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HUMAN RESOURCES

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Hotline information paragraphs: February 1990
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A Moorpark, Calif., company may be the first small business to join the newest child-care trend: the on-site school. A few large companies have recently opened classrooms for employees' children in conjunction with public schools. But George Tash, president of G. T. Water Products, took a different tack. In 1988 he hired a teacher to instruct his two children as well as eight of his 29 employees' children. Tash says it was easy to get a private school accredited. The cost to the $3-million company: about $30,000 a year. And the payoff? "We get résumés from all over the country from people who want to work for us," says vice-president Candice Bilaver.

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Roughly two dozen states have established small-business councils to advise governors and legislators, but so far results are mixed. One of the more effective groups is the Michigan Governor's Entrepreneurial and Small Business Commission, which recently looked into holding a conference of the different councils. The members were disappointed by what they found in other states. "There's not that much activity," says co-chairman Alan Suits. Nor is it clear how well the councils represent small business: some include government officials as members.

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Small high-tech companies are increasingly turning to their customers for financing. So reports Joan Jacobs of Digital Equipment's Technology Executive Roundtable, a national networking group for executives of small high-tech companies. While no figures are available to document the trend, Jacobs says her group is hearing more stories of companies that have persuaded large customers to provide capital needed to help cover development expenses. In return, the big company gets a guaranteed supply of an innovative new product.

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More family businesses are using life insurance as a hedge against big estate taxes. The trend is a response to the 1987 tax law that curtailed the practice of freezing a company's value in order to limit the future estate-tax bite. So now, family business owners are looking for new strategies. One increasingly popular option is to buy a second-to-die life insurance policy, which pays a benefit only when the second parent dies and the estate tax comes due. But take care: consultant Ted Bernstein warns that some such policies have inadequate provisions in case of divorce -- or future IRS changes.

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There's a growing number of software programs on the market designed to help entrepreneurs write business plans. Among the most basic: BizPlanBuilder from Jian, in Los Altos, Calif. This fill-in-the-blank program is for people who "want to get the job done and get on with it," says Jian president Burke Franklin. At the other extreme are companies like Palisade, in Newfield, N.Y., whose @Risk program uses sophisticated statistical techniques to graph not only best- and worst-case financial scenarios but all those in between, as well as their probability of occurrence.

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Parental leave remains stalled at the federal level, but states are starting to make their own rules. At least nine states have passed laws requiring companies to offer unpaid leave to new parents, for periods ranging from 6 to 16 weeks. All of the laws contain some sort of small-company exemption, says David Stephenson of the National Federation of Independent Business, but they don't agree on what's small: the cutoff point for being exempted ranges from 100 employees down to 20.

-- Martha E. Mangelsdorf

Last updated: Feb 1, 1990




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