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: Checkpoint I

Summary
Next week this space will return to The Plan by Rahm Emanuel and Bruce Reed to examine its call for “Universal Retirement Savings.” Our expert guest will be Jordan Curry of Northwestern Mutual.


Certain junctures seem to lend themselves to checkpoints. In this case, Mr. Curry needed to borrow my copy of the book and the expert I engaged regarding The Plan’s pre-college educational aspects is unable to meet my timeline. So, we will adjust our sails.


As the previous installment alluded to changes since the book’s publication, this one compares and contrasts The Plan’s 2006 goal of “Universal College Access,” with the current educational agenda espoused by the Obama administration.


We will see that, in sum and especially regarding educational policy, Obama’s current agenda and The Plan’s are virtually identical. This lends merit to our examination of The Plan as a worthwhile pursuit.


Disclaimer?
What concrete indicators show this administration's commitment behind its rhetoric? In just under 3 weeks, President Obama has removed the ban on stem cell research, directed the closure of the Guantanamo Bay prison, bombed Pakistan, picked a fight with China, assigned and dispatched 2 heavily-credentialed envoys to the Middle East, addressed children’s healthcare and pay inequality in the workplace and is on the verge of delivering an economic stimulus package few can comprehend in size or scope. This is not a complete list of the administration’s documented initiatives or actions. The pace is blistering and intense.


A February 7, 2009, Detroit Free Press article (http://www.freep.com/article/20090207/NEWS15/90207027/1285/Stimulus+compromise+cuts+education+spending) notes that much of the reductions in the stimulus package were from spending marked for education, so by the time this article posts we may have a reaction to that item from the administration. However, a February 7, 2009, opinion piece in The Wall Street Journal (http://online.wsj.com/article/SB123396676711659061.html) suggests, convincingly, that much of these educational funds were politically--not economically--motivated and offers a lesson on why Americans should fear a filibuster-proof majority by either party. Politically savvy and pragmatic, Obama will probably not choose this moment to stake his claim on education.

Checkpoint
When Barack Obama and Joe Biden were among those apparently hopeful of finishing second in the nominating process to Hillary Clinton, the former offered these words on November 7, 2007, to a group in Bettendorf, Iowa, that may have well marked the beginning of his surge:

It...means putting a college education within reach of every American...I'll
create a new and fully refundable tax credit worth $4,000 for tuition and fees
every year, which will cover two-thirds of the tuition at the average public
college or university. I'll also simplify the financial aid application process
so that we don't have a million students who aren't applying for aid because
it's too difficult. I will start by eliminating the current student aid form
altogether - we'll use tax data instead. And I'll tap the tremendous resource of
community colleges, which educate half the undergraduates in this country, by
creating a new Community College Partnership Program. We'll help schools
determine what skills and technical education are needed to help local industry;
we'll expand new degrees for emerging fields; and we'll reward schools that
graduate more students. (http://www.barackobama.com/2007/11/07/remarks_of_senator_barack_obam_31.php)

As a review of last week’s post will confirm, most of this is a “copy and paste” from The Plan. These words are reinforced in Obama’s current public policy statements, as he promises to create, “a new American Opportunity Tax Credit:”

This universal and fully refundable credit will ensure that the first $4,000 of
a college education is completely free for most Americans, and will cover
two-thirds the cost of tuition at the average public college or university and
make community college tuition completely free for most students. (http://www.whitehouse.gov/agenda/education/)

Harkening back to, and perhaps an adjustment on, The Plan’s call for “Universal Citizen Service,” the Obama policy statement also states that, “Recipients of the credit will be required to conduct 100 hours of community service.” The statement also promises to heed The Plan’s call for adjustments to the financial aid process, by:

eliminating the current federal financial aid application and enabling
families to apply simply by checking a box on their tax form, authorizing their
tax information to be used, and eliminating the need for a separate application.

Conclusion
While maintaining positions on unaddressed matters 3 weeks into a Presidency is unremarkable, the completeness of the transference of The Plan’s proposals through a full year of campaigning and into White House policy statements may indicate a high level of commitment and elevated intent to execute.


Future checkpoints on this subject will examine the data behind the proposals and the identity and role of key implementors.

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.

With the possible exception of current macroeconomics, the ambiguous and omnipresent “Web 2.0” phenomenon poses perhaps the most currently perplexing quandary for small businesses. Many feel the former pressuring them to develop their presence on the latter. Additional pressure accompanies the uncertainty surrounding the newness of the medium, both in terms of the sheer array of sites and the differences among them. Small business owners, especially--and ironically as they are the ones who stand to benefit most from effective use of the medium--struggle with managing the time requirements. Finally, a universal set of questions is developing but the answer set is different for each participant. Should I blog? Should I Twitter? On which sites should I maintain a profile? How frequently should I update this profile?

This installment offers high level best practices and a look at the differences among some higher profile players.

So, really, what am I to do?
The good news is that for those with resources to invest, there are experts capable of putting you on the cutting edge in short order. And for those who are just scrimping by, a ton of free information is available. A good place to start looking for them is…where else?…the internet…In any event, here’s the high-level summary of what they’re going to (or should) tell you.

First, decide what you want Web 2.0 to do for you. Web 2.0 can eat your time like potato chips so beginning with an clearly defined end in mind is crucial.

Next, research. Learn the differences among the entities. Pick a few that give you access to your audience. Then, learn what features and options each of those offers, and at what cost.

Each entity will revolve around a “profile.” Building a profile for each of them will take time that should be spent selling. I suggest constructing standard content and storing it in a local document file so that you can simply copy and paste. When you update this file, then, repeat the copy and paste procedure. Some adjustments from site to site will be required but this will substantially reduce your startup and maintenance requirements.

Set parameters and self-imposed limitations for the use of the tool. It’s easy to get sucked in…and this indirect selling, while necessary, must take a backseat to direct revenue pursuits. What works for your strategy…Does it benefit you to establish yourself as a “best answers” person on Linked In? If so, budget 15 minutes or so into every other day for Linked In “Q&A.” Do you need to expand your network locally? Make sure you’re checking Meetup.com once or twice a week to see what groups have been started or are scheduling new events in your area. Email updates are available for these two examples…are you the type of person who gains or loses time by shifting notices to email? Set your notification tactics accordingly.

Facebook
As alluded to in the previous post, Social Networking sites are what magazines used to be: There are a few for most anybody and something for everybody. If you’re focused on international business, you’re a Xing person (who also needs a Linked In presence). If you have a consumer product, creating (a profile, and) a (free) Page for your business on Facebook is recommended. What is important to realize about Facebook is that it lends itself to personal social interaction. It is not a realistic expectation to separate your personal life from your professional life on Facebook. Your friends from high school will find you and send you silly messages. Are you any fun? If so, I say play along. In addition to the aforementioned Page opportunity, Facebook offers other business-oriented widgets. For example, I belong to a group on Facebook called “I’m an Entrepreneur.” Periodic updates from this group are often worthwhile.

Twitter
Twitter is a different animal: 140 characters to “Tweet,” which means to answer the question, “What are you doing now?” My advice for those of you who plan to answer this in a social vein (“Mike is doing laundry.”) are best off leaving that to Facebook. I use Twitter to post links to current articles of interest to my target audience and to promote this blog. On Twitter, people and entities “follow” one another. This means that if I am “following” you, every time you “Tweet,” I see it on my Twitter page. So: if I sign on to “follow” you and know more about when you do laundry than how your knowledge and connections can help my business, I will probably follow you for a very brief period.

Verticals
If you’re in TV, film or a related industry, Variety Magazine has a site called, “The Biz.” In essence, if you learn that there’s not a social network set up for your vertical, you might start one. But there’s a ton…Ning (not to be confused with Xing), Biznik, Bizwiki, Naymz (for job seekers), and of course MySpace (which still seems focused on high schoolers)… Again, pick your spots based on the access they grant to your target audience and the achievement of any other goals.

Seize this day.
Should you "Web 2.0?" Yes, definitely. As big companies pull back in the current economic environment, an enormous opportunity is presented for small companies to use these low- to no-cost venues to brand and proliferate their value propositions.