The Stimulus Package: What It Means For Your Business
Live Panel DiscussionModerated by: Thomas Tan, SAPJuly 29th, 2009
Agenda
How to leverage the $787 billion federal stimulus package (myths, opportunities, resources)
How to uncover the "hidden" stimulus in your business (strategies, tools, examples)
Q&A, Wrap Up
Our Featured Speakers
Chad Moutray
Chief Economist U.S. Small Business
Administration
Steve King
Founder and Partner Emergent
Research
Sam Sliman
PresidentOptimal Solutions
The Current Situation?
Recession: broad-based and severe Real GDP -5.5% in Q1 2009 Unemployment up to 9.5% in June 2009
Signs of improvement Small business sentiment (NFIB index) has been
rising steadily over the past few months (June = 87.9), but it is still too low.
Fed’s Senior Loan Officers Survey – shows continued tighter standards, weaker demand
SBA 7(a) lending – down 46 percent YTD from last year, but loan volume is up significantly since March 2009
Extremely aggressive policy-making Monetary policy: U.S. prime rate down from 8.25%
to 3.25%, Federal funds rate is now targeted to essentially zero
Fiscal policy: Emergency Economic Stabilization Act (October), America Recovery & Reinvestment Act
“Where Is My Check?”
Myths “It doesn’t apply to SMEs”
“SMEs are only getting only 1% of the deal”
“It’s only for those who build bridges”
“Where is my check?”
“The money is all gone”
Reality
We’re Here!
Understand the Stimulus Package
Tax Incentives and Provisions
SBA Loan and Lending Changes
Specific Stimulus Spending
+1
+2
+3
Simply Put, it means 3 things for small and midsize business like yours…
What It Means for Your Business
$730 million to SBA – reducing fees to banks, borrowers $400 million in other support to support economic development and
entrepreneurship, particularly in distressed rural, urban, and low-income communities
Tax Incentives and Provisions
SBA Loan and Lending Changes
+1
+2
Making work pay credit Continuation of section 179 expensing up to $250,000 Accelerated depreciation on certain assets Reduced capital gains tax for holding stock for 5+ years
Energy credits A delay in the 3% withholding tax on government procurement
What It Means for Your Business
$30 billion for improving electricity grid and other energy improvements
$27.5 billion for road construction projects
$26 billion to local school districts
$19 billion for health information technology
$7.2 billion for broadband access
$15 billion for scientific research
….
State and local gov’ts handle most of the disbursements
Methods vary by state Federal government
agencies and resources and Federal Business opportunities
Research (any stimulus money I can apply for? Who is spending it?)
Resources (local gov’t public listings, recovery agency websites, i.e. Recovery.og, Grants.gov)
Submitting bids (what is the contracting process? Know the rules and process, be patient)
The “picks and shovels” opportunity (supplying companies likely to benefit from the stimulus package)
Where is the money? How is it spent? What you need to do?
Specific Stimulus Spending+3
Is There Another Stimulus “Hidden ” In Your Business?
How to Find the “Hidden Stimulus”?
Why “Hidden”? Lack of transparency Disjointed processes Lack of data Lack of integration Departmental technology -
strung together in a haphazard way
How to Find? Integrate - need integrated
data to plan and manage your resources
Determine - what can I do differently and what will the impact be if I do it?
Execute - sustainable best practices for a given process / your industry
Where to Find the “Hidden Stimulus”?
What tactics and strategies can you take? Look Deeper for Hidden Costs/Wastes (reduce consignment inventory? Any unprofitable products?)
Turn to Your Back Office (control cash? overdue collections? vendor terms / financing?)
Find It from Your Customers (unprofitable customers to drop? Get the customer records straight to avoid marketing costs?)
Optimize Resources & Operations (automate manual processes? Use data to optimize delivery routes, inventory?)
Avoid Ongoing Leakage (KPI/dashboard to monitor & prevent problems from happening)
Do you have the right tool to help you look?
Uncovering the “Hidden Stimulus” at Optimal
A typical mid-market company Founded in 1995 – founder is still active as CEO 400 pp worldwide, HQ in Dallas with overseas offices 15 years serving clients with SAP implementations
Spreadsheet madness - lack of access to quality data for effective decision making
3~4 weeks to close the books - very little management reporting and extremely late
Inefficient internal processes not scalable for complex operations Manual effort fraught with redundancies, very error-prone…
Tools: SAP Business All-in-One, SAP BusinessObjects Examples: Customer Analysis, Vendor Analysis, Cash Management Key: integrated data to plan and manage resources
Like many midsize
companies
Finding our hidden
stimulus
Continue the Discussion…
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