Entrepreneur.com - Daily Dose

Franchises Love Veterans

2009-11-14T01:18:27Z

Back in July, I blogged about Maid Brigade's Veterans Franchise Giveaway. This week, to coincide with Veterans Day, the company announced the results of the contest, after narrowing the field down from over 100 entries to six finalists. The winner of Maid Brigade's "Gold Award"--including waived franchise fees, equipment, training, and $27,500 in working capital--is Major Philip Thomas Piaget, a retired Airborne Ranger.

Piaget is no stranger to being honored for his military service--over his 20-year career, he's been awarded a Bronze Star, a Purple Heart and numerous Meritorious Service Medals. He retired from the Army in September, and entered the contest the same month, writing in his application: "I think that my life as a leader of infantrymen and that of a quality Maid Brigade franchisee have very much in common. Trust that my subordinates and superior officers have in me was unquestioned, and my integrity was neither for sale nor up for negotiation. This same uncompromising standard will help to develop dedicated, loyal, and trustworthy employees who understand what we stand for as a company."

Maid Brigade isn't the only company to recognize the value that veterans can bring to a franchise. In fact, this week also marked a milestone for the International Franchise Association's VetFran--a program reinstituted after the September 11th attacks through which almost 400 franchisors offer special discounts for honorably-discharged veterans. Brian Gadson, another Army veteran, became the 1,500th person to purchase a franchise through a VetFran discount. His chosen franchisor, Meineke, reports that it has now provided $500,000 in VetFran discounts.

According to an IFA survey, Meineke is one of the top 10 VetFran participants (based on number of franchises sold to veterans). Here's the full list:
1. Matco Tools
2. The Dwyer Group (Aire Serv Heating & Air Conditioning Inc., Glass Doctor, Mr. Appliance Corp., Mr. Electric, Mr. Rooter and Rainbow Int'l. Restoration & Cleaning)
3. The UPS Store/Mail Boxes Etc.
4. Dunkin' Brands (Dunkin' Donuts and Baskin-Robbins USA Co.)
5. CruiseOne Inc.
6. Meineke Car Care Centers
7. PostNet Neighborhood Business Centers
8. Sport Clips
9. Mr. Handyman Int'l. LLC
10. Maui Wowi Hawaiian Coffees & Smoothies

Meanwhile, the IFA has been urging Congress to pass legislation that would encourage even more franchisors and veterans to team up. Introduced earlier this year by Representatives Leonard Boswell and Aaron Schock, the Help Veterans Own Franchises Act (H.R. 2672) proposes a tax credit for franchisors that offer discounts to veterans, as well as a tax credit for veterans who open franchise businesses in their communities.

Credit Card Transactions -- Could They Be Free?

2009-11-12T00:15:05Z

If you had told me a decade ago that I could pay $40 a month for all the phone calls I could make coast to coast, I wouldn't have believed it. I used to routinely have $250 phone bills. But now, as a reporter who frequently needs to call all over the country, I am a prime beneficiary of the new all-you-can-eat calling plans.

What if credit cards could work the same way for small businesses--a flat fee per month for all you can charge? In a thought-provoking article on the retail-tech/e-commerce site Storefront Backtalk, Focus Brands vice president of information technology Todd Michaud opines that there could be. The credit-transaction business, he argues, is ripe for a disruptive new model that would radically lower costs for merchants.

As I'm sure I don't have to tell anyone regular readers of the Daily Dose, credit-card transaction fees are the bane of every retailer's existence. Customers are always coming in to buy a $.95 pack of gum, and wanting to charge it. And the fee erases all the profit in the transaction, and more. It'd be sweet if card fees became more affordable.

How could it be done? Michaud suggests finding sponsors and basically turning card transactions into a marketing opportunity that would cover the costs, rather than retailers having to pay a fee. Card providers could sell ad space on charge receipts, or banner ads on card-signing pads. Merchants could agree to sell their data to sponsors in exchange for discounted rates.

Is the credit-card space ripe for a disruptive new model that could help take the fee burden off retailers? Or is it just a pipe dream? Comment and let us know what you think.

Personally, I smell a great business opportunity for someone with banking experience who could bring all the parties together to create a new model.

While Feds Debate, Small-Biz Health Care Rates Skyrocket

2009-11-12T17:00:00Z

The whole healthcare-reform debate hit home for me this week. I've been ignoring a large envelope that came from my health insurance agent about a month ago. They left me a sort of ominous-sounding phone message about it, too, but I hadn't had a chance to call back. You know how sometimes when you can smell something bad's up, you just want to avoid it? I was in that mode.

Then I started reading news stories about how small-business healthcare plans were all having their rates jacked up to the sky...and I finally got up the nerve to open the envelope. Then I about fell over.

I'm on a health plan through my local city chamber of commerce through my freelance writing business, for me and my three kids. When I signed up two years ago, I was paying about $450 a month in premiums. This year, that became $560 a month. Guess what they'd like me to pay for the same coverage next year? $840 a month. That's a more than 30 percent increase.

Apparently, it's not just me, though mine seems like it's top of the class for ridiculous rate hikes. The Poynter Institute's Al Tompkins reports the average hike is 15 percent--more like what I saw last year.

Obviously, I'm going to be looking for a new health care plan, and I gather I'm not alone. It'll be interesting to see if this small-business healthcare rate spike has any effect on the ongoing effort to create a national healthcare plan.

Are your rates going up? If so, what's your plan--suck it up, or look elsewhere? Cut benefits?

Does it change the way you feel about national healthcare reform? Leave a comment and let us know.

Run a Small Business and Win a Prize!

2009-11-09T22:33:02Z

There isn't much glory to running a small business. Day after day, you market, sell, hire, fire, economize, mentor, purchase, envision, order, organize, plan, and pay the bills. And nobody notices. Or you win some totally jokey award that doesn't really mean anything, and nobody notices.

Occasionally, there's an exception to the grind--a chance for a few outstanding small businesses to step into the spotlight and enjoy some national recognition for what they've built. One of those opportunities is coming up.

The Small Business Administration is looking for nominees for its annual National Small Business Week Awards. There are a raft of awards, including a Small Business Person of the Year from every state and a national winner, SBA Young Entrepreneur of the Year, and Small Business Exporter of the Year.

On the vendor side, there's also awards for contractors, lenders, individuals and organizations who champion or encourage small business success. You can't nominate yourself--you'll need to get a local organization to nominate you.

My experience is that besides the personal satisfaction of winning, the list of SBA award winners is a great place to be for connecting with media and becoming the subject of news stories. I know I've looked it over many times through the years when I was looking for good small-business stories.

You can download an application here. But you'll have to hurry--nominations have to be in your local SBA office by this Friday, Nov. 13.

There's one other fun contest coming up for would-be small business owners--if you're handy with a video camera, you might win a free, brand-new TCBY frozen yogurt franchise store. You enter by making a two-minute video about why you should win, completing an application form, and send it in. You'll want to get busy making your video, as entries for The Great TCBY Store Giveaway must be in by Nov. 30. More about it on YouTube.

Should Small Businesses Be Allowed to Be Bigger?

2009-11-06T00:52:23Z

For those who don't read the fine print on the Small Business Administration's website, the agency has proposed increasing the size definitions for small businesses in 71 business sectors, mostly within retail industries. It's the first proposed rule change on qualifying size since 1984.

Why should you care? It means bigger businesses would still qualify for SBA loans and other federal assistance to small business.

Now, is that a good thing or a bad thing? I'm of two minds.

On the one hand, small businesses that are succeeding tend to grow bigger. Should they be penalized for that success by not having access to SBA loans anymore?

On the other hand, if the category of qualified businesses gets bigger, it'll likely mean fewer loans for smaller small businesses--and those are the ones that usually have the hardest time finding capital, particularly as they launch. And if companies are growing and succeeding, shouldn't they be able to go out and get traditional loans without the SBA's backing?

Personally, I liked the analysis of Small Business Trends executive editor Anita Campbell, who opined last week that the SBA should stop tinkering with its arcane list of hundreds of various qualifying size standards and instead establish a single size standard that would apply across all business categories.

Whether you think the size-change proposal is good or bad, you've got until Dec. 21 to weigh in. Visit www.regulations.gov, or email sizestandards@sba.gov to voice your opinion.

CIT Bankruptcy: Tightening the Screws on Small Business?

2009-11-04T23:54:06Z

With the filing of a Chapter 11 bankruptcy reorganization petition late last week, the parent company of giant small-business lender CIT is hoping for a speedy trip through bankruptcy court. Small businesses that need loans, however, face a more uncertain future.

While the company has assured the public their lending units will operate normally during the bankruptcy process, not everyone seems convinced: Reuters headlined its story on the filing "CIT Failure To Leave Small Businesses Floundering." On the other hand, American City Business Journals site Portfolio.com titled its story "Bankruptcy Business As Usual." Only time will tell which is right.

CIT's financial woes aren't good news for the U.S. government and taxpayers, either--we lent CIT $2.3 billion we likely won't see again. Many fingernails are likely being bitten from the White House to Main Street, as CIT was the top provider of short-term loans against receivables, a loan type known as factoring.

Business that seek a factor loan are often in pretty dire straits. Getting an advance against receivables is roughly the business equivalent of going to a payday lender, in that rates are higher than for traditional loans. Translation: these businesses have tapped out their credit line, credit cards, and Aunt Mary, and have nowhere left to turn--and they need money fast. They can't wait another month or two for their clients to pay their bills.

If CIT's lending capability dips, some businesses may need to quickly find a new place to get factor loans. But smaller factor lenders (the Internet is crawling with them--JustInTimeCash, IFGNetwork, SolveCashFlowProblems and so on) have limited lending capacity, and it's unclear if even major CIT competitors Wells Fargo and GMAC can absorb all the potential CIT refugees. GMAC focuses on mid-sized businesses, so they may not be an exact fit for CIT's small-business lenders.

In any case, if a small business can't get a CIT loan anymore, it means starting all over establishing new banking relationships. It's unclear whether that can be done fast enough to keep the doors open for businesses on the edge.

If you have CIT loans, weigh in with your take on what the giant lender's bankruptcy is going to mean to you. Think you'll be affected? Are you making other plans? Or is it business as usual, as some hope?

Can LinkedIn's Connection Limit Hurt Entrepreneurs?

2009-11-04T00:29:25Z

When contributing writer Carol Tice wrote about the ROI of networking online, comments from readers revealed their uncertainty over the value of sites like Twitter and Facebook. So when LinkedIn--a site specifically designed for networking purposes--changed its user policy to limit the number of connections a person could have to 30,000, Entrepreneur.com investigated its potential effect on small-business owners and entrepreneurs.

Can LinkedIn's recent cap hurt entrepreneurs? Pick a side.

Yes
Sure, hardly anyone is directly affected. Fewer than 20 users (a minuscule fraction of total membership) are over the limit, and even President Obama claims only about 25,000 connections. But the real problem is what you lose indirectly, says "super connector" Steven Burda, who has more than 37,000 connections, at least 15,000 pending invitations and around 2,500 personal recommendations.

"The cap matters a lot to entrepreneurs and small-business owners," Burda says. "I have used LinkedIn to help multiple small businesses secure funding with venture capitalists, and over the years that I've been on the site, I've probably facilitated thousands, if not millions, of dollars worth of business deals."

But apparently, no good deed goes unpunished. The limit blocks Burda's ability to create more of these deals, and he suspects the change was partly motivated by the fact that LinkedIn is losing out on fees they charge unconnected members for introductory "inmails" ($10 a pop).

"The real victims are the people who lose out on joining a wider network, and miss a potential connection," Burda says. "If the platform really is for helping people, its users need to be able to network with each other." He adds that he just wants to start a dialogue with LinkedIn about preventing more restrictions from being implemented in the future. So far, he hasn't heard back.

No
The LinkedIn representative we reached declined to comment, but asked us to contact other members who were willing to provide an opposing perspective.

Enter Sheilah Etheridge, founder of SME Management and one of LinkedIn's earliest adopters. She views the value of Burda's networking method rather differently. "LinkedIn has its flaws, but the one flaw it does not have is limiting entrepreneurs from helping one another or themselves grow," she says. "There are countless members who help other people find opportunities, and none of them try and take credit for it or expect anything in return. That is the nature of networking."

Etheridge says she connected to Burda in 2006 and found him to be a good networker. But she began to suspect he was abusing the user policy by connecting to people he didn't know; now, he's "networking" by collecting names and making surface introductions (that rarely pan out) in exchange for endorsements. "It's quantity rather than quality, so how does that help an entrepreneur grow or succeed?"

LinkedIn is within its rights to set a cap, she continues, and 30,000 is a generous one, especially when accounts can be free. "People put in a lot of time to make this a real networking site with real value, but Burda's method cheapens and dilutes the experience."
__

In the end, it probably boils down to your personal view of how online networking is supposed to work, but there's one thing we can all agree on: There's no way a measly 30,000-connection cap can stop an entrepreneur from doing what needs to be done.

Tomorrow's Living-Wage Jobs

2009-10-30T20:40:56Z

Last night I was watching the HBO documentary Schmatta: Rags to Riches to Rags, which chronicles how Jewish and Italian immigrants created the New York garment district soon after the turn of last century, and built it into the largest employer in the city. It goes on to show how, after more than 70 years of being a thriving source of good-paying union jobs, it all disappeared as trade protections ended and NAFTA ushered in a new era of global free trade.

The film repeatedly asks the questions: How will we rebuild the American middle class? Where will tomorrow's living-wage jobs come from?

In the 1970s, the film reports, 95 percent of American clothes were made here. Today, it's 5 percent. The days when an unskilled laborer could learn to be a cutter or machinist on the job, make a good living, and be able to afford a house, a car, and other middle-class trappings seem gone. Just ask Detroit. Or ask Boeing workers in Everett, Wash., who learned this week that their company will build a new 787 assembly line in cheaper, nonunion South Carolina, instead of next to their existing union-staffed plant.

Despite the current gloomy headlines, I believe these moves don't spell the end of good, living-wage jobs in America.

Why? I look to my own family story. My grandfather originally sold buggy whips, working as a salesman for another company. When people started driving cars, he switched to automotive parts and started his own business, which thrived and left my grandmother well-fixed after he died. When his living-wage job disappeared, he looked at how the world and markets were changing, and figured out how to create another job--by building a successful business of his own, that offered others good jobs, too.

Yes, it's true that clothes are mostly made elsewhere now, and that the American public no longer seems to care to "look for the union label," as the old jingle went. Change has come, and it's wrenching, and there are workers who are the losers.

But all across this country right now, there's a surge of entrepreneurial energy as more and more workers strike out on their own. Having closely covered the rise of Amazon.com, I think that tomorrow's American living-wage jobs are going to come from new ideas, new businesses, and new entrepreneurs, who are out there right now, creating products, services and ways of doing business that will revolutionize how we even think of work and define a "good job."

I also think of American Apparel, which is seeing smash success making its clothes here in the USA. I think it's possible that as the "eat local" and "buy local" movements progress, we might see more consumer pressure to bring manufacturing back to our shores. Geopolitics may also drive a trend back to domestic manufacturing--think how nervous garment makers with factories in Pakistan probably are about now.

Where do you think tomorrow's living-wage jobs will come from? Comment and let us know.

Twitter Contest Lets You Pitch VCs

2009-10-26T22:57:45Z

If you're hoping to connect with venture capital firms to pitch your company story, a new contest may help--but you'll need to be ready to catch a plane to Seattle.

This year at Northwest Entrepreneur Network's signature networking event, Entrepreneur University, six lucky companies will get to make their pitch before a media panel and conference attendees. How do you qualify? A Twitter contest.

That's right--boil your business idea down to 140 characters and tweet it, using the hashtag handle #EUidol. Better get busy, as entrepreneurs are already pitching away in Twitterland. Winners will be decided by the editors of TechFlash. In addition, five more winners will be picked by members of Northwest Entrepreneur Network.

The deadline is this Friday, Oct. 30! So get cracking if you'd like to play Entrepreneur Idol in Seattle next week. Create a snappy pitch and you could be winging your way to the Bellevue Hyatt Regency, east of Seattle, for Entrepreneur University on Nov. 5.

May the best tweeter win!

Get a Holiday Sales Boost

2009-10-29T19:05:03Z

If you're a retailer who sells online, and you'd like to give your sales a free, end-of-season boost, you might want to join in on the second annual Free Shipping Day.

Created last December on a whim by Luke Knowles of free-shipping coupon site Fre eShipping.org, Free Shipping Day was designed to help retailers on the last day when virtual shops can guarantee delivery before Christmas. Apparently, online shopping starts to decline around Dec. 12, as customers get nervous about whether packages will arrive, and Knowles thought this might help keep the online sales going.

The response from retailers was overwhelming -- Bloomingdale's, JC Penney, Kohl's and Macy's were among the major retailers that jumped on board, along with many smaller retailers. In all, 250 companies participated, and more than 250,000 shoppers visited the FreeShipping site to browse the deals. Many saw a big one-day spike in sales on the event day.

This year Free Shipping Day is back and bigger than ever--Knowles is expecting more than 500 retailers to get on board, which should translate to even bigger traffic. If you can afford to eat the shipping costs for a day, it should be great free marketing exposure--your company logo and free-shipping offer gets posted on the FreeShippingDay.com site merely by visiting the site and filling out a form.

Have you seen any other good free-marketing offers for this holiday season? Comment below and let us know.