Posted by: Stacy Perman on November 06
There is a growing faction that views disparity in income and a dearth of economic opportunities in the Middle East as much of a factor that fuels extremism and volatility as violence -- and one that has just as much gravitas to push the seemingly intractable Israeli-Palestinian peace process forever off its shaky hinges. In tandem with the political process, this group sees bolstering economic progress as an important strategy to secure a viable, sustainable path to peace. And that road they contend is trod with entrepreneurship. Moreover, unlike the unpredictable peace process, this is an approach with both measurable and tangible results.
Israeli industrialist Stef Wertheimer, the founder of Iscar Industries has devoted much of his time and resources to establishing industrial parks that help Israeli and Arab entrepreneurs in some of the lowest income, underdeveloped areas in Israel. Last year, when I wrote about Wertheimer, his handful of industrial parks had helped 175 companies develop, employed 5,000 people, and in 2007 had produced collective sales of $750 million. When I spoke with him, his sixth park established outside of Istanbul, Turkey in 2003 had grown to 70 companies that employed 300 people.
The Middle East Investment Initiative (MEII), a Washington D.C.-based non-profit group is another strong proponent of using businesses to create sustainability and peace. Established in 2005, MEII was formed specifically to stimulate the region’s fragile economies. And for the past two years, MEII (along with its partners, OPIC, the Palestinian Investment Fund, and CHF International) has been the quiet force behind a $228 million loan guarantee program helping small and medium-sized business ventures in the West Bank.
That is the reason why Berl Bernhard, the organization’s chairman and James Pickup, its president, swung by BusinessWeek’s New York office today. On their way to the Middle East, the pair came in to discuss this program that has helped a number of Palestinian businesses get off the ground for the first time.
Continue reading "A New Loan Program Helps West Bank Small Business"
Posted by: John Tozzi on November 06
The eight weeks between today and the year’s end could make a big difference for the nation's small retailers. Many shops do a high percentage of their business in the months of November and December -- as much as 25% or 30% for jewelers, electronics stores, and department stores, and likely even more for certain specialty shops. Robust holiday sales could salvage an otherwise dismal year.
"Clearly the best gains we’re going to see this year are going to come at the end of the year," says Frank Badillo, senior economist at Retail Forward. "They could make up for a lot of pain and suffering from the early part of the year." Panicked consumers cut their holiday spending last year by 4.5% in the months following the financial crisis in 2008, according to the group.
This year’s predictions are out, and most forecasters expect a slight rise from last year’s dismal figures. But small retailers that compete with big box stores and online discounters may see sales drop even if shoppers spend more overall. Though the economy has showed signs of growth, unemployment just topped 10.2%. The rising number of people jobless, underemployed, and those worried about the future will likely hold back spending.
Last month we asked for your help covering this story to get dispatches from the retail front lines. Today I’m pleased to introduce three companies we’ll follow over the next two months –- all small, independent retailers. These companies will share what they’re seeing and hearing from customers, whether their sales are up or down, and what strategies or promotions are working. We hope their insight will help your company this season. Here they are:
Einmaleins
Olympia, Wash.
Mathias Eichler, 32, runs Einmaileins, a European import shop in Olympia, Wash. he started in 2007. The store, located in the city’s downtown, sells “modern European lifestyle products” including kitchen and home items, books, and food. Eichler, who runs the shop with his wife but has no other employees, has averaged between $8,000 and $12,000 in monthly sales this year but hopes to more than triple that in December. He tries to draw customers into his shop with events like a First Friday gallery walk. “We’d rather compete with customer service and atmosphere, where big box stores can’t compete,” Eichler says. He also relies heavily on email marketing, Facebook, and Twitter to reach out to customers and promote his store.
Aunt Sally's Praline Shops
New Orleans, La.
Aunt Sally’s is a third-generation family business that makes the famous pecan candies in New Orleans’ French Quarter. The 38-employee company has a wholesale business, a retail shop that’s a staple on tourist itineraries, and an online mail-order business that usually makes up the bulk of sales during the holidays. Frank Simoncioni became CEO in 2005, four months before Hurricane Katrina devastated the city, and he says it has been a rebuilding process ever since. Though things were beginning to look better in the middle of 2008, further hurricanes in the fall followed by the financial crisis set the company back again. “That Christmas turned out to be really sour,” Simoncioni says. “It was the first year we took a major hit in the Web business.” He says tourism has never returned to pre-Katrina levels. Aunt Sally’s sales were down this year through September, and Simoncioni isn’t sure what to expect for the holidays. “We thought that the economy is pulling out of this recession, but the actual signs are not showing it.”
Overstock Art
Wichita, Kan.
Overstock Art sells hand-painted replicas of famous paintings online. Founder David Sasson, 40, has 14 employees in the United States and China, where the paintings are produced by local artists. The 7-year-old company mostly sells to consumers and small businesses, like restaurants or doctors’ offices looking for wall décor. Most paintings are priced between $100 and $200, and many customers buy them as gifts during the holidays. Overstock Art, which has annual revenue of under $4 million, was growing throughout 2008 at a 25% clip over the previous year, though that pace dropped off to single digits in the fourth quarter. Sasson says business was more or less flat in 2009 until mid-July, when sales picked up swiftly. September was his best month ever except for last December.
We'll check in with these three retailers throughout the holiday sales season. But we still want help from readers to get a sense of how small businesses across the country are faring this year. If you have a tale from your business you want to share, let us know. Or if you see a local shop with a creative promotion, surprising success story, or anything else worth noting, send us a note or a photo. Leave a comment, email me, or let us know on Twitter.
Posted by: Nick Leiber on November 06
This is a post by guest blogger Jonathan I. Ezor.
One of the most valuable features of the Web as a business medium is interactivity, the ability of a company to create a dialog with its customers (current and future) via the Web site. At the same time, though, a company may be concerned that users' actions on their site could expose the company to liability. Whether from defamatory statements about competitors or individuals on a Web site message board, inappropriate language or suggestions in a chat area meant for minors, or copyrighted material posted without permission to the comment area of a blog, users' interactions could lead to legal risk for the site owner, whether or not it knew or approved of the improper postings or actions.
Early in the development of the commercial Web, there were a number of lawsuits brought against Web site owners and service providers, seeking to hold them liable for actions of users. The courts, faced with situations that had no real-world analogues, decided these cases in a variety of ways, which left the hosting businesses in a position of not knowing whether they would be better off editing every post or leaving their sites completely unpoliced.
After a particularly troubling decision holding online service provider Prodigy liable for an anonymous and allegedly defamatory posting in its Money Talk message board, Congress finally decided to act, understanding that the lack of clarity and risk of liability could seriously impede the development of the Internet as a business and communications medium. The result has been two major "safe harbor" laws, the general safe harbor for content liability in
47 U.S. Code Section 230 (passed as part of the otherwise-unconstitutional Communications Decency Act of 1996), and 17 U.S. Code Section 512(c), a specific safe harbor for copyright infringement enacted as part of the Digital Millennium Copyright Act of 1998.
The two laws, though, are sharply different not only in what they cover, but in the requirements they place on companies seeking to take advantage of them.
Continue reading "Your Site, Others' Misbehavior: The Two U.S. Safe Harbor Laws"
Posted by: Nick Leiber on November 06
This is a post by guest blogger Don Sniegowski, the founding editor of the daily franchise news site BlueMauMau.
About as many franchise systems offer group health insurance coverage to franchise owners as there are snowflakes in the Mojave Desert. That's because insurers consider franchisees as separate companies from the franchising firm. So a franchised Burger King restaurant won't qualify for the deep group discounts that Burger King Corp employees receive. The result is that most franchise owners find health insurance too expensive to afford for themselves and their employees.
But one chain of some 550 print shops, Allegra Network, has found a way to buck the trend. The franchising firm is offering its franchise owners and their employees three types of PPO (Preferred Provider Organization) plans through Blue Cross Blue Shield of Michigan.
"Franchisor-based health insurance plans are rare in the franchising industry," said Carl Gerhardt, CEO of Allegra Network. Yet more than a third of Allegra's franchisees have signed on to a health care group discount, he noted. "Being part of a large franchise system like Allegra means that as more franchise owners join our health insurance program, there is a greater likelihood that cost increases will be kept to a minimum in the future."
Laura Pierce, Allegra's Vice President of Human Resources and Controller, explains that in the past insurance companies turned up their noses at covering franchise chains. "We could never find an insurance company that was willing to group several small businesses together under one umbrella and be willing to invoice each of them individually," says Ms. Pierce.
As the economy tightened in 2008, Allegra met with Blue Cross Blue Shield of Michigan.
The health care provider was willing to try.
Continue reading "Why So Few Franchise Chains Offer Health Insurance"
Posted by: Amy S. Choi on November 03
Here at SmallBiz, we spend a lot of time thinking about what drives an entrepreneur. The issue was at the heart of our special report earlier this year on social entrepreneurship, and our feature story on how entrepreneurs beat burnout and stay passionate about their business. We've asked several of our guest columnists to examine the subject, including Steven Berglas and Vivek Wadhwa.
In fact, you could say we're obsessed.
I don't think that's a bad thing. After spending an evening listening to Robin Chase, co-founder of Zipcar and current CEO of GoLoco, dissect one of Carl Jung's paintings at the Rubin Museum of Art last week, I'm convinced that obsession is the core of the entrepreneurial spirit. The Rubin has invited numerous artists, intellectuals, and executives to sit on stage with a Jungian analyst and respond to a painting from Jung's legendary Red Book diary, which famously chronicles the psychologist's descent into madness. Chase could have gone anywhere with the painting, which featured a deity-like man floating above an urban waterfront scene. Instead, she spent an hour discussing the potential tragedy of climate change if people don't deal with excess capacity (share your cars!) and sprawl (infrastructure first!).
This sort of single-mindedness, even when presented with madness, is what has helped propel Chase to success. I'd venture that other entrepreneurs who dive into their business ventures wholeheartedly have the same. After all, what is it to sacrifice everything for an idea, if not madness?
