Financial Change and Cultural Change

Financial Changes—Real or Imagined
Pay scales may change—up or down—as a result of new technology. Now most of us don't mind if it goes up, but what about down? Basic job requirements may change. Incentive and bonus systems may be impacted. Even job security may be threatened. If the technology makes us more productive, does that mean that fewer of us will be needed? If so, who will go first?

Cultural Changes
What once was a high-status, specialized job may no longer be. Isn't the purpose of technology to offset the advantages faster, more capable, more knowledgeable people have? With the new technology, we may now be able to hire less-skilled people. Think about it—what happened when word processors replaced the typewriter? Now it was okay to make mistakes. Speed became more valuable than accuracy, at least the first time around. There was no need to retype the whole page—typos were easy to correct.  The new way didn't require much skill.

And the attractiveness of certain groups may change. What was once a high-status, specialized group may no longer have high status. Now any group with the technology may be able to perform what once only the chosen few could do. Isn't that the purpose of technology, after all—to allow all of us to do more things faster and better?

That's a lot of changes—brought about by the new technology.  How do employees so often hear about these changes? Consider how Bob Green handled announcing a major change to his employees. He called them all together and said:

I wanted to get you all together today to tell you that we are going to get a wonderful new technological tool to help us do our jobs faster and easier. Let me tell you what is going to happen—to you.

First, all of you are going back to school. Some of you may think you are pretty good at what you do. But it's a new day.  You are all equal. You are all starting over. Now, while you are all learning these new skills, I want you to know that the work we have to do still must get done. We are not going to miss any due dates, and I expect the quality to be just as good.  No concessions. You will just have to find the time to keep up with the work while you learn. Also, we are going to have some new procedures. We are working on them now and will have a detailed, lengthy reference manual for each of you as soon as we get it back from the printer.

Of course, there is going to be a period during which we are doing some of our work with the new technology and some the old way. Now, until we complete the changeover, you should follow the old procedures when you do it the old way, and the new procedures when you do it the new way.  And please keep the two straight. We don't want any foul-ups.

Another thing. We will be coming out with a new organization chart. With the new technology, we are going to be able to move some of you people around—sort of shake things up a little. You'll find out what your new job is and who you report to when you see the new chart. Also, we will be changing the way we look at performance. One of the things I'm pleased about is that in the past, there were so many of you that I honestly wasn't quite sure what you were doing every day. Now with this new gadget, I'm going to be able to punch you right up on my screen anytime I want to and see exactly what you've been up to. So you better watch out!

I do have an announcement about your pay. We want to take a look at your positions now that we are going to have this new technology. We just want to make sure we are not paying you more than you're going to be worth.

And one final thing. I understand that there has been a rumor going around that with this new technology we were going to be able in let 30 percent of you people go. Now I want to put the record straight on that one. It is not—I repeat—not 30 percent. Now I know all of you are as excited about this new technology as I am. And I know we are all anxious to get trained and get on with it.

Now suppose you worked for Bob. Would you resist the change?  Probably—we all would.

excerpt from The Competitive Edge
by Fran Tarkenton & Joseph Boyett

The major statement is the income statement, which is sometimes called the profit and loss statement or P&L. This product of accounting summarizes the results of operation for a given period of time. First it will show the sales, which represent your customers coming into your place of business and accepting what you have to sell. Along with the sales are the associated costs to provide these customers with a reason to give you money. These costs will include the obvious direct costs, such as wages, supplies, and advertising. It will also include a class of expense called indirect or overhead expenses. These are usually expenses that will occur in the business regardless of whether you have sales or not. While direct costs will vary with the volume of sales, indirect costs reflect the mere fact that you opened for business. Indirect costs include rent, interest expense, and utilities. Some of you may want to reclassify these expenses, and I suppose we could argue that labor, for example, is not a variable cost, but rather fixed. More on this in a later article. Once we have totaled different types of expenses, we then subtract them from our sales. This will give us a net income or loss. The net income or loss represents how well you have used the resources available to you. On one level it also represents how likely it is that you will remain in business. Personally, I always look at the trend in net income. This is the final benefit of this statement. In business it is not where you have been, but rather where you are going. The income statement will help you in this determination.

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The games I lost were always the ones I thought I had won. Thinking you are ahead, in business or in football, is a sure way to fall behind. It has been my lucky experience that whenever I think I've mastered something, I proceed to get my butte kicked. That's why it is important always to play the games of business and sports as if you are behind.

I learned this lesson in embarrassing and no uncertain terms during my second year in professional football. Our fledgling Vikings expansion team had trounced the mighty Chicago Bears in the previous season opener at Memorial Stadium in Bloomington, Minnesota. Then our hot young team went out and promptly lost its next six games with Mr. Perfect at quarterback. We went into too many games thinking we already had them won—and so we lost.

One game the following season taught me the importance of never playing as if you are ahead, even when you are. We were playing the Bears at Soldiers Field in Chicago.  Going into the final minutes of the game, we were leading by two points and had possession of the ball deep in our own territory. All I had to do was run down the clock and go home with a victory over the mighty Monsters of the Midway. I could have called a quarterback sneak and fallen on the ground, but instead I called an off-tackle run for fullback Doug Mayberry.

No sooner had Mayberry plunged into the line than I saw black Chicago shirts diving into a pile of bodies on the ground. Then the umpire began signaling that the Bears had recovered a fumble! We had lost possession of the ball in our own territory, and now Chicago's place-kicking team was coming onto the field! I stood on the sidelines with my mouth open about 10 feet while Papa Bear Halas's boys calmly won the game with a field goal as the clock ran down. I had played as if I was ahead and lost the game! I had gotten sloppy and called a hand-off when I should have eaten the ball and fallen on the ground. By giving the ball to my fullback, I was setting him up for the remote chance of failure. I had not taken the ultimate precaution to ensure victory.

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Owning your own business can be personally, professionally, and financially rewarding; however, entrepreneurship is not for everyone. Before taking the personal and financial risks of owning a business, an objective appraisal of your strengths and weaknesses is essential. Success in small business depends on decisive and correct actions from the beginning. Although initial mistakes may not cause failure, it takes skill, discipline and hard work to overcome these errors. Moving from employee to employer requires that you consider several personal questions. Before the personal assessment, it is necessary to identify and understand the responsibilities of a small business owner.

Basically a business owner is responsible for the entire operation - not just sales or accounting, but the operation from top to bottom. A business owner wears a number of hats, including researcher, salesman, marketer, warehouseman, analyst, accountant, recruiter, arbitrator, lawyer, secretary, and janitor. Additionally, you will be required to be both the good guy and the bad guy. You are that good guy selling to customers and the bad guy collecting past due customer accounts. You will be the good guy hiring employees and the bad guy deciding the company cannot afford pay raises. With this range of responsibilities, you should understand that business ownership is more than a 40-hour work week. Planning, managing, and executing your business demands considerable time which presents another challenge of business ownership - balancing business and personal time. Recognizing the business owner responsibilities and demands, you can now determine how your personal entrepreneurial skills match up to the task.

The successful business owner should possess the following skills or qualities:

Business Interest

You do not have to graduate from the top of the class or have direct experience in the business you are starting; but, you do need to have prior experience in a business environment and an aptitude for dealing with business situations. You should have an interest in making decisions that are right for the business.

Management

You will be dealing with a variety of personalities in customers, employees, vendors, accountants, lawyers, and the government. You must understand different personalities and manage these relationships.

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We're always looking for ways to improve GoSmallBiz and would appreciate your valuable feedback. From the answers you receive from the consultants, to the articles provided on the website and everything in between, we would like to know your opinion and receive your suggestions.

Click here to email GoSmallBiz

A website is a great way to market your products and services while exposing your business to the online world – as well as your customers who live 2 miles away. With so many people on the internet, it is becoming commonplace for businesses and onsumers to search the internet for the products and services they need.

To build a website, you can either build it yourself – if you’re technically inclined or have someone build it for you. To build a site yourself, you can learn to write HTML (hypertext markup language) code or use an HTML editor such as Macromedia’s Dreamweaver or Adobe’s GoLive, for example. These programs allow you to create webpages by entering text and placing graphics while it automatically generates the HTML code for you. (Note: As a GoSmallBiz member, you have everything you need to create your own 4-page website. Log in and select My Website for more information.)

In addition to an editor, you will need to use a graphics program to create and manipulate images you use on your site. Some nice pay programs include Adobe Photoshop and Paint Shop Pro. Free alternatives such as Paint.NET and the GIMP can help if you are on a budget, but aren’t as full-featured as pay software.

Websites typically use three types of static image formats: JPG, GIF or PNG files. The more graphics that are used on a site, the slower the page is to download. If a visitor cannot download your page in a few seconds, they may click off to another site and never return. The corollary to this is that a site without good visual cues might also turn off visitors. It is an important balance to strike.

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How can we be sure we are compliant with all of the privacy laws such as facta and the like?

While business owners can research business and labor laws themselves through various resources, the most effective way to identify applicable laws and develop specific company polices and procedures is with local business lawyers. Due to the complexity of consumer privacy and other laws, we recommend that our members have a local labor lawyer review their business products and services, employee manuals, other human resource policies and procedures, operating manuals, computer systems, and office filing systems to insure legal compliance and that adequate safeguards are in place. As a Pre-Paid Legal member, you can contact your Provider Lawyer for advice and assistance with policy and document review or a referral to a labor lawyer. You can contact your Provider Lawyer at the phone and fax numbers in your PPL materials or through PPL Customer Service at 800.654.7757. For discussion with your lawyer and business insurance agent, you can review the following information on these laws:

A. FACTA.

1. General purpose. The Fair and Accurate Credit Transactions Act of 2003 (FACT Act or FACTA, Pub.L. 108-159) which was passed by Congress on December 4, 2003 as an amendment to the Fair Credit Reporting Act (FCRA), is a new federal law designed to reduce the risk of consumer fraud and identity theft. The FACTA disposal rule requires the destruction of consumer information before it is discarded.

2. General Application. Any business that obtains confidential information regarding job applicants, employees, customers, or suppliers.

3. Penalties. Potential penalties for violating the disposal rule include actual damages, statutory damages up to $1,000, punitive damages per violation with no cap on class action damages, attorneys’ fees, and civil penalties up to $2,500. If large numbers of employees are affected by a breach, they may be able to bring class-action suits and seek punitive damages from employers.

4. Small company suggestions: While the FACTA law contains a number of provisions, two provisions are most likely to affect small business owners. The first concerns disposal of consumer records derived from a consumer report and the second adopts a new standard for "workplace investigations." One recent regulation issued by the FTC addresses the Consumer Information and Records Disposal provision of FACTA and took effect on June 1st, 2005. Under the Disposal of Consumer Records provision of FACTA, any business that has acquired personal information derived from a consumer report must destroy it before it can be disposed of. This provision is intended to thwart "dumpster diving" for personal information discarded by businesses. Under the FTC rule, businesses will have to shred, burn, smash or wipe all paper or computer disks containing personal information before discarding it. Basically, any business that hires an employee and does a background check that includes a credit check would be covered by the records disposal provision of the law.

The "workplace investigations" provision was adopted to make it clear that employers do not have to get permission to conduct a misconduct investigation. The provision also allows job applicants and employees who have undergone an employment background screening covered by the FCRA to receive a free annual file disclosure from the company that performed the background check.

http://www.itcinstitute.com/display.aspx?id=368

5. Sample reference material:

http://www.usatoday.com/money/perfi/general/2005
-01-14-shredder-cover_x.htm

http://www.morankikerbrown.com/CM/Articles/fact
a_disposal_rule.asp

http://www.privacyrights.org/fs/fs6a-facta.htm

http://www.ftc.gov/opa/2004/11/factadisposal.htm

Workplace investigations:

http://www.businesspowerlaw.com/12/145

http://library.findlaw.com/2004/Jul/28/133531.html

http://www.privacyrights.org/fs/fs16-bck.htm#6

B. FCRA.

1. General purpose. The Fair Credit Reporting Act (FCRA) is a federal law that regulates the collection, dissemination, and use of consumer credit information. The FCRA is designed to protect the privacy of information in credit reports and to ensure that information supplied by credit bureaus about consumers is as accurate as possible. The law specifically permits credit bureaus to release to employers credit reports for employment purposes. While the FCRA does not supersede fair employment laws, it allows employers to review credit records for the purpose of evaluating anyone they may hire, promote, reassign, or retain, consistent with other laws.

2. General Application. Any employer that obtains a consumer report or investigative consumer report for a job applicant or employee from a consumer reporting agency. The FCRA imposes notice, consent and reporting obligations upon an employer who requests reports on applicants or current employees from a consumer reporting agency.

3. Penalties. Failure to comply with the requirements of the FCRA can result in civil liability in the form of actual damages sustained by the applicant/employee, punitive damages (in the case of willful non-compliance), and imposition of costs and attorneys' fees. Additionally, it is a felony to procure a Consumer Report under false pretenses. If convicted, the person who knowingly and willfully obtained the information is subject to a fine, imprisonment for up to two years, or both. Also, the FTC may sue employers for civil penalties of not more than $2,500 per violation.

4. Small company compliance issues and suggestions:

http://www.ftc.gov/bcp/conline/pubs/buspubs/
credempl.htm

http://www.privacyrights.org/fs/fs16b-smallbus.htm

http://www.wildmanharrold.com/labor_library/
FCRA.htm

http://www.adpselect-info.com/client/pdf/fair
CreditReporting ActWhitePaper.pdf#search=
%22fcra%20 compliant%20documents%22

http://findarticles.com/p/articles/mi_qa3988/is
_200111/ ai_n9011628

http://www.pierceatwood.com/showarticle.asp
?Show=169

http://www.nysscpa.org/cpajournal/2002/0602
/features /f064402.htm

Fair Credit Reporting Act:

http://www.ftc.gov/os/statutes/fcrajump.htm

State laws on credit checks:

http://toolkit.cch.com/text/P05_1585.asp

5. Sample reference material:

http://esrcheck.com/ESRPublications/fcra
_compliance _for_employers.htm

http://hrforms.thompson.com/hrportal/pro
dinfo.jsp?pid =130&priority=WEB81440

C. HIPAA.

1. General purpose. The American Health Insurance Portability and Accountability Act of 1996 (HIPAA), with updates effective on April 14, 2003, is a set of rules to be followed by health plans, doctors, hospitals and other health care providers. HIPAA makes it easier for employees to change jobs without fear of losing their health insurance coverage. It was designed to address problems inherent in the employer-based health system, such as the ability of insurers to deny coverage due to a preexisting condition. In the health care and medical profession, the great challenge that HIPAA has created is the assurance that all patient account handling, billing, and medical records are HIPAA compliant.

2. General Application. "All group health plans with at least two participants on the first day of the plan year who are current employees are covered by the federal HIPAA":

http://www.toolkit.cch.com/text/P05_4438.asp

3. Penalties. The penalties for violating HIPAA requirements can be both civil and criminal. For example, as indicated in the following information, "penalties for violation of patient confidentiality standards are substantial with monetary fines and in some cases imprisonment. The secretary may impose a civil monetary penalty (a fine) on any person or covered entity who violates any HIPAA requirement. The civil monetary penalty for violating transaction standards is up to $100 per person per violation and up to $25,000 per person per violation of a single standard per calendar year...Criminal penalties are up to $50,000 and one year in prison for obtaining or disclosing protected health information; up to $100,000 and up to five years in prison for obtaining protected health information under “false pretenses”; and up to $250,000 and up to ten years in prison for obtaining or disclosing protected health information with the intent to sell, transfer or use it for commercial advantage, personal gain or malicious harm":

http://www.hipaaacademy.net/hipaaPenalties.html

The following is additional information on the penalties for violating HIPAA standards:

http://www.hipaaacademy.net/hipaaPenalties.html

http://www.hipaadvisory.com/REGS/HIPA
Aprimer.htm

4. Small company suggestions:

http://www.nfib.com/object/4172804.html

http://www.bizjournals.com/philadelphia/stories/
2004/03/29/focus3.html

http://www.cfo.com/article.cfm/6823738/c_
3666324/?f=archives

5. Sample reference material:

http://www.hhs.gov/ocr/hipaa/

D. Gramm-Leach-Bliley Act. As indicated in the information below, "The Financial Modernization Act of 1999, also known as the “Gramm-Leach-Bliley Act” or GLB Act, includes provisions to protect consumers’ personal financial information held by financial institutions. There are three principal parts to the privacy requirements: the Financial Privacy Rule, Safeguards Rule and pretexting provisions." You can research the Gramm-Leach-Bliley legislation further at the following websites:

http://www.ftc.gov/privacy/privacyinitiatives
/glbact.html

http://banking.senate.gov/conf/confrpt.htm

http://www.pkilaw.com/consumers_privacy_
financial_2.htm

Where can I find a mailing list of potential customers? We are located in CANADA.

Target customer lists are available, or can be compiled, from various sources - local government agencies, phone directories, Internet business directories, and others. Though they may cost a few hundred dollars, the most efficient (time saving, accuracy, etc) source of businesses and individuals by revenues, number of employees, income, location, industry, and other criteria is a commercial list service. An example, MyProspects.com, is available through our website in the Sales & Marketing section under Sales Leads. You can also use your local phone directories, or an Internet search engine to locate commercial lists and directories that may provide you with target customer information. The following are example websites:

http://www.infocanada.ca/

http://www.firstmark.com/category_lists/
canadian_list.html

Dun and Bradstreet is another source of list services:

http://www.dnb.ca/default.html

There are many lists and list brokers available to choose from who can assist you in obtaining a list of potential customers. The key is finding the most current, accurate and targeted list. List companies compile lists, many times, from multiple sources so it's very important to know where the contacts originate from before purchasing the list. A very good article on choosing an effective list, Choosing Effective Lists, is available on Edith Roman Associates site at:

http://www.edithroman.com/content/literature.aspx

 

I would like to buy a laptop for power point presentations. use on business trips for access to the internet ect. cost range from 800 to 1000 dollars. could to recommend a product that would fit the work load?

For that price range, Dell offers a few choices. The Latitude series of notebooks will have a few choices that might work for you:

http://www.dell.com/content/products/
results.aspx/latit?c=us&cs=04&l=en&s=bsd
Alternately, you could go to the Dell Outlet where they have refurbished laptops for good prices, as long as you're willing to search a bit:

http://www.dell.com/content/segmenter.
aspx?s=dfo

Don't forget to purchase Microsoft Office 2003 Small Business Edition with your laptop if you need to work with PowerPoint. It is generally much cheaper to purchase a copy bundled with your laptop than it is to buy a copy retail.

As to other equipment choices, HP, Lenovo, and others make quality machines available. In addition to the weight and cost, you should make a list of features that you want and compare various laptops. Making DVD, Powerpoint, and other business presentations, processor speed, memory capacity (at least 512MB of memory), DVD drives, peripheral attachments, and screen size can all be important considerations. You can compare laptops at your local computer stores and at Internet websites like the following:

http://shopper.cnet.com/4566-3121_9-
0.html?tag=shfd.dir&filter=1000036_2792031_

http://www.pcworld.com/reviews/index/0,00.asp#

http://www.consumersearch.com/www/computers
/laptops/index.html