Entrepreneurial

Why America’s small businesses are becoming like banks

By Terra Terwilliger
The opinions expressed are the author’s own.

Over two years after the start of the Great Credit Crisis, banks are still not lending money. But big businesses know exactly where to go for a quick, interest-free loan … the little guy. Even as corporate profits recover, big companies continue to squeeze their small vendors, stretching out payment terms and writing late checks. Unfortunately, this blatant exploitation is damaging the small business economic engine that drives half of US GDP.

A friend who owns a small consulting company recently received notice from a Fortune 500 client that henceforth their payment terms would be extended from 90 to 120 days. No discussion, no recourse, just a fancy legalese version of “we’re going to start paying you later because it’s better for us, so get used to it.”

That’s as if your employer casually one day sent you a letter saying that they were going to start paying you 30 days late. Unfortunately, you wouldn’t be able to tell your landlord, the gas company and the supermarket the same thing. Your bills still have to be paid on time.

My friend is not alone. Last August, The Wall Street Journal published an article titled “Big Firms are Quick to Collect, Slow to Pay,” which revealed how companies with more than $5b in annual sales were systematically slowing payments to suppliers, while speeding up their own collections. The analysis showed that companies with revenues over $5 billion took an average of 55.8 days to pay suppliers, compared to 53.2 days a year earlier … and compared to the 40.1 days in which businesses with revenues under $500 million pay up.

The situation is not getting better. “We just updated our payables analysis for 2010,” says a spokesperson for REL Consultancy, the company that did the original WSJ research. “We see the same trends in 2010. Large companies continue to pay slowly, and they are still using their muscle to make their suppliers accept longer payment terms.”

Startup ditches dating site for video games

When his original startup concept flopped, Charles Forman decided to give his dating site a makeover.

The New York-based software programmer switched his business model from flirting online to multi-player video games and launched OMGPOP in 2009.

“The original idea didn’t do so well at first,” said Forman, who had launched OMGPOP’s predecessor – ImInLikeWithYou.com – in 2006. “Once we put games on the site traffic increased immediately.”

Small businesses cheer midterm results

– George A. Cloutier is the founder and CEO of American Management Services and the author of the bestselling book, “Profits Aren’t Everything, They’re the Only Thing”. The views expressed are his own. –

Last week’s midterm elections have provided an emotional boost for many small businesses, according to a survey conducted by American Management Services.

About 73 percent of small business owners said they felt more optimistic about the future of their company due to the Republican gains, in a survey of more than 300 small business owners in 25 states following the Congressional elections. The participating companies all employ at least 25 employees and are considered the job-drivers most likely to hire new workers.

Exclusive: Survey says small businesses upbeat about 2011

Small businesses are feeling better about the economy and are looking to grow in 2011, according to a new survey released this week by online marketing firm Constant Contact.

Of the more than 1,400 small business owners that responded to the survey (view full results), 73 percent expected their companies to grow over the next 12 months and nearly 40 percent felt “positive” about the economy over the course of the next year.

“They see the darkness behind them and looking forward they see some light,” said Eric Groves, Constant Contact’s senior vice president of global market development. He added the survey is a “followup” to the Waltham, Massachusetts-based company’s larger spring polling of roughly 4,000 small businesses. Groves said Constant Contact has more than 400,000 clients, predominantly small to medium-sized businesses.

Bringing order to the chaos of student life

As a freshman at the University of Pennsylvania, Jay Rodrigues had a tough time balancing his academic studies, work in student government and his fraternity commitments.

“There was no way of communication,” said Rodrigues about organizing his life on campus, adding he would also miss a lot of live music events, because he would hear about them after the fact. “It was so disorganized.”

His college conundrum led Rodrigues to create DormNoise, a Web-based calendar tool that helps students organize more efficiently.

Four wheels and style to burn

– By Regina Schrambling. This article originally appeared on SecondAct.com. –

First food trucks gave eager young chefs a route into the restaurant world. Now a new fleet of entrepreneurs is close behind with seriously cool mobile retail.

On weekends, one of the hippest places to shop in SoHo In New York sits at the corner of Broadway and Prince, with street artists to the west, trendy stores all around and an endless stream of tourists and shoppers flowing past on the sidewalk. Danceable music pulses out of speakers to stop the human stream long enough for it to notice a show window with graphic T-shirts and collectible toys on display. And every few minutes, a passerby becomes a patron, handing over $35 in cash for a tee and providing a smiling photo op – everyone who buys is snapped with a Canon digital camera, his/her visage to be posted on a website.

from Environment Forum:

Detroit vs. Silicon Valley as green auto hub

Composite image shows an aerial view of downtown Detroit (left) October 16, 2006 REUTERS/Molly Riley, and a view of a rainbow over San Jose City, California, Feb. 5, 2009 REUTERS/Juan Carlos Ulate

There's a debate touring its way around the blogosphere these days: should the new green auto industry be based in Motor City Detroit or shiny, happy Silicon Valley?

The Valley in southern San Fransisco Bay area is already a hub for electronics expertise - certainly a cornerstone in the pursuit for innovative design and engineering. The world's largest high-tech companies, including Apple, Google, Facebook, and Intel are headquartered there.

The culture of the region, a recent NPR series pointed out, is "where people are used to taking a chip, a cell or an idea and working on it until it becomes something big."

Cloud technology lifts “accidental” entrepreneur

– Cindy Bates is vice president of Microsoft’s U.S. SMB organization where she is responsible for the company’s end-to-end SMB sales and marketing efforts. The views expressed are her own. –

Recovery from the recession has been frustratingly slow for many whose jobs disappeared as companies shrank or even vanished.  Many have decided to take the plunge and start their own businesses.

This generation of business executives has become known as “accidental entrepreneurs.”  But a recent Microsoft survey discovered their ability to launch and succeed in a business was no accident – it was made possible to a great extent by technology.

from PopTech:

Edit your life and win a green contest

Graham Hill's latest design initiative, Life Edited, is a contest to renovate a 420 square-foot apartment in New York City in a way that will radically reduce your carbon footprint. With $70,000 in cash, prizes and a design contract, why not enter it?

Hill, who is the founder of TreeHugger.com, which is now a part of the Discovery network, is on a mission to help everybody get rid of all the unnecessary clutter in their lives. In New York City, this is particularly essential if you want to remain sane. A good way to start is by "ruthlessly editing," as Hill says, your minimal personal space in a green way. Speaking from personal experience, it also clears some (much needed) space in your mind.

In New York, this shouldn’t be so hard to do. In fact, stripping your belongings down to the bare essentials is a regular occurrence given the limited space of most apartments and the fact that various furry -- and not so furry -- freeloaders find clutter to be a perfect place to set up home, as I recently discovered.

from PopTech:

Making it right in New Orleans

PopTech speaker Tom Darden is the executive director of the Make It Right Foundation, the organization started by Brad Pitt to rebuild affordable, green homes in New Orleans' lower ninth ward. Make It Right has already built 50 homes and are in the midst of construction for another 30. Their initial goal is to build a total of 150.

So far, Darden has helped raise $36 million for the foundation. In 2009, Darden was named Louisiana's Young Entrepreneur of the Year by the Small Business Administration. After being in New Orleans for four years now and having worked with the foundation since 2007, Darden explains why his work is so essential and how these types of homes can transform a family's quality of life:

More from Tom Darden:

Make It Right partnered with award-winning architects who worked pro bono to design homes based around the needs of lower ninth ward residents. Design features such as covered porches and wide front stairs allow residents to maintain social connections to their neighborhood, preserving the "culture of engagement" that characterized the neighborhood prior to Hurricane Katrina.

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