May 19, 2024

You’re the Boss: This Week in Small Business


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

TALKING IT OUT A Democrat and a Republican have their most intelligent discussion ever and a budget deal gets closer. The G.O.P. issues a report that urges the government to be more like Canada (PDF) in order to improve the economy. Paul Krugman says “that’s the kind of answer that, in Econ 101, has you suggesting that the student get special tutoring.” The economist Chad Stone also disagrees, saying the report’s use of Canada’s growth in the ’90s is misleading: “What I take from this is if you start with a level of expenditures significantly higher than the United States and then reduce expenditures at a time when your major trading partner is experiencing a strong economic boom (after raising taxes), you, too, can have a boom.”

JON STEWART JUST GIVES UP Our corporate tax is now officially the highest in the world — for those who actually pay it, anyway. G.E., for example, paid no taxes last year. Hearing this, Jon Stewart officially gives up. The Daily Beast lists its 15 top corporate tax dodgers. The Tax Policy Center releases a summary of the tax proposals in President Obama’s 2012 budget. The president, according to  Donald Marron, “is proposing to cut taxes by $2.4 trillion over the next decade, raise them by $700 billion, or raise them by $2.0 trillion. It all depends on your benchmark.”

THE DATA’S STILL, WELL, O.K. Personal income and consumption (PDF) increased in February. Energy prices are taking a toll on consumers. Slate’s Annie Lowrey explains why there are more corporate profits but fewer jobs: “Productivity increased 3.9 percent in 2010 while labor costs fell. To simplify: businesses paid fewer workers to do more. In addition, big corporations found customers overseas.” The United States economy outpaces its rivals. Britain starts up its own start-up initiative. A Chinese economist complains about the dollar’s dominance. The president reschedules his Libya speech to accommodate “Dancing With the Stars.”

MORE JOBS? Governors of the 10 worst states for business try to create jobs. State revenues are up again. Unemployment falls to a two-year low. ADP says the private sector added more than 200,000 jobs. But fewer business owners plan to create jobs going forward.

DOES IT COME WITH A POOL? As home prices keep falling, a study finds that nearly 20 percent of homes in Florida are vacant. Dr. Housing Bubble reports that California home prices are 50 percent off  their March 2007 peak. A Russian billionaire reportedly pays $100 million for a Silicon Valley house. Phoenix leads the misery index.

SOMEONE’S AN OPTIMIST Charles Plosser, chief executive of the Philadelphia Fed, is optimistic in a recent speech: “Consumer spending continues to expand at a reasonably robust pace, and business investment continues to support overall growth. Labor market conditions are improving. Firms are adding to their payrolls. I do not believe that weakness (in the real estate sector) will prevent a broader economic recovery.”

MY CELLPHONE’S TOO SEXY The Atlantic’s Daniel Indiviglio is not sure if American Express’s new e-wallet product will succeed, saying, “it won’t be a cinch to break into a market that has been around for a while.” The Small Business Administration reports that small-business loans are losing market share (PDF).  John Taylor explains why he supports gradually raising interest rates to reduce the Fed’s enormous reserve balances. Time’s Steven Gandel reports that the number of problem banks nears 1,000. The Network for Teaching Entrepreneurship in Philadelphia gets a $10,000 grant. Bankers are finding that the best way to find small-business customers is through their mobile devices. Why is that? A recent survey by RingCentral indicates that most people consider their cellphone “sexier” than their spouse.

OLE! Hispanicize 2011 is this week. The online Social Media Success Summit is coming in May.

A COBRA TWEETS THE TRUTH World markets continue to soar. But a hedge fund gives three reasons why the stock market is in a state of denial, for example: “The so-called strengthening recovery is highly fragile and subject to reversal.” Paul Vigna says the stock market increase is due to the G7 putting a lid on the yen. A deadly Egyptian Cobra went missing from the Bronx Zoo, and tweets the truth about Wall Street.

WHAT LEVEL OF ANGRY BIRDS IS HE ON? President Obama has an iPad. Amazon joins the cloud. A company figures out a way for us to do all of our typing with one hand. I beg Microsoft to save me from my BlackBerry, and I think it may be listening. Malcolm Gladwell says social media aren’t such a big deal. Intuit and join forces. Google copies Facebook’s “like” feature, selects Kansas City for its ultra-high-speed-Internet project, makes Gmail look like the Wii, and makes plans to rule our e-commerce payment world.

BALONEY RULESSwipe fees” and other items could delay a bill to fund the Small Business Administration. The House begins digging into a patent-reform bill. The Senate considers blocking blocking Environmental Protection Agency regulation. The Wall Street Journal supports the move. A green industry lawyer says it’s baloney. The Department of Energy is making it easier and cheaper for small businesses to license its technology.

DISCOVER GIVES UP TOO An Accountemps survey finds that office managers send sick people home. A Brother International survey finds that small-business owners are more stressed than ever. A MetLife survey finds that more than a third of employees hope to change jobs in the next 12 months. A Microsoft survey finds that 39 percent of small and mid-size businesses expect to pay for one or more cloud services within three years. A survey by Elance, an outsourcer, finds that online hiring ranks as the most essential cloud-based service for start-ups. Discover decides not to do any more surveys.

DYING INDUSTRIES Eric Kuhn explains how he turned his company around when the dot-com bubble burst. The Wall Street Journal publishes a list of the top 10 dying industries (one of which is, uh, well, oh, never mind).

E-MAILS OR DIRECT MESSAGES? Zenhabits’ Leo Babauta says our e-mails are too long: “I’m not a diva, but I also have things to do and can’t get to every long e-mail. And there are many of them, not just yours.” Facebook quietly starts testing its own version of intent-based advertising, delivering real-time ads based on user wall posts and status updates. A public relations guy hates automatic direct messages on Twitter. Somehow, Nike makes even cricket look cool.

SELL LESS, CHARGE MORE M.I.T.’s Jim Schuchart offers four missing steps for pricing, for example: “Quantify your superiority. There is always more than one way to quantify … value, so consider how your customer will think about it, what data you have, and what data you can easily get.” Better yet, just do what the big guys do and sell less product for the same price. Anthony Iannarino says that selling on price is “chasing the bottom” because “at some point, you have to start creating real value and start chasing the top.”

THE SKILLS TO BE A C.E.O. Fortune’s Joel Bomgar says that “more and more, companies are reconsidering the assumption that tech founders lack the skills to take a company to the next level as C.E.O.’s.” Business Insider reports that 33 percent of the C.E.O.’s of SP 500 companies majored in engineering.


BEST REASON FOR C.E.O.’S TO MAJOR IN ACCOUNTING Andrew Liveris, C.E.O. of Dow Chemical, makes a $719,923 mistake on his expense reports.

BEST ADVICE FOR BEING MORE PRODUCTIVE Ali Luke tells how to have a productive month: “Consider a 30-day trial: Is there some big change you’re considering – like getting up at 6 a.m. instead of 8 a.m., or quitting alcohol, exercising daily, or becoming vegetarian? How about giving it a 30-day trial? If you decide the change doesn’t suit you, just stop after the month is over. But if you decide that it’s been worth it, then this month just might have been one of the most important in your life.”

MOST COMFORTING NEWS ABOUT OIL PRICES Donald Luskin does not think rising oil prices will hurt the overall economy: “The U.S. economy is today well-positioned to absorb an oil spike without experiencing it as an oil shock. First, we’re nowhere near peak oil consumption, which we hit in August 2005 at 21.7 million barrels per day. We’re now 9 percent below that, even though consumption has recovered substantially since its worst levels of the Great Recession in September 2008.”

THIS WEEK’S QUESTION Will rising oil prices affect your business? We reimburse our people for car expenses, so we’re affected.

4:26 p.m. | Correction An earlier version of this post identified Paul Vigna as an investor. He is a journalist at Dow Jones Newswires.

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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