In case you hadn't heard the news, the economy is not so hot at the moment. But what are you supposed to do about that? Unless you have a time machine on hand, you are for a while going to be peddling your wares to a consumer who has rarely been less open to purchasing them.

But even economic bad times present an opportunity that the savvy marketer can exploit, says the Brooks Group. The central insight of a recent blogpost there is that the economic downtimes can be a boon to the seller that figures out how to take advantage of conditions that, in a normal situation, are decided disadvantages. Think of the lean times as a sieve, or filter, in which companies with poor fundamentals that good times propped up may not make it to the other side, but in which those businesses that are run they way they should be will not just survive, but even prosper.

-Build on existing customer loyalty with gifts, exclusive offerings, and the like.. They may be buying less overall, but you can coax them to buy more from you.
-Advertise your expertise. If people have less money to spend, they'll want to be extra-sure that what money they do spend is being spent as wisely as possible.
-Double-down on reliability. Being a trustworthy partner in a business relationship--no matter the goods or services being exchanged--is of course always of paramount concern. But it's even more important during downturns, when customers will have absolutely minimal patience for delays, screw-ups, and the like.

Whether this is just a temporary downturn or a broader...let's just call it "r-word" (it rhymes with "secession"), there are always buyers. Will you be the one they buy from?

There was a fascinating article published yesterday on our partner site, Slate, about the new world of tech start-ups. Takeaway: innovations in open-source software, cloud computing, and other things that may be broadly grouped under the "Web 2.0" rubric have lowered overhead so dramatically that tech start-ups can survive for much longer, and in much less hospitable times, than ever before. But the article has lessons on lowering operating costs for just about any small business that relies heavily on computers--which is to say, for just about any small business.

The article begins by bemoaning the current situation, in which fewer larger companies are willing to buy start-ups--the author notes that Google's proposed buy-out of Digg just went south. But no matter: these small Silicon Valley start-ups can get by because their costs are ever moving towards zero due to vastly shrinking computing costs.

"But strangely, no one's panicking. Despite the doldrums, despite the fact that tech may not get out of this slump for several quarters, startups and venture capital executives are barely breaking a sweat. Here's why: In the last 18 months, new developments in open-source software and cloud computing have made it cheaper to run a Web company than anyone thought possible. Just a few years ago, startups had to build their own IT services and administrative software, and the costs would soar into the millions. Today, tech leaders can just rent prepackaged software from Microsoft. Operating costs have plunged so low that companies vested with just a few million bucks can easily afford to wait until the good times roll around once more."

But you don't have to be Digg, or some even smaller company that makes applications for Facebook or the iPhone, to get in on the cost-saving action. Cartier is now on MySpace; cheaper alternatives to Microsoft's software suite abound. What are you waiting for? Lower your expenses, improve your computing, and be a part of the Web 2.0 revolution.

Earlier this week, we noted "The Mojave Experiment," Microsoft's new, unorthodox ad campaign for its Vista operating system. We argued that while the campaign certainly breaks new ground in a refreshing way, in that it acknowledges the Vista-hating phenomenon head-on, it risks backfiring. Apparently, we were not alone.

"By glossing over real concerns of Vista users and reviewers, which led to the negative perception of the OS in the first place, Microsoft may be doing itself a disservice," writes a BetaNews author. "Instead of responding to legitimate problems, the Redmond company is essentially telling the world that complaints about Vista have no merit."

Popular tech blog Gizmodo notes that the people in the Mojave video are clearly not the tech-savviest (no offense!). "This is a video of people clueless about what Vista looks like in the first place," the blog says. "No Gizmodo readers would fall for such a ruse."

Even a PC World writer who called Mojave a "marketing home run" isn't convinced of the campaign's overall effectiveness, writing, "Good marketing is about appealing to people's emotions, which Mojave does through embarrassment. 'I was wrong' isn't the best way to sell a product, although it has some pull here because Vista perceptions are so negative."

In the end, how you feel about Mojave (the ad campaign) may depend on how you feel about Vista (the OS)--some hard "truth in advertising". If you're predisposed to like Vista, Mojave is pure, sweet vindication. But if you're predisposed to dislike Vista, Mojave is a distraction from the real issues, namely, all of Vista's problems. In the end, Mojave may end up being a brilliant sermon heard only by the choir.

One thing's for sure: in BetaNews's words, "Mojave is drawing a great deal of skepticism across the Web. Rather than the focus centering on message of the marketing campaign, attention is on the approach behind the campaign." That can't be exactly what Microsoft wants.

Sen. Barack Obama is set to break all fundraising records, and even Sen. John McCain looks likely to hold his own in that department. More broadly, the 2008 election features the first-ever African-American candidate and the first campaign with no sitting president or vice president running in 40 years. Excitement has not run this high in at least a generation. How can you capitalize on this quadrennial exercise in democracy?

Certainly media outlets big and small are hoping for a bump, the New York Times reports. So far, the only clear winners appear to be cable news channels as well as a few outliers such as Politico. The Web-based politics news source has harnessed a few new features of how people like to get their political news--constant updates; an emphasis on video; cultivated personalities for specific writers--in order to up its pageviews massively. The lesson seems to be: look not just at the fact that people are paying attention, but also how they are paying attention.

And also who is paying attention. An article at Entrepreneur.com shows small businesses that cater to the booming demographic of politically-minded people under 30 with clever, at times edgy political satire as well as hip, politically-oriented t-shirts.

But, you say, I don't make t-shirts or have a news Website. Probably true. But the presidential campaign is, in addition to a crucial event for the country, an all-encompassing pop cultural moment: a common point of reference that will touch and energize more people than just about anything else. Wherever there is something so big, so dominant, there is a business niche. It's your job to find yours.

Treasury Secretary Hank Paulson called me yesterday to ask what he could do to provide unlimited financial security to my small business.

“Michael,” he said solemnly, “Cedarcrest Capital is too important to fail. How about we open up the Federal Reserve discount window to smooth over any rough patches you might have, like we did for Bear Stearns, and Fannie and Freddie, and like we'll probably do for other banks and brokerages? Would that be something you’d be interested in?” I was about to decline politely when…

…my alarm clock woke me up.

Instead, last week, I hosted two auditors from the New York State Department of Labor. It was a delightful visit, like having laser hair removed from my back, follicle by follicle. Or so I imagine. I’ll describe that in more detail in a future posting. (The auditors' visit, not laser hair removal.)

In the meantime, as a small business owner, I can’t help but be a little resentful when I read about what the government is doing to make up for massive financial errors made by large businesses. I’m bothered by the asymmetrical risk borne by large company owners versus that borne by small company owners. It’s one thing to see these “heads they win, tails I lose” types of bailouts, which may utilize my tax dollars but is an at least arguable course of action; it’s quite another when these bailouts exclude small companies from government care.

I’m not looking for government support, but I am looking for consistency of treatment for success or failure regardless of a company’s size. Is that so much to ask for?

You know an Internet meme has made it when it makes its way into print; and you know it is fully crystallized when the New York Times deems it worthy of its august pages. Please welcome Microsoft's Mojave Experiment, its unique and unliked ad campaign, to that club.

The Times weighs in today, and unsurprisingly, it focuses not on the campaign's efficacy--and certainly not on Vista itself--but rather on the (overwhelmingly negative) blogger and Internet reaction to the campaign. The ploy is “a clever test that demonstrates nothing,” Advertising Age columnist Bob Garfield tells the paper.

The paper does give the pro-Mojave forces a chance to defend the campaign, with an officer at the branding firm that conducted the test calling it "a fair representation of the operating system."

Still, the article spends most of the time discussing the campaign, not Vista; and, where it does discuss Vista, it's mostly a rehashing of everyone's complaints.

It is getting ever-more difficult to argue that this is benefiting Microsoft and Vista. Pretty soon, the Mojave Experiment will likely be declared a failure.

Why do most companies struggle just to meet last year’s revenue numbers? Why do more than 500,000 U.S. businesses fail each year? Growth is a universal and perennial problem. Yet as central as growth usually is, rising energy prices and generally poor conditions have made it more essential and more difficult in 2008 than ever before.

Take manufacturing giant Proctor & Gamble, whose head of global supply, Keith Harrison, told the Financial Times in June: “It’s the toughest operating environment, clearly, that I’ve ever been in.” FT defined P&G’s situation in this eye-popping way: “P&G has forecast that its material and energy costs will increase by $2 billion in the fiscal year starting July 1.” In other words: P&G must either generate $2 billion more in revenue or cut $2 billion in costs just to stay even with this single line-item expense. That’s a mind-bogglingly steep challenge.

The central problem, which faces every business in the world today, is that no company is competing locally or nationally any more. Instead, your business, no matter its size or type, is now competing for products, people, technology, services, delivery, and finance with the businesses, mouths, governments, and cartels of other developed nations as well as powerful emerging economies.

Moreover, this new state of affairs is not a short-term technical correction, but an unprecedented, permanent shift. In the same issue of the FT, Robert Hormats and Jim O’Neill of Goldman Sachs International underscored burgeoning global demand: “Since 2001, the US share of world GDP fell from 34% to 28%,” they wrote, while the sum of Brazil, Russia, India and China’s GDP rose from 8% to 16%.

In sum: historic overhead structures are just that - history. They have been invalidated by sustained and unprecedented global demand for every commodity - from oil to rice to paper, from skilled labor to capital, from delivery to technology.

To overcome this destruction of your overhead structure your business must start growing immediately and grow at a much higher rate than any time in history.

If business leaders want and need to grow, why aren’t more businesses growing? There are three simple reasons:

1. Self-delusion – “This is just a temporary revenue problem – we’ll bounce back next month – surely next year will be better.”
2. Procrastination – “I’m going to create a growth plan next month – well, it’ll have to be next year because I’m just too busy now.”
3. Lack of know-how – “Truth is, and I hate to admit it, I simply don’t know how to get started – I need an easy-to-use blueprint for growth.”

If you need an easy-to-use and quick-to-implement strategic growth process, you’ve come to the right place.

These four steps, when defined in brief, insightful plain language statements, will enable you to kick-start your business’s growth:

1. WHO is my Core Customer?
2. WHAT is my Uncommon Offering:
3. HOW can I differentiate my business, so more customers will buy from me – not my competitors?
4. OWN IT! How can I use my imagination vs. my money to make my Uncommon Offering well known to my Core Customers with little or no investment in infrastructure or advertising?

Want the longer version? To learn more about creating the Growth Discovery Process for your business, read my book cover-to-cover. Click here now to order THE INSIDE ADVANTAGE, The Strategy That Unlocks the Hidden Growth in Your Business. (McGraw-Hill, November, 2007).

The new challenges your company faces may be daunting, but they’re also surmountable. The key is to find your Inside Advantage, and start growing your business.

Here's a cute, fun video from MSNBC on the licensing expo:

It is fascinating how the handbag maker, while fully standing behind the quality of his product, nonetheless knows that he needs a more marketable brand--and that's all slapping an Elvis picture on a bag is--in order to sell.

Also noteworthy how effective it seems this conference is for generating referrals and drumming up business.

We came across this paean to Gmail, Google's entirely-online email server, by a ReadWriteWeb columnist, and we can only second what he says about Gmail's Spam-stopping, search function (it is Google, after all!), and mobility. We'd add that its use of "conversations" rather than individual missives, its bare-bones simple template, and its Gchat instant-message software make it the email provider to be beat.

But Gmail's real value might be not the mail itself but the attendant Google software suite that accompanies it. You can have posts from your favorite blogs delivered to you via Google's great RSS reader (click here to get ours!). You can receive articles about your favorite company or celebrity via Google Alerts. And you can do your word processing on Google Docs, Google's increasingly formidable answer to Microsoft Office, which allows you to share documents and spreadsheets with anyone you choose (in fact, in a decidedly un-Microsoft-ian display of generosity and openness, you can even share Google Docs with non-Gmail users).

Google may be the most important soldier in the Web 2.0 revolution we wrote about last week. Gmail, Google Docs, and the like are classic ways to cloud compute--to access your emails, personal information, important documents, and the like from anywhere, anytime, and to give others access to some of them in turn. Google's software isn't perfect--until it gets word count and a variety of other basic features, its word processor will be no match for Word--but give it time.

Oh, and did we mention how it's all free, as well as completely, totally tech-idiot-proof? There goes some overhead costs, as well as hours of agita dealing with tech support. Owners of big businesses ought to be positively jealous at how disporportionately Google's offerings benefit small business owners.

So if you're not on Gmail, you may want to consider switching over. But regardless of whether it becomes your primary email address, you'll want to register a user name with Google at the very least so that you can begin to explore and take advantage of Google 2.0. (Oh, and bizboxonslate@gmail.com is taken.)

You want to pay your employees what they've earned, and you want to do it in accordance with all the relevant rules, of course. But does it have to be so difficult? For those born without the number-crunching gene, fortunately, there is software. We recently found out about Intuit's online application (yes, that's right, it's all done online--cloud computing anyone?).

How do you handle your payroll? Know of any other good helpers? Email us at bizboxonslate@gmail.com, or tell us in the comments.

After a week of writing about The Mojave Experiment, Microsoft's bizarre, unorthodox, probably unsuccessful ad campaign, we're done. Except to link to this article about it that appeared on our sister site Slate yesterday. There: done.

But what about Vista, the real, all-too-real operating system itself? This was the subject of the comments we received on our original post. "At the end of the day, Microsoft needs to examine how to make its operating systems more reliable and secure," wrote one commenter. "Those are the things that the marketplace wants, not another gewgaw that will demand a computer upgrade to operate properly." Another was more blunt: "Microsoft doesn't have a branding issue with Vista. The issue they have is that it's junk." (And as for the one who smelled conspiracy in our "glowing write-up": are you sure you actually read the post? "Glowing" is probably not the single best adjective.)

We want to hear from you. Many of the complaints surrounding Vista concern the ease (or, more materially, lack thereof) with which users can set it up and use it on the most basic level, with the ur-complaint being that it is well nigh impossible to link a Vista computer to a printer. (For a good laugh, see here.) Such tech-difficulty naturally hits small businesses harder than large ones, which are more likely to have legions of tech guys at everyone's beck and call.

Has this been your experience? To be blunt about it: are small business owners best off upgrading to Vista, or staying put? Or should they be making the move to that other company--you know, the one with the apple logo?

Sharon McLoone, the small business blogger at our sister site Washingtonpost.com, has a great post today on this survey just released by the National Association for the Self-Employed. The survey's finding? The recent streak of sky-high energy costs have adversely affected most very small businesses--a striking 95% of their respondents, in fact.

Small business owners pointed specifically to the costs of transportation related to their jobs as the main way in which energy prices are affecting them. But as McLoone points out, citing the testimony of a Virginia florist, it is also affecting owners of businesses that involve delivering goods as well as businesses who rely upon the delivery of goods--so we're talking pretty much about everyone here.

Not to be too obsessed with our own hobbyhorses, but...you know what cuts down on transportation costs? Cloud computing. Every day that you or any one of your employees is working from home is a day you're not spending money on gas to commute, electricity to turn on the lights and the air conditioning, and Lord knows what else. Just sayin'.

Times small business columnist Paul Brown turned in another great piece yesterday, this time on how to hold meetings. And his advice should be cheering to owners and employees alike: Step one is to try not to!

Before calling the meeting, ask yourself a number of questions to determine whether the meeting truly is necessary.
-Do you know exactly, if broadly, want you want the meeting to produce?
-Is the meeting likely to generate a decision? (You'll frequently find that not only is it not, but that it is in fact guaranteed not to!)
-Does the benefit of holding the meeting outweigh the costs in terms of lost work-time, whatever money is needed for it, and--let's face it--the blow to morale?
-Is the meeting being held for a specific occasion, or has it become such a regular occurence its very regularity is more or less the meeting's justification at this point?

That's a nice filter. But every once in a while, an occasion will arise in which a meeting is called for--so call one. And do the following:
-Set a specific theme. Just as you've established beforehand what the meeting is supposed to produce, make sure everything in the meeting is geared towards that objective. And don't keep it a secret: let the participants know exactly why they are there. Don't be shy, and don't be afraid to be explicit in explaining this.
-Have a liberal policy on participants' coming late/leaving early. You otherwise want employees who are self-starters and have something of an independent streak. There's no sense discouraging such behavior with rigid start- and end-times.
-You are invited; your phone and computer are not. Have them turn 'em off. Period. (Yes, this means you have to turn yours off too.)
-Take notes and revisit them. Not you literally; and your minutes need not be formal. But there should be a fairly detailed record of the proceedings, with an emphasis on their content, so that you can follow up on what was discussed.

Less and more useful meetings: everyone should be able to get behind that goal.

We've been such cloud computing and Google triumphalists recently that the interests of fairness behoove us to supply a counter-example. Gizmodo runs the positively Kafka-esque story of a Google customer named Nick--a customer who, unlike most, has actually paid Google (for extra space; at a basic level, Google's online software really does tend to be free)--and who one day found himself (shudder!) locked out of his Google account!!!

"When he emailed Google to find out what in the hell was going on, he got this less-than-promising reply:

'Thank you for your report. We’ve completed our investigation. Because our investigation was inconclusive, we are unable to return your account at this time. At Google we take the privacy and security of our users very seriously. For this reason, we’re unable to reveal any further information about this account.'"

This is like The Shining-scary, we know.

The story did not have a sad ending: Nick haggled and emailed, and eventually got his account back and all his information along with it. Nor do we think that the story's moral is not that cloud computing is a poor idea, nor that Google--whose famed motto is "Don't be evil"--is bad.

But maybe this chilling tale is a sign that important stuff is still, even in 2008, very much worth backing up in some indestructible, physical location (even if it's an external hard drive kept somewhere exceptionally safe). And if something bad happens with your cloud-computied information, well then, to quote from another motto: "Don't panic".

Good piece today at entrepreneur.com from David G. Javitch. Subject: how to deal with employee turnover. To some extent, this is always going to be somewhat disruptive, but really the smaller the business, the more friction there is going to be as one employee leaves and another comes in to replace him or her. (Bigger businesses operate more like assembly lines, with very few indispensable employees; smaller businesses are more focused around specific people knowing which holes to fill and understanding the idosyncrasies of their jobs and your business.)

Javitch says there are four things you should master starting from the time when your employee tells you he or she (let's use she) is moving on to the time when you welcome a new employee aboard:

-What exactly does she do? That is, what are her day-to-day (and week-to-week and month-to-month) responsibilities? With whom does she work and coordinate inside and outside your company?
-What duties is she supposed to fulfill, and what duties does she really fulfill? Everyone strays from the on-paper job description, usually out of necessity; in fact, you want your employees to be flexible. But in looking for a replacement, don't just assume you need someone to be able to accomplish what the departing employee is supposed to be accomplishing according to some outdated, ideal conception of her job. Find out what the job really is, and then recruit and hire accordingly.
-Which other employees does the departing employee have particularly strong relationships with? This is a change for them too, and they may need to be accomodated.
-How helpful has the departing employee found your other employees? Knowing this, and relaying it to her replacement, will make for a smoother transition.

In an ideal world, as Ravitch points out, the departing employee will stay on long enough not only so that there is not time where her position isn't filled, but even so that she can spend a few days training her replacement. (The extra money it costs to have essentially one extra employee for a bit is, depending on the job, usually worth it.)

But even if you only get two more weeks of your old employee, implementing Ravitch's strategy will make for a smoother, more efficient transition.

Greg Verdino, one of our favorite bloggers, has a really provocative post up arguing that all the hype surrounding Web 2.0 in terms of improving social networking is somewhat overblown. In fact, his innovative, and somewhat revisionist, take is that the Internet as it came into being in the late '80s/early '90s actually originated as a social networking platform. The answer has important implications for entrepreneurs, for whom networking is like oxygen.

Verdino writes:

You logged on to participate in forums, message boards or bulletin board system -- to post messages, read others, visit and revisit to check out the latest replies. You logged on for conversations with a bunch of your closest strangers in America Online, CompuServe or Prodigy chat rooms (in fact, you might have been doing this as early as the 1980s.) If you were truly plugged in, you might have joined The WELL, one of the earliest (and today, longest running) online communities.

Verdino wisely does not go so far as to deny that anything has changed--as any regular reader of his blog would know anyway, he is cognizant of the effects of large corporations stepping into the mix, and of the stunning impact of new and better technologies. But his basic point--that rumors of Web 2.0 positively revolutionizing social networking and the way we use the Web are overblown--is nonetheless worth contending with.

The response is twofold.

First, if some overstate the impact of new technology on social networking, Verdino understates it. For starters, he says he remembers using a dial-up modem--does he remember how slow it took, and how onerous it made going on the Internet? Today's speeds may not technically make online networking any easier, but it does it encourage it greatly. What does make online social networking easier are the friendlier templates established by the likes of Apple, Google, and open-source communities (think Firefox). People were probably acquiring songs and possibly even video over the Internet in the first half of the 1990s; but it took iTunes's brilliant, streamlined interface to make downloading media the mainstream phenomenon that it has become in only a few years. Ditto with social networking: Facebook, Twitter, Tumblr, and the like don't let you do all that much that you could not have done in the early '90s (although they also do provide new things), but they make it so much easier and prettier, which--and this is key--brings more people in on the process. And social networking gets exponentially better the more people are brought in on it.

Second--and this isn't really a fault with Verdino's argument, just something he decided not to address--it's worth pointing out that social networking is only part of the Web 2.0 revolution. Just as, and maybe more, important is the power it puts in the hands of small business and individuals to compete with the biggest guys in the room by lowering overhead costs significantly and leveling the technological playing field.

Still, Verdino's point is well taken. Ultimately, we'd say Web 2.0, if maybe a bit on the over-hyped side, is nonetheless a very big deal for entrepreneurs, who now have the opportunity to do more with less, and to make more and deeper contacts, than ever before--if they are vigilant and savvy about utilizing these fascinating new technologies.

Also, we'd love to hear stories/dispatches from iBreakfast's Web 2.0 NYC Best Practices Conference, at which Verdino spoke. Send them to bizboxonslate@gmail.com, or leave them in the comments.

Sounds like a contradiction in terms, right? If anything were ever all about branding, it would be these candies, which after all are just little pieces of chocolate without those colorful, tasteless shells with the little white m's on them. Yet Mars is launching M&M's Premium: different recipe, different shapes and sizes, new yuppie flavors--mint chocolate, mocha, triple chocolate, raspberry almond and chocolate almond (we're not kidding)--and, last but certainly not least: no shells.

"M&M’s is also tying in samplings and a public relations campaign, including an event at New York Fashion Week in September. It hopes to attract a young, fashion-conscious consumer to the product, which is slightly more expensive than normal M&M’s and does not have the same mouth feel," the New York Times reports.

It will be great to watch one of the most iconic brands around try to spin-off a high-end version of itself. Do you think it will work? Do you have any stories of your own, in which you have tried to rebrand to target a more upscale consumer or clientele? And: can you find an online video of the new M&M's Premium commercial? Please leave in the comments, or send along to bizboxonslate@gmail.com.

As I mentioned in a previous post, two New York State Department of Labor auditors stopped by my office recently. They came, they said, in order to determine whether I properly paid unemployment insurance. I suspect many small business owners could benefit from my experience.

I’ve hired one single employee for 14 months during my four years in business as an alternative source of credit to small businesses and consumers. But the auditors decided it would be a good use of state resources to check into whether they got paid their lump of flesh for unemployment insurance. (Oh, and by the way: they did.) Cedarcrest is a one-person operation, and hosting two auditors for a day puts a total stop to all business. (There’s no human resources department to send them to, for one thing.)

Leaving no good deed unpunished, the auditors informed me that I will owe unemployment insurance taxes for a few college students I hired for odd jobs over the last four years--even though my one full-time employee had been taken care of.

There’s a message in here for small business owners who hire people part-time--or just hire anyone for that matter.

As the head auditor read to me from his rule-book, I realized there’s probably a lot of small employers out there who do not know who qualifies for unemployment insurance. The list, at least in New York, is extremely inclusive, encompassing basically anyone who does any work for you—however temporary or clerical in nature—who is not incorporated as a separate business.

The college senior who spent 15 hours filing papers for me three years ago? Yup, gotta pay extra for him. The friend who I sent to take pictures of a property Cedarcrest lent money on two years ago? A total of ten hours for the project? Absolutely, they informed me. Unemployment insurance is due.

I’m reminded too that while there’s a lot of debate about the minimum wage laws raising the cost of hiring, the greater regulatory and government cost of employing others comes from Social Security, Medicaid, and unemployment insurance costs.

Anyway, gotta go. I think that’s Ben calling me on my other phone (you know Ben, right? chairs the Fed, nice guy). He’s pushing through legislation to shore up federal support for Cedarcrest.

Sharon McLoone of our sister site, Washingtonpost.com, brings news of a provision in the new housing bill, which was passed by Congress and signed into law by President Bush last month, that many small-business lobbyists say is a major hindrance and even threat.

The clause requires credit and debit card companies, such as Visa, Mastercard, and American Express (BizBox's sponsor), to report the transactions of a broader group of companies to the Internal Revenue Service. Specifically: they must report the relevant information for businesses whose annual card transactions exceed 200 and $20,000, beginning in 2010.

The goal of the provision is to bring what companies actually pay more into line with what contingency and clerical errors lead to them actually paying, voluntarily and on time. It is estimated to raise an additional $9.5 billion over ten years (which sounds like a lot, and obviously is, but, when you're talking federal tax revenues, actually isn't that gigantic).

The aspect of the new law that has small business advocates worried--and clamoring for repeal--is its enforcement mechanism, under which, beginning in 2011, credit and debit card processors who cannot successfully use and match a business's taxpayer identification number for purposes of filing these newly-required reports are required to withhold from that business 28% of what is due to it from card transactions until the TIN is verified and usable.

If you own your own business, or are even remotely aware of its finances, we don't need to tell you how much 28% of all debit or credit card transactions is, or how crucial receiving it and on-time is to sustaining your company.

This is something we will be keeping an eye on, especially as groups such as the National Small Business Association and the National Association for the Self-Employed work against this aspect of the new law.

The gallons of ink that have been used to argue for detailed, complicated ways for you to trim your costs and raise your bottom line could fill an aquarium. And while not all of that ink was wasted, it is nonetheless refreshing to come across TechRepublic's list of completely simple things you can do to save money, which we summarize below, most of which require little more than a phone call, and all of which will immediately and obviously increase your income. Read on.

GO PAPERLESS Minimize snail mail, print less, and...your fax machine is history. There are few things you need to do with paper mail, and that includes paying bills, so do as much online as you can. Try to implement systems that involve storing everything electronically, and only actually printing out--which is far more expensive--when you truly need a hard copy of something. As for your fax, if it helps, think of that old machine as an artifact, an antique. How often do you really use it? And how often do you use it when using a scanner and an email attachment wouldn't more easily preserve your document, produce a more usable copy of it, and in the long run cost less? And as for other businesses that haven't come around to the wisdom of your decision and insist on still faxing you things, try a cheap, Web-based fax reception system; TechRepublic recommends Packetel.

SWITCH LANDLINES TO VoIP Switching to VoIP will save you even more money if you frequently make international calls. Also: why not consider cutting out individual phones for your employees in favor of subsidized cell-phone service, or even their own business cell phones?

THE OFFICE-LESS OFFICE. Decrease business travel, increase telecommuting, save on physical office security. Memo: energy costs are up. You may've read about it somewhere; and you read that high energy costs disproportionately hurt small businesses on BizBox. The easiest way to decrease energy costs is to use less of it. Cut back on business travel, via phone-conferencing, videoconferencing, and more generally thinking long and hard about whether tasks that in the (cheap-energy) past have involved travel really, truly, madly, deeply require travel. And encourage telecommuting, or at the least make it possible, by investing in a favorite BizBox hobbyhorse, cloud computing. TechRepublic argues that the benefits that your employees enjoy because of telecommuting--lower gas, food, and even clothing costs--may persuade them to accept lower salaries. Finally, with your decreased dependence on your physical office space, think about ways to save costs on physical office security--savings that can be enjoyed as well as reinvested in ever-more important cyber-security.

IT'S CHEAP TO BE GREEN In-house recycling and eco-friendliness. What for one occupation is outdated technology may be just fine for a different employee with simpler, more clerical tasks; instead of selling or throwing out an old computer, pass it on. Also, for when technology truly is obsolete for your purposes, give it to a charity and write off the donation. But recycling is only one of scores of ways to "go green": and, last we checked (see above), saving on, say, energy and paper costs isn't just good for the environment, it's also good for your bottom line. (Plus, in this day and age, it's a great way to build employee morale.)

GRAB A PARTNER You know how economies of scale work: the bigger the buyer, the lower the per-unit cost. Joining with other small businesses, whether in small groups or larger co-ops--even with ostensible competitors--creates a win-win situation for all involved (except maybe your supplier, but it's a giant multinational, so who cares?).

We recently came across an article that reminded us of Robert Bloom's post last week on our Topic of the Week blog. Bob pointed out just how tough times are, but argued that they could nonetheless provide an advantage to the business savvy enough to differentiate itself from its competition. We also ran a post on this subject, "Selling to a Belt-Tightened Custoerm, a couple weeks ago.

Now Steve McKee weighs in on the topic at Business Week, and his answer to succeeding during tough times is--surprise!--be different, and make sure everyone knows how wonderfully different you are.

McKee's advice may seem counterintuitive: essentially, he urges entrepreneurs to identify the direction in which the majority of their industry is going, and then go in the opposite direction. The trick is in recognizing that, almost always, there are more of your competitors going in that direction than there are dollars. Put it this way: if seven out of ten people want to buy a digital clock and only three want to buy an analog, but eight or nine out of ten businesses are going to sell digital, be the tenth company that sells an analog.

McKee gives four examples of recent, successful counter-brands:

-Mamma Mia! The movie, which was based on the mega-hit musical that uses the songs of Swedish disco supergroup Abba, secured a big opening weekend for itself by opening opposite the biggest fish of them all, The Dark Knight. The film's backers at Universal could barely have hoped to come close to topping the Batman blockbuster, and they didn't. Instead, they gave the smaller group of viewers less likely to want to see Christopher Bale, Heath Ledger, and co.--namely, older women--a great alternative, and cashed in.

-Puppy Bowl The Super Bowl is the biggest television event of the year. Chances are you watch it; and if you're a man, or interested in sports, or interested in football, the chances are exponentially larger. But if you are none of those things, you're not going to be lured away by something that otherwise appeals to the Super Bowl demographic. Instead, you're going to flip the channel to watch cute puppies fall all over each other while "competing". Good thinking, Animal Planet.

-Carl Jr.'s Monster Breakfast Sandwich It's big; it's fatty; it appears to contain, bacon, eggs, sausage, and cheese. In an age when most people are likely to opt for a breakfast without any of those things, or even the buns surrounding them, the relatively few who do want a, well, let's just call it all-American meal are going to have one obvious place to flock to.

-Southwest If you've flown recently--we're really sorry--you know how much worse its gotten lately: with extra fees for carry-on bags, fewer amenities, and generally more expensive tickets. So what has Southwest done but run in the other direction, specifically ruling out price hikes or luxury downgrades. McKee points out that Southwest could be cashing in like everyone else, but has not done so out of fidelity to its sterling brand.

So go against the flow. You may not be trendy (as least to the majority; there is often great pride and hipness in niche marketing). But you will be successful.

Sports fans can (and have!) spent hours and hours debating whether legendary quarterback Brett Favre was correct to return to play another season at the age of 39 after months of waffling and a long, successful career. (A long-time Green Bay Packer, upon his official return Favre was traded to the New York Jets.) But something struck us about his return besides questions of whether he would repeat last season's impressive numbers. Brett Favre...not a Packer? As Drew McLellan points out, Favre is playing fast and loose with his previously Class A brand.

-Packer Pride Though as McLellan reminds us, his first year he did play for the Falcons, Favre was associated with one single team in a way that is quite unusual in this age of trades, gigantic contracts, and free agency. And not just any team: the Packers, with their storied Lambeau Field, their win at the first-ever Super Bowl, and their ownership (as it were) of the brand of football's greatest coach, Vince Lombardi, are arguably the most prestigious NFL franchise. The Jets's brand isn't bad, but it's not like the Packers'; and anyway, even if it were, Favre has still diluted his own personal affiliation.

-Why The Tears? When Favre retired at a tearful press conference after the 2007 season--a season in which he put up some of his best numbers--he followed the number one rule of show business: always leave 'em wanting more. His return retroactively cheapens that bittersweet good-bye.

-Hoping For A Good '08 Note Favre's stellar '07 season: 28 touchdowns, 15 interceptions, a 95.7 quarterback rating--that's ten points higher than his career rating--all while leading the Packers to a 13-3 record. In 2008--a year older, and with an otherwise inferior team--it seems very hard to believe that Favre's numbers will not decline. Additionally, an injury that takes him out of a game or two would be a bigger blow to his brand than to most players': Favre is something of football's Cal Ripken, having started every game since the 1992 season.

Favre is taking a huge risk with his brand in returning for another year for the Jets. His competitive drive may have left him with no option. Still, he is worth studying for anyone who wonders whether a bit more self-discipline might improve the brand of his or business.

Read the July 30 BizBooks conversation with Jill Lublin, the author most recently of Get Noticed...Get Referrals, here.

* Be yourself. Build on your assets and your uniqueness, because they are really what people want. Clients and customers want you--your special viewpoint or approach; your unique insights or touch--not a weak imitation of someone else. Don’t just be a copycat; find your own voice. Get noticed in your own way, in the manner most natural and comfortable to you. Examine the approaches that others have taken and then follow what feels natural for you. Trust yourself and your instincts.

* Work your business around your life, so that it fits in your life, supports your life, and reflects you. Too many people do the reverse: they work their lives around their businesses. It frequently doesn’t work.

* Think of your clients, customers, referral sources, vendors, and suppliers as your partners and friends ─ as people who want to help you. This means never forgetting that they’re people, not just business statistics, and that you cannot succeed without them.

* Master the art of listening, because when you listen, you truly learn. If you listen, people will want to share their knowledge with you, be with you, and help you. They will consider you their friend and go to great lengths to help you.

* Before you take on any project, make sure that you know exactly what the client or customer wants. Transcribe your understanding in writing to eliminate doubt. It’s hard to satisfy people when you don’t know what they want.

* Be generous. Make giving a central part of your life. Work hard and give your clients and customers more than they expect. Give people your time. Always show your appreciation, and thank and reward those who help. Praise others; and give them the credit and the spotlight.

* Surround yourself with the most interesting, active, and positive people. Hang around with experts, authorities, and people who are smarter and more accomplished than you. Find ways to meet them and be with them because they will open amazing new doors for you. They will support your efforts and add fullness and excitement to your life.

* Constantly strive for excellence and do everything in the best possible way. Build a reputation for continually doing outstanding work and everyone will want to be with and work with you. People who live for excellence will find you.

* Always ask: can I do it better, more interestingly, or more inventively? Challenge yourself to go beyond your prior accomplishments and always to surpass your best. Constantly look in new directions.

* Never compromise your integrity. Stand by your values, but don’t preach. Always be truthful, honest, fair, understanding, and humane. Deliver what you promised when you promised.

Follow these suggestions and you will be noticed. The best people will notice and appreciate you ─ and you will enjoy a wonderful life.

Jill Lublin, the author of Get Noticed...Get Referrals and the latest participant in our BizBooks series, has a great new post up on our Topic of the Week blog. Check it out!

A new survey conducted by none other than the Federal Reserve Board of Governors--you know, the group down in Washington that our very own Michael Taylor is so cozy with--reveals that while banks and other lending institutions continued what is now a nearly year-long tightening of their credit extension practices to all businesses, it is the small firms that are getting hit hardest and fastest.

The Fed's July 2008 survey, released yesterday and covering May, June, and July, showed 60% of polled domestic banks having tightened lending standards to big and medium-size companies--a slight increase from the results of the previous, April survey. However, a full 65% of those banks reported stricter standards for small firms, a huge increase over the 50% figure reported in the April survey.

It's...tough out there. Tell us how you're coping. bizboxonslate@gmail.com

We wrote two days ago about the benefits of counter-branding, in which you conceptually go in the opposite direction of your industry in order to snatch up customers who are in the minority (so Universal successfully opened the musical Mamma Mia! on the same weekend as The Dark Knight in order to attract demographics uninterested in the blockbuster). But an article in the Sunday New York Times illustrates an even more radical form of counter-branding: what might be called anti-branding, or setting yourself up as the prime alternative to an industry's dominant product. The subject of the article? Microsoft's Zune, the portable mp3 player that isn't that shiny white Apple product (yes, we know they make them in other colors, too.)

Author Rob Walker isn't shy about listing the Zune's several arguable non-branding advantages over the iPod--very cooly, it allows you to trade songs and playlists very easily with other Zune owners--but suspects that the typical Zune buyer's prime motivation is that owning a Zune practically screams: "I DIDN'T BUY THE iPOD!"

"The cafe patron checking for other Zune owners is less likely to find one than to arouse mild curiosity about his eccentric product choice," Walker says. "Meanwhile, owning an iPod seems roughly as individualistic as a gray flannel suit. Add to this those Apple ads pitting a cool Mac against a hapless PC: they may boost sales, but they have also inspired vitriol among those who find Apple loyalists snobby and smug."

The iPod is sort of a special case, according to Walker, in that, somehow, it has managed to conjure simultaneously an aura of elitism (in both the good and bad sense) and an aura of ubiquity. Still, the lesson for any business offering some sort of product--good or service--in an area with one obvious dominating force is clear. And since that dominating force is likely to be proferred by one of the big guys, it is small businesses especially that should take the lesson of the Zune to heart.

More than a few entrepreneurs start out new businesses with at least one eye on eventually, somewhere down the road, selling to a bigger fish; and for the luckiest among them, a buyer comes along who both pays a fair price and proudly and faithfully continues the company's founding vision. But what happens when a big company comes along, buys a start-up, and then abandons its vision--or even abandons its very business?

Farhad Manjoo has an article on our sister site Slate about one company that (so he says) serially purchases small businesses in perhaps the most buyout-happy of all industries, technology, only to ditch them soon after. The company, which was itself a tech start-up not so long ago, is called Google (you've perhaps heard of it).

Manjoo accuses Google of habitually buying small techs, indefinitely postponing their expansions, and putting the founders to work on other Google projects. The tablets in this start-up graveyard have names like Jaiku, JotSpot, and Dodgeball. Jaiku, which at least in theory could occupy the position that instead Twitter does, has been closed to new users since Google bought it last year. Go to jot.com--you will see that the office wiki-maker has been swallowed whole by Google Sites.

Manjoo's point has to do with Google alone. But entrepreneurs, whether they deal in tech or otherwise, would be well advised to give the article a good, long read, and to perform extremely due diligence if they ever end up considering a sale.

There's nothing wrong with deciding that you have started your business in order to sell it, and that after you sell it, its new owner can do whatever it wants with it. But if that is not your position, then exercise major caution when considering a sale; and, as always, beware Greeks--or Googlers--bearing gifts.

Kudos and thank you to Business Week for a phenomenal feature on six U.S. Olympic athletes who say they derive much of their competitive drive from their "day job"s: running their own businesses.

Some of their companies relate closely to their athletic prowess, such as the Sumner, Wash. gym that weight lifter Melanie Roach runs with her husband. Others don't, like wrestler T.C. Dantzler Colorado Springs-based background-check company.

“To be a good business owner, you have to put in the work, have the vision, and be goal-oriented," says Roach. "It’s the same in athletics. You’re never off the clock. There’s always something you can do better.”

And sailer Austin Sperry commented, in reference to his mobile-home company, “I just enjoy being part of a team. I love the thrill of competition. I hate losing even more than I like winning.”

Read the whole thing.

Referrals are the lifeblood of a small business. And though Jill Lublin is BizBox's resident expert on the matter--see her great recent post on the subject here, and her BizBooks conversation about her recent Get Noticed...Get Referrals here-- we just came across a good piece from Entrepreneur.com's John Jantsch that focuses specifically on getting customer referrals.

Jantsch's main insight seems to be that you need not do things specifically in order to increase customer referrals that you wouldn't otherwise do; rather, the trick is to see all of the ordinary marketing you do through the prism of generating such referrals.

A particular trick is to think of marketing your products or services as fairly distinct from the products or services themselves: "The key is to think far beyond your core products and services and start developing ways you can gain trust with prospects by offering valuable, informational products," Jantsch argues. "Only then should you start to pick apart your actual product or service to make sure you're delivering on the promise you built before the sales process began."

But ultimately, he concludes, all the great marketing in the world will only do so much, and what is being marketed needs to do the rest: "you must intentionally build systems and processes that allow you to deliver such a wonderful experience that your customers have little choice but to rave about your company and its services to their friends, neighbors, and colleagues."

The National Federation of Independent Business has released its July survey for small business confidence and it's, er, not good. Recession-level, actually.

Some specific findings:
-Investments Barely one-fifth of those surveyed said they planned to make capital expenditures over the next few months. The last time that figure in this index was that low was three decades ago. And in fact, only 6% said now was a time amenable to expansion.
-Employment Prospective small business employees might be in worse shape than small business owners, with only 17% of those surveyed announcing job openings. The recently raised federal minimum wage probably didn't help here. However, a net-percentage--that's positive minus negative--of five did intend to increase their numbe of employees.
-Financing A net-percentage of negative 12 expected improved credit conditions.
General optimism Net-percentages of negative 9 and negative 17 expected, respectively, improved real sales and an improving economy. Uh-oh.
Actual earnings The survey's most dismaying statistic? Probably the negative 37 net-percentage of those surveyed who said that their earnings had improved in July.

While businesses don't get to sit entire economic cycles out, many are attempting to do the closest thing, and just try to stay afloat until the situation improves. We can't say we blame them.

Forbes provides a good primer on the differences between various employee retirement plans, taking into account the less-than-three-year-old Roth 401(k) (which, as the article points out, essentially combines aspects of the Roth IRA and the 401(k)).

The guide is written from the employee's perspective, though. And we were wondering: what should an employer--particularly a small business employer--be looking to offer his employees? We ask the question while proceeding from the premise that offering your employees a robust retirement plan is not only the right thing to do but also good for business, since it improves morale and helps you to attract top candidates.

We're going to look into this more and return to it later, but for now, we thought we'd put the question to you: which plans do you offer your employees? Which plans do you pointedly not offer them? And how is this new-fangled Roth 401(k)? Comments are below, and our email is bizboxonslate@gmail.com.

Did you ever consider your state’s bankruptcy laws before you became an entrepreneur? Specifically: in the unfortunate event that everything in your business goes wrong and you are in over your head in debt, do you know what you get to keep after declaring bankruptcy?

I’d bet 95% of small business owners have no idea what their own state’s laws say about the bankruptcy law’s homestead exemptions – that is, how much of your home’s equity is safe from creditors. I bet you don’t know how much of your car is safe from creditors, or whether you get to keep your IRA or 401(k) from the bank in liquidation.

I didn’t check either before I started my company, but I’ll save you the Google search on your own state’s laws now: here is a list of each state's exemptions.

At Cedarcrest Capital, I have had an increasing number of my small business customers go bankrupt this past year, which is very disruptive to my own profitability, to say the least. I know my business is not alone in suffering from this trend since the bankruptcy filing rate in 2008 is up 29% from a year earlier.

The fact that you probably weren't thinking about this issue before you happened upon this post raises another interesting issue: is bankruptcy as a final protection necessary in order to encourage small business owners to take risks?

I strongly doubt it, precisely because I just do not think it enters most small business owners’ minds when they set up their business. Yet I suspect policy makers argue for generous bankruptcy exemptions as a way to encourage entrepreneurship.

The facts seem to back me up. A study by economists published by the St. Louis Federal Reserve actually found that states without any homestead exemption in bankruptcy – meaning the harshest bankruptcy treatment of debtors - had the highest rates of entrepreneurship in the United States.

Have state lawmakers made an error, in the name of protecting small business owners through generous bankruptcy laws? Lately this small business owner feels hurt rather than protected by bankruptcy laws and the rising tide of defaults.

The sentiment embodied in the headline should not come as too much of a surprise. Still, it's worth taking stock of this trend. The big retail winners last quarter, according to the Washington Post, were BJ's Wholesale Club, Fred's, and Wal-Mart. In fact, late last week, Wal-Mart upped its third-quarter projections because its sales and store traffic were higher than they had expected.

So how can this help you? How can you harness the favorable-to-discounting climate without discounting yourself out of business? A recent New York Times article may hold the key.

The piece explores retailers such as OfficeMax and Staples and their creative discounting on back-to-school products. Instead of just generally cutting prices (though they do that too,) they cut them drastically--sometimes to the point where they are selling certain items at a loss--and creatively. A watercolor set for 50 cents. Index cards for 33 cents. Eight of those ubiquitous yellow No. 2 pencils will cost you one shiny penny.

So the point is not (just) to coax buyers with lower prices; it's to lower prices in an innovative way so that prices are also a kind of marketing in their own right. They may also be so low in some places as to persuade buyers to buy a little bit on other items. Toy around. Be a little inventive. Who knows--if you lower prices enough, you just may raise your revenues.

Jerry Kalish, who blogs at Retirement Plan Blog, has taken up on our question regarding which retirement plan entrepreneurs should offer their employees here. Good stuff! Anyone else have any thoughts?

We talked last week about how times are hard, and how there is no type of business on which they are harder than small ones. But enough with the pessimism--how can you ride out this situation? Yesterday we gave some retail tips. Today's topic: maintaining adequate cash flow.

It sounds silly to say that cash flow is especially important in bad times, right? Isn't making money why you're in business in the first place? Well, yes, but whereas during good times--times with ample credit available--you can afford to be a little incautious in how much money you keep around, in this dismal credit market you must be vigilant about having the necessary resources to pay off your creditors before it is too late.

To that end, Entrepreneur.com has a nice list of things to do to safeguard your cash stream. A couple of the recommendations are fairly obvious--cut costs; slash spending; diversify your business--but two of them are worth paying special attention to: find new and exciting ways to raise capital, and leverage any excess cash.

To take the latter first: in a credit-starved economy, that excess cash becomes that much more valuable. Everyone (well, mostly everyone) wants the credit situation to improve, and--who knows?--maybe it will soon. All the more reason to put your excess cash to use as collateral while it is most valuable.

As for raising capital, we came across a provocative post on Forbes's Website that seeks to square the great circle of capital-raising: how to sell stakes of your company without ceding control. While the author acknowledges that to some extent this is impossible--ownership is ownership, and to some extent you want your investors to care enough to be proactive and attentive--he also offers the interesting suggestion of selling convertible notes, which originate as loans but turn into stakes once you've hit a certain mark (the catch here being that, as enticement, you generally grant those converted stakes at an especially generous rate).

If we've said it a thousand times, we'll say it a thousand times more: the lean times can be not just beatable but actually a boon to the entrepreneur savvy enough to get out ahead of his or her competition with innovative strategies such as the ones above.

We weren't exactly kind to Microsoft and to its current latest operating system, Vista, when the software mega-giant unveiled its "Mojave Experiment" ad campaign a few weeks ago. So it is only fair that we tell you of Vista's pitch aimed directly at you, the small business owner.

It's called the Vista Small Business Assurance, and it touts Vista's compatibility, efficiency, and security. As with the Mojave Experiment, Microsoft tackles people's poor perceptions of Vista head-on; unlike with the Mojave Experiment, it does so in a respectful, non-snarky way, saying, "We acknowledge that Windows Vista initially experienced some compatibility and performance issues. With the help of our industry partners, however, Windows Vista has come a long way in the past 18 months. Today, many customers have shared with us how using Windows Vista has helped their small business succeed."

Now's your chance to weigh in. Should we buy what Microsoft's selling?

Let's take a look at two different extrapolations on small businesses from recent U.S. Census reports. One of them we find legit, and troubling; the other we take issue with, and aren't as worried by.

First, via Sharon McLoone of our sister site Washingtonpost.com, comes news of a new book called Race and Entrepreneurial Success. In the tome, two University of California-Santa Cruz economists use Census data to show that Asian-American-owned small businesses generally perform better than white-owned ones, whereas African-American-owned small businesses perform worse. Crunching hard numbers, they point to disparities in start-up capital--which they in turn derive from broad racial wealth inequality--and in level of education to explain this gap.

It is obviously very troubling if unfair structural imbalances are proving a great hindrance to the broad success of black entrepreneurs.

Our second Census data extrapolation comes courtesy of Case Western Reserve Professor Scott Shane, who argues that the vast majority of small businesses end up creating little value at all, while a very small percentage create a ton of value. It's hard to argue with Shane's numbers themselves: he uses the Census data for small businesses starting in 1996 and extrapolating six years: "I picked age 6 since that seems to be an age at which most sophisticated angels and venture capitalists are trying to exit their investments," he says (more on that in a bit).

He finds that over 83% of these start-ups had sales of under $500,000 in 2002, while only 1.6% achieved sales of over $5 million (.03% achieved over $100 million--congrats to those 175 small businesses!). On the other hand, while that 83% created only 4% of the total value of all of those start-ups, the top 1.6% created a whopping 54.2% of the total value. "Generating significant financial value is something done by a very small percentage of start-ups, but a handful that do generate a lot of value," Shane concludes.

Shane's system for measuring value seems somewhat dubious, though. While he acknowledges that, in his words, "most exits of companies are by sale to another private company," his valuations still appear to be based upon preexisting sales rather than on future sales, which seems strange given the routine fact of companies forking over exorbitant amounts for the right to own companies that have yet to approach turning a profit--a process that occurs in no industry more frequently than the tech industry, which probably saw a healthy portion of all start-ups that started up in 1996.

So we are not as bearish as Shane on the prospects of your chances of succeeding with your start-up, say, six years down the road. Whether you believe us or him, though, you can also hold out hope for maybe being one of the lucky top three-hundredths of a percent.

Forbes's Andrew T. Gillies has a nice profile of Frank van Mierlo and his small (they've raised $12.4 million in a first funding) solar power start-up 1366 Technologies. The company's planned trajectory is a case study in what may become an increasingly prevalent trend: the involvement of state governments, and even federal governments, in small businesses, particularly those dealing in green-friendly initiatives.

The pattern of a public sector investment is not an unprecedented one, according to van Mierlo, who points out that the first semiconductor manufacturer was boosted in the 1950s by the U.S. Air Force and NASA.

But here's the catch: the federal government seems less inclined to provide the needed investment to 1366 and other such start-ups than the governments of certain other countries are. "I would love to do production in Massachusetts, but you need a level playing field compared to the people who pick Germany or Malaysia as their home," van Mierlo told Forbes.

The U.S. should want the van Mierlos of the world to do their business here. We will be exploring this and other issues as the presidential election heats up. For now, something to keep in mind: how do we make the U.S. the most competitive climate for green-friendly start-ups in the world?

In our previous post, we discussed the increasing importance of partnership between governments, especially the federal government, and small businesses--a relationship as vital to the governments as to the businesses. So it seems heartening to find the new acting administrator of the Small Business Administration, Sandy K. Baruah, giving voice to the importance of several of our concerns (via Sharon McLoone):

At the Americas Competitiveness Forum in Atlanta, Baruah argued, according to McLoone, that our economy is now global, which in turn means that ability to innovate is the biggest thing separating one venue for business from another, as geography-related characteristics have become increasingly less important.

He also reportedly said, "Unless the private sector is ready, willing and able to invest in a community, economic growth simply will not occur, regardless of how much the government spends."

In the remaining months of his administration, we hope Baruah will begin to match actions to his words--which have recognized the importance of public-private partnership and the cutthroat competition the U.S. faces from other countries as hosts to successful small businesses--and do his part to steer the U.S. government towards increased investment in worthy start-ups.

Not one month after Microsoft debuted "The Mojave Experiment," its unique (and apparently ill-fated?) ad campaign for its Vista operating system, comes news (via Gizmodo) of the Seattle tech giant's initiating a $300 million campaign for Windows more broadly that stars...wait for it...Bill Gates and Jerry Seinfeld.

Gates, of course, is Microsoft's co-founder, former CEO, current chairman, and general mascot. His brand is almost certainly higher than that of the company with which he is invariably associated, especially given his recent work for the Bill & Melinda Gates Foundation, which is arguably doing for the field of philanthropy what Microsoft did for personal computing.

Seinfeld also needs no introduction. Although you wouldn't traditionally think of him as the "funny man" in a comedic duo--after all, he spent nine seasons playing "straight man" to Kramer, Elaine, and George in his eponymous sitcom--one presumes that in these new Microsoft ads (for which Seinfeld is being paid $10 million), Seinfeld will show the more manic side of his personality.

...Unless they're planning on having him represent Apples everywhere. One thought is that the ads could be a direct rebuttal to Apple's notorious "I'm a PC, I'm a Mac" campaign (watch them here). It seems more likely that Microsoft, the aristocrat of its industry, will not deign to respond to its scrappier rival so directly, though it's an intriguing notion.

More likely, Microsoft wants to remind you what you found so appealing about Windows in the first place. It will want to cast its operating system--which, let's face it, Apple semi-ripped off for its own OSs anyway--as classic, and as perpetually accessible. Though not exactly up-and-coming anymore, neither Gates nor Seinfeld are exactly past their primes, either. And nor (so they will say) is Microsoft.

The risk? Bill Gates and Jerry Seinfeld are two of the most iconic figures in U.S. culture...from the 1990s, the decade in which Microsoft really hit its peak (before the first tech bust and the subsequent rise of Apple and Web 2.0 dented its power) and in which Seinfeld aired. Hopefully the ads won't make Microsoft seem like a lumbering, out-of-date giant. Apple's ads already do a perfectly good job of that.

A small business grows while staying small and retaining a core of customers who love it and a vital, organic connection to its neighborhood. Only in dreams? Nope--this week, Ben's Chili Bowl, the famed cafe on Washington, D.C.'s historic U Street corridor, celebrates its fiftieth birthday. Read today's Washington Post story to find out how Ben's prospered while staying down-to-earth. And if you're ever in the District, take it from us: grab a half-smoke with chili while in town. You won't regret it.

We highly recommend Ivana Taylor's sophisticated-yet-commonsensical pricing advice over at Small Business Trends. Our three favorites:

-Prestige Pricing: Higher prices connote higher quality. Luxury brands are the perfect example of this strategy. A latte at Starbucks has a higher perceived value than a basic coffee with cream. Simply improving the look, packaging, delivery or promise of your product you can justify a higher price and support a prestige pricing strategy.

-Large versus Small Losses: Offer your customers multiple payments of less money. Think QVC (the shopping TV channel) offering items for 4 easy payments of $29.99 which is more appealing than $119.96. This strategy plays well with strategy #2 — multiple payments promote greater satisfaction. So your customers will not only perceive a lower price, but actually appreciate your offering more because they will pay more frequently.

Payments to Promote Satisfaction: Anyone who has ever paid for a gym membership and quit the second month has been part of this pricing strategy. If you offer a one-time payment, customers will perceive the item free after a while and not use it as often — thereby limiting satisfaction. Customers who pay more frequently for a product or service use it more often and perceive more satisfaction. So you’re better off charging monthly rather than a one time fee.

But read the whole thing.

The New York Times has a report today on the so-called iFund, a $100 million venture capital project whose goal is to invest in start-ups that make applications for Apple's immensely popular iPhone.

The idea is to invest somewhere in the neighborhood of $5 million in nascent companies that devise software for sale on Apple's Application Store, from which consumers have already made 60 million downloads in a little over a month. This trend of bigger companies serving as an opportunity for smaller companies to begin and thrive will become only more pronounced as the T-Mobile Dream, powered by Google's Android operating system, is released in the next couple months, the article notes.

So, are there any tips in the article for the entrepreneur looking to make it with a smartphone app--or with some other small but potentially explosive product?

Matt Murphy, who runs the iFund, said that his advice is to keep your idea neat and specific. “If you focus on a really simple consumer product, that’s better than worrying about what everyone else is doing,” he said.

Referring to an earlier tech start-up in which he had helped to invest venture capital, he added, “They could have said, ‘Let’s be like Yahoo.’ Instead they just focused on search as the killer app, saying ‘Let’s be the best at that.’"

You may already know the punch-line: the earlier start-up was Google.

UPDATE: via Gizmodo, Business Week quotes an unnamed source at Apple asserting that the company plans to manufacture 40 to 45 million iPhones by this time next year. That's a lot of phone to make even more downloads.

It's not a small business, of course, but it's worth pointing out that Gap Inc.--which owns its eponymous clothing chain as well as Banana Republic and Old Navy--was able to record a 51% gain in its second-quarter profit even as the slumping economy caused its overall revenue to fall. Is the result of crooked accounting? Or magic, perhaps? Nope--just simple cost-cutting.

It sometimes seems like 90% of the advice doled out for how to grow your business concerns literal growth: amping up revenues. But it's worth pointing out that the dollar you gain through extra revenues is not one cent more valuable than the dollar you gain through slashing expenses. And when consumer spending isn't as robust as it sometimes is--i.e., right now--the latter route might be easier than the former.

Last week, we asked what type of 401(k)s small businesses should offer their employees. First, Jerry Kalish of Retirement Plan Blog answered. Now U.S. News and World Report has come out with an article designed specifically to tell entrepreneurs how to offer 401(k)s.

But first, it tells them why they should in the first place. Basically: the notion that you can't offer 401(k)s if you have too few employees, or even are self-employed, is a total misconception. In fact, if you're an owner of a small business under 50, you can invest up to $46,000 in your 401(k) each year, taking as much as 25% of your business's profits. That's an ample tax shelter. And, according to the article, the smaller your business is, the easier it is to set up a 401(k) for yourself: if your business's assets don't exceed $250,000, there's not even any compliance paperwork.

The rest of the article offers a broad checklist for the entrepreneur looking to set up these retirement plans, both for him- or herself and for his or her employees.
-Use "open" brokers--who don't restrict the type of fund or investments for which your plan is designed.
-Don't use any old financial expert to set up your 401(k)s; use a 401(k) expert to set up your 401(k)s.
-Use a Roth 401(k)--which exploits today's low tax rates--but consider putting some money into a non-Roth account as well.
-Decide how involved you want to be in the plan's investments, and set it up accordingly: either a traditional plan, in which a financial professional makes investment choices, or a "self-directed" plan, in which you do.

What are we, and this piece, missing? Take it away.

We recommend a look at all of BusinessWeek's cover package, "Business@Work". But one piece we found particularly useful was an article on how to boost employee morale without using the most traditional, direct method: namely, raising salaries. Not that raising salaries isn't effective; but especially in this economy, it pays (pun intended) to be innovative and come up with ways to induce employee happiness that are cheaper than just forking over more money.

You can group such efforts into two broad categories: giving your workers good times; and helping them through bad times.

In the former grouping, place everything from casual Fridays (but surely you can be more clever than just that!) to monthly awards/prizes/bar-hopping trips--or, if you're the Los Angeles office of law firn DLA Piper, a family-included one-day trip to Disneyland.

In the latter category go preventive things you can provide to ease employees through the day-to-day and year-to-year: everything from nap rooms to emotional counselors. The article excellently sums up the impetus for such measures: "Because companies in the global economy increasingly sell what's inside their workers' heads, managing all those alpha waves is becoming more important. Companies such as Qantas, BMW North America, and Sanofi-Aventis (SNY) are deploying experts to assess the emotional health of their ranks. Think of it as Six Sigma for humans."

Also think of it as a way to attract and keep great employees, who are going to get you through this business cycle to a better one (at which point, maybe raises are in order, too).

Very cool news out of Columbia University, where some of us at BizBox used to go to college. The university's undergraduate engineering school--commonly known as SEAS--is offering a new minor in "technological entrepreneurship," beginning this year. (H/t: Bwog.)

The idea behind the minor, which would see undergrads take courses at both SEAS and Columbia's graduate-level Business School, is the notion that just possessing the technological know-how and added ingenuity is not enough anymore for young people to launch their own businesses successfully--other considerations in the financial and management realms are incredibly significant as well. The minor's one required course is called "Managing Technological Innovation".

SEAS is insisting that students who enter the minor will not have their studies confined to the purely academic realm. Instead, the school would support students with more fully fleshed-out business ideas, and will also give them access to seminars and networking events associated with the B School and its Lang Center for Entrepreneurship.

SEAS also seems intent on having this new minor be only the beginning of its formulation of entrepeneurship studying opportunities. Said a SEAS associate dean, "We have the potential to create entrepreneurship programming not only for SEAS undergraduates and graduate students, but also for local Harlem public schools, local entrepreneurs, and nearby businesses. Our goal is to stimulate the creation and growth of technology ventures among a range of people, from Columbia students and faculty to local entrepreneurs.”

Do you wish you could have studied this stuff? What would you want to see on the curriculum? Let us know in the comments.

Just because you don't have a 50 lawyer-strong legal department doesn't mean you can't be successfully sued if you mishandle an employee termination. Fortunately, HR Daily Advisor has provided a nice checklist with the help of James W. Bucking, the Employment co-chair at Foley Hoag LLP, for how you should go about ending an employee's time in your business without opening yourself to accusations of discrimination.

Know all the facts. Talk to the employee; talk to other employees about the employee; and make notes. Review all related documents, and make sure that you have all the related documents.

Buttress your case for termination. There is nothing wrong with creating new documents that support your decision--just make sure they are honest and accurate, which should not be a problem if you feel you are justified in the first place.

DON'T LIE. Say it with us again: "DON'T LIE." "The worst thing to do when terminating an employee is to be dishonest as to why," says Bucking, adding, "most discrimination allegations turn not on direct evidence (like racial slurs), but on ‘pretext.' An employer gives a false reason for termination, creating the inference that the real reason was unlawful.”

Execute the termination respectfully. Being fired is a traumatic experience for the employee (and yes, however bad it may make you feel, it makes him or her feel worse). Easing the blow with kindness or cordiality as well as other considerations, such as discretion, will lessen the likelihood of subsequent bad blood. At the same time, Bucking also recommends having one other party present at the actual termination, taking notes, so that the record will show that you behaved in an appropriate manner.

Tie up loose ends. Make sure you pay the terminated employee all he or she is owed, including, depending on your company policy, compensation for not-taken vacation days. And check your state's laws: you may be required to make all this payment on the final day. And don't forget that non-disclosure form!

We wrote a post a couple of weeks ago called "Cashing In On The Campaign" advising you to take advantage of the heightened interest this year in the presidential election and in politics more broadly. But never did we think that this advice would be put into practice as literally and as successfully as it was by the Waldman siblings--ages 3, 5, and 6-and-three-quarters--who did exactly what entrepreneurs are supposed to do: find a perfect business opportunity and quickly, and with low-cost, move in to make a killing.

In their case, the Waldmans, who live in Washington D.C., found numerous news- and cameramen around their house late last week camped out in the sweltering August heat in front of the house next door, which happens to belong to ex-vice presidential hopeful Sen. Evan Bayh (D-Ind.). Displaying remarkable business acumen, they opened shop: a lemonade stand, to be precise. One dollar bought (roughly) a pint. ABC News reported that the cameramen especially were big fans.

What lucky situation will create prime conditions for your lemonade stand?

This post's title only fulfills some of the criteria that SuzeMuse lays out in a wonderful post on the art of shameless self-promotion. We've admitted self-promotion, and now we're even being explicit about that. But we haven't been subtle; and we haven't figured out that our pitch may be too overbearing for some.

SuzeMuse's broader point, though, is the truly important one: you're the only one whom you can count upon to sell yourself reliably. So get over whatever fears you may have about "tooting your own horn," and go, well, toot your own horn.

Now if you'll excuse us, we have to go talk up BizBox in the comments of other blogs.

The New York Times reported this morning that in the 2008 second quarter, European venture capital firms invested 35% less money in 42% fewer companies than in 2007's second quarter. This is an even more dramatic decrease than the one seen in U.S. venture capital, which declined 19% over the same period.

Short take-away: uh-oh. Venture capital is the lifeblood of start-ups, especially in industries with greater innovation, such as tech and biotech. Of course, this capital crunch is the unsurprising consequence of an economy in which flipping a young company for profit has become increasingly difficult. As the article reports, a paltry two venture capital-backed tech start-ups have gone public in the U.S. this year.

But, as (almost) always, there are upsides. The traditional start-up industries are taking a huge hit--the two hardest hit in Europe were, surprise surprise, information technology and health care. But other industries, namely information services and (surprise surprise) energy, are on the rise in terms of receiving venture capital.

Moreover, as venture capitalists are increasingly wary of plowing in substantial amounts as a company heads closer to a sale, that vacuum could open up an opportunity for smaller, first-stage financing. And what do you know? The 46% of European venture investments that went towards such financing was the highest such percentage since 2001. In sum, it has rarely been so difficult to sell your start-up, but it may be a little bit easier now to start it.

We've written of our love of so-called cloud computing, and of Google's wonderful, if still somewhat primitive, suite of cloud computing software such as Google Docs. But the danger in cloud computing is that you and your company's information is stored in that "cloud," that murky cyberspace, potentially accessible to hackers...or to whatever random souls to whom you happen to bestow a key.

Such is the cautionary tale described in the New York Times's Bits blog, in which the author, one David Gallagher, recounts how he gained access to the Web traffic reports of numerous newspapers owned by Community Newspapers Holdings Inc. that were compiled and stored via Google Analytics, the search giant's free traffic-counting software, another proud Google cloud computing program. How did this breach--in this case not a huge deal, but potentially devastating--occur? Likely, someone decided to share the information with one Deirdre Gallagher, a CNHI employee, but instead of entering Ms. Gallagher's Gmail address, the sharer entered MR. Gallagher's.

There is no getting around the fact that this sequence of events could not have happened if the information were stored on a secure server rather than in that cloud. And there is no getting around human error, no matter how sophisticated cloud computing software becomes.

On the other hand, hackers had their ways before there was cloud computing. And while Google Analytics does possess this extra security risk, it also lets its users quickly, easily, and (still pretty) securely share information with disparate others--the cloud computing advantage.

Oh, and kudos to Mr. Gallagher (so David, not Deidre) for that headline.

David Mammano, the founder and CEO of college- and life-counseling company Next Step Publishing, has a nice post on Inc.'s Start-Up Blog about nice times: the one-month vacation he just took (in Sicily--great choice!). For wealthy higher-ups at larger corporations, of course, the August vacation is de rigeur, and certainly not grounds for special distinction, or even a blogpost.

But Mammano is rightly proud that he was able to take a month off despite being in-charge of his small business. "The talent, skill, intelligence and commitment of the staff at Next Step is so strong that I didn't even flinch about leaving for a month," he writes. "Each of their roles are clear. I trust them. And they don't need to be micromanaged anyway."

"And next time, maybe I'll take off two months!" he concludes.

The implicit lesson of the article is that Mammano's isn't--or shouldn't be--an exceptional situation. Rather, among your main objectives as the founder of your own business is to make yourself dispensable, at least in the short term, through good delegating, smart hiring, and able managing. That may seem strange--you want to think of yourself as absolutely essential to the business you started (and don't worry, overall you still will be)--but a company that can't survive for more than a week or two without you is a fragile company. And this way, you get to take nice trips to Sicily!

The other point we'd make is: this is what's great about starting your own business! Not to speak for every single entrepreneur out there, but one of the main reasons people list for striking out on their own is to be their own boss, set their own hours, and gain flexibility in their work-life balance. If you start your own business with those goals in mind only to find yourself unable to take more than a day, much less a month, off, then you have lost sight of why you started in the first place.

But in Mammano's case, the needs of a healthy business and healthy lifestyle perfectly coincided.

Rohit Bhargava weighs in on how Apple has accomplished so much, and what you can learn from it. Be sure to check out Rohit's BizBooks conversation here, on his book, Personality not Included.

At some point just about every marketer is bound to look at something that Apple is doing and wish they could have done it for their own brands. There are a few other brands that have this universal admiration from marketers. Coca-Cola is the other notable example that comes to mind. Yet there is a temptation I have noticed to simplify the success of Apple to two things: innovative products and great marketing. I would love to believe this as much as any other marketer, but there is a crucial missing third element that most people never talk about which I think is actually the most important reason Apple has been so successful. They do one thing that almost none of their competitors in any market can do ... they control distribution.

They have their own stores, their own sales people, and their own model for selling their products that cuts out any middleman or competitors completely. The fact that they control distribution offers many benefits:

1. Consistency of messaging - As opposed to other consumer electronics brands that must educate sales people who work for someone else, Apple can control their sales force and the messages that they learn to talk about. As a result, everyone tells the same story about their products.
2. Removes the competition at point of sale - A big issue for many of their competitors is that a customer may come into a store with one product in mind, but can often get steered toward another during the time they are in store. Often they will walk out not with the product they intended to buy, but something that was cheaper, recommended more heavily by the sales staff, or (most frustratingly) another product whose packaging simply was more appealing.
3. Makes upselling easier - When you walk into an Apple store, everything is Apple branded in some way (even the products manufactured by other companies). As a result, you are in the ultimate upselling situation, where you might pay $45 for a connector cable that would ordinarily cost $5 elsewhere. When you are captive in the store and already spending $499 on a big product, who really cares about another $45, right?
4. Retail environment reinforces the community - Apple fans are enthusiastic about the brand and products that they love. Because Apple has distribution focused on their stores, they can create events, features and resources that all reinforce this community. From the Genius Bars to special events hosted at Apple stores, this offers an invaluable marketing asset that few of their competitors can match.
5. Pricing is controlled - It is virtually impossible to find huge discounts on Apple products (particularly new ones). This is another effect of this controlled distribution, that if you are setting the places people buy your products, you can also centrally control the price. Not only does this allow for more consistency, it also gives you the ability to include pricing in your marketing materials and ads because you know its the same price everywhere.

Do check out Rohit Bhargava's post over at our Topic of the Week blog, here.

We wrote earlier this week about the iFund, a venture capital group looking to invest in start-ups that make applications for Apple's iPhone. Noting the potential for young companies that Apple is providing, we further observed that such opportunities will multiply as the T-Mobile Dream, to be powered by Google's as-yet-unreleased Android operating system, is released in the coming months (apparently on October 13).

Now today comes more exciting news for entrepreneurs hungry to cash in on Android: the OS, which Google co-founder Sergey Brin says in this YouTube he wants to provoke the development of exciting, innovative apps, will, according to Gizmodo, make apps available to users without the need for a prior approval-- a stark difference from Apple, which has been famous for rejecting proposed apps and for shuttering already-offered ones.

This is open source to the extreme. Too extreme? Gizmodo argues that Google's hand's-off approach is "great news for Android devs, but could be quite a handful for Google." Mark your calendars, people: let's see what happens come October.

As we gear up for the relatively brief (under two months!) remainder of the presidential contest,, it is worth taking a gander at the candidates' respective positions on issues that especially affect entrepreneurs and small business owners--and, through them, the whole economy. Let's start with this recent report put out by the Small Business and Entrepreneurship Council, which we found via U.S. News & World Report writer Matt Bandyk.

The group, which is nonpartisan but which has a general politics that would likely incline it towards the Republican rather than the Democratic Party--on the group's Website, there is a prominently displayed article advocating an expansion of offshore drilling, an issue that has divided Sens. John McCain and Obama--lays out the two candidates' positions on a whole breadth of issues. Let's take a look.

TRADE McCain would move in a free trade direction: lowering barriers, working through the WTO to enforce existing arrangements, and looking to new markets. Obama would move in a "fair trade" direction, looking to install labor and environmental conditions on trade deals and questioning NAFTA.

TAXES Generally, McCain would keep the so-called "Bush tax cuts" while Obama would seek to repeal them while still cutting taxes for, as he put it last night, "95% of working families." From a business's perspective, McCain would ban cell phone and Internet taxes, allow a first-year deduction for equipment, and lower the capital gains rate from 35% to 25%. Both candidates would make the R&D tax credit permanent. Obama would offer $20 billion tax rebates to try to boost the economy.

WORKPLACE McCain would offer employees the chance to substitute comp-time off for paid overtime. Obama would raise the minimum wage (and index it to inflation), allow card check for unionization purposes, and use an initial $1.5 billion to incentivize states to adopt paid sick leave.

HEALTH CARE Instead of the current employer tax exclusion, McCain would offer refundable tax credits: $2500 for individuals, $5000 for couples. He would establish a national insurance market, and would allow small businesses to pool via associations. Obama's plan purports to be universal, and would include a mandate on small businesses to "play or pay". Under it, a small business would be able to buy into a federal pool, thereby receiving a refundable tax credit worth as much as 50% of employee premiums they pay; employers may also get reimbursed for certain catastrophic costs incurred under certain conditions.

IMMIGRATION McCain would generally work to secure the border, while also establishing a market-based temporary worker program. Obama supports "comprehensive immigration reform" (of the type once associated with McCain).

ENERGY Both candidates would offer numerous prizes/incentives for various clean energy breakthroughs, including clean cars, new batteries, and low-carbon energy sources. Though both would implement a cap-and-trade system, McCain's is less aggressive than Obama's, and would exempt small businesses (Obama's wouldn't). Obama has advocated clean coal public-private partnerships.

FISCAL REFORM Both candidates have pledged to attack earmarks and pork, with McCain especially making this goal central to his broader economic agenda. McCain would also introduce personal accounts into Social Security. Obama wants all government contracts worth more than $25,000 to be competitively bid.

MISCELLANEOUS McCain would emphasize R&D public-private partnerships. Obama would create a 20% tax credit for $50,000 investments in small businesses and micro-initiatives in rural America. He would establish a $60 billion National Infrastructure Reinvestment Bank and a $50 billion-over-ten-years clean energy fund. He would also expand the Small Business Administration, including its capital outreach to minority-owned businesses.

So there you have it. Won't be the last word we have on the election. But be sure that your last word on the election is your vote on November 4.