Category Archives: General Business Advice

National Labs Encourage Small Business Collaboration

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Monica Abeita

Monica Abeita, RDC for Northern NM Connect

Members of Espanola Valley’s Santa Cruz Irrigation District (SCID) believed they needed to invest in an expensive sediment trap to maintain the capacity of their reservoir. Sedimentation had filled more than a third of the reservoir, resulting in water rationing and a shorter growing season for the more than 3,000 farms that depend on its water. With help from a leveraged project through the New Mexico Small Business Assistance Program, the district learned that sediment was coming from multiple sources rather than just one, and it is now pursuing plans to build several smaller, less expensive traps.

“NMSBA prevented us from making a costly investment that would not be effective and offered better alternatives to benefit the farmers,” said Kenny Salazar, orchard owner and board chairman of SCID.

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SBA Seeks Feedback at Event

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John C. Woosley

John C. Woosley, District Director, SBA NM District Office

Janice Lucero was convinced people would pay a little more to renew their driver’s license or car registration if they could do it quickly from a convenient location with friendly service. Lucero turned her conviction into MVD Express, a $5 million company that serves 22,000 customers a month from its 11 New Mexico locations. Lucero’s success and community involvement led the U.S. Small Business Administration to name her the New Mexico Small Business Person of the Year. The award earned Lucero a trip to Washington D.C. where she’s in the running for national recognition.

The New Mexico district of the U.S. Small Business Administration will honor Lucero and other small-business leaders from 11:45 a.m. to 1:45 p.m. June 2 at the state’s Small Business Week Award Celebration luncheon at Embassy Suites Albuquerque Hotel, 1000 Woodward Place N.E.

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Stay Stable with Balanced Cash Flow

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Sandra Taylor Sawyer

Sandra Taylor Sawyer, Director, NMSBDC at Clovis Community College

Cash-flow imbalance is the leading cause of business failure in a healthy economy, according to the U.S. Small Business Administration. So when the economy is sputtering toward its prior vigor, it’s more urgent than ever to maintain a balance between what’s flowing into the business and what’s flowing out.

In business, cash is king. It’s used to pay short-term bills, cover unexpected emergencies and invest for future business needs. Savvy business owners look beyond income and expenses by keeping an eye on cash to manage all cash inflows and outflows.

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Personal Approach to Sales Prospecting Yields Results

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Stacy Sacco

Stacy Sacco, MBA, VP Marketing at WESST

Small-business owners focused on increasing sales sometimes turn to prospect lists – names of potential customers researched on the internet or purchased from a marketing firm. Even if the selection criteria are finely targeted, “cold calls” made from these lists result in fewer sales than calls made to people with whom there is a personal relationship. The key is to turn unknown potential customers into personal connections.

One approach is to generate an ongoing prospect list from public announcements about people who have won industry awards or reached achievements of note, and use the announcement to make a personal connection by sending a letter of congratulations. The letter should be written and addressed by hand, and suggest how doing business together can make the award-winner become even more successful.

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Hired Hands: Employees or Independent Contractors?

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John E. Barraclough, Jr., CPA and Managing Principal, Barraclough & Associates, P.C.

John E. Barraclough, Jr., CPA and Managing Principal, Barraclough & Associates, P.C.

It is more than a matter of semantics to the Internal Revenue Service when a business owner determines that the people who work for him or her are independent contractors rather than employees.

If an individual is a genuine employee, the employer must withhold and pay Social Security and Medicare taxes, withhold income taxes, and pay unemployment taxes on the wages.  An employer also might offer benefits such as health insurance, vacation pay, and retirement incentives.

If an individual is an independent contractor, the employer does not have to withhold taxes or offer benefits or retirement incentives.  The independent contractor must file an income tax return and pay income tax as well as self-employment tax to cover his or her own Social Security and Medicare liabilities. Continue reading →

JTIP Helps Businesses Expand

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Cynthia Evans

Cynthia Evans, JTIP Program Administrator, NM EDD

Outsourced labor, layoffs, and consolidation of jobs may have defined the past few years, but as the economy begins to throw off the weight of recession, businesses are turning their attention to adding workers to handle expanding workloads. Investing in staff is a commitment, especially when lack of training can delay employee productivity. The New Mexico Job Training Incentive Program (JTIP) helps businesses defray the cost of hiring and training new employees.

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Tax Considerations for the Self-Employed

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Eloisa Rivera

Eloisa Rivera, EA, BSA, President of Eagle Storm Corp.

Self-employment has its appeal, especially when businesses aren’t creating jobs fast enough for the nation’s unemployed.

A person who chooses this route might be a sole proprietor in a trade or business — for example, a plumber or cabinetmaker — or she might be an independent contractor, an insurance agent, limited liability corporation member or a partner in a business. These taxpayers are treated as independent contractors by the Internal Revenue Service and must be aware of the responsibilities and benefits of being self-employed. They will quickly become familiar with Schedule C – the IRS’ self-employment form.

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Good Customer Service Can Kick-Start a New Business

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Betsy Gillette

Betsy Gillette, Director of Market Research & Planning, TVC

Mistakes happen, but good customer service is one way to set a business apart. Owners need to build and maintain a stellar perception of their companies so that conversation about it is always positive. This is especially important for startup companies, which are more likely to experience stiff competition from entrenched organizations already in the marketplace.

A savvy owner of a startup business will do research to make sure there is a market for any product before launching it; what customers want from it; and how to price it. Similarly, industry customer-service practices should be researched to determine the extent or types of support typically provided, whether it’s in the form of after-hours help or replacing a component. Considering customer service during product development will ensure the extra cost of providing it won’t take the company down. It may also illuminate new markets that aren’t being served.

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New Online Tool Helps Small Businesses Tap Into Global Markets

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John C. Woosley

John C. Woosley, District Director, SBA NM District Office

Technology and energy products, chili peppers, nuts, dairy goods and other farm products have topped the list of New Mexico’s exports for the past few years, but the state has a vast untapped potential to sell more of its goods and services well beyond our nation’s boundaries.

Nearly 96 percent of the world’s customers live outside the U.S., and two-thirds of the world’s disposable income is also found abroad, according to the U.S. Department of Commerce. That makes exporting a wise choice for New Mexico-based small businesses that want to reach beyond the limited domestic market.  That’s especially true because New Mexico shares a border with old Mexico, which is itself a portal to the southern end of our hemisphere. 

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New Year, New Business Plan

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Mike Mykris

Mike Mykris, Director, NMSBDC at Santa Fe Community College

Writing a business plan is a daunting process to many entrepreneurs, but one that will help find financing and keep a new or existing business on budget and on schedule for growth and development. And it’s worth it — studies show that business owners without a formal plan are three times more likely to close their doors.

A plan can clarify how much money is needed to open a business and help the owner determine where to find capital — whether from a bank or relative — to keep it running. Established businesses are in equal need of a plan in order to stay on track or to make crucial changes, particularly with the state of the economy in mind.

Business plans are from 15 to 150 pages long. Any business plan should contain the following: Continue reading →