Wednesday, October 20, 2010

Membership has privileges!

As I look at the growing list of businesses, I see a triple bottom line of jobs, benefits and revenue that will put an end to this economic depression! Years ago, one of my mentors, Jacqueline Hill, Director of the Pennsylvania Minority Business Enterprise Center, told me that I needed to have criteria on the businesses in the Newman Network. Thank you Jackie for that wonderful advice. Members - pat yourselves on the back for being in business during this economic downturn (3 years or more), investing in your marketing materials(website required) and satisfying your customers (by having a minimum of three testimonials!).

As a marketing consultant for the Urban League Entrepreneurship Center, I have seen how business knowledge is just ONE part of the success equation. An even bigger part is creating systems for accounting, marketing, HR, product development and so on. With the systems in place, businesses need to systematically locate their next CUSTOMER!

This is where networking comes in! As Fran Tarkenton has said on many of his calls, big businesses do business with each other and small businesses need to do the same thing. If we just learn to shop from each other, then we can all achieve the triple bottom line! Newman Networks has set up FREE networking events for members to meet and greet other businesses in the network! Members - please take some time and go through the list of members and decide which business(es) you will become a CUSTOMER of!

Andrea at Orchid Blue Salon, I will be calling soon to schedule my next appointment! I am looking forward to adding a little more criteria for Newman Networks membership!

Monday, August 30, 2010

MEDweek 2010 Recap - The Good, The Bad and The Ugly

I think I will start with the grim reality (The bad) of minority owned business. From the official MBDA (minority business development agency) disparities in capital access report, "The probability of self-employment is substantially higher among the children of the self-employed". Studies generally find that and individual who had a self-employed parent is roughly 2 to 3 times as likely to be self-employed as someone who did not have a self-employed parent. In a study by Michael Hout and Harvey S. Rosen, they note a "triple disadvantage" faced by African-American men in terms of business ownership. They are less likely than white men to have a self-employed fathers, to become self-employed if their fathers were not self-employed, and to follow their father in self-employment. Across all ethnic groups business ownership is 10.1% but in the African American community business ownership is just 5.5%. Of course, we all know access to capital creates job and minorities are redlined in being denied access (which creates jobs) by the financial markets.

The MEDWeek conference showed initiatives (The good) the federal government,through the small business administration, has implemented to addressed these concerns. The SBA is guaranteeing loans up to 90% to mitigate the banks risks in making loans to small business. The SBA has also dropped or substantially reduced the loan application fee . The IRS has creating tax incentives (health care credits) to help employers create jobs and provide benefits which in turn allow employees to stay longer. The SBA has initiatives from the white house to to help small businesses. Quote from "

Administration Announces New Small Business Commercial Real Estate and Working Capital Programs

President Obama announced on February 5, 2010 two new small business lending initiatives to help increase access to capital and create jobs. These temporary Small Business Administration initiatives include a refinancing program for small business owner-occupied commercial real estate and an expanded working capital loan program. At the same time, the president continued his call for a permanent increase of the maximum loan sizes for SBA’s 7(a), 504 and microloan programs and to extend the successful small business Recovery Act lending programs. These initiatives are part of the Administration's broader agenda to improve access to credit for small businesses, including a proposal to transfer, through legislation, $30 billion to a new Small Business Lending Fund that will support lending by community and smaller banks." Small businesses especially minorities are have the upper hand when it comes to importing/exporting goods and services. As we all know people do business with people of a similar ethnic group. The world is brown and 95% of all consumers are OUTSIDE of the United States.

The truth of the matter is that small business is stuck in a rut (The Ugly). Small businesses create 2 out of every 3 new jobs. But inadequate financing and red tape bureaucracy limit job creation. The cycle of business is too dependent on the financial markets. Businesses are required to make the product, pay the employees and wait and average of 60 -90 days from job completion to getting paid from the commercial or government job. To hire employees, businesses must have a solid plan, good credit in order to build a working capital account and float salaries. This is a post on the website that is specific to Philadelphia " I have learned about many business programs that designed to help women and minorities. I hate to say that all of them are dysfunctional. I have wasted my time trying to get any help from those programs.They all nothing but running around service, and they all limited to phone calls and bureaucracy. I suggest to have all these business programs under one umbrella. Through my experience, I learned that those business programs have negative impacts on those who are seeking to start their own business. These programs are: Mayor Action Business Team,Business Development Center,Philadelphia Commission Development Center, SCORE, Profile Re-Employment Program, Fox Business School, Temple University,Women Business, Minority Business.PANO, women WAY etc.. I have tried all of them,until I got exhausted and lost interest."

In this economy, we have to change the financial model of business. We are too dependent on the broken banking system. Commercial contracts need to work with their suppliers and pay deposits on the goods and services they buy. Businesses must give each other lines of credit and work in partnership to complete jobs. We have to shorten the time it takes to get paid from a completed job from 60-90 days to a number under 30 days in the commercial and government sector and the banking system must start providing lines of credit (AGAIN) for commercial accounts.

I was personally impressed that MED Week did not sugar coat these issues. This year they attempted to bring businesses together in the form on a B2B Expo. I found the Expo to be a great idea in theory but the businesses that were there said go to our website and sign up in our database as a diversity supplier. (WASTE OF TIME). Somehow the MBDA must act as an intermediary to build 3rd party creditability (edification). Though the company is IBM, there is still a biased person making a decision to work with that company. The supplier diversity reps did not have a white paper of the type of businesses they were looking for. The responses I heard was they were looking for businesses with capacity and a strong financial foundation (see the good and the ugly with the reason MBE firms do not have this) and that is where the vicious cycle begins. But I am optimistic that a change is coming. Why? Because we have NO choice. Now is a great time to start or be in business because your business in INNOVATION ( read -! The president has even dedicated 3% of the US economy's GDP (gross domestic product) to fund research and development. The world is open to your new ideas and technology has dramatically lowered the overhead to get your business off the ground. Capacity (i.e scalability) is key and while the financial door is closed, capacity can be built through leveraging partnerships that provide resources with your business idea. In a very short time, we are now realizing that discrimination has SUNK ALL SHIPS and MBE firms and non-MBE firms must find a way to work together. What a great concept for business (and for schools, for education, for religion, for life)!

Monday, July 19, 2010

Living Phrugal in Philadelphia

I am still amazed that in 2010 after being in an economic downturn for 10 quarters straight (3-month periods) , we are still calling this economic period we are facing, a recession. The standard newspaper definition of a recession is a decline in the Gross Domestic Product (GDP) for 2 consecutive quarters. ( As I look all over the internet, we are now trying to redefine the terminology for a depression. A depression, from my textbooks in 1995, is a prolonged period (lets say 3 quarters) of a recession. WE ARE IN AN ECONOMIC DEPRESSION. Median household income declined in 2008 and 2009. A number of factors contribute but the most important factor is that housing costs rose during the 1990's into 2000's that outpaced rises in income. What made it even worse is that women still earn 77% of a man's dollar especially in a country where over 33% of all children live in single mother households. ( To put it bluntly, women are bringing home less dollars and have to stretch those dollars for provide shelter, feed and clothe a family. Philadelphia has a very interesting problem, it is not the cost of buying a house that keeps family's out (right now it is credit). Historically, it is the combined rates of PGW and PECO that keep the American dream elusive in Philadelphia.

I will take a very small example, SEPTA, and show the how changes in income affect the middle class. SEPTA recently instituted a small fare increase (during a economic depression). This weekend, my son had to attend an event at Temple University and I decided to make it a family outing using SEPTA. As we got to the EL, I found out that now children over the age of 4 are faring paying adults. Before the hike increase, I would pay $1.00 for my oldest child. Now our 3.00 trip went to $8.00 (166% increase). As I have running around to do, we again travelled using SEPTA to the next destination (another $6.00 - since my son was not present), then travel back to get my son (finally, I was at a station to purchase tokens) so another $4.65. Then our last trip of the day to our home cost another $8.00. In total, it cost $26.65 to take my family to Temple University and back! A small example like this shows why it does not pay to be apart of the middle class. Even my usual first choice, PhillyCarShare, would have cost $48.00 (rates are at a premium on the weekends). Though SEPTA was the cheaper option, it is no longer an affordable option. Before the rate increase, I would have paid $12.00 for this trip, now I have just shelled out $26.65 (rate increase of 110%). One of the qualities that makes me special is the ability to overcome obstacles. In an economic depression, lack of capital is the obstacle.
Here are three workarounds overcome this obstacle:
1) Trader Joe's instead of the your neighborhood supermarket. I discovered Trader Joe's a few years ago we we decided to give up beef, chicken and pork (still eating fish). Trader Joe’s serves eating options as health conscious choices that also satisfy your wallet! The meats are a bit pricey but Philadelphian’s have the famous Reading Terminal Market as an alternative. On average I save 50 -90 dollars on our twice a month shopping trips.
2) PhillyCarShare ( for short trips or a family of three or more. Price includes gas, insurance and only 25 cents a mile! Another perk for business - business accounts include fee membership as compared to Zipcar’s 75.00 membership fee option.
3) SEPTA Regional Rail - Did you know commuting around the city during off peak hours is Free for transpass holders? Take your subsidy back (city transit riders subsidize suburban regional rail riders WOW!) and fill up the comfortable Regional Rail trains.

This morning my oldest child, Sahar, told me that her brother was taking a bubble bath. I thought to myself “that is strange since we have no bubble makers”. To my surprise, Nasir, my 5 year-old had used mommy’s shampoo to make a bubble bath. Apparently, the ability to overcome obstacles has reached my next generation!

How are you overcoming obstacles today?

Wednesday, May 5, 2010

Happy Fitness Month - May 2010

A quote from the book, "E Myth Revisited" by Michael Gerber - "Your business is a reflection of you". Those were powerful words to a overweight mom of three young children under the age of 5. My translation - if I want a better running business, I have to improve myself. Reading those words started me on my fitness journey in June of 2006. Even today, I still count days to when I reached my fitness goal and maintain a fitness routine so I can not return to my pre-fitness weight of 250 lbs.

As I was thinking about this month's theme, I researched on Google and found out that May is National Fitness Month. What a beautiful theme for the month of May! After the April showers, May is the "unofficial" beginning of Spring and the flowers begin to bloom. Philadelphia is a great city for runners - With the 20in24 annual race sponsored by the non-profit organization back on my feet, gener8tion run fundraiser for students run philly style, the ODDYSSEY half marathon, the ING distance run ( now Rock N Roll Philadelphia) in September, the Philadelphia marathon and the greatest race on the fastest course with 30,000 runners this year - the broad street run. These are a few of the many races that line the streets of Philadelphia and the largest urban park in the country- fairmount park and it's enchanting outdoor adventure called Valley Green.

I had successfully lost weight 3 times before but did not maintain the plan once I reached my goal. It was a partnership with SIS fitness that I learned how to lose weight and MAINTAIN my fitness goal. It was at sis fitness that I learned the importance of stretch which took me from a size 16 to a size 10. It is discipline and understanding The Slight Edge by Jeff Olsen that helps me keep the weight off 3 years later. African- American women have the highest rate of obesity in the nation, I share this story to inspire and motivate others to add a healthy balance fitness routine to their lifestyle. It is up to each of us to share our struggles and help each other that will eventually change this statistic. Join us as we celebrate this fitness Month by adding a fitness routine and setting a fitness goal to your lifestyle!

Monday, March 8, 2010

Financial Plan for your business

One of my biggest mistakes was creating a business with a financial plan that consisted of using my own money as working capital. 90% of all businesses fail because of issues with cash flow (not enough revenue coming in or too many expenses). My goal in creating the business was to love my work and be able to do it for the rest of my life. This year I will learn from my mistake by implementing something different! The greatest advantage of being a business owner is the ability to save money utilizing the tax code for business. This country was built and designed for business and the current tax code heavily favors business ownership which used to have a high cost of entry (rent, staff, overhead expenses). Now because of the network marketing industry, anyone and everyone can have access to the tax advantages of business ownership.

Lately, I have been consulting with clients who are expecting a refund from their 2009 tax return. The best advice from Christopher Chaplin, a fellow ULEC Financial Consultant and Michael Bing, Director of The Enterprise Center Capital Corporation is to save the refund (in the form of a savings account or money market account) to use as collateral for the SBA guaranteed Micro loan Program . The loan program has a maximum loan size of 35,000 which President Obama has proposed to increase the limit to 50,000. A lot of business owners do not apply for the program because of the reporting requirements. As you may already know, I am a multi-tasker (mom of three , business owner, network marketer, mentor, mentee) and I view this is an opportunity to complete the W/MBE certification requirements at the same time. Since most of the paperwork for the loan and certification is the same, we can create a financial goody bag!

The financial goody bag should have an executive summary of your business, a company profile (with testimonials and past clients), 3 years of tax returns (call 1-800-TAX-FORM to get past reported information from the IRS), a business privilege license, a certificate of organization from the state, a signature card from the business bank account and the articles of incorporation. Once this information is in the bag (pun intended!) your business is set to complete both the loan application and the state certification for Minority or Women Owned Business. My intention for the micro loan program is to create a working capital account for my business. Expenses that are incurred (like rent, salaries, cell phone, electric, etc) without regard to actually selling a product will be paid from this account. Then the revenue generated from the sales of goods and services will be used to service the debt and create a buffer fund for research and collateral for the next loan. This will remove my company from the feast or famine trap of small business to create the financial stability needed for long term success!

Happy Financial Planning!