Category Archives: Entrepreneur

The unemployment rate went down, but not really?

There has been alot of talk about this weeks employment report- showing a decrease in unemployment.  But that isn’t necessarily a good thing.  There is a good article about this in CNNMoney this week.

The unemployment rate is not a simple calculation, like say “everyone working today/everyone who can work.”  Its everyone that applies for work.  It is everyone that ha s a job even if that job is part time because they cannot find a fulltime job.  It is every college graduate flipping burgers to pay their bills because the jobs don’t exist.    Since unemployment is based on how many file claims, and not all those that don’t – it can be misleading.  In fact, 18% of all statistics are misleading.  Ok, I made that up, but you get the point.

The “Labor Participation Rate (LPR)” is an interesting thing.  It answers the question “Of everyone 16 or over that can work, how many either have a job, or are actively looking for a job?”    People don’t work because they are retired (think Baby Boomers), or don’t want to work, or have given up looking for a job.

The LPR In January 1973 was a little above 60%, and it has risen gradually over the years – mostly as women entered the workforce, reaching a high of 67.3% in 2000.  We have been in decline ever since. and today we are at 63.2% – the same as we were in August of 1978, more than 30 years ago.  A little more than 9% of Americans who “do not work”  are not counted as available – children under 16, those in the military (thats not work??) or prison.  But there are 40 million people who just aren’t looking for work.

Now on the surface – well, that is their choice.  However, it means 40 million fewer Americans contributing to social security, paying for medical insurance, and paying for Medicare.  It means 40 million Americans that may not have the means to purchase the “mandatory” health insurance under ObamaCare, falling back onto public assistance for their health care.  It means 40 million more Americans on Medicaid and other public assistance programs.

And it is going to make supporting the ongoing entitlement programs more and more difficult to fund, as more and more of us Baby Boomers retire…

What Drives Your Pricing?

This  comes from the SCORE Small Business Blog today –


Every business wants to maximize its profits in order to survive and grow. Profit and earnings growth are measures of a company’s success and shareholder value, and product pricing is one of the key factors that affect business profitability. Price the product too high and sales may go down; price it too low, and revenues (and therefore profits) go down, unless the sale of the product goes up commensurately. You can cut the price of the product in half, but then you would have to sell twice as many. This tactic only works for a short time unless the demand for the product goes up significantly. A slight miscalculation in pricing a product can have an enormous effect on the company’s bottom line and should be given close scrutiny by the top leadership in every organization.

Generally there are five different types of pricing models that companies use; sometimes they use multiple models, depending on the circumstances. The models are described below:

1. Market-Driven Pricing:

This is a reactive approach, driven primarily by short-term market conditions. Unfortunately, many companies tend to take this approach when pressured by the Marketing Department to boost market share or by the Finance Department to maintain short-term profitability. Price fluctuations resulting from this approach confuse customers and there is constant pressure on Product Development, Manufacturing and the Procurement Departments to lower the cost of goods sold, often resulting in poor product quality. Bad inventory management also leads to price cuts, resulting in lower profit margins. When companies have to choose between the cost of carrying inventory and lowering prices to “move” products, the outcome is always less than desirable. Market-driven pricing is not sustainable over the long run because the company must rely on external factors and has little control over its own profitability.

2. Cost-Plus Pricing:

This assumes a “fair markup” (i.e., profit) after all the costs are taken into account. But this model has some inherent problems as well. First, customers don’t really care about your costs. And they shouldn’t. It is your job to rein in your total costs in line with your competitors. Customers care about value and the return on their investment. Secondly, “fair” is a relative term. What is a fair markup to a seller may not be so fair to the buyer. Also, the main focus is on the benefit of the seller rather than the benefit the customer realizes by buying your product. Shifting the attention from the buyer to the seller is a sure way to lose customers fast. This model does work in a few cases, where a highly specialized service is involved, with few service providers available.

3. Customer-Driven Pricing:

The goal of this approach is to get as many happy customers as possible in a short time, and increase market share through heavy promotions, discounts, deals and incentives. It also makes the false assumption that the customer is willing to pay that discounted price, regardless of how they perceive the product. Inevitably, this leads to price wars as competitors start slashing prices as well. No one wins, and in the long run, companies with weaker financial foundations go under. Cynics will tell you that big companies sometimes start a price war to drive a smaller competitor out of business. This assertion may or may not be true, but it undoubtedly strains relationships between companies and their distributors, retailers and suppliers.

4. Competition-Driven Pricing:

This is almost an unintended consequence of customer-driven pricing. Slash prices and make a sale “at any cost”.  Commercial airlines have mastered this model to the detriment of passengers as well as their own employees. Long term, it’s a loser.

5. Strategy-Driven Pricing:

The best companies use strategic pricing to maximize their profit margins in a focused and controlled manner. To do that, companies must have a greater grasp of two important factors that make up the profit equation: Revenue and Cost. Minimizing cost and maximizing revenue is the formula for maximizing profits (Profit = Revenue – Cost).

Businesses incur fixed and variable costs. Understanding what they are, how they impact the bottom line and creating a long-term plan to manage and control those costs go a long way towards formulating a stable price structure.

However, businesses cannot cost-cut their way out of a hole all the time for a very long time. They must have a plan for sustained revenue growth. A strategic cost reduction plan, coupled with a comprehensive product and marketing strategy, is a winning combination. Numerous books have been written on how to develop a robust product strategy, and I will touch on some of those strategies and tactics in a future article. For now, be aware that 90% of new products fail in the market mainly because the company launched a product that the market didn’t need.

Which pricing model do you use?


How Entrepreneurs Think Differently and You Should Too

From Entrepreneur online, Rebekah Iliff.

Entrepreneurs are a curious bunch.

They come in all shapes, sizes, genders and backgrounds. They get up at dawn. They’re the first ones to the office and the last ones to leave. They use productivity apps, network their tooshes off and leave no stone unturned when it comes to pretty much everything.

At best, they make the rest of us humans wonder if it’s worth getting up in the morning. At worst, well, ditto. As superwoman/entrepreneur Ingrid Vanderveldt (Dell’s entrepreneur-in-residence, media personality and investor) puts it: “Entrepreneurs are barrier breakers whose optimistic view of the world combined with their creative thinking has the ability to address even the toughest of challenges, including the government’s approach to innovation.”

Sound crazy? Well, that’s the point. Beyond what entrepreneurs actually do, exists a mindset that has them believing even something as morose and archaic as the government is redeemable vis-à-vis entrepreneurship.

Beyond the “to do” lists of the most successful ‘treps I know, lies a way of thinking that acts as the engine to their seemingly invincible take on the world. If you think like this, chances are you may be well on your way to doing something insane…like attempting to innovate in the public sector.
Ready? Here’s how entrepreneurs (and maybe you?) think:

1. You like feeling like a kid.
Entrepreneurs tend to act like kids in a candy store. Nothing is off limits, everything is for the taking, and their inquisitiveness is as infuriating as it is contagious. When I asked Guide’s COO, Leslie Bradshaw, to describe how she thinks, and why she prefers the entrepreneurial approach to life, she responded without skipping a beat:

“I keep my childlike wonderment alive. I approach the world with curiosity, passion, risk tolerance, and faith — just like I did when I was growing up. The more traditional companies I worked for out of college not only didn’t foster these traits, they flat out discouraged them.”

2. You think (or perhaps know?) you can do it better.
Innovation presupposes that whatever came before it is ripe for improvement. For entrepreneurs, this assumption is the driving force behind their efforts. Jeremy Johnson, lifelong entrepreneur and co-founder of 2U, puts it aptly:

“An entrepreneur’s train of thought goes like this: ‘everything around me was invented by someone and that person probably isn’t any smarter than I am.’ We believe almost everything can be improved upon in some way. We start to imagine what could be instead of what is…the world is malleable and many of the rules that exist are more like guidelines.”

3. You are typically optimistic.
This may seem like an extremely obvious thing to point out, but its importance simply cannot be overemphasized. Plenty of entrepreneurs exist who have a somewhat negative disposition. But I would argue that those who think this way generally don’t get very far.

Two things tend to happen: 1) they earn reputations as terrible bosses and 2) their businesses eventually erode because of their own self-fulfilling, pessimistic prophecy.

Special note: being optimistic is just typically a better way to approach the world, so do it for your own sanity if nothing else.

4. You’re a rule breaker.
Entrepreneurs are by nature rule breakers and dissenters. This is an attitude as much as it is a mentality. Meredith Fineman, CEO of FinePoint Digital PR gives an all-too-familiar look at what goes through the mind of an entrepreneur on a regular basis:

“It’s hard for me to relate when people can’t wait for the week to be over or can’t wait to rush out of the office for Happy Hour. My job is never done, nor do I want it to be. That’s not to say that I never do things for pleasure, but I am constructing my own life and not constricting it based on someone else’s ideas or standards.”

5. You’re probably a gear head.
This last point is a direct result of our modern-day reliance on technology as a vehicle for innovation. As Vanderveldt observes:

“Technology has been the common denominator for all the companies I have started — from data mining to green energy. I believe it is the global equalizer and enabler. Young entrepreneurs and startups need to be focused on (and thinking about) enabling their organization to scale, delivering faster and more efficient results, and maximizing workforce productivity – all of which can be supported through technology.”

So whether you’re considering getting your feet wet as a first-time entrepreneur, or you are well on your way to entrepreneurial success, keep in mind that how you think is just as important as what you actually do. Thinking like an entrepreneur requires a unique approach to the world and a mindset to help view the world as limitless in its possibilities for improvement, change and, ultimately, innovation.


3 Simple Ways to Hire Better

As hiring, especially for lower-end employees, gets tougher, I thought this from INC Magazine was timely. – Reeve


To find the perfect fit, stop treating the hiring process like a beauty pageant and start acting like it’s a date.

It’s a great American tradition: people dress up in their best clothing, parade in front of a judge and answer questions, hoping to sound intelligent yet totally inoffensive. A beauty pageant? No, I’m talking about a job interview.

But it shouldn’t be that way. A pageant judge never sees the contestants again, but a hiring manager has to work with the new employee every day. So stop treating the hiring process like a pageant and, instead, act like it’s a date.

Yes, a date. What’s the goal in dating? To find someone to spend the rest of your life with. What’s the goal in an interview? To find someone to spend 40 to 60 hours a week with. Here’s how you can bring the dating process into your office with fabulous (and completely platonic) results.

Don’t talk (entirely) about the past.

Of course, you want to know something about a person’s history. That’s called the resume. But many interviews spend too much time on the past when they should be focusing on the organization’s needs.

Headhunter Nick Corcodilos gives an example of how ridiculous focusing on the past can be. Imagine, he says, if you went out on a date and your date said, “So, the last three women I dated really liked me, and I bought them flowers now and then, and took them out for dinner, and listened to them tell me their problems. I’m a great guy. You can ask them. So, will you marry me?” You’d run long before the check even arrived.

So instead of saying, “Tell me about a time where…,” give candidates a real task to complete or ask them to prepare a presentation. Throw them problems and see how they solve them. It will give you a better idea of what they really will bring to your organization.

Introduce the family.

When hiring, it’s not uncommon for the boss to do all the interviewing and decision-making, then drop the new employee into everyone’s lap. She’ll announce, “Here’s Bob!,” then walk out and expect everyone else to love and cherish Bob the way she does.

Mimecast founder Peter Bauer learned this lesson. “During high growth phases, I’d hire lots of new people and somehow mistakenly imagine that they all knew each other as well as I got to know them during the interview process,” he says. “It took me a while before realizing how important it was to help employees integrate and get to know each other in order to develop a positive team culture.”

Just like you wouldn’t drop your new boyfriend off to spend the weekend solo at your mom’s house, when you bring someone new on board, it’s your responsibility to integrate. And if you can involve your current staff in the hiring process, even better. That way, you’re more likely to find an employee that benefits the whole “family.”

Let opposites attract.

The ideal employee loves your business the way you do, so naturally the person most likely to do that is one who is just like you. Right? Unfortunatelly, that doesn’t work in your business’s best interests. EZ-PR founder Ed Zitron started out looking for employees who could do exactly what he could do. “I thought I needed to clone myself. I thought I needed to just do more of what I do, getting results to make up for less-than-passionate press releases or slowly-delivered blogs.”

When he finally realized that he needed assistants who had strengths where he had weaknesses, he got results. Perfect ones, actually, because these hires had skills that Zitron didn’t have. When you stop looking for mini-me and instead look for someone who completes you (or your department), you’ll get a perfect match.


10 Tips for Working From Home

A great article by Kerry Hannon in Forbes

It’s Labor Day, and while many U.S. workers are relishing the extra day off, I’m working.

But I’m not complaining. I’m perched in a comfy chair on the porch of a simple cottage overlooking a shimmering pond, a herd of horses, and the hazy-blue-toned Shenandoah Mountains in the distance. The morning mist is cloying and no kidding, in the distance, I can hear a rooster proudly announcing the dawn.

Not a bad place to work. My commute–less than 15 seconds.

I run my own media business, and I choose to make my office wherever my laptop will roam. My life is so much better since I quit working in an office over a decade ago.

Working without a traditional employer’s workspace, well, works for me on many levels-flexibility, autonomy, and not having to ask anyone permission to take a break to walk my dog– are a few that come to mind.

For others, the choice to commute or telecommute is not quite as tidy.

With the Labor Day holiday top of mind, I thought it would be a good time to revisit one of my favorite workforce related topics- working from home. I wrote about this topic earlier this year in this post for Forbes contributor Next Avenue.

Here is a rundown of ten things you need to keep in mind to make working from home a success.

1.  Set aside a specific place exclusively for work. You’ll be able to deduct it from your taxes and it will help you psychologically.

As Richard Eisenberg wrote in Secrets of Claiming a Home-Office Deduction, although an estimated 26 million Americans have home offices, just 3.4 million taxpayers claim home-office deductions. Eisenberg notes, and, I agree, that many people with home offices skip the tax breaks because they’re worried the write-offs will spark a tax audit. That’s not really the case these days. But you must file Form 8829, Expenses for Business Use of Your Home. You can read all the home office rules in IRS Publication 587.

In general, to write-off home-office outlays, you must use the “area” for work only and on a regular, or constant basis, either as your primary place of business or a setting to meet with clients or to do paperwork, say, invoicing, ordering supplies, and phone calls. I suggest you snap a pic of the space, too, so you have a record in case the IRS is ever curious.

If you’re a full-time employee at a business, you will only qualify for the deductions if the company doesn’t provide you with an office.

You should be able to write off 100 percent of costs associated exclusively with your home office, everything from buying a work computer to office supplies. The other kind of deductible home-office expenses are “indirect” ones that are pro-rated, based on the size of your home office. These are things like your mortgage or rent, insurance, and utility bills.

In general, if the square footage of your home office equals 10 percent of your home’s, you can claim 10 percent of these expenses.

If that sounds like a lot of paperwork, the IRS announced a new short-cut or “safe harbor” rule earlier this year, which allows you to deduct $5 per square foot of your home office on your return, with a maximum write-off of $1,500 (based on a maximum of 300 square feet). You won’t be able to depreciate the part of your home used for business, though, if you go this route. If your write-offs would top $1,500 or your home office is bigger than 300 square feet, you can still claim your home-office deductions based on actual expenses.

2. Create a daily work schedule. It’s easy to get sucked into being available to work any time, any day. I work far more hours than when I had an in-house job with one employer. My choice since I am self-employed. But, in reality, for the sake of my mental health, I could use someone to pull me away from my laptop from time to time.

If you work for one company, try to set well-defined work hours to avoid phone calls and emails without boundaries on your personal time.

From my experience, to work from home on a regular basis, you must be well-organized, have time management skills and be a self-starter. Not everyone is hardwired that way. Be honest with yourself before you take the leap.

3. Accept that your rise to the top might be thwarted, or do something to fight back. Employers figure that you can’t really manage others when you work from home. I think they’re probably right on many levels. Being a boss means face-time. But even getting promoted (and the bigger salary that goes with it) often gets tied up in the out-of- sight out-of-mind phenom. It’s an unspoken trade-off at some firms if you decide to work from home.

“While working at home can be beneficial for both companies and workers, it can also lead to ‘invisibility’ that can limit opportunities for career advancement,” Ana Dutra, chief executive of Korn/Ferry Leadership and Talent Consulting says. “It is important for telecommuters to remain networked as closely as possible with peers and leaders in the office.

To combat that, I suggest you make a diligent effort to show-up on a regular basis for meetings and other office gatherings.

4. Be an extrovert. Working remotely can prevent you from building workplace relationships and chances to meet new people in an office — those things rarely happen when you work from home. This is a bit of an intangible loss, but, again, push yourself to get out of the house, and squeeze in an out-of-the-office lunch, or coffee with colleagues and bosses.

Co-workers can also be envious and resentful of your freedom. With a little effort, you can avoid the bad blood.

At the very least, every so often, make a phone call instead of shooting off an email or a text. It can be a time suck, but I think it helps build camaraderie and you might even pick up some fun office dishing.

The best work-at-home jobs are often ones that demand a quiet space where there are few distractions. Web-based jobs in accounting, translation, sales, public relations, medical transcription and customer service are some of the growing areas that I write about in my book Great Jobs for Everyone 50+, and there are more coming on stream all the time. Nonetheless, you should always be aware of keeping your people skills sharp.

5. Network electronically. You should, for instance,  get active in LinkedIn groups that relate to your work, employer, alma mater, past employers, or other interests that you follow. It’s key to comment on posts from others and add in your own two cents. It displays your expertise and gives you a virtual feeling of being connected to a community. Plus, it’s remarkable how many new “connections” you can link in with. Check out my post here on  ways improve your LinkedIn profile.

6. Take an aggressive stance on retirement savings. When you work for yourself, this is essential since you don’t have an employer’s plan to automatically set funds aside for you. (The good news is that the self-employed can qualify for very big retirement savings breaks.) If you’re an employee working from home and you’ve stepped off the promotion path, you may not be getting raises, making it tougher to up the amount you put into your 401(k) or a similar employer-sponsored savings plan every year.

7. Ramp up your tech skills. Help is not always on the way. If you run into a technical glitch with your computer, you may very well be left to your own devices. If you’re an employee, try to butter up someone in the IT department, who you can reach out to in a pinch. And show your appreciation, again, a lunch out or gift card are ways to say thanks. If you’re self-employed, you might be able to find tech support at Apple’s in-store Genius Bar (if you own a Mac) or at Best Buy. If you really do get computer freeze, cut it off at the pass by taking a computer class at a community college or, if you’re a Mac user, at an Apple store in your neighborhood.

And if you need to give presentations, you should get conversant with Web-based meeting programs like GoToMeeting, Cisco WebEx,, TeamViewer or Google+ Hangouts. Some are free, some aren’t.

8. Get the proper business paperwork. If you’re operating a small business out of your home, you will probably need the proper tax registrations, business and occupational licenses and permits from federal, state and local governments to operate legally.

9. Don’t forget about insurance.It’s probably a good idea to get an insurance rider in case the Fedex man trips. Most home-business owners have little or no coverage from their homeowner’s policy. What’s more, if you file a homeowner’s (or renter’s) claim for losses that stemmed from an undisclosed home-based business, your insurer may not cover it.

Each state sets its own rules about the insurance coverage that can be offered to home-based businesses.

The least expensive way to add insurance is to tack on a rider to a your existing homeowner’s or renter’s insurance policy. The cost might be around $100 a year for around  $2,500 of additional coverage.

If you have valuable equipment that you might want to protect, though, an in-home policy offered by your home insurer will cover a wider range of incidents. An in-home policy, generally speaking, is issued by a home insurer, and is a plan against injury or theft.  Rates typically run from $300 to $500 and the plans usually cover as much as $10,000 in losses.

For more, go to the Insurance Information Institute in New York City, an industry trade group and information clearinghouse

10. Pay your quarterly taxes. Ugh. It’s quarterly time again. I know the feeling. But send in the check to avoid a possible penalty from the IRS for underpayment of taxes. Independent contractors who are paid only for work performed, in general, must pay federal taxes on income and FICA. You will need to pay estimated taxes throughout the year instead of once a year on April 15. Go to IRS resources to help you understand how to pay federal taxes as an independent contractor: Self-Employed Individual Tax Center. Depending on the location of your business, you may be required to file state and local income and business taxes.

Now about those horses that just thundered by at a gallop in their grassy field– for me that’s the sweet sight (and sound) of successfully working from home.


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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck