Success Story:
Research & Tractor Technology Inc.
St. Joseph-based innovator devises an alternative power source for lawn tractors
Andy DeShon, owner and founder of St. Joseph-based Research & Tractor Technology Inc., has devised a better idea for cutting grass. He has developed and is marketing an electric lawn and garden tractor. The device employs battery-powered motor technology capable of generating the necessary horsepower and small enough to allow for battery storage, yet is durable and easy to maintain.
St. Joseph innovator Andy DeShon has developed and markets an electric lawn tractor that runs at a lower cost and with less noise and fewer carbon emissions than its internal-combustion counterpart.
"It also handles snow in the winter, generating enough torque to blow the snow more than 25 feet," says the lawn tractor innovator.
His interest in electric lawn tractors dates to the '70s when Andy's uncle ran a farm implement store.
"One of the new products in my uncle's inventory at the time was an electric lawn tractor from General Electric," recalls Andy. "It was very expensive and really ahead of its time."
Later Andy, who received a degree from the University of Missouri, studied and worked with electric forklifts. That experience caused him to rethink the application. "I decided to re-invent the electric tractor by making it available to all lawn tractor manufacturers through my patent-pending design."
While spending nearly 10 years researching and developing electric motor and battery technology for lawn tractors, DeShon has successfully converted 14 different lawn tractors from six major manufacturers to electric battery power.
The unique electric motor produces the same power and RPMs for blade-tip speed as its gas-propelled counterparts and it runs for well over two hours. It also operates with significantly less noise than the internal-combustion variety.
Read this complete success story with additional photos.
Business Going Green
Kansas City consultant emphasizes designs to benefit the environment
Today, more than ever, sustainable business means more than profitability. Innovative businesses are realizing the necessity to balance short-term earnings with planetary stewardship.
Small Planet Partners, a Kansas City consulting firm, specializes in developing environmentally sound, socially just and profitable businesses. Founder Willow Lundgren understands the dynamic between a business's bottom line and its investment in the greater good.
"This quote from (former Wisconsin senator and environmental advocate) Gaylord Nelson, 'the economy is a wholly-owned subsidiary of the environment,' was something of a wake-up call for me as a business person," says Lundgren. "Look around the home or office right now. Consider that everything man-made originates from materials that were once grown or mined. That shines a new light on environmental protection. It's a strategic business issue."
Designing for the environment is a systematic way to design products and processes that consider environmental impacts from the outset.
"This mindset can deliver exponential business benefits by providing a 'lens' for innovation. Companies can save money by eliminating pollution and waste, and can also create a market advantage," says Lundgren.
Case in point: Swiss textile company Rohner Textil worked with architect William McDonough and chemist William Braungart, co-authors of the book Cradle to Cradle, Remaking the Way We Make Things, to eliminate all toxic or heavy metals and carcinogenic dyes from their products. By switching to safe dyes they created a fundamental competitive advantage and became the major supplier of environmentally friendly fabrics to customers like Herman Miller Inc. for its growing line of eco-products for home and office furnishings.
"Businesses that consider what happens at the end of their products' useful life at the start of the design process can realize tremendous benefits" says Lundgren. She points to Nestlé as an example. The company will debut 100 percent recyclable Christmas candy selection boxes this year. "By making one simple change — replacing plastic insert trays with a paper-based display card instead — Nestlé will eliminate 200 tons of packaging." Last year Nestlé kept candy the same size, but shrunk boxes by 40 percent — saving shipping costs and reducing waste.
Read the complete going green story on designing for the environment.
Increase Retail Revenues:
Ten low cost ideas for window displays
Small business retailers need to do all they can to reverse the current downturn in consumer spending. One approach involves frequent updating of window displays. An effective display can intrigue customers and invite them in. Displays can generate impulse buys. Over the years, displays in general have become more sophisticated. Have yours?
Potential customers walk by your storefront in a matter of seconds. Your first challenge is to attract their attention. If someone stops to look, you've nearly got them in the door. Come up with something innovative and engaging to attract that attention.
- The first step is to go outside and really take a look at those windows. Are they clean? Do you see bugs, cobwebs, faded signs and merchandise? Get several people to take an objective look at your display and honestly tell you what they think.
- Feature a particular product. What did you sell the most of last month? Last week? Feature that in your window, with a banner "hot seller," poster board of customer quotes, or with a running total indicating how many have sold.
- Work with your vendors. Do any of them have posters or materials they would furnish for display in your windows? If they have quantities of something, you could stack them in your windows. Recently a bookstore put stacks of old encyclopedias to work, gluing them together like structural columns for an interesting and amusing effect.
Read all of the low cost ideas for window displays.
Kauffman Study Finds Credit Card Debt Weighs on Survivability Chances of Small Businesses
KANSAS CITY, Mo. — Credit card debt reduces the likelihood that a new business will survive its first three years of operation, according to findings from a new study by the Kansas City-based Ewing Marion Kauffman Foundation.
The study suggests that, during many firms' first few years of operation, their credit card debt increases and then eventually stabilizes to manageable levels, while firms with high credit card debt close, and successful firms start paying off their debt. The study, The Use of Credit Card Debt by New Firms, bases its findings on data from the Kauffman Firm Survey, a panel study of new businesses founded in 2004 and tracked over their early years of operation. The new research was conducted by Robert H. Scott III, assistant professor of economics and finance at Monmouth University in West Long Branch, N.J.
"New businesses' access to formal credit markets historically has been limited, a situation that has been exacerbated with the recent contraction of credit markets," said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. "Consequently, entrepreneurs use credit card debt to finance their new ventures. Credit cards, however, are an expensive way to fund a business, and this new study suggests that escalating credit card debt negatively affects a new company's chance of survival."
More than half of all new firms rely on debt financing when they begin operations, and a vast majority of these businesses rely on credit card debt to fill any equity gap. Credit cards tend to appeal to small businesses for several reasons. They help small businesses manage their finances and streamline payments, and they are easier to get than traditional bank loans or government business grants. Credit cards smooth revenue streams — especially at the startup phase of operations — and, unlike other types of loans, credit card companies will never ask where their money went.
About 58 percent of the KFS firms relied on credit cards to finance operations in their first year of business. The study results found that every $1,000 increase in credit card debt increases the probability a firm will close by 2.2 percent.
In 2004, those businesses that closed had less credit card debt ($2,365) than businesses that survived ($3,638). This average increases 40 percent by 2005 for surviving firms and increases 190 percent for businesses that closed. However, by 2006, the one-year change in credit card debt balances for surviving firms was a marginal 1.8 percent gain; but the average balance actually decreased by 18.5 percent for firms that closed.
"Numerous factors affect whether or not a new company survives," Litan said. "Credit card debt alone doesn't determine how stable a business will be, but it does appear to be a significant influencer in the company's probability of survival."
SBA News
Small businesses won record $93.3 billion
in federal contracts in FY '08
WASHINGTON, D.C. — Small businesses won a record $93.3 billion in federal prime contracts in fiscal year 2008 (ended Sept. 30, 2008), an increase of almost $10 billion from 2007, according to the U.S. Small Business Administration's recently released third annual small business procurement scorecard.
(Editor's note: Small business clients of the Missouri Procurement Technical Assistance Centers also achieved a record contract level in FY '08 by winning $362 million in federal contracts. This was part of the overall record $434 million in local, state and federal government contracts won by Missouri clients of MO PTAC in FY '08.)
In addition, small disadvantaged businesses, women-owned businesses and service-disabled veteran-owned businesses increased their share of federal contracting dollars by at least $1 billion to $3 billion, according to the SBA.
"This record $93.3 billion in contracts to small businesses is significant, however, across the federal government we are committed to ensuring that the 23 percent goal is met and even exceeded going forward," SBA Administrator Karen Mills said. "Especially during these tough economic times, federal contracts for small businesses can be just the opportunity they need to continue to grow and create jobs. At the same time, the federal government gets access to some of the most innovative and best products and services."
The Obama administration recently reaffirmed its commitment to ensuring that minority-owned businesses, small businesses, including women and veteran-owned businesses have greater access to federal government contracting opportunities. Commerce Secretary Gary Locke and SBA Administrator Mills announced a governmentwide plan that includes federal agency procurement officials holding or participating in more than 200 events during the next 90 days to share information on government contracting opportunities, including those available under the American Recovery and Reinvestment Act.
"President Obama has made a commitment to ensuring that small businesses have greater access to federal contracting opportunities and it is a commitment shared across this administration," Mills said. "We have already begun taking aggressive steps to connect small businesses with contracting opportunities, as well as increase our outreach to federal agency procurement officers to make sure they get the information and tools they need to help them connect with these good, innovative small companies."
Small Business Procurement Scorecards provide an assessment of federal achievement in prime contracting to small businesses by the 24 Chief Financial Officers Act agencies. It also measures progress that departments are making to ensure small business opportunities remain an integral part of their acquisition of goods and services to meet mission objectives. The Scorecard was designed as an internal control and monitoring device to ensure that (1) federal agencies reach their small business and socio-economic goals, (2) accurate and transparent contracting data is used and (3) agency-specific progress is maintained.
The annual scorecard rates federal agency performance in meeting the overall small business goal and the component contracting goals for small disadvantaged businesses, small businesses in HUBZones, and small businesses owned by women and service-disabled veterans. Procurement goals for federal procuring agencies may vary because the SBA negotiates individual goals with each federal procuring agency.
SBA report documents small firms' role in 2008 economy
WASHINGTON, D.C. — Despite more recent numbers showing improvement in the U.S. economy, the economic picture for small firms at the end of 2008 offered few bright spots, according to the 2009 edition of The Small Business Economy released recently by the U.S. Small Business Administration's Office of Advocacy. Small businesses in most industries, especially in the construction industry hard hit by the housing market downturn, saw declines in employment. Along with declining sales, most small businesses faced a less accommodating credit market, especially in the second half of 2008.
"Many small businesses were adversely affected by the economy of 2008, as other small firms prepared to help shape the recovery," said Shawne McGibbon, SBA's acting chief counsel for advocacy. "Policymakers have made it clear that it's important to understand and respond to both the recession's effects on small firms and small firms' role in creating new economic activity. This report reviews changes in the economy of 2008 as well as recent advocacy (office) research on small business."
The 2009 edition of The Small Business Economy: A Report to the President, is the latest in the Office of Advocacy's annual research reports. The report reviews the economic environment for small businesses in 2008, including federal procurement and the financing marketplaces. The first chapter also looks briefly at some key issues for small business, including the cost and availability of health insurance, retaining a quality work force, and global competition. Appendices provide data on small business and a summary of advocacy office research published in 2008.
The Office of Advocacy, the "small business watchdog" of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.
For more information and a complete copy of the report, visit the Office of Advocacy website at www.sba.gov/advo. Print copies are also available upon request to the Office of Advocacy (202) 205-6533.
IRS Roundup:
Five facts about the home office tax deduction
With technology making it easier than ever for people to operate a business out of their house, many taxpayers, entrepreneurs and small business people may be able to take a home office deduction when filing their 2009 federal income tax return next year, according to the IRS.
Here are five important things the IRS wants you to know about claiming the home office deduction.
- Generally, in order to claim a business deduction for your home, you must use part of your home exclusively and regularly:
- As your principal place of business, or
- As a place to meet or deal with patients, clients or customers in the normal course of your business, or
- In the case of a separate structure which is not attached to your home, it must be used in connection with your trade or business
For certain storage use, rental use or daycare-facility use, you are required to use the property regularly but not exclusively.
- Generally, the amount you can deduct depends on the percentage of your home that you used for business. Your deduction for certain expenses will be limited if your gross income from your business is less than your total business expenses.
- There are special rules for qualified daycare providers and for persons storing business inventory or product samples.
- If you are self-employed, use Form 8829, Expenses for Business Use of Your Home, to figure your home office deduction. Report the deduction on line 30 of Schedule C, Form 1040.
- Different rules apply to claiming the home office deduction if you are an employee. For example, the regular and exclusive business use must be for the convenience of your employer.
For more information see IRS Publication 587, Business Use of Your Home, available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
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