Well, I’m not sure. And no one else appears to know either.

But here’s the reality. There are a lot of tea leaves, breadcrumbs, or signs that seem to be
pointing in that direction.

Why is it important for us, as small business owners, to keep an eye on potential indicators? One key reason is so we have some time to prepare for the next one, unlike the jolt we got in the Spring of 2020. We were required to shut down immediately for a far longer period of time
than what was initially expected.

Preparation time is not a bad thing. Smaller (typically private) companies, unlike much larger or publicly traded companies, do not have the capital reserves to sustain their businesses any more than 3 to 6 months if the economy tumbles. Unfortunately for many small companies, it is far less time than that. Following are some things we can do to help mitigate the ravages of a lengthy downturn.

1. Meet with your accountant to get a professional perspective of what your working capital position is. Hint – just like the valuation of your business, your working capital is likely not as strong as you might think!

2. Meet with your banker to find out if you can restructure any existing loans for longer terms or lower interest rates. Or to find out if you qualify for a new loan at this time.

3. Meet with your attorney to determine if there are any contracts or ‘agreements’ that could be restructured if necessary. Especially contracts/agreements that have payment terms, either outgoing or incoming that would be beneficial to alter in case of a business downturn.

4. Consider having a part time business that could be scaled if needed. Not every company is going to be handed the opportunity to make masks or ventilators. A second source of income that be expanded when needed can be greatly beneficial if the primary business’s earning power has been compromised. {Personally, I’m considering obtaining a real estate license. This license enables the holder to receive a commission for any real estate transaction the holder is a party to. A real estate license could be of value to my business because clients I work with are prone to engage in commercial real estate transactions, transactions I could be a party to.}

The official definition of a recession is two or more quarters of declining GDP (Gross Domestic Product), coupled with several other factors. For SMBs (Small and Medium Businesses) like mine, the definition of a recession is much simpler. Revenue and profitability begin to decline and keep declining in an atypical fashion. Customers become late payers. The next engagement we believed was going to be started in the next two weeks suddenly vanishes. And our cash flow begins to suffer. For smaller businesses this could begin to occur 3 weeks into the first of the Government’s two month or longer measurement cycle.

Following are some breadcrumbs, tea leaves or signs you can check on that may tell you long before the GDP cycle confirms what you already are experiencing.

1. Keep an eye on how the major stock markets are doing. If they are closing lower more days than they are staying stable or growing, that’s usually an indicator of either a downturn or a ‘correction’ (which can be almost as bad!). If investors are bailing on stocks, their believe is that either bonds are a safer investment, or that they’re going to sit on cash. Neither of those are encouraging signs. Also, the stock market has almost always preceded the actual upturn or downturn well in advance of the actual downturn or growth spurt.

2. Occasionally read some intel that will tell you whether or not the experts think the stock market is ‘overheated’. That can be a little tricky because of the number of factors involved in that analysis. But over time, if most experts are saying the market is overheated, you can almost count on a correction (at least) occurring, if not a recession.

3. Pricing of goods and services. This one is easy to track since all of us are consumers! Prices of virtually everything are UP! The question is, how much further are they likely to increase? Rising prices without an increase in value leads to the dirtiest of dirty words – inflation. Ultimately inflation leads to an increase in interest rates by the FED. Increasing interest rates tend to do two things. First, capital becomes more expensive, and second, inflation tends to hold or subside – but not without a cost to the economy.

4. The minimum wage issue. While a legitimate issue, right now is not a great time to deal with it, as prices are already rising faster than desired. Broad Government mandated increases in compensation will further increase the cost of goods and services. This will result in an increase in consumer costs for goods and services. Since income for most people is largely fixed, spending will decrease – which furthers the economic downturn.

5. Health care costs, including medicines. Unfortunately, there is no good news on this issue now. The question is will these increases level off or continue to increase?

6. Supply chain. Right now, it’s in trouble. The Truckers Association estimates the industry currently needs at least 60,000 long haul drivers. An astonishing number! This shortage means needed deliveries will continue to be delayed at best. Delays or non-delivery creates scarcity, and scarcity creates rising prices.

7. Unemployment numbers. This one is a bit tricky, because there are a lot of numbers claiming to be the “official” amount. Consider checking with several sources. There are a few things we do know at this time. New hires are not meeting monthly expectations. This means the economy is not growing currently at expected rates. At best it may be holding steady. We also know the construction industry lost 30,000 workers last month. This is attributed to a lack of timely delivery of materials for new housing. Bad news at a time when housing is both overpriced, and the fact that the country is 500,000 units short of expected demand.

In closing, there are a lot of negative signs re: the direction of the economy. We might recover, we might stay stagnant, or we might head toward a recession. The point is it is prudent to be aware of what might happen and begin to take needed steps to survive if the worst case occurs.

©June 17, 2021
Business Development Associates, Inc.

Professional Employer Organizations and What do You Need to Know About Them?

BACKGOUND –
The above title is a legitimate question. And it gets asked frequently. Often the answers given
are not always fact based, resulting in a variety of ‘inputs’ that are not helpful.
The purpose of this article is:

• to share information about PEOs in order to dispel opinions that are not fact based
• to provide information that enables businesses to make a sound decision when considering partnering with a PEO

All businesses are identical in that they exist to provide attractive services and/or products to a
base of clients or customers. In other words, that is the company’s raison d’etre – its reason for
being.

This is true whether the company is a sole proprietorship, a partnership, a LLC, a S Corporation
or a C corporation. The only reason it exists is because of the service/product, client/customer
linkage. If that linkage cannot be established, there is no company.

Companies range in size from the smallest of sole proprietorships who singularly sell a product
or service to a few customers, to the largest that employ a great number of employees, and that
service a worldwide customer base. The largest being Wal-Mart. Wal-Mart has more than 2
million employees working in 11,501 stores worldwide, while generating $520 billion in annual
revenue.

SIZE DOESN’T MATTER –

What many business owners fail to understand is whether the company is one with two
employees selling one product online to a few customers or is Wal-Mart, they share many of the
same overhead requirements.

The only difference between those two companies from a reporting perspective is the amount,
complexity, and number/location of overhead reporting requirements.

A two employee company sells its products only within the city the employees live in. Its
overhead requirements are minimal, relatively speaking.

By contrast, Wal-Mart has overhead reporting obligations by its stores in 27 countries and with
its eCommerce websites in 10 countries. 700,000 of its employees live in the 26 non US
countries. It’s almost impossible to comprehend the complexity of the regulatory and overhead
issues Wal-Mart has to deal with.

In addition to those two size extremes, according to the SBA Office of Advocacy, there are 27.9
million small businesses in the US. Only 18,500 of those businesses have 500 or more
employees. What remains is a large number of US businesses that have local, state and federal
reporting requirements. The problem is, many of those companies are ill equipped from both a
head count and skill set perspective to deal effectively with those reporting requirements.
Unfortunately, small size does not provide a release from a company’s reporting obligations.

REPORTING ISSUES AND OPPORTUNITY COST –

Most small and medium sized companies don’t have an individual with the available time or the
skills required to effectively handle the various reporting functions the company is responsible
for. What happens is much of what needs to be reported never is, or filings are late, or filings
are inaccurate. Those outcomes are not beneficial to the company.

Further, the reporting function and its collateral activities rob the company of the time the
individual could be productive serving a real need, like customer service.

Remember the days when we were teenagers and washed cars, had paper routes, cut grass
and shoveled snow (well some of us shoveled snow!)? We did the work and got paid. If we did a
good job, we usually had the opportunity to get more work. We did the work, we didn’t spend
time filling out papers for regulatory agencies.

That’s what companies are born for. To do the work and service their clients/customers. In our
economy there are volumes of regulations at the local, state and federal levels. The regulations
are in play to level the playing field, to ferret out bad actors, and to capture information that is
necessary for the execution of certain programs.

Regulations and reporting requirements are here to stay, are essential, and are legally binding.

SO, WHAT DO WE DO? –

Fortunately, help is available!!

Professional Employer Organizations (PEOs) also have a raison d’etre – to assist companies by
assuming broad responsibilities for, at a minimum, a company’s payroll and Human Resources
(HR) functions. Assuming those time and personnel draining functions allow companies to focus
more intently on the business of the business – innovating and servicing its clients/customers.

In many PEO/company relationships, the PEO will be liable for both the work to be done and the
legal liability for any wrongdoing.

A co-employment relationship is established when both parties sign a contract that defines the
responsibility of the company and the PEO. The company maintains complete ownership and
operating control of its business.

www.napeo.org, the National Association of PEOs, is a fabulous resource for companies that
are considering a PEO relationship, or who would like to gather more information about how the
process works. It describes the PEO process in detail, and also includes an Inc magazine study
that demonstrates the benefits a company receives when it partners with a PEO.

It’s very hard to find a legitimate downside to the PEO model for companies with 5 to several
hundred or more employees. The PEO has expertise in each of the functions it assumes
responsibilities for. Small to medium businesses simply can’t match that level of expertise.

A final note. For a company that wants to explore the PEO option, make sure those you choose
to evaluate are designated as CERTIFIED. Certification further lowers the company’s risk.

© Business Development Associates, Inc. May 15, 2020

Sadly, Most Businesses Absolutely Waste This Vital Asset!

You Think This Is Hard to Believe? –
Swift, Inc. hires an experienced sales rep. Her starting salary is $80,000 +
benefits + leased company car + commission. Total cash cost to the
company for this hire is approximately $150,000+/year.

She is not given any training about Swift’s service offerings. Is not
introduced to the company’s marketing department, a resource that could
give her valuable information. Is not given any sales goals. She is of no
value to Swift.

“Wait a minute” you say. “No company would do that”!

Exactly! So why companies do the following is even more perplexing.

This is Harder to Believe! –

Most US companies are guilty of investing in an asset that under-performs,
generating little or no value.

As hard as it is to believe, that asset is the company’s website. Most
websites are poorly written and generate little to no return on investment.

How Did This Happen? –

There are numerous reasons for this. A few are noted below.

• As websites became mainstream, there was a frenzy not to get left
  behind. The result, websites were built by individuals who were better
  at design than they were at developing written content.
• There was a rush to throw printed content from brochures and sales
  sheets into websites. Those pages masqueraded as written content.
• Top management was often not in tune with the value a website
  could generate. Or even the need for a website.
• There was often internal confusion between the functions marketing
  and sales were to perform. This further diluted the contribution of the
  website.
• Google emerged. And that changed everything. Google set the rules
  for how answers to searches would be ranked.

The result of the previous bulleted items means millions of websites in the
US were ineffective from the day they were built. And most still are today.

Customers pre website paid little attention to printed brochures and sales
sheets. They continued to react the same way when that printed content
was loaded to a website. Traditional writing styles fail to connect with the
person reading website content.

Attractive design and graphics are necessary for all websites. However, the
real value of each web page is generated from its written content. People
read words to become informed. They do not read artwork.

In the digital age, professional copywriters are trained to approach writing
content for websites from the reader’s point of view.

Copywriters accomplish this by being formally trained to:

• Write in a conversational voice – meaning write the way we talk.
• Write at a reading level of 8 th grade or lower.
• Write as though talking to one person.
• Have a deep understanding of SEO (Search Engine Optimization).
• Have a deep understanding of UX (User Experience).
• Use stories when appropriate – which is almost always.
• Understand the difference between sales and content writing.
• Understand the need to activate positive emotional responses.
• Understand the value of persuasion vs. telling.
• Understand the reader is looking for a specific solution.
• Understand the reader wants to know ‘what’s in it for me’.

Leadership’s continued lack of interest in, or their inability to understand
and support the true function of a website continues to be detrimental to the
successful utilization of that asset.

Confusion and lack of effectiveness occurs when sales and marketing are
lumped together as one function. This creates obstacles for a website to
function as it should – and that is an asset that creates value.

Marketing creates written content that builds relationships and nurtures
people through their buying journey. Sales wants written content that
enables an increase in revenue. The former enables the latter.

The Cure, a Media Platform –

Following are the steps needed to cure the inadequacies of websites that
are under-performing in most companies.

1. Leadership must recognize a website is an asset that requires a
   return on investment. Once that occurs, the website will become a
   key part of the company’s operating strategy.
2. Separate marketing and sales – even if the company has only one
   person in marketing and one person in sales. The result of that
   separation will be far better for the company than having two people
   in sales. In 2020, sales are easier to generate if a digital based
   marketing function supports the sales effort.
3. Follow Jay Moye’s advice. Jay is the Worldwide Editor-In-Chief of
   Coca Cola Journey, the company’s award winning digital magazine.
   Jay suggests that companies rename their website a “media
   platform”. That seemingly simple name change will begin to generate
   the actions that turns the website into a multimedia asset.
4. Engage a trained copywriter to develop the written content for all
   aspects of the media platform. This individual will have expertise in
   SEO (Search Engine Optimization) and UX (User Experience).
5. The copywriter will retain and manage a designer who provides
   design and graphics that supports the copywriter’s written content.
6. Come to peace with the fact that Google sets the rules for ranking the response to searches. 92+% of searches come through Google via voice and various forms of text. The good news – Google’s search rules are the same for all websites, so the playing field is level for all!

For More Information –
For a deeper understanding of the above content, or to transform your
company’s website into a powerful media platform, please contact:

CJ Meese 919.714.7289 (office) or 919.522.3961 (mobile).

Mr. Meese’s profile can be found on LinkedIn at C J Meese, Jr.

© Business Development Associates, Inc. April 24, 2020

Where Should I Meet for Business?

We’ve all done it. Conducted “business” meetings at Wi-Fi hotspots like Panera, Dunkin, Starbucks, Bruegger’s, and similar locations for years.

Initially this was exciting as entrepreneurs charted a new way of doing business.

This new meet up option offered the possibility to meet at the expense of the establishment. We
could meet for long hours rent free and further, not be required to purchase any of the
establishment’s food or beverages. What started out as a trend with a few pioneers became the
norm for the many over time.

The Problem –

While this method of meeting for business has some attractive features, quite a list of
drawbacks quietly emerged over time.
To list a few:

• Often business is being conducted in a crowded environment, without a desirable level
  of privacy.
• Business discussions can and do evolve into social discussions, as there is often no
  compelling reason to end the get together.
• If four or more people are physically at the meeting, available seating can become an
  issue.
• Seats can result in ergonomic and/or comfort issues.
• Some attendees pay more attention to what’s being said in the meeting next to theirs.
• Documents you open on your mobile device, tablet or laptop might not be as secure as
  you would like them to be.
• Wi-Fi may not be fast enough or consistent enough for your liking. Nothing like slower
  than slow uploads to cause people to drift away mentally.
• Then there’s the baby in his carrier who was placed on the floor between you and his
  mother. She fed him before they left home, and she was sure he would sleep through
  her coffee social. He didn’t. You can’t hear your prospect’s reply to your last question
  because of his crying. Of course, Mom is used to it. She doesn’t move him.
• The music being played, or the channel on the TV screen (e.g., ESPN) your prospect is
  focused on are not conducive to the concentration a business meeting requires.
• You’re meeting at a shop that’s next to a high school or middle school. School let out 10
  minutes ago. Your business meeting is mobbed with teenagers talking and laughing as
  they order drinks and a snack. Don’t get mad at them because neither you nor your
  prospect can’t concentrate. The reality is, you’re in their ‘space’, and they’re only doing
  what teenagers do – goof off and have fun after a long day of classes.

Bottom line, there are a lot of factors, such as the ones noted above, at these meet up locations that are out of your control. If you’re scheduling an initial meeting or one that has significant importance to your business, you may want to consider alternative choices.

Consider the article by Andrea Beattie of HuffPost in which she summarized ‘The Secret Study of Business Killers’ that was conducted by market research firm Roy Morgan. In that study, several metrics were measured. Two that are relevant to this topic are the following. 65% indicated it was important for the company to have a local business address and 52% rated a local landline as important.

The Solution –

So how do you accommodate the above thinking for 7 out of 7 people you meet with, as
opposed to 4 out of 7?

Consider the benefits of a virtual office:

• Professional business address and phone number.
• All business mail is delivered to the virtual office location.
• Phone calls are answered by a live receptionist.
• Mail is delivered to the virtual office’s physical location.
• Access to professional meeting rooms and state of the art training rooms.
• Save travel time and expense. Only meet there as required.
• Secure, high speed internet.
• Reduced business overhead.
• No printer, fax machine or copy machine needed.
• No operating/utility costs.
• No property taxes.
• No personnel issues to deal with. To the contrary, a willing staff addresses your every
  concern.
• No distractions like those experienced in informal meeting locations.

A Potential Virtual Office Facility for You to Consider –

The Executive Office Suites at 8480 Honeycutt Road, Suite 200 in Raleigh is the premier office
location in the RTP region. Both for 55+ onsite tenants and almost 80 virtual tenants.

To learn more about the virtual office opportunity at EOS, go to
http://executiveofficesuitesraleigh.com/our-services/ and scroll down to the table that describes
the offerings for virtual office tenants,

And for more information about virtual office opportunities, please contact Holly Van Apeldoorn
at 919.714.7422.

Testimonials –
The staff at Executive Office Suites in Lafayette Village is tremendous.  The amenities are clean
and tasteful and a great place to meet with clients.  Shannon and Suzanne are true
professionals in greeting my clients.  As a virtual tenant, my tax practice runs much smoother
with their help and facilities.
Jeffrey Miller – Jeff Miller Tax

The decision to use digital and cloud-based tools to convert the company to a remote worker
model was easy, but we still needed to convey a physical presence. That's where Executive
Office Suites came to the rescue. They made it easy to manage our phone calls with friendly
call screening and VoIP routing options, as well as secure handling of our mail and packages.
But the best part about having Executive Office Suites as a business partner is the way the staff
makes our clients, guests and team members feel welcome when we are onsite. Over the
years, Executive Office Suites has become an essential part of how we work; and it continues to
be a great partnership.
Olalah Njenga, CEO – YellowWood Group