with the first point, but the new owner needs to know exactly how much income the new business will be generating and how much he will need. If there is a shortfall, a plan needs to be in place for bridging the gap long before the business is purchased.

3.  Where are the holes in your talents?
We all have tasks that we enjoy and tasks that we do not enjoy. As a business owner, many times you have to do both. If there are some tasks that you know you will not enjoy and not excel in, prepare now to hire the appropriate person for that task. Your business is too important not to have the right people doing the right jobs.

4. Have financing arranged ahead of time.
Have your net worth statement prepared, have your credit from your banker extended and know what you can afford before you even begin to imagine the business you will purchase.

5. Have your professional advisers lined up.

Already know who you will use as your attorney, accountant, insurance agent, real estate adviser, or any other consultants before you begin the purchasing process. You must be comfortable with these advisers and you must be willing to use them in the due diligence process - they money you pay them now will be minuscule compared to your costs in the end if you don't use them.

6. Have a business plan.
Make sure the buyer has a detailed business plan for the purchase of the business. Without this very important road map, the new buyer can easily find himself off the road and into the ditch - and if your client seller-financed the acquisition, your client could end up with a lemon.

7. Time to Sell.
Have a valuation done on your projected business plan.  All businesses have valuation formulas.  Some valuations are based on sales, some on EBITA, et cetera. 

In short, make sure that you will get an acceptable return on your investment when it is time to sell.

- Steve Sink

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When an audit is a good thing

Man at desk If you’re like many businesses, you are receiving your premium audit paperwork in the mail this month. And, like many others, you may be wondering why insurance companies need information like:

  • legal business entity
  • gross sales last year
  • description of business operations
  • itemize list of all employees (name, description of work performed, gross wages paid and number of weeks worked)
  • subcontractors used (and certificate of insurance)

The company already insures you, right? Don’t they already have this information?

While that might be true, often times a business can change over a period of a year. A company might incorporate, add a new product line or start offering a new service.

They also could have downsized, eliminated a service that they use to provide or have fewer employees. There are many things that can happen during the course of a year and it is important to make sure that the insurance company has the right information to properly calculate their premiums.

An audit can be mutually beneficial for a business owner as well as it can uncover discrepancies that might have been previously reported and help you lower your insurance costs. The key is to be prepared for your audit.

  • Make sure you have accurate job descriptions for your employees

  • Have your gross sales for the prior policy period calculated

  • Have your payroll calculated and separated by class code

Last but not least, the most important step is to review the final audit when the insurance company has completed it.

I often see these final audits stuffed in a folder or binder - unopened.

Audits contain key information that can affect how much you pay for your insurance. Take the time to review it, confirm that the reported figures are correct and that the class codes match your job descriptions. A little time might save you a lot of money.

Trade Ya!

a peanut butter and jelly sandwich, top slice ...Image via Wikipedia

Last week, I had the pleasure of having lunch with my fourth-grade daughter.  While it was fun spending time with her, it was in many ways a surreal view of a sort of stock exchange floor, where food items were traded and bartered back and forth.  I lost count of how many times I heard the phrase "trade ya" from the children around me.  Trading, it seems, is a skill we learn early in life... and unfortunately forget when we hit adulthood and projects.

I started a new project this week, and it's a new client, so I'm drinking from the proverbial fire hose of information.  I'm learning about their products and services, about their company culture and about my project.  Even though it is the honeymoon phase, I'm still anticipating great things:  from them, from the project and from myself.

As with every single project, I'm having discussions about the triple constraint.  What is that, you ask?  Fair question... as it has been a long time since I covered it here.  The triple constraint is a core concept of project managers.  Some people describe it as good-fast-cheap-choose-two.  I prefer not to use that, as I think it oversimplifies the concept.

Essentially, think of a project in terms of a triangle.  On one side, you have schedule.  This is the number of calendar days (weeks and months) you have to complete the project.  On side number two, we have resources, which is anything that costs you money.  It includes supplies, software, people (and, no, they're not "free" just because they're employees), knowledge, expertise, et cetera.  The final leg of our triangle is performance, which is a interdependent combination of scope (how much are you going to do) and quality (how well are you going to do it).

Because of the relationship of these three triangle sides, you can't change one side without changing at least one other side.  Here's where the tricky part comes in:  Changes will try to occur, but will you as a project manager let them control you, or will you control them?  I liked how this was worded on the Project Daily blog recently:

If the client decides to change or add to the features list, it's up to the PM to make it clear to all the stakeholders that other things may either have to change or suffer. A lot depends on the initial agreement, the change control process, the relationship with the client, and how much wiggle room was included in the original estimates, but in any project based work, a shift in one piece will likely cause a shift throughout. By letting the client know right away that their request might effect the delivery date, the cost, or the quality, you put any trade-off decisions squarely into their hands, with known consequences.

My discussions this week with my project stakeholders have been simple.  Which constraint can move the least?  Which constraint can move the most?  (There is no one right answer to this question, but there is one big wrong answer:  "None of them can move.")  If you can get your decision-makers to agree on this one concept, you will be light years ahead of many other project managers.

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How Do Businesses Weather Tough Times?

Stormy Weather!Image by khalid almasoud via Flickr

We're all trying to navigate our way through turbulent economic waters. Why do some businesses resiliently sail through with relatively little damage while others find themselves sinking? That's the question Ranjay Gulati sought to answer in the book Reorganize for Resilience: Putting Customer's at the Center of Your Business.

Harvard Business Review recently inteviewed Gulati, whose research found that resilient companies have an "outside-in perspective," giving primary consideration to the customer in every part of their business.

Gulati was surprised how exceptional outside-in companies are:

"When I began this research, I naively assumed that all firms must indeed have an outside-in orientation whereby they put their customers first in all their decisions and actions. After all, that is what business is about. Much to my surprise, I found that this was the exception rather than the rule for most businesses."  

While the "Voice of the Customer" is a buzz phrase tossed about by many companies in today's marketplace, many businesses are struggling to effectively change their inside-out menality. Gulati highlights five "levers" needed:

  • Coordination—Alignment of activities, processes, and information across units within an organization
  • Cooperation—Alignment of goals, attitudes, and behaviors across units within an organization
  • Clout—Assignment of power and decision rights to customer-facing individuals as well as those responsible for integration of activities across units within the organization
  • Capabilities—Development of customer-facing generalists along with product specialists
  • Connections—Expand the source of inputs and also complementary offerings beyond internal production units to external strategic partners

Gulati's message is a great reminder for all of us. Giving lip-service to being customer-centered is not the same as organizing our business (administratively, organizationally, operationally) around the customer's expectations.

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Can you afford to pay your payroll taxes twice?

Assorted international currency notes.Image via Wikipedia

It's hard enough to run a business without becoming a payroll tax expert, too.  That's why many people farm out their payroll function to a payroll service.  They almost all do a good job, but woe unto a business when a payroll service goes bad.

Customers of New York payroll service Paybooks Inc. lived the nightmare.  The owner of the payroll service allegedly spent $2 million of funds provided by his customers to pay their payroll taxes.  The IRS and state taxing authorities didn't have much sympathy.

Carpet store owner William Calder is typical of the Paybooks, Inc clients:

...he contacted taxing authorities on his own. Also like the others, he is upset about having to pay the full amount his business owes despite Paybooks having taken $66,000 from the store's account. After some negotiation, the IRS agreed to waive penalties but still charge interest for late payment of his federal taxes, Calder said.

After some negotiation, the IRS agreed to waive penalties but still charge interest for late payment of his federal taxes, Calder said. He rattled off a list of eight other small-business owners being similarly squeezed, including his personal attorney, who Calder said owes $18,000.

Fortunately, you can check up on your payroll service.  Businesses that enroll in EFTPS, the federal Electronic Payroll Tax Filing System, can go online to make sure their payroll taxes are being credited to their accounts. 

Whether you outsource your payroll or take care of it in-house, it never hurts to make sure your payroll accounts are in order.  Nobody wants to pay their payroll taxes to a thief and to the IRS.  It's enough fun to pay them once.

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The Danger of Google Buzz

Image representing Google as depicted in Crunc...Image via CrunchBase

Google just released its new social media platform. Google Buzz allows you to share pictures, thoughts and even your location with your friends. If you already have a Gmail, all you have to do is click the Google Buzz button to get started. But wait!

Industry insiders point to several potential security concerns with Google's new wunderkind. One problem is that Google Buzz automatically sets you up with followers and people to follow. Is there anyone on your current contact list with whom you would prefer not to share your photos and the details of your daily life? You see the problem

While Google is working to patch these security issues, it may be best to hold off on Google Buzz until privacy advocates give the all clear. If you already signed up, here are some step-by-step directions to make sure you have turned off Google Buzz completely. 

Brett Trout
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Touch your customers

93389359 If I could only implement one and only one marketing tactic for any MMG client it would be -- touch your customers.

There's no contest who your best prospect is...it's your current clients.  Why?

  • Your current customers are happy with you, so they are predisposed to buy again
  • Your current customers know you and take your calls
  • Your current customers have other needs
  • If you delight them...they are the ones most likely to create buzz for you

Yet, in most marketing plans they are relegated to some small gesture now and then, if you do anything at all.  And, if a budget cut needs to be made -- we all know who is going to get the short end of that stick.

When I say touch your customers, I don't just mean bombard them with marketing and sales propaganda.  I really mean quite literally -- touch them. 

Touch them intellectually: I don't care who your client is -- one of their biggest fears is that they might be wrong.  So help them get smarter.  Share resources (links, articles, books, people in the know) that will not only remind them of your expertise but help them make wiser decisions and look good to the boss.

Touch them financially:  I'm not talking about slipping them a $20.  But, I am suggesting that you help them connect the work that you do with the results they get -- both for the company and for themselves.  Ask them if they're tied to a performance bonus.  If the company holds that goal in such high regard as to tie a financial incentive to it -- shouldn't it be towards the top of your marketing efforts too?

This is about genuinely demonstrating that you're on their side and are working to help them hit their benchmarks.  Especially if it also puts money in their company's and personal pockets.

Touch them emotionally:  Say thank you.  If they're an awesome customer -- let them know.  Be grateful for their confidence in you and don't be afraid to be a human being.  If your work will allow it -- have some fun too.  Laughing with your customers is one of the best retention tools I know.

Touch them spiritually:  Let them be a part of something bigger. Does your office adopt a family over the holidays?  Invite your clients to join you.  Doing a coat or shoes drive for the homeless?  Why not connect the dots.  Often times - we put this artificial barrier up between our service time (serving on a board, volunteering at church, mentoring a young person, making a donation) and our work time.  That's old school thinking.

Your customers want to connect with all of you.  Let them in.  Let them be a part of the bigger picture.  Be a part of their bigger picture.  This is "high give" marketing.  It's about being in it together and having a shared reaction/celebration to successes.

Then....when you have already done all of the above, go ahead and send them your sales flier.  You'll be amazed at the results at the end of the year.

~ Drew

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Love your job – it’s the heart of the matter

Today, countless cupids will honor their Valentine with candy hearts, flowers and heart-shaped jewelry. But I encourage you to mark this day by considering your own heart, and how work is affecting your health.


Confucius said, “Choose a job you love, and you will never have to work a day in your life.” This is wise advice, and during American Heart Month, it’s especially important to recognize that work stress affects much more than your next performance review.

Recent research provides strong evidence that work stress is linked to the onset of heart disease. Chronic stress also can lead to other health problems, including type 2 diabetes.

Take action to reduce stress at the office for you and your team, including:

  • Create a balanced schedule. Too much of anything isn’t healthy, so find balance between work and family life, social activities and solitary pursuits, to avoid exhaustion.

  • Plan regular breaks. Make sure to take short breaks throughout the day to sit back and clear your mind. Stepping away to briefly relax will help you be more productive.

  • Prioritize tasks. Make a list of tasks you have to do, and tackle them in order of importance. If you have something particularly unpleasant to do, get it over with early. The rest of your day will be more pleasant as a result.

  • Break projects into small steps. If a large project seems overwhelming, make a step-by-step plan. Focus on one manageable item at a time, rather than taking on everything at once.

With cardiovascular disease holding fast as American’s No. 1 cause of death, heart health should be one of your top priorities. Implementing simple steps to better enjoy your job can have life-long benefits, and the Valentines in your life will thank you for it.

Next Generation Poised to be More Racially Accepting

Civil Rights March on Washington, leaders marc...Image via Wikipedia

While there is constant talk among older generations about the failings of the younger generation, one area in which the younger generation should be admired is their views and actions on racial issues.

While older generations have an impressive history in paving the way for increased racial equality, from sparking the civil rights movement to electing a black president, much is still left to be desired. Iowa particularly has been apart of this two-sided equation.

A state that is 95 percent white did more to elect the nation’s first black President than any other state. In addition, Iowa has a rich history of pioneering the breakdown of racial barriers. On the other end, the high number of blacks in Iowa prisons, the large Iowa high school drop-out rate for blacks, the high Iowa jobless rate for blacks, or the failure of many of Iowa’s black entrepreneurs is very disproportionate to the low African-American population in Iowa.

For the past few months Pew research has been studying the Millennial culture in all of its subsets have found that this group of 18- to 29-year-olds is more open to diversity than any other generation sub set previously. Their level of acceptance in this generation is greater than in other generation.

According to the pew study, Millennials, compared with older groups, particularly Americans ages 50 or older, are significantly more likely to be accepting of interracial marriage. In addition, a majority of Millennials say at least some of their friends are of a different race.  Compare those rates to Americans ages 50 and older who are considerably less likely to have cross-racial friendships. This difference is largely the result of fewer older whites having black friends. The study showed just 36 percent of whites ages 50 to 64 and 32 percent of whites ages 65 and older report having at least some black friends. Why does any of that matter? Because we make decision based on trust, we trust those whom we can relate to- those with whom we have a relationship. Without those relationships it’s difficult to be included in the decisions.

Does this infer that older people are racist and younger people are tolerant? Not necessarily.

The Pew study shows that all generations over time have improved in their views on race. However, it is reasonable to assume that Millennials increased experience and willingness to engage with diverse cultures will allow them to be in a better position to deal with some of the lingering racial and ethnic disparities we still face.

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America's Got Talent (Avoiding Sales Objections)

Got Talent Imagine being on America's Got Talent.

"Our next act is Jane Doe, a professional sales person who is going to perform the ever popular handling objections dance."

You go out on stage and give your elevator statement to the judges. 

"My company ..."

Then you ask ...

"Can we help you with ...?" or "Do you have need for ..."

The judges respond ...

"We don't have any needs" or "It is not in our budget" or "We already have someone who ..."

Three strikes and you are done.

Well it is not a television show.  It is taking place thousands of times every day.  Just like on the show, the sales person walks out on stage without knowing exactly what the audience wants to see.  They just start performing and the prospect is just looking for reasons to push the button giving them a strike.

To be effective, turn the tables. Get the judges to perform.  Suppress your natural inclination to talk about what you do, your company, your products, and your services.  Ask them about their company.  Learn to ask them intelligent business questions so that you can discover what your "audience" does want to see.

Start by writing down five questions that can be easily tweaked for your particular audience.  Practice asking them in front of the mirror and then with your sales manager or a peer.

Soon you will find that good conversations are easier to start with prospects and that the conversations will last longer and go deeper.  They will happily be performing for you.

Photo on flickr by Keys Connoisseur

Avoid [paying for] litigation: Indemnification Agreements

Obelix the Saint BernardImage by Aquila via Flickr

I title my posts "avoid litigation" because many clients spend time working to avoid litigation. The best way to do this is to act conscientiously, be fair and prudently choose with whom you associate.

Businesses use Indemnity Agreements to avoid paying for litigation. Indemnification Agreements allow parties to contract so that one party (indemnitor) will pay the other for any loss suffered by the other party (indemnitee) under the contract. Those losses are commonly claims from third parties which can include litigation costs, settlements or awards. Indemnity Agreements are a double edge sword. While an Indemnity Agreement may protect your business, an Indemnity Agreement may also put your business in the position where it is responsible for costs and damages outside your control. You can find Indemnification Agreements in subcontractor agreements, rental contracts, leases, go cart use agreements, sales slips and Goldman Sachs’ agreement with its Board of Directors.  

Writing an Indemnity Agreement into Articles of Incorporation may make sense. Often boards work at no pay. If board members faced individual liability and attorney fees, you may find fewer individuals willing to serve.

For example: a broad agreement may provide that an equipment user (indemnitor) is responsible for all liability related to the use of the equipment even if the equipment distributor (indemnitee) is negligent. The user (indemnitor) may then be liable for injuries caused because a distributor removed a safety feature.

A “good” Indemnification Agreement is like any good contract. It says what it means. If you want an Indemnification Agreement in a contract, specify:

-   Who is covered (just claims from outside parties or claims from the employees of the other parties?)

-   What is covered (only actual amounts paid, only items that go to litigation, provable business losses, only personal injuries, any loss at all?)

-   Will the other party be indemnified if the loss is a result of that party’s own negligence?

There are no cases about sensible Indemnification Agreements because, in those situations, everyone understood their rights and obligations. Bad Indemnification Agreements lead to litigation.

Bad agreements are kitchen sink agreements with no clear intention of the parties. Resist the urge to cut and paste the following:

You agree to be entirely responsible for and to protect, indemnify and hold harmless me from any and all losses, actions, debt, demands, claims, lawsuits, legal fees, costs, and expenses for any injury, death, property damage, or any other liabilities incurred by me.

Moreover, resist the urge to “cut and paste” anything important. Remember: there is no such thing as a “standard” Indemnification Agreement . Read what you sign and be sure that you are comfortable with an agreement. If you are signing a contract for your business, make sure the business is specifically listed as the indemnitor or you may be putting your bank account in the hands of someone who has nothing to lose.

Also, know what your insurance covers and doesn’t cover. Verify that your liability insurance covers liability as a result of a contractual agreement.

Additionally, if you are the indemnitee, understand the indemnitor's coverage. (You may want a certificate of insurance or you may want to be a named insured).

Finally, decide if you really want an Indemnity Agreement. It may be the right time to include an Indemnity Agreement when:

  •  it is the fair thing to do.
  • the other party is “the big dog” who has the resources.
  • your business only deals with professionals who do their own risk assessment and are prepared to take on the risk.
  • you want to afford protection to a consultant, board member, agent or business party and are in a position to offer that protection.
  • there is a financial incentive because sorting out percentage of fault would be impossible.

Caution should be exercised when:

  • the big dog wants you to take on the liability.
  • you could not cover the loss (through insurance or otherwise).
  • the other party doesn’t have assets or insurance with which to pay.
  • a landlord requests that a tenant take responsibility for damage even if from the negligence of the landlord.
  • the intent to indemnify is not clearly expressed.
  • you just don’t understand the agreement.

Just like waivers of liability, Indemnity Agreements have a purpose. If you don’t know that purpose, don’t sign it.

-	  Christine Branstad
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Make Assets Your Adrenaline

Woody AllenWoody Allen via last.fm

Woody Allen, the quintessential pessimist, said, "More than any time in history mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose correctly." When we hear that, we laugh. It's kind 'a funny to look at the world briefly through the eyes of someone who has such a distorted view of reality.

But as leaders, we're limiting ourselves and our colleagues if we walk around with a warped sense of what's possible...even if it's not as warped as Woody's!

Think about it. Do you focus:

  • More on what's right than what's wrong?
  • More on strengths than weaknesses?
  • More on opportunities than problems?
  • More on what can be done instead of what can't?

If you honestly answered no to most of those questions, you need a slight shift in how you see things, in how you think. Shift to "ABT."

There's this way of thinking called "Asset-Based Thinking." Do it and it equips you with a special way of viewing everyday life that yields greater returns on what you're investing in attention and effort. It changes the way you respond in the privacy of your own thoughts -- in every conversation, interaction and circumstance. Sounds pretty powerful, huh? It's a concrete, cognitive process aimed at identifying the strengths, talents, synergies and possibilities that are immediately available in yourself, other people and any situation.

Children follow Asset-Based Thinking instinctively. We can re-capture what came naturally to us if we choose to. Here's what kids do:

  1. They set their sights on what they need/want.
  2. They move past fear.
  3. They start from exactly where they are with gusto and self-abandon.
  4. They practice as if no one is judging.
  5. They build on what they already know how to do -- add, shape, edit, expand.
  6. When they experience victory, they celebrate!
  7. Then they set their sights on what they want next.
Check it out! It's amazing what difference a slight shift in focus from deficit-based thinking to asset-based thinking can make. Focusing on what's working -- our assets -- changes the way we see everything, which changes the way we live, which changes the influence we have on those around us. Rather than letting stress drain our energy, we can let our assets provide the rush to "leap out of bed with our vision turned on."
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Women Business Brokers on the Rise

The number of women business brokers is on the rise and has been steadily increasing for the past several87707104 years. According to business broker Marcie Woolworth of the International Business Brokers Association's (IBBA) Women's Forum, more women are starting to realize that the industry is exciting, but also offers perks such as flexible schedules and good incomes.

In fact, the IBBA, which represents about 2,000 business brokers worldwide, estimates that approximately 10 percent of their membership is female.

There are several steps that women interested in becoming new or better business brokers can take to ensure their own success. First, education is of the utmost importance. Women business brokers should take advantage of state and international associations. There are courses and classes available to gain certifications and increase credibility.

Equally important is a full understanding of financial statements and financing. Although women business brokers are making names for themselves in the financial world, maintaining credibility is extremely important. All business brokers also should continue to take advantage of networking opportunities whenever possible, but women business brokers have some distinct advantages in the field.

Intuitively, women tend to be very good at establishing trust and listening to clients' needs. These are very important aspects when brokering deals, especially when a business owner's spouse has influence on the decision-making. Emotions tend to run high when a deal is in the works, and women business brokers have proven to be very effective cushions between the buyer and seller.

- Steve Sink

What’s in your safety toolbox?

Toolbox A safe work environment can not only affect productivity in the workplace, but it can also affect your workers compensation insurance.

Workers compensation premiums are derived from your annual payroll, employment classification and your experience eod (if your business has one). A good way to help control the costs of this insurance is by having a safe work environment.

While many insurance companies offer free safety videos and loss control services, there are also some free services available online. I came across a unique site at www.safety.blr.com.

This Web site has resources available that range from written safety tips and meeting outlines to Power Point presentations that you can download for free and use for your meetings. 

A common misconception is that safety meetings are only needed for construction industries, garages or manufacturing companies. However, injuries can occur in any workplace including an office and home-based businesses. Computer usage is becoming more prevalent in our everyday work environment and these types of injuries are on the rise:

  • Slips, trips and falls
  • Overuse injuries
  • Back and neck strain
  • Eye strain

Here are a few simple steps you can take to make your workplace safe:

  • Keep all electrical cords organized and out of walk areas
  • If you use a mouse – make sure it is positioned close to the keyboard
  • Invest in ergonomic chairs and keyboards
  • Make sure you have proper lighting and that your employees take their scheduled breaks
  • Sometimes little things can have the greatest impact in the workplace. A safer work environment can help you have fewer claims. And with fewer claims, you may be able to reduce your workers  compensation expenses.

    So the next time you think about the safety of your workplace – think about the toolbox.

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    Law of a Traction

    IceSlip It's winter in Iowa. (Please, keep the cheers to a dull roar.)

    We've had a whopping ton of snow. We've had arctic blasts. We've had wind-blown drifts. And we've had ice.

    It sort of turns walking and driving into a) a new Olympic event; or b) entertainment (provided you're not the one on the ice).

    Sometimes it's hard to gain traction on the slick surfaces, no matter how much testosterone your SUV is channeling.

    Are your projects maintaining their traction as well? There are a few articles about project starts and stops.

    According to the Standish Group, starting and stopping a project multiple times is one of the factors which leads to failure. In RUP, stops and starts go hand-in-hand with multiple bug fixes. The Theory of Constraints blog links multi-tasking as a cause of project starts and stops. Gav Thorpe relates this phenomenon to the project of writing a book (boy, do I understand that one!).

    But how does one get (and keep) project traction on the slippery, wintry surfaces of organizations?

    1. Leadership - the executives writing the checks need to ensure the resources stay dedicated and focused to the project at hand
    2. Prioritization - have criteria in place to determine when or if a project should be shelved and what constitutes "more important work"
    3. Communication - ensure all stakeholders know when and why a project or task has been stopped and why... and when/if it will be restarted
    4. Opportunity Cost - understand what the stops and starts are costing the organization in terms of ramping up, learning curves, politics, et cetera

    If you can keep your projects moving over the ice of competing demands, then you should maintain your traction through completion.

    Carpe Factum!

    Do You Serve ALL of Your Customers?

    LONDON, ENGLAND - SEPTEMBER 08: Shoppers walk ...Image by Getty Images via Daylife

    I've been working on an interesting project lately. This particular client has two distinctly different types of customers. The service delivery system has been built to serve one type of customer and that segment of their customer base is relatively satisfied. The other customer segment isn't so happy.

    We often speak of customers in generic, generalized terms. We tend to think of "the customer" as if there is one profile that fits every person who walks through our door or calls us on the phone. The reality is that most companies have a plethora of customer types. Your customer base could be segmented into very different and distinct groups. Different customer segments can have vastly different expectations. While you can't please call the people all the time, it's important to know who your key customers are and what drives their expectations.

    Sometimes, you discover untapped potential at your own doorstep. Callaway golf looked at their customer base and discovered that women make up only 20 percent of the North America market. They also discovered that their products and service was heavily focused on the male customer. They are working on a line of products "by women, for women" to address what they believe is a customer segment they have largely ignored.

    What are the major customer types coming through your door? Which are you catering to? Which are you ignoring?

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    Taxes: one step over the (state) lines

    Image representing Amazon as depicted in Crunc...Image via CrunchBase

    It is an Amazon world.  Buying cheaply from distant vendors and selling to customers far away is important even to the smallest businesses.  Unfortunately, tapping markets in other states can easily ensnare you in other state tax systems.

    States can impose income taxes on out-of-state businesses with activities that go beyond sales activities to generate orders to be approved out-of-state.  That can be an easy bar to clear.  A Council Bluffs contractor who crosses the river to do a project in Nebraska not only crosses the state line, but also the line that subjects him to the Nebraska income tax.  A salesman who also maintains an inventory in a state to fill orders there brings his employer into that state's income tax.

    For sales tax, the bar is even lower.  Having a non-employee salesman in a state can subject all of your sales in that state to sales tax there, even if the activity does not meet the level that triggers income taxes there.

    Being subject to income taxes isn't the end of the world.  If an individual pays taxes in another state, it may reduce home state taxes dollar for dollar; all states imposing an individual income tax provide a credit for taxes paid in other states.  Corporate taxpayers subject to taxes in other states may be able to take advantage of favorable tax rules in the home state, like Iowa's "single-factor" apportionment rules. 

    Still, taxes in another state are a hassle.  The states all have their own rules for computing taxes, their own deadlines, and, often, their own unhelpful tax bureaucracy.  It's much less of a hassle, though, when you plan for it than when some state assesses you for five years of back taxes.

    If you are doing a project across state lines, let your tax pro know.  When you put together your information for your 2009 business tax returns, be sure to put list out your sales, property and payroll by state.  Let your preparer know if you are renting business property out of state.  If you aren't sure whether you've done enough in another state to trigger tax there, go over things with your tax advisor.

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