Build a strong business with a Total Quality Management System (Wired)

Build a strong business with a Total Quality Management System

The TQM or EFQM Quality Management System is based on two parts. Part one is concerned with your actions. In the article it is represented by the numbers 1 to 5. The second part is all about the results you get. It is in measuring the results keeping metrics and using them as a platform for learning and adjustments. Applying both parts in a continuous fashion, that will make your business a success. We at Arguna Consulting have been consulting lots of companies into and through this process. It had been allways a "winning game" for all sides. For more information see http://www.efqm.com/ or [1]. It does not matter, if you have a small business, a medium sized company or a big cooperation.

Total Quality Management System (TQM or EFQM) Part 1

1. Leadership

You need to develop a thriving vision, a touching mission and the values of your business and act as a model for a culture of excellence. This can mean that you contribute actively and personally to improvement-actions.

2. Business strategy and business politics

Business politics and business strategy should be based on the present and future needs and expectations of all relevant groups concerning the company. Plans or methods are created for the purpose of achieving a goal.

You can collect information and process it in order to define market and market-segments, in which the organization wants to operate today and in the future.

3. Staff - Your People

The staff is rewarded, acknowledged and taken care of. Manage the recruitment and the career-development wisely. This can mean to have an ongoing program for talent scouting in your business. Produce training and development plans in order to guarantee that the staff will meet the present and future qualification-requests.

4. Partnership

External partnerships and finances are managed systematically. Increase the partnership relationship structures in order to achieve an added net value for all people involved.

Only if an increase of value is attained for all partners, will the partnership be working in a good spirit.

5. Business processes

Products and services are produced, delivered and taken care of. Another value to your business is to entertain and deepen the customer-relationships. As a businessman, you must shape the processes in the organization including those key-processes that are necessary to realize company politics and your business strategy.

Total Quality Management System (TQM or EFQM) Part 2

6. Specific results concerning the customer

Here you are to plan, to analyze and to improve and, in order to predict, how external customers perceive the performance of your business, your company.

Metrics concerning your sale and customer service-performances should be:

- Advice and support; - Abilities and behavior of the co-workers; - technical support; - product-specific trainings; - Reaction time; - Guarantee and guarantee-regulations.

7. Results concerning employees

This occasion is about measuring results, which show, how the co-workers perceive, on the basis of surveys, interviews, focus-groups, structured judgment-conversations, the business.

You can measure factors of motivation like:

- Communication; - Career-development; - Participation; - Equal opportunity.

8. Society specific results

Statements about measures that contribute to the protection and lasting protecting of resources:

- Selection of transportations; - Effects on the ecology; - Reduction and avoidance of waste and package; - Substitution of raw material and other business-means.

9. Key-results

How does the business do - with reference to its planned performances?

Finances (Example):

- Total-capital-yield; - Maintenance costs; - Cash flow; - Balance-positions; - Deduction; - Personal capital-yield; - Net profit; - Budget-observance.

How to Avoid Occupational Burnout (Entrepreneur.com)

How to Avoid Occupational Burnout

Take a timeout. Have a life outside your business. Here's what to do if you're headed toward workaholism.

By Ray Silverstein | October 13, 2008

URL: http://www.entrepreneur.com/management/leadership/leadershipcolumnistraysilverstein/article197744.html

Burnout is an occupational hazard for entrepreneurs. It's easy to get so consumed by the business that you forget to have a life.

Entrepreneurial spirit is a good thing, but not when it turns into obsession. Eventually, excessive work, worry and long hours will take a toll on your body and soul.

Either way, when you burn the candle at both ends, sooner or later your flame flickers out. That flame--your passion for the business--is one of your most valuable assets. Once extinguished, it's hard to reignite. That's why it's up to you to protect it.

How do you know if you're headed for burnout? You're at risk, if:

• You often cancel social activities because "something came up at work."
• You rarely take vacation.
• Although you profess to love golf or gardening or whatever, you seldom do it anymore.
• When someone asks you how you are, you respond by telling them about your newest product or problem at work.
• Even when off duty, you constantly check your e-mail and cell phone.

If that sounds like you, you need a timeout.

How to Avoid Burnout
The best way to avoid burnout is to achieve a work-life balance. Make a point of pursuing interests outside of business. Dedicate time every week to things that bring you pleasure, whether that means spending more time with family, starting a fitness program, resuming your favorite sport or engaging in volunteer work that's meaningful to you.

Having a rich leisure life is a healthy solution. Physically and emotionally, it's a great stress reducer. In addition, there are steps you can take to protect your "flame" at work. As an added bonus, these are healthy for the business, too:

• Set goals and priorities. Practice good time management. Don't fritter away the day on trivial tasks; do your most important projects first.
• Delegate. Hand off smaller projects and focus on the big issues. If something prevents you from delegating, address it. (For example, if you pay the bills because you have a problem trusting others, set up a two-person payables system that requires dual signatures.) Delegating helps employees grow.
• Take on exciting, new projects that drive the business forward. Enrich your entrepreneurial spirit by growing in new directions.
• Keep learning. Read new business books, join a peer advisory group or attend a seminar. Do things that keep your mind active and your enthusiasm high.

Bouncing Back
What if it's already too late and you've lost your spark? Don't fight it or ignore it. Don't minimize its importance. The best thing you can do is take some time off and figure out how to regroup. You may come back renewed or decide it's time for a change.

One entrepreneur I know became so overwhelmed he jumped on his boat and literally sailed away. Ultimately, he concluded that it was time to sell his company. If your business makes you that unhappy, then that's the healthy thing to do. Better yet, never let the situation get so dire.

Burnout is Contagious
If the boss is miserable, you can bet your employees are miserable, too. No matter how you try to mask it, your people will be able to read you. And when that happens, morale will plummet--and right behind it, productivity. For a small business, an owner's burnout can have huge, sometimes fatal, repercussions.

You have an obligation to your employees to take care of yourself. As their leader, you set the pace. That's yet another reason to protect yourself against burnout by seeking balance in your life.

There is such a thing as too much of a good thing, and being a workaholic is one prime example. And the irony of it all: You'll be more productive in business when you invest in your life outside it.

Ray Silverstein is the "Leadership" columnist at Entrepreneur.com and president and founder of PRO: President's Resource Organization, a network of advisory boards for small-business owners. He is author ofThe Best Secrets of Great Small Businesses. Find out more at ProPres.com.

Evade the Copywriting Text Trap (Entrepreneur.com)

Evade the Copywriting Text Trap

Use these 5 tips to give buzz words the boot and focus on actionable messages.

By Susan Gunelius | October 02, 2008

URL: http://www.entrepreneur.com/advertising/article197424.html

People are busy--too busy to read or listen to copious amounts of marketing copy. The key to writing effective copy is to get to the point--quickly--using language consumers are likely to respond to. That means every piece of copy used in your advertising and marketing materials should be there for a specific reason. Each word and sentence must work together to create a path for consumers to follow and lead to a way to take action.

Don't risk losing a consumer's attention with copy that drones on with extraneous information. Instead, focus on action-oriented messages that convey the benefits and differentiators of your product, service or brand. Too much text, called the Text Trap, creates visual and audio clutter in consumers' minds, which increases the possibility that they will forget your most important messages.

By writing succinct, actionable copy that speaks to your target audience, you'll boost your marketing response rates, the return on your advertising investments and your profits. Here are five ways to avoid the Text Trap in your copywriting:

1. Remove filler words.
   Extraneous words should be deleted from your copy. Words like that, really and very don't enhance a message. Instead, filler words slow down the pace at which your busy audience can read or listen to your copy. A slower pace equates to a lower percentage of consumers who will stick around to read or hear your entire message. Keep them interested and make it easy for them to get to the next key message by omitting filler words.
   
2. Put your thesaurus down.
   While it might be tempting to fill your copy with gigantic, $10 words, big words impress few people other than your high school English teacher--and probably not even her. It's the messages in your copy that matter, not your ability to use a thesaurus. Big words slow your audience down, meaning fewer people will actually get your message. The tone of your copy should match your audience, and you should write for your audience, not your report card.
   
3. Leave buzz words at the office.
   While jargon and buzz words work in some B2B copy and technical marketing pieces, compelling copy doesn't showcase your ability to use the latest buzz words. Your audience is unlikely to respond to marketing messages teeming with words like grassroots, methodology and paradigm. Speak to them in a tone that meets their expectations and remove jargon that does little more than bore your audience.
   
4. Focus on actionable messages appropriate for your target audience.
   While it may be tempting to include every message about your business in your marketing copy, don't do it. Each marketing piece has an intended audience and goal. Those two pieces of information should make it easy for you to pick the most compelling messages about your business. Remember, too much information works against you when it comes to copywriting. Consumers are busy. If your copy doesn't speak directly to them within a few seconds, they'll move on to the next advertisement or marketing message with nary a backward glance at your campaign.
   
5. Use the Red Pen Rule.
   After writing the copy for your marketing piece or advertisement, take your red pen and delete 30 percent of it. What's left will be far better than what you had before you took your red pen to it. Of course, 30 percent isn't a required amount, but the point of the Red Pen Rule is to delete a significant amount of your copy so only the best, most targeted, most actionable messages remain. These are the messages your audience is most likely to respond to, and these are the messages that will boost the return on your advertising and marketing investments--as well as your profits.

Bottom-line--keep your copy simple. You never want your audience to say, "Hurry up and get to the point." If there's too much information to absorb, consumers will lose interest. Each word in your copy should help create a roadmap to bring consumers to the ultimate goal of making a purchase, calling for information and so on. Don't detour from that roadmap.

Susan Gunelius has more than a decade of marketing and copywriting experience working for some of the largest companies in the world. Gunelius is an author, freelance writer and marketing/branding consultant. Her latest book, Kick-Ass Copywriting in 10 Easy Steps, is now available from Entrepreneur Press.

From Storeroom to Store Shelves (Entrepreneur.com)

From Storeroom to Store Shelves

Use these 9 tips to craft a pitch that will have retailers filling out purchase orders.

By Jennifer Grzeskowiak | October 13, 2008

URL: http://www.entrepreneur.com/sales/salestechniques/article197734.html

Neil Reilly, 46, a former commodities trader, used to walk the streets of Manhattan after the markets closed, trying to pitch his organic, kosher dog treats to retailers. Now Manchester Center, Vt.-based Wagatha's, co-owned by Reilly and Norman Levitz, 52, is projecting $1 million in sales for 2009. Reilly, like other entrepreneurs, learned that getting a product onto store shelves takes patience, persistence and a strong pitch.

Even connecting at first with a buyer for a larger retailer can take time and multiple phone calls. If cost allows, send your product to potential buyers before calling. When you do make contact, they will already have your product in hand.

Once you have a meeting set up, consider these nine tips for getting your product into stores and the hands of customers.

1. Address how your product compares to similar ones the retailer already carries. Adding a new vendor can be costly for a retailer. Buyers are taking a risk by agreeing to dedicate limited shelf space to a new product. Compel them to take a chance on your product by showing why it's better. Maybe your headphones have exceptional sound quality, a higher-than-average margin and come in five different colors.
   
2. Discuss how you and your product fit in with the retailer's culture. "The people behind the product and their mission are just as important as the product itself," says Harvinder Singh, a regional local products forager for Whole Foods. "We look for products that are made with high quality, organic ingredients, have a low carbon footprint and are socially just, meaning the growers and producers are paid fairly and treated well." Also consider the retailer's image: Is it high end or budget conscious? Trendy or traditional?
   
3. Demonstrate demand for your product. Retailers, especially large ones, often calculate revenue per square inch of shelf space. They want to know before they agree to carry your product that there's going to be demand for it. Tell them where else your product is carried or how many units you've sold through your website. Maybe a local boutique only bought 20 of your necklaces in an initial order but sold out of them in three days. Also, know your market. This includes the age, gender, income and interests of your target customer. Compare how your market overlaps with that of the retailer.
   
4. Show your passion. "If it's a quality product, you just have to tell your story," Reilly says. "You have to be really honest and believe in yourself." As part of his pitch to retailers, Reilly often will eat his dog biscuits, which are made in Wagatha's own facility.
   
5. Present a finished product, including packaging. Retailers want to know everything about your product. If you can't have your packaging ready for the pitch meeting, at least know what it's going to look like. Include a logo and artwork, and what materials you're going to use. Keep in mind that some retailers will be looking for recyclable packaging. Reilly says that some home stores and hotels he's pitched his dog treats to have been more interested in the packaging and what the product is going to look like on the shelves.
   
6. Address how your product will fare in difficult economic times. If your price point is comparable to or higher than your competition's, focus on why people still need or will want your product. Retailers, including Whole Foods, are focused on finding the next big trends, Singh says.
   
7. Discuss your ability to deliver. Buyers often are given a set amount of money to work with. If you tie up their funds and fail to deliver your product on time, you are wasting their shelf space and costing them money. Be honest with yourself and the retailer about how much of your product you can deliver and when. Failing to deliver on time also could result in hefty fines.
   
8. Be prepared to discuss your business plan. Major retailers in particular will want to know that you can continue to deliver your product as promised and that you will be professional to work with. "I love people with ideas and passion, but there's a whole other side to it," Singh says.
   
9. Don't exceed the allotted time, and leave enough time for questions. If buyers have important questions about the viability of your product and don't get to ask them, they might go with a surer thing.

Be strategic about the retailers you meet with. Major chains like Target, Best Buy and Costco may seem like a gold mine. But first realistically evaluate your ability to supply them with the amount of product they need. Consider starting smaller to gauge demand for your product. Also look for companies with programs supportive of startups. Whole Foods, for instance, has a Local Producer Loan Program for small, local producers.

Also consider hiring a manufacturer's representative or agent, someone to do most of the legwork for you and who doesn't get paid until your product gets placed.

"Go out and hit the street," Reilly says. "Just make sure you believe in your product."

The Wisdom (or Not) of Non-Compete Contracts (Entrepreneur.com)

The Wisdom (or Not) of Non-Compete Contracts

Here are some things to consider before hiring your first salesperson.

By Ray Silverstein | March 19, 2008

URL: http://www.entrepreneur.com/management/leadership/leadershipcolumnistraysilverstein/article191760.html

Companies use non-compete contracts to protect their interest and restrict ex-workers from capitalizing on contacts or information obtained during their employment.

Typically a sales-specific non-compete contract says that, should a salesperson leave the company, he or she cannot take the employer's clients with him/her. The contract restricts the salesperson from doing business with clients for a specific period, usually a period of two or three years.

Sounds logical, right? After all, you've worked hard to build your client base, and you have every right to protect it.

The problem is non-compete contracts offer several drawbacks. For one thing, they aren't popular with savvy salespeople who may be reluctant to sign them. As a result, you may have trouble finding the kind of salesperson you want.

Furthermore, such contracts are very difficult to enforce after-the-fact. It's not like you can follow your former salespeople around and monitor their activities. And even if you did have proof that someone violated the contract, do you really want the hassle—and bad press—of taking a former employee to court?

The reality is non-compete contracts don't always fare well in the courtroom. Every state has its own definitions of what a fair contract looks like. Some states strictly limit such contracts; in California, they're prohibited altogether. In the past, non-compete contracts have been viewed as standing in the way of an individual's right to earn a living.

So if you're going to insist on a non-compete contract, make sure it's in strict compliance with state law.

But before you pick up the phone and call your attorney, consider an alternative arrangement. Instead of a non-compete contract, how about a 300 Percent Compete Contract?

Under the 300 Percent Compete Contract, ex-salespeople have the right to take your clients with them. The catch? They must pay you for the privilege, and pay you handsomely—300% of the client's lost annual billings, to be precise.

A number of entrepreneurs in my group advisory boards have implemented this concept, and they report good results. For one thing, salespeople are less reluctant to sign them. For another, they're infinitely easier to enforce. After all, it's easy to determine the actual financial value of a client's billing. In addition, it alleviates a fair amount of the emotional turmoil triggered by these situations.

Look at it this way: If an employee—and a client—want to leave you, you've pretty much lost them already. But instead of clutching a damp hankie, you'll have fistfuls of dollars to dry your tears. Which would you prefer?

Ray Silverstein is the "Sales" columnist at Entrepreneur.com and president and founder of PRO: President’s Resource Organization, a network of advisory boards for small-business owners.

Where Businesses Go for Internet Reliability (NYT)

Where Businesses Go for Internet Reliability

By DAVID STROM

THE premier addresses of the Internet age include 56 Marietta Street in Atlanta, 210 North Tucker Avenue in St. Louis and 111 Eighth Avenue in Manhattan. They go by a variety of names, like carrier hotels, Internet peering points and co-locations. And while they may not be located in the fanciest office buildings, and many of them are not in the best parts of town, they are the best places for businesses to get online, taking advantage of huge swaths of reliable bandwidth at a relatively low cost.

Small businesses can lease space in a co-location building and use their own server computers and other hardware to operate Web sites, for example, or handle e-commerce. Or more likely they can use the services of companies like Slicehost.com, which has its own servers at the St. Louis building and provides access to “virtual private” areas on them for fees starting at $20 a month.

Co-location buildings like these sit at major crossroads of Internet connectivity. Most, like 1102 Grand Boulevard in Kansas City, Mo., have electrical power that comes from more than one connection to the power grid, along with battery backups and diesel generators to further protect against blackouts.

At 111 Eighth Avenue in Manhattan, between 15th and 16th Streets, there is an elevator big enough to lift a fully loaded truck to each floor, in case a customer has lots of equipment to deliver. But reliable Internet connections are the main appeal of co-location buildings, particularly for companies that earn significant revenue from their Internet businesses, which need to be running all the time.

“We wanted to make sure that our largest customers, like Domino’s Pizza, could have ‘five nines’ up time,” or 99.999 percent reliability, said David Schenberg, chief executive of BusyEvent in Chesterfield, Mo., which provides automated communications, online invitation and meeting registration services. BusyEvent uses Xiolink.com’s data center at another St. Louis building and has not had a single service failure, Mr. Schenberg said.

A second attraction is location, but not in the sense that real estate agents typically use. In this case, it means nearby fiber-optic connections to Internet carriers, so that businesses can avoid the expense of installing their own fiber-optic cables.

Fiber-optic connections are vital for many businesses because they offer the highest and most reliable bandwidth. Another advantage of co-location, said Joel Snyder, senior partner at Opus One, a co-location services provider in Tucson, Ariz., is that there are usually multiple fiber-optic connections to multiple carriers, so Internet traffic can be handled efficiently, particularly during peak times.

Companies like Opus One can cater to the needs of a variety of customers, from the smallest startup to multinational corporations, depending on their needs.

One challenge for businesses that use co-location is getting comfortable with the loss of some degree of control over computer services. Another, for those companies that decide not to use their own hardware, is finding the right server company to fit the circumstances. Some are thousands of miles away, and a business may want servers located closer to their home base.

But distance can also be an advantage. Many overseas businesses are buying services at American co-locations because they want their servers closer to American customers.

“We sell a lot of our space to Australians,” Mr. Snyder said, “because the cost of their Internet connectivity to the U.S. is higher than if they were to locate their servers here.”

Some server providers offer equipment management services, including backups, updates, routine maintenance and troubleshooting. Others, like Slicehost, offer no extras: just “ping, power and an Internet pipe,” to keep costs down.

“You have to know what you are doing,” said Matt Tanase, Slicehost’s founder. “We aren’t going to help you troubleshoot your applications or set up your database servers.”

If you need one or two servers, it makes sense to have the co-location provider manage the equipment. But if your business’s needs increase, there are companies that specialize in keeping servers running and updated.

“Running your own servers is like a pizza shop trying to fix their own delivery trucks,” said Malcolm Mead, chief executive of the Mead Group, a co-location provider in Seattle.

The biggest challenge for the people running co-locations is persuading business owners that they can do better by outsourcing their server capacity.

“You don’t want to treat your servers as pets,” Mr. Snyder of Opus One said. “You shouldn’t have to see them and touch them very often, and having them in a co-location facility gets you out of doing things the sloppy way, because it makes it more difficult to get to your computers.”

Women Business Owners Seek Better Access to Federal Contracts (NYT)

Women Business Owners Seek Better Access to Federal Contracts

By ELIZABETH OLSON

WASHINGTON — Christine Bierman, a small-business owner, has been to the Rose Garden and met President Bush. She has received awards from the federal government for how she runs her company.

But after 28 years in business, Ms. Bierman says, she has yet to win a six-figure federal contract that would catapult her company, a distributor of industrial safety supplies based in St. Louis, into the higher-earning ranks.

And she is not alone in her frustration. Last year, female small-business owners were awarded only 3.4 percent of annual federal contracts — even though the latest statistics show women own almost half, or 10.1 million, of small businesses nationwide, and generate about $2 trillion in revenue.

Women have spent years trying to open up the system of awarding government contracts. The Women’s Business Ownership Act, which laid the groundwork for women to participate in government contracting, is now 20 years old, yet women are still getting only a sliver of the contracting pie.

In 2000, Congress directed that female small-business owners receive 5 percent of federal contracts each year, now estimated to total $435 billion. But putting that mandate into effect has been a continual battle between lawmakers and the Bush administration.

This week, the Small Business Administration posted the final version of the rule meant to deal with Congress’s order. The rule said the 5 percent set-aside covers contracts in 31 industries, an increase from the agency’s original proposal to include only four industries, which Senator Olympia J. Snowe of Maine, the ranking Republican on the Senate Small Business Committee, called a “sham proposal.” Still, the new number represented less than a third of the 140 industries eligible for government contracts.

Ms. Snowe was among the 16 female senators to write to S.B.A. last week to urge a better remedy for the shortfall in contracting opportunities for women.

The push for more contracts for female-owned businesses comes as increasing numbers of women are running their own companies and looking for ways to expand. Many women, including Ms. Bierman, argue that a lack of defined guidelines for contracts for female-owned businesses — along with complacency, inertia or just the inconvenience of switching suppliers — have reduced the opportunities for women.

“I’ve knocked on doors for 20 years,” said Ms. Bierman, whose company, Colt Safety, sells products including safety glasses, masks and respirators. “But procurement is a confusing and time-consuming maze that’s so difficult to get through.”

Organizations like Women Impacting Public Policy, a bipartisan group representing about 500,000 businesses owned by women, have started programs to help women navigate the complicated contracting system.

“Federal government contracts are an enormous opportunity for women to help increase their revenues by billions each year,” said Barbara Kasoff, president and chief executive of the group. “Right now only 67,000 women-owned businesses are registered with the government, which is less than a quarter of the total number.”

Her group’s program, called Give Me 5, started with Open, the small-business service of American Express. Give Me 5 provides a comprehensive brochure, seminars, events and online education to women business owners on how to register, qualify and identify their areas of expertise for federal government contracts.

The United States Women’s Chamber of Commerce and the National Association of Women Business Owners also offer assistance. And last May, the S.B.A. began running an online discussion and offering an online course to encourage women — more than 8,000 signed up — and other groups to participate in the contracting process.

Still, many women remain flummoxed by the system.

Laurie Simon, chief executive of Ombrella Consulting in Seattle, which helps companies like Microsoft introduce new products and systems, said she was ready to compete with big companies for contracts but was not sure how to go about it.

“We’ve taken the first step — registering on the C.C.R.,” Ms. Simon said, referring to the government’s Central Contractor Registration database, which requires information like the company’s taxpayer identification number from the Internal Revenue Service and determines the firm’s areas of expertise under a system of six-digit codes.

The new Give Me 5 program offers a checklist with all the registry’s requirements so that small businesses can assemble all the financial data needed to complete the process more smoothly and rapidly.

Mary Schnack, president of Mary Schnack Media Services in Sedona, Ariz., enrolled in an early version of the Give Me 5 program and said it pushed her to “get my financial house in order.” That made registering easy because she already had obtained items like her company’s unique identifying number from Dun & Bradstreet. And now she is moving on to search for subcontracting opportunities for her public speaking and media training service.

“In the past, I had looked at federal contracting, but I felt my business was so small that I wondered what was the point?” she said. “I could spend the same amount of money on business I really had a chance to get.”

But in the last five years, she said, she has been looking harder at government contracts as a way to expand her business. When she meets other female business owners, she said, “We all talk about how difficult it is to track down what’s available and to know exactly who you are competing against.”

Ms. Schnack recently sat down with Ann Sullivan, head of government relations for Women Impacting Public Policy. Ms. Sullivan helped her figure out which government codes applied to her business, who her competitors were and how to go about combing through fedbizopps.gov and other online sources to find contracts that she could realistically bid for.

Female business owners said one of the stickier points in the contracting process was figuring out whether to be certified, which means accumulating certain detailed financial information and dealing with an on-site visit from the certifying agency. Groups like the United States Women’s Chamber of Commerce certify female-owned businesses. The National Association of Women Business Owners plans to start a certification service with the Women’s Business Enterprise National Council.

The government’s central contractor registry allows small-business owners to certify themselves, but some have raised questions about whether all such entries are legitimate. The women’s chamber of commerce group issued a report last week that said 27 of the 50 firms owned by women listed as the top recipients of government contracts had male chief executive officers. Margot Dorfman, the chief executive of the women’s chamber, said that finding undercut the credibility of the self-certification program.

The key, Ms. Kasoff and others say, is for Congress to pass new legislation specifying firm guidelines for federal government contract awards to firms owned by women.

“This is the area for growth, and we need to understand it,” said Ms. Kasoff who said that in the next year, the new Give Me 5 program was seeking to double, to nearly 150,000, the number of women registered as eligible for government contracts.

Economy Stalling Your Small Business? Shift Gears (NYT)

Economy Stalling Your Small Business? Shift Gears

By BRENT BOWERS

THESE may not be the best of times to start or run a small business, but Christopher Hazlett’s struggle to hang tough through one crisis after another may hold lessons for the legions of entrepreneurs caught between a stumbling economy and crippling credit squeeze.

At the very least, his upbeat attitude should offer them solace, and maybe even a bit of inspiration.

It has been a rough year for Mr. Hazlett, founder and president of Integrate Consulting L.L.C., a software design firm in Hoboken, N.J. First, during the market turmoil last January, Johnson & Johnson, Merrill Lynch and almost all his other clients walked away from their contracts in just two weeks. His company’s revenue projections for 2008 fell from six figures to close to zero.

Then, he spent a disheartening four months trying to find new business.

Admitting defeat, he made a big gamble to save his company by switching from his comfortable perch of doing software design for Fortune 100 companies to the uncharted territory of developing a Web product for a market that includes churches and synagogues.

His timing is not optimal. He is introducing a software program called Event Clipboard on Friday in the midst of the American financial system’s current nervous breakdown.

Is Mr. Hazlett, 31 years old, nervous?

“Most of all, I feel exuberant,” he said. “I wake up in the morning saying, ‘Yes! I wonder what’s going to happen today?’ ”

It helps that the entrepreneurial urge is in his genes. He formed a theater group in college and made money creating publicity posters and Web sites. Though he weighed a career in acting or the Navy, “I always knew I wanted to start my own company and create something from nothing,” he said.

In jobs after college as a fund-raiser and later as a marketer for a couple of architectural firms, he said, “I got bitten by the bug to make software to make it easier to do things.” Once, he said, for example, he redesigned an operational system that allowed his employer to create photo portfolios for clients in five minutes instead of eight hours.

He said he also inherited his father’s fierce work ethic. He started Integrate in June 2005 while simultaneously studying for a master’s degree in communications at Rutgers University and holding down a part-time job as a data analyst at Johnson & Johnson.

Finally, he exhibited that tell-tale trait of the entrepreneur, boundless self-confidence. After graduating in December 2005, with hardly any savings, he threw himself full-time into Integrate, with Johnson & Johnson as his first big customer.

“Not that I had any huge background in computer science,” he says. “I just knew what I could do.”

He had already learned from a couple of mistakes in his start-up’s early stages. The first was creating a bar code system to manage inventory for a machine shop. The problem was that the owners did not show much interest in it. The lesson, from that, he said, was, “If people aren’t going to use it, don’t make it.”

The second was signing a lopsided contract with a client. The lesson there, he said, was to find a good lawyer and make sure you know exactly what you are getting into when you enter into an agreement.

In 2006, with all his energies centered on Integrate, he prospered. He signed a big contract with Merrill Lynch and a few smaller deals. He hired an assistant, who, like him, worked out of her home. The money rolled in — in the low six figures in 2006 and again in 2007, with phone bills his biggest expense.

But while all this was happening, Mr. Hazlett was also committing a classic blunder of the fledgling entrepreneur: putting his eggs in too few baskets. He said his gut instinct warned him of the danger, but after landing a big job with yet another big corporation last November, he stopped worrying.

Then, it all fell apart. “In early January, we had 12 months of work in the pipeline,” Mr. Hazlett said. “But in just two weeks, all our active clients backed out of their contracts. We went from euphoria to fear.”

After a futile search for new customers, he decided to develop a new product, event-planning software for small and medium-size organizations. Using the open-source Web framework Ruby on Rails, he spent six months writing and fine-tuning Event Clipboard.

“I have a lot of faith in it, in my gut, based on my research,” he said. “We fill a niche that didn’t exist,” which he defines as groups within large corporations, nonprofits, including houses of worship, as well as small and medium-size businesses. Smaller organizations can subscribe to a personal account, which costs $20 a month, while the most advanced version sells for $160.

So far, Mr. Hazlett said, he has recruited nearly 50 beta testers, “and their reaction is very positive.”

The day of reckoning approaches. But he said that the road he had traveled so far had hardened him for whatever lies ahead. These are among the other lessons for running a business that he has absorbed over the past year, he said:

¶Be frugal. Mr. Hazlett never sought outside financing, and has no debt. In Integrate’s heyday, he thought about renting an office, but concluded there was no compelling reason to do so. He cut his salary last year, and even so, puts much of it into his personal savings account.

¶Switch to a new product or service if the one you are marketing is not selling. “I saw that we could only do one of two things: change or close our doors for good,” he said.

¶Be patient. “It takes time to get it right,” he says.

¶Look for opportunity in tough economic times. It was corporate cost-cutting that hurt him last year, he says, and so he is marketing Event Clipboard as a tool for the budget-conscious to save money.

“I’m hoping that by the end of 2009 we’ll have 250 accounts,” he said. “I think it’s going to go.”

Do Rising Costs Point to Domestic Manufacturing? (Entrepreneur.com)

Do Rising Costs Point to Domestic Manufacturing?

Don't assume your next invention will be produced overseas. Several factors make the U.S. a prime place for production.

By Tamara Monosoff | October 10, 2008

URL: http://www.entrepreneur.com/startingabusiness/inventing/inventionscolumnisttamaramonosoff/article197596.html

In an economy that looks gloomier by the day, a couple of important questions spring to mind: How, specifically, are entrepreneurs affected? What are the most important things to know as you move forward with your invention or product idea?

First, understand that it’s not the easiest environment for a small inventor right now. On the other hand, it's not an impossible environment, either. By being aware of the current market conditions and understanding how they will affect your business, you can continue to make wise decisions that will protect your company and your investments in the long run.

Rising costs, in multiple areas, are the biggest factor inventors and entrepreneurs need to consider. It's imperative to understand how these costs (some less obvious than others) will ultimately affect your bottom line, and to factor in all the costs before moving forward. For example, while a large number of entrepreneurs formerly used Chinese manufacturing vs. U.S.-based production based on cost savings, today the price gap is shrinking due to a number of factors, including:

1. The rise in the price of oil. If you're manufacturing in China, the most dramatic affects of skyrocketing oil prices will be on your shipping costs. After all, you pay to transport them much farther than you would if you manufactured domestically. In addition, rising oil prices also affect production costs, as petroleum is used to fuel manufacturing applications such as producing plastic goods.
   
2. New standards for testing products. After incidents like last year's recall of Mattel toys produced in China, many retailers now require additional independent testing of goods produced there. And no matter where you produce your products, retailers also demand that manufacturers carry liability insurance. This can cost thousands of unanticipated dollars per year, adding significantly to your cost per unit. I've known inventors who paid for entire manufacturing runs, only to learn about the necessity of liability insurance after the fact (and at a point when their working capital all but ran out).
   
   For more information on independent product testing. including requirements, visit intertek.com or bureauveritas.com. To learn more about liability insurance, check your local phone book for insurance brokers, who can direct you to appropriate individual insurers.
   
3. Chinese manufacturers are less flexible. It's less common to find offers of smaller manufacturing runs and lines of credit from Chinese manufacturers. They temper their risks by enforcing stricter manufacturing and payment standards, even for trusted businesses with whom they have long-standing relationships. And that can put the squeeze on already cash-starved companies.
   
4. The U.S. dollar is severely weakened. Simply put, $1 doesn't go nearly as far as it used to in foreign markets, meaning you need more money to pay for the same production run of goods you bought six months or a year ago.
   
5. Price of labor and materials. No matter where your manufacturer is based, other costs are rising, including the cost of labor (even overseas) and materials.
   
6. Retailers aren't cutting any slack. Even though it may be costing you a lot more to produce your goods, you've got very little wiggle room to increase your sale prices to retailers. That's because retailers won't budge much when it comes to raising their prices--their consumers expect bargains and value. And that means you take the brunt of the increased costs while your profit margins shrink.
   
   So what can you do in this environment?

1. Consider domestic manufacturing. When you add in all the newly increased costs of doing business with China and perform a careful cost comparison, your cost to manufacture domestically may be very similar. And you'll take out the hassles and complexities of dealing with an overseas manufacturer, including time differences, travel, language and culture differences, freight and customs issues, and more. Yet, don't rule out having a mold made overseas, shipping it back to the U.S., and doing your production run here at home.
   
2. Use a profit-margin calculator to figure out your real costs from the outset. Taking a product to market is a business based on a product. Therefore, you need a business plan. Don't forget to include factors like freight, tooling costs, product liability insurance and product testing, all of which will affect your per-unit price. You don't want to price your products so low that your profits become insignificant or they disappear. You can access a calculator at mominventors.com. (Sign up for free Gold Membership to access it.)
   
3. Take it slow. Ask lots of questions. Don't rush into any sudden decisions based on yesterday's market factors. Before buying that ticket to China, stop and examine other options.
   
4. Know that this is simply a cycle. Eventually, this business cycle will turn around. Use the time to your advantage to grow conservatively and wisely. While large competitors are in downsizing mode, you can carefully and thoughtfully develop your product so that when things turn, you'll be ready to change with the conditions.

Tamara Monosoff is Entrepreneur.com's "Inventions" columnist and the founder and CEO of Mom Inventors Inc., a product development and manufacturing company. She's also the author of The Mom Inventors Handbook: How to Turn Your Great Idea Into the Next Big Thing and Secrets of Millionaire Moms.