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Obama Admits Jobs Tax Credit Won't Work
Tweet Share on Facebook January 13, 2009 Comment (3)That $3,000 tax credit for each new hire that was one of the main tax incentives in Obama's stimulus plan? The Washington Post reports that it has been taken off the table.
Obama's reasons for dismissing the proposal are remarkably similar to the criticisms Bruce Bartlett leveled against it, as I mentioned last week. Democrats rejected the proposal as "difficult to administer" and "ripe for abuse." Bartlett (a Republican, not a Democrat) wrote that it would be pretty much impossible to prevent businesses from gaming the system when it came to these tax credits.
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The Obama Factor: Chicago Hair Salon Cashes In On President's Brand Appeal
Tweet Share on Facebook January 13, 2009 Comment (3)You don't need to sell tacky merchandise to profit from the fervor surrounding Obama's inauguration. Mike Elsheikh, a hair stylist in Chicago, purchased his old employer, Ossama's Hair Design, and rechristened it "Obama's Hair Design."
While Elsheikh says that the new moniker has attracted more customers to his business, you have to wonder if that has more to do with abandoning "Ossama" than adopting "Obama."
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Blackberry Storm: Is It All It's Cracked Up To Be?
Tweet Share on Facebook January 13, 2009 Comment (8)If you're like me, you have trouble adapting to new technology. I have some Christmas presents still in box es that I haven't managed to work up the courage to use yet. Laura Rusick at Small Business CEO says she's not an "early adopter" of new technology either, but she has given the Blackberry Storm a whirl. In a usefeul post she breaks down the good, the bad, and the "painful," but her verdict is overall positive.
If you are looking for a user-friendly phone with email and web capability, The Storm does a nice job. It is a big step up from Windows-based smartphones, and it’s great to have the functionality of a Blackberry while still having touch screen capability.
I look forward to new software upgrades fixing some of the existing user-friendliness issues. My 2009 cell phone wish is for simple cursor positioning.
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Why Twitter Is Overrated
Tweet Share on Facebook January 12, 2009 Comment (10)Some people are saying that Twitter and other social networking outlets are making blogging obsolete for promotion. Ben at Instigator Blog has a good post explaining why you shouldn't believe the hype. Here are his key takeaways:
- When you discover someone’s blog (via a link, referral, etc.) it’s not uncommon to look through a few posts, or even dig into the archives. The same cannot be said for Twitter. On Twitter you may look at a few tweets, but you can’t really build up enough of a profile of someone from that. So you make a much faster “follow or don’t follow” decision. With a blog, you dig deeper. Most of the time when someone follows me on Twitter, the first thing I do upon viewing their Twitter profile is check out their blog. That’s where the “meat” is…
- Blogs still generate more meaningful commentary from your audience. Sure, a bunch of people might re-Tweet something, but that’s not the same as having 10 or 20 or 30 or more people comment on a post.
- Blog posts are eternal whereas Tweets are forgotten. Although most old blog posts really don’t drive a lot of new traffic, they’re still more accessible and meaningful to search engines, and will pick up more traffic than old Tweets. Do you even remember what you posted on Twitter or FriendFeed last week? Probably not. Do you remember what you blogged about? A blog is truly an archive of your life, experiences, thoughts, opinions, etc. Twitter is like someone with no long-term memory.
- Twitter is now used quite actively to drive people somewhere - to get them to click through to somewhere. Brands do it. Marketers do it. Everyone does it. Blogs are destination sites.
- As fun as it is to post something pithy and quick on Twitter, blogging is still a better medium for expressing yourself, for weaving in more thought, multiple ideas, other people’s input and commentary. Blogging is strategic. Twitter is strategic too, but less so
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X-Men Origins: Stan Lee (A Business Success Story)
Tweet Share on Facebook January 12, 2009 Comment (8)Stan Lee is known as a great creative mind--he conceived Spider-Man, the X-Men, the Incredible Hulk, the Fantastic Four, and many others as the best-known writer for Marvel Comics. He is also known as a moneymaker--those original comic books became American classics, and more recently have set off a wave of wildly successful film franchises. The newest entry will be X-Men Origins: Wolverine, set to be released in May.
But Stan Lee is perhaps not quite as well-known as a businessman and entrepreneur in his own right. The Financial Times has a fascinating look into his life with a new venture, Pow Entertainment, a described "intellectual property aggregator."
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McDonald's Proves To Be A Recession-Proof Business
Tweet Share on Facebook January 12, 2009 Comment (3)Fast Food Nation and Super Size Me could not kill it. A culture of Whole Foods and health-conscious chic couldn't kill it. The New York Times reports how McDonald's has been perhaps surprisingly resilient even in today's economy. While almost every other large corporation has been taking a hit in earnings, but McDonald's just won't stop growing. The only two companies in the Dow Jones industrial average who had any growth in share price in 2008 were the golden arches and another heavily vilified company, Wal-Mart.
I first thought when I read this, "Well, of course McDonald's is going to do well--fast food is a booming industry during a recession." Consumers will cut back on high-end dining, and McDonald's is the beneficiary. Small restaurants tend to lose out. But if that were the only explanation, you would see other fast-food places doing just as well. That has not panned out. The parent companies of Wendy's and Burger King, for example, have seen their share prices decline or pretty much stay the same over the past year.
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A Small Business Bailout?
Tweet Share on Facebook January 9, 2009 Comment (94)Bailing out the big auto companies wasn't a very popular idea among Americans. But it's likely that the "bailout" part of that equation isn't what's bothering people--it's the bailing out of big, faceless corporations.
A number of small-business organizations are betting that's the way people feel. I've seen a number of pitches for why small businesses should get their own chunk of the bailout.
The National Development Council's president says we need to create a Cabinet-level position to coordinate federal resources for small businesses, and spend $75 billion on a small business stimulus package.
And the National Small Business Association sent a letter to Nancy Pelosi calling for 25 percent of TARP funds to be aimed at small business lending and a mandate that 23 percent of stimulus infrastructure funds be contracted out to small businesses.
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Obama's Economic Plan: History Does Not Look Kindly
Tweet Share on Facebook January 9, 2009 Comment (6)In his major economic speech today, Barack Obama said:
Our government has already spent a good deal of money, but we haven't yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That's why the American Recovery and Reinvestment Plan won't just throw money at our problems—we'll invest in what works.
For small businesses, that investment appears to be coming in the form of various tax incentives. First, one part of his plan is a $3,000 tax credit for each new hire.
Bruce Bartlett takes that idea to task:
A similar program was enacted in 1978, but a report from the Department of Labor's Inspector General during the Clinton Administration urged Congress to discontinue it because 92% of those hired under the program would have been hired anyway. An academic study found that 70% of the credits were payments for workers that would have been hired without them. Despite many efforts to reform the credit, it was eventually abolished in 2006.
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Business Websites: Do You Really Need One?
Tweet Share on Facebook January 8, 2009 Comment (5)One interesting statistic I've written about is that apparently only about 40 percent of small businesses have their own websites.
Gene Marks in Business Week (HT Jeff Cornwall) says that this lack of web presence is not really a problem--certainly not as much as the eggheads make you think.
But is this really necessary? Can all those site-less small business owners be wrong? They're not trying to shock. They're not trying to grab attention. They're just trying to save some money. Marketing dollars are limited. There's a recession going on. For many, sinking a bunch of dollars into a Web site may not be the best return on investment.
Oh sure, if you're in the Internet porn business, or sell things online, then this is an entirely different story. Or if you're looking to replace all of your marketing materials and send prospects and customers online to learn in detail about your products and services, then it makes sense to a have a full-fledged site. Or if you're going to use your site to provide customer service, manuals, videos, and a knowledge base, you'll want a vehicle to do this. A Web site's great for you, too.
But gee, many of the business owners I know—those incredible, pathetic, dismal, wretched losers who so shock the turtleneck-and-vest-wearing, greasy-haired crowd—don't necessarily have those needs. They are gas station owners, restaurateurs, insurance agents, shopkeepers. They're CPAs, architects, landscapers, plumbers, and electricians. They're not selling books online or running auctions. They're not distributing software or hosting phone services. They're not complex. They're investing elsewhere. They're O.K. with no Web site.
He makes a compelling point. He's also right that your website is not going to get any significant amount of views unless you are willing to sink some cash into it. But I think there's a case to be made that even the simplest of websites is worth putting up for the cash-strapped business owner. Marks is underrating this when he says that it is a waste of time to put up a website that only you or your Mom will see.
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SBA Loans Continue to Decline
Tweet Share on Facebook January 7, 2009 CommentScott Shane's number one prediction for the new year is this:
1. The amount of capital provided to small and start-up companies will continue to shrink
All of the sources of finance, from venture capitalists to business angels to banks to peer-to-peer lenders, are all reducing the amount of money that they are providing to entrepreneurs. Until the problems in the credit markets get resolved and the economy starts to grow again, it’s very unlikely that we will see a reversal of this trend. Getting money will be difficult for entrepreneurs in 2009.
Almost on cue, we find out that SBA-backed loans fell 57 percent (compared to a year earlier) in the first quarter of 2009, which ended December 31, 2008.
