More Make the Call to Start Own Businesses

Entrepreneurism is on a slight rise, according to a new survey. In the second quarter, 8.7% of job seekers went back to work by starting their own businesses. This was an increase from 6.4% in first quarter 2009 and a low of 2.7% in fourth quarter 2008.

The increase comes despite credit that is still difficult to obtain and sluggish spending by businesses and consumers. John Challenger of the consultant firm Challenger, Gray & Christmas says, “Small business owners do not quite see the light at the end of the tunnel, but there is a sense that we have at least passed the halfway point.  Once banks are in a position to open the lending spigot again, we are likely to see a surge in start-ups.”

Despite the increase, the numbers remain quite low compared to past years.

Even as the percentage of job seekers turning entrepreneurs edges toward 10 percent, it is unlikely that the start-up rate among the unemployed will reach levels achieved in the late 1980s and early 1990s.  Between the inaugural year of the Challenger Index in 1986 and 1992, the start-up rate averaged 16 percent annually, peaking in 1989 when 20 percent of job seekers became entrepreneurs.

From 1993 to 1996, the annual start-up rate averaged 10.6 percent.

Guitar Smash Turns Into Sour Note for United

Still not sure about this social media thing and how it might have an impact on your business? While there are positive stories (and many more to come), read on about how airline arrogance came back to haunt United — thanks to a video message and blog.

With a smashed $3,500 guitar by United baggage handlers and a frustrating customer experience involving denied resolution, country singer Dave Carroll got innovative.

Thanks to digital production capacity and some remarkable creativity, Carroll and his band put together a finely tuned video message chronicling the debacle. The four-minute and 37-second video subsequently went viral and so far has attracted no less than 4.5 million views on YouTube.

Mashable’s Jennifer Van Grove wrote: “United is [now] feeling the wrath of citizen journalism, the social Web and the millions of airline travelers who can identify with Carroll’s experience.”

MidwestBusiness.com columnist Michael Snyder of The MEK Group has the full story.

Is the President Anti-Business?

He doesn’t think so. BusinessWeek recently sat down with President Obama and got his take on his relationship with the business community. Very interesting discussion and I recommend you read it in its entirety:

BusinessWeek: A lot of business leaders consider you to be antibusiness. I was struck when I attended the Aspen Institute Ideas Festival. [Council of Economic Advisers member] Austan Goolsbee was speaking, and he hit a fairly hostile audience. These are wealthy, fairly progressive older people who had tended to support you, but they seemed very upset about corporate taxes, individual taxes, card check, all sorts of things you’re doing that they perceived as not helpful to them. What can you say to those people?

Pres. Obama: Let’s look at the record. I’ve been in office six months. So far my only tax policy has been to cut taxes for 95% of working people. I haven’t signed a bill that’s raised taxes yet. To the extent that we have put in place policies, they’ve all been directed at helping businesses. A number of those who think we’re antibusiness seem to forget that it was just three or four months ago when, at great political expense, we yanked them out of the fire. And they still—at least if they’re in the financial sector—are enjoying a whole bunch of government guarantees that are propping up their business models. So it’s hard for me not to be a little skeptical when I hear that somehow we’ve been antibusiness.

BusinessWeek: But you’re aware of that perception?

Pres. Obama: Well, here’s what I think. To the extent that I can identify any aspects of this that make any sense, one is that, at the height of the AIG (AIG) debacle, I used pretty tough language in terms of folks paying themselves bonuses at a time when they were given big taxpayer bailouts. I continue to believe—and this is not antibusiness, this is common sense—that if you’ve presided over an enormous meltdown that has resulted in about $10 trillion worth of wealth being lost, that you might want to be a little self-reflective and perhaps change your business goal. And when I see Wall Street not doing that, it tells me not only that they have forgotten the recent past, but that they are putting the country’s economy at further risk. One of the things I’m worried about is, having had to step in in extraordinary ways, we now have even more potential for moral hazard, where financial institutions think to themselves, "We can continue to take extraordinary risks and pay ourselves extraordinarily high salaries or bonuses because we know that we are too big to fail." I think that’s dangerous for the economy and for business. And so that would be one example.

What are your thoughts? Are his critics in the business community too hard on him — or not hard enough?

Bye, Bye Recession: You Heard It Here First

I’m not an economist, but I have stayed at a Holiday Inn Express in the past. See, sometimes those advertisements stick with you. But I digress. The reason for the opening line: I have no training or expertise for the following statement but here goes — the current recession will officially end (if it hasn’t already) within the next few months.

The evidence is anecdotal — more good news than bad in recent announcements (company relocations and expansions, government reports, important consumer confidence measurements, etc.). Total doom and gloom is giving way to a quiet and slowly building change of course.

Just like recession beginnings, however, the official end won’t be known until many months after the fact. Extensive job additions and the return of fluid capital markets won’t be evident until sometime in 2010. Unemployment rates won’t turn for the better for quite some time. It simply takes awhile for business reality to catch up.

If this proves to have even a small semblance of truth, don’t worry, I will remind you. If Washington politics, continued automaker woes or any other factors have me way off base, nevermind!

Editor’s note: Well, Tom, maybe you’re not so crazy after all.

Putting Education Quality at the Top of the Priority List

For too many years, the Indiana Chamber has been fighting an uphill battle in its various education reform initiatives. A number of other like-minded organizations have come and gone – and support from the second floor Statehouse offices of the Indiana Department of Education has been tepid, at best, and probably better described as missing in (in)action.

State Superintendent of Public Instruction Tony Bennett promised a new day on the campaign trail and when he assumed office earlier this year. The latest in his series of changes for the better is today’s call for altering teacher licensing procedures to improve quality and increase flexibility in the hiring of school administrators.

Indiana Chamber President Kevin Brinegar offered the following statement:

“It’s proven in business every day that there is no longer just one route to effective organization leadership. Indiana school corporations cannot afford to close their doors to superintendent and principal candidates that do not possess the traditional education background.”

Brinegar, also a school board member in Noblesville, adds, “All school boards will have the opportunity to select the top person for the job. Degree, testing and licensure requirements – along with the abilities of elected school board members – will ensure that only the best will be placed in crucial school leadership roles.”

Regarding teacher licensing changes, Brinegar comments:

“The Indiana Chamber has represented the business community in the education arena for many years, advocating for teacher professional development and higher educator compensation. Eliminating any roadblocks to improving teacher quality will help avoid pending teacher shortages in key subject areas, make the state eligible for additional federal funding and, most importantly, help guarantee that our young people are receiving the best education possible.”

Preservers of the status quo will say that this opens the door to anyone and everyone to enter the classroom and the school leadership world. What it is doing is giving principals and the citizens we elect as school board members the flexibility they need to do their job and provide the best teachers and leaders for our students. Remember, that’s the mission here – giving those young people the best chance possible at future success.
 

An Early Look at the 2010 Congressional Vote

Politicos tell us it’s never too early to look ahead to the next election. Washington’s CQ Politics does so for Congress, rating 100 House districts in play in some form in the 2010 mid-term elections.

CQ has eight of Indiana’s nine incumbents in the safe category. They are Visclosky, Donnelly, Carson and Ellsworth on the Dems’ side, and Souder, Buyer, Burton and Pence for the Republicans. Baron Hill (9th District) is in the Democrat Favored listing.

Key items to watch, according to CQ:

  • Democrats will likely lose a portion of their 256-178 (one current opening) advantage. The party in charge of the White House typically loses seats during the first mid-term vote (although the GOP and President Bush were an exception in 2002)
  • Swing seats will be a big focus. In 49 districts, voters favored John McCain for president but elected a Democrat to the House; conversely, 34 districsts backed President Obama but put a Republican in the House
  • Of the 100 seats rated competitive, 59 are held by Democrats. Only three are viewed as toss-ups, a slightly higher numbers as highly competitive and the majority as slightly competitive

Much can change, however, over the next 15 months.

Is “Pay to Play” the Future of the Internet?

An online company’s CEO claims the future will feature more fees for Internet surfers. Bloomberg has the story of how more media giants are insisting the days of free Internet content are going the way of the dinosaur (or dial-up):

Barry Diller, chairman and chief executive officer of IAC/InterActiveCorp, said Web users will have to pay for what they watch and use, joining the refrain of media moguls who say an era of free Internet content is ending.

The media and technology executive, whose company runs the Ask.com search engine and the Match.com dating service, said it’s “mythology” to view the Internet as a system of free communications.

“It is not free, and is not going to be,” Diller said today at the Fortune Brainstorm conference in Pasadena, California. In addition to IAC, he is chairman of Expedia Inc., the online travel service, and Ticketmaster Entertainment Inc.

Diller, 67, joined a group of media chiefs, from Liberty Media Corp.’s John Malone to Walt Disney Co. CEO Robert Iger, who are challenging the accepted model that consumers pay for Internet access and then content is free. Diller predicted there will be three revenue streams: advertising, subscriptions and transactions.

Disney, the world’s biggest media company, is developing a subscription-based product for the Internet, Iger said on July 22 at the conference.

The Burbank, California-based company has opportunities to increase sales from the Web, Iger said. Online advertising can be improved, and marketers can target consumers by tracking their activities and interests. Subscription products are particularly promising to the company.

‘Willing to Pay’

“We have ample evidence both in traditional and new media that people are willing to pay for quality, to pay for choice and to pay for convenience,” Iger said. “And they are willing to pay for what they perceive as value.”

Companies from Disney to New York Times Co. are seeking ways to get more revenue from the Internet and counter the loss of traditional media subscribers and advertisers.

New York Times said in a survey of print subscribers this month that it’s considering a $5 monthly fee for access to its namesake newspaper’s Web site. The company also asked whether existing print subscribers would be willing to pay a discounted fee of $2.50 a month for access to the site. Nytimes.com, the most visited among newspapers’ sites, is currently free.

Yesterday, the newspaper publisher reported second-quarter profit almost doubled as the company cut jobs and wages to cope with a deepening advertising slump. Revenue declined 21 percent.

News Corp.

News Corp., publisher of the Wall Street Journal and owner of the Fox TV and film studios, plans to increase revenue at its Internet businesses by charging customers for news and entertainment, Jonathan Miller, the company’s chief digital officer, said yesterday at the conference.

Going forward, some companies will have material people are willing to pay for, and others won’t, said Miller, chief executive officer of News Corp.’s Digital Media Group.

Journalism will increasingly become a “paid model” online, said Miller. The Wall Street Journal already charges for online subscriptions.

Wage Hike Bad News for Unskilled Workers

Remember the past battles over minimum wage increases? The most recent was two years ago when Congress passed a three-part pay hike. The final installment went into effect last Friday, raising the minimum wage to $7.25.

It makes some sense on the surface. It makes none in reality. We’ll let Heritage Foundation expert James Sherk explain. Read his entire column here.

Unemployment will not fall until businesses resume investing in new enterprises. Ask yourself: Will raising the minimum wage encourage or discourage such investing? Will it encourage or discourage entrepreneurs from starting new small businesses? Raising the minimum wage now will help keep unemployment among unskilled workers high.

Employee Motivation: Perception Isn’t Reality

Tired of walking past your highly qualified staff, only to find them texting their loved ones or surfing the Internet for the latest news on Jennifer Aniston’s love life? Entrepreneur.com offers five myths about employee motivation that you shouldn’t overlook. Here’s the synopsis, but you should read the entire article as it could prove quite useful:

Business owners need to ensure that their employees are productive and eager to do the best job possible–this is especially true during today’s challenging economic times. Yet every industry and every organization has people who simply do not produce work in the quality that they are capable of providing. That can create costly problems for a manager.

Leaders often miss the mark when trying to ramp up employee productivity. Let’s debunk some motivational myths.

1. Money motivates. Of course, if you pay some enough money, they will do almost any job. And when you give bonuses to reward past behavior, the recipients are usually very happy (unless they were expecting a larger bonus).  The staff does a better job following the glow that accompanies added money.

2. Just keep them happy. Employers often go to great lengths to keep their employees happy–some offer game rooms; others have phones with free long-distance access. The theory here is that if we can keep the employees happy during their break time, it will translate into increased motivation and productivity. Unfortunately, this is not very effective.

3. Ignore Conflict. Few people, especially in the professional world, enjoy conflict. Most bosses and employees alike would rather “let something go” or “sweep it under the rug” than make an issue out of it. Too many managers are concerned about being liked that they don’t fulfill their responsibilities to catch problems quickly. Not addressing an employee’s problematic behavior doesn’t help any one.

4. Some people just aren’t motivated. This is a very common misconception. Everyone is motivated–but for different reasons. Walking through the offices, the manager may see someone playing computer games or sending personal email, this could be seen as the individual is not motivated because he’s not attending to the job tasks. But that may not be entirely correct.  At that moment, the “aimless” employee is motivated, perhaps even highly motivated. But that motivation is not work directed, nor is it productive for the company.

5. Smart employees don’t need to be motivated. Being “smart” carries an important cachet in American society. Everyone wants to have smart people working for them because these people are quick to learn, adapt and produce. Employers may erroneously believe that they don’t need to spend much time or attention on these staffers.

Hitting a (Green) High Note

Sweetwater Sound, the third largest music instrument and pro audio retailer in the world, has gone platinum.

The company’s Fort Wayne campus is Indiana’s first commercial building to receive Leadership in Energy and Environmental Design (LEED) Platinum certification (the highest rating) from the U.S. Green Building Council. Unveiled in January 2008, the 150,000-square-foot facility contains office, retail, warehouse and studio space. 

Among sustainability construction/design features:

• 19,026 (or 98%) tons of construction waste were diverted from landfills

• 31.4% of materials contain recycled content

• 80% of regularly occupied spaces throughout the office have access to daylight

• Annual water usage savings total 54% (restrooms contain waterless urinals; low-flow, light-powered faucets with occupant sensors; and dual flush toilets)

• 44% of materials were extracted, harvested, recovered and manufactured within 500 miles of the project site

Great to hear that one of Indiana’s growing success stories is receiving additional recognition for its environmental efforts. See the company details; read about Sweetwater Sound in the March-April 2008 BizVoice magazine; check out the current "green" issue of BizVoice.