Category: Octane Blog

PPP Forgiveness: What You Need to Know

It’s important to understand the instructions to fill out the PPP loan forgiveness application. While the current form will need to be updated based on the Paycheck Protection Program Flexibility Act, this application needs to be submitted to the PPP lender you are working with.

For additional background, per the SBA website, the loan forgiveness form includes instructions and guidance to help you understand the process, including:

Options to help you calculate payroll costs
Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the covered period
Step-by-step instructions for how to perform the calculations required by the CARES Act
Implementation of statutory exemptions from loan forgiveness reduction (based on rehiring by the deadline)
Exemption from the loan forgiveness reduction for cases where you made a good-faith, written offer to rehire worker(s) that was declined

What is the new PPP EZ Loan Forgiveness Application?

The PPP Loan Forgiveness Application Form 3508EZ is now available. This EZ form is much easier – there’s less documentation and fewer calculations required.

You can download from the treasury.gov website or here: PPP EZ Loan Forgiveness Application.

There is a checklist available to help you fill out your loan forgiveness application form. These instructions also provide guidance on the documents you will need to include when you submit Form 3508EZ – the actual loan forgiveness application. Be prepared! You can download these instructions directly from the SBA.gov website: SBA Loan Forgiveness Instructions.

Resources:

Fact Sheet for Borrowers from the U.S. Treasury
US Chamber of Commerce 4-Page Guide
A Law Firm’s Perspective on the details of the Paycheck Protection Program
An Accounting Firm’s Perspective on the Paycheck Protection Program
The SBA Page on the Program
The Full Text of the CARES Act, in case you want to read “from the source”

Please note that this article is provided for informational purposes only. We are not lawyers and cannot provide legal or tax advice. This article represents our understanding of the situation at the time it was written. Please consult your legal and accounting experts, as well as government websites, and rely on them as the final authority.

Learn more about PPP Loan Forgiveness in this video from EO Chicago member Parquesi Partners.

This post was originally published on the EO Global Octane Blog.

Using Digital Marketing to Rebound from COVID-19

Cautious optimism surrounding the recent approval of the coronavirus vaccine may have us hoping for the best, but as the virus continues to rage, it’s still not business as usual. Maybe it never will be. We’ve had to pivot, to flex our agile muscles, to embrace digital marketing as never before.

Digital marketing offers substantial benefits, especially when it seems much of the world is exclusively operating digitally. It eliminates the need for face-to-face interaction (a key to stemming the virus’s spread), but it’s also measurable and easily adjustable. Analytics enables you to see your return on investment and quickly change anything that’s not working.

Digital Marketing Strategies and Tactics to Rebound from COVID-19

While many brands have opted to play it safe for fear of tarnishing their reputation—marketing experts suggest that now is not the time to sit back and hope for the best. Brands and marketers need to focus on offering short-term communication and innovation to secure long-term success in this unpredictable period. It’s a time to reinvent, inspire, and provide a viable solution to a very pressing problem.

Here are some examples of successful digital marketing campaigns to get you inspired:

Guinness Beer: St. Patrick’s Day Video

Guinness created a unique St. Patrick’s day video focused on a message that brings people together, offered a clear value, and let their consumers know that they were there for them in a campaign that will serve them well into the future.

The video uses an uplifting, inspirational tone coupled with a theme of communal care and solidarity to striking an emotional chord while demonstrating value and humanizing the brand in uncertain times.

Guinness yielded excellent results from its Covid-19 marketing campaign, which was original, relevant, and on-brand. The spot performed well above the US norm for brand favourability (49 percent).

Many people wanted to share the ad to be part of the Zeitgeist, with 21percent saying they would share it because the content defined the spirit and mood of the time.

Getty Museum: Creative Social Media

The pandemic closed museums, but the Getty Museum jumped at the opportunity to promote its brand through social media. Launching the ‘Getty Museum Challenge,’ the museum issued a challenge asking social media users to recreate their favorite artwork using just three objects found around the house.

It was an instant hit, generating tens of thousands of responses across social media platforms and providing well-deserved engagement for the Getty Museum.

Dunkin’: Making the Coffee Break Virtual

Dunkin’ tapped into the growing gratitude people expressed during the pandemic for front-line workers with a way for Americans to help and to show support without having to leave home. It created the DunkinCoffeeBreak.com eCommerce site to give customers a way to show appreciation by sending a virtual coffee break in the form of a Dunkin’ e-gift card. Dunkin’ donated $1 (up to $100,000) for every card purchased at the site to the Dunkin’ Joy in Childhood Foundation emergency funds, specifically for non-profits helping families affected by COVID-19.

The site is driving incremental digital gift card sales and has generated a 300 percent increase in year-over-year gift card sales for specific events.

Chipotle Mexican Grill: Zoom Lunch Sessions

One of the first brands to act once the pandemic began upending daily life, Chipotle Mexican Grill launched Chipotle Together, a series of daily sessions on Zoom. First, bringing 3,000 fans and celebrity guests together over lunch, when they may usually have lunch at a Chipotle restaurant under different circumstances, and later offering it at various times throughout the day.

In just two weeks, the campaign generated 500 million impressions and 100 earned media stories. The strategy demonstrated an excellent way to deliver community to consumers hungry for connection in the early days of the lockdowns.

There is no doubt that this is an unprecedented situation, and it’s a real challenge right now for businesses to know how to adapt their creative strategies. The pandemic has challenged everyone, but it also provides businesses opportunities to grow and thrive like all challenges. Taking advantage of digital marketing is an option that can guide you safely into the future.

This post was originally published on the EO Global Octane Blog.

Virtual Team Building Activities For Remote Teams

Even before the pandemic necessitated moving to remote work for thousands of people, it’s been trending upward, growing 173 percent since 2005. Another 2018 study showed that about 70 percent of the entire global workforce telecommutes at least one day a week already.

Research has found that employees who worked from home reported “higher levels of job satisfaction and reduced levels of burnout and psychological stress.” Employees that work from home can often struggle to feel connected with coworkers and the organization. By investing in remote team building activities, you can build happy, engaged, and productive remote teams.

Virtual team building activities can range from silly and straightforward to those that include teaching work competencies under the guise of fun. They can all create solidarity among remote teams.

Mystery & Intrigue

With simple animation and eerie music, virtual games such as Among Us and the virtual version of Codenames provide fun ways to foster team spirit and cooperation. Both games rely on problem-solving skills and a bit of imagination.

Virtual Team Coffee Breaks

A 15-minute “coffee break” each day or once a week, depending on your preference, is a simple way to provide a relaxing environment with team members. The team can gather on a video chat platform for conversations that can be work-related or purely for fun and entertainment, just as if people were sharing a coffee break at the office. Take it up a notch by sending team members a company coffee mug.

Virtual Escape Rooms

This activity lets teams play together while providing a great problem-solving activity. You can split into smaller teams and turn it into a friendly competition. Virtual escape rooms can be done in one sitting or a prescribed amount of time, such as a week.

Articulate

If you’re looking for a virtual team-building activity that combines brain power and laughter, this may be the game for you. It can be adjusted to take 15 minutes or an hour and requires no special materials.

Instructions: 1) Each person gets a different list of 10 words (e.g., laughing, movie, dog, etc.)

2) Each participant gets one minute to describe as many of their words as possible to everyone else, without saying the actual world. Phrases such as “sounds like” or “starts with” cannot be used.

3) After each participant has a turn, the person who can describe their words to the highest number of players wins.

Read My Lips

This is an easy and quick game to play with your team that mixes stress relief with a bit of critical thinking.

Instructions: 1) One team member mutes their microphone so they can only be seen, not heard. Be sure the other players are not muted so he/she can still hear the others in the meeting.

2) The designated player “says” a phrase. To make it a bit easier, you can select a topic or a theme.

3) Everyone has one to two minutes to guess what the designated player said. Once the phrase is guessed or a player’s time is up, another team member is designated.

Dog, Rice, and Chicken

Creative thinking and problem-solving foster collaboration and is a hallmark of a great team. This game practices lateral thinking and teamwork skills and offers an opportunity to discover how well your team can work together when challenged.

Instructions:

1) One person plays the role of the farmer, and the other team members are the villagers.

2) The farmer has a dilemma: he has a dog, some rice, and a chicken he needs to get across a river to get home, but can only carry one item at a time. He cannot leave the dog alone with the chicken because the dog will most likely eat the chicken, and he cannot leave the chicken alone with the rice because the chicken will eat the rice.

3) The villagers must help the farmer come up with a solution.

4) If your team is large, you can create multiple villager teams; then the winner is the team that comes up with the fastest and the least number of boat trips across the river.

Lunch and Learn Sessions

Lunch and learn sessions are fantastic events that allow your team to learn new skills while having a break from the workday. It can be done as a quick presentation or with a guest speaker who shares career-building skills or helps with personal goals. It is also a great way to provide lunch to your remote team via delivery service. You can make this a quarterly event and change the topic each time.

Guided Meditation

During an otherwise busy day, ten quiet minutes can be an effective way to bring people together and build strong remote teams. You can achieve these results with a guided meditation session.

Find a guided meditation exercise online or contact an expert to guide the group. Consider sending employees a care package with scented oils and candles beforehand.

Research has shown that remote team activities have myriad benefits—boosting team morale, increasing productivity, encouraging creativity—all good for business!

This post was originally published on the EO Global Octane Blog.

How to Write and Deliver a Performance Review (With Example Templates)

The performance review. Dreaded equally, in some cases, by the giver and the receiver, but it doesn’t (and shouldn’t) have to be that way. If you’ve never written or delivered a performance review to an employee, or if the thought of doing a review is about as appealing as a root canal, here are a few tips to help you.

In recent years, the annual or semi-annual performance review process has come under a lot of fire. A 2018 article in Forbes magazine said they were pointless and insulting and referred to them as ‘artifacts leftover from the Industrial Revolution.’ Others contend that the written form is still vital because it puts structure into performance evaluations. Taking the time to write an evaluation signals to employees that you think they’re important. A performance review’s goal shouldn’t be to punish an employee for not meeting expectations but to help the employee and the business grow and succeed.

Keep This in Mind Before Writing a Performance Review

Research has found that performance feedback that only occurs a few times a year is unlikely to be meaningful. Providing ongoing, less formal communication consistently throughout the year, followed by a formal written performance review reflecting what employees have heard throughout the year, can be affirming and motivating.

A Gallup poll shows that when managers provide weekly (vs. annual) feedback, team members are: – 5.2 x more likely to strongly agree that they receive meaningful feedback – 3.2 x more likely to strongly agree they are motivated to do outstanding work – 2.7 x more likely to be engaged at work

Follow these steps to deliver a meaningful performance review:

1. Provide regular feedback throughout the year

Offering feedback and coaching (if necessary) regularly throughout the year will help you establish a solid foundation. Here are some guidelines for giving feedback:

Stick to verbal input most of the time. Sharing information feedback will be less intimidating and make employees more receptive. Don’t make it a big production.

Focus on positive rather than negative feedback. Think of the adage: you can catch more flies with honey than vinegar. This is not to say that you have to lavish praise for every effort; however, positive reinforcement is much more effective at encouraging employees to do good work.

Offer training rather than delivering after-the-fact critiquing. There’s always room to learn and grow, no matter what level of experience or how many years an employee’s been on the job.

2. Ask the employee to write a self-evaluation

Much like the formal review concept, the idea of employee self-evaluations has also received its share of criticism. A Harvard Business Review article advocates ditching an official form and instead, asking employees to prepare an informal list of their most important accomplishments and achievements. Again, others prefer having employees submit a formal evaluation (example here) that follows a form. The benefits of self-evaluation can be powerful by:

– Increasing an employee’s self-awareness – Reminding the reviewer of an employee’s accomplishments – Instilling self-confidence in an employee

3. Write & deliver the employee performance review

Using a performance review template (or developing your own, an example is here to get you started) and taking the employee’s self-assessment into account, complete your own review of the employee. While it’s advantageous to emphasize the positives, you should also be honest. A few tips: – Include a mix of numeric and qualitative feedback. (In the example linked to above, there is both a numerical rating of virtues such as “taking initiative” and a comments section to add color) – Don’t make it too long. Don’t view the performance review as a laundry list. Instead, focus on a few key areas where you think the employee has the most to celebrate and the most opportunity for improvement. – Deliver the review in person (or video call if in person isn’t possible). Don’t just email the review to your employee, instead schedule some time to review it together with them. This allows you to explain the context behind your thoughts and allows them to ask clarifying questions.

Click to Open Template of Example Supervisor Evaluation

Performance reviews can, and should, be a positive and beneficial experience for everyone if done correctly. They can also be a powerful tool that can enhance your relationship with employees and improve your organization’s performance.

This post was originally published on the EO Global Octane Blog.

Behavioral Questions to Ask in an Interview (And What to Look For)

Interviewing is hard. Most job applicants are going to make an effort to shine, and it’s hard to tell if the polish is only surface deep. Some candidates are glib and able to give polished answers to standard interview questions. Behavior-based interview questions provide a way for interviewers to delve into how candidates handled past situations. That information can inform their ability to perform in a position. These types of questions often begin with the phrase, “Tell me about a time when you…”

The Benefits of Behavioral Interviews

Behavioral interviewing is based on the premise that the best predictor of future performance is past performance and can:

Save Money
Hiring an employee is a significant investment, and a bad decision can cost your business a lot of money. It can also have a long-term effect on a company because below-average employees can lead to disappointed clients and drag down team productivity.

Provide a better understanding of the candidate
The behavior interview format lets an interviewer gain a more in-depth picture of a candidate in ways that can help determine if they are a good fit for your organization. It’s a way to measure soft skills, personality, problem solving, and work ethic.

Help predict the employees’ future behavior
Questions like “give me an example of” or “what will you do if” can help interviewers understand if the candidate would approach common situations in a given role in the way the company would want.

Are Behavioral Interview Questions Effective?

Behavioral interview questions can be very effective, but they need to be framed correctly. One important component, as explained in a Forbes article, is how the questions are phrased. The idea is that often typical behavioral interview questions give away the right answers, cueing candidates to share success stories and avoiding failure examples.

For example:
ORIGINAL: Tell me about a time when you adapted to a difficult situation and how you did it.

Expressing the question using this language makes it very clear to the candidate that they are supposed to share a success story about adapting, balancing, persuading, etc.

CORRECTED: Tell me about a time when you faced a difficult situation.

Rewording the question allows a candidate to share success stories that provide details, context, evidence of critical thinking, and much more.

What to Look For When Asking Behavioral Questions

The process enables you to more accurately determine what qualities and behaviors you are looking for in a candidate that aligns with your organization’s core competencies.

How does the candidate answer the question?
The candidate should provide the answer in the form of a short story, not just list the tasks and activities they accomplished but also what strategies and tactics they used to accomplish them. Encourage candidates to provide specific details about their actions.

What was the candidate’s individual response to the challenge?
Teamwork is good, but you’re trying to ascertain what the candidate’s exact role was in this instance. If there was a team, how did they personally contribute?

What is the candidate’s body language like during the interview?
While an interview can account for a certain level of nervousness, if the candidate is overly uncomfortable or fidgeting, it may indicate that they are not being fully transparent. If this is the case, feel free to ask follow up questions to more fully explore the past experience.

Sample Behavioral Interview Questions

When using behavior-based interviewing, every candidate must be asked the same questions to assess them fairly.

Example questions include:
– Tell me about a difficult work challenge you’ve had.
– Have you ever been in an ethically questionable business situation?
– Have you ever had a project that had to change drastically while it was in progress?
– Talk about a time when you’ve had to sell an idea to your colleagues.
– Tell me about a major setback you’ve had.
– Talk about a time where you had to make an important decision quickly.
– Have you ever had a deadline you were not able to meet?
– Talk about a time when you had to adapt to significant changes at work.
– Have you ever had to convince your team to do a job they were reluctant to do?
– How have you dealt with an angry or upset customer?

Are additional probing questions needed?

If a candidate’s answers are vague, ambiguous, evasive, or don’t fully address the question, ask follow-up questions triggered by the response. Suggestions include: I’m not quite sure I understood. Could you please tell me more about that? I’m not sure what you mean by ___. Could you give me some examples? You mentioned ____. Could you tell me more about that? What stands out in your mind about that? Can you give me an example of ___? You just told me about ___; I’d also like to know about . . .

Behavior-based interviewing isn’t perfect, and it’s not a panacea for complex recruitment and retention challenges. Still, it is a tried and true methodology that’s used by some of the world’s most successful companies.

This post was originally published on the EO Global Octane Blog.

How To Get An SBA Loan for Your Company

It’s been a challenging year for small businesses. The need for extra cash may be more pressing than before as many businesses dig their way out of the COVID-19 economic crisis. Many companies, regardless of size, use borrowed capital to fuel growth and fund other initiatives. Long-term, low-interest financing makes SBA loans some of the most affordable business loans on the market, and the process of getting an SBA loan can be lengthy and involved (but worth it). Follow these steps to make the process more manageable:

1. Determine your eligibility for an SBA loan.

First and foremost, make sure you’re eligible for an SBA loan. Depending on the program you choose, there are specific guidelines, and some are more flexible than others; however, the general requirements include that your business:

Be a registered for-profit business
Be located and operating in the U.S.
Meet the SBA definition of a small business
Has an owner that has invested time and money into the business
Has no past delinquencies or defaults on government debts

2. Choose your SBA loan program.

The next step in getting an SBA loan is choosing your specific loan program. The SBA offers various loan programs, and each program has unique requirements, terms, loan amounts, typical interest rates, purposes, etc. It’s important to consider all of the options and determine which SBA loan program is best for your business. A few of the most popular options include:

SBA 7 (a) Loans

A few different SBA 7 (a) loans offered by SBA lending partners (typically banks) are available, with loan amounts up to five million dollars. The terms can be as long as 25 years, with interest rates ranging from eight to thirteen percent, and can be used for any business purpose.

SBA 504/CDC Loans

Sometimes referred to as SBA real estate loans, SBA 504/CDC loans are used exclusively for major fixed asset purchases, such as large equipment or real estate purchases. The distinctive structure—a participating Certified Development Company (CDC) in your area provides 40 percent of the loan amount, an SBA lender provides 50 percent, and you offer the remaining 10 percent. The loans can extend up to five and a half million, with interest rates falling between five to six percent and terms up to 25 years.

SBA Microloans

The SBA Microloan program is designed to offer small businesses affordable capital in smaller amounts—with a maximum loan amount of $50,000. The maximum term available is six years, with interest rates falling between eight and thirteen percent. Because the eligibility criteria for this program is more flexible, it can be an excellent option for start-up businesses.

3. Find the right SBA lender.

The right SBA lender for you will largely depend on the loan program you’ve chosen. Check with your local bank or the bank you use for your business and ask them what kind of SBA loans they offer. You can also connect to an SBA lender using the SBA’s website.

4. Gather the information and documentation needed to apply.

The SBA loan application requires significant information and documentation—some of which will depend on your lender and loan program. Overall, make sure that you gather the following information and documents for your SBA loan application:

Basic business information
Basic personal and background information for you, as well as any other business owners
Loan request letter detailing the amount you’re asking for and how you plan to use the funds
Business plan
Personal and business tax returns
Personal and business financial statements—including a balance sheet, profit and loss statement, bank statements, and cash flow statement for the business
Existing business debt schedule, if applicable
Legal documents like business licenses, leases, and contracts
Any SBA loan requirements that are unique to your program

5. Complete your application.

Once you’ve gathered all of the information and documentation you need, the next step to getting an SBA loan is completing the application. The specific document will depend on the lender. Some lenders may offer online-based applications, whereas others will require that you complete a paper form.

6. Close your loan and receive funds.

Congratulations! The final step is working with your SBA lender to close the loan.

These are the basic steps to getting an SBA loan. Although the process may not be particularly fast or simple, the time and effort necessary to get an SBA loan are well worth it.

The EO global entrepreneurial network offers a suite of connections, tools, and resources to help you succeed in your entrepreneurial journey. Explore the forums, events, mentoring, and coaching benefits EO members receive to enhance your business.

This post was originally published on the EO Global Octane Blog.

Online Tools for Better Business

Despite the economic stranglehold impacting the business world, there are a lot of inexpensive online resources that can help you set your business up for success. Here are a few of the best Web sites I’ve come across, and what they have to offer:

99designs.com
The appearance of your business matters, especially when you’re trying to establish yourself in the marketplace. The right designer can be integral to perfecting your corporate image. 99designs takes the risk out of this process by using your business brief to set up a design contest, whereby designers compete to make the best design for your needs. Just know what you want designed and how much you’re prepared to pay for it. You choose your favorite design and pay the agreed fee, and then the designer sends you his completed design and copyright to the original artwork.

Basecamphq.com
This is a project management system that runs online. It’s collaborative, and while it’s mainly recognized by Web developers as a key tool, it serves as a solid project management system for any company. It’s a simple system to use, and it provides file storage, as well as a way of connecting with clients who may not be as good at online communication as you are. This is an excellent, easy-to-adopt project management tool, and it prevents new businesses from having to invest in their own project management system at great cost.

Venda.com
Venda offers technology platform needs and provides ongoing business services and consultation. Its focus is on e-Commerce— they have a team dedicated to finding simple, speedy solutions to e-Commerce problems. After implementation of the technology, there is a support and service infrastructure of more than 200 people who will work with you to boost your return on investment. There is a guaranteed 24/7 help desk, too. What’s more, Venda offers a simple, cost-predictable monthly payment model, so you’re not surprised with hidden costs.

SubHub.com
SubHub makes it easy for anyone to build a moneymaking Web site. It’s turnkey, hosted and managed platform incorporates powerful, yet easy-to-use, content management with a range of income-generating options. These include subscription and membership site functionalities, but also advertising capabilities, affiliate marketing tools and an online store. By making it simple to make money from online content, SubHub gives clients greater freedom and the opportunity to profit from their expertise.

This post was originally published on the EO Global Octane Blog.

What to Ask Before Buying a Franchise

Article by:

Akhil Shahani

EO Bombay

Akhil Shahani is the director of The Shahani Group.

E-mail Akhil at akhil@shahanigroup.com.

If you’re considering buying your own franchise, you probably have a million questions running around in your mind; questions that can make a difference in the success or failure of your business goals. To give you control during the decision making process, here is a checklist of 20 questions that I share with clients before they make the leap into franchising:

How long has the company been in existence before it started franchising? Was it specifically set up to franchise?
What is the company’s financial position? You should check accounts for at least the past three years. Can you get trade or bank references?
Can the franchiser show you any figures or net profits of one or more of its existing franchisees, and can you personally check the figures with the franchisees themselves?
What are the criteria to be selected as a franchisee?
As a franchisee, what are your obligations? Are there any operational restrictions on pricing or use of suppliers?
What is the nature and extent of the rights that will be granted to you?
How many franchised units are currently in operation? Are there also companyowned units in operation?
Does the agreement have a termination clause; if yes, what will it cost you?Can you sell your franchise?
Does the franchiser have a reputation for honesty and fair dealing among its franchisees?
What kind of assistance will the franchiser provide? Will it involve management and employee-training programs, advertising campaigns, credit and merchandising ideas?
Does your region have a law regulating the sale of franchises, and has the franchiser complied with that law?
How much equity capital will you need upfront to purchase the franchise and operate it until the profits start rolling in? Will there be sufficient profit left once you’ve paid all of your expenses?
What are the initial and ongoing fees? Are there any other hidden costs?
Will you get the exclusive rights to the territory for the length of the franchise period, or can the franchiser sell a second franchise in your territory? If the answer to this question is “yes,” what is your protection against the second franchising company?
Have any franchised units failed during the past 12 months? If so, what were the reasons?
Is the franchiser a member of a reputable franchise association? Have they ever been refused membership?
In the event of a dispute between the franchiser and the franchisee, how will it be dealt with?
What is the procedure for terminating the agreement, and what are the consequences of doing so?
How is the communication between the franchiser and franchisees? Is it possible to talk freely to existing franchisees?
What are the franchiser’s long-term plans for the future of the business?

Though business surveys show that fewer than 20 percent of all franchised businesses fail compared to the 60-80 percent failure rate for all new businesses started each year, it’s important that you investigate a franchise opportunity thoroughly. The checklist above will serve as the starting point nof your franchising journey. If you can get the answers to each of these questions, and those answers satisfy you, then you’re on your way to becoming a proud franchise owner.

This post was originally published on the EO Global Octane Blog.

Buying a Business? Start Here.

Buying an established business has its advantages. For example, when you buy a business, you take over an organization that’s typically already generating revenues. There’s also usually a customer base, an established business reputation and existing operational procedures. However, just like any kind of investment, there are risks as well. It is important to do the necessary research and understand the factors that may affect the success or failure of your venture.

We explore three of the most important things to consider before buying an existing business.

1. Is the Business Right for You?

Buying a business that’s not right for your needs and interests may cost you more time, energy and money than you think. To prevent this, gather all the necessary information about the business to help you determine if you can commit to it.

Start by reflecting on your intention of buying the business. Do you plan to get involved actively and manage the business yourself or is this a passive investment? Be honest and clear in your intentions as you assess potential businesses and employees.

Second, you must understand how the organization operates—and be interested in those operations. This doesn’t mean you need to be passionate about the product or industry. Rather, it should at least be something that holds your attention, you have experience with and you would be happy to devote your time and energy.

2. Is the Business a Good Investment?

Once you have established that the business is right for you, the next thing to consider is whether you can make money from the business. While it may seem obvious, confirming profitability requires you dig thoroughly and find detailed answers.

Find out the reasons why the business is for sale. If the business is in bad shape and hasn’t been performing well financially, then ask yourself, “Am I ready and qualified to take on this considerable project?”

It is best to determine the business’s average gross annual revenue and net profits (if any) for the previous two years. If it meets your financial expectations, the next thing you’ll want to do is determine its fair market value.

Make sure you determine the right value of the business using several factors, including the average revenue, expenses, assets, liabilities and future projected earnings. You may also need to consider its market share and clientele, as this can affect future earnings. Through this information, you will likely be able to evaluate the time you need to invest as well as the value of your potential ROI.

Further, check out the business’s reputation. Do they have an established customer base and market share? Are the employees experienced and trustworthy? Are the products and services of good quality and value? How well known is the business in the market? These questions will help you determine whether or not the business is worth buying.

3. Can You Afford the Purchase?

You have established that the business is interesting, valuable and has a potential to become a good investment. The next thing? Find out whether you have the funds to purchase the business outright or if you need to finance the purchase, including being able to cover other operating expenses/unforeseen costs associated with the business.

Aside from exhausting your savings and borrowing money from friends or family, you have the option to take a loan for buying a business. A few of the financing options include SBA loans, ROBS , conventional bank loans and HELOCs. Some of these require a 10 percent to 30 percent down payment, collateral and a credit score of ideally 600 or more.

Further, you have to consider other things when trying to buy a business. Are you going to pay yourself a salary for managing the business? Is it a failing business you need to turn around and invest more cash into over time? Or is it just a passive cash flow investment where you do nothing and expect to receive a return?

Being able to afford a business isn’t just about the initial financing. Consider the expected cash flow and financial demands over time. After all, there might be unforeseen and costly strings attached to buying and owning a business.

Bottom Line

Buying an existing business that’s in line with your interest and has a potential for further growth is a good investment. However, there are strings attached. Other than putting up your own money and securing financing to help you with the purchase and other expenses, you also need to ensure that you’re making the right decision based on your needs.

This post was originally published on the EO Global Octane Blog.

What to do When Generations Clash

Article by:

Jonathan Davis

EO Austin

I’ve just returned from the EO President’s Meeting in Dallas, Texas, USA, where one of the biggest topics was the significance of delivering value to members in order to ensure retention. Like most organizations and companies, acquiring a new member (or customer) is very expensive and time-consuming. It seems obvious that, once you’ve acquired them, retaining members should be a heavy area of focus for any leadership team.

The discussion eventually shifted to the age of our members and the risks/rewards of eliminating the ceiling that is currently placed on new members. When EO was started more than 20 years ago, it was created for entrepreneurs who were under the age of 40. When I joined five years ago, the average age of a member was about 37. Today, the average age of a member is 41. To put it more simply : Every year that I’ve been part of this organization, the average age has gone up by one year, and a new generation of entrepreneurs are ushered in. This is indicative of our entire population, and the management of these people is a major challenge for companies everywhere. As businesses continue to grow and mature, entrepreneurs are worried about the retention of their employees, as well as the age of their teams.

Author Jason Dorsey, widely known by the business word as the “GenY Guy,” has some incredible data points regarding generational employees. Here are a few:

For the first time ever, the world has four generations working together in the same workplace (GenY, GenX, Baby Boomers and “the Mature” Generation)
The average life expectancy of a Baby Boomer is about 78, while the “retirement age” is still 65
GenY employees are the first generation in history that will likely need to work for 65 years (that’s retirement at 87-90 years old)

On top of these points, here are several scary ones for business leaders:

While Baby Boomers are finally comfortable with e-mail and are actively learning about Facebook, GenY’ers aren’t using those mediums as much because they’re cumbersome and/or they’re no longer “cool.”
GenY’ers believe that long-term tenure in a role is 13 months. Meanwhile, Baby Boomers want to give these employees reviews once a year.
GenY’ers aren’t really motivated by money as a “carrot” the way previous generations have been. Why? Because their parents (those same Boomers) have given them a credit card to pay for things like gas, groceries, vacations, etc.

Driving retention, loyalty and performance from the GenY population is becoming a real challenge for businesses. This is a generation that is affordable, hard-working and passionate about their work, but they can’t be relied on to work diligently from 8 a.m. to 6 p.m. every day. They aren’t interested in sitting in meetings to talk about the next meeting, and they’re no longer “tech savvy.” Rather, Jason calls them “tech dependent,” because they don’t have any idea how their smart phone works— they just know they can’t live without it.

What are you supposed to do as a business leader when you wake up and realize that the future of your organization depends on leveraging this new population of workers; these people that you can’t relate to? Here are a few suggestions Jason offers:

Accept that while work/life balance is something that Baby Boomers dream about and GenX’ers talk about, GenY lives it. You won’t be able to keep them around if you expect them to sacrifice their friendships and social time. Create a workplace that inspires them and encourages both hard work in short spurts and downtime.
Let GenY’ers work in teams as often as possible. This is a generation that was raised playing soccer, baseball and other team sports. If you’re asking them to work solo and independently without praise, they’re not going to stay engaged.
Start with the outcome and then work backwards to talk about the steps. This is counter-intuitive to the way most people are used to teaching, but by starting with the big picture and driving universal awareness of the challenges, GenY’ers will embrace the challenge and buy in to the goals instead of zoning out.
Give employee reviews all the time— 10-minute check-ins every week or two are significantly more powerful than an annual review. Let this new generation know what they are doing right, give them praise, offer corrective actions and make minor adjustments all the time instead of hoping they’ll be around for their first annual review.

These and other tips are in Jason Dorsey’s new book, Y-Size Your Business: How Gen Y Employees Can Save You Money and Grow Your Business, which I recommend to all of my EO peers. Jason offers invaluable insights into how to handle new generations of employees, and he’s taught me a lot about how to set my business up for future success. As an entrepreneur, this is one book I can count on.

Source: EO Global Octane Blog