Avoid small business grants scam

A typical Internet ad will promise thousands even if you don’t know the difference between a balance sheet and a balance beam. Real government grants are scarce, tightly targeted toward specific industries, and rigorously competitive. If it sounds too good to be true, it probably is.

Getting a refresher course in that truism cost Donna Hartley of Tahoe City, Calif., a cool $2,500.

A survivor of a major plane crash, cancer and open-heart surgery, Hartley works as a motivational speaker. Interested in raising capital for her management company, Hartley scoured the Internet for leads. She found Grant Financial Network, and in August 2007, she gave the company $2,500 in return for detailed information on grants and assistance in securing them.

Grant Financial Network asked Hartley to authorize payment of the fee as a bank draft, rather than by mailing a check or paying with a credit card. That’s a big red flag: Consumer groups warn that an ACH draft or wire transfer is the most difficult kind of payment to delay or dispute.

“Months and months pass,” she recalls, with her calling repeatedly and not hearing anything. She eventually received some information from the company, but Hartley says it was nothing she couldn’t have found out herself for free - and she never received any grant money.

When Hartley called to try to get her money back, the Las Vegas-based company instead tried to get her to part with an additional $6,500, for which it promised to help her turn her company into a 501(c)(3) charitable organization. The brazen pitch, she recalls, was about how that would make her eligible for even more grant money.

“I feel like I got taken to the cleaners,” she says.

When we tried to call Grant Financial Network for a comment, the phone number listed for the company was disconnected. The Better Business Bureau of Las Vegas rates Grant Financial Network as “unsatisfactory.” The bureau processed 26 complaints about the company in the last 12 months, mostly over refund issues and allegedly dishonest sales practices. More than half of those complaints went unanswered by the company.

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Circuit bankruptcy

Bankrupt electronics retailer Circuit City Inc. said Friday it has asked for court approval to close its remaining 567 U.S. stores and sell all its merchandise.

The company said it has 34,000 employees.

The company said it will redeem its gift cards through the liquidation sale, but the cards will have no value once the stores are closed.

US retail sales plunge in December, 2008

The December retail sales plunge affected all sectors except health and personal care stores.

On an annual basis, December sales were down 9.8 percent from December 2007.

For whole year 2009, it's virtually flat from year of 2007.

SBA small business loans plunge 57%

In the first quarter of its 2009 fiscal year, which ended Dec. 31, the SBA's 7(a) program backed 8,996 loans. That's a 57% drop from the 20,859 loans the SBA backed in the first quarter of 2008, and a 62% drop from 2007's first-quarter total. The total dollar value of loans processed by the SBA also plummeted to $1.94 billion, down 40% from last year's $3.24 billion.

Business Week 2009 Predictions

Source: Business Week

In 2008 prediction, BW didn't anticipate the election of Barack Obama and the financial meltdown rippling across the world economy. But they did nail one call: 2008 was the year of $100-per-barrel oil—they however didn't anticipate its stunning slide back to $40.

For 2009:

• Recession Reigns

Expect more budget cuts, layoffs, shutdowns, bankruptcies, and mergers. Look for beleaguered bookseller Borders Group (BGP) to slip into Chapter 11, and for Barnes & Noble (BKS) to take over some of those stores—but only a few. Also expect Chrysler to merge into General Motors (GM) at a bargain-basement price as Chrysler's private equity owners at Cerberus Capital race to get that investment off their books. With the rapid collapse of oil prices, and the resulting financial pressures, expect two or more mergers among Big Oil. Our best guess? Royal Dutch Shell (RDSA) buys troubled BP (BP), in part to avoid regulatory issues that could come from merging with a U.S. oil company. There will also be tremendous pressure on wireless phone prices, causing financial headaches for companies like AT&T (T). Newspaper companies' profits will continue to shrink; watch for a billionaire such as financier George Soros or New York Mayor Michael Bloomberg to lead a rescue of The New York Times (NYT), which will become part of a not-for-profit corporation by the end of the year.

• Bernanke: Four and No More

President-elect Obama has nowhere to go but down in his approval ratings, so he may lose some popularity points as me makes tough choices in his early months. Also expect to see the last vestiges of the Bush Administration head for the exits. Declaring that his work is done, Federal Reserve Chairman Ben Bernanke will announce he'll leave the Fed upon the expiration of his four-year term as chairman on Jan. 31, 2010. While mostly not his fault, the recession has hurt his standing with the Obama Administration—and it also has worn him down on a personal level. He'll be succeeded by Lawrence Summers, former Treasury Secretary under the Clinton Administration.

There will also be realignment on the global level. Look for Canada to forge stronger labor and trade ties with Europe in an effort to further unhinge itself from the flailing U.S. economy. Canada also will snub its southern neighbor to strike more energy and resource deals with other countries—especially China, which will continue its ascendance on the world stage in spite of economic setbacks. Also, it's a good bet Vladimir Putin will reassume the Russian presidency.

• Oil Rises Again

There's a fair chance for a resurgence in oil prices, even if they dip below $30 in the next few months. Crude is likely to average $60 or $70 per barrel in 2009. OPEC will get its act together and rein in supply, and demand won't shrink as much as speculators had feared. Still, oil won't spike to the $100-plus range because consumers remain more energy-conscious. Oil companies will continue to invest in major projects as cash-strapped nations will open their doors to foreign investments just as they have done in the past when times are tough. And commodities are no longer the place for speculators to make a fast buck.

• Workers Go Creative

Economists agree that further mass layoffs will continue in 2009, and the unemployment rate could reach the double digits. That means workers will turn creative about job opportunities. Look for freelancing and small business applications to explode as laid off workers attempt to strike out on their own. The downturn also is spurring more business and other graduate school applications, and young people will continue to take shelter at universities to ride out the storm.

• Bling Takes a Break

Who can afford bling anymore? Who wants to? The ostentatious—eye-popping expense accounts, showy jewelry, McMansions—will be out and frugality will be back in fashion. Suddenly clipping coupons becomes trendy and, fortified by new Web services, hitchhiking stages a comeback. Boxed wine, already a budget sensation in Europe, will take off in the U.S. Look for eBay (EBAY) to enjoy a revival as Americans turn to the underground market to raise money and scour for bargains.

• Business Embraces Big Government

Long considered a thorn in the side of commerce, the government will continue to be the apple of the business community's eye. Why? In tough times, Uncle Sam remains the economy's last resort. That doesn't mean there won't be plenty of fights over how to regulate industries and how to create not just Big Government, but also Smart Government. But by the time all is said and done, the Troubled Assets Relief Program (TARP) funding will go well beyond $700 billion. President Obama will request, and Congress will approve, another several hundred billion in aid. Much of that will go to homeowners, although airlines will probably get a slug of cash as will auto parts makers.

• Digital TV Nightmare

Chaos ensues in February when U.S. broadcasters cease analog TV signals, throwing millions of Americans into a dark-screen panic. Despite nearly $1 billion in spending on educational campaigns alerting Americans to the change, surveys show that many of the 40 million or so likely to be affected still don't realize what the digital broadcast shift means to them. The government is offering a $40 subsidy to help pay for converter boxes—but plenty of Americans still using older analog TVs have no idea.

• 3D Returns in a Big Way

Recession notwithstanding, innovations in 3D technology will flourish. Computing technology firm NVIDIA (NVDA) is bringing realistic 3D effects on the desktop into the market this year, and more movie theatres will have IMAX screens. Consumers also will get a peek at James Cameron's much ballyhooed Avatar, a 3D movie and game the storied producer has been slaving over since 2004.

• Consumers Fight Back

Tapped out consumers will look for advocates in Congress for protection against predatory or deceptive practices in areas from credit-card fees to mortgages to exorbitant charges for text messaging by wireless companies. Legislation like the Credit Cardholders' Bill of Rights, which passed in the House in September, will have a better shot at passing the Democrat-controlled Congress and being signed by President Obama.

• Housing Hits Bottom, At Last

Super-low mortgage rates—engineered by the government to help zap the economy—finally motivate us to shop for houses again. Prices will remain weak, as people who had kept their houses off the market suddenly put them up for sale as soon as they see a little buying interest. Expect home prices to continue to fall through the end of 2009. While the decline will mean trouble for some, for others, it's a golden opportunity to buy. By early 2010 credit and confidence in the market will be restored, and smart investors will be pleased to see the housing market start to recover.

Online holiday sales, up to 12/23/08, fell 3%

NEW YORK (Reuters) - Online sales for the holiday period up to December 23 fell 3 percent from the same period last year, marking the first decline in online spending since comScore Inc started tracking online sales in 2001.

Too many retail stores in U.S.?

Is America too 'overstored'?

But not everyone sees a dead mall as a negative development.

"Our country has six times more retail space per capita than any other county," said Ellen Dunham-Jones, director of the architecture program at Georgia Institute of Technology.

"We're just cannibalizing our existing stores by building more stores even when sales aren't increasing," she said. "We were long due for a retail correction and we're going through it now."

Historically how long does a recession last

In 2000-01, it faced 8 months of recession, in 1990-91 about 8 months, and 1981-82 about 16 months. Historically, that is how long recession has lasted. But the Great Depression lasted for 3 years.

Warrant

In finance, a warrant is a security that entitles the holder to buy stock of the company that issued it at a specified price, which is usually higher than the stock price at time of issue.

Warrants are frequently attached to bonds or preferred stock as a sweetener, allowing the issuer to pay lower interest rates or dividends. They can be used to enhance the yield of the bond, and make them more attractive to potential buyers. Warrants can also be used in private equity deals. For instance, it was a common practice during the height of the dot-com bubble for a landlord of sought-after commercial real-estate to demand warrants from high-tech startups as part of the lease agreement. Frequently, these warrants are detachable, and can be sold independently of the bond or stock.

Credit crunch hit small businesses

Around 65% of domestic banks say they have tightened their lending standards for commercial and industrial loans to small firms over the past three months, according to the July 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices, released in August from the Federal Reserve System. That's up sharply from the 50% of banks reporting tighter credit in the April edition of the quarterly survey.

Buffett sees economy weak until 2009

By Jonathan Stempel

Warren Buffett said the economy is still in a recession and unlikely to improve before 2009 but that stocks appear better valued than a year ago.

The billionaire investor also said there is a "reasonable chance" shareholders of Fannie Mae (FNM.N) and Freddie Mac (FRE.N) may be wiped out in any government bailout of the mortgage financiers.

Speaking on Friday on CNBC television, Buffett said some housing-related businesses in his Berkshire Hathaway Inc (BRKa.N)(BRKb.N) conglomerate are struggling as the economy works off past excess in making credit available.

"You always find out who's been swimming naked when the tide goes out. We found out that Wall Street has been kind of a nudist beach," said Buffett, who in March was called the world's richest person by Forbes magazine.

He also said Federal Reserve Chairman Ben Bernanke has no "magic wand" to boost an economy facing weak growth prospects, mounting inflation and deteriorating credit. "In my judgment it won't be any better five months from now," he said.

Buffett nevertheless said U.S. stocks are broadly "more attractive" than a year ago. He also said Berkshire has completely unwound a once $21 billion bet against the U.S. dollar, helping boost the greenback in Friday morning trade.

In May, Buffett said Berkshire still had a stake in one currency, the Brazilian real.

The Omaha, Nebraska-based company bought $3.98 billion of stock in other companies in the second quarter, and Buffett said it has added in recent months to its big stake in either American Express Co (AXP.N) or Wells Fargo & Co (WFC.N), but did not say which one.

Shares of both rose in early trading, as did major stock indexes.

Buffett reiterated his support for Barack Obama, the presumptive Democratic nominee, in November's U.S. presidential election, but admires Republican rival John McCain. "President Obama is going to have plenty on his plate in January," he said.

HOUSING EXPOSURE

Since 1965, Buffett has transformed Berkshire from a failing textile company into a $180 billion conglomerate.

Berkshire is best known for insurance holdings such as Geico and sells such products as ice cream and underwear.

But its 76 businesses also include housing-related units Acme bricks, Clayton manufactured homes, Shaw carpeting and the Home Services of America Inc real estate brokerage.

"What we're seeing in business, in our retail businesses, or anything having to do with housing, is even a further slowing down in June and July, both in terms of credit experience where people first got in trouble with house payments, and now credit card payments," Buffett said.

Some economists say a recession occurs when the economy contracts for two straight quarters. Buffett said it occurs when people are doing less well than before.

In morning trading on the New York Stock Exchange, Berkshire Class A shares rose $1,650 to $116,650, and its Class B shares rose $50 to $3,885. American Express shares rose $1.42 to $38.43, Wells Fargo rose 99 cents to $29.43.

The CNBC interview was tied to the national roll-out of the documentary "I.O.U.S.A.," which argues that the nation might face economic disaster if it doesn't curtail mounting debt.

Buffett is interviewed in the movie.

"THE GAME IS OVER"

Fannie and Freddie shares have plummeted as speculation grows about a government bailout of the companies, which own or guarantee almost half of U.S. mortgages. Shares of both have fallen more than 90 percent in the last year.

Buffett called them "too big to fail" and said "the game is over" for them as independent companies. "In a practical sense, as institutions, they don't have any net worth," he said.

Buffett said he has not been approached to assist in any bailout, which he said would be too big to come from the private sector. Though he said "nothing is going to happen" to investors in Fannie's and Freddie's insured mortgages or debt, but "the equity and preferred stock is another question."

Berkshire is trying to reduce the $31.16 billion of cash on its balance sheet, and Buffett said he is being approached by a growing number of "distressed" companies rather than viable takeover candidates.

Buffett said he recently tried to invest $500 million in a Chinese stock he declined to name, but was turned down.

He also said he erred in selling 61 percent of Berkshire's stake in Anheuser-Busch Cos (BUD.N) for $61 to $62 per share, ahead of the U.S. brewer's July agreement to be taken over by Belgium's InBev NV (INTB.BR) for $70 per share.

"It was about valuation and whether I thought the deal would go through," Buffett said. "In retrospect, I was wrong to decide to partially sell."

(Additional reporting by Euan Rocha and Vivianne Rodrigues; Editing by Steve Orlofsky/Jeffrey Benkoe/Daniel Trotta)

Resource conservation

Water Conservation

1. Conduct an indoor/outdoor water usage assessment.

2. Implement all applicable simple conservation measures.

3. Implement industry specific water conservation measures.

Energy Conservation

1. Have your local energy utility or an energy service company conduct a commercial energy assessment.

2. Perform regular maintenance on heating, ventilation and air conditioning (HVAC) system.

3. Implement alternative technologies and behavioral changes.

Monthly cash flow calculations

Starting cash -- This is your starting balance at the beginning of each month.

Cash in -- All cash received during the month, including sales, paid receivables, interest or cash from sales of assets or stock.

Cash out -- Includes all fixed and variable expenses.

Ending cash -- This is your ending balance. Add starting cash to cash in for total cash, then subtract cash out.


*Source: www.bankrate.com

IRS Audit red flags

According to CNNMoney.com

• No profit.
• Very low revenues.
• Sloppy handwritten business return.
• Return has blank sections.
• Take unlikely deduction (plumbing supply owner claiming too many business trips).
• Outsized and excessive deductions.
• Too much fun, such as excessive travel, car, entertainment, and cell phone expenses.
• As part of its small-business crackdown, the IRS is targeting sole proprietors. Schedule C filers with more than $100,000 in annual revenues were audited at a rate of 3.9% in 2006, up from 1.5% in 2000.
• Nice round numbers.

Small business inventory count

Pareto method

The Pareto method, derived from the Pareto principle, is to cycle count inventory by percentage of inventory value. This leads to the expensive items being counted most frequently.

This traditional approach may appeal to accountants by minimizing the variance in inventory value.

Cycle counting by usage

Cycle counting by usage states that items more frequently accessed should be counted more often, irrespective of value. Every time an employee adds or removes an item, there is a risk of introducing inventory variance. Logical inventory zones can be set up to distinguish items depending on how frequently they are touched. Volume consumed and volume transacted and volume moved are all ways of determining this.

ABC codes

When carrying out an ABC analysis, inventory items are valued (item cost multiplied by quantity issued/consumed in period) with the results then ranked. The results are then grouped typically into three bands. These bands are called ABC codes.

1. "A class" inventory will typically contain items that account for 60% of total value
2. "B class" inventory will have around 20% of total value
3. "C class" inventory will account for the remaining 20%

U.S. Small Business Administration

Here is web link to government site: SBA

The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.

Accounting methods

The accrual method -

• Income is recognized when the order is made, the item is delivered, or the services occur, regardless of when the money is actually received.
  
• Expenses are recognized when you receive the goods or services. You don't wait until after money is paid out.
  

The cash method -

• Income is recognized when cash/check/money is received.
  
• Expenses are recognized when they are paid out.

Under the cash method, you generally report income in the tax year you receive it and deduct expenses in the tax year you pay them. Under an accrual method, you generally report income in the tax year you earn it, regardless of when payment is received, and deduct expenses in the tax year you incur them, regardless of when payment is made.

Small Business Cash Flow

• Collect cash if possible.
• Avoid getting bad checks - check ID, don't accept 3rd party checks, don't give cash refund to checks not yet cleared, etc.
• Deposit checks to your bank as soon as possible.
• Be persistent in collecting the unpaid receivables.
  
• Good record keeping for your order records, inventory records, and invoices.
• Good book keeping.
  
• Pay bills just before they are due.
• Work out with your supplier for generous payment due dates, methods, or installments.
• Use your business credit cards to get points back.
• Pay off the highest interest loans as soon as possible.
• Maximize tax saving.
  

Funding - sources

• Personal savings
• Borrow from family and friends
• Business partners and investors
• Home equity loan
• Small business loan
• Credit cards
• Suppliers (defer the payments to the suppliers)

The factors to consider are -

• Where would you put the money to best use?
• What is the cost to your business from this funding source?
• Would you get the funding in time when you need it?
• What is your repayment plan?

Funding for small business, business loans factors

According to Financial Web -

When seeking funding for your small business, it can be a tremendous advantage to know exactly what the lender is looking for in a financing opportunity. Generally speaking, there are five basic aspects of your business that every lender will evaluate when considering a loan to you:

Your credit profile and history. This, of course, is one of the primary factors considered in any institutional lending situation. Lenders are going to scrutinize your credit profile – both your business and personal credit. Therefore, before searching for a business loan, it's wise to obtain a copy of your credit report from all three major credit reporting services: TransUnion, Equifax, and Experian (one free annual copy of your personal credit report can be ordered from each bureau through the Federal Trade Commission's website). Check your reports closely for errors and omission of any good credit you may have that wasn't submitted to the credit bureaus, and do your best to repair any discrepancies before you apply for the loan.

Although your personal credit score is tied to your Social Security number, business credit reports are associated with the company's Employer Identification Number, or EIN (also known as a Federal Tax ID Number). If your business doesn't already have one, you can obtain an EIN from the Internal Revenue Service.

Your vested interest in the company. Lenders want you to have a reasonable amount of equity invested in your company. They tend to feel that they're in a more secure position knowing that your money is on the line right along with theirs, and this drives the assumption that you'll work even harder to make the venture a success.

The amount of working capital that the business possesses. Working capital can be defined as the business's cash on hand, the funds available to pay your company's current debts and operational expenses. If cash on hand is below the levels necessary to meet these present needs, it significantly increases the risk (not only to your organization, but to the lender as well) that your business may fail, and greatly reduces the chances that the lender will approve your loan.

Your ability to repay the loan. Virtually all business lenders normally require at least two possible sources of repayment. The primary source is directly from the company's revenues (its cash flow). The second, or alternate, method is through the sale of collateral pledged by the business against the loan. In addition, lenders will require you to provide the company's current and past financial statements and balance sheets, profit and loss statements, and accounts receivable. Records of your personal assets, liabilities, and tax returns (along with those of any partners in the business) will also be necessary. If you can show on paper that your business has consistently made a profit, your odds of getting the requested financing will dramatically increase.

Your own personal business experience. Lenders definitely prefer that loan applicants for new businesses possess experience in the particular business that they're going into. If you do not personally have such experience, the lender will likely want you to partner with (or at least hire) those who have the necessary expertise. Nevertheless, you should at least be able to show the lender that you do possess a keen business insight and management experience.