Business Banking E-Newsletter - November 2011

Annuities and Insurance: Filling the Cracks in Your Financial Plan

If you're contributing to an employer-sponsored retirement plan on a regular basis, be sure to congratulate yourself!  You are already taking an important step toward addressing what may be the biggest financial challenge you will ever face. And if you are setting aside money for the college education of a child or grandchild, you deserve credit for that, too.

But take heed: There may be more you can or should be doing. In fact, a well-rounded financial plan might also need to include insurance strategies and the use of annuities to safeguard your vision of the future. However, you should consult a financial professional before deciding whether a particular insurance strategy is an appropriate choice in light of your particular needs and financial position.

Retirement Readiness: More Than a Plan?
While most financial experts encourage workers to contribute the maximum amount allowed to their retirement plans, they also warn that such contributions may not be enough to guarantee a secure future.

For example, the Social Security Administration estimates that, on average, retirees receive less than one quarter of retirement income from private pensions (including retirement savings plans); Social Security payments account for only an additional 39% of income. Ultimately, you may be responsible for addressing any shortfalls.1

Annuities may offer one way to bridge that gap.  An annuity is an investment contract offered through an insurance company and purchased with one or more payments.  Annuities offer a lifetime stream of income and depending on the terms of the contract purchased, generally offer a guaranteed return of principal if you die before withdrawals begin. And because an annuity is a tax-deferred investment account, earnings are not taxable until money is withdrawn, which means the value of your assets have the potential to grow more rapidly than in a taxable account.

There are many kind of annuities, but these two types of annuities have become more popular: fixed deferred annuities and variable deferred annuity.  Variable and fixed annuities are long-term, tax-deferred investment vehicles designed for retirement purposes; but the variable annuity contains both an investment and insurance component.

A fixed annuity pays a fixed rate of return for a stated period of time.  A variable annuity offers a variable rate of potential returns, based upon the wide range of investment options through their underlying subaccounts.  However variable annuities don’t guarantee a fixed return.  However, guarantees are based on claims paying ability of the issuer. 

Since annuities generally do not have contribution limits, they may make sense for workers who have already maximized contributions to their other tax-advantaged accounts, such as retirement plans and IRAs. It is important to note that purchasing an annuity inside a qualified plan does not provide additional tax deferral beyond what is received when investing in a qualified plan outside an annuity. 

The Insurance Safety Net
You may also want to consider purchasing insurance policies in order to protect against unexpected financial hardships that might otherwise require you to spend money earmarked for other goals.

For example, disability income insurance could enable your family to maintain its current standard of living in the event that you are unable to work for a period of time. And life insurance could provide your dependents with longer-term security after your death. 

Keep in mind that term life insurance only provides coverage for a predetermined amount of time, while whole life insurance can remain in effect indefinitely, provided premiums are paid. Also, whole life insurance typically includes a cash value feature that can allow you to accumulate additional wealth over time. The cost and availability of life insurance depends on such factors as age, current health, and the type and amount of insurance purchased. 

To learn more about the strategies that could plug holes in your financial plan, consider speaking with a financial professional before you decide whether a particular investment is an appropriate choice in light of your unique financial needs and risk tolerance.

1Source: Social Security Administration, 2006.

Investors should consider the investment objectives, risks, charges and expenses of the variable annuity contract and sub-accounts carefully before investing.  The prospectus contains this and other information about the variable annuity contract and sub-accounts.  You can obtain contract and underlying sub-account prospectuses from your financial representative.  Read the prospectuses carefully before investing.

Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax and surrender charges may apply.  Gains from tax-deferred investments are taxable as ordinary income upon withdrawal.  The investment returns and principal value of the available sub-account portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than their original value. 

*Source: Standard & Poors. © 2010 Standard Poor's Financial Communications. All rights reserved.
*Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates

Not FDIC insured

No Bank Guarantee

May lose Value

Not a Deposit

Not Insured By Any Federal Government Agency

Coulee Bank and Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.

Successful Holiday Marketing Campaigns

Seven Tips to Get the Right Message to Your Audience

It's no longer a question of either-or. Savvy entrepreneurs know that both email and social media are important parts of a successful marketing strategy. Using the right tools to get the right message to the right audience is critical over the holidays, when businesses and organizations are pulling out all the stops to capture consumers’ attention and dollars.

So how can you engage customers when competition is so fierce? Here’s some good news for small businesses on a budget: Social media extends the life and reach of your email marketing campaigns. It empowers marketers to better engage their audiences, and gives customers the means to share content and offers with their networks. If email gets your message heard, then social media spreads the message even farther.

Here's how to extend your email marketing reach and add some social spice to your holiday campaigns. Before you start spreading the cheer, keep these seven tips in mind.

1. Create valuable content to share. Your email subscribers and social followers won't share content just for the sake of sharing. But they will share content that interests and entertains them, shows them you're listening, solves their problems, and improves their lives. And around the holidays, everyone is looking for a great offer, whether it's a clever gift idea, an awesome deal, or a money-saving coupon.

2. Include a social call to action. When you start a conversation, request feedback, or make a promotional offer via email, the next step is to drive your audience to social destinations and engage them. Make it clear to your email readers what you want them to do next. It may be to "Like" you on Facebook to get a coupon, follow you and retweet an offer on Twitter to be eligible for a prize, or continue a hot-topic holiday discussion elsewhere.

3. Make your campaigns easy to share. Your aim is to capture your customers' attention and then inspire them to comment on and share your content or offer with their friends or network. That way, a whole new audience hears about your business, with the implied endorsement of your customers. What a powerful way to get your message across. Be sure to…

  • Add social share icons to the top of your email newsletter, so readers can easily share your content with just one click.
  • Keep your tweets short and sweet so that others can retweet within Twitter's 140-character limit.

4. Customize your message for each network. Tools make it easy to share your email content across social media channels. But don't overly automate your marketing message ("set it and forget it") at risk of losing your personal touch. Get to know your audience segments and their preferred social turf. Then, create a customized message for each network of followers. Post those links to your email newsletter on Twitter, Facebook, and LinkedIn -- wherever your audience spends social time online.

5. Invite email signups via social media and mobile marketing. Holidays are a great time to grow your mailing list, too. Remember to…

  • Post sign-up links across your social media accounts.
  • Add a "Join My Mailing List" box to your website and Facebook pages.
  • Invite your audience to join your mailing list by texting you (if your email marketing service provider offers this feature).

6. Participate in social conversations and inspire new content. Pay attention to customer conversations and feedback when you post on Facebook, Twitter, and LinkedIn. If a discussion catches fire, jump in yourself and fan the flames to keep it going. Engage customers in social conversations, and use their input to develop ideas for future email content that they'll also want to share.

7. Check your social media stats. See how many people shared your holiday campaigns outside the email environment. Take note of what works and what doesn't, so you may take those valuable lessons learned into the new year.

Social media gives email more reach and power, connecting all of your communications in an integrated engagement marketing plan. Combining email and social media marketing enables you to better engage your customers, and inspire them to share your content -- and do some of the holiday marketing for you. Here's to a social and successful holiday season.

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The Five Step Guide to Reinventing Your Business

Making Changes That Lead to Growth

A few months ago, Steve Strauss noticed a fairly popular Italian restaurant in his Portland, Ore., neighborhood had gone out of business. He didn't think anything of it until a week later, when it reopened as a burger joint with a new look, a new name and the same guy behind the counter. "I talked to the owner and said, 'You risk losing your brand. Why would you make such a huge change?'" says Strauss, a business speaker and author as well as a columnist for USA Today. "He said the economy had shifted. That upscale Italian brand wasn't letting him grow the way he wanted. He felt the need to reinvent."

To most business owners who have spent years or decades and hundreds of thousands of dollars building their brand and developing a client base, chucking it all away to reinvent your business probably seems like the height of insanity. And if you do it on the fly or haphazardly, it probably is. But there are many reasons to tweak your business model--or to try out a whole new one--that make perfect sense. If you do it thoughtfully, it could be the best business decision you ever make. Here's our guide to reinventing your business, one smart step at a time.

1. Know When to Make a Change
The first step is deciding if it's the right time for a change. Karyn Greenstreet, a Philadelphia-area small-business coach specializing in self-employment and business reinvention, says she sees a pattern with small-business owners. "Most people who come to me have been running their businesses for about seven years," she says. "They spend the first three years absorbed in getting things started. Then they're in a growth phase for three or four years. Then they hit a glass ceiling, or don't find the work challenging anymore and want to try something different."

Many factors can push a small-business owner toward reinvention--it may be a need to spend more time with family. The market may have changed. The economy may have reshuffled your customer base. You may be bored. All are legitimate reasons for change. But you need to be practical, too. Any change involves risk. If you're paying for kids in college and have a steady cashflow, you may have to suck it up a few more years.

2. Decide What You Want
After the decision is made to change, you need to decide what type of change is necessary to meet your goals. "Once you decide there's something you can do better, you need to decide whether to make a little tweak or a major overhaul," Strauss says. "You have to decide what's best for your brand. It's a matter of looking at your core competencies and sticking with what you're best at." Greenstreet agrees. "Entrepreneurs have more ideas than they have time for. The absolute first stage is deciding to cut off all those other ideas and focus on one. Making a decision to make a decision is the hardest thing for entrepreneurs to do."

The easiest way to figure out what to change--and at what magnitude--is to work backward. Are you chiefly interested in reducing the hours you spend in the office? Are you sick of selling office supplies and think running a dog bakery is your destiny? "Once you have clarity on your goals and values," Greenstreet says, "you have a compass to guide you and help you decide which ideas are good and which are brilliant."

3. Follow the Plan
The next step is something every business owner should be experienced at--making and following a business plan. "You need to act as if you're starting from scratch," Strauss says. "You need to think it through thoroughly, figure out who the competition is, how you are going to beat them and what the costs are."

Strauss and Greenstreet suggest sharing your plans with other business owners or a mastermind group. "Entrepreneurs tend to rely on intuition a lot, but you need to make sure other people think your plan is a good idea," Strauss says.

4. Make the Switch
During the transition, you'll likely be running two businesses at once as you phase out the old business model and ramp up the new one. "Sometimes reinvention means running two businesses simultaneously for almost a year," Greenstreet warns. "It's overwhelming, and business owners are often so excited about the new model, they want to let go of the old model. It's like going through a long divorce before committing to a new relationship. It's not fun."

The solution is to create a detailed exit strategy. Allow time to negotiate new leases, bring on new employees or train current employees. Be transparent through the whole process with vendors, customers, employees and, most important, your family. Give everyone notice that changes are coming, when they will happen and what it means for them.

Pamela Wilson, a marketing consultant in Lehigh Valley, Pa., is in the midst of the process. After running a marketing and design firm for 20 years, she decided to scale back her one-on-one clients and reach a broader audience. In 2010 she created a do-it-yourself marketing course for small businesses called Big Brand System. "It's been difficult juggling two businesses," she says. "But I'm at 50/50 right now. By the end of next year I plan for the new business to generate 75 percent of my income."

5. Mentor and Manage
Even those committed to sticking to their business plans can start to deviate. Greenstreet suggests bringing in outside help. "Business owners sometimes need people to bounce things off of to keep them from going off in crazy directions," she says. "Some people go through a grieving process. They're letting go of a piece of something they've built and need to process that. There's a lot of stuff to deal with, but if you don't, it will come back and bite you hard."

Although the process can be rough, reinventing your business can be a rush. "It's an exciting place to be," Greenstreet says. "A business owner gets to reinvent themselves with capital and 10 or 20 years of experience--without making mistakes. They have an ace in the hole.

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Is Your Attitude Killing Your Business?

How-to Replace Your Angst With Business Building Activity

Several business owners are uneasy with the economy and the potential for another “dip” this winter. They worry that “things are really going to get bad again” but they don’t exactly know how or when. One business woman asked, “Is it better to try to prepare for some worst case scenario or just wait until it happens and deal with it then?”

Years ago, during a similar period of economic uncertainty and sluggish growth, an expansion business plan written by a gas drilling rig equipment owner was a bold plan especially when U.S. gas drilling had stalled out because of declining prices. When the owner was asked why he believed his business could survive, let alone succeed, he said something like this.

"My advantage is my attitude. All of my competitors are complaining about the market and waiting for it to turn around. In the meantime, there are still opportunities out there and I will be the only one pursuing them. If you think the market is dead then soon your business will be dead.” It is dangerous for business owners to adopt a turtle-like “wake me when it’s over” mentality.

Here are some recommendations to replace angst with business building activity.

No. 1: Seek more customers.
In the spirit of the rig operator, now is the best time to go out and pitch new customers. So what if the sales cycle (the time it takes to solicit and receive a first order) may be longer than in years past. Owners should spend at least one day a week pursuing new customers. Here’s another benefit of initiating a new sales campaign. Your employees will be inspired by your confidence and commitment to resist defeat.

No. 2: Evaluate business weaknesses.
Owners should ask every employee or manager the following question. What sudden single event would be heart stopping bad news for your department?  It could be the loss of a the top sales rep to the competition, loss of a big account, loss of a production source,  loss of a bank credit line, etc. 

Once the owner has identified the top areas of vulnerability throughout the company, then the entire staff can work together to come up with action steps to reduce the company’s areas of vulnerability. Not only will the business benefit from the proactive steps taken, but employees will feel more productive addressing problems than worrying about them.

No. 3: Watch customer payment patterns closely.
If commercial banks increase borrowing costs to small business owners or cut off their credit entirely, then owners can expect another nasty slow down in bill paying around the country. Owners should also watch out for customer over-ordering with no intention to pay on a timely basis. 

No. 4: Prioritize payments. For business owners in extreme cash flow distress, it’s worthwhile to establish bill paying priorities. Salaries and payroll taxes should always come first. If owners don’t make timely payroll tax payments, interest and penalties can mount up quickly. Plus, owners are personally responsible for these payments even if their business is structured as a corporation or limited liability company. Next, owners should pay obligations that are backed by a personal guarantee, such as credit cards.

Yes, attitude and actions do matter. If startup entrepreneurs and business owners pause too long, they make it easy for their competitors to pass them by.

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Finding an Edge in a Competitive Market

Three Ways to Stand Out From the Crowd

It may appear that certain industries are so packed with competition these days that it's hardly worth jumping in. But don't let a crowded market deter you.

Savvy small-business owners are still gaining a competitive edge in industries where you wouldn't think one existed anymore. Consider these tips gleaned from the experience of successful entrepreneurs who found ways to make their businesses stand out in a crowd.

1. Personalize the customer experience.
When you're a pioneer in an industry, you get a head-start but you have to get creative to stay ahead once competitors enter the fray.

Take, which launched in 2005 and was among the first question-and-answer web sites. The site helps people solve technical issues with personal gadgets and household appliances -- whether a cellphone or a dishwasher. The San Mateo, Calif.-based company connects owners of similar products and gives them a way to ask each other questions and get responses.

"I figured the best person to help a person with a BlackBerry is another BlackBerry user," says founder and chief executive Yaniv Bensadon, 41, noting that it was an alternative to dealing with "a call center halfway around the world."

But in the past several years, there's been a surge in Q&A-focused web sites, including Yahoo and, which launched in 2005 and 2010, respectively. While these sites don't specialize in solving product issues like FixYa, Bensadon says they can be used to get any kind of answers. So Bensadon has found new ways to make FixYa more user-friendly and social. The 60-employee company recently revamped its web site, adding new social-networking and interactive features to offer a more personalized experience for its 11.5 million registered users. For instance, people can create their own network of favorite "experts" on the site. And people who log in through Facebook can see their friends' postings.

FixYa is also rolling out over the next few months an "experts on demand" feature that allows people to sell technical-support services by creating their own expert profiles on the site, and users can rate them. FixYa will make a commission on any business secured through its site.

Bensadon's advice: Look for ways to offer a personalized experience and interactive features that make your product or service more user-friendly. "When you're just a content site, users usually find you on Google," he says. As a social-networking site, "there's far more trust and credibility, as well as engagement."

2. Be a trendsetter and redefine a common product or service.
When selling a product that's so common it's considered a commodity, consider out-of-the-box, even incongruent, ways to develop your niche and gain market share.

That's what New York restaurateur Roy Liebenthal did when he opened his first Pop Burger in 2003. He turned the traditional fast-food concept on its ear, and added some upscale twists. The original 4,000-square-foot Pop Burger restaurant in Manhattan's trendy Meatpacking District includes a burger counter adjoined to an upscale lounge that serves wine and cocktails. Liebenthal hired a New York-based Turkish designer, Ali Tayar, to create a more modern, hip ambiance, replete with descriptive food-related phrases that light up the walls -- far from what you expect at run-of-the-mill burger joints.

While other upscale burger places have emerged since Liebenthal started Pop Burger, he has continued to expand -- opening a larger second location with billiards in 2007. And this past May he opened a third burger-focused eatery in New York -- Pop Pub -- near New York University. Like his original Pop Burger, which alone generates about $3.5 million in annual revenues, Pop Pub also maintains a hipster vibe. It offers an expanded menu, including items such as lobster rolls and breakfast fare, and boasts more than 50 types of beer.

Liebenthal's advice: Don't just keep up with trends in your industry, be the trendsetter and blaze your own trail. Liebenthal attributes his success to thinking outside the box and redefining what a burger joint is.

3. Cater to an overlooked, underserved slice of the market.
If you're the latecomer in a popular and crammed industry, look for the slice of the market that's not getting enough attention -- and find the best way to fill the need.

In early 2009, Joe Matthews and Sean Strother started, a Chicago social-networking site for sharing tips on drink specials and nightlife around the city. But after a year, they noticed the explosive growth of "daily deal" sites, such as Chicago-based Matthews was taking a master's in business administration course taught by a Groupon founder and, working with him, was able to line up $500,000 in venture capital to revamp Poggled and turn it into a deals site.

But Poggled narrowed its focus to the special needs of nightclubs. For instance, instead of just one-time discounts, the company offered ongoing deals only redeemable on slow nights of the week or before midnight, when many nightclubs are still empty. New deals are emailed out to Poggled subscribers -- as other daily deal sites do -- but they do not expire in 24 hours. The deals could stay active for several weeks or months. Poggled has about 40,000 email subscribers in the Chicago area and recently began offering deals in New York City and Denver. It expects to expand to several more cities in coming months.

Matthews' advice: Rather than trying to serve every customer, cater to the ones that have unique needs. For example, nightclubs "don't want to have 1,000 coupons outstanding" that people can use anytime," says Matthews, 30. "They want people coming on their off nights."

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