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sectors of success.pngStatistics show consumer buying is low, and many small businesses are facing sluggish sales. Beginning in March, the NFIB’s small business optimism index fell three months in a row after six months of rising. And, falling sales were cited as the number one business problem by one out of four business owners, particularly in the services sector.  Only 23 percent of owners reported higher sales, while 36 percent reported lower sales. However, there are some small business sectors that are showing promise for upward-trending sales:


Small Luxuries: The small luxury category presents a surprising opportunity. Despite the sacrifices that had to be made at the height of the recession, some consumers seem ready to alleviate some of their economic stress with small treats – a boon for entrepreneurs seeking to open mid-priced restaurants, coffee bars or affordable beauty salons and spas:


  • 32 percent of Americans say that they regularly dine at casual restaurants, with particular emphasis on simple fares, such as burgers, sandwiches and noodles prepared by classically trained chefs.  Exotic cuisine and tasting menus are also popular.
  • 42 percent are more than willing to have their hair professionally cut and colored, perhaps driven by the need to look professional on the interview circuit.
  • 16 percent are unwilling to give up their daily cup of gourmet coffee, although they are showing an increasing willingness to stray from the big name coffee franchises to hip, friendly local coffee shops or coffee prepared at home from boutique coffee roasters.


Technology: The technology sector is one area that shows promise, as 23 percent of consumers say that technology items like smart phones, eReaders and tablets have become indispensable. There is ample opportunity for small businesses to bring to market products and services that make our lives easier, save us money and allow us to find time to network and maintain friendships through digital means. 


  • Time Savers: For executives looking to stay informed on industry trends and remain competitive by keeping up with current events, there are new services that bring news to their mobile devices and computers in real time, including web services that “crawl” the Internet to identify and send consumers stories on particular topics from mainstream news sources and lesser-known blogs.
  • Money Savers: Despite the fact that consumers are spending 30 percent less than they did in 2008, “daily deal”-facilitated spending is expected to grow 138 percent this year and reach $3.9 billion by 2015, according to a recent study by BIA/Kelsey, a media consulting firm. Time-pressed consumers are particularly attracted to sites that aggregate deals from a variety of online sources; sophisticated online calculators; and sites that allow price negotiation, swapping, product comparisons and customer reviews.
  • Relationship Builders: Some popular small businesses that are thriving in the social networking sector include: a site that helps people find like-minded travelling companions; a service that enables citizens to collaborate on solving community and civic issues; sites that allow consumers to look at reviews, tweets and photos of a product before committing to a purchase and GPS-fueled tools for meeting up with friends and potential dates.


Small Luxuries.pngWellness Offerings: As Americans remain uncertain about how healthcare reform will impact accessibility to medical care, there has been an increasing emphasis on preventative healthcare. Small businesses offering products and services that allow consumers to be more proactive about their health are seeing increasing sales growth. In addition to personal trainers and specialized fitness centers, companies that provide healthful food options to vending machines, health clubs and schools have received a boost in recent months. Additionally, there are a growing number of online services that allow people to track weight loss, communicate with their physicians and network with people coping with similar disorders from arthritis to eczema.


Senior-Care Services: With 77,000,000 baby boomers (more than a quarter of the U.S. population) turning 65 this year, many entrepreneurs are creating or customizing small businesses for the senior sector. From remote monitoring services allowing caregivers to keep an eye on senior relatives to adventure travel and dating services, there are myriad possibilities to serve this increasingly vibrant and long-living market.


Sales trends in the sectors outlined above demonstrate industries that are still experiencing growth despite an uncertain economic landscape. Given the business opportunities in these areas, small business owners should analyze where they might fit into this promising picture.

incubator.pngOrganizations that help launch successful start-ups were hot during the dot-com era when there were tens of thousands worldwide, according to statistics from the National Business Incubation Association (NBIA).  Since the dot-com bubble burst in 2000, the number of business incubators has dropped to 7,000 globally and 1,400 in North America. However, they still serve more than 27,000 companies and are responsible for more than $17 billion in annual revenues (also in North America).


Following the economic downturn, there are small business incubators that are hoping to fill the gaps created by widespread job losses with local film and video production companies, design firms and other creative-sector industries. These types of incubators typically offer small businesses the access needed for resources, ranging from strategic business counseling to development support.


How to Start

evergreen industry.pngIf you are a new or start-up small business seeking incubator support, you need to prepare a detailed business plan a comprehensive start-up marketing plan and assemble a qualified staff. These employees should include a CEO, CFO, IT Director, and marketing and sales directors, as well as experienced external resources in areas such as accounting and legal counsel.


Industries of particular interest to incubators are green tech, clean tech and alternative energy. While the technology sector remains the focus of 39 percent of incubators, evergreen industries such as food and the arts can still find a receptive audience.


The Details

In the dot-com heyday, only some incubators took an equity stake in the companies they developed.  Typically, incubator services focus more on “acceleration” –helping find senior leadership, securing venture capital, structuring financial plans and building a board of directors – and, in exchange, seek as much as a 70 percent stake. Additionally, they provide client assistance with such basic but time-consuming services such as marketing, sales, IT, finance and administrative staff development. There are more than 1,200 U.S. business incubators housing tens of thousands of entrepreneurial companies that help startups of all stripes take root, providing resources to turn them into thriving, growing companies. Not bad for an industry that saw such a tremendous decline following the dot-com bust.

leasing equipment.pngMany small business owners say that overhead costs are one of the leading concerns, or even barriers, to starting or growing a business.  Most of those costs are associated with office space and other equipment. Today, however, business owners have the option to lease on a monthly or annual basis virtually anything from computer software and printers to delivery vans and specialized production machinery.


Renting, as opposed to purchasing outright, can deliver important benefits to small business owners. First, leasing creates greater financial flexibility by enabling you to get what you need for your business without having to pay for it up front. Rather than having to pay thousands of dollars all at once, you will have a manageable payment, which frees up cash and credit to invest in growth and other priorities. Moreover, since you do not have to wait to buy critical equipment until you can afford it, leasing can help you move quickly to take advantage of emerging business opportunities and help preserve your competitive edge.


Second, in a business environment of continuous innovation, access to the latest technology can be integral to the long-term success of a company. Leasing enables business owners to update equipment as necessary, without having to worry about disposing of, and accounting for, depreciated older technology.


Is Leasing Right For You?

While there are definite advantages to leasing, there are several considerations you should take into account when determining the right arrangement for your particular needs.


  • When to lease – The decision to buy or lease is specific to each piece of equipment and owner. Generally, factors worth examining when evaluating whether to lease or buy include cost, availability of capital/credit, nature of equipment and how long equipment will be needed. For example, in some instances it might make sense to invest in certain equipment (e.g., heavy machinery that will likely not change much) versus computer hardware, which requires frequent enhancements and updating. 


  • Renting.pngType of lease – In a true or operating lease, your rental payments do not entitle you to any rights or ownership interest in the equipment. You only have the right to use the equipment until your term in the true lease contract is over. The upsides of a true lease are lower monthly payments and the potential to have the lease qualify as a tax deductible operational expense. 


On the other hand, a financial lease or capital lease is used to finance the purchase of the equipment, allowing you to spread out payments over the equipment’s life cycle rather than paying in one lump sum. At the end of the agreement, you will own the equipment.


  • Terms of lease – Equipment leases can be structured to include various conditions regarding installation, essential maintenance and training as well as options for when the lease expires (e.g., extend, purchase at either fair market value or fixed amount) or simply return what you have leased.


  • Selecting the right leasing partner  – Credit history requirements and other criteria (e.g., age of company, type of business, amount of lease) differ by leasing company and can impact terms and pricing.  You should compare lease packages from several different companies to ensure that you are getting the best deal possible.  Once you select a provider, be prepared to negotiate.


The factors outlined above are essential to consider, and understand, prior to leasing any equipment. Make sure that the lease best serves your business needs. Do you have any suggestions for leasing equipment?

Social Coupons Story Image.jpgFour keys to help prevent your entrepreneurial dreams from turning into a financial nightmare.


by Reed Richardson.


As the economy has struggled over the past few years, one notable side effect from the recession has been a renewed interest in entrepreneurship. But as the number of Americans launching their own ventures has grown, so too has the number of those falling victim to work-at-home business opportunity scams. For budding entrepreneurs looking to break out of the corporate rut full-time or even those just seeking to supplement their regular income, these supposedly lucrative, low-risk, high-reward offers often prove hard to resist. Certainly, there are work-from-home jobs and small business enterprises that are on the up-and-up, but distinguishing these legitimate investments from the fraudulent ones isn’t always so easy. So here are some key warning indicators and due diligence recommendations to help prevent your entrepreneurial dreams from turning into a financial nightmare.


1. If it sounds too good to be true…it is!

Eileen Harrington, Deputy Director of the Federal Trade Commission’s Bureau of Consumer Protection notes that the telltale signs of business opportunity fraud boil down to three main elements: “You can earn a lot of money,” “I will show you how to do it,” and “You can count on being successful.” (For more tips on researching business opportunities, watch the FTC video on avoiding job scams, located in the sidebar.)


Work-at-home-Pull-Quote.pngOf course, rare is the small business that skyrocketed to profitability performing easy, uncomplicated tasks that require no previous experience. So, if a business opportunity promises big returns or guarantees results but seems to involve little more than executing simple, mundane tasks like stuffing envelopes, processing rebates, or performing online searches, you would be well advised to proceed with caution. These can’t-miss pitches usually bury important details in the fine print and often involve using unsuspecting entrepreneurs as shills to rope more people into a pyramid-like scheme, one in which the business is only sustained by bringing in multiple levels of ever-increasing numbers of investors.


For example, a recent envelope stuffing scam, successfully prosecuted as fraudulent by the Federal Trade Commission, promised to pay $10 plus postage for every envelope mailed, resulting in potential income ranging from $550 to $3,000 a week. “Consumers paid a fee of $65 to $160 upfront for a package of supplies from the defendants after being promised ‘BIG PAYCHECKS Within TWO WEEKS . . . If you Act NOW!’” according to the FTC judgment. “While consumers did receive the envelope-stuffing materials, they soon discovered they were simply sending out more solicitations for the defendants’ purported business opportunities. None made the money the defendants promised and none were reimbursed for postage either.”


2. Treat as suspicious any solicitations to pay anything before seeing or starting the business opportunity

“If someone wants you to make an advance payment to ‘get in’ on the ground floor of a new business opportunity—especially if it’s a big investment, or you don’t have much information about the deal—this is a big red flag,” notes this Better Business Bureau article on work-at-home scam warning signs. “Don’t do it. ‘Advance fee scams’ are very common and they come in many varieties.”


This is even true if a business opportunity guarantees full refunds or claims it will send you all their prospectus materials for free, but still wants to charge your credit card a small fee for shipping and handling or processing. If you’re dealing with someone unscrupulous, giving them your credit card number and allowing them to process one transaction, even for just a few dollars, can unlock the door to many other charges, which you may have unwittingly agreed to by clicking on a link on their website or checking “I agree” next to a set of their terms and conditions. And often, that same fine print includes complicated, onerous provisions—commonly called “negative option proposals” or “continuity plans”—that make canceling these ongoing and unwanted charges all but impossible. (Click on this recent FTC report to read more on how a negative option scam works.)


Conversely, some ultimately fraudulent business opportunities can appear completely legitimate because, rather than give their product or service away for next to nothing, they instead require large upfront investments, whether it’s to buy specialized equipment and software or to stock up on initial product inventory. “Often these are the most persuasive kinds of scams. It seems like it might be a real business opportunity—but it’s not,” the Better Business Bureau points out. “Here’s what happens: the buyer makes the purchase and never receives the things needed to set up the business. You can avoid this situation! Check the business out completely before you send a dime.”


3. Research every potential business enterprise thoroughly

Because a preponderance of work-at-home business opportunities begin through contact online or via phone, it is imperative that a budding entrepreneur look beyond what is being said or written to find out what is or isn’t real. A good place to start is the Better Business Bureau and state consumer protection agency. There, you can check the business’s rating and find out if there are any past or pending complaints from other clients. No rating, a poor rating, or even an ongoing lawsuit doesn’t mean a business is fraudulent of course, but a legitimate enterprise with such a track record should be able—and willing—to provide potential investors a reasonable and detailed explanation.


Don’t be fooled by glowing references to the business on apparent news sites or the use of large, corporate brand names like Google in the sales pitch either. The former are often phony and the latter are often completely unrelated to the business opportunity. (In fact, Google’s name has become so popular with work-at-home scammers that in late 2009 the company filed a lawsuit to stop what it said were attempts by fraudsters to deceive people into thinking they actually would be working for Google.)


In addition, it’s imperative that you acquire from any potential business opportunity a full set of written disclosure documents, which should include data supporting any earnings claims as well as a list of every purchaser of the business venture. By law, the FTC also mandates that, upon request, a business must provide potential investors with the names and contact information, including both the phone number and physical address, of at least 10 other investors. So, don’t be satisfied if you’re only provided a handful of contacts, which consist solely of a name and phone number.


Why? Because those few, unseen contacts may very well be in on any scam and therefore primed to exploit your budding interest by feeding you reassuring claims of their experiences. If at all possible, arrange to meet any references in person and ask them for documentation that backs up any individual claims of sales revenue or profitability. If the business can’t provide you with any references that live close enough to personally visit, ask them to explain why. And if a reference can’t back up his or her claims of success with some semblance of proof, this should be another warning sign.


4. Fast No’s and Slow Yes’s

As former work-at-home scammer Jim Vitale tells it, the process of luring someone into parting with their money involves carefully manipulating their enthusiasm (or desperation) to get them to follow a series of seemingly small steps that inevitably lead up to the large decision of buying in. The best counterpunch to that slippery slope, he advises, is an attitude of fast no’s and slow yes’s. In other words, approach any work-at-home business opportunity with a skeptical attitude, one that prevents this momentum from building up and errs on the side of caution and inactivity. Don’t be persuaded into doing something you’re unsure of or uncomfortable with simply because someone warns that the opportunity is a limited offer or only good while supplies last.


Likewise, if detailed questions about the business’s inner workings and demands to see its disclosure documents are ignored, glossed over, or met with a suddenly hostile attitude, it’s wise to step back and reassess the venture. “If [a telemarketer] is dealing with somebody who is asking questions about the legitimacy of the business, at that point, you do a slap takeaway,” Vitale recalls. This high-pressure sales tactic, where the business representative threatens to scuttle any further talks and dismisses the potential investor as not serious, is simply a disingenuous move designed to restart the sales process and encourage someone to take more risks to prove their real interest. 


“People want to believe that there is some opportunity that they can invest in that will guarantee that they will have financial success,” notes the FTC’s Harrington. But that willingness of budding entrepreneurs to step out into the unknown must be tempered with a strongly critical, common-sense approach when it comes to buying a work-at-home business opportunity. Or, as Harrington emphasizes, potential small business owners must continually remind themselves: “There just is no sure deal. None.”


Additional Information

FTC's guidelines to evaluating a business opportunity

1. Insist on seeing a written copy of the company's disclosure document, which includes:

  • Information about the company
  • List of previous purchasers of the business
  • Lawsuits pending against the company

2. Get information in writing about earnings claims

3. Interview references and previous buyers of the opportunity in person

4. Resist any urge to buy a business over the phone

If you feel you’ve encountered a fraudulent work-at-home business opportunity, report it by calling 877-FTC-HELP or going online to

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