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6 Lessons on Becoming a High Impact Business

High growth biz Uncle Sam wanted to know:  What kinds of companies are America’s true growth generators? Is it corporate giants like Apple, Amazon or GE? Is it startups? Is it relative newbies such as Facebook.

After some exhaustive research, the answer was clear: “None of the above.

As it turns out, the real economic spark plugs in the U.S. are not big public companies. They are small, privately-held, fast-growing firms that already exist. These “high-impact” businesses are defined as firms whose sales and employee count have at least doubled over a four-year period.

Surprise! High Impact Includes All Industries

That’s about 350,000 businesses and the research shows they tend to be a bit younger (but still average 17 years old) and a whole lot more productive than others.  And they’re not just a bunch of high tech firms, either. They exist in relatively equal shares across all industries – and get this – even declining and stagnant ones! No single industry dominates.

That alone is both positive news and a huge lesson for startup entrepreneurs and other business owners who fear they can’t hit it big in more traditional businesses or industries. In short, you can.

Here’s another stunning finding of the U.S. Small Business Administration study: This relatively small group (less than 10% of all U.S. companies) of privately-held small firms accounts for all (not most, but ALL) net job growth in the U.S. economy. And get this: These high-impact businesses are also largely immune to ups and downs of the business cycle. Sound good?

Small Firms Dominate

But surely these must be the “bigger” small business, right? Wrong again. The vast majority (94%) of high-impact businesses have just one to 19 employees. Another 5.5% come in at between 20 and 499 employees, and a scant 0.5% have more.

In other words, a few hundred thousand businesses with just a handful of employees are having a bigger collective impact on job growth in the U.S. than all the corporate giants combined. Now ain’t that somethin’!

By now, you should be saying to yourself you’re either one of these firms – or you want to be. But how? For answers, let’s check in with Edward Hess, professor and Executive-in-Residence at the University of Virginia’s graduate business school. Hess has studied high-impact businesses for years and has an insightful new book called Grow to Greatness: Smart Growth for Entrepreneurial Businesses (Stanford University Press, 2012). He offers these six lessons on being a high-growth firm:

1)    Don’t grow yourself into trouble

Many small businesses flame out when they try to grow too quickly, as growth outstrips people, processes and controls. Cash flow is critical. Growth requires investment ahead of cash receipts. “Entrepreneurs must understand they might not be able to afford all available growth,” says Darden. Avoid the “grow or die” myth. A better approach is “improve or die.”

2)    Upgrade continuously

Remember this: What got you here, won’t necessarily get you there. In other words, solutions that work at one size business generally won’t work as you get bigger. Growth means continuous change. Hess has found that common tipping points that require adjustments occur at 10, 25, 50 and 100 employees. Top entrepreneurs and their teams know how to experiment, learn and adapt.

3)    Know when to back off

All private businesses face the same growth challenges. The most successful ones know how to pace their growth. Hess calls it the “gas pedal” approach. They know when to let up on the growth gas pedal to give their people, processes and controls time to catch up.

4)    Manage your risks

Growth creates stress on finances, quality controls, people and processes. It can dilute your business’s culture and customer value proposition. And it can even thrust you into a different competitive space. Understanding these risks is crucial to managing your growth pace and preventing your business from being overwhelmed.

5)    Get better at delegating

In order for your business to grow, YOU must grow, too. There’s only so much you can do yourself. That means you have to evolve from being strictly a doer, to also being an effective manager, delegator and leader.  Sometimes that’s hard to do or swallow, but it’s a must.

6)    Keep strategic focus

Having and keeping strategic focus is also critical to growing “safely.” The most successful high-impact firms focus on doing one thing that lots of customers need, and doing it better than the competition.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

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7 Ways to Embrace a New Normal for 2013

For business owners, there’s a “new normal” out there, and it doesn’t look a whole lot like the old normal.  If your business seems to be on a treadmill, maybe it’s time for a makeover.

Put everything up for grabs, including your mission statement, business and marketing plans, budget, sales and expense expectations and more, says business makeover specialist Patricia Sigmon, president of LPS Consulting, which creates profit-focused tech solutions for small businesses.  Make 2013 about regrouping and renewing your business for the new normal. Here are seven of Sigmon’s suggestions for giving your business a profit makeover:

1. “Fire” unprofitable customers.

Sometimes, the highest-maintenance, most time-consuming customers you have are the ones who pay you the least. Analyze the profit margin or lack of profit margin that each customer or perhaps customer segment produces. Stop pursuing customers who are not helping you be profitable – period.

2. Reward your best customers.

Look at which customers are giving you the most profit, and coddle them, woo them, don’t lose them! Offer them frequent buyer rewards. Send them a small gift at their one-year anniversary. Give them a random call every few months to “check in,” thank them, and ask what else they might need. Treat them like gold.

3. Start relationships.

This coming year, it’s time to overhaul your sales behavior. Turn all one-time sales efforts into relationship sales. Start monthly maintenance plans, suggest auxiliary services, sell complementary products, or offer retainer plans covering 50-100 labor hours, for example.

4. Erase those expense lines.

Reduce your operating expense budget to the lowest possible number. If that means selling your car or closing an office, so be it. You can’t build a new profit base when you are still using yesterday’s expense model. Go through your expenses line by line and get rid of everything you can live without.

5. Outsource more.

Whatever type of skill or service you need, think hard before hiring a new employee or keeping an old employee. Look at each department or each person when you are trying to manage costs. Can you eliminate positions (perhaps through attrition), combine jobs, delete processes, and outsource tasks? Outsource exactly what you need for the right amount of time and the right amount of money.

6. Update your networking.

From blogs to Twitter to LinkedIn to Facebook, invest big-time in building the online and social media presence you need to compete in the new digital world. Businesses that don’t leverage social networking will be left behind. Jump-start new relationships in 2013 with a burst of social media activity. Update all your social sites and accounts. Keep your online relationships fresh and dynamic with news, blogs, newsletters, tips, and surveys. Find an online forum in your industry and become an active contributor.

7. Take your office with you.

With cloud technology, you are no longer bound to a desk. Log onto some new interactive cloud-based systems that can help you do your business anywhere. Make sure to you have Internet connections on all of your devices. Everything you once needed to do in your own office can now be done remotely. Best of all, when your employees are sharing files in the cloud, it makes for a much more cohesive, connected team. j2 Global offers several low-cost cloud-based services that can help.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

6 Customer Feedback Essentials for Small Business

Small business owners hear it all the time: To find out how your business is doing, including what people like or don’t like and what you need to adjust, ask customers for feedback. But your quest for feedback can either produce a magic elixir or simply be an annoyance to customers and prospects, depending on how you do it.

Here are six essentials for collecting, analyzing and using customer feedback in a way that both engages customers and benefits your business:

1)    Make customers feel important. This is critical for getting people to respond to your feedback requests, and for generating helpful information that you can use to make improvements or launch new products and services. In most cases, it’s not necessary to offer “incentives” (also called bribes) for customers to provide honest feedback. Most are willing to do so if approached properly. The key is to make customers feel that you genuinely want to hear what they have to say, value they opinions and will use the information to make improvements that will benefit them as well as others.

2)    Make providing feedback easy, on the customer’s terms. Provide multiple ways for customers to offer their opinions. Don’t limit your efforts to surveys and emails, or old-fashioned feedback forms at checkout. Include a feedback form on your website, and ask for feedback on Facebook and any other social media sites you use. In all cases, keep it simple. At all costs, you must avoid frustrating customers with lengthy forms or confusing questions. And try not to query customers every time you see or connect with them. This leads to feedback fatigue and can cause customers to tune you out permanently.

3)    Pay attention to timing. What you ask is important, sure. But so is WHEN you ask it. Don’t be in a hurry to solicit feedback if your business isn’t really ready to hear or deal with it. It’s helpful to first examine your motivation. If all you are really seeking is approval or a pat on the back, feedback will never help you improve. At times, for some types of businesses, asking for feedback immediately is ideal. But in other cases, it’s best to step back for a bit and do a little self-examination first. Identify what you want to assess and where you would be willing to make changes. And be prepared for opinions that you might not like.

4)    Be both specific and open-ended. Avoid vague questions such as “What do you think?”  Break it down. Ask specifically about customer service, for example, or certain product features. You don’t have to cover everything at once. If you have forms and surveys, design different ones to cover specific topic areas. The time to be “open-ended” is when you are digging for information about what customers really want. In order to find out what customers really want and how they feel, you have to avoid telling them what you want them to tell you.

5)    Leverage your online options. Today there are many low-cost and even free web-based tools and services designed to help small businesses seek customer feedback. These include online surveys (Survey Monkey is a popular choice), web-based feedback forums such as UserVoice (www.uservoice.com) and social media such as Facebook, Google Plus and others. On Facebook, one approach is to simply post a question about some aspect of your product or service and ask for feedback. It’s quick, easy and cheap.

6)    Analyze, respond and act on your feedback.  Always keep in mind that the ultimate goal of your effort to seek feedback is to improve customer satisfaction and grow your business. Take all feedback seriously. Look for trends and common themes in what you hear. By formalizing the process of analyzing and responding to feedback, you elevate its importance as part of your business DNA of listening to customers. Thank customers for the effort they’ve made to provide you with helpful information, and assure them it is both valued and appreciated. When you make changes based on customer feedback, call attention to that fact. This will make it more likely that others will provide feedback in the future.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

10 Small Business Predictions for 2012

Technology shapes how small businesses survive and thrive, and 2012 will see record numbers of small businesses harness the power of technology and especially new online productivity tools to grow their businesses. Jerry Nettuno, founder and CEO of Schedulicity, which is one of those online tools, shares his small business predictions for 2012: 

1.      Daily deals dive: The daily deal space exploded last year, but 2012 will see deal shrinkage of 30% or more. Rapid contraction will leave just a couple of “big guys,” some vertically positioned players and a long tail of locals finding ways to thrive by serving a few small regions or cities.

2.  Surviving deals get a makeover:  Burned by go-for-broke deals, many local businesses will fine tune and target their offers to strengthen loyalty. The more geographically concentrated your customer-base is, the better your chances of turning deal-seekers into repeat buyers. Look for an increase in frequent buyer and perk programs to support this movement in 2012.

3.   Small businesses move to the cloud. The ability to self-publish quickly via the cloud is moving businesses out of traditional media.  Productivity services such as Google Docs, Zoho Creator, Office 365 (from Microsoft) and many others are making it easier than ever to operate entirely online.  Low cost tablet computers will let more service professionals and small business owners run their businesses from a mobile device. 

4.      Breakthrough tools arrive. Emerging technology will spawn more break-through productivity tools.  Business owners will see new, off-the-shelf ways to connect with consumers.  With the launch of Siri, Apple’s new voice-activated personal assistant application, developers will be hard at work on amazing voice-activated apps that will offer a unique way for local businesses to stand out.

5.      The “Digital Coupon Book” takes off:  The move to more online shopping turns passive discount recipients into active coupon seekers.  Digital “coupon books” will dominate within the next two years, offering small businesses another way to leverage existing customer relationships with hyper-local offers.  We’ll see a growth in local offer networks, personalized consumer dashboards and highly targeted deals.

6.      The appointment book disappears.  The success of sites such as Schedulicity, OpenTable and ZocDoc reinforce the idea that the traditional pen and paper appointment book may soon disappear.  The number of appointments booked online is soaring.  Schedulicity alone has seen nearly 7 million appointments booked online since mid-2009. 

7.      Mobile commerce soars.  Mobile payment, location-based promotions, and mobile scheduling will all change the way small business owners conduct business in 2012.  Whether iPad or iPhone, Kindle Fire or Droid, the move to mobile will continue apace.  Making your business website mobile-friendly is only a start.  As more and more consumers are making mobile a mainstay, it will be essential for small businesses to have a mobile commerce strategy to tap into this opportunity.

8.      Thinking “local” gains steam.  With a still-shaky economy and unbending unemployment rates, 2012 is poised to be trying for small business.  Small business owners need to think local – the headlines in the local newspaper and the vibe on Main Street are more important than what’s being talked about on CNBC.

9.      Social media gets marketing money.  Social media marketing isn’t just for early adopters anymore.  Big brands and Fortune 500 companies have spent the past three years discovering (and utilizing) the marketing capabilities of Facebook, Twitter, and other online tools.  In 2012, more small businesses will expand online and embrace Facebook as the dominant social media marketing tool for local business.

10.  The client continues to be king.  Small business and independent service professionals are no longer “too busy for new clients.”  Taking advantage of networking opportunities and exploring new online listing options will help small businesses make themselves known and available to new clients. 

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

8 Getting Started Twitter Tips for Business

Small business owners, local businesses and startups of all stripes are embracing social media marketing with gusto.  Signups on Facebook and Twitter are soaring.  And why not?  Biz owners see these platforms as free marketing that may be tricky and unknown, but well worth a shot.

After all, when half of local businesses say they’ll spend less than $2,500 on marketing this year, the lure of social media is strong with its relative ease, low cost and low entry barriers.  And while Facebook is king, Twitter has seen tremendous growth from local business owners and professionals who aim to build awareness for their products and services – as well as themselves.

If you’re giving tweets a try, here are some vital tips and strategies to keep you from stubbing your Twitter toe:

  1. To start off right choose a good Twitter name or “handle.”  This could be your own name or your business name, a variation or abbreviation of your name or business name, or a combination.  You should make it easy for others to recognize who you are, and connect you to your business, product or service.  Put your Twitter handle (looks like “@name”) on your website, email signature, business cards, name badge, letterhead and anywhere else potential followers will see it.  Avoid cutesy, random or made-up names that have nothing to do with you or your business.   
  2. Set specific business goals for being on Twitter, and pursue them.  For example, you can use Twitter to help position your name or brand, communicate with customers and prospects, announce events, point to articles, videos or other content on your website.
  3. Hone your profile.  A Twitter account lets you create a brief but highly visible profile, so don’t blow it.  I’ve seen many lame profiles that include mundane personal traits or meaningless information. Worse yet, no profile at all.  Others look like random stacks of keywords.  And many lack a link to a website or blog. Don’t make these mistakes.  Include your company, position, fields of interest, and what you have to offer. Consider it your elevator pitch to attract followers.
  4. Avoid pointless tweets.  Concentrate on providing useful information. Promote things you have on your own website, or point to someone else’s content as a useful or interesting resource.   You will only gain followers if people believe they will enjoy, be informed by or otherwise find value in what you tweet.  Concentrate on specialized knowledge your business has and can share with others.
  5. Search the site.  A great way to get ideas for tweets and find potential followers or folks to follow is to use Twitter Search.   This is a highly effective, but under-used Twitter feature that’s both helpful and free.  Also search for tweets that have mentioned your company or brand.  And btw, while you can be choosy about who you follow on a personal account, when using Twitter for business, be sure to follow back anyone who follows your business.
  6. Make Twitter part of your regular networking.  The old days of simply collecting business cards are over.  Today when you attend meetings, trade shows, lunches or other events, make a point to collect Twitter handles and hand out your own.  Many people now display them on name badges, signage or other prominent places.  To go directly to someone’s Twitter page, just add the name (handle) to the end of the Twitter URL, like this:  www.twitter.com/danielkehrer.  
  7. Hop onto hashtags.  Hashtags are used to organize tweets around categories, themes or topics by adding the pound sign (#) before a word or phrase, like #smallbusiness, #entrepreneurs or #startups.  When you use a hashtag in a tweet, it is automatically posted to that category in addition to your basic tweet stream.
  8. Point people to your website.  Tweets are a great way to get people to visit your website.  Perhaps you have a whitepaper available for download, some interesting photos, a new video or some other type of content.  Don’t be shy. Tweet about it with a link back to your site.  But use a URL shortener to avoid filling your entire tweet with a long link.  Two popular services where you can do this in seconds for free are http://bit.ly and http://ow.ly.

Take it from someone with a perfect TwitterGrader score of 100:  If you do it right, Twitter can pack a powerful marketing punch for almost any business.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

Small Business Solutions of the Week

BizBest 30-Second Solutions

“30-Second Solutions” – a BizBest exclusive – spotlights the best new and undiscovered profit- and productivity-boosting products and services for small business, explainable in 30 seconds or less.  Here’s our latest half dozen: 

  1. Daily Discount Deals for Biz Owners:  BizyDeal is a new site offering business owners deep discounts on products and services such as computer networking equipment, software, mobile devices, shipping, payroll, legal and accounting services, travel, car rental, banking, credit cards, insurance and more. It’s free to register and be notified when a new deal arrives.
  2. Your Own Custom Visa Loyalty Cards:  Want to turn heads with a custom designed and branded Visa loyalty, gift or incentive cards featuring your own logo or product images?  It’s easy for any small business to do with a new service from Incentive CardLab.  Arizona-based Woolaver Orthodontics uses the cards to thank patients for referrals.  For any referral that begins treatment, the referring patient receives a $100 Visa Incentive Card with Woolaver branding.  Law firm Balch & Bingham uses the cards to reward employees for years of service.
  3. Boot camp for Startups:  Startup Weekend has a simple premise: “No Talk, All Action.  Launch a Startup in 54 hours.”  So if you have startup on your mind, this is for you.  Startup Weekends are 54-hour events where developers, designers, marketers, product managers and startup enthusiasts share ideas, form teams, build products and launch startups. Events held at locations nationwide offer hands-on experiences where aspiring entrepreneurs can develop and test their startup ideas. 
  4. Quick and Easy Tax Filings:  Got employees?  If so, you must file quarterly IRS Form 941 reports to process tax payments and reconcile tax withholding.  FileTaxes.com – a BizBest ShortList selection – is an easy-to-use, low-cost way to file your forms online.  I’ve used this web-based tax filing service myself for years to process 1099s, W-2s and other tax forms, and it’s been a terrific time-saver.  No more tripping on filing rules.  The FileTaxes service ensures compliance and provides copies for your records that you can print or store and access anytime online. Just enter your summarized payroll data online.  Cost is just $4.95 for each Form 941.
  5. Free IBM Software Suite:  One cornerstone of starting and operating an efficient, profitable business is having the right tech tools and software. But software costs can quickly eat into capital. Lotus Symphony 3, IBM’s office productivity suite, is free and has more features than the typical fee-based office suites bundled with a new Mac or PC. With IBM Symphony, you can customize and arrange toolbars, create one-click PDFs and work in either a tabbed view or dedicated window views for applications (documents, presentations and spreadsheets).  Make no mistake: Symphony is packed with power and easy to use, and is every bit the equal (or more) of its costly counterparts. So why not break out of the costly upgrade cycle of Microsoft Office?  A unique click-to-cloud feature lets you connect directly to the internet from within the application and store or share your documents.  Symphony already has over 12 million users worldwide, and online support is easily available.  Download here: http://symphony.lotus.com.  
  6. More Gov Contracts for Women-Owned Biz:  Under a new program now underway, women-owned small businesses (WOSBs) have more opportunities than ever to snag lucrative federal government contracts.  The first contract awards are expected near the end of 2011.  The Program allows contracting officers, for the first time, to set aside specific contracts for certified WOSBs and EDWOSBs and will help federal agencies achieve the existing statutory goal of five percent of federal contracting dollars being awarded to WOSBs.  The WOSB Federal Contract Program will provide greater access to federal contracting opportunities for WOSBs and economically-disadvantaged women-owned small businesses (EDWOSBs). The Program allows contracting officers, for the first time, to set aside specific contracts for certified WOSBs and EDWOSBs and will help federal agencies achieve the existing statutory goal of five percent of federal contracting dollars being awarded to WOSBsGo here: www.sba.gov/wosb.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

The Future for Small Biz in Social Media

Time.  It’s a little word, but the single biggest roadblock to small business engagement in social media.  Sure, millions of biz owners have embraced social.  But time constraints produce constant dropouts and millions more won’t buy in as long as they believe the time sink outweighs the benefits.

The future, then, may well be a web-based service called Roost – or something like it – which promises to revolutionize social business engagement with free (for now at least) productivity tools that help local biz owners leverage the social web to generate leads and build their businesses efficiently and effectively.

Roost is brand new; barely out of the wrapper.  But its new social marketing platform for Facebook and Twitter solves the nagging problem all business owners face when thinking about social marketing: “What do I post and when do I post it?”

Roost helps biz owners and local professionals plan their social marketing activities in 20 minutes per week. Just set the duration and content types (post, link, quote, etc.) for each social media campaign. Roost automatically provides customized recommendations on post type and frequency to match the length of the campaign and achieve maximum customer and prospect engagement.

Roost’s suggested content feature offers direct access to articles, blogs, quotes and other original content. You can queue up content on a daily or weekly basis from a library of topics related to your type of business.  A feature called The Roost Bar also helps you gain more friends, fans and followers.  When someone views a shared link, a small, branded bar appears above the article and allows audiences to immediately “like” your business Facebook page.

A feature called Roost Circles helps biz owners and individual pros band together with their closest business associates, and by request, share each other’s posts, providing branding and engagement opportunities across each other’s networks. Whether the circle includes employees, favorite customers or vendors, the technology capitalizes on the economically relevant concept that rising tides lift all boats.

Roost was built for the restaurant, CPA or Realtor who can’t devote 10 hours each week to online marketing, says Alex Chang, CEO of Roost. “They know they need to be on Facebook and Twitter, but they aren’t sure what to do or how to start.”  In short, Roost is a service for real business owners who have little to no time, aren’t fully up to speed on all the nuances of social media marketing but who may live and die by referral business.

And best of all, it’s free.

Roost, a venture capital backed startup based in San Francisco, already has about 20,000 small biz professionals using the service.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

New SBA Study says IRS Small Biz Audit Crackdown is Bogus

Ten years ago, a landmark IRS report claimed that small business owners under-report income by $80-100 billion yearly and account for over half of the U.S. “tax gap” of owed by uncollected taxes.   As a result, small business owners have been subjected to increased audits and reporting requirements, including the controversial new 1099 rule.

But now for the truth:  A new study just released by the U.S. Small Business Administration (SBA) Office of Advocacy says the IRS crackdown on the backs of small biz has been bogus all along.  And that comes from independent research commissioned by the Feds themselves – not some anti-tax business group.

After reviewing 10-years’ worth of IRS small business audits related to the innocuously-named “National Research Program” (NRP), outside researchers found that a mere 1% of all issues examined resulted from intentional failures to report income properly. Yes you read that right – one percent. In other words, 99% of income underreporting is unintentional, and undoubtedly the result of a vast and utterly confusing array of tax rules and regulations.

And here’s the real gut punch for biz owners:  While small business was tagged as the tax cheating culprit, the new study says that large corporation tax gaps are scarcely being measured at all, and that the IRS has been using estimates dating back to the 1970s and 80s to calculate corporate noncompliance.  What’s more, says the new report released by SBA:  “The IRS focused its tax-gap study on individual tax returns, and on returns not subject to withholding or third party reporting, which skewed the study unfairly toward small business.”

Over the last five years, audits of returns typically filed by biz owners have soared, while those for corporations with $10 million or more in assets have actually dropped 13%.  These are figures reported by the SBA itself.

But which type of audit pays off the most for taxpayers – small biz or big corporation?  No contest.  According to the new whistle blowing report, the IRS collects an average of $9,350 per auditor hour spend examining big biz returns, but only $1,034 per auditor hour spend auditing small business.

The new study concludes with this:  Unlike large corporations, small businesses lack the resources and expertise to negotiate with the IRS.  Indeed, 71% represent themselves in audits. They are overwhelmed by the complexity of the tax code.  Only aggressive outreach and education designed to help small businesses understand their tax filing obligations will significantly reduce the tax gap attributed to them.

BizBest will email the full 54-page report in PDF, free of charge, to anyone interested. Email your request to editor@bizbest.com, and be sure to include the email address you’d like the report sent to.

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

World’s Richest and Largest Business Plan Contest

Graduate level student-entrepreneurs at universities worldwide are percolating new ideas and pitching them to business plan contests to a record pace.  For a few, the result is money — and gobs of it.  For example, the Rice Business Plan Competition (RBPC) — the world’s largest — will award more than $1 million in prizes to aid new startup businesses at the 11th annual competition at Rice University April 14-16.

Forty-two teams were selected from more than 500 entries, an application pool that was more than 20 percent higher than last year. They were chosen based on their executive summaries to compete in six categories: life sciences, information technology, energy and clean technology, green technology, renewable and recycling, and social and other. The teams will have 15 minutes to present business plans and the top six will vie for the big prize valued at $400,000.

The Rice University Business Plan Competition is the world’s largest and richest graduate-level business plan competition. It is hosted and organized by the Rice Alliance for Technology and Entrepreneurship which is Rice University’s flagship initiative supporting entrepreneurship. The competition aims to give collegiate entrepreneurs a real-world way to fine tune their business plans and elevator pitches and perhaps generate funding. Judges evaluate the teams as real-world entrepreneurs seeking startup funds from early stage investors and venture capital firms.

2011 Rice Business Plan Competition teams

Business NameUniversity
AluseraUniversity of Gothenburg, Sweden
Amma Healthcare TechnologiesRice University
Antenatal Screening KitJohns Hopkins University
Arctic SandMassachusetts Institute of Technology
Are You a Human?University of Michigan
Black LocusCarnegie Mellon University
BOSS MedicalJohns Hopkins University
C5 BioMassachusetts Institute of Technology
CamGaNUniversity of Cambridge, England
ClearBrook ImagingThe University of Texas at Austin
cycleWood PlasticsUniversity of Arkansas
DeepScanThammasat University, Thailand
Diagenetix Inc.University of Hawai‘i at Mānoa
EternoGenUniversity of Missouri
Exciton SystemsUniversity of Illinois at Chicago
Fiddlers’ GreenRice University
GreenCoatThe University of Texas at Austin
Hemova MedicalJohns Hopkins University
iLumi Lighting SolutionsThe University of Texas at Dallas
InnovatorsIndian Institute of Technology
JanusUniversidade Federal Minas Gerais, Brazil
NeuvelNorthwestern University
OsteoceneBaylor College of Medicine / Rice
PK CleanMassachusetts Institute of Technology
PulmoCADWashington University in Saint Louis
Purisorb Inc.Dalhousie University, Canada
QR Code CityBrigham Young University
Quantitative Insights The University of Chicago
ReGenerate Solutions University of Michigan
ReGreen TechnologiesGeorgia Institute of Technology
RhoManiaCarnegie Mellon University
Sahara BotanicalsUniversity of Oxford, England
San + CONorthwestern University
Secure InfoShareGeorgia Institute of Technology
ShuaTech Chemical SystemsLouisiana Tech University
SmartershadeUniversity of Notre Dame
Somatis TechnologiesUniversity of Southern California
StaticFlow AnalyticsUniversity of Washington
SulicoLondon Business School, England
TiFiberUniversity of Arkansas
TitinGeorgia Institute of Technology
TNG PharmaceuticalsUniversity of Louisville

Prizes this year include the $150,000 Investment Grand Prize from The GOOSE Society of Texas, the $100,000 Waste Management “Think Green” Investment Prize, the $100,000 DFJ Mercury Tech Transfer Investment Prize, and $100,000 Opportunity Houston / Greater Houston Partnership Technology Prize, the $100,000 Opportunity Houston / Greater Houston Partnership Life Science Prize, the $100,000 Kleiner Perkins Caufield and Byers (KPCB) Prize for CleanTech Innovation, and the $75,000 OWL Investment Prize.

In 2011, applications increased nearly 20% from the previous year.  More than 100 corporate and private sponsors support the business plan competition. Venture capitalists and other investors from around the country volunteer their time to judge the competition, with the majority of the 250+ judges coming from the investment sector. More than 100 past competitors have gone on to successfully launch their business and are still in business today, raising in excess of $327 million in funding.

“Great ideas are just that – great,” said Brad Burke, managing director of the Rice Alliance. “But, taking that novel idea ensuring it holds a competitive advantage in the market, conducting market research and identifying opportunities, demonstrating management capability, financial understanding and investment potential are what develop that great idea into a venture and hopefully a financially successful business.”

Copyright © 2000-2011 BizBest® Media Corp.  All Rights Reserved.

What You Must Know about Hiring Independent Contractors

If your business uses independent contractors, the best tax advice is simple: Watch your back! Why?  Because state governments are lining up to help the IRS nab businesses they believe have misclassified workers as independent contractors instead of employees.

In tax terms, the difference is huge. If the IRS says you did it wrong, the taxes and penalties will do some serious damage.  And states now want their pound of flesh as well.  Pennsylvania, for example, just enacted a law that can impose civil and even criminal penalties on businesses that misclassify workers. Other states with similar laws include CO, CT, DE, IL, MD, MA, NE, NJ, NM, NY and WI.  Others won’t be far behind.

And be aware that the IRS uses leads and other information it gets from all states to identify and audit small businesses it feels are misclassifying workers.  In short, small business is a big target, and thousands of audits are underway already, with thousands more to come.

Using independent contractors or “contract workers” properly has long been one of the stickiest issues that small business owners face.  Are the people you bring in to provide specific services “independent contractors” (non-employees)? Or are they actually employees?

Because independent contractors are responsible for paying their own taxes, using them can save your business a bundle in payroll taxes, insurance, benefit costs, training and other areas. Independent contractors work for themselves. They operate their own business and have you as a client. You are not their employer and don’t set their hours or control how they perform their work.

But the IRS sees it this way: A worker is an employee of your business unless you can prove otherwise.  “Determining whether a new worker is an employee or an independent contractor can be tough,” says Keith Hall, National Tax Advisor for the National Association for the Self-Employed (NASE).  “Keep in mind that you can’t just choose which one is easiest.  It really depends on who calls the shots day to day.”

If you’re unsure how to classify a worker, here’s quick advice from NASE:

  • If you control the Who, Where, When and How the work is done, they are probably an employee. This means that you, as the business owner, must file a Form W-2 and withhold income and payroll tax, among other things.
  • If the worker controls their own work product and even has other customers besides you, then they are most likely independent contractors.  Payments to independent contractors are reported on IRS Form 1099, and the independent contractors are responsible for their taxes and their own tax forms, including Schedule C, Profit or Loss from Business and Schedule SE, Self Employment Tax.

And also know that workers who believe they’ve been improperly classified as independent contractors can file an Uncollected Social Security and Medicare Tax on Wages form asking the IRS to calculate and collect the employer portion of those two items that would have been due from you.

Here are 12 other things you should do and know:

  1. Using an independent contractor agreement can help (a little): A simple agreement that specifies the independent contractor relationship can help validate your position, but it won’t be enough by itself. Sample independent contractor agreements that you can use or adapt for your own business are available online at Business Owner’s Toolkit and DocStoc.com.
  2. Know the rules for your specific business or industry: Some industries or types of businesses have established a tradition of using independent contractors rather than employees and have cleared this with taxing authorities. But at the same time, firms in certain lines of business are at high risk for aggressive worker “reclassification” audits – especially construction and landscaping.  IRS Publication 15-A, The Employer’s Supplemental Tax Guide (PDF) has detailed guidance including information for specific industries.
  3. The Independent Contractor Report, which has been tracking legal issues in this area since 1986, has detailed information on industries most at risk.   
  4. Know what the IRS says: This is an area where’s it’s important for business to look at what the IRS is saying about the business relationship between you and the person performing the services. The links below have what you need.
  5. Contractors control when and where they work. While they might receive job specifications from a client, they are not given specific instruction on how to accomplish a task.
  6. Avoid setting a pattern of daily or weekly work hours dictated by your business.
  7. Contractors do not usually have a permanent or continuing relationship with your business and have time to pursue other clients. Compensate contractors on a per-job basis, rather than weekly or monthly.
  8. Contractors are paid to complete a set task and may bring in others to complete it, at their discretion and on their payroll.
  9. Contractors use their own tools and technology and are responsible for their incremental expenses. They have an investment in their own “business” and should be able to perform their duties without your facilities.
  10. Contractors can’t be fired as long as they produce results that meet their contract specifications.
  11. Contractors are not covered under health insurance or other benefits you have for employees.  They should have their own.
  12. Legal self-help publisher Nolo has a great guidebook that shows you how to: create a valid contract, assess who qualifies as an independent contractor, hire ICs without risking an audit, retain ownership of intellectual property when using ICs and take advantage of the IRS “Safe Harbor” law.  Details at Nolo.

These IRS resources will also help: