Entrepreneur.com - Daily Dose

Tavis Smiley's Stimulus Plan: Marco's Pizza

2009-07-02T18:19:41Z

Best-selling author. Political commentator. TV and radio talk show host. It's no surprise TIME magazine named Tavis Smiley one of "The World's 100 Most Influential People" in 2009. And when Smiley wanted to have an influence on the economy in his home state of Indiana, he turned to franchising.

The PBS host, along with business partner Harold Patrick and unnamed investors, recently purchased the rights to open at least 37 Marco's Pizza franchises in the Indianapolis area over the next five years. ]]>
His first restaurant opened in April.

That restaurant currently employs around 20 people. Smiley hopes that by the time the other 36 franchises are up and running, they'll have created about 1,000 new jobs. And his high expectations for the business don't stop there. He believes that over the next 20 years, it'll pump at least $1 billion into Indiana's economy. How's that for influence?

Small-Business Owners Anticipate Growth, Market Smarter

2009-07-01T16:50:44Z

For the majority of small-business respondents in the 2009 Small Business Attitudes & Outlook Survey, the economic recovery is nigh. Seventy percent anticipate moderate to significant growth this year (only 1 percent think they will close their businesses), and 47 percent expect to hire additional employees.

The survey, conducted by online marketing firm Constant Contact, reveals two things, said CEO Gail Goodman: the optimism and perseverance of business owners, and their ability to adapt to even the toughest economic conditions.]]>
She also pointed out that social media sites like Facebook, Twitter and LinkedIn are slowly gaining ground among entrepreneurs. "They're just starting to experiment with tomorrow's tools, but from a high level, are really focused on things that are delivering value today."

The Attitudes & Outlook survey was developed in conjunction with the American Chamber of Commerce Executives, SCORE and the Association of Small Business Development Centers. Full results are here.

Entrepreneurial Confidence Rises Slightly

2009-06-29T23:04:35Z

The latest Discover Small Business Watch of entrepreneurs reports that economic confidence among the Main Street business class has risen slightly in June, with its index rising to 80.9 from 78.1 last month.

The main culprit for the increase is cash flow, according to the data. The number of business owners who said they experienced temporary cash flow problems decreased from nearly half last month to 42 percent in June.]]>
"Cash flow problems are back to levels that are more in line with what we've typically seen since the Watch began nearly three years ago," states Ryan Scully, director of Discover's business credit card. "Cash flow concerns usually erode confidence because they represent something tangible to a business owner, more so than an expectation or perception about the economy."

Additionally, 26 percent of the entrepreneurs surveyed said they believe economic conditions are improving -- a number that's up from 23 percent in May.

Interestingly, while much entrepreneurial news has focused on the plight of laid-off workers who want to become startup owners, the survey points to an opposite trend: An increasing number of small business proprietors who want to rejoin the workaday world as employees.

"The economy clearly seems to be taking its toll on the independent spirit of small business owners," Scully states. "This year 36 percent told us they are willing to walk away from their own business to earn more money working for someone else - a jump from 30 percent last year. They are spending much more time this year trying to find new business and deal with government regulations."

Discover this month also asked entrepreneurs about health care reform. It found that 78 percent of the business owners it surveys don't offer health care insurance. Of that number, 48 percent oppose government-run health care; of those who do offer plans, 62 percent opposed government-mandated insurance.

Superheroes Emerge During Recession

2009-06-30T16:00:16Z

Global wealth indicators may have plummeted to record lows this year, but the "real-life superhero" movement is on the upswing. According to a CNN piece earlier this month, the number of people who are taking on superhero identities (and donning outfits to match) has risen more than 25 percent since last summer. People disillusioned by a downtrodden economy, the article suggests, are finding renewed purpose by assuming superhuman alter egos as they "perform community service, help the homeless and even fight crime."

That may seem odd, but the link between superheroes and periods of economic uncertainty is hardly new. Many of the most famous--Superman and Batman chief among them--debuted as comic book stars around the time of the Great Depression and WWII.

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Superheroes serve as a distraction from real-life economic distress.
According to Erin Clancy, curator of the current Superhero exhibit at the Skirball Cultural Center in Los Angeles, "In the 1930s, the American Dream had become a nightmare, and I think comic books and superheroes in particular provided an escapist form of entertainment that allowed the American public to go into a fantasy world where all the ills of the world were righted by these larger-than-life heroes."

A hastily enacted fiscal spending plan is far less comforting than a superhero who saves the world on a regular basis.
Howstuffwork's Jane McGrath noted in her blog that Superman sometimes fought against villains who exploited the hard times for personal gain. Superheroes offer more than escapism--they offer hope, too.

The superhero comic is an example of an innovation that arose from a downturn.
Besides comic book heroes, a slew of things we consider essential to our lives today were invented or popularized during the Great Depression, including nylon stockings, penicillin, and yes, even sliced bread. Who knows what will emerge from this recession?

In the meantime, at least one superhero is also toughing out the worst market in years. A new storyline has Peter Parker losing his freelance job at a newspaper and having to work at McDonald's. Fortunately, based on Spiderman's track record, he should be able to triumph over this tough spot, too.

Billy Mays Dies of Heart Disease

2009-06-29T22:02:53Z

Television pitchman and entrepreneur Billy Mays died Sunday, likely from heart disease, according to reports. An autopsy found that he suffered from hypertensive heart disease, and there was no sign head trauma from a head bump he reported following a rough flight to his hometown of Tampa, Florida.

The 50-year-old's complaints of being hit in the head, possibly with baggage, during the landing of that flight over the weekend led to speculation that Mays' death might have been related. Toxicology tests are pending. Mays is survived by his wife, 3-year-old daughter and adult stepson.]]>
Mays was arguably America's most-famous TV pitchman, and the products he hawked ranged from OxiClean to the Garden Weasel lawn tiller. OxiClean chief marketing officer Bruce Fleming issued a statement that reads, in part, "we are shocked and saddened by the untimely passing of Billy Mays, who served as OxiClean spokesperson for more than a decade and who deserves much of the credit for making OxiClean a household name. Billy was the best of the pitchman genre that he pioneered."

This year Mays signed on to be the star of Discovery Channel reality show Pitchmen, in which prospective entrepreneurs pitch their inventions to him and partner Anthony Sullivan; the best ideas are taken to market, with Mays promising to throw his full marketing weight behind them. The production company behind the show stated that it has not decided whether or not a second season will happen.

Mays began his career pitching products on the Atlantic City boardwalk and made a name for himself selling Orange Glo wood cleaning products on Home Shopping Network in the mid-1990s. The company that owns OxiClean acquired Orange Glo and the rest, as they say, is history.

The pitchman maintained a boisterous, macho personality. Earlier this year he eagerly bad mouthed a newer competetor, "ShamWow" guy Vince Shlomi, on comedian Adam Corolla's now defunct radio show. But it wasn't clear if Mays was serious or just doing shtick.

He seemed to reach new heights of popularity as the economy slumped, direct advertising grew, and cheaper television time allowed his commercials to become more ubiquitous.

Fitness pitch gury Tony Little today had this to say: "In selling, you have to sell yourself first - and Billy did that incredibly well. Of course, people can sense the real thing - and his fans knew that Billy stood behind everything he sold. In this way, Billy was more than the ultimate salesman - he was a powerfully positive force in our industry, an awesome and larger-than-life ambassador."

Employers' Health Care Costs Have Nearly Doubled

2009-06-23T18:20:37Z

The U.S. Department of Health and Human Services today released a report about the rising cost of health care. Among its conclusions: "Employer-sponsored health insurance premiums have nearly doubled since 2000."

That increase in health care costs grew three times as fast as wage growth and cost employers' $12,680 for the average family plan -- nearly the same as a minimum wage salary for one year, according to the HHS.]]>
In a news conference today President Barack Obama addressed the issue, expressing support for reform that's being considered in Congress. "We need to control the skyrocketing costs that are driving families, businesses and our government into greater and greater debt," he said.

The HHS report stated that family deductibles increased 30 percent in two years for average preferred provider (PPO) plans; for families covered by "small firms" the increase was 64 percent, from $1,439 to $2,367.

"It doesn't matter if you have insurance or not," states HHS Secretary Kathleen Sebelius, "when Americans go to the hospital or the doctor's office, they are paying more and getting less."

New Web Tool Calculates Biz Success

2009-06-22T19:00:28Z

Starting a business is not for the risk averse. But in an effort to help entrepreneurs assess just how much risk is associated with launching or running their business, StartupNation.com, a website that provides business advice and networking for entrepreneurs, recently introduced an Odds of Success Calculator.

The business valuation device calculates a business owner's odds of success based on eight factors: amount of capital investment, difficulty in obtaining funds, quality of financial management, degree of business planning, annual industry growth rate, management experience, industry experience and timeframe. ]]>
After a short questionnaire, the online tool computes the probability of success by accessing a database that compares the company against hundreds of thousands of data points of other companies.

Calculating risk is imperative for starting any business. But just how accurate and trustworthy is even the cleverest business valuation tool?

The Wall Street Journal blog, Venture Capital Dispatch, tested the calculator using Twitter's information. The Odds of Success Calculator gave Twitter a 46 percent odds of success over the next five years. The lack of confidence shown by the online tool for one of the most revolutionary startups underscores the improbability for any algorithm, much less one constructed of only eight variables, to provide accurate or even directional guidance. Think about it. If you were Evan Williams, the chief executive of Twitter, would you quit?

That said, the Odds of Success Calculator addresses critical components like debt and management experience for any novice entrepreneur to consider. The calculator was born in response to the growing interest of visitors who wanted to learn whether they were on the right track or not. And the tool's entertainment appeal, with its quick, definitive results, is tough to pass on.

--Deborah Song

Are Gen Y Workers Good for Business?

2009-06-22T17:46:05Z

In his new book The Future Arrived Yesterday: The Rise of the Protean Corporation and What It Means for You (Crown Business), business and technology journalist Michael S. Malone argues that a new generation of young Americans entering the workforce -- Generation Y -- isn't the best choice if you want loyal, hard-working, long-hour employees on your team.

"Managing this generation may not only be a nightmare, it may actually be impossible," Malone writes. "It is quite likely that some sizable percentage of these new workers (and, being the so- called "echo" of the Baby Boom, their numbers are huge) will never work in a steady job on the payroll of a single employer. And an equally large segment may never know a career different from that of a 'permanent part-timer,' contractor, or consultant."]]>
Malone cites a piece written by Jake Halpern in the Boston Globe Magazine in which that author says evidence might suggest "this generation, which is flooding into the workplace, will create chaotic, unpleasant, and utterly unproductive work environments that will drive many a good business directly into the ground ..."

The caveat, though, in Malone's mind, is that Gen Y's fierce independence will accelerate the nation's evolution form a corporate economy of worker bees to an entrepreneurial one of innovative thinkers and rapid change, one where a majority of the Gen Y workforce is self-employed or even part of an ever-widening proprietary class.

"This cohort, many with parents who have always worked at home, has little interest in
ever taking an ofﬁce job, or working for a business that doesn't change," he writes. The Gen Y group will be fiercely start-up oriented, and "by 2013, perhaps two- thirds of all adult Americans will be classiﬁed as entrepreneurial."

The introduction and first chapter of The Future Arrived Yesterday are excerpted here.

Plastic Increasingly Inflexible for Entrepreneurs

2009-06-19T17:35:55Z

This spring a bigger problem than the bank-loan freeze has emerged for entrepreneurs: Credit card companies are slashing their limits, and small business owners are suffering because a majority of them rely on plastic to bolster cash flow and sustain operations.

The pullbacks are especially tough because more and more entrepreneurs are depending on the cards as their main source of credit. According to the National Small Business Association (PDF) 59 percent of small business relied on plastic for daily operations, up from 44 percent last year.]]>
Nearly 8 out of 10 small business owners surveyed by the association say that credit-card terms have worsened in the last five years. In the last year alone, 63 percent of proprietors reported that their interest rates had increased. About 62 percent of owners stated that the newer credit card terms are affecting their ability to grow business.

Meanwhile, The New York Times reports that there is a proposal on Capital Hill to expand a new congressional mandate limiting interest rate hikes for consumer credit cards to include small business plastic.

Economic Recovery in Sight, Economists Say

2009-06-17T17:56:02Z

Good news from the 2009 Chapman University Economic Forecast: Expect the recovery to begin in the next few months.

During an event held this morning in Orange County, Calif., Chapman University president James Doti and Esmael Adibi, director of the A. Gary Anderson Center for Economic Research, presented an update of the 2009 Forecast to an audience of approximately 800 business and community leaders. They reaffirmed the predictions first given in December 2008, and pointed to signs that the economy is on its way up.]]>
On the plus side, the banking sector is "almost out of the woods," stocks have rebounded, consumer confidence is finally rising and housing remains affordable. And most likely, the recovery won't be W-shaped, which would be the case if the stimulus was the only thing supporting a turnaround.

But, Doti cautioned, even if a recovery is imminent, it will be a "mild" one, due to flagging levels of consumer spending (caused in part by higher savings rates) and sorry unemployment numbers that won't reverse until 2010.

Adibi focused on the impact of housing prices and jobs. Although he noted that consumers are "very gloomy," he said the brunt of the recessionary forces will hit in the second quarter of 2009, and year-over-year change in GDP would go from -4.1 percent at the end of 2008 to +2.8 percent by the end of 2009.

He boldly added details to the predictions, stating his belief that the recovery would begin in September 2009. "It's actually going to start on September 8, 2009," he joked. "My birthday."
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*According to BusinessWeek, the 2008 Chapman forecast was one of just two the publication tracked that predicted the current recession. The updated forecast is available in the university's June 2009 Economic & Business Review.