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Weekly Claims for Jobless Benefits Decline

March 7, 2013 by Leave a Comment

WASHINGTON — The number of Americans seeking unemployment aid fell to a seasonally adjusted 340,000 last week, driving down the four-week average to its lowest level in five years, the Labor Department said Thursday. It was a positive sign ahead of Friday’s report on February job growth.

Applications for benefits fell 7,000 in the week ended March 2, the government said. That was near a five-year low reached in January. And the four-week average, a less volatile measure, dropped 7,000 to 348,750, the lowest since March 2008, just a few months into the recession.

Weekly applications are a proxy for layoffs. When they fall, it suggests that companies are shedding fewer jobs and that more hiring may follow.

The decline adds to other evidence that hiring may have been better last month than had economists forecast. Economists project the unemployment rate to fall to 7.8 percent from 7.9 percent.

The economy generated an average of 200,000 jobs a month from November through January. That was up from about 150,000 in the previous three months. In January, 157,000 were added.

The payroll services provider A.D.P. said Wednesday that businesses added 198,000 jobs in February, above most analysts’ expectations. And January’s hiring was revised higher by 23,000 to 215,000.

Services firms, including retailers, restaurants and construction companies, added jobs at a healthy clip, according to the Institute for Supply Management’s monthly survey. An index of hiring by service companies slipped but remained near January’s seven-year high.

The I.S.M.’s manufacturing survey found that factories also added workers in February, too, though at a slower pace than the previous month.

The number of people receiving unemployment aid fell to 5.4 million in the week ended Feb. 16, the latest data available. That was a drop of 362,000 from the previous week. Some of the decline is probably because people found work, but some may be because many have used up all the benefits available.

Article source: http://www.nytimes.com/2013/03/08/business/economy/weekly-claims-for-jobless-benefits-decline.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

You’re the Boss Blog: Would You Pay $6.2 Million for This Business?

January 30, 2013 by Leave a Comment
Creating Value

Are you getting the most out of your business?

From time to time, I intend to take a look at businesses for sale. We’ll examine them from two perspectives – how attractive the business is at the asking price and what lessons the business may hold for the owners of other businesses.

The first business I want to look at is a heating, ventilation and air conditioning business in the southeastern United States. For obvious reasons, we cannot identify the specific business or owner. This listing was brought to my attention by the brokerage site, Bizbuysell.com. (Editor’s note: The author has no current or potential financial stake in the sale of this business, nor does the author certify the accuracy of financial or other information provided by the seller and/or seller’s broker.)

Normally construction companies are among the hardest businesses to sell. Buyers often look at them and pass. Why? If the buyer is a competing business, it will often think, “Let them go out of business, and I’ll just take them over for free.” If it’s a financial buyer — from outside the area or from a different industry — the lack of recurring cash flow may be the stumbling block.

The seller of this particular business is being represented by a broker, Jim Dunmire, of the Murphy Business and Financial Corporation. Mr. Dunmire specializes in selling H.V.A.C. businesses, a subset of the construction industry that tends to be somewhat easier to sell than other construction businesses. Below is the basic listing information:

Type of Business: H.V.A.C.

Location: Southeastern United States.

Asking Price: $6.250 million, for the business and real estate.

Employees: 26 full-time, two part-time.

Furniture, Fixtures and Assets: $280,000.

Real Estate: 12,900 square feet, estimated value $800,000.

Intellectual Property: Training programs and a successfully developed niche.

Financials

 

Business Overview

The company has been in business for 14 years. Its founder is the owner and chief executive of the company, which services only homeowners. It does no commercial work and no new home construction work, which is unusual in the industry.

As a rule, the company says it does not bid for work. All of its projects have been negotiated with the customer, and the company policy is to not reduce prices to meet competition. In addition, the company takes only jobs that fall within a radius of 20 minutes from the company offices. There is a marketing plan in place that has been producing new business in a predictable manner.

The company trains all new employees in a training center at the main office. New employees aren’t allowed into the field until they have been fully trained in the operations and service skills the owner believes they need.

My Take on This Company

According to Mr. Dunmire, this is a company that has strong profits that are more than three times the industry average (it is 10 times more profitable than the average H.V.A.C. company, according to Robert Morris Associates, a database that analyzes company profitability). If I were a potential a buyer, I would be eager to look under the hood and find out how the company has produced those results.

The company appears to have a strong niche. The owner has learned how to say no to business that doesn’t fit his niche and only accepts jobs that work for his business model. As a result, it seems the company has become very efficient at serving these customers.

In addition, the company has eliminated two significant forms of waste that are common to the industry. By staying within a 20-minute radius, the company avoids having its personnel waste time driving around. And by training its employees at its facility, and not in the field, the company allows trainers to focus on getting a new person acclimated – and not on getting a job done.

Challenges in This Deal

Mr. Dunmire told me the asking price for this business is 3.2 times its free cash flow. This is about a third higher than most companies in the industry ask.

In addition, it is likely that there is little chance for growth in the niche this company occupies. This means a buyer looking to grow would have to either expand lines within the footprint — which I would not recommend — or find a way to clone the business in other geographic areas.

It’s likely the owner has developed excellent systems and documentation for the results the company produces. During due diligence, it will be important to learn precisely how the profits are produced.

A first glance, this business looks like a great opportunity for a strategic buyer, such as a competitor. That said, some strategic buyers may be skeptical of the results – regardless of the documentation provided. For that reason, a financial buyer may be more likely to buy this high-margin business.

My Suggestions to a Buyer

Any buyer of this company should hold off on making any changes in operations, marketing or training until it has spent a significant amount of time understanding the secret sauce that has made it successful. But a buyer looking for growth should come with a plan to duplicate the operation in other areas. (Here’s a guide to selling a business that Barbara Taylor wrote, and here is one from Bizbuysell.com.)

What questions would you want to ask if you were the buyer? Do you think the business is priced right? What would you pay for this business?

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/2013/01/30/would-you-pay-6-2-million-for-this-business/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Japan’s Cleanup After a Nuclear Accident Is Denounced

January 7, 2013 by Leave a Comment

But much of the work at the Naraha-Minami Elementary School, about 12 miles away from the ravaged Fukushima Daiichi nuclear power plant, tells another story. For eight hours a day, construction workers blast buildings with water, cut grass and shovel dirt and foliage into big black plastic bags — which, with nowhere to go, dot Naraha’s landscape like funeral mounds.

More than a year and a half since the nuclear crisis, much of Japan’s post-Fukushima cleanup remains primitive, slapdash and bereft of the cleanup methods lauded by government scientists as effective in removing harmful radioactive cesium from the environment.

Local businesses that responded to a government call to research and develop decontamination methods have found themselves largely left out. American and other foreign companies with proven expertise in environmental remediation, invited to Japan in June to show off their technologies, have similarly found little scope to participate.

Recent reports in the local media of cleanup crews dumping contaminated soil and leaves into rivers has focused attention on the sloppiness of the cleanup.

“What’s happening on the ground is a disgrace,” said Masafumi Shiga, president of Shiga Toso, a refurbishing company based in Iwaki, Fukushima. The company developed a more effective and safer way to remove cesium from concrete without using water, which could repollute the environment. “We’ve been ready to help for ages, but they say they’ve got their own way of cleaning up,” he said.

Shiga Toso’s technology was tested and identified by government scientists as “fit to deploy immediately,” but it has been used only at two small locations, including a concrete drain at the Naraha-Minami school.

Instead, both the central and local governments have handed over much of the 1 trillion yen decontamination effort to Japan’s largest construction companies. The politically connected companies have little radiological cleanup expertise and critics say they have cut corners to employ primitive — even potentially hazardous — techniques.

The construction companies have the great advantage of available manpower. Here in Naraha, about 1,500 cleanup workers are deployed every day to power-spray buildings, scrape soil off fields, and remove fallen leaves and undergrowth from forests and mountains, according to an official at the Maeda Corporation, which is in charge of the cleanup.

That number, the official said, will soon rise to 2,000, a large deployment rarely seen on even large-sale projects like dams and bridges.

The construction companies suggest new technologies may work, but are not necessarily cost-effective.

“In such a big undertaking, cost-effectiveness becomes very important,” said Takeshi Nishikawa, an executive based in Fukushima for the Kashima Corporation, Japan’s largest construction company. The company is in charge of the cleanup in the city of Tamura, a part of which lies within the 12-mile exclusion zone. “We bring skills and expertise to the project,” Mr. Nishikawa said.

Kashima also built the reactor buildings for all six reactors at the Fukushima Daiichi plant, leading some critics to question why control of the cleanup effort has been left to companies with deep ties to the nuclear industry.

Also worrying, industry experts say, are cleanup methods used by the construction companies that create loose contamination that can become airborne or enter the water.

At many sites, contaminated runoff from cleanup projects is not fully recovered and is being released into the environment, multiple people involved in the decontamination work said.

Makiko Inoue contributed reporting from Tokyo.

Article source: http://www.nytimes.com/2013/01/08/business/japans-cleanup-after-a-nuclear-accident-is-denounced.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

As Investors, Chinese Turn to New York

August 11, 2011 by Leave a Comment

Investment in the city by companies and entrepreneurs from China has been surging in the last few years, recalling the boom in Japanese investment that swept the region in the 1980s and helping to buoy the local economy even as the country as a whole struggles to get out of recession.

The Chinese investments are occurring with little fanfare, in part because Chinese executives tend to shun publicity. But back home, their government is urging them to invest overseas to diversify China’s foreign-exchange holdings, develop business partnerships and improve the country’s leverage in international affairs.

Dan Fasulo, managing director of Real Capital Analytics, which tracks commercial real estate sales, was combing through his files the other day for deals in New York City that involved Chinese investments. As the list grew longer and longer, he paused, a tone of surprise in his voice. “It’s truly amazing how much they’ve been able to do without being highlighted in public,” he said.

Delegations of Chinese officials and executives have been sweeping through the city, on a nearly weekly basis, assessing the markets, searching for office locations and meeting prospective partners and clients. Last month, officials and executives from China and the United States filled a ballroom at the Waldorf-Astoria to make deals during a business conference.

“Everybody wants to come to New York because New York is the starting point for going global,” said Xue Ya, president of the China Center, a business and cultural organization that was the first tenant to sign a lease at 1 World Trade Center, where it will occupy six floors. Once established in New York, Mrs. Xue said, “you are a player.”

Even one of the region’s fastest growing construction companies is Chinese. The company, China Construction America, has won contracts on major public works projects, including the Tappan Zee and Alexander Hamilton Bridges, the No. 7 subway line extension and the $91 million Metro-North Railroad station at Yankee Stadium.

China Construction is a subsidiary of a state-controlled construction company in China. The wave of Japanese investment in the city a generation ago — epitomized by the purchase of a controlling stake in Rockefeller Center by the Mitsubishi Estate Company of Tokyo in 1989 — stirred anxiety and even xenophobia. Some New Yorkers saw it as evidence that the city and the country were losing their dominant positions.

This time, city officials are welcoming Chinese investment as a boon to the local economy. But in a report in May, the Asia Society and the Woodrow Wilson International Center for Scholars warned that on a national level, protectionist impulses and anti-China sentiment, particularly in Washington, could scare away investors.

Flush with capital from its enormous trade surpluses, China has been on an investment spree, especially in developing countries. While the size of China’s investments in the United States pales in comparison with investments by other countries, it has nevertheless been growing rapidly.

“In terms of overall flow from China into the U.S., many of us believe that it could accelerate very quickly, and it could even parallel what Japanese investment did in the mid-’80s,” said Clarence Kwan, a senior partner at Deloitte, a business services firm.

The Chinese government is acutely interested in diversifying its foreign exchange reserves beyond United States Treasuries. One sign of this is the push by Chinese state-run banks to invest their money in commercial real estate in New York City.

In one of the largest loans by a single lender in the city since 2008, the Bank of China lent $800 million late last year to refinance a building on Park Avenue housing JPMorgan Chase and Major League Baseball, analysts said. Among other deals, the Bank of China recently agreed to lend more than $250 million to refinance an office tower at 3 Columbus Circle.

Analysts, as well as American and Chinese officials, said it was hard to calculate the precise size of Chinese investment in New York, or even the number of deals with Chinese involvement, because of the complexities of international business arrangements and privacy laws. But experts said the current level of interest was only a hint of what could come.

Cong Zhong, chairman of Kingee Cultural Development Company, a conglomerate based in Beijing that makes Chinese decorative products, said he planned a foothold in North America with a flagship retail store on Fifth Avenue. “If we start from New York,” Mr. Zhong explained in a telephone interview from Beijing, “it will be easier to expand.”

Ning Yuan, president of China Construction America, said he had not faced anti-Chinese sentiment. The company, based in Jersey City, uses union workers on its projects in the city.

“So far so good,” Mr. Yuan said. “Our company has a lot of experience in the past 20 to 30 years in China. The economy in China is booming, and a lot of the construction projects have been done by our company. It’s good for the local market that we can bring our expertise.”

Chinese money is also poised to flow into the city through a federal program that offers the possibility of permanent residency to foreigners who invest at least $500,000 in certain development projects.

Under this program, known as EB-5, Forest City Ratner Companies has arranged for $249 million in loans from Chinese investors for residential and office towers at Atlantic Yards, the commercial and residential project in Brooklyn that includes a new stadium for the New Jersey Nets. The developers of a hospital and hotel project in Flushing, Queens, have lined up about $30 million in financing from China, turning away scores of other interested investors, said Richard Xia, president of the firm raising the money.

Tourism from China is booming in New York as well, helping to sustain the hotel, restaurant and retail sectors. In 2010, 266,000 Chinese people visited the city, a 45 percent increase over 2009, according to NYC Company, the city’s tourism arm.

High-end real estate agents are doing their best to accommodate the influx.

Pamela Liebman, president of the Corcoran Group, said her firm had fielded a “huge” increase in inquiries from wealthy Chinese looking for luxury residential properties, “some in the $30-million-plus range.”

“We went from zero to 200 miles per hour in six months,” she said. “This year, it’s the biggest buzz word in real estate: ‘Chinese.’ ”

Xiaolan Shang, an agent with Prudential Douglas Elliman, said that five years ago, she had very few international clients. Now, about 90 percent of her client base is Chinese — and most pay in cash.

“I’ve had people come to New York only for the weekend,” Ms. Shang recalled. “They see the apartment, they make the offer and right away they fly back to China.”

“Cash deal,” she added. “Right away.”

Article source: http://feeds.nytimes.com/click.phdo?i=c61fc3492fbcd09109f1c06e085139dc

Filed Under: Business News Tagged With: , ,