Wednesday, April 15, 2009

Use TARP to Directly Aid Small Business Lending

When the history of the worst recession since the Great Depression is written, August 2008 will stand out as a pivotal month. That appears to be when the credit crunch became a vicious cycle, consuming small businesses in a vortex of vanishing credit lines and increasingly restrictive loan terms.

For Mark Lane, president of Coed Sportswear and Printed Matter, that's when his bank of seven years called in all of their notes, despite the fact that he'd made a host of difficult decisions -- laying off employees, cutting benefits, and slashing other costs -- to maintain what he thought was a "strong, healthy" banking relationship.

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Common Sense Management

Today features the final blog entry from student submissions. It's written by Caleigh Conahan, an Operations Management Major from Hazleton, PA. Caleigh is a Junior.

The economic conditions have unveiled to the public what I like to call "the two faces of management."

First, there is the 9-5 manager who is not concerned with his/her employees or the betterment of his/her company, rather he/she believes by showing up to the office his/her job is done and pay deserved.

Second, there is the manager who has always been--or developed into--the innovative leader.

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Common Business Cash-Flow Mistakes: Tips to Avoid Them

Every business has cash-flow bottlenecks, but if your small business is so tight on cash that you find it difficult to pay salaries or meet day-to-day expenses, then it is time to look for the causes and find solutions.

Here’s how to avoid some common cash-flow mistakes – and ensure that your small business stays in the red.

Not Evaluating Your Clients’ Credit History

You should check out your client’s credit history; if you don’t, it’s very likely that those with bad credit will delay their payments. If this happens, you should cut back on how much products you are supplying them with and at the same time bill them for the maximum.

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Lower Cost for Online Business: 7 Ways to Reduce Costs

Just as you need to continuously monitor and reduce direct and indirect expenses in your regular business, you will also need to reduce costs in your online business if you want to increase your profits.

If you plan to purchase products, then do some research first.

If you plan to buy and sell, it’s important for you to research which items move fast and which move slowly.

You can do this by going to sites like eBay and observing the items that are in greatest demand. eBay also makes it possible to check out the top ten fastest-moving items.

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Negotiating a Better Deal with Vendors

Part of running a successful small business is learning how to negotiate both with your customers and with your vendors.

There is a fine line between asking for a deal and asking for too much. Just as you would not want your customers to make unfair demands about price, you should not make such demands of your vendors.

That being said, there is nothing wrong with trying to negotiate a better price, especially for items that you purchase on a regular basis.

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Should Your Business Extend Credit?

It’s a growing small business dilemma: Do you need to offer your customers credit? If you sell to consumers, you can offer lay-away plans and other simple ways patrons can pay for their purchases before they receive them. You’re not expected to offer credit other than processing standard credit cards. The situation is more complex when you’re selling to businesses since standard business-to-business credit terms are Net 30, meaning the balance is due by the customer 30 days after the date on the invoice.

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Get Your Business Ready Now for Tomorrow's Recovery

Too many businesses, large and small, claim the recession snuck up on them. I remember in January 2008 having a debate with my then bosses who insisted the economy was fine, while I argued otherwise.

So I want to go on record now and predict that, sooner than most of us think -- like they sang in the musical Bye Bye Birdie -- that "gray skies are gonna clear up." I'm not alone in my optimistic outlook either. According to a recent CNN Money article on the economic recovery, amidst the economic doom and gloom of soaring unemployment, plunging home values, and thousands of businesses teetering on the brink of bankruptcy, "a growing number of economists see a recovery on the horizon -- perhaps even a strong rebound." (Last month's Blue Chip Economic Indicators newsletter had a similar, though more tempered outlook.)

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Interview with financial planning executive Christopher Hill

Northern Virginia-based financial planner Christopher P. Hill is in hot demand these days. His clientele, most of them baby boomers, are in a real pickle as they stand by and watch their retirements diminish day by day. Hill has heard his share of tragic tales of woe as of late. Folks who visit his offices seeking advice at times spill their guts and often even shed tears as they seek a financial planning miracle to help them protect whatever is left in their accounts.

As I sat down with Hill, I got the sense he was more than a financial planner. Judging from the various notes of deep appreciation and sincere thanks Hill receives regularly, Hill’s clients clearly see him as a real hero. One such Hill fan sent in a touching note of gratitude:

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Office Time Management Tips

Since you only have a finite number of hours to get your work done, the secret to getting the most out of each and every workday is to manage your time.

Done right, business time management can indeed be an effective technique for focusing on what really needs to be done while removing the clutter and distractions that may get in the way of achieving your goals.

Here are some time management tips to help you in business:

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Successful small business succession planning

Statistics show that nine out of ten small businesses are family owned and operated; no big surprise there. After all, isn’t a start-up virtually by definition a family business? Indeed, what small business can be founded without some involvement, if not a lot of sacrifice, from the family members?

But when the founders ultimately decide to take their leave, orderly transfer of management and ownership to next generations breaks down significantly. In fact, less than one third of small businesses are transferred to family, and that number includes those that work and those that don’t.

In a past career as a business consultant, often working with families who work together in their businesses, I discovered at least two important small business succession planning truths:

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Facebook's Latest Design Update Helps Businesses

Facebook continues to evolve as it strives to master its own business model. With the latest evolution, Facebook makes its service more valuable to businesses. With the updated Fan Page, businesses now have the ability to send updates straight to the news feed of any person who has chosen to be a fan of that business.This will help companies make their online marketing strategies more viral.

Additionally, Facebook is adding an analytics tool called Insight so you can better understand the demographic of your fans. If your business currently does not have a Facebook fan page, now is the time to jump on the opportunity for maximum early exposure.

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7 Business Planning Fundamentals

Time flies. Thirteen months ago I posted Economic Dark Clouds here in September of 2007. Back then I said “the economic news is clustering now,” but my point was essentially sticking to the fundamentals …

With some notable exceptions, your business moves up and down far more because of very-micro specifics of what you and your team and your customers do. Your specific marketing programs, your new product release, your email campaign, your pay-per-click keyword decisions, your product development, your word of mouth … it’s what you do with your business that moves it up and down, not what happens in the headlines.

… but at that point I really had no idea how bad this whole thing was going to get. And that’s with apologies to Anita’s post on small business optimism yesterday.

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Five Ways Web Design Has Changed To The Advantage of Small Businesses

Web design has changed significantly. What are the changes, and how can you to take advantage of them? Let me tell you a story.

In 1999, the Internet bubble was at its peak. New companies — all planning to become “the next big thing” — were launched daily. These companies were famous for two things — thinking BIG and massive “burn rates.” “Burn rate” refers to the rate a company goes through money. They were spending hundreds of thousands on programming to produce web sites considered mediocre by today’s standards.

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Small business and the wonderful world of niches

One of the things Sears Roebuck became famous for is their Craftsmen tools, especially their socket wrenches, which are mechanical wrenches. Once, when I was buying one of these wrenches I was confronted with options of “Good,” “Better” and “Best,” a strategy for which Sears is also famous. When I asked about the difference between the Better and Best models I was told that the Best model had more notches, or teeth, inside the mechanism. This would allow for finer adjustments to be made when tightening a bolt or nut. Plus, in a tight situation, the extra notches make the Best model work, well, best.

For the past 30 years, the marketplace has increasingly become like that “Best” socket wrench; every year, it acquires more notches. Except in the case of the marketplace, notches are called niches (I prefer “nitch,” but some say “neesh” – tomato, tomahto). And just as increasing the notches in a mechanical wrench allows for finer adjustments, niches create finer and more elegant ways to serve customers, which they like – a lot.

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How NOT to Lay People Off

One of the companies I worked for before cartooning full-time was doing some reorganization. The endless rounds of layoffs had everyone jumpy.

After one round, management must have noticed, so we had a meeting in the break room where, after more explanations of the company’s health and a well rehearsed sigh we heard “you know, it’s never easy letting good employees go.” And then, to his fellow management in the back, “what a day, guys! Who wants to grab some drinks after work?”

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Partnership Killers

In theory, a partnership, especially with a friend, is a great way to start in business. Unfortunately, it rarely works out right. Here are some partnership killers:

  • Sharing your capital instead of expenses. Work out a plan where the costs and expenses are shared rather than all of your money and resources.
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Beware Of Telephone Relay Fraud

The Better Business Bureau warns small business owners that reports of scammers plying their trade through telephone relay services — typically used by the hearing impaired to make phone calls — are cropping up all across the country.

BBB has received reports from many types of businesses that received suspicious orders through TTY or telephone relay services. These services are meant to assist the hearing impaired in making telephone calls and often rely on an operator who relays a typed message from the caller to the business. Because, by law, the operator is not allowed to disclose the origin of the call, this service allows the scammers to hide their identity.

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Small firms: Obama doesn’t understand us

Nearly 60 percent of small business owners think the Obama administration doesn’t understand the needs of small firms, according to a recent survey conducted by City Business Journals Network.

More than 40 percent are less optimistic about the national economy than they were when President Barack Obama took office, compared with 26 percent who are more optimistic. Nearly half think Obama will serve only one term in office. When asked their political affiliation, 42 percent said they were Republicans, 34 percent said they were independents and 16 percent said they were Democrats.

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Small Business Optimism is Down, but Sharp Upturn Expected

The NFIB’s latest report on small business sentiment is out. The NFIB’s Optimism Index is one of the longest standing indices of small business sentiment, and so I tend to place a lot of weight on it.

It shows that conditions and sentiment are not a pretty sight among small businesses.

Although there have been some tiny signals — albeit weak signals — from other sources suggesting things may be looking up in the economy, you wouldn’t know it from looking at the NFIB report. First of all, there’s this chart:

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For small business, Cash is no longer King – it’s the Emperor

For generations, business owners have learned that while Profit may be the Queen of business, Cash is King. And there is never a moment in the life of any business, large or small, when this generally accepted truth doesn’t apply. But in 2009, or anytime the economy slows, small businesses must elevate Cash to an even more supreme level. Consequently, these days, and for the foreseeable future,

Cash is Emperor.

Any Questions?

Blasingame’s 3rd Law of Small Business states: “It’s redundant to say, ‘undercapitalized small business.’” There are at least two reasons this statement is a law and not a maxim:

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How you can rock on Twitter

Many of you who read my Twitter post a couple of months ago took me up on the offer to get on the social networking site and started tweeting to help promote your business.

Unfortunately, many of you just don't seem to get Twitter yet (don't worry -- I'm not going to name names).


You can't just tweet over and over again about your products or services. Well, actually you can do whatever you want on Twitter, but just listing products in hopes someone will head over to your Web site and buy your wares is going to get you ostracized, aka un-followed, and fast.

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Investors Can Help and Hurt

Many small businesses grow by taking on investors. This can be an excellent strategy, but there are a few things to consider first before you make any decisions.

An investor is someone who provides capital (cash!) in exchange for a piece of the ownership of your company. The money they bring in can be a real lifesaver. It gives you an important tool for growth and can shore up your financial statements. In addition, some investors wish to make other contributions to your business, such as their time or areas of expertise.

So what's not to love? There can be a downside to sharing ownership of your company. Make sure you understand up front what else investors may believe ownership entitles them to. Will they assume you have to take their advice? Can they insist on changes? Can they "help" you run the show?

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Teaching Your Way to Thousands: Starting a Part Time Tutoring Business

Starting a business does not always involve an innovative product or service idea. In fact, you can literally make an excellent living by simply using what you already have – your mind!

Tutoring businesses are booming as the college admission process grows more competitive and a 4.0 GPA is no longer a worthwhile academic feat. As long as you have a college degree, good communication skills, and a passion for helping others, you can help students of all ages achieve their full academic potential. Or, if you have musical experience playing an instrument, you can become a private music instructor. Both academic tutors and music instructors are in high demand by parents around the country.

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Business Licenses: Which Type Do You Need?

Failure to become properly licensed can have a variety of consequences, so it is imperative that all small business owners learn the regulations in their location so that they can meet every requirement.

Which business licenses you need will depend on your location as well as the type of business that you own. Because there is such a variety of requirements from location to location, it is impossible to provide a list that would apply to every business owner.

Instead, below are some of the most commonly required business licenses. You will need to do some research to find out which apply to your location and your business.

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Ten Excellent Freelance Resources

Whether you are a writer, web developer, graphic designer or virtual assistant; there are more and more online opportunities every day for freelancers who want to work from home–either full time or to supplement their existing income.

Here are some excellent online resources that you can use to start and operate a successful freelance career, regardless of your industry.

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Business Dynamics Statistics

Where can you find data on how many US businesses open and close each year and the impact this has on the economy? Where can you track firm age, firm size, and firm performance over time at state and national levels?

The Census Bureau recently launched
Business Dynamics Statistics (BDS) to track the changing landscape of entrepreneurial activity in the United States. BDS tracks business activity, annual changes in employment, and growing and shrinking businesses. It includes unique information on firm age and firm size and tracks firms over time. BDS currently includes data for 1976-2005.

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How to Keep a Recipient From Hitting the Spam Button

Louis Chatoff of MarketingProfs offers a checklist of actions to reduce your email from being marked as spam by your custormers. Louis recommends:

Before they open your message:

1. Make sure the From address is easily recognizable; it should contain the name of your company or organization.

2. Make sure the Subject line is relevant and truly matches your content.

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Dollars and Scents, Part II

Louis Hotchkiss is one of the best salesmen I have ever met. His description of his products and process is an art. He doesn’t just describe the physical properties of things - rather, he delves deep, giving you a sense of why it came to being, its raison d’être. All this is done with an almost imperceptible theatrical flourish, subtle enough to draw you in but not overpower you with gimmickry or drama.

When he describes his candles, it’s not just a description of the combination of soy wax, scent and a wick in a glass tumbler-like vessel. Nor is it just a detailed account of the packaging, which in itself is the pinnacle of the balance between elegant form and function. As hard as it is to describe, I think he does it by showcasing the harmony between intent and outcome. This is the vision they had for the product and this tangible object in your hand is a realization of it. And that’s magic, magic that connects you not only to the product on an emotional level, but also to the aspirations of the creator.

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NetBooks and Wireless Broadband: Every Mobile Professional Should Have It

As far as tech gadgets are concerned, iPhones and BlackBerry's have "all" the popularity it seems. However, in the world of small business (and consumers) Netbooks, with prices below $500 are increasingly popular.

They're small, affordable and functional - once you get used to the small screens and keyboards.

As your company is looking into what technology to invest in, consider issuing every employee that travels locally or long distance a Netbook with wireless broadband.

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Don’t forsake your small business marketing strategy

It’s virtually automatic, sadly, that when the economy softens, businesses cut marketing first. And like many reactions, this one is almost always the wrong thing to do.

Marketing shouldn’t be an expense. When properly created and executed, marketing should result in more dollars in than dollars out. But before you get the idea that I’m some kind of Ivory Tower egghead, believe me, I understand how difficult it is to commit marketing dollars when dollar availability is declining due to a recession.

That’s why marketing in the 21st century is so exciting. Small businesses have sooo many more ways to penetrate the market including, and especially, on-line marketing. This universe has many characteristics that are perfect for a small business’ need to be efficient and flexible. For example:

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Taxation of LLC’S

Taxation of LLC’s is sometimes misunderstood. All businesses no matter their legal structure must file an annual return. Sole proprietorships and corporations file an income tax return. Partnerships and S Corporations file and information return. These filings are not optional for these types of legal entities.

However, an LLC has several tax filing options it can adopt. An LLC with at least two members can choose to be classified for tax purposes as either a corporation or a partnership. If the LLC elects to be taxed as a partnership it will use IRS Form 1065 as an information return, and the income will be reported on the member’s personal form 1040. If the LLC elects to be treated as a corporation the entities income will be taxed prior to any dividends paid to the members and then taxation of the dividends or distributions once received as income will be taxed to the members.

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Quick Tip For Entrepreneurs ~ April 14

Looking to pitch your business...watch this!

Charlene Li, founder of digital strategies consulting firm Altimeter in this interview on Vator.tv with Bambi Francisco , shares her advice to entrepreneurs relating to pitching a business concept to her as well as insights in to the use of Social Media for business.

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Entrepreneurs Turning To SBDCs For Free Advice

Entrepreneurs are looking to economize these days, so it’s small wonder that free advice from Small Business Development Centers is in great demand, writes microbusiness expert Dawn Rivers Baker.

SBDCs offer a range of services, including classes and individual counseling.

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New Economy Means New Entrepreneurs

Business school students are turning to entrepreneur courses during the recession rather than working toward landing a job with a Wall Street firm or a hedge fund, another sign that the U.S. has entered into a so-called new economy.

With a $787-billion stimulus package and the second part of an enormous financial bailout both set to offer benefits to small businesses and entrepreneurs, the trend could persist for some time.

The Kauffman Foundation, which touts itself as one of the world’s largest foundations devoted to entrepreneurship, has observed that prior to the recession that started just over a year ago, there had been a great expansion in interest on college campuses in entrepreneur courses.

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Can social media be dangerous to your small business?

Social media for individuals is as easy as falling off of a log. But for a business, could social media actually be dangerous? In my opinion, absolutely.

“Blasphemy!” you cry. “Heretic!” you say. Guilty as charged. But remember, Martin Luther was a heretic with a blasphemous message. But today’s heretic may be tomorrow’s prophet.

For a business like mine, which creates content for the consumption of an audience, social networking is pretty logical. But for a Main Street business, like a restaurant, dry cleaners, contractor, etc., these folks struggle to create an effective social media strategy, if they even try at all. And by effective, I mean one that brings in business without shifting too many resources – especially time – from classic strategies that have worked. And that’s where the problem arises.

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Spring Is A Time For Green In More Ways Than One

Troubled times are often the fuel of entrepreneurial spirit. In a recent article in Entrepreneur magazine, Stimulus Package Has Green for Clean Energy, written by Glenn Croston, he notes the importance of supporting green businesses. He quotes Byron Kennard, Executive Director of the Washington, D.C.-based Center for Small Business and the Environment as saying “[w]e’re calling on small businesses to lead the recovery and do it with green jobs and clean energy innovation.” He goes on to say that “targeting the recovery with green businesses is the most practical way to get the economy going.”

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Venture Capital and Green Technologies

As the “Venture Capital (VC) guy” for the Office of Advocacy, I have been frequently asked whether venture capitalists are truly jumping into green technologies with both feet or are tentatively dipping a toe into the water. The answer is more complicated than those questions suggest, but many VCs are going long and strong into this sector.

In fact, according to the National Venture Capital Association, clean technology investments have increased from 90 deals worth over $550 million in 2005 to 277 deals worth over $4 billion in 2008. Last year, three of the five biggest IPO’s were in the solar industry.

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Can Collaboration Save our Economy?

The economic news is depressing, and yet I want to see opportunity where others see looming disaster. And I think one way we can try to make things better is become more productive and do a better job collaborating with each other. Think of it as a no-cost stimulus package that even the Republicans can love.

Remember when the PC was first introduced, everyone thought it was such a great personal productivity tool? Sadly, the more powerful that PCs have become, the harder it is to use them to collaborate. This is because we get used to using them as our personal machines, and most of us don't like sharing our computers, let alone our work products from them.

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5 Tips To Prepare Your Website For Universal Search

Over the past few years, building webpages with good content and SEO best practices has been viewed as the most critical piece to ranking well in Google. Late last year, however, Google indicated several times that universal search results will become more visible during the first part of 2009.

What's the difference between universal search results and traditional results pages? Universal Search pages include other forms of web media. Instead of just seeing just the most relevant webpages to a search term, searchers can now find images, blog posts, and videos mixed in among the results, thus creating a more "universal" list of results.

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How The New Stimulus Plan Could Affect Your Small Business

It seems like everyone but you and I are getting a bailout these days. However, President Obama signed into law “The American Recovery and Reinvestment Act of 2009″ and it contains numerous tax provisions aimed at small businesses.

SBA Advocacy Chief Economist Chad Moutray covers the small business impact of the stimulus package at a high level on the SBA’s Small Business Watchdog blog.

Here is a great nerdy (I have a degree in Accounting so I can tease) summary from the Journal of Accountancy:

Bonus depreciation: IRC section 168(k) is amended to extend the 50% first-year bonus depreciation through 2009 (through 2010 for certain transportation property and aircraft).

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SBA Urged to Jump Start Lending

I was reading the Washington Post this morning and a great article on the SBA caught my eye - “Small-Business Agency Prodded to Spur Lending”.

The article begins with “The chairman of the House Committee on Small Business yesterday urged the new head of the Small Business Administration to try to jump-start lending by using provisions in the economic stimulus bill that so far have sat idle.”

The stimulus bill passed a few months ago included the “Business Stabilization Loan Program and it’s goal is to “provide loans of up to $35,000 to small businesses so they can make payments on their outstanding debt. The loans would be 100 percent guaranteed by SBA”.

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And The Winners Are...

Today we feature Christopher Baginski's blog entry. Christopher is a Junior Accounting Major from Wallington, NJ.

I am quite sure that we all know about the devastating economic recession that has recently plagued our country. The stock market has taken a tremendous tumble, at one point falling 50% below its previous peak. This has caused terrible problems throughout the world. These problems extend to each and every one of us personally. In addition, this downturn has greatly affected businesses, especially in the areas of management and human resourcs.

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Workshop helps small businesses to work directly with the Commonwealth of PA or to become a Commonwealth prime contractor

Do you own a small business? Have you ever thought about doing business directly with the Commonwealth? Do you wish you knew more about becoming a Commonwealth prime contractor? Now is your chance to take your business to the next level! The Bureau of Minority & Women Business Opportunities is conducting this workshop where small business owners can learn:

· How to read and understand Request for Proposals (RFPs)
· How to write effective proposals
· Find and market your company to Commonwealth agency heads, purchasing agents, and RFP administrators
· Learn the Do's and Don'ts on becoming a prime contractor for the State.

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Social Networks bigger than Email?

This article is a little old as it was from March, but I just find it amazing. The article below was written by Dave Kaminski. He talks about the use of social networking and social media. Social Networking sites such as Facebook and Twitter are used more than email is. It is important to consider though that most social network platforms have a message component built in. So this could be replacing regualr email.

The stat that was shocking though, is that 1 out of every 11 minutes one spends online is on Facebook. WOW! This is starting to prove what many others have known all along that social networks are being used by consumers, and they need to be paid attention to my companies, organizations, or anyone who wants to reach out to individuals.

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