Don't get scammed by fake report to Arizona Corporation Commission

There is a business sending out Annual Minutes Disclosure Statements to small businesses, where their statement is made to look like the annual report a Corporation would make to the Arizona Corporation Commission. This business, titled Arizona Corporate Headquarters, is showing an annual fee of $125 (not the usual $45) and a due date of January 26, 2009 (rather than in April). A client made me aware of this scam, and when I googled it online found the following story from an Arizona TV Station, which follows:

3 On Your Side Report

By Gary Harper / 3 On Your Side

PHOENIX -- If you operate a business, big or small, 3 On Your Side has a warning about a huge scam that's out there right now.

I have to say that this is probably one of the most clever scams I've seen in a long time. I say that for a couple of reasons, mainly because it doesn't target consumers. Instead, it targets businesses in the state of Arizona.

Cori Ferguson owns a small consulting business in the West Valley. So when she received a letter recently asking her to update her business information with the state of Arizona, it got her attention. "It looked very official," Ferguson said. "It came with the Arizona Corporate Headquarters information at the top of the envelope."

Arizona Corporate Headquarters wanted Ferguson to fill out a brief document and then, in order for her business to stay in good standing with the state, Ferguson was supposed to mail in a check for $125. Ferguson was skeptical and it's a good thing she was because Arizona Corporate Headquarters is in no way affiliated with the Arizona Corporation Commission, the state agency that facilitates businesses and organizations in the state. "It's absolutely outrageous and it's a fraudulent document," Kris Mayes said. Mayes is an elected official with the Arizona Corporation Commission and 3 On Your Side showed her the document asking businesses for $125. "What they are trying to do is trick people into sending $125 for something not ever required by the state of Arizona," Mayes said. Business owners like Ferguson are supposed to mail their money within 15 days and exactly where is Arizona Corporate Headquarters located? Ferguson said it's at 5025 N. Central Ave., Suite 573. Well, that address is actually a UPS store with mailboxes found inside and Suite 573 is really mailbox 573. Whoever is collecting all the checks arriving to this mailbox, according to Mayes, is pulling a fast one. "It is cleverly disguised to deceive Arizona businesses," Mayes said. "It's outrageous." Ferguson is glad she didn't fall for it and hopes other businesses out there big and small don't fall for it either. "We're all struggling to make ends meet and something like this comes along, it's just not right," Ferguson said.

By the way, the Arizona Corporation Commission has filed a formal complaint with the Attorney General's Office telling them about this scam.

What do machine gun feed chutes and floor care equipment have in common or, perhaps, flavored coffees and parts cleaning equipment? How about non-food items in a convenience store and a turbocharged diesel engine system in a main battle tank? Each pair describes the two principal product lines of three multi-million dollar companies and represents the result of several small, logical decisions played out over many years that create odd product/service pairings.

Are you a successful entrepreneur that is not where they thought their company would be or a less-than- successful entrepreneur trying to turn things around? The process is the same, but the urgency may be different. Since you have read this far, you want something different than what you have now. But what? What does personal and professional success look like to you?

First, look introspectively. Take some time and think about the next 3 years. "X Write down the 3 most important personal goals you would like to accomplish "X Write down the 3 most important corporate goals you would like your company to accomplish Put the goals in a drawer; we will come back to them later. In the mean time, assemble information about the past: "X The most recent business or strategic plan "X You do have one- don¡¦t you? "X Thirty six months of past financials "X Income Statements "X Cash Flow Reports "X Balance Sheets "X Thirty six months of past customer data "X Sales by Account "X Profit by Account "X Thirty six months of past product/service data "X Sales by product/service "X Profit by product/service "X Thirty six months of past industry data "X Industry Sales "X Technology Trends in products/services "X Thirty six months of past competitor data "X Sales "X Profits "X Products/Services Identify a group of 5-10 trusted advisors. These can include business associates, family, employees and even (shudder) consultants. Do not use a bunch of sycophants that will tell you what you want to hear. Look for insightful people inside and outside the company who are motivated to help the business and not themselves. You should expect to compensate them for their time and they should approach the task seriously and confidentially. Give them copies of the information you¡¦ve assembled.

Do individual S.W.O.T. analyses Strengths, Weaknesses Opportunities and Threats Analysis can be one of the best ways to establish the business¡¦ current position and identify potential future directions. Each participant should do the analysis individually based upon their perception of the company. A diversity of opinions is healthy and enables everyone to look at the company with ¡¥new eyes.¡¦ Strengths and Weaknesses are internally focused. Look at all the functional areas of the company- Financial, Product Development, Operations, Sales, Marketing, Human Resources¡K Clarify why something represents a strength or weakness. Opportunities and Threats are externally focused. Look at the market and the competitive and regulatory environments; clarifying why it is perceived to be an opportunity or a threat.

Do a collective S.W.O.T. analysis Have the individual S.W.O.T. analyses turned in anonymously and create a master S.W.O.T. from everyone¡¦s individual analyses. Seriously consider using a third party; someone who does not have an emotional stake in a specific outcome. Assemble your company¡¦s advisors in a place that has no distractions. No phones. No interruptions. Refreshments and meals catered in. This is the company¡¦s future and everyone needs to give it 100% of their attention. Use a third party as a facilitator, someone committed to the process, but without an emotional stake in a particular outcome.

Review the collective S.W.O.T. analysis. Maintain an open mind. Do NOT react or challenge and do not be surprised if some strengths are also viewed as weaknesses and vice versa. The same can be said about opportunities and threats. Individual perspective will influence how an attribute is categorized. For example: Centralized decision making can be faster, more efficient and ensures alignment with corporate goals, culture and vision. Centralized decision making can also be viewed as stifling to new ideas, does not encourage employee involvement or empowerment and what happens if something happens to the decision-maker(s)?

Set Goals and Priorities Goals should be firm, but they are not permanent nor are they unchangeable. Circumstance can require goal changing; for example, the emergence of a disruptive technology. Goals need to: "X Align with the overall strategic direction/mission/vision of the company "X Be fully supported by upper management "X Be objective: "X Who is/are responsible? "X What is to be accomplished? "X When is to be done by? "X Where is it going to be done? "X How much is it going to cost? "X Looking at the SWOT Analyses, prioritize from most to least important. Which are going to have the most significant positive impact upon the "X Customer? "X Employees? "X Financials? "X Be realistic: "X No slam-dunks "X No impossible dreams "X Those responsible must believe the goals are achievable

Take Action Put together an action plan that enables the company to pursue the top 3 priorities relentlessly. Taking on too many priorities depletes everyone¡¦s energy and dilutes the effort. A few things done well will do the company more good than many things done halfway. When those priorities are achieved, return to the list and see if the next three are still relevant. If they are, attack those next. And so on.

Finding the money to run a business is a concern that begins at conception and doesn't stop until the business fails or is sold to someone else. Satisfying a healthy business's appetite for capital requires knowing which kinds of investors to approach at each stage of a company's growth and what size of investment to expect at each stage.

Each funding source has its own guidelines for when to help - and how much to give - a company that's hungry for capital. But the first thing all investors want to know is what stage a company has reached and what chance it has to grow and make money.

Few businesses follow a predictable path and timeline from one stage of life to the next. Some linger for a long time as startups, while others dash directly from startup to exit. Knowing the life cycle of a typical business can help an entrepreneur know where to find capital to reach the next stage.

Life cycle of a business The seed or startup stage starts with an idea or a prototype for a product or service. At this stage, entrepreneurs either tap friends, family members or other personal contacts for funds, or they seek angel investors, grants, micro loans or venture capital. When a company is preparing its product or service for a market launch, it's in the early stage of life. As it begins to produce products and secure customers, the business might need a cash infusion and is most likely to find it through a bank loan, grant, micro loan, angel investor or venture capitalist.

When the company outgrows its original goals, it's in the expansion or growth stage. Banks, government lenders and venture capitalists are interested in companies like these that are moving into new markets, gaining more market share, introducing new products or services and seeking new customers. Changes in the economy or market conditions can cause sales to decrease and a company to decline. Faced with a negative cash flow, the owner must decide whether to seek another opportunity or find ways to salvage the business. Possible funders at this point include suppliers, customers, co-owners or partners.

At the exit stage, an owner is either selling or shutting down a business. Accountants and financial advisers can help decide the best exit strategy, but common ways to raise money at this stage are through management buybacks, Employee Stock Ownership Plans or Initial Public Offerings.

It's a safe assumption that most of the companies doing business today didn't include recession- survival tactics in their plans for 2008-2009. This means that the assumptions underlying their business plans are probably outdated, even for companies launched just a few months ago.

That's how quickly things can change in a global economy buffeted by unstable financial markets, tightened credit and faltering consumer confidence. And that's why forward-thinking companies maintain their advantage by having and progressively updating a written business plan.

For some businesses, the dramatic scenery change of a deepening recession means that the sales assumptions in their original business plans are now overstated and unrealistic. Other businesses - the lucky ones that stand to profit in a slow economy - have business plans that understate their possibilities for expansion and revenue growth. Either approach - over-reaching or under-reaching, based on an invalid business plan - could endanger the unwary business owner.

To increase the chances of surviving this financial winter, companies should revisit the long-term and short-term portions of their business plans and adjust in light of changing circumstances. Those in charge should consider the following:
Evaluate changes in the external environment and how they can affect the business. Competitors, existing and potential customers, suppliers, trends in technology and demographics, government policies and regulations - especially in light of a new federal administration - and the overall economy are among the elements to consider.

Review market analysis and approach. Will recent changes in the market affect demand for a product or service? Have consumer spending practices changed? If so, how might those changes affect the business? How should the business alter its product offerings, pricing, delivery systems or packaging to accommodate market changes?

Reassess the competition. Have any large competitors dropped product or service lines because they can't afford to provide them? What about the territories they served in the past? Perhaps new demands are being ignored and once-served communities are being abandoned. Is there a new or anticipated void that can be filled more economically than in the past?

Reconsider the operating plan. If demand has slowed, could operations be consolidated to save money? Are there new sources of raw materials that can be tapped given changes in volume? Are new suppliers willing to provide discounts, reduced delivery rates or other value-added features? Can facilities be used in a different way to increase efficiency?

Rework the financial analysis. Make sure sales assumptions are realistic - neither too optimistic nor too pessimistic. Consider how the revised assumptions affect cash flow. Is the budget for raw materials acquisition still accurate, or has inflation raised costs? If demand for a product or service is elastic, should retail prices be re-examined? What about delivery or facilities costs? Examine expenses line by line to determine if the assumptions are still accurate, and adjust volume or value based on revised assumptions.

Finally, a business plan is not an immutable document chiseled into stone for eternity. It's a dynamic document, a management tool that helps businesses adapt to changing conditions and conflicting forces so they can stay on course and within budget.