Being able to fund your startup or finding the right funding source on time has meant the difference between realizing your life long dream and letting it die even bore it could start off. There are quite a few regular ways of funding such as personal funds, help from friends and family, bank loans, angel or VC funding etc. I found an interesting article about 3 alternative ways of funding which could help you with much needed cash. Now, they do have pros and cons so they should be considered carefully but I thought it would be a good idea to share them nonetheless. It is authored by David Nilssen and the most important parts are posted below.
by David NilssenIf you’re already a successful business owner or have just received a generous inheritance, you’ll have no trouble financing a new venture. Not only do you have cash, but banks are probably lining up to loan you money. You’ve already got it, so you don’t need it, but that’s exactly when financial
institutions (and people) are anxious to give it to you.
But what about the rest of America’s aspiring entrepreneurs? There are plenty of smart, ambitious and hardworking folks who need to secure financing to build or buy a business. Traditional small business financing—such as the Small Business Administration (SBA) loan programs—can be very difficult to secure, so if you’ve gone down that road and been denied, you are not alone. And I am here to tell you that there is still opportunity ahead: There are other ways to fund your business—some of which you may not even have heard about yet—and one of them will be right for
you. So, to make your search a little easier, here are my top three alternative options for funding a business:
1. Portfolio Loans
Many entrepreneurs fund a business by selling securities they personally own and then investing the cash they earn from the sale into their business. What those entrepreneurs may not realize is that there’s an option to use a portion of a portfolio to invest in a small business or franchise without selling the underlying securities. A portfolio loan allows you to leverage the value of your portfolio assets into a revolving line of credit with a loan-to-ratio value (a lending risk assessment that lenders use) between 65 percent and 90 percent. These loans can offer fair interest rates and a longer amortization timeframe, and generally they move from application to approval in just a few weeks. In addition to attractive terms, entrepreneurs can continue to reap the rewards of appreciation as their stocks increase in value.
What to watch out for:
Unlicensed and unregulated lenders are what you need to avoid. The Financial Industry Regulatory Authority strongly recommends using their FINRA BrokerCheck tool to verify the licensing status and background of promoters, lenders and anyone else involved in the transaction. And if the value of the portfolio declines and the borrower has drawn down the entire line, the borrower may have to bring in outside capital, or sell securities, to maintain the appropriate loan-to-ratio value.
2. Rollovers as Business Startups
Rollovers as business start-ups (ROBS) are also known as 401(k) rollovers, and they’re becoming more and more popular. Some estimate that 30 percent of new franchises each year are funded through this arrangement. ROBS allow you to invest up to 100 percent of your existing retirement assets into a business or franchise by migrating your retirement funds into a new account that then operates as a stakeholder in your business. Migrating the funds this way allows entrepreneurs to avoid paying taxes and penalties for withdrawing funds from their retirement account early; simply emptying all or a portion of your retirement account before turning 59 ½ incurs sizeable penalties and regular income taxes. ROBS began fairly recently, with the Employment Retirement Income Security Act of 1974 (ERISA), which was designed to encourage investments in
What to watch out for:
In order for ROBS to work smoothly and avoid IRS penalties, the arrangement must be set up to exacting standards. Unless you’re extremely well-versed in tax or ERISA law, you should seek the help of a qualified professional to initially form and provide ongoing administration for the plan.
Put simply: Hire a firm that specializes in these types of transactions.
3. Unsecured Credit
Another method of funding a new business is through an unsecured line of credit. (The traditional version of this method—using a secured line of credit—is to use your home or other business’s assets as collateral.) If your personal credit is strong, an unsecured line of credit can be a good way to get your hands on up to $125,000 in startup capital. It’s called “unsecured” because the lender does not require you to pledge personal assets as collateral. Many entrepreneurs prefer not to pledge their personal assets while in start-up phase because a successful outcome is uncertain. For a new business, your application will most likely include a business plan and up to three years of earnings projections. Be prepared to explain exactly what you’ll use the money for, so the lender will feel confident that you’ll be able to pay it back.
What to watch out for:
There are many unsecured programs available with varying interest rates and origination fees. Shop around for the best program but do not apply until you’re certain of the direction you want to proceed—too many hard inquiries into your credit history in a short period of time can damage your credit score and decrease the likelihood that you’ll be approved for a loan with favorable terms. If you have any negative reports (like late payments) on your credit history, make sure you resolve them before seeking an unsecured loan.
By Sunil SrivastavaFor most small & medium business owners and their management team, it’s often a challenge to take the time to stand back from the daily business operations and be able to take stock of their performance and long-term strategic issues. It is however imperative that they review their progress and understand how to get the best out of their business & implement the steps necessary to make them profitable & prosperous.
What makes a business tick?
Businesses that understand ‘what makes them tick’ are the ones that are most successful and profitable. They also do not develop complicated development strategies. They understand that the best strategies are usually the simplest as they are easier to communicate, understand and implement.
The simpler and easier it is for everybody to understand what delivers profit, the easier it is for them to align and support the strategy. The ability to identify and crystallize the most important performance metrics is a simple & effective way of communicating strategy. It also ensures that everyone is focused on a simple model that drives profit in a consistent & repeatable way. These businesses know the main business drivers and use the most important success metrics to monitor their performance against these drivers, and they use this information to ensure they have:
- winning products or services that people want to buy and will continue to want to buy
- clear objectives simply set out and communicated to all staff to motivate them
- a dedication towards continual improvement
- effective management information and financial control
- efficient services and distribution
- dedicated management with the right information & business responsibilities
- Compliant with regulations and minimum disruption to routine.
Business Ownership & Organization Checklist
Selecting the right business structure is a very important decision for a business owner as it affects personal liabilities, taxation and levels of control in the business. The wrong business & financial structure can act as a constraint on the development of your business and cause problems. Hence
having the right information should enable you to determine the right structure for your business.
Businesses can be Sole Proprietorship, General Partnership, Limited Liability Company, Limited Liability Partnership, C Corp, S Corp, etc. Make sure you talk to an Attorney / CPA to determine the right fit for you.
Use this checklist to determine if the business structure is right for you.
Management & Governance Checklist
A Business owner has to understand the value in their proposition to customers, including the tangible and intangible benefits their products or services provide.
Businesses must establish and manage the process for setting vision, mission, strategy and direction in order to achieve superior performance. These then need to be translated into plans, projects and actions throughout the organization.
Use of this checklist will help you understand the importance of clarity of vision, mission and values in a business’s offering.
Are You Creating Value through Your Business?
Your business has to add value. Make sure your selling price covers all your costs of production and promotion. You cannot sell below cost for very long without going bankrupt. Remember also that working more closely with your customers and suppliers can bring competitive advantage. Understanding the value drivers in your business is essential for maximizing your company’s
Use this checklist to look at the factors that can improve or destroy value for your business.
Are You Proactively & Effectively Managing Innovation?
Innovation is all about continuously moving ‘up the value chain’ and adding value in each and every product and service. Successful businesses understand the importance of innovation and incorporate processes into every aspect of their operation to innovate continuously. Innovation is essential for business survival in today’s highly competitive markets where it is increasingly difficult to differentiate between products and services.
This checklist covers the areas that you should consider to ensure your company manages innovation effectively.
Do you know your Business’s Financial Health?
A mix of daily earnings, equity, long-term/short term borrowing, creditors and lines of credit funds a business. It is important that the right balance is struck between these. Each has a cost and you have to be sure that you understand it and are able to pay it.
Understanding your financial position is an important step in evaluating the health of your business. Cash is the life-blood of any organization and must be closely managed to ensure the business can survive and grow effectively. Understanding the basic concepts of cash flow will help you plan for any unforeseen eventualities that may occur.
This checklist will help you analyze the financial health of your business and help you calculate the financial ratios that you need to know.
Do you know your Business’s Physical Health?
You have invested in physical assets such as machinery and equipment. It is essential that you get the most from your investment, but you must also keep an eye on replacement. Technological change is rapid. You should not allow your processes to become non-competitive. Effective asset management helps to improve productivity and performance and reduce costs. This checklist covers the areas that you should consider to optimize your company’s use of assets.
This checklist will help you analyze the physical health of your business.
Do you know your Market Dynamics?
Information about your market and your competitors will enable you to plan your business
strategy and your business structure better. While it may be difficult to build up a complete picture, you should seek to obtain as much information as you can from your customers, trade bodies, suppliers, competitors and the media. Getting a good understanding of how your market is expected to develop is essential if your business is to make the most of its opportunities and remain competitive.
This checklist looks at the competitive dynamics in your market.
Do you continually improve your business?
Quantity without quality could ruin your longer-term market prospects. Quality is a measure of your ability to meet the needs of your customers in a more cost-effective way than your competitors. Be careful to avoid ‘over quality’. Your products and services need only meet your customers’ needs and what they are prepared to pay, not exceed them.
Best value requires businesses to ensure continuous improvement in their performance,
and to demonstrate a commitment to sustainable development.
This checklist looks at the factors affecting quality in your business to examine where there may be opportunities for improvement.
Is your Team Optimized for Success?
Management is all about achieving success through people. Manage them properly and enable them to maximize their own contributions to the success of the business. Good people management is at the heart of achieving a successful, high performance business.
This checklist looks at the key criteria for achieving success through people.
Are you ready for Growth?
Consider whether you want or need to grow. If you decide to grow then do so in a manner that the business can sustain. Appraise the time it takes for you to bring a new project on stream. Match the market with all the resources necessary to achieve your objective. As markets mature, companies need to find new sources of growth. Businesses that are not growing through new product and service introduction are likely to be in decline, as their existing sales portfolio inevitably matures.
This checklist examines the key drivers for growth and managing growth.
Are you in compliance with Rules and Regulations?
Don’t let regulations put you off. An integrated approach to information will mean that many of the demands of the tax man and others can be met from the same information source that enables you to run your business better. It is important that you comply with statutory and other regulatory obligations. Non-compliance is costly and could put you out of business.
This checklist covers the key areas of compliance that businesses need to be aware of.
In summation, the on-going economic downturn means that now, more than ever, small companies need to take a good look at the fundamentals of their businesses, and understand how they can improve performance, strip out any unnecessary costs and focus on the right strategy to survive and take their businesses forward.
When times are tough, knowing exactly what you are facing and being realistic about what needs to change will put your business in better shape to respond quickly to further changes in the market (be they positive or negative) as they occur. Using these checklists will place you in a better position to understand areas of weakness in your business and your potential exposure to the downturn. However, the key thing is prioritizing which areas require immediate attention
and identifying appropriate actions to deal with them.
Suggested actions you could take:
- Improve your decision making – With all the information & insight you have gathered, value creation & creating a competitive advantage should drive all your business decisions.
- Seek fresh perspectives: Business owners and managers are often so close to the action that they lose objectivity. It might help to talk to a trusted professional such as your CPA, Accountant or mentor.
- Evaluate your Strategy: Now that you have access to more current and relevant data, evaluate your strategy and see if it aligns with your mission, vision and core values.
; SUNDAY, NOV 10, 2013 11:30 AM PSTThe below article is reproduced from Salon.com as is because it is a must read for everyone & anyone who wants to see real time proof of the devastation being caused by Wal-Mart and similar big box stores, who simply decimate the economy of almost every community that they move into.
Excerpted from "Happy City" Jobs, Money, and Geometry
Most of us agree that development that provides employment and tax revenue is good for cities. Some even argue that the need for jobs outweighs aesthetic, lifestyle, or climate concerns—in fact, this argument comes up any time Walmart proposes a new megastore near a small town. But a clear-eyed look at the spatial economics of land, jobs, and tax regimes should cause anyone to reject the anything-and-anywhere-goes development model. To explain, let me offer the story of an obsessive number cruncher who found his own urban laboratory quite by chance.
Joseph Minicozzi, a young architect raised in upstate New York, was on a cross-country motorcycle ride in 2001 when he got sidetracked in the Appalachian Mountains. He met a beautiful woman in a North Carolina roadside bar and was smitten by both that woman and the languid beauty of the Blue Ridge region. Now they share a bungalow with two dogs in the mountain town of Asheville.
Asheville is, in many ways, a typical midsize American city, which is to say that its downtown was virtually abandoned in the second half of the twentieth century. Dozens of elegant old structures were boarded up or encased in aluminum siding as highways and liberal development policies sucked people and commercial life into dispersal. The process continued until 1991, when Julian Price, the heir to a family insurance and broadcasting fortune, decided to pour everything he had
into nursing that old downtown back to life. His company, Public Interest Projects, bought and renovated old buildings, leased street-front space out to small businesses, and rented or sold the lofts above to a new wave of residential pioneers. They coached, coddled, and sometimes bankrolled entrepreneurs who began to enliven the streets. First came a vegetarian restaurant, then a bookstore, a furniture store, and the now-legendary nightclub, the Orange Peel.
When Price died in 2001, the downtown was starting to show signs of life, but his successor, Pat Whelan, and his new recruit, Minicozzi, still had to battle the civic skeptics. Some city officials saw such little value in downtown land that they planned to plunk down a prison right in the middle of a terrain that was perfect for mixed-use redevelopment. The developers realized that if they wanted the city officials to support their vision, they needed to educate them—and that meant offering them hard numbers on the tax and job benefits of revitalizing downtown. The numbers they produced sparked a eureka moment among the city’s accountants because they insisted on taking a spatial systems approach, similar to the way farmers look at land they want to put into production. The question was simple: What is the production yield for every acre of land? On a farm, the answer might be in pounds of tomatoes. In the city, it’s about tax revenues and
To explain, Minicozzi offered me his classic urban accounting smackdown, using two competing properties: On the one side is a downtown building his firm rescued—a six-story steel-framed 1923 classic once owned by JCPenney and converted into shops, offices, and condos. On the other side is a Walmart on the edge of town. The old Penney’s building sits on less than a quarter of an acre, while the Walmart and its parking lots occupy thirty-four acres. Adding up the property and sales tax paid on each piece of land, Minicozzi found that the Walmart contributed only $50,800 to the city in retail and property taxes for each acre it used, but the JCPenney building contributed a whopping $330,000 per acre in property tax alone. In other words, the city got more than seven times the return for every acre on downtown investments than it did when it broke new ground out on the city limits.
When Minicozzi looked at job density, the difference was even more vivid: the small businesses that occupied the old Penney’s building employed fourteen people, which doesn’t seem like many until you realize that this is actually seventy-four jobs per acre, compared with the fewer than six jobs per acre created on a sprawling Walmart site. (This is particularly dire given that on top of reducing jobs density in its host cities, Walmart depresses average wages as well.)
Minicozzi has since found the same spatial conditions in cities all over the United States. Even low-rise, mixed-use buildings of two or three stories—the kind you see on an old-style, small-town main street—bring in ten times the revenue per acre as that of an average big-box development. What’s stunning is that, thanks to the relationship between energy and distance, large-footprint sprawl development patterns can actually cost cities more to service than they give back in taxes. The result? Growth that produces deficits that simply cannot be overcome with new growth revenue.*
“Cities and counties have essentially been taking tax revenues from downtowns and using them to subsidize development and services in sprawl,” Minicozzi told me. “This is like a farmer going out and dumping all his fertilizer on the weeds rather than on the tomatoes.”**
Price, Whelan, and Minicozzi helped convince the city of Asheville to fertilize that rich downtown soil. The city changed its zoning policies, allowing flexible uses for downtown buildings. It invested in livelier streetscapes and public events. It stopped forcing developers to build parking garages, which brought down the cost of both housing and business. It built its own user-pay garages, so the cost of parking was borne by the people who used it rather than by everyone else. All of this helped make it worthwhile for developers to risk their investment on restoring old buildings, producing new jobs and tax density for the city.
Retail sales in the resurgent downtown have exploded since 1991. So has the taxable value of downtown properties, which cost a fraction to service than sprawl lands. The reborn downtown has become the greatest supplier of tax revenue and affordable housing in the county—partly because it relieves people of the burden of commuting, and partly because it mixes high-end lofts with modest apartments. All of this, while growing what one local newspaper emotionally described as, “a downtown that—after decades of doubt and neglect—is once again the heart and soul of Asheville.”
For most Small & Medium Business (SMB) owners and their management team, it’s often a challenge to take the time to stand back from the daily business operations and be able to take stock of their performance and long-term strategic issues. It is however imperative that they review their progress and understand how to get the best out of their business & implement the steps necessary to make them profitable & prosperous. This is especially true if there have been recent changes to their business, their market or the economic environment that they operate in. SMBs often fail because owners are unaware of the many aspects that can prevent their business from growing and being successful as the business is organized around the owner’s specific area of expertise, such as marketing, accounting or production and they are not able to see the big picture.
In the first part of this article, I am going to discuss the importance of a business audit, the importance of understanding your business, how & why to develop a business plan and the role of performance metrics. In the second part I will be sharing a number of checklists which will help you analyze your business and benchmark performance standards for the future and also suggest possible next steps.
HOW TO USE THIS AUDIT
If you want to get the maximum benefit from this audit, please make sure that you read through all the material and honestly answer all the questions, with an “Yes” answer indicating no problem and a “No” answer indicating a problem in that area.
This audit is more than a simple audit about management or finances. It provides an overview of the core aspects of your business including its soul i.e. Vision, Mission & Values. Apart from that, the type of organization you are, value proposition, innovation capability, physical assets, marketing, advertising & public relations, financial planning, human resources, growth plans and governance & compliance are also covered. Once the audit is complete, you must & analyze each section of the audit to develop an action and next steps.
A healthy & successful business is well rounded and all the core areas are well balanced. The audit will help the business owner/manager identify the areas that need to be worked on and regular audit will help the business become more adaptive, efficient & prosperous.
Now, more than ever, businesses need to make sure that they are:
· Headed in the right direction
· Competing in the right markets, with the right products and/or services
· Optimizing their market situation - performing better than the competition
· Using the right mix of assets, skills, finance, infrastructure and relationships that enables them maximum value to their customers
· Minimizing the costs that do not add value to their business or customers
· Aware of external environmental changes and are building the capability to respond quickly to new opportunities or threats
· Measuring their performance continuously so that they are always aware of their current performance and the successes or failures of their strategic initiatives.
Two recent articles, Rich Entrepreneur: The Wealthy Aren’t Job Creators, Middle-Class Workers Are by Bryce Covert & The Next Social Contract by Michael Lind that I read have quite succinctly point out why the American middle class is struggling while the top 1% is better off than ever before in history and also call out the fallacy that "the Super Rich (1%) are the job creators".
Bryce Covert writes that "Entrepreneur and self-described one percenter Nick Hanauer warned Congress that rich people like him aren’t the engines of the economy. In a testimony before the Senate Banking Committee, he explained why, in fact, middle-class workers are the economy’s real job creators:
In the same way that it’s a fact that the sun, not earth is the center of the solar system, it’s also a fact that the middle class, not rich business people like me are the center of America’s economy. […]
As an entrepreneur and investor, I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all have failed and all those jobs would have evaporated.
He described what he calls a “virtuous cycle” in which middle class consumers have money to buy goods, which increases demand and therefore hiring. The rich, on the other hand, don’t fuel the economy with their consumption in the same way. “I earn 1,000 times the median wage, but I do not buy 1,000 times as much stuff,” he noted."
On the other hand, inspite of record corporate profits and sky high CEO compensations (which only recently are seeing a downswing), as per a New America Foundation report, minimum wage has changed little in the last 50 years. Come on, 50 years and the majority is still making what they did a half century ago? Prices for everything are changing as they are keeping pace with the changing times, then how come we don’t have a "Living Wage"? Shouldn't the minimum wage keep pace with the changing times?
In the op-ed “When Capitalists Cared”, author Hedrick Smith states that “In 1914, not long after the Ford Motor Company came out with the Model T, Ford made the startling announcement that he would pay his workers the unheard-of wage of $5 a day.
Not only was it a matter of social justice, Ford wrote, but paying high wages was also smart business. When wages are low, uncertainty dogs the marketplace and growth is weak. But when pay is high and steady, Ford asserted, business is more secure because workers earn enough to become good customers. They can afford to buy Model Ts.”
He goes on to note that “Other executives bought his logic, and just as important, strong unions fought for rising pay and good benefits in contracts like the 1950 “Treaty of Detroit” between General Motors and the United Auto Workers.
Riding the dynamics of the virtuous circle, America enjoyed its best period of sustained growth in the decades after World War II , from 1945 to 1973, even though income tax rates were far higher than today. It created not only unprecedented middle-class prosperity but also far greater economic equality than today.”
When Hedrick Smith talks about the “virtuous cycle” he is pointing to the fact that employers like Ford, GM, Chrysler, etc. at that time understood the importance of paying their workers a livable wage. A wage from which a worker could raise a family, save for the future and hope to live a virtuous life, meaning they did not need to depend on anybody else’s pity or handout. And he also points out that even though taxes were higher then, than today, it created a very prosperous middle class and thereby upward mobility & greater economic quality.
We now seem to have the case of the “Vicious Cycle”. This phenomenon started quite a while ago and one of the earlier instances were seen after the 2001 dotcom crash. Even during those times, Wall Street Executives & CEO’s got huge salaries & even bigger bonuses. It did not even seem to matter that those same companies are laying-off massive number of employees. The New Straits Time (September 3, 2001) reported that even as companies laid of tens of thousands of employees (CISCO- 8500 Dell- 5,800), their CEO’s John Chambers & Michael Dell made roughly US$157 million & 201 million respectively. And that was just the beginning. A similar scenario was repeated during the 2008 financial meltdown. Even while the whole economy was crashing, massive layoffs were taking place and the Lehman Bros were imploding, senior executives at firms such as AIG, Goldman Sachs, Chase, BOA, Countrywide, etc. were giving themselves huge salaries & bonuses. This transition from “Virtuous Cycle” to “Vicious Cycle” over the past 2 decades has not only led to major layoffs but overseas shipping of most of the manufacturing and support jobs, salaries cut across the board, health benefits & 401Ks decimated.
When employers devalue a workers work and pay them lesser than what they were being paid for the same work even an year ago, what did they think was going to happen? When the worker can only pay for the essentials, their disposable income goes down and they start cutting down on other expenses and this leads to even lesser services or cheaper products from businesses as that becomes the new normal. With cheaper products or poorer services, the workers make even lesser money and in return they can afford even less and hence cut further back on their spending. The bankrupting race to the bottom continues and the “Vicious Cycle” continues until the only ones left are the very rich or the very poor. That scenario cannot be good for the economy. And that’s why squeezing the middle class is not good for the economy.
Does David Brandt hold the secret for turning industrial agriculture from global-warming problem to carbon solution?
—By Tom Philpott
)CHATTING WITH DAVID BRANDT outside his barn on a sunny June morning, I wonder if he doesn't look too much like a farmer—what a casting director might call "too on the nose." He's a beefy man in bib overalls, a plaid shirt, and well-worn boots, with short, gray-streaked hair peeking out from a trucker hat over a round, unlined face ruddy from the sun.Brandt farms 1,200 acres in the central Ohio village of Carroll, pop. 524. This is the domain of industrial-scale agriculture—a vast expanse of corn and soybean fields broken up only by the sprawl creeping in from Columbus. Brandt, 66, raised his kids on this farm after taking it over from his grandfather. Yet he sounds not so much like a subject of King Corn as, say, one of the organics geeks I work with on my own farm in North Carolina. In his g-droppin' Midwestern monotone, he's telling me about his cover crops—fall plantings that blanket the ground in winter and are allowed to rot in place come spring, a practice as eyebrow-raising in corn country as holding a naked yoga class in the pasture. The plot I can see looks just about identical to the carpet of corn that stretches from eastern Ohio to western Nebraska.
But last winter it would have looked very different: While the neighbors' fields lay fallow, Brandt's teemed with a mix of as many as 14 different plant species.
Screwing up from time to time is part of the entrepreneurial process--but not all mistakes are created equal.
By Ilya Pozin July 11, 2013
Entrepreneurship, at its best, is synonymous with learning. Don’t let the overnight success stories fool you. The more common story looks like this: test a product, fail, retest, and improve. Mistakes are a crucial part of this process.
Of course, not all mistakes are productive. Throughout my years in the start-up community, I’ve witnessed entrepreneurs make some of the same counterproductive mistakes again and again. And hey, I’ve made my share of them too.
Here are nine of the most common–and easiest to avoid:
1. Trusting your gut, rather than getting validation for your idea.
Your business idea may seem like a profitable game-changer, but without validation you may be setting yourself up for failure. Before you invest any time or money into your idea, spend time testing it. Consult with experts from the start-up community and get your product idea in front of potential customers so that you can learn–and adapt–based on their feedback.
2. Not getting your business to market fast enough.
Far too many business ideas fail due to a slow launch, which needs to be both stealthy and strategic to be successful. Don’t spend ages building out your idea and features. Instead, build out your most valuable product, release it, and see how people react to it. In the end, it’s important not to overbuild, because features alone don’t make start-ups successful.
3. Not knowing when to pivot.
Through your early validation efforts, you’re likely to gain feedback that you didn’t anticipate. Rather than throwing in the towel or ignoring what you’ve learned altogether, this should inspire you to change your business model to prevent failure. Many successful business ventures have come through calculating a new route.
By Susie MadrakIf only politicians would stop blathering about the middle class and do something for those who are now poorer than ever. If only people could get full-time jobs. Feel all that freedom trickling down:
The economic "recovery" just keeps getting worse for the average worker: U.S. employers squeezed their employees even harder than usual in the first quarter, leading to the biggest drop in hourly pay on record.
Hourly pay for nonfarm workers fell at a 3.8 percent annualized rate in the first quarter, the Bureau of Labor Statistics reported on Wednesday. This was the biggest quarterly decline since the BLS started keeping track in 1947. Some of the drop was payback for a 9.9 percent surge in hourly pay in the fourth quarter of 2012, as employers shoveled money out the door to avoid tax changes they expected to take place in 2013.
But there have been plenty of such quarterly pay increases in the past. Many were even bigger. Some went on for several quarters at a time. And never has there been such a steep pay drop in response as there was in the first quarter of this year.
Smoothing out the quarterly ups and downs doesn't make the picture look any better. Hourly worker pay rose just 1.9 percent in 2012, a pitiful increase that barely kept up with the 1.8 percent gain in the consumer price index. That was the third-weakest annual increase in hourly pay since 1947, topping only the 1.4 percent gain in 2009 and a 1.8-percent gain in 1994.
Two recent articles I found were very interesting and call out the fallacy that "the Super Rich (1%) are the job creators". Bryce Covert writes that "Entrepreneur and self-described one percenter Nick Hanauer warned Congress that rich people like him aren’t the engines of the economy. In a testimony before the Senate Banking Committee, he explained why, in fact, middle-class workers are the economy’s real job creators:In the same way that it’s a fact that the sun, not earth is the center of the solar system, it’s also a fact that the middle class, not rich business people like me are the center of America’s economy. […]As an entrepreneur and investor, I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all would have failed and all those jobs would have evaporated.He described what he calls a “virtuous cycle” in which middle class consumers have money to buy goods, which increases demand and therefore hiring. The rich, on the other hand, don’t fuel the economy with their consumption in the same way. “I earn 1,000 times the median wage, but I do not buy 1,000 times as much stuff,” he noted." (read more)On the other hand, inspite of record corporate profits and sky high CEO compensations (which only recently are seeing a downswing), as per a New America Foundation report
, minimum wage has changed little in the last 50 years. Come on, 50 years and the majority are still making what they did a half century ago? Prices for everything are changing as they are keeping pace with the changing times, then how come we dont have a "Living Wage"? Shouldn't the minimum wage keep pace with the changing times?
From "The New America Foundation".
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