Economic Indicators, Interest Rates Outlook Positive for US Businesses in 2012

Strategy Plan One

March 18, 2012 

economic indicatorsUS Economic Indicators

As an entrepreneur, review and keep track of US economic indicators and trends.  With the latest report on US Job Recovery in February, many indicators are looking positive.  A recent Bloomberg report cites positive trends in indicators such as the Gross Domestic Product, consumer confidence, the housing industry and interest rate figures.

Economic Indicators – Gross Domestic Product

The Gross Domestic Product (GDP) is the indicator of the market value of goods and services produced in the country through a specific period.  The sources in the Bloomberg report estimate that GDP will grow by 2.2% for 2012 in the US, up from 1.7% in 2011.  Good potential news in the country as recent manufacturing reports have been favorable.  Also an emphasis on “Made in the US” strategy will help boost GDP as the focus may be away from many foreign manufactured or supplied goods.

economic indicatorsEconomic Indicators – Consumer Confidence

Consumer confidence is the measurement of how positive, how comfortable the consumer is with the economy and their own personal finances.  It is usually tied to growth in consumer spending in the economy.  Business Week reported a rise in consumer confidence to a four-year high, and further stated a Bloomberg Consumer Comfort index rising.  Improved industry sectors and employment may be the reasons behind a recent rise in consumer confidence.

Economic Indicators – Housing Industry

A Washington Post article is one of those reports pointing to positive trends, showing the housing market stabilizing and in some sectors, housing sales improving.  With improvement in the housing industry, many other indicators such as employment, retail and material sales could improve.  However, in a fragile economy many of these industries are linked, and so is growth.  Factors such as the increasing fuel could have a negative impact on these recent housing market improvements.

Economic Indicators – Interest Rates

The Bloomberg report sources indicate that interest rates will remain steady and low over the next two years.  This is potentially good news for entrepreneurs who will be looking to start-up new ventures and need commercial loans.  This is also favorable news for existing businesses looking to expand and in need of additional funds.  Within your financing mix, commercial loans take up the majority percentage of all financing.  The low rates will help lower the overall cost of borrowing.

As an entrepreneur or business owner, carefully watch and review economic indicators and trends, as those indicators most likely signal potential impacts on your business and position in the economy.

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Business information, resources and tips for the entrepreneur

© 2012 Strategy Plan One


March Madness – How to Manage March Fiscal Year End Madness

Strategy Plan One

March 13, 2012 

March madness - fiscal year endMarch Madness – Fiscal Year End

In countries such as the UK(April 5th), Canada, India and Japan, many businesses are tied to their own Federal government fiscal year end of March 31st.  In the US, the fiscal year end is September 30th (so you have some time to plan here).  Whether you rely on government services and resources, or if you are a supplier or contractor to government, these fiscal boundaries can have significant impacts on your operations.

Most government agencies have financial mechanisms in place to only allow goods and services to be acquired and received in the fiscal year that the resources occur in.  This means any delay in services or goods through the fiscal year must then be concentrated in the last quarter, and most likely the last month of the government fiscal – September or March in cases of the countries listed above.  Marching madly into March madness would be an understatement.

March madness - fiscal year endMarch Madness – Relying on Government Services & Resources

The first suggestion if you rely on government services and resources, would be to avoid delays and proceed early on in the fiscal year… don’t wait until March or fiscal year end.  Government programs such as business contribution and grant programs have money dedicated to fiscal years, and must provide these amounts to the recipients before fiscal year end.  The trickle effect is that the end eligible recipient must also acquire the business goods and services within the fiscal year boundaries to be within the conditions of the grant and contribution agreement.

If you are a legal recipient of a government service or financial resource, work with your government agency early on in the fiscal year to activate agreements, to enable you to implement your project and spend the money in an adequate time frame.  This will allow you to plan and manage your project around any wrinkles that may occur.  Reporting back on fiscal year activities and spending is critically important to government agencies.

March Madness – Supplier or Contractor to Government

As we all know, government programs and procedures are ripe with problems, and public servants are left scrambling to implement poorly designed public programs.  With poorly designed programs, weak procedures around the government procurement of good and services raise their ugly heads.  These challenges in government agencies give way to significant deviation is budgetary spending.  Some government departments are left scrambling to spend at fiscal year end instead of reporting back that less than the budgeted was spent.

Suppliers and contractors experience an extreme high volume of requests for goods and services at fiscal year end.  In addition to this, the public service demands cost effective and timely services from lists of pre-approved suppliers and contractors.  Those contractors who know the system have adapted to this March madness and will be geared up to adequately supply government with their needs.

March Madness Example

In one example, a small business supplier was asked to fulfill 400 office furniture requests to fully outfit 400 offices, within the last week of the fiscal, across many Federal government branches.  This constituted 60% of the small firm’s annual business.  You can imagine the logistics behind 400 purchase orders, the staff, transportation, etc… all to be delivered to and received by government by March 31st at11:59pm at the latest.

Helpful hints to Alleviate March Madness Pressures

  • Work early on in the fiscal year and integrate operations around the fiscal year end boundaries
  • Be part of the solution and offer suggestions to improving government year end procedures
  • Be a specialist in procurement (firms actually train government agents on streamlined procurement procedures, as government has a higher turn-over rate of employees)

Fiscal year end deadlines are quickly approaching for some countries; US firms take note (you have half of a year to jump on it).

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Business information, resources and tips for the entrepreneur

© 2012 Strategy Plan One

Business Loan Criteria – How You Can Successfully Acquire a Business Loan

Strategy Plan One

February 23, 2012 


Business Loan CriteriaBusiness Loan Criteria

You have almost finished off a detailed business plan and now need to approach lending and funding agencies for possible sources for your business start-up or expansion.

You know that in your financing picture you will need a commercial loan and you know the financial institute will have business loan criteria.


There are some key lending criteria you must be aware of when you are applying for a commercial loan.  To be prepared, here are some of the business loan criteria a lender may have:Business Loan Criteria

  • Your personal and business’ financial history, including loans history
  • Your credit score
  • Your personal and business financial positions, and financial statements including balance sheets (assets & liabilities)
  • Collateral and loan security – what assets can be used as collateral or to secure the loan?

The financial institution may also analyze a detailed business plan with respect to the additional business loan criteria:

  • Projected revenues and expenditures – are they realistic, achievable, measurable, and backed by objective information and assumptions?
  • Profitability and other financial trends and indicators
  • Ability to repay the loan based on business revenue and owner’s draws
  • Strong financial controls, procedures and dedicated staff
  • Key financial personnel, including accountants and bookkeepers
  • Business and corporate structures and governance (ie: is there a strong Board of Directors in place or planned?)
  • Operational procedures and track record of operational and financial performance
  • Duration, value, type and use of the loan funds (ie: is it an operational loan, or for the sole purpose of acquiring an asset for operations, or is the loan for the complete start-up costs?
  • Financing mix (ie: personal or business equity investment plus any other sources)


As you can see, lending and business development agencies will analyze you and your business’ capabilities when making a decision on a loan, based on business loan criteria.


Sometimes you may get declined, and if that is the case, don’t give up.  Rejections mean you must work a bit more to meet criteria.  If you are successful, then you are on your way to business implementation.  Don’t take implementation lightly – every day that goes by, interest is charged on that loan.  Strong and quick implementation will help you achieve the break even point fast and may give you the ability to repay the loan faster.



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© 2012 Strategy Plan One

Super Bowl Advertising – Are Big Advertising Budgets Worth it?

Strategy Plan One

February 6, 2012 

The opinions on the value of advertising during Super Bowl are quite divided by the corporate world and consumers / viewers.  Most viewers that do like Super Bowl ads are appreciating the entertainment value of these ads.  On the other side, a consumer may see little value in some of these ads, as those ads may do very little to tell a story or promote a product or service.  Big advertising budgets obviously have pros and cons, with Super Bowl advertising at the top of the charts.

In this age of protests and occupy this and that, did any corporations get that message?  At $3.5 Million per crack, did anyone think it may be worthwhile promoting or supporting their side causes, instead of entertaining viewers?  I know that sounds boring and maybe not fits, but I can’t help to think of how many watching (the 99 %?) would focus on whether the corporate world was trying to do the right thing.  Of the “other 99%” that did watch, I am not sure they would agree with corporations spending this money on entertainment, when $3.5 Million could employ 70-100 mid-level, full-time positions.  The corporations may come back at us with the fact that $3.5 Million in advertising resulted in an additional $7.0 Million in revenue and 140-200 jobs created.  As you can see, positions are solidified on both sides.

At the end of the half time show, the crowd cheered to the “World Peace” message lit up on the field; I am sure the emotional response from most of the rest of the world viewers was the same.  And that’s the point – emotional connection with the viewers.  I am not sure that a vampire bush party did it, although with reference to the above, was entertaining (different type of connection with viewers).

A lot of things could be done on a $3.5 Million budget.  Most entrepreneurs and small businesses are not in this same league the corporate world is in.  I am sure that there will be some brand awareness or increased sales from these ads, but this only forms part of the multi-million budgets these corporations have.

On positive notes, many positions were created in the production of commercials, and with an estimated $11 Billion spent on food and retail around Super Bowl, many more.  I am sure the good people of Indianapolis benefited greatly with the ~$150 Million in direct spending in their community.  Fiat (LA Times) has reported that their ads during Super Bowl have resulted in a 138% increase in traffic to their website; logic would state this would lead to improved sales, improved company, and more employment.   All benefits from big budget advertising.

When advertising and dedicating resources, perception and optics should be key factors in your marketing budgets and should shape your own business’ or corporation’s messages to the consumer.  In tough economic times it is difficult to do anything else but to message around helping people, helping the consumer, and maybe not just to entertain.

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© 2012 Strategy Plan One

Business information, resources and tips for the entrepreneur

Free: The Benefits of Free or Trial Samples

Strategy Plan One

February 2, 2012 

If you are in a goods or services business, you obviously have reviewed several possible, different marketing activities to build customers.  In this batch of activities, one of the most effective marketing outreach activities may include providing free or trial samples.


You may think or ask yourself, why provide free samples. Or you may be thinking “this is going to cost me a fortune”.  You may be surprised at the results.


The context and delivery is different whether there is a physical location or a location off the track.  Websites or software that offer trial periods, take on another dynamic as well.  All have similarities in terms of benefits that can result from these activities.


Here are some potential benefits in providing free samples:


– Drives traffic to your location, website, etc

– Gains initial interest in a part of you suite of products, goods or services

– Builds brand recognition

– Gains interest from non-customers in close proximity

– Builds a higher conversion rate from pedestrian or visitor to consumer

– Builds relationships

– Builds immediate awareness of product or service

– No investment, no risk on the consumer side

– Experience is the richest, as opposed to an ad in a newspaper (different purposes)

– Free sampler turning into a consumer is a repeat customer

– Free offers spread like wild fire, as one customer will broadcast to others quickly

– Less costly than other forms of marketing

– “Free” is a motivator to try, later converting to buy

– Builds a database of potential customers if asking for basic info (such as a website providing trial provided you give email address)

– Providing free samples is a non-intrusive method of marketing

– Staff generally like to provide give-aways (differing operational activity)

– You convert lag or down time in your business to productive time, eventually generating more customers, more revenues and a stronger business



  1. Plan for this – write out a strategy, goals, operational issues, budget, method to capture data and results, etc.
  2. Remember to put your best foot, best product, best sample forward (i.e.: bakery sample of fresh bread, not liquidating days old bread)
  3. Ensure the free sample will be consistent with the paid product.  Do not mislead potential customers.
  4. Control your costs and scope on the offer (you know you will be able to budget for X number of free samples)
  5. Keep track of your data, results, and all important – how many new customers you gained out of this activity


You will be surprised at the Return on Investment with this marketing activity of free samples.  Keep track of the event or offering, provide a secondary offer and keep in communications with those clients, as you have created relationships.


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© Strategy Plan One 2012

Business information, resources and tips for the entrepreneur

Another 5 ways to Reduce Expenses in your Business

Strategy Plan One

February 1, 2012 

Like the previous blog, this is intended to provide some ideas for cost saving measures in business.  Too many times we have seen companies not adjust with environmental or economic conditions.  Every option should be analyzed as one cut here, could be devastating to another unit over there.  Some of these measures could be temporary until the climate improves, while other measures may be necessary for long-term survival.  As always, weigh your options carefully.  Here are some additional considerations for budget reductions:

Information Technology (IT) Reductions

As you may know, every person, every cubicle and office may not need devices.  Sharing peripheral devices, such as printers, is the way to go, linking in all computers around the office to a common device.  Many organizations and businesses have moved to laptops and docking stations, instead of buying desktops and laptops for each employee.  Ensure you company has developed standard procedures for IT acquisitions, replacement, repair, and decision making.  Request for Proposal processes will allow your organization to benefit from low cost providers.

Carefully weigh your options when it comes to printers, as some of the commercial models can cost you hundreds of dollars a month.

Travel Costs

In times of financial difficulties, travel may be discretionary.  You will need to assess the pros and cons of travel to have meetings with clients, partners or staff in your business against lower cost video or audio conference calls.  Can you temporarily afford to move to having conference calls instead of travel?  The answer in some cases may be yes.  We have known clients that have saved $5,000 in travel costs per quarter per traveler.

Marketing and Advertising

In tight economic times, consumer spending will be down, along with consumer exposure to advertising (ie: buying less, entertainment outings may be decreased).  Be smart about your advertising placements.  This doesn’t mean the complete elimination of your marketing budget, but to use the marketing dollars wisely.  If you have done accurate reporting on marketing activities you should have a track record of the best Return on Investments (ie: increased revenues and profit through the costs of each marketing activity).

Wherever possible, you may want to partner with another company and conduct some joint marketing and advertising.  You may gain access to partner resources to assist in your efforts, such as access to another company’s marketing manager, or to piggy back on existing marketing and advertising avenues.

Client Perks and Benefits

If you have been rewarding clients, this may have to be temporarily discontinued until a more favourable environment.  Whether you consider this to be a necessary marketing expenditure to keep a client, or as one of the add-ons in your goods & services package, you may need to eliminate all or part of the benefits and perks, or it could have a significant impact on your bottom line.  Are the slim resources for perks and benefits to the client or for you to survive?  Like all measures, analyze these options with caution, as a lost customer through financial restraint measures is lost revenue.

Employee Perks and Benefits

The larger your staff size, the more costly the perks and benefits can be.  It would be a good idea to keep essential benefits intact such as medical, dental and retirement savings plan program benefits, but perks such as free memberships or discounts on items the company must pay for could be eliminated.

If you are in the realm of cutting costs, implement with caution and always monitor the impacts and results frequently.  Revise if necessary if the impacts are too severe.  Through your diligent measures, your financial picture will become healthier, and your business will be in a better position to be more profitable when the economic climate become more favourable.

Strategy Plan One

© Strategy Plan One 2012

Business information, resources and tips for the entrepreneur

5 Ways to Reduce Expenditures in your Business

Strategy Plan One 

January 31, 2012 


Tough economic times require tough business and financial management measures.  In some cases with declining revenues, there is a need to balance the budgets by reducing costs.  Here are some ways to potentially assist in this balancing act:


Contracted services

In describing contracting out as a cost saving measure, there are obvious sensitivities and considerations in maintaining employment levels first.  Your employees are valued individuals.   However, instead of running up new staffing costs or continuing to support more staff than your organization needs, consider the benefits of contracting.  Contracting offers flexibilities in scope of work, deliverables, cost and timing.  Most contracts provide the ability for a manager to flick the switch on and off when services are needed.  You will have a defined cost attached to each piece of work, and unnecessary overhead costs can be reduced.


Flexible Work Arrangements

If you can maintain service levels it may be in your best interest to provide options to employees such as flexible working arrangements from home.  This could reduce office overhead as office space would not be needed.  Virtual assistants are popping up all over the place as viable alternatives, and in today’s age of connectedness, there is sometimes no need to be at a physical location.  Management from afar is sometimes challenging, but performance, quality and quantity of work can still be tracked.


Reduction of Fleet Vehicles

Depending on what business and industry you are in, you should probably review the unnecessary costs associated with maintaining a fleet of vehicles for operations.  It also depends on how frequently your employees travel.  It may make sense to move to a Personal Motor Vehicle (PMV) allowance, based on a set rate for usage (usually $0.XX per mile).



Depending on the partnership arrangements, a whole list of savings can be realized, from sharing of internal staffing resources, to marketing costs, to utilization of partner resources completely.  Do not overlook partnerships as a valuable cost saving measure.


RFP Processes

Request for Proposal (RFP) processes in any business should be considered as an essential procedure for the procurement of any goods and services for the business.  RFP processes allow you to define the scope of work and allow you to send out requests to suppliers to competitively bid on that scope of work.  Ensure you also develop an RFP assessment, ranking score card that may rank bids based on cost, experience, track record, timing, and added benefits.  If you need to find a low-cost provider to reduce expenditures, this may be the process for you.


Carefully review your processes and procedures to maximize value, while trying to maintain balance in your budgets.  Whenever possible seek the advice of a qualified professional for financial management.

Strategy Plan One

© Strategy Plan One 2012

Business information, resources and tips for the entrepreneur