Small Business Development Center
At Chemeketa Center for Business & Industry
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Monthly Archives: September 2011

Knowing financial terminology important

By Chemeketa SBDC

Knowing financial terminology important

Every business owner should be familiar with a few common financial terms. We toss around business language like some people toss around acronyms (BTW, we at the SBDC try to avoid such behavior). Some are daily business terms. Others are used in only special situations (like borrowing money) but all should be clear in the business owner’s overall management style.

Capital: This is the equity of a business, including your investments and retained earnings. This is seen on the balance sheet and is often called “owner’s equity.”

Retained earnings: This is also a balance sheet item and is increased (or decreased) by the profit (or loss) of operations that is transferred to the balance sheet at the end of your accounting period.

Equity: This is the difference between the fair market value of something and any balance owing. If you own your house valued at $100,000 and owe $60,000 on the mortgage, your equity is $40,000

Assets: these are the things you own that are worth money. They may include land, savings, investments, accounts receivable, prepaid accounts, inventory and equipment.

Liabilities: These are the things you owe. They may include mortgages, loans (to all lenders including shareholders), installment loans, undeposited payroll taxes and accounts payable.

Working capital: This is the difference between your current assets and liabilities (those that can be converted or paid within one year). This shows your available “liquid” money and your ability to pay current debts. Also, in a loan proposal, working capital is the amount of “cash” you borrow to pay future expenses. Keep in mind that you cannot just ask for cash — it must be tagged to specific expenses.

Liquid: These are assets that can be realistically turned into cash within one year.

Collateral: This is assets pledged to secure a loan. If a loan is not repaid, the assets would be sold and the proceeds used to retire your obligation. Rarely will a bank consider current market value as the collateral value as they would not expect the need to foreclose on a business failure for some time thus the asset would be worth considerably less at a later time.

Discount: This is when assets are valued lower than their market value to make sure they can be sold quickly (see collateral).

Depreciation: Except for land, assets lose their value. This loss in value is amortized.

Amortized: This is when you spread the value of an asset over time. For example, if a machine is bought for $10,000 and used for 5 years, straight-line depreciation would decrease the value of that asset by $2,000 per year.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to SBDC@chemeketa.edu. Visit the SBDC at 626 High Street NE. in downtown Salem or call (503) 399-5088.


One negative employee can bring down others

By Chemeketa SBDC

A wealth of current research tells us that the most critical factor in controlling undesirable turnover and increasing retention of talented people are the skills of managers. People join companies but they leave managers. Satisfied employees are critical to the success of your business. If they’re not happy on the job, customers are not happy being with them.

So what do you do when you have an employee who is just not happy? Every business can have “the glass is half empty” person on the lookout for something to go wrong. You can recognize them: They spend the majority of the day in a negative slump and critical of everything from projects to people. And other people — once happy and motivated — are starting to gossip and criticize. Negativity is like the flu: It’s contagious. It’s also expensive. Negativity costs companies millions in terms of productivity.

So how do you deal with an employee whose negativity is starting to rub off on other people? Our first instinct may be that the person’s behavior is just about their “bad attitude” and try to ignore it. Not a great idea. This can actually fuel the fire by setting a culture of negativity. In fact, if we do nothing about the negativity, we are condoning the behavior and subsequently, endorsing it. You do need to take some action.

Often at the heart of a negative attitude are fear and uncertainty. Change is the biggest single cause of workplace negativity. Even if that new billing system is for the better, people will automatically ask themselves: What am I losing? For employees, change automatically equals the loss of something comfortable, and they will resist it.

Here are some simple steps for quelling the office critic, paraphrased from some great work by Chris Penttila, a freelance journalist.

1. Understand change from the employee’s perspective. Employees can put up with change as long as they can talk openly about it. Remember most negative people don’t know that they’re negative because no one ever tells them.

2. Find the fear, then focus on solutions. Teach negative employees to focus on offering solutions, not just criticism. Turning the griper into a solution provider gives them a genuine avenue to contribute.

3. Do some coaching. Work with the negative person on improving their attitude. Chances are, these people are complaining because they think they have good ideas that haven’t been heard.

Ultimately, employers can work too long and hard with some negative people when it’s better just to cut your losses, recognizing a bad fit. If there’s no improvement after three to six months, maybe it’s time to let them go (legally, documented, etc., of course). After you let a negative person go, talk with employees about the future of their workplace. It can be the perfect opportunity to take the pulse of your company culture.

Marcia Bagnall is Director of the Chemeketa Small Business Development Center and instructor of Small Business Management Program. The Small-Business Adviser column is produced by the center and appears each Sunday. Questions can be submitted to SBDC@chemeketa.edu. Visit the SBDC at 626 High Street NE. in downtown Salem or call (503) 399-5088.


2011 New Business of the Year Award – Scott Sadler of Sadler Business Coaching

By Chemeketa SBDC

This award provides the Chamber the welcomed opportunity to acknowledge a business for its innovation and added value to the city of Salem.  This year’s recipient is a wonderful example of the accomplishments that can come from hard work and dedication.

Although the owner of this business is receiving an award as a new business, many of Salem’s professionals have worked with him and have known him for five, ten or even twenty years as a result of his continued dedication to helping his friends and colleagues.  Today, these friends and colleagues acknowledge this entrepreneur for his wonderful work and achievements. Here are just a couple of comments his clients had to say about his work ethic:

 “I have known and worked with him in many avenues throughout the past seven years.  One of the things that prompted me to work with him is his integrity.”

“He is a practical, no-nonsense entrepreneur.  He doesn’t just find success; he logs it, tracks it and studies it.”

“He works hard to find “win/win” situations and is—as many others have mentioned—a man of great integrity.”

The winner of this award is a man of many respectable traits.  Integrity is just one of them.  Empathy is another.  He believes in helping our youth gain valuable skills and knowledge and has shown his support by volunteering for the Salem Chamber Leadership Youth Program since 2007 and for the Boys and Girls Club for the last 18 years.   

We have many excellent examples of businesses that make it their mission to promote sustainability and community within Salem.  This business is just one of many great examples, but what’s especially important to acknowledge today is the way in which the owner has built a business, really, around giving back to Salem.  He has supported the sustainable effort so of Salem  by volunteering over the course of five years to promote the Riverfront Park Eco-Earth project as the Marketing Director.  He has also played an instrumental part in several Chamber activities, including Government Affairs and Ready-to-Learn, Ready-to-Work. 

 The winner of the New Business of the Year Award, Scott Sadler of Sadler Business Coaching, is being honored for his care, concern and genuine interest in his clients, his friends and his community.  Congratulations!


Doing Business with the Government

By Chemeketa SBDC

Doing Business with the Government

Become familiar with State of Oregon bidding opportunities, local government websites and useful resources that can assist you in growing your business. Come and learn the following:

  • How to look up state bidding opportunities
  • Strategies for networking
  • How to look up expired contracts
  • Gain helpful information about state programs that help Oregon small business

Date/ Time: October 29, 1 pm - 3:30 pm
Location: Chemeketa Center for Business & Industry, 626 High Street NE, Downtown Salem
Cost: $35
Registration and Information: 503.399.5088


Understanding Your Business Financials

By Chemeketa SBDC

Understanding Your Business Financials

Understanding financial statements is essential to the success of your business. Learn the basic concepts of accounting to make informed decisions that affect financial health and success of your business.

Date/ Time: October 20, 1 – 5 pm
Location: Chemeketa Center for Business & Industry, 626 High Street NE, Downtown Salem
Cost: $35
Registration and Information: 503.399.5088


The Basics of Government Contracting

By Chemeketa SBDC

Covers the process of selling products or services to the government including using the Internet to locate selling opportunities. Learn the steps to becoming a government contractor or advance your current potential to compete in the government contracting market.

Topics include:

  • Where and how to register?
  • Where and how do I find out what the government buys?
  • How to contract with the BLM and Forest Service in your area .

Date/ Time: January 12, 9 am – 12 noon (class), 1 – 4 pm (individual sessions by appointment).
Location: Chemeketa Center for Business & Industry, 626 High Street NE, Downtown Salem
Cost: $35
Registration and Information: 503.399.5088


Before You Sign

By Chemeketa SBDC

Things to Know About Commercial Leases

Commercial Leases are complicated contracts. Tailored to address the concerns of business owners, this workshop will provide an overview of commercial leasing and will highlight some of the pitfalls commercial tenants should be aware of, such as, actual monthly cost, use restrictions, default, and personal guarantees.

Time: Thursday, February 9, 3 - 4:30 pm
Location: Chemeketa Center for Business & Industry, 626 High Street NE, Downtown Salem
Cost: $25
Registration and Information: 503.399.5088