More Debunking...

A story about my kid
My kids are aspiring actors. This week, the talent agency called and my daughter auditioned for a radio commercial. The agency emailed me the script, we phoned the contact and my little Goofball delivered her lines beautifully. Later that afternoon, three representatives from the Denver-based advertising agency to which our talent agency had referred us would hear I-don't-know-how-many additional auditions. From this pool they will select their favorites for a second round of auditions next week, and bring in the talent fortunate enough to be cast in the part next Friday to actually lay down the audio. For Goofball, this consists of three sentences as part of a single 60-second spot. Then the agency assembles all the elements and goes into post-production...

Certainly, the end client, a Baltimore-based hospital, has assured itself of a quality product that stands a very good chance of gaining approval on first pass and of being well received by the consumer. They've put their faith in reputable consultants and a proven process. Big investment, high accountability, big return.

Conversely, my 20 years as a promotions producer are full of, "You got pipes, you can read, you do the voice over." Need a female voice? Grab the news anchor on her way to the edit bay or see if the lady from PR can do you a solid. This saves time, money, and...er, time and money. Lots. It also provides flexibility, which is especially important in dynamic corporate environments where pricing and messaging points change because the right person changed her mind or because
you have an opportunity to get out in front of a competitor. Re-voice? No problem. Breakeven is exponentially easier to reach. So long as you have the horses in your stable, you can keep running them.

Why is he talking about his kid?
Here's a good article: Five Phases of Social Media Marketing by Janet Lee Johnson: http://socialcomputingjournal.com/viewcolumn.cfm?colid=789. This is an excellent read for anyone trying to make sense of social networks as a marketing vehicle. Johnson's walk through the approach demystifies the medium by applying steps and tactics fundamental not just to marketing planning but to any targeted effort. Whether you're thinking about launching a new product line, acquiring a competitor, hosting an event or finishing your basement, Johnson's phases: Discovery, Strategy, Skills [identification], Execution and Maintenance are solid pillars for any implementation.

Johnson stresses, "that social media marketing is not free." She cites and endorses the $50K figure cited in the BusinessWeek article previously argued in this blog space (http://mikehanbery.blogspot.com/2009/03/swift-kickin-rebuttal-debunking-six.html). Johnson amplifies and clarifies the argument that effective use of the free tools out there (e.g. Facebook, Twitter, blogs, Search Engine Optimization of website) requires expertise, which doesn't come free.

This is true. The time and effort you invest are quantifiable. Training costs money. Bringing in a consultant to execute the plan through phases adds time and money to the process in exchange for better returns on the end product. Why do you hire a bookkeeper? Because you're not an accountant. Why don't you fix your own computer? Because you'd only make it worse (and void the warranty). Why don't you construct your own marketing plan? Because it will be worth what you paid for it, fraught with missed opportunities.

Here's another perspective, courtesy of an April 7, 2009, Financial Times article, "Social Media Puts Fizz into Coke (http://www.ft.com/cms/s/0/3b8b4cf2-230b-11de-9c99-00144feabdc0.html?nclick_check=1)":

Liz Miller, Vice President...at the CMO Council...warns that in such a nascent
market there remains a risk of being sold snake oil. "Please don't ever hire
a Twitter consultant," [says Miller].

Get to the point, Mike.
Do you need to be an expert in social media to use it to your advantage? No. Should you get some help?

In the marketplace of ideas, barriers to entry are thankfully low. Experts are not always swimming in the same pond. Some social media marketing experts are working to establish a price point--$50,000--for social media marketing consulting. Now, I'll be more than happy to work for that figure but I don't think my audience has it to invest. For most of the people I see at networking events, who have sat at my kitchen table on Saturday sipping coffee, who delicately walk the line between deliberate pursuit of business growth and alienating friends with the "hard sell," and who invite me to speak to their groups about the social media phenomenon, $50K is a huge chunk of their annual revenue figure, and may well be equivalent to the annual salary an entrepreneur affords herself.

The $50K price point creates a false barrier to entry for small and emerging businesses in an area that provides outstanding opportunities for collaboration, brand recognition, market development and leads generation.

Social media strategies are not an area where absolutes are safely applicable. If you have the resources to take weeks to employ multiple levels of agencies for a single radio spot, you may well benefit from $50K worth of consultants to research, launch and maintain your social media program. If you don't, there are people out here swiftly kicking to help you for less.

In sum...
Even if you don't have $50K, you can--and should--play in the social media sandbox. As with all other aspects of your business, scale your expectations. If you talk to a Twitter consultant who tells you to expect the same results from a self-managed strategy as you would from a $50K investment, swiftly kick that snake oil salesman to the proverbial curb. Just as there are those of us who write, source, voice and turn out TV and radio spots in hours or days rather than weeks, there are social media strategits willing, able and modeled to work on a smaller scale.

But if you have $50K and decide I'm your man, I'm sure Goofball can help me spend it.

About the Blogger
Mike Hanbery (http://www.linkedin.com/in/mikehanbery) is an Executive MBA with
20 years of experience in marketing and media at the national and local level
for startups to Fortune 500. His company, Hanbery & Hanbery, Inc.
(http://www.hanbery.com) works with small nonprofit and for profit businesses in
accounting, business development and marketing. Mike speaks on, trains, designs
and implements social media strategies and is co-author of the soon to be
released book: Connect and Contribute: Creating a Social Business.

Twitter: Show Me the Money

Time is money...?
Saying it has "lots of time for experimentation (http://www.foxnews.com/story/0,2933,511000,00.html," Twitter will explore and probably offer commercial accounts this year, using a subscription model as a revenue generator
(http://www.eweek.com/c/a/Messaging-and-Collaboration/Twitter-Offering-Commercial-Accounts-For-a-Price-723430/).

Twitter as SaaS
Another or perhaps ancillary potential revenue source for Twitter is its inclusion on the dashboard of CRM giant SalesForce
(http://www.eweek.com/c/a/Enterprise-Applications/Salesforcecom-Puts-Twitter-in-Its-Service-Cloud-351280/).

Giving the Big Dogs a Bone
Microsoft is Facebook's biggest backer and may be the source that fosters cooperation, or at least "coopetition," between the two surging social networks as it recently announced its sponsorship of ExecTweets, which is designed to deliver the microblogs of big dog American execs to the great unwashed (us)
(http://www.eweek.com/c/a/Search-Engines/Microsoft-Now-Sponsoring-Twitter-Enterprise-Site-725461/). While sponsorship is not a revenue stream, this strikes me as a kickin' marketing tactic: Well-timed and presenting directly the value of the service to a vain set of decision-makers who in recent years have probably authorized thousands of dollars on high-priced, low-paid, twenty-something consultants to poke around their companies and deliver reports stating
that everything will turn around if they just communicate better.

What is leads generation worth to you?
Applications like TweetDeck and Twhirl are being used for leads generation but Twitter hasn't figured out exactly how to procure a "finder's fee" for the business deals it helps facilitate. Twitter remains overtly committed to avoid an advertising model. This sets an interesting converse relationship with Facebook, which continues to vow it will not charge for subscriptions but is experimenting with advertising, and shows a bold willingness--determination?--to
participate in what would surely be a large share of a projected $2.4 billion chunk of cash flow in 2009 (http://www.imediaconnection.com/news/22493.asp).

Turn and face the strain.
Just because these networks started out "free" doesn't mean they're going to remain that way. According to your user agreement, they owe you little or nothing and can change the terms at any time. The more social media fits into your marketing and sales strategy, the more important it is to follow these developments and plan for changes.

Twitter and especially ExecTweets will be interesting to follow to see not only how well it takes hold at the corporate CEO level and what happens from there but to watch what happens within the social media industry thereafter. These folks didn't get to where they are by not thinking ahead.

The fact that Microsoft is Facebook's sugar daddy and chief investor in ExecTweets indicates rubber is getting closer to meeting road in the developing...er, relationship...between the two networks. Astute social media users and strategists will be ready for any and all possible changes. That is, to swiftly kick with the current.

About the Blogger
Mike Hanbery (http://www.linkedin.com/in/mikehanbery) is an Executive MBA with 20 years of experience in marketing and media at the national and local level
for startups to Fortune 500. His company, Hanbery & Hanbery, Inc. (http://www.hanbery.com) works with small nonprofit and for profit businesses in
accounting, business development and marketing. Mike speaks on, trains, designs and implements social media strategies and is co-author of the soon to be
released book: Connect and Contribute: Creating a Social Business.

Pining for Profit: Facebook

Introduction
Facebook is hotter than Phoenix in July, but more users mean larger infrastructure
requirements, which cost money. User interface redesigns cost money. Employees cost
money. When the venture capital runs out, where's the money coming from?

In November, 2008, Facebook made a $500 Million offer to purchase Twitter, which the
latter declined. What fascinates this observer, as he's stated to every group who has
hosted him since, is that this attempted purchase and developing rivalry is between
two companies that (probably) have yet to earn a penny of profit (both are private
entities and do not disclose earnings) or show a model by which they transform the
increasing popularity of social media to a consistent and sustainable revenue stream.


Show Me the Money
A few weeks ago, at http://twitter.com/mikehanbery, I posted a Charles Cooper article
(http://news.cnet.com/8301-17939_109-10184856-2.html) about a proposal Facebook has
received, and which has led to a(nother) protest movement within Facebook, wherein
users are voicing displeasure with the notion of paying for the service. As the
article states, with 200 million users, even a $1 per year subscription fee would
provide a kickin' chunk of change. That said, Facebook has promised not to pursue it.
Facebook's revenues are drawn from the ads it wisely places noticeably but relatively
innocuously, on the right side of the page and in peripheral view of the user. Do
they work? The short answer is, historically, no
(http://gawker.com/tech/advertising/facebook-consistently-the-worst-performing-site-24
2234.php). $400 Million is the high end estimate of Facebook's 2008 revenues, $250
Million the low. These figures taken against the 200 million user figure place revenue
per user in the $1.25 to $2.00 range. That's 2 bucks per user...per year. So
Microsoft, Facebook's principal benefactor, values the site at $15 billion? Well, it
wouldn't be the first time they knew something we didn't.

The Facebook demographic is rapidly growing older, which means more purchasing power
for the overall base. Kudos to the site for pursuing an innovative "engagement"
formats for ads, which the New York Times explains in an article today:

Facebook’s approach is to invite advertisers to join in the conversation. New
“engagement” ads ask users to become fans of products and companies — sometimes with the promise of discounts. If a person gives in, that commercial allegiance is then
broadcast to all of the person’s friends on the site
(http://www.nytimes.com/2009/03/29/technology/internet/29face.html?_r=1).

What's so very cool about this approach is that it maintains the balance of
unobtrusiveness for the user with indiscreet positioning for the advertiser while emphasizing
interactive Web 2.0 functionality. Working against it is the aforementioned poor
performance record of social networking ads and that the vast majority of social media
content is created by a whopping nine percent of its population
(http://www.useit.com/alertbox/participation_inequality.html). This means that the
range for Facebook's annual revenue per active user is (again, probably) somewhere
between $13.89 and $22.22. Still a small sum, yes, but an indication that the
aforementioned $2/user/year figure may be off by as much or more than one thousand percent, and consequently that Facebook's goals should shift from user acquisition to user engagement, i.e. converting the 90 percent of the inactive or observant population--"lurkers"--to contributors. In fact, given Facebook's probable high level of operational expenses and the large amount of debt it continues to accumulate (http://www.businessweek.com/technology/content/mar2009/tc20090326_604141.htm), let's change that "shift from," in the last sentence to "expand to include."

Conclusion
Why does this matter? Because the mighty have fallen and taken a piece of us in the process; just ask anyone with Lehman stock. Facebook can't be a loss leader forever, especially as it operates in the aura of its younger rival, Twitter. What's the solution? Try this on: You are. Your public profile (aka "Page"), your ads, in fact all of your efforts will be successful to the extent that you as a user can bring active users to your network...your Facebook network.


Preview
Kickin' Twitter in the next post. They don't even sell ads and they gotta feed the monkey like the rest of us.


About the Blogger
Mike Hanbery (http://www.linkedin.com/in/mikehanbery) is an Executive MBA with 20
years of experience in marketing and media at the national and local level for
startups to Fortune 500. His company, Hanbery & Hanbery, Inc. (http://www.hanbery.com)
works with small nonprofit and for profit businesses in accounting, business
development and marketing. Mike speaks on, trains, designs and implements social media
strategies and is co-author of a book due in April, 2009: Connect and Contribute:
Creating a Social Business.

The Future of Facebook

This blog is not sponsored.

Last week, I had a conversation about Facebook for business with two Denver area business activists, one of whom was Todd Morrissette, Vice President of Business Development for Corossol Software. Todd's vision of Facebook as a business tool was so compelling and interesting that I asked him to be interviewed for this blog. Todd responded with a complete article so eloquent that I have decided to publish it here in its entirety. I can get kicked pretty swiftly, myself.

Corossol Software specializes in developing software applications for small and medium size businesses. Corossol's latest product is Centreboard, an online document management solution that assists companies with automating their business processes. Its goal is to provide an enterprise software solution without enterprise software costs. For more information, please visit www.corossolsoftware.com or contact Todd at todd.morrissette@corossolsoftware.com.

It is from this perspective that Todd offers his views about Facebook as a business tool. I hope you find it as kickin' as I do:

Facebook in its current form is a social networking tool. It was not developed for business, but for personal use by individuals. However, as we have seen over and over, tools developed for one group is often used by another. Typically, tools for business have been adopted for personal use such as cellular phones and email. Facebook is having the trend move the other way. Businesses are now trying to determine how to best benefit from the Facebook phenomenon. The reason businesses are adopting Facebook is because, unlike its social networking predecessors such as My Space, Facebook is being used by a larger demographic, not just teenagers. Since Facebook is being accepted by such a diverse group, businesses are taking notice and are trying to see how they can most benefit by adopting the application.

Currently, we are seeing businesses start to use Facebook as a marketing tool to communicate their name and brief descriptions about themselves. This is being done by creating “Fan” pages. Once users become “Fans” of the company’s page, the company can then direct market to those individuals by posting information on the page or sending emails to the individuals. In order to take it a step further, companies can create groups for people to join. Groups allow companies to find “like minded” people and then direct market to them. Here is an example of an organization using a group to its advantage:

A company that prepares tax returns for individuals creates a group called “Doing Taxes Stinks”. Several people may join this group for many reasons, such as they agree, they think it’s funny, or perhaps because a friend joined. The group starts to grow and grow using the 6 degrees of separation theory. Soon the group is over 200 strong. Now the tax company has the names of 200 users who think doing taxes is not fun and they can now market directly to these users through the group page.

More importantly is where the future of Facebook will take us. Facebook is already making changes to fit the needs of businesses by trying to outline how a business can create a Fan page or Groups.

I believe Facebook will eventually become a collaboration tool businesses can use to bring people in remote locations together- virtually. Businesses will be able to create “internal groups” where project team members can provide status updates, schedule meetings (events), post messages to the team and post documents to be shared by the team. This will be an application a business can easily introduce to their employees because their employees are already familiar with the tool. Furthermore, their users enjoy going to Facebook and do it frequently. Employees will not be as reluctant to adapt to the change and the application will be accepted more.

Once again we are seeing how the internet is providing a change to how we do business. With the new social networking websites, individuals are able to communicate with one another like never before. Communication is frequently listed as a major issue in companies, by both employees and management. Facebook, as well as other social networking websites, offers another option for people to communicate. Today, Facebook users are able to share their thoughts and communicate easily to masses. Likewise, users are able to filter who they want to hear from. In the near future, the same will be done within organizations who seek creative solutions to their historical issues.

The Stimulus and Small Business

This week we will examine the timely topic of the American Recovery and Reinvestment Act, a.k.a. the federal "stimulus" plan, and its opportunities and impact on small business.

Scam Letter Alert
Not surprisingly, the thieves have emerged to prey on the hopeful but nondiligent. A scam letter on counterfeit SBA letterhead is currently making its way around small businesses. It asks for bank and account information (Source: http://www.bizjournals.com/triad/stories/2009/02/16/daily62.html) so that the agency can determine eligibility for a tax rebate. If you receive this letter, contact the Office of the Inspector General Fraud Line at 800-767-0385 or OIGHotline@sba.gov, then please shred and recycle it immediately. Want to really get put off your dinner? See below at the amount of money this type of anticipated activity justifies.

Opportunities
The Stimulus--as I will begrudgingly refer to this bill--provides $730 Million for the Small Business Administration for the purpose of providing "new loans to assist small businesses with meeting debt payments," offering, "higher loan guarantees" and lower fees (http://www.ketv.com/money/18755827/detail.html). Here is a breakdown of the SBA's allotment, courtesy of Infozine:

• $375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans
• $255 million for a new loan program to help small businesses meet existing debt payments
• $30 million for expanding SBA’s Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders
• $20 million for technology systems to streamline SBA’s lending and oversight processes
• $15 million for expanding SBA’s Surety Bond Guarantee program$25 million for staffing up to meet demands for new programs
• $10 million for the Office of Inspector General

(Source: http://www.infozine.com/news/stories/op/storiesView/sid/34149/)

Much of the additional spending is for infrastructure and government facility modernization. Small businesses who deal directly with, or support firms who sell to, the federal government have optimistic outlooks. Similarly, there will be opportunities at the state level,especially for businesses who qualify as a Minority Owned Business, Woman Owned Business or Disadvantaged Business. If you have previously dismissed or are at present conflicted about the considerable time, effort and hundreds of dollars required to become a certified MBE, WBE or DBE, there may be no better time or motivator than this Act, right now.

For Colorado small businesses, here is a document that explains certifications and the process:
http://www.dot.state.co.us/EEO/CERTIFICATION/linkedFiles/CDOT_CertificationRoadMap.pdf.

Complaints

The New York Times (http://www.nytimes.com/2009/02/20/business/smallbusiness/20sbiz.html?ref=business) reports,"a little detective work is needed to reap the full benefits of the law." And to understand whether or not you benefit. Businesses can deduct $250,000 for capital expenditures, for example, but only if they are profitable. Similarly, the bill allows a 50 percent bonus deduction on capital investments made in 2008 or 2009 that normally would be deducted over many years, but if you're not making money, you're probably not purchasing.

The bill provides for companies to use losses from 2008 to offset profits in any full year that two to six years ago and obtain an immediate refund. This is only for 2008 and for companies with annual revenues of $15 million or less...so, in other words, carrybacks are okay...just like they were before this bill.

Opinion

I recently presented at a University of Denver symposium (http://www.estlow.org/) at which Global Voices co-founder Ethan Zuckerman accepted an Anvil of Freedom award. Mr. Zuckerman spoke of the importance of remaining active and diligent in pursuit of facts. When a student asked "Why should we care?" Mr. Zuckerman responded, "Because awful things happen in the shadows."

According to SpeedReadingBlogger (http://www.speedreadingblogger.com/tag/stimulus-bill/), the average person reads 200 words per minute. There are 207,421 words in the stimulus bill. That's 17 hours and 17 minutes; longer if you need to go to the bathroom or blink.

No one in Congress read the whole bill. Why it couldn't be chunked out like all other political agendas? Is this administration using "the politics of fear," which candidate Obama quite rightly condemned, as leverage to promote an ideological agenda? Is it irresponsible to vote "yes" on a bill you haven't read, and does the unprecedented magnitude of expense this bill proportionately increase the darkness of the deed?

Conclusion

Please find and take advantage of the opportunities in the stimulus package. And please hold accountable yourself, your partners and your government. Know that this bill is full of shadows.

Resources for The American Recovery and Reinvestment Act:

http://www.recovery.gov/

http://readthestimulus.org/

Full Text of the Bill http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf

Obama's Plan: Where's Your Opportunity, Part IV

"Universal Retirement Savings"

Continuing in our analysis and treatment of The Plan by Rahm Emanuel and Bruce Reed:

Prologue
This installment is privileged with the expertise of Jordan Curry, Financial Representative for Northwestern Mutual. The author of this blog wishes the reader to know that the blog is not sponsored by Northwestern Mutual or any other entity.

Background on Subject Matter Expert
Mr. Curry, an alumnus of Arizona State University's Carey School of Business, serves as Chair for the Board of Directors for a Denver-based travel company and actively supports multiple nonprofits, including Save Our Youth, the Pat Tillman Leadership Through Action Program and the Business School Council. He is a member of Denver Young Professionals and the Financial Planner Alliance. Mr. Curry can be reached via email Jordan.Curry@nmfn.com, or his website http://jordancurry.nmfn.com/.

Summary
With "Universal Retirement Savings," The Plan seeks to address the convergence of increasing "demands on...nest eggs" and our aging population; the decline in available pension plans and low percentage of retirement savings; and the wealth gap, by reforming the "complicated" tax code and "alphabet soup" of retirement savings plans and raising the minimum wage.

This installment acknowledges and summarizes the entirety of the initiative as stated in The Plan, but analysis focuses primarily on a single aspect having the greatest potential impact to small business: The 401 (k) requirement. In previous installments, this blog has sought to identify opportunity areas for small businesses in order to empower its readers with advantageous positions on the change curve. While it is the sincere hope of the author that reaction and discussion uncover ideas of that nature, this installment would be incomplete without addressing economic realities past and present and the considerable risks that also accompany this proposal.

To preserve context, the summary provided by the authors is restated
here in its entirety:

From now on, every job ought to come with a 401(k). An aging society cannot afford to keep saving less and risking more. We need new means to create wealth, based on the needs and responsibilties of twenty-first-century employees and employers. Employers should be required to offer 401(K)'s, and workers will be enrolled unless they choose otherwise. If they switch jobs, they can take these accounts with them. When their paycheck goes up, so will their savings. Instead of a workforce in which only half the workers have retirement savings plans, every American will have one.

"More Ownership and More Security"
One stark change since the book's publication in 2006 is a position reversal on the consequences of debt. The Plan criticizes President George W. Bush for, "dig[ging] the country still deeper into debt--an unlikely way to strengthen the nation's long-term finances," and for having "a political vision, not a practical one." In 2009, the "stimulus" plan for which President Obama has been pressing is funded by unfathomable debt and is peppered with political objectives.*

Another is public perception of the 401(k) as a dependable source of retirement income. According to a February 12, 2009, US News and World Report article (http://www.usnews.com/articles/business/retirement/2009/02/12/how-did-your-401k-really-stack-up-in-2008.html), in 2008, the average American employee lost 14 percent of her retirement savings--a $19,000 drop in average account balance.

"Americans aren't savers," says Curry. "The savings rate has historically been negative. That's a large part of the current credit crisis, and it's a result of fiscal mismanagement. Most people look at their paycheck and see a chunk of it sent to Uncle Sam for Social Security, but the reality is that personal savings is a very large part of life after retirement."

The Plan agrees: "71 million Americans work for an employer that doesn't offer a retirement plan, and another 17 million who could take part in an employer plan don't. More than half of all households have no retirement savings beyond social security." First, why don't those 17 million engage?

According to The Plan, its because "the burden of navigating and managing" plans and the sheer number of them is too bewildering. Curry disagrees, offering that having a menu of options
for savings and investment is a result of market demand for specialized services. "Problems arise," Curry offers, "when individuals aren't educated or diligent in learning about, or
managing, their retirement funds," which he admits is the realm of the professional financial advisor. "As you age, your investment portfolio should rebalance. Much of our problem right now is that this hasn't happened; people have portfolios that are in the wrong risk area."
Curry calls attention to The Plan's educational designs (previously discussed in this blog), offering that finance as a pre-college core curriculum item would provide substantial opportunity for long-term economic stability for individuals, business and the nation as a whole.

"A 401(k) with Every Job"
The Plan's proposal is to:

[R]equire all employers to offer workers a pension or 401(k), and expect all workers to contribute unless they make an affirmative step to opt out...[E]very employee would automatically be enrolled in the employer's 401(k), with the choice to opt out at any time. If employees switch jobs, they could take their account with them to a new employer. Employers could enroll each worker in their own plan, or in a state-sponsored retirement plan similar to the Thrift Savings Plan [Author's note: The TSP is currently available only to military and federal government personnel (www.tsp.gov).]

The current Obama position, available on the White House website (http://www.whitehouse.gov/agenda/seniors_and_social_security/)
states:

The Obama-Biden retirement security plan will automatically enroll workers in a
workplace pension plan. Under their plan, employers who do not currently offer a
retirement plan will be required to enroll their employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems. Employees may opt-out if they choose. Experts estimate that this program will increase the savings participation rate for low and middle-income workers from its current 15 percent level to around 80 percent.

The Obama administration also plans to "ensure that all employees who have company pensions receive detailed annual disclosures about their pension fund's investments" by requiring "full disclosure of company pension investments." The Plan calls for similar transparency, and even assigns agency responsibility for enforcement. Neither Obama's position statement nor The Plan make provisions for the size of a company relative to these requirements, nor do they provide for the specifics for creating a state-sponsored savings plan accessible by the private sector.

Opportunity and Risk Areas
The populist motives are clear, but questions and concerns abound for small businesses:

• Will the requirement to provide a retirement plan raise barriers to entry for my competitors?
• Will this requirement require me to employ fewer people? Or decrease
  wages? Will it limit my ability to expand?
• Will transparency in reporting requirements increase my payroll and overhead costs, and by how much?
• Into what actual quantitative and qualitative changes to business operations do these changes translate?
• In the market for talent, this change presents opportunity. Where? How can we seize this change for competitive advantage?

Conclusion
Curry's final observation on the topic is reflective of the fact that such a large majority of Americans are employed by small- to medium-sized businesses. He states, "These owners create the wealth in our society. Raising the minimum wage doesn't promote economic growth,
but economy is just one element of society." Similarly, the challenges posed for small businesses by this administration's agenda will probably provoke a reaction of discomfort and resistance.

It is this blog's hope that its readers will emerge as educated opinion leaders, with solutions at the ready.


*According to the Wall Street Journal, $500 Billion of the $6.2 Trillion Weatherization Assistance Program is for beaureaucratic "expenses;" there's $6 Trillion to help General Services Administration buildings go green; and there's even money for yacht repair (http://online.wsj.com/article/SB123379617394050229.html). The Christian Science Monitor says $300 Million has been set aside for what might be golf carts (http://features.csmonitor.com/economyrebuild/2009/02/14/my-five-favorite-things-in-the-stimulus-bill/). In fairness and if you haven't heard, they did take out the condoms (http://www.politico.com/news/stories/0109/18066.html).

Obama's Plan: Where's Your Opportunity? Part III

Continuing in our analysis and treatment of The Plan by Rahm Emanuel and Bruce Reed:

Prologue
This installment is privileged with the expertise of Rhonda Sinnema and Jennifer Marshall of College Assistance Plus (http://www.caplusdenver.com/). The author of this blog wishes the reader to know that the blog is not sponsored, by CA Plus or any other entity.

Background on Subject Matter Experts Experts
CA Plus gives students and their families guidance and direction in choosing a college, comparing financial aid packages, and accepting offers to attend. They work with families and prospective collegians to develop strategies to maximize financial aid. CA Plus clients leave schools of their choice with degrees…not debt. Mrs. Sinnema is the Owner of CA Plus Denver; Miss Marshall serves the firm as Director of Education.

Summary
With “Universal College Access,” The Plan seeks to make college available to those who want to go but can’t (“The main reason young people don’t go to college—or don’t finish—is cost.”); the “achievement gap,” i.e. holding colleges accountable for student dropout rates; to “provide lifelong training” for “any worker at any age…at an accredited institution;” and “to strengthen and reform our system of public education in elementary and secondary school,” the latter of which is identified as, “the weakest link in our educational system.”

This installment will acknowledge and summarize the entirety of the initiative as stated in The Plan, but analysis will focus only on the collegiate aspect. To preserve context, the summary provided by the authors is restated here, in its entirety:

We must make a college degree as universal as a high school diploma. More than ever, America’s success depends on what we can learn. We have an education system built in the last century, with a school year left over from the century before that. In this new era, college will be the greatest engine of opportunity for our society and our economy. Just as Abraham Lincoln gave land grants to endow our great public universities, we will give the states tuition grants to make college free for those willing to work, serve, and excel.

“Closing the College Gap”
Here we find a jarring reminder of what has changed since The Plan was published in 2006 as the authors show disdain for the practice of “subsidizing banks;” perhaps ironically preceding the prediction, “In the years to come, with the strength of our economy on the line, going to college will itself be a form of national service.”

The authors propose, first:
[To] simplify the tax code by replacing the five major existing education tax incentives—the Hope Scholarship, the Lifetime Learning Credit, the deduction for higher-education expenses, the exclusion of employer-provided education benefits, and the exclusion for qualified tuition reductions—with a single $3,000-a-year refundable credit for four years of college and two years of graduate school.

Second, The Plan states we should, “pass a truth-in-tuition law that requires colleges to set multiyear tuition and fee levels so that those in each incoming freshman class know in advance exactly what their degree will cost them.”

Finally and “most important,” the authors propose to, “provide Tuition Grants to states,” so they can, “offer free or low-cost tuition to students who work their way through school, excel in class, or commit to careers in critical professions.”

Other Components
To “hold colleges accountable for producing more graduates,” i.e. increasing graduation rates, The Plan prescribes the US adopt “the accountability system in Britain, which holds back a portion of colleges’ public funding until students actually graduate.” In this way The Plan addresses what it calls, “The Other Dropout Problem.”

The Plan also proposes changes to non-collegiate education and non-traditional collegiate education. Sinnema and Marshall agree with The Plan’s assertions that these areas, particularly pre-college education, are in need of immediate improvement. This component will be addressed in a separate and subsequent blog installment.

Relevancy
CA Plus advises that the only significant change to this Plan item in regard to the shift in our economy is that college affordability is even more prevalent an issue. People who saved in a 529 plan or intended to borrow against their house to pay for college now find their house devalued, their ability to borrow diminished and their retirement accounts in decline.

The brunt, say Sinnema and Marshall, is borne by the middle class. Perkins and Stafford Loans along with Pell Grants, the most common forms of financial aid, are awarded based on financial need, typically low end of middle income. Private loans are more difficult to acquire as well: According to http://www.finaid.org/, the number of private lenders facilitating college loans was 60 just last year; now it is 39.


Opportunity Areas
Anyone able to open cash flow opportunities for middle class families will have fast friends. There is a broad chasm of difference between, “How can I help you?” and, “What can I sell you?” Practitioners of the latter have contributed greatly to our current mess, and should not be welcomed in your network. Allow the market to marginalize the dinosaurs seeking transactional relationships learning the wrong lessons from, or ignoring, Enron and Madoff. Transformational, relationship-enriching, “win/win” opportunities can and will be created with increasing frequency. The sun is setting on the day of the one-sided deal.

The Plan does not address how these changes will be implemented. Opportunities exist within implementation, and may avail to entrepreneurial entities proactively seeking implementation avenues.

Regardless, an increased number of college students increases demand for textbooks, and the design, printing, and delivery thereof. Staff—academic, administrative and support--and facilities will need to be expanded. As a number of students and programs will be nontraditional, the number of internet-based programs will increase. The content and structure of curricula will need to be adapted to fit the medium, and a range of technologies will need to be integrated to collegiate systems and maintained. The initiative(s) may also, Sinnema and Marshall argue, increase the perceived selection available, thereby raising demand for options and research.

Of course, these are what occur to a few minds. Input is welcome. Please check in frequently to leave and read comments, and next week for further analysis of The Plan.

Obama's Plan: Where's Your Opportunity? Part II

Continuing in our analysis of The Plan, by R. Emanuel and B. Reed:

What’s the connection?
This installment does not attempt to debate the merits of, or offer an opinion on, The Plan. Rather, it accepts as reality the intentions and ability of those in power to execute it. An ongoing discussion on feasibility, motivation, or any other aspect of The Plan is most welcome, but beyond the scope of primary blog content. The goal of these installments is to illuminate direction and identify opportunities for small businesses in the changes prescribed by the new leadership in Washington, D.C.

The author of this blog encourages the reader to remain aware of current events but to remember that rarely and only in extreme circumstances do singular events alter the long term policy intentions of a Presidential administration. Events such as the recent bombing of sites inside Pakistan and/or the change in policy regarding stem cell research, especially when undertaken in such a nascent Presidency, should be understood to be positioning for the long haul. In short, the actions that dominate daily media reports are means, not ends. The Plan is about ends; this blog will suggest means by which they may be accomplished and opportunity areas created therein.

Background
The "bedrock principle" behind The Plan is, “You do your part, and your government, your company, and your country will do theirs (page 52).” By gaining followers to this principle, the authors hope to achieve a "new social contract for economic growth (p 46)" in America.

The first of The Plan’s tenets is “Universal Citizen Service.” To preserve context, the summary provided by the authors is restated here, in its entirety:

If you forget everything else you read in these pages, please remember this: The Plan starts with you. If your leaders aren’t challenging you to do your part, they aren’t doing theirs. We need a real Patriot Act that brings out the patriot in all of us by establishing, for the first time, an ethic of universal citizen service. All Americans between the ages of eighteen and twenty-five should be asked to serve their country by going through three months of basic civil defense training and community service. This is not a draft—nor is it military. Young people will be trained not as soldiers, but simply as citizens who understand their responsibilities in the event of a natural disaster, an epidemic, or a terrorist attack. Universal citizen service will bring Americans of every background together to make America safer and more united in common national purpose (p. 54).

Emanuel and Reed present two options for implementation, both centered on Americans aged 18 to 25. The first involves the creation of a new program:

[T]he nation will enlist them for three months of civilian service. They’ll be asked to report for basic civil defense training in their state or community, where they will learn what to do in the event of biochemical, nuclear or conventional attack; how to assist others in an evacuation; how to respond when a levee breaks or we’re hit by a natural disaster. These young people will be available to address their communities’ most pressing needs (p 62).

The second option, “for those willing to make a longer commitment,” comes with a prescriped expansion of Americorps (p 62) http://www.americorps.org/.


Opportunities
Even as the US government increases its own responsibility and involvement with the economy and its players, there are limits to what it can accomplish. Successful marketers pose questions such as, “What needs are unmet/underserved?” Another way of looking at this might be to say, “What might be in it for me in supporting this effort?” The answer lies in fulfilling the needs of the client—in this case, your community; your government. They know where they want to go; how can we help them get there?

Needs that private enterprise may offer in the execution include:

• Transportation – of youth to and from training centers
• Lodging – of participants and facilitators
• Facilities – principle and support facilities, i.e. medical, storage
• Infrastructure – Where will the training take place? Some communities will require more change and preparation than others.
• Diversion – entertainment for participants and facilitators
• Training – supplying the subject matter experts, trainers, simulators, materials, etc.

Opportunities may also avail in the follow-through. What, the astute observer asks, happens once the training is finished and these young people return to their communities with this knowledge? How can the community take full advantage?

Ongoing reinforcement and ROI for the community can be realized, and private enterprise can find opportunity, through (for example):

• Community meetings on the training - facilitating and moderating discussions on the changing physical and psychological impact the initiative has on the community.
• Executing and managing changes to physical and procedural infrastructure that will inevitably result from the training. This will include residential, commercial and municipal areas.
• Rewarding these youth for their contribution, and validating their sacrifice.

How can we help to ensure these programs maintain an acceptable level of effectiveness? That conditions remain optimal for learning, retention and re-conveyance? How will a program like this alter this generation, and future generations, in terms of their worldview and stewardship? What will be their outlook and long-term goal for our nation?

What will the answers to these questions reveal for the next level of opportunities? And the next…?

WIFM
Anyone who has been given pause noticing our young people isolate themselves behind their iPod earphones will surely be able to appreciate the initiative to re-engage our youth. “Many aspects of our lives,” The Plan offers, “are simply not the common experiences they once were…Opportunity and responsibility go hand in hand (pp 66-67).”

Perhaps this is the time for which many entrepreneurs have been preparing; a chance to profit fairly while strengthening your community.

Next:
Next week’s installment will focus on “Universal College Access,” and will feature expert input from Jennifer Marshall, Director of Education for College Assistance Plus Denver http://www.collegeassistanceplus.com/.

Obama's Plan: Where's Your Opportunity? Part I

On this day, January 20, 2008, Barack Obama is inaugurated as President of the United States.

In 2006, Rahm Emanual http://www.huffingtonpost.com/2008/10/27/obamas-chief-of-staff-rah_n_138240.html, then a US Congressman from Illinois, penned The Plan: Big Ideas for America (The subtitle has since been altered, and is now “Big Ideas for Change in America.”) www.readtheplan.com with fellow Clinton White House veteran and liberal journalist Bruce Reed http://www.ndol.org/ndol_ci.cfm?kaid=86&subid=191&contentid=3420. The book purports “a new social contract for the twenty-first century (Page xviii)” by way of eight high level directions they prescribe.

Emanuel and Reed split loyalties in the 2008 US Presidential election. Reed worked with Senator Hillary Clinton, penning the debate zinger, “change you can Xerox (
http://www.politico.com/news/stories/1108/15314.html).” Emanuel threw his support to fellow Illinoisan Barack Obama and was selected to be the new President’s Chief of Staff immediately upon the conclusion of the campaign. With the appointment of Senator Clinton to lead the State Department and multiple additional Clinton White House veterans to other posts, the split between the authors seems to have been temporary; the shared ideology intact.

As Obama’s actions reinforce his belief in the tenets put forth by Emanuel and Reed, as similarities exist between The Plan and Obama‘s Blueprint for Change booklet, and as he enters office on the wings of a broad mandate, small business owners and entrepreneurs have an opportunity to choose where they operate on the change curve. In a broad sense and at a high level, over the next several weeks this blog will dedicate itself to identifying the opportunities and challenges for these people and their businesses.

Objectivity will be a goal. Experts will be consulted and interviewed. Each topic will be addressed, as will changes that have occurred since publication--most significantly and consistently, the growing financial crisis that, three years ago, only a few had the courage to acknowledge and still fewer to confront.

The prongs of The Plan are:

1. Universal Citizen Service - “All Americans between the ages of eighteen and twenty-five should be asked to serve their country by going through three months of basic civil defense training and community service (P. 54).”
2. Universal College Access - “[W]e will give the states tuition grants to make college free for those willing to work, serve and excel (P. 55).”
3. Universal Retirement Savings - “From now on, every job ought to come with a 401(k) (P. 55).”
4. Universal Children’s Health Care - “[C]ut the cost of health care so that every business can afford it and every child in America can at least get it (P. 55).”
5. Ending “Corporate Welfare” - The authors' central strategy to fund the aforementioned goals (P. 56).
6. Tax Reform - Simplify the tax code (P. 138), establish a corporate flat tax of 35 percent (P. 138) and increase the overall tax burden on the wealthy while decreasing it on families earning less than $100,000.00 per year (P. 145).
7. Winning the War on Terror - “[A]dding to the special forces…expanding the US Army by 100,000 more troops…a new GI Bill (P. 56),” and other reforms.
8. A New Energy Policy - “[A] sweeping campaign to develop new energy technologies (P. 56)” centered around decreasing dependence on foreign oil by emphasizing hybrid vehicles (P. 167).

Next week’s post will analyze the Universal Citizen Service notion, and suggest its potential impact on small businesses. Eventually, we will explore The Obama/Biden Blueprint for Change, and compare and contrast it with The Plan and current events.

Again, the goal of these explorations will be to identify and illuminate the opportunities for small businesses; to provide an opportunity to ride on the crest of the wave of change.