Entrepreneurial

Q&A with Jeff Stibel: What small business owners need to know about the fiscal cliff

With the so-called fiscal cliff looming, Reuters Small Business interviewed Jeff Stibel, chairman and CEO of small business credit rating agency Dun & Bradstreet Credibility Corp to ask him a few questions about what small businesses need to know about the government’s self-imposed tax agreement deadline and what small businesses can do in case congress fails to ink a tax agreement plan before the end of the year.  

Reuters: First off, can you define fiscal cliff for us?

Jeff Stibel: The U.S. Congress and President Obama created the “fiscal cliff” last year as they negotiated ways to lift the federal debt ceiling. The cliff causes two things to happen at midnight on December 31, 2012. First, a range of temporary tax cuts will expire as the Budget Control Act of 2011 goes into full effect. For American small businesses, this will mean the end of several key tax breaks and the imposition of new taxes. Secondly, mandatory budget cuts will be imposed at the federal level. The result has the U.S. economy – and, with it, U.S. businesses – hurdling towards its own cliff.

Reuters: I think a lot of people are aware of the fiscal cliff and its impact on taxes. What impact would it have on small businesses? And what do small businesses need to know about the fiscal cliff?

Stibel: Falling off the fiscal cliff could produce a recession and significantly contract credit markets, which would put additional strain on business owners. Banks cling to cash at any sign of instability. The fiscal cliff is creating that uncertainty, evidenced by steep market declines last week. It’s unfortunate that credit markets could tighten, since many small businesses can’t access capital. A recent study from Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet Credibility Corp. discovered only a third of small businesses who sought loans actually secured them, a reminder that market conditions are already tough and getting tougher. We also expect to see consumer spending lag, as consumers may end up paying higher taxes, money a consumer might otherwise use for retail. The most important thing for small businesses is certainty – they need to know what they’re dealing with so they can make long-term decisions.

Reuters: What sort of, if any, small businesses will be initially impacted and/or impacted the most should the government fail to come to a compromise?

Employers hold the hammer when it comes to office politics

As an extremely close election race heads into its final days, offices across the country will become political hotbeds. But employees should remember that the freedom to express your political beliefs is mostly a one-way street that favors the employer.

In nearly every state in the nation bosses have the right to fire their employees if they don’t approve of their politics. On the other hand, workers have little recourse when their employer tries to intimidate them to vote a certain way.

Earlier this month, Westgate Resorts owner David Siegel caused a stir when he sent a company-wide email to his 7,000 employees that suggested they could lose their jobs if Barack Obama is re-elected.

Small business owners feeling glum about economy: poll

President Barack Obama called them the “engines of growth” in a debate this week against Mitt Romney, but small businesses are feeling decidedly glum about the broader economy and more than half of them have no plans to hire anytime soon.

Just a third of small businesses say they are optimistic the economy will improve this year, down from 61 percent who felt the same way last spring, showed a new survey by The Hartford insurance group released on Thursday.

Their uneasiness about the sluggish economy has small businesses holding off on hiring. Nearly 60 percent of the 2,000 small business owners, with fewer than 100 employees, surveyed back in August said they did not add staff in the last year and 67 percent did not intend to hire over the next 12 months.

Swing state small businesses could loom large

In a very close presidential election race, small businesses in swing states could decide who wins or loses.

Nearly 50 percent of small business owners in key swing states (Colorado, Florida, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Virginia and Wisconsin) favored Republican challenger Mitt Romney over President Barack Obama, according to a survey released last week by Manta, an online small business community.

Despite Romney’s lead among swing state small business owners, Obama was narrowing the gap. The president was the choice for 38 percent of respondents, up six percentage points from a previous Manta survey released in May.

Q&A with Silicon Valley “Godfather” Steve Blank

For those who don’t have a Silicon Valley area code, Steve Blank likely doesn’t have much name recognition. But amongst the Apples, Googles and Facebooks of the world, Blank enjoys iconic status. Blank says he gets asked for autographs just walking down the street in Palo Alto, where he teaches entrepreneurship at Stanford. Some young entrepreneurs reverentially refer to the 59-year-old as: “The Godfather.”

How did Blank earn his celebrity status? First, he is a successful serial entrepreneur, having started eight venture-backed Silicon Valley companies, including software company E.piphany, which raised $66 million prior to going public in 1999. Second, Blank’s first book, “Four Steps to the Epiphany”, became a handbook for every budding tech entrepreneur and spawned the term “customer development” that sparked the “lean startup” movement.

Blank’s blog has become a must-read among entrepreneurs and is widely syndicated, regularly appearing on The Huffington Post. Recently, Blank launched an online version of his customer development course, called “The Lean LaunchPad”, which he says has more than 50,000 registered users.

Small tech CEOs say Romney better for the economy: survey

Regardless of who won the presidential debate, the majority of executives from small technology firms would feel better if Republican presidential candidate Mitt Romney wins next month’s general election.

Twice as many CEOs from small to medium-sized technology companies (57 percent) believe the U.S. economy would be better off under Romney, according to a poll conducted last month by Boston-based executive search firm Polachi.

Just 27 percent of executives polled thought President Barack Obama would do a better job guiding the economy.

Women-owned small businesses on the rise, but obstacles remain

When Hedy Ratner started the Women’s Business Development Center in Chicago 25 years ago, women owned just 10 percent of U.S. businesses.

Although today that figure is close to 30 percent, Ratner hoped by now women would have leveled the playing field in the business world.

“We never expected to need to be in business 25 years later,” said Ratner, whose organization helps women start and grow their own businesses by offering training, mentorship and funding.

SBA says small business lending up, but some feeling left out

This week Small Business Administration chief Karen Mills gave America’s top banks a pat on the back for boosting their lending to small businesses over the last 12 months, while separate data showed that funding for the most needy small businesses actually contracted.

In a blog posted on the SBA’s official website, Mills trumpeted that the U.S.’s top 13 biggest banks have increased loans to small businesses by a whopping $11 billion since last September as part of a commitment to boost lending by $20 billion by the end of 2014.

“The continued success of this commitment serves as an important example of what is possible when the public and private sectors work together to assist America’s small business owners and entrepreneurs,” Mills wrote.

Small businesses likely to benefit from patent law overhaul

When new patent legislation was passed a year ago Alex Frommeyer was one of the first entrepreneurs to take advantage.

The Louisville, Kentucky-based inventor filed a provisional patent to protect the technology that went into making the Beam Brush – a toothbrush with a built-in sensor that records how long people spend brushing their teeth and relays the information to a mobile app that allows smart phone users to track their progress.

Before his provisional patent lapsed, Frommeyer recently filed two regular patent applications: one for the sensor technology and the other to cover the “infrastructure,” or system that allows the data to flow from the toothbrush and be displayed on a user’s phone.

from Felix Salmon:

Job creation: Where are the startups?

Tim Kane, at the Hudson Institute, has a new paper out with a simple title: "The Collapse of Startups in Job Creation". His paper is basically a slightly politicized version of the charts put out by the Bureau of Labor Statistics last month, under the headline "Entrepreneurship and the U.S. Economy". The first two charts are particularly striking. The first one looks at the number of startups in America -- companies less than one year old.

bdm_chart1.png

This shows a reasonably steady rise in entrepreneurship from 1994 to 2006, then a collapse as the housing bubble bursts, and -- most worryingly of all -- no recovery at all after the recession ends. Instead, we have significantly fewer startups right now than we did even at the depths of the recession.

If you look at the number of jobs at these startups, rather than the number of startups, the picture is equally bad, although the decline is older. This series peaked back in 2000, and has been declining ever since:

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