Employee incentives pay off. A new study gives business owners even more reason to invest in lower-level employees. According to The New York Times, Jody Heymann of McGill University's Institute for Health and Social Policy spent six years studying businesses with employee-friendly policies and the ways in which they profited from those policies. The study, entitled "Profit at the Bottom of the Ladder," monitored productivity at companies like Dancing Deer Baking Company, which began providing employees free English classes and soon saw an increase in efficiency. American Apparel also offered its employees incentives by paying factory workers based on the amount of clothes they made, tripling their daily output. The report concludes, "The companies in our study showed that investing in their employees at all levels made economic sense, going against the common market wisdom that considers these investments an unnecessary expense."
How to bow out gracefully. You put a whole lot of blood, sweat, and tears into building your business, it would be a shame to let all that effort go to waste when the time comes to move on. With that in mind, the American Express OPEN Forum has some tips to help you make a smooth transition when you sell your company. Not surprisingly, careful planning is key. As one business owner explains, "You can't wait for a sale to begin preparing for the transition. The training and organizational structures, documentation of procedures, legal issues all take time." The post has a number of suggestions for strengthening your management team prior to the sale and ideas on how to create a transition plan.
Tesla teaming up with Toyota. As Inc.com's Courtney Rubin reported this morning, electric car company Tesla, run by past Entrepreneur of the Year Elon Musk, has announced that it will receive a $50 million investment from Toyota. The companies also announced that Tesla has bought a closed Toyota assembly plant in California that will initially be used to produce the Model S, Tesla's forthcoming, and first, sedan. "The new Tesla factory will give us plenty of room to grow," The New York Times reported Musk as saying.
Congress looks to increase taxes on carried interest. Venture capitalists are fighting a provision in yesterday's proposed American Jobs and Closing Tax Loopholes Act of 2010 that would change tax rules on carried interest. Under the bill, investment fund managers would pay 75 percent of their carried interest at the much higher tax rate for ordinary income, the Wall Street Journal reports. The remaining 25 percent would continue to be taxed at the current capital gains rate. (That rate today is 15 percent, but was previously set to increase to 20 percent next year.) The Journal says that some industry practitioners have calculated the bill would increase taxes for fund managers as much as 156 percent starting in 2013, when the bill would go into full effect. "Expect a serious last-minute push against the bill by the industries affected," the Journal writes.
The benefits of having a safety net. Just because you have a lower tolerance for risk than the average entrepreneur, why should you be left out of the fray? That's the argument being advanced by Adrienne Villani in the social enterprise magazine Beyond Profit, when she suggests we expand the definition of entrepreneurship to include innovators inside the corporate sphere (via PSFK) Whether or not you agree with her, she points to the case of the Tata Group's developing the Swach, an affordable water purifier, to demonstrate the benefits to social entrepreneurship projects having corporate backing and a safety net. For another take on the matter, see Marla Tabaka's guide to whether you should be an employee or an entrepreneur.
A visual guide to portable music players through the ages.The Big Money has a photo history of street beats, starting with the invention of the transistor, which went mass market in the mid-50s, through post-Woodstock era modular stereo, the eight track, the Walkman, boomboxes, minidisc and MP3 players, to the Apple "1,000 song in your pocket" iPod 1.0 in 2001. (via peHUB)
Staff editor KASEY WEHRUM has written for Inc. magazine on subjects ranging from the businesses behind professional bull riding to gadget inventor and father of the infomercial, Ron Popeil. His work has appeared in the New York Times, Worth, Budget Travel, and on MSNBC.com. He lives in Brooklyn.