How to Turn Criticism Into Money | Inc.com.

In a bid to retake the initiative on small-business policy, President Obama Wednesday is expected to propose a 10 percent tax credit tied to new hiring. But the policy appears designed as much to draw a political distinction as to generate new jobs. In describing the proposal, which Mr. Obama will flesh out in a visit to a Washington-area small business, the administration drew a sharp contrast with a Republican small-business tax cut that passed the House last month, which the White House contends is too tilted toward the wealthy.

Under the White House proposal, which the president previewed in a video address over the weekend, a company would get credit against income taxes worth up to 10 percent of the increase in total wages in 2012, which could come either in the form of salaries for new hires or raises. A company that increased its payroll by $4 million would see a $400,000 income tax credit.

The tax credit is capped at $500,000 to make it more valuable to smaller companies. And the White House specifically targets middle-income earners by limiting the proposal to the top wage that is subject to Social Security tax, $110,100. “Unlike the House Republican proposal,” the White House said in a news release outlining the tax, “the president’s proposal ensures that companies that offer raises only to already well-paid executives would be ineligible for the tax relief.”

The Republican bill allows companies with fewer than 500 employees to deduct 20 percent of their income in 2012, though the deduction is limited to half of cash wages paid to employees. In its statement, the White House said that the Republican bill “would cut taxes of hedge fund managers, law partners and many of the wealthiest Americans regardless of whether they employed or hired a single worker.” An analysis by the Tax Policy Center estimates that almost half of the benefit of the tax cut would go to people earning more than $1 million.

House Republicans have countered that their measure, as the majority leader, Eric Cantor, put it, “puts more money into the hands of small-business owners so they can reinvest those funds to retain and create more jobs and grow their businesses.” The nonpartisan Congressional Joint Committee on Taxation has disputed this claim, but it’s not clear that the president’s proposal would add many jobs either — it could simply reward companies that planned to increase payroll anyway.

Nor is it clear that the president’s proposal will win over Republicans in Congress, or their small-business allies. Kevan Chapman, a spokesman for the National Federation of Independent Business, the conservative advocacy group, said in an e-mail that the tax credit is “not a big help to small businesses that are struggling or treading water.” Rather, he said, “our members are mostly concerned about the threat of rates going up and some of the most popular tax-extenders going away at the end of the year. That’s what the president and Congress need to work on.”

In fact, the president also plans to propose extending through 2012 one of the incentives on the N.F.I.B.’s agenda: the special 100 percent bonus depreciation for 2011 that was signed into law as part of the deal to extend the Bush tax cuts. Bonus depreciation is broadly popular, and this part of the president’s proposal may have a better chance of becoming law.

Leadership Lesson: When to Take Advice | Inc.com.

Sincerely,

Chris Gibson

Click here to view the original article from Farming Magazine.

The New York Farm Viability Institute is accepting proposals for grant funding for projects that assist New York farmers in improving profitability.

The New York Farm Viability Institute is announcing its 2012 competitive grants program, with funding awarded to projects that help farmers improve profitability, offer models for other farms to follow, and meet farmer-prioritized needs and opportunities within New York State.

The Institute awards grant funds to projects that reflect the diversity of New York agriculture, including the various production sectors, farm sizes, production practices, geographic location, and more.

Farmer groups, researchers, educators, nonprofit groups and privately-owned businesses may apply for funds.

“We are seeking proposals for projects that offer practical solutions for working farms in New York State.  We promote innovation by investing in research and outreach efforts that lead to a strong, viable agriculture sector in the state,” said Jim Bittner, chair of the NY Farm Viability board of directors, and operator of Singer Farms in Niagara County, NY.

The New York Farm Viability Institute is a farmer-led nonprofit organization that works with farmers throughout the state to identify and prioritize immediate opportunities and needs, then implement research and outreach projects to meet those needs.

The requests for proposals for all three NYFVI grant programs are online at www.nyfvi.org.  The Institute will offer grants in the following categories: Agriculture Innovation Center, which includes business planning, marketing and value-added product development; Energy Management & Bioenergy, including on-farm energy conservation and bioenergy systems, and Outreach & Applied Research, including on-farm research trials and outreach education.

The Institute is also announcing a series of grant writing workshops.  The workshops are designed to describe the funding opportunities and application requirements, and help project leaders develop successful applications:

• June 5, 10 a.m.- 3:00 p.m., Farm Credit East Office, 4363 Federal Drive, Batavia, NY.
• June 12, 10 a.m.- 3:00 p.m., Cornell Cooperative Extension of Cortland County, Cortland County Office Building, 60 Central Ave., Cortland, NY.
• June 13, 10 a.m.- 3:00 p.m., Cornell Cooperative Extension of St Lawrence County, Extension Learning Farm, 2043 State Highway 68, Canton, NY.
• June 14, 10 a.m.- 3:00 p.m., Cornell Cooperative Extension of Ulster County, Kingston Plaza, 232 Plaza Rd, Kingston, NY.

Participants must register by June 1 for the workshops at http://db.nyfvi.org/ or by calling the NYFVI office.

Application budget requests may not exceed $150,000.

Applications are due by 11:59 p.m. August 12, 2012, and contingent upon receiving a state contract for funding, the NYFVI Board plans to make funding decisions in December.

Applications must be submitted online.  Funded projects must complete quarterly progress reporting, requests for expense reimbursements and final reporting, using an online system maintained by the NY Farm Viability Institute.

The New York Farm Viability Institute receives funding from legislative appropriations through the New York State Department of Agriculture and Markets.

May 15, 2012
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We’ve heard a number of CEOs say, “Our product is more advanced than anything else on the market. How can we fail?” Unfortunately, you don’t have to look far to find great products that were commercial failures. Take for example,

• Betamax vs. VHS
• Sony Playstation 3 vs. Nintendo Wii
• Android (4G) phones vs. iPhone 4 (3G)
• The Slanket vs. The Snuggie

In each, the creators of the first product believed they were creating a better product, but the market proved, through better customer adoption, that the competing product created more customer value.

When does the better product win?

Better products win when the total value – that is, the benefits minus the cost – is clear and measurable to the customer and creates more value than comparable offerings.

Unfortunately differentiating factors aren’t always clear, and consumers don’t always get the right to choose. Consider the battle between Blu-ray and HD-DVD; while consumers could buy either product, ultimately the war was fought over which content providers would exclusively back each format. Since more content was available on Blu-ray, it ended up creating more customer value, despite the possibility that HD-DVD was a technically superior product.

So when is better just not good enough?

• When your superior features don’t satisfy customers’ needs
• When consumers can’t observe and easily quantify these “better” features
• When the benefits don’t outweigh the incremental costs – whether they be cash costs or indirect costs (e.g., total cost of ownership)

What’s the lesson for entrepreneurs here?

Entrepreneurs building a new business often falsely assume that their novel product will succeed based on its great new feature set or superior technology. While the next great technology may in fact sell regardless of the competition, few products are so lucky. In most cases we need to shed our rose-colored glasses and instead focus on building what the customer wants.

How can an entrepreneur build a great business around an average product?

1. Only build the features that customers want and are willing to buy.
2. Make your product’s value proposition a clear comparison to the market alternatives, and work to lower barriers to acceptance.
3. Build a complete business model, including sales channels and distribution partners that allow you to deliver on the value you aim to create.
4. Understand the underlying economics of your business model, and build them to scale up as your business grows.
5. Build an investment plan that will fund your business growth and allow you to drive customer awareness, trial and adoption.

Are you trying to build the “next best product?” Share your questions and best practices with us at karlandbill@avondalestrategicpartners.com.

Avondale Associate Chris Lyman contributed to this article.

Click here to view the original article.

I was recently talking to a friend of mine who is struggling to find a production manager to run his small factory. The conversation brought back painful memories of my own struggles, many years ago, to find someone to oversee my factory.

At the time, I was trying to delegate so I could move on to working on the business instead of in the business. These were not the good, old days. I was in my early 30s, and the company was growing quickly, perhaps too quickly. Things were out of control. I worked long hours, had constant problems, was stressed out all day — and I was going through production managers the way Elizabeth Taylor went through husbands.

In one four-year period, I went through eight. Their tenures lasted anywhere from three weeks to a year. Believe me, as I write this, it sounds as nuts to me as I’m sure it does to you. But I learned three very important lessons that turned the situation around completely — and I do mean completely. My current production manager has been with me for more than 15 years, and his predecessor was here for five years. My factory is a well-oiled machine, and I do very little of the oiling.

When I walk down memory lane with one of the employees who has been with me the longest, we can recite the signature lines of each failed manager who passed through. Those lines have stuck in our minds for more than 20 years.

1. “I don’t deserve this check. Take it back!” That was his response to me when I pointed out that an order he had just finished was not done properly.

2. “When am I supposed to take my break?” That was the answer I got when I asked one manager whether he thought it was a good idea to sit with his feet on his desk in the middle of the production area while everyone else around him was working.

3. “I need more manpower!” That was the answer one manager gave every time an order was not done on time. We had plenty of people.

4. “Let me explain something to you,” said one manager as he drew a triangle on a piece of paper. “The people at the top have what is called a piece of the action.” This was right after he had informed me that he had lied to me about how much money he had been making at his previous job and that he had actually taken a pay cut to take this job. (The employment agency had told him to do it.) He said he was working too many hours for what I was paying him. After two months on the job, he decided he should be my partner. I calmly told him that I had a solution — he should quit. He backed his way out of the office and said, “Let’s just pretend we never had this conversation.” He was gone within a month.

5. “Thank you.” That’s what one manager said after I fired him. He was used to working in a factory where his main responsibility was counting the widgets at the end of the day. The previous day he had had to break a window to get in the factory because he had forgotten his keys. The alarm went off. The police came. They called me at home.

6. “I’m sorry it wasn’t just you and me.” This was said by one manager on his way out the door in reference to my vice president at the time. The vice president was gone a month later. I explained what happened in a post aboutthe dangers of having a No. 2.

7. One manager had no signature line. He would just walk around with an unlit cigar in his mouth. A pacifier probably would have been more appropriate.

8. “If you hire me, I’ll be asking you for more work by the end of the week!” I thought I’d finally found someone who could tame the beast. I nicknamed him Rambo (only in my head). Four weeks later, he came into my office, plopped down in a chair, and said, “I almost feel like quitting. The whole place is out of control.”

Here’s what finally did happen: I told him that I thought it was a good idea and that he should quit. After he left, I just sat in my office and laughed. The light bulb in my head finally went on. I had assumed that Rambo, the professional manager, must certainly know more than I did. But he didn’t! None of them did. They all were older than I was. They all were more experienced. Unlike me, they had all run factories, and I assumed they all would know better. But they were not qualified for the job. They either did not understand custom manufacturing, or they did not have the people skills or standards to run the place the way I wanted it run. I realized I could do this.

Before hiring the next production manager, I spent a lot more time looking for the right person and checking references (which is not a waste of time). I spent months training him. I continued to manage. And it worked. So here are the three lessons:

1. Hiring. I was very bad at it. I was young and naïve, and I didn’t understand that a custom-order factory like mine is very different from a widget factory. If you don’t have the right person, it isn’t going to work. And you might have to go through 200 résumés to find the right person.

2. Training. I thought that I could hire the person, point in the right direction, and move on to other things. I was not delegating, I was relegating — giving it away. A smart consultant summed it up for me accurately: “Jay, you are hiring a production manager, and you think you’re hiring a C.E.O. He needs to be managed.” Voilà.

3. Tenacity. After every one of my missteps, I wondered whether it was possible to do what I was attempting to do. Most frame shops are run by the owner. Maybe what I was trying to do could not be done. But if you fall off the horse, you really do have to get right back on. Let me repeat. I did this eight times. (O.K., truth to tell, it was really 10 times. I just don’t remember anything worth saying about two of them.)
I hope that some owners will get some insight from this, or at least some comfort knowing that they are not the only ones struggling to get things under control. It took me many years. I wish someone would have told me — but that’s the nature of entrepreneurship. We’re always reinventing the wheel.
Jay Goltz owns five small businesses in Chicago.

How to Pick a Name for Your Business : Lifestyle :: American Express OPEN Forum.

A sign can make or break your business. Size, design and wording can be the deciding factor as to whether a new customer walks through the door or keeps driving to your competitor, according to anew survey by FedEx Office.

Seventy-six percent said they would enter a store they’ve never been in before based on its sign, while 68 percent have actually purchased a product because a sign caught their attention.

While signs can draw in customers from the street, they can also be good general marketing tools. Seventy-five percent of those polled said they’ve told someone about a business simply based on its signage. Sixty-eight percent of respondents said they believe a store’s sign is reflective of the quality of products or services that the business offers and 52 percent said they are less willing to enter a business with misspelled or poorly made signs.

If you think a sign isn’t worth your investment, think again — 60 percent of consumers are deterred from entering a business with no signage. According to the results, two to three signs on a storefront will get your business the attention it deserves.

Click here to check out some of our favorites — the good, the bad, the ridiculous — and then submit a photo of any signs that have caught your eye.

How to Start a Small Business: The Best (and Hardest) Way | Inc.com.