» Posts tagged ‘Entrepreneurship’

Yeah, I know, just what we need … another checklist of the 10 Stupid Things I can’t stop doing ..or the Top 5 things I need to do before I brush my teeth (really, nothing, do that first … please).

Nonetheless, this is a good time of year to consider The 10 Questions You Should Never Stop Asking … mostly because you should never stop asking! This is one way to make sure that the “Makes an ASS out of U and ME” assumptions that are grounding our actions are the right ones … NOW … Next Year … and always.

Ask yourself these questions as you sharpen your focus on 2010.

The other day we learned of renewed efforts promised by the Obama Administration to stimulate small business.

This week, they announced some plans to sweeten guaranteed loan programs. The administration is allowing a few weeks for comments before finalizing these details.

1. The SBA will raise loan limits from $2m to $5M
2. Local banks can get 3% interest rates in they demonstrate how they’ll use TARP funds for small business, a reduction from the 5% big banks usually pay.

There is not a lot enthusiasm for this program among banks, however, as many of them report that the paperwork is overwhelming and that few small businesses are seeking loans. Some banks are also concerned about the “strings attached” and don’t want to be tainted by any hint of federal bailout money.

The sudden resignation of Ken Lewis from Bank of America highlights, yet again, the risks that family and other businesses take in failing to prepare for the inevitable succession of leadership.

A succession plan doesn’t mean you have all the work done and the perfect successor is comfortably waiting in the wings, although that would be desirable. It does mean, at a minimum, that you have an interim CEO in place who can hold down the fort while certain details are worked out and long term plans are implemented. Developing an emergency plan also gives the Board or family a chance to discuss these often thorny subjects without stockholder worries, employee hand-wringing or the emotional burden that comes with a fallen leader.

Often, this process highlight gaps within the family or board about the suitability of a particular successor.

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How do you create jobs? Finally, this question is finally getting some attention in Washington …  sadly, it took increasing painful unemployment reports to get this front and center … but from the ground floor where we live, I don’t see the efficacy of some of the programs being considered.

The NY Times summarized some of the current activity, focused around a jobs tax credit that would cover  2X the payroll cost of new employees over a 2 year span. While some of the details aren’t clear, some have suggested that companies would save about 15% in the first year, and 10% in the second year when hiring a new employee.

While this approach is probably endearing to many, I don’t think it will drive job creation. It’s a modest windfall for employers who are hiring, but I don’t think a 15% cost reduction is going to drive a business in the middle market to change their hiring strategy. Product demand is what drives hiring. Only when demonstrable and sustainable revenue growth is evident will employers begin to think about adding permanent employees to the mix.  A jobs credit won’t get many employers juiced about getting ahead of revenue growth in their hiring plans.

White Elephant? Red Herring? No matter. It won’t work.

Despite all the recent publicity about the SBA’s “helping hand” to small business, recent reports tell another story. Loan volume in dollars is down $3.6 billion, around 27%, and 25,000 fewer businesses have been served this year. Pretty woeful record when programs to support Wall St. and the banking industry got delivered virtually overnight … and at least HALF of this nation’s jobs are in small businesses.

Seems a lot like the stimulus package hyped earlier this year … more smoke than fire, too much bureaucracy, slow execution …. Another frayed lifeline for small businesses which are the backbone of job recovery.