SBANC Newsletter
January
11, 2005
Issue
354-2005
QUOTE
"Business
is not financial science, it's about trading.. buying and selling.
It's about creating a product or service so good that people
will pay for it."
-- Anita Roddick
FEATURE
PAPER
An Approach For Solving The Coming Financial Crisis
In Social Security
This paper was presented by Stephen
T. Evans, from Southern Utah University, and Matthew T. Evans,
from Brigham Young University,
at the Allied Academies International Conference in Maui, Hawaii on October 13-16, 2004.
Although Social Security contributions have increased
by 961-fold since 1938 (60-fold, even after adjusting for inflation),
more
retirees, longer life-expectancy, increased benefits, and relatively
fewer FICA workers have offset these increases. The projected $560
billion in OASI taxes in 2004 will take care of this year’s
retirement payments, but demographic reality will result in outflows
exceeding contributions by the year 2018 and a complete depletion
of the Trust Fund by 2044. Bipartisan commissions have tried to
avert the financial crisis by adjusting the policies and formulas,
but the “fixes” have been compulsory and not fully
effective and have been a disincentive for people who are otherwise
compelled to participate. An average worker deferring retirement
for one year is better off by $16,411 (considering net wages),
and the government is better off by $22,343 for that year (with
deferred payments and more taxes). These numbers create large incentive
opportunities. As a solution to the coming financial crisis we
propose that the federal government offer upfront cash payments
and other rewards for those who choose to defer retirement. Our
models show that with only 7% of potential retirees accepting such
incentives, the Social Security system would be preserved for an
additional 8 years, and 14% would add nearly 20 years of financial
viability.
Read the Entire Paper...
TIP
OF THE WEEK
Final Steps in Buying a Business
Once you have decided
to purchase an existing business and determined its worth, there
are some final steps to consider before completing your small
business purchase.
Negotiate to Close
Have you ever been to
a yard sale? Chances are that, if you have, you probably negotiated
the price of a sale item. Negotiation is not limited to yard
sales and small money deals. Negotiation takes place after the
price has been established for the buyout.
The two main factors involved with negotiation are
- Your top dollar price
- Your target price
The top dollar amount is the highest amount you are willing to
pay, and the target price is the realistic price that you want
to pay for the business. A successful negotiation is one in which
you view the process as a win-win situation for both parties rather
than a win-lose deal. Negative features are weighted against each
positive feature. When negotiating a price, keep in mind the intangible
factors that are an important part of the price; goodwill is one
such factor. Goddwill is the asset value of an established name,
image, and patronage that is publicly known. Another intangible
factor is the benefit of an exclusive territory.
Negotiations between buyer and seller usually affect financing.
As the down payment increases, the price tends to fall. Apart from
teh financing aspect of the purchase transaction, here are a few
good rules to follow when negotiating the deal:
- Be prepared. This lets you be more in control of the negotiation
process.
- Identify your needs. The negotiation time frame will be shorter
if you know exactly what you want from the seller.
- Let your attorney be the
middleman. The attorney can keep the
buyer's and seller's emotions off the bargaining table. People
tend to get into arguments when opinions differ; consequently,
the deal often falls through.
- Be ready to leave the deal. Establish your limits before the
negotiation process begins. Don't accept terms that you will
be unhappy with or that are unfair to you.
Many books describe how to negotiate in a variety of common situations.
By reading these books, the buyer can benefit greatly.
The Closing
The final step in buying a business involves closing the purchase
arrangement. The entrepreneur should have an ttorney make certain
that there are no legal implications or contingent liabilities
present. A contingent liability is a claim on the business that
may result from some action. For example, a contingent liability
might be an unsettled lawsuit against the business; after settlement,
the business might have to pay a sum of money that would change
the business's value. An attorney can handle the transfer of title
as well as any other stipulations written into the purchase agreement.
Regardless of how honest both parties may be, a handshake is not
sufficient for closing a deal. A written contract is needed to
spell out issues such as method of payment or any agreements concerning
assets.
Finally, it's the time that you, the official small business owner,
have waited for! Your business is ready to function under your
guidance.
Corman, J., Lussier,
R., & Pennel, L. 2005. "Small
Business Management: A Planning Approach," p. 58-59.
Cincinnati, OH: Atomic Dog Publishig.
CONFERENCES
Arizona Economic Development Course
The University of Arizona Economic Development Research Program will
hold its 37th Annual Arizona Economic Development Course at the University
of Arizon in Tuscon on January 23-27, 2005.
For more information,visit: http://ag.arizona.edu/edrp/2005%20course%20brochure.pdf
USASBE/SBI National Conference
A USASBE/SBI Joint National Conference will be held in Indian Wells,
California, USA on January 13-16, 2005. The theme of the conference
is "Entrepreneurship in a Diverse World."
For more information, visit: http://www.usasbe.org/conference/2005/index.asp
The 5th National Multicultural Business Conference
DiversityBusiness.com invites you to attend the Fifth National
Multicultural Business Conference taking place on March 30- April
1, 2005 at the beautiful Foxwoods Resort Casino located in Mashantucket,
CT.
For more information, visit: http://www.div2000.com/Events/DivEvent/2005/
The Journal of Small Business Management
The Journal of Small Business Management will host the inaugural
Special Issue and the Office Depot Small Business Research forum
on April 16, 2005 at Fort Lauderdale. The inaugural forum will
focus on small enterprise finance and include topics such as:
bank lending, venture capital, private equity, business valuation,
self-financing, internal capital markets, securitization,government
financing programs, small firm governance, and other related
topics. There is limited space available for non-author participation.
If you would like to express an interest in attending the Office
Depot Small
Business Research Forum, please send a short bio to Karen Duray-Smith
at kdsmith@fau.edu. The priority will be given to the ICSB members.
The invitations will be sent out by January 31, 2005. Please note
participants will be responsible for expenses.
Symposium on
Information Systems Risk, Security & Assurance
The Center for Research and Training in Information Security
and Assurance (CReTISA) in the School of Accountancy at The University
of Akron announces its Third Annual Symposium on Information
Security on Friday February 25, 2005 (7:30 AM to 5:00 PM.) at
Crowne Plaza, Akron, OH. The Symposium offers an opportunity
for faculty, business and accounting professionals, and students
to interact and share ideas about contemporary information security
issues. This yearâEUR(tm)s theme is Assuring the Integrity
of Financial Information Systems. The Symposium contains sessions
on (a) Sarbanes-Oxley and information security, (b) XBRL/XML
technology and financial information integrity, (c) database
security and financial application integrity, and (d) obtaining
and securing evidence in a computer crime investigation. Speakers
are experts in their fields with national and international reputations.
Participants earn six hours of CPE credit.
For more information, visit: http://www3.uakron.edu/cba/cretisa/2005/
CALL FOR PAPERS
Enterprise
Development Growth & Expansion
The next Enterprise Development Growth & Expansion (EDGE) Conference
will be held at the Singapore
Management University on July 11-13, 2005. The theme is "Bridging
the Gap: Entreprenteurship in Theory
Practice."
Submission Deadline: January 15, 2005
For more information, visit: http://www.research.smu.edu.sg/faculty/edge/conference_2005/index.htm
Hawaii International Conference on Business
The 5th Annual Hawaii International Conference on Business
Topic areas include: accounting, agribusiness, agricultural economics,
business communications, business
education, business ethics, business law, and more.
will be held at the Waikiki Beach Marriott in Honolulu, Hawaii,
USA on May 26-29, 2005.
Submission Deadline: January 18, 2005
For more information, visit: http://www.hicbusiness.org/cfp_bus.htm
International Council for Small Business
The International Council for Small Business (ICSB) will hold its
50th World Conference at the Crystal Gate Marriot in Washington,
DC, USA on June 15-18, 2005. The focus wil be on "Golden
Opportunities in Entrepreneurship."
Submission Deadline: January 15 2005
For more information, visit: http://www.usasbe.org/conference/2005-ICSB/index.asp
International Association for Computer Information
The International Association for Computer Information (IACIS)
will hold its Pacific Conference with the theme "Technology
and Information Security Issues in Knowledge-Based Organizations" at
the Grand Hotel in Taiwan on May 19-21, 2005.
Submission Deadline: January 17, 2005
For more information, visit: http://www.iacis.org
Pan-Pacific Business Association
The Pan-Pacific Business Association (PPBA) will hold its Pan-Pacific
Conference XXII in Shanghai, China on May 25-27, 2005. The theme
of the conference is "The e-Global Age, New Economy, and
China: A Close Up."
Submission Deadline: January 21, 2005
For more information, visit: http://www.cba.unl.edu/outreach/ppba/2005CallForPapers.pdf
ANNOUNCEMENTS
The National Economists Club
The next NEC lunch will be from 12 to 1:30 Thursday, January 13.
Elise
Golan, Chief, Diet, Safety, & Health Economics Branch, USDA,
will speak on
"
Traceability in the U.S. Food Supply," at the Brookings Institution,
1775
Massachusetts Av., NW. Washington, DC.
For more information, visit: http://www.national-economists.org/
January 2005
Edition of "International
Business News"
The International Business News Newsletter comes out of Little
Rock, Arkansas.
View this Newsletter: http://www.buyusa.gov/doc/arkansas/15
Visit: http://www.buyusa.gov/arkansas/arknewsletter.html
U.S. Commercial Service
The United States of America Department of Commerce has a Global
Network for finding a trade specialist near you. If you are interested
in reaching new customes worldwide, then check out these sites
to find information on entering new export markets faster and
more profitably with the worldwide network.
www.export.gov
www.buyUSA.com
2005 Enterprise Creation Competition
The next Preeminent International Undergraduate Business Plan Competition
will be held on March 18-19, 2005 at Ball State University in
Muncie, Indiana.
FOr more information, contact: Midwest Entrepreneurial Education
Center
Miller College of Business
Ball State University
Muncie, IN 47306
Tel: (765) 285-9002, Fax: (765) 285-9003
E-Mail: mailes@bsu.edu
Missing Newsletter
The Small Business Advancement National Center is currently missing
a newsletter file: Issue 345, October 12, 2004. If you have this
file saved to your computer or e-mail inbox, please forward it
to the center by e-mail: sbanc@uca.edu.
SBANC Staff
Main Office Phone: (501) 450-5300
Dr. Don B. Bradley III, Executive
Director of SBANC & Professor
of Marketing
Direct Phone: (501) 450-5345, E-mail: donb@uca.edu
Esther
Mead, Co-Lead Development Director, E-mail: estherledelle@yahoo.com
Amanda Harris, Development Intern,
E-mail: abharris84@yahoo.com
Jesse Holmes, Development Intern, E-mail wags4pets@yahoo.com
To subscribe or unsubscribe to the SBANC
Newsletter, please E-mail SBANC at sbanc@uca.edu
