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December 2007
Volume 1, Issue 5
The Turkey Transition
Is your Business fit? Get a Fiscal Physical
IL SBDC at ISU Seeks Field Studies Projects
Circles Bring SBDC Entrepreneurs Together
Trace Designs a Bright Future
Learn more about the Bank of Illinois
Please do your best to purchase locally.
Follow our checklist to see if you'll be in a cash crisis down the road.
It seems to me that Thanksgiving ushers in a transitional period – both personally and professionally. Most people seem to go from a “normal” pace of life to one filled with holiday parties, receptions, school programs, family gatherings, and friends visiting from out of town. Some businesses, especially retail, begin their busiest season. Others slow down to a grinding halt.
Whichever scenario describes you and your business, it is also a good time to look ahead to another transition – into a new tax year. Could your bookkeeping habits use some brushing up? Do you know how you’ve done this year compared to your peers? Get a fresh start in the New Year with our Fiscal Physical seminars, co-sponsored by the Bank of Illinois. Offered over three mornings, this series of workshops will “translate” the language of business finance into plain English, so you can understand what the numbers are trying to tell you...
How am I doing compared to others in my industry? What’s going to happen to my company if sales decline? Can I afford to expand my business, and is now the right time? If I’m making profit, why don’t I have any cash? Will I run out of cash at any time during the next year? What happens to profits if certain costs suddenly increase? How much will I need to increase sales to pay for that new piece of equipment?
These and other questions confront and confuse small business owners on a regular basis. Business finance is much like a foreign language, requiring a method of translation to understand its meaning.
Bank of Illinois and the Illinois Small Business Development Center at ISU are offering a series of workshops to business owners that will “translate” the language of business finance into plain English, so you can understand what the numbers are trying to tell you. This series is designed for companies who know they are experiencing financial challenges, as well as those who think they are doing well. Even a healthy person goes to the doctor for a physical exam once a year – just in case.
The Field Studies Course is the capstone project for all Management and Quantitative Methods (MQM) majors in the Entrepreneurship sequence. The course is designed to provide business students with an opportunity to apply all of the skills they have developed during their time at Illinois State to a real world business situation at NO COST to the participating company.
Small teams of four to five senior-level students provide consulting services for a local firm. The group works directly with a contact from the firm and is advised by one of the University’s College of Business professors as well as the staff of the Illinois Small Business Development Center (SBDC) at ISU. Students sign confidentiality and conflict of interest statements before working with any client companies. The project lasts the full semester and culminates in a presentation of recommendations from the students to the client and professor.
C7, the unique new program designed to provide small and medium-sized business owners the opportunity to be mentored by a seasoned business person, is in its third month. Topics covered include time management and setting priorities (September), basic marketing (October), and managing employees (November).
The mentorship experience is conducted in a group setting with five other individuals (protégés) seeking the same mentorship experience. C7 groups will meet each month until May 2008 when they will attend a graduation event.
Several client companies from the Illinois Small Business Development Center at ISU have taken advantage of this mentoring program. Entrepreneurs benefit through the relationships they build with others in their groups. Mentors will offer their wisdom and knowledge acquired from their experiences with growing their businesses. Protégés will have an outlet to discuss business struggles or frustrations with others who may be experiencing similar hardships. The program also offers an avenue for the sharing of new ideas and insight.
When Brad Barth first came to the Illinois Small Business Development Center at ISU in November 2006, he was ready for expansion. Barth was building a portfolio of satisfied clients and was adding video production to his previously traditional graphic design and web marketing firm. “He was ready to grow, but Brad needed to raise some capital to pay for his expansion, including equipment, additional staff, and moving to a larger office in Uptown Normal,” explained Illinois Small Business Development Center Director Elizabeth Binning.
“Because of his expanding business and client demands, he needed a quick turn-around on his funding request. So, Brad got a crash course on business plans and we prepared him for both banks and the McLean County Revolving Loan Fund committee.” Binning explains that it is common for entrepreneurs to fund their business ventures and expansions through a variety of funding sources. “The key,” says Binning, “is to fit the financing to the need.”
Bank of Illinois completed construction on its new building in uptown Normal year. In addition to the bank, various other organizations and businesses are headquartered in this beautiful new four story 40,000 square building. That focus on growing the community extends to their support of the Illinois Small Business Development Center at ISU. Since the Illinois SBDC’s inception, Bank of Illinois has helped provide the needed financial support for the free-of-charge services to the small business community.
As Bank of Illinois President Larry Maschhoff said, “The SBDC is a great asset to our business community and one which we financially support. Elizabeth and her staff provide businesses with help in many aspects of their business (business plans, marketing plans, etc.). We at the Bank of Illinois encourage and recommend many of our bank customers to contact the SBDC to help them with their business problems and planning so they can succeed.”
As you begin this busy season yourself, take some time to be generous with yourself. What does this holiday season mean to you? Perhaps the most generous thing you could give is your time – to a charitable organization or just to your family and friends. When you do make purchases, please do your best to purchase locally. Why? Actually, I have ten good reasons to shop at locally owned businesses:
Significantly more money re-circulates in your community when you buy from locally owned, rather than nationally owned, businesses: More money stays in the community because locally owned businesses purchase from other local businesses, service providers, and farms. Purchasing locally helps grow other businesses as well as your community's tax base
Business owners often get trapped because they don't heed the messages their business sends and they don't pay attention to basic principles. The following checklist represents a clear set of danger signals - situations and issues - that have a clear and negative effect on cash flow. Take a few minutes under the harsh, cold light of reality to ask yourself how many of the following danger signals exist in your business and then evaluate carefully their implications:
No physical inventory taken on a regular basis.
Lots of unsold inventory sitting around.
No monthly cash budget projection.
Bank credit line not paid down to zero within the last year.
Term loan payments were paid late one or more times within the year.
Buying at trade shows without a purchasing plan.
Short-term credit like credit lines used for long term assets such as rental equipment.
Bank statements not reconciledevery month....
To learn more about the Seeds of Tomorrow please follow this link.
The Illinois Small Business Development Center is funded in part through a cooperative agreement
with the U.S. Small Business Administration in partnership
with the Illinois Department of Commerce and Economic Opportunity and Illinois State University.
All SBA programs are extended to the public on a nondiscriminatory basis.