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5 News Stories Not to Miss This Week

Sequestration trickles down to business travel, Subway's big lunch coup, and the five cities where entrepreneurs are most likely to be audited.
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Some stories from the week for those on the move.

1. Travel Report: Expect Delays

American Airlines grounded hundreds of flights last week because of a massive computer problem that affected primary and back-up systems for hours. But they still haven't found what caused the hiccough, and all this as they try to integrate the acquisition of U.S. Airways.

Not that American is the only airlines facing some... challenges. Lufthansa canceled 1,700 flights because of a union strike. And in case any other carrier felt a touch of competitive schadenfreude, the FAA has started air traffic controller staff furloughs because of the budget sequester (remember that political debacle?), which is turning into flight delays pretty much everywhere in the country. Did someone just ask for the Greyhound bus schedule?

Even if you and your staff don't have to travel, you haven't missed the bullet. All sorts of things move by airline, including packages. So you might want to officially move the "last minute" up by 24 hours, just to be safe. Similarly, order rush supplies a day early when possible to avoid an operationally painful disappointment.

2. About Those Spreadsheets...

If you think airline software can cause problems, look at the havoc you can wreak with a spreadsheet. Harvard economists Carmen Reinhart and Kenneth Rogoff had written a highly influential paper that claimed to show GDP growth in countries slowed significantly after national debt hit 90 percent of GDP. The research fueled much of the recent demand for austerity budgets, although the pair for years would not release their underlying data. Unfortunately, when they finally did, a spreadsheet mistake found by graduate student Thomas Herndon undercut their argument and possibly sent a lot of public policy chasing a mistake. Reinhart and Rogoff admit the error but say that the conclusions are still correct. Herndon and others disagree.

3. The Tax Man Followeth

You're more likely to face an IRS audit if you live and run a business in and around Los Angeles, San Francisco, Houston, Atlanta, or the District of Columbia. Why? Because that's where the IRS thinks that most tax cheating goes on. You're particularly at risk if you run a small business in construction or real estate. Large amounts of deductions for your income, or large amounts of expenses for the size and type of business, are red flags.

4. Death of the PC and Rebirth of the Start Button?

If you're in the personal computers business, the past few months have not been kind, and they're likely to get worse. Although Microsoft had an overall healthy quarter, when you back out advanced sales, the Windows business has been flat--right after Windows 8 came out. Not a good sign, and not helped by Intel seeing a 25 percent drop in quarterly profits. Yes, mobile has taken a big toll.

The good news for many? Microsoft may bring the start button back to the user interface in Windows 8.1. Well, sort of. The bad news? All the hopes for a new profitable mobile world may run into difficulty if no one can prove mobile ads work.

5. Golden Arches Torpedoed

McDonald's has long been a master of advertising in all its forms. But it apparently isn't advertising enough to businesspeople. A new survey says that Subway beat McDonald's as the lunch spot for workers. Not only was it more popular but more expensive, with an average bill of $10.79, versus $7.16. Third on the list: Starbucks (for those who go straight for the caffeine), followed by HMSHost, which sells its wares at many airports and convention centers.

Maybe part of the problem at the top is customer service. McDonald's is trying to fix its "friendliness issues" and enforce service with a smile--tough when you operate through many franchisees and a lot of workers find the pay dismal.

Last updated: Apr 23, 2013

ERIK SHERMAN | Columnist

Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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