7 Things You Should Know Before Starting a Business
BY Nitasha Tiku
Drop the rose-colored glasses. Tired of hearing would-be entrepreneurs speak about how smoothly their startup is going to go, seasoned tech vet and blogger Neil Patel deals out some tough love with a post titled, the 7 Harsh Realities of Starting a Business. Patel lets business novices in on such secrets as "Owning a business isn't easier than working a 9 to 5 job," and "You have to give a lot to get a little."
Small business alternatives to holiday perks Bonuses, parties, and gifts for clients are the hallmark of the holiday season. But small businesses that can't afford the usual perks are getting creative instead, reports the Wall Street Journal. According to American Express OPEN's survey of 500 entrepreneurs, only 31 percent are giving year-end bonuses (down from 44 percent last year), only 16 percent are giving raises (down from 30 percent in 2008), and nearly 1 in 4 have opted not to give gifts to employees or customers. On the other hand, about 28 percent of small businesses are using reward points, bartering, and making gifts to get in the holiday spirit, without spending cash. At Proforma Worldwide Support Center in Cleveland, execs are scraping the snow off of all 100 employees' cars at least once a month and rotating access to a guest parking space closest to the building. Eat My Words in San Francisco bartered with clients and collected products that would make good gifts. In fact founder Alexandra Watkins accepted 25 percent of her payments through in-kind trade this year, up 5 percent from 2008. "It's something I thought about at the very beginning of the year and I really strategically picked who we would trade with," says Watkins.
What's coming from the country's most innovative entrepreneurs? Wireless electricity, invisible speakers, and a mind-reading headset, to name a few. CNN Money fills you in on the rest with their 'Next Little Thing 2010' slideshow.
Cyber Monday sales a bright spot. Shoppers logged on to e-commerce sites in droves yesterday, spending at a pace that probably set a single day record. The Wall Street Journal cites a comScore report that estimates that online retail sales grew by 6 percent compared with last year, to $900 million. But just as shoppers on Black Friday were spending less on average per person than in years pass, the Journal reports that "shoppers were chasing discounts and spreading out purchase," which drove the average size of each sale down by 14 percent. The article notes that Cyber Monday, a term invented by the National Retail Federation, hasn't typically been the largest online shopping day of the year, "Yet the day's influence has grown as more retailers try to move online shopping to earlier in the season by piling on more discounts in November."
Inc. 500 company files for Chapter 11 protection. Things have gone from bad to worse for Silicon Valley darling and 2009 Inc. 500 company Canopy Financial. First, TechCrunch alleged last week that executives at the health care software company had duped investors with fraudulent financial documents. We followed that news with a report on an FBI investigation into the company. Now, as the Wall Street Journal reports, Canopy has sought Chapter 11 bankruptcy protection. In the affidavit submitted to the bankruptcy court on Nov. 25, Canopy's general counsel writes that the company discovered in November "that the financial statements provided to...its investors...and lenders were fraudulent, and also uncovered other significant financial and accounting regularities." As a result, the company placed two unnamed executives on administrative leave; one was later fired and the other resigned. The filing also provides new details on the mass layoffs at Canopy we reported last week: the company cut its staff from 123 full-time employees to 31 on Nov. 19 and owes approximately $420,000 in severance and vacation pay to the employees it laid off.
Greener Cars and smarter transit could play a big role at COP15. "Given the role that transport plays in causing greenhouse gas emissions, any serious action on climate change will zoom in on the transport sector," UN climate chief Yvo de Boer said earlier this year. And with COP15, the UN's climate talks in Copenhagen, set to kick off next week, transportation is coming to the forefront again, reports earth2tech blogger Josie Garthwaite. Low-tech and high-tech solutions for cleaning up cars will be a key component in slashing emissions over the next decade. Warren Buffet predicted that by 2030 all cars will be electric, but de Boer says the world can't wait for a silver bullet solution that won't be commercialized until the future. In the interim, near-term improvements on existing technologies like window glazing as part of California's "Cool Cars" initiative or higher-efficiency fuel injection systems like those being developed by a startup called Transonic Combustion could be instrumental.
Culinary schools cooking up sales growth. According to the Los Angeles Times, the business of culinary schools is on the rebound after being hammered by the recession earlier this year. The article cites several schools in the L.A. area that have experienced high sales growth due to people looking to save money by cooking for themselves, and the unemployed who are looking to try their hand at the food industry. "People are taking advantage of the economic downturn and looking to change careers," said Eric Crowley, who owns Chef Eric's Culinary Classroom. By adding budget-friendly courses such as "Everyday Cooking for Families" and "One-Dish Meals," Crowley sold out of his 20-week professional chef program and 10-week professional baking program, enabling him to begin drawing a salary again after forgoing paychecks to cover business costs.
Reporter NITASHA TIKU covers technology, finance, green business, and social entrepreneurship for Inc. magazine and contributes to the staff’s daily links blog. Her work has appeared in New York magazine, The Villager, Chelsea Now, and on nymag.com. She lives in Brooklyn, New York. @nitashatiku