What\'s Going On With My Bank?

September 28, 2012, 3:47 pm

By PAUL DOWNS

Wednesday was kind of a busy day, but late in the afternoon I tried to log in to my bank's Web site to see what checks had posted (I bank with PNC). I couldn't get in. Web sites don't load now and then, and I didn't give it much thought.

Yesterday morning I was discussing the payments we expected to receive this week with my two salesmen, Don and Nate. They are responsible for sending out invoices and keeping track of whether we have been paid with a cash management spreadsheet. Nate had received verbal confirmation of a sale of a conference table on Tuesday and added it to our production queue. We normally require a deposit in hand to do this, but you know how it goes - putting up a sales number is fun, a nd we were convinced the deal was a go. Why not do the client a favor and schedule manufacturing?

I asked Nate whether we had received a deposit from a new customer I'll call Company T. This client had said it was  sending its deposit through an electronic funds transfer. Nate hadn't heard whether the deposit, a little more than $9,000, had been sent and suggested I check the bank Web site to see whether the payment had posted. I tried again to log in, and again couldn't connect. Hmmm. I tried refreshing several times, quitting and restarting the browser, and finally tried using two other browsers. Eventually PNC displayed a page that said the site was experiencing some technical issues and that I should try later. Again, other duties pressed and I set it aside.

At the end of Thursday, Don took a credit card from a client he had been working with - let's call it Company S. We added the client to our list, but now I had a problem: Wh o gets the first available production time, Company T or Company S? They both wanted their tables as soon as possible, so the first one to commit money would get it. The call from Company S happened late on Thursday, just as I was walking out the door. I figured I would sort it out on Friday morning.

So when I came in on Friday, I tried again to log in, and this time nothing at all came up. This was starting to seem strange. As it happened, I needed some cash, so I hopped in my car to go to the local branch and see what was going on. When I got there, I was told that hackers had taken down the PNC Web site and that a number of major banks had been affected. The teller had no idea when it would be back up. At least I was able to see, on the bank's own computers, that Company T's transfer had gone through on Thursday.

Back at the office, I tried again to log in. No luck. I've continued to try throughout the day, and even as I wrote this post (early afternoon) I cou ldn't get in. Now I'm a little worried. My bookkeeper won't be able to reconcile our payments for the week, and I won't be able to confirm that my cash management plans are still current. And beyond that: what's up with PNC?

There hasn't been much news about this incident (The Times's Bits blog ran a post), but I was able to find out that a number of major banks had been affected. I have accounts with Chase and Wells Fargo, and I was able to get access to both of them, although it took a while to log in. PNC seems to have been hit harder or not been as nimble in response.

It's disconcerting, to say the least, to find out how vulnerable my bank is to an outside attack. It's been a disruption to my business that I didn't expect, and the longer it goes on, the more worrisome it becomes.

I have planned my business around ready access to up-to-date financial information and rely on it to make sure I'm solvent. This particular week I have some cushion in my acco unts, but I've lived through many periods where knowing whether $9,000 had arrived or not would make all the difference in the world - if I were trying to make payroll, for instance, or trying to make sure that critical materials shipped, or trying to avoid penalty payments on a credit card.

Is anyone else having trouble seeing their accounts right now?

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside Philadelphia.

How a Diner Gets the Most Out of Social Media

September 28, 2012, 7:00 am

By MELINDA F. EMERSON

Squeeze In is a modest little breakfast-and-lunch diner with four locations in the greater Reno, Nev. area. The restaurants are open seven days a week, 7 a.m. to 2 p.m. While online commenters rave about the food, I can't get over how creatively this little chain has managed its social media. It has a Web site and a custom mobile site. It promotes the business through Foursquare, Twitter, Facebook, Pinterest and Instagram.

“We want to reach our guests where they are: on their phones, in their homes, on their laptops or desktops, on their weekends and at their charitable events,” said Misty Young, 50, the company president. “We want to be in their heads when they think breakfast or lunch.”

The diner has a custom smartphone app. In 2010, the company invested $2,500 in building the app for iPhone, Android and BlackBerry phones. It took four months to develop and to date, 2,795 people have downloaded it. If you browse the menu on the way over, you will find app-only deals to show your server once you're seated. The deals have been redeemed nearly 2,000 times.

Servers have been trained to offer to take a group picture if they see a smartphone on the table. This, of course, is a terrific way to generate Instagram and Facebook photos that are posted directly by guests and then linked to by Squeeze In in its Flickr photo stream (the app also has a built-in tip calculator). Everything that's done in social media is quantified. “Our Foursquare newbie offer for first time check-ins has been unlocked 1,151 times,” said Ms. Young. “The mayor special has been unlocked 140 times. People are actively using this stuff.”

T he restaurant has 6,800 “likes” on Facebook, more than 42,000 views of its YouTube videos, more than 1,000 followers on Twitter and more than 52,000 members of its Egghead Breakfast Club, a guest loyalty program that uses a customized magnetic swipe card system. The transaction data taken from the cards drive marketing and sales decisions, promotions and initiatives. The program also helps lead members to social media review sites, and the chain responds to every review posted on Yelp. Not surprisingly, if you type the restaurant's name into a Google search, you will find it holding the top three positions. And it never pays for online advertising.

The people who work at Squeeze In seem to have a lot of fun. “For example, we created an energetic parody video just for a good time and to feature our cool staff,” said Ms. Young. “It cost us a whopping $600 to produce.” The parody video is the staff's take on the popular Black Eyed Peas song “Imma Be.” The Squeeze In version is called “Omma Lette.” It has been viewed more than 2,500 times.

The online presence helped the chain land a spot on the Food Network's “Throwdown With Bobby Flay.” When Ms. Young asked a producer how the network had found Squeeze In, the producer responded, “We troll the Web, and we look for and listen to what people are saying.” The Food Network exposure immediately increased revenue 25 percent, Ms. Young said, and encouraged the company to speed up its expansion plans. “It's called social for a reason,” she said. “We've multiplied our Twitter presence by 450 percent in a year. We've run contests, promoted specials, posted photos and videos, engaged. We've been social to keep growing.”

Squeeze In has 270 nonfiltered reviews on Yelp, and one of the owners of the restaurant has responded to every review. “Being responsive, social, relevant and listening has been a key to our social success,” said Ms. Young, who runs th e business along with her husband, her daughter and her son-in-law, all of whom own a stake in the company. When the reigning mayor of FourSquare stops by, she is treated to a complimentary mimosa (yes, Squeeze In serves liquor at 8 a.m. to people who order bloody marys or champagne with their omelettes). Customers can also get free breakfasts on their birthdays and free champagne on their anniversaries.

The chain also uses social media in its internal operations. A private Facebook group, for example, helps communications with the 96 employees and has improved camaraderie, job satisfaction and job retention. And it uses multiple public Facebook pages to engage the surrounding communities. Each of the four locations has its own page to allow for check-ins and special offers, but they also offer community information - if there's a cat lost, they post about it; if there's a high school production or a breakfast event, they'll support it and post it on their fan page.

This kind of social media effort does not come free. Squeeze In's social media efforts are handled by three people: Ms. Young, who is really the face of the company in social media; her daughter, Shila Morris; and Eva Litson, a full-time communications manager. Ms. Young estimates that she spends an hour a day on social media, mostly in 15-minute bursts, monitoring the brand across all social media accounts and engaging with customers. Ms. Morris handles day-to-day operations and monitors Yelp. Ms. Litson handles external marketing efforts, including managing the Web site, the monthly newsletter and e-mail blasts, and she reviews the metrics of all the company's social media efforts.

Of course, none of this would matter if people didn't like the food. “All our communications tactics are lame and ineffective if we can't back it up at the table,” said Ms. Young.

Melinda Emerson is founder and chief executive of Quintessence Multimedia, a social media stra tegy and content development firm. You can follow her on Twitter.

Readers Have a Stake in President Obama\'s Free-Speech Disconnect

September 27, 2012, 5:21 pm

By MARGARET SULLIVAN

President Obama's ode to free speech at the United Nations on Tuesday was welcome for those of us who put the First Amendment almost on par with our first-born children.

“In a diverse society, efforts to restrict speech can quickly become a tool to silence critics and oppress minorities,” Mr. Obama said, in the context of recent anti-American tumult in the Muslim world.

Speech, of course, is not just people shouting in a public square, not just a billboard, not just a violence-inducing film.

It's also a newspaper article, a book, a Web site. It's Keith Olbermann, it's Rush Limbaugh and it's everyone along the spectrum. The First Amendment protects these as well, and American journali sts are grateful that it does.

New York Times readers, whom I represent as public editor, should be, too. Free speech allows journalists to do their jobs - getting information to the public so that they can be informed citizens.

Mr. Obama's speech seems to be in keeping with all of that. The Washington Post called it “refreshingly clear.” The Times said it was “much needed.”

But with all the praise Mr. Obama received for his protection of free speech on one of the world's largest stages, it's worth acknowledging that he has also authorized the federal government to engage in an unprecedented crackdown on journalists and whistle-blowers here in the United States, relentlessly pursuing and initiating new cases against journalists and their sources.

Consider the Times reporter James Risen - whose 2005 work with Eric Lichtblau on the federal government's use of warrantless wiretapping was perhaps the most important nat ional security journalism of the last decade.  Mr. Risen has been under constant pressure from the Justice Department to reveal his confidential sources. Federal prosecutors say one of those sources is the former C.I.A. official Jeffery Sterling, whom they accuse of leaking secrets about American efforts to sabotage Iran's nuclear program to Mr. Risen for his 2006 book “State of War.” (Glenn Greenwald wrote powerfully about Mr. Obama and Mr. Risen last year in Salon.)

Just this month, according to the Web site Secrecy News, government lawyers continued their full-court press against Mr. Risen:

Government attorneys this week reiterated their argument that New York Times reporter James Risen “does not have a ‘reporter's privilege' to refuse to identify his source” in the prosecution of former CIA officer Jeffrey Sterling, who is accused of disclosing classified information to Risen. The attorneys cited a new ruling in another Circuit that rej ected a similar claim of privilege, and they urged the Fourth Circuit Court of Appeals to affirm their position.

Mr. Risen and Mr. Sterling are not the only two who have been pursued. There have been others. 

It's worth noting that Mr. Obama's prosecution of whistle-blowers is not an isolated instance of the disconnect between words and actions on free speech.

The Post reported on Wednesday on the controversy surrounding the recently released book “No Easy Day” and the levels to which its description of the killing of Osama bin Laden can be discussed in the Department of Defense. (Whistleblower.org offers a good take on a similar topic.)

And lastly, who can forget when the Air Force blocked its employees' access to The Times's Web site and those of more than 25 other news organizations that published diplomatic communications obtained by WikiLeaks.

Mr. Obama's notice to the world that “efforts to restrict speech can quickly b ecome a tool to silence critics and oppress minorities” should also be employed at home.

So, yes, I'm glad to hear Mr. Obama's words defending free speech. But in the context of First Amendment press rights â€" so important to readers - I'd like to see his administration's actions keep pace with his rhetoric.

Are You Involved in Every Decision at Your Company?

September 27, 2012, 7:00 am

By JOSH PATRICK

Does every problem still come across your desk? Are you spending too much time in the weeds and not enough thinking about the big picture? Are you feeling burned out? For many business owners I know, the answers to these questions are a resounding “yes.”

One of the best ways I know to create value in a business is for the owner to become operationally irrelevant. That doesn't mean leaving the business. It means changing your relationship to your business. Instead of being involved in every decision, you build a team and find a way to trust your senior employees to take care of their individual areas of responsibility.

I use the term passive owner to describe owners who have removed themselves f rom the day-to-day operation. Instead of solving problems all day, they have moved on to working on strategic issues. You know a business has a passive owner when it can run for weeks and or even months without the direct intervention of the owner, because there are managers in the company who are competent and have been given the authority and responsibility to keep things running smoothly. Here's a fun way to think about it: Several years ago, Norm Brodsky wrote a column for Inc. magazine in which he argued that the more vacation time he took, the more he increased the value of his company.

Passive ownership is hard to achieve. At first, we don't believe it's possible. If we get to the point where do believe it's possible, we often have to change not only our behavior but the culture of the company. Worse, we're busy - so busy in fact, that we often don't have time to stop and take a look around. We're forced to deal with emergency after emergency after emergency. Before we know it, another day has passed and we're still in the same place.

To take the first step toward passive ownership, we have to be able to get past living as if everything is a crisis. When we're constantly in crisis mode, everything is late and we're always under tremendous pressure. At least, that's how it was for me. I thought I had to be involved in every decision. I lived as if everything was an emergency. I drove my staff crazy and, frankly, my company wasn't a very satisfying place to be - neither for my employees nor for me.

In the early '80s I ran across a book by Stephen Covey called “Seven Habits of Highly Effective People.” The book talks about four stages that people occupy. They are:

1. Urgent and important (where I was living).
2. Important, but not urgent (where I needed to be).
3. Not important, but urgent (I delegated, but not effectively. The project seemed to always land back on my des k).
4. Not important and not urgent (where I hid behind useless activities and was completely unproductive).

I realized that I would have to move out of stages 1 and 3 and spend more time in stage 2 if I were ever going to be successful. It wasn't easy, but I found one thing that I thought was a crisis and successfully delegated it to someone else. Then, I did it again. Over the course of a couple of years, I managed to get some time to work on important but not urgent activities. And that's when life started to change.

Passive ownership requires the owner to build a team of effective managers, to have a reporting system that shares critical company information and to have systems in place that let front-line employees know what to do and how to act. This might sound easy, but it often takes several years of taking small steps before you even get close passive ownership.

For my company, the result was that we went from providing inconsistent serv ice to being tactically excellent. We developed systems, and we stopped acting as if everything was a crisis. We had systems in place to keep crises from happening in the first place but could plan for things that were likely to go wrong.

Building trust between my managers and me was a real challenge. My issue was that I had a very difficult time understanding what was happening when one of my managers made a mistake. At some level, I didn't fully understand that it wasn't on purpose. This is where I ran into W. Edwards Deming and his books on quality management. One of his rules was that you don't blame the person - you blame the system. This was a really difficult rule for me to embrace. But as we put more and better systems in place, the mistakes got smaller and more manageable. This took time and the willingness to change.

There's a reason a lot of owners have a habit of micromanaging. In the early years, if I hadn't been obsessive about being involved in eve ry aspect of the business, the business might well have failed. It was only as the business became more successful that I had the option of learning to back off. But I know I waited longer than I should have.

Take a moment and ask yourself whether you are constantly feeling the pressure. If you answered yes to the questions at the beginning of this post, you might want to think about ways to make at least some of these issues go away.

Josh Patrick is a founder and Principal at Stage 2 Planning Partners where he works with private business owners on wealth management issues.

Pitching a Surveillance System for Tugboats

September 26, 2012, 1:00 pm

By CAROL ROTH

In my last post, I reviewed a pitch for an employee-owned assisted-living facility. This week, I review a pitch for a safety surveillance system for tugboats.

You can view the original video pitch and my review of the pitch below.

Here's the pitch:

Here's my review:

In terms of the pitch, the TugCam video from Christopher Machut and GM Services hits on almost all of the items that make a great pitch.

What the company does: It creates a surveillance system that wirelessly transmits audio and video from around a large vessel back to the tugboat captain to increase the captain's awareness of what can be seen and heard while navigating waterways. The platfor m can also be used in other industries, including fish farming.

While I don't know enough to evaluate the scope of the problem, I do like that the company overcame potential objections by talking about adoption and by stressing that the platform needs to be rugged and easy to use. It also has to have cross-technology capability (BlackBerry, Android).

What problem the company solves: Tugboats push vessels through waterways with a blocked line of sight, which has resulted in vessels running into other boats (some with people on board). This was well illustrated visually with actual video - a big barge running over a smaller boat.

The secondary problem is financial. This solution helps avoid accidents, which solves a problem for insurance carriers, a clever thing to point out in the pitch and of course a catalyst for adoption.

My biggest question here is whether this solution is the right one for the problem. It seems as if there could be many ways to ch ange the scope of a vessel's views, so I would want to inquire more on this front.

Who is on the team: The team has decades of what sounds like relevant experience. The founder has nearly 30 years in the industry and has built and sold a business (experienced entrepreneurs give investors additional confidence). Mr. Machut, who is also a partner, has nearly 20 years of technology experience and has also sold a business.

What is the financial opportunity: The company showed revenue projections of $20 million without funding and $50 million with funding within five years. While more details are needed to evaluate the opportunity - How will that revenue be generated? How profitable will the company be? - the initial numbers create a large enough opportunity to pique investor interest.

How they will bring the product to market: The insurance company angle is the initial entry point being pursued for marketing. It sounds as if insurance companies may offer a disc ount to their clients for using TugCam. This needs more “meat” around it - How many companies have moved forward? What kind of results do they expect? - but the strategic thinking is sound.

The one thing the pitch is missing is a discussion of competition: Who else is offering solutions and why is the TugCam solution better? I also found the narration a bit stiff, but over all, I thought that this was a very solid pitch.

Now, again, I know nothing about safety-surveillance equipment or tugboats or the marine transportation industry, so I personally would have a hard time evaluating where the holes in the opportunity might be. That said, for the right investor who does know the industry, I think that this pitch - assuming the solution and the opportunity hold up - would definitely create investor interest.

What do you think?

Carol Roth is a business strategist who has helped clients raise more than $1 billion in capital. You can follow her on Twitt er.

Immigration Reporter Julia Preston\'s Views on \'Illegal Immigrant\'

September 26, 2012, 1:33 pm

By MARGARET SULLIVAN

Earlier this week, I opened up the question of whether the term “illegal immigrant” is disparaging or simply accurate. The response has been robust, and I'm paying attention to all of it â€" in e-mails, on Twitter, in comments on my blog posts and in conversations.

As one step along the way, I chatted with The Times's immigration reporter Julia Preston this morning. Because she is such an important voice in this discussion, I want to present what she had to say as a separate post. Ms. Preston â€" who speaks Spanish, Portuguese and French - is a former correspondent in Mexico who has also covered the federal courts.

It's worth noting that Ms. Preston had a story in Wednesday's paper that us es the term in its lead paragraph. It's also worth noting that she is not satisfied with the paper's current stance on this issue and believes it should be more flexible.

I want to restate that, as public editor, I don't make policy, but I'm hoping to be able to take an informed stand fairly soon.

Here is the gist of my interview with her this morning:

“I think we need a little more flexibility,” Ms. Preston said. “But we should use the term at times â€" it is accurate. It is a violation of law for a foreign-born person to be present without legal status.”

In many cases, she noted, that is a civil violation â€" for example, if a person has overstayed his or her visa. However, she said, “If you cross the border without inspection, that's a crime â€" a federal misdemeanor.”

She said, “We don't make the assertion that they are criminals,” but “a shorthand way to describe them is illegal immigrants.”

Ms. Preston called the current situation “a very dynamic debate that is putting a pressure on our language.”

“We are told we are tarring people as criminals. I don't think that's true. The majority of readers don't go to that inference. If they do, they may already have a preconceived idea. The critics of the term are among the most active readers in drawing that inference.”

Ms. Preston, who has covered immigration for six years, tries to answer “every reasonable reader e-mail. I have an ongoing dialogue, and I think I understand how people are reacting.”

In short, her feeling comes down to this: “We could use more flexibility. Whether or not the terms is accurate, there is a growing group of readers who are put off by it.”

In addition, she said, the political dialogue is changing and offers some additional options.

In the work context, a worker can accurately be called “unauthorized,” a term many prefer. “It can be us eful,” she said.

“In many cases, people are calling themselves undocumented and prefer that term, and in some cases, they are right,” she said. She noted that there was a new federal program suspending deportation for those who were brought to the United States as youngsters under the age of 15.

“These young people are saying: ‘I'm not illegal. I'm undocumented.' ” So the term “has a new currency.”

The Times stylebook â€" the newspaper's arbiter of language â€" “is quite stern on the term undocumented,” Ms. Preston said. “It says it is a euphemism and should be avoided.” Here is the language in the stylebook:

illegal immigrant is the preferred term, rather than the sinister-sounding illegal alien. Do not use the euphemism undocumented.

Ms. Preston disagrees with the ruling on the term “undocumented.” It should not be so strictly avoided. But, she said, neither should “illegal immigrant” be banned. “It's accurate and it considers the broad terms of the debate. We shouldn't be banning an accurate term.”

Ms. Preston is well aware that “there's a constituency now advocating for the language to change.”

This is new, she said. “They have been ‘the other.' They haven't had a voice.”

“I'm acutely aware of this issue, and my purpose is to tell stories in a way that everyone can hear them.”

Would a Home-Shopping TV Appearance Damage a High-End Brand?

September 26, 2012, 11:00 am

By JOHN GROSSMANN

We just published a case study about Eve Pearl, a cosmetics company named for an Emmy-winning makeup artist who created a line of products with skin care nutrients. Begun by Eve Pearl in her New York apartment in 2005, the business moved three years later to an Upper East Side boutique with an address befitting the high-end positioning of her goods.

By last year, she had built sales to about $1 million through three primary outlets: retail sales in her shop, wholesale distribution to makeup professionals she cultivated at trade shows, and retail sales on her Web site (which accounted for the vast majority of her business). Eager for faster growth, Ms. Pearl faced a big decision when ShopNBC, the natio n's third-largest home-shopping network, invited her to appear in front of its cameras.

Ms. Pearl immediately recognized both pros and cons. On a single live broadcast, she could reach multitudes and build her brand. But her profit margins would shrink drastically, and waiting 60 days for payment, minus returns, could cause cash flow problems. She worried, too, about whether the mass sales platform offered a good fit for her high-end cosmetics.

Below, you will find the recommendations of business owners familiar with the outcome of a home shopping network appearance. Please use the comment section to share your thoughts. Next week in a follow-up post we will give you an update on what Ms. Pearl decided.

Jen Groover, creator of the Butler Bag and chief executive of Jen Groover Productions, which is based in Philadelphia and New York: “Home-shopping television is ultimately a branding strategy for most vendors. Think of it as y our eight-minute commercial. How much would you typically spend on an eight-minute commercial? It allows the creator to tell her story in an extremely saturated category of business. But in order to not jeopardize the equity of her brand, she should offer slightly different product configurations on ShopNBC or create a diffusion brand, a step-down line extension of an existing high-end brand. If Eve Pearl performs well on ShopNBC and her personality shines, she'll raise consumer awareness and increase her ‘celebrity,' which should, in turn, increase street traffic into her store. What most people don't realize is, when products are on a home shopping channel, it actually increases the sales in brick-and-mortar stores.”

Scott Jordan, founder and chief executive of Scottevest, which makes multipocketed travel clothes and is based in Sun Valley, Idaho: “The home-shopping networks typically require a highly demonstrable product and a charismatic owner/entrepreneur to make the presentation. It appears Eve Pearl has those things. Moreover, QVC told me they appeal primarily to women buying for themselves - so she qualifies for that as well. But unless you have excess inventory, like we did, or insane margins, or you do real volume with them, you need to consider it a complete advertising proposition.”

Bethany Karlyn, founder of Prtty Peaushun Skin Tight Body Lotion in Sherman Oaks, Calif: “Maintaining a high-end brand image in a home-shopping venue is not the challenge it once was. In fact, she'll find herself in good company. The schlock impression has changed with high-end brands such as Elizabeth Arden, Benefit, Lancôme, Vincent Longo, Lorac and Shiseido, on HSN. On QVC, Perricone has a two-ounce product selling for $495. Since cosmetics are an aspirational product and every socioeconomic group is aspiring to the next level, exposing only the top 1 percent to your brand is a death sentence.

“You may want to consider h iring P.R. to further your reach, if it is within your budget. If not, then do an in-house outreach to beauty editors and beauty bloggers to review your products and expand your social networking to promote. Encourage your celebrity clientele to support you with tweets and perhaps an appearance on your shopping network segment or at least a call-in during the segment. You may also want to consider freshening up your Web site so it is as beautiful to enter as the physical store itself.”

What do you think?

What Do You Do With the Brilliant Jerk?

September 26, 2012, 7:00 am

By CLIFF OXFORD

My most recent experience with a Brilliant Jerk occurred when I was helping a group of 25 doctors thrash out their shared values as they tried to become a real company.

Toward the front of the room, I spotted the Brilliant Jerk. He was the one doctor who dampened the unity with subtle but consistent complaining about why the group couldn't do some things and shouldn't do others. When he spoke, everyone became quiet and listened - not out of excitement for what he was going to say but out of respect. Yes, the doctors had respect for the Brilliant Jerk.

Here's why: He was always the first to cover for doctors who were on call. He was always the first to volunteer to work on holidays. He had the most articles published by the American Medical Association. He was the first to get new training and share it with others one-on-one. And by the way, he was the highest revenue producer of all the doctors in the group. In fact, he was producing twice the revenue of some of the doctors. He had been the third doctor to join the group and without his revenue, the start-up could not have been successful.

But here's the problem: While he had performed brilliantly for the start-up, he was not performing brilliantly for a company that was trying to grow. The brilliant start-up talent had become the Brilliant Jerk. I define Brilliant Jerks as specialized, high-producing performers. They are not, however, brilliant business people, and that is what companies need during periods of rapid growth. There are a lot of hurdles to cross when companies move from start-up to growth, including dealing with chaos and changes in culture. But the biggest hurdle is dealing with the human factor - how you move, shift and replace people as the company grows into the next level of success.

Most high-growth companies start with two or three founders who have a common idea and are passionately committed to the mission. The cause creates shared values among the founders and early employees, and work is fun. Most days, everyone feels like part of the team and does great work; some days it feels like “Survivor” - as when you are working nights and weekends to ensure that the start-up is still in business come Monday morning. At this stage, everyone is important. Decisions are usually made when everyone is in the room or at least within earshot.

But then, with this kind of commitment, hard work and passion, the company starts to grow and maybe even double in size and revenue. All of a sudden, instead of being part of a scout troop, you are riding a rocket. Work is fun and exciting but with constant turbulence, and all of the par ticipants have to give it their all to keep the rocket in orbit and in alignment on the new mission of growth. Inevitably, at least one of the founders or early superstars will not like the new mission. This person will still want to be the Brilliant Talent of the start-up - instead of being a contributor on the rocket, where everyone has to step up to new roles and where new superstars are being made.

I had a brilliant start-up talent when I was building my company, STI Knowledge, into a global brand. When we hired him, we hired over our heads. He had juice. We marveled at his manic performance, which often propelled all of us. When we had a crisis, he could solve it. Yes, he could have taken bigger jobs at bigger salaries but he chose to work with rebels. He knew we were right in our vision and mission, and he knew we could not do it without him. But in trying to maintain his glory, he struggled to let us go and grow.

The growth phase required the addition of s taff members, systems and structure that changed the dynamics of the company. While the brilliant talent was a high-tech genius, the new stars were being made in areas like sales, marketing and education. He felt left out. He was no longer needed in every meeting. He could not simply pop into the chief executive's office four or five times a day like old times, and the new processes and systems hindered and even prevented him from being the savior. Right before our eyes, the brilliant talent became the Brilliant Jerk.

I have listened to Brilliant Jerks proclaim, “I am the one who is always on call, who drives the most revenue, who is here on weekends and who has the knowledge.”  And the Brilliant Jerk speaks the truth. But I have also seen him stick his head in the door and deflate an entire management team. A growth company needs enablers, not disablers.

So what do you do with the Brilliant Jerk? Generally, the thought of firing the Brilliant Jerk is not ev en considered. Entrepreneurs are builders and growers, and termination of the Brilliant Jerk is not one of their basic instincts. Sheer loyalty compels most entrepreneurs to try to find a way to make it work. But that's almost always a mistake. That's what happened with the Brilliant Jerk doctor and the medical group. He hung around, unhappy, until he abruptly quit one morning - and then spent the next couple of years attacking the company from every conceivable angle: poaching employees, helping competitors and starting legal battles.

So what's the right answer? Get rid of the Brilliant Jerk as fast as you possibly can.

The biggest waste of time in a high-growth company is the period that falls between when you know someone does not fit the growth culture and the time you terminate the relationship. On average, I'd say the Brilliant Jerk hangs around for 1.5 years; decisive action can limit the period to less than six months. The likes of Bill Gates, Steve Jobs and Roger Ailes have had no problem showing Brilliant Jerks the door, and all built world-class brands faster and better than the rest of us. I wish I could tell you I was as tough as those guys. I learned the hard way by not taking action when I should have.

I can tell you from personal experience that coddling the Brilliant Jerk - letting him work from home, consoling him,  giving him special assignments - does not work. It just kicks the can down the road. At my company, I was worried about the impact his firing would have on other employees who had shown him respect. To my surprise, the reaction was, “What took you so long?”

One of the worst feelings I have ever experienced was looking at the Brilliant Jerk and saying, “We have a vision, and I have decided you are no longer a match for where we need to go.” One of the best feelings came the next day when everyone was moving forward together.

Cliff Oxford is the founder of the Oxford Center for Entrepreneurs.

Why the Health Care Tax Credit Eludes Many Small Businesses

September 25, 2012, 3:30 pm

By ROBB MANDELBAUM

The Agenda

How small-business issues are shaping politics and policy.

The Agenda has now profiled three small businesses that are struggling in different ways with providing health insurance to employees. The companies are very different - they trade in very different parts of the economy, and couldn't be located much further apart geographically - but they do have one thing in common: Though all three have fewer than 25 employees, not one has qualified for the tax credit in the Affordable Care Act that was intended to help small businesses pay for health insurance. Indeed, the credit is one element of t he controversial health law that has already fallen short of expectations.

Estimates of the number of businesses eligible to take the tax credit have ranged from 1.4 million to 4 million companies, but in May, the Government Accountability Office reported that only 170,300 firms actually claimed the credit in 2010. Of these, only a small fraction, 17 percent, were able to claim the whole credit.

For eligible companies, the credit effectively refunds 35 percent of health insurance expenses between 2010 and 2013.* After 2014, the credit increases to 50 percent and is available for any two consecutive years. The credit is fully available to companies with 10 or fewer full-time employees and average wages below $25,000. It phases out as the number of employees rises to 25 and wages grow to $50,000. In 2009, there were about 4.6 million companies with fewer than 10 employees, according to the Census Bureau, and 5.7 million with fewer than 100.

The credit was aim ed squarely at the smallest companies, which rarely offer health insurance to employees. However, as we reported two weeks ago, it appears not to have persuaded very many to start offering insurance. The most recent study of employer health insurance from the Kaiser Family Foundation found that just half of all companies with fewer than 10 employees offered insurance, a share that has not moved much since 2005.

So why has the credit fallen short of expectations? The G.A.O. concluded that the credit was too small to sway business owners. Moreover, it said, claiming the credit is a task so complicated as to discourage many companies from trying. Companies have to determine the number of hours each employee worked in the year, as well as compile information about their insurance premiums. “Small-business owners generally do not want to spend the time or money to gather the necessary information to calculate the credit, given that the credit will likely be insubstantial, ” the report said, citing conversations with tax preparers. “Tax preparers told us it could take their clients from two to eight hours or possibly longer to gather the necessary information to calculate the credit and that the tax preparers spent, in general, three to five hours calculating the credit.”

The G.A.O. report hints at the complexity with this delicious example:

On its Web site, I.R.S. tried to reduce the burden on taxpayers by offering “3 Simple Steps” as a screening tool to help taxpayers determine whether they might be eligible for the credit. However, to calculate the actual dollars that can be claimed, the three steps become 15 calculations, 11 of which are based on seven worksheets, some of which request multiple columns of information.

It may be tempting to hold the Internal Revenue Service responsible for whatever burden accompanies the tax credit, but in this case, the complexity is written directly int o the law. It turns out that legislators wrote the provision in a way that makes it appear more generous than it really is. Many businesses with both fewer than 25 employees and average wages below $50,000 are in fact unable to claim the credit.

Under the law, once such a business has calculated its potential credit, it is required to reduce the credit first to account for any excess employees over 10 and then separately reduce the potential credit to account for any excess average wages paid over $25,000. For many companies, the two reductions exceed the potential credit itself - meaning the business gets no credit.

That's what happened to Carrie Van Dyck, who along with her husband owns the Herbfarm Restaurant outside of Seattle. Excluding its owners, the Herbfarm, which we profiled in June, employed the equivalent of about 21 or 22 full-time staff members, who were paid an average wage of about $35,000 - a few thousand dollars over the credit's threshold for 2 1 employees. The result surprised Ms. Van Dyck, she said recently by e-mail, because “it would seem that we are a pretty typical small, mom-and-pop type business that this should apply to.”

Of course, by making the credit less generous, the senators who wrote the law made it less expensive to the United States Treasury. Now it is apparent that credit will be even cheaper than planned: initially it was expected to cost the Treasury $2 billion in 2010; instead it cost the government only a quarter of that.

The law also excludes owners and owners' families from counting toward the credit, which can cut both ways. On the one hand, owners don't count as employees and their salaries are excluded from the annual wages, exclusions that could make some companies eligible for a bigger credit than they might otherwise have gotten. On the other hand, premiums paid for the owners' and their families' insurance aren't eligible for the credit, which for some companies, as Y ou're The Boss commenter JAB recently noted, “greatly reduces the incentive to provide coverage for employees.”

The White House has said that the number of businesses claiming the credit for 2011 has grown to at least 360,000, but that is still well below even the smallest estimate of eligible businesses. Some advocates for the law say that more businesses will take advantage of the credit in 2014, when it grows to 50 percent, especially if the new insurance exchanges make it easier and cheaper for small companies to offer insurance.

The Obama administration has proposed making more businesses eligible for the credit, in part by starting phase-outs at higher thresholds, and also by changing the way it is calculated so that every business within the limits, such as the Herbfarm Restaurant, can take some amount of credit.

But judging from the comments of Representative Sam Graves, chairman of the House Small Business Committee, the initiative is unlikely to pass a Republican-controlled House anytime soon. “This tax credit has already largely failed to attract small-business owners, and expanding it will not make the president's health care law affordable,” the Missouri Republican said in a statement. “For small employers that do not offer health insurance, tax incentives are unlikely to cause many of them to choose a massive new expense they just cannot afford in the first place.” It was Mr. Graves who sought the G.A.O. report.

Of course, a business denied a credit has not been made worse off by the 2010 health law. But the law surely has raised and dashed a lot of hopes, and these are the early days - the sweeping changes that are the law's hallmark don't come until 2014.

*There are, of course, many caveats here, but the main one is that the company has to pay at least half of the premium.

The Big Banks Say They Are Meeting Their Lending Commitment

September 25, 2012, 7:44 am

By AMI KASSAR

Earlier this month, I published a post entitled, “Are the Big Banks Keeping Their Commitment to Small Businesses?” It had to do with a commitment that 13 of the largest banks in the country made last September to increase their small-business lending by $20 billion over the following three years.

Before writing that post, I spoke with executives from three of the largest banks on the list, the Small Business Administration and the Financial Services Roundtable, a trade association that represents these banks. Because I wanted to understand what exactly the banks had promised to do, I asked some basic questions:

What types of small businesses were the banks talking about? Were they truly small bus inesses that needed capital, or were the banks including larger businesses that have tens of millions of dollars of revenue? What type of loans were included in this commitment? Were the banks including credit card lending? Do all of the banks have the same understanding of the commitment?

The questions might seem like nitpicking, but without a clear definition of the kinds of loans and the kinds of businesses, it was hard to know whether the commitment meant much of anything at all. Furthermore, judging by what the banks have stated in their call reports to the Federal Deposit Insurance Corporation, it seemed the big banks had fallen behind in their commitment. But the Small Business Administration and the Financial Services Roundtable assured me that they would be issuing their own report card toward the end of September and that it would clearly state how the banks were doing at the one-year mark of their commitment.

In a blog post published Monday night, the S.B.A. administrator, Karen G. Mills, announced that in just one year “the 13 banks have already increased lending by more than $11 billion.” But the post offered no further information about what the terms of the commitment. Meanwhile the Financial Services Roundtable, the American Bankers Association and the Consumer Bankers Association sent out a release announcing the progress and stating, “Our members are fully committed to increasing lending to small businesses.” Their release was short and simple and similarly provided no additional detail.

According to Ms. Mills, the banks are up by $11 billion; according to the F.D.I.C. call reports, the banks have fallen behind by more than $2 billion. We are still hoping the banks will explain what exactly they have committed to do.

Ami Kassar founded MultiFunding, which is based near Philadelphia and helps small businesses find the right sources of financing for their companies.

Ethan Bronner Discusses the \'Core Issue\' About Voting

September 24, 2012, 5:25 pm

By MARGARET SULLIVAN

When I wrote recently about the problem of “false balance” in news stories, I quoted the national legal affairs correspondent Ethan Bronner, whose Sept. 9 story was criticized by some readers.

Those readers believed - and I agree - that his story should have included a clear statement that there is virtually no evidence of in-person voter fraud.

But in quoting one of Mr. Bronner's statements, I got his words right but misrepresented what he was getting at. He later told me so, and I asked him if he'd like to provide that clarification to readers.

Here it is:

Margaret,

In your column about false balance, you quote me (accurately) as saying of in-person voter fraud that while there is no evidence that it exists, it is “not the core issue.” Some readers said it sure seemed like the core issue to them. But as I had said to you originally, while both sides have been fighting about voter ID, a much bigger issue is the failure of both parties to address the country's appallingly low voter registration. Some 51 million voting age Americans, about a quarter of the voting age population, are not registered to vote. We lack a national voter roll which every other advanced (and many not so advanced) country has. Instead we have 13,000 such rolls which vary in accuracy and ease. When voters move, which they do often in this country, they must register anew. While it is certainly true, as I made clear in my front-page story from Pennsylvania in July, that voter ID requirements will disproportionately affect the poor and minority groups who vote more for Democrats than Republicans, the percentage of REGISTERED v oters who lack the needed ID appears low. One survey from 2008 show that 90 percent of whites who are registered to vote have the needed ID and 85 percent of blacks who are registered to vote do as well. When advocates say that 750,000 people in Pennsylvania lack the Department of Transportation-approved ID there, what goes unsaid is that perhaps 650,000 to 700,000 of them are not even registered to vote so the ID question at polling stations is moot.

I wrote a story about this that appeared on July 31st and quoted Robert Pastor of the Center for Democracy and Election Management at American University saying it this way: “The proponents of voter ID are adamant that it is essential to stop electoral fraud even though there is hardly any evidence of voter impersonation, and the opponents are sure that it will lead to voter suppression even though they haven't been able - until Pennsylvania - to point to a single instance where a voter could not vote because of a lack of ID,” he said. “I did a survey of Indiana, Maryland, and Mississippi and found only about 1.2 percent of registered voters did not have photo IDs. The problem remains registration - not IDs - in reducing voting participation. To quote Jorge Luis Borges on the Falklands war, ‘It's a fight between two bald men over a comb.'”

Even if he slightly overstates his case (there are other scholars who say he does), his point seems to me very significant and it was the point I was trying to make in my conversation with you.

Ethan

Small-Business Lessons From Harley-Davidson\'s Turnaround

September 24, 2012, 4:00 pm

By JOSH PATRICK

This weekend, I read an article in the Wall Street Journal about how Harley-Davidson turned itself around using “lean” manufacturing strategies. Lean, or just-in-time, manufacturing is the Toyota production system, which started with W. Edwards Deming and his work with statistical quality control. Whenever I see this kind of article about a large company, I think about how the thoughts and principles can be applied to the smaller companies I work with.

As I read this one, three things occurred to me.

1. The idea behind lean is to create capacity - not to reduce employee headcount. In this case, Harley-Davidson reduced its headcount by more than 1,000 people using l ean techniques. Harley-Davidson probably can do this just once. If it continues to use lean strategies to reduce headcount, it will see employee enthusiasm for the program wane.

People don't want to see their jobs go, and they don't want to see their friends' jobs go either. If the layoffs are an economic necessity, they can work. But you can only have so many economic emergencies before people say enough is enough.

My favorite use of lean is to create capacity for more business with the same headcount. I find that employees get excited and stay excited when more business comes into the company. If using lean techniques to make the company better allows for more job security through efficiencies, employees are all for it. If you cut employees in for a piece of the action through bonus programs, so much the better.

2. Installing lean in large companies is much different than installing lean in small ones. Large companies have lots of resources, both economic and human, that they can throw at arrangements like this. Small companies do not.

Still, I'm a big believer in lean activities in small companies. I've seen successful implementations increase profits by 50 percent or more. While large companies can afford to do more than one lean project at a time, the small company successes I've seen take it one step at a time.

3. Often, we see these activities led by those who have been through M.B.A. programs. The problem I often see with M.B.A.'s in smaller companies is that their educational training is for making positive changes in large companies. But those changes don't always work in smaller companies with fewer resources. And an understanding of the strategies that do work in small companies is often totally foreign to those with advanced business degrees.

I've got nothing against M.B.A.'s. I've just come to believe that those with advanced degrees often need to have a complete reset in their beliefs about how successful change is done in a smaller company. Thankfully, there are several programs in the country that concentrate on small businesses.

I found this article very provocative. What do you think?

Josh Patrick is a founder and Principal at Stage 2 Planning Partners where he works with private business owners on wealth management issues.

Is \'Illegal Immigrant\' the Right Description?

September 24, 2012, 1:23 pm

By MARGARET SULLIVAN

For Debate

Readers debate a Times journalistic decision.

Jose Antonio Vargas is a man on a mission. The journalist turned immigration activist wants news organizations to stop using the term “illegal immigrants,” which he finds disparaging and inaccurate. He's particularly focusing on The Times and The Associated Press to change their policies.

Vargas has approached me about it by e-mail, and I've said I would be happy to hear him out. I should note that, as public editor, I don't make Times policy on such things. However, I could, at some point, take a stand.

At this point, I don't know enough.

I do know what Vargas - who revealed that he is an ‘undocumented immigrant' in a Times Magazine piece last year - told the Online News Organization in a speech there last Friday.

And I talked about it Monday morning with Philip B. Corbett, the associate managing editor for standards at The Times. “We do think about this, and we talk about it all the time,” he said.

Asked about the matter by Poynter.org's Mallary Tenore on Monday, he responded as follows:

Obviously we know this is a sensitive area, one that we continue to struggle with. As my colleague Julia Preston, who covers immigration, has suggested, we're trying hard to be neutral on an issue where there isn't much neutral ground.

For one thing, we don't reduce our coverage of this complicated issue to a single label. Julia and other Times reporters try to be detailed, descriptive and as accurate as possible in writing about immigrants in a whole range of different situations.

But in referring in general terms to the issue of people living in the United States without legal papers, we do think the phrases “illegal immigrants” and “illegal immigration” are accurate, factual and as neutral as we can manage under the circumstances. It is, in fact, illegal to enter, live or work in this country without valid documents. Some people worry that we are labeling immigrants as “criminals” - but we're not. “Illegal” is not a synonym for “criminal.” (One can even park “illegally,” though it's not a criminal offense.)

Proposed alternatives like “undocumented” seem really to be euphemisms - as though this were just a bureaucratic mix-up that can easily be remedied. Often those phrases seem deliberately chosen to try to soften or minimize the significance of the lack of legal status. We avoid those euphemisms just as we avoid phrases that tend to cast a more pejorative light on imm igrants. For example, we steer clear of the shorthand “illegals” and also the word “aliens,” both of which we think have needlessly negative connotations.

So, in keeping with my promise to make this blog a continuing conversation about journalism and journalistic practices, I'll put the question out there for discussion.

In the meantime, I also hope to talk with Julia Preston. Here are her comments last week in an ABC/Univision story:

http://abcnews.go.com/ABC_Univision/News/jose-antonio-vargas-drop-illegal-immigrant-challenges-nyt/story?id=17291550#.UGB5S1Jy890

What do you think? You can respond in comments to this blog, e-mail me at public@nytimes.com or reply on Twitter, where my handle is @sulliview.

I'll aggregate the discussion and comment more substantively soon.

I Swear I\'m Going to Stop Doing That

September 24, 2012, 11:00 am

By PAUL DOWNS

My wife and I attended the opening of our town's newest library, which is magnificent, and on the way home I said I was glad to live in a fairly small place that manages to have six libraries. “You forgot one,” she said, and she mentioned another that I'm not going to name here.

“That doesn't count,” I said, noting that it is part of a different borough.

“They are all crabby there anyway,” she said, “Those ladies are all sour and rude to everyone.  Except there's one lady, she's nice.”

It's true: they are a very sour pack of library ladies. “That's the sign of a bad boss,” I said. “For whatever reason, the boss sets the tone. And then the workers pick up on it and dial i t up a notch, and they get used to it, and it keeps going. That one nice lady probably just wants to have a nice day and doesn't buy into the negativity. But the boss is letting the other ones get away with it.” It was an easy diagnosis for me, because I run into this same thing myself.

I sit in a very small office with my administrative assistant, my two sales engineers and my design engineer. All five of us hear each other's conversations and are privy to most of what we all do each day. And inevitably there are moments when we get off a phone call or finish reading an e-mail in which we have encountered some bad news or something irritating, and we vent.

I do it; the others do it. It's just human nature. But I've learned to make sure that I take a deep breath and try to get my mind back to a better place. And I make a point of listening with sympathy but then reminding everyone that most of our clients and vendors are good peopl e who are easy to deal with. And I repeat that to myself. Again and again. I really need to keep thinking about that as often as I can.

After 26 years of long days, bad pay and dealing with a million fires, it would be easy to let the fog of cynicism and negativity engulf me. But if I do that, the bad attitude will spread quickly to everyone around me. I find it's one of the hardest things about being a boss - keeping that smile on my face, answering the phone with the perfect jaunty greeting no matter how crummy I feel, and staying calm even when the situation calls for running in circles and screaming. Understanding that the staff will mirror the attitude of the boss, I know I have to set the tone. If I let my guard down, I can do great harm.

And most of the time, I do O.K. But I'm bad about one thing: at work, I have a very foul mouth. I'm not sure where I picked this up. I could say that it's a result of working on construction sites, but I haven't spent a hu ge amount of time on construction sites. I think it's just a way I have of letting off steam. Clearly, I can communicate without swearing when I want to. But if it's just me and my workers, I am one swearing - oops, almost did it again!

Maybe I could stop doing this, but I haven't made the effort. It's not something I'm proud of, but no one has ever complained to me about it. I should probably cut it out. But I have limits to what I'm willing, or maybe able, to do to be the perfect boss. I have enough trouble with the basics of running a profitable factory. Perfect behavior seems to be too much of an effort.

Do you have a bad habit that you know you should stop?

Paul Downs founded Paul Downs Cabinetmakers in 1986. It is based outside of Philadelphia.

This Week in Small Business: $931 Billion in Cash

September 24, 2012, 7:00 am

By GENE MARKS

Dashboard

A weekly roundup of small-business developments.

What's affecting me, my clients and other small-business owners this week.

Economy: Still Sitting on Their Cash

Matthew Philips thinks 2013 is going to be a bummer. FedEx turns pessimistic. A Citibank study of small businesses finds that their biggest problem is a lack of sales growth. Still, retail sales rose in August. And in real estate, builder confidence and residential building growth (PDF) continued to gain momentum, existing home sales and prices went up and architectural billings turned positive. Manufacturing in both the New York and Philadelphia regions weakened. Port traffic in Los Angeles is down compared with the previous year, and weekly rail traffic is mixed. Businesses now hold a record $931 billion in cash.

Management: Eat

These are the 50 most powerful women in business. Michelle Patterson says women are leading the economic turnaround. Suzie Humphreys just loves to do payroll! Mark Cuban explains how to make $2.3 billion: “Either you know your business inside and out or you don't. Either you're willing to do whatever it takes to win or you won't. Very simple.” Here are 27 everyday ways to get inspired. Here's how to tell if you are a micro-manager. Jacquelyn Smith suggests some things you should do on your lunch break every day, including: “Eat. Don't try to be a hero and starve yourself for the sake of being a hard worker or checking off another ‘to-do' item.” Brett and Kate McKay offer advice on getting your kids to do their chores. The Exotic Entrepreneur says there are three steps to expanding your business online. Randall King believes every entrepreneur should read these three Kindle books. Michael Hartzell lists three ways to establish a good reputation, including: “Keep informed about fund-raisers and other events in your area and find ways to get involved. … Not only will you be embracing the needs of your neighborhood but it is a great networking opportunity.”

The Campaign: 47 Percent

Here are the 47 percent in one graphic. Gallup says the race is still a dead heat. A guy gets bored during a campaign stop. President Obama leaves a nice wedding gift and celebrates Talk Like a Pirate Day. The cast of “The West Wing” jumps into the fray.

Finance: Two Questions

Here's what it's like when two people are dating and start a company together. Ryan Matthew Pierson offers his thoughts on why start-ups fail. Anna Farmery has five tips for developing your freelance career. This is an investor's-eye view of the Chicago start-up scene. Philip Campbell says beware the phrase, “Cash is a little tight now.” Caleb Wojcik says getting personal finances in order is the not-so-sexy step that every profitable entrepreneur must take: “The reason that entrepreneurs need to have their personal finances in order before they start taking risks is the freedom and flexibility it offers.” The mobile payment company Square is now worth more than $3 billion. This interactive graphic will help you understand how different financing strategies will affect you and your investors over time. Warren Berger reveals the secret phrase innovators use. Here are two important questions to answer before you invest in a small business. Is “Shark Tank” a good deal?

Your People: Forget Qualifications

Ken Oboh offers advice on finding the right people: “In our hiring, we've never looked at what the individual has in terms of formal qualifications; we've alwa ys looked for people who love the Internet and have a passion for building an online business.” Julie Rains shares the secret for finding great temps. These companies offer work-life balance. One in five job-seekers rejects employers who ban social media. Jill Jusko explains how to develop high-potential employees. An infographic shows where the jobs will be in 2020. This is how obese employees hurt your bottom line. Finally, someone explains why the chicken crossed the road.

Marketing Offline: A Really Sweet Halloween

Alyson Stanfield gives advice for promoting events six months out. Susan Ward thinks Halloween could be a really sweet business opportunity: “Large parties with participants wearing elaborate costumes are becoming increasingly popular - excellent news for people looking for niche business opportunities.” Here's an interesting case study on how a high-end closet company segments its customers. Here are three reasons successful business owners still rely on print materials. This sentence will blow your mind. Hootsuite's Ryan Holmes explains how to build a recognizable brand. Is this the sexiest, coolest, most epic bus commercial ever?

Marketing Online: Social Media Insurance

Ninety-eight percent of small businesses do not have mobile-ready Web sites. These are the six landing-page questions your visitors want answered. Studies show eye contact is the antidote to online animosity. Here's how small businesses can use six LinkedIn marketing tools. A conference call provider, InterCall, starts a new online community for small businesses. As managing your company's Facebook page becomes easier, AJ Kumar explains how a Facebook search engine could change the way people find your business. Denise Keller explains how to reactivate your lapsed e-mail subscribers. And you knew it was coming: social media insurance.

Around the Country: Sweepstakes

Philadelphia's zoo will use cards and scanners to trac k guest behavior, and the city's opera company gives a surprise performance at the train station. Hershey's new plant could bring $1 billion to Pennsylvania. The Small Business Administration increases its support for Hispanic entrepreneurs, and the Morris County Hispanic-American Chamber of Commerce in New Jersey celebrates its “Business Man of the Year.” New York City businesses sound off on the mayor's sugar ban. Small businesses can go here to win a “neat” prize. JetBlue plans free Wi-Fi and other airlines add routes to the North Dakota oil patch. NCR announces a $10,000 sweepstakes for small businesses. The UPS Store makes a pitch to small businesses.

Around the World: China's Tantrums

Japanese businesses in China are hit by protests, but Wayne Arnold says that markets are dismissing China's “anti-Tokyo tantrums.” Here is China by the numbers. The world's central banks flex their muscles. Russia reveals it is awash in diamonds. Small businesses i n France are facing job-creation hurdles. Greece readies further budget cuts. Arctic ice melting is providing opportunities. A company in Britain builds hotels from shipping containers. A fire tornado in Australia burns up the Web. The Obama administration denies plans to invade Canada.

Red Tape: Hanging With NASA

A new poll finds that most people still don't understand the health care overhaul, and the Congressional Budget Office raises its estimate of those who will pay the mandated tax. Health care costs are expected to continue to rise (PDF) in 2013. NASA's chief hangs out with a small-business partner and the agency seeks more small-business proposals for high-tech research and development. It's estimated that pending federal legislation would restrict state and local governments' ability to levy sales and gross receipts taxes and cost state and local governments $3 billion a year in forgone revenues.

Technology: Setting iPhone Records

The iPhone 5 has record orders, and Walter S. Mossberg loves it. But Anita Li reports that the smartphone's connectors could be a headache for businesses. Nearly half of business travelers would give up brushing their teeth before giving up their iPads. Anton Wahlman thinks it's more likely than not that Microsoft will take a beating from Google and Apple in the wake of the Windows 8 introduction. Twitter's chief executive says that Apple is his mentor and unveils a new look. Mile-high buildings will be possible by 2025, and this robot could transform manufacturing. Amazon Web Services introduces a new hunt for innovative cloud companies. Yahoo gives employees smartphones (but not BlackBerrys). A Web meeting scheduler, Tungle.me, closes its doors. An investment strategist names the biggest growth sector. Here's how tablets are making cash registers obsolete. This is how to use Microsoft Excel to manage your life.

Tweet of the Week

‏@charlesarthur: Which statistics packa ge do pirates use to count their treasure? R.

The Week's Best

Erica Douglass writes about why 99 percent of entrepreneurs don't make it: “I often hear teachers, coaches and even bloggers describe this as a ‘passion.' ‘You have to find what you're passionate about and then do that,' they say. And to that, I say: Hogwash. You don't need to go on a mission and find your passion to start a business. You just have to throw away much of your guilt and self-doubt … and own the fact that you were put on this planet to do this very thing that you're doing right now.”

This Week's Question: Do you understand how the health care overhaul will affect your business?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

A Look at the Reaction to The Time\'s Quote-Approval Policy Using Storify

The public editor uses Storify to collect the reaction to The Times's new quote approval policy.

On Identifying a Rape Victim, Naming a Prophet, and Nate Silver\'s Role

September 21, 2012, 9:00 am

By MARGARET SULLIVAN

Readers have written to me about a number of issues in the past week. Here's a roundup of some of their questions and complaints, and my answers and comments.

Why was a rape victim's blog mentioned and quoted from in a story on a rape in Central Park, allowing readers to identify the woman?

The reporter Wendy Ruderman, who is The Times's police bureau chief, recounted what happened last Friday night when a story on the Web site for about two hours contained a brief quote from the victim's blog that could lead readers to identify her by name. That form of the story also appeared in an early print edition on Saturday.

Ms. Ruderman said she felt it was important to write this third-day story to provide important context about the victim, a regular visitor to Central Park, and how she used her blog as a “wall of shame” to embarrass people who were misusing the park.

Although reporters and editors were careful about using a brief quotation from the unnamed blog â€" even taking the precaution of typing the words into a search engine to see if it could lead readers to the blog - they apparently were not careful enough. My assistant performed the same search and was able to find the blog in question.

As soon as a reader e-mailed The Times, saying that the quotation could lead to her blog, thus identifying her, it was removed and that section of the story was paraphrased online and for later print editions, Ms. Ruderman said.

I e-mailed the woman who was raped, asking for an interview. She said she was unable to talk now because of the criminal case against the suspect, but she clearly held no grudges against Ms. Ruderman, referring to her as “a gem.”

“Over all, the Internet is a huge challenge - I have struggled with it a lot,” Ms. Ruderman said. The lesson, she said, is that “on a story like this, we should take extra care. We need to be very careful on all stories, but we also feel the pressure to be immediate.”

Ms. Ruderman is right. The initial use of a quote from the blog was wrong. but the quick response to the complaint was appropriate; and the lessons learned are crucial ones. The issues regarding privacy and the Internet are getting more complicated for journalists every day.

Why does The Times refer to Muhammad as the Prophet Muhammad, but not refer to Jesus Christ in the same way?

Philip B. Corbett, the associate managing editor for standards, provides this reasonable answer: “We try as much as possible to respect the terms and language used by religious groups. Muslims routinely refer to Muhammad as “the Prophet Muhammad,” but I'm not aware of any Christian denominations that use ‘the Prophet Jesus.'”

Why is the statistical whiz Nate Silver, of the FiveThirtyEight blog on The Times's Web site, not included as a regular part of The Times's political coverage?

Some readers point out that his perspective would be useful in stories based on public opinion polls. Mr. Silver called the 2008 presidential election with near perfection. For many weeks now, he has been giving President Obama approximately a 75 percent chance of winning the election, at a time when various public opinion polls have been calling the race “neck and neck.”

I asked the executive editor Jill Abramson about this. She said she views Mr. Silver's work as a separate entity, somewhat analogous to that of a columnist. The Times would not, under normal circumstances, use quotations from, for example, David Brooks's column in its coverage. “It's already in the paper,” she said.

Mr. Silver, too, prefers the arm's-length distance. “It leaves me free to question the dominant narrative,” he told me this week.

Mr. Silver's work, although mostly online, is occasionally used in bylined stories in print in the news pages of The Times. It will also appear this weekend in the Sunday Magazine.

I understand the separation but I'd like to see Mr. Silver's work included more regularly for the benefit of print readers.

My Problem With Company Retreats

September 21, 2012, 7:00 am

By TOM SZAKY

Aside from eating rabbit, I think there's only one thing I'm allergic to: company retreats.

Even in elementary school, I found the idea of team-building games - from trust falls to three-legged races - nauseating. But in a professional environment with a group of adults? I cannot understand why a company would spend money and people's time at such retreats. Of course, there is an entire industry built around these events, which suggests a question: Do they actually work?

If you look at the Web sites of the companies that manage retreats, they say the goal is to build communication and cooperation and to improve morale and have fun. These sources go on to highlight that a company retreat wouldn't be co mplete without “considerations” like a spa evening or a golf outing. The goal, after spending a considerable amount of money and time, is to “stimulate future productivity by helping your employees reconnect and relax.”

Now, I consider myself something of a new age chief executive. Our company prides itself on transparency and accessibility, and we even have a culture of Nerf guns complete with our own chief Nerf gun officer (the C.N.O.). But we are a business, and we come to work to work, not to play or relax. While I am in the business of giving frequent and direct feedback, I am not in the business of giving hugs or focusing on things that don't drive fundamental and objective productivity. That is not to say that I don't want all of my colleagues to love their jobs and enjoy their time at the office. Work should be fun, rewarding and enjoyable. It's what we spend most of our waking lives doing.

I think that if an organiza tion needs a company retreat to rebuild morale or excitement, there is something fundamentally wrong with the organization. The leadership of an organization should always consider the general mood of the staff and try to make real-time changes to improve it. But only to a point. All organizations have grumblers and naysayers, and no matter how many extra hours you give for lunch or how many company retreats you run, that's not going to change.

Companies also have retreats to rethink the big picture - the vision, mission and path of your business over the coming years. And this has come up a number of times at TerraCycle, as has the idea of running the very retreats I have such distaste for. In the past, as a compromise, I have hosted full-day off-sites at my house for the entire business to discuss these kinds of issues. The cost was always high - primarily the opportunity cost of the entire staff taking a day away from work - and the results were generally modest. Pe ople liked the off-sites but didn't learn much.

When I recently was asked about doing another, we decided that instead of a company off-site we would reduce the meeting to just the senior team and run a one-hour session every month to discuss big-picture issues. The results were significantly better. We came up with a guiding document that crystalized our key challenges for the following year, and we were able to communicate that to the team at large.

In the end I have realized that instead of having lofty, expensive and infrequent company off-sites, it may be better to split the goals into bite-sized chunks. To get staff members interacting with folks they usually wouldn't spend time with, we throw bi-monthly company parties at someone's house (cost is usually a few hundred bucks for food and drinks). To keep rethinking the big picture, we run those one-hour monthly meetings with the senior staff and then bring changes to the whole staff when appropriate.

The closest thing we have to an off-site is our annual international week. During this time (usually a week in May) about 30 or so international staff members from our offices outside the United States come to spend the week in Trenton to share ideas and insights, meet their fellow teammates and party. We started holding international weeks three years ago, and it has been a major success.

Since it is a rather big expense - probably more than $35,000 in travel and hotel costs plus the hard-to-quantify expense of having basically the entire company not focused on its work - we take the scheduling of this event seriously. Over the last three years, we have worked harder and harder to make sure the week is well organized and creates as much value as possible. The goal is to work hard on opportunities and challenges and then party together to get to know the person you usually speak to only on the phone.

A critic might ask, isn't international week a company retreat? And my answer would be no. The goal of this week is to work very hard to create concrete results for the business. Our work days are extended from 9 a.m. to 5 p.m. to 8 a.m. to 6 p.m. And the meetings are never esoteric; they are highly focused on specific issues, for example: “using SAP in your local country” or “how to promote a new waste collection program.”

Most important, there are no trust falls, no ropes courses, and no golf. It's an exhausting week of hard work with a focus on improving the business. And the response from our team has been overwhelmingly positive.

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.

In New Policy, The Times Forbids After-the-Fact \'Quote Approval\'

September 20, 2012, 3:53 pm

By MARGARET SULLIVAN

The New York Times is drawing “a clear line” against the practice of news sources being allowed to approve quotations in stories after the fact.

The practice, known as quote approval, “puts so much control over the content of journalism in the wrong place,” the executive editor Jill Abramson told me in an interview. “We need a tighter policy.”

Times editors have been working on the policy for months, she noted - ever since a July story by Jeremy Peters revealed the practice as a widespread one that included many reporters.

A memorandum on Thursday says that “demands for after-the-fact quote approval by sources and their press aides have gone too far.”

“The practic e risks giving readers a mistaken impression that we are ceding too much control over a story to our sources,” it says. “In its most extreme form, it invites meddling by press aides and others that goes far beyond the traditional negotiations between reporter and source over the terms of an interview.”

It includes this firm directive: “So starting now, we want to draw a clear line on this. Citing Times policy, reporters should say no if a source demands, as a condition of an interview, that quotes be submitted afterward to the source or a press aide to review, approve or edit.”

Ms. Abramson said that she never wants to put obstacles to news-gathering in front of reporters but that “anodyne or generic quotes that are scrubbed or changed don't add anything” to stories.

If the practice were allowed to continue, she said, “you will only see more control and manipulation” by news sources in the future. In making thi s move, The Times joins news organizations like The National Journal and Reuters in opposing quote approval; Reuters stopped short of an outright ban.

Ms. Abramson, who has many years of Washington reporting and editing in her own background, including a stint as Washington bureau chief, said she understands that “we'll lose interviews” because of the new policy.

Interviews without quote approval “will be seen as too risky” by news sources, she said. “The practice is so ingrained.”

She said there could be exceptions to the rule if there were critical information that would otherwise be denied to the reader, and if the exception were discussed with a senior editor in advance.

Believing that such a directive might be coming - and responding to a Monday column by David Carr and my blog calling for a clear policy - a number of reporters have been in touch with me this week to express their points of view.

One who provided thoughtful comm entary was the White House correspondent Peter Baker. He wrote:

As much as I hate the practice, it grew out of a laudable desire on the part of newspapers to stop using so many blind quotes in White House stories. As I recall, it was during the late Clinton era and editors pushed us to go back to sources who spoke on background and get permission to use their names with specific quotes we were planning to use anyway but anonymously. Sources generally found that being on the record was not so worrisome (or career-threatening) once they knew what we actually wanted to use and they often agreed. As a result, stories that traditionally were filled with anonymous quotes began having more named sources. This was a benefit to our readers. Over time, sources began to take advantage of this and institutionalize it to the point that they came up with this name for it, quote approval. It's grown way too common and has become an objectionable means of control by too ma ny people who should frankly just talk on the record, especially paid spokesmen. But it's also a practice with tangible benefits for our readers and we should consider the trade-offs before making any hard-and-fast rules.

The memo recognizes that distinction:

We understand that talking to sources on background â€" not for attribution â€" is often valuable to reporting, and unavoidable. Negotiation over the terms of using quotations, whenever feasible, should be done as part of the same interview - with an  “on the record” coda, or with an agreement at the end of the conversation to put some parts on the record.  In some cases, a reporter or editor may decide later, after a background interview has taken place, that we want to push for additional on-the-record quotes. In that situation, where the initiative is ours, this is acceptable.  Again, quotes should not be submitted to press aides for approval or edited after the fact.

Ms. Abramson put it succinctly:  When possible, “it should be part of the same transaction.” She also said she realizes and sympathizes with the concerns of reporters who don't want to lose one of their ways of getting information to readers.

As the memo states:

We know our reporters face ever-growing obstacles in Washington, on Wall Street and elsewhere.  We want to strengthen their hand in pushing back against the quote-approval process, which all of us dislike. Being able to cite a clear Times policy should aid their efforts and insulate them from some of the pressure they face.

In the end, Ms. Abramson said, it is a control issue. “The journalist shouldn't be a supplicant,” she added.

The policy strikes me as both sensible and necessary.

Do You Really Expect Your Business to Get You Through Retirement?

September 20, 2012, 7:00 am

By JOSH PATRICK

I've been speaking with and working with private business owners for more than 15 years. Most owners have a dream of running their business for their working career, finding a buyer and then riding off into the sunset with no other planning.

Lately, I have been sensing that business is getting better, and I have been told that buyers are starting to make offers much richer than they were even last year. But before you decide to think about selling your business, you need to think through whether you can afford to sell your business. I encourage you to do the math carefully before you make the move to sell.

First, let's consider some bracing statistics about private businesses that come from the Cen sus Bureau.

• There are approximately 6 million private businesses that employ people in the United States.
• Only about 300,000 of these businesses do more than $ 5 million in sales.
• Only about 150,000 of these businesses do more than $10 million in sales.
• Private businesses on average sell for between three and six times their earnings before interest, taxes, depreciation and amortization, or Ebitda.
• The average private business has an Ebitda that falls between 7 and 13 percent of annual revenue.

So, let's run the numbers on a simplified example. Suppose we take a business that has $10 million in revenue and an Ebitda of $1 million, or 10 percent. If this company is put up for sale, the transaction might look something like this:

• Revenue: $10 million.
• Ebitda: $1 million.
• Sale price of 4.5 times Ebitda: $4.5 million.
• Taxes and expenses on sale (35 percent): $1.575 million.
• Net proc eeds from sale: $2.925 million.
• Pretax annual income available at 4 percent of invested proceeds: $117,000.

And there you see the conundrum that many business owners face when contemplating the sale of their businesses. Keep in mind that in this example, the owner - before the sale - had been enjoying $1 million of annual cash flow before interest, loan principal payments, capital investments and taxes. And this is one of the lucky few businesses in America that have annual revenue of $10 million, one of the top 2.5 percent. Does your business create more than $1 million in Ebitda? Are you in the top 2.5 percent?

If not, and if you are hoping that you might one day be able to leave your business, you might want to consider the following strategies:

Start and fund a qualified retirement plan. I call this prefunding your buyout. While your business is creating significant cash flow, take $40,000 to $60,000 and put it in a qualified retirement pl an. If you are able to get a 6 percent return and invest $50,000 a year for 20 years, you will generate a nest egg of approximately $1.8 million.

Qualified plans are complicated beasts. There is a great deal of customized design that can go into your plan. The people in the qualified plan world who are experts at plan designs are called third party administrators. You will want to find one who understands the various options. Your accountant or investment adviser should be able to point you in the right direction.

In many cases you can tell your adviser how much money you want to save, and he or she can put together a plan that fits those parameters. I've seen business owners who got a late start save as much as $200,000 a year in their plan.

Think about owning the real estate. If it's possible for you to purchase the real estate where your business operates, you should strongly consider this. Many business owners who own their own real estate end up sellin g the business but keeping the real estate and collecting rent.

Like a qualified retirement plan, starting early with real estate is important. Many owners will buy their business's real estate and pay rent to themselves for 15 years to pay off the mortgage. After the mortgage is paid off, the rent flows to the business owner. Sometimes, the income from the rent is more than the income from the principal on the sale of the business.

Do a financial plan first. I have seen business owners sell their businesses, think they are going to retire and then find out four or five years later that they have to go to work for someone else. These owners often wind up with seller's remorse. They wish they didn't sell their business after all.

Doing the financial plan can help you figure out your financial needs before you start to plan the sale of your business. And advanced planning while you have strong cash flow can help you avoid the mistake of assuming that selling your business, even for millions of dollars, will cover all of your retirement needs. Once you sell your business, you don't want that assumption to come back and bite you.

Have you thought about what it's going to take for you to leave your business?

Josh Patrick is a founder and Principal at Stage 2 Planning Partners where he works with private business owners on wealth management issues.

Can Entrepreneurship Solve the World\'s Problems?

September 19, 2012, 10:56 am

By YOU'RE THE BOSS EDITORS

After Hurricane Katrina wiped out Kevin Langley's New Orleans construction business, he saw the role that business owners and entrepreneurs played in trying to put the city back on its feet. Inspired, Mr. Langley became global chairman of the Entrepreneurs' Organization and wound up going on a world tour of troubled locations where he sought to inspire, mentor and connect entrepreneurs. Please read Ian Mount's small-business conversation with Mr. Langley and tell us whether you think entrepreneurship is the answer.

Passing Up the Opportunity to Appear on \'Shark Tank\'

September 19, 2012, 7:00 am

By AMI KASSAR

Last week, I met with two entrepreneurs from a growing company called Brooklyn Slate. Sean Tice and Kristy Hadeka, whose company makes cheese boards out of slate, shared their stories with me, and many of them  would have sounded familiar to anyone who has struggled to build a business. But there was one story that I had not heard. Mr. Tice and Ms. Hadeka had come close to appearing on the ABC reality show “Shark Tank,” where entrepreneurs pitch their companies to a group of wealthy investors, including Mark Cuban, the owner of the Dallas Mavericks.

While many entrepreneurs would give their left toe to be on this show, Mr. Tice and Ms. Hadeka declined. And they did so for an intriguing reason: In or der to proceed, they were required to enter into an agreement with Finnmax, the show's producer, that would have given Finnmax the option either to receive a 2 percent royalty on the operating profits of the company or take a 5 percent equity stake.

Hearing this story encouraged me to sit down Friday night with my children and, along with hundreds of thousands of other families, watch the season debut of “Shark Tank.” We saw four entrepreneurs pitch their dreams to the sharks. Two companies made a deal, one rejected an offer and another went home with its tail between its legs.

As I watched, it was hard for me to focus on the entertainment and forget what I do for a living, which is to help businesses obtain financing. You see, there are options available to these entrepreneurs besides giving away equity. Debt options are particularly relevant when a company is in the business-to-business space and has purchase orders and account s receivables. On Friday's show, this was the case for two of the companies, BevBuckle and BuggyBeds, that received equity financing.

If a company has a purchase order from a viable company, it can usually get a purchase-order financing company to advance the money the company needs to fulfill the order. As soon as the products ship and there is an invoice, an accounts-receivable financing company pays off the purchase-order financing company. When the invoice is paid, the business owners get paid, minus the financing fees.

These lending programs can be expensive, but the financing is transactional, and as the company grows, the fees eventually fall. Most important, while angels and sharks who take equity are likely to be with you forever, the debt holder eventually goes away.

It's also important to understand that the financing companies offer a tool with the capacity to grow. If a company's orders grow from $50,000 one month to $500,000 the next, the busi ness owner has an instrument in place that's ready to handle the increase. By contrast, when owners give away a big percentage of their company for a $100,000 investment and then get hit with a big order, they have a brand-new cash flow problem.

On Friday night, Jay Kriner, the owner of BevBuckle, gave away 51 percent of his company for $50,000 to Barbara Corcoran, one of the sharks. He told us that Urban Outfitter and other major retailers were ready to give him purchase orders. Similarly, the owners of Buggybeds, Maria Curcio and Veronica Perlongo, gave away 25 percent of their company for $250,000. They had sold $150,000 of product at Home Depot in the previous six months.

When entrepreneurs consider accepting a debt or equity investment, they should always consider the alternative and evaluate the pros and cons. Sometimes debt is too expensive or too onerous, and equity is the best choice. Whatever the situation, the decision can make or break a company and needs to be thought through carefully. At least, that's my opinion. Mark Cuban thinks the decision is a lot clearer than I do.

In an e-mail exchange, he wrote, “I would tell every entrepreneur what I tell them right now, debt is a nightmare. Banks are not forgiving, and the last thing you want to do is build your business with a priority placed on having to pay back the bank before you invest further in your business. Equity is far better and sweat equity is the best.”

In a phone interview, Ms. Corcoran told me a story about how before she sold her company for $66 million, she hit a tight spot and almost gave away a big part of the company to a savvy, wealthy investor. Today, she is thrilled that she didn't choose that option. And yet, on Friday night she didn't seem hesitant about paying $50,000 to take a 51 percent interest in BevBuckle.

Remember that when you're giving away equity, you're getting married to your investors. Make sure that your value and ideas are in synch. And keep in mind that if your company ever wants to borrow money in the future, it's likely that any investor who owns 20 percent or more of the company will have to guarantee the loan personally. Will your investor be willing to do that? And if your investor is promising expertise and help the way the sharks do, make sure they spell out precisely what they mean before you sign.

What do you think? Did Sean Tice and Kristy Hadeka make the right decision when they passed up the opportunity to exchange 5 percent of their company for an appearance on “Shark Tank?” Do you think Jay Kriner of BevBuckle and Maria Curcio and Veronica Perlongo of BuggyBeds got good deals from the sharks? Or would they have been better off taking debt financing and keeping 100 percent of their companies?

Ami Kassar founded MultiFunding, which is based near Philadelphia and helps small businesses find the right sources of financing for their companies .