May 26, 2018

You’re the Boss Blog: This Week in Small Business: Not Again!


A weekly roundup of small-business developments.

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

Small-Business Must-Reads

An unregulated, decentralized virtual currency just became a billion-dollar market (but Felix Salmon explains why Bitcoin’s rise is nothing to celebrate). A videographer, Dustin Cohen, tells a Brooklyn shoemaker’s story, and an important part of the health care legislation affecting small businesses is delayed.

The Economy: ‘We’ve Been to This Rodeo’

The March jobs report is a “punch to the gut” (but don’t blame sequestration). Companies added fewer workers than projected last month, held back by limited hiring in construction. Ylan Q. Mui wonders whether this is an April Fool’s economy: “We’ve been to this rodeo twice already. In 2012 and 2011, seemingly strong momentum in the first half of the year gave way to summer slumps. Will the third try be the charm? Or is this just another prank — one that’s getting old fast.” Construction spending (pdf), as well as personal income and consumption all increased in February but economic confidence slipped in March. Demand for office space improves. Car sales surge as General Motors introduces a pair of midsize pickup trucks for casual users and small businesses. Economic activity in the nonmanufacturing sector also grows. Steven Hansen says that despite the headlines, manufacturing is not good. And here are 16 big bubbles that are getting ready to burst.

Employment: Hiring Veterans

The National Federation of Independent Business reports that small-business employment climbed last month by the most in a year, but hiring fell according to a monthly survey by SurePayroll. Another study, from Intuit, found that small businesses hired more in February but revenues continued to drop. Derek Bennett says hiring veterans is good business. Workers in seven of the 10 largest occupations typically earn less than $30,000 a year, and for many small-business owners, two jobs are a must. A survey finds small companies favor immigration changes that would provide a path to citizenship.

Management: Disco and Leadership

Bill J. Bonnstetter writes that empathy is one of the qualities most entrepreneurs lack. Terry Starbucker explains what the rise, fall, and comeback of disco teaches us about leadership. Nick Tasler says there are reasons we ignore good advice. Nate Bolt provides a photo summary of how people sit in meetings and what they really mean. A new smart drug is especially popular among entrepreneurs.

Energy: A Zero-Energy Retail Store

The first refinery in the United States since 1976 is being built in North Dakota as the Obama administration moves ahead with sweeping rules requiring cleaner gasoline. Some blame the corn industry for high gasoline prices — but after a sharp two-month climb of nearly 60 cents a gallon, gas prices have fallen over the past month and may have peaked for the year. Even so, farmers are planning on planting the most corn since 1936. A retailer’s new store will supply its own energy.

Ideas: Smell-O-Vision

These are the 10 fastest-growing industries for small businesses. Teaching a course using your expertise is just one of five potential sources of side revenue you could be earning, according to John Corcoran. Samuel Wagreich thinks there are plenty of profits in 3-D printing. Sperm has become one of America’s hottest exports. A Smell-o-Vision display emits localized virtual odors.

Customer Service: Apple Learns a Lesson

This infographic sums up the true cost of poor customer service. Jason Harter explains how Twitter has revolutionized the way we interact with customers. This is how the Zac Brown Band cultivates fans. Small businesses are finding success with customer-relationship software. Lauren Simonds says giveaways can turn tough sales into easy ones. Apple learns a customer-service lesson in China.

Start-Up: A Giant Mood Swing

Peter Cohan lists five steps for raising start-up capital. Kevin D. Johnson believes “the potential for attaining greatness is in creating new markets.” These are the 11 start-ups that beat 1,700 others for spots in New York’s hottest accelerator program. Being the founder of a start-up is just “one big giant mood swing.” CNBC has a new series that will feature small businesses in a reality competition.

Cash Flow: Calculating Gross Profit

An alternative lender plans to provide loans to 100,000 small businesses this year. Here is a useful guide on how to calculate gross profit. Macy’s mistakenly marks down a $1,500 necklace to $47. Amanda Henson shares some options for finding the right small-business grant. Here’s how to go global with your small business, and a Small Business Administration official has advice for how to get payment for your export sales.

Your People: Working From Home

Barbara Corcoran explains what motivates employees more than money, and JJ Ramberg suggests three ways to energize your staff. Ian Smith offers ideas for creating a more positive environment for employees, and here are 26 delightful ways to make the work day more fun. Stephen J. Dunn analyzes the differences between employees and independent contractors. Liane Cassavoy offers tips for keeping your work-from-home employees accountable (without spying), and Mike Russell has thoughts on telecommuting from a manager’s perspective. A new study encourages men to do less housework.

Online: The Death of QR Codes

These are the top boards for monetizing Pinterest. Marla Tabaka has advice for attracting a huge crowd with LinkedIn. A co-founder of YouTube announces a new video-creation Web site. Christopher Mims explains how the Internet is making us poor. On April Fool’s Day, Google introduces a “search and smell” feature and trades insults with Microsoft. David Meerman Scott says you should never delete content. Dana Prince says your opt-out rate is one of five online metrics to watch. Christopher Penn says there are times when it’s O.K. to use boring e-mail subject lines. Aaron Strout believes QR codes are dying.

Taxes: The Bagel Tax

K’Lee Banks lists five ways to book the right bookkeeper. Here’s how to claim a home-office deduction for your small business. Paul Caron summarizes a few last-minute tax tips (but be sure to avoid these crazy deductions). These 10 corporate “taxation heroes” paid as much in taxes as the bottom 75 percent of all American taxpayers. The chairman of the House Ways and Means Committee is outlining proposals to reduce the burden the tax code imposes on small businesses. And did you know that New York State charges an extra 8 percent tax if you ask for your bagel to be sliced? Was Shakespeare a tax-evading food hoarder?

Red Tape: Teenage Tanning

The chairman of the House small business panel wants to know how the Small Business Administration will deal with the sequestration’s impact. The president hints at a budget compromise, continues to push his plan to build infrastructure and plays an April Fool’s joke. The fight over an Internet sales tax intensifies. New Jersey’s governor signs a teenage tanning law despite small-business concerns. New software will allow New York taxi regulators to monitor taxi whereabouts in real time. Saki Knafo believes that New York’s paid sick leave bill may serve as a model for the United States, but New York’s mayor vows to veto it.

Around the Country: Mentor Month

An OfficeMax in Milwaukee refashions itself so that it can offer more to small-business customers. An online Ponzi scheme leaves a North Carolina town poorer. The Small Business Administration and AARP will hold a series of events for “Mentor Month.” A contest sponsored by the UPS Store will shine a spotlight on small-business owners. Local experts explain the difficulties of making money in Chicago’s comedy business. A longtime owner sells his Minnesota grocery store to his employees. A California city is allowed to go bankrupt. A survey ranks the most (and least) small-business-friendly states and cities while another study concludes that there is more economic freedom in red states. A bunch of people walk backward through Times Square.

Around the World: Jeddah’s Entrepreneurs

Cliff Wachtel shares seven lessons he learned from Cyprus, where many small businesses were caught in the cross-fire. A Small Business Saturday is scheduled for Britain, and a Startup Weekend highlighted Jeddah’s entrepreneurial spirit. Queen Elizabeth gets a raise. One Chinese entrepreneur believes mainland start-ups must “become huge or die.” China’s manufacturing growth improved in March but the euro zone’s manufacturing slump deepened. The Netherlands falls prey to the economic crisis and the mortgage crisis in Ireland is “insane.” In a survey, America is found to be the most difficult retail market while Africa is the most promising. With its new start-up visa program, Canada is hoping to lure foreign entrepreneurs. A Samoan airline decides to base its fares on a passenger’s weight. A global giving initiative is hoping to empower small businesses to change their communities and better their lives. Nauru is the world’s least visited country.

Technology: A Data-Centric Universe

New software puts Facebook front and center on Android phones. Kyle Wagner believes battery life is “the only spec that matters.” Mike Foreman says small-business awareness of the cloud’s benefits is growing. This is how to triple your business with a little guidance and good software. Brace yourself for a data-centric universe with sensors everywhere, says a chief technology officer. Karen E. Klein has examples of how small businesses use big data. The first mobile phone call was placed 40 years ago.

Tweet of the Week

@DearAnyone – A good way to get out of a conversation is to take off one of your socks and hand it to the person talking.

This Week’s Best Quote

Karen Vitale’s advice to her 20-year-old self includes, “Chill out”: “You will get dream jobs, lose dream jobs, realize there are no true dream jobs, and life will march on. Instead of trying too hard to get employers to want you, channel some of that nervous energy into figuring out if this is the best job for you. And if things do go south, remember that how you respond will say more about your character than any pat answer to an interview question. Do your best damage control and show the interviewer how you manage a crisis in real time.”

This Week’s Question: Do you support paid sick leave?

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.

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Coffee and Power Site Aims to Get Jobs Done, Bit by Bit

Now he wants to change the nature of work.

While Second Life is still around, it never lived up to its hype. But Mr. Rosedale, 43, is back with a new business called Coffee and Power, where people buy and sell most any kind of task, like making Halloween costumes or writing sophisticated software.

To prove his point that a work exchange could function, Mr. Rosedale built the software for his new company by hiring programmers from around the world and dividing up the work into about 1,600 individual tasks, from setting up databases to fixing bugs.

“We think it’s the new model for how software will be written,” he said. “It worked so well that we decided to extend it to all sorts of work.”

Coffee and Power has storefront space in a nondescript part of San Francisco’s Market Street where people can drop in and offer to do jobs or hire people for tasks. They can even start working together on the spot. Mr. Rosedale works upstairs, along with a handful of full-time staff members.

On a recent day, the public space had three groups of people making use of the human and laptop fuels behind the company name. The groups were working on software projects, business planning and tutorials.

As with Second Life, the business has a virtual currency for buying, selling or bestowing tasks as gifts. Coffee and Power takes a 15 percent fee for moving the money back into real dollars.

The site has been active since spring with little fanfare. It attracted fewer than 700 transactions, but is now starting to actively solicit buyers and sellers.

“About 25 percent of our site is needs, and the rest is offers,” Mr. Rosedale said. “We’ll need about 10,000 jobs before we know what the final balance is like.”

Other online services have similar ideas — Task Rabbit, and Amazon’s Mechanical Turk among them. One of the striking things about these services is how inexpensive it is to get something done.

Translation services on Coffee and Power currently sell for $10 a job, and a bike messenger can be had for $15. Much of the time, the people involved are already in these professions and are looking to make a few extra dollars on the side.

Besides putting downward pressure on what people can charge, the low prices also raise questions about the quality of the services. That is one reason that Mr. Rosedale is publicizing that he used cheap labor to build his own site.

He paid about $200,000 to build Coffee and Power, he said, using an earlier version of the service called Worklist. Every step in the development process is visible on the site, including the amount people have been paid for their work. An Australian working under the name Lithium has earned $46,523 since January, for example.

Another test project, called Hudat, is an iPhone application that converts pictures of Facebook and LinkedIn friends into online flashcards. The idea is that a person can review images before attending a party. It cost $2,600 to build, a fraction of what work like this normally costs, and was built in two weeks. The process is open for anyone to see.

“We work on total transparency,” Mr. Rosedale said. “If you don’t want anyone to see what you are working on, this is not for you.”

Second Life, in its heyday, held similar promise. While it became notorious for sexual chatter, it has over the years attracted a Reuters news bureau, now defunct, as well as emporiums of several companies like American Apparel and Starwood Hotels. Cisco Systems also held meetings there. Second Life still exists, but is much quieter now, offering virtual currency, meetings and digital real estate, among other services.

While he is still chairman of Linden Lab, the company that created Second life, Mr. Rosedale talks about that venture in the past tense.

“The problem with creating an immersive 3-D experience is that it is just too involved, and so it’s hard to get people to engage,” he said. “Smart people in rural areas, the handicapped, people looking for companionship, they love it. But you have to be highly motivated to get on and learn to use it.”

Mr. Rosedale, who raised about $1 million for Coffee and Power from investors including Jeff Bezos, Catamount Ventures and Greylock Partners, sees the trend of breaking work into smaller pieces — both in software and for physical tasks — as one that will continue to gain traction.

“I would rather hire a kid in Brazil who is hungry for work for a project than hire a Stanford graduate,” he said.

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