Articles Posted in Motivation and Success

Collaboration_logo_V2.svg.pngA new year often provides an opportunity for business owners to review their goals and their progress towards those goals, to consider whether those goals remain the same, and to make adjustments to the business based on changed circumstances in the market or in their own lives. Small businesses, especially closely-held and family companies, often depend on the hard work and dedication of their owners. It can be difficult for owners to step back from the business, even when necessary. Succession planning, which allows a business to continue operations in the event that the owner or owners cannot continue in their previous role for whatever reason, is a critical responsibility of a business owner. The arrival of a new year may be the perfect time, if an owner has not thought about succession planning yet, to start thinking about it. Here are four steps in succession planning to help small business owners on their way.

Identify the Organization’s Needs. Every business is unique, obviously, so each one will have its own unique needs for a smooth transition in leadership. Some small business owners may designate someone to take over for them, but all succession plans should have clearly-defined procedures for identifying a successor and moving them into a leadership position. If running the company requires a high level of expertise in a particular field, or even professional credentials like a law or medical license, a succession plan should include a process for keeping the business in the hands of qualified individuals. If such individuals are not already part of the organization, the plan should include a way to locate and recruit someone.

Identify Personal Needs. Small businesses often depend on leaders working together, and discord is frequently the cause of a small business’ failure. A succession plan must consider the personalities and relationships of the people who currently comprise the business and, to the greatest extent possible, plan for the continuation of the business with minimal feather-ruffling. It should also consider personal issues like income and estate tax.
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_DSC7714.JPGPeople come to New York City from all over the world to pursue careers in the arts. The city is a global hub for visual arts, theater, dance, music, literature, and television, to name but a few. Not everyone can make a career out of their artistic passion, but the experience of trying can prepare one for the world of entrepreneurship and small business ownership. A recent profile of a dancer-turned-entrepreneur in Crain’s New York Business highlights how the business skills she developed during years of working as a ballet and Off-Broadway dancer led to her success as an entrepreneur. Artists can gain experience and skills in many areas of the arts by focusing on the similarities between entrepreneurship and the arts as a profession.

1. Discipline

Honing one’s crafting in the arts requires focus, dedication, and near-constant practice. Dancers and musicians train constantly. Writers and visual artists, such as painters and sculptors, create much of their work through trial and error. All artists must endure auditions and other forms of review, along with the accompanying and inevitable rejection. Artists become great not only by practicing, but also by not giving up.

Starting a business requires a similar sort of discipline. An entrepreneur must dedicate considerable resources to their new business, including both time and mental focus. Someone who has acquired the discipline to pursue artistic expression, as a profession or a hobby, can apply it to their new endeavor as well.
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file00066095512.jpg“Family business” typically refers to a business owned by members of the same family, but it also often means that family members run the business. Many “family” businesses may need to take on some employees who are not family members, and these businesses should take care to treat family and non-family members of the business equally and fairly. This is important to a business’ continued competitiveness and success, but also for compliance with federal and state employment laws. A recent column written by business journalist Randy Myers and published in Entrepreneur discusses how family businesses can take care of their unrelated employees.

“Part of the Family”

The culture of a family business is probably the most important element in attracting and retaining employees, or as Myers puts it, family businesses should make all employees “feel like part of the family.” Family businesses can achieve this in any number of ways, from involving non-family employees in the central operations of the company, to offering benefits and other incentives that encourage employees to stay with the company. This keeps employees “energized,” according to Myers, and allows the business to maintain the culture that the family had created while benefitting from the knowledge and skills of others.
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file0002062790027.jpgNew York and New Jersey are among the best places in the country to start a small business–at least, that is what we believe. A wealth of talent in the tech sector means a wealth of tech startups in the Greater New York area. While a business needs support ranging from sound financial advisors to skilled business attorneys, entrepreneurs need support as well. Each and every business begins as a collection of people and ideas, and the people who give form to these ideas must care for themselves as well as their businesses. At a recent gathering of the NJ Tech Meetup, a group of “entrepreneurs, software developers and tech industry enthusiasts of all stripes,” “serial entrepreneur” Ari Meisel described his efforts at improving efficiency and reducing stress in his own life, and how he turned that into a business. New Jersey Tech Weekly‘s Esther Surden reported on Meisel’s advice, which provides useful guidance for New York and New Jersey businesses and business owners alike.

“Optimize, Automate, and Outsource”

Some tasks require the direct involvement of a business owner, director, or officer. Most do not. Identifying the tasks that do not require your constant attention is key to optimizing how your business runs. Meisel cautioned his audience, however, that outsourcing does not, by itself, increase efficiency, if the outsourced task is itself inefficient. His advice is to divide a business task into its fundamental parts, to determine which tasks are necessary, which are wasteful, and which are outsourceable. Meisel recommends the use of virtual assistants for routine tasks, many of which are available online.
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Booker1.jpgNewark Mayor Cory Booker spoke at the South By Southwest (SXSW) Interactive Conference in Austin, Texas earlier this month about his involvement with social media and the potential for social media to help bring people and government together. Booker’s SXSW session, titled “The New Media Politician,” was a seated discussion with Steven James Snyder, an editor at The topics of discussion ranged from his experiences using social media in office to his future political plans. His remarks, which earned him the designation of “Speaker of the Event,” are applicable to New Jersey businesses, which may also benefit from connecting with consumers and government alike via social media.

Reaching a Wider Audience

With around 1.3 million followers, Booker reaches a far wider audience on Twitter than Newark’s population of around 280,000. This has allowed him to communicate with a broad range of people, and it has allowed news about issues facing Newark, and New Jersey in general, to gain a wide following. Issues like Hurricane Sandy relief have brought New Jersey to the forefront of the nation’s attention in recent months, and social media has been a major driver of information. New Jersey businesses, even those that only do business within their community, can also reach a wider audience via services like Twitter or Facebook. This can lead to new markets, or merely to greater exposure for the company’s product or brand.
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1277560_99475835.jpgA New Jersey organization representing more than one thousand small business owners rallied outside the Statehouse in Trenton recently to advocate for a state health insurance exchange (HIX). The Legislature passed a bill that would have created a New Jersey HIX in early 2012. Governor Chris Christie vetoed the bill in May, citing the pending decision from the U.S. Supreme Court regarding the constitutionality of the Affordable Care Act (ACA), commonly known as “Obamacare.” Governor Christie stated that, until the Supreme Court ruled on the ACA, the New Jersey law’s constitutionality was similarly up in the air. Since the Supreme Court upheld most of the ACA in June, many small business leaders want him to approve a HIX for the state.

The ACA requires states to create HIXs in order to assist people in obtaining health insurance coverage for the themselves or their families. States have until November 16, 2012 to enact their own state-run HIXs. After that date, the federal government will operate the HIX for the state. So far, eleven state legislatures have created HIXs, and three governors have created them by executive order.

Consumers and small businesses can use HIXs to compare and contrast private health insurance plans, and to learn about tax credits and other benefits. The federal government has made grants available to the states to facilitate the establishment of HIXs. According to the U.S. Department of Health and Human Services (HHS), New Jersey has received two grants: a $1 million “State Planning Grant” in 2010 and a $7.6 million “Level One Grant” in 2011. State HIXs are expected to go online, sometimes literally, in 2014, when many of the provisions of the ACA take effect.
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735753_42003913_02242012.jpg“Are funny people more successful in business?” This was the question asked recently by Forbes columnist Jenna Goudreau. She noted how humor in a work setting can improve morale and foster trust and cohesion among workers. Lawyers, as a general rule, do not get to use humor in their work very often. For business owners, it can be a fine line to walk. Humor can help build a team, but inappropriate humor can drive people apart.

Goudreau quotes psychologist Steven Sultanoff, Ph.D., who has studied workplace humor extensively. He lists three ways that humor impacts people: cognitive, emotional, and psychological. From a cognitive standpoint, humor can help put a problem into perspective for employees, and can help people to relate to a difficult issue. Emotionally, humor can supplant stress or frustration. People who effectively use humor often have a better ability to interact and connect with others, which can lead to a more productive workplace. As for the psychological aspects of humor, people tend to work better when they are happy and feel good, and when they perceive their environment as positive.

Of course, not all situations lend themselves to humor, and not all people can effectively use humor. Some issues are too important, and some problems too critical, to lighten with jokes. Goudreau mentions several companies that have successfully incorporated a sense of humor into their businesses and shows how and why it works.

Southwest Airlines is famous for its funny flight attendants. The airline identified a necessary but rather dull feature of commercial flying, the safety instructions, and found a way to make it more engaging for passengers. They did this without neglecting important information and without making light of the serious issue of passenger safety. Another example is Ben & Jerry’s, a company that produces clever and creative ice cream flavors. The unique personalities of the founders became an integral part of the company’s identity.

A business owner or manager must take care to ensure that office humor does not cross a line into harassment, and this can be a difficult task. Each person has a different sense of humor, and what is funny to one person could be highly offensive to another. Attempts at humor should always focus on bringing workers together, not pointing out differences. This is particularly true if jokes relate to race, gender, religion, sexual orientation, and so forth. Nothing can tear apart office cohesion like issues of harassment or discrimination, and managers must be constantly on watch for this. Humor that leads to legal liability for a business is clearly not worth the trouble.
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1181597_60270378_01292012.jpgA surge in optimism is evident among New York City’s small business owners, according to the New York Daily News. As the national unemployment rate slowly drops and consumer spending slowly rises, confidence in an economic recovery may be on the rise as well. Anyone who follows business news knows that bad economic conditions bring an onslaught of people offering all sorts of predictions and prognostications about impending recoveries or further collapses. The Daily News did not talk to any of those people though. Instead, it spoke to business owners themselves, and they demonstrated some of the causes for their optimism. While the optimism may only be temporary, it could at least serve as motivation or inspiration for other businesses.

The Daily News interviewed the owner of a Brooklyn restaurant as an example of current conditions for many of New York City’s small businesses. She reports that her business grew by more than twenty-five percent in 2011 and that they plan to open a second location early this year. She credited her success on two factors. First, she says they maintained an emphasis on “customer service, excellent product and overall value.” Of course, these are good goals for any business, since a business with poor service and an undesirable product probably should not survive. Of perhaps more direct benefit to her company was the second factor in her restaurant’s success: they were featured on the Food Network. The lesson for other small businesses, perhaps, is not only to offer exemplary service and a good product but also to find a way to be highly visible. Not everybody can get on cable television, but everyone can get on the internet.

A survey conducted by Newtek Business Services demonstrates the rise in optimism among small businesses in New York City and around the country. Newtek is a business consulting and service company with clients all over the country. They conduct a monthly survey of about 100,000 businesses, although all of the surveyed businesses are customers of Newtek. They found that fifty-five percent of small businesses have an optimistic outlook about “the future,” and sixty-four percent are optimistic about their own businesses. On both questions, twenty percent of respondents reported feeling pessimistic, with the remainder answering “neutral.” Sixty-eight percent of respondents said they find it easier to grow their sales than to reduce costs.
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547914_48067370_01252012.jpgThe economy may be improving, but the speed of the recovery may not be fast enough for many sole proprietors and small businesses. Even in the face of seriously decreased revenues, many small business owners may not relish the idea of trying to reenter the job market. Besides, the job market is not doing so great, either. The key to survival for small businesses in many situations is the ability to adapt to new market conditions and economic realities. For small businesses in New York, this might mean anything from targeting a slightly different demographic all the way to completely restructuring a business to offer a new product or service.

A few pieces of advice we could offer might be:
1. Do your research before trying anything.
2. Test the waters before making any major purchases or investments in something new.
3. Watch out for scammers who prey on struggling businesses.
4. Get the advice of a good business attorney.

Some large and venerable companies have not weathered the economic downturn well. Companies that might have already been struggling to adapt to new markets and new technologies will have a difficult time under current conditions. One example would be Kodak, which was at the forefront of photographic equipment and supplies for over a century. As digital photography grew in popularity and the demand for camera film and similar supplies dwindled, Kodak had difficulty adapting. Now it finds itself struggling financially, and it recently filed for Chapter 11 bankruptcy. Small businesses and sole proprietors can face the same difficulties, with the only difference being one of scale.

Small businesses that find a way to adapt may find themselves at the forefront of a new market or new technology. Of course that scenario is by definition rare, but any company that successfully finds a way to reinvent itself will at least know it has survived where many others have not. An article in Crain’s New York Business gives the example of a New York City real estate agent who found her business decimated when the real estate bubble burst. With little demand for luxury real estate, she looked at other facets of the market she had served. She became a certified feng shui practitioner and an accredited green associate, and she began marketing her services to corporate clients. By finding a new niche that was not far from her old one, and by doing it quickly, her business grew and she continued to thrive.
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484010_62695363_01032012.jpgThe beginning of a new year is as good a time as any to take stock of your business, review your performance over the past twelve months, and take a look at the state of the economy and business in general. Every year, people publish lists of trends from the past year, trends to watch out for in the new year, lessons and warnings, and so on. A small business owner can get overwhelmed by all the lists and advice circulating, especially in the first week of the new year. As business attorneys, we like to take a look at the issues affecting New York and New Jersey to see how we can best serve our clients.

The economic outlook for New Jersey and New York is good, but current conditions remain rather bleak, with hiring still down and borrowing and lending only rising slowly. In times like these, it is important to recognize what is working in your business and what is not working, and to look at new developments that could help. The Street‘s Elizabeth Blackwell recently identified five lessons for small businesses from 2011 that are worth reviewing.

First, New Jersey small businesses have an abundance of resources offering support to owners and managers. Trade associations, merchant groups, chambers of commerce, and city- and state-supported programs allow business owners to draw on the expertise of others, or just to spend time among like-minded people. No one should have to run their business entirely alone.

Technological advances continue to change the way we run our businesses. Sometimes these changes make little overall difference and eventually fade away. Others make a lasting mark. Blackwell identifies the iPad, which gained ever-greater prominence in 2011, as an “instant status-booster and conversation-starter.” Identifying which new technologies are worthwhile and which are not is an ongoing challenge of running a business.

Social media may have hit its high point in 2011, with nearly every business in America deciding whether or not to join Facebook, Twitter, Google+, and other platforms. Some businesses will thrive online while others will remain comfortably analog. This decision depends entirely on the personality and needs of the business and its owners. Some features of the pre-internet days remain crucial features of running a business. For many businesses and customers, no amount of social media proficiency will ever replace the power of a simple handshake.
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