Casual Articles - Business

Current Estimate of Economic Impact of Options Backdating
I had a discussion with Erik Lie about the experiences with Stock Options Backdating (SOBD) and the economic impact of his work. According to Erik, at least 15% of the stock options grants between 1996 to August, 2002,were backdated. Some were within 30 days of the grant date, others more egregious. The number of companies though he said that were going to come clean would be far less than 15%. Here is what we came up with.First the assumptions:1. # of companies that actually are investigated or asked by the SEC (currenty June 03 is 42) by June 2006 = 1002. # of companies that will complete the 3 step process of preliminary investigation, comprehensive audit and finally restatement of results (approximately at 30-50%) = 403. Approximate amount of time spent performing the initial investigation = 4-6 weeks.4. Approximate time spent doing comprehensive audit = 20-32 weeks5. Costs in back taxes, delisting, restatement, defending lawsuits & fines = 30% of cumulative value of option grants6. Size of company assumed on average: $500M in revenues, 2500 employees, 25+ grants under inquiry7. Grant value net = $15M per incidentIf you want to do your own analysis (how much will this cost my company), feel free t

ng a company, but there are some essential ingredients.

• Don’t Fool Thy Self. Always be truthful to yourself. Understand the risk you can withstand. Listen to what your trusted advisers are saying to you. Do your homework. Continually research, learn, revise and ask questions. Be “coachable.” Believe it or not, you may not know everything. Never blame others. Do it yourself. If you have a spouse, keep them informed.

• Network. Network. Network. Did I mention you should network? You can learn a lot from the experiences of seasoned entrepreneurs, and they are much more approachable than you think. Find a mentor. Talk to 50 strangers. No, talk to 250 strangers. Ask the advice of angels and respected service providers. If you can't find anyone who is excited about your idea, chances are it isn't worth being excited about. This may be time to reflect deeply and come up with another idea. Even if your first idea does

How Do Paralegals Get Smart?
A paralegal is by nature bright and socially adept. She has mastered language skills, and can artfully feint and parry both verbally and in written form. He is a whiz at multi-tasking. Their deductive reasoning is unparalleled.What makes paralegals so smart?· Obviously, individuals can take credit where personal credit is due. Some legal assistants are gifted or quick learners. Others just plain work hard to achieve their goals, their noses to the grindstone.· The second ingredient is higher education. Nobody ever got hurt by learning more.· On-the-job experience, i.e., baptism by fire, completes the makeup of a paralegal’s brilliance.We’ll leave gifted individuality out of the equation for now, although that might make an interesting separate article later. Somebody remind me! Moving right along to higher education: a college education is pretty much considered mandatory these days. An associate’s degree would be the minimum requirement for many jobs, and most career positions demand a bachelor’s degree. Highly specialized training in the fields of law, science and medicine, mean even more years in school.Depending on how far a paralegal wants to go in his career, he may be able to fly on his own coat ta

Ditch the business plan and buy a lottery ticket. That's what I tell new entrepreneurs who seek angel or venture funding. The odds are probably better, you will save yourself a lot of time and grief and you'll get results sooner with the lottery. If you have a great idea that can change the world, then bootstrap your way until you can prove it. Funding will come just when you don't need it.

I've mentored and helped fund dozens of entrepreneurs over the past few years. There always seems to be a “catch-22” — you need seed financing but no one will give you a cent until you have a marketable product with paying customers. Ironically, raising millions of dollars is always easier than raising thousands. Why? Because venture capitalists are drawn to those who have done it in the past. If you don’t have a documented track record, it is hard to convince someone you have what it takes to be successful.

BEYOND IDEAS. A myth taught and propagated by many top business schools is that the way to build a venture is to create a comprehensive in-depth business plan, perfect your elevator pitch and then present your PowerPoint slides to venture capitalists. If that doesn't work, you knock on the door(s) of angel investors – both organized groups and high-wealth individuals - and pitch them.

Ask any entrepreneur who has called on venture capitalists, and they will likely tell you it is almost impossible to even get calls returned. If you get lucky and are invited to present your idea, the due-diligence process will drag on for many months while you mortgage your assets, ruin your marriage and survive on hope. If you do hit the jackpot, the venture capitalists will require you to trade away your first born in exchange for an investment. And, guess what, you now have a “partner” looking over your shoulder on a regular basis – more often if you do not hit your milestones.

In reality, most business plans don't deserve funding. Most business plans are poorly written, contain spelling and grammatical errors and read more like science fiction novels. Venture capitalists receive hundreds of plans every week, and few are worth the paper they are printed on. Everyone jumps on the same new trend, or the ideas are so far out that they have no chance for success.

Additionally, most entrepreneurs don’t take the time to understand what venture capitalists are looking for. Entrepreneurs don’t know that most venture capitalists seek companies that can demonstrate a large market opportunity in a fast-growing sector. Plus, they want a company scale to a $100 million to $300 million revenue stream within five years. This means the market potential has to be at least $500 million or more, eventually-and the company needs to achieve at least a 25 percent market share. Therefore, great ideas won’t do it; it takes an experienced, proven entrepreneur and management team, outstanding execution and a receptive market that is both large and growing. It's hard for even the best venture capitalists to separate the wheat from the chaff.

So what should an entrepreneur do?

My advice to the very few with realistic, well thought-out business plans is to bootstrap. That is, go it alone without angel or venture capital funding. Just get going. Focus on validating your idea, building it and always selling for survival. You need to raise enough money to get started by begging and borrowing from family and friends. And be prepared to dip into your savings and credit cards, obtain second mortgages, and perhaps look for part-time work, consulting work or customer advances. Or better yet, you may want to keep your “day job” while you launch your idea.

There is no single formula for bootstrapping a company, but there are some essential ingredients.

Relocation: Are You Considering Relocating For A New Job?
Relocation is a big decision that you might have to make during your career.Specifically, I’m referring to relocating for a new job that you are considering taking. Certainly, the farther you are considering moving from home only adds to possible concerns that you might have about accepting the position.I’ve helped people accept jobs that have involved them moving to different cities and I’ve also helped some relocate to a new country.Depending on whether you are looking at moving to a new city/state/province or if you are moving to a new country, there are many issues you need to think about. Here are some thoughts regarding my experiences helping people relocate for a new job.Relocation to a new city or state/province1. How will it effect your family and friends? Relocating might cause you concerns if you have elderly family that you like to be close to and could also have an effect on other members of your family, too. Carefully consider any family issues that might arise. Will your new company reimburse you for trips home or do you need to cover this cost yourself?2. What are your new living arrangements and how much help will you get sorting it out? Depending on the level of your position

yth taught and propagated by many top business schools is that the way to build a venture is to create a comprehensive in-depth business plan, perfect your elevator pitch and then present your PowerPoint slides to venture capitalists. If that doesn't work, you knock on the door(s) of angel investors – both organized groups and high-wealth individuals - and pitch them.

So what should an entrepreneur do?

There is no single formula for bootstrapping a company, but there are some essential ingredients.

Advertising Balloons Take Marketing to a New Level
Regardless of what business you're in, it's safe to assume there are times when you want to catch someone's attention. Perhaps you want to drive more traffic to your retail store. Maybe you want your booth to stand out at a street fair. Perhaps you want your conference attendees to feel special and appreciated. Whether you're a retailer or an event planner, you should know that advertising balloons can take marketing to a whole new level. Advertising inflatables can take many forms. Custom balloons with your company name and logo can be used outdoors as an attention-grabbing display or indoors for decoration and as a giveaway to kids. Helium advertising blimps range in size from seven feet long to thirty feet long. Advertising balloon companies generally keep generic advertising blimps in stock (such as those that say "Grand Opening" or "Sale"), and are also able to print virtually any message on customized blimps in order to reach your audience. If you are holding an outdoor event, you may want to consider advertising inflatables designed like characters. For example, if your company is sponsoring a local baseball game, you may choose an advertising inflatable that looks like a baseball. In the same vein, patriotic advertising balloons - s

do not hit your milestones.

So what should an entrepreneur do?

There is no single formula for bootstrapping a company, but there are some essential ingredients.

Career Development - When It's Time for a Change
There's a certain courage required to hear your gut. To really be true to how you are feeling. And that is never more important than in your career. Sometimes people feel that they are not completely happy. At other times they might have a sense of distance from the business or organisation they are in.This lack of 'alignment' makes for discomfort - and many people listen to it for the whole of their careers (and lives) and yet never truly hear it.So what are the clues that can help us realise that if change is in the air, it is a good thing, rather than something to fear? Here are 19 things to look out for:- You feel bored You actually yawn a lot You get irritated easily You find yourself daydreaming (maybe even looking out the window) You get excited when something out of the ordinary happens Each year feels repetitive You get in late You get sick a lot Cynicism about your orgaisation starts to increase You team up with your own people against the organisation You have a sense of being 'locked in' You see others progress and wonder why Sunday evenings are filled with dread

erefore, great ideas won’t do it; it takes an experienced, proven entrepreneur and management team, outstanding execution and a receptive market that is both large and growing. It's hard for even the best venture capitalists to separate the wheat from the chaff.

So what should an entrepreneur do?

There is no single formula for bootstrapping a company, but there are some essential ingredients.

When Businesses Enforce Every Rule & Count Every Nickel, They're In Trouble
I look back on my career and I see with perfect hindsight how shortsighted I was in handling certain customer relationships.I’ve done it all.I’ve “fired” clients that have told little lies to me. I’ve failed to stay in contact with past clients. I’ve deliberately not used certain clients as references because I didn’t want to make them feel important, or give them any influence over my career.The list goes on.And because of my failings and miscues I’m in a good position to notice when others are being shortsighted or foolish with me.Recently, a travel company didn’t want to give me a refund because I had to reschedule a trip.I had already spent a good amount of money with this online entity, but it insisted on dinging me a huge amount for changing my plans. Obviously, it couldn’t see that I travel quite a lot, and the future value of my patronage far outstripped the amount they were penalizing me.I got more than filled up on appetizers at a restaurant that I have frequented for more than a dozen years, and I flagged the server and asked if we could cancel the entr?e. A full twenty minutes later she said it was too late to do it, and “You can always take it home with you.”Clearly, it didn’t take twenty minute

ng a company, but there are some essential ingredients.

• Prepare to work long hours in the beginning, the middle and maybe later on. Remember, it’s your baby. This means working evenings, weekends and even holidays. Your customers should determine your schedule. Not vice versa.

• Find a way to connect with your market. Speak to potential customers, analysts, business partners, suppliers and competitors — anyone who can help you understand your target market. If you can sell customers on your concept, maybe they'll help you fund it or agree to be a test site or a valuable reference. Customers don't usually know what they want, but they always know what they don't need. Make sure that there is a real market for your product or service.

• Start small and scale. Your idea may be terrific and have the potential to change the world, but you are only going to do this one step at a time. Look for simple solutions, test them, ask questions and learn from the feedback. Get your first customer. Realize revenue. Get your second, third, fourth, etc. customers. If possible, work for someone else first in your target industry. Carefully observe. Take notes. Ask questions about everything. If you're creating a software program, learn by doing some consulting assignments or create some utilities. You don't have to start with the ultimate product.

• Focus on revenue and profitability from the beginning. Watch every penny. Find creative ways to earn cash by selling tactical products, prepaid licenses or royalties. Pay employees partially in stock, if possible. And sweep the floors yourself. Look for free or leased hardware and lab facilities - from universities, government subsidized incubators, friends - any which way to avoid capital costs. Barter. Swallow your pride and ask for favors.

• Cash flow is everything. Cash flow is like the blood that flows in our veins. Without it, we are dead! It's as simple as that. That’s why happiness is positive cash flow. Manage your cash flow on a daily basis to ensure that your life-blood is sufficient for your short term survival. This means setting aside the big opportunities while you complete small deals with a short sales cycle and recurring revenue. Know when you will get paid.

• Think innovation. There is always a better way to solve a problem. There is no value in following the path of others — you're simply going to be battling established competitors on their turf. If you want to compete against Muhammad Ali, don’t compete with him in the ring. He will defeat you every time. Change the landscape, change the rules and compete against him on your own turf and under your rules.

• Entrepreneurial Solution Selling. For your business to succeed you have to persuade people to give you what you want (i.e., a sale), and you achieve this by convincing them you're offering something that benefits them. As an entrepreneur, you're always selling — whether you are marketing your product, recruiting talent, or raising capital. Find a way to incorporate your product or service into a customer solution. Therefore, learn about the customer’s needs first. Find the customer pain and cure it. If your product can’t do it alone, find a partner to complete the solution. If your product doesn’t work for the customer, let them know. Then kindly ask for a referral to another potential customer. Become the industry expert; the “go-to” person. Talk benefits, not features. If you are selling to large enterprises, speak their language. Get in step with their goals and buying cycles. Don’t ask them to do something they are not capable of, such as attempting to close on a capital acquis

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How businesses operate all depends on where they are located. Each locality has a unique sense and style of running things with regards to business. Of course, the differences are all due to the laws that govern each of these locales. A product or service could be offered legally in one country, but not in another.

If you're a small business owner, you may not want to invest thousands of dollars in billboard advertising. That doesn't mean, however, that you can't take advantage of outdoor advertising methods in promoting your business.

Every generation in the workforce today reports that work and life balance is one of the top issues for them and that they want to work in a company that supports their desire to have more balance in their life. Whatever the reason for the movement, we should be glad it is upon us.

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