Vol I Iss Vi 2010 May

Volume I, Issue VI May 2010

Letter From The Editor
Robert Fulghum wrote ―All I Really Need to Know I Learned in Kindergar-
Special Points of ten‖. I have decided that Mr. Fulghum left out one thing: ―Oh, the Places
Interest: You’ll Go” by Dr. Seuss should be a book we all must reference during
our adult lives. Never in my life did I think that I book, written for chil-
 Why Employees dren, would be relative to the workplace and life in general. I had an ―Aha!‖ moment while
Leave reading this story to my nephew, and cannot stop talking about it to those around me. I‘m
just sad that it took me until now to read this book.
 Financing Your Busi-
ness
Each page I turned, I thought about a different time in my life that I was going through what
 Marketing to Women the kid in the book went through. I have told friends about it and they have bought copies of
it for themselves. It‘s really that good!

Basically this book focuses on making decisions and what may happen when things do not go
your way. It speaks of being the ―best of the best‖ and being lonely more times than not. It‘s
inspirational, reiterating that you can do anything although sometimes you may be stuck wait-
Inside this issue: ing for things to happen.

I would recommend reading this book, if you haven‘t already. Remember, all you really need
Letter from the 1 to know you learned in kindergarten….and from Dr. Seuss!
Editor

Technology 2

―On and on you will hike.
How To 3 And I know you‘ll hike far
and face up to your problems
whatever they are.
Human Resources 4 You‘ll get mixed up, of course,
as you already know.
You‘ll get mixed up
Sales & Marketing 6 with many strange birds as you go.
So be sure when you step.
Step with care and great tact
Legal/Finance 7 and remember that Life‘s a Great Balancing Act.
Just never forget to be dexterous and deft.
And never mix up your right foot from your left.‖
Comic Corner 10
-excerpted from Oh, the Places You‘ll Go
by Dr. Seuss

Medium Business Alliance Volume I, Issue VI Page 2

Technology:
Marketing Your Company in a Downturn to Create an Upturn in Revenue

Small businesses can learn three important tips from eco-
nomic and signage experts: to continue marketing and
advertising during the downturn, to rely on their digital
display to help them compete with larger businesses, and
to understand that a digital display is the most cost-
effective advertising medium for them.

1. Regardless of the state of the economy, consumers still
spend money on the products they want and need. Now
isn‘t the time to stop marketing:
 ―It is historically true in any industry, the easiest
time for a company to gain market share is dur-
ing downturns,‖ says Doug van Dorsten of ana-
lysts Thomas Weisel Partners.

2. A crucial component of gaining market share is a small
business‘s sign: retailer can have, reaching by far the most people
 ―The right place-based advertising will effectively for the least cost of any other medium," says Andy
and economically permit the local shopkeeper to Bertucci, executive director of the United States
successfully compete, even with the mass mer- Sign Council (USSC).
chandiser or big box retailer.‖  Large companies can afford a mix of TV commer-
 Many fledgling small businesses are totally de- cials, radio, newspaper and online ads.
pendent on commercial signage for their custom-  Broad-based advertising such as newspaper, radio,
ers or retail sales. and TV aren‘t cost effective for small companies
 Without an on-premises sign, these businesses because 85% of sales come from customers within
cannot compete with larger chains and fran- a 5-mile radius of smaller retailers. (Small Business
chises. Business signage is an integral and essen- Association web site) A digital display can reach
tial component of U.S. businesses‘ marketing and this audience when they can turn in and buy.
advertising strategies, and by extension, of their  National chains just need static signs with an easily-
success.( U.S. Small Business Administration, recognized logo that attracts customers who al-
<http://www.sba.gov/smallbusinessplanner/ ready know what they sell and how much it will
index.html>) cost.
 Without ―a well-designed, placed and legible sign,  Smaller businesses, on the other hand, must rely on
it appears that a sizeable segment of the mobile their digital display to attract those people who
and newcomer market will be lost to small busi- live, commute, and work in the vicinity of the busi-
ness.‖ ness. (The Signage Foundation for Communication
Excellence, Inc., ―The Economic Context of On-
3. A digital display is the most cost-effective advertising Premise Business Sings and How to Establish Value
medium for the smaller retailer. in the Marketplace.‖)
 ―A sign is the most effective form of advertising a

Daktronics designs and manufactures its digital displays in factories located in America‘s Midwest. Established in 1968 in a
tiny brick building in Brookings, South Dakota, today, the industry recognizes us as leaders in developing and bringing new
display technologies to the market. Our on-site LED displays help businesses across the U.S. and Canada to promote
goods and services in an affordable and effective way.

201 Daktronics Drive PO Box 5128, Brookings, SD 57006-5128
www.daktronics.com
Email: commercial@daktronics.com Phone:1-888-325-7446


How To: How To Buy A Business Phone System

There are many considerations when buying a new business
phone system and with so many brands to choose from it
can become a very daunting task.

This article will try to explain what to consider when pur-
chasing a new business phone system and in the process
hopefully save you some headaches and money as well.

First you have to know the current communication needs
for your company and how many lines and extensions
(telephones) you may need. Fax machines, credit card termi-
nals, and modems also have to be taken into consideration
as they will require the use of extensions.

Can the business phone system you are using be expanded
in the future to accomodate your needs? You might save
some money in the beginning but when your business phone
system has reached its maximum capacity for lines and ex-
tensions... then what?

You need to buy a whole new system and spend a great deal
of money in the process. And so the future growth of your company has to be considered as well. Your phone system
should to be able to grow as your business grows.

Some phone systems will let you expand as your company grows with the addition of cards that will supply more lines
and extensions or by the addition of an expansion unit similar to your main phone unit.

This in turn may save you money as the cost of adding more lines and extensions will be far cheaper than having to go
out and buy a whole new business phone system.

Another consideration down the road is whether your business phone system works with or is compatible with any of
the communication trends you may want to use such as voicemail, conferencing equipment, and headsets. Otherwise
again, you will have to go out and buy a whole new phone system again.

Most business phone systems will offer the same basic features such as intercom, speed dialing, caller ID, music on hold,
auto attendant etc. so it doesn't become too much of a factor.

What it really comes down to is whether your phone system can grow as your business grows and whether the brand
you are purchasing is compatible with or will offer any of the emerging communications technology that your business
may need in the future.

To conclude, do some research on the business phone system you may want to purchase and ask questions from the
dealer you are purchasing from. Choose your business phone system wisely and it will save you money and possible
headaches in the future.

Al Martinovic has 10 years experience in the telecom industry and operates a website that features business telephone
equipment at http://www.grandslamtel.com


Human Resources: Why Employees Leave
Ross Blake, the Employee Retention Manager

The following article is Part 1 of a four-part series by Ross Blake. Each month he will focus on the most common reasons that employees leave
and what to do about it. Be sure to look for the continuation of the series each month.

One of the questions I‘m asked most often by employers of all
types, including those in different countries, is ―Why do em-
ployees leave?‖

Some research shows thirty or more reasons why they leave.

Here are ten of the most common reasons employees leave; I
haven‘t ranked them in order with the exception of the first
one, which is usually the single largest reason for leaving.

10 Common Reasons Employees Leave Employers

1. Poor relationship between the employee and their immedi-
ate boss.
2. A poor match between the employee and the job or the
employee and the organization.
3. Compensation not competitive.
4. No direct link between strong performance and increased rewards.
5. A lack of stimulating or meaningful work.
6. A lack of appreciation, recognition, and rewards.
7. Insufficient coaching and feedback.
8. The quality of the people the employee works with.
9. Lack of career advancement.
10. Insufficient alignment and communication about how the employee‘s work helps achieve organizational objectives,
and how the employee can be a greater success.

Reason #1: Poor relationship between the employee and their immediate boss

There‘s a cliché that says, ―People leave managers, not companies.‖ In many ways, it‘s very true.

And it‘s often because of the way their supervisor or manager communicates and works with them.

Their boss may frequently criticize them while withholding praise and appreciation for quality work; demean them in
front of others; pile on more work as a ―reward‖ for being productive; refuse reasonable requests for time off or other
matters; and act disagreeably.

Many employees became supervisors or managers after demonstrating a good work ethic and the ability to get the job
done, but they often lack essential people and communication skills.

What can you do?

a. Make employee retention part of their job descriptions and base at least 25% of their bonuses on employee
retention.
b. Provide training in how to give corrective feedback-and in how to praise and recognize employees.
c. Help them understand the high cost of employee turnover and how it affects their performance and department.
d. Train them to conduct ―stay interviews‖ with their employees so they find out why they continue to work there,


what would entice them to leave, what they like most about their jobs, and other skills they want to
learn.
e. Get employee input about how their supervisor works with them-and how they can improve how they work with
them. (Notice that we haven‘t used the terms ―good‖ or ―bad‖ or ―right‖ or ‗wrong‖ here-only what they do
well, and what would improve what they do. Your goal is to help develop supervisors and managers, not criticize
them).
f. Consider coaching for supervisors and managers who need it; my experience is that most can make improvements.

Reason #2: A poor match between the employee and the job or the employee and the organization

Many new hires start with a fair amount of enthusiasm when they begin a new job with a new employer. However, when
the new hire, the job, or the employer haven‘t been well-matched, many will leave while the employer incurs expensive
replacement costs.

How can you increase the number of successful new hire “fits?”

a. Use exit interviews, preferably by a third party who can promise confidentiality to find out why some employees
leave.
b. Be certain job descriptions are accurate and up-to-date, and identify the skills and competencies the job requires, not
just the tasks. Be able to state what is required to be successful in the job.
c. When you have qualified candidates, pay them to shadow a capable employee in the same job for one day, and then
get feedback from both of them.
d. Ask the prospective employee to identify the needs and expectations they have of the job and the organization. Spell
out the needs and expectations the organization has of them, and then compare what both of you have written.
How close are you?
e. Continue to review the needs and expectations you have of each other at least once a month during their first three
months.

The better job you do of informing prospective employees about the job, the organization, its culture, policies, proce-
dures, and match expectations up front, the more good matches you‘ll make.

Work to be certain you understand the key needs both new and existing employees have. For example, one call center
manager I know had a lactation room created in his company due to the number of new mothers in his department.

Experience has shown that measures like these which organizations don‘t have to do-but are wise for them to do- greatly
increase employee loyalty, effort, and retention.

~Next month will feature reasons 3-5 of why employees leave: Compensation not competitive, No direct link between strong performance and
increased rewards, and A lack of stimulating or meaningful work.

Ross Blake, the Employee Retention Manager, shows employers how to implement employee
retention strategies and greatly reduce turnover costs.

Free Special Report, ―Stop Losing $5,000 to $50,000 by Keeping Your Valuable Employees
Longer‖ at: http://www.EmployeeRetentionManager.com


Sales and Marketing: Think Metropolitan When Marketing to the Women in
Business Market with a Pinch of Cross Marketing
by Jerrilynn B. Thomas

As a business woman, you know firsthand that the women marketing message will produce even BIGGER results if
in business market are lucrative because of the different they engage in cross marketing partnerships with the busi-
hats we wear in our business and personal lives. We are ness and professional women who reside in the key met-
CEOs of our own companies and households, mothers, ropolitan areas they want to expand into.
wives, consumers of personal products and services,
brides, caretakers of our aging parents, students, home Cross marketing at its essence is nothing more than join-
buyers, drivers, and more. But have you considered that ing forces with compatible companies so that everyone
our businesses are shaped by the metropolitan areas we involved can more effectively capitalize on each others‘
live in? existing client base. Corporate America was built using
cross marketing partnerships. Think sodas and movie
theaters, fashion and cosmetics, computers and software
companies, etc.

Instead of seeing every business person as a prospective
client, look at them as a prospective collaborator. Why
get one new client when you can get ten or more by ser-
vicing the client base of complementary compa-
nies? Prospective cross marketing partners are all around
you. They are your clients, LinkedIn connections and
group members, and even your Twitter contacts.

If you want to target business women in Metro Atlanta, a
company like Prescribe Me Insurance, LLC
(www.PrescribeMeInsurance.com) owned by Evelyn Jack-
son that offers health insurance plans for solopreneurs
and micro businesses would make an excellent cross mar-
The metro economy, job market, culture, business re- keting partner. A+ Professional Resources, LLC
sources and more affect our bottom lines and needs. De- (www.aBizResource.com), a business office support com-
pending on our professions and place we live, it is either pany owned by Reverle Harris, is also a great b2b com-
feast or famine right now. The way that you marketed to pany.
business women a few years ago requires a different ap-
proach now. The recession has changed the metropolitan Cross marketing etiquette is really straightforward. Do
landscape globally by separating the weak from the strong unto others as you would have them do unto you. Don't
while shining a glaring spotlight on the business needs that ask someone to give you access to their Rolo-
are not being met. dex. Approach them with a concept that mutually bene-
fits both of your companies -- joint press release, special
Business women in the Dallas / Austin area have different newsletter, teleconference, etc. -- in which you can both
needs from ones in Los Angeles or Toronto, Can- engage your clients. Commit to a one-time project to
ada. Women who analyze the women in business market test the waters.
on a metro by metro scale will grab a BIGGER share of
the market by uncovering under-served niche audiences Good Luck!
and new needs brought about by the recession. Their

Georgia businesswoman Jerrilynn B. Thomas is the founder of WomenPartner International. Jerrilynn‘s specialty is fa-
cilitating cross marketing partnerships between complementary business and professional women to help them increase
their client base while saving time and money on their marketing. Her services are very exclusive. She works with
women in select business 2 business fields and limits the number per state and international areas. Visit http://
WomenPartner.com to see if your business is a fit for her expertise.You can follow her on Twit-
ter @WomenPartner, LinkedIn, and on Facebook.


Legal/Finance:
Financing Your Small Business: Tricks and Traps for the Unwary
By Jonathan B. Wilson, corporate and business finance attorney, Taylor English Duma LLP

Many small business owners and entrepreneurs find that they must obtain fi-
nancing for their small businesses. Few banks are lending these days, however,
and that has led many business owners to search for alternative ways of getting
working capital. Business owners should always obtain legal advice for an ex-
perienced business finance attorney, however, as there are many ways a small
business can get into big trouble in no time at all.

What is Financing?

Financing for a small business can take many forms. ―Equity‖ financing includes
any transaction in which the investor (the party providing the cash to the busi-
ness) will obtain a permanent ownership stake in the business. If the business is
a corporation, an equity investment might involve a sale of the corporation‘s
stock, which might consist of common stock, preferred stock, or other inter-
ests that involve stock. If the business is organized as a limited liability com-
pany, an equity financing will involve the sale of ―membership interests‖ in the
company. While membership interests in a limited liability company are some-
times called ―units‖ or ―shares‖, they are the same thing.

―Debt‖ financing – in contrast with equity – is an investment where the investor provides cash and receives in return a
stream of future payments that will repay the original investment plus interest. Once the debt is repaid, it is retired and
the investor has no further claim against the company.

Debt and equity financings are different in ways that are important both to the business owner and the investor.
In an equity transaction, the investor stands in the same position as other owners of the business: the investor will make
money only when the business begins to distribute cash, derived from earnings, to other owners of the company‘s equity.
In a debt transaction, the investor stands ahead of the company‘s equity owners. The debt transaction documents will
often describe (or limit) the situations in which equity owners can withdraw earnings from the company prior to the com-
plete repayment of the debt. In many transactions, distributions to equity owners will be prohibited until the debt is re-
paid in full.

With debt, however, once the debt is repaid, the investment is over. The investor will never receive more than repay-
ment of the original investment plus interest.

With equity, the investment has the potential to grow in value to an amount far in excess of the original investment.
Sophisticated investors may also consider ―hybrid‖ investments that contain both debt and equity components. One of
the more common of these hybrids is a ―convertible note.‖

A convertible note is a promissory note in which the business promises to repay the original amount of the note, plus
interest. The note can be ―converted,‖ however, upon various circumstances into a number of shares of stock in the
business (if it is a corporation) or a quantity of membership interests (if it is a limited liability company). For example, a
convertible note might be converted at the discretion of the investor or at the discretion of the company subject to the
occurrence of certain key events (such as sales exceeding a particular threshold, or the company raises more than some
threshold of new investment).

A hybrid vehicle like a convertible note gives the investor the security that comes from a debt investment (where the debt
investor would be repaid before equity investors in the event of the bankruptcy or liquidation of the business) but the
potential upside of an equity investment (where the investor could convert the note into equity if the business increased
in value).


“Whether a small business investment is made as debt or equity, it is
also important, both to the investor and to the business, that the
transaction be structured in compliance with federal and state
securities laws.”
There is a nearly limitless number of combinations of debt, equity and hybrid models that are possible.

Key Issues in any Financing

There is no comprehensive list of issues to consider in a financing transaction, but some key issues include the following:
Will the investment consist of debt, equity or a combination of debt and equity?
What are the financial terms of the investment?
If the investment is made in equity, what voting rights will the investor have and how will those voting rights re-
late to those of other investors?
Will the business be prohibited or limited in its ability to take certain actions (such as borrowing money or selling
equity) for as long as the investment is outstanding? Will the business be prohibited from taking certain ac-
tions without the consent of the investor?
If the investment is made in debt, will it be guaranteed by the business owner? Will there be any collateral for
the debt? If the business fails to repay the debt when it is due, what rights or remedies will the investor have
against the business to recover the investment?

Complying with Securities Laws

Whether a small business investment is made as debt or equity, it is also important, both to the investor and to the busi-
ness, that the transaction be structured in compliance with federal and state securities laws. Securities law compliance is
complicated and many small business owners and entrepreneurs are not aware of how easily they can take on serious
liability for even a small mis-step in this area.

In general, both a debt investment (i.e. a loan) or an equity investment in a business are a form of ―security.‖ The issuance
of securities is regulated both by U.S. federal law as well as by state laws.

On the federal level, the key statute is the Securities Act of 1933 (often called the ―1933 Act‖). The 1933 Act provides, in
general, that it is illegal for any person to sell (or offer to sell) any security unless that security is either registered or ex-
empt from registration. The concept of ―registration‖ includes a number of methods of registration, but for most busi-
nesses it is sufficient to think of companies that are publicly-traded (meaning that their shares are available for purchase on
the NASDAQ, the NYSE or another national exchange). Publicly-traded securities, in general, have been registered with
the Securities and Exchange Commission (the ―SEC‖) and are subject to ongoing reporting requirements with the SEC.

Virtually all small businesses are not publicly-traded, which means that their shares (whether stock in the case of a corpo-
ration or membership interests in the case of a limited liability company) are not registered. To structure an investment
in a private company (i.e., one that is not publicly-traded) therefore requires that the securities being sold in the transac-
tion are exempt from registration.

The provisions of the 1933 Act and the SEC regulations that describe how unregistered securities are exempt from regis-
tration (and how transactions in unregistered securities may be exempt) are complicated. Business owners and investors
should not attempt to structure a transaction around these issues without the help of an experienced securities attorney.
In addition, after the transaction considers the applicable exemptions under the 1933 Act for U.S. federal law purposes,
the attorney structuring the transaction must also consider applicable state laws.

After the stock market crash of 1929 (which was one of the historical reasons for Congress passing the 1933 Act) most
states also passed laws governing the sale of securities to residents of their states. One judge quipped that some of the
fraudulent securities being sold before the 1929 crash were not worth ―an acre of Kansas blue sky‖ and, as a result, these


state securities acts are often called ―blue sky laws.‖

Like the federal 1933 Act, most state blue sky laws also prohibit the sale or offer of any security unless the security is ei-
ther registered with the state or exempt from registration. The federal 1933 Act pre-empts state law with respect to
registered (i.e. publicly-traded) securities, but state blue sky laws are still important with respect to sales of unregistered
securities.

As with the 1933 Act, however, cutting a trail through the complex thicket of state blue sky laws is something that should
only be done by an experienced securities attorney.

Some small business owners may ask why it is important to focus on securities law compliance. After all, some may say,
entrepreneurs seem to be often involved in issuing stock options to investors and new employees.

While it is true that many small businesses ignore securities law compliance, and sometimes seem to get away with it, they
do so at their own peril. With the recent economic downturn, state securities regulators are aware of increased efforts
by small businesses to obtain financing and have begun cracking down. Both state and federal regulators are empowered
to issue ―cease and desist‖ orders to prevent a private company from selling unregistered securities that are not exempt.
In serious cases, regulators may also begin enforcement actions and can assess fines and penalties. In some states, criminal
violations of securities laws can carry the potential for incarceration.

More frequently, a business‘ failure to comply with securities laws will be used as a weapon by an unhappy investor if the
business fails or if the investor gets less than he or she hoped to get from the investment. An investor in a non-exempt,
unregistered security may sue to ―rescind‖ the transaction, aiming to get a return of the original investment. In some
cases parties involved with the unlawful transaction, including other owners of the business, can have personal liability to
refund an investment that was made in violation of the law.

Succeeding with Safety

The best course of action for any small business owner contemplating a financing is to consult with an experienced busi-
ness attorney. Even if the business owner has found an interested investor and the parties have agreed on the terms of
the transaction, an experienced attorney can often help prepare the transaction documents in a way that helps both side
understand the transaction better and ensures that the transactions complies with the law.

Jonathan B. Wilson is a business attorney with the Atlanta law firm of Taylor English Duma LLP
(www.taylorenglish.com). As a member of the Firm‘s Business Transactions, Corporate &
Taxation Group, his practice includes corporate securities, corporate finance and governance,
mergers and acquisitions and intellectual property. He has represented both Fortune 100, mid-
dle-market and start-up companies in transactional matters for more than 19 years.

Mr. Wilson has represented both large and small companies in outsourcing, patent licensing,
software licensing, distribution and strategic alliance agreements.

Mr. Wilson has written numerous articles as well as three books:
 THE IN-HOUSE COUNSEL‘S ESSENTIAL TOOLKIT (American Bar Association, 2007) (contributor, Volume 3)
 OUT OF BALANCE: PRESCRIPTIONS FOR REFORMING THE AMERICAN LITIGATION SYSTEM (iUniverse, 2005)
 INTERNET FORMS AND COMMENTARY: A PRACTITIONER‘S GUIDE TO E-COMMERCE CONTRACTS AND THE WORLD WIDE
WEB (co-author and co-editor) (American Bar Association, 2002)

He publishes his personal blog at www.jonathanbwilson.com and often writes for the Manhattan Institute think tank at
www.pointoflaw.com. Mr. Wilson can be reached at jwilson@taylorenglish.com or by phone at 678-336-7185.


Partner Spotlight

Taylor English Duma LLP is a full-service business law firm that provides high quality legal services for optimal value. The
firm‘s attorneys practice in areas including Employment & Labor, Technology, Business Transactions, Corporate & Taxa-
tion, Litigation and Dispute Resolution and Real Estate, Development & Construction.

Taylor English Duma represents all types of clients—from Fortune 500 companies and start-ups to individuals. The firm
has grown from four attorneys in 2005 to over 75 attorneys today. For more information, visit www.taylorenglish.com.

Comic Corner
Murphy applied for an engineering position at an Irish firm based in Dublin. An American applied for the same job and
both applicants having the same qualifications were asked to take a test by the Department manager. Upon completion of
the test both men only missed one of the questions. The manager went to Murphy and said.
Manager: "Thank you for your interest, but we've decided to give the American the job"
Murphy: "And why would you be doing that? We both got nine questions correct. This being Ireland and me being Irish I
should get the job!"
Manager: "We have made our decisions not on the correct answers, but on the question you missed."
Murphy: "And just how would one incorrect answer be better than the other?"
Manager: "Simple, the American put down on question #5, "I don't know.", You put down "Neither do I."

The owner was interviewing a potential employee for a position in his company. He wanted to find out something about
his personality so he asked, "If you could have a conversation with someone, living or dead, who would it be?"
The interviewee quickly responded, "The living one."

Smith goes to see his supervisor in the front office.
"Boss," he says, "we're doing some heavy house-cleaning at home tomorrow, and my wife needs me to help with the attic
and the garage, moving and hauling stuff."
"We're short-handed, Smith," the boss replies. "I can't give you the day off."
"Thanks, boss," says Smith, "I knew I could count on you!"

www.mediumbusinessalliance.com
Contact us at Membership@mediumbusinessalliance.com

THIS IS NOT INVESTMENT, TAX OR LEGAL ADVICE. Contact your financial advisor, accountant or attorney be-
fore making important decisions in any of these areas. Medium Business Alliance, L.L.C. Copyright © 2009. Medium Busi-
ness Alliance, L.L.C. All rights reserved. This material may not be reproduced, distributed, transmitted, cached or otherwise
used, except with the prior written permission of Medium Business Alliance, L.L.C.

Vol I Iss Vi 2010 May

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