Small Business

You’re the Boss Blog: Not Just Talking the Talk in Washington

June 14, 2013 by NewsMaker Leave a Comment

Searching for Capital

A broker assesses the small-business lending market.

Sunday night, I packed my bag and broke my own rules by dusting off my navy suit and a tie for what I feared would be another day of Washington blather. And then on Monday, I participated in what was billed as the Capital Access Innovation Summit, which was sponsored by the Small Business Administration and the Department of the Treasury. It was not what I expected.

In the morning, the plenary sessions featured bankers, government leaders, corporate executives, and alternative lenders sharing their carefully scripted messages with a group of about 150 of us who had gathered for the day. We were an interesting mix of small-business owners, S.B.A. officials, Treasury officials, bankers, alternative lenders, academics and various other folks in the small-business finance community. I was genuinely impressed by the group.

Among those I met were a few people and companies I had not previously encountered. Lending Club, for example, was there to discuss its plans to start financing small businesses over the next few months. If the plans come to fruition, it sounds as if the company will be lending at an annual percentage rate between 9 and 10 percent, which is a fraction of the price being charged by some of the current alternative lenders who also attended the event.

I enjoyed meeting the leader of the American Dream Fund, which has built a platform that matches entrepreneurs with various local and state grants and funds that can be tough to identify and find. And I was fascinated to meet the chief executive of a company, North End Financial, that provides collateral to banks that make loans to small businesses of less than $200,000. This is similar to the idea of a collateral exchange that I have blogged about.

The rhythm of the day changed dramatically in the afternoon when attendees got to choose break-out sessions. These offered conversations on many different topics. I think for the first time I appreciated some of the challenges that the political appointees struggle with as they try to drive change. I realized that many of them suffer frustrations similar to my own.

The discussions had a different vibe. Instead of contributing to an us-versus-them confrontation, we all rolled up our sleeves and tried to figure out the right things to do. It was nice to see Jacob Lew, the Treasury secretary, come into some of these sessions and listen intently. Some of my favorite discussions concerned the powerful economic impact likely to result if large corporations would simply pay their small-business suppliers faster and free up their cash flow. A program like this would be about Americans helping Americans, and might not require any legislation or tax policy.

I was also impressed by the conversation about the marketing challenges facing the S.B.A. The agency offers many programs that could work wonders for many small businesses — at rates that are reasonable and affordable. Unfortunately, many small-business owners either don’t know about these programs or they don’t know how to find lenders that facilitate them. My hope is that the sexiness of the new alternative lenders, many of whom played a role in the conference, will not overshadow the more traditional programs that offer lower rates.

After some of my previous trips to Washington, I felt as if I had wasted my time. I left frustrated, wondering why I had bothered to make the trip. This time, as I took off my jacket, loosened my tie, and walked back to my hotel, I felt different. I hope the feeling lasts.

Ami Kassar founded MultiFunding, which is based near Philadelphia and helps small businesses find the right sources of financing for their companies.

Article source: http://boss.blogs.nytimes.com/2013/06/14/not-just-talking-the-talk-in-washington/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: fruition, rhythm of the day, small business finance

You’re the Boss Blog: Maybe Someone Else Has Already Figured This Out

June 13, 2013 by NewsMaker Leave a Comment

Building the Team

Hiring, firing, and training in a new era.

We walked into 600 Corporate Park Drive in St. Louis with 15 minutes to spare. As we were greeted by a friendly person at the front desk and began to sign in, I turned to my team to make sure their expectations were set appropriately.

I suggested that while we had flown to St. Louis from New York specifically for this meeting, it might not turn out to be what we were expecting. We were there to meet with Andrew C. Taylor, chairman and chief executive of Enterprise Holdings, which owns Enterprise Rent-a-Car and has been ranked No. 20 on Forbes’ list of the largest private companies in the United States with estimated sales of $13.5 billion.

This was November of 2011 (Mr. Taylor is now executive chairman). At the time, H.Bloom was one and a half years old, and we had just introduced our SEED Program. We started the program to recruit ambitious people who aspired to run their own business some day. We put them through rigorous training so they would be prepared to manage an H.Bloom market if they graduated successfully. We believed that this would enable our company to grow fast by promoting from within and putting people in leadership positions who had already demonstrated success at H.Bloom.

While we were proud that this focus on training and talent development seemed to be unusual for a start-up, we believed there must be other companies – older, more established companies – that had employed similar strategies. Surely, those companies that had built their own talent-development programs over the course of decades would have a lot to share with a young company like ours. If we could learn from folks who were smarter and more experienced than we were — and that seemed like nearly everybody! — we were eager to do it. We didn’t want to reinvent the wheel.

We did some research and learned that Enterprise Holdings had a renowned management-training program, with more than 8,000 recent college graduates trained each year. Once we identified Enterprise as a company to emulate, we tried to figure out how to meet with them so we could learn how they built their team so effectively. It turned out our vice president of sales, Tom MacLeod, had a connection. Mr. MacLeod’s parents had grown up in St. Louis and had gone to high school with Mr. Taylor. So, we asked Mr. MacLeod to send an e-mail, acknowledging that the likelihood of a response was low. Within 24 hours, however, we received a response from Mr. Taylor, inviting us to visit Enterprise headquarters in St. Louis.

As we were waiting in the lobby, I suggested the following to my colleagues: “Mr. Taylor is a busy man running a massive organization. It is possible that he will have someone else in his organization meet with us today, or that this meeting with H.Bloom has been overlooked altogether.”

Just as I finished my comment, Mr. Taylor’s executive assistant came in to the lobby to welcome us. After a warm hello, she led us in to Enterprise’s executive briefing center, a massive room with a large U-shaped table that made the space feel like a slightly more intimate version of the General Assembly Hall at the United Nations. Starting at the head of the table (the middle part of the U) and fanning out from there were placards in front of each chair, with the names and titles of all of the participants: “Mr. Andy Taylor, Chairman CEO, Enterprise Holdings,” “Mr. Bryan Burkhart, Founder CEO, H.Bloom.” I turned to my team: “Well, I guess they are expecting us!”

Minutes later, a door opened in the wall, and Mr. Taylor, along with several senior executives entered the room. After we exchanged pleasantries, poured coffee, and took our assigned seats, Mr. Taylor welcomed us with very kind opening remarks. He started with the following (which I am paraphrasing):

Welcome to Enterprise. I am impressed that a company like yours, just over a year old, is focusing so much energy and passion on talent development. Our own focus on talent development has enabled Enterprise to achieve whatever success we have had over the years, and it is something that we discuss with much more mature organizations every day. In fact, just yesterday we hosted executives from one of the largest banks in the world, who were here to talk about how we handle talent development at Enterprise. It’s a big deal that you are thinking about it already. Over the next three hours, I will walk through a high level presentation of how we manage talent development at Enterprise, and then our management team can answer questions.

Mr. Taylor and the members of his team were extraordinarily gracious. I am still amazed by and grateful for their willingness to spend half of their day with a team of upstarts from New York. We learned so much, and I will use my next post to enumerate the most important takeaways.

Today, though, I want to underscore an important lesson that we have learned: It really is important to avoid wasting time reinventing the wheel. Figure out the type of team you want to build; go look for great companies and people to emulate; and find a way to meet with them directly. Leverage your personal and corporate network. Follow people on Twitter and try to engage with them. Reach out over LinkedIn. Send an e-mail out of the blue. The worst that can happen is nothing at all — but there is so much to gain.

The good news for all of us is that there are exceptionally accomplished people, like Mr. Taylor, who are willing to take the time to teach. I hope to do the same one-day once we have achieved a modicum of success at H.Bloom.

In my next post, I’ll write about what we learned from Mr. Taylor.

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/06/13/maybe-someone-else-has-already-figured-this-out/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: andrew c, bloom, forbes

Creating Value: Business for Sale: Putting a Price on an I.T. Company

June 12, 2013 by NewsMaker Leave a Comment

Creating Value

Are you getting the most out of your business?

Occasionally in my posts, I like to take a look at businesses for sale, which can offer important lessons for both sellers and buyers. For this post, I have selected an information technology company that is based in the southeastern United States. It employs 14 and says it is on track to do about $30 million in sales this year.

As with my earlier posts on businesses for sale, I have no stake in the sale of the business, nor do I certify that any of the information about the business presented is accurate. The information provided came to me in the form of the public listing and through conversations with the selling broker.

This business specializes in providing the infrastructure and backbone equipment for data-processing centers. One third of its business is done with the federal government, one third with state governments and one third with private enterprises. That split allows it to have a smooth sales cycle. Often when one segment is roaring, another is slower than the owner would like.

The business came to my attention through its broker, Murphy Business and Financial Corporation. Generally, Murphy Business and Financial lists all businesses for sale on Bizbuysell.com. In this case, the broker, Matt Slappey, concluded that given the size of the business and its probable selling price, a better strategy would be to sell the company through a controlled-auction process.

A controlled auction is a sales process that encourages potential buyers to submit offers. The process is used to weed out buyers who are not qualified and to engage buyers who would be a good match. The goal is get potential buyers to bid against each other and increase the selling price. It works best when, as is this case with this company, several qualified buyers have expressed interest.

Broker: Mr. Slappey

Type of Business: Valued-added reseller of I.T. equipment.

Employees: 14 full-time.

Location: Southeastern United States.

Asking price: Buyers will make offers in controlled-auction process.

Fixed Assets: Few. No real estate.

Intellectual property: Knowledge of bidding process for government contracts. The company has a preferred relationship with several companies, including Cisco Systems, Dell Computer, VMWare and EMC.

Reason for selling: The owner is 62 years old. He expects to stay with the buyer for two or three years and wants to be able to leave by the time he’s 65.

Financials:

Business Overview

The owner started the business in 2006. He has a sales force that is based in several cities and backed by quality engineers who focus on the pre-sale process, installation, and customer training. Some 80 percent of the company’s sales come from hardware, 20 percent from service contracts.

The sales team is motivated through an incentive compensation system that rewards new sales. The company has developed strategies for winning government contracts. Suppliers recommend the company because it has built relationships with primary vendors.

The owner has developed strategies to identify government entities looking for the products and services that the company provides. He believes that the right buyer could accelerate the company’s growth.

Challenges

The company has little in the way of recurring revenue. A buyer will want to spend time in due diligence understanding the sales process and how the company finds new business. The company possesses important intellectual capital that it will be important for a new owner to learn. A buyer will need to develop a methodology to get this information from the owner and systematize the sales process.

Sales Strategy

One of the most interesting things I learned speaking with Mr. Slappey concerned the way he is handling the sale of the company. Along with using a controlled auction, he is also using an unusual method to collect his “success fee” on the sale. Most business brokers use what is called a Lehman scale to calculate the fee. Mr. Slappey is using a reverse Lehman scale, which means the more money he sells the business for over an agreed upon amount, the higher the percentage he will receive from the seller.

It is also worth noting that Mr. Slappey will receive his commission payments at the same time the seller gets paid. If the seller receives 100 percent of his money at closing, so will Mr. Slappey. If the seller receives 80 percent at closing and 20 percent over five years, Mr. Slappey will do likewise. This aligns incentives for seller and broker.

My Take

If I were the buyer, I would be very careful in negotiating the sale. I would want either to have an earnout or to place a reasonable amount of the sales price in an escrow account. I would be concerned that some of the current owner’s knowledge may not be transferable. I would also want to make sure that significant employees were tied to the company for a particular period of time and could not leave with customers or intellectual property.

What do you think? If you were a buyer, what would you pay for this business? If you were a broker, how would you position the sale? Do you think the seller should publish an asking price? What would you want to know before you were willing to make a bid?

Josh Patrick is a founder and principal at Stage 2 Planning Partners, where he works with private business owners on creating personal and business value.

Article source: http://boss.blogs.nytimes.com/2013/06/11/business-for-sale-putting-a-price-on-an-i-t-company/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: businesses for sale, information technology company, southeastern united states

Tech Start-Up Benefits from ABC’s ‘Shark Tank’

June 12, 2013 by NewsMaker Leave a Comment

The start-up’s co-founders, Ryan Frankel, 29, and Kunal Sarda, 31, promote their company as the world’s only instant, 24-7 “human-powered” translation service. Inspired by a harrowing episode when Mr. Frankel could not communicate the symptoms of a virulent stomach bug to a pharmacist in Beijing, the service takes just 15 seconds to put mobile users in touch with a human translator fluent in both English and any of 11 other languages. In other words, it combines the speed of Google Translate with the precision of a traditional translation service — at least that was the pitch Mr. Frankel and Mr. Sarda made to the sharks.

Within 72 hours of the segment being shown, 20,000 new customers had downloaded the VerbalizeIt app, according to Mr. Frankel. Daily revenue, he said, more than tripled. The company charges about $1.50 a minute from individual consumers and as much as 27 cents a word from businesses that use the same network of 10,100 freelance translators to translate documents and videos.

The segment became one of the most debated of the show’s fourth season. Many “Shark Tank” followers discussed on chat rooms, blogs and Twitter how Mr. Frankel and Mr. Sarda erred when they turned down an offer of $250,000 for 25 percent of their company from Mark Cuban, a shark who owns the Dallas Mavericks and has previously invested in translation companies.

Their thinking was that while Kevin O’Leary, a shark and a Canadian financier, topped Mr. Cuban’s offer with a bid of $250,000 for 20 percent of VerbalizeIt, Mr. Cuban would have brought superior experience and connections. But what most of the show’s followers did not realize was that what seemed to be happening on TV that night was not exactly how things unfolded after the cameras stopped rolling. (Shocking, right?)

In reality, the VerbalizeIt founders turned down Mr. O’Leary, too. Last July, a week after they were taped shaking hands with him, Mr. Frankel and Mr. Sarda called Mr. O’Leary to tell him they had decided to pursue a different set of investors.

“A lot can happen between the time we finish shooting and a segment airs,” said Mark Burnett, the British-born creator of “Survivor” and “The Apprentice” whose company is a co-executive producer of “Shark Tank.”

Inevitably, some deals fall apart when the sharks’ advisers get a closer look at the entrepreneurs’ claims. In other cases, it appears that entrepreneurs come on the show with no real intention of closing a deal.

“They say ‘yes’ on the show because it makes for a better story,” said Rob Merlino, author of SharkTankBlog, who said he has interviewed more than 70 of the show’s participants. “But they were always in it strictly for the exposure.”

Mr. Burnett insisted these cases represented a small fraction of the 253 entrepreneurs who have appeared on the show. Even so, the producers are well aware of the value that seven million viewers, and potential customers, can bring to an early-stage business. It is the reason participants are willing to sign over a small equity share just to appear on the show. The standard appearance contract entitles the show’s producers and ABC to 5 percent of the company or 2 percent of future royalties, regardless of whether a deal materializes with a shark. The show’s producers declined to comment on the contract.

As for Mr. O’Leary, he said he has learned to factor the exposure “Shark Tank” generates into his own calculations. “I’m always looking for that company with a great concept that just needs the platform we provide to really take off,” he said.

A perfect example, he said, was Wicked Good Cupcakes, a cupcake shop on the South Shore of Massachusetts that hit on the idea of shipping its fresh-baked confections in single-serve Mason jars and sending them anywhere in the country. In an episode shown in April, Mr. O’Leary struck a deal with the mother-daughter team that runs the company, agreeing to give them $75,000 to finance their move into a full-scale commercial kitchen in exchange for $1 from every cupcake sold until he gets his money back and then 45 cents a cupcake in perpetuity. In the eight days after the segment aired, he said, the company sold $250,000 worth of cupcakes.

“I thought VerbalizeIt could be another Wicked Good Cupcakes,” Mr. O’Leary said.

Mr. Frankel and Mr. Sarda, however, had other plans. At the time of the taping last July, they were enrolled in Tech Stars, a start-up accelerator program. Three months after returning to Boulder, Colo., to finish the program, they accepted a deal offered by several mentors. It staked them to $1.5 million at a significantly higher valuation than Mr. O’Leary had placed on the company.

For Mr. Frankel and Mr. Sarda, former classmates at the University of Pennsylvania’s Wharton School, appearing on the show has been a win-win-win. While not all of the feedback they received from the sharks was positive, Mr. Frankel said the critique helped them rethink several aspects of the business.

“The segment was only eight minutes, but we were in there shooting for 50 minutes,” he explained. “It was just like any intense investor meeting.”

For example, Mr. Cuban hammered away at whether they had the infrastructure in place to serve businesses. Mr. O’Leary encouraged them to license their back-end technology to large translation companies that occupy the higher end of the market.

“You look at where we were then and where we are now, and we’re almost an entirely different company,” Mr. Frankel said. “And a lot of that has to do with the feedback we got on ‘Shark Tank.’ ”

On the Friday night the episode appeared last month, VerbalizeIt held a viewing party for friends and employees at its Manhattan offices. Earlier in the week, the company had posted ads on career forums offering multilingual residents $10 an hour to attend the party and bolster their ranks of translators for an expected wave of post-show calls.

After the episode ended, a group of translators sat a table as cellphones went off around them. One call came to Austin Jacobson, a 22-year-old part-time drummer and French speaker, who had relocated from Washington just two weeks earlier. “Hello, VerbalizeIt, ready to translate,” he said.

“I need to know how to say, ‘I’m sorry, I love you,’ ” said a man on the other end of the line.

“Well, there are a couple of ways you can say it,” Mr. Jacobson responded. “You can say, ‘Je suis désolé, je t’aime.’ Or you can say … “

“Just say it one way,” said the man, more urgently. “She’s standing right here.”

“Je suis désolé, je t’aime.”

“Thank you,” said the man softly.

A moment later, an update flashed on Mr. Jacobson’s work history account. Thanks to VerbalizeIt and “Shark Tank,” the aspiring jazz musician had helped a young couple find love and made 20 cents.

It could not have been scripted any better.

Article source: http://www.nytimes.com/2013/06/13/business/smallbusiness/tech-start-up-benefits-from-abcs-shark-tank.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: founders, kunal, stomach bug

You’re the Boss Blog: An Old-Fashioned Business Copes With Modern Tech Issues

June 12, 2013 by NewsMaker Leave a Comment

Tech Support

What small-business owners need to know about technology.

Ian Jones Shawn Reed, founder of form-function-form.

This is one in an occasional series of posts that look at how small-business owners manage their technology needs.

The Business: form·function·form in Orlando, Fla., is a year-old leather-working business owned by Shawn Reed, 35, who makes products such as wallets and watchbands in a home studio. Forty percent of his sales last year came between Thanksgiving and Christmas, which coincided with the introduction of his “Button-Stud Weekender” watch (he designed the band). Mentions in Esquire, Dappered, Free/Man, AH Magazine and A Headlong Dive, as well as consistent business with Huckberry, has kept sales brisk enough, he said, for him to “scale responsibly and maintain quality.”

The Owner: In his previous life, Mr. Reed worked as a landscape architect. After 10 years, he left to get a master’s degree in economics at George Mason University and finished in early 2010, a time when the recession was lingering and his interest in landscape architecture was waning. A few years earlier, he had started working with leather, even tracking down a specific leather he wanted to make a bracelet from a tannery in Chicago. He enjoyed the process so much he taught himself to make other items.

Old School Tools: Mr. Reed begins by creating pencil sketches in a moleskin notebook. His studio is equipped with two large rectangular tables and a variety of hand tools for making holes, a beveler for rounding corners, X-Acto knives for cutting pattern pieces on leather and a burnisher — a small, hardwood wheel attached to a Dremel rotary tool that smooths the leather’s edges. The studio also has three hand presses. One, a larger hydraulic press, is a standard shop press that a local welder modified for Mr. Reed, who uses it to carve patterns into leather. “It’s like a heavy-duty cookie cutter,” he said. Two smaller hand presses made by YKK Snap Fasteners America set rivets and snaps. Everything is hand-stitched using large needles. There’s also an electric branding iron Mr. Reed uses to burn his logo into the leather.

New School Tools: After Mr. Reed sketches, he draws his idea on his Apple Mac Pro desktop using AutoCAD, an architectural drafting program he used in his previous career. AutoCAD lets him draw very precisely — to 124th of an inch — and then he prints the drawing full size and uses it as a pattern. When he gets exactly what he wants, he sends the drawing and corresponding measurements to a company in Texas that creates a heavy-duty cutter, called a die, for his press.

For his e-commerce site, Mr. Reed uses WooCommerce, a WordPress e-commerce platform, along with MaxCDN, a content-delivery network that speeds up his Web site by serving it from the closest location to a customer. “I got my load time down from 35 seconds to two,” Mr. Reed said. He pays $10 a month to use Outright for bookkeeping, he uses a free version of FreshBooks for invoicing, he uses Google Voice as his free phone service, and he pays $25 a month for ShipStation, which provides shipping labels and tracking information. Some of his corporate customers still use a fax, so he employs a Wacom tablet — another holdover from his life as a landscape architect — to “write” onto PDF forms sent to him and then he faxes those back using FaxZero’s free service.

Pain Points: Cutting out patterns on leather would be a lot faster with a laser cutter, Mr. Reed said, but it could cost as much as $20,000. He also wanted to sketch directly on his iPad, rather than in his notebook, but he couldn’t find a pen that would work well on the screen. Another sticking point has been Web hosting. Mr. Reed said that in hindsight he wonders if it was the best decision to use a hosting service, DreamHost, that requires a lot of management on his part. “I’m not at the point yet where hiring an I.T. consultant is worth it,” he said, even though keeping his site up and running is crucial. “I wonder if one of the managed shopping cart/Web server services like Shopify would have been a better fit for me at this point. I have paid less on paper, but the amount of time I’ve spent keeping the site up and working correctly has probably eaten into — if not completely offset — what I’ve saved.”

Thinking Ahead: Mr. Reed continually wrestles with his opportunity costs. It’s been difficult for him to figure out which tasks he should contract out. Just because he is capable of figuring out how to do all of the things that go into running a business, Mr. Reed said, doesn’t necessarily mean he should do them. “I need to budget wisely to maximize my productivity and, subsequently, profits,” he said.

What do you think? Should Mr. Reed automate — or delegate — more of his operational tasks? Should he change his e-commerce platform?

You can follow Eilene Zimmerman on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/06/12/an-old-fashioned-business-copes-with-modern-tech-issues/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: dremel rotary tool, mr reed, school tools

Tech Support: An Old-Fashioned Business Copes With Modern Tech Issues

June 12, 2013 by NewsMaker Leave a Comment

Tech Support

What small-business owners need to know about technology.

Ian Jones Shawn Reed, founder of form-function-form.

This is one in an occasional series of posts that look at how small-business owners manage their technology needs.

What do you think? Should Mr. Reed automate — or delegate — more of his operational tasks? Should he change his e-commerce platform?

You can follow Eilene Zimmerman on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/06/12/an-old-fashioned-business-copes-with-modern-tech-issues/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: beveler, pattern pieces, small business owners

You’re the Boss Blog: Business for Sale: Putting a Price on an I.T. Company

June 11, 2013 by NewsMaker Leave a Comment

Creating Value

Are you getting the most out of your business?

Broker: Mr. Slappey

Type of Business: Valued-added reseller of I.T. equipment.

Employees: 14 full-time.

Location: Southeastern United States.

Asking price: Buyers will make offers in controlled-auction process.

Fixed Assets: Few. No real estate.

Reason for selling: The owner is 62 years old. He expects to stay with the buyer for two or three years and wants to be able to leave by the time he’s 65.

Financials:

Business Overview

Challenges

Sales Strategy

My Take

Josh Patrick is a founder and principal at Stage 2 Planning Partners, where he works with private business owners on creating personal and business value.

Article source: http://boss.blogs.nytimes.com/2013/06/11/business-for-sale-putting-a-price-on-an-i-t-company/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: auction, information technology company, state governments

You’re the Boss Blog: This Week in Small Business: Cronuts!

June 10, 2013 by NewsMaker Leave a Comment

Dashboard

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Must-Reads

Jim Tankersley wonders if the era of uncertainty is over and whether a growth boom will begin. Drex Davis asserts that the Marketplace Fairness Act will bankrupt small businesses. And here is everything you need to know about cronuts.

The Economy: Bigger and More Profitable

Construction spending (pdf) increased in April, the service sector picked up slightly and the trade deficit is $6.3 billion (pdf) smaller than a year ago. Auto sales roared back in May, and Ford truck sales hit their highest levels since 2007. The financial sector is bigger and more profitable than ever. But factory orders rose less than expected, manufacturing declined and Vahan Janjigian believes that manufacturing is on life support. A research paper asks if the information technology revolution is over. A poll finds that more than half of America thinks we’re still in a recession and only 36 percent are satisfied or very satisfied with the economy.

Jobs: Solid

The jobs report was “solid” but unemployment ticked up and wages are not rising. Private employers added 135,000 jobs in May, and small businesses picked up the hiring pace. Gallup says job creation is the best it has been in five years.

Ideas: Drone Deliveries

Here are 2013’s 100 most creative business people. Amazon starts delivering groceries, and Matt Yglesias explains why. Burger King gets into the delivery game and, not to be outdone, Domino’s uses a drone to deliver pizza. The Dollar Shave Club introduces a very special product for the guy who has everything — and a jilted girlfriend leaves a brilliant note for her guy.

People: Taco Bell Responds

Smoking employees cost employers $6,000 a year, a study finds. A Taco Bell employee appears to lick a bunch of shells, and here’s how the restaurant chain responded. John Patrick Pullen says transparency is essential to a trusting staff. A Cornell professor discusses whether tipping should be banned. These internship stories paint a tough picture for young professionals. Here are Jim’s greatest office pranks. One in 10 young job hunters is rejected because of social media. A peer-to-peer bonus system is made easy for employers. A job site is recruiting only beautiful candidates. A mind-body therapist explains her methods for reducing stress for Google’s employees. Apple employees based in Cupertino, Calif., earned $2 billion in 2012 and the company is poised for another hiring spree.

Cash Flow: Excess Cash

An online resource for entrepreneurs and small businesses releases a guide to help owners get an overview of the different types of Small Business Administration loans. Ked Harley suggests four steps to take before applying for a small-business loan, and Pam Baker summarizes all of the ways you can be paid. Michael Shedlock says the Federal Reserve’s policies and President Obama’s programs are exacerbating the credit squeeze for small businesses. Ian Kerrigan wants owners to think about diversifying their investments, and here are a few places to consider investing excess cash.

Red Tape: Insurance Premiums

The president wants to prosecute patent trolls. The Internal Revenue Service continues to take heat. Here are six ways that the new health care law changes insurance premiums, and a dental start-up sees profit in the law’s gaps.

Women: A New Index

The United States tops Dell’s new index on female entrepreneurship, but unfortunately the opportunities are not as good in India. This is what you should know about women in agriculture. Richard White suggests 10 tips for female entrepreneurs to stay on track.

Management: Three Companies in Five Weeks

A book offers help for easing any manager’s people problems. Jay H. Heyman explains how much a $10 bottle of wine really costs. A Cigna study finds America’s sole proprietors are independent and confident — and often uninsured. And if a tornado destroys your business, here’s what to do. Salvatore Babones says that when it comes to business profits, “it’s the ‘plutonomy’ versus the ‘realonomy’ — and the plutonomy is winning.” R. Kay Green shares six lessons in entrepreneurship. Kevin Owyang thinks you might be a social entrepreneur without knowing it. One entrepreneur sells three companies in five weeks.

Marketing: Getting Leads

John Jantsch suggests giving stuff away to generate referrals. Harry and Sally Vaishnav explain why better packaging improves sales. Ciara Pressler evaluates whether you should hire a publicist or do it yourself. Sara Davidson explores where marketers get leads.

Around the Country: Best Cities

Rieva Lesonsky explains why you should get ready for National Small Business Week. Constant Contact will celebrate the week with Get Down to Business events across the country. A report says that Denver, Minneapolis and Seattle are the cities most friendly to employees of small companies. Two Philadelphia women are selling fashion from a truck. Researchers at the Massachusetts Institute of Technology explain why doubling a city’s population increases its economic productivity by 130 percent. Other countries are seeking entrepreneurs from Silicon Valley. A New York factory of the future fabricates customer-ordered designs with top-of-the-line, industrial 3-D printing machines.

Around the World: Learning From Dabbawalas

A Spanish city is using a network of sensors to improve services and save money. David Rohde explains how privately financed economic initiatives are quietly spreading peace in the Middle East. A recalculation of gross domestic product may help app designers in Nigeria. The International Monetary Fund halves Germany’s growth forecast, and Australia’s economy expanded at the slowest annual pace in almost two years. Unemployment in France rose to 10.8 percent. Brandon Smith reports that Canada could be an entrepreneur’s utopia, and this is what start-ups in India can learn from dabbawalas. A teenage “wakeboarder” takes on a flood.

Start-Up: Big Data

Bill Gates is helping lead a $35 million investment in a networking Web site for scientists. Intel creates a $100 million fund for more “human-like” devices, and Bloomberg L.P. introduces a fund to invest in start-ups. A new company aims to beat Verizon and ATT with free mobile phone service. A 17-year-old entrepreneur learns about starting a business from Jack Dorsey. Here is how to avoid bad advice that can kill a start-up. Dealstruck takes on banks with a “Lending Club for small businesses.” Here are 14 big data start-ups you’re going to hear more about, and Tim Devaney and Tom Stein explain what big data can do for a small business.

Social Media: A LinkedIn Strategy

Here is how to avoid a virus on Facebook that can drain your bank account. Jill Konrath suggests a LinkedIn strategy that can pay off, and this is how Motorola Solutions uses Facebook to generate more engagement. SocialBro raises $1.8 million to help businesses manage, analyze and monetize their Twitter communities, and here are six factors that make a picture popular on Pinterest. The grumpy cat gets a movie deal.

Online: The Best Unsubscribe Message

Andy Crestodina compares your blog to a beer: “an enticing head is just the beginning.” Hubspot creates the best unsubscribe message ever. A case study shows how two artists used online content to build their face-to-face business. Joy Gendusa shares four aspects of pay-per-click marketing that can help you solve the puzzle. Jayson DeMers explains how to build an online community around your business. Daniel Oyston has advice for improving content marketing, and here’s how to not break the law when using testimonials, endorsements and online reviews.

Mobile: A Competitive Edge

Google is closing the mobile app gap, and its Chrome browser starts to take off even as Android dips among mobile operating systems. The Onion reports that a new, improved Google Maps lets users launch missiles at any location on the globe. Foursquare is testing small-business promotions. This is how mobile marketing is changing the way companies appeal to customers. Francesca Louise Fenzi explains why Starbucks’ mobile payment success is good news. Here are seven oddball mobile apps.

Technology: Windows 8

The number of Amazon Web Services servers has exploded. Om Malik shares his thoughts on Salesforce’s decision to buy Exact Target for $2.5 billion. Windows 8 is failing to beat Windows 7 (and XP and even Vista). Insightly integrates its customer relationship management software with Microsoft Office 365 and Outlook 2013. Here are 10 excellent video-editing apps, and this is how to protect your small business from cybercriminals. A teenage inventor tests a homemade submarine. Here are nine great hotels for technology users.

Tweet of the Week:

@saundiela – If a company just can’t seem to make it, you need to look at the top! A good manager is a good checker a good owner checks his managers.

The Week’s Best Quotes:

André Mouton warns that the first quarter was business as usual for cloud companies — and that’s a bad thing : “Cloud companies are growing, and they’re losing money. If that’s all you know about them, it’s enough. Those two facts define the industry more than any hyperbole coming out of Silicon Valley. Much as their predecessors did 15 years ago, today’s tech companies are selling an exciting new technology; and like the dot-coms, they’ve embraced a business model that will self-destruct at the first sign of trouble.”

Derek Thompson explains why work-life balance is so bad: “Although the workweek has fallen, the changing composition of families has put tremendous time stresses on more mothers. Over all, research shows that lower-income men have never had more downtime, while working single mothers have never been more common. The first part is a problem. The second is a crisis.”

This Week’s Question: Where do you get your leads?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/06/10/this-week-in-small-business-cronuts/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: private employers, small business owners, trade deficit

Groups Propose to Simplify Accounting Rules for Small Businesses

June 9, 2013 by NewsMaker Leave a Comment

Making accounting easier for small companies — and saving them the need to report some losses that big companies can face — has become a new preoccupation of the accounting profession.

The American Institute of Certified Public Accountants, a trade group, will announce on Monday that it is has created a “framework” that would simplify accounting for such companies. It would differ from the “generally accepted accounting principles,” or GAAP, that public companies must follow in a number of ways, large and small.

On the same day, the Financial Accounting Standards Board, which determines just what those accepted principles are, plans to propose its first exceptions for private companies — that is, for companies whose securities are not traded publicly. Those exceptions are expected to deal with some of the same issues as the institute’s proposal.

“The framework is going to deliver tailored financial reporting for the small business community,” said Robert Durak, the institute official who led the effort to compile it. “It provides very meaningful, clear accounting.”

Some private companies have complained that preparing GAAP statements costs too much, with a considerable portion of the cost coming from rules that provided for disclosures that might be irrelevant. The companies say that because owners and lenders generally know one another, it is easy for them to arrange to get only the information they actually need, whether or not the rules require companies to provide it.

In the United States, unlike some European countries, there are no legally required accounting standards for most companies. The Securities and Exchange Commission requires that companies that sell securities in the public markets follow GAAP, but all others can use any form of accounting that the company and its creditors find acceptable. Many smaller companies just use tax accounting, because they must file tax returns like everyone else.

To win widespread acceptance, the institute framework would need support from two groups: accountants and bank lenders. “We think it will be a grass-roots-type of effort,” Mr. Durak said, where local certified public accountant firms “go to their clients and say, ‘This might be the right option for you. Let’s go talk to your banker.’ ”

Any company that chooses to adopt the framework would face new headaches if it ever decided to go public. Then it would have to redo its financial statements for at least two years to conform to accepted accounting principles. “The framework is not intended for companies that are looking to go public,” Mr. Durak said.

The changes being proposed for a new GAAP for private companies might prove less of a problem. Because they are presented as specific changes from the normal rules, it might be easier to reverse them if a company needed to do so to sell securities in public markets.

Efforts to get simpler accounting for smaller companies have been going on for several years. In 2009, several accounting organizations appointed a “blue-ribbon panel on standard-setting for private companies.” In 2011, the panel recommended that “exceptions and modifications” be made to GAAP for private companies, but advised against “a separate, self-contained GAAP for private companies or a wholesale reorganization of GAAP.”

One dissenting member of the group contended that only companies that did not like some standards, not users of financial statements, were demanding changes.

As a result, the Financial Accounting Foundation, the parent of the standards board, set up a council to advise changes for private companies. It has recommended three changes, and the board is expected to propose them formally them on Monday.

One area where change appears to be coming is in accounting for good will, which is created when a company acquires another company for more than the tangible assets are worth. GAAP now requires periodic reviews to see if the good will is “impaired,” and needs to be written down, because the acquired operation has lost value.

The institute framework deals with that by saying such companies never need to review whether good will in impaired. The proposal from the standards board is slightly less permissive, allowing companies to avoid writing down good will unless it is clear the entire company is worth so little that there is no justification for having good will on its balance sheet.

Article source: http://www.nytimes.com/2013/06/10/business/groups-propose-to-simplify-accounting-rules-for-small-businesses.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: accounting profession, american institute of certified public accountants, institute of certified public accountants

Neighborhood Joint | Bushwick: At Green Village, in Bushwick, Goods Both Mundane and Strange

June 7, 2013 by NewsMaker Leave a Comment

On the opposite end is Green Village.

Located on Starr Street in Bushwick, Brooklyn, just off the Jefferson Street stop on the L train, this warehouse-size junk shop is stacked to the ceiling, and spilling onto the street, with all manner of forgotten and discarded items, many of them in dusty disrepair. The longtime store manager, Sidney Ober, 56, is an affable Hasid who lives nearby in Williamsburg. He runs the shop from a cluttered area by the door, where he can be seen arguing over prices and directing pieces of furniture in and out of moving vans.

Customers pick through long aisles cluttered with goods both mundane and strange. Dressers, telephones, yellowed books, broken chairs, piles of clothing — for $2 a pound — and pots and pans are mixed in with handmade trinkets, high school sports trophies and other items of questionable resale value. (A glass jar labeled “hummus” and indeed lined with desiccated chickpea mush was nestled among used pieces of crockery.) The place stays busy, frequented by bargain-hunters, arbitrageurs and people mostly browsing for novelty’s sake.

On a recent Sunday, Sanjee Abeytunge, 42, and his wife, Bjorg Larson, 33, were scanning the aisles for unique pieces of furniture for their Fort Greene apartment. He is a research engineer at Memorial Sloan-Kettering Cancer Center. She is a physics professor at Drew University. They like to hunt for antiques and were cheerfully amused at the chaos. They bent to inspect a Betty Crocker toaster wheel (“What is this?”) and a hand-fashioned lamppost (“Better question: What is this?”) before moving on to another aisle.

Mr. Ober gets his wares from estate sales and the occasional abandoned warehouse but says he does not buy items from his customers. “You have to be careful,” he explained. He has run Green Village since it opened 16 years ago in Greenpoint. Climbing rents forced an earlier move to Williamsburg, then another to Bushwick almost nine years ago.

“Everybody comes here because this is the greatest place,” he said. “And you don’t have to look around long for a good price,” he continued, before correcting himself. “A great price, the best price.”

Chaya Wagschall, 77, a woman who also lives in Williamsburg, has known Mr. Ober for years and often comes to buy toys for her grandchildren and great-grandchildren. “I have a few hundred, you know,” she joked. Ms. Wagschall shared a few tricks for navigating Green Village: “I look for name-brand toys like Fisher-Price and Little Tikes. You know their quality. They last longer.”

On a recent Sunday — the busiest day for Green Village, which is closed on Saturdays for the Sabbath — the actor Alex Karpovsky, better known as Ray on the HBO show “Girls,” was mulling over some mugs, many of which displayed their provenance in faded lettering on the side: “Railroad Museum, Long Island”; “Café du Monde, New Orleans”; “Mabel’s Whorehouse, Las Vegas.”

“Obviously I am getting this one,” he said of a quirky mug with a doughnut hole through the center, before thinking better of it and placing it back on the shelf. As for the other items piled in his arms, he was prepared to haggle with Mr. Ober for them. “He’d be offended if I didn’t,” Mr. Karpovsky said.

“It’s not true,” Mr. Ober said later. “I hardly ever haggle. Everything is priced fairly, and if the customer buys it, it’s the right price.”

And if they don’t, chances are, somebody else eventually will.

This article has been revised to reflect the following correction:

Correction: June 7, 2013

An earlier version of this article misstated when Green Village opened. It was 16 years ago, not 25.

Article source: http://www.nytimes.com/2013/06/09/nyregion/at-green-village-in-bushwick-goods-both-mundane-and-strange.html?partner=rss&emc=rss

Filed Under: Small Business Tagged With: bargain hunters, high school sports, sports trophies

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