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You’re the Boss Blog: S.B.A. Unit’s Study of Costs of U.S. Regulation Raises Questionis

April 10, 2013 by Leave a Comment
The Agenda

How small-business issues are shaping politics and policy.

In late March, Representative Tammy Duckworth, a Democrat from Illinois, announced a new bill promising regulatory relief to small businesses. But what caught The Agenda’s eye was Ms. Duckworth’s justification for the legislation. “For businesses with less than 20 employees,” she said in the press release, “the annual cost of federal regulation can be over $10,000 per worker.”

To be precise, it was $10,585 per employee in 2008, according to a 2010 study sponsored by the Small Business Administration’s Office of Advocacy. For large companies, the study says the cost is $7,755 for every employee. And the total cost of federal regulations to the economy was $1.75 trillion in 2008, an impressive figure — if it is true. Certainly it has been accepted as currency by many business and free market advocates; it has been cited by the U.S. Chamber of Commerce, the National Federation of Independent Business, and the Competitive Enterprise Institute. Mitt Romney embraced the notion of a $1.75 trillion price tag in his presidential campaign. And, as Ms. Duckworth shows, the outrage the claim inspires is not strictly partisan.

But the Advocacy study has also come under scrutiny from economists and legal scholars, who have challenged the methodology, the underlying data and the authors’ reluctance to share certain details about how they did their work. And while much of the criticism comes from liberal organizations like the Center for Progressive Reform and the Economic Policy Institute (which weighed in twice), here, too, the outrage is not strictly partisan: the Congressional Research Service has also cast doubt on the study’s findings.

Written by W. Mark Crain and Nicole Crain, economists at Lafayette College in Easton, Pa., the study tried to calculate all of the costs of all federal regulations on the books in 2008, regardless of when they were first adopted. To do this, the Crains (or “Crain and Crain,” as they are known in the academic world) tallied the costs of four categories of regulations and then added them together.

The largest of these categories is economic regulations, which they said carried costs totaling $1.2 trillion in 2008. It also is the source of most of the controversy surrounding the report. The Crains defined economic regulations broadly, to include issues as diverse as trade rules, antitrust policies, consumer product safety obligations and some labor rules. (Labor safety, though, is a separate category.) And because it would be extremely difficult to identify, let alone calculate, costs associated with each economic regulation, the Crains didn’t try.

Instead, they used a mathematical formula to try to predict how increases and decreases in regulation would affect a country’s economic output, an exercise known as regression analysis. And to measure the amount of regulation, the Crains turned to a global index of “regulatory quality” devised by researchers at the World Bank and the Brookings Institution — and here is where the controversy begins. According to the Crains, countries that score higher on the index have less regulation. But the index is not a systematic accounting of regulations in each country. Instead, according to the index’s creators, it captures “perceptions” of how well governments make “sound policies and regulations” that foster economic growth. It does this by surveying experts and relying on polls of business owners and individuals.

But are sound policies the equivalent of less regulation? Not according to one of the index’s creators. Evaluating a regulatory environment “is very different from simply measuring whether it is ‘stringent’ or not,” Aart Kraay, a World Bank economist, wrote in an e-mail to the Crains that was later provided to the Congressional Research Service. For example, the Netherlands and Scandinavia had higher scores on the regulatory quality index than the United States in 2008, and, as the Economic Policy Institute noted dryly, these are “countries not typically associated with a lack of regulation.” It is also possible that the surveys that make up the index absorb sentiment about regulations that the Crains cover elsewhere — like environmental rules, for example — which would effectively double-count the cost of those rules. (Despite repeated requests, the Crains did not agree to be interviewed for this post.)

Even if a consensus existed on precisely what the regulatory quality index measured, converting a soft concept into a hard number raises other concerns. The formula the Crains used tried to account for other factors, or variables, that could affect economic growth, such as education. However, the economists initially would not share the precise data they used with other researchers. When the Congressional Research Service tried to replicate the Crains’ findings using similar, but not identical, supporting data and methods, it found that “the regulatory quality index had no discernible independent effect on G.D.P. per capita, suggesting that the analysis is highly sensitive to the choice of control variables and measures.”

The Economic Policy Institute performed a similar experiment and got similar results. “It’s basically a case of garbage in, garbage out,” said John Irons, who analyzed the study for the Economic Policy Institute. “That $1.2 trillion number is not a reliable number in any sense at all.” But Mr. Irons acknowledged that this did not necessarily mean it was too high, only that it was wrong.

The Crains’ treatment of economic regulations accounts for about 70 percent of the total regulatory cost for 2008, so that’s where critics focused most of their energy. Still, they also found much to dispute in how the researchers treated other regulations. For example, to calculate the cost of environmental, labor safety and homeland security regulations, the authors relied heavily on the Office of Management and Budget, which performs cost-benefit estimates for many regulations.

The government figures are presented as a range, but the Crains told the Congressional Research Service that they used only the high-end figure because the government does not track every rule and because the researchers believe “government agencies tend to be conservative in estimating regulatory costs.” But government agencies generally rely on information provided by the regulated industry to estimate costs, and, as the Center for Progress Reform and the O.M.B. itself point out, there is good reason to believe that industries facing regulation tend to overstate those costs.

Nor does the report consider the benefits of regulations, because the Office of Advocacy did not ask the Crains to measure them. The O.M.B. is required by law to tally benefits as well as costs as best it can, and it has concluded that, in general, the benefits of regulations exceed their costs to society. Advocacy is required by law only to “measure the direct costs and other effects of government regulation on small businesses.” Even the Crains have acknowledged that this is a skewed foundation on which to base policy.

Before the study was made public, it was reviewed by a pair of economists. Richard Williams, a conservative scholar, raised several questions about the suitability of relying on the Regulatory Quality Index. But later, he cited the study as authoritative, even though he acknowledged that he did not know whether his concerns had been addressed in the final version. In a recent interview, he said  he understood the Crains’ intellectual impulse. “I think they’re right — you want to know how regulations affect G.D.P.,” he said. “The theoretical concept was good, but at the time there just weren’t good databases.” Asked why he cited the study and the $1.75 trillion figure if he had doubts, he responded, “We only have two estimates of the cost of regulations. One is the O.M.B.’s, which is clearly an underestimate. On the other hand, we have this big number, which clearly has problems, but it is a number.”

The other reviewer was Robert Litan, a former Clinton administration official. His comments at the time, in their entirety, were, “I looked it over and it’s terrific, nothing to add. Congrats.” He recently declined to comment further about the study.

The S.B.A.’s Office of Advocacy also declined further comment. It still defends the paper online, where it says “the study demonstrated that small businesses bear a larger burden from regulations than large businesses,” but “as with almost any academic methodology, it was not intended to be considered a precise finding.” One measure of how independent the Office of Advocacy is from the rest of the S.B.A. and the rest of the Obama administration is that administration officials have publicly, and harshly, criticized the findings. Austan Goolsbee, then the president’s chief economic adviser, called them “utterly erroneous.”

The office of Ms. Duckworth, the Illinois Democrat, did not have much to say. The bill she introduced would allow a small business to escape a fine for “a first-time error in filling out federal paperwork.” Her spokesman, Anton Becker, was happy to talk about that. About the $10,500 figure, he would say only, “The figure cited in the press release is an example of one study’s findings from the Small Business Administration.”

Article source: http://boss.blogs.nytimes.com/2013/04/10/questions-on-a-study-of-the-cost-of-federal-regulation/?partner=rss&emc=rss

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Applications for Jobless Claims Fall 11%

January 5, 2012 by Leave a Comment

“Businesses have increased hiring to meet the underlying pick-up in demand,” said Neil Dutta, an economist at Bank of America Merrill Lynch.

Weekly applications for unemployment benefits dropped to a seasonally adjusted 372,000 last week, the Labor Department said Thursday. That was 11 percent lower than the same time last year.

Much of the decline occurred this fall. Applications had fluctuated sharply over the first nine months of 2011, falling as low as 375,000 and rising as high as 478,000. By early September, they were at 432,000 — only 5,000 below where they began the year.

Since then, applications have declined steadily. That has pushed the four-week average, which smoothes fluctuations, to 373,250 — the lowest level since June 2008.

When applications drop below 375,000 — consistently — they generally signal that hiring was strong enough to reduce the unemployment rate.

ADP, which processes payroll data, said private employers added 325,000 jobs last month.

Service firms, which employ roughly 90 percent of the work force, grew a little faster in December, according to the Institute for Supply Management.

The trade group of purchasing managers said its index of nonmanufacturing activity rose to 52.6. That’s slightly above November’s reading of 52 — the lowest in nearly two years — but well below last year’s high of 59.7 recorded in February. Any reading above 50 indicates expansion.

An increase in new orders and stronger imports drove last month’s modest expansion. But a gauge of hiring showed many service firms were hesitant to add workers.

Small businesses remain encouraged about their plans to hire over the next three months. The National Federation of Independent Business said the proportion of those firms that expect to add workers was slightly off from the three-year high hit last month.

Economists are predicting that overall hiring increased in December and will strengthen this year.

John Ryding, an economist at RDQ Economics, forecasts that employers added 180,000 jobs last month, a big jump from November’s 120,000 net jobs.

Economists surveyed by The Associated Press project that the economy will generate an average of 175,000 jobs a month this year. That would be a step up from average monthly gains of 130,000 last year and 78,000 in 2010.

In November, the unemployment rate fell to 8.6 percent from 9 percent. Still, about half that decline occurred because many of the unemployed gave up looking for work. When people stop looking for a job, they’re no longer counted as unemployed.

The pickup in hiring reflected some modest improvement in the economy. Growth will probably top 3 percent at an annual rate in the final three months of last year, economists expect. That would be a sharp improvement over the 1.8 percent growth in the July-September quarter.

Even so, many economists forecast that growth may slow to roughly 2 percent this year. Europe could fall into recession because of its financial troubles. And without more jobs and higher incomes, consumers may have to cut back on spending. That could drag on growth in 2012.

Article source: http://feeds.nytimes.com/click.phdo?i=f9bea53357b7ff1a697517a8dd0e2c80

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You’re the Boss Blog: Do Small-Business Owners Feel Overtaxed and Overregulated? A Survey Says No

November 21, 2011 by Leave a Comment

The Agenda

How small-business issues are shaping politics and policy.

Among many small-business advocates, it has become an article of faith that “uncertainty” about new regulations and higher taxes is frustrating the ambitions of small-business owners.

A “massive federal regulatory nightmare,” is how the head of the National Federation of Independent Business, Dan Danner, puts it on the organization’s Web site, one that “stifles innovation, grinds small businesses down and prohibits job creation.” And Republicans in the House have used these concerns to wage an aggressive campaign against federal regulations sanctioned by existing law as well as any proposal to raise taxes in order to reduce the deficit. But it turns out that these concerns are not shared by as many actual small-business owners as you might expect.

That, at any rate, is one finding of a recent poll released by the Hartford Financial Group. According to a summary of the survey, when small-business owners were asked to name the single biggest barrier to success, only 9 percent cited government rules and regulations. Just 2 percent cited “too many taxes or uncertainty related to taxes.” (The Washington Post reported recently that economists say regulation has little impact on job creation over all.)

Interestingly, the myth of the overregulated and overtaxed small business has such a strong hold over the public imagination that the survey’s authors appear to believe it themselves, despite their own findings. How else to explain this paragraph in a press release from the Hartford Financial Group:

Small businesses are also challenged by government regulations, which result in greater administrative and accounting burdens. According to the study, small business owners identify economic constraints, such as government rules, regulations and taxes, as the single biggest factor holding them back (37 percent). And, they say that uncertainty about how public policy could potentially stunt the future growth of business is hindering their ability to plan ahead.

It turns out that this 37 percent also includes people who cited other factors beyond taxes and regulation, including a lack of paying customers and unspecified complaints about the economy. In fact, regulations and taxes were the two smallest of the four factors constituting the 37 percent, while lack of paying customers and those unspecified complaints were cited by 26 percent of all responders.

A spokeswoman for Hartford, Deborah Pont, confirmed the figures but insisted that the press release did not exaggerate concern about regulations and taxes. “Concerns about economic constraints — including regulatory challenges, taxes and the broader economy — were a recurring theme expressed throughout the study, both qualitatively and quantitatively,” she wrote in an e-mailed statement.

In any event, the poll had other interesting findings. For one, most small-business owners apparently do not cast their votes based solely on their companies’ interests. Just 24 percent of small-business owners said their business was their “primary concern” in the voting booth, while 31 percent said that their company had no impact on how they voted. Forty-four percent, meanwhile, said that in some cases, policies that directly affect their business could also affect their vote.

The survey, which mostly concerns itself with how small-business owners view success, divides respondents by their ambitions — whether they wish to expand their businesses or merely maintain them. This has become an important distinction in the last few years, as more economists, like Jared Bernstein, pin their hopes for economic growth on so-called gazelles, and are sometimes dismissive of slower-growing businesses.

The survey found that owners were nearly evenly divided between growers (52 percent) and maintainers (48 percent). And apart from how much money they hope to make, there are not huge differences in their views on defining success or the obstacles to achieving it. Except for this: maintainers are noticeably more likely to complain about government regulations than growth-oriented entrepreneurs. And the growth-oriented — whom many economists and policy makers now believe are crucial to creating new jobs — find it much harder to obtain capital. Fully a quarter of growing companies report that it is extremely difficult to get a loan, slightly more than say it is easy to obtain financing. By contrast; 41 percent of maintenance businesses say it is easy to get a loan, while only 11 percent find it extremely difficult.

The poll also looked at minority small-business owners, and here again the results are striking. For one thing, they are far more ambitious than business owners as a whole: 65 percent said they were growth-oriented. And while at first blush that might imply a strong desire for personal gain, a closer look at the results suggest they are more interested in the welfare of their communities than the survey population at large. Eighty-three percent of minority respondents said paying high enough wages for employees to live comfortably is important to success, compared with 72 percent of all respondents. And only 30 percent of minority owners ranked making enough money to maintain their own lifestyle as the first or second most important factor defining success, compared with 42 percent among the broader group.

The survey interviewed, by telephone, 2,000 owners of companies with fewer than 100 employees but more than $100,000 in annual revenue. The companies had been operating for at least a year. They were randomly selected from a list maintained by Dun Bradstreet. The margin of error on the national sample is 3 percent.

Article source: http://feeds.nytimes.com/click.phdo?i=149abc416e728155605e67a6128a5eac

Filed Under: Small Business Tagged With: , ,

You’re the Boss: This Week in Small Business: How to Sell Out

June 20, 2011 by Leave a Comment

Dashboard

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

CONFIDENCE FALLS, EXCEPT ON WALL STREET Confidence among small businesses falls to an eight-month low in May, dampened by a deteriorating outlook for sales and hiring, according to a National Federation of Independent Business survey. Gallup also says economic confidence plunged. Builder confidence declines, too. An economist says there’s a 99 percent chance of recession in the United States by next year. The director of the Congressional Budget Office says there’s a great deal of pain ahead, but he’s “heartened by the fact that households have de-leveraged, businesses are sitting on cash, and anything that increases individual and business confidence could prompt new spending.” Seventy-seven percent of venture capital executives are optimistic about their industry. Calculated Risk says the slowdown may be temporary. One analyst says a stock market rally is about to happen. Jeff Reeves, an investor, offers 11 reasons stocks will surge soon.

WORKER INCOME COLLAPSES Jobless claims and housing starts are better than expected. Retail sales fall in May, but Scott Grannis says they remain strong. Industrial production edges up. (Just checking: are you really paying attention?) The Southern California housing market continues to disappoint. Consumer and producer prices rise slightly. Cargo traffic in Los Angeles is up. Residential remodeling increases. But our workers’ share of national income is collapsing. The Philadelphia Fed’s index of manufacturing activity is down.

GLOBAL TRENDS TO WATCH Ernst Young reports six global trends are shaping business strategy. A few well known academics explain why American management rules the world. A desire for United States passports is the trend in China. The Dalai Lama isn’t laughing. Greece teeters. A new survey lists five countries women should avoid.

TO STIMULATE OR NOT Ben S. Bernanke warns that we must raise the debt ceiling, but the parties are still a trillion dollars apart on a budget deal. A Seeking Alpha blogger explains where are all the QE2 money went. President Obama courts executives on jobs and proposes a high-tech training plan. Morgan Stanley offers proof that the United States is already solving its debt crisis. Jared Bernstein, a fellow at the Center on Budget and Policy Priorities, offers our leaders some dos and don’ts. For example: “As federal stimulus fades and states continue to face budget constraints, we mustn’t allow policies that are boosting demand to fade too soon.” John Mason reports that business lending appears to be getting stronger, but Scott Shane says small businesses are still finding it hard to get loans.

TIME FOR THAT DIET? Makeuseof.com writes about Ididwork, a free tool for remote employees to track their time. A new study from the Guardian Life Small Business Research Institute reports those born after 1982 are 100 percent more likely to sell their businesses than older entrepreneurs. I like this info graphic explaining how games can help your enterprise. A study finds that skinny women and overweight men earn the most. Daniel Radcliffe shows us how to succeed in business. A few academics teach us a few tricks to tell if someone’s lying. Wisconsin’s Supreme Court backs the governor’s collective bargaining position. American students don’t know much American history.

RED TAPE Susan Dickenson asks retailers if they were able to claim the new small-business health care tax credit for 2010. Four senators urge the Federal Reserve to crack down on the marketing of business credit cards, but overwhelmed regulators give the financial industry a reprieve. Congressman Sam Graves wants the government to stop withholding small-business payments: “Imagine you own a business that puts a new roof on the local high school. After you do the work, the school pays only 97 percent of what it owes you. Why? On the off-chance you may not pay your federal taxes.” Obama’s top regulator cozies up to business. The Postal Service is trying to cut back to five days. The Democratic National Committee’s chairwoman says Mr. Obama has signed bills with 17 small-business tax cuts (and a fact-checker agrees).

PRIORITIES, PRIORITIES The city of Dallas is busy inspecting small-business signs while two crazy dudes run wild through its airport!

TOP TEN LISTS Inc.com suggests 10 videos every entrepreneur should watch. Betty White shares her top 10 tips for living a happy life. Jason Del Rey shares 29 things he thinks he learned at one of those small-business summits. DailyCandy’s 2011 Start Small, Go Big Contest is accepting entries. Sunsweet is daring us to eat prunes.

SMALL-BUSINESS TECH UPDATES Before you move to the cloud, you might want to check out this chart. Google makes a $280 million solar investment. This guy thinks Skype could be Microsoft’s best acquisition ever. And Office 2010 is Microsoft’s fastest-selling version to date. Pandora goes public. Here are eight easy steps for creating a scanned signature for your e-mail. A small-business technology expert shares five essential business apps. Maybe it’s me, but there’s no way a dummy is buying this Dummies book. Beware of a new “mass-meshing” attack on small-business Web sites. The United States Senate’s Web site is hacked.

MIRACLE-GRO LIKES WEED Sub-Saharan Africa is booming. A food storage company and crematorium may be joining forces in Minnesota. Atlanta small-business owners get a new opportunity to offer input on growth and profitability. Miracle-Gro and others see big bucks in marijuana. Chicago is determined not to lose its trade show business.

GETTING STARTED Start-ups make their pitches in Boston, and more cities are scheduled. A freelance writer lists nine free programs that help you build a side business. Des Traynor poses some interesting questions for a would-be start-up, such as “How are you going to delight your users? How are you going to engage them, make them advocates, make them loyal? Are you creating passionate users?” A 15-year-old starts and sells his company. OfficeMax’s founder says entrepreneurs must rule their start-up like a benevolent dictator. An angel investor says patent reform could stifle start-ups.

FACEBOOK DECLINES Facebook reports traffic drops in the United States and Canada, but PCMag says Facebook users are spending more time than ever on the site: “People visiting Facebook are actually visiting 40 percent more pages per visit than they were just three months ago.” Which is yet another dumb thing about being in your twenties.

MCDONALD’S LEARNS A LESSON Writer Kathryn Hawkins offers tips for building a better customer survey. Example: “Provide an incentive. Very few customers will take the time to fill out a survey form without the promise of a reward.” A marketing expert says that branding for small businesses is a luxury: “Many small businesses tend to try to mimic the branding efforts of large corporations, and it’s simply not possible.” McDonald’s racist sign hoax reminds us that the Internet never forgets. A new tool shortens URLs while advertising your business.

THE WEEK AHEAD Summer officially begins Tuesday, which is also when we’ll probably hear how bad existing home sales were in May. On Wednesday Mr. Bernanke speaks to the press. Thursday brings unemployment claims and new home sales. Corporate profits from the first quarter are finalized on Friday.

THIS WEEK’S BESTS

REASON TO NOT THINK POSITIVE A Blogger explains why positive thinking can be counterproductive: “I’m 45. I’m 5-foot-8. It doesn’t matter how much positive thinking I do, I will NEVER play professional basketball. I can be super positive all year long, and I’ll never get picked. Too old, too small. I can use positive thinking tactics to think that I will write a New York Times bestseller but it will never happen unless I start to do the actual writing. And this is where positive action comes in.”

REASON NOT TO MAKE A PLAN Matt Krautstrunk lists his five worst tips for entrepreneurs, including my favorite: “Anybody who tells you that you need a business plan either doesn’t understand the competitive landscape or is ‘old school.’ Nowadays, business plans are used primarily for attracting investors, and often fail to account for changing external factors.”

ADVICE FOR SELLING OUT James Altucher shares nine important things to remember if you want to sell your start-up. I like: “Prepare a year in advance. The first company that I sold (in 1998) I started meeting with all the ad agencies about a year in advance of selling. I wasn’t ready then (I would’ve sold then but I was too small) so I kept everyone in the loop with monthly updates. And lunches or breakfasts every three months just to update on the business in general. By the time I was finally ready to sell we had four or five instant offers.”

THIS WEEK’S QUESTION Do you have an exit plan for your business?

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://feeds.nytimes.com/click.phdo?i=afeee5e2690461cb6cdcd8eec0db2b44

Filed Under: Small Business Tagged With: , ,

You’re the Boss: This Week in Small Business: Tax Day Today, Deficits Tomorrow

April 18, 2011 by Leave a Comment

Dashboard

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

DID YOU FILE? Individual tax returns are due today. A new survey finds that the federal tax code is “a massive resource drain for small businesses.” The Tax Foundation celebrates Tax Freedom Day. A study says that corporate-only tax reform could hurt small businesses. A hard-working entrepreneur pays off a $1.7 million tax debt.

OBAMA’S TURN Tyler Cowen points out that a lot of the 2011 budget cuts agreed to by Congress last week are frauds. Congress passes them anyway. The president says he will cut the deficit by raising taxes (here are the top 10 increases to expect), reducing spending (but not entitlements) and saving on interest. The V.P. snoozes. Paul Ryan says he is sincerely disappointed. Matt Yglesias thinks Mr. Obama’s premise is “weird.”

PESSIMISM IN THE AIR Gallup reports that economic optimism plummeted in the United States in March. So did the National Federation of Independent Business’s small-business confidence index. The Index of Industrial Metals hits an all-time high, but the Chicago Fed assures us that commodity prices really don’t push core inflation. First-quarter G.D.P. estimates are downgraded. But Regus, which rents office space to businesses and individuals, reports that global business confidence is surging (PDF). Accountants say half their clients are still in crisis. Oh great, and now I’m told sugar can be toxic. On a brighter note, Charlie Sheen says he may return to “Two and a Half Men,” and February job openings are the highest in two and a half years. The Pulse of Commerce Index is looking healthy, the trade deficit narrowed and retail sales increased in March. Rail volumes also increased. And the Fed says the economy’s improving.

NOT THE END OF THE WORLD What is the No. 1 thing investors will be watching this earnings season? F. Hale Stewart says there are seven headwinds confronting stocks. Mike Shedlock advises against a long-term approach to the market. Mark Thoma explains why economists just can’t agree. Catherine Rampell explains why we should fear the bond market: “If there is fear that the government will default on its debt, the costs for the government to borrow will go way up, as would be the case with any borrower.” Larry Kudlow says it’s not the end of the world. And Mickey Mouse shows us how to break dance.

MR. SALMON IS IN DENIAL A new Pew study finds that 81 percent of adults agree that buying a home is the best long-term investment a person can make. Felix Salmon thinks these homeowners are in denial, and admits he may be, too: “If you asked me the question in the poll (“Thinking about the recession, which began in December 2007, is your home worth more or less NOW than it was BEFORE the recession began, or is it worth about the same?”) about my own place in New York, I’d probably say it was worth more.” In exchange for mortgage payments, some consumers turn their houses into billboards. A Congressional panel finds that credit raters were the cause of the financial crisis.

DON’T GO WEST, YOUNG MAN Eight of 10 California business owners wouldn’t start a business in California. Kansas City’s small-business vitality index plunges. Kiplinger lists 11 comeback cities. Austin is the best city for “small business creation and development.”

GETTING GOOD P.R. FOR YOUR P.R. START-UP A start-up takes dating to a whole new level. An increasing number of entrepreneurial-minded immigrant students are choosing to navigate the murky waters of the visa process so they can open businesses in the United States. To spur innovation, Chile is offering American start-ups $40,000 in seed funding. Christopher Noll writes how to start a business for free. Score introduces a program to help military vets start their own businesses. Scoutmob, an Atlanta-based deals start-up with a “great vibe and product design” expands to 10 more cities. The best industry to start a business in is … public relations.

COMPETING AGAINST THE CHAINS David Hennessy thinks that Wal-Mart’s new price-match policy puts pressure on small businesses: “If customers are always going to get the lowest price at Wal-Mart, there’s really nothing you can do to compete with the company’s pricing. What you can do, and must do, if your shop has the distinct misfortune of being located within driving distance of a Wal-Mart is to play to your strengths as an independent small business. What can you offer customers that a place like Wal-Mart can’t?” Both Applebees and the Olive Garden come up with an innovative way to attract the youth market.

OUTLAWING COMPETITION A freshman in Congress uses his small-business experience to get his first bill passed. The French assert their authority. A new bill intended to level the competitive playing field between new car dealerships and independent repair shops is introduced in Congress. Gary Locke, Commerce secretary, explains the benefits of exporting for small-business owners. Brian Armstrong, a Web entrepreneur,  thinks technology and innovation are being stifled by the law: “Competition means that I’m continually kept on my toes trying to provide the best product at the best price. So it’s somewhat discouraging whenever I see companies NOT competing on quality or price, but instead by competing in the courtroom — trying to outlaw their competition.”

WILL SOMEONE HIRE WILL? Will Connelly, who has interviewed with more than 50 companies, has some advice for us. Tony Schwartz, chief executive and author, explains how he became an optimist: “Negative emotions such as anger, fear and blame make it harder to think clearly and creatively and can even be paralyzing.” What do you think are the five biggest challenges of owning a family business?

COOKING LESSONS FOR MOTHER’S DAY? Taco Bell is testing nacho cheese Dorito shells. A craft spirits industry begins to emerge among artisans. NBC Chicago starts a small-business blog. Soon we could be making cell phone calls with our thoughts. Matthew Keegan gives us Mother’s Day promotion ideas like: “Restaurants are packed on Mother’s Day, but not every mother wants to eat out. This gives other businesses an opportunity to come alongside families and provide a special meal or the fixings to make one. Caterers can deliver everything right to the home and take-out restaurants may offer exemplary dining options on the go. Other retailers can provide gift cards for cooking lessons, meals on the go and for kitchen ware.”

THE NEXT BUBBLE? PayPal’s Peter Thiel says the next bubble is higher education: “Parents see kids moving back home after college and they’re thinking, ‘Something is not working. This was not part of the deal.’” In a related story, a university studies 6-year-olds in an effort to explain democracy.

AN ADVERTISTING SHIFT These charts may suggest a saturation point in social media. John Paul Titlow thinks Facebook is great but asks if businesses can make any money with it: “Seven years in, shouldn’t Facebook be driving e-commerce by now? The businesses surveyed reported a 1 percent click-through rate on Facebook posts, which pales in comparison to the 11-percent average click-through rate seen with good old-fashioned e-mail marketing.” According to a new survey, more than two-thirds of marketers say they plan to invest more dollars in display advertising over the next 18 months, and 59 percent plan to invest more in mobile over the same period.

TECH NEWS Cisco decides the Flip is a flop. Microsoft’s Bing now powers 30 percent of all searches and introduces its own business portal. Odesk, an outsourcer, offers three steps for creating successful Web site videos. Information Week reports that 8.8 million tablets are in use at small businesses. Microsoft says its enterprise resource planning systems are going to the cloud.

THIS WEEK’S AWARDS

BEST REASON TO KEEP AN EYE ON THE CZECH PRESIDENT He might steal your pen.

BEST START-UP ADVICE Neil Patel, a co-founder of two Internet companies, offers 10 lessons learned from his experiences. For example: “Try to set hard deadlines and even if you don’t hit them, address it and set others. Meeting in person really does help drive a team. Working remotely is great when getting work done but inspiration doesn’t come from e-mails.”

BEST EXAMPLE OF BEING STREET SMART Corey Hofstein, blogger and investor, says he’s learned a lot from rap’s biggest moguls. For example: “Lil Wayne’s incredible productivity can only come from a mix of two factors: an unbelievable work ethic and an unbelievable passion for what he does. Is every song a hit? Unlikely. But as they say, practice makes perfect, and nobody has shot to stardom as fast as Lil Wayne.”

QUESTION OF THE WEEK How many hours a week do you work? I probably work at least 60, but it’s at all hours of the day and for the most part under my control.

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://feeds.nytimes.com/click.phdo?i=74b35566e1c9abb86e7e53512db2feb5

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